https://mronline.org/2024/07/25/the-class-struggle-in-every-commodity/
~~ recommended by newestbeginning ~~
Originally published: Liberation School on July 8, 2024 by Jeremy Algate (more by Liberation School) | (Posted Jul 25, 2024)
Introduction
Every year, Pew Research publishes a study on the U.S. population’s political priorities. Their 2024 report shows that, like the previous years, “no single issue stands out after the economy,” with almost 75 percent of respondents rating it the main goal for the next administration, a rate “considerably larger” than any other policy 1. Yet when we see pundits discuss “the economy” on the news, they speak an obscuring language.
The economy is an abstraction, in that there is no such “thing” as the economy. What we call “the economy” is, in reality, the ways that humans produce, distribute, exchange, and consume products or services. In this sense, “the economy” has a history as long as humanity. Yet there are different ways of organizing the economy. Unlike what we’re taught, the capitalist economy is a relatively recent phenomenon and is neither the final, just, most effective, nor possible form of organizing what, how, and why we produce.
The introductory article to this series ended with one of the most foundational of the contradictions of capitalism: between use value and exchange value 2. Understanding this one contradiction goes a long way in helping understand the antagonism between those of us who live by working and the few of them who live by making us work. The conflict between use value and exchange value is an expression of the struggle between classes.
This entry explains some aspects of the contradiction between use value and exchange value, how they help us better understand the world around us, and some ways we can wield that understanding to explain the exploitation humans, all living creatures, and the Earth suffer from, which is necessary for eliminating the root cause of that suffering.
Capitalist commodities
Use value describes the utility (or usefulness) of the goods and services we produce and consume. This seems simple at first, but it is actually expansive and detailed. Use value names what a society in general finds useful, whether we, as individuals, find it useful or are even conscious of the use it provides us. The use value of the same commodity can vary from person to person; one person might eat bread for its taste while another for its carbohydrates. Use values are dynamic on a higher level, in that what one society finds useful now, it might not find useful next year.
Under capitalism, commodities are also exchange values. On the surface, exchange value is the ratio at which one commodity exchanges for another (e.g., a loaf of bread is equal to two quarts of milk). In order to purchase a commodity for its use value, we have to exchange it with one of our commodities (or something that represents them, most often money or credit).
The contradiction between use value and exchange value is the basis of many foundational problems with capitalism—which means it’s the basis of much of the world’s suffering. We ended the introduction to this series by noting that this contradiction is helpful when agitating around a variety of issues to advance a specific struggle and raise class consciousness in general 3. The most egregious examples of this contradiction are struggles over the privatization of formerly public goods. Privatization is another name for commodification, the process where capital takes a use value from the public, makes it private and turns it into a commodity to sell it back to us. The most egregious examples are struggles over water rights. In 2023, Beverage Industry reported that Coca Cola made $948,411,136—or almost $1 billion—in 2022 4.
Like Pepsi and their Aquafina bottled water, Coca Cola’s profits by purchasing the rights to public waters (like lakes) from municipalities, filtering it, bottling it, and selling households the same tap water in nearby homes at inflated prices, around 133 times more than tap water costs, according to Consumer Reports 5. Talk about capitalist innovation!
In Detroit, for example, people faced water shortages and shut offs if they fell behind on their water payments by $150. During the same time period, bottled water corporations like Coca Cola “also racked up tens of thousands of dollars of past-due water bills that went unpaid for months” without any repercussions. In other words, Detroit deprived thousands of households of the same “natural water” they continued letting corporations access and sell at enormous mark-ups. That makes perfect sense for Coca Cola. If it doesn’t make sense to your coworker, it means they already know that capitalism is illogical. Water is for the world to use, not a source of profits for corporations.
Before getting into some of the details of the use value and exchange value contradictions, we should take a minute to clarify what Marx means by “social usefulness.”
“Free choice” under the dictatorship of capital
To live and reproduce ourselves, all humans—regardless of time or place—need to create use values. Non-capitalist societies have also exchanged different use values, and even today we do this frequently. When I trade a book that I’ve read to a friend for one they have read and I want to, we’re engaging in exchange. Neither of us produced the books, let alone their exchange-value. We’re simply passing along use-values to one another.
One factor that distinguishes the capitalist mode of production from others is that, under capitalism, commodities are produced solely for their exchange value (or their potential exchange value) and for sale on the marketplace.
As a result, capitalist production—including the kind of work available, the assortment of commodities on the market—aren’t determined by what society really finds useful or truly desires but by what generates the most exchange value for individual capitalists. It is not like capitalist societies engage in democratic processes to decide what we want to produce; we don’t vote on whether our society should create warships and weapons or schools and houses. We live in a dictatorship of capital. We don’t freely “choose” to buy new adaptors or cables for our phones every year, just like we don’t freely “choose” to buy things that are planned to be obsolete in a short period of time. It is more accurate to say that, in this system, use values are what capitalists find useful for the society over which they rule.
A first take at the contradiction: Quantity v. quality
Use values are tied to the inherent properties or qualities of a commodity. Your friend likes apples because of their taste, texture, smell, and prefers them over oranges, my favorite accessible fruit, because they aren’t as messy to eat.
At first, exchange value seems like it is also the result of the specific properties of a commodity. We might assume that one brand of fruit is more expensive than another because it doesn’t contain any pesticides, for example. As Marx writes, “exchange value, at first sight, presents itself as a quantitative relation,” and because exchange value (or the price of a commodity) goes up or down (usually up), it “appears to be something accidental and purely relative, and consequently an intrinsic value” 6. Because we don’t know why one loaf of bread is worth two large sodas, we assume it must be due to actual qualities of the commodities or that society in general finds two large sodas the same use as a loaf of bread.
Exchange value is, essentially, what a commodity can be sold for. This is something that is assigned to commodities in the context of trade or exchange. Everything we do, of course, requires some form of human labor, at the most basic level. Everything from housing, clothing, caring for someone, raising a child, doing the dishes, making the bed, entertainment, etc., all imply someone doing work. Without doing work, we are dead! And then one can explain that even more so is the case for commodities–stuff produced to fulfill some use or need, that in capitalism is reduced to the value of what can be sold. If my friend makes a crocheted blanket for me and makes an identical version of the blanket to be sold, the latter crocheted design would take on an exchange value. The first blanket on my couch does not have an exchange value.
How can two completely distinct things—like apples and socks, or apples and oranges—enter into a relation of equal exchange? They do have something in common: they both contain value, or the socially-necessary labor-time required for their production. A given commodity’s value (and at this point we can assume commodities exchange-value is equal to their value, as determined by the socially-necessary labor-time required for their production) is determined by the average skill, time, degree of intensity, and overall knowledge required for its production as a whole 7.
Exchange value is about what can be sold to make more money than what was invested in production. This is the concern of capitalists and owners. People need stuff to use. Capitalists and owners need to produce and/or sell stuff to accumulate capital and, to out-compete each other, they have to produce and/or sell more than their competitors and at lower values. Individual capitalists find all kinds of ways to produce more commodities at a faster rate, from speeding up the assembly line to replacing workers with machines. Because capitalism is inherently competitive, capitalists have no choice in the matter and end up driving production times down. As a result, we end up with an increasing number of goods, the value of which decreases. We work so well that we find ourselves unemployed.
The general formula for capital and for the rest of us
Viewing capitalism through this prism, it is clear that workers and bosses have opposing interests in any single commodity. Marx outlines these two conflicting motivations for interacting with commodities in the following formulas: C-M-C and M-C-M*. These are less daunting than they might appear. Let’s take them one at a time.
Workers are interested in use values. Exchange for workers looks like this: we have a commodity (C) we are forced to sell (our labor-power), which we exchange for money (M), which we then exchange to purchase goods and services we need or want (C). Use-values are realized through their use; and we have to begin the cycle again.
Capitalists are interested in exchange values. Exchange for the capitalist looks like this: they have money (M), which they use to buy commodities (C): our labor-power, the materials and machines we work on, and other things like workplaces and accountants. They take the products of our labor not to use them but to sell them (M). Although no one would do this just to end up with the same amount of money they started with, which is why the commodities must be sold at a cost that is higher than our labor power and other materials combined, so they can sell them for more money (M*), where * represents the surplus value from our labor power.
What’s their next move? Unlike us, they aren’t back in the same situation, forced to sell their labor-power for money to survive. Instead, they have more money to throw back into the circuit. There is theoretically no possible end to what Marx called the “general formula of capital,” or M-C-M*. There are, however, concrete ends, which we call economic crises.
C-M-C is how the masses of people participate in capitalism. The one commodity we have, which is not natural but a product of capitalism, is our labor-power, or the ability to sell our capacity to work to a boss for a certain amount of time. The wage we receive, “M,” we take and, if we haven’t already spent it on necessities, we generally spend it for commodities we need, whether it be gas or clothing, food or education. We end up right back where we started: we have to sell our labor-power to the capitalist again in order to survive so we can keep working.
Meanwhile, people who start with money have a completely different relationship with production. Capitalists use money in hopes of making more money—which is when money functions as capital—and the source of this additional exchange value is our exploitation, or the work we perform after we’ve worked enough to create our wage. The decision of what to buy so that workers can make something else doesn’t matter to capital: oranges, chairs, or weapons, for the capitalist they only matter insofar as they can be exchanged for additional value.
Conclusion
Capitalism organizes our entire lives around surplus production. We labor to produce as many commodities as possible, and other capitalists try to get us to consume as many commodities as they can. They constantly work to get more exchange value out of existing commodities and to even commodify public goods, from schools and hospitals to our water and air.
The production of commodities for their exchange value is a choice, one made at the level of our entire political and economic structure. Socialism is at its core a system organized around producing commodities for their use value, which is far more able to respond to crises like climate change, because there is not a competing incentive to increase profits.
Notes:
- ↩ Pew Research Center, “Americans’ Top Policy Priority for 2024: Strengthening the Economy,” Pew Research, 29 February 2024. Available here.
- ↩ Derek Ford, “Capitalist Contradictions and Revolutionary Struggle: An Introduction,” Liberation School, 19 December 2023. Available here.
- ↩ Ibid.
- ↩ Chloe Alverson, “2023 State of the Beverage Industry: Sparkling, Flavored Waters Make a Splash,” Beverage Industry, 06 July 2023. Available here.
- ↩ Ryan Felton, “How Coke and Pepsi Make Millions From Bottling Tap Water, as Residents Face Shutoffs,” Consumer Reports, 10 July 2020. Available here.
- ↩ Karl Marx, Capital: A Critique of Political Economy (Vol. 1): The Process of Capitalist Production, trans. S. Moore and E. Aveling (New York: International Publishers, 1867/1967), 44.
- ↩ Derek Ford and Mazda Majidi, “Surplus Value is the Class Struggle: An Introduction,” Liberation School, 30 March 2021. Available here.
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