1965 Kamenov International Values

International Values and Prices
Author(s): Evgeni G. Kamenov

Source: The American Review of Soviet and Eastern European Foreign Trade, Vol. 1, No. 5
(Sep. - Oct., 1965), pp. 18-43
Published by: Taylor & Francis, Ltd.
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Theory of International Value
Ikonomicheska misul, 1964, No. 3
Evgeni G. Kamenov (Bulgaria)
INTERNATIONAL VALUES AND PRICES
The high degree of development of the productive forces in the

socialist as well as in the advanced capitalist countries condi
tions a broad development and further deepening of the inter
national division of labor. On this basis there arises, with
ever greater acuteness, the objective need to develop and ex
pand international economic ties, and to diversify and improve
the various forms of international economic relations.
Among the great variety of international economic relations
a priority role ? in significance and range ? is played by in
ternational commodity exchange, which includes among its most
important economic problems those concerned with the value
and prices of exchanged goods.
One can cite a considerable number of concrete studies in
Marxist economic literature that deal with the various aspects
of international prices in different periods and with individual
goods and markets; yet studies on the problem of international
value are still few in number. (1) This fact indicates not only
18
VOL. I, NO. 5 19
an underestimation of the problem of economic value, but an

expression of the widespread view ? explicitly stated, or im
plicitly understood ? that such a category does not exist at
all. (2)
One should, however, consider the category of international
prices as generally accepted; these prices are discussed as
something different from domestic prices. If we were to ex
amine these differences between international and domestic
prices more closely, it would become clear that they cannot be
reduced to simple deviations from the national value. The very
level of international prices and their movement demonstrate
that they have their own bases, their own average, around which
they move, and that this is precisely their international value.
(3)
The first question raised is that of the nature and magnitude
of international value and of its relationship to the national
value.
Marx revealed that a commodity has value because it is a
product of human labor, and that the magnitude of this value is
determined by the quantity of abstract labor necessary for its
production.
But can we consider that the abstract character of labor
which creates value means that it is divorced from the con
crete conditions and concrete environment in which the labor
process is being implemented and that, therefore, it could have
one given value alone?
Such an interpretation of the abstract character of labor that
creates value is incorrect. It is abstract in the sense that it
is freed from the qualitative character of the various types of
concrete labor and from its peculiar qualities that are con
nected with the qualitative differences and peculiarities of the
goods as consumer values. However, its abstract character
does not make it a theoretical concept, divorced from concrete
economic reality and from conditions of production.
"Exchange value," Marx stressed, "requires the population as
a prerequisite, and precisely such a population which produces
under given relations; it also presumes a given type of family,
20 FOREIGN TRADE
or community, or state, etc." (4)

Solution of the problem of the qualitative determination of
abstract labor that creates value clearly shows the connection
between value and the concretely determined economic condi
tions in which value is being formed. The magnitude of value
or, in other words, the quantity of abstract labor is measured
by the average socially necessary labor time. And we can
speak of an average socially necessary labor time only with
regard to a concrete economic reality, in given production re
lations. How can we speak of a "value in general" when value
is a characteristic of a given type of commodity, and its mag
nitude is the quantity of abstract human labor necessary for the
production of this commodity under average, normal conditions
of production, under an average intensity and labor skill?
These normal or dominant conditions of production are the con
ditions of a given economy; average intensity and skill are also
the intensity and skill referring to a given economy; they do
not hang in mid-air nor can they be invented.
What is it that determines the limits of this economy, the
range of those production enterprises whose conditions consti
tute a basis for determining this average necessary labor time
that serves as a measure for the social value of a given com
modity? Is it all the enterprises in the world, or in a given
country, or in a given territorial district, or in a given com
munity?
In order to answer these questions, we must bear in mind
that the very concept of a commodity contains the definition
which refers to that product of human labor which is destined
for the market. It is the market which creates the connection
among the producers of commodities, and between them and
the buyers of their goods, and which is a necessary condition
and prerequisite for the appearance of value as exchange value.
Every production that is not connected with a given market has
no relation at all to the formation and determination of the mag
nitude of the value of the commodity. Thus, for example, the
conditions in which consumer value is produced do not and can
not have any influence on the formation of the social value of a
VOL. I, NO. 5 21
given commodity if it is not destined for the market, if it is not

being sold, but goes into the hands of the consumer ? for ex
ample, within the framework of a barter, closed, se If- sufficient
economy. (5)
The concept oi a market should not be understood in a tech
nical or geographic-territorial sense, as a place where one
engages in the exchange of commodities. As an economic cat
egory, the market represents a sum total of regular eco
nomic ties of individual producers and consumers, expressed
in the existing social division of labor and in the commodity
exchange that takes place between them. Therefore, the range
of a given market embraces those producers and consumers
who are connected with the regular ties of commodity
exchange and who, as a result of these ties, can be viewed as
a given economic entity. (6)
Thus there is no value in general, but a value of goods
which are produced for a given market and are exchanged in
that market.
The geographic-territorial range of a given market can be
most varied. Thus, for example, the medieval city, together
with its neighboring village, constituted an independent market
where value was formed on the basis of the production condi
tions in the artisan workshops producing for that market.
The same goods could simultaneously be produced in another
city, in another artisan center, in which the exchange of goods
occurs within the limits of the city and its neighboring villages,
but this will represent a separate market in which individual
values will be formed. This has indeed been the actual situa
tion during extended periods of history, regardless of the fact
that these cities existed within the framework of a political
community (on the territory of one and the same feudal prop
erty or of one and the same state), since no economic (market)
ties existed between them. The only tie established by the then
existing international fairs (Champagne and others ? in the
West, and Uzundzhovo, Eski-Dzhumaya, etc. ? in Bulgaria)
was not sufficient to create an economic unity of these city
markets. It played only a limited roll in overcoming the iso
22 FOREIGN TRADE
lated and closed character of the city markets and in gradually

creating a broader community in terms of a territorial (re
gional) market. (7) Historically, the ties developed in such a
way that, originally, market connections were not established
simultaneously over the entire national territory, but within
the framework of larger or smaller districts. The range and
limits of these territorial markets were determined to a
larger or smaller extent by the ties of communication, as well
as by the further development of the social division of labor.
The national market was established only later, with the
final overcoming of feudal dispersion, with the further develop
ment and improvement of the division of labor, with the devel
opment of national roads and other communications media, and
with the expansion of production (primarily, the development
of handicrafts and, later, of factory production).
It is obvious that at the time when the territorial market
was dominant, several markets existed within the boundaries
of a country; these markets had their own values, which did not
depend on the production conditions of the entire country but
only on those in the enterprises connected with this territorial
market.
The gradual expansion of economic ties among the individual
districts and regions of the country, the development of com
modity exchange on a national scale, and the strengthening of
market ties between enterprises and consumers of the entire
country led to the formation of a national market and, conse
quently, to the creation of national value.
As regards international commodity exchange, it has a very
ancient history. International trade existed as early as the
slave period (the Egyptians, Phoenicians, Greeks, Romans,
etc.). During the Middle Ages and at the beginning of modern
times, it also existed in the form of international fairs as well
as of the famous Levantine trade. However, all this occurred
within the framework of the barter economy and of undeveloped
commodity relations. Trade itself was of a limited and ? in
view of the dominant production relations ? accidental charac
ter. Under such conditions one could hardly speak of a genuine
VOL. I, NO. 5 23
manifestation and action of the law of value, all the more so

since part of the exchanged production was the fruit of direct
exploitation in kind of the labor of slaves or feudal serfs.
With the development of capitalism, international economic
ties began to develop parallel to the development and forma
tion of the national market; international trade, international
transportation and communication assumed a worldwide char
acter. A world capitalist market and a world economy began
gradually to be established. (8) Naturally, this did not happen
overnight, but was the result of an extended process which as
sumed the gradual raising of economic ties among the individ
ual countries to a higher level and higher degree of intensity
and regularity.
International value originated and developed on the basis of
and under the conditions of the world capitalist market.
What is the role of individual countries in the formation of
international value?
First of all, those countries which do not produce a given
commodity for the international market, which do not export
this kind of commodity, do not participate at all in the
formation of international value, regardless of whether they
produce the same type of commodity, in larger or smaller
quantities, for their domestic markets.
Thus, just as barter, non-commodity production in a country
has no relation to the formation of the value of goods ? al
though they could represent, in terms of their qualities, identi
cal products as consumer values ? similarly, the production
of individual countries that is not destined for world markets
and is not exported to that market does not participate in the
formation of international value. In other words, the world
market, in spite of its name, does not include the entire world
production, but only that production which is destined for that
market. As a result, we can exclude whole countries if for
some reason they do not take part in the international market,
do not produce goods for export, although one cannot find such
examples in the present state of the world economy.
The concept of a world market is also narrower than the
24 FOREIGN TRADE
sum total of the national markets of all countries because of

the fact that it fails to include many commodities with a purely
domestic destination. First of all, if we compared the com
modity list of the international market with that of the sum to
tal of the national markets of all countries, we would find that
the former is considerably more limited than the latter. The
list of goods which are produced in individual countries, and
which are the object of domestic trade without becoming ob
jects of international commodity exchange, is not small. This
may be due to various reasons: they are destined for the sat
isfaction of needs unknown in other countries; national differ
ences (national costumes; specific national foods, seasonings,
beverages; objects connected with national customs, national
tastes, etc.); climatic peculiarities (differences in the clothing
of people from polar countries, moderate climates, tropical
countries, etc.); immobility (for example, buildings); the ex
tremely limited range of mobility of goods (very heavy and
voluminous objects, or perishables, or economic disadvantages
due to lengthy transportation: reinforced (concrete parts for
assembled buildings, bricks, stones, etc., ordinary building
materials, bread, some types of fresh vegetables, fruits, etc.);
or other general economic reasons. We must also add the
fact that many means of transportation or communication are
used internationally. In addition, due to considerations of na
tional security or to political, economic, and other reasons,
certain items of national commodity production are not per
mitted to enter international markets.
As a result of all this, the range of the world market in
cludes only a certain part of the national economy of individual
countries; consequently, only parts of the commodity produc
tion of the individual countries serve as its basis. For exam
ple, the production of bread, no matter how extensively it is
distributed, no matter how important it is in the commodity
production of all countries, remains outside the framework of
the international market.
When we come, however, to the concept of international value
and try to ascertain the foundation which determines it, the
VOL. I, NO. 5 25
circle becomes even narrower. Not all the commodity pro

ducers of different countries which produce for export and
sell their goods on the international market have a decisive
influence in determining the magnitude of the international
value of a given commodity, but only those which are the major
exporters of this good. This follows from the very concept of
the average socially necessary labor time, since this is the
time required to produce a given commodity under average,
normal conditions of production and with average intensity and
labor skill. As is known, not all enterprises which produce a
given commodity serve as a basis for determining the magni
tude of the national value, but only those which yield the major
? the mass ? production of this commodity for the market,
those which, so to speak, dominate the market with their output
and play a determining role. The situation on the international
market is analogous. Here, those countries which are of sec
ondary importance on the international market, which are not
among the major producers and exporters of that commodity,
do not play a determining role in setting the magnitude of in
ternational value. International value is determined in accord
ance with the average conditions for producing this commodity
in those countries which are the major producers of that good
for the international market. Naturally, in the case of agricul
tural or other primary products, where the effect of the law of
land rent is valid, one must take into consideration the changes
connected with the effect and requirements of that law.
One could cite several examples to prove that specific in
dividual countries or a group of countries are the major, dom
inant producer and exporter on the international markets of a
given kind of commodity, and that, consequently, production
conditions in those countries play a determining role in the
formation of the international value of those commodities.
Thus, for example, 74.9%of the entire export of tin from
capitalist countries in 1961 came from Malaya; 72.6%of the ex
port of copper came from four major exporting countries:
Chile - 21.3%, Northern Rhodesia - 22.5%, the USA -
16.1%, and the Congo ? 12.7%; three capitalist countries ac
26 FOREIGN TRADE
counted for 45.7% of the export of pig iron: the Federal Re

public of Germany -23%, Canada - 11.9%, and the USA -
10.8%; 59.9% of the export of crude petroleum came from the
Near and Middle East, and 27.2% from Venezuela; as to total
coal exports, the USA accounted for 50.6%, the Federal Repub
lic of Germany - 26.7% and England - 9.2%. (9)
As to the participation of individual countries or a group of
countries in the export of agricultural commodities, one could
cite the following examples: two South American countries
account for 50% of the entire coffee export from non-socialist
countries, namely, Brazil ? 37.5%, and Colombia ? 12.5%;
two countries ? Ghana (40.2%) and Nigeria (18.3%) ? account
for 58.5% of the cocoa export; 62.4% of the export of washed
wool came from Australia (43%) and New Zealand (19.4%);
80% of the export of natural rubber came from four countries:
Malaya (44.9%), Indonesia (24.7%), Thailand (7.1%), and Cey
lon (3.4%), etc. (10)
The dominance of Malaya as an exporter of tin to the inter
national capitalist market will undoubtedly mean that the con
ditions of production of tin in that country will have a deter
mining influence on the international value of that commodity
on the international capitalist market. In some cases, how
ever, several countries ? rather than one ? play the role of
major producers and exporters of that commodity on the inter
national market; as a result, the conditions of production in
those countries have a primary effect on the formation of in
ternational value.
One could mention cases of enterprises, even entire
branches, which produce goods destined entirely for the inter
national markets, but the case of producing partly for the do
mestic and partly for the international market is more fre
quent. The fact that a given producer has the choice between
two markets ? national and international ? represents the
basis for a peculiar connection and possibility of mutual influ
ence of the domestic on the international market, and of the
national on the international value, and vice versa, (11) How
ever, this does not eliminate the existence of two different and
VOL. I, NO. 5 27
separate markets and of two separate values even when these

values are approximate or, as an exception, identical to each
other.
The causal relations, cited earlier, in the formation of in
ternational value inevitably lead to the situation where in sev
eral countries the value of a given commodity will be lower
than the national value, while in others it will be higher. As a
result, when selling their goods on the international market
at prices determined by their international value, some coun
tries will lose in the sense that they will be forced to go below
the national value of those goods; other countries, on the con
trary, will derive additional profits from the fact that they will
find on the international markets values and prices which are
higher than the domestic ones. Naturally, in the formation of
international value, a relatively high share accrues to the labor
expended in transporting the commodity; this share also differs
for different countries and depends on the type of good as well
as on the location of the countries participating in the commod
ity exchange.
We cannot agree with some statements in the otherwise in
teresting and very substantial study by Professor G?nther
Kohlmey on the Marxian theory of international value. (12)
Professor Kohlmey declares that the international magnitude
of the value is a "weighted average," that "while the socially
necessary labor time within the boundaries of a state is de
termined by the mass, ordinary production conditions, the
process of forming the international magnitude of the ex
changed value includes all the national degrees of productivity
participating in world trade (with regard to given commodi
ties)." (13)
In assuming that international value is determined not by the
mass, ordinary conditions of production of a given commodity
for the international market, but by all other degrees of pro
ductivity participating in world trade, and that it is some
"weighted average," Professor Kohlmey in fact retreats deci
sively from the Marxian theory of value and takes a fundamentally
different position. There is no justification for producers who
28 FOREIGN TRADE
play a secondary role on the international market, who are not

the mass, ordinary suppliers of this commodity to that mar
ket, to influence the magnitude of international value. The
Marxian theory of value, and of international value, has noth
ing in common with the understanding of value as some arith
metic average of all individual or national values, which is
what the above-quoted definitions and statements by Professor
Kohlmey mean in reality.
Professor Kohlmey comes to these conclusions by basing
himself on the idea that the law of value suffers modifications
on the world market. Thereby, he tries to explain the nature
of these modifications by quoting from Marx. However, the
passages he cites from Capital, The Critique of Political Econ
omy, and Theories of Surplus Value do not justify his conclu
sion. When Marx stresses that "in world trade, commodities
universally unfold their value" (Capital, Vol. I, p. 118) or that
"it is only on the world market that money functions fully as a
commodity whose natural form is at the same time a direct
social form of realization of abstract human labor" (ibid.), etc.,
he does not introduce new principles for the determination of
value, as does Kohlmey, but only shows how this same law acts
in the specific environment of the world market.
What is there that is new here? It is the fact that commodi
ties unfold their value universally and that money is freed
from its national form and the latter's limitation, while its
natural form ? gold as metal and weight ? appears as a direct
social form for the realization of abstract human labor, e.g.,
the value of the remaining goods. There is, however, not even
the slightest hint about any "weighted average" in this case.
One can say the same with regard to Kohlmey's attempt to
draw from a quotation from Theories of Surplus Value, where,
in connection with a remark by Say, Marx notes that the law
of value experiences substantial modifications in the course of
commodity exchange among different countries. Marx shows
what these modifications are: three working days in a given
country can be exchanged for one working day in another
country and, in this instance, the richer country exploits the
VOL. I, NO. 5 29
poorer one even when the latter gains from the exchange. (14)
In this case, too, we find an expression of this specific char
acter of international value only in connection with the new
sphere in which it operates, but the basis for determining its
value does not change. It is precisely because the value is
determined by the production conditions in the internationally
dominating, richer and more productive countries that they can
exploit the poorer countries which must expend more labor in
order to produce their export commodities.
One must regret that Marx was unable to implement his
plan to work out the problem of foreign trade and thus give us
the necessary theoretical findings in this important and diffi
cult field. Still, he did express, in different places and on dif
ferent occasions, his attitude toward the problem of interna
tional values and prices.
First of all, he speaks firmly about international value,
about the international level of labor intensity and productivity,
and about the average unit of world labor as a measure of
labor intensity. These and other statements clearly demon
strate Marx's understanding that:
a) the essence (substance) of international value (as well as
of national value) is abstract human labor;
b) its magnitude is determined by the average socially nec
essary labor time for the production of a given commodity,
while taking the average magnitude of the world's labor into
consideration.
At the same time he stresses that the value undergoes sub
stantial modifications in its international expression. In speak
ing of these modifications, he has in mind:
a) first, the differences that exist between the national
averages of intensity, productivity, and skill, and the corre
sponding international averages (see, for example, Capital,
Vol. I, p. 455: "...the national intensity and productivity of
labor rise above the international level");
b) differences in the relative value of money (Capital, Vol.
I, p. 456: "...the relative value of money will be lower in
countries with a more developed capitalist method of produc
30 FOREIGN TRADE
tion than in less developed countries");

c) peculiarities in the function of money as world money
(Capital, Vol. I, p. 118: "In world trade commodities unfold
their value universally.... Only on the world market does
money function fully as a commodity whose natural form is at
the same time a direct social form of realization of human
labor in abstracto. Its method of existence becomes adequate
to its definition.").
The formation of international value as a category and mag
nitude, differing from national value, does not occur at once.
It is the result of a continuous process. As we pointed out,
international trade has ancient origins and antedates the ap
pearance of capitalism by many centuries. Still, one cannot
speak of the formation of true international value at that time.
But even after the appearance of capitalism and of interna
tional capitalist trade, international value does not appear
all at once. In order for international value to appear as a
magnitude, separate from national value, one needs as a nec
essary condition a higher degree of development of interna
tional economic relations ? that degree which enables these
economic relations to assume a more regular and orga
nized character: to have, so to speak, channels and avenues of
international commodity exchange, to have a realistic relation
ship and mutual influences among the producers of different
countries which participate in international markets. Even
more, this process of a gradual "becoming" of international
value does not occur simultaneously for all types of goods or
for all countries and regions.
Until these relations reach the necessary degree of intensity
and regularity, international commodity exchange and the ex
change of goods among individual countries occur at prices
which are, at first, based on the national value. In my opinion,
Marx's words to the effect that "the different quantities of
goods of one and the same type, produced in different countries
during the same working time, have unequal international
values, which are expressed in different prices, e.g., in differ
ent monetary sums, in accordance with the international val
VOL. I, NO. 5 31
ues" (and not "with the given international value," as it is

erroneously translated in the Bulgarian edition of Capital [15] ),
refer precisely to such an earlier phase of the development of
the international market when true international value was not
yet created as an independent magnitude and the individual na
tional values played the role of international value to a greater
or smaller degree.
It is worth noting that the degree of development of the
world economy and of the world market a century ago, when
Marx worked on these problems, was such with regard to most,
if not to all commodities, that one could hardly have spoken
about a completed process of identification of an independent
international value, different from the national value. At the
same time, however, Marx clearly notes the basis on which
the real international value is formed and developed,
namely, on the basis of the development of the international
market, of world labor, and of the international level of labor
productivity and intensity.
International trade has today reached a very high degree of
development and, for several countries, it represents a very
high percentage of their gross national product. (16)
A significant role in the formation of international value,
different from national values, is played by international com
modity exchanges. However, they play such a role for a lim
ited number of commodities ? those involved in commodity ex
change trade. The active trading with other commodities,
which are objects of conventional forms of international trade,
brings this commodity exchange to such a degree of develop
ment that in this case, too, international values are formed on
the basis of the international, socially necessary labor time,
i.e., of the international level of labor productivity, intensity,
and skill.
As far as individual commodities are concerned ? those
which are about to appear on the international market or which
have not yet asserted themselves as permanent and generally
recognized objects of foreign trade ? national values still ful
fill the functions of international value and serve at first (for a
32 FOREIGN TRADE
shorter or longer period of time) as a basis for determining

the international prices of those commodities, in spite of the
general high level of development of international trade and
international markets. The situation changes, however, with
the inclusion of these commodities in the intercourse of inter
national trade, with the higher degree of intensity and regular
ity (constancy) in the international exchange of these commodi
ties. Gradually, the international value of these goods is also
formed on the basis of the world's labor, the international
average socially necessary labor time ? more or less differ
ent from the average socially necessary labor time for the
production of the same good in the individual producing and ex
porting countries.
The process of formation of international values for several
goods is accelerated by the undertakings connected with imple
mentation of the so-called capitalist economic integration.
The question of the mutual relations between national and
international value is of special interest, since these relations
have their own specific peculiarities, which stem from the
nature of things. The peculiar feature consists, in this case,
in the fact that the world market has no production base of its
own, separate and different from the national commodity pro
duction, which serves as a basis of national values. This situ
ation is basically different from that of the medieval city mar
kets, which gradually merge? and become territorial markets
and, later, national markets. The moment they become parts
of the territorial market, they cease being city markets, and
the value which exists in these city markets disappears as such
and is replaced by the territorial and, respectively, the na
tional value. The situation is similar in the case of the trans
formation of a territorial into a national market. Those pro
ducers who participate in the formation of the territorial value
now participate in the formation of the national value, and the
moment the national value is consolidated, the territorial value
ceases to exist as a category and magnitude. The birth of one
of the values is at the same time the death of the other, that is,
the process of the gradual appearance of one of the values is a
VOL. I, NO. 5 33
process of the gradual disappearance of the other. The new

element here is that the producers who had participated in the
formation of territorial values now participate in the forma
tion of national values, but in a different combination. They are
already connected, through the national market, with the pro
ducers of other territorial markets with which they had no
prior connection. Now, the average socially necessary labor
time is determined on the basis of the national production and
is identical for a given commodity for the entire country,
whereas previously it was different for the individual territo
rial markets.
The picture is completely different as far as the formation
of international value is concerned. This new category is born
on the basis of the national production of one or more countries,
but this production continues at the same time to be at the basis
of and to apply to the national value as well. The creation of
international value does not mean the disappearance of national
value, or the transition of one into the other. In this case we
do not have a displacement by or substitution of one for another
value, but a peculiar cumulation of both values.
But how is it possible for the same producers simultaneously
to participate with the same output in the creation of two dif
ferent values?
This situation, which at first glance seems paradoxical, is
explained, first, by the fact that these producers participate
at the same time in two different economic entities, repre
senting links of two different markets: national and inter
national. The smaller entity, the national market, represents
one basis, yields one value, while the larger one, the interna
tional market, represents another basis with the participation
of other producers from other countries.
Yet, in order correctly to solve the problem of international
value and prices today, it is not only sufficient to note the high
degree of development of the international commodity exchange,
but also to take into consideration the complex and very peculiar
picture presented by the nature of the contemporary world
economy and commodity exchange. Today the international
34 FOREIGN TRADE
division of labor on a world scale presents a varied and color

ful picture. The contemporary world economy can be dis
cussed as a complex and contradictory entity, composed of the
following links that are connected among themselves in varying
degrees: the division of labor and the economic relations of
the capitalist countries among themselves; the international
socialist division of labor and the new type of economic ties of
mutual assistance and cooperation among the socialist coun
tries; the division of labor between the socialist countries, on
the one hand, and the capitalist countries, on the other hand,
as well as the economic relations among them. The picture
becomes even more complicated if we take into consideration
the specific character of the countries of Asia, Africa, and
Latin America, liberated from colonial yoke, and discuss the
economic relations of these countries with the developed capi
talist countries, their economic relations with the socialist
countries and, finally, the economic relations among them
selves.
This complicates the picture of the international division of
labor and of international economic relations, and raises some
problems of terminology. We permit ourselves to propose the
following terms: the expression "world division of labor"
should apply to the division of labor on a world scale as a com
plex sum total of all the above-mentioned divisions of labor
among individual countries and groups of countries, while
"world market" should apply to the complex sum total of com
mercial and economic relations among all those countries and
groups of countries; the division of labor among socialist coun
tries should be called "socialist international division of labor"
and, correspondingly, "socialist international market"; the
division of labor and the market among capitalist countries
should be called, respectively, "capitalist international division
of labor" and "capitalist international market." In my opinion,
the market where socialist and capitalist countries meet and
where commodity exchange takes place among them could be
called "mixed international market." We shall use these terms
in our further discussion. (17)
VOL. I, NO. 5 35
In view of the complex and contradictory picture presented

by the international division of labor and international com
modity exchange today, we are justified in raising the following
questions: how are international values and prices formed in
the capitalist market and what do they represent; are there
separate international values and international prices on the
international socialist market; how are they determined; what
is their relation to value and prices on the capitalist market;
do they coincide or do they differ from one another; are they
independent or do they influence one another, etc.?
The dropping out of several countries from the world capi
talist system and their inclusion in the system of socialism
have brought revolutionary changes not only in the national
economy of those countries, but in the nature, causal relations,
degree of development, and trends of their international eco
nomic relations as well.
First of all, we have witnessed a rapid and considerable ex
pansion of commodity exchange and other economic ties among
the socialist countries. Thus, for example, over 80%of the
commodity exchange of Bulgaria takes place with socialist
countries. The percentage differs for the remaining socialist
countries, but it usually fluctuates between 60% and 80%.
Irrespective of this, the economic relations and, in particu
lar, the commodity exchange of these countries among them
selves assume a character which is substantially different
from that of the economic relations among capitalist countries.
The law of value that is characteristic of socialism applies
to the international socialist market. There, commodity pro
duction is based on public socialist property of the means of
production and does not contain relations of exploitation con
nected with private capitalist property. Its sphere is limited
because, on the one hand, the labor force ? that commodity
characteristic of capitalism ? stops being a commodity and,
on the other, because many objects of commodity exchange
under capitalism ? such as natural resources, forests, mines,
factories, and others ? are excluded from the sphere of com
modity circulation. Abstract labor, which creates the value
36 FOREIGN TRADE
of goods under socialism, represents a specific form of direct

social labor. To the extent that there exists, under socialism,
a contradiction between the consumer value and the value of
the goods, it has a non-antagonistic character. The law of
value does not act arbitrarily; rather, it is used and taken into
account when planning the national economy, and it appears in
direct connection with the law of the planned proportionate
development and with the requirements of the basic economic
law of socialism.
Prices are not determined arbitrarily by the socialist state;
they are determined in a planned manner, keeping in mind
their value. However, they are also used as a means to stimu
late given outputs, to redistribute accumulations among the
various branches, as well as for other similar purposes.
Prices in the socialist market are characterized by their rela
tive stability; they are not affected by business fluctuations
and other phenomena of the capitalist fury.
All these features of commodity production and value, as
well as of price formation, are valid under socialism, and
also for the international socialist market.
The law of value appears in the world capitalist market as
based on capitalist production relations and acts as an arbi
trary regulator of production and prices which, under the in
fluence of the continuously changing relationship between de
mand and supply, deviate from value. Especially characteristic
of the contemporary international capitalist market is the great
influence of international monopolies over the formation and
level of prices. Business fluctuations in the capitalist economy,
capitalist competition in its various forms, as well as other
similar factors which do not affect the socialist market, de
termine peculiar price changes and movements on the interna
tional capitalist market. One should add to this the impact of
all kinds of stock market speculations that are part and parcel
of the international capitalist market.
These differences and other peculiarities which characterize
the international capitalist and the international socialist mar
kets ? plus the fact that the overwhelming part of the commod
VOL. I, NO. 5 37
ity exchange of the socialist countries takes place on the inter

national socialist market, while the major commodity exchange
of the capitalist countries involves other capitalist countries ?
give us reason to discuss them as two separate markets.
The above discussion on the determination of the interna
tional value on the socialist and capitalist markets would be
completely valid if the two markets were truly and fully sepa
rate from one another, if they developed independently from
one another, and if there were no mixed international market
where countries belonging to the two different economic sys
tems did not meet. Actually, however, there is also interna
tional division of labor and commodity exchange between these
two groups of countries. (18)
How ?is international value formed in the mixed international
market? In the same manner as in any other international
market. In this case, too, the value of every commodity is de
termined primarily by those countries which are its major
producers and exporters on the mixed international market.
These countries may be capitalist or socialist and, in some
cases, simultaneously socialist as well as capitalist. One must
point out that in this case only those countries are important
that are actual participants in this market, and only with respect
to those commodities with which they participate in that market.
If for some reason or other (for example, due to various politi
cal reasons, to artificial limitations and obstacles, to the policy
of blockades, etc.) some countries are absent from that market,
they also cannot participate in the formation of the international
value in that market, regardless of the important and even de
cisive role they play in the formation of value on some other
international market, for example, the capitalist market.
As to the goods which are exported to that mixed interna
tional market exclusively or mainly by socialist countries, the
conditions of production in those very countries will determine
the magnitude of the international value; while if goods are sold
mainly or exclusively by capitalist countries, their international
value will be determined in accordance with the conditions of
production in those countries. The conclusion follows that the
38 FOREIGN TRADE
greater the participation of the socialist countries in the inter

national mixed market, and the greater the size and variety of
the goods of which they are the main producers and suppliers
to that market, the greater will the degree of their increased
participation be in the formation of the international value in
that same market. This, in turn, will lead to an ever greater
convergence between the domestic value in individual socialist
countries or a group of countries and the international value of
those goods of which they have become major exporters. This
will also solve the problem of an ever greater recovery of for
eign exchange and of the effectiveness of foreign trade.
The existence of a mixed international market also compli
cates to the highest degree the problem of international values
and prices in the remaining markets, since the capitalist and
socialist international markets do not remain isolated from
each other but, thanks to the mixed market, are mutually influ
enced. The opportunity is created for a capitalist country to
exchange its commodities either on the international capitalist
market or the international mixed market, and for a socialist
country to sell or buy either on the international socialist mar
ket or the international mixed market. This opportunity of a
choice leads to the fact that, through the intermediary of the
international mixed market, prices at the international capi
talist market affect prices at the international socialist mar
ket, and vice versa. As is known, at the present stage, prices
at the international socialist market are determined on the
basis of the average level of prices at the international capital
ist market, with certain corrections. This fact is an expres
sion of this influence of the international capitalist market on
the international socialist market.
But this does not eliminate the possibility and the necessity
for determining prices at the international socialist market on
their own basis, since it is normal that these prices be deter
mined by the international value that is proper for that market,
and not by its alien capitalist international value. We should
interpret the existing situation as an indirect and temporary
influence from outside, connected with the possibility of ex
VOL. I, NO. 5 39
changing the same goods either on the international socialist

market or on the international mixed market. However, even
at the present time, this refers not to all commodities, but
only to those which are objects of exchange on both markets.
Goods traded among socialist countries ? and for some rea
son or other not entering the mixed market ? have their own
price basis.
Moreover, even the now existing influence of capitalist
prices in the socialist international market does not involve
their simple transfer from one to the other market. It is
broken by the prism of the causal relations and specific char
acter of the socialist market; the prices, thus "transferred,"
change their character radically: they assume a relative sta
bility, free themselves of capitalist business fluctuations; the
deviations from value which are the fruit of capitalist specula
tion, of the role of monopolies, are corrected, etc.
The existing stronger influence of the international capital
ist market over the international socialist market stems from
the fact that, until the appearance of the socialist market, the
international capitalist market has been dominant for centuries,
it is much larger and more developed, it is based in many
cases on higher labor productivity, etc.
However, it is noteworthy that this is a temporary situation
which is continuously changing. The share of the socialist coun
tries in world trade is growing; the commodities with which
they participate in the world commodity exchange are being
diversified. The number of commodities of which they have
become major exporters is increasing; labor productivity is
growing, and it is reaching, will reach, and will surpass that
of the most developed capitalist country in many new branches.
This development will, in the long run, change the character of
the world economy: the socialist countries ? no longer the
capitalist countries ? will become the major producers and
exporters of a large part of the most important export com
modities, which will be produced with a labor productivity that
surpasses that of the developed capitalist countries. And then
it will be the capitalist market which will experience the influ
40 FOREIGN TRADE
ence of the socialist market, and not vice versa. This will have
unforeseen, profound, and substantial economic consequences
on a world scale. The socialist system will become the deci
sive factor, in the true sense of the word, in so important a
field as that of world commodity exchange. This will be a su
preme moment, a decisive victory of socialism over capital
ism in the economic competition between the two systems.
Then Lenin's thought that higher labor productivity is the most
important condition for the victory of the new social order will
apply with new force.
For this purpose, however, the socialist international divi
sion of labor must be developed and improved, and its effec
tiveness increased. This decisive victory cannot be won by
disunity in the forces of the individual socialist countries, by
relying on one's own forces, but, on the contrary, by uniting
the forces of the world communist movement even more closely
and by raising to an ever higher level the economic cooperation
and mutual assistance among all socialist countries.
Led by their own Marxist-Leninist parties, the socialist
countries are actively and consciously carrying out the policy
of expanded economic relations with the capitalist countries by
relying entirely on the above-mentioned objective economic
laws, which make these relations not only possible but also
necessary. Our countries are consciously striving to expand
these relations in their own interests, since this enables them
to take advantage of the benefits of the international division of
labor and to save on social labor. At the same time, an impor
tant political motive for such an economic policy is the desire
to help consolidate world peace by developing peaceful economic
relations with other countries. These economic relations are
an important aspect and an inseparable part of the policy of
peaceful coexistence that is steadfastly pursued by our coun
tries.
Footnotes
1) This problem has been dealt with more specifically by:
G?nther Kohlmey in "Karl Marx' Theorie von den internationa
VOL. I, NO. 5 41
len Werten," in Probleme der politischen ?konomie, Berlin,

1962; Josef Mervart,"Vyznam ? vivoj cen v mezinarodnim
obhode," Prague, 1960, published in Russian under the title
"Price Formation in International Trade," Moscow, 1962; as
well as some articles in [the Russian-language] Problems of
Communism, World Economy and International Relations, For
eign Trade, and in [the Bulgarian-language] Labor and Prices,
Foreign Trade, and others: A. Bechin, "The Export of Capital
in the System of the World Capitalist Economy," MEMO, 1960,
No. 6; V. Drozdov, "Criticism of the Current Bourgois The
ories of Foreign Exchange" in [the Russian-language] Money
and Credit, 1961, No. 8; Chikosh-Nad, "Problems of Price
Formation on the Socialist World Market," KSzgasdasagi
Szemle, 1959, No. 12; S. Zscherpe, "?ber die Notwendigkeit
eines sozialistischen Weltmarktpreissystems," Der Aussen
handel, 1960, No. 24, p. 11; N. Kaigl, "Die internationale Ar
beitsteilung im sozialistischen Weltsystem" in Wirtschaftswis
senschaftliche Informationen, Nos. 10-11, published by the In
stitut f?r Wirtschaftswissenschaften bei der Deutschen Akade
mie der Wissenschaften zu Berlin, 1958: in Bulgaria, see: M.
Balabanov, "Contemporary Problem of the Theory of Interna
tional Prices," Foreign Trade, 1957, No. 11; Emil Bakhcheva
nov, "On the Problem of the Methodology of the Limited Study
of Capitalist Export Prices," Foreign Trade, 1960, No. 2; A.
Zlatanov, "Problems and Difficulties in the Foreign Exchange
and Financial System of the Capitalist Countries," Foreign
Trade, 1961, No. 9; St. Sukmandzhiev, "The World Economy
and the International Economic Cooperation Under Capitalism,"
Works of the K. Marx Higher Economic Institute, 1958, No. 1.
2) The view that there is no international value outside of
the national value was expressed in different ways during the
discussion that took place at the economic section of the Union
of Scientific Workers (December 1963-January 1964). Such
views have also been expressed abroad, as can be seen from a
note in G?nther Kohlmey's The Theory of Karl Marx on Inter
national Value, p. 39. Karl Marx explicitly mentions interna
tional values: see, for example, Capital, Vol. I, 1948, p. 455;
42 FOREIGN TRADE
Vol. ni, p. 252.

3) For the time being we are not dealing with the problem of
whether and to what degree international value is transformed
into production price.
4) Karl Marx, The Critique of Political Economy, p. 246.
5) "The market," writes Lenin, "appears wherever and
whenever social division of labor and commodity production
appear" (Lenin, Collected Works, Vol. I, p. 83).
6) "The size of the market," writes Marx, "has a double
meaning. First, the mass of consumers, their number. Sec
ond, the number of independent trades. The growth of the mar
ket in the latter sense is possible without any growth in the
former" (Karl Marx, Theories of Surplus Value, 1932, Vol. Ill,
p. 208). Lenin, in mentioning the size of the market, adds:
"... e.g., the quantity of products which become commodities"
(Collected Works, Vol. I, p. 77). Also: "The size of the mar
ket corresponds exactly to the degree of specialization of so
cial labor" (ibid., p. 80).
7) On the problem of market mergers, see Lenin, Collected
Works, Vol. I, pp. 137, 217, 218; also, Vol. II, p. 146; Vol. Ill,
pp. 45-47, 288 and 344.
8) "World trade and the world market initiated the contem
porary history of capitalism during the sixteenth century" (Cap
ital, Vol. I, p. 103).
9) See BIKI, Appendix No. 4, The Conjuncture of Basic Com
modity Markets of the Capitalist Countries in 1962 [in Russian],
pp. 8-14, 66, 77, 104.
10) FAQ, Trade Yearbook, 1962, pp. 78-79, 152-155, 207
208, and 214-215.
11) "But the domestic market under capitalism is inevitably
connected with the foreign market" (Lenin, Collected Works,
Vol. 22, p. 233).
12) G?nther Kohlmey, Karl Marx' Theorie von den interna
tionalen Werten, Berlin, 1962.
13) Ibid., p. 44.
14) K. Marx, Theories of Surplus Value, Vol. Ill, Moscow,
1932, p. 182.
VOL. I, NO. 5 43
15) Capital, Vol. I, pp. 455-456.

16) If we compared exports with the gross national product
of individual capitalist countries, we would have the following
picture: in 1961, USA exports represented 4.9% of the do
mestic GNP, those of France - 11.5%, of Italy -13.7%, of
England ? 15.7%, of the Federal Republic of Germany ?
16.7%, of Belgium - 34.3%, and of Holland - 39.3% (com
puted on the basis of data in Annuaire de statistique des comp
tabilit?s nationales, United Nations, 1962. Statistisches Jahr
buch f?r BRD, 1962, p. 345, Yearbook of International Trade
Statistics, 1961).
The index of the volume of world exports and of exports of
individual countries shows the following picture: in 1961,
world exports reached an index of 217.6 (base year 1938 = 100);
corresponding data are: 231% for the USA, 257.3% for Can
ada, 352.4% for France, 391% for Italy, 332.5% for Holland,
and 232.1% for Belgium-Luxembourg (computed on the basis
of data on the volume of foreign trade in Annuaire statistique,
1962, UNO, pp. 451-453).
17) It is obvious that according to our definition, the "world
market" does not exist as an independent, unified market. "The
world market" is nothing but a complex and contradictory en
tity which includes within itself the three international mar
kets ? capitalist, socialist, and mixed ? as well as the mutual
relations and influences among them.
18) The Political Report of the Central Committee of the
Russian Communist Party (Bolshevik) at the Eleventh Party
Congress states: "... the Russian and the international market
to which we are subordinate, with which we are connected,
from which we will not break away... (Lenin, Collected Works,
Vol. 33, p. 247).

1965 Kamenov International Values

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1965 Kamenov International Values

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International Values and Prices

Author(s): Evgeni G. Kamenov

Ikonomicheska misul, 1964, No. 3

Evgeni G. Kamenov (Bulgaria)

INTERNATIONAL VALUES AND PRICES

The high degree of development of the productive forces in the

an underestimation of the problem of economic value, but an

or community, or state, etc." (4)

given commodity if it is not destined for the market, if it is not

lated and closed character of the city markets and in gradually

manifestation and action of the law of value, all the more so

sum total of the national markets of all countries because of

circle becomes even narrower. Not all the commodity pro

counted for 45.7% of the export of pig iron: the Federal Re

separate markets and of two separate values even when these

play a secondary role on the international market, who are not

tion than in less developed countries");

ues" (and not "with the given international value," as it is

shorter or longer period of time) as a basis for determining

process of the gradual disappearance of the other. The new

division of labor on a world scale presents a varied and color

In view of the complex and contradictory picture presented

of goods under socialism, represents a specific form of direct

ity exchange of the socialist countries takes place on the inter

greater the participation of the socialist countries in the inter

changing the same goods either on the international socialist

len Werten," in Probleme der politischen ?konomie, Berlin,

Vol. ni, p. 252.

15) Capital, Vol. I, pp. 455-456.

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