This page will describe Marx’s Capital 1. As Capital 1 is such a long text Davis Harvey’s companion to it will be drawn upon to keep this description within bounds.
Book 1; The Process of production of capital
Part One; Commodities and Money
Chapter 1 : The Commodity
1 The two factors of the Commodity; Use Value and Value (substance of value, magnitude of value)
Marx begins by saying,
“The Wealth of societies in which the capitalist mode of production prevails appears as an ’immense collection os commodities’ ; the individual commoditiy appears as its elementary form. Our investigationtherefore begins with the analysis of the commodity” (125)
But David Harvey warns us that the word ‘appears’ twice in Marx’s passage, and ‘appears’ is not the same as ‘is’. He adds that Marx uses the word frequently during Capital 1, and that it means that Marx is saying that something else is going on beneath the surface appearance (01).
Marx then spends a page describing the usefulness of commodities, and introduces the notion of use-value, a concept that covers all commodities. He then introduces the idea of exchange-value,
“Use-values are only realised in use or consumption. They constitute the materialcontent of wealth, whateverits social form may be. In the form of society to be considered here they are also the material bearers of … exchange- value.” (126)
Again Marx uses a phrase ‘bearers’, as bearing something is not the same as being something.
Exchange-value appears when considering echange processes in the market. Harvey adds that,
“Commodities are bearers of something else, which has yet to be defined…. Commodities can keep changing hands and keep moving in a system of exchanges. Something makes all commodities commensurable in exchange” (16 to 17).
So all commodities must be reducible to the thing that makes them commensurable.
Marx examines this problem on pages 127 to 128.
On page 127 Marx points out that the third element cannoy be geometrical, or physical, or chemical or any other natural property oc commodities.
Only one property of commodities remains says Marx, and that is that all commodities are products of human labour; and he concludes that all commodities are reduced to the same type of labour and that is human labour in the abstract. He adds that,
“Let us now look at the residue of the products of labour. There is nothing left of them in each case but the same phantom like objectivity; they are merely congealed quantities of homogenous human labour, i.e. of human labour power expended without regard to the form of its expenditure. All these thngs now tell us is that human labour power has been expended to produce them, human labour is accumulated in them. As crystals of this social substance, which is common to them all, they are values – commodity values”128).
But Marx reaches further than this,
“We have seen that when commodities are in the relation of exchange, their exchange-value manifersts itself as something totally indepemdent of their use-value. But if we abstract from their use-value, there reains their value, as it has just been defined. The common factor in the exchange relation, or in the exchange-value of the commodity is therefore its value. The progress of the investigation will lead us back to exchange-value as the necessary mode of expression, or form of appearance of value, For the present, however, we must consider the nature of value independently of its form of appearance.” (128).
Marx continuous (129) that a use-value or useful article only has value because abstract human labour is objectified or materialised in it. How then can the magnitude of this value be measured?
Only by the quantity of labour – the value forming substance – contained within the article. This is measured by its duration, by hours, by days etc.
It might seem that if a slower worker produced the article, them more time would result.
But the labour that forms the substance of value is equal human labour, the use of identical human labour power. The total labour power of society, manifested in the values of the world of commodities, counts here as one homogenous mass of human labour power – made up of innumerable units of labour power.
Each of these units is the same as any other, to the extent that it has the character of a socially average unit of labour power and acts as such, and only needs to produce a commodity the labour time which is necessary on an average – or in other words is socially necessary.
“Socially necessary labour time is the labour time to produce any use-value under the conditions normal for a given society and with the average degree of skill and intensity of labour prevalent in that society” (129).
What exclusively determines, says Marx (129), the magnitude of value of any article is therefore the amount of labour socially necessary, or the labour time socially necessary for its production.
Marx continues (130), that commodities which contain equal quantities of labour, or which can be produced in the same time, have therefore the same value.
He adds that the value of a commodity is related to the value of any other commodity as the labour time necessary for the production of one is related to the labour time necessary for the production of the other.
“as exchange-values, all commodities are merely definite quantities of congealed labour time” (130)
Sections 2 and 3 are covered by David Harvey in a concise manner, and will be used for these two sections.
Section 2: The Dual Character of the Labour Embodied in Commodities
Marx says this,
“Tailoring and weaving, although they are qualitatively different productive activities, are both a productive expenditure of human brains, muscles, nerves, hands etc., and in this sense both human labour. They are merely two different forms of the expenditure of human labour power. Of course human labour power must itself have attained a certain level of development before before it can be expended in this or that form. But the value of a commodity represents human labour pure amd simple, the expenditure of human labour in general” (28).
As such, Marx adds, it is what he calls ‘abstract labour’. This kind of generality of labour contrasts with the myriad concrete labours producing actual use–values.
Harvey adds (29) that Marx’s point is that abstract (homogeneous) and concrete (heterogeneous) aspects of labour are unified in the unitary act of labouring…..The duality resides within a singlular labour process: making the shirt that embodies the value. This means there could be no embodiment of value without the concrete labour of making shirts and furthermore, that we cannot know what value is unless shirts are being exchanged with shoes, apples, oranges and so on. There is, therefore, a relationship between concrete and abstract labour. It s through the multiplicities of concrete labours that the measuring rod of abstract labour emerges.
Harvey then quotes Marx, as follows,
“On the one hand all labour is an expenditure of human labour power, in the physiological sense, and it is in this quality of being equal, or abstract, human labour that it forms the value of commodities. On the other hand all labour is an expenditure of human labour power in a particular form and with a definite aim, and it is in this quality of being concrete useful labour that it produces use values. (137)
Harvey ends this section as follows. The singular commodity internalises use –values, exchange-values and values. A particular labour process embodies useful concrete labour and abstract labour or value (socially necessary labour time) in a commodity that will be the bearer of exchange value in the market place. (30).
Section 3: The Value Form or Exchange Value
Harvey dislikes much of Marx’s material in this section. But then gets down to business (30).
Marx’s objective he writes, is to explain the origin of the money form – and Marx writes that this was never attempted by bourgeois economists.
Marx starts with a simple barter situation. A has a commodity, and B has a commodity.
“The relative value of the A commodity is going to be expressed in terms (the labour input) of the B commodity. Turn the relationship around and the A commodity can be viewed as the equivalent of the B commodity” (31).
In barter situations of this sort all commodity owners look for a equivalent in another commodity.
As there are as many commodities as the number of people involved, there are as many equivalents as there are commodities and exchanges (31).
Marx wants to show that the act of exchange has a dual character – of relative and equivalent forms – in which the equivalent commodity figures as the “embodiment of abstract human labour”.
The opposition between use-value and value internalised within a commodity becomes represented on the surface by an external opposition between one commodity that is a use-value and another that represents its value in exchange (31).
In a market place of complex fields of exchanges, commodity A will have multiple potential equivalents, and everybody out there will have potential relative values with commodity A.
The increasing complexity of exchange relations produces an expanded form of value that morphs into a ‘general form’ of value.
This ultimately crystallizes into a ‘universal equivalent’; one commodity plays the exclusive role of a money commodity.
The money commodity arises out of a trading situation and does not precede it; it is the generalisation of exchange relations that is the necessary condition for the crystallization of the money form (31).
S0, in Marx’s time market systems required money commodities of some sort to function correctly – eg, gold and silver.
But Marx argued that money was not invented by someone as a good idea – money arose as a result of market systems.
But, above, is Marx making an historical argument or a logical argument. Harvey feels that Marx’s historical argument is ‘rather thin’. Money systems had been in existence for a long time and he feels historical records would show money did not arise as Marx argued. (31).
But on the other hand with the arrival of capitalism and market systems existing forms of money had to conform to become absorbed into capitalism and perform the necessary functions of money. It should be clear that markets could not have evolved without all that happening (32).
The foregoing then establishes the necessary relation between commodity exchange and the money commodity, and the mutually determinative role that each plays in the development of the other. (32)
Harvey then quotes from Marx – here is a taste of it,
“Not an atom of matter enters into the objectivity of commodities as values – in this it is the direct opposite of the coarsely sensuous objectivity of commodities as physical objects. However, let us remember that commodities posses an objective character as values only insofar as they are all expressions of an identical social substance, human labour, that their objective character as values is therefore purely social. From this it follows self-evidently that it can appear in the social relation between commodity and commodity” (138)
For Harvey this is a vital point, “Value is immaterial but objective”
“Value is a social relation and you cannot touch, feel or see social relations directly, but they have an objective presence,” (33).
Harvey then describes some of Marx’s proposals. First, values, being immaterial cannot exist without a means of representation. Next, there is nothing universal out there called value that after many, and many years of struggling, finally gets to be expressed through monetary exchange. Rather there is an internal and coevolving relation between the rise of money – and the value forms. Thirdly, the rise of monetary exchange leads to socially necessary labour time becoming the guiding force within a capitalistic mode of production. Finally, value as socially necessary labour time is historically specific to the capitalist mode of production. It arises only in a situation where market exchange is doing the requisite job. (33).
Harvey finds two conclusions and one major question from Marx’s analysis. The two conclusions follow now.
- Exchange relations exist in a dialectical relation with values such that values depend on the exchange relations as much as the exchange relations depend on the values.
- The second conclusion confirms the immaterial phantom like but objective status of the value concept; and that all attempts to measure value directly will fail.
The major question concerns how reliable and accurate the money representation is of value. This concerns the immateriality and objective of value.(33).
Harvey then quotes from Marx as the latter works through the problem step by step.
“It is only the expression of equivalence between different sorts of commodities which bring to viw the specific character os value-creating labour, by actually reducing the different kinds of labour embedded in the different kinds of commodity to their common quality of being human labour I general (142).
There follows a partial answer to the question of how the reduction from skilled and complex human labour to simple human labour occurs. Marx continous.
“Human labour in its fluid state, or human labour, creates value, but is not value itself. It becomes value in its coagulated state, in objective form. (34).
Harvey adds that a distinction therefore needs to be made between the labour process and the thing that gets produced.
Human labour, he adds, is a tangible process, but at the end of the process, you get this thing – a commodity – which coagulates or congeals value. While it is the actual process is what is significant, it is the thing that has the value and the thing that has the objective qualities. (34).
Harvey then quotes Marx from page 142 of Capital 1.
“The value of the linen as a congealed mass of human labour can be expressed as an ‘objectivity’, a thing that is materially different from the Linen itself and yet common to the linen and all other commodities”
The problem: says Harvey, is how does value, this “this thing which is materially different from the linen,” get represented? The answer lies in the money commodity form.
Bur Marx finds some peculiarities with this solution.
- The first is that a particular use-value becomes the form of appearance of its opposite, value. And Harvey adds that this conceals a social relation.
Marx adds that this substitution only occurs in the case of commodity B (coal, maize or iron) when some other commodity A (linen etc) enters into a value relation with it, and then only within the limits of this relation. (145).
- The second peculiarity is that private labour takes the form of manifestation of its opposite, abstract human labour.
Marx adds that because this concrete labour, tailoring counts exclusively as expression of undifferentiated human labour, it possesses the characteristic of being identical with other kinds of labour, such as the labour embodied in the linen. (150)
- The final peculiarity is similar in that private labour takes the form of its opposite, namely labour in its directly social form (Harvey 34).
Harvey continues – This means not only that the universal equivalent, the money commodity, is subject to the qualitative and quantitative problems that beset the production of of any use-value, but that the production and marketing of the money commodity as well as its accumulation (eventually as capital) lie in private hands even as it performs its universalizing social function. (35)
These are the sorts of contradictions that Marx’s analysis leads us to contemplate, and we will later see how these peculiarities and contradictions start to play out in the creation of possibilities for financial crises.
In any case he says, the fundamental conclusion has to be that the relation between values and their representation in money form is fraught with contradictions, and so we can never assume a perfect form of representation. This mismatch, as it were, between values and their representation turns out to have advantages even as it is deeply problematic, as we will see. (35).
On page 36 Harvey goes back to Aristotle,
“There can be no exchange without equality, and no equality without commensurability”
Harvey then says (36), the relationship between relative and equivalent forms of value presupposes an equality between those doing exchanges. This attribute of equality within the market is terribly important; Marx understands it as fundamental to how capitalism theoretically works.
Marx is then brought back (36) to expand on the three peculiarities of the money form, in order to identify an emergent opposition.
“ The internal opposition between use-value and value, hidden within the commodity, is therefore represented on the surface by and external opposition i.e. by a relation between two commodities such that the one commodity, whose own value is supposed to be expressed, counts directly only as a use-value, whereas the other commodity, in which that value is to be expressed counts directly only as exchange value.”
Harvey concludes that ”the opposition between the expression of value and the world of commodities, and opposition that results in an ‘antinomy’ between commodities and money, has to be interpreted as an externslisation of something that is internalised within the commodity itself. Once externalised, the opposition becomes explicit. (36).
So what do we take from this, Harvey asks (36). First, he says, socially necessary labour time cannot operate as a regulator of what is happening directly, because it is a social relation. Indirectly, it will do it through the medium of the money form. Remember, he adds that value is immaterial but objective.
He goes on, that this creates a lot of problems for common sense logic that assumes that value can actually be measured; even some Marxist economists spend a lot of time how they can do so.
Bur Harvey disagrees with this; you can’t do it. If it is immaterial you cannot measure it directly. It only exists in relations between commodities and only gets expressed materially in the contradictory and problematic form of the money commodity.
Harvey then takes almost a page to summarize his views, including his geographical specialiuty. This will be a clumsy version of his offering, that omits his often references to space time
He talks of the three value concepts of use values, exchange values and pure values. These concepts he says internalize fundamentally different referents.
Use-values exist in the material world of things and can be described like anything else in the world. Exchange values lay in the in the relative motion and exchange of commodities.
Pure values can only be understood only in terms of the world market. (The immaterial relational value of socially necessary labour times come into being within the evolving of capitalist global development.)
As Marx has convincingly shown values cannot exist without exchange values, and exchange cannot exist without use-values; the three concepts are dialectically integrated with one another.
Section 4, The Fetishism of the Commodity and its Secret
This section will be a summary of Marx who writes about 14 pages.
Marx begins like this on page 163,
A commodity appears at first sight an extremely obvious, trivial thing. But is analysis brings out that it is a very strange thing, abounding in metaphysical subtleties and theological niceties. So far as it is a use value, there is nothing mysterious about it, whether we consider it from the point of view that by its properties it satisfies human needs, or that it first takes on these properties as the product of human labour. It is absolutely clear that by his activity, man changes the forms of the materials of nature in such a way to make them useful to him,
Marx continuous (164) that the mystical character of the commodity does not arise from its use value, just as a little does it proceed from the nature of the determinants of value.
Whence then arises the enigmatic character of the product of labour, as soon as it assumes the form of a commodity.
Later in the page Marx writes that ‘The mysterious character of the commodity form consists therefore simply in the fact that the commodity reflects the social characteristics of mens own labour as objective characteristics of the products of labour themselves, as the socio-natural properties of these things.`
Later Marx adds that ‘This fetishism of the world of commodities arises from the peculiar social character of the labour that produces them’ (165).
Still on (165), the labour of the private individual manifests itself as an element of the total labour of society, only through the relations which the act of exchange establishes beyween the products, and, through their mediation between the producers.
(166) it is only by being exchanged that the products of labour aquire a socially uniform objectivity as values.
By equating their different products to each other in exchange as values, they equate their different kinds of labour as human labour.
These magnitudes vary continually, independent of the will, foreknowledge and actions of exchangers. (167) The value character of the products of labour becomes firmly established on;y when they act as magnitudes of value.
The production of commodities must be fully developed before the scientific conviction emerges from experience itself, that all the different kinds of private labour ….. are continually being reduced to the quantative proportions which society requires them. (168)
Political economy has indeed analysed value and its magnitude, however incompletely.(173) But it has never once asked the question why this content has assumed this particular form, that is to say, why labour is expressed in value, and why the measurement of labour by its duration is expressed in the magnitude of the value of the product (174).
The degree to which some economists are misled by the fetishism attached to the world of commodities, or by the objective appearance of of the social characteristics of labour, is shown, among other things, by the dull and tedious dispute over the part played by nature in the formation of exchange-value. (176)
Marx then closes in on the end of the chapter;
If commodities could speak, he says, they would say this: our use value may interest men, but it does not belong to us as objects. What does belong to us as objects, however, is our value. Our own intercourse as commodities proves it. We relate to each other as exchange values.
In the direct relation between the thing and the man, while inversely, its value is onlyrealised only in exchange, ie in a social process (177).
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Profit, Wealth and Value 