For this study I am using the Penguin Classics edition of Marx’s Capital, Volume 1, translated in 1976 by Ben Fowkes. Page numbers refer to this edition. You can read the older 1887 translation by Samuel Moore and Edward Aveling online at marxists.org; Chapter One, on commodities, is here. Readers of German can find the first edition here.
Marx writes well and I recommend that people read him rather than secondary literature. It may seem difficult if you aren’t used to reading theoretical works, but it is no harder than reading Kant or any of the other horrors.
The commodity
Marx begins by observing that social wealth under capitalism appears as an ‘an immense collection of commodities... the individual commodity appears as its elementary form’. He goes on, a little tongue in cheek:
A commodity [die Ware] appears at first sight as an extremely obvious, trivial thing. But its analysis brings out that it is a very strange thing, abounding in metaphysical subtleties and theological niceties. (p163)
In every kind of society, people need to produce things to sustain human life. The way they do this depends upon their society’s mode of production (Produktionsweise), i.e. the way its economy organises the making of products. In the feudal mode of production, the main basis of wealth was land: noble landowners extracted an agricultural surplus from the unfree peasants who worked their land. In the capitalist mode of production, the products primarily take the form of commodities produced for exchange.
For bourgeois society, the commodity-form of the product of labour, or the value-form of the commodity, is the economic cell-form. (p90)1
When the economy is based upon commodity production, the producers of those commodities – the people who work in that society – start to relate to one another by way of commodities and of commodity exchange.
A commodity is an object that satisfies a human need or desire in some way: it might be a pair of shoes, or a loaf of bread, or an overcoat, or to take modern high-tech examples, a smartphone or computer software. It could even, under slavery, be a human being. The commodity has a dual or double character (Doppelcharakter): it possesses both use-value and exchange-value.
Use-value
Use-value (Gebrauchswert) is not to be confused with a money ‘value’: it is what the item is used for. Wealth begins with useful things, the products either of nature or of human labour, that satisfy human needs or desires. The use-value of a stream is that we can drink from it; the use-value of a pair of shoes is that they can be worn to protect your feet; the use-value of a scarf is to help keep you warm. The use-value is ‘realised in use or consumption’ and is based upon the item’s physical, sensuous, material nature:
It is conditioned by the physical properties of the commodity, and has no existence apart from the latter. (p126)
E.g. the scarf keeps us warm because it is made of wool that retains heat. The use-value lies in the ‘physical body of the commodity itself’ and is ‘independent of the amount of labour required to appropriate its useful qualities’. If an item is of no use to anyone, it has no value (of either kind).
Marx notes:
The nature of these needs, whether they arise, for example, from the stomach, or the imagination, makes no difference. Nor does it matter here how the thing satisfies man’s need. (p125)
Use-value extends beyond mere subsistence to include products of luxury or things we merely desire. Modern consumers buy lots of things they do not literally need (e.g. the latest album of a favourite pop group) but which still have a use-value for them.
Exchange-value
At the same time, a commodity also has an exchange-value (Tauschwert), that is, it can be exchanged for other commodities. This is where things get more complex. As Marx memorably noted:
So far as [the commodity] is a use-value, there is nothing mysterious about it, whether we consider it from the point of view that by its properties it satisfies human needs, or that it first takes on these properties as the product of human labour. It is absolutely clear that, by his activity, man changes the forms of the materials of nature in such a way as to make them useful to him. The form of wood, for instance, is altered if a table is made out of it. Nevertheless the table continues to be wood, an ordinary sensuous thing. But as soon as it emerges as a commodity, it changes into a thing which transcends sensuousness. It not only stands with its feet on the ground, but, in relation to all other commodities, it stands on its head, and evolves out of its wooden brain grotesque ideas, far more wonderful than if it were to begin dancing of its own free will. (p163-4)
We shall see what he means by this in a moment. Marx describes exchange-value as
the quantitative relation, the proportion, in which use-values of one kind exchange for use-values of another kind. (p126)
In other words, it is a measure of how much one commodity is worth compared to another – it is in fact a relation between commodities.
To exchange two dissimilar objects, we need to find something they have in common. Marx gives the example of one quarter of wheat having the same exchange value as x amount of boot-polish or silk or gold. These objects have some ‘common element’, a ‘third thing’ by which we determine their value. It can’t be a physical attribute, since commodities can take wildly different material forms; exchange-value must be some kind of abstraction, a ‘form of appearance’ (Erscheinungsform) of a content distinguishable from it.
To identify this content, Marx begins by explaining that every thing may be looked at in terms of either quality or quantity:
As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value. (p128)
Quality concerns the physical characteristics of the items. We judge use-values by their quality: how well the shoe fits and protects our foot, and so on. Trying to compare the value of a book and a helicopter based on their physical qualities is unhelpful – they are too different.
Exchange-values rely on quantity, i.e. a ‘socially recognised standard of measurement’ expressible in numbers. This is normally expressed by a price in money but is not synonymous with it. This gives us a way of making disparate items equivalent: the book might cost £10 and the helicopter £100,000. On this scale 10,000 of those books would have the same exchange-value as one helicopter. We have found a common element by which two wildly different objects can be compared.
Where do we get these quantities?
Labour
Exchange-value varies across time and place, making it seem relative and somehow intrinsic to the object itself, but this is an illusion. It is rooted in something else. Marx observes:
If then we disregard the use-value of commodities, only one property remains, that of being products of labour. (p128)
The only source of a commodity’s value is human labour. This is known as the labour theory of value, and it predates Marx – classical economists like Adam Smith held the same view.2
Naturally-occurring things can have a use-value, such as the air we breathe, or the water we drink. But Nature’s things are not mediated by labour; they are not human-made objects. Humans’ objects are the products of both Nature (which provides the raw matter from which they are made) and labour (an act that transforms those materials into an object that meets a specific human need); commodities’ use-values are a combination of natural materials and human labour. A commodity has to have a use-value: ‘if the thing is useless, so is the labour contained in it’ (p131).
All of a commodity’s value comes from human labour. A diamond is expensive, not because of its glitteriness or other material properties (however attractive one might find them), but because it is very rare and requires a huge investment of skilled labour to discover, mine and process. If diamonds could be picked up off the ground like pebbles, they would be worthless, however glittery they were.
As exchange-values, we consider items only in terms of quantity. Labour is performed in particular ways by particular people with particular materials to make particular objects, but as an element common to all commodities, it must be considered in the abstract, as labour in general:
With the disappearance of the useful character of the products of labour, the useful character of the kinds of labour embodied in them also disappears; this in turn entails the disappearance of the different concrete forms of labour. They can no longer be distinguished, but are all together reduced to the same kind of labour, human labour in the abstract. (p128)
Thus all individual, physical, sensuous properties fall away, and the products of labour instead appear as ‘congealed quantities of homogeneous human labour’ (Marx also calls them ‘crystals of this social substance, which is common to them all.’) Human labour is not itself value, but it creates value when it is objectified.
A use-value, or useful article... has value only because abstract human labour is objectified or materialised in it. (p129)
Marx makes a distinction (p128) between exchange-value and value. An item’s exchange-value is the necessary expression or form of appearance (der notwendige Ausdrucksweise oder Erscheinungsform) of the value created by labour.
Socially necessary labour time
Value derives from human social labour. How, then, do we measure labour? Marx explains:
This quantity is measured by its duration, and the labour-time is itself measured on the particular scale of hours, days, etc. (p129)
Marx notes that one person taking an excessively long time to make an object does not make it more valuable, and that the labour-time needed is not constant in all societies at all times. Some societies have more advanced productive forces than others – e.g. a modern web printing press can produce vastly more books in a month than a Renaissance printing press, which in turn could produce more books than a medieval scribe. So we must consider the context: how much labour-power is necessary ‘on an average’, that is, how much is ‘socially necessary’.
Socially necessary labour-time is 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. (p129)
The value of a commodity is determined entirely by the amount of socially necessary labour-time required to make it. This depends upon all sorts of things: Marx mentions workers’ skills, the level of technology, how production is organised, seasonal variation (e.g. in agriculture), and the richness of available resources (e.g. mines). It ‘varies in character in different countries and at different cultural epochs, but in a particular society it is given’ (p135). If in your society an item normally takes one hour to make, but you are badly organised or slow and need three hours to make it, you can’t charge three times as much; you have simply taken three hours to make something that is only worth one hour’s pay, i.e. you are less productive than the social average.
This is how we find that common element between 10,000 books and one helicopter. Commodities produced by equal amounts of socially necessary labour-time are equal in value, however different they might be from each other. This reduction to a single property, expressed in money, is how capitalism finds equivalence between diverse and incommensurable items.
As exchange-values, all commodities are merely definite quantities of congealed labour-time. (p130)
Socially necessary labour-time is not a fixed quantity, but changes with the increase of productive forces, as Marx notes:
In general, the greater the productivity of labour, the less the labour-time required to produce an article, the less the mass of labour crystallised in that article, and the less its value. (p131)
This is clear enough. An illuminated book that took a medieval scribe several years to write and draw is worth far more than a facsimile of that book churned out in minutes on a modern press, requiring a tiny fraction of the labour-power. Or consider how the price of personal computers keeps falling even as they become more powerful. On the globalised market, producers are competing with the international norm of socially necessary labour-time in their industry: a high-investment economy can produce a given commodity with less labour-power than a low-investment economy, and can thus sell at more competitive prices.3
The dual character of labour
Marx points out that if the commodity has a dual character (both an object of utility and a bearer of value), so too does labour:
in so far as it finds its expression in value, it no longer possesses the same characteristics as when it is the creator of use-values. (p132)
1) When we make a coat purely to be a useful thing, it is productive human activity combined with natural materials, and our labour has a particular form and aim – it is about the ‘how and what’ of labour.
2) With respect to the value of a commodity, our labour becomes labour in general – it is about the ‘how much?’ of labour. We might halve the amount of abstract labour needed to make a coat, but the usefulness of the labour would stay the same. Again, we reduce incommensurable items (this time diverse forms of labour) to a single property, i.e. abstract labour.
Exchange
A thing can be a use-value without being a value: such as the air, forests and water found in nature. Until it is exchanged – put on the market – it is just a useful thing, not a commodity. This is the difference, for example, between growing vegetables in your back garden for you to eat yourself (use-value only) and taking those vegetables to a market to sell (commodities). Exchange-value does not lie in the commodity itself but in its social relations, i.e. what people do with the object. Commodities are use-values produced for others – for exchange.
The way people relate to one another in capitalism is that a buyer with a need goes to the market to find a seller with a commodity that will meet that need. There is an exchange of value – the consumer pays money for the item. The two people relate to one another through the commodity as buyer and seller.
Historically this was an innovation. People have produced goods and services in all societies, but in the earliest societies, production was broadly in common. With only a simple division of labour (e.g. between men and women) there was no basis for commodity production.
Only the products of mutually independent acts of labour, performed in isolation, can confront each other as commodities. (p132)
Commodity production did exist in earlier societies, but it was not the majority of social wealth. Most production was carried out by a class of toilers and appropriated by the ruling class of the day with nothing given in return. Under feudalism, for example, peasants handed over most of their agricultural produce to their lord. A huge share of production was consumed by the producers for their own sustenance – e.g. peasants growing their own food – and only a fraction was exchanged on the market. The distinctive characteristic of capitalist societies is that the production of commodities for exchange became the dominant source of social wealth.
It follows that economic forms such as value are not timeless, following eternal laws: they are socially and historically determined. Any given mode of production used not to exist, and at some point in the future it will stop existing, if it hasn’t already.
The value-form of the product of labour is the most abstract, but also the most universal form of the bourgeois mode of production; by that fact it stamps the bourgeois mode of production as a particular kind of social production of a historical and transitory character. If then we make the mistake of treating it as the eternal natural form of social production, we necessarily overlook the specificity of the value-form, and consequently of the commodity-form together with its further developments, the money form, the capital form, etc. (Footnote 34, pp174-5, my emphasis)
Later in that very long footnote, Marx goes on to ridicule bourgeois economists with their pedantic systems,
proclaiming for everlasting truths, the banal and complacent notions held by the bourgeois agents of production about their own world, which is to them the best possible one.
For Marx, the ‘magic and necromancy’ (p169) of commodity production disappears when we are dealing with other forms of production. Under feudalism (whatever we may think of the power relationship between lord, priest and serf), economic relations take a direct form: e.g. the serf works a given number of hours per week on the lord’s land. They are understood as immediate social relations between people.
The mystery of commodities
If you or I sat down to make ourselves a pair of shoes, assuming we had the skills, we would be producing to satisfy our own needs or desires, and the labour that produced them would be obvious. However, in a commodity-exchange economy it can be difficult to grasp that the source of all value is human labour. Most products are made not for immediate use or consumption by the maker, but for selling on the market, i.e. they are made by anonymous workers for anonymous buyers.
In advanced economies with a high division of labour, the process of production gets very complicated. Things are produced to be commodities, for example in a factory, usually with no contact whatsoever between the producers (private individuals who work independently and may not meet one another or might even be making different parts in different countries) and those who eventually buy the finished item.
Take a conventional book (as opposed to an ebook), such as the Penguin Classics edition of Marx’s Capital. It seems simple enough – we find it on the shelf in a bookshop and buy it. But countless people are involved in making it. Different people in different places at different times uprooted the trees, pulped them into paper, laid up the pages on a computer, printed them on a press, bound them, delivered the printed books to a retailer, and so on. Every step requires human labour. The greater the division of labour, the greater the number of people involved in the book-producing process. Instead of one person labouring for a certain number of hours to produce one thing, we have many people performing one small step in a total process of producing the thing. You can imagine how complicated this gets. If the trees are cut down for wood pulp, who designed and built the chainsaws? Who made the woodcutters’ clothes, built the factory where the paper is made, cleaned the toilets, educated the staff, did the book-keeping, served on the till in the bookshop?
But when I buy the book through a simple exchange (my money for the book), this immense network of human labour is hidden or forgotten. The complex social relations governing production and distribution appear as impersonal market forces beyond the control of any one person – they can even seem to be out of the control of human beings altogether, though in reality it is a system maintained entirely by people.
Commodity fetishism
Every artifact is simply material transformed by living, breathing human beings through labour-time. When it becomes a commodity, however, the item takes on a strange character, inextricably bound with the ‘peculiar social character of the labour which produces them’. Marx discusses this in the fourth section of Chapter 1, ‘The Fetishism of the Commodity and its Secret’. He notes:
1. Different kinds of human labour are expressed in terms of an abstracted value.
2. Socially necessary labour-time is expressed in terms of the magnitude of abstracted value.
3. Relationships between human producers take on the form of a ‘social relation between the products of labour’ (p164).
Under commodity exchange, Marx argues, none of the producers have any face-to-face relation to each other, and the social character of their labour only appears via the exchange. We can’t know the conditions and processes involved in making even the most familiar objects in our lives. As a result, the commodity form makes us misunderstand what’s going on: we confuse relations between people for relations between things. In Volume 3 of Capital, Marx referred to these objectified relations as ‘reification’ (Verdinglichung, or ‘thingification’, p969).
Marx likens this to seeing with the eye: we think of the seen object as a thing outside us, forgetting it depends upon a sensation from our own optic nerve, a ‘physical relation between physical things’. Marx concludes that the commodity and its relations take on ‘the fantastic form of a relation between things’ (p165), and looks for an analogy in ‘the misty realm of religion’:
There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men’s hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities. (p165)
Our relations with one another appear not as human relations but in terms of the commodities themselves, which seem to have a life of their own, independent of social labour and human social interactions. Commodities are like gods: they are created by us, but we are not conscious of this, and so we mistake them for the creators/rulers.
This concept, known as commodity fetishism, has been profoundly influential. By separating products from the labour that made them, commodity fetishism masks actual social relations, making commodity production look natural and inevitable. Even if we are aware of it (e.g. by reading Marx) we cannot escape it, as the commodity is a social fact upon which our society and its economy are built. And it raises big social questions, such as human beings’ sense of alienation from society. In the 20th century, the Hungarian Marxist György Lukács would extend commodity fetishism into wider society with his own, fuller theory of reification, which became a founding theme in the aesthetics of Theodor Adorno.
In Marx’s view, commodity fetishism could be avoided by a transformation of society away from capitalist commodity production. He invites us to imagine instead
an association of free men, working with the means of production held in common, and expending their many different forms of labour-power in full self-awareness as one single social labour force. (p171)
Under these conditions, when human beings control production and not the other way around, Marx hopes we could escape the confusions of our relations to commodities.
We see, then, that an apparently simple idea – producing an item for sale in the marketplace – has complex implications. And since these implications are peculiar to capitalism, they are also historical: prehistoric hunter-gatherers or medieval monks were not confronted by them, because they did not live in economies based upon commodity exchange. The nature of labour, exchange-value, etc therefore is not fixed and timeless but social, historical and relative. Value is not intrinsic, it is determined by social relations forged by the actions of human beings. Yet these relations become confused by abstraction and by our inability to grasp the complexities of the economy.
Notes
1. Karl Marx, Capital, Vol. One, Preface to the First German Edition (1867).
2. Fearing its political implications, many economists have tried hard to disprove the labour theory of value (without success).
3. Hence for example the poor rate of growth in the US compared to China which has a considerably higher rate of investment. In 2017, US growth was only 2.3% compared to China’s 6.9%.
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