d) Samuel Bailey
[α) Superficial Relativism on the Part of the Author of “Observations on certain Verbal Disputes” and on the Part of Bailey in Treating the Category of Value. The Problem of the Equivalent. Rejection of the Labour Theory of Value as the Foundation of Political Economy]
Bailey's “Critical Dissertation” was the main work, prior to the development of neoclassical theory, that sought to overturn the concept of value, and the theories of value developed by Smith, Ricardo, and Malthus.
“It is definitely worthless except for the definition of the “measure of value”, or rather, of money in this function. Compare also the same author’s: A Letter to a Political Economist; occasioned by an Article in the Westminster Review on the Subject of Value etc., London, 1826.” (p 125)
As stated earlier, Bailey's work essentially agrees with the anti-Ricardian view set out by the anonymous author of the “Observations”. Marx includes quotes from the latter, as part of his critique of Bailey's work. The author of the “Observations”, along with Bailey, see value only as relative value, i.e. value only as it is manifest in commodity exchange. It is the ultimate form of commodity fetishism, whereby the value of A can only be expressed in accordance with how much of B exchanges for it. In this way, value is then a function of exchange, rather than the rate of exchange being a function of value.
On this basis, there is no divergence between market price and value/exchange-value, because price is merely exchange-value, expressed in terms of the money-commodity, and whatever, at any time, is the price of a commodity, is, thereby, also its exchange value. This is the importance of the distinction, set out earlier, between value and exchange-value.
In Theories of Surplus Value, Part II, Marx described the weakness of Ricardo's explication of his theory, in terms of his failure to distinguish clearly between value and exchange-value, and his tendency to describe value only in terms of exchange value, i.e. relative value. This weakness is what Bailey and the author of the “Observations” pick up on. They accuse Ricardo of taking value/exchange-value as an expression of relative value, and turning it into an expression of absolute value, based on the labour embodied in the commodity. This embodied labour theory of value is also a weakness in Ricardo's theory, inherited from Smith, which can also be seen in the works of Ben Franklin that Marx cites in “A Contribution to the Critique of Political Economy”.
The author of the “Observations” asks,
““If the absolute quantity of labour, which produces the greater part of commodities, or all except one, is increased, would you say that the value of that one is unaltered? In what sense? since it will exchange for less of every commodity besides. If, indeed, it is meant to be asserted that the meaning of increase or diminution of value is increase or diminution in the quantity of labour that produced the commodity spoken of, the conclusions I have just been objecting to might be true enough. But to say, as Mr. Ricardo does, that the comparative quantities of labour that produce two commodities are the cause of the rate at which these two commodities will exchange with each other, i.e., of the exchangeable value of each, understood in relation to the other, is very different from saying that the exchangeable value of either means the quantity of labour which produced it, understood without any reference to the other, or to the existence of any other” (Observations etc., p. 13).” (p 125)
But, this is indeed the basis of the difference between value and exchange-value. The value of a product, whether it is purely a product, or is also a commodity, is determined by the labour-time required for its production, or more accurately its reproduction. For a product, i.e. something produced not for sale or exchange, but for direct consumption, this labour-time is equal to the embodied labour, i.e. the actual concrete labour required for its reproduction. It is immediately, an individual value of the product, rather than a social value.
This individual value, itself goes through a process of historical development. For example, we know from various anthropological studies that initially all labour is treated as though it is abstract rather than concrete labour.
On the tablets, inscribed in a Semitic language, found at Susa, the wages in the household of a prince are fixed uniformly at 60 qua of barley for the cook, the barber, the engraver of stones, the carpenter, the smith, the cobbler, the cultivator, the shepherd and the donkey man. (Clement Huart and Louis Delaporte “L’Iran antique” p 83). Yet, it's clear, as Marx describes in Capital I, that the labour performed by different labourers, even in producing the same products, is not equal, some are more skilled, some work faster or slower etc. For an individual producing use values only for their own immediate direct consumption, this does not matter. It is only the individual value of their own production with which they are concerned. But, from the earliest times, humans existed not as individuals but as social beings, and their production was social production, cooperatively undertaken. It is not the value produced by the individual hunter in the hunting party that determines the individual value of their production, but the average of the hunting party itself. In this sense, the individual value itself already becomes a social value, an average of the individual values of each hunter.
If we take Marx's example of Robinson Crusoe, set out in Capital I, Chapter 1, Crusoe's labour is itself also immediately social labour, because he alone comprises his society.
"In spite of the variety of his work, he knows that his labour, whatever its form, is but the activity of one and the same Robinson, and consequently, that it consists of nothing but different modes of human labour."
The individual value of the products of his labour, are thereby also immediately their social value.
But, as Marx and Engels describe, as nomadic tribes, and communities come into contact with others, as members of one tribe marry into another, trade begins between such communities as each tribe provides gifts to the other, usually of some product that it can produce in relative abundance, but which are prized by the other. Over time, this exchange of products, between tribes and communities, becomes more regularised trade, conducted by merchants acting on behalf of the tribe or community. The exchange of products is no longer just reserved for ceremonial occasions, but arises as each community recognises the advantage of exchanging things it can produce more easily, for things it cannot produce so easily. Each tribe begins to produce products specifically, therefore, for the purpose of exchanging them for other products it needs, products begin, thereby to develop into commodities.
The individual value/social value of products is determined by the average labour-time required for reproduction by the direct producer/consumer, for example, as Marx describes in relation to Robinson. But, for a commodity, that is not the case. A commodity, must first be a product, i.e. a use value, produced by labour. But, unlike a product, produced for direct consumption, it is not its individual value, i.e. the labour embodied in it, which determines its social or market value, but the amount of socially necessary abstract labour required for its reproduction. That is because, in social production, even the social production of products, rather than commodities, the labour involved is not homogeneous, as is the case with that of Crusoe. It comprises many different producers all with different levels of skill etc. And, the concrete labour involved in producing one type of product, for example, pottery, is different from that involved in producing, say, linen. All of this aggregate concrete labour has to be reduced to a common abstract labour, stripped of all these differences. Not only does this average socially necessary labour differ from the concrete labour embodied in the product/commodity, but it is itself constantly changing, as a result of changes in social productivity. And, now, as products become transformed over time into commodities, it is not just the social value, of products produced by one community that is relevant, because several different tribes/communities produce the same types of products that they seek to exchange, and as the role of merchants increases in organising this trade, so they are able to determine an average, social value of these products across these different tribes/communities.
The fact that 10 hours of labour may have been embodied in 100 metres of linen yesterday, does not prevent the value of those same 100 metres of linen falling to just 9 hours of labour today, if there has been a 10% rise in productivity, which thereby reduces the amount of socially necessary labour-time required for the reproduction of those 100 metres. In a primitive commune, for example, the Law of Value exerts itself, precisely in the fact that it seeks to use labour efficiently, so as to produce the greatest quantity of use values/products with the least expenditure of value/labour-time. So, such communes quickly discover that some of its members are better at producing one type of product than another. By allocating those with the greatest aptitude to these different types of production, they raise the level of output, and the quality of the products they produce, without raising the value of that output, i.e. it requires only the same expenditure of labour-time. Even at the level of production of such products, therefore, what starts off conceptually as the individual value of the product of individual producers, such as Crusoe, is immediately subsumed under the individual value of the output of this collective social labour. In other words, it is the output of the commune, of pottery, its members working cooperatively together, whose individual value is determined, the individual value of each of these producers now being merged into this social average. The more, such division of labour enables all of these producers to increase their skill, the more the commune, as a whole, is able to raise its output of products with no additional expenditure of value/labour-time.
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