Chapter 1 is divided into four sections:
(1) The Two Factors of the Commodity: Use Value and ValueA summary of the first two sections is here. Below is a critical summary of the last two sections.
(2) Dual Character of the Labour embodied in Commodities
(3) The Value-Form, or Exchange-Value
(4) The Fetishism of the Commodity and its Secret.
(3) The Value-Form, or Exchange-Value
A commodity has a dual nature: a use value (natural form) and a bearer of labour value (value form) (Marx 1990: 138). Commodities have heterogeneous use values (natural forms), but a common value-form in their money-forms (Marx 1990: 139).
According to Marx, in early stages of human society (so it would appear) commodities do not exchange for equal labour values, but merely use value for use value:
“But to be equated to linen, and again to iron, is to be as different as are linen and iron. This form, it is plain, occurs practically only in the first beginning, when the products of labour are converted into commodities by accidental and occasional exchanges. …. ” (Marx 1906: 75).A full exposition of how Marx sees the origin of commodities and money does not appear until Chapter 2, however. Marx appears to argue that as commodity production becomes a major form of production within a community labour values come to dominate exchange value.
The labour value is a social phenomenon, not a physical one:
“The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition. Turn and examine a single commodity, by itself, as we will. Yet in so far as it remains an object of value, it seems impossible to grasp it. If, however, we bear in mind that the value of commodities has a purely social reality, and that they acquire this reality only in so far as they are expressions or embodiments of one identical social substance, viz., human labour, it follows as a matter of course, that value can only manifest itself in the social relation of commodity to commodity. In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it.” (Marx 1906: 55).By defining labour value in this way, Marx seems committed to defending the labour theory as an empirical concept.
Marx now turns to the question of the origins of prices or money-forms (Marx 1990: 139). He gives the following example:
20 yards of linen = 1 coat, whereThe linen is in “relative form” and the coat is its equivalent in terms of value (Marx 1990: 140). Marx argues as follows:
linen (relative form of value) = coat (equivalent) (Marx 1906: 56).
“… in the value relation nothing is seen but the proportion between definite quantities of two different sorts of commodities that are considered equal to each other. It is apt to be forgotten that the magnitudes of different things can be compared quantitatively, only when those magnitudes are expressed in terms of the same unit. It is only as expressions of such a unit that they are of the same denomination, and therefore commensurable.” (Marx 1906: 57).Marx’s argument here follows the initial one in Section 1 of Chapter 1, but he does not prove that labour value is the common quantitative unit underlying commodity exchange.
Marx’s argument continues:
“If we say that, as values, commodities are mere congelations of human labour, we reduce them by our analysis, it is true, to the abstraction, value; but we ascribe to this value no form apart from their bodily form. It is otherwise in the value relation of one commodity to another. Here, the one stands forth in its character of value by reason of its relation to the other.It is only when commodities with labour value exchange for other such commodities that abstract labour is compared and made commensurable.
By making the coat the equivalent of the linen, we equate the labour embodied in the former to that in the latter. Now, it is true that the tailoring, which makes the coat, is concrete labour of a different sort from the weaving which makes the linen. But the act of equating it to the weaving, reduces the tailoring to that which is really equal in the two kinds of labour, to their common character of human labour. In this roundabout way, then, the fact is expressed, that weaving also, in so far as it weaves value, has nothing to distinguish it from tailoring, and, consequently, is abstract human labour. It is the expression of equivalence between different sorts of commodities that alone brings into relief the specific character of value-creating labour, and this it does by actually reducing the different varieties of labour embodied in the different kinds of commodities to their common quality of human labour in the abstract.
There is, however, something else required beyond the expression of the specific character of the labour of which the value of the linen consists. Human labour-power in motion, or human labour, creates value, but is not itself value. It becomes value only in its congealed state, when embodied in the form of some object. In order to express the value of the linen as a congelation of human labour, that value must be expressed as having objective existence, as being a something materially different from the linen itself, and yet a something common to the linen and all other commodities. The problem is already solved.” (Marx 1906: 58–59).
“The body of the commodity that serves as the equivalent, figures as the materialization of human labour in the abstract and is at the same time the product of some specifically useful concrete labour. This concrete labour becomes, therefore, the medium for expressing abstract human labour. If on the one hand the coat ranks as nothing but the embodiment of abstract human labour, so, on the other hand, the tailoring which is actually embodied in it, counts as nothing but the form under which that abstract labour is realised. In the expression of value of the linen, the utility of the tailoring consists, not in making clothes, but in making an object, which we at once recognise to be Value, and therefore to be a congelation of labour, but of labour indistinguishable from that realised in the value of the linen. In order to act as such a mirror of value, the labour of tailoring must reflect nothing besides its own abstract quality of being human labour generally.” (Marx 1906: 67).
Marx thinks that Aristotle was the first to show that commodity exchange constitutes an equality, but was prevented from moving to a labour value theory because of slavery:
“There was, however, an important fact which prevented Aristotle from seeing that, to attribute value to commodities, is merely a mode of expressing all labour as equal human labour, and consequently as labour of equal quality. Greek society was founded upon slavery, and had, therefore, for its natural basis, the inequality of men and of their labour powers. The secret of the expression of value, namely, that all kinds of labour are equal and equivalent, because, and so far as they are human labour in general, cannot be deciphered, until the notion of human equality has already acquired the fixity of a popular prejudice. This, however, is possible only in a society in which the great mass of the produce of labour takes the form of commodities, in which, consequently, the dominant relation between man and man, is that of owners of commodities. The brilliancy of Aristotle’s genius is shown by this alone, that he discovered, in the expression of the value of commodities, a relation of equality. The peculiar conditions of the society in which he lived, alone prevented him from discovering what, ‘in truth,’ was at the bottom of this equality.” (Marx 1906: 69).But this does not answer the question: does a product made by slave labour have a labour value in Marx’s terms? (Harvey 2010: 36 seems to imply that it would not).
But, to resume the main argument, Marx states that changes in the socially necessary labour time required to produce commodities will continue to determine exchange values (Marx 1990: 145).
Marx also makes it clear that a commodity can only have a labour value if it actually obtains an exchange value on the market (a view he repeats in Chapters 2 and 3 and as stated by Harvey 2010: 37):
“When, at the beginning of this chapter, we said, in common parlance, that a commodity is both a use-value and an exchange value, we were, accurately speaking, wrong. A commodity is a use-value or object of utility, and a value. It manifests itself as this two-fold thing, that it is, as soon as its value assumes an independent form—viz., the form exchange value. It never assumes this form when isolated, but only when placed in a value or exchange relation with another commodity of a different kind.” (Marx 1906: 70).By the end of section 3, Marx touches on the origin of money, but almost wholly in an abstract, theoretical way (an empirical analysis is provided in Chapter 2):
“The expanded form of value comes into actual existence for the first time so soon as a particular product of labour, such as cattle, is no longer exceptionally, but habitually, exchanged for various other commodities.If we were to choose linen as a “universal equivalent,” Marx argues, then the following would be true:
The third and lastly developed form expresses the values of the whole world of commodities in terms of a single commodity set apart for the purpose .... By this form, commodities are, for the first time, effectively brought into relation with one another as values, or made to appear, as exchange values.
The two earlier forms either express the value of each commodity in terms of a single commodity of a different kind, or in a series of many such commodities. In both cases, it is, so to say, the special business of each single commodity to find an expression for its value, and this it does without the help of the others. These others, with respect to the former, play the passive parts of equivalents. The general form of value C, results from the joint action of the whole world of commodities, and from that alone. A commodity can acquire a general expression of its value only by all other commodities, simultaneously with it, expressing their values in the same equivalent; and every new commodity must follow suit. It thus becomes evident that, since the existence of commodities as values is purely social, this social existence can be expressed by the totality of their social relations alone, and consequently that the form of their value must be a socially recognised form.” (Marx 1906: 70).
“The general form of relative value, embracing the whole world of commodities, converts the single commodity that is excluded from the rest, and made to play the part of equivalent—ere the linen—into the universal equivalent. The bodily form of the linen is now the form assumed in common by the value of all commodities; it therefore becomes directly exchangeable with all and every of them. The substance linen becomes the visible incarnation, the social chrysalis state of every kind of human labour. Weaving, which is the labour of certain private individuals producing a particular article, linen, acquires in consequence a social character, the character of equality with all other kinds of labour. The innumerable equations of which the general form of value is composed, equate in turn the labour embodied in the linen to that embodied in every other commodity, and they thus convert weaving into the general form of manifestation of undifferentiated human labour. In this manner the labour realised in the values of commodities is presented not only under its negative aspect, under which abstraction is made from every concrete form and useful property of actual work, but its own positive nature is made to reveal itself expressly. The general value-form is the reduction of all kinds of actual labour to their common character of being human labour generally, of being the expenditure of human labour power.” (Marx 1906: 77).Money, then, as a commodity with a labour value expresses its value in a potentially infinite series of exchange values (where labour value is equal) with other commodities (Marx 1990: 161).
“… a particular kind of commodity acquires the character of universal equivalent, because all other commodities make it the material in which they uniformly express their value. (Marx 1906: 78).
It was gold that won out as the universal equivalent:
“Gold is now money with reference to all other commodities only because it was previously, with reference to them, a simple commodity. Like all other commodities, it was also capable of serving as an equivalent, either as simple equivalent in isolated exchanges, or as particular equivalent by the side of others. Gradually it began to serve, within varying limits, as universal equivalent. So soon as it monopolises this position in the expression of value for the world of commodities, it becomes the money commodity, … .” (Marx 1906: 81).The expression of a commodity in terms of gold is its “price form” (Marx 1990: 163).
(4) The Fetishism of the Commodity and its Secret
Curiously, this section was moved from a mere appendix in the first German edition of Capital (1867) to the concluding part of Chapter 1 in later editions (Harvey 2010: 38).
Marx states that the commodity has a certain metaphysical or mystical nature, but this does not consist in its use value or the concrete labour used to produce it (Marx 1990: 163–164). Experience of the commodity as a use value gives no access to its nature as a labour value (Harvey 2010: 39).
According to Marx, capitalist society seems to hide the social character of labour through the act of exchange of commodities:
“Whence, then, arises the enigmatical character of the product of labour, so soon as it assumes the form of commodities? Clearly from this form itself. The equality of all sorts of human labour is expressed objectively by their products all being equally values; the measure of the expenditure of labour-power by the duration of that expenditure, takes the form of the quantity of value of the products of labour; and finally, the mutual relations of the producers, within which the social character of their labour affirms itself, take the form of a social relation between the products.The enigmatic nature of the commodity consists in being the “social character of men’s labour” as manifested in labour values through exchange. Commodities are “social” things, and the social relations between people as labourers, consumers and capitalists occur through commodity exchange, even though this very process disguises those relations (Harvey 2010: 39).
A commodity is therefore a mysterious thing, simply because in it the social character of men’s labour appears to them as an objective character stamped upon the product of that labour; because the relation of the producers to the sum total of their own labour is presented to them as a social relation, existing not between themselves, but between the products of their labour. This is the reason why the products of labour become commodities, social things whose qualities are at the same time perceptible and imperceptible by the senses.” (Marx 1906: 82–83).
“As a general rule, articles of utility become commodities, only because they are products of the labour of private individuals or groups of individuals who carry on their work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact with each other until they exchange their products, the specific social character of each producer’s labour does not show itself except in the act of exchange. In other words, the labour of the individual asserts itself as a part of the labour of society, only by means of the relations which the act of exchange establishes directly between the products, and indirectly, through them, between the producers.” (Marx 1906: 83–84).
Marx’s theory has a strange incoherence. On the one hand, exchange values are governed by labour value. But these labour values are apparently a secret or hidden phenomenon determining exchange values:
“The character of having value, when once impressed upon products, obtains fixity only by reason of their acting and re-acting upon each other as quantities of value. These quantities vary continually, independently of the will, foresight and action of the producers. To them, their own social action takes the form of the action of objects, which rule the producers instead of being ruled by them. It requires a fully developed production of commodities before, from accumulated experience alone, the scientific conviction springs up, that all the different kinds of private labour, which are carried on independently of each other, and yet as spontaneously developed branches of the social division of labour, are continually being reduced to the quantitative proportions in which society requires them. And why? Because, in the midst of all the accidental and ever fluctuating exchange-relations between the products, the labour-time socially necessary for their production forcibly asserts itself like an over-riding law of nature. The law of gravity thus asserts itself when a house falls about our ears. The determination of the magnitude of value by labour-time is therefore a secret, hidden under the apparent fluctuations in the relative values of commodities. Its discovery, while removing all appearance of mere accidentally from the determination of the magnitude of the values of products, yet in no way alters the mode in which that determination takes place.” (Marx 1906: 86–87).How such a secret and hidden phenomenon can determine individual exchange values is not explained by Marx in this Chapter, though by Chapter 3 we have a fuller description.
When commodities are related to units of money (the universal equivalent commodity) the producers can understand how their own labour relates to the labour of society:
“Consequently it was the analysis of the prices of commodities that alone led to the determination of the magnitude of value, and it was the common expression of all commodities in money that alone led to the establishment of their characters as values. It is, however, just this ultimate money form of the world of commodities that actually conceals, instead of disclosing, the social character of private labour, and the social relations between the individual producers. When I state that coats or boots stand in a relation to linen, because it is the universal incarnation of abstract human labour, the absurdity of the statement is self-evident. Nevertheless, when the producers of coats and boots compare those articles with linen, or, what is the same thing with gold or silver, as the universal equivalent, they express the relation between their own private labour and the collective labour of society in the same absurd form.” (Marx 1906: 87).A use-value of a thing can be realised by a direct relation between the thing and a human being, but labour value is realised in exchange of commodities (Marx 1990: 177).
Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.
Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.
Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.