Karl Mark was a German philosopher who dippy addressed the issue of capitalism. Among the issues he was concerned with were value, commodity, exchange and money. He debates these issues in depth and relates them to the capitalist economic system. Among the topics that he addressed deeply was the value.
Each commodity has a value that is assigned to it. However the value of a commodity can take two forms: actual value that is determined by the components of the commodity and relative value or the use value that is determined by the people using the commodity. There are two parameters that are used to assign a value to a commodity. These factors are the quantity and the quality of the commodity. Quantity is concerned with how much while quality is determined by how the commodity satisfies our needs (Karl Marx, 1992). Thus every useful commodity that a human being uses can be evaluated from the parameters of quality and quantity and so is the value assigned to that commodity. Depending on social agreement standards have been set to determine the quality and quantity of a commodity.
The first perspective to of viewing the value of a commodity is determined by the intrinsic nature of that commodity. Though a commodity satisfies somebody’s needs, it is first of all external to the human and has its own characteristic. It has is weight, breadth, height and other intrinsic nature (Karl Marx, 1992). This internal value of a commodity does not matter on how the commodity is able to meet the human needs.
The other perspective of value is determines by the external factor to the commodity. This is the value assigned to a commodity out of its use. Thus this value is called use value and is determined by how the commodity satisfies human needs. The way a commodity satisfy human need is determined however by the physical nature of the commodity (Karl Marx, 1992). For example a hoe is useful to a farmer not because of the iron or still in the hoe but out of the physical nature of the hoe. Thus it is the shape and form of the still in the hoe that makes it useful to the farmer. Thus the value of the hoe to the farmer is a use value. As it seen, the use value is realized at the time of use of a commodity, at the point of consumption. This use value is completely independent of the properties of the commodity and it result to commercial values of commodities.
Human’s needs are diverse. One commodity can not satisfy human need. Human being is forced to exchange the one commodity for another. From the exchange of commodities another form of value is derived: Exchange value. This is an accidental value that is determined by external factor such as depend and supply v but not the internal properties in satisfying human need. The quality of the commodity seems to play a major role in the exchange value since people would want to exchange the commodities, not out of quantity but the properties of the commodity that comprise it quality. Thus exchange value is a qualitative relation through which use-values are exchanged (Karl Marx, 1992). The exchange value will differ from one time to another and from one place to another. Since one commodity is exchanged for another commodity, it implies that the exchange value if a just mode of expression. It also follows that a valid exchange value of a certain commodity ought to be equal. It also implies that in two commodities there exist proportions that relate the exchange values of the commodities. Since one commodity can be exchanged for more than one commodity, each relative exchange proportion represents the exchange value of that particular commodity.
Comparing the use value and the exchange value of a commodity; the use value is primarily determined by the quality of the commodity while the exchange value of a commodity relative to another commodity is determined by the quantity. The use-value is thus determined by the relationship between the commodity and the user while the exchange value is determined by the quantity of a commodity that is exchanged for another commodity.
The exchange of commodity calls for a common form of exchange. The common form of exchange must be able to express the exchange values of the commodities through a something common to the exchange values (Karl Marx, 1992). This common exchange represents the varied quantities of the commodity. This common exchange, thus, can not be another commodity with a use value but a commodity that abstract the use value of a commodity. From the abstraction of the use value, then each use value become as important as another use value that is represented by the same exchange value. This common exchange is able to represent the use values of different commodity by the quantity of that common exchange.
To a commodity, despite the use value and the exchange value, there is another factor that should be considered. That is the factor of labor. For a commodity to be made and to exchanged, it is transformed by the work of labor. But the labor can also be abstracted to the form of use value and exchange value. However this factor is usually not directly reflected in the commodity. However the labor used in production of a commodity differs and can only be abstracted as human labor. This different labor from different people can be assigned value. Is noted that the labor element is the one that gives a commodity value since it transforms it from one nature to another and enable it to satisfy human needs.
As labor is important in giving a commodity its use value, the quantity of value creating labors should, thus, determine the use value of the commodity. The magnitude of labor is measures however by the duration of time. This has led to labor time is standardized and measured by the numbers of days, hours and weeks (Karl Marx, 1992). However the value of a commodity is not determined just by the quantity of labor used but the average human labor that is used in the production of that commodity. This amount of labor is the one that is socially necessary for the production of that commodity. Since the labor determines the use value of a commodity, then the use value of every commodity can be expressed in terms of the amount of labor time. It implies that the use value of commodities would re main the same if the labor time used to produce the commodity were the same.
The quantity of labor time used in production of a commodity is however determined by other factor besides. The skill of the laborer would determine how fast they would be able to work, the
level of technology in use, the organization of the laborer and other natural environmental factors. For example the amount of labor time used in mining gold in a mine with a lit of gold can not be the same as the amount of labor time used in another mine where the gold is scarce. These factors thus implies the use value represent fraction of the labor time but not fully determined by it. When the laborer are more effective then they will use less labor time but when they are less effective then more labor time would be used. Relating this to the value of a commodity, a commodity value would rise with lowering of the labor productivity and will be lowered when the productivity of the laborers is higher. Thus the value of a commodity has been shown to be represented in terms of labor time.
When a commodity’s utility to man does not require human labor then the commodity can have a use value without a value since value is derived from the amount of labor time used. At the same time a thing can be useful to human being and a product of labor but not a commodity (Karl Marx, 1992). For example a person who satisfies his need by using his own labor and time gains values from his labor but create no commodities. To produce commodities a person must produce use values for other but not only for himself.
For something to be a value then it should be an object of utility to the human kind. If a commodity produced is not useful for human then the labor used in producing the commodity is wasted. Since it creates no value then it can not be counted as labor.
Labor as the source of value in a commodity also has two natures: quality and quantity. Labor is capable in creating different use values from the same source. For example, labor is used in creation of linen but at the same time labor would be used to create a coat from the linen. In this case the labor used can be differentiated. In creation of lines then weaving is done while in creation of a coat from the linen tailoring is done. Depending on the quality of labor used the value of a commodity differs. For example the value of a coat would be higher than the value of linen although may be the same amount of labor time may have been used. At the same time the same subject may be involved in production of two different commodities but these commodities would have different values. For example, the same person may be involved in production of linen but would be as well be involved in the sewing the coat but the value of a coat would be different from that of a linen.
Accidental form of value
Commodities have two forms: the physical form or natural form and the value form. The value of a commodity however differs with time, place and scarcity. Thus the value of a commodity usually differs very significantly from the physical or material nature of the commodity (Karl Marx, 1992). In this case the commodity usually have a social value that assigned by the society. This values are realities and are acquired by their expression through an object of value and an identical social substance. From this reality value can only manifest itself in the social relation of a commodity to another. A value relation can be evident when one commodity is used for exchange of other commodities of different kinds. From the relation between two commodities we can be able to get a simple expression on a single commodity. Thus value can take two form: the relative form and the equivalent form.
The two expression of value however are strongly connected, inseparable and mutually dependent. How ever these expressions are just the extremes of the same thing and thus are mutually exclusive. The relative expression of value compares the value of one commodity with another commodity and presupposes the existence of such other commodity. Equivalent value however does not compare but assume that the value of the commodities is equal although the commodities may be different. The relative value and the equivalent value of a commodity however usually accidental, it depends on the position of the commodity in the value expression (Karl Marx, 1992).
The relative nature of value try to express the value of a commodity by using the same unit of measurement. For example the value of linen can be compared to the value of a coat by expression the coat in terms of linen. However the two different commodities are not equivalent; they are different and used differently. It is only their value that is compared in the expression. The expression shows how these commodities can be exchanged. In the expression one commodity is used as a form of existence of value. It also plays as a material embodiment of the value of the value of the other commodity compared in the expression. Since it is the labor that creates value in the commodities, when we compare the value of two commodities in the expression, we as well compare the labor embodied in one commodity to that embodied in the other commodity. Using this expression of value the value of coat as compared to that of lined would be higher even though the coat may have an equivalent of linen in it.
The equivalent expression of value is usually used to imply that the equivalent commodities can be exchanged. When one commodity serve as an equivalent of another then that commodity can be used for direct exchange with the other commodity. Equivalence then could not be used in commodities that can not be exchanged.
A commodity can have either relative or equivalent value as compared to another commodity. However these values are independent of the value form of the commodity. Whether a commodity is used a relative or an equivalent, the magnitude of the of the commodity used as relative of equivalent is determined independently by its value form. This value form is however determined by the labor time used in the production of the commodity. When a commodity acquires a relative or and equivalent value, its value acquires no quantitative expression but it only figures the definitive quantity of some article.
The form value of every commodity is derived from the amount of labor time use in the production of the commodity. Thus the body of the commodity that is used as the equivalent figures as materialization of abstracted human labor. It also reflects the subtle usefulness of human labor in creation of value. Each human labor is useful in creation of value. It does not matter the kind of labor given but the value created out of the human labor.
Considering the principle form of value of a commodity as a whole, then the elementary form of value is expressed in the value relative to the value of another of the same kind commodity or in exchange value relative to another commodity of different kind (Karl Marx, 1992).
The need for exchange of commodity is fundamental to human. The exchange form of value of a commodity allows it to exchanged another commodity. However this form require that two commodities be exchangeable. This condition does not always occur and thus there is need for
a universally accepted form of exchange.
A universal equivalent form is a form that generalizes value. Through it every commodity is assigned a value. Gold as a measure of value give a parameter for measuring the value of a commodity. Today money is used to generalize the value of a commodity. Through it value is assigned to the commodity and is used for the exchange of different commodities. As a measure of form value this universal equivalent should be universally recognized and accepted. This commodity is found to have assumed the universal equivalent form. This commodity has there for been excluded from other commodities as there equivalent. For universally their exclusion is left for one commodity and this commodity becomes unique for the exchange of other communities . This universal commodity can not however be exchanged for the same commodity. For example gold as an exchange commodity can no be used for exchange of gold but it represent the equivalent value of other commodities. Thus a particular commodity, with whose bodily form the equivalent form is thus socially identified, becomes the money commodity or as money. Money commodity is a commodity the has its own form value but it is also used as a measure of value for other commodity and used for exchange of other commodities (Karl Marx, 1992).
Gold is used as money with reference to other commodities because it was previously a simple commodity with reference to those other commodities. As other commodities gold was used as an equivalent value for other commodities. With time this commodity became universally accepted as a form of exchange for other commodities. The use of money commodity is used to express the elementary relative of commodities. For example gold is used to express the relative value of linen in term of another commodity such as coat (Karl Marx, 1992). Gold however gradually stared to become accepted a form of exchange. With time this commodity monopolized as a exchange commodity as it was used to express the values of other commodities. By the social acceptance by the society, the exchange commodity replaces other commodity and became a form of exchange. In place of gold money is used to express the form value of another commodity and is universally used for exchange of the commodity.
Luke other commodities money does not represent the magnitude of its value but can only express it in relative to another commodity. In the consequence, as form value of a commodity result from the labor time used, money indirectly represents the labor time used the production of the commodity(Karl Marx, 1992). In exchange of commodities, then money compares the
amount of labor time used in production of one commodity to the labor time of the other commodity. The value of money is usually determined before it goes into the market.
The relationship of value and money is directly expressed in its use. With no initiative from their own commodities find their own value-configuration ready to hand, in the form of physical commodity existing along side them. This physical object becomes the direct representation of human labor (Karl Marx, 1992). Thus money become a measure that can also be used to measure the value of labor used in the production of a commodity.
As an expression of value, money is used to measure the amount of labor time used in the production of the commodity. As a measure of labor time, money is used to express the value of labor. Thus money is used to reward of labor and through this it shows the direct relation of labor time and commodity value.
However the value of a commodity in the market is not purely a representation of the actual value of the commodity. The exchange value is also determined by relative factors that change from time to time. This factor is varied with time, place and the scarcity of the commodity.
Thus a commodity is defined by all these factors. A commodity therefore becomes mysterious due to the social character of the human labor stamped in the commodity. The value of a commodity determines its exchange value and in consequence is represented by money commodity or money.
Karl Marx (1992) Capital: A critique of a political economy:-Penguin book:-
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