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Capital and analysis of commodities by Carl Marx
Carl Marx defines commodity as any object that has the capability of satisfying a certain desire. In that case, desire is any human need. An object becomes a commodity if it can satisfy a need whether the want is a primary one or not. Marx considers this the embodiment of the capitalist ideology itself. For example, in a capitalist setting, an employee may invest his skills and energy in the production of a commodity. Through this effort, an object is turned into a commodity.
On the other hand, through the ownership of capital, or the object that is initially invested, the employer is the owner of the commodity that is eventually produced. Thus, the employer retains the right to trade the commodity for whatever other gain he or she might wish to acquire. In such a situation, the ownership of the invested capital, labor, and expertise cannot be contested. However, the contentious issue arises over the ownership of the resulting commodity.
The scope of concept of value
To Marx, a commodity has two values. The use-value is the potential of the commodity to satisfy certain human wants, while the exchange-value is the quantity of the commodity in terms of a universal parameter. The owner of the commodity controls the manner in which the commodity is used and the value for which it is exchanged.
According to Marx, accumulation of such commodities is the basis on which capitalist economies are built. Marx observes that commodities have different exchange values depending on the parties involved in the act of exchange itself. He continues to observe that labor is the real value of a commodity since it is common to all commodities. It is through labor that all objects are made useful to a human being.
The time for which a laborer works on a commodity determines the ultimate value of the commodity according to Marx. The theory of value is therefore not limited to capitalism. Since labor is provided by the society, every commodity has a social aspect in its value. Thus, even in a socialist system, the theory of value of a commodity is still valid.
Marx postulates that the monetary value appended to every commodity obscures the underlying value of labor in the particular commodity. He continues to say that the monetary value of a commodity is explicitly evident in the capitalist economies, which do not acknowledge the social aspect of value. However, in a socialist system, the value of labor and its relationship with the commodity is of prime consideration.
The difference between exchange-value and use-value
When the consumption of a commodity takes place, the use-value of the particular commodity is realized. For a commodity to have use-value, the purpose for which it was created must be realized. Furthermore, for a product to be put into use, an act of exchange must be executed for the consumer to acquire the commodity.
The philosophy of use-value implies that this particular aspect of the commodity is not intrinsic to it. A commodity does not hold use-value within itself at all times. Use-value manifests after the exchange of the commodity and subsequent utilization in an activity of some kind.
According to Carl Marx, the exchange-value of a commodity is a comparison of the commodity to another form that can in turn be compared to other commodities. This means that the exchange value is relative. For example, a commodity can be compared to a certain amount of money, while other commodities are also comparable to different amounts of money. This way, money is used to represent the exchange-value of a commodity.
Exchange-value is a separate entity that is different in nature from the particular commodity itself. The quantity of exchange-value should not have any use-value such as the one possessed by commodities. It should be a mode of expression of the value of a commodity. For example, money can be expressed just as a number, which does not possess any utility by itself. A commodity can be exchanged for this number, which has a proof that has no use-value by itself.
On the other hand, Marx associates value of a commodity to labor alone. The length of time for which the society or a member of the society lends his or her labor towards the goal of realizing the utility of a commodity is the value of the particular object. The magnitude of labor corresponds to the value of the resulting commodity.
Application of the concept of value on things
It is possible for a thing to have use-value without possessing any value. Natural objects such as the earth and the atmosphere have a use-value since they have utility. These things actually aid our existence. On the other hand, such things that do not incorporate human labour in their creation or modification to their current form do not have value. According to Marx, value can only be attributed to commodities that consume labor time in their creation or modification to their current form.
Validity of labor is established by the usefulness of the resulting commodity. According to Carl Marx, if an object is not of any use, the effort put into its creation or modification to its current form is not considered labor.
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