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For Your Reference

What Is Commodity Production?

by Nan Ching

[This article is reprinted from Peking Review, #22, May 30, 1975, pp. 11-12.]

ALL products of labour made for exchange are called commodities. Lenin said: “A commodity is, in the first place, a thing that satisfies a human want; in the second place, it is a thing that can be exchanged for another thing.” A commodity has two properties: use-value and value. To become a commodity, a thing should first of all possess use-value. For instance, clothes are used for warmth and a machine tool is used in production. The fact that two different commodities can be exchanged is because there is something in common between them. Every commodity item is created by human labour and is the crystallization of human labour without any distinction. A certain amount of human labour is embodied in every kind of commodity. The value of a commodity is the human labour in general congealed in it. Therefore, what is common to, all commodities is value. The magnitude of the value in a commodity is determined by the amount of labour-time socially necessary for producing it. In exchanging commodities according to value, people actually exchange their own labour. This is why Marx stressed that a commodity is not just a material thing, but a definite social relation between people concealed beneath a material wrapping.

Production for exchange in the market is commodity production. At the beginning of commodity exchange, people bartered one product for another. Later in the long process of the development of commodity exchange, a particular commodity—money—was separated from other commodities spontaneously.

Commodity production exists within a certain historical span. It is bound up with particular historical phases in the development of production. There was no commodity production in the initial stage of primitive society. In the wake of the development of social productive forces, there emerged social division of labour and conditions for commodity exchange; only then did private ownership and commodity production make their appearance. In the future communist society, the commodity system will perish. Historically, there are three forms of commodity production: simple commodity production, the capitalist mode of commodity production and the socialist type of commodity production.

Simple commodity production was based on individual private ownership of the means of production and on individual labour, such as individual handicrafts and farming. This was the historical forerunner of capitalist production. Production conditions for each simple commodity producer differed and individual labour-time spent in producing the same kind of commodity also differed. But the same kind of commodity could be sold only at the same price in the market. This gave rise to polarization, i.e., a small number of people could possess a large quantity of commodities and money which were turned into capital, while a great number of people went bankrupt and had to sell their labour power. This polarization of the simple commodity producers at the end of feudal society provided the conditions for the emergence of capitalist relations of production.

The capitalist mode of commodity production is based on the capitalists possessing the means of production and exploiting wage labour to get surplus-value. Capltalist production is the highest stage of the development of commodity production. Under it, not only do the general products of labour take the form of commodities, even labour power becomes a commodity. This kind of commodity production reveals the economic relations between the exploiters who are the capitalists and the exploited who are the workers. Its development makes it possible for the capitalists to grab and amass great riches while the working class becomes poorer day by day.

Commodity production and commodity exchange still exist in socialist society, and a commodity system is still practised. This is mainly because two kinds of socialist ownership, namely, ownership by the whole people and collective ownership, exist side by side. No unpaid allocation of products between different ownerships of the public economy can be practised. Their economic relations can only be commodity exchange, and hence commodity production. State distribution of consumer goods among workers and staff also utilizes the form of commodity exchange through money. However, the socialist type of commodity production differs from the capitalist type. This is manifested chiefly by the fact that there no longer is the economic relation of exploitation of workers by the capitalists, anarchism in production has been eliminated and the scope of commodity exchange has been reduced. Yet it must be noted that bourgeois right unavoidably exists in distribution and exchange in socialist society. The principle of exchange of equal values is still carried out in commodity exchange. If bourgeois right in distribution and exchange is developed and extended at will, capitalist ideas of amassing fortunes and craving for profits will spread unchecked; such phenomena as turning public property into private property, graft and corruption, theft and bribery, and speculation will arise, and there will be a change in the nature of the system of ownership in certain departments and units which follow the revisionist line. The inevitable result will be polarization, i.e., a small number of people will acquire an increasing quantity of commodities and money and convert them into capital. These people will turn out to be new bourgeois elements. The labouring people, on the other hand, once again will become oppressed and exploited wage-slaves. Therefore, bourgeois right as regards distribution and exchange has to be restricted under the dictatorship of the proletariat and conditions for finally eliminating the commodity system must gradually be created.

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