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Heading into Chapter 4 of Capital, one realizes that this is going to be a marathon, not a sprint. Are there really another 800 pages to go? Yes, there are. 840, to be exact, if we include the very serious-looking appendices. Time to fix one’s Marxist courage to the sticking place. Tally ho! Thank goodness David Harvey is such an inspiring guide.
In case the previous 50-page colossus of a chapter hadn’t convinced us, Marx reminds us in the opening of Chapter 4 that the ultimate product of capitalism is money. As an aside, let us note that it’s not happiness, peace and goodwill on earth, or eternal youth, or any other sort of malarkey. No sir.
But capitalism doesn’t begin and end with money as money per se. Money must be transformed into capital. And how exactly does this transformation occur? Here, Marx briefly returns to his earlier formulae – two of which do NOT describe capitalistic exchanges, one of which DOES — can you tell which one?
C-C: Commodity-Commodity exchange (a barter system) – two items of equal value are traded, i.e. my bicycle for your turnip
C-M-C: Commodity-Money-Commodity exchange (exchanging commodities of equivalent value using money rather than straight-out trading)
M-C-M: Money-Commodity-Money exchange. In this form of exchange, the owner of money transforms his money into a commodity; this commodity he later hopes to sell for a profit
Yes, it is indeed the last one that makes the Gucci-little-piggies squeal with pleasure! M-C-M is the formula for how money acts as capital.
Marx here notes that unlike with C-C and C-M-C, the capitalist exchange system M-C-M is no longer about the exchange of equivalents.
It’s not about me trading my home-brew beer for your home-brew wine and us both enjoying the equal value of getting rip-roaring drunk. M-C-M is about starting out with $100, and rather than trading for its equivalent, trying to find a trade that will increase the value of that $100. As Marx notes, if we simply wanted to hoard our $100 in order to show off to everyone what a big fancy-pants moneybags we are, well then, we could be a miser. And by being a miser, we would avoid the risk of commodity circulation altogether.
But are capitalists a bunch of risk-averse, nappy-wetting, nervous Nellies? No they are not!
And so capitalists take the risk of exposing their money to the vicissitudes of the system of commodity exchange. When $100 becomes $110, what has been achieved is not a qualitative change – it’s still money at the end of the exchange – it’s a quantitative change. Marx calls the increment of value that is added to the original sum of money the surplus value. It is critical, of course, in realizing the surplus value that the original sum of money remains intact. In other words, you need to return your original investment plus make a profit.
So let’s imagine that a cunning capitalist has successfully transformed $100 into $110. What then? Well, if he then blows his whole load and exchanges his $110 for a sumptuous meal of, say, dead duck and fine wine, the $110 is no longer capital. Nor is it capital if – like the miser – he hoards it. In such a state, it is “petrified”and it “could remain in that position until the Last Judgement without a single farthing accruing to it” (p252).
So as is becoming evident, money has got to keep moving in order to be capital. It can’t stop, it can’t go on holiday, it can’t take a Time Out. Indeed, as Marx points out, unlike exchanging money for commodities, in which a final goal is in mind – the satisfaction of a need or want – “the circulation of money as capital is an end in itself…”(p253)
It is thus limitless. If you’re going to turn $100 into $110, why not then turn $110 into $120? Why not for that matter, keep going until you’re at $100,110 or indeed $2.4 millon or $937 billion or $19,378 supercalifragilisticazillion? After all, this money, as has been noted previously, provides social power. Do I have the same social power as billionaire Bill Gates? As if! That’s like comparing a flea to a white shark.
On page 255, Marx indulges again in some of his delightful figurative speech when he notes capital’s ability to shapeshift – transforming itself continuously – so that capital can be both money and commodities (commodities of any kind under the sun). Capital is boundlessly creative of value, endlessly adaptable to being and becoming whatever it needs to be in order to increase its magnitude. Rather enigmatically, Marx says, “By virtue of being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or at least lays golden eggs.” (p 255)
David Harvey here cautions the reader to not take Marx literally. Of course, capital does not actually have occult powers. Nevertheless, you would think that capital does indeed have some kind of ominous and supernatural force, given how citizens and especially their governments both fear and revere it. We talk about watching our money “grow” as if it were a beanstalk. When capital is moving through large markets, such as the Stock Exchange – Lord, it’s as if it has become Zeus himself, with powers to “punish” even Western European governments.
More language to provoke angry cries of “blasphemy!” among the dogmatically-inclined lie in wait at Chapter 4’s end, as Marx notes how in a capitalist system, value, in its manifestation as original value and surplus-value, is rather like a certain Mr. Bigshot in Christianity:
It [capital] differentiates itself as original value from itself as surplus-value, just as God the Father differentiates himself as God the Son, although both are of the same age and form, in fact one single person; for only by the surplus value of £10 does the original £100 originally advanced become capital, and as soon as this has happened, as soon as the son has been created, and through the son, the father, their difference vanishes again, and both become one, £110.
Value therefore now becomes value in process… (p256)
I like how Marx usurps the language of faith to critique a system that in a spectacularly short amount of time historically has assumed the same power as organized religion. With its omnipotence and mysterious ways, with its “invisible hand” and its stern – even wrathful – behavior, but also with its boundless capacity to guide the obedient on their way to the Promised Land, capital does indeed emerge as the new deity.
Praise be to Capital; thy Kingdom has come, thy will is done!
As the now-deceased rapper Notorious BIG once said, “Mo money, mo problems.” Karl Marx would agree. In Chapter 3 of Capital, “Money, or the Circulation of Commodities,” we learn that once a barter system is superseded by a system of exchange based on money, society is in the grip of an ungovernable force that is prone to crises.
Money presents a whole host of problems, many of which are elucidated in this chapter.
What is money?
As with my readings of chapters 1 and 2, I am referring extensively to David Harvey’s lectures on Capital available in streaming video. Harvey starts his discussion of Chapter 3 with a basic question. What is money? By the time this question was answered, I had understood why it is better to have $1 million in hard cash as opposed to, say, $1 million in the form of commodities: be they soya beans, Batman comics, or Russian prostitutes.
What’s so special about the filthy lucre?
As Marx explains, money (which he equates with gold for the purpose of his discussion) has two purposes. 1) it is the measure of the value of commodities. 2) it is the means of circulation of commodities.
In the former, money expresses the value of a commodity as a price. The couch that I purchased on rue Saint Hubert last spring was on sale for the price of $260. (Was it actually worth $260 given that it subsequently broke?) Of course, prices like $260 don’t affix themselves to couches by chance. Marx observes that “The guardian of the commodities must… lend them his tongue, or hang a ticket on them, in order to communicate their prices to the outside world” (189).
Determining whether the guardian or owner of a commodity has chosen a price that expresses value appropriately is the job of the market. Alas, I am just one person, and so I cannot dictate that my couch should actually have been priced at under ten bucks. However, in a market made up of many people, the prices of commodities are obviously going to find socially acceptable levels – usually…
Marx clarifies that pricing is a “purely ideal act” – i.e. it occurs strictly in the mind. And so the money attached to a price is “imaginary.” It does not become real until the commodity is actually exchanged for money. Everything preceding that is hypothetical.
So while I could go on e-Bay and ask for $1 million for lint harvested from my navel, the $1 million will remain imaginary until an actual purchase is made. Convincing people to exchange money for a commodity is not always easy.
Sales and purchases on the market are rendered possible by money’s circulation function. To realize a sale of the sumptuous, shapely lint from my navel, there must be money circulating so that one very lucky individual can pony up the $1 million and buy it. As David Harvey puts it, money is the “lubricant” of the system.
How much lubricant – money – does the system need? Argh – here we get into mathematical territory (never my favourite place to be). But never fear – it turns out that the amount of money required in a system of commodity circulation can be expressed as quite a simple formula:
MONEY MASS = SUM TOTAL OF COMMODITY PRICES x VELOCITY + RESERVE FUND
Whoa! What the #*^*@ is velocity? And why the heck do we need a reserve fund? My head was spinning with these questions. Marx doesn’t make life easy. Fortunately, Professor Harvey flies in like a superhero to save dunderheads like me from a lifetime of ignorance.
It turns out the first part of the formula is straight forward. Let’s take a simple country like Canada. How much money should be in Canada’s system of commodity circulation? For a start, it should be sufficient to cover the sum total of prices of all the commodities for sale in Canada. Temporality is an important factor here. Obviously, the number and prices of commodities are not always the same and not all commodities are sold at the same time. Sometimes Canada experiences a dip in the total price of its commodities (in a recession, for example). In which case, less money is required. But temporality assumes a different dimension when we consider velocity.
Velocity describes the speed at which commodities are being exchanged. Let’s imagine a very simple system of exchange: it’s between Banchi and me and my neighbour James. Let’s say it’s a somewhat frenetic velocity of exchange. I sell Banchi a can of Friskies for $1. After this transaction, I have $1 and Banchi has a can of yummy food. Then she sells me a dead moth. I now give her the $1 back in exchange for the moth. Banchi then goes downstairs and buys a cigarette from James. Now James has the $1 and Banchi has a cigarette. James then decides he would really like my dead moth in order to press it and hang on his wall. So he comes by to give me $1 for it.
Pretty amazing to contemplate that only $1 dollar was sufficient to cover the exchange of a can of Friskies, a dead moth, and a cigarette. Everyone managed to part with a commodity that they didn’t need/want and obtain a commodity that they did need/want. If, by contrast, there were a slow velocity of exchange in my local market; say I bought a dead moth for $1 from Banchi, hung it on the wall and then decided to stop exchanging for the day, a problem might well emerge. If Banchi or James hoped to buy any further commodities, more money would need to enter the system, because I’m sitting on the only available $1. So the general rule with velocity appears to be that the higher it is, the less actual money is required. This is why credit cards are encouraged. They speed up exchange, while sparing us the need to have large volumes of real money to cover all the purchases made on any given day.
In the formula, everything pretty much now makes sense except the RESERVE FUND. What the heck is that? It would appear that a reserve fund is something that is in the control of the State. Let’s say Canada, for the sake of argument. It’s a pile of money that is outside of the usual system of exchange that enables the government to somewhat regulate the economy. If there is a banner commodity production year – literally oodles of iPods and TVs and yachts and beef steaks crowding the market – why then, the Canadian government will release money from its reserve fund so that people can buy all these wonderful commodities. The government wants commodities to find buyers, see? That’s how wealth is generated! Similarly, at those times when there is too much money on the market and not enough commodities to spend it on, the government can withdraw money from circulation and return it to the reserve fund.
But I have jumped ahead. Money measures value by virtue of taking a form in which all other commodities can be measured – i.e. a couch = $260. It turned out that gold (and also silver) proved to be the easiest forms for money to take, because these metals could be divided by weight in order to express a value. Hence, literally one pound of silver became one pound, the unit of currency for the United Kingdom. However, as Marx points out, the origins of these names — pound, dollar, franc — quickly lost relevance. Nevertheless, it is still important to Marx that dollars and pounds etc. stay related to the metals that they represent. So that even when money changes form and we’re no longer trading literal pieces of gold in ounces and pounds, but rather, tokens or symbols that represent the same, gold or silver are still agreed to be the underlying supports of the currency’s value. Hence, we can start using paper money, just so long as we agree that $1 is redeemable for a certain unit of gold, which is held by the government in a vault somewhere.
Complicating things further is the fact that long after Marx wrote this, the world mostly abandoned the custom of storing gold as a support to its paper money. Since 1973, the direct relation between our money and precious metals has been broken.
Another important point is made by Marx about money versus price. “…The possibility that the price may diverge from the magnitude of value is inherent in the price form itself” he writes (p196). To stretch the same point further, he notes on the next page, “[the price] may harbour a qualitative contradiction, with the result that price ceases altogether to express value…”
These are crucial points. Price is not always indicative of value is the bottom line. I might slap a price of $1 million on a turd, but whether the turd is really going to have a $1 million real value is up to debate. If I polished the turd would it help? Still debatable. I expected Marx to say here, “Aha, this contradiction in capitalism is part of what’s so rotten about the system!” But in fact, he says the opposite. He says it is not a “defect” that there is an incongruity between price and value; indeed, “it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities” (p196).
From C-C to C-M-C to M-C-M
With a better handle on money as a measure of value, Marx goes on to flesh out money as a means of circulation. Harvey helps draw a chronology here that is enormously useful. He backtracks right to the original system, discussed in Chapter 1, of commodity-commodity (C-C) exchange. This is essentially a barter system, whereby I trade something I don’t need for something I do need (a cat for a bicycle, for example).
Once money enters the equation, a more sophisticated pattern of exchange is possible: Commodity-Money-Commodity (C-M-C). This was illustrated with my whole dead moth, cigarettes, Friskies example. Now here we have to pause. Marx breaks down the C-M-C scenario into its constituent parts, arguing that they are not exactly the same. C-M means that a commodity is exchanged for money. M-C means that money is exchanged for a commodity. The former is a sale, the latter is a purchase.
Marx takes issue with previous political economists who had asserted that because every purchase is a sale and every sale is a purchase it therefore follows that the system of exchange maintains an equilibrium. He is disagreeing here with Say’s Law. According to Marx, the system does not always have equilibrium, because C-M and M-C are very different forms of exchange. The power is all on the side of the M-C exchange. Why? Because money is the universal equivalent; it can be exchanged for anything and everything. Hence there are all sorts of reasons why C-M might not be followed naturally by M-C. The supposed equilibrium can easily be thrown off by sellers simply hoarding their money and thus taking money out of general circulation.
This is where Marx finds the makings of a monetary crisis. And he was far from alone in worrying about general crises of capitalism. Malthus and, much later, Keynes, also were perplexed by the system’s propensity to fail.
The final step in the evolution of the system of circulation is the acknowledgment of a further form of exchange called M-C-M. That is to say, Money-Commodity-Money. In this system, money is not simply what is exchanged for a commodity. Money is instead focussed on the acquisition of more money. Money is directed toward a commodity for the purpose of converting that commodity to a return of additional money. Hence, I take $5 to the Kahnawake reserve and buy a pack of cigarettes; I return to a Montreal school yard where they’ll easily retail for $10.
I’ve just made a big old profit! And enabled an illegal smoker. Score!
The commodification of everything
Harvey talks about how money enables private individuals to appropriate social power, which is one of the chief reasons why the lust for money in a capitalist economy is limitless. This is why commodification is also limitless. To anyone who argues that certain things are sacred and beyond commodification, David Harvey points out that the Catholic Church, by selling indulgences, already commodified Heaven. Back in the medieval age, you literally could buy your way into God’s kingdom.
And so it goes. You can commodify human organs, the sex act, and ideas…
For the purpose of social power, then, money is best as money. Harvey asks why would you even want to transform all your money into use-values? He cites Imelda Marcos and her giant shoe collection. Is a collection of 3,000 shoes a good way of ensuring social power? Not really. What use-value is one person supposed to get out of 3,000 shoes? You’d be hard pressed to wear each pair at least once over the course of a lifetime.
And so the commodification of everything proceeds apace because capitalists realize that money is power and more money is more power. Meanwhile, us Marxists sit on the sidelines and grumble that mo money is mo problems. Can’t we all just get along? As it turns out, we can’t.
We are under siege from big money-grubbing thugs
The capitalists’ tireless and limitless accumulation of money — and when Marx says limitless, he means it, he means infinite — puts their social class into a collision with others who don’t share their privileges or worldview. It puts them into conflict with other humans, as well as with animals and with the environment itself. So while BP attempted to extract as much oil worldwide as possible, it also attempted to minimize its expenditures on safety measures. Within the logic of capitalism, BP played by the rules exactly as they are spelled out. Capital accumulation is BP’s business — not protecting coastline, birds, or fishermen. As Chris Hedges argues here, BP and similar companies are headed by sociopaths who, unless caught, are quite content to maim, kill, and destroy everything that stands in their way of getting another dollar.
Literary theorist Terry Eagleton has written in The Guardian that football – i.e. the sport currently galvanizing the attention of billions of the world’s population – should be abolished. That’s right. Abolished! Because this is Eagleton, it’s an entertaining read, but one that I disagree with. In fact, I think he might have scored an own goal.
If every rightwing thinktank came up with a scheme to distract the populace from political injustice and compensate them for lives of hard labour, the solution in each case would be the same: football. No finer way of resolving the problems of capitalism has been dreamed up…
This reminds me of arguments Noam Chomsky made many moons ago in Manufacturing Consent. But OK, football is topical right now, so let’s give Eagleton our attention!
Modern societies deny men and women the experience of solidarity, which football provides to the point of collective delirium… Like a jazz band or drama company, football blends dazzling individual talent with selfless teamwork, thus solving a problem over which sociologists have long agonised. Co-operation and competition are cunningly balanced.
I agree with all of this. Surely few societies have fragmented their populations into such atomized and lonely units as those in western capitalism. However, the latter evocation of football’s blend of individuality and teamwork obscures the object of Eagleton’s ire. Is it the sport we watch on TV or the game that large numbers of people actually play that he hates? Or both? Without making a distinction between the two, Eagleton goes on to pay homage to one of Marx’s most famous phrases: “…football these days is the opium of the people, not to speak of their crack cocaine.”
To which a rather witty commentator responded at the end of the article:
Well back in the good old days it wasn’t the opiate of the people, you had to be really committed. Watching twenty-two blokes booting a casey over the gasworks in the pouring rain for ninety minutes had nothing to do with entertainment and was a more a kind of existentialist trial of the will.
Eagleton’s final point, made with the gusto of somebody who has never shied away from controversy, is this: “Nobody serious about political change can shirk the fact that the game has to be abolished.”
Perhaps here we can see an example of how leftists earn their reputation of being rather dour killjoys who want everyone to dress in hemp sackcloth and eat alfafa sprouts. The world after the longed-for revolt against capitalism would NOT INCLUDE football? Jeepers, it looks like our cause just shed a couple of billion possible recruits. It would be nice if sometimes the Left made the post-Capitalist world seem nicer and more exciting than the one we currently live in. If socialists of Eagleton’s ilk are coming to take away our football, what else are they going to abolish? Beer? Fart jokes?
While I agree that spectator sports have a terrible knack of distracting everyone from other more meaningful forms of mass social expression, let’s just think of all the things that football has to contribute to someone with a more socialist frame of mind.
As Eagleton notes, you play the sport as an individual and as part of a collective. The balance between the two is just the kind of thing I’d like to see in a socialist utopia! And everyone more or less can find their place in football, which makes it very inclusive. Most of us won’t make the World Cup or England’s Premiership, but even kicking around a ball with a handful of other leaden-footed no-hopers is enormously edifying. Name any other occupation in a capitalist economy that offers such fulfillment to losers. Moreover, football can instill such passion into its adherents that they’re prepared to keep toiling away – sweating, kicking, swearing, falling down, getting hurt, getting back up again – even in the face of failure! Football gives ownership of its wealth to every member of the roster; all enjoy the spoils of victory and all suffer the ignominy of defeat. Moreover, the enterprise is inherently healthy for mind and body! Which cannot be said about sitting in front of a computer all day.
In short, when I lose myself in playing football, I truly enjoy a rare glimpse into what true dedication to a collective cause is all about. If more of life were like playing football, I’d be happier!
Chapter Two of Capital, entitled “The Process of Exchange,” seems uncharacteristically short. Marx’s investigation here starts with the assertion that “Commodities cannot themselves go to market…” (p. 178) Indeed, a commodity that could do such a thing would most definitely be rather magical!
Rather than waltz by themselves to the market, commodities, of course, have owners. Generally speaking, that could mean you and me, folks! These owners recognize each other as owners of private property. It is no secret that capitalists are pretty big on the concept of private property; indeed, as Marx notes, relations between owners of private property are “juridical” – and they’re often codified in law as contracts.
When the owners, then, go to the market, they exchange their commodities with each other. Marx notes that in this system, all commodities are non use-values for their owners but “use-values for their non owners.” This is not as convoluted as it may sound. Obviously, if I were to embark on a long trek to the market to sell a pot of honey but then stopped and, like Winnie-the-Pooh, turned that honey into a use-value for myself by devouring it all greedily, I would no longer have a commodity left.
It takes a certain discipline to be a capitalist, no?
So if my pot of honey is to operate as a commodity on the market, it must be a non use-value to me, but a use-value to someone else.
In return for my pot of honey, I will obtain a commodity that is a use-value for me. Maybe a nice bottle of wine! In this part of the process of the exchange, we return to the idea of the universal equivalent that was broached in Chapter 1, whereby, within a simple system of exchange, I consider my pot of honey to be the universal equivalent of whatever I might want on the market. In other words, my pot of honey contains in it, in whole or in part, the equivalent value to any other commodity. But as has been established, the socially-accepted universal equivalent in the market is not usually a pot of honey or a bottle of wine or what have you: generally, it’s a precious metal like gold or silver. It’s money.
Marx notes that, at first, through the system of exchange, the value of commodities gets affixed by “chance.” It is merely the encounter between two owners of commodities that determines that a pot of honey might equal, say, one bottle of wine. In some other context, this exchange might seem a rotten deal. But “the constant repetition of exchange makes it a normal social process” (p182). And so, after many thousands of transactions, it becomes not mere chance but rather a socially accepted norm that 1 pot of honey = 1 bottle of wine. Or rather, because we’re operating in a money economy, 1 pot of honey in a simple market = $10, and a bottle of wine is also $10.
In the process of exchange, all commodities have a relationship to money, which is the universal equivalent, or the universal commodity. This means we get away from the idea that 1 pot of honey = 1 bottle of wine. These two commodities, like all commodities, now relate to money, enabling far more complex transactions. Now I can sell 10 pots of honey for $10 each and go home from the market without buying anything if I so choose. I can now horde my money until such a time as there is a glut of wine on the market and then return, like a conquering king, and buy up hundreds of bottles of wine and get leglessly drunk every day for a week. Hollah! (This scenario is taken from my imagination, not from Capital.)
OK, a few final observations in Chapter 2 before Marx moves on quickly on his swift Marxist legs. Or rather with his nimble Marxist fingers. He writes how money is like any other commodity in that it cannot express value in relation to itself; it can only express value in relation to other commodities. So $10 is pretty much valueless unless I exchange it for something other than $10; to realize its value, I need to exchange it for something. Like a kitten or an antique ashtray.
Marx then asks, how does a commodity become money? What alchemy is at work here? Well, as it so happens, there really is no alchemy: “…all other commodities universally express their values in a particular commodity because it is money. The movement through which this process has been mediated vanishes in its own result, leaving no trace behind” (p187).
In other words, commodities don’t become money, they express their value as money because money is what it is: the socially-accepted universal equivalent.
And let’s not forget that money, as a commodity like any other, is the incarnation of human labour. So within a capitalist mode of production, gold and silver, ripped out of the earth, embody human labour immediately upon their emergence into the system of exchange. Marx concludes that the “money fetish” and the “commodity fetish” are one and the same. In this system, for the hapless workers, “Their own relations of production therefore assume a material shape which is independent of their control and their conscious individual action” (p187).
David Harvey, whose lectures are enormously illuminating Capital for me (and thousands more besides), lingers on this point a lot longer than Marx does here in Chapter 2. Harvey says that Marx is agreeing with Adam Smith that capitalism is a system that is not the result of an individual or group. Rather, it is a system that operates according to its own logic, over which individuals or groups are powerless. Smith’s famous “hidden hand of the market” does indeed regulate behaviors and creates values; Marx would nod his bearded head and agree 100%. In so doing, the hidden hand of the market creates a social order. However, Marx parts ways with Ricardo and Smith; unlike them, he does not believe that the social order will be just and that it will benefit everyone. He believes it will benefit the bourgeoisie, that is, the owners of the means of production.
I’ve got a feeling we’re going to hear a little more about these injustices!
This year I’ve decided to try reading Volume 1 of Capital by Karl Marx. With Monika out of town all summer, what else is a bored and lonely leftist to do?
I should note that while I work my way through this immense tome, my pea brain is getting some invaluable assistance from NYU professor, David Harvey, whose lectures on Capital are available in video form.
Chapter 1 of Capital starts with an exploration of the commodity. A commodity is like the building block of capitalism. The commodities Marx seems most fond of in his discussion are linen, corn and coats. If he’d written it today, he might have discussed gasoline, iPads and Twizzlers.
A commodity is whatever satisfies a human desire or need. That said, not everything that meets a human desire or need is a commodity. If I had the land required (and the skill) to grow myself some nice tasty tomatoes, the fruits of my labours, if consumed by me and my immediate circle (Monika, Banchi, friends), are not commodities. They’re simply tasty homegrown tomatoes! Similarly, in pre-capitalist societies, most of what was produced by the peasants – even if “stolen” by the ruling aristocracy – did not meet the definition of a “commodity.” Because, as a building block of capitalism, a commodity, to be a commodity, must enter into the marketplace.
Marx says a commodity has a use-value and an exchange-value. Boy, there is a lot of time spent discussing use-value and exchange-values. For the reader, it’s a bit of a tough row to hoe. Use value, insofar as my dunce-head can grasp it, describes the particular use a person can make out of a commodity. So to use Marx’s original terms, linen might have a use-value to me because I can make a coat out of it.
Since they’re part of capitalism, commodities, in addition to use value, must also have exchange-values. i.e. they must be something that I can trade in the marketplace.
This is where things get sticky. Because Marx then notes how each and every commodity is exchangeable with every other commodity. And he supposes that this is because each and every commodity must have something in common with each and every other commodity. Since I could, in theory, trade an iPad for a cocker spaniel – or for any other commodity for that matter – there must be something in common between the two commodities to make such a trade possible. There must be something in common between even an iPad and a cocker spaniel. That “something” is a third quality of a commodity that Marx calls value.
Ha, ha, see?! So a commodity is bestowed with use-value, exchange-value, and value. Simple as mud in your eye.
What then, exactly, is value? If commodities have a use-value, which is quite tangible (i.e. I can drink it, eat it, take it for a walk and have it lick my face) as well as an exchange-value, which is also fairly tangible (I can trade it for something else) then what is this third quality of commodities – this mysterious thing called value? Value seems to be an abstraction, since it is not something that I can actually see in the commodity. But whatever this value is would appear to be very important, since it is what makes all commodities exchangeable with each other.
David Harvey really saved my pea brain from total meltdown here. It turns out that value is socially necessary labour time. This is to say that what gives a commodity value is the labour that went into it. But of course, that labour must be “socially necessary” – your labour must create a use-value for somebody else.
So if I were to start Villeray Incorporated (hmm, sounds like a familiar story), and I decided to start manufacturing cat kibbles, in order to satisfy the definition of “commodity” my cat kibbles must have a use-value, an exchange-value, and value. My cat kibbles have use-value because they can be eaten (i.e. by Banchi, or by me, depending on how poverty stricken I am that month); they must also have an exchange-value so that I can exchange them with my neighbor, James, for, say, lettuce from his garden. And lastly, what gives my cat kibbles their exchangeability is the fact that they hold value: their value is that they provide a use-value for somebody else (in this case, for James, because he can feed my yummy cat kibbles to his own cats).
Voilà! Bob’s your uncle: commodities are totally easy to understand!
Or are they?
Marx is not satisfied to say that commodities are bearers of value simply because of the labour that goes into them. Socially necessary labour time is a term that merits a good deal more unpacking. Because it is not at all clear at first glance how exactly socially necessary labour coheres into commodities of value. Does it mean that if I bust my ass manufacturing cat kibbles for 14 hours a day that at the end of the week I have created commodities of great value? This is obviously not a certain thing. Given the means at my disposal, I could hardly manufacture sufficient cat kibbles to be of any great value to anyone else, because I am competing with factories. I might spend a week to create the equivalent of one bag of cat kibbles. The factory-made equivalent could be purchased for under $20. So the context in which labour occurs turns out to be highly important.
Socially necessary labour time is the labour time required to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society. (p129)
Ah ha! It all makes sense. But while some of us might have been quite happy to go down the bar and celebrate these clever discoveries with some pints, Marx, overachiever that he is, delves even further into his inquiry. He differentiates between concrete labour and abstract labour. The first, concrete labour, creates use-values. If I make a coat out of linen, I have applied my concrete labour into something with a use-value: I can wear it! Marx goes on to generalize about concrete labour in a way to encompass nothing short of the entirety of human history; concrete labour is a condition of human existence. We interact with nature, and have done so since time immemorial, by making use-values out of the material things we find around us. So concrete labour, as a creator of use-value, is not limited to a capitalist mode of production. But when the objects of our labour, commodities, enter into exchange with each other, our labour-power is being abstracted. Our labour becomes the equivalent of somebody else’s labour, as objectified in the commodity which is going to be exchanged. It is abstract labour, no longer merely tied to one particular use-value, but abstracted to a system of exchange with a potentially infinite number of other products of labour.
(This is as far as I can go with concrete v. abstract labour, because to be frank, it was all a bit murky to me.)
Marx goes on to make a wonderful observation about the value of commodities. He notes that you cannot find a value of a commodity within the commodity itself. You cannot take a table, dissect it, and thereby calculate its value. “Not an atom of matter enters into the objectivity of commodities as values,” he writes (p138). As David Harvey notes, a similar dynamic is at play when we consider gravity. You can’t calculate a gravitational pull on a stone by dissecting the stone. Gravity only appears when the stone is in relation to other things. Commodities only have value by virtue of their relationships with other commodities. Marx says that these relationships are, by definition, social.
There is no inherent value to a commodity outside of the value that is actualized once it enters the marketplace. If labour is expended to create a commodity that cannot be traded, that commodity is useless. And so too is the labour I expended on it.
Marx now considers something very ingenious indeed. Every commodity is exchangeable with every other commodity, however, as we all know, these exchanges are far from simple and straightforward. If I own a cocker spaniel, I can’t just trade it straight up for, say, a Boeing 747… or a yacht. In a system of straight exchanges, we get used to the idea pretty quickly of saying something like, one Boeing 747 = x cocker spaniel; x in this case might well be in the order of 900 cocker spaniels. Or 19,000 cocker spaniels — I’m not sure, having not tried to buy a Boeing 747 recently.
Marx spells out a few hypothetical examples of exchanges, using linen as the commodity against which all other commodities are compared in value:
10 1b. tea__________
40 1b coffee___________ = 20 pounds linen
2 ounces gold________
½ ton gold_______
The choice of linen as the basis for comparison is totally arbitrary. Marx could just as well have made it coffee or tea or coats, or what have you. Furthermore, the quantities are pretty arbitrary too. What makes 20 pounds of linen the basis of comparison? Why not 50 pounds? Or one pound?
Within a system of exchange of increasing complexity, the place of linen in the very simple example above is taken instead by some other commodity. This commodity is what is called the universal equivalent. Generally, in capitalist societies, the universal equivalent is gold. What we have all gotten used to over time is the idea of gold as the money commodity. But for the sake of the argument Marx builds here, the money commodity is serving the exact same function as linen in the example above. It is the agreed-upon commodity against which all other commodities will be compared for the sake of discussing value. A cocker spaniel is worth 2 ounces of gold, or 2 dollars, is pretty much the same as saying it is worth, say, 2 pounds of linen.
But where does my breakfast come from?
The last section of Chapter 1 is called “The Fetishism of the Commodity and its Secret,” and is perhaps the most interesting and liveliest section to read, but a good deal of it eludes my overtaxed mind muscles. Fetishism is used in this section by Marx to describe the way in which commodities appear to take on a life of their own. Insofar as a commodity is useful (it has a use-value) it is not all that mysterious, but just as soon as it is exchanged, something very strange indeed happens:
it changes into a thing which transcends sensuousness. It not only stands with its feet on the ground, but, in relation to all other commodities, it stands on its head, and evolves out of its wooden brain grotesque ideas, far more wonderful than if it were to begin dancing of its own free will (p163-164).
There is another wonderful passage that evokes the mysterious nature of the value of these seemingly animated commodities:
Value… does not have its description branded on its forehead; it rather transforms every product of labour into a social hieroglyphic (p167).
This, to me, very much describes the world in which we live, whereby the commodities that surround us appear as objects of value in their own right; these objects have a relation with each other and also with us, but Marx’s contention, I think, is that these relations have obscured the relations between actual flesh and blood human beings. We are encouraged within a capitalist mode of production to personify commodities to the degree that I will say “I love Camembert,” and “I love my new cell phone,” but discouraged from thinking about how we might feel about the labourers who created the Camembert or cell phone in question. Indeed, these things cannot matter too much to us, because while it is fairly straightforward to have a relationship with the limited number of commodities that make up our daily lives, it is downright impossible to have a relationship with the millions of people responsible for making and distributing those same commodities.
David Harvey explains, “People under capitalism do not relate to each other directly as human beings; they relate to each other through the myriad products which they encounter in the market.”
I do not think Harvey here is suggesting (or claiming that Marx is suggesting) that all direct human relationships are impossible under capitalism; there are, after all, human interactions that occur outside of the capitalist mode of production. But whenever a social relation is enacted within a capitalism system of exchange, direct human relationships are rendered impossible.
Harvey fleshes this out in a very tangible way. He asks, “Where does your breakfast come from?”
When I contemplate the smorgasbord that I might serve up on a Saturday morning: mangoes and cherry jam and croissants and coffee and milk and so on, it quickly becomes apparent that answering Harvey’s question is almost impossible, or would be, at least, the result of a good week of investigation. Of course, all these food commodities came from the corner epicerie, but this was only the last step on what was a very long journey involving countless human beings and hours of human labour.
Capitalism, Marx argues, has concealed the human relationships behind commodities — those on my table or anywhere else. When it comes to commodities, we generally hold something like an iPad in very high esteem, but the labourer who made it? Not so much. Apple anounces the iPad to be a “magical and revolutionary product at an unbelievable low price.” I think that this hyperbolic language is part of what Marx has in mind when he talks of commodity fetishism. The iPad is no more “magical” than a hammer; it does exactly what it is supposed to do according to the properties invested in it by the humans that invented it and the human labour that enabled its mass production. As for “unbelievable price…” How often do we hear in capitalism the apparent language of religion to describe concepts such as pricing that are actually quite banal in their rationality? The price of an iPad is not unbelievable; it is exactly the price that Apple has calculated to cover the cost of production (which includes, in part, the pay to the workers) while ensuring a healthy return to the company and its owners. So Steve Jobs can be even richer.
What is not mentioned in the language of commodity fetishism that swirls enthusiastically around the iPad is our social relation with the workers that manufactured the gizmos in the first place. They apparently work in conditions so grim that several of them have committed suicide. You can find out here lots more about human rights abuses, brutal hours and low pay at the iPad sweatshop. When confronted with a news story like that, it’s yet another reminder about the contradictions in capitalism: the smooth sheen of the surface versus the sweat and squalor that lies underneath. Both surface and underlying conditions are real, but we must acknowledge both to understand what is going on.
What I find fascinating in Marx is to see the terms and concepts and internal contradictions that he exposes in capitalism playing out all around you in the real world every single day.
And that’s just chapter 1!
I bought my lucky bamboo from the Jean Coutu on Jarry and Lajeunesse in July 2008. That sets a personal record: this is the longest I have ever kept a plant alive.
My winning strategy is that any time my lucky bamboo looks like it might shrivel up from neglect, I water it. I take it to the kitchen sink faucet, fill it up, and return it to the shelf where it lives. Am I superstitious about my lucky bamboo? I am not really sure where I stand on this score. I have had a lot of good and bad luck since buying it, but on balance, I think it has served me OK.
At the time of my lucky bamboo purchase, my apartment was nearly empty. I moved from Edmonton to Montreal with only a large backpack, a few blankets and sheets, a suitcase of clothes, and an old laptop. I cohabitated in Verdun for a year, then moved here alone to Villeray. The first few weeks in this apartment for my silent bamboo and me were mostly uneventful. I slept on a camper bed in the middle of my empty bedroom. I slowly tried to assemble some sort of home without increasing my debt too too much. My aim was to make the place seem welcoming for when Monika finally joined me in Montreal. I got a queen bed, a kitchen table, curtains — fancy stuff like that.
As busyness, stress, and pecuniary problems subsequently conspired against me, my apartment stopped getting any more home-like. After a brief bed bug scare, I threw out my camper bed and the couch that I had inherited when moving in. I fumigated the living room. Then I purchased a new couch for $260 from some crooks on rue Saint Hubert. I say crooks because the couch broke about a month later. But I still use it. I pile up a bunch of scrap wood underneath the middle crossbeam. Every now and then, this pile of wood collapses and the couch lurches downwards violently. Typically this happens while Monika is over. She finds it hysterically funny.
My dwellings are probably not much different from those of your average grad student.
Recently, the shelf for my spices, on which the lucky bamboo resides, enjoyed a thorough cleaning. This is thanks to the only civilizing influence in my life – Monika, again. Now the plant strikes a more confident pose against the white wall. I watered it today; long life seems built into its DNA, but I am doing my part, I am convinced of it.
Some debate has occurred in these parts as to whether it’s actually possible to kill a lucky bamboo. I contend that it is, which makes my feat of keeping one alive all the more impressive. I have met people who HAVE killed a lucky bamboo. Unfortunately, I cannot remember their names, which does not help me in the heat of debate.
Sadly, besides keeping alive a lucky bamboo, in all other respects, I do not have green thumbs. I cannot garden and I don’t know the first thing about the all the millions of photosynthesizing organisms on this planet. My cousin and his wife know a lot about these matters, as you’ll see on their blog. I envy them.
How is it that I can be told the name of a tree or flower several times and always end up forgetting it and yet I only need to be told the capital of Mongolia ONCE and it sticks forever? (It’s Ulan Bator.) What accounts for this selective memory? Could it be that I excel in the show-offy recollection of facts that only help out in conversations with like-minded friends? (“You know, the USA reached peak oil production in 1970 and has been in inexorable decline ever since.”)
Like many who share my leftist, apocalyptic, vaguely communitarian leanings, I am better at talk than deeds. My inability to garden is but one symptom of my condition. Gardening is a form of practical knowledge. My BA in Political Science can’t exactly be called practical knowledge.
As our economy shows ever more signs of entering terminal decline, my inability to procure any of my basic needs by dint of my own labour brings me increasing regret. I truly look forward to spending more time in a genuine and productive relationship with the natural world one day. Perhaps this is the dewy-eyed viewpoint of an out-of-touch city slicker, but I think that eating tomatoes from my own garden would be something of a spiritual rebirth for me. I was born and raised in the country; a return of some kind to more earthy endeavours would bring me considerable contentment.
Many of the material trappings of the city do deep damage to my soul, I am convinced of it. Billboards and bar room TVs and traffic jams and laptops, iPods, cellphones everywhere – these make me uneasy and anxious. Nothing has made me happier in recent years than being in the middle of the mountains in France with Monika, hearing nothing but each other and the wind.
I am not pining to be out of the city, of course, because Montreal is a wonderful place to be at nearly times. What I need is balance; a bit less city, a bit more green. Until I find that balance, the lucky bamboo will have to suffice.
As oil continues to gush into the Gulf of Mexico, the result of the BP Deepwater Horizon explosion April 20, it seems appropriate to post my latest article for the warehouse. It’s based on an interview with Antonia Juhasz, and discusses the stranglehold the oil industry has had on American policy thanks to its enormous wealth and lobbying/legal activities. Scarcely a couple of weeks after I interviewed Juhasz, she was arrested while protesting at a Chevron stakeholders meeting and thrown into jail. You can find more about that here at Democracy Now.