Commodities, Use-Value, and Exchange-Value?

[Hermes]

I'm reading through Capital for the first time, and I'm not really sure I'm grasping exactly what he's saying. Any help would be greatly appreciated! This is what I'm not sure I'm right on, so far.

Commodities have, by definition, both a use, and bear value, correct?

Use-value is the useful qualities a commodity has, right? As in, it would be judged on how well it keeps you warm, feeds you, etc?

Exchange value, on the other hand, is the 'natural' value of a commodity, as well as the labor hours put into it, and has no relation to the use-value of the commodity? What determines its natural value, assuming that I'm right in the definition of exchange value?

The 'relative form of value' is the value of a commodity as related to another commodity, right? Where the other commodity is the 'equivalent value', and represents no value of its own except as in relation to other commodities?

Sorry if these are really simple, economics aren't really my strong point (if I have strong points, hah).

[Decolonize The Left]

Exchange value, on the other hand, is the 'natural' value of a commodity, as well as the labor hours put into it, and has no relation to the use-value of the commodity? What determines its natural value, assuming that I'm right in the definition of exchange value?

There is no such thing as "natural value." There is only "use value." The exchange value of something is the middle point between two individual's ideas of the use value of the object.

I.e. I think object B is has a use value of X, you think it's has a use value of Y. The middle of X and Y is the exchange value of object B.


The 'relative form of value' is the value of a commodity as related to another commodity, right? Where the other commodity is the 'equivalent value', and represents no value of its own except as in relation to other commodities?

Nothing has a value "in itself." Every value is relative. In general, we refer to use values which means the value of the object in relation to it's use.


Sorry if these are really simple, economics aren't really my strong point (if I have strong points, hah).

Much of Capital is very complicated. What I have stated above is merely my opinion and perspective and is not meant as a 'this is what Marx meant in Capital' reply.

[The Jay]

I'm reading through Capital for the first time, and I'm not really sure I'm grasping exactly what he's saying. Any help would be greatly appreciated! This is what I'm not sure I'm right on, so far.

Commodities have, by definition, both a use, and bear value, correct?

Use-value is the useful qualities a commodity has, right? As in, it would be judged on how well it keeps you warm, feeds you, etc?

Exchange value, on the other hand, is the 'natural' value of a commodity, as well as the labor hours put into it, and has no relation to the use-value of the commodity? What determines its natural value, assuming that I'm right in the definition of exchange value?

The 'relative form of value' is the value of a commodity as related to another commodity, right? Where the other commodity is the 'equivalent value', and represents no value of its own except as in relation to other commodities?

Sorry if these are really simple, economics aren't really my strong point (if I have strong points, hah).

Commodities have use-value, exchange-value, and something that relates them, value.

Could you quote some of the relevant sections that you are talking about? I am not far in myself.

[jookyle]

Use value you pretty much have.

I've always understood exchange value differently, in that exchange value (put simply) means how much one good trades for another in terms of quantity. As in the exchange value of chickens to cows are five chickens are equal in trade to one cow.

Marx also sees "price" to not be the same thing as exchange value as a commodity may be priced independently of it's exchange value. So you will most likely see it referenced other places as well as in Das Kapital (although it's not always so clear) to be it's own category.

A commodity also has a value, meaning how much an economic actor can benefit from it, whether through utility or through profit/gains by the market from that commodity.

I would honestly suggest you read at least some Adam Smith before reading Das Kapital. Das Kapital is the critique of capitalism as it is pretty much defined by Adam Smith and other members of the "classical economists". I really find Marx's work makes more sense after reading the classical economists. It's hard to understand the critique of capitalism if you don't really understand capitalism.

[Hermes]

There is no such thing as "natural value." There is only "use value."

Ah, thanks! Looking back, I realized that I'd somehow completely separated the statement where he equated natural form with use-value, so I understood them as separate concepts. I'm not entirely sure how that happened!


Commodities have use-value, exchange-value, and something that relates them, value.

Could you quote some of the relevant sections that you are talking about? I am not far in myself.

Ah, okay. I think for some reason, in connection with my response to AugustWest, I have problems with relating two, or several, concepts. For some reason I never thought of value as a concept independent of use-value and exchange-value. I'll have to read much more carefully in the future (regardless of what I'm reading).

I would, but looking through for them, I can't find any single quotes that show my confusion. Which either means that I'm having problems relating all of the concepts to each other as a whole, or that my thinking was just completely botched when I first read through it.


I've always understood exchange value differently, in that exchange value (put simply) means how much one good trades for another in terms of quantity. As in the exchange value of chickens to cows are five chickens are equal in trade to one cow.

Could you explain what Marx means when he says that they can only become comparable in quantitative terms once they've been reduced to the same unit? I'm not entirely sure I understand what that unit is.


A commodity also has a value, meaning how much an economic actor can benefit from it, whether through utility or through profit/gains by the market from that commodity.

So, unless he prefaces 'value' with another concept, he is always talking about the benefit an economic actor can derive from it?


Marx also sees "price" to not be the same thing as exchange value as a commodity may be priced independently of it's exchange value. So you will most likely see it referenced other places as well as in Das Kapital (although it's not always so clear) to be it's own category.

Thanks! I had vague notions about this from other sources (including here), but I was still pretty lost.


I would honestly suggest you read at least some Adam Smith before reading Das Kapital. Das Kapital is the critique of capitalism as it is pretty much defined by Adam Smith and other members of the "classical economists". I really find Marx's work makes more sense after reading the classical economists. It's hard to understand the critique of capitalism if you don't really understand capitalism.

This is probably a good suggestion. I guess I'm a little too eager to actually finish Capital, because of a belief that I'm not really in any position to agree with Marxism, or communism in general, without having read it. Which I realize is ridiculous both because I probably wouldn't be able to grasp Capital without understanding what he's reacting to, and because it isn't the end all, etc.

Would you suggest Wealth of Nations, or? It's really the only work of his that I've heard of. Is there anything I should read prior to reading Smith, as well, or was his one of the first definitions of capitalism?

[The Jay]

I don't think that you need to read Wealth of Nations, though it would help. If I were you I would just start Capital again and go slowly. It is better to go slowly and not go through many pages per hour than to go through a lot and get lost.

[Aurora]

Check this out: http://www.revleft.com/vb/marx-39-s-t41211/index.html

It's a short book called Marx's Kapital for Beginners by David Smith and Phil Evans, sections 1 2 and 5 address your questions about Commodities, Use-Value and Exchange-Value with good examples.

[jookyle]

Could you explain what Marx means when he says that they can only become comparable in quantitative terms once they've been reduced to the same unit? I'm not entirely sure I understand what that unit is.


The unit can really be anything that is used as an indication of worth within the market. So in a capitalist system, the unit is usually seen as currency


So, unless he prefaces 'value' with another concept, he is always talking about the benefit an economic actor can derive from it?

Almost certainly, although the context in which he uses it may indicate other wise. But with a better understanding of the terms it should be easier to see what he's talking about and be able to distinguish between the two when reading a passage that does not explicitly state the term being discussed or applied.

The Wealth of Nations is kind of the book for understanding the classical economists way of thinking and will only do you good to read it. There's also various places on the internet you can find ebook and pdfs of his collected works as well as other classical economists.

If you really want to read Marx right now I suggest putting down Das Kapital and saving for after you've read at least a bit of Adam Smith and instead read Marx's The Economic and philosophic Manuscripts of 1844 which may be found here: http://www.marxists.org/archive/marx/works/1844/manuscripts/preface.htm the website also has it available for download as a pdf or in ebook format.

[RedMaterialist]

Use value seems to be fairly well understood, it is the utility a commodity provides, such as a coat provides warmth.

Exchange value is the quantity of another commodity for which a commodity can be exchanged: 1 coat = 10 yds of cloth = 2 bushels of wheat = 2 oz. of gold = $20, and, fundamentally, = 1 hr of generalized, abstract, socially necessary labor.

Profit, or surplus-value, arises when labor produces the $20 per hour of value but wages are paid for less, say, $10. And, actually, the wages are in fact, in general, worth $10: It has cost 1/2 hr of labor to pay for the wages. The worker continues to work the rest of the hour for free.

It seems to me that Marxists should just replace use-value, exchange value and surplus-value with utility, price and profit. The whole point of capitalist production is that utility, price and profit are all produced during the process of production.

The apologists for capitalism maintain that profit and price are produced only during the act of purchase. Thus, they say, utility determines price and profit.

[Blake's Baby]

Hermes, at its simplest, when Marx refers to 'value' alone he means 'exchange value'. This is not the same as price, nor is what two people agree to exchange something for.

Use value is whether something has a quality that is useful - as Jookyle says, it's relatively easily understood. A coat has a use-value of 'keeping you warm and dry', for example. It also implies (as Marx says commodities must have a use-value) that there is an 'end-market' for a commodity - it is useful because someone wants to use it. If it had no use, it would have no use-value, and therefore no matter what you did with it, no exchange-value either (you can polish a turd if you like, but no-one wants to buy it).

Exchange-value is how much labour, on average, something takes to produce. If there are a hundred factories with 10,000 workers all making one coat an hour, and I hand-make a coat taking 100 hours, the one coat I make will be worth the same as if I'd spent an hour on it, not 100 hours - because a coat is, on average, made from 1 hour's labour. It exchanges on the market (= its exchange value is) as if it takes 1 hour to make whether it does or not, against other goods that take 1 hour to make.

This isn't the same as price. If there are a gazillion coats and it's very warm and dry, the price of coats will go down (due to oversupply). If it's cold and wet, prices will go up, because more people will be buying coats. Prices fluctuate in the market, but the value doesn't, because value is determined by labour. When he examines value, Marx starts from the assumption that supply and demand are balanced. Obviously they aren't in the real world (capitalism is less efficient than Marx supposed) but the fact that supply can excceed demand (prices go down) or demand can exceed supply (prices go up) proves that supply and demand (and therefore price fluctuation) are to an extent accidental - and therefore irrelevant to 'what is value?'. 'Value' is the midpoint that prices go up or down from.

[Hermes]

I know that the Thanks button is supposed to do this, but I'd just like to say thank you to all of you again.

I think I'm going to read Wealth of Nations before attempting Capital again. I hope that, along with giving me some background on what Marx is saying, I'll also be able to improve my reading comprehension, as it's obviously pretty poor at the moment.

[Blake's Baby]

You really don't need to read Wealth of Nations to understand Capital.

I don't think your reading comprehension is particularly bad - Capital is pretty dense. But you can hack your way through it. There are plenty of reading guides and there are also of plenty of people here that can help.

[Zanthorus]

Exchange-value is how much labour, on average, something takes to produce.

False, Marx makes a distinction between value as such, which is what you are attempting to describe in this sentence, and exchange-value. Exchange-value is "this form under which value first appeared to us." From the previous sentence: "...we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it." Marx starts by describing use-value as something that has both qualitative and quantitative dimensions, qualitative in terms of the specific needs that the use-value meets, and quantitative in terms of socially recognised measurements such as bales of hay, gallons of petrol etc. "Exchange value, at first sight, presents itself as a quantitative relation", at first glance exchange-value has no qualitative dimension, but on closer inspection, anything which is to be compared quantitatively must be reduced to qualitative equivalence, a homogenous substance which is to be compared. We thus move from exchange-value to value as such, determined by abstract labour time, and exchange-value reveals itself as the form of expression of value, the commodity expressing it's value as such in terms of a certain quantity of another commodity - "...exchange value is the only form in which the value of commodities can manifest itself or be expressed." Exchange-value is the appearance, value is the essence, exchange-value is the form, value is the content.

And bollocks to the reading guides. Just keep reading Marx.

I remembered that I scribbled these notes on value down a while back, they might be useful to some degree:

If we take the commodity as it presents itself to us in immediate appearance, we will see that it has a use-value and an exchange-value. Use-value can immediately be considered according to the categories of quality and quantity. Qualitatively every use-value is the material for the satisfaction of a particular human need, and quantitatively we have the various socially approved standards of measurement such as gallons of oil, bushels of corn and so on.

Now with exchange-value, it appears originally that we can only consider at as a quantitative relationship. However, this is a deceptive appearance. When we equate two commodities in this way, we consider them as being capable of taking one another's place, as thus being both manifestations of the same substance. This substance, the qualitative aspect of exchange-value, is value. It's substance is socially necessary labour and it's measure is time.

We now find that our initial judgement, that the commodity consisted of a use-value and an exchange-value was, strictly speaking, wrong. The commodity turns out in fact to be comprised of a use-value and a value with exchange-value being value's form of appearance. We will further find that the development of this form of value from the simple equation of commodities to the equation of all commodities with the money-commodity was something inherent in the initial equation itself, the abstraction and reduction of all commodities to manifestations of the same substance is realised in immediate practice as the equation of all commodities with certain quantities of money.

Now it might appear that this equation of all commodities with money was an awkward and roundabout procedure and, given our previously expounded theory on the substance of value, that the ultimate development would be a direct expression of the value of all commodities in terms of labour-time, as in the labour voucher schemes of the Proudhonists. But this mystifying form of appearance, the separation of form and content, is inherent in value (And we will see the separation reappearing as an essential point all throughout Marx's work on Capital). Only in socialism, when value has been abolished, will form and content be reconciled and mystification be eradicated.

[Lucretia]

I'm reading through Capital for the first time, and I'm not really sure I'm grasping exactly what he's saying. Any help would be greatly appreciated! This is what I'm not sure I'm right on, so far.

Commodities have, by definition, both a use, and bear value, correct?

Use-value is the useful qualities a commodity has, right? As in, it would be judged on how well it keeps you warm, feeds you, etc?

Exchange value, on the other hand, is the 'natural' value of a commodity, as well as the labor hours put into it, and has no relation to the use-value of the commodity? What determines its natural value, assuming that I'm right in the definition of exchange value?

The 'relative form of value' is the value of a commodity as related to another commodity, right? Where the other commodity is the 'equivalent value', and represents no value of its own except as in relation to other commodities?

Sorry if these are really simple, economics aren't really my strong point (if I have strong points, hah).

The important point to grasp in that first chapter is that Marx is trying to understand the dynamics by which a society of isolated units of production manages to reproduce itself. That is, he is looking at a society composed of coopers, and blacksmiths, and farmers, and other such artisans, all of whom produce goods that are useful (have a "use-value," which you define correctly) but who (due to a growing division of labor) specialize in making one or a few things and exchange those things with other people who make other sorts of useful things. THe question is, how do people in this hypothetical society produce and distribute their products in such a way that needs are met well enough for society to continue to exist, and for production to continue to occur on a similar basis?

The answer, according to Marx, is that the cooper doesn't just say, "Well, Mr. Farmer, you're making useful things, and so am I. So let's just randomly and arbitrarily swap barrels for crops, and hope that, by chance, we'll get what we need." Instead, the farmer and cooper are attempting to exchange equivalents (the assumption is they won't want to exchange at a loss, and would only do so if the other party has a monopoly). But equivalents of what? Crops are qualitatively different than barrels -- they are items of a completely separate type, with a distinct set of properties that make them useful. Does one kilogram of wheat equal one barrel or two?

Marx argues that the exchange occurs on the basis of a third thing that these items objectively possess -- the human labor embodied in them, as measured quantitatively by the amount of time socially necessary required to produce the item (in other words, the social average -- in reality, some laborers will produce a little faster and a little slower than the average, with the slower ones being penalized). For that is the only property that any two commodities can be guaranteed to share in a way that makes them comparable quantitatively and not just qualitatively. This third thing, measured by the amount of human labor objectified in a product, is VALUE ("exchange-value" is the phenomenal form assumed by value, e.g., some kind of currency that operates as a "store of value"). Value is "abstract" in the sense that it "abstracts from" or does not take into account of all the other physical properties that make the product useful. And when an item is produced as a commodity (that is, for sale on a market), the producer assumes a peculiar type of relationship to his own labor process -- he is not producing "food" or "nourishment" if he is a farmer. These use-values are incidental for his reason to produce more than he requires. Rather, he is producing for the sake of creating "value," and in this sense his laboring process becomes abstract in the sense of losing concrete social relevance. The aim of the farmer is not to produce use values for others directly -- it is to produce abstract value he can use to acquire goods for himself. So you can see where this critique is going even at this early stage...

So value is NOT natural. It is a SOCIAL relationship (hence the point above about "social average), a relationship between producers that obtains when those producers are exchanging items with one another out of mutual dependence, and when they do not have political control to dictate the terms of the bargaining. And it implies a historically specific kind of production process -- production not for the direct satisfaction of need for one's self or others, but for the purpose of indirectly meeting one's own needs by producing value that might or might not ever be realized in the process of exchange.

Notice that in all of this, Marx is not yet talking specifically about capitalism, but rather about value relations, which emerge earlier than capitalism with petty commodity production on the interstices of previous modes of production. Capitalism presupposes the existence of these value relations, and in turns realizes them in their fullest and clearest dimensions -- to the point where people like him can begin to make sense of these relationships by coining concepts like "value."

Let me know if this makes sense.

[L.A.P.]

Use-value can only be realized in the consumption of a commodity as it is a qualitative measurement of its usefulness. Like other users have said, commodities - as products of human labor - don't have any value at all unless there is some objective use for them. Somewhere along the lines there is an 'abstraction' where the labor necessary (a qualitative thing) to produce two commodities are quantitatively equated with each other through an exchange-relation; hence exchange-value. The equivalent form of value is the commodity whos use-value is the embodiment of value for other commodities; note it's necessary that the commodity standing in the place of universal equivalent is excluded from the 'world of commodities'.

Basic form

20 yards of linen = 1 coat
(relative expression of value) | (equivalent form of value)
__________________________________________________ ____________
Expanded form

20 yards of linen
10 lbs. of tea = 1 coat
1 quarter of corn |
(relative expression) (equivalent form)
_______________________|__________________________ ______________________
Money form

1 coat
20 yards of linen
10 lbs. of tea = 2 ounces of gold
1 quarter of corn |
(relative expression) (equivalent form)
|