value and exchange value

Allin Cottrell cottrell at
Mon Aug 7 13:45:14 MDT 1995

Juan Inigo quoted me as follows:

> >I think the solution here is quite simple, if 'value' simpliciter is
> >defined as the labor-time socially necessary to produce a given
> >product.

and then commenced an onslaught:

> At first sight, Allin's assertion could seem close to a synthesis of Marx's
> developments concerning value, if it were not, above all, for the use of
> the word _product_ where Marx says _commodity_.

> [W]hile socially necessary abstract labor (that
> is, the socially necessary consumption of human brain and muscles) becomes
> materialized in its product regardless of [its] specific social form[,]
> it only becomes determined as value, it takes the form of value, when this
> production is specifically determined as a production of commodities...

> When a certain labor is allocated directly under its concrete form as a
> part of social labor, its product has no way of being determined as a
> commodity, and therefore, it has no way of having value, however much human
> brains and muscles have been materialized in it.

Consider a tractor produced in a planned, socialist economy.  This tractor's
production requires a certain amount of the labor-time available
to the society -- let us say, 800 hours total.  The socialist tractor
does not assume the form of a commodity.  It is not sold, but is
allocated to a certain farm.  Consider by contrast a John Deere tractor
that also embodies 800 hours' social labor, but that does assume the form
of a commodity, and is sold for $15,000.  This price represents the
commodity-tractor's exchange-value.  If you know the prices of other
commodities you can work out how many of them will exchange (indirectly,
via the medium of money) for one such tractor.

Although the socialist tractor is not produced for exchange, the planners
of the socialist economy must attach an index to the tractor for
costing purposes (as one input into the decision of how many to
produce in a given period). To refer to such an index, one wants a
shorthand way of saying "amount of socially necessary labor-time
embodied".  The term "value" offers such a shorthand.  Using the term
in this way does not at all imply the erasure of the distinction
between a commodity-producing society and a socialist one.  In the
former, nobody (except perhaps a Marxist researcher) attempts explicitly
to measure the total labor-time that goes into making the tractor,
although this quantity ends up being expressed, to an approximation,
in its exchange-value, in what it will fetch relative to the products
of labor in other branches of production.  In a situation where social
production as a whole is subordinated to a common plan, the tractor's
value is calculated directly, and it never "assumes the form" of exchange-

Allin Cottrell
Department of Economics
Wake Forest University
cottrell at
(910) 759-5762

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