It is only because a money-commodity, and the commodities whose values it expresses, all have in common the fact that they are values, products of labour, that they can be equated, on the basis of the quantity of value that each possesses. In order that any collection of objects can be equated on a quantitative basis, (length, weight, hardness, ductility, value etc.) they must first each have the specific quality in common, and the quantity of that specific quality possessed by each must then be measured, so that it can be compared one with another. In order to know that 1 football pitch equals 75 tables, I must know the length of a table, and that of a football pitch, and so on. I can, of course, take a table, and laboriously measure it out against the football pitch. But, that will not then help if I want to measure the length of a tennis court.
Each of these different objects are infinitely measurable against each other, in a series of proportional relations, just as the value of apples can be measured against oranges, plums, tables, chocolate, ….. But, it becomes easier to establish some common units of measurement that can be more conveniently used to express these relations, though initially, a range of such common units of measurement are developed. For example, in England, to measure length in different circumstances the foot, inch, yard, chain, furlong, mile etc. are developed. Each of these, as with the cubit, are themselves based upon some existing unit. For example, a furlong was the distance a man was able to plough in a day, i.e. the length of a furrow.
So, instead of measuring a football pitch as 75 tables, or 10 tennis courts, etc., by using a common measurement, for example a yard, its possible to say that a football pitch is 150 yards, the table 2 yards, and so on. For any new object I seek to measure, its relation to every other object is then readily apparent. But, this is only possible because each of these objects, along with the standard unit of measurement, all have in common the quality of length, extension in space-time.
And, the same is true in relation to value, as Marx described in Capital I. It is the fact that products are values, i.e. the product of labour, which enables that quality of value to be measured, not by some other product, i.e. not purely relatively, but absolutely by the quantity of labour, required for its production. As those products start to be traded these varying amounts of this quality they have in common – value/labour – can be established between each of them, as products become commodities, and these values take the form of exchange values/prices. It is only because of this process that a single commodity is selected to act as the general measure of exchange value – the universal equivalent form of value – just as, over time, all of the different physical measurements of length, which had their own historical origins, all become relics, as a few standard units of measurement were selected to perform that function, such as the yard, metre and so on.
Incidentally, this historical process, whereby existing exchange relations between commodities, based upon their values, gradually results in the selection of a money-commodity, is what is missing from Ricardo's analysis of money, and the idea that it arises, simply as a convenient means of exchanging commodities.
But, Bailey also disregards all this actual historical evolution of money, which is impossible without first products having values, and then products becoming commodities, and values thereby assuming the form of exchange-values, which then takes the form of exchange-value incarnate as money. Instead, Bailey announces that the whole question of value measurement is resolved before our eyes, with no further investigation required by the very fact that the relative valuations of commodities, are already expressed in their prices, i.e. in the exchange relation to money.
He says,
““The requisite condition in the process is, that the commodities to be measured should be reduced to a common denomination which may be done at all times with equal facility; or rather it is ready done to our hands, since it is the prices of commodities which are recorded, or their relations in value to money” (op. cit., p. 112).
“Estimating value is the same thing as expressing it…” (op. cit., p. 152).” (p 160-1)
Marx responds, with glee,
“We have the fellow here. We find the values measured, expressed in the prices. We can therefore [asserts Bailey] content ourselves with not knowing what value is. He confuses the development of the measure of value into money and further the development of money as the standard of price with the discovery of the concept of value itself in its development as the immanent measure of commodities in exchange. He is right in thinking that this money need not be a commodity of invariable value; from this he concludes that no separate determination of value independent of the commodity itself is necessary.
As soon as the value of commodities, as the element they have in common, is given, the measurement of their relative value and the expression of this value coincide. But we can never arrive at the expression so long as we do not find the common factor, which is different from the immediate existence of the commodities.” (p 161)
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