Value (exchange)

The social labor of commodity producers, embodied and materialized in a commodity.
Value is the social attribute of a thing, an attribute acquired in certain historical conditions—namely, in conditions of commodity production. It is created in production and manifested in exchange, when the commodity produced by the commodity producer is equalized with other commodities. Commodity producers are joined with one another in a system of social division of labor; they thereby work for one another, by virtue of which their labor takes on a social character. Differing from one another as use-values, the commodities being exchanged have one feature in common—that is, they are the products of labor, and labor that has been expended on their production constitutes their value. The proportion in which some commodities are exchanged for others is called the exchange-value. Thus, value manifests itself externally in the act of exchange, that is, in the exchange-value; the use-value of the commodity—the utility of a thing—becomes the bearer of exchange-value.
The magnitude of the value of a commodity is defined as the amount of labor socially necessary for production of the commodity; it is measured by work (labor) time. Since the various commodity producers expend an unequal amount of labor (time) on the production of one and the same commodity, the commodities have varied individual value. Since value embodies social labor, however, the social (market) value cannot be defined by individual expenditures of labor. Social value is defined as the socially necessary work time—the time expended on the manufacture of a commodity under socially normal conditions of production, and with the average degree of skill and intensity prevalent at the time—or it is defined as the time expended on the production of the basic mass of commodities of a given kind.
With private ownership, the proportions in which commodities are exchanged are spontaneously regulated by the socially necessary expenditures of labor (work time) in the process of competitive struggle (seeCOMPETITION). The complexity of labor also influences the magnitude of value. The magnitude of value is measured by the expenditures of simple labor that any unskilled worker is able to perform. In the exchange of commodities of different kinds, complex labor of all kinds is reduced to simple labor (seeREDUCTION OF LABOR). As a result, complex labor appears as multiplied simple labor, and in exchange, every hour of complex labor is equalized with a larger amount of simple labor.
W. Petty, A. Smith, and D. Ricardo laid the foundation for the labor theory of value. To K. Marx, however, belongs the credit for providing the labor theory of value with a highly consistent and comprehensive scientific grounding, and for drawing all the social and class conclusions therefrom.
Vulgar bourgeois political economy has attempted and is attempting to overthrow the labor theory of value. In bourgeois economics, for example, exchange-value is often treated as the expression of use-value. In this conception, the exchange proportions of commodities are determined not by the social labor expended but supposedly by the use-value of the commodity (seeMARGINAL UTILITY THEORY). Another theory of value, no less popular, treats value as the result of the effect of the three factors of production—land, labor, and capital (seePRODUCTIVITY, THEORIES OF).
In actuality, the amount of socially necessary labor expended on the production of a commodity determines the value of the commodity and the proportions in which one commodity is exchanged for another. “In general, the greater the productiveness of labor, the less is the labor time required for the production of an article, the less is the amount of labor crystallized in that article, and the less is its value” (K. Marx, in K. Marx and F. Engels, Soch., 2nd ed. vol. 23, p. 49). Marx’ labor theory of value served as the basis for his theory of surplus value.
The simple, elementary, or accidental form of value was coterminous with the early stage of exchange, when exchange was accidental in character. A commodity whose value was expressed in another commodity assumed the relative form of value; a commodity in which the value of another was expressed assumed the equivalent form of value, that is, it was the equivalent of the first commodity. The relative form of value reflects primarily the homogeneity of the commodities being exchanged as the products of human abstract labor. In the stage of accidental exchange, a single, accidental commodity plays the role of equivalent.
With the first great social division of labor, namely, the separation of stock raising from crop cultivation, exchange became more regular, and livestock were systematically exchanged for other commodities, which appeared not as accidental equivalents but as particular equivalents, to which the livestock were equated. To this stage of exchange corresponded the total, or expanded, form of value, in which one commodity expressed its value in a whole series of other commodities.
As exchange became regular, the expanded form of value was gradually transformed into the general form of value, when from the world of commodities a single commodity was excluded to become equivalent to all other commodities—a universal equivalent. Only one commodity, in which all commodities expressed their value uniformly, played the role of universal equivalent. The universal equivalent possessed the character of universal exchangeability. Depending on the concrete conditions of production, various commodities fulfilled the function of universal equivalent—such as livestock, hides, and fish. When exchange transcended the bounds of the local market, there arose a need to restrict the function of the universal equivalent to a single commodity only—which now became money. To this stage of exchange corresponded the money-form of value.
The role of money initially fell to various commodities; finally, however, it was restricted to a single commodity—gold, whose properties made it eminently suited to fulfill the function of money. With the appearance of money, the value of all commodities is expressed in money, and commodities thereby acquire a price. In the market, under the impact of supply and demand, the price fluctuates around value (seeVALUE, LAW OF).
The value of a commodity expresses the value created by past labor and transferred, by concrete labor, from the expended means of production to a given commodity; it also expresses the new (newly created) value imparted by living labor to the commodity in a given production process. As production becomes technologically more advanced, the unit value of production generally falls, the share of past labor in value increases relatively, and the share of newly created value decreases. In every socioeconomic formation in which commodity production exists, the ratio of past and newly created value expresses the production relations specific to that formation.
Under capitalism, value consists of the constant capital (c) used in the production of a commodity; the variable capital (v), or that portion of the newly created value that is equivalent to the value of the labor power expended in the process of production; and the surplus value (m), or that portion of the newly created value that is appropriated without compensation by the capitalists. The social value of a commodity coincides with the actual social costs of production but differs from the capital costs of production by the magnitude of the surplus value. Under developed capitalism, as a result of the spontaneous redistribution of surplus value and the equalization of profits to an average profit, the value of commodities is transformed into the price of production.
Under socialism, value expresses socialist production relations. It is created and used in conditions in which public ownership of the means of production prevails and social production is organized in planned fashion. In socialist society, use-value becomes directly social value, that is, it is earmarked for the planned satisfaction of the growing needs of society. The organic unity of value and use-value manifests itself in the planning of production and sales of production—both in money and in kind—and in the use of value-forms for the calculation and evaluation of expenditures of social labor, for control of the production, distribution, and exchange of material goods, for the organization of material incentives, and for increasing the efficiency of production. Value expresses the value of the means of production expended (outlays of past, materialized labor), the value of the necessary product, and the value of the surplus product (outlays of living labor).
The socialist economy distinguishes between value and the prime cost of production. The difference between the two is the enterprise’s net income, or profit. Through planned pricing, value acts as a reference point for individual enterprises, one that indicates the average level of the social productivity of labor. The social unit value of production is lowered as the individual value at individual enterprises is reduced by the increased productivity of social labor. Enterprises that produce with outlays less than those socially necessary make greater profits, a portion of which is used, in accord with standards set by the state, to create economic incentive funds. Socialist society has an interest in lowering the unit value of production, since to do so is to ensure the means necessary for production development and higher standards of living.
Under socialism, the formation of value is an objective process, organized in planned fashion for the whole of society. The socialist state, once it establishes a need for a certain product and the social importance of that product, determines the enterprises and quantities in which the product is to be manufactured. It plans the expenditures of labor and of the means of production at every enterprise and organizes plan fulfillment, thereby exerting an influence on the amount of socially necessary work time and thus reducing work time. Under socialism, changes in the magnitude of value are the result of conscious human activity, planned and directed by the socialist state.
Value is a historical category, whose existence is derived from the commodity-money relations that will be overcome in full communism.
===REFERENCES===
Marx, K. Kapital, vol. 1, chs. 1–3. In Soch., vol. 23.Lenin, V. I. “Karl Marks.” Poln. sobr. soch., 5th ed., vol. 26, pp. 60–62.Rozenberg, D. I. Kommentarii k l-omy tomy “Kapitala” K. Marksa. Moscow, 1961.
Zakon stoimosti i ego ispol’zovanie v nar. khoziaislve SSSR. Moscow, 1959.
Zakon stoimosti i ego rol’ pri sotsializme. Moscow, 1959.
Tovarno-denezhnye otnosheniia v sisteme planomerno organizovannogo sotsialisticheskogo proizvodstva. Moscow, 1971.A. A. SERGEEV
Category:Economics