Michael Nuwer quotes: > Supply and demand regulate nothing but the temporary fluctuations of > market prices. They will explain to you why the market price of a > commodity rises above or sinks below its value, but they can never > account for the value itself. Suppose supply and demand to equilibrate, > or, as the economists call it, to cover each other. Why, the very moment > these opposite forces become equal they paralyze each other, and cease > to work in the one or other direction. At the moment when supply and > demand equilibrate each other, and therefore cease to act, the market > price of a commodity coincides with its real value, with the standard > price round which its market prices oscillate.
It should be mentioned that Marx (and I'd guess Engels) had a pre-Marshallian view of supply and demand. At least in CAPITAL, "supply" doesn't refer to a curve or schedule of different quantities offered corresponding to different prices, while "demand" doesn't refer to a curve or schedule. Instead, as far as I can tell, "supply" refers to the quantity supplied at the price of production, and "demand" refers to the quantity demanded at the price of production. When the two quantities become equal, the market has attained equilibrium at the price of production. This of course is not the same as the value of the commodity (as Marx's vol. III shows). -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
