The Importance of Exchange, and Use-Values, in Realizing Value, and the Contradiction between Private and Social Labor

In exchange, sellers see no direct use-value in their commodity, else they wouldn’t want to sell it. For sellers, it is the exchange-value of the commodity they hold that matters.

All commodities are non-use-values for their owners, and use-values for their non-owners.

I’m not entirely certain if what follows fits for this chapter, but I’d like to mention some thoughts about the importance of exchange in realizing value, and in the contradiction between private labor and social labor.

Exchange “completes” the loop in recognizing, or not recognizing, private labor as social labor. It is only if the commodity is successfully exchanged, and hence if the commodity has use-value that is socially recognized, that it can be realized as value. Only exchange can prove that the private individual labor was social and counts as abstract labor creating value.

For the labor expended on them only counts in so far as it is expended in a form which is useful for others. However, only the act of exchange can prove whether that labor is useful for others…

My Penguin version of Capital has an introduction written by Ernst Mandel. I thought I’d share his words on importance of use-value in realizing value, and exchange in realizing private labor as social labor:

"... in a society based upon private property and private labor (in which economic decision making is fragmented between thousands of independent firms and millions of independent 'economic agents') social labor cannot immediately be recognized as such... If Mr. Jones has his workers produce 100,000 pairs of shoes a year he knows that people need shoes and buy them... But he has no way to knowing whether the specific 100,000 pairs of shoes he owns will find specific customers... Only after selling his shoes and receiving their equivalent can he say... 'my workers have truly spent socially necessary labor in my factory'. If part of the produced shoes remain unsold, or if they are sold at a loss or at a profit significantly less than the average, this means that part of the labor spend on their production has not been recognized by society as socially necessary labor, has in fact been wasted labor from the point of view of society as a whole... its production has created no value. "

A similar description is given in the Soviet political economy textbook Political Economy: Capitalism - Kozlov (Ed) (1977).

In commodity production based on private property there is a deep internal contradiction between private and social labor. Private ownership … gives [commodity producers’] labor a private character. … At the same time, the social division of labor makes all commodity producers closely interdependent, makes the labor of each of them a part of the aggregate social labor…

While the commodity producer is occupied in making a commodity, the social character of his labour remains unobserved and hidden, but it becomes clear as soon as the products come onto the market. There it is discovered whether or not the labor of a given commodity producer is needed by society and whether or not it will receive social recognition. If the commodity does not find a buyer, that means that the given private labor has not been recognized as part of social labour… (pg 71-72)

Anwar Shaikh also gives his interpretation of exchange “exposing and resolving” the contradictions within production in his paper “Neo-Ricardian Economics: A Wealth of Algebra, a Poverty of Theory”. This starts moving beyond the contents of Chapter 2.

... Marx points to the fundamental contradiction which exists here. On the one hand, each labor process is privately undertaken as if it is independent of all others, with exchange for profit as the goal. On the other hand, this undertaking assumes in advance that other similar labor process will also be there at the right time… Buyers of this product, sellers of the means of production … if it is to be repeated (reproduced).

Each apparently private and independent labor must therefore presuppose a social division of labor.

It is in exchange that the apparent independence of each private labor process collides with the true interdependence inherent in a social division of labor. Exchange is the sphere, as Marx puts it, where the contradictions of commodity production are “both exposed and resolved”.... Exchange is the sphere which the contradiction internal to production itself, the contraction between private labor and the social division of labor, is made visible.