Law of Value 4: Value

Use-Value, Exchange Value, Value

part 4 of the Law of Value series

This is one of many abandoned houses in my neighborhood. The slumlord owner let the property deteriorate until it became unlivable and doesn’t want to pay the money to make it livable again. There are thousands of abandoned houses in this city, and thousands of homeless people. Despite the urgent social need for houses these properties don’t fulfill a social use. Why not? Because the owners of these commodities are not interested in their use. They are interested in their exchange-value, the rent they receive from the property. For decades they collected rent while the use-value of the house deteriorated. And now these houses sit vacant, a testament to the contradiction between use-value and exchange-value.

This is not a contradiction restricted to housing. Every commodity contains this contradiction because every commodity is produced to be exchanged, not to be used by the producer. We have enough food on the planet to feed everyone, yet millions starve. Why? Because we don’t produce food directly for social need. We make food in order to sell it for money. Society has much of the technological ideas it needs to reduce greenhouse gas emissions, yet it isn’t acting fast enough to apply these ideas. Why? Because production is not undertaken to direct   ly mediate our relation with the environment. We produce for profit.

The exchange of the products of labor in the market is just one of many possible ways that the private labors of billions of individuals can be coordinated. Some people think this is the best possible way to coordinate human productive activity. Marx saw that, despite all of the dynamism and technological wizardry of capitalism, there were fundamental social antagonisms at the heart of this means of coordination… that production for market exchange leads to all sorts of unexpected consequences including gross inequality, exploitation, and crisis. And for Marx all of these social antagonisms can’t be understood until we understand the contradiction within the idea of a commodity itself: the contradiction between use value and exchange value.

Use value vs. exchange value

A commodity has a use. This is its use-value. What does use-value tell us? It tells us how a commodity satisfies a social need. If we want to feed everybody we need a certain quantity of food. If we want to build everyone a house we need a certain quantity of wood and nails. Some use-values require no effort to attain: air, sun, gravity, etc. Others require effort to attain. There is a finite limit to the amount of labor that can be devoted to the production of use-values. Society must apportion this labor between the production of different use-values in some way. As technology changes the amount of labor required to produce some use-values decreases thus signaling a change in the apportioning of labor. As technology evolves to reshape what human labor is capable of producing so do our needs and desires evolve.

In different societies this labor is apportioned by different methods. In a market society it is the buying and selling of the products of labor in the marketplace that serves the purpose of allocating labor between the production of this use-value or that use-value. This creates a second type of value, unique to market societies: exchange-value.

Exchange value is the ratio in which one good exchanges for another. Perhaps one book exchanges for a loaf of bread… Or a new car exchanges for a thousand bottles of whiskey. These ratios are all exchange values. They say a book is worth this much bread; a car is worth this much whisky. In a developed market society one commodity eventually emerges as the primary commodity in which all other commodities express their exchange value. This is what money is. For most of the history of capitalism this commodity has been gold. By comparing the ratio of tomatoes or cars or baseballs to gold all commodities measured their exchange value in ratios to gold.

These two sides of the commodity, its use-value and exchange value, form two opposing, contradictory poles.  Much of the social antagonisms of capitalism are rooted in this tension between use-value and exchange value. Of course, most of the time when we look at a commodity it doesn’t seem very antagonistic. This is because the antagonistic social relations behind the commodity are not visible. But when we look at a society organized around commodity exchange we can see lots of social antagonisms.  To understand how these social antagonisms spring from the opposition of use-value and exchange-value we will need to take a closer look at both…

You can’t use it AND exchange it!

If I am selling a tomato this tomato has no use-value at all for me. Its use-value only exists for the person that buys it. I am only interested in the exchange-value, how much money I can get for it. Production in a capitalist society is not production for use, but for exchange. This means that we have no inherent interest in the usefulness of our labor outside of its ability to create exchange-value. Now, from a social perspective, it is very important what kind of labor we do: Do we make bombs or flowers? Oil or cupcakes? But as individuals we have no stake in this. We produce in order make money, to get exchange value.

Why do people produce for exchange and not for their own use? Because in a capitalist society the working class does not own the means of producing their own subsistence. The only way for working people to get the necessities of life is buy them in the market. And the only way to do this is to sell our labor to a capitalist for a wage. We spend our whole life making a profit for an employer so that we can spend this wage in the market to obtain our daily bread. Our job is not a means toward personal satisfaction. Our job is a means of making money so that we can buy our satisfaction in the market.

Bourgeois subjective value theory talks about a “double-inequality of exchange.” It says that the only reason exchange happens is that two people value the other person’s product more than the product they are giving up. Marx actually goes even further than this. He says that to the seller the commodity has no use-value at all, other than the fact that it can be exchanged.

Not only does this bourgeois theory of “double-inequality of exchange” give the mistaken impression that people produce for their own wants and then sell off the surplus in the market, but it also imposes the profit-maximizing logic of the capitalist onto the consumer. By claiming that consumers make a subjective profit from exchange it transposes the real, objective profit of a capitalist who pays his workers one sum of money and sells the products of their labor for a greater sum of money, onto a completely intangible and unquantifiable notion of subjective profit. But subjective preferences for commodities can’t be measured, divided, added to, or compared in a numerical fashion. By imposing the logic of capital onto consumers it effectively erases class from the scope of its analysis.

The mystery of exchange value…

One book=  1 car. What does that mean? What does it mean to say something is worth so much of something else?
Some people think that the usefulness of a commodity can answer this. But uses of things can’t be compared. You read books. You drive cars. They are two totally unrelated and incomparable uses. Maybe you like books more than cars. Does this mean that books are worth more than cars? (1)

What does it mean to say a book is worth so many jars of peanut butter, or so many cups of coffee? Clearly jars of peanut butter or cups of coffee are measuring something. And clearly any other commodity could be used to measure this something. A book could be worth so many pencils, so many kittens, so many tires… And each of these exchange values would be a different way of measuring the value of the book.

But this means that the book has a value independent of the particular commodity that we choose to measure it with. Whether we measure the book’s value in beers, beans or kittens it stays the same. Yet we can’t see this value. We only see the specific exchange ratios of the book as it is exchanged with other commodities. [The only thing that changes is the "form of appearance" of this value- the particular manifestation of this value.] But isn’t this what exchange value really is- the comparison of the value of one commodity with the value of another? These exchange-values only make sense, only work, because there is something called value that is being measured by them. Exchange value necessarily implies the presence of an underlying value. Marx uses the term “intrinsic value”. By this he doesn’t mean that value lies buried within the commodity, or that it is magically bestowed upon the commodity, but that it is impossible to compare commodities to each other in the market without a commodity having its own value. But what is this value?

What is the 3rd thing?

We have seen that exchange value implies that commodities have an intrinsic value expressed in different exchange ratios. This value is not use-value or exchange-value but a 3rd thing. What is this value? Where does it come from?

I know you are in a lot of suspense so I’ll just come right out and say it: Marx argues that it is the labor time that society devotes to the production of these commodities that accounts for this underlying value. Commodities that take more labor to create have more value than ones that take less labor. As labor becomes more productive, as it becomes easier to produce things, their value falls. But what is Marx’s justification for choosing labor as this 3rd thing?

Marx’s critic Bohm-Bawerk pointed out that there are lots of properties that are common to all commodities: Marx could just as easily have said scarcity or utility were this third thing. This, of course, is the approach taken by marginal utility theory which argues that it is our subjective desires for commodities in relation to their scarcity that determines their value. Why is it that Marx doesn’t take this route?

For one, scarcity and utility cannot be understood without reference to labor. The amount of a commodity that exists at any point in time is clearly related to the amount of labor that has been devoted to producing that commodity. And utility isn’t just some abstract, individual substance detached from the labor process. Subjective desire only counts economically when it is turned into real action, when we buy things in the market. The only way to enter the market as a purchaser is to also enter it as a seller. We must sell the products of our labor and then use this money to buy the commodities we desire. (More specifically, workers sell their ability to work, their labor power, to an employer. The employer sells the product of that labor in the market. Workers receive a part of this value in the form of a wage.) The only means of attaining our desires is the buying and selling of the products of labor. Not only does capitalism shape our desires, it determines how we go about attaining our desires.

But there is an even more important reason why Marx doesn’t choose scarcity and utility as the determinants of this underlying value. Utility and scarcity both describe the relation between individuals and objects. Marx is interested in the relations between people. If we think back to Marx’s argument about commodity fetishism we will remember that in a capitalist society the relations between people take the form of relations between things. Objects appear to have power and value, on their own. But this wold of appearance is not the full story. These value relations between commodities are actually relations between people whose work is coordinated indirectly through commodity exchange.

And this is where any social theory must begin: with a study of the productive activity of people as they work to create the world  they live in. Not only is this the best starting place for an analysis of society, it is also the best starting point for a radical social theory whose aim is to investigate the possibility of changing the world. If we realize that human society is not the result of some natural or divine eternal logic but merely the creation of our own labor then that means that we have the power to mold and shape that society as we see fit. In a capitalist society these creative powers take the form of an external world of value and capital that acts back upon society, shaping it against the will of its creators. Yet, in the end the world of capital is nothing but the product of our own creation. If we truly want to change the world it is not up to nature, God, fate or experts, but up to us. This is the radical challenge of the law of value.

Let’s review and clarify:

1. The usefulness of a commodity is its use-value. Uses can’t be quantitatively compared.
2. The exchange-value of a commodity is the proportions at which it exchanges with other commodities.
3. Price is a specific type of exchange-value, the ratio at which a commodity exchanges with money.
4. The fact that commodities measure their worth against each other implies that they have an intrinsic value.
5. This intrinsic value is not a physical thing, nor is it magically bestowed upon commodities. It is not a timeless trait existing for all products of labor everywhere. Value, in the way Marx uses the term, is the means by which the labors of isolated producers are coordinated through commodity exchange. It is the social substance the binds together the labors of isolated, disparate individuals separated through the market.

Price and Value (a brief distinction)

We notice then that value and price are not the same thing. The value of a sandwich may be 1 hour of labor. Yet we don’t see this 1 hour when we buy a sandwich. All we see is its price. Prices are just the exchange value of commodities measured in money. The only way we see value is indirectly through these quantitative relations between commodities. Though value and price are indirectly linked, their connection is still strong. If demand rises suddenly causing the price of sandwiches to rise this will trigger an inflow of sandwich-making labor to meet demand. And once demand and supply have balanced, price falls back down to meet value. If the productivity of sandwich-making rises the time it takes to make a sandwich falls. The supply rises and the price falls. Prices and values fluctuate around each other, constantly codetermining each other.


The last thing we should note is that this concept of value is historically specific. Unlike bourgeois economic theory which projects its categories of utility and capital back in time to make all of history retroactively bend to the laws of capitalism, Marx’s theory of value describes a specific type of social organization unique to a society in which the dominant form of production is production for market exchange. When we don’t produce directly for use, but for exchange, we find that our productive activity is regulated by unconscious economic laws which Marx calls the “law of value”. Whereas before we said there was an antagonism between use-value and exchange-value we can now say that this is really an antagonism between use-value and value (since exchange value is an expression of value). As long as production is production to produce values instead of uses we will have to deal with the social antagonisms that spring from this contradiction: The logic of profit will dominate over society rather than the logic of usefulness. And the nature of work will be to maximize profit at all cost rather than to maximize the quality of the experience of work or of the life of the worker.


1. There have been attempts by neoclassical economists to reduce the usefulness of commodities to some common substance. Since there is no common substance that makes up usefulness they have to make up an imaginary substance called “utles”. These economists actually say things like, “A cup of coffee has 13 utles and a car has 3000 utles of utility”. But such attempts to invent imaginary substances with which to reduce utility to are generally thought to be pretty silly and misguided. In neo-classical economics this concept has been mostly replaced by the concept of rank preferences, or graded utility: A consumer has a ranking of demand preferences but these can’t be reduced to some common scale. In this way the question of value, in the sense that a commodity has a definite amount of value as determined by subjective social demand, is mostly abandoned: Commodities don’t have values, but consumers have preference rankings and these preference rankings result in prices. This approach conveniently eliminates many of the theoretical problems with earlier marginal utility theory (namely the unquantifiable nature of subjective utility), yet it has an inherent circularity: consumer preferences are not formed in a vacuum. They are formed on the basis of preexisting exchange ratios. As the prices of commodities change so do the preference rankings of commodities. So commodity prices must first be assumed in for marginalists to theorize the subjective processes of price formation. This is circular. The pink elephant in the room is the productivity of labor. As this productivity changes so do prices. There are a host of other criticisms lodged at Marginalism by Marxists. Perhaps sometime in the future I can write/produce more on the topic.

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53 Responses to Law of Value 4: Value

  1. Jeff says:

    I really appreciate this series

  2. Misteriousness Al says:


    No. Not circular. It’s a causal cycle. Circular is meant to describe reasoning. What you just described is a causal cycle, but you did not at all criticize their reasoning for proposing that causal cycle. If you call that circular, then so is the statement that we produce for money so that we can buy commodities, since the the observance of having these commodities bought also signal that I should produce, which will get me my commodities bought, etc. The first basis of that causal cycle, however, is the subjective processes of price formation–that’s the initial condition. That’s one possibility. A second is that price formation and preference ranking is parallel, even if the independent cause is the subjective preference ranking. Third possibility: if you go back far enough, there will be a point when consumers did not have a price to observe. The initial interpersonal valuations established the condition for price observation that would help further valuate goods. Also, remember that money is a good as well, so it also has a price, and that valuations always change even after price formation.


    There can be no exchange value with no use-value. If no one deemed anything useful, there could be no exchange. Use-value is a necessary condition for exchange. If you’re referring to personal use-value, which most people do when they say use-value, it says nothing as to whether a good satisfies a social need–only your need is being satisfied. Without exchange, goods are not allocated at all–rather, they stay as property of individuals. Exchange gets goods to go on hold to certain places at certain times. If other people really need houses or food, there is high demand. Naturally, producers would try to exploit that by trying to raise profits–this would involve trying to make production cheaper and cheaper (cheaper but harmful ways will suffer market discipline)–changing the structure of production/labor, increasing stock, lowering prices. You’re also completely ignoring political policy as a possible factor for deterred supply.


    Goods precede labor, otherwise their would be nothing to labor with or to labor for. With competition due to scarcity to appropriate (not through force, hopefully) goods, we also have exchange for goods in order to produce/labor, where different people value their own goods “opposite” to each other at certain times. The labor allows for consumption and also for further exchange, development in method, and increase in goods, and thus living standards. You are right, I guess, in a sense, that labor is the basis of production and is thus the basis of the creation and multiplication of goods, but it is not what creates the value of goods. It is the subjective valuation of goods that give them their value. Just because labor increases stock doesn’t mean it’s what has created the value of the good–their was labor for a reason in the first place. Their was labor in the first place because of the valuation of goods. This pushed labor forward for meeting those goods and/or using them to make more goods, which meant an increase in stock. As the stock increases, we make more valuations that continue to determine the structure of production, the stock of a certain good, and, in the end, the allocation of resources, because our valuations are based on present goods. Remember that in the beginning their is nature, not defiled by human touch. You’re right: value doesn’t mean anything unless its translated into action, but the fact that people act to attain things is what subjective value theory is about. It’s the backdrop of action, whatever that action is: labor or consumption. We CAN change our world through production/labor. We’re doing it all the time. However, the demand depends on the culture (ideas), which are related to people’s valuations of goods. Culture and economy is parallel, because valuation and action is parallel. Valuation helps to understand action in relation to goods, while culture helps us understand the economy, in terms of where the resources are going, how they are being given out, and what is being produced most, etc.

    “Marx is interested in the relations between people.”

    Unfortunately, the people are also connected to their environment (which includes things as well). Society is interactive, and the acquisition of things is also a natural part of humanity, which is why it is also another essential part of society besides a society’s ideas and customs. People affect people, along with goods. It isn’t about a fetish. It’s about recognizing the reality that people WANT things (even other people) and that this basic fact also goes into how they interact with each other and how they get them. That’s what economics is about. Politics, morals, ethics, aesthetics is about what people should want. What people should do. How we should enforce things. How people should interact with each other regardless of wants. That’s all. If you’re going to completely dismiss it by labeling it a “fetishistic ideology,” you’re not gonna get anywhere.

    • Re. circularity:

      But the very notion of subjective value holds that people decide how much value to give things. But in reality this is not the case. We confront a pre-existing world of prices which we have no power to change. We make our choices in the market based on a pre-existing world of prices. Now, at this point we don’t even need to wonder what the cause of these pre-existing prices is to see the circularity in the argument. (Obviously I think it is the productivity of labor that is the ultimate influence in these prices.) If I have no control over prices I confront in the grocery store then by definition their value is not something I am subjectively creating. I am obviously engrossed in a vast web of social interaction, an objective world of production, which I then relate my subjective preferences to. Nobody is denying that people have preferences. What is problematic is the idea that these preferences have a determining force in the exchange ratios between commodities. The neoclassical demand/supply curve can’t be drawn without a ceteris paribus condition (all things being equal). It is necessary to assume constant the prices of all other commodities except the one under investigation. Then one presupposes all prices on the demand and supply curves and then uses these presuppositions to “determine” the equilibrium price. Marx’s theory of price on the other hand does not require a ceteris paribus. He analyzes the simultaneous effect of the entire structure of production and the structure of demand upon commodity prices.

      “There can be no exchange value with no use-value”.
      Of course. This is why Marx conceives of value as a unity of exchange value and use-value. And I’ve tried to explain this concept to the best of my ability in my videos “Das MudPie” and “Value”.

      “Without exchange, goods are not allocated at all”.. I guess that depends on how you define exchange. Here I am talking about market exchange. I think it is problematic to assume that all modes of social distribution are just variations of market exchange. There are qualitatively distinct features to market exchange that make is very different than other forms of past of future distribution of the social product. Marx’s theory of attempts to theorize this distinct aspect of market distribution….

      “…where different people value their own goods “opposite” to each other at certain times.” This, I believe, is a core fallacy of the modern micro-econ/subjective-value position. People don’t value the use of the products of their labor at all because they don’t produce for personal use, but for exchange. By repeating this empirical error bourgeoise economy perpetuates the myth that all production is production for use, the surplus being exchanged. This was the case with pre-capitalist exchange but is not the case anymore.

      Here we are actually saying the same thing except that we are interpreting it in radically different ways. I actually agree with all almost all of your comment here and I think you have stated a great defense of Marx’s theory of value…. almost. The way I would put it is this: without labor we have no way of meeting our needs as a society. In a market we require a mechanism of apportioning this labor to meet demand for the products of labor. Price is this mechanism. The things that effect price are the productivity of labor in the production of the objects of our demand and the relation of demand to supply. The constant fluctuation of these factors determines the allocation of labor. This is the “law of value”. This system would reach an “equilibrium state/price” except that at at the heart of value production lie contradictions which move the system toward disequilibrium (covered in a future video). Of course aggregate demand effects price and thus the allocation of labor. It does so by raising or lowering price above or below value to send signals to producers. And this is why there must be a correlation between price and labor time for a society of commodity production to function.

      “Culture and economy is parallel, because valuation and action is parallel.”

      Is this not what Marx meant when he said “Men make their own history but not as the choose”? We create our social world through our labor and this labor in turn shapes our world-views and demands. In a capitalist society this process is beyond our conscious control- blind forces of value production shape these desires and create the bourgeois, utility-maximizing subject. This subject does not exist in a timeless vacuum.

      “Unfortunately, the people are also connected to their environment (which includes things as well)”

      Ah, but here you forget the unity of use and exchange value. Those objects are only scarce, only have value because it requires labor and a social organization of this labor to acquire this object. Objects that don’t require labor lie outside of the market and outside of value theory. I am not “dismissing the way people interact with each other regardless (sic) of their wants.” On the contrary I am talking about the way the social organization of labor constructs both our desires and our means of attaining these desires.

      • Misteriousness Al says:

        I apologize. I think I’m starting to understand what you mean not about value theory. However, I think this has a lot to do with semantics than anything else. Have you ever thought about synthesizing Austrian economics with Marxist economics? I think they have an awful lot of parallels. The thing is that each one approached it from a different focus, which sometimes skews conclusions. This is why sometimes Austrians, like most right-libertarians, sometimes end up being “vulgar libertarians” (i.e., apply their Austrian-ness in an obfuscated way or through equivocation to defend the current system that the left refers to as “capitalist”). Also, the other “right”-libertarians that are not vulgar who have a different definition of capitalism and do not apply it to the defense of the current situation through equivocation. The left is similar. There are the market socialists or mutualists who recognize “State socialism” and “State capitalism” to be of the same breed, and emphasize the role of the State in capitalism, i.e. as necessary to capitalism. Other leftists do not, and attack the private sector through the use of force (State or otherwise) to fulfill certain goals, while the market socialists see this as counterproductive and even unethical. Most of the disagreement is either ideological/semantical rather than economic, perhaps. I have a problem with Marx because of the language he uses. I actually got struck with some confusion with your videos, but this response helps a lot. Having already encountered the Austrian school, I found their language more understandable, and it could perhaps be applied to describe Marx’s theories. I know supply and demand only works in the short-term determination of prices; while demand and supply have an influence on price, I would agree that it doesn’t fully explain the determination of price on the long-term, which would necessitate the basis of labor as the determinant of equilibrium price.

        Do you know of Kevin Carson?

      • Yes I’ve read Carson’s book and I find it an interesting read. In the end I think it is a failure. His attempt to revitalize the LTV doesn’t actually address Marx’s theory of value at all. Rather he focuses solely on Ricardo and Smith and conflates their use of the theory with Marx’s. The result is that he is constantly misrepresenting Marx and failing to understand Marx’s insights into why labor takes the form of value in a capitalist society. Rather he treats labor value as an accounting unit- a physical input into the production process, not as a social relation between producers as Marx does. This leads him to conclude that there is some really important synthesis needed between subjective value theory and the labor theory of value. But this is just a confusion of categories. Subjective preferences take a role in the formation of demand preferences which influence prices. But this is different than the objective structure of the division of labor, where production is production of exchange value… where the social substance of society, our labor, is coordinated through exchange values. He also fails to address the question of intrinsic value.

        I agree that Marx is hard to understand. So is capitalism. To that end I have tried to make my work as accessible as possible, though I am sure I have not always been perfect in this regard. But just because something is hard doesn’t mean it is wrong. Adopting Austrian categories would not help one bit with Marx though, I am afraid. Their theoretical approach is exactly the opposite- dwelling in the world of surface appearance and ideology, rather than trying to pierce through to the actual social relations of production.

        I also think that Mutualists, with their obsession with blaming the state for all of the ills of capitalism, have it completely wrong. You will notice in my videos that I make no mention at all of the state. That is because the contradictions, the social antagonisms, of capitalism exist in the basic structure of production for exchange, not as an external imposition by the state. Yes the state is necessary for these antagonisms to exist. But there is no possibility in having production for market exchange without them. Thus Mutualism is a theoretical quagmire, a giant distraction that keeps intelligent people from actually examining the inner contradictions in the free market.

  3. hi says:

    first video has been removed. erase my comment when problem fixed.
    thanx, good work!

  4. Livid says:

    I can’t believe the pro-capitalists would sink so low to get your videos removed as to file copyright complaints. If I were a betting man, I’d wager that it was a “libertarian” who ostensibly opposes Intellectual Property. Those dirty !@#$%^& rats.

    • It was flagged for having nudity. I will upload a different version next week when I have more time… or I may just upload the original to a different site. No worries, the video is not lost. Yes, it was probably flagged by some immature libertarian (the irony of ironies: libertarians relying on censorship to win arguments….)

      • Everpresent says:

        Bourgeois theorists are already responding to your video’s. Come help and educate them:

      • I don’t see a link here. Are you referring the pathetic series of videos made by some inarticulate teenager who calls himself “fringeelements” or something? I found the videos (those I finished watching) very amusing but not really worth responding to. The kid doesn’t even try to understand anything in my videos. He just makes up his own strawman arguments to use as fodder for his inarticulate libertarian ranting. It is not really possible to have a debate with someone who isn’t interested in actually understanding his opponents position. I suspect that as my videos increase in quality and as my audience grows I will probably attract all sorts of responses and I will have to decide which ones are worth responding to and which ones are a complete distraction and waste of time.

  5. Everpresent says:

    yeah, it’s all bourgeois.

  6. Allan says:

    Great article. Is the final version available online?


  7. Zach S. says:

    I’m currently reading Capital, along with Harvey’s companion guide, and these vids are good little reviews that help solidify the info for me!


  8. Cathy says:

    This is my first look at Marx and his theories, apart from random comments made by lecturers, as I start Uni of course. The quiz was amazing to get me to focus and realise what I had no conception of and misconceptions of. Plus, I really appreciate how you include a script with the video’s, it allows me to read then watch the video, and then rinse and repeat a few times until I get it.

    My next stop is reading his works for myself and comparing and contrasting your concepts with what he himself wrote. I feel confident that I am going to find that you’ve done a pretty amazing job. :) and feel confident that I may just be able to tackle reading him at all now ^^.

    • Everpresent says:

      Brilliant. May I suggest a reading list and some words of caution?

      – capital volume 1 + companion to marx capital (harvey)
      – limits to capital (harvey)

      Applying Marx ideas to other spheres of life except economics is a bit tempting I would say but that’s my point of view. There is/was actually more debate on the interpretation of his concepts, theories than actual development of the framework in the way Marx would have done himself (dialectically).
      The proof of this are the various ‘forms’ of Marxism with sometimes diverging ideas (and methodological assumptions) without actually continuing the work of Marx as in expanding the argument. Remind for example the Althusser -Gramsci debate or the different controversies on the interpretation of Marx (transformation problem).
      That is also one of the reasons why I think that Marxism was almost extinct. The application of Marx his unfinished (but brilliant) concepts sometimes went too fast and too far (politically and scientifically). For example the different assumptions that Marx used to advance his argument in capital always have to be kept in mind (equal exchange for example).

  9. allan says:

    I really appreciate the work you are doing on Marx; it helps people like me, I think, who have been reading Marx but not really understanding him.

    In the above article you mention how Marx places commodity production in historical context. My question (and I think i have asked it somewhere else on this site) is, how does commodity production compare to slavery and feudalism? I would think that those systems dont produce commodities, yet they produce use-values and exchange-values.

  10. k02nq says:

    These videos are truly great. The way I learn best is to approach the same topic from different angles. Even though I’m doing pretty well on the basics, these videos are a great help in solidifying my understanding. I guess learning is essentially repetition (Gramsci?). – Also, I find your (and others’) discussions in the comments sections greatly illuminating; your dedication to this inspiring. So I thought I’d post this in support. – Your friend from the Middle East.

  11. MrEverpresent says:

    Re= ideological abstraction of marginal utility, preferences scales in mainstream economics.

    For me the ideological abstraction starts with the conceptualization of “use value” or “utility”. Let’s see what Marx says about use value in volume 1 first:
    “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. (…). The utility of a thing makes it a use value.But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities.”

    You can clearly see that for Marx use value is the physical body that is useful for someone. The two elements: usefullness and physical body are inseparably connected because the physical body determines the usefullness in a fundamental sense (Lay’s chips are only used for eating and not wiping my ass off because they are not physically made to be “used” in the toilet). What do mainstream economists do: they SEPARATE or abstract the (rather) subjective usefullness from the physical body of the commodity in which the consumer is interested. But Marx shows us that use value doesnt ‘dangle in mid-air’. Indeed, people have a desire, want, etc. for a physical thing. Abstracting the physical thing all away obscures the object of investigation. It seems like we are in a fantasy land where only subjectivity floats freely. They also displace the capitalist mentality (profit maximalization) onto the consumer: he max. utility.
    This is fundamental for Marx: the unity of physicality and subjectivity.

  12. AntsInMyPants says:


    I’m currently in the process of reading Capital (only just finished chapter 1), but am already confused on the terminology (especially the use of “value”). Maybe you can help clarify for me.

    I’m reading and hearing people use the term “use-value” to explain the “natural form” of a commodity. Are these terms, “use value” and “natural form” of a commodity, synonymous?

    If they are not synonymous, this leads me to another question. When Marx talks about the dual nature of a commodity, he outlines this as the “natural form” (the physical object) and the “value form” (socially necessary labor time, right?). Where does use value fit into this? Also, “exchange value” specifically refers to the relation of one commodity to another when they are exchanged, and this also splits into two different parts. Relative and equivalent form of value. This is correct?

    I think part of my confusion has to do with an ever contracting use of the term “value” or “forms of value”. To put it in another way, the scope of the word “value” seems to decrease as chapter 1 of Capital moves forward.

    For example, there is the “value-form” in the dual nature of a commodity (which is defined as labor?), but then there is “use value” and “exchange value” as “forms of value” which don’t seem to fit under “value-form” (in fact, use value is independent of labor, correct?). But then there are also “relative form of value” and “equivalent form of value”, but these are only with regards to the expression of value within the exchange relation of two commodities.

    It makes it all incredibly confusing, so if you could help clarify for me that would be awesome.

    • Ed George says:

      A commodity is a useful thing which is produced to be exchanged, i.e. sold, to be consumed by someone else, and not by its producer.

      When Marx talks about the ‘natural form’ of a commodity he is talking about its physical characteristics, wherein lies its usefulness. So, yes, ‘natural form’ and use-value in this sense are synonyms.

      The value of a commodity is the labour, measured in time, socially necessary for its production. The exchange-value of a commodity is the manifestation of value of value in exchange; as exchange is the only place where value does manifest itself we can say that exchange-value is the observable manifestation of value. The exchange-value of a commodity is the physical quantity of the other commodity for which it is exchanged. When this other commodity is the money commodity, the exchange-value of a commodity is its price.

      The ‘forms of value’ (simple, expanded, general) is a conceptual device deployed by Marx to show how the value of a commodity finds expression in the physical substance of another, and, ultimately, to show all commodities express their values in money, i.e. as in prices. This derivation will become very important in volume 3 when we consider the (normal) cases when commodities exchange in proportions different from the labour socially necessary for their production.

      My notes on chapter one might help ( as might my glossary for volume 1 (

      • AntsInMyPants says:

        Thank-you Ed, MrEverpresent, and Ed George for your help! I’m definitely starting to get it.

    • tagging on to what has already been said regarding use value.

      Depending on the context Marx could mean different things, or different aspects of use-value. Sometimes he could be talking about the specific heterogeneous uses of things (like the fact that I eat a pizza and drive a car.) These uses are very much tied up in the physical body of the thing, in its unique properties. Thus sometimes Marx means the actual physical body of the thing when he says ‘use-value’. So when he is talking about the money commodity he might say that commodities express their value in the use-value of the money commodity. Here the physical body of gold is expressing the exchange value of other commodities.

      Sometimes people say that use-value is just the same as the modern notion of utility. I do not think this is necessarily the case. I think that Marx’s argument for why use-value cannot be the source of value (since use-values are heterogeneous) can also apply to the concept of utility. But I don’t think that, if he were alive today, he would be comfortable interchanging the two terms. Utility is refers not to the specific qualities of a commodity but to the subjective relation between a consumer and a commodity. While Marx talks about use-value it is not in a way where the use-value of a commodity changes depending on who is evaluating it. He talks about commodities have a socially-determined use-value, and they seem to have the same social use regardless of who individually is using them. At least that is my understanding.

      • Ed George says:

        I think Marx uses the term use-value in two senses, either as a property of something, in the sense that something can *have* use-value, and also to refer to things that have the property, such that something can *be* (a) use-value.

        I think it is also right to understand the social determination of use-value. Although Marx insists that usefulness lies in physical properties, but he also argues that the *discovery* of usefulness ‘is the work of history’, and that use-value is ‘only realised in use or consumption.’ Silicon, for example, derives its use-value, at least in part, from its capacity to be used on the manufacture of semi-conductors; but this use-value of silicon, although a consequence of its physical composition, lay undiscovered for many thousands of years, until it became both possible and desirable to manufacture semi-conductors. So if use-value is intrinsic to a thing, it is only intrinsic to the extent that it represents a potential. ‘As Marx says, ‘the magnet’s property of attracting iron only became useful once it had led to the discovery of magnetic polarity.’

      • MrEverpresent says:

        It follows from his materialist method that the relation between the physical aspect and the social aspect of the commodity is fundamental. Without the physical body, no discovery of uses. It is also here that the meaning of “utility” in the modern sense and “use value” depart. The concept of “utility” in the modern sense erases the relationship of the physical body and the subjective appreciation of it. For Marx, this relation is fundamental.

  13. ED says:

    Use value is the use the commodity serves to you subjectively.
    It’s value is the amount of labor socially nessisary for its production.
    It’s exchange vale is its quantitative measurement (exchange ) compared to other commodities.
    A commodities exchange value is expressed in other commodities.

    • allan harris says:

      I have the same problem with value, exchange-value and use-value as “Antsinmypants.” I just can’t get the distinction between value and exchange value. I see that value is socially necessary labor and that price is the monetary expression of value, and use-value is the utility a commodity has for human beings. But value and exchange value seem to be too general and vague.

      In modern terms use-value has been replaced with “utility,” and value has been replaced with “price.” This confusion, in my opinion, has resulted in the economics of “marginal utility”: The price of something is the relative use one person might have for a commodity as compared to someone else; the so called subjective value, or relative market-value at different times and places for different people, or even for the same person.

      Why not use the modern terms and replace value with price? Everybody understands what price is. And everybody knows that sometimes you get more or less value for a price, but that over time, value will ultimately equal price. You can then eliminate utility from the determination of price.

      The real issue, I think, is that price, as average value, contains both the value of labor (wages) and profit (surplus-value.) Why not just simplify all this and say: Labor + Non-labor (raw materials, etc.) + profit = price. The marginal utility people will claim that profit can only be produced in the market, through buying and selling, or that profit is produced by the skill of the entrepeneur, or that the capitalist risks his money and thereby creates profit. This is all complete nonsense, yet an entire, dominant economic theory is based on the nonsense.

      How is it possible to convince people that profit/surplus-value is created in the process of production before the commodity even enters the market? And that price is only the monetary expression of a value created in production? And that utility is a non-market concept just because it is, more or less, entirely subjective?

      The economists in their statistics seem to confirm the Marxist theory: Production is measured in price: GDP is the total price of all goods and services, investment, and government spending expressed in dollars, euros, etc. There is no category in GDP specifically for profit. Which, according to Marx, is because profit is already contained in price. If you added a category “profit” to the GDP, the numbers would not work.

      There is even a table in the GDP (I believe Table 1.16 or .17, in the BEA figures) which describes the per unit price components in labor, non-labor costs and profit. In other words, Labor + Non-Labor + Profit = Price. Of course, the BEA doesn’t say that profit is created during production; but there are the numbers.

      I also agree with “Ants” that Marx’s genius never ceases to amaze me.

      • ED says:

        Price and value are two different things. Price is there to reflect value. Competition and demand will pull price around but value will remain dependent on labor time.
        Value is abstract labor time hiding behind price.

        It is entirely necessary to have a theory of value and a theory of price.

      • Ed George says:

        The problem is that everybody *doesn’t* understand what price is. It’s what you pay for something in a shop but what determines it? Computers are more expensive than pencils: why? You can’t say that it’s because computers are more useful: computers are more useful at doing what computers do but pencils do what pencils do better than computers. The danger in using the term ‘utility’ is that marginal utility theory works on the basis that utility is quantifiable (and therefore comparable) whereas in reality it is qualitative. Something either has it or it doesn’t, and between different objects utility has a different character.

        As for price and value, if price is what you pay for something then why do you need value: because if you don’t have value you can’t explain profit. *No* other theory than Marx’s – and going back to Smith and Ricardo up to the present day – can explain where profit comes from: they all observe it, and measure it, and assume its existence, but they can’t explain where it comes from. Why does this matter? Why are we in a severe economic crisis (and I live in Spain, and, believe me, we’re in a severe economic crisis) and why does it take the form that it does? Because, in my view, there has been a growth in fictitious capital over non-fictitious capital as industrial capital gets driven out of productive investment and into assets as a consequence of a decline in the rate of profit. But if you don’t have a theory of value – or a theory of price as the manifestation of value – this doesn’t make sense. Why should it be unsustainable to invest in asset markets when the rate of return – profit – is so high? Because profit is *not* profit –profit is surplus-*value* (just as price is ultimately *not* price but value) – value created in production beyond that required for the reproduction of the value-creating force, labour. So the profit on fictitious capital is not profit but *somebody else’s surplus-value*. So you have a crisis caused by what is in effect an overaccumulation of capital (exactly as in part 3 of volume 3 of Capital, which could have been written yesterday). But if you don’t have a conception of value as embodied abstract labour, and price as its manifestation, and that, therefore, the price, value embodied as money, and the value, socially necessary labour-time, of a commodity, real or fictitious, not only can, but must, diverge, then none of what I have just said here makes sense, and you’re left with bourgeois explanations of the crisis – financial mismanagement, greed, living beyond your means – which, because they don’t address the root of the crisis, can’t solve it, and ultimately end up as weapons in the class war to further the material interests of the ruling class while everybody else’s standard of living – yours and mine included – goes down the chute.

      • Tagging on to what has already been said: without a price-value relation you have no way of theorizing the way the price mechanism works. Prices have to be measuring something and this process of measurement in turn serves to allocate labor to different activities thus regulating the social labor process. If we just had ‘price’ without ‘value’ what would price be measuring? What would it be allocating? What social process would it have a relation to? Without value we’d have to say that price was measuring price!

        In contrast Marginal Utility, in my understanding, has to argue that price doesn’t measure anything, that it is a by-product of the collision of individual preference scales, that it serves an allocating mechanism without actually measuring anything. This is, of course, absurdist.

      • allan harris says:

        I understand that socially necessary labor creates value and that price is a monetary expression of this value.

        But is this value use-value, exchange-value, a combination of both or just “value?”

        Also, Marx showed that “value” is labor and that labor (or labor power) is measured in time, but that price is measured in money. How does time become money, especially dollars, euros, etc? Is it just “time is money?” And isn’t money, at least as gold, a commodity itself, having a labor value? When you exchange an ounce of gold for a computer, you are exchanging labor for labor. But when you exchange $100 for a cell phone what is happening? Is labor still being exchanged for labor? I understand that if I work for day and am paid $100 that I actually produce, say, $200 of value, which is profit for the capitalist.

        It seems like a fundamentally unsolvable problem: value is labor-time, but price is money. Is this the so called transformation problem?

      • Allan,

        Have you read the first chapter of Capital to familiarize yourself with the way in which Marx develops the money form from the commodity form?

      • I ask because it seems to me that the derivation of the money form from the commodity form would solve your mystery of how time comes to be measured in money. Money, for Marx, at least commodity money, represents a quantity of labor-time. Thus when money measures the value of another commodity it is the same as if two quantities of labor time were being equated. This doesn’t immediately answer the question as to what to make of inconvertible paper money. But it does answer the question of the relation of money as a measure of value to the value of commodities.

        I’m not sure if your question was directed to the issue of inconvertible but if it was my short answer (and my long answer will be in my next video in the Law of Value series which will be on the topic of money) would be that once the measure of value is established historically in this abstract way then the token of value which we use to represent it can float away from its commodity base, at least for a time being, although in times of crisis there will be a demand for some sort of commodity base for the measure and store of value.

        To your other question:
        “I understand that socially necessary labor creates value and that price is a monetary expression of this value. But is this value use-value, exchange-value, a combination of both or just “value?””

        The SNLT that goes into a commodity is its value. It’s exchange value is the relation between this labor and the labor of whatever it is being exchanged with. If it is exchanged for money than this is called price. But I think that you know all that so I am not sure what your question is.

      • allan harris says:

        Yes, I think you do focus where I might be going.

        One computer = 1 hr labor time
        One x = 1 hr labor time
        One oz of gold = 1 hr labor time

        Since gold was easy to carry around, could be stamped, etc., then it became the universal commodity, money.

        But since it was even difficult to carry gold around, and dangerous, banks must have begun to issue certificates of deposit representing a claim on their gold deposits. In addition, the banks would accept and discount bills of exchange from different manufacturers.

        These certificates, over time, would become paper money issued by banks, then later issued by sovereign countries. Gold originally was an actual commodity, then money, which then became paper, and now the money is simply a computer entry.

        However, and I think this is where I am stuck, money is still an expression of labor-created value. So,

        1$ = ? labor time. If you took the total dollar value of goods and services produced (say in the U.S.) and divided by the total number of hours worked, should that not give you the labor time contained in a U.S. dollar?

      • If, as in your example, you divide all of the commodity value being exchanged by the total amount of money used to make those exchanges then you would arrive at the monetary expression of labor time or MELT. Since our current monetary system is not a commodity money system then MELT does not represent the labor ‘contained’ in a US dollar. Rather it represents the labor-time represented by a US dollar.

      • allan harris says:

        Very interesting. thanks for the reply.

  14. ED says:

    Use value really has nothing to do with production or economics.

    It just says that to the purchaser, the commodity must have some kind of use.

    • MrEverpresent says:

      Not entirely right.
      I think that the point however is that the concept of use value depicts uses (washing, eating) and is determined by the physical characteristics of the thing (no use value without the physical characteristics).
      “use value is conditioned by the physical proporties of the commodity. It is therefore the physical body of the commodity itself”

      • MrEverpresent says:

        Use value is actually very important in production. The most essential point we can get from Marx is that use value should be the most important thing in society: it satisfies our needs.
        But under the capitalist mode of production we also have different kind of value system. A tyranny of the majority: a law of averages. This conditions everything in social life: we can see this most clearly now in the economic recession.

  15. Like Kapitalism101 says in his video’s. Value (socially necessary labor time) is abstract. This abstraction is expressed in commodities.

    If you exchanged two commodities that were equal values, they will have the same amount of labor (time) in them i.e. 15 hours for 15 hours.

    Labor, like raw materials is a commodity, and is used in the production process. The capitalist has to buy them both and you as the consumer need to pay for them too (plus the capitalist’s surplus).

    (((But, surplus value comes from paying less for labor in production than the value labor creates but that’s for later on)))

    • allan harris says:

      I don’t think this is correct. Surplus value comes from the process of production, the labor (power) used to produce the commodity. The capitalist takes the surplus value without paying for the labor which produced it.

      • Yes, it is the commodity that creates more value than it is worth

      • allan harris says:

        Surely you don’t mean that. A commodity is a thing, it can’t produce any value. It contains value, but it is the worker who creates this value. And the value is in addition to the wages paid to the worker and the raw materials used in the production. This additional value, surplus-value, is the profit the capitalist appropriates from the process of production.

  16. Yes I do mean that. Labor power has a use value and an exchange value…It is something that is bought and sold on the market. labor is a commodity.

    • allan harris says:

      I think you meant that the particular commodity, labor (-power), when in use (by the capitalist) produces more value than it itself cost to produce. It is true that labor is a commodity, but it is not true that all commodities in use create surplus-value.

      • Yes, a distinction needs to be made between dead labor and living labor.

        And to add to your question of “1$ = ? labor time”

        It would be hard to find that out exactly. The cost of labor more or less is a supply and demand issue.
        You will have an hour of ones labor be 7.25 and another’s 20.95 depending on demand and amount of people competing for jobs.
        commodity expressions of labor time deviate from place to place, capital will seek out the cheapest possible expressions they can find.
        But in the abstract an hour is an hour, We could say that on average a watch has a low amount of total labor, therefore, will have less value than a battleship.

        As far as figuring it out, I believe what K101 said would be the best way to figure it out for a economy as a whole, but it is still just the expression of value.

      • allan harris says:

        I didn’t mean so much the cost of labor or wages. If money is a commodity then it would seem to follow that a dollar/euro/yen contains a certain amount of labor time, as does any commodity. So, if 1 oz of gold contains 1 hour of labor time, then how much labor time is contained in $1, or, rather, how much labor time is $1?

        According to the FRED (fed reserve) statistics the average hourly U.S. wage is $25 and the average production per hour is about $50. If this is correct then $1 should contain, more or less, about one minute of labor time. This is entirely speculation on my part.

      • This short paper by Fred Moseley talks about a method of determining MELT under a regime of inconvertible currency:

        For an alternative point of view see:

      • allan harris says:

        I don’t seem to be able to access the Moseley paper. Is this a journal you have subscribe to?

        Also, so now there is a debate about commodity money and non-commodity money? Isn’t gold the classic form of commodity money, and non-commodity money simply government printed paper? Aren’t both still a monetary expression of labor value?

      • Try this:

        And yes there is always a debate about everything and anything related to Marx and value.

      • allan harris says:

        Thank you for the link. The article directly addresses what I was thinking about. One question: the monetary expression of labor-time…since it is agreed (among marxists) that labor is value, isn’t MELT another way of saying “monetary expression of value,” which is, as Marx said, price.

      • If you are asking “is MELT the same thing as price?” the answer is no. If the price of a sandwich is $7 and the MELT is $1 and sandwich happens to be trading at its value then the sandwich contains 7 hours of socially necessary labor time. Price is a monetary expression of labor time but MELT refers specifically to how much labor-time is represented by a unit of currency (a dollar for instance) so that we can convert prices into labor-time and vice-versa. It is a means of converting between the two.

  17. It is a bit confusing that the material expressions of labor are different from area to area.
    But really…when we analyze things in models, it is just to assume commodities = value.
    Also, to show that labor will always valorize the past value in the commodities you need a theory of surplus value creation.

    For instance, if you make a model and assume that commodities are bought and sold at values you need to find some way to express surplus value, therefore the labor must be exploited.

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