Exchange Value

Exchange Value is Value in Exchange. Whereas Value is an absolute quantity, Exchange Value is a relative quantity. Whereas all products of human labour contain Value, only commodities have Exchange Value. The Value of any product of human labour, including commodities remains constant so long as the labour-time required for its production does not change. Exchange Value changes if either the labour-time required to produce the commodity changes, or if the labour-time required to produce the commodity it is being exchanged with alters.

Whereas, Value is measured in Labour-time, Exchange Value is measured in a certain quantity of some other Use Value. For example,

The Value of 100 yards of linen = 10 hours of labour-time.

The Value of 1 ton of iron = 10 hours of labour time.

The Exchange Value of 100 yards of linen = 1 ton of iron.

If the labour-time required to produce 1 ton of iron is reduced to say 5 hours due to a new production process then.

The Value of 100 yards of linen is still 10 hours of labour-time.

The Value of 1 ton of iron = 5 hours of labour-time.

The Exchange Value of 100 yards of linen = 2 tons of iron.

The same is true if the situation were reversed. The the Value of the iron would remain constant whilst the Value of the linen would be halved, and its Exchange Value against iron would also be halved.

If both now require only 5 hours of labour-time, their Value is halved, but their exchange Value remains constant.

So:

The Value of 100 yards of linen = 5 hours of labour-time

The Value of 1 ton of iron = 5 hours of labour-time

The Exchange Value of 100 yards of linen = 1 ton of iron.