A Contribution to the Critique of Political Economy/Chapter 1

by Karl Marx

 

Capital in General.

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BOOK I.

CHAPTER I.

COMMODITIES.

At first sight the wealth of society under the capitalist system presents itself as an immense accumulation of commodities, its unit being a single commodity. But every commodity has a twofold aspect, that of use value and exchange value.^[1]

A commodity is first of all, in the language of English economists, "any thing necessary, useful or pleasant in life," an object of human wants, a means of existence in the broadest sense of the word. This property of commodities to serve as use-values coincides with their natural palpable existence. Wheat e. g. is a distinct use-value differing from the use-values cotton, glass, paper, etc. Use-value has a value only in use and is realized only in the process of consumption. The same use-value may be utilized in various ways. But the extent of its possible applications is circumscribed by its distinct properties. Furthermore, it is thus limited not only qualitatively but also quantitatively. According to their natural properties the various use-values have different measures, such as a bushel of wheat, a quire of paper, a yard of linen, etc.

Whatever the social form of wealth may be, use-values always have a substance of their own, independent of that form. One can not tell by the taste of wheat whether it has been raised by a Russian serf, a French peasant, or an English capitalist. Although the object of social wants and, therefore, mutually connected in society, use-values do not bear any marks of the relations of social production. Suppose, we have a commodity whose use-value is that of a diamond. We can not tell by looking at the diamond that it is a commodity. When it serves as a use-value, aesthetic or mechanical, on the breast of a harlot, or in the hand of a glasscutter, it is a diamond and not a commodity. It is the necessary pre-requisite of a commodity to be a use-value, but it is immaterial to the use-value whether it is a commodity or not. Use-value in this indifference to the nature of its economic destination, i.e. use-value as such lies outside the sphere of investigation of political economy.^[2] It falls within the sphere of the latter only in so far as it forms its own economic destination. It forms the material basis which directly underlies a definite economic relation called exchange value.

Exchange-value appears at first sight as a quantitative relation, as a proportion in which use-values are exchanged for one another. In such a relation they constitute equal exchangeable quantities. Thus, a volume of Propercius and eight ounces of snuff may represent the same exchange value, in spite of the dissimilar use-values of tobacco and elegy. As exchange-value, one kind of use-value is worth as much as another kind, if only taken in right proportion. The exchange value of a palace can be expressed in a certain number of boxes of shoe-blacking. On the contrary, London manufacturers of shoe-blacking have expressed the exchange value of their many boxes of blacking, in palaces. Thus, entirely apart from their natural forms and without regard to the specific kind of wants for which they serve as use-values, commodities in certain quantities equal each other, take each other's place in exchange, pass as equivalents, and in spite of their variegated appearance, represent the same entity.

Use-values are primarily means of existence. These means of existence, however, are themselves products of social life, the result of expended human vital power, materialized labor. As the embodiment of social labor, all commodities are the crystallization of the same substance. Let us now consider the nature of this substance, i. e., of labor, which is expressed in exchange value.

Let one ounce of gold, one ton of iron, one quarter of wheat and twenty yards of silk represent equal exchange values. As equivalents, in which the qualitative difference between their use-values has been eliminated, they represent equal volumes of the same kind of labor. The labor which is equally embodied in all of them must be uniform, homogeneous, simple labor. It matters as little in the case of labor whether it be embodied in gold, iron, wheat, or silk, as it does in the case of oxygen, whether it appears in the rust of iron, in the atmosphere, in the juice of a grape, or in the blood of a human being. But the digging of gold, the extraction of iron from a mine, the raising of wheat and the weaving of silk are so many kinds of labor, differing in quality. As a matter of fact, what in reality appears as a difference in use-values, is in the process of production, a difference in the work creating those use-values. Just as labor, which creates exchange value, is indifferent to the material of use-values, so it is to the special form of labor itself. Furthermore, the different use-values are the products of the work of different individuals, consequently the result of various kinds of labor differing individually from one another. But as exchange values, they represent the same homogeneous labor, i. e., labor from which the individuality of the workers is eliminated. Labor creating exchange value is, therefore, abstract general labor.

If one ounce of gold, one ton of iron, one quarter of wheat, and twenty yards of silk are exchange values of equal magnitude or equivalents; then one ounce of gold, half a ton of iron, three bushels of wheat and five yards of silk are exchange values of different magnitudes, and this quantitative difference is the only difference of which they are capable as exchange values. As exchange values of different magnitudes, they represent greater or smaller quantities of that simple, homogeneous, abstract, general labor, which forms the substance of exchange value. The question arises, how are these quantities to be measured? Or, rather what constitutes the substance of labor, which makes it capable of quantitative measurement, since the quantitative differences of commodities in their capacity of exchange values are but quantitative differences of labor embodied in them. Just as motion is measured by time, so is labor measured by labor-time. Given the quality of labor, the difference in its duration is the only property by which it can be distinguished. As labor-time, labor has the same standard of measurement as the natural time measures, viz., hours, days, weeks, etc. Labor-time is the vital substance of labor, independent of its form, composition, individuality; it is its vital substance quantitatively, having at the same time its own inherent measure. Labor-time embodied in the use-values of commodities is the substance which makes exchange values and, therefore, commodities of them and at the same time serves to measure definite quantities of their value. Corresponding quantities of different use-values, in which the same quantity of labor-time is embodied, are equivalents; or, to put it in another form, all use-values are equivalents when taken in proportions containing the same quantity of expended, materialized labor-time. As exchange values, all commodities are but definite measures of congealed labor-time.

To understand how exchange value is determined by labor-time, the following main points must be kept in mind: The reduction of labor to simple labor, devoid of any quality, so to speak; the specific ways and means by which exchange—value-creating, i. e., commodity producing labor becomes social labor; finally, the difference between labor as the producer of use-values, and labor as the creator of exchange values.

In order to measure commodities by the labor-time contained in them, the different kinds of labor must be educed to uniform, homogeneous, simple labor, in short, to labor which is qualitatively the same, and, therefore, differs only in quantity.

This reduction appears to be an abstraction; but it is an abstraction which takes place daily in the social process of production. The conversion of all commodities into labor-time is no greater abstraction nor a less real process than the chemical reduction of all organic bodies to air. Labor, thus measured by time, does not appear in reality as the labor of different individuals, but on the contrary, the various working individuals rather appear as mere organs of labor; or, in so far as labor is represented by exchange values, it may be defined as human labor in general. This abstraction of human labor in general virtually exists in the average labor which the average individual of a given society can perform—a certain productive expenditure of human muscles, nerves, brain, etc. It is unskilled labor to which the average individual can be put and which he has to perform in one way or another. The character of this average labor varies in different countries and at different stages of civilization, but appears fixed in a particular society. Unskilled labor constitutes the bulk of all labor performed in capitalist society, as may be seen from all statistics.

It is obvious that if A spends six hours in the production of iron and six hours on linen, and B also produces iron during six hours and linen during another six hours, it is but a different application of the same labor time that would be expended, if A produced iron during twelve hours, while B worked twelve hours on linen. But how about skilled labor which rises above the level of average labor by its higher intensity, by its greater specific gravity? This kind of labor resolves itself into unskilled labor composing it; it is simple labor of a higher intensity, so that one day of skilled labor, e.g., may equal three days of unskilled labor. This is not the place to consider the laws regulating this reduction. It is clear, however, that such reduction does take place, for, as exchange value, the product of the most skilled labor is, when taken in a certain proportion, equivalent to the product of unskilled average labor, or equal to a definite quantity of that unskilled labor.

The determination of exchange-value by means of labor-time implies, further, the fact that an equal quantity of labor is embodied in any given commodity, e. g., a ton of iron, no matter whether it is the work of A or B, that is to say, various individuals expend an equal amount of labor-time for the production of the same use-value of a given quality and quantity. It is thus assumed that the labor-time contained in a commodity is the labor-time necessary for its production, i. e., it is the labor-time which is required for the production of another specimen of the same commodity under the same general conditions of production.

The conditions of labor, which creates exchange value, as shown by the analysis of the latter, are social conditions of labor or conditions of social labor. Social, not in the ordinary, but in a special sense. It is a specific form of the social process. The homogeneous simplicity of labor means first of all equality of the labors of various individuals, a reciprocal relation of equality of their labors determined by the actual reduction of all kinds of labor to uniform labor. The labor of every individual, as far as it is expressed in exchange value possesses this social character of equality and finds expression in exchange value only in so far as it is a relation of equality with the labor of all other individuals.

Furthermore, the labor-time of a single individual is directly expressed in exchange value as universal labor-time, and this universal character of individual labor is the manifestation of its social character. The labor-time represented by exchange value is the labor-time of an individual, but of an individual undistinguished from other individuals in so far as they perform the same labor; therefore, the time required by one individual for the production of a certain commodity is the necessary labor-time which any other individual would have to spend on the production of the same commodity. It is the labor-time of an individual, his labor-time, but only as labor-time common to all, regardless as to which particular individual's labor-time it is. As universal labor-time it is represented in a universal product, in a universal equivalent, in a definite quantity of materialized labor-time; the latter is indifferent as to the particular form of use-value in which it appears directly as the product of an individual, and may be turned at will into any other form of use-value to represent the product of any other individual. Only as such a universal quantity, is it a social quantity. In order to result in exchange value, the labor of an individual must be turned into a universal equivalent, i.e., the labor-time of an individual must be expressed as universal labor-time, or universal labor-time as that of an individual. It is the same as though different individuals had put together their labor-time and contributed the different quantities of labor-time at their common disposal in the form of different use-values. The labor-time of the individual is thus, in fact, the labor time which society requires for the production of a certain use-value, i.e., for the satisfaction of a certain want. But the question that interests us here is as to the specific form in which labor acquires a social character. Let us suppose that a certain quantity of labor-time of a spinner is realized in 100 lbs. of yarn. Suppose 100 yards of linen, the product of the weaver, represent the same quantity of labor-time. Inasmuch as these two products represent equal quantities of universal labor-time and, hence, are equivalents of every use-value which contains the same amount of labor-time, they are also equivalent to each other. Only because the labor-time of the spinner and that of the weaver take the form of universal labor-time and their products appear as universal equivalents, is the labor of the weaver realized for the spinner, and that of the spinner, for the weaver, the labor of one takes the place of the labor of the other, i.e., the social character of their labors is realized for both. Quite different it was under the patriarchal system of production, when spinner and weaver lived under the same roof, when the female members of the family did the spinning, and the male members did the weaving to supply the wants of their own family; then yarn and linen were social products, spinning and weaving were social labor within the limits of the family. But their social character did not manifest itself in the fact that yarn, as a universal equivalent, could be exchanged for linen as a universal equivalent, or that one was exchanged for another, as identical and equivalent expressions of the same universal labor-time. It was rather the family organization with its natural division of labor that impressed its peculiar social stamp on the product of labor. Or, let us take the services and payments in kind of the Middle Ages. It was the specific kind of labor performed by each individual in its natural form, the particular and not the universal aspect of labor, that constituted then the social tie. Or, let us finally take labor carried on in common in its primitive natural form, as we find it at the dawn of history of all civilized races.^[3] It is clear that in this case labor does not acquire its social character from the fact that the labor of the individual takes on the abstract form of universal labor or that his product assumes the form of a universal equivalent. The very nature of production under a communal system makes it impossible for the labor of the individual to be private labor and his product to be a private product; on the contrary, it makes individual labor appear as the direct function of a member of a social organism. On the contrary, labor, which is expressed in exchange value, at once appears as the labor of a separate individual. It becomes social labor only by taking on the form of its direct opposite, the form of abstract universal labor.

Labor, which creates exchange value, is, finally, characterized by the fact that even the social relations of men appear in the reversed form of a social relation of things. Only in so far as two use-values are in a mutual relation of exchange values does the labor of different persons possess the common property of being identical universal labor. Hence, if it be correct to say that exchange value is a relation between persons,^[4] it must be added that it is a relation disguised under a material cover. Just as a pound of iron and a pound of gold represent the same weight in spite of their different physical and chemical properties, so do two use-values, as commodities containing the same quantity of labor-time, represent the same exchange value. Exchange value thus appears as the natural social destination of use-values, a property which they possess by virtue of being things and in consequence of which they are exchanged for one another in definite proportions, or form equivalents, just as chemical elements combine in certain proportions, forming chemical equivalents. It is only through the habit of everyday life that we come to think it perfectly plain and commonplace, that a social relation of production should take on the form of a thing, so that the relation of persons in their work appears in the form of a mutual relation between things, and between things and persons.

In commodities this mystification is as yet very simple. It is more or less plain to everybody that a relation of commodities as exchange values is nothing but a mutual relation between persons in their productive activity. This semblance of simplicity disappears in higher productive relations. All the illusions in regard to the monetary system are due to the fact that money is not regarded as something representing a social relation of production, but as a product of nature endowed with certain properties. The modern economists who sneer at the illusions of the monetary system, betray the same illusion as soon as they have to deal with higher economic forms, as, e.g., capital. It breaks forth in their confession of naive surprise, when what they have just thought to have defined with great difficulty as a thing suddenly appears as a social relation and then reappears to tease them again as a thing, before they have barely managed to define it as a social relation.

Since the exchange value of commodities is, in fact, nothing but a mutual relation of the labors of individuals—labors which are similar and universal—nothing but a material expression of a specific social form of labor, it is a tautology to say that labor is the only source of exchange value and consequently of wealth, in so far as the latter consists of exchange values. Similarly, it is a tautology to say that matter in its natural state has no exchange value,^[5] because it does not contain any labor, and that exchange value as such does not contain matter. But when William Petty calls "labor the father and earth the mother of wealth," or when Bishop Berkeley asks "whether the four elements and man's labour therein, be not the true source of wealth,"^[6] or when the American, Thomas Cooper puts it popularly: "Take away from a piece of bread the labour bestowed by the baker on the flour, by the miller on the grain brought to him, by the farmer in ploughing, sowing, tending, gathering, threshing, cleaning and transporting the seed, and what will remain? A few grains of grass, growing wild in the woods, and unfit for any human purpose"^[7]—then all these views do not refer to abstract labor as the source of exchange value, but to concrete labor as the source of material wealth; in short, to labor in so far as it produces use-values. In assuming that a commodity has use-value we assume the special usefulness and distinct fitness of the labor absorbed by it, but that is all there is to the view of labor as useful labor from the standpoint of commodity. Considering bread as a use-value, we are interested in its properties as an article of food and not at all in the different kinds of labor of the farmer, miller, baker, etc. If by some invention nineteen-twentieths of this labor could be saved, the loaf of bread would still render the same service as before. If it fell ready-made from the sky it would not lose a single atom of its use-value. While labor which creates exchange value is realized in the equality of commodities as universal equivalents, labor as a productive activity with a useful purpose is realized in the endless variety of use-values created by it. While labor which creates exchange values is abstract, universal and homogeneous, labor which produces use-values is concrete and special and is made up of an endless variety of kinds of labor according to the way in which and the material to which it is applied.

It is wrong to speak of labor in so far as it is applied to the production of use-values as of the only source of wealth, namely, the material wealth produced by it. Being an activity intended to adapt materials to this or that purpose, it requires matter as a pre-requisite. In different use-values the proportion between labor and raw material varies greatly, but use-value always has a natural substratum. Labor, as an activity, directed to the adaptation of raw material in one form or another, is a natural condition of human existence, a condition of exchange of matter between man and nature, independent of all social forms. On the contrary, labor producing exchange value is a specifically social form of labor. Tailoring, e.g., in its material manifestation as a distinct productive activity, produces a coat, but not the exchange value of the coat. The latter is produced not by the labor of the tailor as such, but by abstract universal labor, and that belongs to a certain organization of society which has not been brought about by the tailor. Thus, the women under the ancient system of house industry made coats without producing the exchange value of the coats. Labor as a source of material wealth was known to Moses, the legislator, as well as to Adam Smith, the customs official.^[8]

Let us consider now some propositions which follow from the determination of exchange value by labor-time.

As a use-value, every commodity owes its usefulness to itself. Wheat, e.g., serves as an article of food. A machine saves labor to a certain extent. This function of a commodity by virtue of which it serves only as use-value, as an article of consumption, may be called its service, the service which it renders as use-value. But as an exchange value, a commodity is always regarded as a result; the question in this case is not as to the service which it renders, but as to the service^[9] which it has been rendered in its production. Thus, the exchange value of a machine is determined not by the quantity of labor-time which it saves, but by the quantity of labor-time which has been expended on its own production and which is, therefore, required to produce a new machine of the same kind.

If, therefore, the quantity of labor-time required for the production of commodities remained constant, their exchange value would remain the same. But the ease and the difficulty of production are constantly changing. If the productivity of labor increases, the same use-value will be produced in less time. If the productivity of labor declines, more time will be required for the production of the same use-value. Thus, the labor-time contained in a commodity or its exchange-value is a variable quantity, increasing or diminishing in an inverse ratio to the rise and fall of the productivity of labor. The productive power of labor which is applied in the manufacturing industry on a predetermined scale depends in the agricultural and extractive industries also on natural conditions which are beyond human control. The same labor will yield a greater or less output of various metals, according to their more or less close occurrence in the earth's crust. The same labor may be embodied in two bushels of wheat in a favorable season, and only in one in an unfavorable season. In this case, scarcity or abundance, as natural conditions, seem to determine the exchange value of commodities, because they determine the productivity of certain kinds of labor which depend upon natural conditions.

Unequal volumes of different use-value contain the same quantity of labor-time or the same exchange value. The smaller the volume of a use-value containing a certain quantity of labor-time as compared with other use-values, the greater its specific exchange-value. If we find that certain use-values, such as, e.g., gold, silver, copper and iron, or wheat, rye, barley and oats, form a series of specific exchange values which, though not retaining exactly the same numerical ratio, still retain through widely remote epochs of civilization the same rough proportion of relatively larger and smaller quantities, we may draw the conclusion that the progressive development of the productive powers of society has equally, or approximately so, affected the labor-time necessary for the production of the various commodities.

The exchange value of a commodity is not revealed in its own use-value. But, as the embodiment of universal social labor-time, the use-value of one commodity bears a certain ratio to the use-values of other commodities. Thus, the exchange value of one commodity is manifested in the use-values of other commodities. An equivalent is, in fact, the exchange value of one commodity expressed in the use-value of another commodity. If I say, e.g., that one yard of linen is worth two pounds of coffee, then the exchange value of linen is expressed in terms of the use-value of coffee, viz., in a certain quantity of that use-value. This ratio being given, I can express the value of any quantity of linen in coffee. It is clear that the exchange value of one commodity, say linen, is not confined to the ratio of any one commodity, e.g. coffee, as its equivalent. The quantity of universal labor-time which is represented in one yard of linen is at the same time embodied in an endless variety of volumes of use-values of all other commodities. The use-value of any other commodity forms the equivalent of one yard of linen, in the proportion in which it represents the same quantity of labor-time as that yard of linen. The exchange value of this single commodity is, therefore, fully expressed in the endless number of equations in which the use-values of all other commodities form its equivalents. Not until the exchange value of a commodity is expressed in the sum total of these equations or of the different proportions in which one commodity is exchanged for every other commodity, does it find an exhaustive expression as a universal equivalent; e. g., the series of equations:

1 yard of linen = ½ lb. of tea,
1 yard of linen = 2 lbs. of coffee,
1 yard of linen = 8 lbs. of bread,
1 yard of linen = 6 yards of calico,

may be represented as follows:

1 yard of linen = ⅛ lb. of tea + ½ lb. of coffee + 2 lbs. of bread + 1½ yards of calico.

Therefore, if we had before us the sum total of the equations, in which the value of a yard of linen is exhaustively expressed, we could represent its exchange value in the form of a series. As a matter of fact, the series is an endless one, since the circle of commodities, constantly expanding, can never be closed up. But while the exchange value of one commodity is thus measured by the use-values of all other commodities, the exchange values of all the other commodities are, in their turn, measured by the use-value of this one commodity.^[10]

If the exchange value of one yard of linen is expressed in ½ lb. of tea, or 2 lbs. of coffee, or 6 yards of calico, or 8 lbs. of bread, etc., it follows that coffee, tea, calico, bread, etc., are equal to each other if taken in the same proportion in which they are equal to the third article, linen; consequently, linen serves as the common measure of their exchange values. Every commodity, as the embodiment of universal labor-time, i.e., as a certain quantity of universal labor-time, expresses in turn its exchange value in definite quantities of the use-values of all other commodities, and the exchange values of all the other commodities are, on the other hand, measured by the use-value of this one exclusive commodity. But as an exchange value, every commodity is at the same time the one exclusive commodity that serves as a common measure of the exchange values of all other commodities; and, on the other hand, it is but one of the many commodities in the entire series of which every commodity expresses directly its exchange value.

The value of a commodity is not affected by the number of commodities of other kinds. But the length of the series of equations in which its exchange value is realized does depend upon the greater or less variety of other commodities. The series of equations in which the value of coffee, e.g., is represented, indicates the extent to which it is exchangeable, the limits within which it performs the function of an exchange value. The exchange value of a commodity as an embodiment of universal social labor-time is expressed in its equivalence to an endless variety of use-values.

We have seen that the exchange value of a commodity varies with the quantity of labor-time directly contained in it. Its realized exchange value, i.e., its exchange value expressed in the use-values of other commodities, must also depend on the proportion in which the labor-time spent on the production of all other commodities is changing. If, e.g., the labor-time required for the production of a bushel of wheat remained constant, while that required for the production of all other commodities doubled, the exchange value of a bushel of wheat expressed in its equivalents would become half as large as before. The result would be practically the same as if the amount of time necessary for the production of one bushel of wheat had been reduced by one-half, and that required for all other commodities had remained unchanged. The value of commodities is determined by the proportion in which they can be produced in the same labor-time. In order to see what possible changes this proportion may undergo, let us take two commodities, A and B.

First case. Let the labor-time required for the production of commodity B remain unchanged. In that case the exchange value of A, expressed in terms of B, rises and falls with the rise and fall of the labor-time required for the production of A.

Second case. Let the labor-time required for the production of commodity A remain constant. Then the exchange value of A, expressed in terms of B, falls and rises in an inverse ratio with the rise and fall of the labor-time required for the production of B.

Third case. Let the labor-time required for the production of commodities A and B rise and fall in equal proportion. Then the expression of equivalence of A and B remains unchanged. If through some cause the productivity of all kinds of labor were to decline uniformly, so that the production of all commodities would require an equally increased quantity of labor-time, then the value of all commodities would rise, though the expression of their exchange values would remain unchanged, and the actual wealth of society would decrease, because it would have to expend more labor-time on the production of the same stock of use-values.

Fourth case. Let the labor-time required for the production of A and B rise and fall, but not uniformly; that is to say, the labor-time required for the production of A may rise, while that required for B may fall, or vice versa. All of which can be reduced to the simple case where the labor-time required for the production of one commodity remains unchanged, while that required for the other rises or falls.

The exchange value of any commodity is expressed in the use-value of any other commodity, be it in integral units or in fractions thereof. As exchange value, every commodity is capable of subdivision, like the labor-time embodied in it. The equivalence of commodities is independent of their physical divisibility as use-values, just as the sum of the exchange values of commodities is indifferent to the change of form which use-values have to undergo when converted into a single new commodity.

So far we have considered commodities from a two-fold point of view, as use-values and exchange values alternately. But a commodity as such is a direct combination of use-value and exchange value; and it is a commodity only in relation to other commodities. The actual relation between commodities constitutes the process of their exchange. It is a social process participated in by individuals independent of each other but the part they take in it is that of owners of commodities only. Their mutual relations are those of their commodities, and thus they really appear as conscious factors of the process of exchange.

A commodity is a use-value, wheat, linen, a diamond, a machine, etc., but as a commodity it is, at the same time, not a use-value. If it were a use-value for its owner, i.e., a direct means for the satisfaction of his own wants, then it would not be a commodity. To him it is rather a non-use-value; it is merely the material depository of exchange-value, or simply a means of exchange; as an active bearer of exchange value, use-value becomes a means of exchange. To the owner it is a use-value only in so far as it constitutes exchange value.^[11] It has yet to become a use-value, viz., to others. Not being a use-value to its owner, it is a use-value to the owners of other commodities. If it is not, then the labor expended on it was useless labor, and the result of that labor is not a commodity. On the other hand, the commodity must become a use-value to the owner himself, because his means of existence lie outside of it in the use-values of commodities not belonging to him. In order to become a use-value, the commodity must meet the particular want of which it is the means of satisfaction. Use-values of commodities are thus realized use-values through a universal change of hands by passing from the hands in which they were held as means of exchange into those where they become use values. Only through this universal transfer of commodities does the labor contained in them become useful labor. In this process of their mutual interchange as use-values, commodities do not acquire any new economic forms. On the contrary, even the form which marked them as commodities disappears. Bread, e.g., by changing hands from the baker to the consumer does not change its identity as bread. On the contrary, it is only the consumer that begins to regard it as a use-value, as a certain article of food, while in the hands of the baker it was only the bearer of an economic relation, a palpable yet transcendental object. Thus, the only change of form that commodities undergo while becoming use-values, consists in the fact that they cease to be, as a matter of form, non-use-values to their owners, and use-values to those who do not own them. To become use-values commodities must be universally alienated; they must enter the sphere of exchange; but they are subject to exchange in their capacity of exchange values. Hence, in order to be realized as use-values, they must be realized as exchange values.

While the single commodity appeared from the standpoint of use-value as something independent, as exchange value it was regarded first of all in its relation to all other commodities. This relation was, however, merely theoretical, imaginary. It becomes real only in the process of exchange. On the other hand, a commodity is an exchange value in so far as a certain quantity of labor-time has been expended on it, and it consequently represents materialized labor-time. But of itself it is only materialized individual labor-time of a particular kind, and not universal labor-time. Therefore, it is not directly an exchange value, but must first become such. First of all, it is an embodiment of universal labor-time only in so far as it represents labor-time applied to a definite useful purpose, i.e., when it represents a use-value. This was the material condition under which alone labor-time contained in commodities was regarded as universal social labor. Thus, while a commodity can become a use-value only after it has been realized as an exchange value, it can, on the other hand, be realized as an exchange value only if it proves to be a use-value in the process of alienation.

A commodity can be alienated as a use-value only to one whom it serves as a use-value, i.e., as a means of satisfying a certain want. On the other hand, it is exchanged for another commodity, or, if we put ourselves on the side of the owner of the other commodity, it, too, can be alienated, i.e., be realized, only if brought in contact with that particular want of which it is the object. In the universal exchange of commodities as use-values the basis for their mutual relations is in their material difference as distinct objects which satisfy different wants by their specific properties. But as mere use-values, they are indifferent to each other, and are incommensurable. As use-values they can be exchanged only with reference to certain wants. They are exchangeable only as equivalents, and they are equivalents only as equal quantities of materialized labor-time, so that all regard to their natural properties as use-values and therefore to the relation of the commodities to particular wants is eliminated. On the contrary, a commodity is realized as an exchange value by replacing as an equivalent any definite quantity of any other commodity, regardless of whether it is a use-value for the owner of the other commodity or not. But to the owner of the other commodity it is a commodity only in so far as it is a use-value to him, and it becomes an exchange value to its owner only in so far as it is a commodity to that other person. Thus, the same relation appears as a proportion between commodities as magnitudes of the same denomination, but differing qualitatively; or, as an expression of their equivalence as embodiments of universal labor-time, and, at the same time, as a relation of qualitatively different objects, of use-values intended for the satisfaction of particular wants, in short, a relation in which they are distinguished as actual use-values. But this equivalence and non-equivalence mutually exclude each other. Thus we have before us not only a vicious circle of problems in which the solution of one implies that of the other, but a combination of contradicting claims, since the fulfillment of one is directly connected with that of its opposite.

The process of exchange of commodities must result both in the unfolding and in the solution of these contradictions, neither of which, however, can appear in that process in this simple way. We have only observed how commodities are mutually related to each other as use-values, i.e., how they appear as use-values within the process of exchange. The exchange-value, on the contrary, as we have considered it so far, appeared as an abstraction formed in our own minds, or—if we may so put it—in the mind of the individual owner of commodities, which lie stored in his warehouse as use-values, and weigh upon his conscience as exchange values. In the process of exchange, however, commodities must be not only use-values, but also exchange values to one another, and that should appear as their own mutual relation. The difficulty which we first encountered was that a commodity must be first alienated and delivered to its purchasers as a use-value, in order to appear as an exchange value, as materialized labor, while on the other hand its alienation as use-value implies its being an exchange value. But let us assume that this difficulty has been overcome. Suppose the commodity has divested itself of its use-value, and has thereby fulfilled the material condition of being socially useful labor, instead of a particular labor of an individual. In that case, the commodity must become an exchange value, a universal equivalent, an embodiment of universal labor-time for all other commodities in the process of exchange, and thus, leaving behind its limited role of a particular use-value, acquire the ability to be directly represented in all use-values as its equivalents. But every commodity is just such a commodity, appearing as a direct incarnation of universal labor-time by divesting itself of its particular use-value. On the other hand, however, commodities confront each other in the process of exchange as particular commodities, as the labor of private individuals embodied in particular use-values. Universal labor-time is itself an abstraction, which, as such, does not exist for commodities.

Let us examine the series of equations in which the exchange value of a commodity finds its concrete expression, e.g.:

1 yard of linen = 2 lbs. of coffee.
1 yard of linen = ½ lb. of tea.
1 yard of linen = 8 lbs. of bread, etc.

These equations simply signify that equal quantities of universal social labor-time are embodied in one yard of linen, two pounds of coffee, half a pound of tea, etc. But as a matter of fact the individual labors which are represented in these particular use-values, become universal, and, in that form, also social labor, only when they are actually exchanged for one another in proportion to the labor-time contained in them. Social labor-time exists in these commodities in a latent state, »o to say, and is first revealed in the process of exchange. We do not proceed from the labor of individuals as social labor, but, on the contrary, from special labor of private individuals which appears as universal social labor only by divesting itself of its original character in the process of exchange. Universal social labor is, therefore, no ready-made assumption, but a growing result. And thus we are confronted with a new difficulty, that on the one hand commodities must enter the process of exchange as embodiments of universal labor-time, while, on the other hand, this embodiment of the labor-time of individuals as social labor-time is itself a result of the process of exchange.

Every commodity becomes an exchange value by divesting itself of its use-value, or of its original nature. The commodity must therefore assume a double capacity in the process of exchange. But that second capacity of exchange value can appear only in the shape of another commodity, because only commodities confront each other in the process of exchange. How is a particular commodity to represent directly materialized universal labor-time, or—to put it differently—how is individual labor-time, which is embodied in a particular commodity to be made directly universal in character? The concrete expression of the exchange value of a commodity, i.e., of every commodity as a universal equivalent, is represented in an endless series of equations, such as:

1 yard of linen = 2 lbs. of coffee.
1 yard of linen = ½ lb. of tea.
1 yard of linen = 8 lbs. of bread.
1 yard of linen = 6 yards of calico.
1 yard of linen = etc.

The above form is theoretical in so far as commodities are only thought of as definite quantities of materialized universal labor-time. But the capacity of a particular commodity to serve as a universal equivalent from a mere abstraction becomes a social result of the process of exchange by a simple inversion of the above series of equations, viz.:

2 lbs. of coffee = 1 yard of linen.
½ lb. of tea = 1 yard of linen.
8 lbs. of bread = 1 yard of linen.
6 yards of calico = 1 yard of linen.

While coffee, tea, bread, calico, in short, all commodities express in linen the labor-time contained in them, the exchange value of linen, on the other hand, unfolds itself in all other commodities as its equivalents, and the labor-time embodied in it becomes direct universal labor-time, which is equally expressed in different volumes of all other commodities. Linen thus becomes the universal equivalent through the universal action of all other commodities upon it. As exchange value, every commodity served as a measure of value of all other commodities. Now, on the contrary, since all commodities measure their exchange values by means of a particular commodity, this excluded commodity becomes the special expression of exchange value, as a universal equivalent. At the same time, the endless series of equations in which the exchange value of every commodity was expressed, is reduced to one single equation consisting of two members. The equation 2 lbs. of coffee = 1 yard of linen now fully expresses the exchange value of coffee, for in this expression a yard of linen appears as the direct equivalent of a definite quantity of every other commodity. Thus, within the sphere of exchange all commodities are or appear to each other as exchange values in the form of linen. The proposition that commodities, as exchange values, are to each other as different quantities of materialized universal labor-time, may now be worded to the effect that commodities, as exchange values, represent nothing but different quantities of the same article, linen. Universal labor-time thus assumes the aspect of a distinct thing, as a commodity existing along with and outside of all other commodities. At the same time the equation 2 lbs. of coffee = 1 yard of linen, in which one commodity appears as the exchange value of another, is yet to be realized. Only by being alienated as use value—which depends upon whether it proves to be in the process of exchange the object of a certain want—does the commodity actually transform its existence as coffee into the existence as linen and thus takes on the form of a universal equivalent and becomes, indeed, an exchange value for all other commodities. Conversely, since all commodities are turned into linen by being alienated as use-values, linen becomes the converted form of all other commodities, and only as a result of this transformation of all other commodities into it, it becomes the direct embodiment of universal labor-time, i. e., the product of universal exchange and of the elimination of individual labor. If commodities thus assume a twofold character in order to appear as exchange values to each other, the commodity which has been singled out as the universal equivalent becomes, on the other hand, a use-value in two ways. Besides its special use-value as a particular commodity, it assumes a universal use-value. This latter kind of use-value constitutes its special feature, emanating as it does, from the specific part which the commodity plays as a result of the universal relation which all other commodities bear toward it in the process of exchange. The use-value of every commodity as an object of a particular want, has a different value in different hands, e. g., it has a different value in the hands of the one who disposes of it, than in those of the one who acquires it. But the commodity singled out as the universal equivalent, is now an object of a universal want arising from the very process of exchange, and it has the same use-value to everybody, viz., that of serving as the depository of exchange value, of being a universal means of exchange. Thus we find in one commodity the solution of the contradiction which is inherent in commodity as such, namely, of being at one and the same time a particular use-value and a universal equivalent, and, therefore, a use-value for everybody or universal use-value. Thus, while all other commodities express their exchange value in the form of an ideal equation with the excluded commodity—an equation yet to be realized—the use-value of the special commodity, although real, appears in the process itself as a mere form which is yet to be realized through transformation into actual use-values. Originally the commodity appeared simply as commodity, as universal labor-time embodied in a particular use-value. In the process of exchange, all commodities are related to the one excluded commodiity as to a simple commodity, one which appears as the embodiment of universal labor-time in a particular use-value. Thus, particular commodities become related to one particular commodity as a universal commodity.^[12] In that manner the mutual relations of possessors of commodities based on the fact that they regard their labor as universal social labor, takes on the aspect of their relations to commodities as exchange values; and the mutual relation of commodities as exchange values appears in the process of exchange as the relation of all of them to one particular commodity as to a specially adopted means of expression of their exchange value; again, from the point of view of that particular commodity the above relation appears as its specific relation to all other commodities, and, therefore, as its own definite, spontaneous, social character. The particular commodity which thus appears as the specially adopted expression of the exchange value of all other commodities, or the exchange value of commodities as a particular exclusive commodity, is money. Money is a crystallization of the exchange value of commodities which they themselves form in the process of exchange. Thus, while commodities become use-values to each other in the process of exchange by casting off all definite forms and entering into mutual relations in their direct material shape, they must assume a new form, viz., proceed to the formation of money in order to appear as exchange values to each other. Money is not a symbol, no more than the commodity aspect of a use-value is a symbol. That a social relation of production takes the form of an object existing outside of individuals, and that the definite relations into which individuals enter in the process of production carried on in society, assume the form of specific properties of a thing, is a perversion and by no means imaginary, but prosaically real, mystification marking all social forms of labor which creates exchange value. In money this mystification appears only more strikingly than in commodities.

The necessary physical properties of the particular commodity in which the money form of all other commodities is to be crystallized—as far as they are directly determined by the nature of exchange value—are: divisibility to any desired extent, homogeneity of its parts, and uniformity of all the specimens of the commodity. As an embodiment of universal labor-time it must be homogeneous in its structure and capable of representing only quantitative differences. Another necessary property is durability of its use-value, as it must last through the process of exchange. The precious metals excel in these qualities. Money not being a result of a scheme or agreement, but having been produced instinctively in the process of exchange, a great variety of more or less unsuited commodities had successively performed its functions. At a certain stage of development of the process of exchange, the necessity arises for a polar distribution of the functions of exchange value and use-value among commodities, so that one commodity e. g. should act as a medium of exchange, while another is being alienated as a use-value. This necessity brings it about that one or even several commodities possessing the most generally accepted use-value, begin, incidentally at first, to play the part of money. Even if not direct means of satisfying existing wants, their being the most considerable material constituent part of wealth, insures to them a more general character than to the other use-values.

Direct barter, the original natural form of exchange, represents rather the beginning of the transformation of use-values into commodities, than that of commodities into money. Exchange value has as yet no form of its own, but is still directly bound up with use-value. This is manifested in two ways. Production, in its entire organization, aims at the creation of use-values and not of exchange values, and it is only when their supply exceeds the measure of consumption that use-values cease to be use-values, and become means of exchange, i. e., commodities. At the same time, they become commodities only within the limits of being direct use-values distributed at opposite poles, so that the commodities to be exchanged by their possessors must be use-values to both,—each commodity to its non-possessor. As a matter of fact, the exchange of commodities originates not within the primitive communities,^[13] but where they end, on their borders at the few points, where they come in contact with other communities. That is where barter begins, and from here it strikes back into the interior of the community, decomposing it. The various use-values which first become commodities in the barter between different communities, such as slaves, cattle, metals, constitute therefore in most cases the first money within those communities themselves. We have seen how the exchange value of a commodity is manifested the more perfectly as exchange value, the longer the series of its equivalents or the greater the sphere of exchange of that commodity. With the gradual expansion of barter, the increase in the number of exchanges, and the growing diversification of the commodities drawn into exchange, commodities develop into exchange values, which leads to the formation of money and has a destructive effect on direct barter. The economists are in the habit of ascribing the origin of money to the difficulties which are encountered in the way of extensive barter, but they forget that these difficulties arise from the development of exchange value and from the fact that social labor becomes universal labor. E. g., commodities as use-values can not be subdivided at will, a property which they should possess as exchange values. Or, a commodity belonging to A may be a use-value to B, while the commodity belonging to B may not have any use-value to A. Or the owners of the commodities may need each other's indivisible goods in unequal proportions. In other words, under the pretence of analyzing simple barter, economists bring out certain aspects of the contradiction which is inherent in commodities as entities simultaneously embodying both use-value and exchange value. On the other hand, they consistently cling to the idea that barter is the natural form of exchange, which suffers only from certain technical difficulties, for which money is a cunningly devised expedient. Arguing from this perfectly superficial view, an ingenious English economist has rightly maintained that money is merely a material instrument like a ship or a steam-engine, but not an expression of a social relation in the field of production and consequently not an economic category; and that it is, therefore, wrong to treat the subject in political economy, which really has nothing in common with technology.^[14]

The world of commodities implies the existence of a highly developed division of labor; this division is manifested directly in the great variety of use-values, which confront each other as particular commodities and which embody as many different kinds of labor. The division of labor embracing all the particular kinds of productive occupations, is the complete expression of social labor in its material aspect viewed as labor creating use-values. But from the standpoint of commodities and within the process of exchange, it exists only in its results, in the variety of the commodities themselves.

The exchange of commodities constitutes the social metabolic process, i. e. the process in which the exchange of the special products of private individuals is the result of certain social relations of production into which the individuals enter in this interchange of matter. As they develop, the mutual relations of commodities crystalize into various aspects of the universal equivalent and thus the process of exchange becomes at the same time the process of the formation of money. The whole of this process which takes the form of a succession of processes, constitutes circulation.

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1. Aristotle, d. Rep. L. l, c. 9 (edit. I Bekkeri Oxonii, 1837):

   ἑκάστου γὰρ κτήματος διττὴ ἡ χρῆσίς ἐστιν…ἡ μὲν οἰκεία, ἡ δ᾽ οὐκ οἰκεία τοῦ πράγματος, οἷον ὑποδήματος ἥ τε ὑπόδεσις καὶ ἡ μεταβλητική. Άμφότεραι γὰρ ὑποδήματος χρήσεις: καὶ γὰρ ὁ ἀλλαττόμενος τῷ δεομένῳ ὑποδήματος ἀντὶ νομίσματος ἢ τροφῆς χρῆται τῷ ὑποδήματι ᾗ ὑπόδημα, ἀλλ᾽ οὐ τὴν οἰκείαν χρῆσιν: οὐ γὰρ ἀλλαγῆς ἕνεκεν γέγονεν. Τὸν αὐτὸν δὲ τρόπον ἔχει καὶ περὶ τῶν ἄλλων κτημάτων."

   ("Of everything which we possess there are two uses:—one is the proper, and the other the improper or secondary use of it. For example, a shoe is used for wear, and is used for exchange; both are uses of the shoe. He who gives a shoe in exchange for money or food to him who wants one, does indeed use the shoe as a shoe, but this is not its proper or primary purpose, for a shoe is not made to be an object of barter. The same may be said of all possessions." The Politics of Aristotle, translated into English by {{subst:al|Benjamin Jowett|B. Jowett}}, Oxford, 1885, v. I., p. 15.)
2. That is the reason why German compilers are so fond of dwelling on use-value, calling it a "good." See e. g. L. Stein, "System der Staatswissenschaften," v. I., chapter on "goods" (Gütter). For intelligent information on "goods" one must turn to treatises on commodities.
3. A ridiculous presumption has gained currency of late to the effect that common property in its primitive form is specifically a Slavonian, or even exclusively Russian form. It is the primitive form which we can prove to have existed among Romans, Teutons, and Celts; and of which numerous examples are still to be found in India, though in a partly ruined state. A closer study of the Asiatic, especially of Indian forms of communal ownership would show how from the different forms of primitive communism different forms of its dissolution have been developed. Thus e.g. the various original types of Roman and Teutonic private property can be traced back to various forms of Indian communism.
4. "La Ricchezza è una ragione tra due persone." ("Value is a relation between two persons") Galiani, "Della Moneta," p. 220 in vol. II. of Custodi's collection of "Scrittori classici Italiani di Eeonomia Politica. Parte Moderna," Milano, 1803.
5. "In its natural state, matter . . . is always destitute of value." McCulloch, "A Discourse on the Rise, Progress, Peculiar Objects, and Importance of Political Economy," 2nd edition, Edinburgh, 1825, p. 48. It is evident how high even a McCulloch stands above the fetishism of German "thinkers," who declare "matter" and half a dozen other foreign things to be elements of value. Cf. e. g. L. Stein, l. c. v. I, p. 110.
6. Berkeley, The Querist, London, 1750.
7. Thomas Cooper, Lectures on the Elements of Political Economy, London, 1831, p. 99.
8. F. List could never grasp the difference between, labor as a source of use-value and labor as the creator of certain social form of wealth or exchange value, because comprehension was altogether foreign to his practical mind; he, therefore, saw in the modern English economists mere plagiarists of Moses, the Egyptian.
9. It can be readily understood what kind of "service" is rendered by the category "service" to economists of the type of J. B. Say and F. Bastiat, whose pondering sagacity, as Malthus has justly remarked, always abstracts from the specifically definite forms of economic relations.
10. “Egli é proprio ancora delle misure d'aver si fatta relazione colle cose misurate, che in certo modo la misurata divien misura della misurante.” Montanari, Delia Moneta, p. 48 in v. III. of Custodi’s “Scrittori classici Italiani di Economia Politica. Parte Antica.” (“It is the property of measure to be in such a relation to the things measured, that in a certain way the thing measured becomes the measure of the measuring thing.”)
11. It is in that sense that Aristotle (see the passage quoted at the beginning of this chapter) conceives exchange value.
12. This expression is used by Genovesi.
13. Aristotle makes the same remark with reference to the private family as the primitive community. But the primitive form of family is the tribal family, from the historical dissolution of which the private family develops. "ἐν μὲν οὖν τῇ πρώτῃ κοινωνίᾳ (τοῦτο δ᾽ ἐστὶν οἰκία) φανερὸν ὅτι οὐδὲν ἔστιν ἔργον αὐτῆς (namely τὰς ἀλλαγὰς) "And in the first community, which is the family, this art is obviously of no use." Jowett's transl. l. c.)
14. "Money is, in fact, only the instrument for carrying on buying and selling (but, if you please, what do you understand by buying and selling?) and the consideration of it no more forms a part of the science of political economy, than the consideration of ships, or steam engines, or of any other instrument employed to facilitate the production and distribution of wealth." Th. Hodgskin, Popular Political Economy, etc. London, 1827, p. 178, 179.