Use-value is things: things in general and things in particular. The
term use-value was introduced in Volume
1 of Capital. Use-value
is regarded as central to socialist practice. For instance, medical
services delivered free at the point of use are pure use-value. But
neither in Capital nor in any other socialist writing is understanding
of use-value developed beyond the intuitive level.
Marx
argues that every commodity consists of exchange-value and use-value.
Exchange-value is the worth of a thing in money terms. Use-value is
the useful aspects of the thing which embodies exchange-value. For instance,
a chair is a thing which is useful to humans; so it is, or has, use-value.
Also it can be bought or sold for money, so it has exchange-value.
In
finance, the term "commodity"
has the more specific meaning of a primary good such as crude oil, copper
ore or pork bellies, as distinct from other kinds of secondary assets
such as machinery, ships, corn futures or stock options. But Marx used
the term "commodity" in a broader
sense, to denote any tradeable good, such as a chair.
Some
things possess use-value but have no exchange-value. For instance, air
is very useful to human beings as it enables them to breathe and hence
stay alive. But it is normally available to everyone free of charge.
So air is not a commodity.
The
conversion of use-values into commodities is a long-term historic process.
When the Sioux were offered money for the Black Hills of Dakota they
said, "How can anybody sell the ground on
which the people walk?" The notion was meaningless to them.
Just as I would be perplexed today if somebody offered to buy out my
interest in the oxygen content of my house. If somebody proposed to
sell me the Brooklyn Bridge, I probably would not take the offer seriously.
But
if a toll is charged for crossing the bridge, then everybody who pays
the toll is purchasing a small part of the use-value of the bridge.
On
the other hand, some things have exchange-value but only a negligible
amount of use-value, with their exchange-value bearing no relation to
their use-value. The most obvious example is banknotes, which can be
bought and sold in currency markets but which have no practical usefulness
other than as waste paper.
Capitalism
arises from trade, and trade arises ultimately from barter. In a basic
barter of, let's say, some hides for some axe handles, the goods must
be exchanged, on average, in amounts equal to the amount of time taken
to produce them. If one person can prepare an animal hide in a day,
and another person can prepare five axe handles in a day, then the ratios
in which hides and handles exchange will generally be one to five. Other
proportions of exchange would not be sustainable in the long run; at
least not in conditions where the sustenance of life is dependent on
relatively scarce human labour, which must therefore be rationed.
Barter
is a transaction between two parties A and B, each of whom receives
use-value from the other. When exchange is mediated by money, every
transaction still involves two parties, just as barter does. But A may
receive some use-value from B giving not use-value but money in return.
However B will receive use-value from C (in exchange for money), who
will in turn receive use-value from D, and so on, until the circle is
completed when Z receives use-value from A.
The
money (or medium of exchange) circulates—goes round and round
in circles. The circuit may be very long—but it is a statistical
certainty that if I pay for something with a particular coin, and if
I live long enough, then eventually I will receive back that coin (or
its replacement if it gets worn out or lost) in payment myself, after
it has passed through perhaps millions of other people's pockets.
By contrast, the life-cycle of use-value is very short, and it does
not circulate the way money does. Use-value comes from the ground (or
from nature) and returns to nature. Even non-material forms of use-value,
such as entertainment, culture, education and other services which are
manifestations of human skill and social experience can be thought of
in this way. Looked at like this, all the different forms of human effort
or labour are use-value, including unpaid effort such as housekeeping,
socialising and child-rearing.
Use-value
goes from the ground to A to B to C to D to E and back to the ground,
undergoing some transformation or usage at each stage. The money that
mediates this movement and transformation of use-value goes in the opposite
direction; part of the great circuit of this money being ... to E to
D to C to B to A to ... .
To
illustrate the point, the maker of axe handles gets the material from
the forest, and the axe handles themselves will usually have only one
user before they are worn out and thrown away, so this trajectory is
from ground to A and back to ground.
The
finiteness of the trajectory holds even for complicated modern use-values
such as mobile phones. The component use-values of the device are transmitted
through the hands of several owners in a manufacturing sequence, and
the silicon, metals and plastics may travel great physical distances
before ending up in some teenager's schoolbag. But the number of such
preliminary stages (or owners or users) probably does not exceed six
for any of the phone's component parts. And the phone itself will probably
only ever have one owner until it is discarded.
To
illustrate the point further, some of the materials for a transistor
in the mobile phone will have originated in a sand bank, from which
silicon ore was extracted and sold on to a chip manufacturer, sold on
in turn to a phone assembler, then to a retail chain and finally to
a phone customer as part of the device itself. In this picture there
are about six stages or nodes, at each of which the material or use-value
is worked upon and transformed into something else. A seventh node is
the land-fill site in which the discarded phone ends its career. If
there is re-cycling of waste materials, then the use-value may not completely
return to nature in the short run. But in the long run, the second law
of thermodynamics ("Everything is eventually
degraded")—and commonsense—implies that it does
so.
If
we think of the movement of use-value and money as traffic on a network
of motorways, with use-value represented by red container lorries, and
money being white security vans, then the red and white traffic are
each travelling in all road routes and directions, but each red lorry
going in one direction is matched by a corresponding white van going
in the opposite direction. While the overall picture of the traffic
is immensely complicated, this correspondence between individual elements
of the red and white motions is very precise and rigid. The one is conditional
upon the other. To put it more strongly, the white traffic regulates
and controls the red traffic.
In
another analogy, think of a machine such as a motor car in which power
is transmitted from the engine to the wheels by means of interlocking
cogged wheels in which one cog-wheel (the white van in the previous
analogy) rotating in one direction transmits energy to another cog-wheel
(the red lorry) rotating in the opposite direction. But perhaps the
red cog-wheel (the goods) is driving the white one (the money)? We will
return to this question.
Continuing
the first analogy, think of the nodes or stages in the history of a
use-value as being cross-roads or intersections in the road system.
Any individual use-value (in its various forms during its trajectory
or "life history") has, unlike
the money which mediates its transitions, quite a short journey—not
in the physical sense of actual distance on the surface of the earth,
but in terms of the number of nodes or "road
intersections" or owners or transformation stages it encounters.
But its history is physically very complicated in a different way. At
each crossroads, the use-value separates out and goes off in many different
directions. The red container (the goods) is unloaded and transformed,
and the resulting use-value loaded up into hundreds of different containers
going off in hundreds of different directions.
Departing
from the analogy, the transistor manufacturer will receive use-value
from many different suppliers—raw materials, semi-finished parts,
energy supplies, equipment and machinery and vehicles; services such
as maintenance, security, law and order, education and training; and
hundreds or thousands of individual suppliers of labour and skills.
The
manufacturer will, in turn, supply various kinds of transistors to hundreds
of other users—manufacturers of household equipment, industrial
machinery, motor cars, medical equipment and so on.
This
degree of complexity may be replicated at each of the nodes at which
any particular use-value arrives. So can we make a rough estimate of
the overall complexity? It can be done very crudely as follows.
Suppose
a use-value has six stages in its history. Let initial extraction from
the earth be combined with final deposit back in the earth, to count
for one of the stages; omit this stage, and account for the remaining
five stages. Suppose there are one hundred possible different destinations
or nodes to which the use-value can be transmitted at each of the five
stages. Then we take a particular piece of the use-value at the moment
of extraction from nature and estimate the total number of possible
intermediate destinations it can go to before it is returned to nature.
This
estimate is produced in this case by multiplying one hundred by itself
five times (one hundred to the power of five). The result is ten thousand
millions, or ten billion. And for every additional stage the complexity
(number of possible destinations) is multiplied by a factor of one hundred.
Now
take this kind of argument a little further. We can look at many aspects
of many kinds of use-value. One example is the production and processing
of food-stuffs (including the quite complex details of transport, storage,
preparation, cooking and serving in households, where money or exchange
value does not mediate the trajectory or transformations of the use-values
involved, and is therefore, in the stultifying language used these days,
a command economy or basket-case economy). Others are the production,
storage and delivery of different kinds of energy such as electricity,
gas, coal, oil; the operation of a hospital, and so on. We can make
crude estimates of the numbers of different kinds of use-values involved,
and the total number of each kind.
Take
the manufacture of a motor car, for instance. There are large-scale
components such as doors (five for each car, say), windows (eight, say),
wheels (five including the spare), carburettor, brake discs, lights
and so on. Each of these will have sub-components. A sequence of manufacturing
processes must take place, in which the correct quantities of parts,
materials, equipment, energy, labour and so on must be available at
the right time, in the right place, for the various stages of transformation.
Let us say there are ten thousand different kinds of use-values involved
in the manufacture of a car. Then consider the different kinds of use-value
in the whole range of human activities. This gives us another perspective
on the complexity of human economy.
We
can introduce a third perspective by considering the totnal number of
transformation nodes in the system—the number of crossroads, interchanges
and intersections in the network of motorways of the earlier analogy.
So
what miracle of organisation makes it all work? Why don't the red container
lorries (the goods) and the white Securicor vans (the money) end up
in chaos?
In
the three volumes of Capital, Marx shows in great detail how the main
phenomena of capitalist economy follow from the law of exchange-value—that
the prices of commodities are, on average, proportional to the amount
of human labour embodied in them.
Is
there a law of use-value? Yes there is, but it is not mentioned by Marx.
It is the manner and degree to which the conditions of transformation
of use-value are determined by the qualities of use-value and the nature
of the transformations. On the rare occasions in which this "law"
is mentioned in socialist literature it is called the law of proportionate
production, or the law of balanced production.
Some
attempt to express it is given in the previous paragraphs. In some ways
it is practically a tautology or truism; and strangely this apparent
simplicity is an obstacle both to understanding and coming to terms
with the role of use-value and exchange-value in real life. The law
of use-value is one of the circumstances that we come to grips with
in late infancy. In earlier infancy we experience the force of gravity
(by falling over and so on) and learn to deal with it. Then we generally
cease to think about gravity and thereafter deal with it instinctively
or intuitively, even in situations (such as riding a two-wheeled vehicle
at speed) where its operation is far from simple to deal with physically;
and very difficult indeed to grasp intellectually.
It
took enormous expenditure of intellectual effort to actually understand
the law of gravity; and when it was eventually explained in the seventeenth
century it led to some better understanding of the nature of the universe
as a whole. This is an awesome and unexpected achievement.
Perhaps
it is the sheer brilliance and glamour of this discovery that have motivated
and induced economists to adopt a corresponding terminology—law
of supply and demand, law of value and so on. But I think there is some
merit in the outlook – the hubris—which this kind of terminology
implies, and even though it may seem a bit quaint, I propose to adopt
the expression "law of use-value".
The
next step is to tease out this truism.