whatever may be the ways in which the prices of different commodities are first established or fixed in relation to one another, the law of value governs their movement. When the labor-time required for their production falls, prices [ of production ] fall, and where it rises, prices [ of production ] rise, as long as other circumstances remain equal.[ 46 ]
For Marx, prices of production are influenced via changes in the parameters of socially necessary labortime, which makes production prices rise and / or fall, however, the mechanism of socially necessary labortime is relatively stable over time, thus, for Marx, as well are prices of production. In fact, price of production is the stable tether, within a sphere of production, between spheres of production and across society, in general, by which the seeming anarchy of market prices, brought about by fluctuations of all types and kinds, pertaining to supply and demand, are in the end stabilized and made predictable. As Marx states,“ the various different values … balance out into production prices and the various production prices into a [ social ] general production price that governs the [ total ] market”[ 47 ]. From Marx’ s perspective, all individual prices of production within individual spheres, together, form a general totalizing price of production that is applicable across all markets within capitalist society, regulating all the anarchy of all market prices towards a generalized societal market value.
By and large, for Marx, prices of production have longevity and tend to remain steady in the long-run, exercising a stabilizing and equalizing influence on the anarchy of market prices. On the other hand, for Marx, market prices are subject to the constant fluctuations of supply and demand, and other varying factors, which always destabilize market prices, driving them up and driving them down chaotically. However, according to Marx, these fluctuations tend to occur within a stable range, a stable range predicated on the pillars of prices of production, namely that“ prices of production [ are ]… the centres around which market prices fluctuate”[ 48 ]. Market prices are the everyday prices of things, commodities and / or services,“ the concept of market price means that the same price is paid for all commodities of the same kind, even if these are produced under … different condition and … different cost prices”[ 49 ]. Market prices constantly change, due to the fact that market prices are subject to the vagaries of supply and demand, as Marx states“ market price... is [ only ] fixed at any given [ point ] by demand and supply”[ 50 ], which is itself stabilized and fixed via a specific price of production. In this regard, market prices fluctuate up and down, depending on supply and demand, but tend, according to Marx, to remain near their general market value, i. e. price of production,“ market value [ that is price of production ]… forms the centre around which market prices fluctuate— these being the same for all commodities of the same species”[ 51 ]. The centers of market values set the limits of market price fluctuations. It is important to mention that, for Marx, price of production and market value are synonymous, they are interchangeable concepts in the sense that:
Market value [ is ] distinct from the individual value of particular commodities produced by... different producers. The individual value of some of these commodities will stand below the market value( i. e. less labor-time has been required for their production than the market value expresses), the value of others above it. Market value is to be viewed on the one hand as the average value of the commodities produced in a particular sphere, [ i. e. price of production,] and on the other hand as the individual value of commodities produced under average conditions in the sphere in question, and forming the great mass of its commodities.[ 52 ]
Market values, or prices of production, only fluctuate due to the applied pressures of socially necessary labor-time, namely, as the socially necessary labor-time within a specific sphere of production fluctuates, due to competition and improvements in technology, so do market values, i. e. prices of production, fluctuate in turn.