Chapter 1 – The Commodity
Section 1: Use-Value & Value
The commodity is Marx’s starting point.
“The wealth of societies in which the capitalist mode of production prevails, appears as an immense collection of commodities; the individual commodity appears as its elementary form.” (p. 125)
Marx is signalling that there is something else going on beneath the surface appearance.
The Commodity is something produced for sale and not for immediate consumption
It has both use-value and exchange-value.
A thing has a use-value if it can find a use.
The use-value refers to the physical properties that make it potentially an object of use.
Something makes all commodities commensurable in exchange.
Commodities are the material bearers of exchange-value.
“Exchange-value appears first of all as the quantitative relation in which use-values of one kind exchange for use-values of another kind” (p. 126)
As a commodity changes hands, so it expresses something about not only its own qualities but the qualities of all commodities, i.e., that they are commensurable with one another.
They are all products of human labour.
Value expresses the fact that the commodity is the product of social labour, of a part of the labour-time of society as a whole, and not simply the private labour of a particular individual. Thus: the substance of value is “human labour in the abstract”, “congealed quantities of homogenous human labour”, “human labour-power expended without regard to the form of its expenditure” (p. 128).
Exchange-value is the form of appearance of value; it is the representation of the human labour embodied in commodities: “exchange-value as the necessary mode of expression, or form of appearance, of value.” (p.128)
The magnitude of value is determined by the labour-time socially necessary to produce the commodity, defined as “the labour-time required to produce any use value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (p. 129)
“What exclusively determines the magnitude of value of any article is therefore the amount of labour socially necessary, or the labour-time socially necessary for its production.” (p. 129)
“As exchange-values, all commodities are merely definite quantities of congealed labour-time.” (p. 130)
It is the socially necessary definition of labour time that distinguishes Marx from Ricardo.
The commodity is a thing (a “use-value”) that embodies a certain portion of society’s labour-time (a “value”).
Commodity values are not fixed magnitudes; they are sensitive to revolutions in technology & productivity.
“The value of a commodity, therefore, varies directly as the quantity, & inversely as the productivity, of the labour which finds its realisation within the commodity.”
“Now we know the substance of value. It is labour. We know the measure of its magnitude. It is labour-time. The form which stamps value as exchange-value, remains to be analysed.” (p. 131)
“A thing can be a use-value without being a value.” e.g. virgin soil.
“A thing can be useful, & a product of human labour, without being a commodity.” e.g. vegetables grown for domestic consumption.
“In order to become a commodity, the product must be transferred to the other person, for whom it serves as a use-value, through the medium of exchange.” (p. 131)
Wealth is not the same as value: the former is the total use-values, the latter the amount of socially necessary labour time; More productive labour can produce more use-values in the same amount of time – wealth increases, but value remains the same.
Use-value: heterogeneous material qualities & quantities
Exchange-value: quantitative & homogenous
Value: immaterial & relational (socially necessary labour time)
The analysis is not causal, but one of dialectical relations.
The exchange-value (price) can vary with supply & demand fluctuations, but the value remains constant (supply & demand are abstracted away).
Section 2: The Dual Character of Labour Embodied in Commodities
“labour…has a dual character: in so far as it finds expression in value, it no longer possesses the same characteristics as when it is the creator of use-values. I was the first to point out & examine critically this twofold nature of the labour contained in commodities.” (p. 132)
Behind the distinction between use-value and value lies that between useful (“concrete”) and abstract (“social”) labour.
Useful labour is “labour whose utility is represented by the use-value of its product, or by the fact that its product is a use-value…i.e. productive activity of a definite kind, carried on with a definite aim” (pp. 132-3)
“Labour, as the creator of use-values, as useful labour, is a condition of human existence which is independent of all forms of society; it is an eternal natural necessity which mediates the metabolism between man & nature, & therefore human life itself.” (p. 133)
“Labour is…not the only source of material wealth, i.e. use-values it produces. As William Petty says, labour is the father of material wealth, the earth is its mother.” (p. 134)
The value of a commodity does not express these concrete characteristics of particular labours, it expresses the common quality of labour as social “homogenous” labour (abstract labour). The basis on which different useful labours can be compared as simple expenditures of labour time is the fact that the same individual can perform a whole range of different kinds of useful labour. Abstract labour is social labour, i.e. the expenditure of human labour-power insofar as such expenditure is socially necessary.
“the value of a commodity represents human labour pure & simple, the expenditure of human labour in general.” (p. 135)
“Simple average labour…varies in character in different countries & at different cultural epochs, but in a particular society it is given. More complex labour counts only as intensified, or rather multiplied simple labour…In the interests of simplification, we shall henceforth view every form of labour-power directly as simple labour-power.” (p. 135)
The ‘reduction problem‘: reducing skilled labour to simple labour independently of the value of commodities.
“with reference to use-value, the labour contained in a commodity counts only qualitatively, with reference to value it counts only quantitatively, once it has been reduced to human labour pure & simple.” (p. 136)
“an increase in the quantity of use-values constitutes an increase in material wealth…an increase in the amount of material wealth may correspond to a simultaneous fall in the magnitude of its value. This contradictory movement arises out of the twofold character of labour.” (pp. 135-6)
“The same labour…performed for the same length of time, always yields the same amount of value, independently of any variations in productivity. But it provides different quantities of use-values during equal periods of time.” (p. 136)
The value of a commodity does not represent the amount of labour actually expended by a given individual, but that portion of social labour that is credited to that commodity. It is only in exchange that the producer finds out how much of his labour-time was socially necessary. This is precisely what exchange does: it validates the socially necessary character of the labour-power expended in producing a particular commodity as that commodity is compared in the market with others.
The act of exchange (the market) brings together the dual aspects of concrete & abstract labour.
Section 3: The Value-Form, or Exchange-Value
Commodities “have a dual nature, because they are at the same time objects of utility & bearers of value…they possess a double form, i.e. natural form & value form.” (p. 138)
Value is immaterial but objective. Value is a social relation.
“Not an atom of matter enters into the objectivity of commodities as values…we may twist & turn a single commodity as we wish; it remains impossible to grasp it as a thing possessing value…commodities possess an objective character as values only in so far as they are all expressions of identical social substance, human labour, that their objective character as values is therefore purely social. From this it follows self-evidently that it can only appear in the social relation between commodity & commodity.” (pp. 138-9)
Since value is a purely social phenomenon it cannot find any direct natural expression, but can only be expressed in the relation between commodities.
Values, being immaterial, cannot exist without a means of representation. All attempts to measure value directly will fail.
“Everyone knows, if nothing else, that commodities have a common value-form which contrasts in the most striking manner with the motely forms of their use-values. I refer to the money-form. Now, however, we have to perform a task never even attempted by bourgeois economics. That is, we have to show the origin of this money-form, we have to trace the development of the expression of value contained in the value-relation of commodities from its simplest, almost imperceptible outline to the dazzling money-form. When this has been done, the mystery of money will immediately disappear.” (p. 139)
I have the relative form, you have the equivalent form: the relative value of my commodity is going to be expressed in terms of the value of the commodity you hold. So your commodity is going to be a measure of the value of mine. Turn the relationship around & my commodity can be viewed as the equivalent value of yours.
The imperatives of commodity exchange give rise to money (the universal equivalent).
“a particular kind of commodity acquires the form of universal equivalent, because all other commodities make it the material embodiment of their uniform & universal form of value.” (p. 160)
It is exchange that gives rise to money and not money that gives rise to exchange. It is the proliferation & generalisation of exchange relations that is the crucial, necessary condition for the crystallization of the money form.
A logical argument, rather than an historical argument.
“the universal equivalent form has now by social custom finally become entwined with the specific natural form of the commodity gold. Gold confronts the other commodities as money only because it previously confronted them as a commodity.” (p. 162)
“…human labour creates value, but it is not itself value. It becomes value in its coagulated state, in objective form.” (p. 142) Human labour is tangible process, but at the end of the process, you get a thing, a commodity, which congeals value.
Money is itself a form of social relation.
The value of the commodity, which is really simply an expression of the portion of social labour embodied in the commodity, appears to be an inherent and semi-natural property of the commodity, its price.
The exchange relation, which is really only a relation between amounts of social labour embodied in the commodities in question, appears to be a relation that exists between commodities themselves, without reference to the producers.
Section 4: The Fetishism of the Commodity & its Secret
The fetishism of commodities arises from the fact that commodity producing labour is not directly social. Commodities are produced by individuals working independently of one another. Although the total of these individual labours is the total social labour devoted to producing the total social product, these producers do not come into contact with one another until they exchange their products. Hence the social character of their labour only appears in exchange, and they exchange their labour for that of others only by exchanging products.
“To the producers, therefore, the social relations between their private labours appear as what they are, i.e. they do not appear as direct social relations between persons in their work, but rather as material relations between persons and social relations between things” (p. 166)
Thus value appears to be an inherent quality of the product that dictates to the producer rather than vice-versa.
It is the fourth section that clearly differentiates Marx’s theory of value from that of the classical political economists, especially Ricardo.
Marx does not see exchange relations simply as the quantitative market relations between commodities. Marx sees exchange relations as the particular social form through which the labour of producers who work independently of one another without reference to social needs can be brought into relation with one another and so with the needs of society. Thus for Marx exchange relations are a form of social relations of production: the market regulates the interdependence of producers who appear to be working independently of one another.
The idea that exchange relations reflect the amount of labour-time expended on particular commodities was not original: it was central to all of classical political economy.
The idea that Marx introduces is the idea that exchange is a particular system of social relationships and not simply an institution through which prices are mechanically derived from labour-times.
For Marx, value is a characteristic only of a society in which the relations between producers as members of society are regulated through the market.
This has a fundamental effect on Marx’s theory of value. It is through his examination of form of value that Marx was led to argue that exchange value is not an expression of labour-time (of the amount of time actually spent by the labourer), but is an expression of value.
Value, in turn, does not simply express labour-time actually embodied in the commodity (either individual or on average), but the socially-necessary labour-time, the portion of the total labour-time of the society allocated to that commodity, the labour-time of the individual producer in relation to the labour-time of society as a whole. This relationship cannot be found in the individual commodity, or in the relationship of the individual producer to that of the commodity, but only in the relationship between producers that manifests itself in the exchange relation between commodities.
Hence, for Marx the concept of value is not a technological concept, it is fundamentally a social concept: value expresses the social relation between producers.
Thus, while for Ricardo value expressed the labour of the individual producer, for Marx it expressed the labour of the producer as a member of society.
“It is only the expression of equivalence between different sorts of commodities which brings to view the specific character of value-creating labour, by actually reducing the different kinds of labour embedded in the different kinds of commodity to their common quality of being human labour in general” (p. 142).
These points are very important, because a quite different interpretation of Marx’s theory, that equates it with the Ricardian theory, is very common.
Marx’s theory does not see value as inherent in the commodity, in isolation from the exchange relation – indeed that it is not is the core of Marx’s theory of the form of value.
In a capitalist society prices diverge systematically from values because of the tendency for profits to be equalised between different capitals.
It is not true that all things with an exchange-value are products of labour: virgin land can be bought but is not a product of labour, and nor are all products of labour commodities.
Marx also makes a rare mention of what a communist society might look like, “Let us finally imagine, for a change, an association of free men, working with the means of production held in common, & expending their many different forms of labour-power in full self-awareness as one single social labour force…The total product of our imagined association is a social product. One part of this product serves as fresh means of production & remains social. But another part is consumed by members of the association as means of subsistence. This part must therefore be divided amongst them…We shall assume…that the share each individual producer…is determined by his labour-time. Labour-time would in that case play a double part. Its apportionment in accordance with a definite social plan maintains the correct proportion between different functions of labour & the various needs of the associations. On the other hand, labour-time also serves as a measure of the part taken by each individual in common labour, & of his share in the part of the total product destined for individual consumption. The social relations of the individual producers, both towards their labour & the products of their labour, are here transparent in their simplicity, in production as well as in distribution.” (pp. 171-2)
“The veil is not removed from the countenance of the social life-process…until it becomes production by freely associated men, & stands under their conscious & planned control.” (p. 173)