So Marx's definition of Value as residue comes down to this, right (correct me please if I misunderstand, I've struggled here a while): We begin with all aspects/materials characteristics of commodities. Subtract all things which are different between commodities (which includes the aspects we could call use-value) and you are left with the common aspects. These aspects are: 1 exchanges value because the commodities still share the ability to be traded with one another and; 2 Value because all commodities were produced by some form of labour power which crystallizes in the commodity.

He calls it residue because exchange values are not inherent but socially determined while the labour power to produce it is inherent to the commodity. Am I missing something here?

Thanks for setting this up. I think we still have to tag comrades in the comments rather than the post for it to show up in their inbox. Unless mine is just being screwy.

So, both the labor theory of value and "supply and demand" can both coexist in Marx's framework. They are compatible ideas. On the most basic level, cloth from a loom has a "use value." I can take the cloth and use it as a towel or a wash-cloth. Or, I can take the cloth, cut it up, and sew it together into a shirt, pants, etc. This "use value" is what basically determines the "demand" part of supply and demand. The "supply" part of supply and demand is basically determined by the labor that goes into making a thing. Someone has to plant the cotton, pick it, put it on the loom, dye it, transport it, sell it at the market, etc.

So, the higher a "use value" is, the higher the demand can be. And the more labor that has to go into making something, the lower the "supply" will be. This is a big, big oversimplification, of course. But to continue the cloth example, if you look at high-quality, durable blue jeans vs. a simple washcloth, the blue jeans have more "use value" to you as a consumer, so they can have a higher demand, increasing their price. You can then take the basic "use value" of the blue jeans and find its "exchange value" by looking at all sort of different things, including advertising, artificial scarcity, etc., which affect demand, and things like labor laws, monopolization, transportation infrastructure, etc. which affect supply.

The main difference between "exchange value" and price is that "exchange value" is independent of many complicating factors affecting price, like currency exchange rates, geographical differences in standard of living, etc. For example, the same blue jeans, with the exact same "use value" and "exchange value," might be sold at a higher price in New York City than Boise, Idaho, because people there are willing to pay more money for the same jeans. In a more online example, the exact same video game is sold at wildly different prices in different countries with different currencies. Discounts and sales affect prices even more drastically. But the existence of a coupon/discount does not change the "use value" of a game, or even its abstract "exchange value," just the price you pay for it.

This is actually a very subtle issue, with a lot of complicated details to work through. Here an entry about it from the literal "Encyclopedia of Marxism:"

Exchange-value differs from “price” in two ways: firstly, price is the actualisation of exchange-value, differing from one exchange to the next in response to a myriad of factors affecting the activity of exchange; secondly, price is the specific value-form, measuring the value of the commodity against money.

https://www.marxists.org/glossary/terms/e/x.htm#:~:text=Exchange%2Dvalue%20differs%20from%20%E2%80%9Cprice,of%20the%20commodity%20against%20money.

But to sum it up, Marx does believe in "supply and demand," which is perfectly compatible with the labor theory of value. It's just that labor determines the "supply" side of supply and demand. Because it is laborers who are ultimately "supplying" the raw materials, and the labor that goes into turning those raw materials into usable commodities. Hope this helps!

Refutations of the labor theory of value often start with a claim that LTV means that if a laborer slacks off and is super inefficient in their production, that this will somehow make the commodity they produce more valuable. Another version of this argument is the claim that LTV means that the quality of the commodity doesn't affect it's value, or that literally useless commodities are supposed to have value.

If these people have read Capital, they didn't get past the first 3 paragraphs, because paragraph 4 is where the discussion of use value begins. It turns out, surprise, commodities actually have to be useful to people and of usable quality to have value, they don't just magically gain value because someone spent a lot of labor on processing or manufacturing it. A few paragraphs later, we get to discussions about the average labor power of society, and how that correlates to prices of exchange. I think what people get backwards about LVT is that, yes, inefficient productivity CAN cause a commodity to be very valuable and have a high price, but only when the average amount of labor required to produce or extract it is very high.

Marx's example of diamond extraction is prescient: diamonds were legitimately quite difficult to extract from the earth in that era, and so their value was high. In our modern age, automation in mining and synthetic diamond production have dramatically increased the productivity of labor of diamond mining, which has made them much less valuable. That's not because any particular worker was working super slowly and inefficiently, nor is it because of the use value of diamonds decreased (their use value has arguably increased, as they've found applications in industrial processes).

(I think it's not until vol 3 that Marx talks about monopolies, but that's an obvious elephant in the room when talking about diamonds)