Friday, 2 September 2022

Chapter Two – Money or Simple Circulation, Measure of Value - Part 7 of 14

When philosophers first come to examine value and exchange-value, this dual nature of the commodity was also obvious to them. Aristotle, for example, recognised in the commodity both use-value and exchange-value, and also that the use value was incommensurable. The same deliberations were taking place, at the same time in China. But, Aristotle recognised that commodities did exchange, and that the basis of any such exchange had to be an equality between them, an equality that could not derive from the incommensurable nature of their use-value.

However, given the time he was writing, Aristotle could not identify the source of this commensurability, in equal values, i.e. equal quantities of universal labour. So, he ends up equating incommensurable quantities on the basis of an equation with money, which, by then, was well established. He failed to identify the basis of this equality and the origin of money itself in commodity exchange.

“Aristotle does indeed realise that the exchange-value of commodities is antecedent to the prices of commodities: “That exchange took place thus before there was money is plain; for it makes no difference whether it is five beds that exchange for a house, or the money value of five beds.” On the other hand, since it is only in price that commodities possess the form of exchange-value in relation to one another, he makes them commensurable by means of money. (Note *, p 68)

There is an obvious logical flaw, here, for Aristotle, because if its only via money that this commensurability is achieved, how could commodities have been made commensurable prior to money?

“Aristotle is aware of the fact that the different things measured by money are entirely incommensurable magnitudes. What he seeks is the oneness of commodities as exchange-values, and since he lived in ancient Greece it was impossible for him to find it. He extricates himself from this predicament by making essentially incommensurable things commensurable – so far as this is necessary for practical needs – by means of money. “Now in truth it is impossible that things differing so much should become commensurate, but with reference to demand they may become so sufficiently” (Aristotle’s Ethica Nicomachea, L. 5, C. 8, edit. Bekkeri, Oxonii, 1837). [The English text is from Aristotle – Ethica Nicomachea.” (ibid)

The use-value of a commodity is a function of the concrete labour used for its production, whereas its value is a function of the universal labour it represents, and exchange-value is merely the proportional relation of this value to that of other commodities. Its price is then this exchange-value proportional to the money commodity. So, the difference between exchange-value and price appears purely nominal.

“as Adam Smith says, labour is the real price of commodities and money their nominal price. Instead of saying that one quarter of wheat is worth thirty days’ labour, one now says it is worth one ounce of gold, when one ounce of gold is produced in thirty working days.” (p 69)

In reality, the relation is far from being purely nominal, and, as Marx sets out in Theories of Surplus Value, Chapter 17, et sub, and in Capital II and III, is the basis of crises of overproduction of commodities, and potentially of capital, as the circuit of capital is disrupted.

“The difference is on the other hand so far from being simply a nominal difference that all the storms which threaten the commodity in the actual process of circulation centre upon it. A quarter of wheat contains thirty days’ labour, and it therefore does not have to be expressed in terms of labour-time. But gold is a commodity distinct from wheat, and only circulation can show whether the quarter of wheat is actually turned into an ounce of gold as has been anticipated in its price. This depends on whether or not the wheat proves to be a use-value, whether or not the quantity of labour-time contained in it proves to be the quantity of labour-time necessarily required by society for the production of a quarter of wheat.” (p 69)


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