Tuesday 10 May 2022

A Contribution To The Critique of Political Economy, Preface - Part 2 of 8

 A Contribution To The Critique of Political Economy

Preface



Mill continued to view commodities as though they were still products (See: Theories of Surplus Value, Chapter 17), and so in which use-value and value were inextricably fused. But, Marx demonstrates that, as soon as the product is alienated from the producer, i.e. becomes a commodity, value and use value are no longer fused but are separated. The most obvious manifestation of that is that the seller sells a commodity, which, for them, has no use value, and they sell it to obtain value, in the form of exchange-value, even if the only purpose of doing so is to again obtain some other use value. The producer can now produce use values, not because they have any use for them, but solely because, in producing them, they can alienate their value, i.e. they can realise the labour contained in them in some other form.

The producer of cloth produces it, not because they want to use the cloth, now, but solely in order to be able to exchange it for wine, and the wine producer produces wine to exchange it for cloth. Production and consumption have now been separated, and along with it, use-value, and value. So long as these commodities are exchanged in some form of barter, then, demand and supply are balanced, as described in Mill's Law of Markets (Say's Law), but, once money intervenes, that is no longer true. Now, sellers can demand money, as the general commodity, not to consume it, as say wool or wine is consumed, but also to save it, to hoard it for future use and so on. Consequently, supply and demand, as well as production and consumption, use-value and value, are separated, making overproduction of commodities possible. As Marx sets out in Theories of Surplus Value, Chapter 17, in his response to Ricardo's assertion that

Productions are always bought by productions, or by services; money is only the medium by which the exchange is effected.”” (p 499)

He says,

Money is not only “the medium by which the exchange is effected” (l.c., p. 341), but at the same time the medium by which the exchange of product with product is divided into two acts, which are independent of each other, and separate in time and space. With Ricardo, however, this false conception of money is due to the fact that he concentrates exclusively on the quantitative determination of exchange-value, namely, that it is equal to a definite quantity of labour-time, forgetting on the other hand the qualitative characteristic, that individual labour must present itself as abstract, general social labour only through its alienation.” (p 504)

And,

At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.” (p 505)

If we take a step back, then, as Marx describes, the primitive communities that only produced products, first exchanged some of them in ceremonies and rituals such as weddings, between different communities, but these accidental and occasional exchanges of products gradually expand into trade between the communities. The initial basis of the trade is easy to identify. Community A produces cloth with greater facility than community B, i.e. its individual value, the concrete labour required for its production, is lower. Likewise, community B produces wine with a lower individual value than A can achieve. In other words, there is a comparative advantage for both communities in specialising and trading to meet their combined needs.

Its only necessary to assume that A could also exchange its cloth with communities B1 – B12, who also produce wine, to see that competition between the wine producing communities would reduce the value of wine to the average labour-time required for its production, and the ability of wine producers to exchange their wine with communities A1 – A12 would do the same to the value of cloth. In the process, the value of the product, as individual value, based upon individual labour, has been transformed into social labour, and value is no longer individual value, but has become social or market value. It is this, which forms the basis for the comparison of the value of cloth and wine, and so the establishment of a proportional relation between them, the exchange value.


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