Karl Marx. Capital Vol One Ch2

Exchange

Labor is the fruit of value according to Marx. This is why he sees the exchange of commodities in a negative light. Labor is a thing that constitutes social worth along with producing something to satisfy a want.

Capitalism is a practice where people use their labor to package up social part of labor and exchange it with others as if it didn't matter. The price on a product is just a false image of what value is.

Commerce also makes people who trade commodities as impersonal as the value of the commodity itself. They are just someone who holds on to abstract values to part with them in order to get an abstract value from someone else.

Near the end Marx also introduces how people gravitate towards money as a commodity itself. In a sense, being obsessed with an abstraction of an abstraction of the real thing.

Karl Marx. Capital Vol One Ch1 Sec4

THE FETISHISM OF COMMODITIES AND THE SECRET THEREOF

This section is a bit more opinionated than previous sections of chapter one. Marx relies less on examples that resemble equations and more examples from fiction.

Marx sees that originally man drew value from from labor. Labor emanated through many social roles such as family members. Labor was done not to produce commodities. Labor was more a way of life.

Capitalism severs this link with Labor. Commodities are produced to be exchanged for other commodities. Social roles are unimportant. Capitalists' valuation of the commodities is explained almost as it was voodoo. The way people valued products of their labor in the past was Labor, but Marx suggests the capitalists arbitrarily places value on commodities using those same instincts from the past but abstracted from Labor. This amounts to some 'franken-value'.

Karl Marx. Capital Vol One Ch1 Sec3

The Form of Value or Exchange Value

Marx gives a step by step explanation from occasional bartering to a deliberate currency of value.

Money is explained to be a commodity just like coats, fabric, and corn. The only difference is that money holds a monopoly over value.

This might be made clearer by this example. Marx theorizes about a commodity, linen, that is used to establish worth of several other commodities. But in this case linen has a utility and a monetary role.

Linen could make sense if trade was infrequent, but it gets complicated when trade is common. People could wear money. Money really is a commodity where it is meant for one purpose, to hold value.

Karl Marx. Capital Vol One Ch1 Sec2

The Twofold Character of the Labor Embodied in Commodities

Marx takes into consideration a coat and the material that makes a coat. There are two professions that are involved with this example. Weaving and Tailoring. The weaver makes the cloth and the tailor sows up a coat.

What Marx wants to point out that at a given time a coat might be twice as much as the linen involved in making it. But the EXCHANGE VALUE of the coat is not dependent on the cloth. The EXCHANGE VALUE of the coat is strictly the amount of coats available. Marx attributes this number to the efficiency of labor. So if the price of cloth goes up, but the tailors make more coats, the EXCHANGE VALUE of coats will decrease.

Karl Marx. Capital Volume One Ch1 Sec1

The Two Factors of a Commodity: Use-Value and Value

If Marx wants you to know one thing about capitalism, it is that it is all about commodities. The opening of the book establishes what Marx considers a COMMODITY to be.

Basic tenets of COMMODITIES:

1. It has to be human made and not taken from nature.
2. It has to be produced to be exchanged and not to be given directly to consume.

When considering COMMODITIES Marx points to two important values:

1. USE VALUE - A value to acknowledge the quantity of the commodity. It is some value linked to a physical trait either the amount of units, weight, the units of length.
2. EXCHANGE VALUE - a value used to arbitrate the ratio between the USE VALUE of two different commodities. It is not linked to any physical trait. It is just a ratio of USE VALUES.

LABOR is calculated very much like USE VALUE in that it is a number based on a trait. This is the duration of LABOR needed to produce an amount of the commodity. Marx states that when calculating LABOR in a capitalist system, it is only important to consider LABOR of the entire system. This means the total amount of LABOR used to make all the commodities exchanged.

Marx puts much emphasis on LABOR being the driving force for USE VALUE and EXCHANGE VALUE. The reason being that the more of a commodity you can make the hire the USE VALUE (remember the USE VALUE is just measurement of how much of a commodity you have). When the USE VALUE changes it effects the EXCHANGE VALUE because when you make more of something it generally decreases in value making the ratio of its value to other commodities different.

LABOR is also fluctuates in productivity for various reasons that either boost or deflate. This in turn fluctuates the EXCHANGE VALUE as commodities' USE VALUE will be going up and down.