Olúfẹ́mi O. Táíwò
Why Everything Costs Money Part 1
[Capital Volume I, Chapter 1: The Commodity, pgs. 126-177 of Penguin Press]
Part 1 of an ongoing series of posts going through Capital Volume 1. Marx for folks who aren't trying to read 900 damn pages, by someone who has nothing better to do. See a full introduction to this series here, and access free electronic copies of Volume 1 here or here. Continue to Part 2.
If you've got the outline of the book in front of you, you'll see that Part One (the first 3 chapters) is called "Commodities and Money". Part 2, the next 3 chapters, is called "The Transformation of Money into Capital". Commodities, money, and capital have something to do with each other if you ask Marx, and the goal of these first few chapters is for him to say what exactly they have to do with each other. Marx says this like he says everything in this book: painfully, painfully slowly - these chapters are together 127 pages in the Penguin print. Buckle up.
Marx lays out the basics to what folks call the labor theory of value. Marx didn't come up with this theory but he makes some important innovations in these pages.
Capitalism is an economic system based on commodity production. But what's a commodity? It's an "external object, a thing which...satisfied human needs of whatever kind" (125). Oh, you mean, like a stapler? Like a stapler. Or an iPhone, or a baseball bat, whatever. Commodities have (and, confusingly, are) two kinds of value: a use-value and exchange-value.
Two Kinds of Value for Commodities
Use-value means the thing Marx just got done saying: you can use something thing to do shit you want done. What you can use it to do depends on its physical characteristics - machetes aren't great for doing neurosurgery because they're not the right size and they're shaped badly for the job. Great for hacking through tall grasses though. Since the physical properties of an object (e.g. size and shape) determine what it can be used for, when you're describing what makes a machete potentially useful you're just describing a machete. Commodities are use values.
But we also exchange objects. In a world like ours we usually exchange them for money, but what makes money useful is that we can buy other stuff (use values!) with it, so you might as well cut out the middleman if we're going to think philosophically about it. That is: say I have a machete, machetes = $2 bucks, and you have some plantains, each of which = $1 dollar. (Marx uses coats and linen. this doesn't matter.) If I want some plantains and don't want to keep my machete, I have a clear strategy for how to get them: find someone who will trade dollars for my machete, and then trade you the dollars for two of your plantains. But if they're really worth what I've said they're worth, I might as well have handed you the machete for your plantains in the first place, instead of each of us finding two extra people who have nothing to do with the trade I had in mind.
But wait, isn't that weird (pgs. 163-165)? A machete is a lot of things - sharp, metallic, good at cutting things, a certain size and weight. Plantains are lots of things too: soft, tasty when fried, like bananas but for real niggas. But if what I've just said is true, I've said that there's a mathematical equation like this: 1 machete = 2 plantains! A machete is a couple of plantains? The fuck does that mean?
However weird it is, this follows from the fact that anything you buy has a price. Now maybe prices are a magical fantasy of some kind, and they don't mean anything. Maybe "1 machete = 2 plantains" and all the equations that we could make with the same kind of thinking ("1 iphone = 150 Subway footlongs" or "1 Mexican stratocaster = .00048 yachts") are just gibberish, and it don't mean anything. But that's not what Marx thinks. Marx thinks it does mean something. There's something they have in common, a unit of measure that we can give them that makes the math meaningful. That's exchange value.
The exchange-value isn't the same kind of value as use value - no matter how many plantains you stack up, you're not going to be able to cut grass with them. In Marx's terms, a machete and a plantain are "qualitatively" different use values. But somebody had to build the machete, and someone had to do the agricultural work to plant and harvest the plantains. And maybe in our example it takes twice as much work time on average to turn the steel into a machete like the one I wanted to trade you as it takes on average to harvest plantain. If our equation "1 machete = 2 plantains" had something to it, if there was a real equivalence in value being expressed there, maybe it's that. This is a hidden "law of nature", the signal under the noisy movement of relative prices that makes them tend towards certain proportions (maybe machetes will be $1.97 tomorrow and 2.04 the day after, but there's a reason why they're dancing around $2). (168).
(You might be thinking: what if this particular machete was really quick to make? Is the equation wrong? But we don't value particular objects this way: no one goes to the store and asks whether this box of Poptarts on the left got forgotten in the back of the factory and actually took more labor-time than the other boxes of Poptarts. This is what the "on average" thing is doing - getting us to judge the from a societal level, on the whole category of object "machetes" rather than the particular one I have in my hand right now.)
So again, commodities: machetes, plantains, staplers, iPhones - they all have two kinds of value. Use value describes their physical shape and what they're good for as a result, exchange value describes how much labor goes into making those kinds of things.
Two Kinds of Value for Labor
But we can say the same thing about labor! The kind of work that it takes to make a machete is qualitatively different than the kind that it takes to make plantain - the first kind involves probably some kind of metal work with fire and shit, and the second has something to do with trees or something. To say it with Marx's terms, the use-value of metal work is different from the use value of agricultural work. But when we were figuring out exchange value of machetes and plantains, we didn't talk about what kind of work was needed to make both of them. We only talked about how much, and we measured that with time - that is, not the specific kinds of skills or practices were involved. You need the right kind of work to make sure you end up with the right kind of object at the end, a machete instead of a fancy paperweight. You need the right amount of work time to make sure that the machete you end up with is worth twice what a plantain's worth. Think about this last point whenever you see Marx (or Marxists) talk about "simple labor", "abstract labor" "congealed labor" or even just "labor" when people are describing that in some kind of weird abstraction.
Money and the Two Kinds of Value
So, both commodities and labor have two kinds of value: the kind based on what they do and their particular concrete characteristics (use-value) and the kind that abstract from their particular characteristics and make individual commodities or production labor measurable against other ones in the mathsy way. The second kind lets you put them in equations based on abstract characteristics (how much of society's general "simple labor" it takes to make a thing, or how much labor-time is "congealed" in the commodity).
But what's special about plantains? Other than the treat of eating fried slices of them, nothing: we could compare machetes to pencils, or iPhones, or cakes. Which comparison would get us at the real value of machetes themselves, rather than their value relative to plantains or pencils or cakes? If we can only say how valuable something is by saying how valuable it is relative to something else, we could ask how valuable that second thing is. Then we'd need a third thing to measure the value of the second thing. But then: how valuable is the third thing?! You never get to the end of that road no matter how long you kick the can. Don't get me wrong, you'll hit a wall eventually since there aren't a literal infinity of things sold: we could try just simultaneously comparing machetes to all the other goods in society in a given historical period (1 machete = 2 plantains = 2.4 oranges = .000032 rocketships =...) but then we would need to start over this every time someone comes up with new shit to sell. (153-162).
But there's an easy way out of this. We can just designate one commodity as our unit of measurement for value, in the way that (I assume) King Cumberbatch the 23rd-and-a-half of England just pointed to his Air Aquinas sneakers one day and that's why we measure distance in "feet". Historically, the value of everything that got bought and sold in a society has often been pegged to standardized weights of gold, but we can skip to paper currency because that's obviously where this is going unless you are on team Ron Paul. There's a danger of "fetishism" here, which is that we might forget that we're just using gold as a yardstick, and might start thinking of gold itself (in the physical, use value sense) as being the thing that confers value on other things. That's not so important here yet, but this kind of argument will matter later.
Finally: all of this pretend math really stands in for complicated social relationships (149-152, 164-166). The social processes that organize the creation of commodities, and their relation to exchanges that (based on perceptions of value) help clarify what social relationships are involved and why they matter. What it actually means that a machete is "worth $2" is that I live in a society that a) has dollars as a currency to begin with and b) will exchange two of those dollars for this machete. Even though there's an explanation for the math behind the initially weird "1 machete = 2 plantains", its a social explanation: in this society, given how labor is organized and our current levels of technology, it takes twice as much labor-time in general as a society to make 1 machete as it does to make 1 plantain.
If our society was organized differently, if someone patents a new machete making device, (looking at the larger supply chain) if steel becomes cheaper to get, the relative costs that we summarize in our "1 machete = 2 plantains" equation might shift. More importantly, these factors could even shift the objective value of the machete measured in our chosen standard of gold or paper moeny. Since this is true, the value of a commodity is only "objective" relative to a specific historical context - something that was very valuable or "high tech" in the past might still be useful now, but might be valued very differently now relative to our current possibilities and needs (152-153). Think of outdated software or wood pencils.
How Historical Context Matters (even for the math!)
These particular social relationships, as they're set up under capitalism, make the stuff we produce "commodities" as opposed to just stuff. Folks produced things before capitalism, but those objects were just use values, not commodities. The reason that the use values that folks produce become "commodities" under capitalism, rather than just use values, is because of the social relationships that exist under capitalism. A machete becomes a commodity rather than just a usable thing because it is in a historical context where its objective social value is set by its exchange value. Its exchange value is set by the amount of labor-time needed to make that kind of thing. That labor time is "simple" or "abstract" - it doesn't matter who does it or what the process of making it is concretely likely. Under capitalism, they are done by private individuals who work independently of each other and only meet when exchange is happening (164-166). That's importantly different from the social relationships that explain division of labor in a village or ethnic group where the social relationships are already there before any exchanges that happen and help.
Ideally, on a good day, when we exchange machetes and plantains, we are trying to make it true that your labor is just as good as mine, even though we don't conceive of things in these terms. The big equation that relates all the machetes to the plantains and the iphones, and the labor that produces all of those things, would be an achievement of just and fair human exchange based on political equality (pgs. 166-167).
Why everyone sucks but Marx (according to Marx)
Marx thinks that folks should have figured all this out already, but have been led wrong in their social science and philosophy by having the wrong politics. Aristotle got as far as figuring out that there was something weird about exchange value, but didn't figure out why because Greek society was a society built on slavery, and you have to be able to conceive of the basis equality of human labor to come up with the right explanation of values (152). Under feudalism, there was no ambiguity about people's material and personal dependence on each other: serfs and lords, laymen and clerics knew the game. Every serf knew that they produced for themselves, that they produced for others, and which things were which. But capitalism is different, because social relations that used to be between people (lord and serf) are now expressed in relationships between objects (capitalists and means of production, workers and labor power). "Bourgeois economists" - always a target of shade in this book - got it wrong because they were in too close with sellers of commodities, who don't care what they are used for and who are just trying to make this money, and haven't had an interest in asking how value of products and labor work under capitalism (173-176).
Continue to Part 2.