Question

What is the meaning of the quote "The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labor which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.", and explain the potential problems of the analogies used?

Answer 1

The quote suggests that labor is the true measure of a commodity's value in exchange. However, this view is limited because it overlooks factors like demand and utility, and labor value can be obscured by differing skill levels and technological advancements.

Step-by-step explanation:

The quote implies that the value of a commodity for someone who does not intend to use it themselves but to exchange it, is determined by the amount of labor it can command in the market. It suggests that labor is the true measure of value for all commodities. However, this analogy can be problematic because it overlooks other factors that affect a commodity's exchangeable value, such as consumer demand, scarcity, and utility.

For instance, a highly demanded but low-labor commodity might have high exchange value. The quote does not account for this scenario. Additionally, as economies advance and diversify, labor value becomes less transparent due to varying skill levels, production efficiency, and the use of machinery, which impacts the estimated amount of labor intrinsic to a commodity.