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- Law_of_value abstract "The law of value (German: Wertgesetz) is a central concept in Karl Marx's critique of political economy, first expounded in his polemic The Poverty of Philosophy (1847) against Pierre-Joseph Proudhon, with reference to David Ricardo's economics. Most generally, it refers to a regulative principle of the economic exchange of the products of human work: the relative exchange-values of those products in trade, usually expressed by money-prices, are proportional to the average amounts of human labor-time which are currently socially necessary to produce them.Thus, the fluctuating exchange value of commodities (exchangeable products) is regulated by their value, where the magnitude of their value is determined by the average quantity of human labour which is currently socially necessary to produce them (see labor theory of value and value-form). In itself, this theorem is fairly simple to understand, and intuitively it makes sense to many working people. Theorizing its implications is, however, a much more complex task; it kept Marx busy across more than two decades.When Marx talked about \"value relationships\" or \"value proportions\" (German: Wertverhältnisse), he did not mean \"the money\" or \"the price\". Instead, he meant the value proportions that exist between products of human labour. These relationships can be expressed by the relative replacement costs of products, as labour hours worked. The more labour it costs to make a product, the more it is worth, and inversely the less labour it costs to make a product, the less it is worth. Money-prices are at best only an expression or reflection of Marx's value relationships - accurately or very inaccurately. Products can be traded above or below their value in market trade, and some prices have nothing to do with product-values at all (in Marx's sense), because they refer to tradeable objects which are not regularly produced and reproduced by human labour, or because they refer only to claims on financial assets.".
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