An Introduction to Marx’s Capital—Part-10

(This is based on and mostly from “Marx’s Capital” written by Ben Fine and Alfredo Saad-Filho)

                            (For Part-9, please see the blog entry dated 21-1-2012)

Summary of the Chapter-2 “Commodity Production”

Labour Theory of Value

Introduction

1. Marx is renowned for his “labour theory of value”. It is concerned self consciously to reproduce in thought the economic relations, processes and structures that prevail in capitalist society.
2. Marx’s labour theory of value has simple beginnings, but becomes richer and complicated as it unfolds to confront the complexities of capitalism.

Use Values

3. Production of use values (any useful thing that satisfies a human need and includes personal services also like educational, health and other services) by human labour is the condition required for continuing existence of any society.

4. In all societies (other than the simple primitive societies depending on gathering of food and hunting with sticks and stones for their existence) there is division of labour wherein different kids of use values are produced at different work places.

Commodity

5. In the societies that existed prior to capitalism, there was simple commodity production where in the producers that produced use values by their labour directly exchanged them in the market with the other kinds of use values required by them, but produced by others. When a use value is thus exchanged for another use value, it becomes a commodity. In the societies prior to capitalism, production of commodities i.e production of use values for exchanging with other use values was not the dominant feature. But the crucial feature of capitalism is that it is a highly developed system of commodity production.

6. Every commodity has a use value ( it is a useful thing satisfying a human want) and exchange value ( it can be exchanged  with another commodity in the market through the medium of money or directly in the barter system in earlier days). Air, sunlight, etc which are freely available in nature are use values, i.e useful things, but not commodities since they cannot be exchanged with other use values. Similarly the grain produced for use by the family or any thing produced for use by self and family or for giving to relatives and friends is not a commodity since it is not exchanged for another use value.

Exchange Value or Value is a social relationship

7. If commodity x is exchanged in the market for commodity y in the market, it means there is some thing in common in the two in equal quantity. Otherwise they cannot be exchanged.

8. This some thing in common in equal quantity in the two commodities exchanged for each other in the market is their exchange value or value.

9. The value of a commodity cannot be any of their physical or chemical qualities.This is because the commodities are not exchanged merely because they are equal in weight or volume or hardness or softness or colour etc. (for example 100 grams of rice and 100 grams of gold are not exchangeable although equal in weight).

10. It is a social relationship that exists between commodities exchanged, which gives them their value. What is this social relationship?

The two fold character of human labour-Concrete labour and Abstract Labour

11. To understand this social relationship which gives value to the commodities, we have to understand the dual character of human labour.

12. As a quality, human labour is of different kinds—the labour of carpenter, goldsmith, potter, computer operator, weaver etc. These are specific, concrete labours. Each concrete labour produces a particular kind of use value—the labour of weaver produces cloth, of the tailor the coat, of the carpenter the table, of the computer operator the work on the computer etc.

13.  But all of these concrete labours are nothing but human labour in general, since in all these concrete labours, the brain, nerve and muscle of human beings is expended. Thus these are all abstract human labour, abstract labour.

14. If a software engineer gets the doubt that how his labour for which Rs 30,000 is given per month can be measured as identical with that of a weaver who will get only Rs 6000/- a month?

15. The fact that both labours are measured by money terms, that is one getting Rs 6000/- per month and the other getting Rs 30,000 per month proves that they are units of the same substance, that is, the abstract human labour or abstract labour, in different quantities.

16. Thus all concrete labours are at the same time abstract labour, homogeneous human labour.

17. Now let us understand the social relation that gives value to the commodity, on the basis of this dual character of human labour.

Concrete Labour  measured as  abstract labour is the basis for the value

18. The concrete labour that produces a particular use value at a particular work place reaches the market in the shape of the commodity and it (the concrete labour) gets itself measured against the concrete labour that produced the other commodity with which it is exchanged.

19.  But how these two concrete labours that produced these two commodities which are exchanged, can be measured against each other?

20. They are measured as definite quantities of the same homogenous human labour, abstract labour. That is, by the labour time required to produce the commodity.

21. But in such case a worker with less skill will take more time to produce a commodity where as a worker with more skill will take less time to produce the same commodity. Similarly a worker working on a higher technology will take less time to produce a commodity, whereas another worker working on a lower technology will take more time to produce the same commodity. Does it mean that the value of a commodity varies with the time taken by the individual worker to produce it? No.

22. What is measured in the market in the exchange of commodities is not the individual labour time. It is the socially necessary labour time which is the average of the time required to produce the commodity, based on the average skill and average technology available in the society at a particular time.

The definition of the value of a commodity

Therefore the value of a commodity is equal to the labour time socially necessary to produce it.This is the point in Marx’s labour theory of value.

23. The meaning of this labour theory of value is that the concrete labour, the individual labour of the worker is measured and valued as part of the total labour of the society, social labour. This is the social relation that gives value to the commodity. This social relation is, the individual labour is measured and valued as a part of the social labour, as a definite quantity in the total quantity of the social labour.

Value and Price

24. But this is not to say that the value of a commodity (the socially necessary labour time required to produce it) and its price in money terms are the same. The price of a commodity fluctuates around its value, depending upon circumstances like supply, demand, skills, technologies and tastes etc. But in no case, the value of 100 grams of gold can be equal to the vaue of 100 grams rice. However, it in future, through development of technology, the production of 100 grams of gold takes the same socially necessary labour time for producing 100 grams of rice, then the value of both will be equal.

The difference between Marx and mainstream economists

25. The difference between Marx and mainstream economics is to be noted on this basis. The mainstream economics is concerned with price theoies, explaining the fluctuations, the up and downs of the prices based on supply, demand etc.

26.  But the economists belonging to this main stream do not go deep to find the social relation that creates value to the commodity, that is, the social relation of the concrete labour, the individual labour, to the total social labour.

27. On the otherhand, Marx is mainly not concerned with a price theory, but his concern is (a)  to trace the social relation that gives value to the commodity and (b) on that basis to understand the system of capitalist production in all its aspects, including its origin, its limitations, its effects on human beings  and the possibilities in it for transforming it into a new society, socialist society.

Labour Power and Labour

28. Another distinction in Marx’s Capital is that it distinguishes between the worker and his ability or capacity to work. Marx called the capacity of the worker to work as “labour power”, and the application or performance of this labour power as labour. Thus labour power is the capacity to do work and its performance is the labour.

Labour power is a commodity under capitalism

29. The most important distinguishing feature of capitalism is that labour power becomes a commodity. The worker is the owner of this commodity  and sells it to the capitalist, the buyer.

Labour Power has two use values in capitalist societies

30. Labour power has a use value, which is, the production of other use values. This use value of the labour power exists in all societies.

31. However, in capitalist societies wherein the labour power has become a commodity which can be sold and bought has the specific use value, that is, it is the source of value when exercised as labour. When the labour power of the worker is exercised as labour , it produces the use value which is exchanged as a commodity in the market. The labour which produced the commodity, gives value to the commodity as the socially necessary labour time.

32. Therefore the labour power purchased by the capitalist has two fold use value—(a) it produces other use values (commoditis), and (b) it is the source of value to the commodities, it gives value to the commodities when exercised as labour and measured as socially necessary labour time.

The relations of production in capitalism are based on property relations

33. But a capitalist is a capitalist since he owns the means of production—land, building, machinery and raw materials. The worker is a worker because he does not own the means of production and as a result, compelled to sell his labour power for the survival of himself and his family.  

34. Therefore the labour theory of value captures (a) the distributive relations established in the exchange of the products of labour, and (b) captures the more fundamental relation of production specific to capitalism where in the labour power is sold  and purchased as a commodity.

Mainstream economics hiding the reality

35. But the mainstream economics does not make the distinction between labour power and labour. It treats the land, building, machinery, raw materials and the labour (the worker)—all equally as factors of production, as factor inputs and the produced commodities as factor outputs.

36. This terminology of the mainstream economics conceals the reality of exploitation of the worker by the capitalist and gives the impression that labour and capital inputs contribute in the way to the production process, so much so that, the status of the worker is reduced to “human capital” and reduced to the status of a physical input!

The Fetishism of Commodities

Social relations between people appear as relations between commodities

37. What gives value to the commodity is the social relation, how much is the particular labour that produced the commodity, is part of the total socially necessary labour.  It is socially necessary labour time, a social relation.

38. But this relationship between the workers and the products of their labour does not appear as a social relation.  It appears as a relation between things, say x commodity=y commodity, or one worker week=so much standard of living (wage bundle). Thus the social relationship of production expresses itself and appears in part, as the relation between things, between commodities. These relations are further mystified when money enters into consideration and every thing is analysed in terms of price.

39. Thus while capitalism organises production in definite social relationships between the capitalists and workers, these relationships are expressed as and appear in part as, relationships between things, the relations between commodities. These relationships are further mystified when money enters into consideration, and every thing is analysed in terms of price.

Commodity Fetishism

40. Marx calls such a phenomenon of the capitalist world where the relations between people in producing the use values appear as the relationships between the commodities, as the fetishism of the commodities (fetishism is the attribution of religious or mystical qualities to inanimate objects) of commodities.

41.  Thus under this commodity fetishism, the commodities are attributed mystical qualities which actually they do not have. They appear as if they are independent beings endowed with life, and entering into relation with one another and with the human race.

42. This fetishism is most apparent in modern economics where labour power is treated as an input or factor like any other factor or input. According to them, the factor labour power gives the reward of wage to the worker and the factors of means of production (land, building, machinery, raw materials) give the reward of profit to the capitalist. Thus the inanimate object machene was attributed the mysterious quality of rewarding profit to the capitalist! This, Marx called as ‘Commodity fetishism”.

Religious Fetishism in Feudalism justifying the exploitation

43. Under feudalism, the kings, nobles and priests took possession of the products of the labour of the peasants or artisans without any remuneration. But the  the God, who is the creation of human beings, justifies such relationship of exploitation and it appears as if that relationship of exploitation was ordered by the God and by birth some are kings and by birth some are peasants.

44. The newly arisen capitalist class in England and especially in France questioned this fetishism of religion where in the exploitative relationship appears as a divine order. They campaigned that all men were equal by birth and the feudal exploitation, the exploitation of peasants by the kings, lords and priests should end.

Commodity Fetishism in Capitalism concealing the exploitation

45. But capitalism itself has its own God and bible. The place of religion is substituted by free market exchange. It is said that in market, the owners of commodities exchange their commodities freely on the basis of negotiation and bargain. It is also said that the worker is the owner of his commodity labour power, and in the market, he sells it at his own free will, to the capitalist in return for wage. Therefore it is a just order free from exploitation.

46. Thus the exploitation of the worker is concealed behind the exchange of commodities in the market. But the commodities have a real existence, and their exchange represents, and to some extent conceals the real social relationship of production. Similarly the price system exists and is attached to the broader economic and social system, but without making the nature of such social system transparent.

47. In particular, buying and selling commodities does not reveal the circumstances by which they have come to the market, or the exploitation of the direct producers of the commodities, the wage labourers, by the capitalist class.

Marx’s emphasis on prices as value system, to reveal the exploitation

48. To reveal the nature of this exploitation, Marx’s emphasis is upon prices as value system determined by the class relations (relations between capitalists and workers) of production and exploitation.

Alienation in capitalist society

49. This commodity fetishism where the class relations in production appear as exchange relations between commodities, results in alienation. Alienation means the separation of things that naturally belong together. Alienation in society (social alienation) means separation of people from aspects of their human nature.

50. In capitalist society neither the worker nor the capitalist is able to be the director of their own actions.

The Alienation of the Worker

51. The worker is divorced from the product of his labour since it is owned by the owner, the capitalist. Besides this, the worker has no control on the work process itself. Since the worker sells his labour power to the capitalist, the way of exercising that labour power, that is, the labour process, is decided by the capitalist. Thus the worker has no control on his work process and on it the product of his work. He is alienated from both.

The Alienation of the Capitalist

52. The capitalist also is alienated in capitalist society. His actions are not decided by himself. His actions are decided by the imperatives of profit, competition, stock market etc. Thus the capitalist is subject to social control.

Both the Capitalist and the worker blame impersonal forces for their “fate”, but not the real cause, the capitalist relations of production

53. For both the capitalist and the worker it appears that external powers exert this control, and not their social relations in production as capitalist and worker. When a capitalist becomes bankrupt, or when a woker loses job, they blame an impersonal force or thing like the break down of a machene, changes in the consumer preferences, competition or economic crisis, but will not understand it as the result of the capitalist relations of production, as the result of the relations of production established between them as capitalist and worker.

54. But on what basis competition, economic crisis and globalisation have to be understood? To do this, we must go beyond this mysticism. We must start with a clear understanding of the social relations underpinning the capitalist production, rather than fetishise (attribute religious or mystique qualities) its effects.

Realities grasped through their consequences

55. But however well understood, it is not possible to wish away the price system by an act of will. But the underlying realities of capitalist system are grasped from time to time through the consequences of daily practices. The reflection of such realities (like unemployment, poverty, price rise, vast inequalities,  economic crisis)  becomes the subject of both material and ideological struggle (The occupy wall street movement in the highly developed capitalist country USA questioning the inequalities in the capitalist system is an example in this regard).

56. The existence of profits, interest and rent indicates that capitalism is exploitative; the unemployment, economic crisis, vast inequalities, environmental degradation and so on are making the realities of capitalism transparent.

The issues hotly debated

57. This raises two closely related and hotly debated issues:

a)      The first is methodological and analytical question of how to order the diverse empirical (known by direct observation) outcomes associated with capitalism. Can we deal with inequality independent of class relations—the relations between capitalist class, working class, landlords, peasantry etc? Can we deal with poverty apart from economic and other forms of exploitation? Can we deal with growth separately from crisis?

b)      The second is , to what extent are such conditions like unemployment, poverty and economic crisis are endemic ( natural character) to capitalism  and  whether they can be reformable within capitalism?

Marx’s antipathy to reformism

58. One of the strengths of Marx’s “Capital”, acknowledged by friend and foe alike, is that it has pointed out the systematic character of capitalism, that is, the inherent character of capitalism and its essential features. By the same token, Marxism’s antipathy to reformism (reforming the capitalist system) other than as a broad strategy for socialism, is based on the inevitable limitations within the confines imposed by capitalism.However you reform it, capitalism cannot be free from unemployment, poverty and crisis.(Inspite of all such “reforms”, the capitalism is facing a recession and crisis in USA, Europe and in the entire world with slow growth or no growth, severe unemployment etc)

Alienation in Capitalism and the individual

59. In “Capital”, after extensive study, Marx is able to make explicit the coercive forces exerted by the capitalist society on the individual. These coercive forces are the compulsion for profit and wage and the subtle distortions by which these forces are ideologically justified: abstinence, work ethic, freedom of exchange and other aspects of commodity fetishism. Marx’s theory of alienation places the individual in a class position (individual belonging to a class- capitalist class, working class, landlord class, peasantry, agricultural labour etc) and analyses the perception (awareness) of that position.

60. Such analysis based on the position in the class is not about the powerless individual in an unexplained system of irrationality, impersonality, inequality, authoritarianism, bureaucracy or whatever. These phenomena have their own character and function in capitalist society at a particular time. They can be only understood as a whole or in relation to individuals against the perspectives of the workings of the capitalism.

This we will know in our further study.