This entry focuses on Karl Marx's summation of the results of economic thought about exchange value.
Certain contemporary Marxian scholars have underscored this perspective, often citing the pronounced discrepancies between exchange-value and actual monetary prices in fixed assets, such as housing, as evidence of the existence and dynamics of fictitious capital.
Marx makes this abundantly clear in his dialectical derivation of the forms of value in the first chapters of Das Kapital (see value-form).
It was only in the 13th century AD when the word price came into use in Western Europe, its Latin root being pretium, meaning "reward, prize, value, worth", referring back to the notion of "recompense", or what was given in return, the expense, wager or cost incurred when a good changed hands.
Its evolving linguistic meanings reflect the early history of the growing cash economy and the evolution of commercial trade.
This distortion not only inflates asset values beyond their productive basis but also destabilizes broader economic systems.
Such conditions foster speculative bubbles, exacerbate wealth inequality, and create barriers to access for essential resources like housing.
In the first chapters of Das Kapital, Marx traces out a brief logical summary of the development of the forms of trade, beginning with barter and simple exchange, and ending with a capitalistically produced commodity.
This sketch of the process of "marketisation" shows that the commodity form is not fixed once and for all, but in fact undergoes a development as trade becomes more sophisticated, with the end result being that a commodity's exchange-value can be expressed simply in a (notional) quantity of money (a money price).
However, the transformation of a labor-product into a commodity (its "marketing") is in reality not a simple process, but has many technical and social preconditions.
For practical purposes, prices are however usually preferable to labour-hours, as units of account, although in capitalist work processes the two are related to each other (see labor power).
He famously claimed to find that what's left is that all commodities have value (or "labor-value"), the abstract labor time needed to produce it.
He was talking about overall movements and broad averages, and his interest was in the social relations of production existing behind economic exchange.
If, however, prices can fluctuate above or below value for all sorts of reasons, Marx's law of value is best seen as a "law of grand averages", an overall generalisation about economic exchange, and the quantitative relationships between labour hours worked and real prices charged for an output are best expressed in probabilistic terms.
For that reason, the whole process of the formation of value which Marx so carefully lays out, with its complex determinants, seems like an unnecessary detour from commercial wisdom.
So the money markets and foreign exchange markets become dominated by simple slogans—larger fiscal deficits lead to higher interest rates, an increased money supply results in higher inflation, public expenditure bad, private expenditure good—even when those slogans are persistently refuted by events.