William J. Blake: An American Looks at Karl Marx
The wealth of capitalist society is made up of an immense number of goods or articles that are useful for the satisfaction of some want, whether real or imaginary. These goods or articles may be useful either for consumption—that is, to be worn, tasted, eaten, or even in the case of perfumes, to be smelled or, as with books, to be read or, with phonograph records, to be heard—or they may be useful for the production of other goods. That is, they may be fabrics that have to be made into clothing, or cotton that has to be woven into cloth. Or they may be machines for converting that cotton into cloth. Or more remote still, they may be tools for the manufacture of parts of the machine that is to be employed to make raw cotton into yarn, which then is to be made into cloth.
We classify goods according to their economic destination, or use, into two categories, producers’ goods and consumers’ goods. The value of these goods for the unique purposes of production or consumption is termed their utility or, in Marxist speech, their use-value. And this use-value has been the common feature of the goods of every society. No man can live without food and drink, few without shelter or clothing and, at a given point, men go beyond necessities and enjoy luxuries.
Wealth Is Not Related to Goods
But when wealth is looked at socially, a surprising fact comes to light. The wealth of capitalist society, or of any given individual in it, is not reckoned by his accumulation of these useful articles, so far as his own wants are concerned. A man may be esteemed very rich who has very few of these articles. We know that the wealth of most men consists either in their ownership or their possession of the means of control and acquisition of large quantities of goods that are not intended to supply their wants at all. These goods are accumulated either for other people’s use or in order to produce goods for other people’s use. A man can become richer without adding to his store of wealth a single unit of goods that would gratify him. He may, in fact, become very poor by having too many goods that nobody else wants. Before the modern era, such a state of affairs was exceptional. In most communities it was inconceivable. Now it is the rule.
Goods Are Made for Exchange
When we say that these goods are intended for a use other than to gratify the wants of their owner, we mean that they are to be exchanged for other goods which, in practice, is represented by their being exchanged for money. They are made to be sold. Practically all goods are made with this object in mind. Hence we can say that the production of economic goods becomes effective with their sale, and such goods are called merchandise, or in economic language, commodities. The capitalist system is represented by an accumulation of commodities. Or as Marx succinctly puts it: “The wealth of societies in which the capitalist mode of production prevails presents itself as an immense accumulation of commodities.... Our investigation must begin with the analysis of a commodity.”
Use-Value Distinguished from Exchange Value
As useful objects, these commodities have the same character they would have if they were produced not as commodities, that is, as objects of sale, but produced for the consumption of their maker. That is, their use-value is independent of capitalism, and is therefore not the subject of political economy, but of the commercial or businessman’s knowledge of goods. He appraises their qualities: if the silk be honestly made or weighted, if the measure be true or short. Whether as quality or quantity, their properties belong to physics and not to political economy. Their use-value is independent of the quantity of labor required to make the articles. For it is indifferent to the consumer, as eater or wearer, what labor went into the article he is consuming. It satisfies a want and he esteems it in that proportion. Since use-value bears no relation to the quantity of labor embodied in production, it is outside, for this second reason, the consideration of economists. Thus “free goods,” such as air, have great utility, but they are not exchangeable.
This is a vital distinction, for once it is apprehended, the so-called utility theories of value, including marginal utility, become irrelevant to political economy, even if (possibly) significant for psychology. The reason why it appears paradoxical is, as Marx says, that since goods are produced for sale (although they must have a use-value as well), it appears as though their value in that exchange is proportional to the quantity with which another commodity is exchangeable for them. But since their exchange value is always changing, it seems ludicrous to assert that there is an intrinsic value in the commodity itself. How can there be a value that does not find its expression in exchange value? If a customer offers one price for a commodity on Monday and another on Tuesday, what does Marx mean by saying that there is a value inside the commodity that does not appear in the relative quantity of goods it can command in exchange? Where does it appear if not in exchange? And if not in exchange, of what use is the term anyway?
The Generality of Exchange Value
This presupposes that a commodity has one exchange value. But it has many, in fact it has nearly an infinity of them. Let us illustrate.
A yard of silk is exchangeable for, say, a yard of wool in goods. It is exchangeable, however, for two yards of rayon cloth. It is exchangeable for twelve quarts of milk, sixteen one-pound loaves of white bread, and for one catcher’s mitt. Now each of these commodities must have equally varied exchange-values once any of them can exchange for any one of the others. If we compare a hundred commodities, the number of their exchange-values as against each other will be the permutation and combination of the hundred. Each of these exchange values is replaceable, as such, for each other. And yet, although the quantity of one exchange value can be equal to any other, what an astonishing variety of yards, pounds, colors, and tastes! What then have all these commodities in common that they can be exchanged at the same value for each other at any given point? The relation of any two commodities must, therefore, have something in common with some other factor, some third factor. Or if, say, sixty commodities are considered, they all have something in common with a hidden sixty-first factor that can make them exchange at equal values with each other. Now what is the missing factor?
If the theory that use-value was the missing factor had any merit, we could find it out easily. But although sweetness makes chocolate candy useful, and luster in silk makes it useful, there is nothing in common here. No quality exists in common of the whole world of exchangeable commodities. So use-value is not the value realized in exchange. For commerce, one set of goods of any kind is as good as another, if they exchange at the same value. Different quantities of exchange value have no correspondence whatever with the qualities that make use-values. Use-value, therefore, is not the secret of availability in exchange. But there is one common property all goods have. It is their only common property. They are all products of labor.
Now notice that the use-value is not related to exchange value as we have seen. That means that the varying qualities of labor incorporated into the production of these goods has no relationship to value, since value is the expression of the one thing all exchangeable goods have in common. And so it is proved that use-value does not concern economic students.
Abstract Labor Produces Value
Since use-value is eliminated from consideration, then it is not their shape or quality or workmanship that we consider in discussing values, but what we are considering is abstract human labor. That is made clear in the following way. If use-value or the utility of these diverse objects is not the source of their exchange equivalence, then the different kinds of labor do not appear in their special useful qualities (as painting of pots, silk-weaving), but only as the quantity of labor which is common to all of them. Since that quantity of labor has no common useful properties, we speak of it as abstracted from special types of manipulation; hence the expression, abstract labor.
Now abstract labor looks like an absurdity, or some scholastic concept that no one can imagine. It looks like sleight-of-hand, an economic conjurer’s trick. The only labor we see is painting, weaving, trucking. Whoever saw anyone doing abstract labor?
The answer is that the market sees it. If it equates all the labor-products as a common sum of exchange values, the painted object and the sweet object being exchangeable against a cigar and a baseball, then what it equates is abstract labor embodied in all of these articles. The laws of any science are found beneath surface phenomena, their common ingredient rarely being the varied superficial appearances they first present. But in science this is now traditional, we are used to it, whereas in political economy it is new and seems odd and too clever by half. But the embodiment of abstract human labor is the basis of exchange value, despite all the shapes it assumes.
But since abstract human labor can be equated in the universal exchangeability of every commodity against any other in some proportion, it follows that this abstract human labor is the expenditure of social labor, of the whole labor of man, as a totality. For Marx always considers all economic phenomena as social totalities, to begin with. As he says, each commodity is a crystal in which its one social substance, human labor, is embodied, and that labor is value. This labor-power is different from labor itself, for labor is concrete, real, whereas this common quality of labor-power is homogeneous (i.e., not varied), and is the basis of value without reference to the special mode or shape or form of its expenditure.
Value Antecedent to Exchange Value
Exchange value, then, merely brings out in the open the common value (that is, abstract social labor) that already resides in commodities. For the something that all commodities have in common must precede their being exchanged against each other. Therefore, value is different from exchange value, it is the basis of exchange value, and exchange value is merely the mode by which we perceive intrinsic value, just as an electric current is the means by which we experience electricity.
The Magnitude of Value
Since abstract human labor is embodied in all articles, how is the quantity of value established? Obviously by the quantity of this labor. And what is the common denominator that establishes the quantity of labor, that is, of the totality of labor, of social labor? It is the time embodied in the production of any commodity.
At first blush the time, as the measure of the quantity of labor, seems absurd. Why not some more delicate scale? It seems that this is nonsense since it equates skilled and unskilled labor and makes the work of the incompetent and the lazy more valuable than the competent and the industrious, because the worse the workman, the more time he takes.
But of what labor-time are we speaking? Of the expenditure of one uniform labor-power. Why that? Because the universal exchange-value requires that the corresponding quantity of labor be equally social and widespread.1 Marx says: “the total laborpower of society-embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labor-power, composed though it be of innumerable individual units.” Logically there is no other analysis possible. For here we are speaking not of exchange value, in which value is manifested, but of that value that is primary to exchanges at all, that value which is hidden from us by the operation of exchange value. It is the permanent substratum of all value just as total mass is the substratum of all masses, however they may appear to us in different objects.
Homogeneous Labor Time
Since we speak of one uniform labor-power, it is clear that to make up this total every unit is equal, every unit counts as one. Each contains its divisible proportion of the average socially necessary labor-time. Now this does not mean, of course, that every object contains exactly the same amount of labor-time. Of course they do not. But it does mean that every commodity contains homogeneous labor-time in its fabrication. If, say, the total social labor-time put into total production is one billion hours, then every unit of labor-time of that billion counts as one. Later on we shall explain the difference between specific labor in each commodity, and the units of labor-time incorporated into each commodity as a divisible sum of the total labor-time, the latter being considered as one social mass.2
Socially Necessary Labor-Time
How do we ascertain what is socially necessary labor-time? By ascertaining that time which on the average, under normal conditions of production, is required by labor having the average skill and intensity prevalent at any given time to make any commodity. For we have no way of determining a total except by some less universal referent that we can begin counting with. The sum of these smaller units is the total. If we begin with the average skill and intensity of labor, as normally manifested, and take that as a basis, we have a picture of the social average labor time required to produce commodities, or any articles, whether they be commodities or merely embody use-value. This limitation, prevalent at any given time, is important. For obviously if machines are introduced that enable labor to produce twice as much in the same time, the value (which equals social labor-time) falls by one-half of the goods so produced.
Of course, labor that is wasted, that is, does not result in production, or labor that is superfluous (where more than was necessary was used in order to produce), are not properly social labor-time incorporated into articles. It is only normal, average labor that is properly a divisor of the total labor of society, that counts in the creation of value. Any individual unit of production, then, is value-forming if it is at about the normal standard of that total.3
Now this socially necessary labor-time that is incorporated in articles and which gives them their value is not the same as saying that they will exchange for each other in the proportion in which they have value. It would seem logical that when we begin with the problem of exchange value and ask, what is there in common that allows of equivalence in exchange, that when we have found that common denominator we can then reverse the process and say that these goods exchange in proportion as they embody that common denominator. If not, there seems to be an illogical difficulty.
How Exchanges Disguise Value
But the law of value and the law of exchange value are quite different matters. Everyone knows that in practice commodities are bought with money. Everyone knows the commonplace that money here acts as the agent, or on behalf of other goods, since it, in turn, can be exchanged for any goods.
When a clock is sold, for example, it embodies an immense sum of labor-times. There is the fabrication of the clock itself, then the time every unit took to produce, then the time required to make the raw materials that enter into the parts, etc. Nobody really knows the social labor-time employed in the final clock.
When the clockmaker sells his clock he does not ask how much socially necessary labor-time is included in its making. He knows, to use the commercial expression, what it cost him to produce it, how much time he took about it, what is the number of dollars he can get for it, and what else he can buy with the money he will receive.
Now if neither the seller nor buyer ever takes labor-time (social) into account, and it forms no basis of exchange reckoning, of what use is the conception at all? And this question is asked not merely by beginners. The encyclopedic, though hostile, critic of Marx, Werner Sombart,4 says of the Marxist theory of value that it is correct but that as this value does not reveal itself in exchange relations of commodities, under capitalism, it is not found in the real world, but is an ideal mental concept, extremely useful only for philosophical exploration of the foundations of political economy.
Many so-called Marxians have pretended that one could do just as well with the rest of the Marxist theory, without concerning oneself with the value that precedes exchange value, and which is manifested only by exchange value, and yet is not exactly measured by exchange value. They decline to believe that the subcellar is necessary to the building, although they often think it correct, “metaphysically.”
Since this is a question of pure economic theory we must pursue its implications to the end. The foundations of political economy itself are involved in this very discussion.
How the Market Equates Commodities
In the first place, it will be noted that there is an interesting social approach in exchange values, or in their monetary expression which is called price. The market price is the same for all commodities of the same type without any reference to their differing conditions of production, whether the producer is efficient or inefficient, whether his costs are high or low. If a businessman buys a thousand yards of silk from six competitors, he is indifferent to their troubles. He pays for them as social products, as measured against the totality of silk being offered on the market. He makes the same abstraction for himself as a purchaser, that we are told is so metaphysical. He abstracts the specific modes of production of these silk goods, whether done on new or old looms, and asks only of the same commodity that it compete, that is, measure itself, against the totality of silk goods on offer. We shall return later to the common basis embodied in this transaction. It is obvious that it must tend to approximate, as a total of prices, to something like the total of social labor-time, expressed in value. But since it is not an exact correspondence (for reasons to be discussed later), it is the fact of social abstraction by buyers that is here cited to show that such an abstraction must take place if economic categories are to exist at all. Since labor, as a totality, is the determining factor to which total prices must be related, why is there no complete correspondence? Why do not the two abstractions coincide?
Division of Producers
Today all commodities are produced for sale by separate producers. Hence the social labor, which is the quantity of value, is not producing socially. It is split up into many private productions. The only manner in which goods can possibly be exchanged, then, is by sale. Hence, unless the value of commodities is expressed in exchange value, it does not emerge. The unsold objects are not commodities, they are merely products having utility.
Labor does not directly serve labor. It serves it indirectly, by way of the exchange process, in the market. Now, to make clear the relation between value and exchange value, let us take up another type of society. For it must be recalled that for Marx all economic phenomena are descriptive only of certain historical social relations. A contradiction such as that the quantity of labor determines value but that it is not expressed that way, may not be found at all in another society.
And yet useful articles would there be produced. In order to differentiate this society from one in which goods have to be exchanged, let us conceive of it as one in which men would have direct, immediate relations with each other.
Direct Production and Its Implications
Let us take a self-sustaining peasant family. It produces wheat, wine, cattle, flax and linen, clothing, even tools and earthenware. For the family all these articles are products of labor and useful. They do not buy and sell these articles against each other, nor does the labor of the members become manifested only after an exchange. All work is done in common, all goods enjoyed in common. There is a division of labor, but it is a natural division based on age, sex, strength, and also on the seasons. They do not pay wages or have claims against each other, that is, price or property claims. The whole family is a simple machine which works a total number of hours, and every individual is judged by the number of hours in which he helps along. Those hours are the direct social expression of his labor.
It may be thought such a family society is too simple to bear comparison with a highly developed capitalism, so let us take a communist society, even if imaginary. Here too the distribution among the laborers of that portion of their production set apart for their subsistence (after allowing for the renewal of means of production) could be arranged according to their labor-time. The worker would draw goods from the common store in the measure of the labor-time he had added to that store. All goods would be seen by him as produced by his labor-time.5 As with the patriarchal peasant family, his interest does not conflict with anyone else’s in order to determine how goods shall be consumed. His interests are fused with the total labor-time of all producers. This is termed direct social labor.
In capitalism men are related to each other not as men but through the relationships of commodities. Hence their social labor is expressed not in the equivalence of the social labor of other men, but indirectly, in terms of another thing, another commodity.
“Things are in the saddle
And ride mankind”
sings Emerson. His poetry is exact economic theory.
How Capitalism Realizes Value
Engels sums it up, simply. For a commodity to have a given value it must (in capitalism) have the following attributes:
(1) It must be a socially useful product (useless products are unexchangeable and the labor in them is wasted; privately useful objects have concrete utility only and not value, so they are not reckoned as part of the social product).
(2) This commodity must be produced by a private person or company for private profit.
(3) Although a product of private labor, it is also unconsciously and involuntarily a social product, and exchanges socially, on a definite social standard.
(4) This standard is expressed not in terms of labor, but in another commodity.
Summary: The reason why there must be value at all is that goods are exchanged. In a noncommodity society there is no value. Value is the socially necessary labor-time incorporated into an object only because it is a commodity: this value exists as the common social form which becomes visible in the shape of exchange value. The reason that no one suspects that labor-time is concealed in exchange value is that owing to the production relations of classes whereby direct social labor is excluded, the value of commodities is made known by other commodities, and, in practice, by one commodity, money.
The fluctuations of this exchange value about the real value, while wide and sometimes very errant, do refer, by and large, to that basis, since price itself has to be based on a social abstraction of all commodities in order to give them a common valuation. By this action it ratifies their basis in value.6
Value a Transient Category
This tedious analysis, though not inviting, is a necessary discipline. It is now clear that Marxist theory does not use a sterile concept in the underlying notion of value, as Sombart thought. This identification of value, and the fact that it is different from the only form in which it becomes visible, enables the social anatomy of production to be laid bare. It reveals the real relation of capitalism to social labor. It shows that what are called the eternal laws of political economy, such as the law of value, are merely the abstract expressions of temporary social relations, in this case based on the division between social labor and private appropriation. It is the cornerstone of socialist thought.
To conclude, value is a transient phenomenon, characteristic only of commodity production, and is due to the production relations basic to commodity exchange.
The Theory of Labor-Time
Labor-time needs exploration. If, as values, all commodities are, in Marx’s figure of speech, “masses of congealed labor-time,” it is patent that the value of any commodity would be unaltered if the labor-time required to produce it remained constant. But as it does not, or rather, is constant for only short periods, its effects on value are extremely varied. Labor-time is altered, of course, with every variation in the productiveness of labor. The most commonly met with variables affecting this productiveness are:
(1) The average amount of skill of the workers.
(2) The state of the arts, science, and the extent of their application in practical life.
(3) The maturity of social organization of the workers and their disposition in labor.
(4) The range and capacities of the means of production.
(5) Physical conditions, climatic, etc.
The same amount of labor-time in China and the United States leads to totally different results. That in Massachusetts of the seventeenth century and in the same state in the twentieth, are incomparable. When the sun is kind, the work done in the vineyard is rewarded by flavor and abundance. When it is cold, the wine is acid and the crop short. The same labor applied to a rich reef of gold in fabled Golconda yields far more than an abandoned quartz in Brazil. Diamonds require tremendous labor for their minute bulk.
At first this would seem to modify the theory that value is proportional to the social labor-time. But Marx pointed out in the beginning of his study that labor-time was defined within historical limits. It is the time rendered necessary, socially, by the average skill and intensity prevalent at the time. If the average amount of skill of the workers is improved, it means that they do more productive tasks in less time, thus reducing value. If science doubles production, the labor-time is cut in half and with it the value added by labor. The crops may vary from year to year but their long-range average time decides their fundamental values. Otherwise wheat would sell sometimes at sixty dollars and other times at one dollar, instead of its limitation to a range rarely more than 50 per cent as against the average price level.
Wasted Labor
If too much time is required by an exhausted vein in a mine, it takes up so much more than average social time that it counts as wasted labor. The same applies to climate. Bananas grow by hundreds of millions in Costa Rica with a small expenditure of labor-time for their collection. That is the socially average labor-time for world banana production. Any attempt to raise bananas in Norway would not be referable to average social labor but to wasted labor. This is an extreme illustration, but it shows the content of Marx’s doctrine, that the average social labor at any given time is the measure of value for commodities as a total.
The Permanent Tendency of Unit Values to Fall
The increase in the productiveness of labor for generations has meant that the value in commodities has fallen, on the whole. No one can compare the labor-time put into cloth or raw cotton a hundred years ago and today. If the sum total of values has risen, it has been because of the enormous increase of the sum total of all commodities or, in other words, because of the increase in the number of units. But each unit represents less value than it did when productivity was small and it took a greater amount of time to produce each unit.
NOTE: This decrease in value may not seem plausible when it is recalled that prices have risen over the last few centuries. Everyone knows that by and large, the amount of goods commanded by one dollar in the open market was greater a few generations ago than today. Wages of $10 a week were better pay than $15 today.
Here the Marxian method is shown at its best. There is a clear contradiction between value and price; there is no correspondence whatever in their respective magnitudes. Price is the money expression of exchange value and, in turn, is ultimately the expression of exchange value in gold. What the price of anything measures, as we shall later see, is the labor-time incorporated in gold against the labor-time incorporated in the mass of commodities that comprise the capitalist market. If the hours of labor-time required to produce gold are, say, cut from 1,000 hours to 300 hours, and the labor-time required for all other commodities cut from a base figure of 1,000 to 500, then the prices which were the ratio of 1,000 hours to 1,000 hours, or even, are reduced to 500-commodity-value for 300-gold-value, or it takes the difference between 300 hours in gold and 500 hours in commodities to buy the commodities, or in other words prices have risen by 66 per cent, whereas the value of commodities has fallen from 1,000 to 500, or 50 per cent. The idea of price is here introduced out of turn, long before its logical appearance, but since this apparent objection will most certainly be made by those who confuse value and price, and who have not the patience to grasp the Marxian system in its fullness before formulating objections, it clears matters to take it up before its time.
Disparity of Value and Exchange Value
It does not follow that commodities invariably exchange, even roughly, consonant with their value. There are commodities on the periphery of the economic system that sometimes sell at less than their value for long periods. Of gold, the cynical epigram is that there has been more gold sunk into the ground than was ever taken out of it. It is, therefore, because of its glamor, a sentimental will-o’-the-wisp, that it invites wasted labor. As for the prize commodity of all, the labor-power sold to the capitalist by the worker, the long periods of hunger and of pauperism indicate that it can often be sold below its value, that is, below the labor-time required to reproduce it and sustain it.
Law of Quantity of Value
But to return to the labor-time theorem of Marx. Since the greater the productive power of labor, the less labor is put into a given unit, and hence a smaller value results, and the more labor the greater the value, we reach the formulation:
The value of a commodity varies directly as to the quantity and inversely as to the productiveness of the labor incorporated in it.
The Twofold Character of Labor in Commodities—Use and Value
An object can have utility without having value. Wherever no labor is used any such article is wholly without value: air and fresh water in a brook, where no pipe work is required to make it available, virgin soil (before its alteration by the labor of tillage), pasture lands, meadows, building sites, etc.7 This is true of any useful thing, produced by labor for its own enjoyment, with no exchange in mind. It has a use-value or utility, but it does not have value because it is not a commodity. Value arises only socially, that, is, a commodity must have use-value for others but not for the producer. But nothing has any value unless it has utility. A useless object cannot be exchanged. The labor that was put into a useless object does not count as labor, for labor in a social sense is creation of use-values that are exchangeable. If it be argued that certain use-values which we state are not values but utilities, such as virgin soil, or meadows, command a price, the fact is that things that have no value can command a price. We shall later see that the right to take tribute of the products of labor can be bought and sold, but this is not the price of an exchangeable article, but the monopoly right to hold up producers. The value of land is a capitalized form of appropriation whose exact economic (ethics apart) equivalent is theft. There is no question here of the social exchange of commodities for commodities.
Use-value contains the material content of wealth, value the social content, in our present society.
Commodities have this twofold character. But labor which produces these commodities has two corresponding distinct characters as well. The treatment of these two characters of labor is, according to Marx, the pivot of political economy. He proudly stated that this conception was the best thing in his book Capital. Upon the proper understanding of this distinction of two characters in labor itself is based his entire theory of wages, of the exploitation of labor and, ultimately, of commercial and financial crises.
Exchange Caused by Differing Uses
Take two commodities. The value of one is double that of the other; say an office coat is worth twice ten yards of rayon. Both of these are entirely different as physical objects and in their uses. A tailor produced one and a weaver the other. The reason that these two commodities are exchanged at all is that they have these different uses. No one exchanges commodities with identical uses. It would have no purpose. The only apparent exception is that on commodity markets, where a grain merchant sells December wheat and buys May wheat. But here too he is exchanging different utilities, for use may differ as to time as well as to function. Briefly, in order that commodities may be exchanged at all they must represent different uses, be different specific goods.
The division of labor is required if these multiple uses are to become general. A social division of labor is a necessity for the production of commodities since, unless there are multitudes of separate uses, the enormous number of exchanges characteristic of capitalism could not take place. But though the division of labor is necessary in order to produce commodities, that same social division of labor could serve societies without commodity production, with direct labor relations. Inside a factory there is a division of tasks without the employees exchanging the results of their individual operations. Division of labor is antecedent to the specific social relations of commodity exchange.
Every commodity must have utility; that utility must differ from that of every commodity with which it is exchanged. Each of these products must result from specialized labor, and this specialized labor must be done independently by private producers.
This qualitative difference in products is the result of the conjunction of natural goods and specific labor, and it precedes all social relations. Hence labor does not produce all wealth; it is its conjunction with Nature both as to materials and forces that results in production.
Labor Distinguished by Use and Value
Let us now distinguish utility from value.
An office coat is worth twice as much as ten yards of rayon. Therefore twenty yards of rayon are worth just as much as the office coat. As values, the coat and the rayon are identical, as goods they are different. Is there any significance in the fact that differing qualities have the same quantitative equivalence in values? When we compare the coat with ten yards of rayon, instead of twenty, it now has twice the quantity of exchange value without changing its quality of being a coat by one whit. We know they both incorporate labor. As utility, they represent qualitatively different labor, and this we will call concrete labor. As equivalents in exchange they represent abstract labor. But it is the same human laboring power that represents both. For a man who works is not divided into two men, one of whom does work as a tailor or weaver and the other as a creator of value. He does only one job and that is his special business of sewing or weaving. We see him doing only a special, single job. How does it come about that the same laborer turns out differing qualities and homogeneous quantities of value? Both tailoring and weaving have one expenditure in common, the expenditure of labor-power. The expenditure of the energy of brains and muscles is necessary to both, whatever their greatly varied forms. These variations are the differing forms of utilizing that expenditure of brain and muscle energies. It is this common expenditure of energy that is the source of abstract labor-power, or value, whereas it is the specific shape of this expenditure that produces concrete labor or utility.
But if the expenditure of ordinary labor-power, that is, abstract labor, exists on the average in every worker, what about individual skill? It is simple to consider the effort of every laborer as a unit, a divisor of total social laboring power. But this is an abstraction. Actually we meet only more or less skilled workers. How does one equate this constant difference in skill with the crude idea of abstract labor?
Skilled Labor
Marx answers that skilled labor counts as simple labor intensified, that is, skilled labor counts as a multiple of unskilled labor. The reduction of these two to a common denominator is constantly being made. The commodities produced by skilled labor are worth a definite quantity of those turned out by less skillful labor. If the market for commodities abstracts the different utilities of weaving and tailoring and beats them both into a common pulp called value, so too does the market beat the differences between more skilled and less skilled into differing magnitudes or quantities of the same pulp of value. Skilled labor may count for twice unskilled labor, as tailoring may count, time for time, for twice weaving, but all are reduced to the one common denominator of abstract labor. Necessarily these have to be reduced to the average labor met with at the time, unskilled labor falling below the average and skilled labor above. This is not to be confused with the question of wages. The skilled laborer receives higher wages for reasons to be discussed later.
What we are here concerned with is the value of the commodity which evidences the labor-time spent in its production. Here everything is a multiple of the social average labor-time, however composed.
Labor Distinction Basic
This elaborate study of the composition and distinctions of labor is often condemned as repetitious, tautological, and wearisome. These critics then delight in a hundred pages of gymnastics on subjective valuation and the gyrations of prices.8 Here Marx is quite obviously correct when he points out that such scholars are bourgeois. They find it quite natural that the intricacies of business should be fascinating, but that labor, that class without elegance and social standing, is dull. For Marx the labor that is the foundation of all values is the supreme object of study of political economy. His apparently long-winded studies become rich with economic and social meaning as they reveal the relations of all classes in production and distribution.
We have seen that the difference in value between one office coat and ten yards of rayon, where the coat was worth twice as much, was due to twice as much abstract labor-power being embodied in the coat and, as twenty yards of rayon embody twice the abstract labor-power of ten, that number of yards becomes equal in value to the office coat. That abstract labor-power is the one we measured by time, in the first study of value.
Quality Not a Factor in Value
But it may be objected that men pay for quality as well as for the differences of time due to abstract social labor-power. They pay for the exquisite scrollwork on a fine watch-case because it is finer in craftsmanship than metal-stamping. They do not. The scrollwork is paid for because the amount of labor-time expended in it is enormous for that bulk of goods compared to that for a similar bulk of metal. The difference often is that of a hundred average hours, or a thousand, to one. The differences of quality and workmanship emerge as value only becouse of the differences of labor-time.
We shall later amplify, but in passing it must be noted that by social labor-time we do not restrict the term to the time actually employed in the last stages of fabrication. The ten years of training of a scrollmaker count as labor-time, spread over his average laboring life. The simple labor that stamps metal takes only a day to train. That difference between ten years and one day are also to be counted. The delicate precision instruments used by the skilled laborer took more labor-time in their fashioning, per bulk of goods produced, than the stamping-press of the metal worker relative to bulk produced. We shall later discuss the composition of labor-time, but labor-time it remains. Value is homogeneous abstract social labor-time, and nothing else.9
Different Aspect of Labor Creates Quantity and Quality
Therefore the labor in any commodity counts only quantitatively. The labor in any utility counts qualitatively. Here is the twofold character of the same labor’s daily task. It is the difference between How and What? and How Much? 10
It follows that all commodities, taken in certain proportions, must have the same value. Their differences are those of proportion only. If an invention is introduced that enables the office coat to be produced in half the time, it sinks to the value of only ten yards of rayon, although the tailoring skill in its making is unchanged.
Now the conclusion of this is startling. The increase of utilities is the increase of human wealth. The more goods, the more the wants of mankind are satisfied. But if these goods are produced in abundance, that is, in less time, as a whole, there may be a terrific drop in value. This is an opposite movement, an antagonistic development. Productive power, when it varies, is manifested by more or better goods, that is, by utilities. But if the laborers continue to work eight hours a day, notwithstanding this gain in creating utilities (in Marx’s idiom, use-value), then the total amount they produce, from the viewpoint of abstract labor-time, is unaltered and hence value of the mass of products is unaltered. As there are twice as many of the objects produced, then each represents only half the proportion of total labor-time as before, whereas the mass of value is unchanged.
Value is always the same for the same amount of time, as a whole. But if the total quantity of goods produced can themselves be produced in less time, then the total value will fall as well. This is another of the social contradictions brought to light by the Marxist analysis. The twofold character of labor differentiates clearly between utility and value, and explains their opposed tendencies.
Marx Corrects Labor Theory of Value
Herein is Marx’s correction of what is called the labor theory of value. Adam Smith and Ricardo maintained that labor was the cause of the value of commodities. But they did not know that labor produces two values, one a use-value that is antecedent to the product becoming a commodity and which does not enter into the commodity relationship, or into value itself, which is the labor-time socially required in production and which we recognize only as it appears in exchange. If there were no social contradiction, that is, if goods were produced by labor in direct social relations, there could be no such twofold character of labor. The reason for this twofold character is social, the division of classes, and the realization of value by exchange, that is, the recognition of the value of one commodity by way of another. The critics of the labor theory of value attack the Smith-Ricardo hypothesis which has little in common with the Marxist. Marx neither holds (as nearly everyone believes) that labor creates all wealth, nor that labor creates all value. Only abstract labor creates all value, and then only for a definite social reason.
NOTE: Certain considerations have to be taken up here, although they logically belong further on, for objections are likely to be made at this point. They are: Irrespective of the labor put into commodities, are not the more abundant articles valued at less and the more rare at more? In that case is it not the abundance or scarcity of supply relative to demand that determines the value of an article?
The scarcity or abundance of any commodity is itself determined by the quantity of labor put into it. Since goods that require a small amount of labor-time can be produced in large amounts in a given hour, they are abundant and cheap. Goods that require a great deal of labor-time to produce them are scarce for that reason. Abundance and scarcity are merely derivatives of labor-time. The cart is before the horse.
If labor-time is wasted, does this not mean that it is not labor-time that is decisive for values in the long-run, but demand?
Labor-time is not determined by its quantity required to produce an article, but to reproduce it. Hence labor is never wasted for reproduction. But there is no contradiction here in any case. If a commodity took more labor-time than is socially necessary and this is reflected by a falling off in demand, then the reduction of social labor-time in its reproduction measures its true value. If the commodities are not wanted at all, there is no value, because social utility must precede any value, but does not determine the quantity of value. To resume, either there is some value or no value; if no value (no use, that is), no question of magnitude of value enters. If some value, then social labor-time required to reproduce the article is its value. Labor-time alone remains efficient to explain quantity of value.
Does not supply and demand alter prices in excess of any differences in labor-time?
Socially, on an average, emphatically no. Its violent fluctuations are merely the register of altered labor-time relations in the production of the comparative commodities in question. Here too the object reflected in supply and demand appears to originate there.
Small fluctuations, yes, since exchange value is realized by way of price, and since the capitalist system is split into many producers, their mode of obtaining the equivalent of value is by each one individually testing the market. The fluctuations of prices, by stabilizing about the labor-time, are the means whereby that labor-time is confirmed. The variations are, so to speak, the premium for discovering basic labor-time in commodities. It follows from this that it would be extremely rare for two commodities to hit off each other’s labor-time at once, since the calculus of probabilities is against such a perfect coincidence, and rather favors any of a large number of intermediate variations in price. These cannot be large variations for the reason assigned by Lenin, that millions of exchanges carried on every day could find no social basis whatever unless they equated one and the same labor-power.
1. Clearly, if the average socially necessary labor required to make a pair of shoes is two hours, the incompetent worker who does it in four can rcceive only commodities in exchange normally given for two hours only.
2. The critics of Marx often write as though he holds that two hours in any object means that it must exchange against any other object with two hours labor. This confuses social labor-time with individual variations. A bad worker takes more time than the average social labor-time, a good worker less; their value is their average proportion to total labor-time. To have a composite social labor-time you must have units above and below that average.
3. Some Marxians, anxious for complete clarity, point out that the exchange value of goods is determined by the necessary time to reproduce them rather than to produce them. Since labor may prove to have been excessive by the time commodities enter the market, this distinction makes clearer the concept of “necessary” labor.
4. Leading non-Marxian historian of capitalism. His historical method, though, has been impeached as unprofessional.
5. This was practically the rule among the advanced Incas, Iroquois, etc.
6. More simply, oatmeal is always about 10 cents, suits over $10, diamonds above $100, houses above $1,000, passenger boats above $100,000. Their everlasting proportions to each other represent a substantial difference of a common exchangeable quantity, whatever their fluctuations.
7. We do not speak of price, only of value. See the chapter on Rent.
8. Anyone who has worked through F. Y. Edgeworth’s Mathematical Psychics, or Karl Menger’s Calculations of Needs, to name only two, would find Marx a relief for simplicity.
9. A good woman is more precious than rubies, the word of God is a pearl of great price, in Heaven there are many mansions attainable by faith. It is not labor-time that makes these priceless, although they embody, to the believer, more beauty than any labor-time can create. If Keats is confirmed that truth is beauty, it is not related to skill. There is a subtle error in consumption theories. A dear object can be acquired only by the rich. They are “refined.” Therefore what embodies more labor-time takes on the attribute of their “elegance.” But a hobo who esteems a whiff of prairie air more than their jewels shows that what they buy is simply so much labor-time.
10. Concrete labor is valid for any social order; accordingly, abstract labor is valid only for capitalism, or, more exactly, labor has two qualities, expressed in its twofold character, concrete and abstract, and one quantity, magnitude of value.