#simple commodity production

[yngwrthr]

In order to understand the “full story” of the development of capitalism, we must turn to a consideration of the “value form” of products, which is identical with the “commodity form” of property and which in the same sense contribute to “commodity fetishism”, and results from the historical/ anthropological conditions of simple commodity production and exchange. Marx’s economic construction of “value form” is necessary in order to account for the “social form” of the products of labor in commodity societies that organize need and want however nominally through exchange and exhibit in embryo the system of private property and alienation. The commodity form of property and the value form of products represent only the very beginning foundations or initial conditions for organizing society around accumulation of ever increasing exchange value (capital). That is, commodity production and exchange based on the simple form of value prepare the way for capitalist civilization.

The course of the development of commodity production culminated in the emergence of capitalism, which is “mediated” through relations of production between capital and wage labor. Capitalist society begins in part with the generalization of commodity exchange and the further development of the form of value into the era of capitalist vs. wage worker. The value form is basic to these relations, imposed through the generalization of “non-restricted” exchange, and necessary for emergence of capitalism per se; as well as its reproduction.

[yngwrthr]

Exchange is — the — key to Marx’s concept of value. To reiterate: “Value” only exists when there is an exchange of what labor produces. And, historically, the amounts exchanged have revolved around the embedded amount of labor. While capitalism is the “value economy” — one “primarily” based on commodity exchange and exchange value — this is not to say that value and an exchange of what labor produces did not exist at the margins or even more significantly “for 1,000’s of years”, or that Engels was “wrong” re the existence of value outside capitalism.

Most fundamentally, Marx explains much better what I’m trying to get at on “value before capitalism.” And per Marx’s suggestion, pre- capitalist commodity exchange, based on embedded labor time, was at the margins of society. Re capitalist society, however, all products that have use value are exchanged based on embedded labor time. And, of course, requires a “modified” understanding of the value of a commodity (which brings us to production price). Marx not only foretold virtually everything significant in contemporary, bourgeois economics— such as the dynamics of supply and demand on price that he is accused of ignoring— but did so more methodically and went far beyond…

[yngwrthr]

The differences between simple and capitalist commodity production are schematically summarized in Rosdolsky; “The Law of Appropriation in Simple Commodity Economy”, ch. 10 in Vol I of the Pluto Press paperback copy of “Making Capital”… Absolutely amazed by how rich his understanding is of so much of Marx’s work. Although, to an extent, I feel he misses the “historical” aspect of the distinction between basic commodity production as it first emerged.. and commodity production as it was — historically — modified/ generalized by capitalism. Again, please take all of this with a grain of salt… I may be totally missing the mark… the material is overwhelming:

Guided by Rosdolsky’s schema of Marx’s theory of value, simple commodity production is where production is not for use but for exchange… and not “just” for exchange (e.g. individual exchange, barter) but for exchange value. This situation, where the commodity is voluntarily and reciprocally exchanged by its owner for its equivalent exchange value, is what Marx calls the “very Eden of the innate rights of man”; perfect freedom and equality realized within the “form” of value. (And labor time necessary for production provides an answer to the question of “how much” is the value of a commodity; the “magnitude” of value.) Simple commodity economy, speaking of commodities and labor represented strictly by the form of value, contrasts with the more developed relations of capitalism.. where production and exchange of products is not just for exchange value, a simple substitute of equal value, or value form, but for increased value; i.e. commodities and labor are produced/ represented by — capital!..

Simple exchange, which Marx represents by C-M-C — exchange value exchanged with an eye toward its equivalent in value form or money form — is necessary in order to develop capital — M-C-M(+) — exchange value exchanged with an eye toward increasing exchange value. Significancntly, M(+) is not simply replacing an equivalent in commodity or money form but represents capital, a money form which has a greater value than the original outlay of “M”. “At this point”, we’re moving into the development of capital from money and commodity values, along with further development of social division of labor that makes possible transformation of the level of simple commodity production into the higher level of capitalism.

With the beginnings of capitalist society in history, the quest for simply replacing exchange values is transformed into a process of accumulating and increasing exchange value. Simple commodity production is based on an exchange of equivalents — replacement of value form; as opposed to capitalism, primarily tending toward an increase in value as a result of buying, consuming, exploiting wage labor.. And, of course, capitalist production takes place under the guise of the more basic relations, equality of value form, reciprocity of simple exchangers, freedom of commodity owners etc…

*** I have already indicated that this is a — very — rough outline of the path humanity has traversed to arrive at the present — historical — situation. Hopefully things are clear enough…

[yngwrthr]

Therefore, however much the capitalist mode of appropriation may seem to fly in the face of the original laws of commodity production, it nevertheless arises, not from a violation of these laws but, on the contrary, from their application. Let us make this clear once more by briefly reviewing the consecutive phases of motion whose culminating point is capitalist accumulation. We saw, in the first place, that the original transformation of a sum of values into capital was achieved in complete accordance with the laws of exchange. One party to the contract sells his labor power, the other buys it. The former receives the value of his commodity, whose use value — labor — is thereby alienated to the buyer. Means of production which already belong to the latter are then transformed by him, with the aid of labor equally belonging to him, into a new product which is likewise lawfully his. The value of this product includes: first, the value of the means of production which have been used up. Useful labor cannot consume these means of production without transferring their value to the new product… The value of the new product includes, further, the equivalent of the value of the labor power together with a surplus value. This is so because the value of the labor power — sold for a definite length of time, say a day, a week, etc. — is less than the value created by its use during that time. But the worker has received payment for the exchange value of his labor power and by so doing has alienated its use value — this being the case in every purchase and sale. The fact that his particular commodity, labor power, possesses the peculiar use value of supplying labor, and therefore of creating value, cannot affect the general law of commodity production. If, therefore, the amount of value advanced in wages is not merely found again in the product, but augmented by surplus value, this is not because the seller has been defrauded, for he has really received the value of his commodity; it is due solely to the fact that this commodity has been used up by the buyer. The law of exchange requires equality only between exchange values of the commodities given in exchange for one another. From the very outset, indeed, it presupposes a difference between their use values and it has nothing whatever to do with their consumption, which begins only after the contract has been concluded and executed. Thus the original transformation of money into capital takes place in the most exact accordance with the economic laws of commodity production and with the rights of property derived from them. Nevertheless, the result is: 1. that the product belongs to the capitalist and not to the worker; 2.that the value of this product includes, apart from the value of the capital advanced, a surplus value which costs the worker labor but the capitalist nothing, and which none the less becomes the legitimate property of the capitalist; 3. that the worker has retained his labor power and can sell it anew if he finds another buyer. […] Thus the law [of value] is not broken; on the contrary, it gains the opportunity to operate continuously.

Karl Marx, “The Transformation of Surplus Value into Capital”, in Capital, Vol. I, trans. by Ben Fowkes, New York: Penguin, 1990, pp. 730-732.

[yngwrthr]

“Where I am now” in terms of trying to explain Rosdolsky’s interpretation of Marx on “the transition [from value and money] to capital” (chapter 11 in “Making Capital”) — if that is at all possible and the attempt further suggesting that I’m wrong or at least too simplistic — is that, in order to develop capital from money, “selling in order to buy” (C-M-C), must pass over to “buying in order to sell” (M-C-M). “Only under these conditions i.e. if the circuit C-M-C turns into the circuit M-C-M, can money become self-preserving and self-augmenting value, become capital” (p. 188).

In the simple commodity circuit “C-M-C”, a commodity owner begins by exchanging a commodity for its equal in money. Next, our commodity owner exchanges this money for an equivalent value in new commodities. Thinking qualitatively, i.e. in terms of use value, the owner exchanges a commodity which is not a use value for him for another commodity which is useful for him, via the universal equivalent — money. Considered quantitatively, there is no increase or expansion of value and the exchanges values of each commodity are equal.. which is also equivalent to the value of the money involved. We notice commodities are exchanged for their equivalent in money form. And money is exchanged for its equivalent commodity form of value. This means that simple commodity exchange is a process of exchanging equivalent exchange values with a view on consumption, not increasing exchange value.

“One commodity is ultimately exchanged for another commodity… and the circulation itself only served, on the one hand to allow use values to change hands according to need, and on the other to allow them to change hands to the extent to which labor time is contained in them… and to the extent to which they are factors of equal weight in general social labor time”. (p. 185). But “Value does not emerge from value; rather, value is thrown into circulation in the form of a commodity… The same magnitude of value which previously existed in the form of the commodity, now exists in the form of money” (pp. 186-187).

Already, we see how simple commodity exchange — selling in order to buy — is determined by the use value of a commodity. At this stage of economic development, exchange value has not yet thrown use value into the dustbin. However, dominance of exchange value.. “where exchange value as such becomes further developed” (p. 186).. “the form wherein exchange value is the point of departure” (p. 184)… is the basis of the capitalist mode of production. “Capital must be understood as self-augmenting value… And for this purpose it is necessary to proceed… from ‘exchange value’” (p. 185). But capital is not simply “self-reproducing exchange value” (p. 184). That is, cannot be accumulated unless commodities are exchanged for an increase in money.

In the capital exchange circuit, “M-C-M”, value only becomes capital and the owner of money a capitalist because the commodities are produced with a view towards exchanging them for a greater exchange value than the original exchange value of “M”. In this circuit, in its complete form, the function of labor power is not only useful but becomes essential. And thus we arrive at the core of capitalist society — commodity exchange of labor power for wages.

[yngwrthr]

As I read more, my analysis appears to be consistent with chapters 11-14 of Rubin’s Essays on Marx. Though, I — still — have not fully digested all of this — despite having read and re-read these chapters... I began today with ch. 14 on “Abstract Labor”, which refers back to ch. 11 on “Equality of Commodities an Equality of Labor”. Next comes ch. 12 on “Content and Form of Labor”; followed by ch. 13 on “Social Labor”. It seems that Rubin’s interpretation of Marx is that “socially equalized labor” is an appropriate way to characterize pre-capitalist social forms — but, as Rubin points out, “abstract labor” does not dominate until capitalism. Socialized labor occurs not only pre-capitalism but also under communist relations. 

Maybe it is beyond my pay scale to give an accurate analysis of the distinction Rubin makes — and attributes to Marx — between socially equalized and abstract labor. Rubin, though, seems to me to be correct and in line with Marx in his analysis. Another slow, careful read of ch. 11-14 would probably be helpful in sorting this out. But “at this point”, I don’t see the distinction between “abstract labor” and “socially equalized labor” other than the fact that abstract labor rather than socially equalized labor is (overwhelmingly) used to describe the substance of value in capitalist societies. However, and again this may be above my pay grade but, for me, both seem to reflect an amount of socially necessary labor time that lurks behind exchanges in all social forms, but is not dominate/ fully developed until capitalism and neither guides production nor is necessarily a focus of accumulation in pre-capitalist societies.. If this is the case, the difference seems merely semantic to me..

I’m amazed how perfect the citation (in Chap. 1; section 4 of Capital I): When Marx states that “..value appears IN PRACTICE”, he referring to the dominance of value as not only for “occasional” exchanges in pre-capitalist social forms but (in practice) the regulation of production as well as the impetus for accumulation in capitalism. I do not feel — and also don’t feel that Marx stated — that exchange is “always” regulated by socially necessary labor time. However, I feel there are instances where “socially equalized labor” — as the substance of value — was the center of gravity as measured by stones, “bars in the mind”, cattle, etc. Consequently, there was “value” and the “value form” before the emergence of capitalism. Moreover, I assert that, opposed to capitalist societies, the value basis of exchange was weakened by exchanges based largely and more often on supply and demand as well as concrete labor/ craftsmanship, etc.

Overall, I am thus asserting that there is a difference between “value” — which is present in (almost) all social forms and described by Marx’s “Law of Value”; and the fully developed form of value — which is synonymous with capitalism and described by value form theory. (And perhaps for a later discussion: Is there a distinction between commodities — existing in pre-capitalist societies — and the universal commodity form — exclusive to capitalism?.)

[yngwrthr]

Different forms of property express different forms of social relations… In an undifferentiated society of petty commodity producers the property relation expresses the social relations of petty commodity production. However on the basis of petty commodity production new forms of property, and new social relations, emerge. The exchange of commodities gives rise to money as a special commodity and the emergence of money to the formation of capital and of labor power. The analysis of capitalist society cannot therefore stop with the analysis of the commodity form in the abstract. It must proceed to the investigation of the different social relations that are expressed through the different forms of the commodity [the money form, the capital form etc.]. However the analysis of the commodity form remains the key.

Simon Clarke, Marx, Marginalism, and Modern Sociology: From Adam Smith to Max Weber, London: Macmillian Press, 1982, p. 72.

[yngwrthr]

Again, I am likely in the minority and (anachronistically) on the heels of Engels, but I feel Marx’s “Law of Value” (simply) asserts that “when” commodities are exchanged (pre-capitalist and capitalist) the “center of gravity”/ basis on which they are exchanged is their value/ “abstract labor”. However, commodities have, in general, been exchanged closer to their center of gravity/ value (embodied/ objectified labor) over time — particularly as communication and transportation has developed. Thus, for me, “value” emerges with the exchange of commodities in any mode of production — not just capitalism. Albeit, value “for itself” — production for the expansion of value — emerges with capitalism and the exploitation of the only commodity that can expand value, labor power. (Although, I am now reading the section on interest-capital in Vol. III where Marx notes that, similar to labor power, loaned capital is also a commodity that can increase rather than shed value when used; with interest taken from or as a portion of surplus value — which, of course, labor alone produces when set to work by “operating capital” not interest capital).