I came upon a video explaining the Marxist view of use value and exchangeable value and immediately saw the difference between the values of Marx and those of Smith.
|Use Value||Usefulness of an object||Usefulness of an object to a person|
|Exchangeable Value||Purely relative, intrinsic value of an object "(value) expressed in terms of something common to (all commodities)" (Capital 1.1)||
Value of an object to society
"The power of purchasing other goods which the possession of that object conveys" (Book 1, Chap. 4)
|Labour Theory of Value||Value based on mechanical human labour "human labour in the abstract" (Capital 1.1)||Value based on pain or pleasure "toil and trouble"|
By reading Marx's flow of ideas in Section 1 of Capital, I noticed that his mind seems to view every economic thing from the viewpoint of matter first, generaly disregarding the human mind or the perceiver of that matter. In contrast, Smith's mind in The Wealth of Nations sees everything from the viewpoint of the human mind first by going into the interests of each sector of society. Marx's mind jumps from physical matter to physical matter, while Smith's mind jumps from mind to mind, a technique he explains in full in The Theory of Moral Sentiments, wherein he puts himself in the shoes of other people. In a nutshell, Marx takes the materialist approach, similar to Say and Malthus, while Smith takes the metaphysical approach, similar to Hume and Locke.
Materialist economic systems such as Communism (above) and Capitalism (below) excel in mobilizing work by focusing on objective, material results without really asking why such results are needed. Capitalism outputs more work than Communism because it has a psychological element of freedom.
The whole problem of unstable and unjust exchangeable value was created by negating psychology or the toil and trouble of various sectors of society, in favor of either materialist production in Communism or profitable production in Capitalism. Thus, neither system, nor any materialist system that focuses of prices or products, can provide the solution. In fact, the possible solution of Capitalism of Modern Monetary Theory and the Communist solution of eliminating exchangeable value, will only worsen the problem. Smith's non-materialist Political Economy can easily solve the problem by focusing on the trade or agreement between the people themselves, instead of focusing on the objects they are trading with. This is embodied in his commodity-based valuation which is explained fully in Book 1 Chapter 5 and Book 4, Chapter 5 of The Wealtth of Nations, and is integrated into our proposed resource allocation system.