Supply and demand
Steele thus refers to marginal theory, under which labor is just another input in the production process and therefore concludes that to say that capital exploits labor makes as much sense as saying "that labor exploits capital, or electricity exploits roofing tiles". Indeed, it has been argued that Marx never offered (despite promising to do so in Volume 3 of "Capital") a positive proof for his theory or an explanation for why labour-power is the only commodity that can create more value. Steele also argues that Marx thought that prices needed to be explained by some third factor, beyond supply and demand, because he believed that when supply and demand balance or equal each other, they can cancel each other out and thus could not explain equilibrium prices (hence the need for the labour theory of value to explain equilibrium prices). Steele argues this is mistaken as it is based on the view that supply and demand are magnitudes or numbers, when really they can be viewed more like schedules or functions. Supply and demand, when equal, do not cancel each other out but rather they are actually coinciding; at that particular price, the quantity supplied is equal to the quantity demanded. Price is thus always (proximately) determined by supply and demand, even when the two coincide. Thus when supply and demand are understood this way, Marx's argument cannot be forwarded. Eugene Böhm-Bawerk uses an analogy to a balloon filled with gas. The balloon will continue to rise through the air until the air pressure of the atmosphere and the air pressure within the balloon are in equilibrium. Thus the height of the balloon can only be explained by considering the relative density of the balloon on one side and the atmosphere on the other. However, Böhm-Bawerk argues that if Marx's view of equilibrium is used, then one would have to say that the densities would cancel each other out and thus have "ceased to act", meaning they cannot explain why the balloon is now floating, which is incorrect as it is the relative densities that explain why the balloon floats. Thus for Böhm-Bawerk, it is simply inaccurate to state that supply and demand cannot explain equilibrium prices because they supposedly cancel each other out.