This situation does not arise overnight. As Marx says, in his Letter to Kugelmann, The Law of Value manifests itself in the form of exchange-value, in societies based upon generalised commodity production and exchange, because the defining characteristic of the commodity is that it combines both use value and exchange-value, and the exchange of these commodities implies that they exchange at a rate determined by the value of each, i.e. by the average labour-time required for their reproduction. In societies prior to such generalised commodity production, the direct producers do not produce in order to obtain exchange-value, but to maximise their use value. But, this does not mean that they can escape The Law of Value. If a producer can produce either 100 kilos of potatoes or 200 kilos of carrots, in the 1,000 hours of labour-time at their disposal, this still means they are constrained by The Law of Value, in terms of what they can produce, and in what proportion. They do not “exchange” one product for another, and so do not express its value as exchange-value, or money, but that does not prevent them estimating the value of the product in terms of labour-time, and comparing it with the labour-time required to produce some other use value, which they must forego in order to produce it.
A preference for potatoes might lead them to spend 600 hours in that production, providing them with 60 kilos of potatoes, but, the cost of that to them, i.e. what they must forego, is that they can now only spend 400 hours producing carrots, so that this amounts to 80 kilos of carrots. The cost to them of the 60 kilos of potatoes is the 120 kilos of carrots they have not then produced. They have in reality, still exchanged this 120 kilos of carrots for the 60 kilos of potatoes they have produced.
The direct producer does not exchange potatoes and carrots in the marketplace, as they would if they were a commodity producer, but The Law of Value still inflicts the same constraints upon them nevertheless that, with a limited amount of labour-time, they must make choices about how to allocate it, and allocating it in one way necessitates a loss of production of some other use values had it been allocated in another. Indeed, it is this basic reality that, for the direct producer, manifests itself as individual value of their different products, that is the objective basis of exchange-value, but with these individual values now transformed into a social or market value of the commodity, determined not by individually embodied labour, but by the average socially necessary labour.
It is precisely because the imperative for the direct producer is to maximise use value that they look to allocate their labour-time to that effect. And, it is that imperative that leads the direct producer in the primitive commune to develop the division of labour within it, as the commune realises that some of its members have greater aptitude for different types of concrete labour, and so total output of use values is maximised by engaging in such specialisation. It is, in turn, what leads the commune to exchange those products which it has some natural advantage in producing for those, which it requires, but which some other commune has a similar natural advantage in producing, so that the maximisation of use value is effected via this trade, on the basis of comparative advantage.
And, as the primitive commune dissolves into separate families, and the development in their hands of private property, so too, even as direct producers, these separate families understand this same benefit of comparative advantage so as to maximise their production and consumption of use values, so that they are led to produce products that they have some advantage in producing, which can be exchanged for other use values required for their consumption, rather than attempting to directly produce every product required for their own consumption. And, for some producers, this means that they specialise only in one type of production. For example, the blacksmith comes to spend more and more of their time in that activity, rather than in tending their own land.
In Africa, Ralph Piddington tells us that a peasant from the Heh tribe who orders a spear from the smith works on the smith’s land while he is making the spear. “An Introduction to Social Anthropology” p 275.
“Should a Dadaga wish more of these utensils, he would have to work in the field of the Kota iron worker of whom he requested them while they were being forged.” David Mandelbaum “Notes on Fieldwork in India” in Herskovits “Economic Life of Primitive Peoples” p 136-7.
On this basis, also some of these artisans come together in towns, and as towns grow in size, so larger concentrated markets develop, required for larger scale commodity production and exchange, which in turn is a fundamental requirement for capitalist production.
As Marx says in Capital I, explaining this foundation of The Law of Value, in relation to the calculations of Robinson Crusoe,
“Necessity itself compels him to apportion his time accurately between his different kinds of work. Whether one kind occupies a greater space in his general activity than another, depends on the difficulties, greater or less as the case may be, to be overcome in attaining the useful effect aimed at. This our friend Robinson soon learns by experience, and having rescued a watch, ledger, and pen and ink from the wreck, commences, like a true-born Briton, to keep a set of books. His stock-book contains a list of the objects of utility that belong to him, of the operations necessary for their production; and lastly, of the labour time that definite quantities of those objects have, on an average, cost him. All the relations between Robinson and the objects that form this wealth of his own creation, are here so simple and clear as to be intelligible without exertion, even to Mr. Sedley Taylor. And yet those relations contain all that is essential to the determination of value.”
And Engels makes the same point in Anti-Duhring,
“As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the politico-economic concept of value. (Deutsch-Französische Jahrbücher, p. 95) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital.”
(Anti-Duhring, Chapter 26)
Marx, in The Critique of the Gotha Programme also makes this clear, in relation to socialism.
“Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labour, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption. But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labour in one form is exchanged for an equal amount of labour in another form.”
All that changes here is that the basis of commodity fetishism is removed. Value is expressed directly in terms of what it is, labour and thereby measured in labour-time, rather than indirectly as exchange-value, measured by money, which leads to the illusion that value is somehow an intrinsic quality of the commodity itself. As Marx puts it in Capital III, Chapter 49,
“... after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever.”
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