The Essential Marx 2: Exchange Value (But Where’s The Value At…?)

Marx has commenced his critique of capitalist society by focusing on the commodity. He’s started by looking at it as a ‘use value’, a useful thing that people need or want, and now he will look at a commodity’s ‘exchange value’…

Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value.

Use values are the ‘substance of all wealth’. It might be tempting to think that money, or gold, or jewels, or credit cards are the substance of all wealth, but actually a society’s wealth can be understood as the amount of useful things it produces that people want or need: Someone could have all the money in Las Vegas but if for some reason they can’t exchange it socially for food then how wealthy are they really?

Marx initially considers that ‘exchange value’ is a sort of social substance that is ‘deposited’ in the useful object. So the commodity is taking on a duality as both a use value and an exchange value.

Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort, a relation constantly changing with time and place.

Use value is expressed qualitatively, such as how essential bread is to someone when they’re hungry, or how much a person enjoys playing with Lego (😂 👍), while exchange value appears as expressed quantatively in the exchange process – a cold, hard amount of another commodity or cash equivalent. Already we see a certain tension forming in the commodity’s dual nature as a value… Use value indicates clearly that people need bread to address their hunger, say, but clearly not all in our so-called ‘globalised’ economy have sufficient quantity of means to buy bread.

Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e.g., 1 quarter corn = x cwt. iron. What does this equation tell us? It tells us that in two different things – in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.

The basic exchange formula may appear natural to us: X amount of this useful thing is equal to Y amount of that other thing, and we exchange them to get what we want. But Marx points out that there must be some standard beneath this appearance that is common to both X and Y which determines why these two different things are equal to each other in differing amounts…

This common “something” cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use values. But the exchange of commodities is evidently an act characterised by a total abstraction from use value.

The ‘something’ that determines the value of things can’t be a physical property of a commodity such as its weight (otherwise a common brick would be worth an awful lot of gold!).

People use bricks and bread a lot more than they use diamonds, but bricks and bread are much, much cheaper than diamonds; so a thing’s usefulness, while it may provide the social conditions for trade (people needing or wanting various useful things), clearly does not determine its value.

Marx will go on to explain that the value-determining thing common to all commodities is the human labour contained in them.

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