Capital Volume 1 Part 1 Chapter 1 Section 3A3

This section is called “The Equivalent form of value”

Page 55: “We have seen that commodity A (the linen), by expressing its value in the use-value of a commodity differing in kind (the coat), at the same time impresses upon the latter a specific form of value, namely that of equivalent.  The commodity linen manifests its quality of having a value by the fact that the coat, without having assumed a value-form different from its bodily form, is equated to the linen.  The fact that the latter therefore has a value is expressed by saying that the coat is directly exchangeable with it.  Therefore, when we say that a commodity is in the equivalent form, we express the fact that it is directly exchangeable with other commodities.”

So far, just a recap of previous sections.  Commodities express their equivalence insofar as they can be exchanged, and to assert that commodity A can be exchanged for commodity B is to say that they are equal in that sense.  The significant thing, for now, is that the value of commodity A is now being defined in terms of commodity B.  Now we’re going to explore the implications of this equality.

“When one commodity, such as a coat, serves as the equivalent of another, such as linen, and coats consequently acquire the characteristic property of being directly exchangeable with linen, we are far from knowing in what proportion the two are exchangeable.  The value of the linen being given in magnitude, that proportion depends on the value of the coat.  Whether the coat serves as the equivalent and the linen as relative value, or the linen as the equivalent and the coat as relative value, the magnitude of the coat’s value is determined, independently of its value-form, by the labor-time necessary for its production.  But whenever the coat assumes in the equation of value, the position of equivalent, it’s value acquires no quantitative expression; on the contrary, the commodity coat now figures only as a definite quantity of some article.”

Whew.  Okay.  The real value of the coat is determined by the labor necessary to produce it.  This value is expressed in some other commodity.  When we are determining the value of some commodity in terms of coats, then the role of coats is to express the value of that other commodity.   There.  I think I got that right.  Let’s go on and see where it leads us.

Page 56: “For instance, 40 yards of linen are worth–what?  2 coats.  Because the commodity coat here plays the part of equivalent, because the use-value coat, as opposed to the linen, figures as an embodiment of value, therefore a definite number of coats suffices to express the definite quantity of value in the linen…when the commodity acts as equivalent, no quantitative determination of its value is expressed.”

Right.  To say 40 yards of linen = 2 coats is to say nothing of the quantitative value of the coats; it is to express the quantitative value of the linen.  The coats become the measuring stick.  Of course, we can reverse the equation, and then we are expressing the quantitative value of the coats in terms of linen.  What I don’t get, is why this matters.  Let’s go on.

“The first peculiarity that strikes us, in considering the form of the equivalent, is this: use-value becomes the form of manifestation, the phenomenal form of its opposite, value.”

Okay, well, for those of us with a fascination for philosophy, that is actually kind of cool.  But the economic importance hasn’t hit me.

“The bodily form of the commodity becomes its value-form.  But, mark well, that this quid pro quo exists in the case of any commodity B, only when some other commodity A enters into a value-relation with it, and then only within the limits of this relation…every commodity is compelled to choose some other commodity for its equivalent, and to accept the use-value, that is to say, the  bodily shape of that other commodity as the form of its own value.”

Right.  A use-value (ie, a physical object, the commodity) becomes the expression of an abstraction, value, in another commodity, by the act of the exchange.

“A sugar-loaf being a body, is heavy, and therefore has weight: but we can neither see nor touch this weight.  We then take various pieces of iron, whose weight has been determined beforehand.  The iron, as iron, is no more the form of manifestation of weight than is the sugar-loaf.  Nevertheless, in order to express the sugar-loaf as so much weight, we put it into a weight-relation with the iron.  In this relation, the iron officiates as a body representing nothing but weight.  A certain quantity of iron therefore serves as the measure of the weight of the sugar, and represents, in relation to the sugar-loaf, weight embodied, the form of manifestation of weight…were they not both heavy, they could not enter into this relation, and the one could therefore not serve as the expression of weight of the other…just as the substance iron, as a measure of weight, represents in relation to the sugar-loaf weight alone, so, in our expression of value, the material object coat, in relation to the linen, represents value alone.”

I love this.  Makes perfect sense.

Page 57:  “Here, however, the analogy ceases.  The iron, in the expression of the weight of the sugar-loaf, represents a natural property common to both bodies, namely their weight; but the coat, in the expression of value of the linen, represents a non-natural property of both, something purely social, namely, their value.”

And important distinction: because something is not natural (ie, because it is social), does not mean it isn’t real.

“Since the relative form of value of a commodity…expresses the value of that commodity, as being something wholly different from its substance and properties…we see that this expression itself indicates that some social relation lies at the bottom of it.  With the equivalent form it is just the contrary.  The very essence of of this form is that the material commodity itself–the coat–just as it is, expresses value, and it is endowed with the form of value by Nature itself.  Of course, this holds good only so long as the value-relation exists, in which the coat stands in the position of equivalent to the linen.  Since, however, the properties of a thing are not the result of its relations to other things, but only manifest themselves in such relation, the coat seems to be endowed with its equivalent form, its property of being directly exchangeable, just as much by Nature as it is endowed with the property of being heavy, or the capacity to keep us warm.  Hence the enigmatical character of the equivalent form, which escapes the notice of the bourgeois political economist, until this form, completely developed. confronts him in the shape of money.  He then seeks to explain away the mystical character of gold and silver, by substituting for them less dazzling commodities, and by reciting, with ever renewed satisfaction, the catalog of all possible commodities which at one time or another have played the part of equivalent.  He has not the least suspicion that the most simple expression of value, such as 20 yds of linen = 1 coat, already prepounds the riddle of the equivalent form for our solution.”

Whew!  Okay, before tackling this, I want, just for fun, to include a footnote.  Marx says, “Such expressions in general, called by Hegal reflex categories, form a very curious class.  For instance, one man is king only because other men stand in the relation of subjects to him.  They, on the contrary, imagine that they are subjects because he is king.”

Anyway, let’s look at that monster paragraph.  Remember, we are dealing with the relative form, and the equivalent forms of value.  The relative form is the expression of the value of one commodity in terms of the use-value of another; the equivalent form is, um, what?  Here we go back to that short paragraph that I thought was interesting, but didn’t see the point of: in the equivalent form, we express value in terms of a physical object, a use-value.

So, okay.  The equivalent form expresses value as a social substance, that is, the labor embodied in it.  The equivalent form is the expression of value contained in the commodity itself.  The relative form finds value relative to other commodities, the equivalent form refers to the value of the commodity itself.  I think I have that right.  I may be way off here.  This shit is hard.

So, okay, if I’m right, what he’s saying is that the properties of a thing (in particular, a commodity) are actually contained in the thing, but manifest only in relation to other things.  A character in a story (or in reality, but never mind) has certain inherent aspects of his personality, but you only actually see them when he is interacting with another character.  I might be full of shit here, but that’s how I’m interpreting it.

P58:”The  body of the commodity that serves as the equivalent, figures as the materialisation of human labour in the abstract, and is at the same time the product of some specifically useful concrete labour.  The concrete labour becomes, therefore, the medium for expressing abstract human labour.  If on the one hand the coat ranks as nothing but the embodiment of abstract human labour, so, on the other hand, the tailoring which is actually embodied in it, counts as nothing but the form under which that abstract labour is realized.  In the expression of value of the linen, the utility of the tailoring consists, not in making clothes, but in making an object, which we at once recognize to be Value, and therefore to be a congelation of labour, but of labour indistinguishable from that realized in the value of the linen.  In order to act as such a mirror of value, the labour of tailoring must reflect nothing besides its own abstract quality of being human labour generally.”

Okay, that part I think I got.  If I own a factory making computer chips, then, during production, it matters to me very much that they are computer chips.  At the market, what matters to me is they are commodities I can sell.  Similarly with the labor to produce them.  At the point of sale, all that matters is that it was abstract human labor, which has value.

“In tailoring, as well as in weaving, human labour-power is expended.  Both, therefore, possess the general property of being human labour, and may, therefore, in certain cases, such as in the production of value, have to be considered under this aspect alone.  There is nothing mysterious in this.  But in the expression of value there is a complete turn of the tables.  For instance, how is the fact to be expressed that weaving creates the value of the linen, not by virtue of being weaving, as such, but by reason of of its general property of being human labour?  Simply by opposing to weaving that other particular form of concrete labour (in this instance tailoring), which produces the equivalent of the product of weaving.   Just as the coat in its bodily form became a direct expression of value, so now does tailoring, a concrete form of labour, appear as the direct and palpable embodiment of human labour generally.”

Right.  Just as a specific commodity contains value in general, so a specific form of labor produces value in general.

“Hence, the second peculiarity of the equivalent form is, that concrete labour becomes the form under which its opposite, abstract human labor, manifests itself.”

I just said that!

“But because this concrete labour, tailoring in our case, ranks as, and is directly identified with, undifferentiated human labour, it also ranks as identical with any other sort of human labour, and therefore with that embodied in the linen.  Consequently, although, like all other commodity-producing labour, it is the labour of private individuals, yet, at the same time, it ranks as labour directly social in its character.  This is the reason why it results in a product directly exchangeable with other commodities.  We have then a third peculiarity of the equivalent form, namely, that the labour o fprivate individuals takes the form of its opposite, labour directly social in character.”

A man living alone in the woods might well do some work to kill an animal, skin it, and make clothing for himself.  But what happens in a society based on commodity exchange is that labor, as we use the term, only has meaning socially.  He isn’t making clothes for himself, he’s making clothes for a wage so that the owner of the clothes can exchange them.  This is a social activity.

P 59: “The two latter peculiarities of the equivalent form will become more intelligible if we go back to the great thinker who was the first to analyse so many form, whether of thought, society, or Nature, and amonst them also the form of value.  I mean Aristotle.

“In the first place, he clearly enunciates that the money-form of commodities is only the further development of the simple form of value–i.e., of the expression of the value of one commodity taken at random; for he says–

5 beds=1 house

is not to be distinguished from

5 beds = so much money.

(I’m leaving out Marx’s quotation of the original Greek — SB)

“He further sees that the value-relation which gives rise to this expression makes it necessary that the house should qualitatively be made the equal of teh bed, and that, without such an equalization, these two clearly different things could not be compared with each other as commensurable quantities.  ‘Exchange,’ he says, ‘cannot take place without equality, and equality not with commensurability.’ (more Greek quotations here – SB)  Here, however, he comes to a stop, and gives up thefurther analysis of the form of value. ‘It is, however, in reality, impossible (Greek) that such unlike things can be commensurable’–i.e., qualitatively equal.  Such an equalization can only be something foreign to their nature, consequently, only ‘a makeshift for practical purposes.’

“Aristotle therefore, himself, tells us, what barred the way to his further analysis; it was the absence of any concept of value.  What is that equal something, that common substance, which admits of the value of the beds being expressed by a house?  Such a thing, in truth, cannot exist, says Aristotle.  And why not?  Compared with the beds, the hosue does reprsent something equal to them, in so far as it represents what is really equal, both in the beds and the house.  And that is–human labour.”

This seems clear enough to me, and, also, fascinating.

“There was, however, an important fact which prevented Aristotle from see that, to attribute value to commodities, is merely a mode of expressing all labour as equal human labour, and consequently as labour of equal quality.  Greek society founded upon slavery, and had, therefore, for its natural basis, the inequality of men and of their labour-powers.  The secret of the expression of value, namely, that all kinds of labour are equal and equivalent,  because, and so far as they are human labour in general, cannot be deciphered, until the notion of human equality has already acquired the fixity of a popular prejudice.  This, however, is possible only in a society in which the great mass of the produce of labour takes the form of commodities, in which, consequently, the dominant relation between man and man i, is that of owners of commodities.  The brilliancy of Aristotle’s genius is shown by this alone, that he discovered, in the expression of the value of commodities, a relation of equality.  The peculiar conditions of the society in which he lived, alone prevented him from discovering what, ‘in truth,’ was at the bottom of this equality.”

Perhaps I need not have added the Aristotle stuff to this already long post, but I am always fascinated by the relationship between the material conditions of life, and the ideas they produce.

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0 thoughts on “Capital Volume 1 Part 1 Chapter 1 Section 3A3”

  1. Anybody who makes a coat out of twenty yards of linen is mighty damn extravagant with the linen, is all I can say.

  2. Whoa! That’s a heady post.
    My initial thought is how Marx’s assessment of how the value or quality of a thing (e.g.: “king”) is “real” only in relation to the things around that interact with it. Which is an observation that would underlie Saussure and semiotics, Barthes, Lacan, and then Slavoj Zizek.

  3. Emma: Uh, but if the coat was made from twenty yards of linen, then, with the addition of labor, it would worth substantially more than twenty yards of linen, and so they wouldn’t be equal.

    Er, I’ve missed a joke, haven’t I?

  4. My first impression from this is that Marx really likes that converting from one abstraction to another, then converting back to the first type of abstraction thing. I can almost feel the glee.

    I think that shortly before he wrote it (a few decades?), the mathematical notation for algebra and the mathematical commutative law were being developed and explored. The ideas must have seemed new and fresh and exciting.

  5. Page 55: “We have seen that commodity A (the linen), by expressing its value in the use-value of a commodity differing in kind (the coat), at the same time impresses upon the latter a specific form of value, namely that of equivalent. The commodity linen manifests its quality of having a value by the fact that the coat, without having assumed a value-form different from its bodily form, is equated to the linen. The fact that the latter therefore has a value is expressed by saying that the coat is directly exchangeable with it. Therefore, when we say that a commodity is in the equivalent form, we express the fact that it is directly exchangeable with other commodities.”

    I told you this was a nasty paragraph. Steven, you dismiss this as merely review. It is meant to sound like review, but it is not. It’s brand new.

    “We have seen that commodity A (the linen), by expressing its value in the use-value of a commodity differing in kind (the coat), at the same time impresses upon the latter a specific form of value, namely that of equivalent.”

    Where did Marx demonstrate that value is expressed as use-value or vice versa? In this entire work so far, he has done nothing more than dismiss use-value, “abstracting” it out of existence, because it is a constant.

    There is no review in this paragraph. It is pure invention, intended to add unproven elements. What’s worse, is that by developing this over weeks, Steven, it is even harder to remember that Marx never did the work to demonstrate that Value has anything to do with use-value. In fact, he demonstrated that Value is a function of only labour-value. Or have you forgotten?

    Let’s go back and review what Marx did, from the beginning.

    He first introduces use-value. Use-value is a Constant — a function of the physical properties of a commodity. (Which makes in fundamentally irrelevant to the real world. People judge an items value relevant to its usefulness towards the single use that person will put it to, not all uses others may have for it.)

    Then he introduces the concept exchange-value. Exchange-value is used to demonstrate the equivalence of various commodities. (Another deluded concept. People maximize their profit or value in a trade, after comparing against other trades they can make. Further, retailers buy for one price and sell for another, ensuring that the same product with a constant labour-value is sold at two different prices, demanding that labour-value is not the only variable in a commodity. If a single product can be bought and sold by one person for a different price, one exchange was inherently not equivalent, if the other one is.)

    He then eliminates from exchange-value the portion attributed to use-value (abstracting it out is nothing more than subtraction), and calls the remainder “Value,” arbitrarily declaring that Value must be a function of labour-value, and assigns all variable aspects of exchange-value in commodity exchange to the labour associated in its production.

    He then drops the capital off of Value and calls it value. Mathematically:

    (1) Exchange-value = F1(use-value) + Value
    (2) value = F2(labour-value)

    Now, all of a sudden, in the above paragraph, he introduces the concept that “value” has a component derived from use-value, returning again to:

    (3) Value = F3(use-value) + F4(labour-value)

    … hunh? Value was, by definition, entirely composed of labour-value. If Value can be expressed as a function of labour-value and use-value, then there was no Value in the first place.

    but remember

    (4, 2 substituted into 1) Exchange-value = F1(use-value) + F2(labour-value)

    See the similarity between Value and Exchange-value? To me, it’s bvious that F1(X) = F3(X) and F2(X) = F4(X), and we’re back to the start, having actually proven nothing. It was all inherent in the defiition of the equations in the first place. Okay, back to Marx.

    What? We eliminated use-value to invent the term Value in the first place! You can’t then put back the concept of use-value into Value, or else you never eliminated it in the first place.

    This is why technical terms in an argument must be stated and consistency maintained in their use. By eliminating the V off Value and proceeding with value, Marx can get you to equate value as solely labour-value with use-value plus labour-value, without you recognizing the switch. It’s a con-job of the first order, premitting multiple definitions simultaneously, which can get you to believe anything he wants you to. If forced to retain mathematical terms and consistency, Marx can’t get where he wants to go.

    In other words, you just got snowed.

    There is one truism in Internet debating. The Truth always takes second place to a good debater’s arguments. A bad debater with truthful arguments will always lose to a good debater with false arguments. At all times, you must beware the debater’s capacity to convince you of a lie. You’re giving Marx the benefit of the doubt when he says, “We have seen”. You need to turn on your BS filter and ask, “Where did we see that?” You’ve given him credit, just because he claimed to have proven something.

    Is Marx done with his double-speak? Nope. Get a load of this one…

    “The first peculiarity that strikes us, in considering the form of the equivalent, is this: use-value becomes the form of manifestation, the phenomenal form of its opposite, value”

    Well, he does notice the problem himself, but he fails to recognize that it is merely a creation of his own flawed re-use of the term “value”. He has, quite literally, snowed himself with his own inability to identify technical terms and equations that form their foundation. It is, essentially, just bad mathematics that has created his peculiarity. No, instead we’ll look to Aristotle for an answer.

    So how does Aristotle resolve the fact that value is a function of use-value, it’s inherent opposite?

    He doesn’t!

    Neither does MArx!

    He drops it. He goes into a “fascinating” discussion of Aristotle and leaves both of his “peculiarities” to be forgotten.

    You got snowed again. It’s called “sleight of hand” in magician circles. And it lets people create magic.

    Marx: ‘“Aristotle therefore, himself, tells us, what barred the way to his further analysis; it was the absence of any concept of value. What is that equal something, that common substance, which admits of the value of the beds being expressed by a house? Such a thing, in truth, cannot exist, says Aristotle. And why not? Compared with the beds, the hosue does reprsent something equal to them, in so far as it represents what is really equal, both in the beds and the house. And that is–human labour.”

    Steven: ‘This seems clear enough to me, and, also, fascinating.’

    And useless to the point of introducing Aristotle in the first place. This does nothing to resolve the peculiarities. None of them are mentioned in even the slightest. Marx has merely reiterated his previous equation (3), and given himself a classical equivalence by demanding that he has extended Aristotle. Aristotle introduces no new concepts to resolve the actual peculiarity. We already know that Value expresses itself as a function of both use-value and labour-value. That’s not new, so it can’t solve the problem, since the problem draws on that equation itself. Stating it anew with Aristotle in the sentence is just a distraction, hoping you won’t notice that he hasn’t solved the actual problem.

  6. Sorry to be a bother, but it seems as if my comment cannot post in the other thread. Do comments await approval? Was the thread too old? (Progress report and thank you)

    Anyway, my exciting comment was all about how the Tiassa blurb is out. Now it’s one sentence :P

  7. Good call, Kriestor–that’s where my confusion came in. It sounded like review, but that is where the equivalent form is introduced; he is here pointing out that, inherent in the relative form, is the side of the equation that makes a certain commodity equivalent. The whole things makes much more sense now. Thank you!

    Other parts of your comment are interesting, but I’m going to hold off addressing them for a bit.

    Billy: That’s really weird; I don’t know what’s causing that.

  8. OK, I have a question about the universal value of human labor according to Marx, mentioned in this excerpt.

    Suppose we have two ditch-diggers. One is strong and the other is not so strong. The strong ditch-digger can dig 20 feet of trench in an hour; the other can only dig 10 feet.

    Should both these individuals receive equal compensation for their hourly labor? If so, then why should the strong laborer not slack off and put in half the effort that is necessary, leading to pervasive productivity and production problems? If not, isn’t the compensation inequitable for the weak ditch-digger who is trying as hard as he can?

    One can then extend this question to compare ditch-digging, which most people can do to at least to some extent, with let us say wet-nursing, which less than half the working population can do, or theoretical physics, which hardly any people can do due to lack of appropriate education.

    Should any of these people — strong ditch-diggers, wet-nurses, or physicists — be compensated more for their hourly work than weak ditch-diggers?

    Looking at this question, it may appear rhetorical, leading, or deliberately provocative, but I want to know the answer here according to Marx, not argue.

  9. Miramon, Marx is simply dismissive of skilled labour.

    “Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction 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.14 The different proportions in which different sorts of labour are reduced to unskilled labour as their standard. are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom. For simplicity’s sake we shall henceforth account every kind of labour to be unskilled, simple labour; by this we do no more than save ourselves the trouble of making the reduction. ”

    In truth, he does not deal with it at all. He reduces the man to an emotionless automaton, without the jealousy or sense of pride that superior productivity creates. He thinks people shouldn’t care that they are more or less productive than others: their labour is equally valuable just by being work.

    You and I can see the obvious flaw in that. Human beings are emotional creatures, They are jealous, vindictive, and petty, and no amount of philosophical or political education will ever change that. By failing to provide a reward mechanism for those that provide skilled (or inherently more productive) labour, productivity reduces to the minimum of any worker as effective labourers see the efforts are in vain, rather than inspiring the best from all by rewarding those that make greater efforts.

    The problem for Communism now is that non-skilled labour in Western Civilizations is disappearing. The average age of entry into the work force is now over 20, where it was 16 in the 1950’s. All work takes skill now: you need a college diploma just to get into the work force. Colleges give courses in bricklaying and farming, fer goodness sake! When all labour is skilled, can you trivialize labour to an unskilled equivalent? How can you convince the unskilled masses to revolt, when they are outnumbered 3:1 by the skilled labour force? The skilled force looks at their enhanced labour and the enhanced profit it generates for their employers (be it industry or government) and expects reward for it, and will reject Marx’s thought that they should not expect superior income for their superior effectiveness. No longer in the minority, the skilled labour force can numerically reject the unskilled force’s desire for equivalency in wages, and it can do so without being a part of the oppressive Capitalist elite, instead doing so from a position of majority.

    “The different proportions in which different sorts of labour are reduced to unskilled labour as their standard. are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom.”

    Marx only covers the case where both individuals are working for a Capitalist elite, not the case where the two workers are self-employed. Marx throws the baby (the freedom of self-employment) out with the bathwater (the Capitalist elite that ran the horrible factories of the 1800’s), because he simply had no evidence that it could happen.

    The freedom attained from the Capitalist elite through ever broadening small company success would be a concern for later generations of Communist theorists. They never did solve the problem.

  10. Now that he’s said that 5 beds = 1 house is not to be distinguished from 5 beds = so much money, does that mean we can start talking about price? Or is it still out of bounds?

  11. When I previously warned about the first paragraph in this article, I obviously could not foresee that Steven would proceed with such a large portion of the text. There is simply too much text to attack every weakness.

    Here is a “short” version of some of the vectors I could use:

    1. By demonstrating that commodities can form relationships outside the exchange, Marx has demonstrated that value can also be formed based on relationships besides exchange. Value is a relative, and therefore inherent in any comparison. Whenever you compare, you evaluate, and what’s the root word of that? You don’t even need to compare something to another commodity to evaluate it. You only need to compare it to wherever you want to use that item. A 56″ TV doesn’t fit in a kitchen and therefore has no value there; whereas, a 16″ TV does have value, and can have increased value if it has more pixels, less weight, and anti-glare capability if there’s a picture window nearby.

    2. 20 linen equals 1 coat. 40 linen equals 2 coats. But for me, would I ever trade 400 linen for 20 coats? I need only one. Would I really trade 40 linen for a second coat I don’t need, when I don’t have pants? The more coats one has, the fewer one needs and the less one is willing to exchange for it. In other words, the economic system is not and never was linear. If labour-value does not change, but decreasing need reduces the equivalent one will provide, there is obviously some missing variable from the system that Marx has not identified.

    3. Paragraph 2 speaks of knowing the characteristics of the properties being exchanged but not being able to know the proportions in which the commodities will be exchanged based solely on that knowledge. He says that the commodity’s value and the ultimate exchange is determined by the labour time used to manufacture it.

    3a. So… does Marx demonstrate how every commodity buyer knows at all times how much labour it took to produce a commodity? Can he show that they even care? We’re talking about the ultimate Capitalists here, aren’t we? These are the guys that are supposed to be abusing the labourers with their greed and immorality, in order to justify killing them all in violent revolution. If they are actually evaluating trade based on labour content, then isn’t it impossible for them to be profiteering in the way Communism demands? For the Capitalist elite that are making these trades in such a way to abuse the labourer, there *MUST* be some other aspect of the trade that ensures that it is *NOT* equivalent, otherwise, their trades are equivalent and not vile in any way. And once it isn’t equivalent, because it’s a Capitalist making the trade, you cannot demand that only labour makes for the variation in exchange. Greed must inherently be a part of the exchange in order to vilify the Capitalist, and once you enter the realm where emotion and human flaw affects exchange, you can only find an equivalent exchange if you can demonstrate that there are some humans that are inherently not greedy. Greed is a fundamental flaw in all of humanity, so that’s going to take some work. I am *NOT* letting you have it both ways. Exchanges are either corrupted by Capitalist greed, or they are not.

    3b. Since the equivalency hinges on an accurate knowledge of the labour content of a commodity, what happens when we introduce the obvious problem that human beings do not know everything about the commodities they are exchanging? Most exchanges do not take place between two labourers with their own product — in fact few do. Once the commodity has passed between a few traders, no one knows how much time went into one coat vs. another. Only the first exchange involves an expert on this particular coat. Marx has made his equivalency dependent upon the specific knowledge of the traders, and that cannot be guaranteed to be accurate, and thus can introduce variation in exchange beyond labour content, but also in the flawed knowledge of manufacturing processes.

    4. Tailoring ranks as undifferentiated human labour. Fine. But what about medicine or civil engineering? If a tailor screws up, he loses a few minutes of time and wastes a little linen. If the doctor screws up, someone dies. If the civil engineer screws up, the bridge collapses, taking all of the people on it, underneath it, and maybe near it, costing many human lives and thousands of tons of steel and other resources. Is a doctor’s work even remotely comparable to undifferentiated labour, when the failure of either labourer has such disparate consequences? It takes days to learn to be a tailor, and it carries little risk. It takes years to become a doctor and carries much risk. It takes fewer years to become a cviil engineer and carries far more risk. It is pure fantasy to equate a tailor to a doctor. Communism gets around this problem by pointing a gun at the smart person, or threatening re-education in the appropriate facilities, which is only the enslavement of the intelligent to the needs of society.

    5. “The first peculiarity that strikes us, in considering the form of the equivalent, is this: use-value becomes the form of manifestation, the phenomenal form of its opposite, value.”

    5a. Easy. All things can be expressed in terms of it’s opposite. In a room there are 100 people, 40 Capitalists and 60 Communists. Ca = 100-Co. I have now expressed the quantity of Capitalists in relation to the number of Communists. You don’t need to jump through any hoops at all to demonstrate an equivalency using an opposite to some quantity in the original equation. Just substitute Unity-Opposite in whatever equations you are using.

    5b. Marx would have you beileve that somehow, by introducing labour-value into the first peculiar relation of value as manifested in use-value that use-value is no longer relevant. Adding a variable to an equation does not eliminate the variables already present, unless you are substituting, and Marx has not suggested labour and use-value are identical. Adding labour does not solve the initial peculiarity, and only serves to distract from his own inability to recognize the demands of properly modeling reality.

    6. I would love to look into Aristotle and see if Marx did some quote mining. Given the short quotes, I suspect that’s what happened here. I find it highly suspect that Aristotle would have left any question unanswered. But I’m not going to bother, because Aristotle has been demonstrated in just about everything else to be no longer relevant. He was brilliant in a time when no one knew anything, but he has been superceded by modern science and methods and been reduced to irrelevance except as a historical thinker of admiration for his genius at that time, not his genius in this time.

  12. Miramon: Marx isn’t saying anything at all about what should or shouldn’t be; he is describing capitalism as it actually operates. Your two ditch diggers are paid according to a collective bargaining agreement that is a part of how the value of labor-power is determined (I think he gets into that in volume II).

  13. Steven, that’s not what he’s asking. There was no Collective Agreement in Marx’s time, so the ditch diggers are in a competitive environment. There were a few rare jobs with Guilds keeping them organized (the Free Masons started as that), but that was the exception, not the rule. Guilds rarely lasted in unskilled labour (Anhk-Morpork notwithstanding): masonry was skilled work (eventually leading to carving the gothic stonework after years of proving yourself), requiring apprenticeships, so membership could be controlled and competition prevented. In Marx’s age, there was no way for a Union or Guild to protect itself, legally. Miramon is asking how Marx would see it at his time, not ours where ditch diggers could theoretically unionize.

  14. His theory about how capitalism operates makes profit an impossibility — it is the contradiction that he discovers in the capitalist system. But profit clearly continues to operate. That’s the main sticking point. He claims to be descriptive, but his description fails.

    The price of every commodity fluctuates wildly every day, often on a minute by minute basis. The labor it takes to produce most of these commodities remains fairly constant. The only conclusions you can draw from this are either that price has very little to do with value, or that labor has less to do with value than Marx maintains.

  15. Kriestor: Yes, there was collective bargaining in Marx’s time. There was a history of Trade Unions published in 1894. And Adam Smith discusses them in The Wealth of Nations, written during the American Revolution.

    Duffy: No, it explains how profit enters the system–but we aren’t quite there yet. The fluctuations are no mystery; the question is what they fluctuate around.

  16. You’re still dodging his question by nitpicking at details. If you can’t explain Marx’s position on Miramon’s question, then admit it and move on.

    Miramon asked, “Should any of these people — strong ditch-diggers, wet-nurses, or physicists — be compensated more for their hourly work than weak ditch-diggers?”

  17. Should is beside the point. Strong ditch-diggers are compensated the same as weak ditch-diggers. We aren’t talking about what ought to be, we’re describing capitalism as it works. Of course physicists are compensated more than ditch-diggers. Labor-power is a commodity; it costs more to produce a physicist than it does a ditch-digger.

  18. The value of a thing is the sum of all the labor put into it. When there is an exchange of two items for their value, then there has been an equal exchange of labor. If a capitalist takes a profit, he either charges more than the value for the commodity, or he steals the value from the laborers. That means there is no room for profit over and above the labor that is put into a commodity — no room for the capitalist to make money. As I understand it, that is what Marx sees as the fundamental “contradiction” of capitalism, and why it is doomed to ultimate failure and replacement by communism.

    If Marx’s theory 0f value is wrong, however, then there may not be a logical basis for his critique of capitalism. (It might still be a terrible system, but it wouldn’t be for the reasons that Marx says.)

  19. Duffy, of course his analysis of value is absurd. He’ll tell you that later, in exactly those words. The problem is he retains the conclusions he drew from the absurd premises, which is a gross violation of common sense. It’s a fool that stands near statues with feet of clay. The inherent flaw is that Exchanges are made by people, and people are incapable of evaluating Use-Value in the first place. No individual (or group) can actually calculate his definition of Use-value since it is infinitely complex, so it was never a part of the exchange in the first place. What is a part is the Need of the buyer (and how well the commodity fills that need) and the Seller’s estimate of the Buyer’s Need, which is all based on flawed human knowledge. In the case of barter, you do that both ways. He’ll later re-spin it, acknowledging that people don’t use Use-value, but some subset of Use-value to fit their Need, but that statement undermines all of his conclusions, because each individual will use a different sub-set, thereby introducing inconstancy into the Exchanges, invalidating his conclusion that Labour is the only variable in Exchange Value deviations. Marx builds a house of cards, and destroys it himself, if your memory is good enough to remember what the original foundations of his argument were.

    Steven: No, “should” is not beside the point. He asked what MARX’s opinion of how the strong ditch digger should be compensated, not how Capitalism rewards the ditch digger, nor what Marx’s opinion of how Capitalism rewards him. How does MARX think he should be compensated? Or does Marx state that all people should be paid equally, regardless of quality or quantity of work performed?

  20. Mr. Burst,

    When I read the sections I saw no bounds to the relative value of commodities and could thus assume that 20 Linen need not universally equal 1 Coat. It could in one instance but may not in another (maybe it was 19 Linen). In other words, there need not be an assumption that relative value be constant and if that is so, then Kriestor’s criticism about buying 2 coats when he has no pants would be valid.

    But, if that is so then the labor value used to create the coat is meaningless because only the relative demand for any given coat (commodity) will determine the relative value of the commodity pairs. What is worth 20 Linen to a hypothermic man is worthless to a man who isn’t freezing.

    This is obvious and maybe off point and so I mention it only because it seemed that the debate hinged on the acceptance of relative value as constant or non-differential.

  21. “If labour-value does not change, but decreasing need reduces the equivalent one will provide, there is obviously some missing variable from the system that Marx has not identified.” -Kreistor.

    The missing variable is marginal utility.

  22. Yes, Ty, it is. I’m a generalist, and one of my problems is a poor memory for technical terms. I remember the concepts taught in my Econ courses, but not always the words used to define them.

    I’ve been doing a little (very little) study on this, and it seems that the concept of marginal utility predates Das Kapital, and so there is no excuse for its exclusion from Marx’s effort. He should, at the very least, criticize it so that he can discount it. At the worst, by ignoring a concept that is used less than a decade later to criticize Das Kapital (by at least two economists of the time), he has proceeded with his effort without adequately preparing for the obvious debunking it would face.

    I think the tragedy is that the (willful?) ignorance of marginal utility lead to the advancement of a sociopolitical system that murdered millions and ultimately failed, because the oligarchy was incapable of advancing the actual intelligent people it needed to the vital positions that needed them, because the people capable of fixing the system could not honestly spout the flawed political BS that determined who rose in the oligarchy.

    Basically, Communism became a system whereby adherence and regurgitation of Marxist-Leninist theory determined how high a position you could reach, but the smart people that could see the flaws in the system couldn’t advance in it to save it (unless they beame capable of Doublespeak or just plain lied). Instead, you got incompetent people that were vulnerable to brainwashing promoted without proving their competence in the industry, because spouting Communist theory doesn’t actually make you a good manager of either people or technical projects. This made the management of the system fundamentally incompetent, which lead to a system whereby success was actually punished. Former Soviets have described it to me like this:

    Regional managers would publish production requirements for every factory, farm, etc. A factory that produced more than that amount would, the next year, see its required production rise. That might make sense, except that environmental factors that caused increased production were ignored. This was the worst for Farms, which are heavily affected by fickle weather. A farm that suffered a great year followed by a drought would see its manager imprisoned for incompetence. Consequently, the factories and farms intentionally underproduced during good periods, in order to ensure they did not get themselves punished for a failure to maintain that production if something went wrong the next, providing a buffer in which the factory could fail and the manager not wind up going to jail. Organized incompetence.

    The question is: how could this be solved? Obviously, you need intelligent regional managers that can recognize when a production increase is temporary and not sustainable. The flaw here wasn’t the low level manager trying to avod jail time, but the regional manager incapable of determining when a production increase could be sustained, and when a great year had nothing to do with management effectiveness.

    How do you get smart people into that position?

    Make them spout Marxist-Leninist theory!


    By identifying good managers from the lower managers of that industry (which demonstrates competence in the industry), and using expert interviewers to determine which of these were lucky and which talented, then promoting the most talented. Capitalism does that as a matter of course, as the most logical way of finding a manager.

  23. I think Marx ignored marginal utility because he held some form of contempt for the concept (pure speculation on my part). It doesn’t exactly jive with what he was putting out there.

  24. Well, Marginal Utility did only come out a couple years before Das Kapital. Imagine you’ve got most of the book written, then this new idea comes out that completely annihilates your basic premise (that differences in exchange value are due to labour costs, instead of the relative need of the buyer). You’ve either got to abandon all that work as debunked, or do a complete re-write.

    But, frankly, since Marx admits the premise of all of this is absurd, it didn’t matter to him. He was performing a thought experiment that says more about how easily you can snow people by telling them what they want to hear than proving any economic theory. So it didn’t matter, since he already knew what he was writing was unsupportable. Remember, to put Marx’ theory into preactice, he needed to demonstrate how to convince uneducated workers to follow the new elite, by convincing them that they had the workers’ best interests at heart, not just create convincing theories. Socialism has, at its heart, the drive of guilt; that is, some people feel guilty that they’re well off when others are not. That on its own is enough to convince that element to go forward with socialist change. But workers, who expect reward for their efforts, and more reward for additional effort, won’t see a fundamental advantage in a system where all are paid equally, despite poor effort. They aren’t well off, and won’t have the guilt motive (being poor themselves), and they’re not educated enough to understand an argument based on real economic concepts they could never comprehend. How many people can understand the concept of fiat currency without panic? How many people prefer the gold standard (as promoted by the absurd Ron Paul), despite being just as illusory as fiat? Fiat is faith in money retaining value. The gold standard is faith in gold retaining value. The difference is superficial. But how many people are snowed into the anti-Central Bank camp by the argument that gold has intrinsic value? (The only things with intrinsic value are oxygen, food, and water, since you can live without everything else.)

  25. Going to jump right in the middle here, with an utterly simplistic view of things.

    Price is what you pay, value is what you get. That being the case, profit is the fee you pay for the opportunity to obtain value. A surcharge, if you will.

    Paul, I think, isn’t arguing against what people think he is arguing against when he talks about fiat money. He’s kind of talking around the actual problem, which no one really wants to talk about. Or maybe he’s actually stupid. I don’t believe that to be the case, but I could be wrong.

    The problem isn’t money as an abstraction of value (since gold, to be useful as money, has to become an abstraction of anything it can buy). The problem is that we have now reached a state (thanks to Friedman and his disciples) where money has become an abstraction of an abstraction of an abstraction, and often times there is absolutely no value there to be abstracted. The abstraction itself is treated as if it has value, and that is, frankly, impossible.

    Money based on (supposed) intrinsic value has a lot of problems, but it does prevent banks from simply creating unlimited amounts of money out of thin air. Since money is nothing more than an abstraction of value (Keynes was right!), our current system allows for the creation of value without actually creating anything of value…

  26. Sorry, I shouldn’t have mentioned Ron Paul. That goes off on a huge tangent.

    All I’m going to say is that he either knows the economic system really well, and how to misrepresent it in order to get the paranoid vote, or a little knowledge is a dangerous thing, and he has no idea what the consequences of his proposals would be. Remember that he is a politician, and he wants re-election, or better yet election to higher office.

  27. Your article is interesting but the sentence attached below is incorrect and I think rather deverts the rest of the logic you’ve used.

    “The real value of the coat is determined by the labor necessary to produce it.”

    The labour necessary to produce is the “real cost”, not the real value. It is indeed the _real_ cost because all human items of utility and consumption are expressable in terms of human usage, the obvious unique currency being the time/portion of lifespan used to bring it into useful form. Things which are not used by humans can have intrinsic value but because they’re not interact with by humans they don’t require or it would be inaccurate to assign them a ‘human valuation’. The human valuation would only ever be in terms of proposed value to humans, which is not intrinsic, and brings us back to the human time (labour) concept.

    Value vs Cost. Cost is what is involved in bringing something to it’s current existence. To make the linen, or to make the coat, etc.
    The value is what the perceived worth is and is based on the opposite end of the process. eg a writer might create a story, and if the story catches the imagination and hearts of the reader it has high value, or perhaps it is promoted through a third party (eg a church or Oprah) this raises it’s “value”.
    If value is less than cost, then eventually production will consume more resources than it creates, and unless subsidised (from something that produces more), evolution/natural selection will see it fail.

    Understandably power structures can be used to force value by limiting options.

  28. Having now worked through more of the material you’ve quoted, Marx was operating at a time when abstract concepts were not well accepted and understood, and such concepts such as “value add” were still waiting to mature.
    A simple proof of his inaccuracy/lostness can be taken from the less than ideal operations. Thus a coat, linen, book, bed or house can take a labourer many hours and still be a failure fit only for the rubbish heap. Yet the methods of calculation give them the same values and properties of a fine work by a master artisan. Indeed the amateur may take far longer, and far more raw material to produce the worthless mess than one who is skilled. The Skill in this case having an invested “abstract value”. However at the end of the day, if your computer factory is churning out obsolete chips it doesnt matter how perfect or what labour style (automated or 2000 sweatshop employees) is used, the value is set by the end use and the demand for that use. To the refugee, a helicopter ride for their child would be worth their lifes’ savings – yet that exact same trip for recreation the same person would sneer at $100/ticket.
    This is the same as the coat and linen. Just because the coat is manufactured from linen gives no virtue. The demand for the coat creates it’s value, that it needs linen creates a demand for linen. Now that linen is seldom used for clothing it’s value has reduced (compared to it’s cost which has risen). Yet coats are in more demand than ever (rising population) and people are willing to pay more, and even extreme amounts for coats with unusual or stand-out characteristics (the later being something which upset and was reject by many social policies, despite being a huge drive of the individual person!)
    If we look at the bread and iron. Both share a property, “weight”. And if your picnic blanket was blowing away either will serve – as that “property” (a term we have made more concrete from Object Orientated analysis) is in demand. Yet should you be standing in a food line, it is unlikely the iron has any value whatsoever, and given if you own it, you will have the responsibility of moving it, its value to you may be negative! With absolutely no link to what its production costs were, even if it was recycled and has two of more lots of production costs! This is because what Marx was looking for is the Demand factor, its marketability, its “value add”.

    The next step, is the bed and houses, the manufacturer of the house has a set cost, and is unlikely to change their perception of it’s value without external reason. If the beds are high quality and the house low, then the house owner may think there is more Future Value in the beds, and conversely if the bed owner has more beds than they require (because they have specialised – see Adam Smith, Wealth of Nations first chapters) then both parties might be willing to swap. This last part is usually the busllshit angle that most economics courses take (that currency developed as a means to track barter type trades, and to help trade goods that had no immediately equality – ie how to sell 5 beds if you didn’t want another house!) In reality better historians with ready access to wider resources determine that currency developed to trade conveniently (I have 5 beds, you want one give me an IOU) and for taxation purposes (known as fiat currency, the government demands gate tolls and land taxes, thus levies a value on demands for tribute and protection, but needs pay its troops and courtiers for services. The difficulty being a government doesn’t actually produce anything “real” (ie all abstract) so how does it bind those whom its powerbase depends, in order to maintain that power? Failure to do so, of course, would result in the collapse of the powerbase; even faster should a competitor be gaining power.

  29. The Labor Theory of Value says that the value is the standard amount of labor required by artisans of standard skill level to produce the goods. If I spend 10 hours building a chair that a standard carpenter could make in 5 minutes, the value of that chair is 5 minutes. If I’m a super-skilled carpenter and build it in 1 minute, its value is still 5 minutes. The decisions as to what should be produced are independent of the value (which is why the system fails in the real world).

  30. It occurs to me that perhaps the word “value” is being seen or understood in differing lights by each individual posting about this word.

    Perception is reality and the perceived value of anything versus the actual “cost”-value of something created are two different things.

    At the same time it’s important to understand that with relative value comes the inevitable estimation of what “the market” will bear as to a general perceived value of the end consumer of the product.

    Thus wherein a communist marketplace, perhaps the “cost”-value would come into play more directly as the end price of something manufactured (within that part of the world and not as an import item such as levi’s jeans); as opposed to a capitalist marketplace perceived value would hold a stronger effect as to the price to the end user of said item.

  31. Cost is value expressed in money; since in this passage Marx is solving for money, he cannot use money to describe it anymore that I could define mile in terms of miles.

    I plan to resume when I’ve unpacked enough boxes that my heavily marked-up copy of Capital reappears.

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