This subsection is “Quantitative determination of Relative value”
Page 53: “Every commodity, whose value it is intended to express, is a useful object of a given quantity, as 15 bushels of corn, or 100 lbs of coffee. And a given quantity of any commodity contains a definite quantity of human labour. The value-form must therefore not only express value generally, but also value in definite quantity. Therefore, in the value-relation of commodity A to commodity B, of the linen to the coat, not only is the latter, as value in general, made the equal in quality of linen, but a definite quantity of coat (1 coat) is made the equivalent of a definite quantity (20 yards) of linen.”
This is a restatement and summary of the earlier subsections: the equivalent form asserts qualitative equality in that human-labor = human labor, and quantitative equality (x of commodity A = y of commodity B).
“The equation 20 yards of linen = 1 coat, or 20 yards of linen are worth 1 coat, implies that the same quantity of value-substance (congealed labor) is embodied in both; that the two commodities have each cost the same amount of labour of the same quantity of labour-time. But the labour-time necessary for the production of 20 yards of linen or 1 coat varies with every change in the productiveness of weaving or tailoring. We have now to consider the influence of such changes on the quantitative aspect of the expression of relative value.”
If the amount of labor embodied in a commodity determines the value of the commodity, then we need to determine how changes in the productivity of labor affects the value.
“I. Let the value of the linen vary, that of the coat remaining constant. If, say in consequence of the exhaustion of flax-growing soil, the labour-time necessary for the production of linen be doubled, the value of the linen will also be doubled. Instead of the equation, 20 yards of linen = 1 coat, we should have 20 yards of linen = 2 coats, since one coat would now contain only half the labour time embodied in 20 yards of linen. If, on the other hand, in consequence, say, of improved looms, this labour-time be reduced by one-half, the value of the linen would fall by one-half. Consequently, we should have 20 yards of linen = 1/2 coat. The relative value of commodity A, i.e., its value expressed in commodity B, rises and falls directly as the value of A, the value of B being constant.”
As productivity increases, less labor is required to produced commodity A, therefore the value of A falls compared to B.
“II. Let the value of the linen remain constant, while the value of the coat varies. If, under these circumstances, in consequence, for instance, of a poor crop of wool, the labour-time necessary for the production of a coat becomes doubled, we have instead of 20 yards of linen = 1 coat, 20 yards of linen = 1/2 coat. If, on the other hand, the value of coat sinks by one-half, then 20 yards of linen = 2 coats. Hence, if the value of commodity A remains constant, its relative value expressed in commodity B rises and falls inversely as the value of B.
The obvious corollary to the above.
“If we compare the different cases in I. and II., we see that the same change of magnitude in relative value may arise from totally opposite causes. Thus, the equation 20 yards of linen = 1 coat, becomes 20 yards of linen = 2 coats, either, because the value of the linen has doubled, or because the value of the coat has fallen by one-half, or because the value of the linen as doubled.”
“III. Let the quantities of labour-time respectively necessary for the production of the linen and the coat vary simultaneously in the same direction and the same proportion…”
Well, yeah, double them both, and there’s no change. Cut them both in half, and there’s no change. Seems clear enough.
“IV. The labour-time respectively necessary for the production of the linen and the coat, and therefore the value of these commodities may simultaneously vary in the same direction, but at unequal rates, or in opposite directions, or in other ways. The effect of all these possible different variations, on the relative value of a commodity, may be deduced from the results of I., II., and III.”
This seems pretty obvious. It also gladdens my heart to see that old Marx was a believer in the serial comma.
“Thus real changes in the magnitude of value are neither unequivocally nor exhaustively reflected in their relative expression, this is, in the equation expressing the magnitude of relative value. The relative value of a commodity may vary, although its value remains constant. Its relative value may remain constant although its value varies; and, finally, simultaneous variation in the magnitude of value and in that of its relative expression by no means necessarily correspond in amount.”
This is a straightforward extension of the two theses: value of a commodity is determined by the amount of labor, and value is expressed relative to other commodities.
21 responses so far ↓
1 Tim of Angle // Jul 28, 2010 at 8:44 pm
Marx was an idiot, even if he (correctly) used the serial comma.
If I take a blown glass goblet, and add a little labor to it by shattering it on the pavement, that addition of labor has not increased the value, but destroyed it utterly.
Labor has nothing to do with value, except in the fevered imaginations of those determined to find some connection. Labor determines the *cost* of a thing; value is entirely subjective on an individual basis, and only determinable in a relative way. It is the egocentric values that vary from individual to individual that makes a market possible.
2 skzb // Jul 28, 2010 at 10:59 pm
Tim, the labor of shattering a glass is not socially necessary, hence does not add value. This has been explained to you before, as well as the precise definition of value being used in the text. When you try to criticize something that you clearly have not read, you just embarrass yourself.
3 Duffy Pratt // Aug 10, 2010 at 4:25 pm
At this point, value = human labor and only human labor. This is supposed to be an empirical proposition. But is it? Price hasn’t entered the picture yet. So how do we go about verifying or falsifying this proposition? To do so, you would need to have some objective measure other than human labor. Then you could say by that measure that two commodities had the same value, and in turn, look to see whether the same amount of labor went into producing the two. But we can’t do that, because we aren’t allowed to use price and there is no other objective measure. That’s why I think that the idea that value equals labor becomes a definition and not an empirical matter.
Let’s take a common exchange which really does lie at the heart of things. I’m sitting on a pile of gold, which is a commodity. My friend needs that gold to exchange it for some equipment so he can make coats. He borrows 2 pounds of gold from me and agrees to give me back 2 pounds and 2 ounces of gold in six months time. Does his use of my gold have any value? If you look at the real world, the answer is universally “yes.” Some people and religions thing this transaction is immoral, but even they don’t deny the value of having liquid asset to a commodity for the purpose of exchange. The labor theory of value, however, insists that there is no labor that increases the value of the gold by an extra two ounces. The transaction, thus, involves a “contradiction” because it contradicts the labor theory of value.
The question then becomes whether you believe the theory or the facts, because the facts say that the ability to use a commodity has value. The theory says it doesn’t.
4 skzb // Aug 10, 2010 at 5:11 pm
You’re introducing the concept of interest, which is important, and will be coming up later. For now, we are concentrating on simple exchanges–ie, what is happening when a coat is exchanged for linen.
5 Duffy Pratt // Aug 10, 2010 at 5:53 pm
Even in these simple exchanges, there’s no evidence that the labor underlying the exchanges is the same. Yes, its true that when you lower the labor it takes to produce a commodity, you will then be able to exchange it for less of another commodity. But is the function linear? Is there no other possible component of value for the commodity? If you measure by price, it’s pretty clear, as an empirical matter, that labor doesn’t always have everything to do with the price of the commodity. But price is not allowed. So again, how do you measure? How do you empirically test the labor theory?
Lets say that I can exchange 4 pounds of silver for an ounce of gold. (These are both pure commodities.) Do you really think it takes 64 times the work to get an ounce of gold out of the ground and to market as it does to get one of silver? If it doesn’t, which is wrong, the fact of the exchange, or the idea that the value of the commodity comes from the labor?
6 Tim of Angle // Aug 12, 2010 at 8:09 am
I’m sorry, Steve; I had presumed that you were as readily able as I to see the holes in Marx’s methodology. Obviously that was an error on my part, for which I do apologize.
All right; we’ll plod.
The notion of “socially useful labor” is bogus, an intellectual deus-ex-machina designed to paper over the huge crack that separate Marx from reality. Marx knew that this chasm would be perceptible to the average ten-year-old, and so had to deal with it proactively. Thus we discover that the famous “labor theory of value” suddenly becomes the “socially useful labor theory of value”, with “socially useful” winding up meaning whatever Marx and his entourage want it to mean at any particular moment.
The basic problem here is that Marx is not an economist, nor a historian, nor even a philosopher. Marx is a theologian, no different from Aquinas or Maimonides or Ibn Rushd — he starts with an agglomeration of irrational premises that appeal to him emotionally; then, accepting it as fact, proceeds to build this immense intellectual construct on top of it as if it actually had some connection with the real world.
Since we are practical fellows, you and I, let us ponder some concrete examples:
(1) The composer Haydn’s wife was notorious for cutting up his musical manuscripts to use as curling papers. Was this “socially useful labor”, or not? From the viewpoint of a musician or member of the intelligensia, probably not; it did not add to, but rather detracted from, the value of the manuscripts. From the viewpoing of a housewife or member of the proletariat, probably yes; it created something useful from something vain. Certainly Haydn’s wife thought so. (And where is the “commodity” here?)
(2) In 2001 the Taliban destroyed the Buddhas of Bamyan. Was this “socially useful labor” or not? From the standpoint of most civilized people, probably not; it did not add to, but rather detracted from, the value of the statues. From the viewpoint of a fundamentalist Muslim, probably so; it reduced the number of idols in the world, an unqualified Good Thing under Shari’a law. Certainly the Taliban thought so. (And where is the “commodity” here?)
(3) Consider urolagnia. Some people are apparently fond of getting peed on; there are magazines and websites devoted to the subject, and no doubt young ladies are standing by, ready to perform this service for an appropriate remuneration. Is this “socially useful labor” or not? (And what is the “commondity” here?)
These examples serve to demonstrate that utility (what Marx calls “use-value”) is completely and totally subjective; it does not form any measurable or quantifiable attribute of any object, because it exists, not in the object itself, but in the beholder of the object.
Thus, the amount of labor (even “socially useful labor”) invested in, say, a shovel is irrelevant both to its utility (”use-value”) and to its price (”exchange-value”) because any two different people will have correspondingly different (often grossly different) notions as to what those “values” are EVEN THOUGH THE AMOUNT OF LABOR (EVEN “SOCIALLY USEFUL LABOR”) THAT WENT INTO MAKING THE SHOVEL IS NOW FIXED AND DOES NOT CHANGE.
I hope that this satisfies your objections regarding my appreciation of Marx. If you want to discuss this further, I’ll be happy to dig out my notes from the two-semester course I took on Kritik der politischen Oekonomie thirty years ago as an Economics major at Yale and give you the benefit of my thoughts on the subject, although I warn you that it may mean delving into the original German text (and Marx is even more tedious in German than he is in English, although thankfully not as tedious as Hitler — sadly, German is an easy language in which to be tedious).
7 skzb // Aug 12, 2010 at 9:15 pm
Tim: One historical note: you seem to be operating under the assumption that the labor theory of value was Marx’s. It wasn’t. Authorship rests with David Ricardo, Adam Smith, and Benjamin Franklin.
I think you would have understood “socially necessary labor” if you had read the text.
I’m convinced you haven’t read the text because most of what you’re saying is either answered by Marx in the sections we’ve been through, or was said by him first. For example, you say that use-value is totally subjective and not quantifiable. Yes. Exactly. We covered that in, I think, the very first section.
Your example of Hayden’s wife is another reason I’m convinced you haven’t read the text. We’ve made it clear that we are discussing *commodity exchange* and we’ve made it very clear what a commodity is in this context. Do Hayden’s manuscripts qualify as a commodity? If not, why are you bringing them up?
And there is the fact that you keep changing socially necessary to socially useful; indicating, again, that you are operating on your prejudices, rather than the text. By socially necessary, we are simply pointing out that wasted labor does not add value. Do you think it does? Why would it?
Your shovel argument might make sense if, at the market, the price changed according to how much different people wanted it; since that doesn’t happen, your shovel argument falls apart.
On the other hand, we have one point of agreement: On the German language. As Twain said, “When the literary German dives into a sentence, that’s the last you’re going to see of him until he emerges, dripping wet, on the other side of the Atlantic with his verb in his mouth.”
8 Duffy Pratt // Aug 13, 2010 at 10:46 am
“Your shovel argument might make sense if, at the market, the price changed according to how much different people wanted it; since that doesn’t happen, your shovel argument falls apart.”
But that’s exactly what does happen. When the Miata first came out, it was selling for well above sticker price, because people wanted it so much. A year later, with no difference in labor to produce the model, the price had come down to a significant discount below sticker price. The same thing happens every time Apple introduces one of their stupid new “i” products. The initial price always tends to drop after the first burst of enthusiasm dies.
American stores give us a skewed sense of how this stuff generally works. Check any auction place, or go to a market overseas where people actually haggle. It may be true that the price at Home Depot for a shovel doesn’t fluctuate much. But take a look at what happens at other hardware stores on the Gulf Coast, when a hurricane is coming, and people want batteries, generators, and plywood. The labor in the commodities doesn’t change, but the price goes up precisely because of how much people at the market want the items.
9 Duffy Pratt // Aug 13, 2010 at 1:26 pm
Let me try another example, one closer to my, and perhaps your, heart: Food. A chicken is ready for butchering. The butcher kills the bird, plucks it and then divides it into sections for market. For simplicity, lets ignore the neck, the feet, the liver and gizzards, and only talk about the major parts.
The bird gets split into four major cuts: breast, thigh, and wings. When the wings are separated from the breast, it takes the same labor to divide the two parts. But the parts have different value. There has to be something that allocates value to the different parts of the bird, but the same labor goes into making the parts. Thus, it’s pretty clear that something other than labor has to be involved in the allocation of value to the parts of the chicken. It’s simply not the case that wings are worth much less than breasts because less labor went into the production of the wings.
Now let’s talk about the wings themselves. For a long time, at least here in the U.S., the value of wings was very low. For the most part they sold wholesale for pet food. The a restaurant in Buffalo realized that it could get supplies of wings for dirt cheap, and sell them as something special according to it’s special hot recipe. It started a craze. As a result, more and more restaurants, and even grocery stores, started carrying wings and the value of wings went up.
When the value of wings went up, this didn’t cause a reallocation of the value of different parts of the bird. It wasn’t that some of the labor in the breast suddenly got transferred to the wing commodity. Rather, the value of the parts of the bird, in the aggregate, went up. It still took the same amount of labor to produce the four major parts, but suddenly the butcher could exchange those parts for more linen or more coats.
As an aside, I will also note that the pet food, which is perhaps the least valuable part of the butchering process, is also the part that takes the most labor.
Here, we have an example, on the one hand, of how labor is not always the only consideration in the value of a commodity. (The same thing goes on with many, many products, including corn, petroleum, types of mining, natural gas, etc…)
And, on the other hand, we have an example where the value of something — the chicken parts — goes up because of their subsequent use, and not because of the labor inherent in the product itself.
10 Tim of Angle // Aug 13, 2010 at 4:23 pm
“Look, I came in here for an argument!”
“Oh, I’m sorry–this is abuse. You want 12A, next door.”
Shall I mail you some Valium and come back later?
11 A different Tim // Aug 15, 2010 at 12:52 pm
Tim of Angle,
On behalf of people named Tim, a group of which I am honored to be a member: Please stop being a dick. You’re making us look bad.
12 Tim of Angle // Aug 15, 2010 at 1:39 pm
-> Different Tim
Well, my name isn’t really “Tim”, so you can rest easy. That’s just what most people call me, so your complaint would seem to be with them, not with me.
It’s not clear in my mind how you came to be empowered to make judgments on behalf of “people named Tim”, however much honor you feel. Indeed, since you don’t deign to leave your full name and contact details, as I have, I must conclude that the honor you feel doesn’t have any resemblance to real honor as understood by honorable people
I’ll make you a deal. I’ll quit being a dick when you quit being a pussy.
13 skzb // Aug 16, 2010 at 4:40 am
Duffy: Your chicken example is interesting. Let’s examine it a bit.
In order to get the chicken to the processing plant, obviously, takes a certain amount of labor on average. A butcher then expends labor in cutting it apart. Clearly, a cut chicken has more labor embodied in it than an uncut chicken; and this is reflected at the market.
So far, so good.
But, according to the Marxist theory, labor has already been expended in the cutting and sorting process–thus this labor is embodied in the cut (and, presumably, packaged; packaging also costs labor) chicken. This labor is then returned for the whole chicken. Exactly how this surplus value is divided is irrelevant.
In other words, the labor is embodied in the process chicken in total, and comes back from the sale of the processed chicken in total.
Now, if the parts of a chicken grew independently, and identical amounts of labor were involved in growing each part, and yet the consistently sold for different values, then you would have an argument.
14 Duffy Pratt // Aug 16, 2010 at 12:27 pm
I was expecting your answer, and I think it’s a fairly good answer. But I still have a few problems with it. First, it denies commodity status to the various parts of the chicken, and I see no good reason to do this. And maybe you can do that for chickens, but I really don’t think anyone would want to deny that, for example, gasoline and benzene are separate commodities, even though both come from petroleum refining.
The second trouble I have with your explanation is the simple fact that the value of chickens did go up when the wings became popular. The labor to produce the entire bird, and then to butcher it. But the value of the full bird went up. The same thing would happen again, if someone could convince Americans how wonderful chicken feet taste.
Also, don’t get me wrong. I’m not saying that labor has nothing to do with value. I just don’t think its the whole story.
15 Tim of Angle // Aug 16, 2010 at 7:54 pm
Duffy, I think I’m in your corner on this, but I have to take care of some meta-stuff first.
Steve, Dickless Tim to the contrary notwithstanding, I’m not just hanging out here because it amuses me to bicker. I was under the impression (correct me if I’m wrong) that you wanted to work through Kapital (and that’s a useful thing) and chose to do so in this semi-public forum so that everyone could benefit from the discussion.
Now, I think I have a contribution to make in this process, but perhaps unfortunately the only copy of Das Kapital I have is in German–the 1872 edition, published in Hamburg–and it sometimes is a problem (the whole “socially necessary/socially useful” things was me mistaking notwendige for nuetzliche — I told you, it’s been 30 years — and you’re right to call me on it, although I am prepared to argue that it doesn’t detract from the point I was trying to make). Now I don’t know which translation you’re using, but there is one on the web at http://www.marxists.org/archive/marx/works/1867-c1/ that appears to be the product of Real Marxists and so is presumably as close to an authoritative version as may be. If you want to continue this conversation, let’s use that as the Official Hair To Be Split. (If not, of course, just tell me to buzz off and I’m gone; it is, after all, your blog.)
16 skzb // Aug 17, 2010 at 12:22 am
Duffy: “The second trouble I have with your explanation is the simple fact that the value of chickens did go up when the wings became popular”
Um. Call me dense. Isn’t this an argument in favor of the labor theory of value? What am I missing?
Tim: You are welcome to continue the conversation. I intended to mention the edition I’m using, but perhaps I didn’t. I’m using the 1967 trade paperback edition from International Publishers.
17 Duffy Pratt // Aug 17, 2010 at 6:32 am
Before: Wings were sold wholesale for pet food. Other parts sold for human consumption.
After: Wings sold to retaurants and grocery stores, for much more. Other parts sold for the same amount.
The labor involved before and after was almost exactly the same. The value of the bird, as a whole, went up. Same labor, but more value.
18 skzb // Aug 17, 2010 at 9:25 am
When you say the value of the bird went up, I assume you mean the price. I’m not convinced it DID go up, except perhaps short-term. Seriously, do you forget competition and market share? If someone was selling a chicken for considerably more than it’s value, what kept his competitors from undercutting him? I’d really like to see hard numbers on this, over a long period of time, before I’m convinced.
19 Terry // Aug 17, 2010 at 1:47 pm
Disclaimer: I have not read the book at all.
But there’s got to be somewhere in the model an acknowledgment that new inventions and discoveries can change the world. When the cotton gin appeared, the cost of labor to produce cotton went down. I think this is the same kind of thing — if someone discovers that people will pay for wings if they have hot sauce squirted on them, then the whole model similarly changes.
20 Duffy Pratt // Aug 17, 2010 at 10:42 pm
The demand for the wings went up. As I understand it, suppliers started producing more chickens to satisfy the increased demand for wings (and the insatiable demand for breasts). As a result, leg and thigh part prices either dropped or remained steady. But the overall price for the birds went up.
It’s possible the facts are not quite what I’ve stated. I’m basing this on an article I read many years ago, and I can’t even be sure that that article was based on a solid scientific survey. For the most part, people do economics without having alot of solid, raw data on which to base it. Before, I asked for some real empirical evidence that two commodities that were worth the same (which could be exchanged) actually contained the same amount of labor. Maybe here I’m guilty of the same failure to provide real evidence.
21 skzb // Aug 18, 2010 at 1:39 am
Terry: Discovering that people will pay for wings, unlike the cotton gin, does not change the amount of labor required to produce it.
Duffy: I would never in a million years attempt to deny the effect of supply and demand on price; or of competition. We will be dealing with both later, when we get into the relationship between price and value. But first we have to solve the mystery of money, which is what we’re in the middle of now.
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