Value Relationship Is The Basic Economic Relationship And The Law Of Value Is The Basic Economic Law Of Market Economy.

In principle, commodity prices are separate from value and revolve around value. K. Marx wrote:

The value of a commodity expresses the necessary, inherent relation of the process of its creation to the money commodity, which is external to the commodity. These exchange relations express the value of the commodity, just as they may express the larger or smaller quantities which the alienation of the commodity usually brings about under certain conditions. The possibility of a quantitative disagreement between price and value therefore lies in the form of value. This is not a defect of this form; on the contrary, it makes it suitable for a mode of production in which the rule can only be realized as a law of averages, the blind operation of irregularity” [42,136] .

Here , price is formed through the interaction of supply and demand, due to

that of the market. In other words, the market with the interaction of two forces of supply and demand, goods and money is what directly determines the formation of prices. In other words, the market mechanism is the mechanism that determines prices. Here , the interaction between market forces, that is, between production and consumption, between sellers and buyers, between goods and money in determining prices is in the form of competition. Competition here means, on the one hand, the process of determining prices.

price determination, and on the other hand, from there, production and exchange are on the principle of parity, that is, according to market prices. ë in a certain sense, the principle of parity, because

That is competition and the law of competition is the expression of the law of value, production and exchange are on the basis of necessary social labor expenditure. But in turn,

is the stage where the law of value is implemented, the principles of parity and competition are the essentials of the market mechanism. It makes the market mechanism

established and became an economic mechanism in which value moves and increases continuously.

Second , once prices are determined, prices have the following basic functions:

i , Price, on the one hand, is that which measures, or determines, the market value of a commodity, and on the other hand, through price, the value of the commodity is realized. Therefore, price is the basis on which buying and selling are carried out.

ii , Price is the equality of supply and demand, therefore, through the quantification of the value of goods, price simultaneously determines the scarcity of goods. In turn, through scarcity, people know the relative movement between supply and demand, and on the basis of the movement of supply and demand, people move the production structure, move the investment direction. It can be said that price is a great compass, a soldier showing people what to produce. In other words, through price, the market mechanism solves a fundamental problem of a production: the problem of what to produce . Any intervention that weakens competition and distorts prices seriously damages the market mechanism, thereby damaging the mechanism of regulation and rational allocation of resources for economic development, ultimately causing society to lose the basis for solving the first fundamental problem of the economy.

iii , Price is the monetary expression of value, so the law of value operates through the law of price. In production, the production subjects have very different levels of labor expenditure in creating goods, but when exchanged on the market, goods are sold at market prices. This means that if any economic subject has lower social labor expenditure than necessary social labor expenditure, then when selling goods at market prices, they not only receive the value of the goods, but also receive an additional value, that is, super-value. Here , market prices become the deciding law, how people produce or by what method of production .

iv , In a market economy, wealth is expressed as a huge pile of commodities, and commodities are the elemental form of wealth. This implies: a , Economic subjects in a market economy are also commodity subjects, and ownership here is essentially ownership of commodities. b , The economic realization of commodity ownership rights by owners is the realization of the value of commodities. Here , on the one hand, the circulation of commodities, therefore, the market and the market mechanism are what determine the economic realization of ownership rights; on the other hand, the form of realization of ownership rights is the price of the corresponding commodities .

This means that, ultimately, the division and distribution of wealth or income is on the basis of the market and that the economic realization of property rights is the realization of the price of the owner's goods. It can be said that in a market economy, the market and prices are the means by which the distribution of income is realized. In this distribution function, prices and markets are the decisive factors.

determine the most basic problem of the economy, the problem of production for whom or the problem of income distribution .

v , Through price, the law of value is the law of screening and eliminating outdated production methods and backward production units, at the same time, promoting the emergence of productive forces and adaptive relations, in general, promoting the emergence and development of new production methods. It can be said that the law of market economy is the law of the process of restructuring the economy, forming and developing new production methods, therefore, it is the economic system of development.

Thus, it can be said that price is the central category of the market economy and the market economy is a self-regulating economic machine, operated by the market mechanism, in which the market is what decides the basic issues of an economy.

1.2.1.3. A market economy is a profitable economy .

The form of wealth in a market economy is value. When money is formed, as a form of value, money is the basic form in which the wealth of production is expressed. But in a market economy, money is not

not only has functions in the process of commodity circulation, but also has another decisive function, the function of capital. Of course, money is not capital, but when money is in motion and increases, money is transformed into capital. From this we see that the market economy contains within itself a fundamental process, the process of money turning into capital, and therefore contains capital relations. “Value becomes self-moving value, self-moving coins, and as such it becomes capital” [42,203] . And the fact that money begets money, the production of surplus value, that is, capital, is established not only because it takes place in the market economic system, that is, the economic system that operates when the product of labor is transformed into commodities and labor crystallizes in commodities in the form of value, and the entire movement of the economy takes place on the basis of the market mechanism, according to the principle of equal value, but more decisively, capital is the essence of the market economy. V. Lenin once pointed out that the daily and hourly production of commodities gives birth to capitalism. And K. Marx determined:

If we compare the process of value creation with the process of value increase, we shall see that the process of value increase is simply the process of value creation extended beyond a certain point. If the process of value creation is extended to the point where the labor power paid by capital is replaced by a new equivalent, it is simply a process of value creation. But if the process of value creation continues beyond that point, it becomes a process of value increase ” [42,252]

and

As the unity of the labor process and the value-creating process, the production process is the process of commodity production. As the unity of the labor process and the value-increasing process, the production process is the capitalist production process, the capitalist form of commodity production” [42,254 ] .

K.Marx's analysis shows us that, on the one hand, the production of value and surplus value are in one system, one process, they are different in quantity; and on the other hand, in the end, the capitalist relationship is an internal relationship of the market economic system.

But when capitalist relations arose, the market economic process underwent a profound change. Now, production was not simply the production of commodities, and therefore the production of value, but the production of surplus value. Naturally, the production of surplus value became the whole that governed the entire economic process, and thus became the basic economic law and became the goal and the decisive driving force of the economic process.

In capitalist relations, the various costs of producing commodities in the form of constant capital and variable capital are considered as production costs, and the surplus value produced, considered as generated by capital, is called profit .

Here, when considering all waste in the form of capital waste, in the form of production costs, then there is a fundamental change in the economic nature of production: First , production, viewed from the perspective of the market economy, is the production of surplus, the production of profit. In other words, production completely sheds its material form, therefore, production is the creation of surplus value, the production of profit. If an activity

any activity that produces only a value corresponding to its cost of production is not

is called production. Second , in the capitalist form, the economic system is a business system, in which capital is invested and produced to generate profits . Here , the commodity-money relationship is the basic relationship, and the decisive economic relationship is the cost-profit relationship. Third , in the capitalist form, economic movement

driven by the goal of profit and profit is placed in a mechanism of conversion into additional capital and makes production become expanded reproduction, or in other words, accumulation, conversion of surplus into additional capital is an internal economic law of capital. From the above, we see that the market economy with capitalist content is a profit-making economy, and pursuing the goal of profit is an internal law of the market economy.

1.2.1.4. The market economy is an economy of enterprises .

In a market economy, the essence of economic activity is the movement and constant increase of value and economic activity, in the end, is no longer simply production, but business. Business is the investment of capital and the increase of capital value . It can be said that the entire economic activity of social production based on the market economic system is the sum of business processes. In a market economy, business processes are organized in enterprises. Enterprises, here, are the form of business organization in which capital is invested and surplus value is produced, or value is constantly increased. Thus, enterprises operating according to the method of capital investment aiming at profit on the basis of market mechanisms are enterprises of the market economy, an economy structured by enterprises operating according to market mechanisms.

When considering the market economy as a system, we consider market economic entities as representatives of economic categories, so economic entities

dX is placed outside the research object. But when it comes to enterprises, when it comes to business, the economic subjects are the business owners and the owners of the goods that make up the capital in motion, who are the decisive economic figures of the market economy .

Market economy has a development process. In the current development conditions

Modern market economy has transformed from a free market economy to a modern market economy with new characteristics. Firstly, the modern market economy is a macro market economy, that is, the economy as a system established by macro relations. Secondly, the modern market economy is a mixed market economy, a mixture of state economy and private economy. In which, the state appears as a special economic entity, a public economic entity, providing public goods and services. On the other hand, the state appears as a participant in regulating economic processes. Here , when the state has two identities, the identity of a public economic entity and the identity of a participant in regulating the economy, the state