Supply, Demand, Value & the “Mud Pie” Argument


The labor theory of value is an essential concept in a Marxist understanding of the world. It explains how value finds its origin in the productive efforts of human beings, that workers are essential to the realization of value in production. Their labor power is exploited in this dynamic, because while they are essential to the realization of value, they are only compensated a meager wage, rather than being compensated for the full value they worked to create. It is in this way that value requires labor to be realized, because without workers and their labor power, there can be no production. Without people working to build and manufacture goods, to extract natural resources, to transport them and to facilitate their use, value is impossible to realize.

This would seem to make sense to anyone willing to critically analyze our system, to see who does the work in our society and who ends up taking home the products of the blood, sweat and tears of workers, yet this theory is contested by the proponents of bourgeois ideology and analysis. In any classroom one would attend teaching economics under capitalism, it is impossible to avoid the analysis that “market forces” decide value, not labor. “Supply and demand” are seen as the chief determiners of the value of commodities. To illustrate their point of contention with the labor theory of value, they lay out a ludicrous scenario known as the infamous “mud pie” argument. Here we will examine the validity of this “argument” and offer refutation.

The “Mud Pie” Argument Itself

“Imagine you spend hours and hours of time working to make a mud pie. Would it be worth more for the labor you had put into it? Of course not, because no matter how hard you work to make a mud pie, it is still a mud pie, regardless of how much or how little time you put into something. There is no demand for mud pies, and if someone needed one, they could make it themselves, because mud isn’t in short supply.”

The Contortions of a Thought-Experiment Gone Wrong

The astute reader would hear this feeble analogy and not be convinced, since the hypothetical situation required to call this theory into question is absurd, yet the labor theory of value can be demonstrated in every workplace. In explaining the labor theory of value, one need only give the example of a workplace, a simple wage, the products produced and the difference between what a commodity sells for and how the workers is paid by comparison, showing the surplus value as being a product of the exploitation of a worker’s labor. Yet in this attempt to “debunk” we have a goofy story wherein someone spends a great deal of time playing with mud and asking to be paid for it. The question is, how exactly is an unrealistic scenario about making mud pies supposed to “disprove” the idea that value cannot truly be realized without human labor?

In the course of philosophical debate, hypothetical scenarios like the “mud pie” are referred to as Gedankenexperiments, or thought-experiments, wherein perspectives can be applied, challenged and assessed within the context of a scenario. These can vary in extremeness from being a realistic, everyday occurrence to being outlandish and bizarre. They are important in philosophy since they allow ideas to be tried out when the application of these ideas would be difficult, unethical or inconvenient to create within reality.

Some philosophical proclamations, such as perceptions of what a god or gods are like, how perfect worlds might function, how morality relates to these sort of concepts, etc., require experiments of thought because they cannot be tested in reality. If an idea cannot be applied to material conditions, the idealist will create idealized conditions with which to apply it to. This is precisely the case with our mud pie. Is anyone in their lifetime going to see someone work for 7 hours on a mud pie and attempt to sell it for, say, $700 dollars if they aren’t mentally disturbed? Probably not. Yet, tomorrow, are we going to see workers make the products which will stock stores and be paid a fraction of the wealth they’ve helped bring about for their bosses? Yes, without fail. The lengths of silliness that this argument must go to make it a silly argument.

The Market is the Chief Source of Value?

Ignoring, for a moment, the silly knots with which capitalism’s apologists will tie themselves into to attempt to “disprove” Marxism, let’s examine the position their argument seems to suggest. If someone can spend hours making a mud pie, and its value not increase, then its value must not be determined by labor, but by the market. Without market, without supply and demand in the context of a market, there can be no value yielded from labor. Essentially, if we believe the premise of this argument, then this “market” is the generator and arbiter over all value.

Yet how can this be the case? The “market” can’t build things, cannot mine coal or run machinery for the purpose of producing industrial and consumer products. Yet, we are supposed to see it as the chief decider of value, as if labor could be removed from the situation effectively. It is only in the realm of the hypothetical that this could be achieved. Labor is, and always will be, the key to unlocking any value, whether it is a highly processed commodity or an item picked off of the ground. As well, one doesn’t require a market to find value in something, since someone can find use-value in something they acquire, with the supply being irrelevant and their demand being the only demand taken into consideration. Let’s say someone has an itch on a hard-to-reach spot on their back, picks up a stick from the grass, and proceeds to use it to scratch that itch. This person is gaining use value, and needs not evaluate it in the context of how many sticks are in the nearby area. This value was not realized by a market, but was realized by the physical exertion of bending over, picking up the stick and manipulating it to work for their needs. Again, as well, here we have an example that anyone with access to a stick can try out to see the validity of labor determining value rather than exclusively markets determining value.

Misreading Marxism to “Defeat” Marxism

This mention of “use value” brings us to another problem with the “mud pie” problem. In addition to notions of the origin of value that are, at their core, idealist, there is also a logical fallacy that this argument takes up as its backbone. This argument mischaracterizes the Marxist labor theory of value, and thus succeeds only at arguing with a straw-man of its own creation, rather than actual Marxism. It assumes that value is generated only through labor, which makes it possible to create value whenever labor is done. Is there only one value that has as its creator the human hand? The answer is no.

Marxists understand a variety of different expressions of value: use value, exchange value, surplus value, to name a few. The Marxist understanding of value is fluid; it endeavors to understand the context of the creation of commodities, the use of commodities, the purchase and sale of commodities. As value is something that must be understood in its material context, Marxists endeavor to understand production in its different phases to be able to apply the correct understanding of value and exploitation.

There can be no Supply or Demand without Labor

The nature of their argument would seem to suggest a universal and omnipotent characterization of the “market” as the creator of value, since their mud pie example would seem to imply that labor entirely incidental to the creation of value. If this is truly the case, that supply and demand are the central mechanisms for understanding value, then where does this supply come from? How can there be a demand without there being people who have the purchasing power to fulfill the “demand for demand” by using their wages to purchase everyday items? Clearly, somebody has to physically do something at some point for value to be realized, so value is at least partially contingent on labor power.

It is possible for us to further deconstruct and abolish this argument by demonstrating a scenario wherein demand is high, supply is low yet the prices for a commodity are low. Imagine a poor society suffering from famine, the likes of which are not uncommon. The people in this society are incredibly poor, the harvest has been poor and food is scarce. Those who are able to sell the little food that is available cannot sell it for very high. Why? Because if you are holding onto a highly valued commodity and price it to a level where no one can afford it, you cannot realize any value for that commodity. High demand and low supply do not, as the mud pie apologists would argue, account for value in every situation that realistically takes place in the material world. Yet because there was someone who invested the energy to harvest, despite the horrendous conditions for agriculture, value can be realized through the little food that remains.

Mud Pies for Sale!

After pointing out these holes, it might seem to be an afterthought to point out that mud pies are bought and sold under capitalism, and found use value for thousands of years. Mud has been, and still is, utilized as a material for building and sculpting. Bricks are, essentially, baked mud. Pottery is still made using mud. Mud is bathed in, is used in landscaping and finds other uses in everyday life. A mass of “mud” could, arguably, be sold if it were sculpted into something useful such as a brick or container of some sort.

Again, a commodity exchange evaluating the supply of mud and how much people are willing to pay for a mud pie do not capture the origins of the value for mud. However, having human hands sculpt it into something useful does. Human beings engender value when they take something that is needed elsewhere and use their bodies in the process of facilitating its transport. The genius of human production can, and does, take something from being in a state where it is less useful, less valuable, and turns it into something precious through their labor. Scientists can take a lump of carbon, subject it to incredible heat and pressure, and create synthetic diamonds. The supply and demand for carbon didn’t create the value here, but the efforts of human labors have.

Conclusion: The “Mud Pie” Argument isn’t much of an Argument

The “mud pie” argument is ubiquitous, but not hard to defeat. While the enemies of Marxism see it as an Achilles heel, the Marxist understands that the “vulnerability” they exploit does not come from an objective flaw in Marxist theory, but flaws in the deluded thinking of bourgeois economists and those who hear and repeat this argument without seriously examining Marxism or their own argument. What this weak argument reveals is that absurd analogies, one liners and straw-men is the best capitalism can do against Marxism. With “problems” like the “mud pie argument,” the Marxist has little to worry about.

Categories: Economic Exploitation, Economy, Myths About Socialism, Theory, Workers Struggle

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