The Necessity of Commodity Production and Money
(From gFrom the Gold Standard to Managed Currencyh, 1988-89)
Written by Hayashi Hiroyoshi
Translated by Roy West
This is the first in a series of nine articles written by Hayashi Hiroyoshi
from 1988 to 1989, entitled gFrom the Gold Standard to Managed Currencyh.
Page numbers listed for the passages from Capital refer to the Penguin
editions, and MECW refers to the Collected Works of Marx/Engels published
by International Publishers.
1. Modern gMoneyh
2. Money [kahei] and the Concept of gValueh
3. The Particular Historical Character of Labor that Takes the Form of
4. Money and the Necessity of Human Relations Appearing as Relations
5. Money Teaches Us that Human Labor has become Thoroughly Social
1 Modern gMoneyh
To understand international currency, it is necessary to first understand
the meaning of money. [It is important to note that gmoneyh here is a
translation of kahei, which is similar to the German geld and can signify
metallic money (gold), and is different from shihei (paper money).] Exactly
what is money, and what are the production relations that make money necessary?
It is becoming increasingly difficulty to answer this question. In the
past money had actually circulated and was something concrete in the eyes
of the people who used it. Today, however, it only appears as paper money
[kahei] in its function within the circulation process. In the past, metal money
itself had value and was not simply a functional existence, whereas money
now lacks any internal value of its own and is only paper. It thus appears
as if todayfs money has a purely functional existence.
With the breaking away from the so-called ggold standardh in the 1930s,
and then with Nixon ending the convertibility of the dollar to gold in
1971, capitalism seemed to gfreeh itself from the restrictions of gold,
and gold money appeared to have been banished from the world of capitalism.
However, was this truly the case, and if so in what sense?
Capitalism cannot exist without money. Capitalist society (commodity production)
necessarily gives birth to money, and this money plays a central role as
the lever of capitalistic production. This is the real existence of capitalistic
wealth and appears, glitteringly, as its materialistic symbol. Money [kahei] is fundamental to capitalist society, but in modern capitalism it does
not appear within actual circulation, and this is an enormous, new contradiction
that represents a significant theoretical problem. To gsolveh this problem
is to elucidate one of the fundamental characteristics of modern capitalism.
2 Money [kahei] and the Concept of gValueh
Without the role of money, capitalism could not even exist for one day.
The contradictions of capitalism make money necessary -- Marx emphasized
this fundamental point in Capital.
However, we must pay particular attention to the fact that here capitalism
is used in the sense of commodity production, not to the class struggle
between capital and labor. Capitalism is the highest development of commodity
production society, and for this very reason the gvalue relationshiph
is also highly developed to the point where money is transformed into capital.
In other words, it is commodity production society and its contradictions
that make money necessary. This ultimately comes down to the question of
what is the commodity and its gvalue.h To discuss money presupposes,
therefore, an understanding of value.
The commodity immediately exists as a use value and at the same time as
value (exchange value). The fact that the commodity has a use value is
an evident fact that requires little explanation. Without being useful
to human beings, no product could ever become a commodity in the first
On the other hand, however, the commodity also has an exchange value --
i.e., it is a product that can be exchanged at a fixed ratio with other
products. This raises the question of why a commodity can be exchanged
at a fixed ratio with other commodities and what this reveals.
It should first be pointed out here that this problem concerns the commodity
as the product of human labor (what we will call here the gprimary commodityh).
We will not consider other so-called derivative commodities (such as land,
credit, or stock certificates). Of course, un-conceptual bourgeois scholars
remain dissatisfied with this gmethodology.h They would argue that, when
considering the commodity, we must include all commodities and not limit
ourselves to one type (i.e., only products of labor). They have gforgottenh
that to understand complex capitalist society, it is necessary to start
form the most essential (most abstract) relations, and then proceed, step
by step, towards a deeper understanding. It is simply not possible to understand
everything immediately and at the same time.
Bourgeois scholars would no doubt be greatly surprised by the idea that
for the commodity the most essential thing is the quality of being a gproduct
of labor.h But for workers this is perfectly clear. The problem centers
on the gproductionh and greproductionh of the material livelihood of
human beings and the historical form this takes. This is a question of
what is the primary in terms of the commodity. Thus, it is natural that
products of labor make up the greater part of commodities. Moreover, by
understanding the meaning of the gprimary commodity,h it becomes possible
for the first time to understand other gcommoditiesh that only exist
in the derivative form.
Conversely, if one attempts to elucidate all types of commodities at once,
nothing will be clarified, and we would only end up with something that
lacks a concept.
In the first place, a world of commodities without the gprimary commoditiesh
is unthinkable, whereas one can easily imagine a world without land commodities
or stock certificates (capital commodity)! Even from this simple observation,
or from daily experience, one can easily see the nature of the gprimary
commodity,h but for bourgeois scholars understanding this is seen as a
virtually impossible task.
How then can the exchange value of a commodity be defined, or in simple terms: why can one commodity be
exchanged with another commodity at a fixed ratio? Why at a certain rate,
and not another?
People often say that the exchange of commodities is random and that no
fixed rate of exchange can be assumed. The prices of the commodity markets
fluctuate daily, and this is also the exchange value of the commodities
(the exchange value as expressed in money). But we are already getting
ahead of ourselves. Here we will have to be satisfied with just pointing
out this fact. Of course, to those who view the exchange value of commodities
as being random, the idea that this in fact has a certain necessary gobjectiveh
content must appear to be an outrageous statement.
Despite what the advocates of the gtheory of utility valueh (i.e. subjectivistic
theory of value) may believe, exchange value has objective content and
is certainly not simply something gsubjective.h
This is witnessed, for example, by the fact that a car (1 million yen)
cannot be exchanged for a single teacup (500 yen). Normally, a car might
be exchanged for 2,000 teacups. The exchange ratio of cars to teacups would
likely fluctuate on the market. For example, one car might be exchanged
for 1,000 or 3,000 teacups instead of 2,000. These prices fluctuate constantly
in the markets. But the question here is why exchange value does not fluctuate
to the point that one car can be exchanged for one teacup -- in other words,
why the price of the car does not drop that low (or the price of the tea
cup rise that high). Since exchange is repeated and becomes more general
and universal, the exchange ratio between cars and teacups would become
increasingly stable and tend to gravitate around a certain point. Of course,
essentially speaking this would not mean that the exchange rate could become
perfectly gfreeh of fluctuation.
The attempt to explain from gutility valueh why one car could not be
exchanged for one teacup will certainly not succeed. This is because on
the basis of gutility valueh there is nothing strange at all about a
car being exchanged for one teacup. Instead, this could be seen as a necessity
since people often recognize a greater gutility valueh for a teacup than
a car. (If a person were to say that this was the case in their own household,
proponents of the gtheory of utilityh would they indignantly say that
that person has introduced an argument outside the realm of science into
a scientific debate?)
According to their logic, one hundred cars might be exchanged for a single
teacup, and there would be nothing wrong about such a concept. At the very
least, they say that such a thing could occur, or that this possibility
cannot be denied.
However, workers know that such a thing could never occur in reality. They
would know immediately that what the gtheory of utility valueh is arguing
could never occur even if the sky was turned upside down.
Here a new question emerges: why does one car exchange for 2,000 teacups,
instead of for one teacup? Exactly what does this gexchange valueh teach
Marx gave a clear response to this question. He said that the reason two
commodities can be exchanged at a fixed ratio is that they both contain
an equal amount of human labor abstracted in them. Of course, here ghuman
laborh refers to human labor expended in a certain social form, i.e. abstract
Marx says that the gsubstanceh of the value of the commodity is human
labor. However, unlike members of the Uno school (or bourgeois critics
of Marx in general), we do not think that this is the gessenceh or most
important content of Marxist economics.
In fact, this is not the most important element of Marxfs concept of value.
If this were the extent of his concept of value, it would fundamentally
be the same as the concept provided by the classical school of economics,
particularly Ricardo. In this aspect, Marxfs task, as he himself recognized,
was not simply to scientifically examine Ricardo and make his theory more
The crucial thing for Marxfs concept of value was not that the gvalueh
of a commodity was labor (this was already recognized as a fact prior to
Marx), but rather the question why labor takes the form of gvalueh (and
the form of money). Marxfs real task was to explore the historical nature
of labor that takes the gfetishistich form of value, and therefore the
form of money.
3 The Particular Historical Character of Labor that Takes the Form of Value
Concentrated within money is one particular historical type of production
relation. Money is the decisive reflection, or gfetischistich expression,
of the historical character of the labor that produces commodities.
What is the historical particularity of the labor that produces commodities?
In a word, this is labor that is private but at the same time social. Labor
that begins as private labor (because this is the labor of private commodity
producers), but ultimately is proven to be (or realized as) social labor
-- acquiring the significance of being one part of the aggregate social
We must recognize that in a commodity-economy society, labor is thoroughly
social labor. In other words, production is carried out not for the needs
of the producers themselves, but for others. Production satisfies the wants
of society and is carried out for the gmarket.h The appearance and development
of a commodity-economy society forever relegates to the past the old gself-sufficienth
society in which people produced to satisfy their own personal needs.
Of course, saying gproduction for othersh does not signify a simple volunteer
activity. This refers to social labor as one part of the aggregate social
labor within the division of labor of society. In terms of the individual
producer, the labor that he or she provides in one form is received back
in a different form.
However, the labor of the producers is gmutually independently carried
out private laborh (Capital), not social labor in the direct sense. The producers are not consciously
working for the aim of satisfying the consumption needs of society. Rather,
they undertake labor entirely in accordance with their own judgment and
for the sake of their own interests (larger profits!) Their labor is social
but at the same time private.
The labor gobjectifiedh in the commodity is privately expended but thoroughly
social labor. It is important to recognize that labor under capitalism
that appears in the value of commodities is also social labor.
However, this social character does not exist directly. The social character
of labor gobjectifiedh in commodities only appears through commodity
exchange. The starting point is private labor. Thus, people exchange the
products they produce and thereby verify that their own private labor is
at the same time social labor (one part of the aggregate social labor).
This is the reason that labor takes, and must take, the form of value.
If labor were expended consciously from the beginning as social labor,
such labor would certainly have no need to take the form of value. Under
capitalism, money is the expression, or outcome, of the contradictions
of the social labor of human beings.
If labor were consciously expended directly as social labor (from the outset
as one part of the aggregate labor of society), this would in fact be socialism.
However, the problem is not limited to this. In addition to the issue of
the private and social nature of commodity-producing labor, this labor
is also social labor as abstract general human labor. This is the precise reason that commodity-producing labor appears in
the form of value or money.
Letfs turn to Marx for the definition of this concept ofabstract human labor. At the beginning of Capital, he provides the following concept of the substance of value being abstract
human labor. That is, Marx says that gabstract human labor,h which is
the substance of value, refers to different kinds of labor that gcan no
longer be distinguished, but are all together reduced to the same kind
of labour, human labour in the abstract.h These kinds of labor are thus
gmerely congealed quantities of homogeneous human labour, i.e. of human
labour-power expended without regard to the form of its expenditure.h
Thus, gas crystals of this social substance, which is common to them all,
they are values.h (Capital Vol. 1, p. 128)
Marx goes on to discuss the gdual character of the labor embodied in commodities,h
and this discussion provides a more precise definition of abstract labor
gJust as, in viewing the coat and the linen as values, we abstract from
their different use-values, so, in the case of the labour represented by
those values, do we disregard the difference between its useful forms,
tailoring and weaving. The use-values coat and linen are combinations of,
on the one hand, productive activity with a definite purpose, and, on the
other, cloth and yarn; the values coat and linen, however, are merely congealed
quantities of homogeneous labour. In the same way, the labour contained
in these values does not count by virtue of its productive relation to
cloth and yarn, but only as being an expenditure of human labour-power.
Tailoring and weaving are the formative elements in the use-values coat
and linen, precisely because these two kinds of labour are of different
qualities; but only in so far as abstraction is made from their particular
qualities, only in so far as both possess the same quality of being human
labour, do tailoring and weaving form the substance of the values of these
two articles mentioned.h (Ibid.135-6)
Marx adds that abstract human labor is nothing but concrete useful labor
gunderstood in an abstract form.h And this is also an important perspective.
What needs to be noted here is that abstract human labor cannot be thought
of as an supra-historical category; i.e., the idea that compared to the
historical category of gvalue,h abstract labor is a supra-historical
category common to human society in general. In fact, however, abstract
human labor is also a historical category. This is clear, for example,
from the fact that, in general, prior to capitalism labor in communities
did not take the form of value, and therefore did not appear as abstract
When Marx spoke of abstract human labor, he was using it as a term with
human historical significance. In other words, even human labor takes the
form of commodity value, it becomes something that is truly social, and
social in a global sense.
This is labor that is not the possession of anyone in particular, nor does
it produce anything in particular. Rather, it is simply labor as the expenditure
of labor power. This is thus the personal independence and equality of
individuals, on the one hand, and the fundamental mutual interdependence
of these individuals on the other hand. The labor of each person, as long
as it satisfies some social need, is abstract labor, completely equal without
discrimination or distinction. Indeed, by discovering this relationship
within the reality of capitalism (commodity production society), modern
socialism gained its own truly conscious foundation, thereby becoming scientific
socialism. The discovery of abstract human labor as the gsubstanceh of
value represents a decisive stage in human history, which clarifies that
socialism has become a realistic task. This is certainly not a supra-historical
category, and to consider it as such would result in stripping modern socialism,
i.e. scientific socialism, of its realistic basis.
Marx explains in detail how gsimple laborh is a historical category in
his Introduction to the Grundrisse, but there is also an interesting discussion of this in A Contribution to the Critique of Political Economy. First letfs look at the Introduction. In this work, there is a clear definition of gsimple laborh (the substance
of value) as a gmodern category.h Incidentally, this essay of Marx is
a treasure-trove for understanding the gmethodologyh of Marxism.
gLabour seems to be a very simple category. The notion of labour in this
universal form, as labour in general, is also as old as the hills. Nevertheless,
considered economically in this simplicity, glabourh is just as modern
a category as the relations which give rise to this simple abstraction.h
(MECW, Vol. 28 p. 40)
gThe fact that the specific kind of labour is irrelevant presupposes a
highly developed totality of actually existing kinds of labour, none of
which is any more the dominating one. On the other hand, this abstraction
of labour in general is not simply the conceptual result of a concrete
totality of labours. The fact that the particular kind of labour is irrelevant
corresponds to a form of society in which individuals easily pass from
one kind of labour to another, the particular kind of labour being accidental
to them and therefore indifferent. Labour, not only as a category but in
reality, has become a means to create wealth in general, and has ceased
a determination to be tied with the individuals in any particularity. This
state of affairs is most pronounced in the most modern form of bourgeois
society, the United States. It is only there that the abstract category
glabourh, glabour as suchh, labour sans phrase, the point of departure of modern [political] economy, is first seen to
be true in practice.
gThe simplest abstraction which plays the key role in modern [political]
economy, and which expresses an ancient relation existing in all forms
of society, appears to be true in practice in this abstract form only as
a category of the most modern societyc
gThe example of labor strikingly demonstrates that even the most abstract
categories, despite their being valid -- precisely because they are abstractions
-- for all epochs, are, in the determinateness of their abstraction, just
as much a product of historical conditions and retain their full validity
only for and within these conditions.h (Ibid. pp. 41-2)
Here Marx is saying that, simple labor and abstract general labor are historical
categories that emerge and develop with capitalistic production, and even
though they have significance in socialist society, they are not supra-historical
categories. Of course, with the highest level of communist society, these
categories would likely lose their significance within society, but at
the stage of socialism, where what the individual receives back from society
is in accordance to the labor contributed, these categories remain real
ones. But we must be aware of the following.
We have already seen that the gsubstanceh of the commodity is abstract
human labor, and in this sense social labor, but this does not mean that
all social labor appears as abstract human labor (the reverse is not also
true!). For example, in primitive communist society labor could be called
social labor, but this certainly was not abstract human labor. This was
directly concrete labor, which could not be reduced to abstract human labor.
In the A Contribution to the Critique of Political Economy, Marx says the following about the gparticular social qualityh of labor
as exchange value, and therefore labor that appears as money.
gFrom the analysis of exchange value it follows that the conditions of
labour which creates exchange value are social categories of labour or categories of social labour, social however not in the general sense but in the particular sense,
denoting a specific type of society. Uniform simple labour implies first
of all that the labour of different individuals is equal and that their labour is treated as equal by being in fact reduced to
homogeneous labour. The labour of every individual in so far as it manifests
itself in exchange values possesses this social character of equality,
and it manifests itself in exchange value only in so far as it is equated
with the labour of other individuals.h (MECW, Vol. 29, p. 273)
gOr finally let us take communal labour in its naturally evolved form
as we find it among all civilized nations at the dawn of their history.
In this case the social character of labour is evidently not mediated by
the labour of the individual assuming the abstract form of universal labour
or his product assuming the form of a universal equivalent. The communal
system on which [this mode of] production is based prevents the labour
of an individual from becoming private labour and his product the private
product of a separate individual; it causes individual labour to appear
rather as the direct function of a member of the social organization. Labour
which manifests itself in exchange value appears to be the labour of an
isolated individual. It becomes social labour by assuming the form of its
direct opposite, of abstract universal labour.h (Ibid. p. 275)
gBut since [Franklin] does not explain that the labour contained in exchange
value is abstract universal social labour, which is brought about by the
universal alienation of individual labour, he is bound to mistake money
for the direct embodiment of this alienated labour. He therefore fails
to see the intrinsic connection between money and labour which posits exchange
value, but on the contrary regards money as a convenient technical device
which has been introduced into the sphere of exchange from outside.h (Ibid.
gThe commodity as such is an exchange value, the commodity has a price. This difference between exchange value and price is a reflection
of the fact that the particular individual labour contained in the commodity
can only through alienation be represented as its opposite, impersonal,
abstract, general -- and only in this form social -- labour, i.e. money.h
(Ibid. p. 308)
The final passage is particularly important. Labor in bourgeois society
is social labor, but this does not directly exist as social labor, as expended
social labor, but rather (1) appears as social labor through the exchange
of products of private labor.
Moreover (2), this takes the form of gvalue,h i.e. as general abstract
labor common to all people, and is only social labor in this form (this
has a social character different from gsocialh labor in primitive or
These two points must be clearly recognized as the historical character
of labor taking the form of value or money!
Here the problem is quite simple and essential. We have been able to recognize
the gparticular social characterh of the labor that produces commodities.
Finally, letfs look at a quote from Capital.
gSomething which is only valid for this particular form of production,
the production of commodities, namely the fact that the specific social
character of private labours carried on independently of each other consists
in their equality as human labor, and, in the product, assumes the form
of existence of value.h (Ibid. p. 167)
Here Marx says that gthe specific social character of private labours
carried on independently of each other consists in their equality as human
labour.h In other words, since they are equal as human labor, they are
social. The labor is social because it is abstract and indiscriminate.
The labor is separated from its concrete content, and first evaluated in
terms of its abstract definition. This completely general labor, labor
as simple labor, which does not belong to any one person and is not applied
for the production of a particular use value. Labor is abstracted from
the concrete content of labor, but this is because this is in fact the
case for labor that produces gvalue.h
In this sense, the notion that abstract labor is an alienated form of labor
is not that far off. However, this certainly does not negate the great
historical significance of the determination of labor as abstract labor
(in this sense the New Left gview of labor,h derived by relying on Marxfs
early works, as solely galienated laborh is one-dimensional and incorrect).
In appearing as abstract, general labor, human labor for the first time
has truly social significance. It acquires a broad (indeed global) social
quality. The labor of workers who produce cars in Japan is exchanged for
the labor of workers in the United States who cultivate grapefruit, thereby
obtaining an international social quality (of course, under capitalism
this is mediated by the exchange of gthings,h i.e. commodities).
The appearance of human labor as value, and as money, represents great
progress for human history. Marx points out that Aristotle was able to
see the value relationship, but lacking an awareness of labor in this gmodernh
sense, could not grasp the true significance of this relationship.
gAristotle therefore himself tells us what prevented any further analysis:
the lack of a concept of value. What is the homogenous element, i.e. the
common substance, which the house represents from the point of view of
the bed, in the value expression for the bed? Such a thing, in truth, cannot
exist, says Aristotle. But why not? Towards the bed, the house represents
something equal, in so far as it represents what is really equal, both
in the bed and the house. And that is -- human labour.
gHowever, Aristotle himself was unable to abstract this fact, that, in
the form of commodity-values, all labour is expressed as equal human labour
and therefore as labour of equal quality, by inspection from the form of
value, because Greek society was founded on the labour of slaves, hence
had its natural basis the inequality of men and of their labour-powers.
The secret of the expression of value, namely the equality and equivalence
of all kinds of labour because and in so far as they are human labour in
general, could not be deciphered until the concept of human equality had
already acquired the permanence of a fixed opinion. This however becomes
possible only in a society where the commodity-form is the universal form
of the product of labour, hence the dominant social relation is the relation
between men as possessors of commodities. Aristotlefs genius is displayed
precisely by his discovery of a relation of equality in the value-expression
of commodities. Only the historical limitation inherent in the society
in which he lived prevented him from finding out what ein realityf this
relation of equality consisted of.h (Capital Vol. 1, pp. 151-2)
gMen are all equal,h since all labor, as abstract human labor, is qualitatively
the same and gequal.h As long as labor is undertaken in this particular
form, all men are equal. Whether labor is expended in agriculture or industry,
as long as it is abstract human labor there is no distinction! (But today,
more than a hundred years after Marx wrote this, there is no shortage of
dim-witted gMarxistsh and gcommunistsh who argue that agricultural
labor is somehow special, or, even worse, that a particular profession
-- such as education -- is somehow sacred because it is not productive
The special character of labor (producing commodities) in capitalist society
should now be clear, but the question naturally arises about the nature
of labor in socialist society.
This is indeed the question! In a socialist society, would the determination
of human labor as abstract labor be shed?
Certainly not! Of course, in a socialist society all human labor is directly
social labor and therefore does not take the form of money or value. However,
not only is this aspect of human labor within commodity production not
abandoned, in a sense it gains important meaning.
Labor that takes the form of value is abstract human labor, and in a socialist
society as well, labor is also social as abstract human labor. This is
why Marx said that the gcontent of the law of value would remain under
socialism.h However, unlike capitalism, in a socialist society, this does
not take the oppositional form seen in the division between concrete useful
labor and abstract labor. Therefore, labor does not take the gmaterialh
[bushouteki] form of value.
Abstract human labor expresses the fact in terms of producing social objects
of consumption, human labor is indiscriminate and equal. Therefore, this
forms the basis for the equality and freedom of everyone within this society.
Even though the bourgeois value form is shed in socialist society, its
content is preserved in the new society, and in fact the awareness of peoplefs
(workersf) gparticular social laborh is the great premise of socialism,
its starting point. This is what Marx calls the gcontent of the value
determination,h and this category plays an essential and decisive role
in both the planning of social production and distribution to individuals.
We need to recognize the enormous significance of labor taking the historical
form of value (and money) under capitalist society. This expresses the
fact, stated strongly, that the labor of people throughout the world, as
general and abstract human labor, emerges with a social quality that has
global significance, and people throughout the world come to be connected
(and this connection is developing steadily).
Certainly, under socialism peoplefs labor directly appears as social labor,
and in this sense gabstract general laborh slips into the background
or loses its direct meaning. But this does not mean that the opposition
or contradiction between concrete useful labor and abstract general labor
is abolished. This is in fact impossible. Rather, the determination of
human labor gains real meaning under socialism (this is because the limitations
of the bourgeois determinations are broken through).
From chapter two, we will discuss the modern gmoney system,h but in preparation
for this we need to first discuss the particular, historical character
of the labor that produces commodities.
4 Money and the Necessity of Human Relations Appearing as Relations
In capitalist society, people think that it is natural that things, i.e.
products of labor, are exchanged. However, for Marx this was a completely
strange reality. In such a society, people exchange gthings,h that is,
they exchange the fruit of their labor as gcommodities,h and this forms
one type of human society. Those who glorify this system brazenly say that
equilibrium can only be achieved through free competition and that this
is an ideal society that is always self-renovating and developing, or at
least that it is superior to any alternative society. These apologists
cannot imagine any society except one in which gthingsh are produced
based on the responsibility of private individuals and then exchanged,
a system in which products of labor are exchanged as commodities.
However, we need to consider the following: What is the exchange of gthings,h
exactly? What is the content of this exchange of gthingsh? In other words,
what exactly is it that is being gexchangedh?
These gthingsh are exchanged as equal value. However, they are not exchanged
blindly or at random. That is, only things that are equal in terms of value
are exchanged. Moreover, the commonality of the commodities (= gsubstance
of valueh), which becomes the standard of exchange, is not their use value. It is precisely because their use values are different
that they can be exchanged as things.
But we have already dealt with this and there is no need to repeat it again
here. What governs this exchange of things is the human labor gobjectifiedh
in the things. The substance of gvalueh is human labor.
For Marx, the peculiar thing is why the relations between people take the
form of a relationship between things, and indeed must take this form.
That is, to explain the strange occurrence in which gthingsh themselves
come to have a gsocial-natural qualityh and assume a social relationship.
If one says that the exchange of gthingsh is mere appearance, and that
it is labor that is in fact being exchanged, there still remains the question
of why this would this be necessary and what makes it necessary.
Marx says, first of all, that the mysterious quality of the commodity does
not arise from its use value or the content of the value determination.
The use value of a commodity is clearly the natural character of the thing.
And for Marx, the gcontent of the value determinationh is that human
beings create a product through labor: that is, in the case of gmodernh
society, social labor is carried out in the form of abstract human labor.
The issue here is how much labor is expended for the necessary products
for society, and the fact that the labor of individuals in this form of
labor is one part of the total social aggregate labor, so there is no great
gmysteryh (of course the bourgeoisie would probably disagree).
What, then, is the source of the gmystery.h gClearly, it arises from
[the] form itself,h Marx responds, and his explanation is presented in
the following passage:
gWhence, then, arises the enigmatic character of the product of labour,
as soon as it assumes the form of a commodity? Clearly, it arises from
this form itself. The equality of the kinds of human labour takes on a
physical form in the equal objectivity of the products of labour as values;
the measure of the expenditure of human labour-power by its duration takes
on the form of the magnitude of the value of the products of labour; and
finally the relationships between the producers, within which the social
characteristics of their labours are manifested, take on the form of a
social relation between the products of labour.
gThe mysterious character of the commodity-form consists therefore simply
in the fact that the commodity reflects the social characteristics of menfs
own labour as objective characteristics of the products of labour themselves,
as the socio-natural properties of these things. Hence it also reflects
the social relation of the producers to the sum total of labour as a social
relation between objects, a relation which exists apart from and outside
the producers. Through this substitution, the products of labour become
commodities, sensuous things which are at the same time supra-sensible
or social.h (Capital Vol. 1, pp. 164-5)
gThe fact that commodity owners treat one anotherfs labour as universal
social labour appears in the form of their treating their own commodities
as exchange values; and the interrelation of commodities as exchange values
in the exchange process appears as their universal relation to a particular
commodity as the adequate expression of their exchange value; this in turn
appears as the specific relation of this particular commodity to all other
commodities and hence as the distinctive, as it were naturally evolved,
social character of a thing. The particular commodity which thus represents
the exchange value of all commodities, that is to say, the exchange value
of commodities regarded as a particular, exclusive commodity, constitutes
money. It is a crystallization of the exchange value of commodities and is formed
in the exchange process.h (MECW, Vol. 29, p. 289)
The simplest relation of gthingsh is the exchange relationship of individual
commodities. A commodity exchanging with another commodity at a certain
ratio (at a certain quantity of use value) is nothing but a relationship
of gthings.h With further development, money is formed and a commodity
is exchanged for money, and the money then exchanged for a different commodity
-- this is indeed the relationship between gthingsh and its development,
not a relationship of human beings (the Uno school scholars say that this
is not simply a grelationship of thingsh because humans are the bearers
of commodities or purchase commodities with money).
Marx emphasizes the strange inversion in which a product of labor comes
to have value itself, the value has magnitude, and then the product enters
into a relation with another gthing.h
The value of a commodity is value as the gobjectificationh of human labor.
But, as Marx pointed out, value is a gsupra-sensualh thing, and even
if one holds a commodity (such as a fabric) up to the light to look at
it the value within the commodity body will not be visible. However, as
one social gsubstance,h value is manifested as a realistic force, and
even while being the outcome of peoplefs labor, it turns the relations
of people into relations of things. As the value of the commodity, value
is a distant gthingh to the worker (and appears as an attribute of the
thing). When one thinks about it, it is strange that as a thing, a commodity
has a social attribute (value) and comes to rule over human beings. Still,
in terms of the necessity of commodity production, this contradiction itself
is thoroughly revealed within money.
The following passage provides the most appropriate explanation by Marx
of the significance of money:
gIn the first part of my book [A Contribution to the Critique of Political Economy], I mentioned that it is a characteristic of labour based on private exchange
that the social character of labour gmanifests itselfh in a perverted
form?as the gpropertyh of things; that a social relation appears as a
relation between things (between products, values in use, commodities)c
gBut to say that evaluef is not an absolute, is not conceived as an
entity, is quite different from saying that commodities must impart to
their value of exchange a separate expression which is different to their use value and of their existence as real products, in other words,
that commodity circulation is bound to evolve money. Commodities express
their exchange value in money, first of all in the price, in which they all present themselves as materialised forms of the same labour, as only quantitatively different expressions of the same substance. The fact that the exchange value of the commodity assumes an independent existence in money is itself the result of the process of exchange, the development
of the contradiction of use value and exchange value embodied in the commodity,
and of another no loess important contradiction embodied in it, namely,
that the definite, particular labour of the private individual must manifest
itself as its opposite, as equal, necessary, general labour and, in this
form, social labour. The representation of the commodity as money implies
not only that the different magnitudes of commodity values are measured
by expressing the values in the use value of one exclusive commodity, but
at the same time that they are all expressed in a form in which they exist
as the embodiment of social labour and are therefore exchangeable for every other commodity, that they are
translatable at will into any use value desired. Their representation as
money -- in the price -- therefore appears first only as something nominal,
a representation which is realised only through actual sale.
gRicardofs mistake is that he is concerned only with the magnitude of value. Consequently his attention is concentrated on the relative quantities of labour which the different commodities represent, or which the commodities as
values embody. But the labour embodied in them must be represented as social labour, as alienated individual labour. In the price this representation
is nominal; it becomes reality only in the sale. The transformation of
the labour of private individuals contained in the commodities into uniform social labour, consequently into labour which can be expressed in all use values and
can be exchanged for them, this representation of exchange value as money,
is not elaborated by Ricardo. This circumstance -- the necessity of presenting labour contained in commodities as uniform social labour, i.e. as money -- is overlooked by Ricardo.h (MECW, Vol. 32, pp. 317-8)
Some might say that a thing is a thing and that it is strange for it to
have a social relation. Social relations are human relation, and in particular
a relation formed in human labor = production. Human society necessitates
social labor, and to carry this out, and for societyfs members to assume
a part of this labor, is not a relationship between gthings,h and there
is no necessity for this to be expressed as a relationship between things.
But in capitalist society it does appear as such, and this is a necessity.
Marx says that what appears as a relationship between gthingsh is in
fact a relationship between human beings. This appears as a relationship
between things because the true reciprocal human relations are hidden,
generating the illusion particular to this society, i.e. the illusion that
takes relations between things at face value (as a natural social attribute
of the things). Marx called this the gfetishismh of the world of commodities,
and used the expression gconsciousness of the fetish-worshipperh to this
manner of understanding. This, simply put, is the illusion that fails to
see the nature of human social labor and its relations in the nature of
the things (commodities) and the relations in which they appear, seeing
this instead as the natural trait or natural relation of the things themselves.
For example, people find it strange that a thing could have a social trait
and be connected to social relations. But arenft commodities, money, and
capital all gthingsh and at the same time social relations?
Clearly they are social relations! -- But the question is whether things
such as commodities have natural relations as gthings.h Bourgeois scholars
concur that commodities, money, and capital have a quality as gthings,h
or reduce them to this (this is the basis of all bourgeois economics, and
its gmysteryh). But the social quality seen in these things is in fact
the social quality of human labor, and there is no way for commodities
as things to take on such a quality -- and this is precisely the sort of
fundamental consideration that is necessary!
Where, then, does this mystification come from? The answer to this can
be seen in the answer to the question why commodity production is necessary:
g[T]his fetishism of the world of commodities arises from the peculiar
social character of the labour which produces them.
gObjects of utility become commodities only because they are the products
of the labour of private individuals who work independently of each other.
The sum total of the labour of all these private individuals forms the
aggregate labour of society. Since the producers do not come into social
contact until they exchange the products of their labour, the specific
social characteristics of their private labours appear only within this
exchange. In other words, the labour of the private individual manifests
itself as an element of the total labour of society only through the relations
which the act of exchange establishes between the products, and, through
their mediation, between the producers. To the producers, therefore, the
social relations between their private labours appear as what they are,
i.e. they do not appear as direct social relations between persons in their
work, but rather as material [dinglich] relations between persons and social relations between things.h
(Capital Vol. 1, p. 165-6)
Since individual, separated private producers cannot directly exchange
their own labor (since it is not expended consciously as one part of the
aggregate social labor), it is through the exchange of their own products,
through this process, that their own private labor becomes social labor.
In this way, the product becomes a commodity. It is the social relationship
of private products that makes commodity production necessary. To avoid
misunderstanding here, commodity production is historically necessary and
progressive (compared to feudal society and subsistence farming, as well
as the gsocialismh of Mao and Stalin) and moralistic criticism is nonsensical
and powerless. What is necessary for workers is a historical criticism
of commodity production. Today, this consideration is extremely important,
considering the ggreat trendh of capitalism in which commodity production
is developing in such countries as China, where a rapid transformation
to capitalistic production is taking place.
Finally, we must consider the significance of money in connection to gfetishism.h
Letfs start by listening to Marx:
gMoney is not a symbol, just as the existence of a use value in the form
of a commodity no symbol. A social relation of production appears as something
existing apart from individual human beings, and the distinctive relations
into which they enter in the course of production in society appear as
the specific properties of a thing -- it is this perverted appearance,
this prosaically real, and by no means imaginary, mystification that is
characteristic of all social forms of labour positing exchange value. This
perverted appearance manifests itself merely in a more striking manner
in money than it does in commodities.h (MECW, Vol. 28, p. 289)
gWe have already seen, from the simplest expression value, x commodity
= y commodity B, that the thing in which the magnitude of the value of another
thing is represented appears to have the equivalent form independently
of this relation, as a social property inherent in its nature. We followed
the process by which this false semblance became firmly established, a
process which was completed when the universal equivalent form became identified
with the natural form of a particular commodity, and thus crystallized
into the money-form. What appears to happen is not that a particular commodity
becomes money because all other commodities express their values in it,
but, on the contrary, that all other commodities universally express their
values in a particular commodity because it is money. The movement through
which the process has been mediated vanishes in its own result, leaving
no trace behind. Without any initiative on their part, the commodities
find their own value-configuration ready to hand, in the form of a physical
commodity existing outside but also alongside them. This physical object,
gold or silver in its crude state, becomes, immediately on its emergence
from the bowels of the earth, the direct incarnation of all human labour.
Hence the magic of money. Men are henceforth related to each other in their
social process of production in a purely atomistic way. Their own relations
of production therefore assume a material shape which is independent of
their control and their conscious individual action. This situation is
manifested first by the fact that the products of menfs labour universally
take on the form of commodities. The riddle of the money fetish is therefore
the riddle of the commodity fetish, now become visible and dazzling to
our eyes.h (Capital Vol. 1, p. 187)
gWe have already shown in connection with the most simple categories of
the capitalist mode of production and commodity production in general,
in connection with commodities and money, the mystifying character that
transforms the social relations for which the material elements of wealth
serve as bearers in the course of production into properties of these things
themselves (commodities), still more explicitly transforming the relation
of production itself into a thing (money). All forms of society are subject
to this distortion, in so far as they involve commodity production and
monetary circulation. In the capitalist mode of production, however, where
capital is the dominant category and forms the specific relation of production,
this bewitched and distorted word develops much further.h (Capital Vol. 3, pp. 965-6)
The social quality that is seen in the commodity, and in money, according
to Marx, is in fact a reflection of the social quality of the human labor
that produces the commodity. Money itself as a gthingh does not have
a social character, rather this quality is in the human labor that produces
commodities. Moneyfs trait of gbeing exchangeable for any commodity,h
means that the human labor contained within commodities is qualitatively
identical as abstract labor, and that there is thus only a difference in
quantity. The quality of the labor that produces commodities is reflected
in the quality of money.
Even though, to begin with, money is only money within social relations,
the quality and functions of money appear to be the natural attribute that
gold or silver are endowed with. For example, we can buy anything with
gold (money) -- it can be exchanged for any commodity. But this is certainly
not because of the quality of gold as a natural thing. Outside of commodity
society (outside of the value relationship of commodities) gold would not
be money. But within bourgeois society, gold seems to be money for the
simple reason that it is gold. Certainly money is gold, but gold is not
Money is born through the exchange relationship of commodities, and is
money in terms of being the gcrystallization of the exchange-value of
commodities and [being] formed in the exchange process,h (Capital Vol. 1) so that gthe relation of production itself is [transformed] into
a thing (money)h (Capital Vol. 3). In other words, value as the social gsubstanceh
of the commodity appears here as a thing (money), and the true abstract
social nature of human labor, its power, appears in the form of money as
a gthing,h which is directly exchangeable for all other commodities and all-powerful! The mystification of the commodity
extends to money, and people worship at the alter of this supreme power!
In bourgeois society, mammonism (the idea that money is almighty and everything!)
is nothing but the extreme form of fetish-worship consciousness.
Marx, in a very instructive fashion, offers the following:
gThe belated scientific discovery that the products of labour, in so far
as they are values, are merely the material expressions of the human labour
expended to produce them, marks an epoch in the history of mankindfs development,
but by no means banishes the semblance of objectivity possessed by the
social characteristics of labour. Something which is only valid for this
particular form of production, the production of commodities, namely the
fact that the specific social character of private labours carried on independently
of each other consists in their equality as human labour, and, in the product,
assumes the form of the existence of value, appears to those caught up
in the relations of commodity production (and this is true both before
and after the above-mentioned scientific discovery) to be just as ultimately
valid as the fact that the scientific dissection of the air into its component
parts left the atmosphere itself unaltered in its physical configuration.h
(Capital Vol. 1, p. 167)
In short, this illusion is rooted in the relations of production, and without
overcoming these production relations it cannot be eliminated. Here Marx
is criticizing the position of Ricardo and others. Ricardo gdiscoveredh
that the gsubstanceh of the value of the commodity is human labor, and
thought this was the end of the matter. In other words, he didnft see
this as a historical relation with limitations for people, and thought
it natural and normal that human labor would take the objectified form
of value. For Marx this is a bourgeois illusion, and he warns that this
will inexorably lead to fetishized consciousness. This can also be taken
as a criticism of the Uno school, since they recognize the gsubstanceh
of the commodity to be labor, but are unable to defend a position that
reaches truly revolutionary conclusions and practice, falling instead into
nonsensical arguments and becoming bedazzled by the fetishism of commodity-production
society (recall how they followed in the path of the marginal utility school
with their upside-down idea that the value of the commodity cannot be defined
without considering use value!). In this way they have become bourgeois
philistines (in their thought and way of living!).
5 Money Teaches Us that Human Labor has become Thoroughly Social
People tend to view commodity-capitalist production as simply gvillainous,h
but seen historically it represents great progress for the history of humankind.
For human labor to take the form of value, and therefore the form of money,
means that human labor has become a thoroughly social thing in an abstract
Of course, in this form gsocial natureh is in contradiction. It is not
directly social, but rather is a social quality that is formed, a social
quality that appears gafter the fact,h and a social quality that is brought
about spontaneously and within peoplefs unconscious activity.
For this reason, this takes the form of the gfetishismh of the value
of the commodity. This has to proceed to the formation of money. Furthermore,
this contradiction in the form of labor under capitalism is an important
moment in the necessity of socialism -- (important, but only one moment,
since more significant is the actual moment of workersf class struggles).
Under capitalism, despite this contradictory form, this is still a step
forward for human history in terms of peoplefs labor becoming truly social,
and their relations becoming thoroughly social, thereby establishing humanity
as humanity (for its historical and real conditions).
The appearance of commodities, and therefore money, has such significance.
Money is the gphenomenalh expression that peoplefs labor has become
truly social as abstract human labor (indeed, this is a social quality
that has a human-historical significance and spreads to the global level).
Money reflects and expresses the character of the labor which produces
commodities. This is abstract human labor in a form that is visible to
the eye (money). Money becomes world money, but this is the outcome of
this. As capital comes to be produced throughout the entire world, commodity
production unites all of humanity, and for this very reason money becomes
or emerges as world money. World money shows that human labor achieves
a social nature on a global scale, and at the same time the labor of workers
throughout the world (the direct producers), as long as they produce commodities,
turns into abstract human labor that has gthe same quality and is only
different in quantity.h This means that it becomes possible to speak of
relations of equality and a socialist union between the workers of the
world. Marx refers to ggeneral commodity distribution,h and distinguishes
this from the gdomestic commodity distributionh that is formed, elucidating
the opposition between the international and domestic markets, and we will
discuss this later.
Despite what the petty bourgeois Japanese Communist Party might think,
this global trade has very revolutionary significance. Already more than
one hundred years ago Marx wrote the following:
gThe need for a constantly expanding outlet for their products pursues
the bourgeoisie over the whole world. It must get a foothold everywhere,
settle everywhere, establish connections everywhere.
gThrough the exploitation of the world market the bourgeoisie has made
the production and consumption of all countries cosmopolitan. It has pulled
the national basis of industry right out from under the reactionaries,
to their consternation. Long-established national industries have been
destroyed and are still being destroyed daily. They are being displaced
by new industries -- the introduction of which becomes a life-and-death
question for all civilized nations -- industries that no longer work up
indigenous raw materials but use raw materials from the ends of the earth,
industries whose products are consumed not only in the country of origin
but in every part of the world. In place of the old needs satisfied by
home production we have new ones which demand the products of the most
distant lands and climes for their satisfaction. In place of the old local
and national self-sufficiency and isolation we have a universal commerce,
a universal dependence of nations on one another. As in the production
of material things, so with intellectual production. The intellectual creations
of individual nations become common currency. National partiality and narrowness
becomes more and more impossible, and from the many national and local
literatures a world literature arises.
gThrough rapid improvement in the instruments of production, through limitless
ease of communication, the bourgeoisie drags all nations, even the most
primitive ones, into civilization. Cut-price commodities are the heavy
artillery with which it batters down all Chinese walls, with which it forces
undeveloped societies to abandon even the most intense xenophobia. It forces
all nations to adopt the bourgeois mode of production or go under; it forces
them to introduce so-called civilization amongst themselves, i.e. to become
bourgeois. In a phrase, it creates a world in its image.h (Communist Manifesto, from Cambridge University Press Marx:Later Political Writings, pp. 4-5)
gWorkers have no nation of their owncNational divisions and conflicts
between peoples increasingly disappear with the development of the bourgeoisie,
with free trade and the world market, with the uniform character of industrial
production and the corresponding circumstances of modern life.
The Rule of the proletariat will make the disappear even faster. United
action, at least in the civilized countries, is one of the first conditions
for freeing the proletariat.h (Ibid, pp. 17-8)
There is little that we can add to these beautiful sentences. The JCP has
thrown aside the core of Marxism and fallen into a vulgar and narrow-minded
petty bourgeois nationalism. Shouldnft reactionaries like [JCP leaders]
Miyamoto, Fuwa, and Kawakami, who are absorbed with one-sided and narrow-minded
nationalism and peddle an gintense xenophobiah more inflexible than ideas
held by gundeveloped societies,h listen to these words of Marx a hundred
or even a thousand times. Itfs hard to imagine anyone being more ignorant
of Marxism (and therefore ignorant of capitalism and socialism!) and distorting
its fundamental spirit to the extent that this group has!
Our starting point is not the anachronistic gindependent national economyh
or gprotection and development of national industries,h which seeks a
self-sufficient and increasingly closed economy, but rather a gglobal
economyh where the international connections of people (workers) are increasingly
developed. When we take up the topic of the modern international monetary system, it is precisely from this standpoint, not the craven petty bourgeois perspective that fears the global economy
and seeks refuge in the gnational economy.h