(audio source: Libravox via Internet Archive)
Marx begins Capital by describing what I would call a commodity’s “trinity of value“. The trinity consists of use value, exchange value, and value. These are all terms of art that are to be used with precision. Use value, in my interpretation, is most analogous what I would call “value”¹. It is largely subjective and impossible to quantify. An item’s exchange value, in my interpretation, is analogous to what we would today call fair market value, or market price, and is measurable in terms of what one might expect to receive for the item if one intended to exchange on the market. Ironically, the term value has no analogy among my previously-held notions of “value”. To Marx, value arises out of the “socially-necessary labor time” required to produce a commodity. To me, the amount of labor necessary to produce a commodity is irrelevant to the commodity’s “value”. Quite to the contrary, a potential item’s latent, pre-existing “value”, i.e demand, is usually what induces the labor necessary to make the item in the first place. Labor is the effect of “value”, not its cause. Nonetheless, to facilitate the proper interpretation of the term value as Marx will inevitably continue to use it, I will assign to the term value the definition that Marx has assigned it, however useless I find the concept to be.
At 6:15, Marx observes the following relationship between the exchange values of different items:
In my understanding of “value”, a voluntary exchange is evidence that each party to the exchange “values” the items they are exchanging differently, not equally. If I have a quarter of wheat and I exchange it for z gold, it is because I value the gold more than the wheat. If the other party to the exchange voluntary relinquishes z gold in receipt of a quarter of wheat, it is because she values the wheat more than the gold.
At first I considered Marx’s account of the equality of exchange values between the items in an exchange to be an error. Upon reconsideration, I decided that Marx might find the above inequality to be a property of the item’s use value. If I were a jeweler and my partner in exchange were a miller, I would subjectively find greater use value in the gold, and the miller would find a greater use value in the wheat. I learned an early lesson: Whenever one part of Marx’s trinity of value fails adequately to describe reality, he always has at two others to fall back on.
At 11:46, Marx identifies the source of a commodity’s value that gives rise to its exchange value:
David Harvey, at 65:40 of his introductory lesson on Capital, concedes on Marx’s behalf that this conclusion is an “a priori leap”. In other words, it is a completely unsubstantiated declaration. With a hat-tip to Harvey, I need not dwell on that aspect of Marx’s declaration any further.
However, it is worth while to describe the potential for Marx’s definition of value, to deviate substantially from my own definition of “value”. First, observe the impressive mental acrobatics that Marx employs to rescue his definition of value from an obviously fatal deficiency:
This is precisely the sort of abstruse reasoning that I liken to geocentric astronomers‘ vain attempts to explain apparent retrograde motion using such contrivances as deferents and epicycles. I would encourage those who accept Marx’s definition of value to apply Occam’s Razor liberally to pages 45 and 46 of Capital. The simplest explanation is often the best. The earth is not the center of the universe, and labor is not the center of value.
For all his rehabilitory efforts, Marx has failed, in my view, to revive his definition into usefulness. Why does Marx feel at liberty to average out the labor of individual workers? This suggestion should offend anyone who takes enough pride in her work to improve her productivity through effort. Suppose the average worker requires two hours to assemble a stool, while Smith requires only one hour. Under Marx’s proposed definition, the two stools should be of the same value: that of an hour’s worth of the average worker’s labor. But Smith’s stool is different from the stool of the average worker. Smith’s stool comes bundled with a bonus hour of free time. Smith might use that free time either for himself or to enrich his neighbors through additional productive activity, i.e., assembling a second stool for exchange. Does Smith’s additional free time have value of any kind? If so, then Marx should represent this value somewhere in his definition of value. As far as I can tell, he does not.
Marx could conceivably revive his flatlined definition of value by henceforth bundling each and every commodity on the market with a measure of time either saved or consumed in its production, but this would add to the already unnecessary unwieldiness and ungainliness of Marx’s proposal. Personally, I would wipe the slate clean here and start anew, but I do not have that luxury. If I am to understand Capital, I must receive it in Marx’s terms, however unwieldy, ungainly, and unuseful those terms may be.
Marx closes the first section of Capital with an example of how changes in productivity lead to changes in value:
This is essentially what most people today would recognize as the supply side of the law of supply and demand, which states that as the supply of a thing increases, its fair market value, i.e. its exchange value, will tend to decrease. Marx’s runs into trouble, however, when he erroneously applies this law to his idiosyncratic definition of value.
Suppose a Hollywood movie glorified pizza twirlers so as to inspire many movie-goers to become pizza twirlers. Suppose that as a result, the number of pizza twirlers doubled. The quantity of pizzas would increase, even though the labor expended per pizza would not. The value, as Marx has idiosyncratically defined the term, of each pizza would remain the same, irrespective of the increase in quantity of pizzas. Therefore, the value would not vary directly as the quantity, the way Marx has assured us it would. His general rule simply does not work in this situation.
One possible way to cure the rule would be to limit its application, and therefore its usefulness, only to those situations in which the number of laborers in a given field remains constant. In such situations, an increase in quantity would necessarily imply an increase in productiveness, and therefore a decrease in labor that would result in a decrease in value. The section does not speak of any such limitation, however, and the problem so-far remains unresolved.
At the end of chapter one, section one of his allegedly great work, Marx has already dug himself into a deep hole. I’m interested to see how he attempts to claws his way out. In the meantime, enjoy some pizza: