Marx’s Theory of Price — Capitalist Commodity Production

Prices in capitalism, as in commodity production systems in general, are symbols of the relative worth of commodities (and the production activities that give rise to them) which assume a money form. The particular money form they assume is not only a commodity money form but also, and typically, one of intrinsically valueless paper - state- issued paper money. For Marx, the purpose of prices in capitalism, as in all commodity production systems, is to facilitate the reproduction of individual commodities in the context of the reproduction of the economic system. In capitalism the reproduction of the system also implies its expansion. Capitalism is a commodity production system characterised by the existence of a surplus product which assumes an exchange value or money form and is appropriated by producers in relation to the exchangeable worth of inputs advanced to undertake production. The inputs advanced are capital, and include outlays on labour power. The surplus product permits an expansion of the system by enabling an expansion of inputs used in production (and encouraging technological change). Prices facilitate expanded reproduction by enabling producers to command, on the one hand, the necessary inputs to reproduce the existing volume of commodities and, on the other hand, additional inputs to produce additional commodities.