Briefly describe the function of the law of value

The law of value is the basic law of commodity economy, commodity production and commodity exchange. As long as there is commodity production and commodity exchange, there is a law of value.

The role of the law of value:

1, the law of value regulates the distribution of means of production and labor in various production parts;

The law of value regulates the distribution of means of production and labor in various production departments. This is because the law of value requires the principle of equivalent exchange in commodity exchange, which is realized through the two-way restriction of price and supply and demand. Therefore, when demand exceeds supply, prices will rise, thus expanding production; Oversupply will depress prices, thus reducing production. The law of value here is like an invisible baton, directing the flow of means of production and labor. When the supply of a commodity exceeds the demand, the law of value guides the means of production and labor to flow out of the department that produces this commodity; On the contrary, it guides the means of production and labor to flow into the department that produces this commodity.

Of course, the spontaneous action of the law of value will also cause great waste of social labor, so it needs national macro-control. Here, the macro-control of socialist countries can be more effective than that of capitalist countries.

2. The law of value stimulates commodity producers to improve production technology, management and labor productivity;

Because the law of value requires goods to be exchanged according to the value determined by socially necessary labor time, whoever improves technical equipment first will have high labor productivity, and whoever produces goods with less personal labor time than socially necessary labor time will get more profits. Therefore, there must be competition in the same department and industry, which will stimulate commodity producers to improve production tools, improve labor productivity, strengthen management and reduce consumption, thus reducing individual labor time.

3. The law of value urges commodity producers to survive the fittest in the competition.

Promoting commodity producers to survive the fittest in competition is the result of the second function. There is competition in commodity economy, which urges commodity producers to try their best to shorten individual labor time, improve labor productivity and promote the survival of the fittest. This is independent of human will.

Under socialist conditions, because the means of production are publicly owned, under the condition of private commodity economy, the survival of the fittest will not lead to polarization in China.