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P UNTO & C OMMA IN

ECONOMY

•On the theory of value •The problem

of information asymmetry in the Colombian
financial market

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On the theory of value
The debate of the classics and the natural essence of value.
ABSTRACT: To analyze the theory of value, it is
necessary to consider in the first place, what it
tries to explain. Although its main purpose, with
reference to the market, is to determine the forces
that influence the formation of relative prices,
essentially, the theory of value in economic
classicism seeks to answer two fundamental
questions: what determines the value of a
commodity? And what factors intervene in its
variation?
These questions encouraged the theorists of the
past to propose various theories in terms of a
satisfactory solution to the problem of value. The
first outbreaks of a theory of value arise in the
context of the nascent mercantilism, due to the
eagerness of the merchants to solve the problems
related to commercial exchange. But it is with the
thought of Quesnay and the Physiocrats that
it emerges gracefully, finally to be the subject of
lengthy discussions, courtesy of the forerunners
and critics of political economy, namely, the
classics. With cards on the table and tempers high,
we'll cheat to see each author's game and then
figure out how we can hope to win this matchup
against the foremost intellectuals of the old school.
1. Landreth, Harry and Colander, David, History of economic thought: Physiocracy, p.62 2002, Spain,
McGraw Hill Interamericana SAU
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Carlos Anthony Garcia Daza
Economy student
Pilot university of colombia
matter; to be able to understand
Withoutthefurther
theory of ado,
value oflet's getis into
a classic,
I need to initially study the pen
thought of the school that, in theory
estuary, laid the foundations of economic liberalism,
better called classicism: Physiocracy. The system
of ideas of the Physiocrats can be summed up in
this short but deterministic phrase “laissez faire”;1
The “slogan” that made them so famous: “let go,
Keywords:
let go”, the systemic conception of a harmonious
economy that It is governed by natural principles.
Value, Surplus value,
Physiocracy, Classics,
Liberalism, Socialism.
The little motto became so
popular in the classical school that all its authors
mention it and dedicate numerous pages of their
writings to its analysis and on several occasions,
its critic François Quesnay was the ideological
leader for the Physiocrats,
truth that is manifest in the writings
of those who succeeded him; These texts are
practically a reflection of the thought of
this illustrious medical surgeon. Quesnay did
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interesting contributions in relation to the abstraction
of a theory of value, suggesting that it was found in
the land, whose product, when exchanged, generates
a surplus for farmers represented in pounds.
Quesnay used mathematics and the scientific method
to explain his theory of value based on what he
called "Tableau economique", an accounting model
in which he explains with creative and amazing
simplicity the interdependence of economic sectors
and the process where the surplus ends up with the
farmers.2
Indeed, Quesnay was not the only physiocrat
who formulated a theory regarding value.
There is another important contribution made by the
natural successor of the father of physiocracy. Anne
Robert Jacques Turgot, great friend of Quesnay
and protector of Physiocratic philosophy, was
this natural successor, who, thanks to his privileged
political position, carried out a more detailed study
of value.3 Turgot proposed that value was found in
the usefulness of a good, that is, its ability to satisfy
needs or desires, affirming with this that value is
generated in fixed assets ; Moreover, Turgot did not
leave aside the production factor when he proposed
his theory of value, on the contrary, he affirmed that
another determining factor of price (value) was the
diminishing returns of land, where wages come to
play an important role. , work and efficiency
with which the land is cultivated.
Having clarity on the ideas of the Physiocrats, we
can start with the economic analysis of value made
by an important character, the philosopher Adam
Smith, the first precursor and pa
dre of political economy. Smith began to popularize
with his masterpiece4 the notion of the theory of
value as an explanation of the origin of relative
prices5 (in this context capitalism is on the crest of
the wave and the market is vigorously established
as the main regulating entity of the price). shift
economic system). Although Smith was strongly
influenced by Turgot and defended the order
natural of Laissez faire, proposed that the value was
not determined by the value of use (the capacity to
satisfy needs or desires), but by the exchange value
of a good, here production and goods play a decisive
role. commodity prices .
Smith divided the formation of relative prices into
two: the natural price and the market prices6
, stating that the determinant of
The price of a commodity underlies the costs of
production, which in turn contain the amount of raw
materials and inputs needed to produce the
commodity, the payment of wages, the capital, and,
of course, the remaining profit for the producer. . The
costs must be satisfied by the natural price, which
led Smith to conclude that the value of a commodity
is formed when it reaches its natural or long-run
equilibrium price.
Another theory of value emerged in the Age of
Enlightenment in opposition to the ideas put forward
by Adam Smith. This new theory was developed by
who is known as the first professional economist,
David Ricardo Rubén. The charismatic and
intellectual aristocrat had studied the ideas of Turgot
and the writings of Adam Smith, especially his theory
with

2. Anzil, Federico, Physiocracy, Based on the books History of Economic Theory and its Method (Ekelund
and Hebert). Retrieved on April 28, 2009 from: http:// www.econlink.com.ar/ fisiocracia
3. University of Malaga, Los fisiócratas, retrieved on April 24, 2009 from: http:// www.eumed.net/ cursecon/
texts/ Sieveking/ s2.1.htm
4. An investigation into the nature and causes of the wealth of nations.
5. Landreth, Harry, and Colander David, A History of Economic Thought: Adam Smith, Smith, and Relative
Prices, pp. 94-95. 2002, Spain, McGraw Hill Interamericana SAU
6. The market price is determined in the short run by the forces of competition.

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relation to value based on the cost of labor in a
primitive society.7 Ricardo judged it confusing
and impractical when applying it to reality, so he
had to give it a new direction and a new dynamic.
For David Ricardo “The value of a commodity,
that is, the amount of any other commodity for
which it is exchanged, depends on the relative
amount of labor necessary for its production and
not on the greater or lesser remuneration paid for
it. this work.”8 Ricardo deals in his theory of value
with topics such as labor, land rent, and capital
losses. To explain it generally, one must first
understand what David Ricardo meant by the
relative amount of labor needed to produce a
good.
In analyzing Smith's labor theory of value, Ricardo
identified the flaws that Smith had
when developing your hypothesis. While in
Smith's theory there appear three necessary
variables to measure the amount of work,9 David
Ricardo's theory of value only appreciates a
constant understood in “hours of work necessary”
for production; Since Ricardo maintained that
capital was accumulated labour, it was also
necessary to include in the price of the commodity
both the amount of work done directly by the
worker and the indirect work done by capital, both
variables measured in clock hours, solving thus
the measurement problem that Adam Smith had
with his three variables.
As for the rent of land, Ricardo found that when
applying his theory of value to Turgot's diminishing JS Mill assumed that in most cases the value of a
returns, labor was the factor that determined the
rental value of land.
the land exposing the hypothetical case of the
two lands of different fertility, where the rent is
paid according to the time necessary for its
harvest, which in turn leads us to infer that the
amount of work also determines wages and not
on the contrary, as Smith thought.
Despite working so hard on his theory of value
based on the quantity of work fixed by
an invariant measure of clock hours, David
Ricardo found that there were other determining
factors in the formation of relative prices such as
scarcity, profits, and
rents, which in the short term would generate
fluctuations in the prices of merchandise. Even
with this Ricardo concluded that even though the
amount of labor was not the only force that caused
the variation of prices, it was the most important
since it constituted a significant percentage in
relation to the other
factors that caused changes that in practice were
insignificant in said variation.10 Note that Ricardo
deviates somewhat from the orthodoxy regarding
the formation of relative prices, however, later he
comes to dominate the thought of another great
theorist of the political economy: John Stuart Mill,
who guides the theory of value towards a more
“Smithian” approach, so to speak.
“He presented a theory of value based on the
cost of production in which monetary costs
fundamentally represent the real costs or
disutilities of work and abstinence.”11
good or service varies according to the monetary
investment that was necessary for its production.

7. Landreth, Harry, and Colander David, A History of Economic Thought: Adam Smith, The Labor Cost Theory of
Value in a Primitive Society, pp. 95-97. 2002, Spain, McGraw Hill Interamericana SAU
8. David Ricardo, On the Principles of Political Economy and Taxation, p. eleven.
9. Time, Ingenuity and Difficulty.
10. Landreth, Harry and Colander David, A History of Economic Thought: Ricardo and Malthus, Did Ricardo Advocate
the Labor Theory of Value? pp. 131-132. 2002, Spain, McGraw Hill Interamericana SAU
11. John Stuart Mill, On Liberty, ed. From People, London, Longmans Green, 1913, p. 448.

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production, emphasizing wages paid to jobs not take into account the amount of direct work done
performed inefficiently, by the worker and the amount of indirect work
production losses and refraining from spending done by capital; since capital (in this case
the profit generated in order to re-invest machines) is the product of the labor of other
in the production process. It should be noted that workers, it is necessary to appreciate this amount
Mill's analysis in relation to supply and demand of labor.12
(where both must exist but only supply determines Upon completing his analysis, Marx reaches
the price), corroborates his theory of value directed conclusions diametrically opposed to classicism
towards the real costs of production, however he regarding the problem of value, instituting man
assumed that these costs were constant in his through his work as the only generator of value.
analysis of industrial production, thereby neglecting Marx introduced into his theory of value the
marginal production. themes of surplus value and exploitation that
occur during the production process, where a
As we can see, the classics were in a passionate worker is stimulated and pressured, even using
and antithetical debate that over time would violence, to be more productive during a regular
become inflamed because of their supporters. We period of work. under; By understanding these two
have found affinity in the concepts we will be able to understand the
positions of Smith and JS Mill - with certain and questions of the qualification of the work and the
punctual discrepancies - followed by Ricardo's physical effort that it included.
antagonism with his labor theory of value, which Marx in the development of his ideological system.
would be redeemed by the author that I will Finally we realize that in the classical school there
analyze below, extolling the fact that this are two conflicting positions to explain the value,
distinguished character broke with the dominant namely, the
British line of economic thought, being of German production costs against the amount of work, but
origin and becoming the most vigorous and intrepid in all the authors the orientation and dynamics
critic of capitalism. applied to argue these two positions vary. Perhaps
the problem can be solved through dialectics.
Karl Hienrich Marx, a neo-Hegelian idealist,
passionate lover of the academy and of a firm There are fundamental productive forces that
revolutionary position, studied the writings of the govern the dynamics of the economy, of which we
English economist David Ricardo to formulate his could say that they are the generators of pure
famous labor theory of value. Marx changed the value, these in turn are sources of social welfare.
perspective that Ricardo used to analyze his However, with the classical school a new thought
theory when he introduced the issue of job and a new spirit appear that give rise to a system
qualification and physical effort, although keeping that revolutionizes the method of assigning the
the labor measurement in clock hours. In an values generated by the productive forces:
attempt to solve the problem of value, Marx Capitalism, where the notion of individual
oriented his theory in relation to the amount of accumulation of wealth prevails. . Sponsoring the
labor socially necessary to produce a good, which, system we find the rise of manufacturing and
laughing, explains with this that in order to agribusiness, where the rationale for economic
determine the exchange value of said good, it is growth
necessary

12. Landreth, Harry, and Colander David, A History of Economic Thought: Karl Marx and His Critique of Classical
Economics, Marx's Labor Theory of Value, pp. 198-201. 2002, Spain, McGraw Hill Interamericana SAU

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it exists in Free Enterprise and the maximization
of utility from the mass production of commodities,
namely the market. In this context, two opposing
philosophies flourish: the
capitalist (who thinks in terms of the market) and
the worker (who thinks in terms of his well-being);
quality vs. Technology, at this point it is possible
to identify an analogy linked to the
paradox of diamonds and water, which by the
way no classical author could solve.
It may seem like an affront: Man vs. Machines,
well, it's not like that. Man belongs to mother
earth and is part of her nature, he is related to his
habitat, in the same way man must respect what
he is part of, therefore, he cannot be in conflict
with that to which it corresponds and with which
it has been fertilized from the beginning. Human
beings cannot create anything, they only try to be
able to interpret and transform the nature that
contains them for benefit, the
The problem is that the relationship must be
reciprocal. We do not know what the future holds
for us, what we do know is that it will generate
changes that will differentiate it forever from the
present, the question is, will we still exist to live them?
In short, the most adequate theory to define
the value underlies the tendency to rescue him
as a generator of well -being and to liberate
him of the judgment of the price to the cost of
production or of work; it consists in relating man
to his habitat based on a common objective;
Because the economy was born to generate well-
being for all human beings, I intend to emphasize
the fact that goods cannot continue to be treated
as merchandise that is measured by what it cost
to produce them and by the profit they must
represent, but rather as what they are. really
"goods", generators of happiness for man.
The desire of the classics to formulate a theory
of value arose from materialism, individualistic
thought and the concentration of wealth and
productive forces in the hands of a libertine
bourgeoisie, which with its wielded power exerts
a titanic influence.
harmful on the economy to impose their profane
interests to the detriment of the masses. These
potential capitalists have alienated us from our
will and our conscience so that we say laissez
faire to the amoral market and the petty exploiter.
Is this system perhaps a new slavery? Let's not
forget that “he who doesn't move, doesn't feel the
chains”.13 The moment is approaching for man
to emancipate himself from individualism and
begin to think in favor of the welfare of his equals
and of his habitat.

Seeing the truth we experience the essence of freedom and life!

However, Victor Hugo said:

"The truth is like the light of the sun, which when it comes
out allows us to see everything clearly, but it never lets
itself be seen directly"

13. Rose Luxemburg

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