Red Letter
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Commodities, Use Value and Exchange Value
by Ernest Mandel
Estimated Reading Time: 3 min

Every product of human labor normally possesses utility; Today's reading is brief and fairly clear. Keep that good will in your heart because tomorrow's is a doozy. Rest up your brain. it must be able to satisfy a human need. We may therefore say that every product of human labor has a use value. The term “use value” will, however, be used in two different senses. We will speak of the use value of a commodity; we will also talk about use values, as when we refer, for example, to a society in which only use values are produced, that is to say, where products are created for direct consumption either by the producers themselves or by ruling classes which appropriate them.

Together with this use value, a product of human labor can also have another value, an exchange value. It may be produced for exchange on the market place, for the purpose of being sold, rather than for direct consumption by the producers or by wealthy classes. A mass of products which has been created for the purpose of being sold can no longer be considered as the production of simple use values; it is now a production of commodities.

The commodity, therefore, is a product created to be exchanged on the market, as opposed to one which has been made for direct consumption. Every commodity must have both a use value and an exchange value.

It must have a use value or else nobody would buy it, since a purchaser would be concerned with its ultimate consumption, with satisfying some want of his by this purchase. A commodity without a use value to anyone would consequently be unsaleable, would constitute useless production, would have no exchange value precisely because it had no use value.

On the other hand, every product which has use value does not necessarily have exchange value. It has an exchange value only to the extent that the society itself, in which the commodity is produced, is founded on exchange, is a society where exchange is common practice.

Are there societies where products do not have exchange value? The basis for exchange value, and a fortiori Meaning for an even stronger reason than one that has already been accepted for trade and the market place, is constituted by a given degree of development of the division of labor. In order for products not to be directly consumed by their producers, it is essential that everybody should not be engaged in turning out the same thing. If a particular community has no division of labor, or only its most rudimentary form, then it is clear that no reason for exchange exists. Normally, a wheat farmer has nothing to exchange with another wheat farmer. But as soon as a division of labor exists, as soon as there is contact between social groups producing different use values, then exchange can come about, at first on an occasional basis, subsequently on a more permanent one. In this way, little by little, products which are made to be exchanged, commodities, make their appearance alongside those products which are simply made for the direct consumption of their producers.

In capitalist society, commodity production, the production of exchange values, has reached its greatest development. It is the first society in human history where the major part of production consists of commodities. It is not true, however, that all production under capitalism is commodity production. Two classes of products still remain simple use value.

The first group consists of all things produced by the peasantry for its own consumption, everything directly consumed on the farms where it is produced. Such production for self-consumption by the farmer exists even in advanced capitalist countries like the United States, although it constitutes only a small part of total agricultural production. In general, the more backward the agriculture of a country, the greater is the fraction of agricultural production going for self-consumption. This factor makes it extremely difficult to calculate the exact national income of such countries.

The second group of products in capitalist society which are not commodities but remain simple use value consists of all things produced in the home. Despite the fact that considerable human labor goes into this type of household production, it still remains a production of use values and not of commodities. Every time a soup is made or a button sewn on a garment, it constitutes production, but it is not production for the market.

The appearance of commodity production and its subsequent regularization and generalization have radically transformed the way men labor and how they organize society.

Commodities, Use Value and Exchange Value
Communism Is How We Forcibly Break Apart the Organized Power of the Capitalist Class
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