The following quote can best describe Marx’s opinion on the connection between exchange-value and commodity value.
We have seen that when commodities are in the relation of exchange, their exchange-value manifests itself as something independent of their use-value. But if we abstract from their use-value, there remains their value, as has just been defined. The common factor in the exchange relation, or in the exchange-value of the commodity, is, therefore, its value.” (Vintage/Penguin edition, p. 128, chapter 1, §1, para. 12)
- First of all, he claimed that the value of the use of products for people has nothing to do with their prices or exchange-value.
- Second, he claimed that all the products are social by their nature since their production is the result of the division of labor. The value of a product is determined by the amount of work that was used for its production.
- Third, he divided value and exchange-value. In his opinion, the cost is universal and shared characteristic for all the commodities and is the part of exchange-value. He calls it “the common factor”. Exchange-value is the appearance of value in the trade.
Marx also considered exchange-value as the reflection of the owner’s purchasing power or as the ability to command labor meaning that the main aspect of the commodity production is labor and value is measured by the amount of labor required.
Commodity and value form of product
As it was mentioned above, Marx stated that the value of the product is determined by the amount of labor that was used for its production. That value can be expressed as the amount of money required for the product (price of the product)
The process of “marketing” of the product shows that the commodity form is not the fixed and changes through the time. Historically, it went through the development as the trade became more and more sophisticated. Value of the product goes through many stages.
The development of social and technological stages needed for “marketing” the product determined the simultaneous development of the commodity and value form of the product.
The approach is pretty obvious. The role of the value in exchange-value is essential since the production needs determine it. Besides, the factors of supply and demand partly reflect the use value of the product and allow comparing the production value with market prices that reflect the needs of customers.
If the products were gaining their value after the production and were estimated according to their importance for consumers, then the economic misbalance would have occurred. The goods would have been estimated without the relation to the spending required for production leading to over or underestimation of the product. Besides, it would be hard to determine the value for the end consumer since the factor is somewhat subjective.
So, in fact, the concept presented by Marx reflected reality and corresponded to his time. However, his approach was concentrating on labor as the primary factor that determines the value of the product while this method has some disadvantages.
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