Made in China
Short Story
I was customizing air filter panels. Why? Because I’m being irrational with my money. Just kidding.
I was messaging a Chinese factory that specialized in producing paneled air filters. Here’s how the conversation went:
1 | Me: How much for one panel, 155mm × 255mm × 10mm? |
Reflections:
Did I win this deal? Or did I lose?
Joke: The manufacturer exploited me so much, he forgot how to do math.
The factory wasn’t really negotiating in the sense of “shaving off the price.”
They were negotiating in the sense of “getting the order to align with the logic of an assembly line.”
IMPORTANT: WHOSE SHOES ARE YOU WEARING
Why does producing one panel versus two matter?
Does producing 1 or 2 panels make a difference?
The marginal cost of the second panel is almost zero. It’s cheaper for them to give me an extra panel than to break their established price structure.
So why won’t they sell one panel for 50 RMB, but will sell two for 60 RMB? Why start at 60 for one and then suddenly say 60 for two?
Why Can’t they Price it below 60?
It is the invisible hand…Just kidding
PROTECTION:
It’s about price integrity.
If they sell one panel for 50 RMB, word will get out—and other buyers, even those ordering in bulk, will expect the same or lower prices. This undermines their profit margins on large orders, where they actually make most of their money.
Plus, price is part of a negotiation ritual. Dropping prices too quickly looks desperate or unreliable. It is a mind game.
Instead, they “add value” — in this case, an extra panel — to make the buyer feel like they won something, even if the unit price stays the same. (Still, it might appear irrational)
From their perspective, assembly lines have fixed setup costs—adjusting machines, cutting raw materials to size, and so on. These costs don’t change whether they make one or two panels.
So, it’s more efficient to throw in an extra unit than to redo pricing for tiny quantities.
Why not 50 for 1, but 60 for 2?
Because in a high-volume, assembly-line world, value isn’t priced by your needs — it’s priced by the efficiency and consistency of their system.
The Division of Labour and Wealth
A Little EXTENSION from you favorite.
MR.SMITH
“Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour therefore, is the real measure of the exchangeable value of all commodities.”
For Smith, it is not owning money that makes you rich.
In the primitive world, people produce what they consume.
However, once division of labor is established:
- specialization due to self-interest(more irreplaceable and replaceable at the same time)
- Why? You become the most delicate leaf, but when the branch falls, the leaf fade away with the branch.
- Most of the needs are fulfilled through the products of other people’s labour.
Smith defines wealth as the amount of other people’s labor that one can command.
But does labour always reflect market price?
No.
Labour gives commodities their value, but price fluctuates with supply, demand, speculation, and monopolies.
For example, a handmade chair may take 20 hours to make, but if no one wants it, it might sell for less than a machine-made chair that took an hour.
Marx’s perspective:
“The value of a commodity would therefore remain constant, if the labour-time required for its production also remained constant. But the latter changes with every variation in the productiveness of labour. This productiveness is determined by various circumstances, amongst others, by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organization of production, the extent and capabilities of the means of production, and by physical conditions…”
Marx points out:
- A commodity’s value depends on the labour-time socially necessary to produce it.
- If the labour-time stays constant, the value stays constant.
- But in reality, labour-time changes because productivity changes.
He then provides this example:
This applies still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years, ending in 1823, had not realised the price of one-and-a-half years’ average produce Of the sugar and cofee plantations of the same country, although the diamonds cost much more labour, and therefore represented more value. With richer mines, the same quantity of labour would embody itself in more diamonds, and their value would fall. If we could succeed at a small expenditure of labour, in converting carbon into diamonds, their value might fall below that of bricks.
Marx realized that diamonds are worthy because it is a small physical quantity that contains a lot of labour-time.
Hypothetical:If science found a cheap way to turn carbon into diamonds, their value could drop below bricks.
Question: If carbon can be converted into diamonds, what will happen?
Will monopolies control this technology and obtain fortunes from it?
Who would obstruct diamonds from achieving the natural price?
Conclusion for Marx
More productive labour → less time needed → less labour “embodied” → lower value.
Less productive labour → more time needed → more labour “embodied” → higher value.
The value of a commodity rises or falls depending on how much labour-time society must invest to make it — and that, in turn, depends on how productive labour is, which is shaped by skill, technology, organization, resources, and nature.
Final thought:
In capitalism, value is a function of socially necessary labor time — how productive labour is, shaped by technology, skill, and organization.
So next time you haggle over a factory price, remember:
You’re not just bargaining with a person — you’re navigating an entire system of labor, costs, and production logic.
“It is not because one man keeps a coach while his neighbour walks a-foot, that the one is rich and the other poor; but because the one is rich he keeps a coach, and because the other is poor he walks a-foot.” —Adam Smith
