>Keen points out that Marx later realized that objects have a "use value" as well as an "exchange value". This use value can be greater than the exchange value---a worker using a drill press is much more productive than a worker drilling holes by hand---and the excess use value allows the capital inputs to add excess value to the products, as well as the labor.

Marx mentions the concept of use value right before exchange value and Value in Chapter 1 of Capital; the whole formulation of Marx's concept of the LTV takes use value into account: "The labor embodied in labor power is the labor value of the means of subsistence which the worker requires to reproduce his labor power. In other words, the value of labor power is the labor value of "necessary consumption" used to maintain the workers. The use value of labor power is the labor which the capitalist can get out of the worker. The difference between the number of hours which the worker works and the labor value of labor power is the source of profit under capitalism."[0]

Not to mention that Marx probably read Smith before starting on Capital, and Smith had introduced the concept before him. I don't think it's an oversight (unless he had drafted Capital without use value beforehand) as much as it is the fact that English translations of the book and decades of explanatory volumes have read Marx in a myriad of ways, all admitting that Marx simply wasn't very good at writing. Althusser for example suggests to skip the first few chapters. There is even debate now among for example Zizek and Wolff about the different forms of value elucidated by Marx. On the whole, I don't consider Marx's values to be muddle-headed as Russell says, I consider them hard to understand, and I can only hope that I am understanding them semi-correctly.

As to the worker using the drill press, the labour embodied in the machine is coupled with the labour of the worker (who operates the machine) being transferred to the products, labour being the creator of the use value in the sheet, but its combination in totality with the press counting as the exchange value, as a portion of the total societal mass of abstract labour, reduced to unskilled labour. That's my understanding, anyway.

I don't think it makes sense to compare use values and exchange values, though, despite the fact that they are both products of labour.

"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. Then one use value is just as good as another, provided only it be present in sufficient quantity. Or, as old Barbon says,

“one sort of wares are as good as another, if the values be equal. There is no difference or distinction in things of equal value ... An hundred pounds’ worth of lead or iron, is of as great value as one hundred pounds’ worth of silver or gold.”[8]

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."[1]

I must admit though that I'm really quite sketchy on this. When it comes to Marx's theory of value, I'm a novice, having only started to read up on this a couple of weeks ago. There are alternatives to Marx's conception of the LTV, found within Post-Keynesian Economics though I haven't read into that.

[0] http://www.dreamscape.com/rvien/Economics/Essays/LTV-FAQ.htm...
[1] https://www.marxists.org/archive/marx/works/1867-c1/ch01.htm...