Tuesday, 24 July 2012

The Law Of Value


The Law Of Value states that Value is determined by the labour-time required for production, and this Law applies as a Law of Nature for all societies. The amount each society Values any particular Use Value, is determined by the proportion of Social labour-time devoted to its production as opposed to all other uses of that labour-time. This Law, Marx states, as a Law of Nature is not changed by the particular methods by which different societies go about the process of producing in order to meet its needs. Only its form of manifestation is altered.

This is made clear in Marx's letter to Kugelmann, where he writes,

Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour. It is self-evident that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production; it can only change its form of manifestation. Natural laws cannot be abolished at all. The only thing that can change, under historically differing conditions, is the form in which those laws assert themselves. And the form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products.”


In Capital, Marx elaborates on this.

He sets out the way in which Robinson Crusoe maximises his utility by measuring the labour-time required for producing different items,

Since Robinson Crusoe’s experiences are a favourite theme with political economists,let us take a look at him on his island. Moderate though he be, yet some few wants he has to satisfy, and must therefore do a little useful work of various sorts, such as making tools and furniture, taming goats, fishing and hunting. Of his prayers and the like we take no account, since they are a source of pleasure to him, and he looks upon them as so much recreation. In spite of the variety of his work, he knows that his labour, whatever its form, is but the activity of one and the same Robinson, and consequently, that it consists of nothing but different modes of human labour. Necessity itself compels him to apportion his time accurately between his different kinds of work. Whether one kind occupies a greater space in his general activity than another, depends on the difficulties, greater or less as the case may be, to be overcome in attaining the useful effect aimed at. This our friend Robinson soon learns by experience, and having rescued a watch, ledger, and pen and ink from the wreck, commences, like a true-born Briton, to keep a set of books. His stock-book contains a list of the objects of utility that belong to him, of the operations necessary for their production; and lastly, of the labour time that definite quantities of those objects have, on an average, cost him. All the relations between Robinson and the objects that form this wealth of his own creation, are here so simple and clear as to be intelligible without exertion, even to Mr. Sedley Taylor. And yet those relations contain all that is essential to the determination of value.”


He goes on to describe how the Law of Value manifests itself in the peasant society of medieval Europe.

But for the very reason that personal dependence forms the ground-work of society, there is no necessity for labour and its products to assume a fantastic form different from their reality. They take the shape, in the transactions of society, of services in kind and payments in kind. Here the particular and natural form of labour, and not, as in a society based on production of commodities, its general abstract form is the immediate social form of labour. Compulsory labour is just as properly measured by time, as commodity-producing labour; but every serf knows that what he expends in the service of his lord, is a definite quantity of his own personal labour power.”

And then of a community of free individuals,

We have one close at hand in the patriarchal industries of a peasant family, that produces corn, cattle, yarn, linen, and clothing for home use. These different articles are, as regards the family, so many products of its labour, but as between themselves, they are not commodities. The different kinds of labour, such as tillage, cattle tending, spinning, weaving and making clothes, which result in the various products, are in themselves, and such as they are, direct social functions, because functions of the family, which, just as much as a society based on the production of commodities, possesses a spontaneously developed system of division of labour. The distribution of the work within the family, and the regulation of the labour time of the several members, depend as well upon differences of age and sex as upon natural conditions varying with the seasons. The labour power of each individual, by its very nature, operates in this case merely as a definite portion of the whole labour power of the family, and therefore, the measure of the expenditure of individual labour power by its duration, appears here by its very nature as a social character of their labour.”

In a society where production has become one based on commodity production, the form in which the Law of Value manifests itself is through Exchange Value. Such societies are still constrained by the fact that what can be produced is determined by the amount of available social labour-time, and the Value the society places on these Use Values can still be gauged by the proportion of social labour-time devoted to their production. But, the means of allocating this labour-time is no longer based on overt relations between human beings, but is mediated by Exchange Value. The dominant Use Value of commodities becomes not that they fulfil useful functions, but that they possess, Exchange Value. Production is organised not to maximise wealth, through the maximisation of the production of Use Values, but so as to maximise Exchange Values.

But, in a socialist society, the Law of Value continues to operate too, for the reasons set out above.

Products produced by a Socialist economy will not be commodities, but will have Value. As Marx puts it, in fact, Value will be even more significant then.

“Secondly, after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever.”

Capital III, Chapter 49, p 851

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