Monday 6 August 2012

Capital I Chapter 2

Exchange


Upon the basis of a real economic relationship develops a set of laws.  Commodities exchange against each other in given proportions, as we've seen. But, commodities can only do this if the owners of these commodities agree to do so. This requires a legal framework, that establishes, in law, these exchange relations, on the basis of freely entered into contracts, by the various parties involved in the exchange.

The extent to which Marx’s analysis is an objective study of these economic relations, rather than a subjective study of the particular human beings, that make up the society, can be gauged by his comment.



In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them.”
(p 89)

The owner of a commodity does not see in it any Use Value for themselves. That's why they seek to exchange it. Its only Use Value, to them, is precisely that it has Exchange Value. The basic relation is that commodities exist as Exchange Values for sellers and Use Values for buyers. A commodity only realises its Use Value having been bought, just as it only realises its Exchange Value having been sold.


The Relative Form of Value is represented by barter where the owner of X amount of A, exchanges it directly for Y amount of B. Both A and B only become commodities in the act of barter. At this early stage, something only becomes a commodity when it is not a Use Value for its owner. That is it's superfluous to their immediate needs. That's why the first types of exchange often arise as the exchange of accidental surpluses.


These first exchanges, then, can be on the basis of chance, rather than any measurement of labour-time. But, once begun, they promote a development of trade and exchange that increasingly leads those who dispose of their goods to seek exchange on the basis of Value. The more commodities are produced by individuals, for exchange within communities, the more they seek to measure this Value accurately.

It is this historical process that leads to the need for a general equivalent form of Value (which goes through a succession of different physical forms specific to each society before eventually arriving at the Money Form). Different commodities have likewise acted as the Money Commodity – cattle, salt, gold, silver.


Nomads are the first to develop money, because all their possessions are in the form of movable wealth, which they can sell, and because they constantly come into contact with others, with whom they can exchange. Slaves have acted as money, but land never has, because it is not moveable.

although gold and silver are not by Nature money, money is by Nature gold and silver,” (p 92)

As an embodiment and manifestation of Value, of Abstract Labour, - whose nature is that it is qualitatively homogeneous, and therefore only measured by its quantity – a money commodity must share the same nature. Gold and silver are such. They can both be divided, with each piece being qualitatively identical to any other.

As a money commodity, they assume a dual Use Value. They continue to retain their Use Value as commodities, e.g. for jewellery, but now, its new social function gives it a special Use Value, acting as the Universal Equivalent of all other commodities. But, Money is a commodity, as this history of its origin and development shows. Its Value is not determined by its Use Value, but, like every other commodity, by the labour-time required for its production. It cannot express this Value, other than by how much of it exchanges for every other commodity.

On this basis, as Marx says, it can be seen that the view that Money is merely a symbol, without real Value, is false. Of course, what does arise, as we shall see later, is the introduction of real symbols that represent money in token form.


"These objects, gold and silver, just as they come out of the bowels of the earth, are forthwith the direct incarnation of all human labour.” (p 96)

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