Value

The measure of capitalist production

The Editor

06 Apr 25

This article is part of a series on classical Marxism.

One major characteristic separating the Marxist school from other philosophies is the engagement with liberal economics following Marx’s exhaustive survey of classical English political economy. As physical beings, we have real biological needs sated by an ever-more complex capitalist economic system. It is this system of production and consumption that cannot help but exert influence on our conscious thoughts—and that is true even as few people have any meaningful understanding about how our economic system works. So many imagine economics as stock tickers, randomly fluctuating commodity prices, national GDP charts, unemployment percentages and bespectacled accountants with blank personalities.

Statistics are revelatory but they are only surface-level expressions of the multitude of relations between people engaged with each other in production and consumption. More generally, global society as a whole “does not consist of individuals, but expresses the sum of interrelations, the relations within which these individuals stand.”¹ In economic terms, wealth and status are acquired relative to others. Within capitalism we can say an individual is “wealthy” only because he generally has more money or assets than most others. We can identify others as “employee” or “employer” or “contractor” or “entrepreneur” only in the presence or absence of a relation to clients, a boss or paid staff. Value is likewise a social product created through interrelations. Marx writes: “The law of gravity 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.”² Like gravity, value is asserted not as a material force but as a relation between subjects locked in a process of exchange.

In the realm of capitalist relations, the signature object of production is the commodity.³ A commodity embodies three value forms in a self-supporting dialectical unity:

Use-value refers to the utilitarian qualities of a commodity and its ability to satisfy the wants or needs of people. For example, chicken and vegetables can satisfy hunger, just as a smartphone can satisfy the want of entertainment and communication. How one might use a commodity is a subjective quality unlike price.
Exchange-value roughly corresponds with the objective cost to produce commodities as they move along the supply chain. Price can fluctuate wildly in accordance with monetary liquidity and the law of supply and demand but, in equilibrium, the exchange-value of a commodity tends to reflect the cost of producing it—the labour time and materials. For this reason, chicken and vegetables tend to exchange at significantly lower prices than smartphones which require specialty materials and expert design. Supply and demand determines short-term oscillations in price but it does not define exchange-value.
Value. Value refers to the natural material and quantity of labour congealed in a commodity. It is a historical constant that, absent mental and physical human labour, nothing can be produced or consumed. Therefore, labour is the only component of the process that transforms nature into commodities. Value is in constant flux and cannot be measured with precision because the labour-time congealed by a commodity must be socially necessary if it is to impart value. Inefficient workers or technologically-backward factories cannot impart value into their product by taking more time than is necessary to produce it. By the metric of socially necessary labour time, chicken and vegetables purchased at the grocery store will have a lesser value than those same items served on a plate in a fine dining restaurant. A smartphone, on the other hand, will have more value than either of those commodities because of the additional labour time required to produce a more sophisticated item.

To avoid confusion, it should be emphasized that this unity of values is what is found in commodities on the market. Marx did not believe that value was a measurement that could be universalized. Previous modes of production saw the construction of mountainous pyramids and gleaming temples which contain impossibly-high amounts of congealed labour and priceless materiel and no realistic use-value or market exchange could ever justify producing such wonders today. The rationale behind the historical production of priceless artifacts, monuments and palaces belong to entirely different sets of economic relationships that are now extinct.

In present times, an individual may expend great quantities of labour time writing bad novels or packing sand castles and never produce a commodity because their product has no use-value that someone would exchange for. The last idiosyncrasy to note is the world of scams, derivatives, fiat currency and financial speculation that are all designed chiefly to transfer money between market participants without contributing to the global store of value. One notorious example is quantitative easing, which sees the money supply increase faster than the actual production of value. This is what causes inflation.

With knowledge of the value forms, one can apply them to any commodity that is produced and sold in the capitalist system we live in. A potted plant finds use-value in its aesthetics and air purifying potential. It might exchange for $20 and it congeals a value relative to its growing conditions, the time it took to reach a 12 inch height and the transportation required to deliver it to the local gardening centre.

As the only commodity capable of imparting more value than it withdraws, labour is the linchpin—without this commodity, the global web of capitalist production collapses. The wage and salary worker must “bring a commodity to the market, i.e., his own skin.”⁴

The employee offers up their labour-power for use by an employer, transferring a value that correlates with their cumulative experience and skills. In exchange, they are paid a wage that is primarily determined by the supply and demand of the labour market. And it is from this special commodity where the enormous surpluses of the modern age are derived, where government budgets are inked, armies are raised and corporate largesse is created: that labour-power injects more value into a commodity than it will receive back in a wage.

Discovering this surplus-value is what led to Marx’s articulation of crisis theory; as workers produce a surplus beyond what they are able to consume, the system must be constantly expand in order to absorb the created surplus. Inherent to capitalism are periodic eruptions due to overproduction and barriers to expansion that result in economic recessions and depressions. This tendency toward crisis is papered over by mass immigration, warfare, “free trade” agreements and a flow of debt and credit, but crisis in capitalism can only be delayed and never avoided.

In this capitalist economy, the use-value of cheap labour is sought the world-over and unemployment levels are carefully managed in order to suppress wages via inflow immigration, the outsourcing of production and state expenditures or cuts. The result is a feast whereby a global ruling class gorges on those with nothing to sell in the market but their bodies.

It was shown that the appropriation of unpaid labour is the basis of the capitalistic mode of production and the robbery of the worker is carried out by its means; that the capitalist, although he buys the labour-force of the worker at the full value which it possesses in the market as a commodity, yet derives more from it than he has paid for it, and that in the last instance this surplus creates the total amount of value from which the capital steadily increasing in the hands of the capitalistic class is amassed.⁵

As presently constructed, the capitalist class needs the working class to create value but the working class needs the capitalist class to actually survive. A massive power imbalance between the elite capitalist ruling class and workers is thus concretized by economic necessity and witnessed by the commodity, value-forms conjoined.

Value

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