Karl Marx was a rationalist who rejected religious or metaphysical arguments.
He was, therefore, drawn to the scientific approach to economics that the cost of production theory of value expressed. Chapter 1 of Capital’s first volume lays the conceptual foundations for Marx’s analysis. He starts by focusing on the dominance of commodities in capitalism.
But before we get into the subject, what does Marx mean by the word commodities?
Volume 1 of Capital was written in German, Marx’s mother tongue. He used the word Der Ware, which has several English equivalents including commodity and ware, an archaic English word. In the French translation published in 1872 which he approved, marchandises is used: it can mean commodities, goods and wares.
The English translation where the word commodity is for the first time used was published in 1887, four years after Marx’s death. There’s no evidence he approved this translation.
So the conclusion is:
- Der Ware is Marx’s chosen noun but it has in English several translations. There’s no evidence he approved any of them or the word commodity.
- The context throughout Volume 1 suggests that Marx is referring to goods produced in factories where the division of labour prevailed
- A contemporary reader would find the word ware or manufactured good more comprehensible than commodity, which is now often used to apply to raw materials and agricultural goods traded in bulk.
On top of that, Marx’s earnings were mainly due to his newspaper journalism. He had been a newspaper editor twice and knew the importance of a hard-hitting and comprehensible opening sentence. Would he have chosen a word in English that would have readers scrabbling for a dictionary?
And it’s easy to imagine him travelling by foot or carriage from the British Library along Tottenham Court Road and studying the ever increasing range of factory-made goods for sale in its shops, from kitchen utensils to factory-made boots. He would undoubtedly speak with amazement about the mass of new products available in London’s shops. It’s something his readers would have instantly understood.
I believe the word commodity is now ineffective and needs to be replaced with the “wares” or “manufactured goods’ for sale.
Let us now turn to the detail of Chapter One, starting with its first sentence.
“The wealth of those societies in which the capitalist mode of production prevails, presents itself as an immense accumulation of commodities…”
The commodity, therefore, is the starting point of Marx’s analysis; not capital, labour, value, price or exploitation. To understand Marx’s conception of these and other categories, the reader must have a proper understanding of the commodity which Marx defines in stages:
“The commodity is at first an exterior object, a thing, which by its properties satisfies human wants of one sort or another.”
This sentence says two things. The first is that a commodity is “a thing”. But the commodity can’t just be any thing; it has to be one that meets human “wants” (the word used by Marx is Beduerfnisse, which can be translated as “needs”, “essentials” etc). The idea of the “exterior object” expressed by Marx can be interpreted in more than one way. It can be inferred that the object has material characteristics and must be, therefore, always tangible. Another interpretation is that the object could also be something which is objectively perceptible at the level of the individual but lacks physical characteristics. This could include music and teaching, which are intangibles.
Marx’s ideas of wants, however, can be more definitely interpreted as encompassing intangibles as the following sentence suggests.
“The nature of such wants, whether they arise, for instance, from the stomach of from imagination makes no difference.”
Here, Marx acknowledges that wants can be those emerging from the mind and not just those derived from physical needs such as hunger and the need for warm clothing, though the modern reader will see a connection between the two. The logical conclusion is that use-value can be simultaneously objectively and subjectively perceptible. The dichotomy is more clearly explored as the chapter proceeds. Marx wrote (the author will cite the relevant sentence in German):
“Die Nuetzlichkeit eines Dings macht es zum Gebrauchswert.”
This is accurately translated as:
“The usefulness of a thing makes it a value in use (use-value).”
Marx then wrote this:
“Durch die Eigenschaften des Warenkoerpers bedingt, existiert sie nach ohne denselben.”
This sentence is conventionally translated as: “Conditioned by the physical properties of the body of the commodity, it has no existence apart from the latter.” But this seems to be wrong.
A more accurate translation is: “Conditioned by the quality/nature of the body of the commodity, it does not exist without the same (the latter).”
This suggests that Marx meant that what conditioned the commodity was something that could be intuitively perceptible: its nature and quality.
The intangible characteristic of a use-value is further implied in the following sentence: “A use-value or good only has value because labour is objectified or materialised in it.”
But how can labour be chemically or physically incorporated into a thing? There is no scientific explanation. Logically, this sentence can only mean that use value has an intangible component and one that is only intuitively obvious, though it is objectively perceptible. The logic of this statement suggests that the labour power embedded in a use value must be intangible.
Finally, the word “Nuetzlichkeit (usefulness)” implies intangibility because it begs the question: useful to whom?
One person’s answer will be different to another’s because it will depend upon each individual’s perception of the usefulness of each useful object. This will change over time as well. For example, a flint sharpened so it can be used as a knife has no use value in today’s world (though people might keep it as a curiosity). But the same object more than 10,000 years ago would have been deemed to be very useful. It’s physically the same object but its use value has changed over time. Use value therefore implies intangibility, a characteristic that can only be subjectively perceived.
The second nature is exchange value or value. Marx is unambiguous about its key characteristic. It is an abstraction and an intangible.
“The value of commodities is the very opposite of the coarse materiality of their substance, not an atom of matter enters into its composition.”
The following passage explains at greater length how the exchange-value characteristic of a commodity is purely subjective and hence intangible even though it uses the words “substance”, “reality”, “objects of use” and “corporeally”, all of which imply tangibility.
“The fact that the substance of the exchange-value (of a commodity) is something utterly different from and independent of the physical-sensual existence of the commodity or its reality as a use-value is revealed immediately by its exchange relationship. For this is characterised precisely by the abstraction from use-value. As far as the exchange-value is concerned…commodities are first of all simply to be considered as values, independent of their exchange relationship or from the form, in which they appear as exchange-values. Commodities as objects of use or commodities are corporeally different things. Their reality as values forms, on the other hand, their unity.”
Marx was grappling with the dichotomous (tangible/intangible) character of commodities and he refers throughout Capital to the ‘dual nature’ of commodities. They are perceptible as material and immaterial, at the same time. At no point did Marx define the dividing line between a commodity’s dual natures because this is impossible. Intangibility is indefinable by definition. The conclusion is that Marx conceived a commodity as an objectively perceptible item – and one that might, or might not, have physical characteristics – the value of which is intuitively or subjectively perceptible, both in use and in exchange. A commodity, therefore, can have value in use and in exchange without physical characteristics. In other words, Marx’s conception of a commodity is that it can be simultaneously objectively and subjectively evaluated by an individual who wants to use it and by a group of individuals that might want to acquire it.
In Marx’s model, therefore, the commodity is the vector through which physical things and human desires are mediated and that its production and exchange are, in effect, the twin engines of the capitalist system. The commodity, seen this way, is both the source and the outcome of everything the capitalism does.
For Marx, price, in contrast, is a derivative. It is the means by which capitalism measures what is produced and exchanged and it has no necessary equivalence to use value, exchange value and value. These are all intangibles perceptible at the level of the individual and consequently objectively unquantifiable. But Marx’s analysis of the commodity requires buyers and sellers to see through the disguise every commodity wears to perceive the value at its core. The conflict at the level of society between contrasting individual perceptions of the value of a commodity – whether it is in a tangible or intangible form and particularly between the price of labour power and its value – is the dialectic that drives the Marxist system.
The neoclassical system views price (market-clearing or otherwise) as the key vector through which physical resources and human needs are reconciled. Price in neoclassical thinking replaces Marx’s idea of the commodity as the origin and the product of the system. Its theoretical model shows that value only matters at the margin for marginal buyers and sellers and the less that market participants worry about value and the more they focus on price, the better.
Marx and his followers tried to prove that prices are on average, and over the long-term, connected to embodied labour values. The main objective was to provide a scientific basis for the claim that workers were exploited and in support of Marx’s assertion that the profit rate in the capitalist mode of production would inevitably decline, causing the system to collapse. Given that value, as has been explained, is a subjective concept, this seems to be a pointless exercise. The futility becomes total once it is recognised that the capitalist system abandoned commodity money forms – gold and silver – more than 100 years ago. Through the printing press and electronic payment systems, the cost of producing money has been reduced to close to zero. Marx accepted that the quantity of commodity money had to affect its price relative to labour power as a commodity. Changes in the money supply caused by government action, therefore, would create volatility in the price of money compared with the price of all other commodities, including labour power as a commodity. If there is evidence of a relationship between the value of aggregate labour power and the price of all other commodities in an environment in which governments can manufacture money, it is a coincidence,