- Marx starts with the commodity, a need-satisfying object that's produced for trade. Wealth in a capitalist society, such as the United States, is an immense collection of commodities, he says. Even when you check out songs to buy on iTunes, those are all commodities.
- Commodities are both use-values and exchange-values. A use-value is the thing's usefulness. If you sip a Monster Energy drink you've purchased, you're consuming it as a use-value so that you're more alert. But if you're selling the drink to your friend, it's an exchange-value.
- The exchange-value of a commodity can change depending on time and place. Right now an amount of wheat may be traded for such-and-such amount of silk, or for such-and-such amount of gold. Tomorrow the amounts might differ. So exchange-value is relative.
- If one commodity can be exchanged for another commodity, Marx argues, the two things must have something in common that allows them to be compatible as items that can be bought and sold. This commonality is their value; not exchange-value or use-value, but just plain ol' value. To discover what the value in common is, Comrade Marx abstracts away from (or looks away from) the various qualities commodities have as use-values, and away from the various quantities they have as exchange-values. He sees that the only thing remaining in common is that commodities are all products of human labor. Somebody had to work to make each one. Individual acts of labor differ, of course, but he's talking about a generalized notion: human labor in the abstract.
- Labor is measured in terms of time, Marx says. It might take hours or days to make a particular commodity.
- Value itself is socially necessary labor time. Here's the big definition of value, in his words. First: Socially necessary labor-time is the labor-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 labor prevalent in that society. Second: What exclusively determines the magnitude (or the amount) of the value of any article is the amount of labor socially necessary, or the labor-time socially necessary for its production.
- So, when you see a Monster Energy drink on the shelf at Wal-Mart, imagine that particular commodity as being a lump of labor-time stuck together.
- Finally, the time required to produce a commodity can change in many ways, all of which affect the commodity's value. Technology can improve, or workers can gain skill, for example, which lessens the time required to make an item and thus cheapens its value.
- Next, our economics brainiac is going to drive home the difference between concrete, heterogeneous labor and abstract, homogeneous labor, both of which are present in any particular commodity.
- Concrete, heterogeneous labor is the specific type of work that went into an individual product considered as a use-value. For example, a coat is made by tailoring, not cooking, and a restaurant dinner is made by cooking, not tailoring. Tailoring and cooking are different types of concrete labor, each of which is unique and results in certain types of use-values.
- Abstract, homogeneous labor, on the other hand, is the impersonal quantity of labor that goes into producing a commodity. It's measured by the amount of time the work takes. You might spend two hours cooking a dinner to sell, while your friend spends five weeks building a computer to sell; your individual types of concrete work differ, but the amount of time each of you take can be quantitatively compared as abstract labor—despite the qualitative differences.
- Besides blabbing on and on about the distinction between the two types of labor, Mister Marx makes some other interesting points in this section.
- He says use-values have to be qualitatively different in order to be exchanged as commodities. You can't trade a Monster Energy drink for an identical one, unless you're being silly or something. Therefore, commodity production requires some division of labor—people making different stuff—although the reverse isn't true: there can be a division of labor without commodity production, as in primitive communities.
- The need to labor to create use-values is part of the human condition independent of whatever form of society is in place. Marx puts this in fancy-talk: labor is an eternal necessity that mediates the metabolism between man and nature, and therefore human life itself.
- Labor isn't the only source of material wealth (wealth is the grand total of use-values). Nature is the other source, since it provides the raw materials.
- It's a difficulty for the quantitative measurement of labor that some labor is more complex than other kinds of labor. But, for the purposes of analysis, Marx boils everything down to what he calls simple average labor. We're basically just going to have to be okay with that, he says.
- If one commodity is worth twice as much as another, it's because the first one takes twice as long to produce as the second.
- Value is dependent on human productivity. Highly productive workers might make tons of commodities quickly, which would create a large amount of material wealth, but the value of those thingamaboppers would be low, since not much time went into them. Material wealth and value are distinct things.
- Comrade Marx now tells us that value is immaterial, because you can't point to it—there's no atom or molecule containing the value. It's objective, since the comparison of the quantity of labor that went into one commodity with the quantity of labor into that went into another describes a real social relationship.
- Now Marx is going to trace the logical development of money. He starts by looking at a situation in which such-and-such amount of one commodity is equal to such-and-such amount of another.
- Marx's example starts off with 20 yards of linen worth one coat. He makes this kind of overly complicated, but it boils down to the idea that if I have a commodity, and you have one, and we're looking to trade, then from my point of view, your commodity is the equivalent form of mine. Mine is the relative form. From your point of view, your commodity is the relative form and mine is the equivalent one. We're equating the labor contained in them.
- Marx has all sorts of fun with arithmetic and goes into way too much detail about all of this. If the value of the coat is cut in half, then it's now worth 10 yards of linen, not 20. And so on.
- Exchange makes for some interesting peculiarities. Marx looks at three. One is that use-value in the equivalent form becomes the appearance of value for the relative form. If I am holding a Monster Energy can—it's my relative form—and I want to know what it equates to when I'm thinking of its exchange value, I look at your equivalent form, say two cans of Dr. Pepper, and think, Ah, this Monster Energy can is worth the use-value of two Dr. Peppers. This Monster Energy exchange-value means two Dr. Peppers' worth of use-value. Exchange-value and use-value reflect one another, even though they are different things.
- Another peculiarity is that the concrete labor that went into specifically making the use-value of a commodity becomes translated into the abstract labor of exchange-value. It's no longer personal. Concrete and abstract translate to one another.
- Similarly, the labor is no longer private once we're talking about exchange-values, but social—that's the third and final peculiarity.
- Marx takes a look at Aristotle and says the Greek thinker figured out that if two items are to be exchanged, there must be something in common between them. But Aristotle couldn't figure out what it was—the socially necessary labor time that went into making each article—because the slave economy of Greek society made labor seem very unequal: there was slave labor over here, and free labor over there, and so people weren't thinking of labor as comparable.
- Then Comrade Marx analyzes situations in which I might want to buy, say, a video game console, and you don't have one, but you have a guitar, which, once I buy it from you, I could trade to someone else who wants it and does have a video game console. He doesn't say anything that surprising here.
- Eventually, what happens is that the exchange of commodities becomes widespread in a society, and one type of commodity ends up becoming the universal equivalent for all the other relative forms. This is the money commodity. Gold often serves as the money commodity.
- Commodities, Marx says, become imbued with, or objectify, social labor. They take on additional meaning, like a fetish does. They take on an exchange-value.
- When you're shopping for a T-shirt, instead of seeing the laborers who produced that T-shirt, their good or bad working conditions, or their lives, you just see the T-shirt's price tag. That exchange-value conceals the social relations behind the commodity; you forget the reality (the social labor) in favor of the fetish (the exchange-value).
- People relate to one another through the exchange of commodities. People don't perceive the social relations—who works for whom, what their jobs are like—directly, but through the intermediary of commodities. The commodities get in the way of social relations.
- The appearance or fetish of exchange-value becomes so predominant that the reality of value—that is, socially necessary labor time—becomes something of a secret hidden from people. Prices start to appear to be natural characteristics of products, and we forget the labor that went into them.
- It seems absurd, Marx says, to say that such-and-such amount of a commodity is worth such-and-such amount of gold because the latter is the universal incarnation of abstract social labor. But that is what people are acting out when they exchange commodities.
- Marx comments on the Robinson Crusoe myth, in which economists imagine that the shipwrecked sailor would keep an accounting of his life like a shopkeeper would. By making fun of the Robinson Crusoe story, Marx wants to show that capitalism isn't something that exists in every time and place across history. He contrasts with capitalism the corvée system and a hypothetical communist system to show how economic life can be different.
- In a footnote, Marx says that he views the economic structure of a society as the foundation for that society's laws, politics, and intellectual ideas—not the other way around.
- Marx criticizes the capitalist economists who preceded him for viewing capitalism as a self-evident and nature-imposed necessity instead of something time-bound and historical. He says these economists have been misled by the fetishism of commodities to believe that exchange-value is some natural property of objects.