Marx’s Capital, Volume 1, Chapter 1: A Critical Summary, Part 1 (Updated)

Chapter 1 of volume 1 of Capital is called “The Commodity,” and presents Marx’s theory of the commodity and labour value.

Chapter 1 is divided into four sections:

(1) The Two Factors of the Commodity: Use Value and Value

(2) Dual Character of the Labour embodied in Commodities

(3) The Value-Form, or Exchange-Value

(4) The Fetishism of the Commodity and its Secret.

Interpreters of Marx admit that the first few chapters of Capital are made difficult to understand because of Marx’s use of a Hegelian style of argument (Brewer 1984: 21).

Let us now turn to a summary of the first two sections. I will examine the last two sections in the next post.

(1) The Two Factors of the Commodity: Use Value and Value
Capitalist production is a system founded on production of commodities for sale, and the commodity is the elementary form or thing in capitalism (Marx 1990: 125). For Marx, capitalism is the commodity form of production (Foley 1986: 12), and ultimately only a transient system of production in human history.

Marx’s definition of the commodity is as follows:

“A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another. The nature of such wants, whether, for instance, they spring from the stomach or from fancy, makes no difference. Neither are we here concerned to know how the object satisfies these wants, whether directly as means of subsistence, or indirectly as means of production.” (Marx 1906: 41–42).

At the heart of Marx’s analysis of commodities is his idea that they have a dual nature, as follows:

(1) as qualitative things called use values, and

(2) as quantitative things called labour values and manifested in exchange values.

A use value of a commodity is determined by its usefulness to human beings as derived from its properties, and use values are realised in use or consumption (Marx 1990: 126). A society can produce things with use values without being capitalist or producing commodities for sale (Brewer 1984: 22). That is, a good can be a use value without being a commodity (Brewer 1984: 22).

Commodities also bear exchange value, but this is quantitative. Marx assumes that, when one commodity exchanges for another, this entails an equality (Marx 1990: 127). But since Marx will later admit in volume 3 of Capital that most commodities do not exchange at their labour values, Marx has not even properly proven that commodity exchange constitutes such an equality in the first place.

Marx’s “proof” of labour value, as presented in Chapter 1 of Capital, is grossly inadequate:

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

A simple geometrical illustration will make this clear. In order to calculate and compare the areas of rectilinear figures, we decompose them into triangles. But the area of the triangle itself is expressed by something totally different from its visible figure, namely, by half the product of the base into the altitude. In the same way the exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity.

This common ‘something’ cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use-values. But the exchange of commodities is evidently an act characterised by a total abstraction from use-value.” (Marx 1906: 43–44).

“As use-values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use-value. If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour. But even the product of labour itself has undergone a change in our hands. If we make abstraction from its use-value, we make abstraction at the same time from the material elements and shapes that make the product a use-value; we see in it no longer a table, a house, yarn, or any other useful thing. Its existence as a material, thing is put out of sight. Neither can it any longer be regarded as the product of the labour of the joiner, the mason, the spinner, or of any other definite kind of productive labour. Along with the useful qualities of the products themselves, we put out of sight both the useful character of the various kinds of labour embodied in them, and the concrete forms of that labour; there is nothing left but what is common to them all; all are reduced to one and the same sort of labour, human labour in the abstract.

Let us now consider the residue of each of these products; it consists of the same unsubstantial reality in each, a mere congelation of homogeneous human labour, of labour-power expended without regard to the mode of its expenditure. All that these things now tell us is, that human labour-power has been expended in their production, that human labor is embodied in them. When looked at as crystals of this social substance, common to them all, they are—Values.

We have seen that when commodities are exchanged, their exchange value manifests itself as something totally independent of their use-value. But if we abstract from their use-value, there remains their Value as defined above. Therefore, the common substance that manifests itself in the exchange value of commodities, whenever they are exchanged, is their value.” (Marx 1906: 44–45).

Harvey (2010: 17) sees this argument as an a priori one; he is right and that is part of the problem. The labour theory of value needs to be empirical, and requires an empirical argument to support it, not an a priori proof. Secondly, Marx thinks that all commodities are products of human labour, but this need not be so: commodities might be the product of animal labour or in theory purely of machines or robots, as I point out here. Thirdly, this leaves us with the problem of the products of slave labour: are products produced by slaves and sold for money profit commodities in Marx’s sense of the term?

Fourly, another serious problem is that it is not obvious at all that commodity exchanges constitute an equality in the way Marx sees them. Marx actually admits later in Chapter 1 that in some human societies commodities may simply exchange as use value for use value:

“But to be equated to linen, and again to iron, is to be as different as are linen and iron. This form, it is plain, occurs practically only in the first beginning, when the products of labour are converted into commodities by accidental and occasional exchanges. …. ” (Marx 1906: 75).

And later in volume 3 of Capital Marx will admit that most commodities do not exchange at their true and equal labour values. So why should we think that there must be a common quantitative basis for exchange in labour values?

Now there is an equality in exchanges in the sense in which, say, 2 sheep might exchange for 1 cow, and only two sheep and nothing more are exchanged, and vice versa. But this is a trivial sense of equality. It does not help Marx. Marx’s leap to the conclusion that there must be an additional, fundamental unit of homogeneous labour time in which both commodities can be measured quantitatively and by which they can both be shown to be equivalent simply does not follow. It is a non sequitur. Marx’s argument was shoddy and commits a straightforward logical fallacy.

Now exchange value, for Marx, is an “expression” or “form of appearance” of labour value (Marx 1990: 128), but how do we measure value? What is the “measure of its magnitude”? According to Marx, we measure it by the quantity of labour-time needed to produce a commodity (Marx 1990: 129).

However, it is not raw or concrete labour hours that count in determining value, but abstract socially necessary labour time:

“Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskilful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour-power. The total labour-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour-power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more than is socially necessary. The labour-time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time. ….

We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour-time socially necessary for its production. Each individual commodity, in this connexion, is to be considered as an average sample of its class. Commodities, therefore, in which equal quantities of labour are embodied, or which can be produced in the same time, have the same value. The value of one commodity is to the value of any other, as the labour-time necessary for the production of the one is to that necessary for the production of the other. ‘As values, all commodities are only definite masses of congealed labour-time.’” (Marx 1906: 44–46).

This answers some common objections to the labour theory of value (such as, for example, the criticism that, if more concrete labour is taken to produce an individual commodity by a slower or less experienced worker, then the more value it must be). Labour must be necessary and not wasted. However, Marx’s ideas here lead to serious problems as well, such as how to reduce all heterogeneous forms of human labour to such socially necessary labour time. Another problem is joint production: if a production process produces more than one commodity but two or several, then how does one calculate socially necessary labour time? (Brewer 1984: 23; Nitzan and Bichler 2009: 101–102). In particular, Ian Steedman has argued that joint production leaves open the possibility that some labour values of commodities produced in joint production can be undefined, nil, or negative (Nitzan and Bichler 2009: 101).

Next, Marx examines productivity. The greater the productivity of human labourers, the less socially necessary labour time is needed to produce a given commodity (Marx 1990: 131).

Marx even attempts to explain the high price of diamonds by reference to the great socially necessary labour time needed to produce diamonds:

“The same labour extracts from rich mines more metal than from poor mines. Diamonds are of very rare occurrence on the earth’s surface, and hence their discovery costs, on an average, a great deal of labour-time. Consequently much labour is represented in a small compass.” (Marx 1906: 47).

At the same time, Marx seems to doubt that gold and diamonds actually do fetch an exchange value equal to their socially necessary labour time (Marx 1990: 130), but this point is quickly passed over.

Marx makes an interesting point which is later taken up in Chapter 3:

“A thing can be a use-value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity.” (Marx 1906: 47–48).

That is to say, things that are not produced by human labour have no real value (e.g., air, uncultivated soil, natural meadows) and, according to Marx in Chapter 3, and only fetch an “imaginary” money price. (Marx 1906: 115).

The final passage in section 1 contains an admission that undermines Marx’s “proof” of the labour theory of value earlier in the section:

“Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use-values, but not commodities. In order to produce the latter, he must not only produce use-values, but use-values for others, social use-values. Lastly, nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.” (Marx 1906: 48).

As I have pointed out here and here, this admission is a devastating contradiction, because Marx cannot claim that he can deduce that labour time is the common quantity determining value totally independently of use value. Marxists like Harvey (2010: 22) fail to notice how badly this undermines Marx’s argument.

Another fundamental problem is this: is Marx’s labour theory of value meant to be (1) an empirical phenomenon Marx has discovered or (2) a mere analytic concept and definition he has formulated to analyse capitalism? (the problem is noted by Brewer 1984: 24). This is crucial issue.

Marxists frequently claim that Marx in volume 1 of Capital merely assumed as a simplifying assumption that commodities exchange for true labour values (Brewer 1984: 25), but I find it hard to take this seriously. For one thing, Marx never makes such a claim in Chapter 1 or Part 1 of volume 1 of Capital, and secondly as we read Chapter 2 and Chapter 3 of volume 1 we find that Marx makes explicit statements about how labour values do govern individual exchange values of commodities, which are simply rendered nonsensical if all this was only a “simplifying assumption.”

(2) Dual Character of the Labour embodied in Commodities
Just as a commodity has a dual nature (as a use-value and an exchange value), so does the labour embodied in the commodities. Marx thinks he was the first to identify the dual nature of labour as embodied in commodities (Marx 1990: 132).

To produce a specific use-value, one needs labour of a particular type (Marx 1990: 132). So labour comes in qualitatively different forms:

“As the coat and the linen are two qualitatively different use-values, so also are the two forms of labour that produce them, tailoring and weaving. Were these two objects not qualitatively different, not produced respectively by labour of different quality, they could not stand to each other in the relation of commodities. Coats are not exchanged for coats, one use-value is not exchanged for another of the same kind.

To all the different varieties of values in use there correspond as many different kinds of useful labour, classified according to the order, genus, species, and variety to which they belong in the social division of labour. This division of labour is a necessary condition for the production of commodities, but it does not follow conversely, that the production of commodities is a necessary condition for the division of labour. In the primitive Indian community there is social division of labour, without production of commodities. Or, to take an example nearer home, in every factory the labour is divided according to a system, but this division is not brought about by the operatives mutually exchanging their individual products. Only such products can become commodities with regard to each other, as result from different kinds of labour, each kind being carried on independently and for the account of private individuals.

To resume, then: In the use-value of each commodity there is contained useful labour, i. e., productive activity of a definite kind and exercised with a definite aim. Use-values cannot confront each other as commodities, unless the useful labour embodied in them is qualitatively different in each of them. In a community, the produce of which in general takes the form of commodities, i. e., in a community of commodity producers, this qualitative difference between the useful forms of labour that are carried on independently by individual producers, each on their own account, develops into a complex system, a social division of labour.” (Marx 1906: 48–49).

So the “social division of labour” is Marx’s version of the division of labour from Classical economics.

Labour, then, comes in two forms:

(1) qualitatively different types of concrete, useful labour that produces specific use values, and

(2) abstract socially necessary labour that is the quantitative source of value, and is reducible to a homogeneous single unit of measurement (Brewer 1984: 23–24).

Social labour, the labour required to produce commodities, is the only thing that produces value (Foley 1986: 16). But labour of different qualitative, concrete types is a “natural necessity” for the creation of use values, and use values are the result of a combination of (1) material provided by nature and (2) human labour (Marx 1990: 133). In this sense, labour is not the only source of use values:

“The use-values, coat, linen, &c, i. e., the bodies of commodities, are combinations of two elements—matter and labour. If we take away the useful labour expended upon them, a material substratum is always left, which is furnished by Nature without the help of man. The latter can work only as Nature does, that is by changing the form of matter. Nay more, in this work of changing the form he is constantly helped by natural forces. We see, then, that labour is not the only source of material wealth, of use-values produced by labour. As William Petty puts it, labour is its father and the earth its mother.” (Marx 1906: 50).

By contrast, values of commodities are produced only by labour and are quantitative:

“On the one hand all labour is, speaking physiologically, an expenditure of human labour-power, and in its character of identical abstract human labour, it creates and forms the value of commodities. On the other hand, all labour is the expenditure of human labour-power in a special form and with a definite aim, and in this, its character of concrete useful labour, it produces use-values.” (Marx 1906: 54).

If we take an exchange of a coat with linen, then

“So far as they are values, the coat and the linen are things of a like substance, objective expressions of essentially identical labour. But tailoring and weaving are, qualitatively, different kinds of labour.” (Marx 1906: 50).

But in order to argue that values are just homogeneous unit quantities of labour, Marx has to demonstrate how this is so.

His answer is that all the different qualitative forms of labour can be reduced to a common unit of simple labour power:

“Productive activity, if we leave out of sight its special form, viz., the useful character of the labour, is nothing but the expenditure of human labour-power. Tailoring and weaving, though qualitatively different productive activities, are each a productive expenditure of human brains, nerves, and muscles, and in this sense are human labour. They are but two different modes of expending human labour-power. Of course, this labour-power, which remains the same under all its modifications, must have attained a certain pitch of development before it can be expended in a multiplicity of modes. But the value of a commodity represents human labour in the abstract, the expenditure of human labour in general. And just as in society, a general or a banker plays a great part, but mere man, on the other hand, a very shabby part, so here with mere human labour. It is the expenditure of simple labour-power, i.e., of the labour-power which, on an average, apart from any special development, exists in the organism of every ordinary individual. Simple average labour, it is true, varies in character in different countries and at different times, but in a particular society it is given. Skilled labour counts only as simple labour intensified, or rather, as multiplied simple labour, a given quantity of skilled being considered equal to a greater quantity of simple labour. Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom. For simplicity’s sake we shall henceforth account every kind of labour to be unskilled, simple labour; by this we do no more than save ourselves the trouble of making the reduction.” (Marx 1906: 51–52).

Skilled or experienced labour is, then, a multiple of simple abstract labour (as noted by Harvey 2010: 29). All labour is reducible to a meaningful, common homogeneous unit of labour (Foley 1986: 16). It follows that all concrete labour can be reduced to units of simple abstract labour and aggregated too.

But how does the market do this reduction of all heterogeneous types of labour power to homogeneous units of simple labour? Marx does not explain how, but merely assumes it does: “[e]xperience shows that this reduction is constantly being made.” But how? Marx says that the process is not even consciously known or understood by capitalists:

“Experience shows that this reduction is constantly being made. A commodity may be the product of the most skilled labour, but its value, by equating it to the product of simple unskilled labour, represents a definite quantity of the latter labour alone. The different proportions in which different sorts of labour are reduced to unskilled labour as their standard, are established by a social process that goes on behind the backs of the producers, and, consequently, appear to be fixed by custom.” (Marx 1906: 51–52).

But this is a lazy statement and a serious problem with Marx’s theory. Even a Marxist like Harvey notes that this passage has not explained how heterogeneous types of labour are reduced to homogeneous units of simple labour:

“Notably, Marx never specifies what ‘experience’ he has in mind, making this passage highly controversial. In the literature it is known as the ‘reduction problem:’ because it is not clear how skilled labor can be and is reduced to simple labor independently of the value of the commodity produced. Rather like the proposition about value as socially necessary labor time, Marx’s formulation appears cryptic, if not cavalier; he doesn’t explain how the reduction is made. He simply presumes for purposes of analysis that this is so and then proceeds on that basis.” (Harvey 2010: 29).

In the same vein, Brewer (1984: 24) rightly notes that critics of Marx find the argument flawed. First, if exchange of the products of skilled labour for products of unskilled labour can be used to determine the value of skilled value as a multiple of simple labour, then the argument is circular. Exchange values determine labour values, but labour values are supposed to be a source of exchange values.

Secondly, this part of the argument contradicts the previous idea stated by Marx that the reduction of skilled labour to a simple unit of abstract labour can be conducted in a physical or scientific manner by examining the “expenditure of human brains, nerves, and muscles.” If the only actual way we can determine the value of skilled value is by looking at the actual market exchange of the products of skilled labour for products of unskilled labour, then why bother with explaining the difference in terms of “expenditure of human brains, nerves, and muscles”?

And what if exchanges of the products of skilled labour for products of unskilled labour lead to radically inconsistent measures of the value of skilled labour as a multiple of simple labour?

These are severe problems with the theory. We are still left with the question: how are all heterogeneous forms of human labour power meaningfully reduced to simple homogeneous labour units?

Marx ends section 2 by pointing out that productivity changes can change the quantity of goods produced by labour, but not the duration of simple labour per se:

“Productive power has reference, of course, only to labour of some useful concrete form; the efficacy of any special productive activity during a given time being dependent on its productiveness. Useful labour becomes, therefore, a more or less abundant source of products, in proportion to the rise or fall of its productiveness. On the other hand, no change in this productiveness affects the labour represented by value. Since productive power is an attribute of the concrete useful forms of labour, of course it can no longer have any bearing on that labour, so soon as we make abstraction from those concrete useful forms. However then productive power may vary, the same labour, exercised during equal periods of time, always yields equal amounts of value. But it will yield, during equal periods of time, different quantities of values in use; more, if the productive power rise, fewer, if it fall. The same change in productive power, which increases the fruitfulness of labour, and, in consequence, the quantity of use-values produced by that labour, will diminish the total value of this increased quantity of use-values, provided such change shorten the total labour-time necessary for their production; and vice versa.” (Marx 1906: 53–54).

In essence, the value of one hour of abstract socially necessary labour time is always the same, but changes in labour productivity change the quantity of use values that can be produced in one hour (Brewer 1984: 24).

BIBLIOGRAPHY
Brewer, Anthony. 1984. A Guide to Marx’s Capital. Cambridge University Press, Cambridge.

Foley, Duncan K. 1986. Understanding Capital: Marx’s Economic Theory. Harvard University Press, Cambridge, Mass. and London.

Harvey, David. 2010. A Companion to Marx’s Capital. Verso, London and New York.

Marx, Karl. 1906. Capital. A Critique of Political Economy (vol. 1; rev. trans. by Ernest Untermann from 4th German edn.). The Modern Library, New York.

Marx, Karl. 1990. Capital. A Critique of Political Economy. Volume One (trans. Ben Fowkes). Penguin Books, London.

Nitzan, Jonathan and Shimshon Bichler. 2009. Capital as Power: A Study or Order and Creorder. Routledge, Abingdon, UK and New York.