Lecture 3: Value, money and mystical veil of commodity production
What we have learned so far:
The economic structure of society is the real foundation on which politics and political struggle arise – it follows also that the economic standpoint adopted in relation to society inevitably expresses and reflects the economic interests of classes in society. In that context Marxist writings on the economic structure of capitalism and imperialism are part of the class struggle:
they express the fundamental interests of the proletariat
they lay bare the economic law of motion of capitalist society
they are a weapon in the hands of the class which will destroy capitalist society – the working class. So Engels could say that ‘Modern Socialism is nothing but the reflex, in thought, of this [class] conflict in fact; its ideal reflection in the minds, first, of the class directly suffering under it, the working class. (Socialism: Utopian and Scientific p97, 1877).
Why then are we socialists? Why is socialism/communism progressive? Because capitalism is a fetter on the productive forces. That is what we have to show. (Lecture 1)
First we need to understand Marx’s method in Capital.
For Marx the method of inquiry and that of presentation are very different. Inquiry follows the actual course of bourgeois history. Presentation takes a quite different process of development. Marx begins Capital with an analysis of the simplest social form in which the product of labour presents itself in capitalist society, the commodity. He proceeds from ‘immediate being’ (commodities or more precisely the exchange of commodities) moves to mediating ‘essence’ (value – expenditure of human labour) to the forms of value, exchange value, money, capital etc. That is we move from the abstract to the concrete. We start from simple (abstract) conceptions such as labour, need, value, exchange-value and end with the state, international exchange and the world market etc.
‘The concrete is concrete, because it is a combination of many determinations and therefore a unity of diverse elements, in our thought, it therefore appears as a process of synthesis, as a result, and not as the starting point, although it is the real starting point and, therefore, also the starting point of observation and conception…the abstract definitions lead to the concrete subject in the course of reasoning…While the method of advancing from the abstract to the concrete is but the way of thinking by which the concrete is grasped and reproduced in our mind as concrete…’ (A Contribution to the Critique of Political Economy Chicago 1904 Introduction p294 and Grundrisse Penguin 1973 p101)
This method is essential if we are to not, like vulgar economy, to remain trapped in what Marx called the ‘estranged outward appearance of things’. If essence and outward appearance of things coincided there would be no need for science. (Lecture 2)
So let us move on to Marx’s understanding of value.
Marx begins Capital with the statement:
‘The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.’
We begin our analysis with the way the capitalist mode of production presents itself – we begin with ‘immediate being’ – commodities or more precisely the exchange of commodities – and examine the single commodity. (In German, the ‘Elementarform’ instead of unit.)
Use-value
A commodity in the first place is an object outside us, a thing which satisfies human wants of some sort or other – an object of utility or use-value. Nature of those wants- whether they spring from stomach or fancy makes no difference. The use-value of the commodity has no existence apart from that commodity. It is independent of the amount of labour required to appropriate its useful properties. Use-values become a reality only by use or consumption; they constitute the substance of all wealth – whatever the social form of that wealth.
In the society we are now considering, that is capitalist society, use-values are the material depositories of exchange-value.
Exchange-value
Exchange-value presents itself as a quantitative relation: the proportion in which use-values of one sort exchange for use-values of another sort. This relation changes with time and place and hence appears to be accidental and purely relative. So that an exchange-value that is inseparably connected with, inherent in commodities-an intrinsic value – seems a contradiction in terms. Marx then examines the question more closely. (p36)
One commodity, say wheat, can be exchanged for many others; a quarter wheat is exchanged for y silk, z gold etc in short for other commodities in different proportions. It appears to have many exchange values. However since y silk, z gold etc each represent one quarter wheat they must, as exchange-values, be replaceable by each other, or be equal to each other. So Marx concludes that:
Valid exchange values of a given commodity express something equal,
Exchange-value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it. (p37)
What then is this thing common to them all…for which the commodity represents a greater or lesser quantity?
Marx gives the analogy of the area of rectilinear figures – area of spaces with any number of sides. We divide the area into the area of triangles and then calculate the areas by means of the areas of these triangles. But the area of the triangle itself is expressed by something totally different from its visible figure, that is, by one half the base times the altitude, so in the same way the exchange value of commodities must be capable of being expressed in terms of something common to them all, of which they represent a greater or lesser quantity.
That something cannot be either a geometrical, chemical or other natural property of the commodity – this affects only their use-value and is necessarily different for each commodity. As use-values, the commodities are all of different qualities but as exchange-values they are merely different quantities and ‘consequently do not contain an atom of use-value.’ (p37)
If we leave out of consideration the use-value of commodities the only thing that they have in common is that they are the products of human labour. Not of a particular kind of concrete labour that is, weaving or tailoring etc, but human labour abstracted from its concrete qualities.
‘along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract’ (p38).
The social substance that is common to them all is that they are the product of human labour in the abstract – they are values. Hence a commodity is a use-value and a value. Exchange-value is the only form in which the value of commodities can manifest themselves or be expressed.
In the first edition this was made very clear but in later editions was dropped for simplicity:
‘Hence, commodities are first of all simply to be considered as values, independent of their exchange-relationship or from the form in which they appear as exchange-values.’ (p9 Value in Marx)
How then is the magnitude of this value to be measured? By the quantity of the value-creating substance, that is, abstract labour as a quantity – by its duration, labour-time.
But socially necessary labour-time. That is, the most idle person does not produce the most value. Labour-time changes with every variation of the productivity of labour (labour time dependson the skill of the worker – use-value of labour – state of science, application of machinery, knowledge etc). When the power-loom replaced the hand loom, probably half the labour was needed to weave a given quantity of yarn into cloth. Even though the hand loom weavers were required to work the same time as before, the product of one hour of their labour represented after the change one-half an hour’s social labour, and consequently fell to one half its former value.
The total labour-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour, composed of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour power of society and takes effect as such; that is, so far as it requires for producing a commodity no more time than is needed on average – no more than is socially necessary. The labour time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time.(p39)
The value of a commodity varies directly as the quantity and inversely as the productiveness of the labour incorporated in it.
Use-value and value
A thing can be a use-value without having value eg air, virgin soil, natural meadows. This is the case when the use value is not due to labour. A thing can be useful and the product of labour and still not be a commodity. This is the case if something is produced for oneself and not for others – to be a commodity it has to be exchanged – that is transferred to others through exchange. What the peasant produces for the lord is not a commodity – no exchange. Finally nothing can have a value unless it is an object of utility ie a use-value. If the thing is useless so is the labour contained in it.
Twofold character of labour embodied in a commodity
Just as commodities have a twofold character as use-values and values so also has labour, as concrete labour and abstract labour.
As, for example, coats and linen are two qualitatively different use-values so also are the two forms of labour which produce them.
So far as labour is the creator of use-value it is a necessary condition, independent of all forms of society, for the existence of the human race (p42-3). Labour is not the only source of material wealth, that is of use-values, but so is nature which supplies the material substratum on which labour is expended.
The division of labour is a necessary condition for the production of commodities but not vice-versa: ie in the primitive Indian community, there is a social division of labour but not commodities.
In a famous letter to Kugelmann (11 July 1868) Marx makes this point in another way:
‘Every child knows that a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish. Every child knows, too, that the mass of products corresponding to the different needs require different and quantitatively determined masses of the total labour of society. That this necessity of the distribution of social labour in definite proportions cannot possibly be done away with by a particular form of social production but can only change the mode of its appearance, is self evident. No natural laws can be done away with. What can change in historically different circumstances is only the form in which these laws assert themselves. And the form in which this proportional distribution of labour asserts itself, in a state of society where the interconnection of social labour is manifested in the private exchange of individual products of labour, is precisely the exchange-value of these products’.
To return to the two-fold character of labour. Productive activity, if we leave out of sight its special form, that is, the useful character of the labour, is nothing but the expenditure of human labour-power. The output of human energy from human brains, nerves, and muscles etc. (NB Marx’s formulation is expenditure of human brains, muscles etc – rather loose.) Weaving and tailoring are but two different ways of using up this common labour power. While human labour power must have attained a certain level of development or skill to operate in so many different ways – we are speaking of the expenditure of human labour in general abstracted from these particular skills or differences. We are speaking of the expenditure of simple-labour power, that is, of labour power which, on an average, apart from any special development, exists in the organism of every ordinary individual. This varies in character in different countries and at different times, but in a particular society it is given.
Skilled labour counts only as multiplied simple labour – a given quantity of skilled labour being equal to a multiple of simple labour-a quantitative difference not a difference in kind. Experience shows that this reduction of skilled labour to multiples of unskilled or simple labour is constantly being made. ‘A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. Here Marx adds a footnote of some importance: he is not talking of the wages or the value that the labourer gets for a given labour-time, but of the value of the commodity in which that labour-time is materialised. Wages as a category has no existence at the present stage of our investigation. The reduction of skilled to unskilled labour as their standard says Marx are established by a social process which goes on behind the backs of the producers. In the analysis from now on we shall assume, for simplicity’s sake, that every kind of labour is unskilled, simple labour.
We now come to an important point about the antagonistic or contradictory movement or relationship of use-value and value. If the productivity of all the different sorts of useful labour required to produce coats remains the same then the sum of the values of coats produced increases with their number. If one coat represents x days labour then 2 coats represent 2x days labour etc…But suppose the time necessary to produce a coat was halved due to a doubling of the productivity of labour in coat production. Two coats would then have the same value as one previously before the increase in productivity. That is the number of use-values has increased while the value has remained the same and each coat embodies half the value it had before. That is use-value and value move in opposite directions:
‘An increase in the quantity of use-values is an increase of material wealth. With two coats two men can be clothed, with one coat only one man. Nevertheless, and increased quantity of material wealth may correspond to a simultaneous fall in the magnitude of its value. This antagonistic movement has its origin in the two-fold character of labour.’ (p45-6),
Productivity refers only to labour of some useful concrete form. The more productive, the more products, that is, use-values, will be produced. On the other hand no change in this productiveness affects the labour represented by value. Abstract labour is an abstraction from precisely the useful qualities of that labour and therefore its productiveness. So however much the productive power of labour varies, the same labour exercised over equal periods of time always yields equal amounts of value. But it will yield, during equal periods of time, different quantities of use-values. This antagonistic and contradictory movement is the result of the commodity being both a use-value and value, being the product of concrete and abstract labour. It is an expression of the antagonistic and contradictory character of the capitalist mode of production. It will reappear in different forms as we move from the commodity to money and capital.
