Karl Kautsky

The Economic Doctrines of Karl Marx


Part I.


(1) The Character of Commodity Production

WHAT Marx designed to investigate in his Capital was the capitalist mode of production, which is the prevailing one to-day. He did not concern himself in his work with the laws of Nature, which form the basis of the process of producing; to investigate them is the business of mechanics and chemistry, not of political economy. On the other hand, he did not propose to investigate the forms of production which are common to all peoples, as such an investigation could, for the most part, only result in commonplaces, such as that man always needs tools, land, and food in order to be able to produce at all. Marx investigated the laws of movement of a definite form of social production which is peculiar to a definite period of time (the last few centuries) and to particular nations (European nations or nations originating from Europe – in recent times our mode of production has taken root among other nations, for example, the Japanese and the Hindoos).

This prevailing mode of production, the capitalist system, with whose peculiarities we shall become more closely acquainted, is strictly distinguished from other modes of production, for example, from the feudal system, as it existed in Europe during the Middle Ages, or from the economy of primitive communism, as it existed on the threshold of the development of all peoples.

If we survey present day society we find that its wealth consists of commodities. A commodity is a product of labour which is not produced for the personal use of the producer or of the men associated with him, but for the purpose of being exchanged with other products. Consequently it is not natural qualities but social qualities that make a product a commodity. An example will make this clear. The yarn which a girl belonging to a peasant family spins from flax, in order that it may be woven into linen to be used by the family itself, is an article of use, but not a commodity. If, however, a spinner spins flax in order to exchange the yarn with a neighbour for wheat, or if a manufacturer causes many hundredweights of flax to be spun day after day, so that he might sell the product, the latter is a commodity. It is also, of course, an article of use, or an article of use which has to perform a special social function, that is, to be exchanged. We cannot detect whether it is a commodity or not from the fact of its being yarn. Its natural form may be the same whether it is spun by a maiden in a peasant’s cottage for her trousseau, or in a factory by a factory girl who will perhaps never use a thread of it herself. It is only from the social rôle, or the social function which the yarn performs, that one can ascertain whether it is a commodity or not.

Now in capitalist society the products of labour assume to an ever increasing extent the form of commodities. If all the products of labour are not yet commodities it is because vestiges of former modes of production still inhere in the present mode. Leaving these survivals, which are quite insignificant, out of account, we may say that all the products of labour now assume the form of commodities. We cannot understand the present mode of production unless we have a clear idea of the character of commodities. We must therefore begin with an examination of the commodity.

In our opinion, this investigation will be facilitated if first of all we exhibit the typical features of commodity production in contrast to other modes of production. We shall thereby most easily reach an understanding of the standpoint from which Marx commenced his investigation of the commodity.

As far back as we can penetrate into the history of the human race, we always find that men have acquired their means of sustenance living in smaller or larger societies, that production has always borne a social character. Before his chief books were written, Marx pointed this out clearly in his articles on Wage, Labour and Capital, which appeared in the Neue Rheinische Zeitung.

“In the work of production men do not stand in relation to Nature alone. They only produce when they work together in a certain way and mutually enter upon certain relations and conditions, and it is only by means of these relations and conditions that their relation to Nature is defined, and production becomes possible.

“These social relations upon which the producers mutually enter, the terms upon which they exchange their energies and take their share in the collective act of production, will of course differ according to the character of the means of production. With the invention of firearms as implements of warfare the whole organization of the army was of necessity altered; and with the alteration in the relations through which individuals form an army, and are enabled to work together as an army, there was a simultaneous alteration in the relation of armies to one another.

“Thus with the change in the social relations by means of which individuals produce; that is, in the social relations of production, the powers of production are also transformed. The relations of production collectively form those social relations which we call a society, and a society with definite degrees of historical development, a society with an appropriate and distinctive character.”

Some examples may serve to illustrate the foregoing. Let us take the case of a primitive people existing at a low level of production, where hunting forms the chief branch of activity for procuring food, such as the Indians. In his book on The Hunting Grounds of the Great West, R.I. Dodge gives the following account of their methods of hunting:–

“As brains are only occasionally called into requisition, while the demands of the stomach are incessant, the tribe is habitually under the control of this ‘third estate.’ The power is composed of all the hunters of the tribe, who form a sort of guild, from the decisions of which, in its own peculiar province, there is no appeal. Among the Cheyennes these men are called ‘dog soldiers.’ The younger and more active chiefs are always enrolled among these ‘dog soldiers,’ but do not necessarily command. The ‘soldiers’ themselves command by viva voce determination on general matters, the details being left to the most renowned and sagacious hunters selected by them. Among these ‘dog soldiers’ are many boys who have not yet passed the initiatory ordeal as warriors. In short, this ‘guild’ comprises the whole working force of the band. It is the power which protects and supplies the women and children.

“Every year ‘the great fall hunt’ is made for the purpose of killing and curing a supply of meat for winter use. The ‘dog soldiers’ are masters now, and woe be to the unfortunate who disobeys even the slightest of their arbitrary or democratic regulations. All being ready, the best hunters are out long before the dawn of day. If several herds of buffalo are discovered, that one is selected for slaughter whose position is such that the preliminary manoeuvres of the surround and the shouts and shots of the conflict are least likely to disturb the others ... During all this time the whole masculine portion of the band capable of doing execution in the coming slaughter is congregated on horseback in some adjacent ravine, out of sight of the buffalo, silent and trembling with suppressed excitement. The herd being in proper position, the leading hunters tell off the men and send them under temporary captains to designated positions. Seeing that every man is in his proper place, and all ready, the head hunter rapidly swings in a party to close the gap, gives the signal, and, with a yell that would almost wake the dead, the whole line dashes and closes on the game. In a few moments the slaughter is complete. A few may have broken through the cordon and escaped. These are not pursued if other herds are in the vicinity.

“When bows and arrows alone were used, each warrior, knowing his own arrows, had no difficulty in positively identifying the buffalo killed by him. These were his individual property entirely, except that he was assessed a certain proportion for the benefit of the widows or families which had no warrior to provide for them. If arrows of different men were found in the same dead buffalo, the ownership was decided by their position. If each arrow inflicted a mortal wound, the buffalo was divided, or not infrequently given to some widow with a family. The head hunter decided all these questions, but an appeal could be taken from his decision to the general judgment of the dog-soldiers. Since the general use of firearms has rendered impossible the identification of the dead buffalo, the Indians have become more communistic in their ideas, and the whole of the meat and skins is divided after some rule of apportionment of their own invention.” (Hunting Grounds of the Great West, R.I. Dodge, 266, 353-355.)

Be it observed that among this hunting people production is carried on socially; various types of labour co­operate in order to achieve a collective result.

We can detect here the beginnings of division of labour and systematic co-operation. The hunters perform different kinds of work, according to their differing capacities, but are based on a common plan. The result of the co­operation of the various types of labour – “the exchange of energies,” as Marx puts it in Wage Labour and Capital; the spoils of the chase – is not exchanged, but divided.

It may be pointed out in passing that an alteration in the means of production – the substitution of firearms for bows and arrows – involves a change in the mode of distribution.

Let us now turn to another and higher type of a social mode of production, for example, the Indian village community based on agriculture. Of the primitive communism which once prevailed there only a few scanty traces may now be found in India. But, according to Strabo. xv, 1, 66, Nearchus, Alexander the Great’s admiral, described countries in India where the land was common property, commonly tilled, and after the harvest the produce of the soil was divided among the villagers. According to Elphinstone, these communities were still in existence in some parts of India at the beginning of the last century. In Java village communism continued to exist in the form of a periodical re-distribution of the arable land among the villagers, who did not receive their share as private property, but merely enjoyed the usufruct thereof for a definite period. In India the arable land has mostly become the private property of the village communes. Woods, pasture land, and uncultivated land, however, are in many cases still common property, over which all the members of the community have a right of usage.

What interests us in such a village community, which has not yet succumbed to the disintegrating influence of English rule, especially of the fiscal system, is the character which the division of labour assumes therein. As we have already noted such a division of labour among the American Indians, but a much higher type is presented by the Indian village communities.

Next to the head of the community, who is called the Pateel when he consists of one person, or the Pantsch when this office is filled by a committee of five persons at the most, we find a whole series of officials in the Indian economic community: the bookkeeper, who has to supervise the financial relations of the commune to each of its members and to other communes and to the State; the Talker for the investigation of crimes and encroachments, upon whom also devolves the protection of travellers and their safe conduct over the communal boundary into the next community; the Toti, the fields patrol and surveyor, who has to see that neighbouring communes do not encroach upon the boundaries of the fields, a circumstance that can easily happen in the cultivation of rice; the water-overseer, who distributes the water from the common tanks for irrigation, and sees that they are properly opened and closed, and that every field receives sufficient water, which is of great importance in the cultivation of rice; the Brahmin, who conducts the religious services; the schoolmaster, who teaches the children to read and write; the calendar-Brahmin or astrologer, who ascertains the lucky or unlucky days for sowing, reaping, threshing, and other important labours; the smith, the carpenter, and wheelwright; the potter; the washerman; the barber; the cow herd; the doctor; the Devadaschi (the dance maidens); sometimes even a singer.

All these have to work for the whole community and its members, and are remunerated either by a share in the open fields or by a share in the produce of the harvest. Here also, with this highly developed division of labour, we find the co-operation of various types of labour and the division of the products.

Let us take an example which should be familiar to every body: that of a patriarchal peasant family, which satisfies its own needs, a social structure which has developed out of a mode of production such as we have just described in the Indian communal economy, a mode of production which may be detected on the threshold of the development of all civilised peoples with whom we are familiar.

Such a peasant family likewise does not reveal isolated persons, but is a type of social organism based on the co­operation of various kinds of labour, which vary in accordance with age, sex, and season. Ploughing and sowing are carried on, the cattle are tended and milked, wood is collected, cut up and carpentered, wool is spun, woven, and knitted. The various types of labour co-operate and dovetail into each other; no more than in the previous example are the products here exchanged by the individual workers, but they are divided amongst them in accordance with the conditions.

Let us now [1] assume that the means of production of an agricultural community, such as we have described, are perfected to such an extent that less labour than formerly is devoted to agriculture.

Labour-power is set free, which, provided the technical means are sufficiently developed, will perhaps be devoted to exploiting a deposit of flint situated in the communal territory, and making flint tools and weapons. The productivity of labour is so great that far more tools and weapons are made than the community needs.

A tribe of nomadic shepherds in the course of its wanderings comes into contact with this community. The productivity of labour has also increased so far as this tribe is concerned, which has reached the point of rearing more cattle than it needs. It is obvious that this tribe will gladly exchange its superfluity of cattle for the superfluous tools and weapons of the agricultural community. Through this act of exchange the superfluous cattle and the superfluous tools become commodities.

The exchange of commodities is the natural consequence of the development of the productive forces beyond the limited needs of the primitive communities. The original communism becomes a fetter upon the progress of technical development when the latter has reached a certain level. The mode of production demands a widening of the circle of social labour; as, however, the separate communities are independent of, and even hostile towards, each other, this widening is not possible through the extension of systematic communistic labour, but only through the mutual exchange of the superfluous goods produced by the labour of the communities.

It is no part of our purpose to investigate how the exchange of commodities reacted upon the mode of production within the community, until commodity production became production carried on by private individuals working independently of each other, and owning the means of production and the products of their labour as private property. What we design to make clear is that commodity production is a social type of production; that it is inconceivable without social co-operation; and that it even signifies an extension of social production beyond the limits of the communistic system (embodied in the tribe, the community, or the patriarchal family) which preceded it. But the social character of production was only implicit in the latter system.

Let us take a potter and a cultivator, considering them first as members of an Indian communistic village community, and secondly as two commodity producers. In the first case, they both work in the same manner for the community; one hands over his pots, the other the fruits of his labour in the fields; one receives his share of the fruits of the field, the other his share of pots. In the second case, each carries on private work independently for himself, but each works (perhaps to the same extent as before) not only for himself, but also for others. Then they exchange their products, and it is probable that one receives the same quantity of cereals and the other as many pots as formerly. It seems that nothing has been altered in essentials, and yet the two processes are fundamentally different.

In the first case, it is obvious that society is the force which brings the various types of labour into connection, which causes one to work far the others, and directly assigns to each his share in the product of the labour of others. In the second case, each person apparently works for himself, and the manner in which he obtains the product of others does not seem to be attributable to the social character of their labour, but to the peculiarities of the product itself. It does not now seem that the potter and the cultivator work for each other, and that consequently pottery work and cultivation are necessary for civilisation, but that certain mystical qualities inhere in the pots and the field produce which bring about their exchange in certain proportions. The relation between persons, which determines the social character of labour, assumes the appearance of a relation between things, viz.: products, under the system of commodity production. So long as production was directly socialised, it was subject to the decisions and direction of society, and the relations of producers to each other were manifest.

As soon, however, as various kinds of work were carried on by individuals independently of each other, as soon, therefore, as production became planless, the relations of producers to each other appeared as the relations of products. Henceforth the determination of the relations of producers to each other no longer rested with themselves; these relations developed independently of the wills of men; the social powers grew over their heads. To the simple intelligences of past centuries they seemed to be divine powers, and to later enlightened centuries they seemed to be the powers of Nature.

The natural forms of commodities are now invested with qualities which seem to be mystical, in so far as they cannot be explained from the relations of producers to each other. Just as the fetish worshipper ascribed to his fetish qualities which had no existence in its natural constitution, so to bourgeois economy the community seems a sensuous thing endowed with supersensuous qualities. Marx calls this “the fetishism attaching to labour products when they present themselves as commodities – a fetishism which is inseparable from the mode of production.”

Marx was the first to detect the fetishistic character of commodities, and, as we shall see later on, of capital also. It is this fetishism which makes it difficult to perceive the peculiarities of the commodity, and, until its importance has been properly appreciated, it is impossible to reach a clear understanding of commodity-value. The chapter in Capital entitled The Fetishism of Commodities and the Secret thereof seems to us one of the most important in the book, to which every student ought to pay special attention. It is precisely this chapter which has been most neglected by the opponents, and even by the supporters, of the Marxian doctrines.

(2) Value

Once we are clear about the fetishistic character of the commodity, its investigation will present relatively few difficulties.

As we have seen, the primary object of the commodity is to be exchanged. Its exchangeability, however, depends upon its being able to satisfy a human need, whether it be a real or an imaginary one. Nobody would exchange his product for another product if the latter were useless to him. A commodity must therefore be a useful thing; it must possess use-value. Its use-value is determined by its physical properties. Use-values form the material content of wealth, whatever its social form may be. Moreover, use-value is not a quality which is peculiar to the commodity. There are use-values which are not commodities at all, as, for example, the products of a communistic society, as we have seen above. There are even use-values which are not the products of value, as fruit in the primeval forest or running water. On the other hand, there is no commodity which does not possess use-value.

As soon as use-values become commodities, that is, are exchanged with each other, it is observed that this act of exchange always takes place in certain proportions. The proportion in which a commodity exchanges with another is called its exchange-value. This proportion may vary according to time and place, but it remains a constant magnitude for a definite period and at a particular place. If we exchange 20 yards of linen for one coat, and at the same time 20 yards of linen for 40 lbs. of coffee, we may be sure that one coat would also exchange for 40 lbs. of coffee. The exchange-value of the coat wears quite a different aspect when exchanged for linen than when exchanged for coffee. But however different the exchange-value of a commodity may appear, the same content underlies it at a definite period and in a particular place. An example from physics will serve to elucidate this social phenomenon. If we say that a body weighs 16 kilograms, or 32 lbs., or one Russian pud, we know that these expressions relate to the specific gravity of the body. In the same way, a specific content underlies the various expressions of the exchange-value of the commodity, and this we call its value.

We have now reached the most important fundamental category of political economy, without a knowledge of which the operation of the prevailing mode of production cannot be properly understood.

What constitutes the value of a commodity? This is the question to be answered.

Let us take two commodities, for example, wheat and iron. Whatever their exchange relation may be, it can always be represented by a mathematical equation, for example, 1 bushel of wheat = 2 cwts. of iron. But, as we shall remember from our school days, mathematical operations can only be carried on with equivalent magnitudes. For instance, we can subtract 2 apples from 10 apples, but not 2 nuts. Thorn must consequently be some common property in wheat and iron which renders it possible to equate them, and it is that which is their value.

Now is this common property a natural attribute of the commodities?

As use-values they are only exchanged because they have different, not similar or common, natural qualities. These qualities constitute the motive for the exchange, but they cannot determine the proportions in which it takes place.

If we take away from commodities their use-value, only one quality remains to them, that of being products of labour. But if we abstract from products their use-value, we also abstract the particular kinds of labour which have created them: they are no longer the products of the carpenter’s or the spinner’s labour, etc., but are only products of human labour in general. And as such they are values.

Therefore a commodity possesses value only because homogeneous or general human labour is embodied in it. How then is the magnitude of its value to be measured? By the quantity of value-forming material, or labour, contained in it. Now the quantity of labour is measured by time.

It might seem that if the value of a commodity is determined by the time expended upon its production, the idler and more unskilful a man is the more valuable his commodity would be. But the labour we are concerned with here is not individual, but social, labour.

Let us remember that commodity production represents a system of various kinds of labour which, although independent of each other, are carried on in a social connection. “The combined labour-power of the community, represented by the value of the world’s commodities, counts here as one homogeneous human labour-power, although it consists of the labour-power of innumerable individuals. The labour-power of any of these individuals is the same as that of any other of them, in so much as it bears the character and has the effect of a social average labour-power, and consequently in the production of a commodity only the average labour-time commonly required for that production is consumed. Socially necessary labour-time is the labour-time requisite for the production of a given use-value under existing normal conditions of production, and with the average degree of skill and intensity of labour.” If the productivity of labour changes, it involves an alteration in the socially necessary labour-time, and consequently in value.

The time necessary to produce a curtain product must of course be of interest to man under every mode of production. Even under a communistic mode of production, it must exercise an influence upon the degrees in which the various types of labour co-operate.

Let us again take the example of an Indian communistic village community. It employs two smiths for the manufacture of agricultural implements. An invention raises the productivity of labour to such an extent that only one smith is needed to manufacture the required agricultural implements within a given time. Two smiths are no longer entrusted with this work, but only one; the second smith is perhaps employed in the forging of weapons or the making of ornaments. On the other hand, the productivity of field labour remains the same. As much labour-time as formerly must be expended in order to satisfy the requirements of the community upon the same scale.

Under these circumstances, every member of the community receives the same share of foodstuffs as before, but a distinction now arises. The productivity of the smith’s labour has doubled; only one share of foodstuffs, instead of two, is now assigned for the manufacture of agricultural implements. The change in the relation between the various types of labour is here a very simple and transparent one. It assumes a mystic character as soon as smith’s labour and field labour cease to co-operate directly and are only brought into relation with each other through their products. The change in the productivity of smith’s labour then appears as a change in the exchange-relation of the product of smith’s labour with other products, as an alteration in its value.

Ricardo recognised that the magnitude of the value of a commodity was determined by the quantity of labour expended upon its production. He did not, however, perceive the social character of the value that is concealed in the value-form of the commodity, that is, the fetishism of the commodity. Nor did he distinguish clearly between that side of labour which forms the exchange-value of a commodity, and that side which forms its use-value.

We have already described the fetishistic character of the commodity. Let us now follow Marx in his investigation of the duplex character of the labour embodied in the commodity.

The commodity appears to us both as a use-value and as value. Its material composition is furnished by Nature. Its value is formed by labour, but so is its use-value. Now in what manner does labour form value, and in what manner does it form use-value?

On the one hand, labour appears to us as the productive expenditure of human labour-power in general; on the other hand, as specific human activity for the attainment of a given object. The first aspect of labour forms the common element in all the productive activities carried on by men. The second side varies with the nature of the activity. In the case of smith’s labour and field labour, the element common to both is that they represent the expenditure of human labour-power in general. But each of them differs as regards purpose, mode of operation, subject, instruments, and result.

The specific variety of human activity which aims at a definite end forms the use-value. In its manifold variety, it forms the basis of commodity production. Commodities are only exchanged because they are different. Nobody would exchange wheat for wheat or hemp for hemp, but wheat would be exchanged for hemp. Use-values can only be brought into juxtaposition as commodities when they embody qualitatively different kinds of useful labour.

As values, however, commodities differ not qualitatively, but quantitatively. They are exchanged because they differ from each other as use-values. In the act of exchange they are compared and put in a certain ratio with each other because as values they are equal. Value cannot be formed by labour as a definite and appropriate kind of activity, in its qualitative aspect; it can only be formed by labour of an equal character in all branches of activity, as the expenditure of human labour-power in general. Regarded as expenditures of labour-power, the various kinds of labour differ, not qualitatively, but quantitatively, just as values do. From the standpoint of the formation of value, every kind of labour is regarded as simple, average labour, as the expenditure of mere labour-power, by an average man under normal conditions. In this connection skilled labour only counts as a multiple of simple labour. A small quantity of skilled labour is equated with a larger quantity of simple labour. In accordance with the character of commodity production, this process, which fixes the relations of the various kinds of labour, reducing each of them to simple labour, to each other, is a social, but at the same time an unconscious, process. It seems, however, to those who are under the spell of the fetishism of the world of commodities that it is not social, but natural causes which present the various kinds of skilled labour as multiples of simple labour. A number of academic socialists, who desired to “constitute” value, that is to fix it once for all, have attempted to discover these alleged natural causes, and to fix the quantity of value created by every unit of labour (cf. Rodbertus’ Normal Working Day). In reality these causes are social, and are subject to continuous alteration.

There are few provinces of investigation which reveal so many erroneous conceptions as that of value. A number were indicated by Marx himself, in particular an error which is often made by supporters as well as by opponents of the Marxian doctrines: the confusing of value with wealth. The sentence is very often put into Marx’s mouth that labour is the source of all wealth. Readers who have followed the foregoing exposition will easily perceive that this is in flat contradiction to the basis of the Marxian ideas, and presupposes entanglement in the fetishism of the commodity world. Value is a historical category, which is valid only for the period of commodity production; it is a social relation. Wealth, on the other hand, is something material, and consists of use-values. Wealth is produced under all modes of production; there is a form of wealth which is only supplied by Nature, and in which no labour is contained at all; there is no form of wealth, however, which comes into existence through the agency of human labour alone. “Labour is not the only source of the material wealth resulting from the use-values it produces,” said Marx. “Labour is its father, as William Petty says, and the earth is its mother.”

Other things being equal, an increase in the productivity of labour is accompanied by an increase in the material wealth of a country; and vice verse. The total of the existing values may at the same time remain unchanged, provided the quantity of labour expended be the same. A favourable harvest increases the wealth of a country, but the total of commodity values represented by this harvest would be the same as in the previous year if the amount of socially-necessary labour expended remained unaltered.

If Marx did not say that labour is the source of all wealth; if this sentence is based upon the confusion of exchange-value with commodity-value, then the various conclusions that have been fastened on to Marx in connection with this sentence fall to the ground. It may now be seen with what little justification many of Marx’s opponents have reproached him with overlooking the part played by Nature in production. Indeed, these opponents have overlooked something themselves, namely, the distinction between the body of the commodity and the social relation which it represents:–

“To what extent some economists are misled by the fetishism inherent in commodities, or by the objective appearance of the social characteristics of labour, is shown, amongst other ways, by the dull and tedious quarrel over the part played by Nature in the formation of exchange value. Since exchange value is a definite social manner of expressing the amount of labour bestowed upon an object, Nature has no more to do with it than it has in fixing the course of exchange.”

Marx has not therefore “overlooked” the part of Nature in the production of use-values. If he rules it out of account in the determination of value, it is not out of forgetfulness, but owing to the possession of an insight into the social character of commodity production which is denied those economists who deduce the laws of society from a condition of unsociality, from men considered in isolation.

Another error which is fairly common in connection with the Marxian theory of value consists in confusing the value-forming property of labour with the value of labour-power. These two conceptions must be kept strictly apart from each other. Labour considered as the source of value can no more have a value than gravity can have weight or warmth a temperature. So far we have only been dealing with the value which is formed by simple or skilled labour, and not with the value which labour-power possesses and which finds expression in the wage of the worker who is the embodiment of labour-power.

So far we have been presupposing simple commodity production and simple commodity exchange, and labour-power as a commodity does not yet exist for us.

With respect to human labour-power and its value we shall deal more fully later on. At this stage our purpose is to indicate an error.

Where they do not contradict assertions that Marx never made or merely consist of terms of reproach, such as the favourite one of Marxian dogmatism, most of the objections to the Marxian theory of value are based on such errors.

Such errors can only be guarded against by keeping steadily in mind the character of such a law as the law of value is.

Every natural-scientific or social law is an attempt to explain the processes of Nature or of society. But hardly any one of these processes is determined by a single cause. The most varied and complicated causes underlie the most varied processes, and these processes themselves do not operate independently of each other, but intersect each other in the most various directions.

The investigator of ramifications in society and in Nature has therefore a two-fold task. First of all he must separate the various processes from each other: isolate them. Secondly, he must separate the causes which underlie these processes, the essential from the inessential, the regular from the accidental. Both kinds of investigation are only possible through abstraction. The scientific investigator is assisted in his labours by a series of infinitely perfected instruments and methods of observation and experiment. The investigator of social laws is obliged to forego the latter, and with respect to the former, he must content himself with very imperfect expedients.

By means of abstraction, the investigator is enabled to perceive the law which underlies the phenomena which he designs to explain. Without a knowledge of this law, the phenomena in question cannot be explained; but the knowledge of one law alone never suffices to explain these phenomena fully. One cause may be weakened by another, and even completely neutralised in its effect. It would, however, be wrong to infer from such a case that the cause did not exist at all. The law of gravity is valid, for example, in a vacuum, where a piece of lead and a feather fall with equal rapidity to the ground. In an air-filled space the result is quite different, on account of the resistance of the atmosphere. Yet the law of gravity is not thereby impugned.

So it is with the case of value. When commodity production had become the prevailing mode of production, the persons engaged therein must have been struck by the regular character of commodity prices, and prompted to try to investigate the causes which underlay them. The investigation of commodity prices led to the determination of the magnitude of value.

But the value of a commodity is the sole cause of its price just as little as gravity is the sole determining cause of the phenomena of gravitation. Marx himself points out that there are commodities whose prices may remain below their value, not only temporarily, but constantly. Thus, for example, gold and diamonds are probably never sold at their full value. And, under curtain circumstances, the commodity labour-power may be sold below its value.

Marx has even shown that in the capitalist mode of production the law of value is so affected by the influence of profit that the prices of most commodities are inevitably either above or below their value. Nevertheless, the law of value still remains operative, as these deviations of price from value can only be explained with the assistance of the law of value. At this juncture we can only mention this fact without pausing to discuss it more fully. Its understanding requires a knowledge of the law of capital and of profit, and we shall return to this subject later.

A great number of the objections to the Marxian theory of value are based upon the confusion of value with price. Both conceptions must be kept strictly apart. But, as already pointed out, one must not be blinded by the fetishistic character of the commodity, nor mistake the social relations which find expression in the body of the commodity for its natural qualities.

If the student never loses sight of the fact that commodity production is a type of social production, in which individual businesses produce for each other, although not with each other, and that the value of commodities is not a relation of things, but represents a relation of men to each other concealed in a material shell, he will know how to interpret the sentence that forms the basis of Marx’s analysis of the capitalist system:

“It is thus only the quantity of socially necessary labour, or the socially necessary time of labour for the production of a use-value which regulates the magnitude of its value.”

(3) Exchange Value

The magnitude of value of a commodity is determined by the labour-time socially necessary for its production. But the magnitude of value is not expressed in this manner. Ono does not say: “This coat is worth forty labour-hours,” but: “It is worth as much as 20 yards of linen or 10 grammes of gold.”

So far the coat, regarded by itself, is not even a commodity; it becomes such only if I resolve to exchange it. Consequently, the value of a commodity does not become manifest unless I compare it with that of another commodity, with which I purpose to exchange the former. The magnitude of value of a commodity is indeed determined by the labour socially necessary for its production; but it is expressed through its relation to the magnitudes of value of one or several other commodities, through its exchange relation. Bourgeois political economy often assumes that it is the exchange relation of a commodity which determines its magnitude of value.

An example will expose the absurdity of this notion. Let us take a sugar loaf. Its weight is already given, but I can only express it through comparison with the weight of another body, for example, iron. I place the sugar loaf in a scale, and in the other a corresponding number of pieces of iron, each being of a specific weight, which we will call a pound. The number of pieces of iron apprises us of the weight of the sugar; but it would be stupid to try to make out that the sugar weighed 10 lbs., for instance, because I had placed ten pound-weights in the other scale. I had rather to place ten of such weights in the scale because the sugar weighed 10 lbs.

This clearly shows how the matter stands. But the position is the same with regard to the magnitude of value and the form of value.

The expression for the weight of a body offers many similarities with the value-expression of a commodity, that is, the form in which we express the magnitude of its value. A sugar loaf weighs 10 lbs., which means, strictly speaking, if we carry our example further, that a sugar loaf is as heavy as the ten particular lumps of iron; similarly we may say of a coat that it is worth as much as, for example, 20 yards of linen.

We could not place iron and sugar, as bodies in a certain relation to each other if a natural quality were not common to them both: weight; nor would we be able to bring coat and linen, as commodities, in a relation to each other if they did not possess a common social attribute: that of being the products of general human labour, or values.

In the first equation iron and sugar play two different parts: a sugar loaf is as heavy as 10 lbs. of iron. Here the sugar appears as sugar, the iron does not appear as iron, but as the embodiment of weight, as its phenomenal form. In this equation we do not abstract the specific material qualities of sugar, but we do abstract those of iron.

A similar phenomenon is presented by the equation one coat = 20 yards of linen.

Both the coat and the linen are commodities, and therefore use-values and values. But in the value-form, in the exchange-relation, the coat appears here only as a use-value, while the linen appears as the phenomenal form of value.

I can weigh the sugar not only with iron weights, but also with brass or load weights, etc. And I can express the value of the coat not only in linen, but also in any other commodity. In the equation one coat = 20 yards of linen, I therefore abstract altogether the specific natural form of the linen, which in this relation counts only as value, as the embodiment of general human labour. The linen is the phenomenal form of the value of the coat in contradistinction to the substance of the coat. The contrast between use-value and commodity-value which is inherent in the coat, as in every other commodity, is reflected in the expression of value, within which its bodily form as coat only figures as a type of use-value, while the bodily form of the commodity linen only figures as a type of the commodity world, as the value-form.

Nevertheless, the use-value of the commodity in which the value of the other commodity is expressed – Marx calls it the equivalent – is not a matter of indifference. The two commodities must be different. The equation 1 coat = 1 coat is meaningless.

I can express the value of the coat not only in linen, but in any other commodity of a different nature.

And I can also reverse the equation and express the value of the linen, as well as that of any other commodity, in the coat.

I can formulate the equation

1 coat


20 yards of linen,
10 lbs. of tea,
40 lbs. of coffee,
10 cwts. of iron,
2 bushels of corn, etc.

I may also reverse it and say:

20 yards of linen
10 lbs. of tea
40 lbs. of coffee
10 cwts: of iron
2 bushels of corn, etc.


1 coat,

Both equations seem to say the same thing, but they say the same thing regarded merely as mathematical equations; as different forms of the expression of value, however, they have a logically and historically different signification.

In the beginnings of commodity production, products were exchanged only here and there, occasionally and accidentally.

This period may be designated by an elementary value-equation, in which one commodity is only placed alongside another in a certain ratio, for example, 1 bronze hammer = 20 lbs. of rock-salt; this form Marx calls the elementary or the accidental value form. So soon, however, as a labour product, for example, cattle, is exchanged with other labour products, no longer by way of exception, but as a matter of course, the expression of value assumes the form of the first of the two above-mentioned equations, as, for example:

2 mantles,
1 sword,
1 cow
10 sandals,
3 goblets, etc.


1 girdle,

This form of value, instances of which may be found in Homer, Marx calls the total or expanded form of value.

But commodity production develops still further. The number of labour products which are fabricated for exchange, and therefore as commodities, grows, and the habitual act of exchange embraces an ever greater number of the most varied commodities. Not only cattle, but swords, girdles, goblets, etc., are now exchanged as a normal social act. The most practicable of these commodities, cattle for example, is that in which the values of commodities are most frequently expressed, and eventually it becomes the sole commodity used for this purpose. Then the point is reached at which the second of the above-mentioned formula, the general form of value, comes into operation.

Let us now consider more closely the equivalent form in this equation. As we have already seen, the equivalent form appears as the embodiment of human labour in general. But in the previous form of expression it was only accidentally and temporarily that a commodity played this part. In the equation 1 coat = 20 yards of linen, the linen at any rate figures only as the phenomenal form of value. But if 20 yards of linen is equated with 1 bushel of corn, or again with 1 coat, it is now corn or coat which appears as the embodiment of general human labour, while the linen figures again as use-value. The case is otherwise with the general form of value. Now only a single commodity serves as the equivalent. Like all other commodities, it is use-value and commodity-value both before and after. But all the other commodities now appear to confront it only as use-values, while it itself figures as the general and sole phenomenal form of value, as the general social embodiment of abstract human labour. It is now itself the commodity with which all the other commodities are directly exchangeable, and which therefore everybody accepts. On the other hand, all the other commodities thereby lose the capacity and possibility of being directly exchangeable with each other. Each exchange of a pair of commodities can only be effected through the medium of the general equivalent, in which the values of all other commodities are reflected.

(4) The Exchange of Commodities

In order that an exchange of commodities may be effected, two conditions must be fulfilled: (1) The products to be exchanged must be use-values for those who do not own them, and non-use-values for their owners; (2) The exchangers must mutually recognise each other as the owners of the commodities to be exchanged. The juridical relations of private property are only the reflexion of the relation of the wills of the exchanging persons, which are determined by the economic relations. Men do not begin to exchange commodities because they mutually regard each other as the owners of alienable things, but they began mutually to recognise each other as owners because they chanced to exchange commodities with each other.

The earliest form in which a labour product becomes a non-use-value for its owner, and therefore the first form of the commodity, is that of a superfluity of labour products above the needs of their owner. The products are not yet destined for exchange as a matter of course, but are produced for self-consumption. They only become commodities through exchange.

As regards the second point, the mutual recognition by the owners of alienable things as their private property, this is only possible where independent persons confront each other.

“But such a state of reciprocal independence has no existence in a primitive society based on property in common, whether such a society takes the form of a patriarchal family, an ancient Indian community, or a Peruvian Inca State. The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities or with members of the latter. So soon, however, as products once become commodities, they also, by reaction (in time) become so in its internal intercourse.”

In the beginnings of exchange, the magnitude of value and the form of value are very little developed. The ratio of the magnitudes or quantities in which products exchange is at first an accidental and extremely fluctuating one. But the exchange of products becomes more and more a normal social act. The practice gradually creeps in of not merely exchanging the use-values that are superfluous to the producer’s own needs, but of producing use-values for the sole purpose of exchange. Consequently the ratio in which they are exchanged becomes increasingly dependent upon their conditions of production. The magnitude of value of a commodity begins to be a magnitude which is determined by the labour-time necessary for its production.

So soon, however, as labour products are produced solely for the purpose of being exchanged, the contrast between use-value and value latent in the commodity nature is bound to become manifest.

This contrast which is potential in every commodity finds its expression, as we know, in the form of value. In the expression 20 yards of linen = 1 coat, the linen itself tells us that it is use-value (linen) and value (coat equivalent). But in the elementary form of value, it is still difficult to fix this antagonism, as the commodity which here serves as the embodiment of general human labour assumes this rôle only temporarily. In the expanded form of value the antagonism distinctly reveals itself, as now several commodities serve or are able to serve as the equivalent, because they possess the common property of being labour products or values.

But the more the exchange of commodities develops, the more labour products become commodities, the more necessary a general equivalent becomes. In the beginnings of exchange, each person directly exchanges what he does not need for what he does need. This becomes increasingly difficult in the degree that commodity production becomes the general form of social production.

Let us assume, for instance, that commodity production is already so far developed that tailoring, bakery, butchery, and carpentering, form independent businesses. The tailor alienates a coat to the carpenter. For the tailor the coat is a non-use-value, for the carpenter a use-value. But the tailor does not want any more carpenter’s products, as he has furniture enough. The tables and chairs are non-use-values for the carpenter, and also for the tailor. On the other hand, the tailor needs bread from the baker and meat from the butcher, for the times are past when he baked at home and fattened pigs. The meat and bread which the tailor needs are non-use-values for the butcher and baker, who, however, require no coat at the moment. The tailor is therefore in danger of starving, although he has found a customer for his coat. What he requires is a commodity which serves as general equivalent, which, as the direct embodiment of value, has use-value for every body as a matter of course.

The same development that renders this equivalent necessary also brings it into existence. So soon as the various commodity owners exchange various articles with each other, it is inevitable that several of the latter are compared as values with a common type of commodity, and that therefore they find a common equivalent. At first a commodity serves in this capacity only temporarily and accidentally. So soon, however, as it is advantageous that a particular commodity should assume the general equivalent form, the connection of the equivalent form with this commodity is bound to become ever closer. The type of commodity to which the general equivalent form will cling is determined by various circumstances. Eventually it was the precious metals which achieved the monopoly of serving as the general equivalent form, and which became money. Partly this may have been due to the fact that from the earliest times ornaments and ornamental material were important articles of exchange, but the factor that was decisive in this connection was that the natural properties of gold and silver corresponded to the social functions which a general equivalent has to fulfil. Here we need only refer to the two facts that the precious metals are always of the same quality and deteriorate neither in air nor in water, being therefore practically unalterable, and that they are divisible at will and capable of being re-united. Consequently they are very suitable for the embodiment of indistinguishable, general human labour, for the representation of magnitudes of value which differ in respect of number (quantitatively) and not in respect of qualities (qualitatively).

Gold and silver could only secure the monopoly of serving as general equivalent because they confronted the other commodities as commodities. They could only become money because they wore commodities. Money is neither the invention of one or several men, nor is it a more token of value. The value of money and its specific social functions are not arbitrary creations. The precious metals became the money commodity through the part they played as commodities in the exchange process.



1. A whole series of facts proves that the first stages in the development of commodity production actually proceeded upon similar lines to those we proceed to describe. Of course matters did not proceed so simply as is here indicated, but the object of our exposition is not to write the history of commodity production, but only to indicate its spatial peculiarities, which can be most easily recognised in contrast with other modes of production.


Last updated on 16.6.2004