For a long time, commodity production exists as an adjunct of direct production. In other words, communities produce the use values required for their consumption, and directly consume them. They only exchange surplus production, and that is true when commodity production and exchange begins to occur within communities, as the primitive communes dissolve. Each peasant household continues to produce, primarily, products for its own direct consumption, as well as undertaking surplus labour (rent) on behalf of the landlord. Its the need to pay rents and taxes in money form that increasingly forces peasant producers into increased industrial commodity production, in exchange for money, alongside their direct production, but it is in the rapidly growing towns that commodity production and exchange, on the basis of an extended social division of labour, is first developed.
“Commodities, as we have seen, constitute fully developed exchange-value only when a world of commodities and consequently a really developed system of division of labour is presupposed; in the same manner circulation presupposes that acts of exchange are taking place everywhere and that they are being continuously renewed. It also presupposes that commodities enter into the process of exchange with a determinate price, in other words that in the course of exchange they appear to confront one another in a dual form – really as use-values and nominally (in the price) as exchange-values.” (p 86-7)
These prices, equating them to a quantity of gold, for example, are ideal prices, because they do not at all mean that, in reality, they can be exchanged for this quantity of gold. The gold acts as an equivalent form of value, measuring, indirectly, the quantity of universal labour represented by the commodity, but this ideal price does not at all mean that it can be realised in practice, because it requires that the particular use value finds demand for it at that price. Indeed, this is why, although commodities are ideally money, representing a quantity of social labour-time, in reality, it is only the money commodity that acts as money. There is always demand for money, and it is always exchangeable at its value, precisely because it is universally exchangeable for all other commodities.
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