Studying Karl Marx’s Capital From a Libertarian Perspective, Chapter 1, Section 1: The Two Factors of a Commodity: Use Value and Value

February 27, 2010
(audio source: Libravox via Internet Archive)

A given commodity, e.g., a quarter of wheat is exchanged for x blacking, ...

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.  Read the rest of this entry »