Friday, 28 December 2012

The Relative Form of Value

Value is measured in labour-time, but Exchange Value is the relation of the Value of one Use Value compared to a quantity of some other.  This relation is expressed in the Value Form.  The Value form comprises two parts.  The first part is the Relative Form of Value, the second is the Equivalent Form of Value.

So, for example 1 metre of Linen = 10 kilos of Sugar.

Here, 1 metre of Linen is the Relative Form of Value.  Its Value is being expressed relative to a quantity of some other Use Value - here 100 kilos of Sugar, which is its equivalent.

This relation can only exist because both contain Value.  Linen and Sugar are clearly two different things, which cannot be compared.  However, the fact that both contain Value, means that this common thing Value can be compared.  Because both linen and sugar contain different amounts of value i.e. both require different amounts of labour-time to produce, the only way in which an equal amount of Value can appear on both sides of the equation is if the Value of the 1 metre of linen, is equated with the quantity of sugar that contains this same amount of Value.

The Relative form of Value can remain constant, whilst its Equivalent Form changes.  For example,

1 metre of linen = 100 kilos of feathers.

Even the Equivalent Form measured in the same Use Value can change.  For example,

1 metre of linen = 12 kilos of sugar.

That can be for several reasons.

  1. The Value of linen could rise, because more labour-time is now required for its production.
  2. The Value of sugar could fall, because less labour-time is now required for its production.
  3. The Value of linen could rise, and the value of sugar fall.
  4. The Value of both linen and sugar might rise, but the Value of linen rise by more than that of sugar.
  5. The Value of both linen and sugar might fall, but the Value of linen fall by less than that of sugar.
By the same token, the Value of both linen and sugar might rise or fall, and yet the Equivalent Form remain constant, because both have moved in the same proportion.

For example, suppose the Value of 1 Metre of linen = 10 hours labour-time.
The Value of 100 kilos of sugar is also = 10 hours of labour-time.  So,

1 metre linen = 100 kilos sugar.  But, suppose a rise in productivity means both linen and sugar can be produced in half the previous time.  Now, the Value of 1 metre of linen = 5 hours labour-time, and the Value of 100 kilos of sugar also = 5 hours labour-time.  The Value of both linen and sugar has been halved.  But, we still have:

1 metre linen = 100 kilos sugar.

The Value has been halved, but the Exchange Value of linen remains constant measured in its Equivalent Form, sugar.

For a fuller discussion see.

3 comments:

Unknown said...

I have been looking at the value form passage of Vol. 1 to assist my understanding of dialectics, particularly Carchedi's recent explanation of the idea. I appreciate your explanation as I had been struggling to distinguish relative and equivalent forms. I am still struggling a little however. Isn't the relation between the two compared commodities really a proportionate relation or a ratio. It seems to me arbitrary to consider the number `1' as the reason the relative value form is identified. A metre of linen can, after all be considered as 37 inches of linen. What happens to the case then? Is it rather that the relative value form is considered the subject, and its equivalent the object, for the purposes of considering the value form as it is expressed in comparison/exchange of two commodities?

Boffy said...

Thanks for your comment. I am dealing with the issue of the history of value in a series on that topic, so I do not want to expand much here, as it will be duplication, and I am rather pressed for time in general.

You have tor read Marx's Value Form Analysis in Capital I, as an historical explication of the value form from the individual value of products, produced by individual communities, into a social or market value, as these different communities, initially nomads, begin to trade these products more extensively. Initially, products are exchanged as part of various ceremonies, such as wedding ceremonies, where members of one tribe/community marry members of another - Engels' Origin of the Family, Private Property and the State, is also useful in understanding this. These products exchanged as wedding gifts etc. are not exchanged at their values. But, as Marx says this does not mean that these products were not of themselves values, any more than it is only when science identifies the gas oxygen that oxygen comes into existence or exerts its influence on chemical reactions. The exchanges initially are based on what the recipient of the gift finds valuable, which in this context means useful, and usually what they do not themselves possess in sufficient quantities. As Marx sets out in TOSV, the initial derivation of the word "value" is the same as useful.

But, as these separate communities begin to trade more, and each community appoints merchants to undertake this trade, the more the existence of value makes itself known openly. One tribe produces product A, with less labour time than other tribes, and so on. The merchants who have a vested interest in getting to know this data, thereby play a crucial role in averaging out (arbitraging) the different individual values of these products produced by different communities, into an average social or market value. What begin as occasionally traded products, whose exchange relation to other products is more or less random, and based upon relative scarcity and utility, increasingly becomes more regular trade based upon the relative values/average labour-time required for the production of these products.

Relative value arises, because initially a wide variety of products are exchanged, and the exchange relation of each of these products one to another is established. Marx's value form analysis is about how, as trade increases, certain products come to be exchanged more frequently, and used as equivalents. So instead of A,B,C,D,E all exchanging with each other, and the exchange relation of A to B, to C, to D, to E, and the exchange relation of B to C, to D etc. being established, the exchange relation of A, B, and C may be established to D and E, which are more commonly traded products. D and E, become the means of externally measuring the value of A, B and C. (The Equivalent Form of Value) This process ends up with one commodity, initially something like cattle, but ultimately gold or silver, and sometimes gold and silver, acting as the universal equivalent. It acts as the one external measure of value of all other products.

Cont'd

Boffy said...

Cont'd

Along the way, as those communities that have a comparative advantage in producing certain types of product (their individual value is lower than the market value) they see that they can obtain a profit on alienation from such exchanges (unequal exchange, they get more value/labour-time back, than they expend), and so have an incentive in producing more of these products specifically for the purpose of exchange - they become commodity producers, and products become transformed into commodities.

As Engels explain in The origin, this is the basis then also for families to emerge from within these primitive communes, as they are commodity producers within the commune, able to produce commodities with lower individual values, and thereby to obtain such profit on alienation. What begins as casual exchange of products between primitive communes, becomes the production of commodities, and their exchange between communes, and this sets in place the basis of the commune itself, as individual family producers within the commune specialise in that commodity production, and thereby accumulate private property. Commodity production, and exchange, thereby is introduced within the commune, bringing about the end of communal production and distribution, and the dissolution of the commune.

I can't engage in further discussion of this at the moment, due to time constraints, but as said earlier, I will be dealing with this at greater length in my history of value series.