Marx and Ricardo
Marxist value theory treats economic value, i.e. exchange value, as an attribute of labour-products/commodities which exists by virtue of social relations of production in the capitalist mode of production. Thus, value is a purely social characteristic of commodities. The substance of the value of a commodity is a determinate quantity of social labour.
That is, the existence of exchange value presupposes social relations between people organised into a society. 'Socially necessary labour time' encapsulates this essential 'relatedness' of value - it is labour time assessed in relation to social needs, not merely labour time performed.
This distinction demarcates Marx from other political economists, but is often overlooked in accounts of Marx's value theory. Marx understood that the casual reader might mistakenly treat his category as interchangeable with its Ricardian predecessor, and in later editions and the Afterword to the Second German Edition implores readers to pay particular attention to the mediations between that old category and the one his own theory sought to establish. Marx's concept of value is not intended to be an equilibrium price. He does not assume market equilibrium, but aims to explain how the process of convergence between supply and demand practically occurs, that is, why supply and demand meet at a given price point when a sale is realised in a specific market.
Read more about this topic: Socially Necessary Labour Time
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