For Marx , the law of value is more or less a general articulation of the specific regulatory mechanism of socially necessary labor-time , which is primarily focused on pressuring individual commodity production towards specific average standards via the allocation of the finite sums of social labor-time based on social need . While , the law of value , more or less , regulates the allocation of finite social labor-time based on social need over all spheres of production and the capitalist marketplace , in general . As a result , the law of value is like a homogenizing force the exerts it influence across all spheres of production , right down to the specific socially necessary labor-time that goes into specific branches of commodity production . The law of value , for Marx , “ is simply the same law that is already exhibited by the individual commodity ”[ 60 ], translated on a broader scale . This overarching law of value regulates overall production and overall market value across all economic branches , based on overall social need , just as the specific mechanism of socially necessary labor-time regulates what is and is not socially necessary labor-time within individual production itself . In effect , the law of value regulates how much of the total labor-time within a society shall be allocated for each specific sphere of production and each specific commodity-process within these particular spheres . The law of value is the regulating mechanism of socially necessary labor-time on a broader scale . The law of value , according to Marx , dictates how much “ such-and-such a quantity of [ necessary labor-time ] is required in order to satisfy [ a ] social need ”[ 61 ], pertaining to an individual commodity and / or a sphere of production , which is based on profit rates , average profits , social need , and what is and is not sold across all spheres of production . The law of value , for Marx , determines that “ under the given conditions of production , society can spend only so much of its total labor-time on one particular kind of product ”[ 62 ]. As a result , the law of value is an expansion the specific mechanism of socially necessary labor-time across all spheres of production within capitalist society . The overarching law of value , structures production , consumption and distribution on a general societal scale . It determines necessary labor-time expenditures , what is produced , what is not produced , how things shall be produced , what average price specific species of commodities will possess , what rates of profit can be expected pertaining to individual spheres of production , and more importantly , where capital is apt to be invested throughout the multiple sectors of capitalist society .
In Marx ’ s estimation , market prices over an extended period of time eventually congeal with their prices of production , i . e . market value , due to the fact that it is the law of value , lying behind the surface appearance of price and profit , which animates their fluctuations and slowly pulls price and profit into agreement with market value . As per Marx , it is “ the law of value [ that ] governs prices and their movement ”[ 63 ]. It is not the reverse . As supply and demand diverge , and they tend to do , market price diverges from market value , i . e . price of production . Vice versa , according to Marx , “ if supply and demand coincide , the market price … corresponds to [ its ] price of production [, i . e . market value , and ] the inner laws of capitalist production ”[ 64 ], that is , the regulating mechanism of socially necessary labortime .
Therefore , to paraphrase Marx , it is not price that determines the law of value , but the law of value itself , which is the mechanism of price determinations and fluctuations , “ any rise or fall in prices is an expression of … value ”[ 65 ], meaning that behind the structure of prices lies the governing structure of value and / or value-production , expressed in the law of socially necessary labor-time and / or the law of value . It is value-production , i . e . the unseen structure of the law of value , which is the essence of the capitalist modes of production , consumption and distribution . In fact , it is value-production governed by the overarching mechanism of socially necessary labor-time , i . e . the law of value , which gives gravity to market values , i . e . prices of production , pressuring individual market prices through an autonomous gravitational pull to conform to average value / profit standards . Market values are able to exert an equalizing effect on market prices , according to Marx , because “ value and capital [ that is price ]… is determined … by the socially necessary labor-time required for [ their ] reproduction ”[ 66 ], meaning that price , capital and / or value are constructed and composed of the same substance , namely labor . And labor