Karl Marx: Critique of Political Economy. 1859

Part I


The wealth of bourgeois society, at first sight, presents itself as an immense accumulation of commodities, its unit being a single commodity. Every commodity, however, has a twofold aspect – use-value and exchange-value. [1]

To begin with, a commodity, in the language of the English economists, is “any thing necessary, useful or pleasant in life,” an object of human wants, a means of existence in the widest sense of the term. Use-value as an aspect of the commodity coincides with the physical palpable existence of the commodity. Wheat, for example, is a distinct use-value differing from the use-values of cotton, glass, paper, etc. A use-value has value only in use, and is realized only in the process of consumption. One and the same use-value can be used in various ways. But the extent of its possible application is limited by its existence as an object with distinct properties. It is, moreover, determined not only qualitatively but also quantitatively. Different use-values have different measures appropriate to their physical characteristics; for example, a bushel of wheat, a quire of paper, a yard of linen.

Whatever its social form may be, wealth always consists of use-values, which in the first instance are not affected by this form. From the taste of wheat it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist. Although use-values serve social needs and therefore exist within the social framework, they do not express the social relations of production. For instance, let us take as a use-value a commodity such as a diamond. We cannot tell by looking at it that the diamond is a commodity. Where it serves as an aesthetic or mechanical use-value, on the neck of a courtesan or in the hand of a glass-cutter, it is a diamond and not a commodity. To be a use-value is evidently a necessary prerequisite of the commodity, but it is immaterial to the use-value whether it is a commodity. Use-value as such, since it is independent of the determinate economic form, lies outside the sphere of investigation of political economy. [2] It belongs in this sphere only when it is itself a determinate form. Use-value is the immediate physical entity in which a definite economic relationship – exchange-value – is expressed.

Exchange-value seems at first to be a quantitative relation, the proportion in which use-values are exchanged for one another. In this relation they constitute equal exchangeable magnitudes. Thus one volume of Propertius and eight ounces of snuff may have the same exchange-value, despite the dissimilar use-values of snuff and elegies. Considered as exchange-value, one use-value is worth just as much as another, provided the two are available in the appropriate proportion. The exchange-value of a palace can be expressed in a definite number of tins of boot polish. London manufacturers of boot polish, on the other hand, have expressed the exchange-value of their numerous tins of polish in terms of palaces. Quite irrespective, therefore, of their natural form of existence, and without regard to the specific character of the needs they satisfy as use-values, commodities in definite quantities are congruent, they take one another’s place in the exchange process, are regarded as equivalents, and despite their motley appearance have a common denominator.

Use-values serve directly as means of existence. But, on the other hand, these means of existence are themselves the products of social activity, the result of expended human energy, materialized labour. As objectification of social labour, all commodities are crystallisations of the same substance. The specific character of this substance, i.e., of labour which is embodied in exchange-value, has now to be examined.

Let us suppose that one ounce of gold, one ton of iron, one quarter of wheat and twenty yards of silk are exchange-values of equal magnitude. As exchange-values in which the qualitative difference between their use-values is eliminated, they represent equal amounts of the same kind of labour. The labour which is uniformly materialised in them must be uniform, homogeneous, simple labour; it matters as little whether this is embodied in gold, iron, wheat or silk, as it matters to oxygen whether it is found in rusty iron, in the atmosphere, in the juice of grapes or in human blood. But digging gold, mining iron, cultivating wheat and weaving silk are qualitatively different kinds of labour. In fact, what appears objectively as diversity of the use-values, appears, when looked at dynamically, as diversity of the activities which produce those use-values. Since the particular material of which the use-values consist is irrelevant to the labour that creates exchange-value, the particular form of this labour is equally irrelevant. Different use-values are, moreover, products of the activity of different individuals and therefore the result of individually different kinds of labour. But as exchange-values they represent the same homogeneous labour, i.e., labour in which the individual characteristics of the workers are obliterated. Labour which creates exchange-value is thus abstract general labour.

If one ounce of gold, one ton of iron, one quarter of wheat and twenty yards of silk are exchange-values of equal magnitude or equivalents, then one ounce of gold, half a ton of iron, three bushels of wheat and five yards of silk are exchange-values which have very different magnitudes, and this quantitative difference is the only difference of which as exchange-values they are at all capable. As exchange-values of different magnitudes they represent larger or smaller portions, larger or smaller amounts of simple, homogeneous, abstract general labour, which is the substance of exchange-value. The question now arises, how can these amounts be measured? Or rather the question arises, what is the quantitative form of existence of this labour, since the quantitative differences of the commodities as exchange-values are merely the quantitative differences of the labour embodied in them. Just as motion is measured by time, so is labour by labour-time. Variations in the duration of labour are the only possible difference that can occur if the quality of labour is assumed to be given. Labour-time is measured in terms of the natural units of time, i.e., hours, days, weeks, etc. Labour-time is the living state of existence of labour, irrespective of its form, its content and its individual features; it is the quantitative aspect of labour as well as its inherent measure. The labour-time materialised in the use-values of commodities is both the substance that turns them into exchange-values and therefore into commodities, and the standard by which the precise magnitude of their value is measured. The corresponding quantities of different use-values containing the same amount of labour-time are equivalents; that is, all use-values are equivalents when taken in proportions which contain the same amount of expended, materialised labour-time. Regarded as exchange-values all commodities are merely definite quantities of congealed labour-time.

The following basic propositions are essential for an understanding of the determination of exchange-value by labour-time. Labour is reduced to simple labour, labour, so to speak, without any qualitative attributes; labour which creates exchange-value, and therefore commodities, is specifically social labour; finally, labour in so far as its results are use-values is distinct from labour in so far as its results are exchange-values.

To measure the exchange-value of commodities by the labour-time they contain, the different kinds of labour have to be reduced to uniform, homogeneous, simple labour, in short to labour of uniform quality, whose only difference, therefore, is quantity.

This reduction appears to be an abstraction, but it is an abstraction which is made every day in the social process of production. The conversion of all commodities into labour-time is no greater an abstraction, and is no less real, than the resolution of all organic bodies into air. Labour, thus measured by time, does not seem, indeed, to be the labour of different persons, but on the contrary the different working individuals seem to be mere organs of this labour. In other words the labour embodied in exchange-values could be called human labour in general. This abstraction, human labour in general, exists in the form of average labour which, in a given society, the average person can perform, productive expenditure of a certain amount of human muscles, nerves, brain, etc. It is simple labour [English economists call it “unskilled labour”] which any average individual can be trained to do and which in one way or another he has to perform. The characteristics of this average labour are different in different countries and different historical epochs, but in any particular society it appears as something given. The greater part of the labour performed in bourgeois society is simple labour as statistical data show. Whether A works 6 hours producing iron and 6 hours producing linen, and B likewise works 6 hours producing iron and 6 hours producing linen, or A works 12 hours producing iron and B 12 hours producing linen is quite evidently merely a different application of the same labour-time. But what is the position with regard to more complicated labour which, being labour of greater intensity and greater specific gravity, rises above the general level? This kind of labour resolves itself into simple labour; it is simple labour raised to a higher power, so that for example one day of skilled labour may equal three days of simple labour. The laws governing this reduction do not concern us here. It is, however, clear that the reduction is made, for, as exchange-value, the product of highly skilled labour is equivalent, in definite proportions, to the product of simple average labour; thus being equated to a certain amount of this simple labour.

The determination of exchange-value by labour-time, moreover, presupposes that the same amount of labour is materialised in a particular commodity, say a ton of iron, irrespective of whether it is the work of A or of B, that is to say, different individuals expend equal amounts of labour-time to produce use-values which are qualitatively and quantitatively equal. In other words, it is assumed that the labour-time contained in a commodity is the labour-time necessary for its production, namely the labour-time required, under the generally prevailing conditions of production, to produce another unit of the same commodity.

From the analysis of exchange-value it follows that the conditions of labour which creates exchange-value are social categories of labour or categories of social labour, social however not in the general sense but in the particular sense, denoting a specific type of society. Uniform simple labour implies first of all that the labour of different individuals is equal and that their labour is treated as equal by being in fact reduced to homogeneous labour. The labour of every individual in so far as it manifests itself in exchange-values possesses this social character of equality, and it manifests itself in exchange-value only in so far as it is equated with the labour of all other individuals.

Furthermore, in exchange-value the labour-time of a particular individual is directly represented as labour-time in general, and this general character of individual labour appears as the social character of this labour. The labour-time expressed in exchange-value is the labour-time of an individual, but of an individual in no way differing from the next individual and from all other individuals in so far as they perform equal labour; the labour-time, therefore, which one person requires for the production of a given commodity is the necessary labour-time which any other person would require to produce the same commodity. It is the labour-time of an individual, his labour-time, but only as labour-time common to all; consequently it is quite immaterial whose individual labour-time this is. This universal labour-time finds its expression in a universal product, a universal equivalent, a definite amount of materialised labour-time, for which the distinct form of the use-value in which it is manifested as the direct product of one person is a matter of complete indifference, and it can be converted at will into any other form of use-value, in which it appears as the product of any other person. Only as such a universal magnitude does it represent a social magnitude. The labour of an individual can produce exchange-value only if it produces universal equivalents, that is to say, if the individual’s labour-time represents universal labour-time or if universal labour-time represents individual labour-time. The effect is the same as if the different individuals had amalgamated their labour-time and allocated different portions of the labour-time at their joint disposal to the various use-values. The labour-time of the individual is thus, in fact, the labour-time required by society to produce a particular use-value, that is to satisfy a particular want. But what matters here is only the specific manner in which the social character of labour is established. A certain amount of a spinner’s labour-time is materialised, say, in 100 lb. of linen yarn. The same amount of labour-time is assumed to be represented in 100 yards of linen, the product of a weaver. Since these two products represent equal amounts of universal labour-time, and are therefore equivalents of any use-value which contains the same amount of labour-time, they are equal to each other. Only because the labour -time of the spinner and the labour-time of the weaver represent universal labour-time, and their products are thus universal equivalents, is the social aspect of the labour of the two individuals represented for each of them by the labour of the other, that is to say, the labour of the weaver represents it for the spinner, and the labour of the spinner represents it for the weaver. On the other hand, under the rural patriarchal system of production, when spinner and weaver lived under the same roof – the women of the family spinning and the men weaving, say for the requirements of the family – yarn and linen were social products, and spinning and weaving social labour within the framework of the family. But their social character did not appear in the form of yarn becoming a universal equivalent exchanged for linen as a universal equivalent, i.e., of the two products exchanging for each other as equal and equally valid expressions of the same universal labour-time. On the contrary, the product of labour bore the specific social imprint of the family relationship with its naturally evolved division of labour. Or let us take the services and dues in kind of the Middle Ages. It was the distinct labour of the individual in its original form, the particular features of his labour and not its universal aspect that formed the social ties at that time. Or finally let us take communal labour in its spontaneously evolved form as we find it among all civilised nations at the dawn of their history. [3] In this case the social character of labour is evidently not effected by the labour of the individual assuming the abstract form of universal labour or his product assuming the form of a universal equivalent. The communal system on which this mode of production is based prevents the labour of an individual from becoming private labour and his product the private product of a separate individual; it causes individual labour to appear rather as the direct function of a member of the social organisation. Labour which manifests itself in exchange-value appears to be the labour of an isolated individual. It becomes social labour by assuming the form of its direct opposite, of abstract universal labour.

Lastly, it is a characteristic feature of labour which posits exchange-value that it causes the social relations of individuals to appear in the perverted form of a social relation between things. The labour of different persons is equated and treated as universal labour only by bringing one use-value into relation with another one in the guise of exchange-value. Although it is thus correct to say that exchange-value is a relation between persons, [4] it is however necessary to add that it is a relation hidden by a material veil. Just as a pound of iron and a pound of gold have the same weight despite their different physical and chemical properties, so two commodities which have different use-values but contain the same amount of labour-time have the same exchange-value. Exchange-value thus appears to be a social determination of use-values, a determination which is proper to them as things and in consequence of which they are able in definite proportions to take one another’s place in the exchange process, i.e., they are equivalents, just as simple chemical elements combined in certain proportions form chemical equivalents. Only the conventions of our everyday life make it appear commonplace and ordinary that social relations of production should assume the shape of things, so that the relations into which people enter in the course of their work appear as the relation of things to one another and of things to people. This mystification is still a very simple one in the case of a commodity. Everybody understands more or less clearly that the relations of commodities as exchange-values are really the relations of people to the productive activities of one another. The semblance of simplicity disappears in more advanced relations of production. All the illusions of the Monetary System arise from the failure to perceive that money, though a physical object with distinct properties, represents a social relation of production. As soon as the modern economists, who sneer at illusions of the Monetary System, deal with the more complex economic categories, such as capital, they display the same illusions. This emerges clearly in their confession of naive astonishment when the phenomenon that they have just ponderously described as a thing reappears as a social relation and, a moment later, having been defined as a social relation, teases them once more as a thing.

Since the exchange-value of commodities is indeed nothing but a mutual relation between various kinds of labour of individuals regarded as equal and universal labour, i.e., nothing but a material expression of a specific social form of labour, it is a tautology to say that labour is the only source of exchange-value and accordingly of wealth in so far as this consists of exchange-value. It is equally a tautology to say that material in its natural state does not have exchange-value [5] since it contains no labour, and that exchange-value as such includes no material in a natural state. It is true that William Petty calls “labour the father and earth the mother of wealth", Bishop Berkeley asks

“whether the four elements, and man’s labour therein, be not the true source of wealth,” [6]

and the American Thomas Cooper explains in popular form:

“Take away from a piece of bread the labour bestowed by the baker on the flour, by the miller on the grain brought to him, by the farmer in ploughing, sowing, tending, gathering, threshing, cleaning and transporting the seed, and what will remain? A few grains of grass, growing wild in the woods, and unfit for any human purpose.” [7]

But all these observations are concerned not with abstract labour, which is the source of exchange-value, but with concrete labour as the source of material wealth, in short with labour in so far as it produces use-values. Since the use-value of the commodity is postulated, the specific utility and the definite usefulness of the labour expended on it is also postulated; but this is the only aspect of labour as useful labour which is relevant to the study of commodities. In considering bread as a use-value, we are concerned with its properties as an article of food and by no means with the labour of the farmer, miller, baker, etc. Even if the labour required were reduced by 95 per cent as a result of some invention, the usefulness of a loaf of bread would remain quite unaffected. It would lose not a single particle of its use-value even if it dropped ready-made from the sky. Whereas labour positing exchange-value manifests itself in the equality of commodities as universal equivalents, labour as useful productive activity manifests itself in the infinite variety of use-values. Whereas labour positing exchange-value is abstrect universal and uniform labour, labour positing use-value is concrete and distinctive labour, comprising infinitely varying kinds of labour as regards its form and the material to which it is applied.

It would be wrong to say that labour which produces use-values is the only source of the wealth produced by it, that is of material wealth. Since labour is an activity which adapts material for some purpose or other, it needs material as a prerequisite. Different use-values contain very different proportions of labour and natural products, but use-value always comprises a natural element. As useful activity directed to the appropriation of natural factors in one form or another, labour is a natural condition of human existence, a condition of material interchange between man and nature, quite independent of the form of society. On the other hand, the labour which posits exchange-value is a specific social form of labour. For example, tailoring if one considers its physical aspect as a distinct productive activity produces a coat, but not the exchange-value of the coat. The exchange-value is produced by it not as tailoring as such but as abstract universal labour, and this belongs to a social framework not devised by the tailor. Women in ancient domestic industry, for instance, produced coats without producing the exchange-value of coats. Labour as a source of material wealth was well known both to Moses, the law-giver, and to Adam Smith, the customs official. [8]

Let us now examine a few propositions which follow from the reduction of exchange-value to labour-time.

A commodity as a use-value has an eminently material function. Wheat for example is used as food. A machine replaces a certain amount of labour. This function, by virtue of which a commodity is a use-value, an article of consumption, may be called its service, the service it renders as a use-value. But the commodity as an exchange-value is always considered solely from the standpoint of the result. What matters is not the service it renders, but the service [9] rendered to it in the course of its production. Thus the exchange-value of a machine, for instance, is determined not by the amount of labour-time which it can replace, but by the amount of labour-time expended in its production and therefore required for the production of a new machine of the same type.

Thus, if the amount of labour required for the production of commodities remained constant, their exchange-value would also remain unchanged. But the facility or difficulty of production varies continually. If the productivity of labour grows, the same use-value will be produced in less time. If~the productivity of labour declines, more time will be needed to produce the same use-value. The amount of labour-time contained in a commodity, and therefore its exchange-value, is consequently a variable quantity, rising or falling in inverse proportion to the rise or fall of the productivity of labour. The level of the productivity of labour, which is predetermined in manufacturing industry, depends in agriculture and extractive industry also upon unpredictable natural conditions. The same quantity of labour will result in a larger or smaller output of various metals – depending on the relative abundance of the deposits of these metals in the earth’s crust. The same amount of labour may yield two bushels of wheat in a favourable season, and perhaps only one bushel in an unfavourable season. Scarcity or abundance brought about by natural circumstances seems in this case to determine the exchange-value of commodities, because it determines the productivity of the specific concrete labour which is bound up with the natural conditions.

Equal amounts of labour-time, or equal amounts of exchange-value, are contained in unequal volumes of different use-values. The smaller the volume of a use-value which contains a given amount of labour-time as compared with other use-values of commodities, the greater is the specific exchange-value of that commodity. If we find that in different epochs of civilisation separated by long periods of time, various use-values – for example gold, silver, copper and iron, or wheat, rye, barley and oats – form a series of specific exchange-values which on the whole retain their relative order in relation to one another, though not their exact numerical proportions, it follows that the progressive development of the social productive forces has exerted a uniform or nearly uniform effect on the labour-time required for the production of these commodities.

The exchange-value of a commodity is not expressed in its own use-value. But as materialisation of universal social labour-time, the use-value of one commodity is brought into relation with the use-values of other commodities. The exchange-value of one commodity thus manifests itself in the use-values of other commodities. In fact the exchange-value of one commodity expressed in the use-value of another commodity represents equivalence. If one says, for instance, one yard of linen is worth two pounds of coffee, then the exchange-value of linen is expressed in the use-value of coffee, and it is moreover expressed in a definite quantity of this use-value. Once the proportion is given, the value of any quantity of linen can be expressed in terms of coffee. It is evident that the exchange-value of a commodity, e.g., linen, is not exhaustively expressed by the proportion in which a particular commodity, e.g., coffee, forms its equivalent. The quantity of universal labour-time represented by a yard of linen exists simultaneously in infinitely varied amounts of the use-values of all other commodities. The use-value of any other commodity taken in the proportion which represents the same quantity of labour-time constitutes an equivalent for the yard of linen. The exchange-value of this particular commodity can therefore be exhaustively exprcssed only by the infinite number of equations in which the use-values of all other commodities form its equivalent. The only exhaustive expression for a universal equivalent is the sum of these equations or the totality of the different proportions in which a commodity can be exchanged for any other commodity. For example the series of equations –

1 yard of linen = ½ lb. of tea
1 yard of linen = 2 lbs. of coffee
1 yard of linen = 8 lbs. of bread
1 yard of linen = 6 yards of calico

may be put in the following form –

1 yard of linen = 1/8 lb. of tea + ½ lb. of coffee 2 lbs. Of bread + 1½ yards of calico.

Thus if we had all the equations in which the value of a yard of linen is exhaustively expressed, we could denote its exchange-value in the form of a series. This is in fact an infinite series, for the range of commodities can never be finally circumscribed but expands continuously. Since the exchange-value of one commodity is measured by the use-values of all other commodities, the exchange-values of all other commodities are on the contrary measured in terms of the use-value of the one commodity measured by them. [10] If the exchange-value of one yard of linen is expressed in 1/2 lb. of tea, or 2 lbs. of coffee, or 6 yards of calico, or 8 lbs. of bread, etc., it follows that coffee, tea, calico, bread, etc., must be equal to one another in the proportion in which they are equal to linen, a third magnitude, linen thus serves as a common measure of their exchange-value. The exchange-value of any commodity considered as materialised universal labour-time, .e., as a definite quantity of universal labour-time, is measured successively in terms of definite quantities of the use-values of all other commodities; and on the other hand the exchange-values of all other commodities are measured in the use-value of this one exclusive commodity. But any commodity considered as exchange-value is both the exclusive commodity which serves as the common measure of the exchange-values of all other commodities and on the other hand it is merely one commodity of the many commodities in the series in which the exchange-value of any other commodity is directly expressed.

The existing number of different types of commodities does not affect the value of a commodity. But whether the series of equations in which its exchange-value can be realised is longer or shorter depends on the greater or smaller variety of different commodities. The series of equations which express, say, the value of coffee shows the range of its exchangeability, the limits within which it functions as an exchange-value. The exchange-value of a commodity as the objective expression of universal social labour-time finds its appropriate expression of equivalence in the infinite variety of use-values.

We have seen that the exchange-value of a commodity varies with the quantity of labour-time directly contained in it. Its realised exchange-value, that is its exchange-value expressed in the use-values of other commodities, must also depend on the degree to which the labour-time expended on the production of all other commodities varies. For example, if the labour-time necessary for the production of a bushel of wheat remained unchanged, while the labour-time needed for the production of all other commodities doubled, the exchange-value of a bushel of wheat in terms of its equivalents would have been halved. The result would actually be the same as if the labour-time required to produce a bushel of wheat had been halved and the labour-time required to produce all other commodities had remained unchanged. The value of commodities is determined by the amount of them which can be produced in a given labour-time. In order to examine what changes are liable to affect this proportion, let us take two commodities, A and B. First The labour-time required for the production of B is assumed to remain unchanged. In this case the exchange-value of A expressed in terms of B falls or rises in direct proportion to the decrease or increase in the labour-time necessary for the production of A. Secondly. The labour-time necessary for the production of commodity A is assumed to remain unchanged. The exchange-value of commodity A in terms of B falls or rises in inverse proportion to the decrease or increase in the labour-time required to produce B. Thirdly. The labour-time required for the production of A and of B is assumed to decrease or increase at the same rate. The equation expressing the value of commodity A in terms of B remains unchanged in this case. If some factor were to cause the productivity of all types of labour to fall in equal degree, thus requiring the same proportion of additional labour for the production of all commodities, then the value of all commodities would rise, the actual expression of their exchange-value remaining unchanged, and the real wealth of society would decrease, since the production of the same quantity of use-values would require a larger amount of labour-time. Fourthly. The labour-time required for the production of both A and B is assumed to increase or decrease but in unequal degree, or else the labour-time required for the production of A is assumed to increase while that required for B decreases, or vice versa. All these cases can be simply reduced to the position where the labour-time required for the production of one commodity remains unchanged, while that required for the production of the other either increases or decreases.

The exchange-value of any commodity is expressed in terms of the use-value of any other commodity, either in whole units or in fractions of that use-value. Every commodity as exchange-value can be just as easily divided as the labour-time contained in it. The equivalence of commodities is just as independent of the physical divisibility of their use-values as the summation of the exchange-values of commodities is unaffected by the changes which the use-values of the commodities may undergo in the course of their transformation into a single new commodity.

So far two aspects of the commodity – use-value and exchange-value – have been examined, but each one separately. The commodity, however, is the direct unity of use-value and exchange-value, and at the same time it is a commodity only in relation to other commodities. The exchange process of commodities is the real relation that exists between them. This is a social process which is carried on by individuals independently of one another, but they take part in it only as commodity-owners; they exist for one another only insofar as their commodities exist; they thus appear to be in fact the conscious representatives of the exchange process.

The commodity is a use-value, wheat, linen, a diamond, machinery, etc., but as a commodity it is simultaneously not a use-value. It would not be a commodity, if it were a use-value for its owner, that is a direct means for the satisfaction of his own needs. For its owner it is on the contrary a non-use-value, that is merely the physical depository of exchange-value, or simply a means of exchange. Use-value as an active carrier of exchange-value becomes a means of exchange. The commodity is a use-value for its owner only so far as it is an exchange-value. [It is in this sense that Aristotle speaks of exchange-value (see the passage quoted at the beginning of this chapter).] The commodity therefore has still to become a use-value, in the first place a use-value for others. Since it is not a use-value to its owner, it must be a use-value to owners of other commodities. If this is not the case, then the labour expended on it was useless; labour and the result accordingly is not a commodity. The commodity must, on the other hand, become a use-value for its owner, since his means of existence exist outside it, in the use-values of other people’s commodities. To become a use- value, the commodity must encounter the particular need which it can satisfy. Thus the use-values of commodities become use-values by a mutual exchange of places: they pass from the hands of those for whom they were means of exchange into the hands of those for whom they serve as consumer goods. Only as a result of this universal alienation of commodities does the labour contained in them become useful labour. Commodities do not acquire a new economic form in the course of mutual relations as use-values. On the contrary, the specific form which distinguished them as commodities disappears. Bread, for instance, in passing from the baker to the consumer does not change its character as bread. It is rather that the consumer treats it as a use- value, as a particular foodstuff, whereas so long as it was in the hands of the baker it was simply representative of an economic relation, a concrete and at the same time an abstract thing. The only transformation therefore that commodities experience in the course of becoming use-values is the cessation of their formal existence in which they were non-use-values for their owner, and use-values for their non-owner. To become use-values commodities must be altogether alienated; they must enter into the exchange process; exchange however is concerned merely with their aspect as exchange-values. Hence, only by being realized as exchange-values can they be realized as use-values.

The individual commodity as a use-value was originally regarded as something independent, while as an exchange- value it was from the outset regarded in its relation to all other commodities But this was merely a theoretical, hypothetical, relation. It realises itself only in the process of exchange. On the other hand, a commodity is an exchange- value in so far as a definite amount of labour-time has been expended on its production and it accordingly represents materialised labour-time. Yet the commodity as it comes into being is only materialised individual labour-time of a specific kind, and not universal labour-time. The commodity is thus not immediately exchange-value, but has still to become exchange-value. To begin with, it can be materialisation of universal labour-time only when it represents a particular useful application of labour-time, that is a use- value. This is the material condition under which alone the labour-time contained in commodities is regarded as universal, social labour-time. A commodity can only therefore become a use-value if it is realised as an exchange-value, while it can only be realised as an exchange-value if it is alienated and functions as a use-value. The alienation of a commodity as a use-value is only possible to the person for whom it is a use-value, i.e., an object satisfying particular needs. On the other hand, it can only be alienated in exchange for another commodity, or if we regard the matter from the standpoint of the owner of the other commodity, he too can only alienate, i.e., realise, his commodity by bringing it into contact with the particular need of which it is the object. During the universal alienation of commodities as use-values they are brought into relation with one another as discrete things which are physically different and because of their specific properties satisfy particular needs. But as mere use-values they exist independently of one another or rather without any connection. They can be exchanged as use-values only in connection with particular needs. They are, however, exchangeable only as equivalents, and they are equivalents only as equal quantities of materialised labour-time, when their physical properties as use- values, and hence the relations of these commodities to specific needs, are entirely disregarded. A commodity functions as an exchange-value if it can freely take the place of a definite quantity of any other commodity, irrespective of whether or not it constitutes a use-value for the owner of the other commodity. But for the owner of the other commodity it becomes a commodity only in so far as it constitutes a use-value for him, and for the owner in whose hands it is it becomes an exchange-value only in so far as it is a commodity for the other owner. One and the same relation must therefore be simultaneously a relation of essentially equal commodities which differ only in magnitude, i.e., a relation which expresses their equality as materialisations of universal labour-time, and at the same time it must be their relation as qualitatively different things, as distinct use-values for distinct needs, in short a relation which differentiates them as actual use-values But equality and inequality thus posited are mutually exclusive. The result is not simply a vicious circle of problems, where the solution of one problem presupposes the solution of the other, but a whole complex of contradictory premises, since the fulfillment of one condition depends directly upon the fulfillment of its opposite.

The exchange process must comprise both the evolution and the solution of these contradictions, which cannot however be demonstrated in the process in this simple form We have merely observed how the commodities themselves are related to one another as use-values, i.e., how commodities as use-values function within the exchange process. On the other hand, exchange-value as we have considered it till now has merely existed as our abstraction, or, if one prefers, as the abstraction of the individual commodity- owner, who keeps the commodity as use-value in the ware- house, and has it on his conscience as exchange-value. In the exchange process, however, the commodities must exist for one another not only as use-values but also as exchange- values, and this aspect of their existence must appear as their own mutual relation. The difficulty which confronted us in the first place was that the commodity as a use-value has to be alienated, disposed of, before it can function as an exchange-value, as materialised labour, while on the contrary its alienation as a use-value presupposes its existence as exchange-value. But let us suppose that this difficulty has been overcome, that the commodity has shed its particular use-value and has thereby fulfilled the material condition of being socially useful labour, instead of the particular labour of an individual by himself. In the exchange process, the commodity as exchange-value must then become a universal equivalent, materialised general labour-time for all other commodities; it has thus no longer the limited function of a particular use-value, but is capable of being directly represented in all use-values as its equivalents. Every commodity however is the commodity which, as a result of the alienation of its particular use-value, must appear as the direct materialisation of universal labour- time. But on the other hand, only particular commodities, particular use-values embodying the labour of private individuals, confront one another in the exchange process. Universal labour-time itself is an abstraction which, as such, does not exist for commodities.

Let us consider the series of equations in which the exchange-value of a commodity is expressed in concrete terms, for example –

1 yard of linen = 2 lbs. of coffee
1 yard of linen = ½ lb. of tea
1 yard of linen = 8 lbs. of bread, etc.

To be sure, these equations merely denote that equal amounts of universal social labour-time are materialised in 1 yard of linen, 2 lbs. of coffee, 1/2 lb. of tea, etc. But the different kinds of individual labour represented in these particular use-values, in fact, become labour in general, and in this way social labour, only by actually being exchanged for one another in quantities which are proportional to the labour-time contained in them. Social labour-time exists in these commodities in a latent state, so to speak, and becomes evident only in the course of their exchange. The point of departure is not the labour of individuals considered as social labour, but on the contrary the particular kinds of labour of private individuals, i.e., labour which proves that it is universal social labour only by the supersession of its original character in the exchange process. Universal social labour is consequently not a ready-made prerequisite but an emerging result. Thus a new difficulty arises: on the one hand, commodities must enter the exchange process as materialized universal labour-time, on the other hand, the labour-time of individuals becomes materialized universal labour-time only as the result of the exchange process.

It is through the alienation of its use-value, that is of its original form of existence, that every commodity has to acquire its corresponding existence as exchange-value. The commodity must therefore assume a dual form existence in the exchange process. On the other hand, its second form of existence, exchange-value, can only be represented by another commodity, for only commodities confront one another in the exchange process. How is it possible to present a particular commodity directly as materialised universal labour-time, or – which amounts to the same thing – how can the individual labour-time materialised in a particular commodity directly assume a universal character? The concrete expression of the exchange-value of a commodity, i.e., of any commodity considered as universal equivalent, consists of an infinite series of equations such as –

1 yard of linen = 2 lbs. of coffee
1 yard of linen = 1/2 lb. of tea
1 yard of linen = 8 lbs. of bread
1 yard of linen = 6 yards of calico
1 yard of linen = and so on.

This is a theoretical statement since the commodity is merely regarded as a definite quantity of materialised universal labour-time. A particular commodity as a universal equivalent is transformed from a pure abstraction into a social result of the exchange process, if one simply reverses the above series of equations. For example –

2 lbs. of coffee = 1 yard of linen
1/2 lb. of tea =1 yard of linen
8 lbs. of bread =1 yard of linen
6 yards of calico=1 yard of linen.

Just as the labour-time contained in coffee, tea, bread, calico, in short in all commodities, is expressed in terms of linen, so conversely the exchange-value of linen is reflected in all other commodities which act as its equivalents, and the labour-time materialised in linen becomes direct universal labour-time, which is equally embodied in different volumes of all other commodities. Linen thus becomes the universal equivalent in consequence of the universal action of all other commodities in relation to it. Every commodity considered as exchange-value became a measure of the value of all other commodities. In this case, on the contrary, because the exchange-value of all commodities is measured in terms of one particular commodity, the excluded commodity becomes the adequate representation of exchange- value as the universal equivalent. On the other hand, the infinite series or the infinite number of equations in which the exchange-value of each commodity was expressed is now reduced to a single equation consisting of two terms. The equation 2 lbs. of coffee = 1 yard of linen is now a comprehensive expression for the exchange-value of coffee, for in this expression it appears as the direct equivalent to a definite quantity of any other commodity. Commodities within the exchange process accordingly exist for one another, or appear to one another, as exchange-values in the form of linen. The fact that all commodities are related to one another as exchange-values! i.e., simply as different quantities of materialised universal labour-time, now appears in the form that all exchange-values represent merely different quantities of one and the same article, linen. Universal labour-time thus appears as a specific thing, as a commodity in addition to and apart from all other commodities. At the same time, the equation in which one commodity represents the exchange-value of another commodity, e.g., 2 lbs. of coffee = 1 yard of linen, has still to be realised. Only by being alienated as a use-value – an alienation which depends on whether it is able to prove in the exchange process that it is a needed object – is it really converted from the form of coffee into that of linen, thus becoming a universal equivalent and really representing exchange-value for all other commodities. On the other hand, because as a result of their alienation as use-values all commodities are converted into linen, linen becomes the converted form of all other commodities, and only as a result of this transformation of all other commodities into linen does it become the direct reification of universal labour-time, i.e., the product of universal alienation and of the supersession of all individual labour. While commodities thus assume a dual form in order to represent exchange- value for one another, the commodity which has been set apart as universal equivalent acquires a dual use-value. In addition to its particular use-value as an individual commodity it acquires a universal use-value. This latter use- value is itself a determinate form, i.e., it arises from the specific role which this commodity plays as a result of the universal action exerted on it by the other commodities in the exchange process. The use-value of each commodity as an object which satisfies particular needs has a different value in different hands, e.g., it has one value for the person who disposes of it and a different value for the person who acquires it. The commodity which has been set apart as the universal equivalent is now an object which satisfies a universal need arising from the exchange process itself, and has the same use-value for everybody – that of being carrier of exchange-value or a universal medium of exchange. Thus the contradiction inherent in the commodity as such, namely that of being a particular use-value and simultaneously universal equivalent, and hence a use-value for everybody or a universal use-value, has been solved in the case of this one commodity. Whereas now the exchange-value of all other commodities is in the first place presented in the form of an ideal equation with the commodity that has been set apart, an equation which has still to be realised; the use-value of this commodity, though real, seems in the exchange process to have merely a formal existence which has still to be realised by conversion into actual use-values. The commodity originally appeared as commodity in general, as universal labour-time materialised in a particular use-value. All commodities are compared in the exchange process with the one excluded commodity which is regarded as commodity in general, the commodity, the embodiment of universal labour-time in a particular use-value. They are therefore as particular commodities opposed to one particular commodity considered as being the universal commodity. [The same term is used by Genovesi. (Note in author’s copy.)] The fact that commodity-owners treat one another’s labour as universal social labour appears in the form of their treating their own commodities as exchange-values; and the interrelation of commodities as exchange-values in the exchange process appears as their universal relation to a particular commodity as the adequate expression of their exchange-value; this in turn appears as the specific relation of this particular commodity to all other commodities and hence as the distinctive, as it were naturally evolved, social character of a thing. The particular commodity which thus represents the exchange-value of all commodities, that is to say, the exchange-value of commodities regarded as a particular, exclusive commodity, constitutes money. It is a crystallization of the exchange-value of commodities and is formed in the exchange process. Thus, while in the exchange process commodities become use-values for one another by discarding all determinate forms and confronting one another in their immediate physical aspect, they must assume a new determinate form they must evolve money, so as to be able to confront one another as exchange-values. Money is not a symbol, just as the existence of a use-value in the form of a commodity is no symbol. A social relation of production appears as something existing apart from individual human beings, and the distinctive relations into which they enter in the course of production in society appear as the specific properties of a thing – it is this perverted appearance, this prosaically real, and by no means imaginary, mystification that is characteristic of all social forms of labour positing exchange-value. This perverted appearance manifests itself merely in a more striking manner in money than it does in commodities.

The necessary physical properties of the particular commodity, in which the money form of all other commodities is to be crystallised – in so far as they direct]y follow from the nature of exchange-value – are: unlimited divisibility, homogeneity of its parts and uniform quality of all units of the commodity. As the materialisation of universal labour- time it must be homogeneous and capable of expressing only quantitative differences. Another necessary property is durability of its use-value since it must endure through the exchange process. Precious metals possess these qualities in an exceptionally high degree. Since money is not the result of deliberation or of agreement, but has come into being spontaneously in the course of exchange, many different, more or less unsuitable, commodities were at various times used as money. When exchange reaches a certain stage of development, the need arises to polarise the functions of exchange-value and use-value among various commodities – so that one commodity, for example, shall act as means of exchange while another is disposed of as a use-value. The outcome is that one commodity or sometimes several commodities representing the most common use-value come occasionally to serve as money. Even when no immediate need for these use-values exists, the demand for them is bound to be more general than that for other use-values, since they constitute the most substantial physical element in wealth.

Direct barter, the spontaneous form of exchange, signifies the beginning of the transformation of use-values into commodities rather than the transformation of commodities into money. Exchange-value does not acquire an independent form, but is still directly tied to use-value. This is manifested in two ways. Use-value, not exchange-value, is the purpose of the whole system of production, and use- values accordingly cease to be use-values and become means of exchange, or commodities, only when a larger amount of them has been produced than is required for consumption. On the other hand, they become commodities only within the limits set by their immediate use-value, even when this function is polarised so that the commodities to be exchanged by their owners must be use-values for both of them, but each commodity must be a use-value for its non-owner. In fact, the exchange of commodities evolves originally not within primitive communities, [11] but on their margins, on their borders, the few points where they come into contact with other communities. This is where barter begins and moves thence into the interior of the community, exerting a disintegrating influence upon it. The particular use-values which, as a result of barter between different communities, become commodities, e.g., slaves, cattle, metals, usually serve also as the first money within these communities. We have seen that the degree to which the exchange- value of a commodity functions as exchange-value is the higher, the longer the series of its equivalents or the larger the sphere in which the commodity is exchanged. The gradual extension of barter, the growing number of exchange transactions, and the increasing variety of commodities bartered lead, therefore, to the further development of the commodity as exchange-value, stimulates the formation of money and consequently has a disintegrating effect on direct barter. Economists usually reason that the emergence of money is due to external difficulties which the expansion of barter encounters, but they forget that these difficulties arise from the evolution of exchange-value and hence from that of social labour as universal labour. For example commodities as use-values are not divisible at will, a property which as exchange-values they should possess. Or it may happen that the commodity belonging to A may be use-value required by B; whereas B’s commodity may not have any use-value for A. Or the commodity-owners may need each other’s commodities but these cannot be divided and their relative exchange-values are different. In other words, on the plea of examining simple barter, these economists display certain aspects of the contradiction inherent in the commodity as being the direct unity of use-value and exchange-value. On the other hand, they then persistently regard barter as a form well adapted to commodity exchange, suffering merely from certain technical inconveniences, to overcome which money has been cunningly devised. Proceeding from this quite superficial point of view, an ingenious British economist has rightly maintained that money is merely a material instrument, like a ship or a steam engine, and not an expression of a social relation of production, and hence is not an economic category. It is therefore simply a malpractice to deal with this subject in political economy, which in fact has nothing in common with technology. [12]

The world of commodities presupposes a developed division of labour, or rather the division of labour manifests itself directly in the diversity of use-values which confront one another as particular commodities and which embody just as many diverse kinds of labour. The division of labour as the aggregate of all the different types of productive activity constitutes the totality of the physical aspects of social labour as labour producing use-values. But it exists as such – as regards commodities and the exchange process – only in its results, in the variety of the commodities them- selves.

The exchange of commodities is the process in which the social metabolism, in other words the exchange of particular products of private individuals, simultaneously gives rise to definite social relations of production, into which individuals enter in the course of this metabolism. As they develop, the interrelations of commodities crystallise into distinct aspects of the universal equivalent, and thus the exchange process becomes at the same time the process of formation of money. This process as a whole, which comprises several processes, constitutes circulation.



1. Aristotle, De Republica, L.I, C. “Of everything which we possess there are two uses:... one is the proper, and the other the improper or secondary use of it. For example, a shoe is used for wear, and is used for exchange; both are uses of the shoe. He who gives a shoe in exchange for money or food to him who wants one, does indeed use the shoe as a shoe, but this is not its proper or primary purpose, for a shoe is not made to be an object of barter. The same may be said of all possessions.... ”

2. That is why German compilers write con amore about use-values, calling them “goods". See for example the section on “goods” in I. Stein, System der Staatswissenschaft, Bd. 1. Useful information on “goods” may be found in “manuals dealing with merchandise.”

3. At present an absurdly biased view is widely held, namely that primitive communal property is a specifically Slavonic, or even an exclusively Russian, phenomenon. It is an early form which ean be found among Romans, Teutons and Celts, and of which a whole collection of diverse patterns (though sometimes only remnants survive) is still in existence in India. A careful study of Asiatic, particularly Indian, forms of communal property would indicate that the disintegration of different forms of primitive communal ownership gives rise to diverse forms of property. For instance, various prototypes of Roman and Germanic private property can be traced back to certain forms of Indian communal property.

4. “La ricchezza e una ragione tra due persone.” Galiani, Della Moneta, p. 221. In Volume III of Custodi’s collection of Scrittori classici Italiani di Economia Politica. Parte Moderna, Milano, 1803.

5. “In its natural state, matter ... is always destitute of value.” McCulloch, A Discourse on the Rise, Progress, Peculiar Objects, and Importance of Political Economy, Second Edition, Edinburgh, 1825, p. 48. This shows how high even a McCulloch stands above the fetishism of German “thinkers” who assert that “material” and half a dozen similar irrelevancies are elements of value. See, inter alia, L. Stein, op. cit., Bd. 1, p. 170.

6. Berkeley, The Querist, London, 1750.

7. Thomas Cooper, Lectures on the Elements of Political Economy, London, 1831 (Columbia, 1826), p. 99.

8. Friedrich List has never been able to grasp the difference between labour as a producer of something useful, a use-value, and labour as a producer of exchange-value, a specific social form of wealth (since his mind being occupied with practical matters was not concerned with understanding); he therefore regarded the modern English economists as mere plagiarists of Moses of Egypt.

9. It can easily be seen what “service” the category “service” must render to economists such as J. B. Say and F. Bastiat, whose sagacity, as Malthus has aptly remarked, always abstracts from the specific form of economic conditions.

10. “It is another peculiarity of measures to enter into such a relation with the thing measured, that in a certain way the thing measured becomes the measure of the measuring unit.” Montanari, Della Moneta, p. 41 in Custodi’s collection, Vol. III, Parte Antica.

11. Aristotle makes a similar observation with regard to the individual family considered as the primitive community. But the primitive form of the family is the tribal family, from the historical dissolution of which the individual family develops. “In the first community, indeed which is the family, this art” (that is, trade) “is obviously of no use” (Aristotle, loc. cit.).

12. “Money is, in fact, only the instrument for carrying on buying and selling” (but could you please explain what you mean by buying and selling?) “and the consideration of it no more forms a part of the science of political economy than the consideration of ships or steam engines, or of any other instruments employed to facilitate the production and distribution of wealth” (Thomas Hodgskin, Popular Political Economy, London, 1827, pp. 178,179).