If use-value is not the basis by which exchange-value can be measured, what then is the “something" common to all commodities by which this can be effected?
Take the two metals, iron and gold. Both are mined and brought to market where they exchange, weight for weight, in a ratio of some thousands to one. It is not their respective use-values that causes this exchange disparity, for while gold is a commodity essential to the capitalist mode of production, in that it is hoarded by the banks to back up the money-notes issued by them as currency, etc., a more than equal case exists for iron in that it is the material of industrialisation and its modem machinery and tools without which present-day society ceases to function.
Finding in use-value no common factor that is measurable, there is left the fact that all commodities are the product of human labour. Human labour measured by time is therefore the obvious basis for assessing value in exchange. Take again our iron and gold example; miners, according to a recent radio talk, must hew and process some six tons of quartz rock before it will yield gold enough to fill a matchbox, while on the other hand, the same amount of labour would produce tons of more freely found iron.
Exchange is therefore the interchange of one labour product for another of different use-value, the exchange-relation being based on the labour-time that capitalist society allots to the production and reproduction of any particular commodity, while in every exchange the kind of labour that produced the commodities, be it specialised or “unskilled” is reduced to the unity of undifferentiated human labour, i.e., the labour embodied in machinery made by industrial workers, will exchange for the products of agricultural labour, skilled labour being a multiple of unskilled labour. Yet the amount of labour in commodities is not decided by the whims of the individual capitalists but is thrust on them all by those who manage to reduce the labour-time by the latest labour-saving technique and machinery, setting up in effect the “socially necessary labour time” to which one and all must adhere or have their commodities rejected by the market as too “dear.”
Every exchange comprises a sale and purchase and looking at our gold and iron example one can say that either could change position, in that the iron could "buy” the gold or vice-versa. This implication is borne out by the long history of exchange in which first this and then that commodity served as a universal equivalent, the most favoured, being the precious metals because they concentrated labour in a handy form and were easily divisible. Among these, gold holds supreme position to-day as the commodity set aside as the measure of value and standard of price. Thus an ounce of gold of legal fineness, will mint as coinage into just under four sovereigns of legal weight, making it possible for the labour embodied in one or many such portions of this metal to express in currency terms the labour-relation between it and any other product of labour. In brief, while labour is the cause of value, gold measures this value and expresses it in the various national currencies as price. The fact that sovereigns have been replaced by paper tokens does not invalidate the foregoing, except that tokens open the door to inflation by legally expressing price in an unwanted number of tokens over and above the real money of gold.
Keeping in mind the meaning of price, one can say that exchange is but the movement of labour products for others of equal labour value, and the question which naturally arises here is that if exchange amounts to the giving of one value for an equal, how can profit arise? It might appear that the capitalists in the exchange of labour products out-smart each other by giving less labour for more in return, but a seller, to continue in business, must at some time be a buyer and is himself “caught,” thus levelling up any gain. Finally, the “outsmarting” theory is entirely nullified by the fact that the whole capitalist class make a profit regularly. Let us look a little closer at this. The capitalist buys at the proper market price, machinery, raw materials and workers’ energies and when the process of converting the materials is completed and the sale of the new product is effected, he finds that not only has he sufficient money to repeat this process, but enough and more as the business grows to cease all ”work" and hand over his mandate to his paid manager. No “robbery” has been committed by the honest business man, yet he is in possession of values in the shape of commodities for which he has given no equivalent in return. How does it happen? Read the next article entitled “Something for Nothing.”
Frank Dawe
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