We have noted that every product is a product of a specific kind of labour and that a certain amount of that labour needs to be spent on producing that product. We also noted that these days many different kinds of labour needs to be spent on producing just one kind of product and that the labour time spent by each needs to be known.
Today we want to ask the question as to why we call a product not a product but a commodity? Why is that?
Today we want to ask the question as to why we call the labour time spent in the production of a product -deposited in the product- value and its form of appearance exchange value? Why is that?
Before we look into this let us remember Lenin and his reminding of us that life is made up of relationships, all are related, and thus dialectics, just as life itself is a study of relationships. Things not related to other things would be frozen. Not moving at all. Not changing, not developing and thus not being destroyed at all. But all is related. And thus all moves, all change and develop and is destroyed.
If one looks at a drinking glass together with Lenin, one sees that in its use, when it is related to its use, it changes: if you want to drink water it is a glass to drink water from. But if you like you can use it to drink alcohol from, than it becomes a glass to drink alcohol from. If after all that drinking you or others become drunk and a fight start you or other may decide to throw that glass at your-their head but this way that very same glass becomes a weapon-not a drinking glass anymore. Or if you are a flower loving person and you have no other vases at home you can use this glass to place your flowers in and the very same glass becomes a vase-not a drinking glass anymore. Etc etc. of course if all you wanted was drinking water it would not matter if the glass was made of glass, it could be made of metal, ceramics, wood, or indeed you may have preferred to use your hands..
Thus in a relationship things end up changing-gaining new characters, new qualities. or loosing old characters, old qualities.
This is what happens to our product and our labour time deposited in a product.
If you are a Robinson Crusoe and even more isolated than him thus have nothing that originated from the labour of another human and you have collected wild fruits from the wild forest, the time spent to collect them is yours and you know the amount of time you spent and they are your products for you collected them from the wild forest. Well, in this case you are not even a Robinson Crusoe, you are a monkey at best!
In the meantime, the writer of Robinson Crusoe was a slave trader and in the novel Robinson Crusoe gets ship recked while on his way to buy slaves from Afrika.
In human society we have to produce things as we have explained before, and as such we have to establish relationships with others during this production process. It is precisely this relationships that we establish during production that is transforming our product into commodities and our deposited labour time into value- exchange value.
When we have developed our capacity to produce and when our primitive form of communism came to an end the question of who owns the means of production and thus the products produced using these became well established, giving rise to slave owners and slaves; feudal landlords and serf peasants; bourgeoisie and proletarians. This resulted in the need to exchange one product with another; giving rise to buyers and sellers. In this society we live, things are owned and produced to be sold-to be taken to the market and sold! In this process products are owned
Products ss commodities gain many a new qualities: you collected the wild fruit and took it to market-they are yours. They are your property. They are the wild fruits you collected in the wild forest but you brought them to the market and they are yours. They are your property. You want to sell them, that is why you brought them to the market. Will somebody in the market buy them? If they do they may eat them later if nobody buys what you have collected what will you do with them? Afterall they are yours. You can dump them or take them home and see if you can eat them before they have rotted. If somebody buys them you have some money and with that money you can buy something you want from the market. A product is what you buy but it belong to another and you had to buy it. It is more than a product it is a product that is called a commodity!
Last week we had a look at our smart phone and we saw that many a thing and many a people are needed to produce that smart phone. These days all products are also commodities so much so that even our labour power is a commodity! We have it but we have to find a boss to sell it to. If we cannot find someone to buy it we can take it home and do nothing with it. And if we cannot sell it neither can we get money (wages) for it. If we cannot get money for it (wages) we cannot buy anything from the market. We cannot even buy food. We cannot feed ourselves and our family.
That is because product becomes commodity when products are owned by some. And this ownership leads to means of products being owned by the bourgeois class while the proletarian class owns none of those, the only thing he/she owns is his/he labour power.
It is this labour power that is deposited in product as labour time spent. And now and since the product is owned by someone this labour time spent in producing the product becomes value. When the products are exchanged in the market the value appears: it is exchange value. The relationships this commodity establish and thus the relationships this value and exchange value establish and thus the changes they go through-like our glass- would puzzle anyone. No wonder Marx talked of fetishism of commodities. Capital, wages; price, credit, money, bank note, rent; profit; interest, tax;….all either living or accumulated-dead labour time spent in production of this or that assuming all these characters in the process of production and exchange (of products and money). All starting with the simple: it is mine! Giving rise to classes in the society.
In our present day society the bourgeoisie owns all the means of production so much so that labouring masses have to sell their labour power-labour time to them – if they cannot do so they have no wages and thus nothing. In the production relations we establish one small section of the society owns all the means of production and thus the products produced using these means of production. Others do not own the means of production and thus the products produced using these means of production-although they are the ones who are using these means of production and they are the ones who are producing these products. A relationship arises: relationship of bourgeoisie to the proletariat. On one side of this relationship the quality of owning all the means of production accumulate: they are the bourgeois. On the other side this quality of ownership cannot be; that side is denied the quality of ownership of the means of production. They are the proletarians. This relationship is antagonist, for the quality of ownership is accumulated on one side, monopolised by one side while it is denied to the other side.
If and when all means of production is owned communally, and thus and if and when all the products are owned communally, the fact that these products need to be distributed amongst people who own these communally, does not make them a commodity. They remain as nothing more than products produced communally, owned communally and distributed amongst the members of the society to meet their needs. In those conditions products do change hands, but products do not change ownership. Thus they do not become commodities.
That is the difference between a commodity producing society, such as the present capitalist system, and a society that produce things to satisfy all its members needs and distribute it amongst its members.
What is the first role of money as it comes into being?
It is to be a measure of labour time spent in the production of products, and provide a standard for this!
Since it comes to be as a result of development of divisions of labour and thus the increase in the amount and different kinds of products, and thus their exchange in the market, it is also not only a product of transformation of products into commodities but itself is also a commodity!
Under the conditions of commodity production just as products become commodities so does the labour time needed (socially necessary labour time) for the production of products become value. Thus value of a commodity is the deposited amount of labour time needed to produce the product in question. Exchange value is the form in which it, value, shows itself.
Thus every commodity has a value and thus money also has a value. When a product is taken to the market and exchanged for money, the value of money and the value of the product must be equal. Thus the labour time needed to produce the amount of money used in exchange for the product and the labour time needed to produce the product that is to be exchanged for that amount of money must be known and must be equal.
It is thus that money is fist and most of all a rare metal, and first and most of all gold! The labour time needed to produce it is determined by the labour time needed to produce gold, its value is thus determined. It then can be used for exchange of products representing equal value, equal labour time needed to produce both the amount of gold used to exchange with the product in question and the said product.
This of course is already complicated for instead of comparing the labour time needed for the production of one product that one produce to the labour time needed for another product that one does not produce but need, and thus exchanging them directly, we are using a mediator, money, and achieving our aim of obtaining the product that we need through the medium of money.
Thus not only do we need to know the labour time our own product contain, and the product we need contain, we also need to know the amount of labour time the money contain.
We can complicate the matter more. For example one kind of labour used to produce a kind of product represent more labour time than another kind of labour that is used to produce another kind of product. That difference must be taken into account too.
Such complications were relatively easy to resolve right at the start, when all new each other and thus the labour they performed and the products they produced, and exchanged them locally. Especially before money came into operation. Through barter of commodities. But money becomes necessary to progress commodity production and is produced and is used to exchange products. And that creates problems even when the commodity production is not well developed, for after all money may belong to another community, say the Roman empire, and who knows how much labour time it contains. And who is going to stop the Roman empire pillaging gold of others and who is going to stop the merchant from cheating the peasant and artisan….These are in the nature of commodity production. Just have a little look at what happens with it these days. America put paper to the printing press and declare it to be dollar, money that is worth certain amount of value and all goes “oh yeah, I want some of that…” and give away all that they produce in exchange for that piece of paper! That is by the by. And we will come to that.
But there are very funny examples regarding the value of money (that is gold) in history. One of the Chinese emperors is short of money. Thus demands a solution to his problem. Find a solution to the problem or have your head chopped off! Thus one of the clever consultants come up with a solution. He says: now we are calling 5 gram of gold one dollar (whatever) what we do is we melt them all and produce one dollar that actually has 4 grams of gold in it. Thus when we go to the market to buy all that grain etc., we give them one dollar for one tone of grain as before, but we will have much more dollars at hand. Wow says the Chinese emperor that is clever. And it is done. But the merchants in the market place are absolute utter whatever you want to call them. They realise the amount of gold has decreased, so the price (exchange value’s price form) goes up! And the Chinese emperor is back to square one. And of course the clever chap who proposed the solution ends up having his head chopped off. You may think that is funny, but ask the chap who lost his head. And we will come to that.
COOPs, COMMUNES, COUPONS OR MAGICAL WAY OF GETTING RID OF COMMODITY AND MONEY THAT DO NOT WORK
There are of course, and also, many an examples of attempts at getting rid of money and using say coupons that says the owner have spent so much labour time to obtain it. Robert Owen is one. But it does not work, for in the society where all the products turn into commodities, to exchange products you need money, a commodity agreed by all to be an equalant value to a certain standard. It did not work. The same problems are faced by many an anarchist co-operatives. They start say organising a market where producers come and exchange their products directly, thus going back to barter times. So long as things remain within that barter level, different producers can exchange their products, never of course achieving absolute equality, but nevertheless agreed by the producers of different products and exchange is completed. But than a producer want to exchange his product in that market but has nothing he wants in that market. How is he going to get rid of his product within that market? Thus a coupon for that market is produced. Producer sells his product and receives a coupon to prove that he sold such and such product worth so many coupons, which he can use when there is a product he wants and is produced by the members of the co-op. But what if there is nothing the producers of the coop produce that he wants, say he wants a spare part for his tractor, or some other things which are only produced outside the co-op and can only be obtained at the wider market (of commodity producers; some of them are huge companies, not coops at all, and of course they could be members of another independent coop-commune). These people will not accept these coupons. But they will accept say euros (these sort of coops are mainly in Europe.) Thus coop moves to creation of a mechanism whereby every coupon is worth certain amount of euros and provides these euros to the coop members in exchange for the coupons! The same problem arise for the people who are not members of the coop, do not produce nothing, but want to shop in the market set up by the coop members. They work outside, earn euros and have euros and want to shop in the coop’s market that only use those coupons. What to do? Certainly the coop wants to grow and make life better for its members. Help them sell more. Thus and again, these buyers are provided with coupons in exchange for their euros.
Here it is clear that someone has to decide what is the value of each product, thus equality can be achieved when they are exchanged, thus no inequality is committed against any of the producers, and more, somebody has to decide what the exchange rate of those coupons to euros is. Now the latter step takes the coop into the wider world of value of labour time for all the members of the wider society who are not the members of the coop at all. Who decides on the value of the labour time for all those people? Sorry to say so, but not the coop but the big capitalists who control the euros!
Thus these coops come up with all sorts of democratic structures to decide on the value of each product (thus the value of each producer’s labour time) so that an equal exchange can be achieved, and the democratic structure to decide on the exchange rate of the coupon with euro. And there is more.
Some of these coops grow so much that they produce things in Chine! And sell these products in the coop! And of course why not sell it outside the coop, so long as the funds are used to better the life of the coop members. But then who decides the wages of the Chinese workers. Coop’s democratic structures of course-Chinese workers are not part of those. And why go all the way to China if you are not producing things cheaper there. For the benefit of the coop, and thus coop members of course. Clearly the attempts to provide equality and democracy is breaking down in the jungle of capitalist commodity production.
Does that mean coop movement is bad in and by itself under capitalist conditions? Of course not, for even under such conditions coops can produce better conditions for producers and consumers. They produce not only better conditions for producers and consumers but also many an honest coop personnel who want to do the right thing for its members and the wider community. Yet and since they are stuck within this ocean of commodity production they may and usually they do end up growing, since they must, and do become capitalist companies not really serving the members and the community but those who run the coops. In any case, they are a reactionary movement if they claim that they are able to resolve the problems of capitalism within the system of capitalism.
There is more to this coop-commune movements. People lose their jobs. Are forced into small production to survive. And even than cannot sell their products and are forced into forming exchanges amongst people like themselves. Desperate to survive. Even if they do not form a producers’ coop, they form a local exchange coop and come up with their own coupons. There are many examples of these. Nay more people lose their job, have no product to sell but the labour that they can perform. Thus local labour exchanges are formed. One goes and perform certain labour for certain length of time, get a local coupon for that and then can call another person to perform another kind of labour at his place or exchange that coupon for food, goods etc. that others are willing to provide in exchange for the labour they can perform-or another member can perform for the coupon.
All these reflect the fact that capitalism at its most developed, as monopoly capitalism is not able to take care of its people, and people are forced into all sorts of barter situation-this is going back to commodity production at its most backward, at its start. This used to occur after big wars, such as WWI and WWII yet it is occurring now when there is no such wars.
This has happened when USSR collapsed. Still goes on in x USSR and People’s Democracy countries more than other countries.
Does that mean such movements are bad in and by themselves? Of course not. These are the results of forced conditions on the members of the working classes and so long as they are used to expose the fact that finance capitalism is in its general crises and is unable to function for such members of the society (as well as the out and out unemployed) they are not only a means of survival but also a means of exposer of finance capitalism. But if they are used to cover up the shortcomings of the financial oligarchs and the society they create and run (or rather not run) they become a reactionary movement.
We can call all these coops, communes etc., Robert Owen effect that is kept alive after all these years and after Marx, as well as the failure of the capitalist system in its most “developed” stage! They are not reactionary in and by themselves but extremely reactionary as and when they claim to be a way, a means of salvation of humanity-and when they claim to be democratic as such, for these structures are invariably bound with bureaucracy. Dissolution of bureaucracy require a society that produce plenty and no commodity, and they are not the way forward to achieve that. Clearly not so in the age of micro-chips!
Marx notes that Robert Owen’s attempt to replace money with coupons in the process of exchange of commodities is an attempt to replace money with something that directly represent labour time spend by each individual, but that does not work since within the commodity production money is not a direct representative of labour time spent, but is itself a commodity. It cannot represent labour time directly but only as value, that is as value, since labour time (socially necessary) becomes value under commodity production, and that value present itself to us only as exchange value. No coupon can change this fact under commodity conditions. The only way to represent labour time directly is to put an end to the commodity production. And that requires communal ownership of all products (and thus means of production) and the developed, modern means of production that makes it possible to count the labour time needed for each production. And of course abundance of products.
We shall further have a look at these next week with particular emphasis on commodity production under socialism.