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6; Chapter 7; Chapter 10 and Chapter 14, all from Volume One of Das Kapital, or, in English, Capital. Karl Marx's Capital can be read as a work of economics, sociology and history. He addresses a myriad of topics, but is most generally trying to present a systematic account of the nature, development, and future of the capitalist system. There is a strong economic focus to this work, and Marx addresses the nature of commodities, wages and the worker-capitalist relationship, among other things. Much of this work tries to show the ways in which workers are exploited by the capitalist mode of production. He also provides a history of past exploitations. Marx argues that the capitalist system is ultimately unstable, because it cannot endlessly sustain profits. Thus, it provides a more technical background to some of his more generally accessible works, like The Communist Manifesto. This study guide focuses on one component of Capital, Marx's schema of how the capitalist system functions. Marx argues that commodities have both a use-value and an exchange-value, and that their exchange-value is rooted in how much labor-power went into them. While traditionally people bought commodities in order to use them, capitalists use commodities differently. Their final goal is increased profit. Therefore, they put out money and buy commodities, in order to sell those commodities for a profit. The cycle then repeats itself. The reason why the capitalists are able to make a profit is that they only need to pay workers their value (how much it takes to keep them functional), but the workers produce more than that amount in a day. Thus, the workers are exploited. The capitalists are able to do this because they have more power, and control the means of production. Furthermore, the workers' character is negatively affected by the system. They don't own the products of their labor, and the repetitive work they have to do makes them little more than machines.
Terms Use-value - A use-value is something that is valuable because it is useful. It can also be a measurement of the usefulness of a commodity.
etc. etc. the living personality. machines. He says that useful things can be looked at from the point of view of quality and quantity. Magnitude of Value)"³Marx introduces us to his analysis of commodities. of a human being. Mode of production . They have many attributes and can therefore be used in many ways. This is comprised of the distribution of the means of production.Relations between people necessary for a certain form of material production. Exchange-value is the proportion by which use-values of one kind exchange for usevalues of other kinds. For example. . which means that a certain amount of corn equals a certain amount of iron. corn and iron have an exchange relation. It is a constantly changing relation.Value and Value (Substance of Value. capabilities which he sets in motion whenever he produces a use-value of any kind. and is independent of the amount of labor needed to make the commodity useful. and can be reduced to this thing. They are "congealed quantities of homogenous human labor.According to Marx. This is comprised of the instruments of production (tools. A commodity is an external object that satisfies a human need either directly or indirectly. It consists of the means of production as well as the relations of production." A commodity's use-value is a trait of the thing itself. Chapter 1: The Commodity (Section one) Summary In this section³which is subtitled "The Two Factors of the Commodity: Use. and applied knowledge (science.).The forces of production." This common factor in the exchange-value of the commodity is its value. methods of working (skills. division of labor. etc. "The usefulness of a thing makes it a use-value. The common element cannot be a natural property of the commodity. and distribution of the product. forms of cooperation.The economic structure of society that defines people's mode of living.Labor-power . He uses the term use-value in relation to commodities' quality. only one property remains³the commodities are the products of abstract human labor.).). Discarding use-values." Means of production . Relations of production . labor-power is "the aggregate of those mental and physical capabilities existing in the physical form. but rather must be abstracted away from its use-value. and is not inherent to the object. forms of possession (collective and individual private property). Each must therefore equal a third common element.
However. therefore. In contrast. Marx says that this is the object's value. This section also gives a general sense of Marx's approach in Capital. It implies that the price of commodities comes from how much labor was put into them. its exchange value is also determined by the demand curve. the fact that the hammer and screwdriver can be exchanged at all suggests that there must be something common between them. is how such natural resources can have exchange-value (people do spend money on them) without benefiting from labor. For example. A use-value corresponds to the usefulness of an object. This occurs when something's usefulness is not produced through labor. Later Marx will analyze things like the role of money and the capitalist. such as forests and other natural resources. it is largely a book of economic theory and its implications. In modern theory. It is also important to consider how Marx's conception of the roots of exchange value differs from modern economic theory. A commodity's value would stay constant if the labor-time also stayed constant.Thus. However. This is measured by the amount of labor-time socially necessary to produce it. leading to a decrease in value. An object doesn't have an exchange value in itself. a hammer might be worth two screwdrivers. so it is very important to be clear on their meanings. of the labor which finds its realization within the commodity. Analysis Marx presents several definitions that will be important throughout his work. One problematic question. and is internal to that object. so is the labor contained in it." Something can be a use-value without being a value. One implication of this is that objects with natural use-value. less labor is "crystallized" in the product. varies directly as the quantity. it takes less labor to produce a commodity. Value means the amount of labor it takes to make the commodities. Its use-value comes from its usefulness.Here he dissects one aspect of the modern capitalist system and presents a schema for understanding why it functions as it does. something's exchange value is rooted in people's subjective preferences. "The value of a commodity. For example. Marx focuses exclusively on labor. This labor theory of value is very important to Marx's theory. if something is useless. some means of comparison. but only in its relationship with other objects. a use-value only has exchange-value when it consists of abstract human labor. nothing can be a value without also being a use-value. and inversely as the productivity. a hammer's exchange-value comes from its value relative to other objects. then. With greater productivity. . While the amount of labor required would be linked to the supply curve of a commodity. and thus. a hammer is a use-value because of its contributions to building. While this book makes many historical and sociological arguments. do not have value because no labor went into them.
M-C-M. the second transforms a commodity into money." In the end. In this case we sell commodities in order to buy more. However. then. Analysis Marx introduces here the idea that money plays a very different role in modern capitalistic society than it does in traditional society. by quantitative increase. and thus gets spent once and for all. and it seems absurd to exchange it for itself. However. and from M' we go to M'' and so on. Thus." His aim is boundless enrichment. the final product is a use-value.Chapter 4: The General Formula for Capital Summary Marx says that capital's starting point is with the circulation of commodities. Both M and M' have the "same vocation. to approach. we buy in order to sell. Use-value is the purpose of C-M-C. There is no "reflux" of money because it is lost in exchange for the product bought. Thus. C-M-C uses money as a unit of . by the nature of the process. but rather advanced. the money is not spent. the possessor of money becomes the capitalist. The original value adds to itself and converts the surplus value to capital. He is a capitalist in so far as the increase of wealth is the sole force behind his actions³in this role he is "capital personified and endowed with consciousness and a will. We see this every day. Marx distinguishes two kinds of circulation. They are similar in that both have M-C and C-M phases. and money acts as a kind of middle-man. where M' = M + excess. The first phase transforms money into a commodity. as it appears in the sphere of circulation. Ultimately. It is distinguishable only in amount. This excess is called surplus-value. money is again the starting point. Marx then compares C-M-C and M-C-M. M-C-M' is the general formula for capital. in M-C-M what really occurs is M-C-M'. The ultimate product of this commodity circulation is money. the cycle is endless. we exchange money for money. money is capital. as near as possible to absolute in wealth. Money is indistinguishable. in the case of C-M-C. when capital enters various markets in the form of money. Since M-C-M is buying in order to sell. C-M-C (commodities transformed into money which is transformed back into commodities) is the direct form of circulation. This reflux of money occurs regardless of whether a profit is made. In this case. and buyers and sellers. there is also another form. involving commodities and money. while exchangevalue is the purpose of M-C-M. In M-C-M the seller gets his money back again.
sell them at their value. or M-C). It is an end in itself. he is not a capitalist. One thing to consider when thinking about Marx's characterization of capitalism is where this capitalistic ethic came from. Chapter 6: The Sale and Purchase of Labor-Power Summary Marx here addresses the problem of how money is transformed into capital. Its ultimate purpose is the accumulation of money. and is put out into the market to buy goods in order to sell them for more money. and then used that money to buy corn. and that the system of capitalism requires and perpetuates this attitude. then. The money is instrumentally useful in trading commodities. he can sell the hat to someone for money. Rather. the change must occur in the first act of circulation (Money to Commodity. M-C-M' represents modern capitalism and is very different. and then buy the corn from someone else with that money. by definition a capitalist's goal is boundless enrichment. or in the resale of the commodity. however. and he and the owner of money must meet . the individual must be selling his labor-power as a commodity. What made people view M' as an end in itself? Where does this thirst for profit come from? Marx's description does not spend a lot of time explaining how people could have come to develop these ideas. is to consume use-values (in this case the corn). He says that he must explain how someone can buy commodities at their value. This limitation is a potential theoretical difficulty. Insofar as a capitalist is not working towards that goal. money is properly thought of as capital. Thus. The change in value cannot occur in the money itself. The commodity's use-value must be a source of value whose consumption is a creation of value. There is a never-ending cycle. The ultimate purpose of C-M-C. However. This occurs in the case of labor-power. Rather. Here. Marx says that capitalists have an endless need for more money. First. Notice that according to Marx.exchange. the person with the hat doesn't have to find someone who would like to buy it with corn. because the end product is simply more money. An example would be a person who sold a hat for $30. Even if this is true. there are necessary social conditions in order for labor-power to be a commodity. and also make a profit. This means he must own his own person. it does not explain how capitalism developed in the first place.
It is "the product of many economic revolutions. Rather. they must sell their labor to others. such as property laws. who will provide the leather or the food. This will only happen when the laborer does not own the means of production. by selling it as property. since the labor-power cannot be maintained at a normal rate. While Marx will not explore here why it is that some people own money while others only own their own labor-power. of the extinction of a whole series of older formations of social production. If the price of labor-power falls below the cost of subsistence. . but rather depends upon social structures. Second. he must be forced to sell his own labor-power. He also can't make boots if he can't afford to buy food until the boots are finished. In Marx's framework. he must be willing to put it at the buyer's disposal. in order to claim his rights to it. A hammer's value comes from the amount of labor put into it. somebody else owns their labor and the products of that labor. This means that the laborer alienates himself from his labor. The means of subsistence must be paid for by the worker's income." Furthermore. In order to treat his labor as his property. It "announces from the outset a new epoch in the process of social production. Because of this. labor-power is a commodity in the market. In these cases. the person will have to sell his labor-power to someone else. and it is used by capitalists as another commodity in the production process. a person must not be able to sell the commodities that his labor has created. because we have to define what subsistence means. One social factor that is very important for Marx's theory is that the workers don't own the means of production.in the marketplace as legal equals. Analysis Marx spends a lot of time discussing the ways in which capitalism is rooted in social institutions. As a result. What. then it falls below its value. they don't own the commodities they produce. The result is that workers become alienated from their labor³they do not control or own what they create. a person can't make boots without leather. It is precisely because workers do own their own labor that they are able to give up all claims to it. For example. Marx's labor theory of value becomes very important when looking at the commodity of labor-power. is labor-power's value determined? Labor-power's value comes from the amount of labor-time needed to produce and reproduce itself." How. Capitalism is not natural. the existence of capital is rooted in historical pre-conditions that took all of the world's history to develop. he does observe that this situation is not natural." There are therefore historical and moral elements to this definition. Its value is determined in the same way as for other commodities. then. "The value of laborpower is the value of the means of subsistence necessary for the maintenance of its owner.
Labor is a process between man and nature. producing a usevalue. for example. An instrument of labor is something that directs the worker's activity onto an object. such as caught fish. as an instrument of labor. Marx attempts to analyze the labor-process. as man takes on the materials of nature and adapts them to his own needs. Man's labor is different from that of animals: "what distinguishes the worst architect from the best of bees is that the architect builds the cell in his mind before he constructs it in wax. the object onto which work is performed. Through this he changes his own nature. Let's say that a worker needs $100/week to survive and function. he sets that labor-power to work. Chapter 7: Labor and Valorization Processes Summary In the first part of this chapter. Many objects of labor are spontaneously provided by nature. The labor process then alters the product. Labor consumes products in order to make products. or as a product. as is the case with extracted iron ore. then.then. To simplify. This concept will be very important in later chapters. The seller becomes a worker." Other use. $100/week as well. the products of previous labor. when Marx will try to show that it is possible to exploit labor. and is compelled to produce certain use-values. also enter into the current labor process as a means of production. the object has been worked on. The object of labor is "raw material" only if it has already been altered in some way by labor. A worker's "price" (his wage) must be at least $100/week in order for the worker to be paid at value. Whether a use-value should be seen as raw material. it is the amount of labor needed to keep the laborer alive and functioning at his capacity. Marx says that the "simple" elements of the labor process are the work itself." Man realizes his own purposes through his labor. such as a tool. is determined simply by its function in the labor process. The value of his labor-power is. He must subordinate his will to the work. the labor process is purposeful activity aimed at making use-values. . and force his attention on it. When a person purchases labor-power. More broadly. we may also include the conditions necessary for carrying out the labor process. we first look at the labor process itself. "labor has been objectified. Labor becomes "bound up" with its object. such as workshops and roads. and is common to all human society.values. Or more simply. is labor-power's value? Marx applies the definition of value³its value is the amount of labor needed to produce and sustain labor-power. and the instruments of that work. In its abstract form. therefore.
He then consumes the labor-power he has bought. The capitalist pays the value of a day's labor. the creation of value. and is therefore surplus-value. the mode of production must be seen as a constant. The total value of the product is equal to the total amount of labor put into it. Here. The capitalist takes advantage of this distinction. and then he consumed their use-value. Secondly. both the means of production and labor-power. the second determines its use-value. Thus. First.Marx then looks at our would-be capitalist. Because . We are no longer concerned with the quality or character of the labor. all kinds of labor have the same character. the value the work created is double what the capitalist pays for it. the capitalist taking the laborer as he is. Marx turns to the valorization process.power is half a day's labor. however.value of his labor-power) is owned by the capitalist." Thus. "this circumstance is a piece of good luck for the buyer. has two main characteristics. and not by the worker." The capitalist paid full value for all of the commodities he used. the capitalist wants a commodity greater in value than the sum of the values of the commodities he used to produce it³he wantssurplus value. Capitalists do not produce use-values for their own sake. In the beginning. However. when the capitalist consumes labor-power. We can treat the labor required to make raw materials and the labor required to make the final product as part of the same process. and therefore has it for the day. Thus. let's say sustenance for the laborer only costs a half-day's labor. The first determines labor's exchange-value. There is. Marx says. Rather. The labor process. the worker is under the control of the capitalist. the product of the worker's labor (the use. but rather only with its quantity. It is important to note that in this context. to whom his labor belongs. we must see how much labor-time is objectified in it. they are produced only insofar as they have an exchange-value. In the second part of this chapter. Part of the value of the commodity thus comes from the value of the means of production. but by no means an injustice towards the seller. by making the laborer consume the means of production through his labor. because the value of the end-product is equal to the values of the inputs. This result would seem to suggest that there is no surplus value. the value of a day's labor. This comes from the fact that the cost ofmaintaining labor-power is different than labor-power's expenditure in work. The fact that half a day's labor is necessary to keep a worker alive does not mean that he can't work more than this. The other half-day's labor goes beyond the value of labor-power. He has just bought all of the needed factors for the labor process. let us now look at the production of commodities as a process of creating values. and the capitalist can pay the worker at that value. Furthermore. surplus value. The value of a commodity is determined by the amount of labor "materialized in its use-value.
this exchange can be considered "just. Once the worker is paid for a day's work. and because of this. they require factories and other means of production. the capitalist has the right to use him for a day. Justice is part of the overall mode of production of the times. because there would be no profit. Chapter 10: The Working Day . Marx believes that how people labor largely defines how they live." Why do the workers put up with such exploitation? Couldn't they demand higher wages. but he produces more than this value. Laborpower's use-value (what it can create) is not the same thing as its exchange-value (what is needed to sustain the worker). this allows the capitalist to make a profit. the capitalist gains surplus-value. Marx attempts to create a schema for understanding how the production process works. According to Marx. The workers are selling an abstract capacity to labor. the capitalist is able to exploit them by only paying laborpower's value. The way humans labor sets them apart from animals. where does the surplus value come from? If there's no surplus value.of the asymmetry between the use-value and exchange-value of labor. He also sells the endproduct at its value. and as a result. etc. However. and then more particularly how the capitalist structure works. raw materials.power.process. Marx's answer comes from the unique character of labor. Marx's labor theory of value again makes an appearance. A worker sells himself at his value. This is significant. If this is the case.) at their value. The worker could complain that he is not being paid for the value of what he produces. as he tries to explain a seeming paradox. labor is pivotal for people's self-definition. then capitalism cannot exist. Consider whether you think Marx's characterization of the labor market is fair. because it explains how exploitation can occur as the result of a series of freely made trades. Analysis Marx begins this chapter with a discussion about the character of the labor. however. In this chapter. that match the value their labor-power produces? Marx's answer is that the workers don't have the capacity to work without the capitalists. In this way. A capitalist purchases all of the inputs needed to make a commodity (labor-power. the capitalist can reply that the worker is being paid his value. and they have a special relationship with those products of their labor. Does labor have the ability to fight exploitation and set wages closer to the value of what they produce? Think of this both historically and theoretically.
the capitalists are the stronger class. The time in excess of the necessary labor time is surplus labor. The capitalist has a very particular view on this matter. it can only vary within limits. the working day is a variable quantity. because it createsvalue. Thus. "Using my labor and despoiling it are quite different things. all of history has been defined by class conflict. and the history of capitalist production reflects such tension between the capitalists and the workers. both sides have equally valid rights in this case. Rather. Modern times are no different in this regard. For example. which changes according to the amount of surplus labor. However. The maximum is constrained by physical limitations and moral constraints. From the worker's perspective. However. Based on the principles of commodity exchange. the fact that they are the stronger class does not simply give capitalists more bargaining power. and it can approach but not reach zero." The worker argues that the capitalist can't use three days worth of his labor power and only pay him for one. force will be the solution. the capitalist tries to get the maximum possible benefit from the worker's use-value. the amount of labor needed to provide subsistence does not always equal the length of the work-day. such as the need to fulfill other obligations. he is effectively robbing the capitalist.Summary We have assumed that labor-power is bought and sold at its value. and are defined by tension between the capitalist and the worker. as he mentions again the asymmetry between the use-value and exchange-value of labor-power (already discussed in Chapter 7). because the capitalist lives on surplus labor. His laborpower is different from other commodities. the worker has his own view about how much he should work. However. According to Marx. Marx describes one source of this tension in this chapter. He demands the value of his commodity. and make the means of production absorb as much surplus labor as possible. Analysis An important theme in Marx's work is class tension. as determined by the labor-time necessary to produce it. In this class conflict. However. the capitalist's demands reflect an excess expenditure of laborpower. Here. This allows them to exert more force and define what workers will be paid.power in a day that it would take three days to restore it. he is only capital personified. If a worker uses his disposable time for himself. a capitalist could potentially use so much labor. "As a capitalist." Capital's drive is to create surplus-value. His soul is the soul of capital. There is no real minimum limit. social . Thus. there must be some surplus labor because of the nature of the capitalist system.
such as a minimum wage or welfare are simply band-aids. The worker is transformed by these manufacturing developments.institutions such as property laws are defined to support the capitalists' needs. Manufacture attacks the individual at his very basis. Marx says. the capitalist must exploit." Marx says that the modern division of labor makes it necessary to have an increased number of workers under one capitalist. and is thus "the first system to provide the materials and the impetus for industrial pathology. It is both a necessary part of civilization's progress and a more refined way to exploit workers. they cannot change what a capitalist is. He loses some of his identity in order to fit his specific job. methodical and systematic" form of capitalist production. The capitalist system requires exploitation. The only way to do so is to exploit workers by failing to pay workers for the full value of what they produce. there will always be tension between them and the workers. In order to survive. Measures to ease workers' hardships. Thus. The mode of production reflects the economic system of capitalism. with time it becomes "the conscious. The minimum amount of capital that the capitalist has must continue to increase. and they make the worker machine-like. The division of labor is a specifically capitalist form of social production." Manufacture is originally spontaneously developed. with the advent of machines these obstacles are pushed aside and capital takes center stage." The worker becomes impoverished of his individual productive power. There are obstacles to the development of the division of labor during the manufacturing period. The very essence of a capitalist is his desire to gain surplus-value. it is a way of creating surplus-value at the expense of the worker. However. the tension between workers and capitalists is structural. . It is important to realize that the capitalists cannot behave differently. It will continue to do so. Capitalists wish to discourage imagination. until it self-destructs. he must become an appendage of a larger machine. However. Chapter 14: The Division of Labor and Manufacture Summary In a section entitled "The Capitalist Character of Manufacture. "the worker is brought face to face with the intellectual potentialities of the material process of production as the property of another and as a power which rules over him. and continue to favor the capitalists.
commonly thought of as the father of classical economics (and a major supporter of capitalism). its impact on the individual worker is quite devastating. he can . one person would cut the wood. Where might this extra money come from? The answer comes from the idea of surplus value. Smith's response was to encourage public support for education. Marx gives a very harsh critique of the role of manufacture and of the division of labor on the individual. Therefore. and then later sells them at their value. No one person is responsible for the final product. one person would put the pieces together. and it is considered to be an important aspect of the industrial revolution. With the division of labor. Labor-power's value is the amount of money it takes to keep the worker functioning. and one person would paint it. Now. Being forced to do the same repetitive task every day squelches the imagination. For example. in the capitalist's consumption of the labor-power. considering that Marx believes labor to be integral to the human character. workers specialize in one task and work together to produce commodities. This is the only way that we could end up with more M than we started with (C-M'). The commodities the capitalist buys are being paid for in full-value (MC). it is not hard to guess that he would find such as change in how people labor to be extremely important. he was far from alone in making such a critique.Analysis First. This actually happens with labor-power. it is important to understand what Marx means by the division of labor. According to Marx. For example. However. How convincing do you find Smith's and Marx's criticisms of the division of labor? Do you think there are solutions within the capitalist system for this problem? Study Questions and Suggested Essay Topics How is it that M' is bigger than M in the M-C-M' model of circulation? Answer for Study Question 1 >> The M-C-M' circulation appears at first to be paradoxical. Surplus value is the excess (M') that the capitalist ends up with at the end of an M-C-M cycle. for a profit. but he does not believe that education is a suitable solution. in building chairs. each simply does his own task. However. Adam Smith. It makes the worker little more than a machine. in order to gain surplus value we must be able to create value through the use-value (consumption) of one of those commodities. It describes a circulation where a capitalist purchases a group of commodities (for example labor and raw materials) at their value. This is typically thought to be more efficient than to have each person make a whole product. was very concerned about the division of labor's detrimental effects on the worker. Marx mentions Smith's observations.
Marx does not really address how these things fit into his overall theory. and is in fact critical of socialists who believe that the evils of capitalism can be eliminated through reforms that preserve the essential structure of the system. Marx says that there are some things with use. there must be something common between them. and therefore doesn't have the option of working for himself According to Marx. how much of one good is worth another one. however. compromise is not possible. which Marx believes will happen. The legal institutions and social structures have been made by the capitalists. When capitalism is overthrown. While the amount of labor input would have to have some . a capitalist seeks ever.receive total value greater than the value of the labor-power. Therefore. its exchange-value would likely vary considerably. One potential criticism of this theory is that is doesn't adequately account for all kinds of exchange-values. However.value that don't have value because there was no labor input. but the worker has no choice because he doesn't own any means of production. is there room for compromise between the interests of the workers and the interests of the capitalists? Answer for Study Question 2 >> Marx sees little room for compromise. Things like forests would be examples of such use-values. can only be achieved through exploiting the surplus-value of a worker's labor. Exchangevalue reflects the relationship between different goods. Marx uses this theory of value in his discussion of the exploitation of the worker and the circulation of capital. Their exchange-value comes from this value. The interests of capitalists conflict directly with those of workers.expanding profit. this overthrow will have to be a violent destruction of the entire social system. when the product is sold for its value. the capitalist receives a profit. By his nature. what could make a desk worth two chairs? Marx's answer is that both required the same amount of labor-power to produce them. and therefore are intended to preserve their own mode of production. This. What is the labor theory of value? What are the potential criticisms of this theory? Answer for Study Question 3 >> The labor theory of value begins with the concept of exchange-value. For example. Furthermore. Depending on the popularity of a given commodity. To remove the exploitation would be to eliminate the capitalists. if these goods can be compared at all. This is exploitative of the worker. in reality such things do have exchange values. This labor-power is the value that the desk and chairs share. Thus. However. the entire social system protects and preserves the interests of the capitalists. One could also argue that Marx does not leave sufficient room for consumer demand in his labor theory.
practical experience would seem to suggest that it is not the sole influence.impact on exchange-value. .
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