Ep. 360: Karl Marx on Economic Value (Part One)

0:07 Mark: You're listening to the Partially Examined Life, a podcast by some guys who are at one point set on doing philosophy for a living, but then thought better of it. Our question for episode 360 is something like, what's the connection between economic value, labor and machines? We're continuing our discussion of Karl Marx, looking at the first chapter primarily of his book Das Kapital, first published in 1867. We read some other bits of it and we added his fragment on machines from 1858. For this week, more information about the texts and the podcast, please see partiallyexaminedlife.com this is Mark Linsenmayer, commoditized, yet not commodified.

0:46 Seth: In Madison, Wisconsin, this is Seth Paskin, obsessing over my use value.

0:53 Wes: In Austin, Texas, this is Wes Owen welcoming you to the machine. In Cambridge, Massachusetts, this is Dylan Casey

1:01 Dylan: calling out the blue light special in aisle six, where we're tired now cost only six coats.

1:05 Wes: In Madison, Wisconsin, I expected most people to go with a fragment on the machine on Shane's reference because it's more potent and it's more, you know. But I'm the only one who did that.

1:17 Mark: Well, I almost preempted you because I had, until this morning, down and as my mama always told me, welcome, my son, welcome to the machine.

1:25 Wes: Yeah, I was worried about that. But I go third, so I knew I wouldn't be stepping on anyone's foot. Yeah.

1:32 Mark: So last time we were mostly talking about his methodology, and there's much more to say about his methodology, but we're not going to say it so much as try to really get into how he does it. Right. Of course, with Feuerbach and Hegel, where this obsession of how abstract are we going to be? And, you know, when you're doing modeling, a model is abstract and it's a really complicated model. We talked about last time, how he thought that British social economists, political economists, were focusing on the wrong things. They were pulling things out of this complex system of production, consumption, distribution, exchange.

They were focusing, for instance, just on exchange. It's all about supply and demand. But of course, what sort of production you have in place, what sort of consumption you have in place, will determine something about demand, will determine a lot about supply. And so he wanted to say that production is the main thing in it. We didn't get to. In the Grundrisse, you sort of stopped before we got to his section on exchange, but his section on exchange was very short. Just to say, these other folks are overvaluing exchange. We're going to talk about exchange.

But let's. Well, he decides to start capital talking about the commodity, which we're going to analyze and see how that relates to labor. And that's going to be really the crux of it. The thing that all these political economists have been searching through the surface data of money and exchange and what happens in the actual marketplace. And if you really drill down to this, you get to the commodity, the atom of economic exchange and the value of the commodity is going to be entirely about human labor. Any other opening thoughts people have at this point?

3:13 Wes: I assume we're starting with the fragment on machines, right?

3:16 Mark: I thought we were just. We wanted to do capital.

3:18 Dylan: Yeah, we're doing chapter one.

3:19 Wes: Okay.

3:20 Mark: The fragment of machines is earlier, but I think the machine thing will be a nice response to. If you want to say, why is something valuable? Well, it's all because of labor that's put into it. Well, but what if I bring along a machine and that reduces the labor, you know, really marginalizes and makes labor sort of a trivial. Just somebody has to attend the machine. What does that do to it? Well, so this is why there's, of course, a whole chapter, a lengthy chapter in capital on machines. But this earlier fragment distills it nicely. So, yes, let's start with the capital.

3:51 Seth: Before we start talking about how ridiculous this is or whatever, I really want to understand the mechanics of the argument because first of all, I don't think Marx was that stupid. And second of all, I think there are some intricacies and interests here, and we can connect it to some of the broader issues. So let's just be generous and careful to get started.

4:08 Wes: Yeah, I don't think this is ridiculous if I'm the one who's guilty of that, you know, I think I'm more impressed with Marx from chapter one of Capital than I've been by anything else he's written. So I think it's a very intricate and interesting argument. In a way, he's trying to give this almost a priori derivation of money and. And explain what money is. And it's a very puzzling thing when you think about it, how it is we can look at something. For instance, I can look at a commodity in a commodity. Right. Just means any product that we conceive of as something exchangeable for something else.

I can look at something and price it and say, no, I'm not paying $100 for a carton of eggs. I know it's not worth that. So just. Even the psychology of valuation and the role that Money plays in the way we value things is fascinating in and of itself. But yeah, what he's trying to do here I see almost as this attempt at an a priori deduction. It's not quite that, but it looks like that. So it's intricate and to me, fascinating, and it's foundational to his thinking. And it gets into very interesting psychosocial observations as well, especially with the last section on this about fetishism.

5:26 Dylan: So I agree with the whole idea of going through the argument, and I'm interested to understand it better myself. Mark commented about Marx's point is, in part, it's all about production, even though all these things are tied up together and not just supply and demand. And there's something worth, I think, observing that Marx is surely reacting to, which is the rise of mercantilism effectively. And the reason why supply and demand might be the way in which you look at things, in fact, you focus on exchange is exchange ends up being, in part, it seems, just on the face of it, the added value that a trader or a merchant is adding to the whole process.

And so the whole. It might be the wrong analysis. But if I think about the thing that becomes a key engine for economies in this rising world of trade that is coming about in the hundreds of years before Marx, obviously trade's been around for a long time, but it's amping up even more and more and more with advances in other kinds of technology. That seems like it isn't crazy to me that you would focus on exchange as being the key component of valuation and economy. And so that, to me, makes Marx's insight or critique all the more interesting.

Part of taking this seriously is also realizing it's probably not stupid to imagine that exchange is the key component and not production.

7:05 Wes: Yeah, just to reinforce your point, exchange, trade, and the division of labor implied in that, so that I'm not trying to scrape together all the things that I need just for myself. I can rely on other people and I can specialize and do some things very well, and other people can specialize and do other things very well. And then we can exchange those things. And that's how you increase your standard of living. And that's what wealth is. So wealth is directly a product of that kind of cooperative behavior. And yes, you know, you get technology and you get other things that enhance that, but that's the basic idea.

7:42 Dylan: And so as we take Mark seriously in his critique, it's also worth understanding that he's reacting to something that's not crazy on the face of it either.

7:52 Wes: No. And I think it's not just not crazy, it's right.

7:55 Dylan: Well.

7:56 Seth: Right.

7:56 Wes: I don't think we can deny that aspect of things. And I'm not sure exactly what Marx is saying in relation to that, based on what we've read. Maybe that'll become clear as our conversation proceeds.

8:08 Seth: Yeah, there are a few hints of it in some of the footnotes. He's actually not proposing a radical new theory. He's actually trying to come up with an explanation for something that had been out there, that had been proposed by others, including his opponents, but that he felt they had not explained or accounted for certain aspects of properly.

8:29 Wes: And he largely proceeds on the assumption that people like Adam Smith are right locally rather than globally. They're right when it comes to capitalism, at least as a historical moment. He doesn't like the expansion of that to economics in general. So he. If you. Or political economy, he critiques it as something global rather than local. And I tend to think he's wrong about that as well. But what I find interesting. So when people say, oh, Marx is critiquing capitalism, to me, it's like, oh, you're critiquing the wind or something. It's just a force.

It is the general laws of how things work. So that's my bias, and I'm willing to be wrong about that. But the way he starts in chapter one with the commodity, it's an interesting starting point because we really start with something very specific. And it's almost like he wants to do this. Ultimately, what he wants to explain is money and exchange. In that sense that we are on the track of that. That's the explanandum. That's the thing to be explained. But he's going to start out with a phenomenon, the commodity, the thing that appears to be exchangeable for anything else.

And then we can analyze that. And when we analyze that and the concept of value in that, it tells us something about not just value, but the way it's related to labor.

9:51 Mark: So money is important, but wealth is the primary thing is what he starts off with. You know, so that's. This is why we're starting with a commodity in general, where, you know, then you can ask, is money a commodity? Well, yeah, it's the commodity that it's exchangeable for every other commodity. But he's going to have some things to say about how you measure one commodity against each other. So money is going to be a special commodity, but right. Wealth in general. What if we want the wealth of Nations. If we want to increase the wealth, what are we talking about? We're talking about increasing commodities. So that's the sell of wealth.

10:23 Wes: Yeah. So wealth is again, wealth. The thing to be explained is money. So that he's going to try to give us a conceptual evolution of that, starting out by thinking about the ways in which commodities are exchangeable. And then money turns out to be. This starts out as a special sort of commodity and then it becomes money. But we'll see how that evolves. So wealth and commodity are assumptions, they're starting points, they're phenomena to be analyzed. And the first question is to kind of pin down value and distinguish our ordinary conception of value day to day, which is use value, from this weird other value, which is supposed to account for how things are exchangeable.

Because it is really weird when you think about it. It's not like you can look at an object and say, oh, look there, here are little particles in it, little value particles. And this one has 10 and this one has five. And that's why I can exchange them at two for one. He doesn't want to think of it as purely subjective. He doesn't want to think of in the way that I think he thinks that traditional economists think of it. It's not just a made up subjective thing. And of course, as we know, he's going to tie this to quantity of labor or socially necessary labor time.

It's social or socially constructed in the end. But it's certainly not something natural. Although we treat it as natural in a way.

11:47 Dylan: It is use value.

11:49 Seth: Well, when you.

11:50 Dylan: I'm just. I'm just looking for what the reference is when you say it is something we treat as natural. You mean use value?

11:57 Wes: No, I mean value, value itself.

12:00 Dylan: Okay, okay, that's fine.

12:01 Seth: Okay.

12:01 Mark: The economic value. I know he just refers it as value simplicitor throughout this, but economic value versus exchange value versus use value.

12:11 Seth: Okay, why don't we start off. Let's just read really quickly the first why he starts where he does. So this is page 126, the start. The commodity is first of all an external object, a thing which through its quality satisfies human needs of whatever kind. Doesn't matter what the needs are, doesn't matter how it satisfies them. Every useful thing can be looked at from two points of view of quality and quantity. As many properties can be used in many ways. The discovery of these ways and the manifold uses of things is the work of history. The diversity of measures for commodities arises in part from the Diverse nature of objects to be measured.

And in part from this convention, the usefulness of a thing makes it a use value. So that's where we start. Things satisfy needs that we have, whether it's food that we eat or shelter or clothing or cooling us off when it's hot or whatever. And the value that those things have in that respect is, are their use values.

13:14 Wes: And so this is the non mysterious form of value.

13:16 Seth: Correct.

13:17 Wes: We can all. We don't have to really explain this very much. Although it becomes mysterious.

13:22 Seth: Yes, it does.

13:22 Wes: When you think it's exchangeable. When you take two things where the primary value is the use value. And so. Right. So my watch and your blender, they have very different use values. They don't do the same things. And there's no commensurate use property. Right. Something they have in common, which we can use to figure out at what rate they exchange. This would be uons if they were particles. Right. I can't look into the thing naturally and find inherent use value particles that are commensurate. So it becomes mysterious. Use value per product is completely unmysterious. Use value, when you compare products becomes. Whoa, how does that work if I'm going to exchange.

14:06 Dylan: Yeah, so when you put it that way, which I think is the right way to put it, it means like. Well, what does it mean for me to talk about the equivalent number of meters in a kilogram? So those two things aren't commensurate with one another. Right. They're two different kinds of things. Now it becomes a little bit more interesting to me when you start talking about. Well, what does it mean to talk about a given number of meters in a second. You then start talking about things that have relationships with one another that might actually be natural, that are incommensurate with one another, but you maintain their relationship with one another.

14:46 Wes: Now, yeah, they co. Vary. There are no meters in a second, but they can covary exactly. In speed.

14:52 Dylan: Yes. No, but that's my point. Right. Is that there. So some of that. It is mysterious that you would have two different kinds of commodities in your watch and your blender. And to me, if you really were going to talk about this being somehow natural, you would start talking about. And I think that's in the end, what labor value is intended to do is intended to provide that conversion function between those things. The thing that is of the constant relationship. It's like the velocity between.

15:25 Wes: Yeah. I mean, it turns out is a common unit wants to argue it's going to be labor yeah, it's just there's

15:31 Mark: two things that as a philosopher, you know, we want to pay attention because this brings to mind like Bentham's utilitarianism. Right. The Yuans that you're referring to, Wes, are like what we were calling the pletons, the pleasure, you know, to what degree? Well, first it's to whom. It's not just useful simpliciter, it's only useful to someone who is in the situation that has a use for it, is the kind of person has a use for it. And we're just going to, we're talking sociologically so it's useful to somebody. But just saying that is a very useful towel or you know, a very useful machine when my 90 some year old dad is not going to know how to use that machine at all. So it's use value to him is zero.

16:12 Wes: So that iPad cost $0.

16:15 Mark: Yes, exactly. And then the other one is quality. So Wright Mill's response to Bentham is, well, how do you compare the pleasures of philosophy versus the pleasures of sex? They're fundamentally different kinds of pleasure. So Marx explicitly says, I don't care where this comes from. But the Epicureans, the Stoics, many ancient folks would say, well there are needs and there are needs in quote, like socially generated needs we were talking about last time. Bullshit. Needs, luxuries, things that are not really needs.

16:47 Wes: Well, our higher needs, if you wanted to look at it different. Well, if it's philosophy. But anyway.

16:52 Mark: Yes, yes, well, exactly. So is this just a general case of what you were just talking about, the incommensurability of different use values or are we importantly, Ms. You know, as he goes forward, he's going to say when talking about the wages of a worker like that we are from the employer's point of view, the worker is just a resource. And so you have to pay them, hopefully just enough that they can survive and come back and work well. So you want to feed them enough. And he goes through these histories of people trying to keep wages low so people wouldn't just like, I'm fine after working five hours a day, I have enough money or you know, now I have all this free time. It's in the interest of the capitalist class to keep the workers controlled.

17:37 Dylan: I'm going to ask this question and then I think we should continue going through. But to me what you've done is you've commoditized labor and you've made it fungible. When I was reading about commodities, I was getting a little confused because When I think about commodities, I think about things that do have exchange value. They have value that's maybe more transparent to be able to be root raw materials for things. Right? Oil is a commodity. Pork bellies are a commodity. Right. But paintings in the Louvre aren't a commodity. And there are plenty of other things that my phone might be getting close to being a commodity, but chairs themselves aren't commodities in that way.

Now Marx is going to say they are because they're just all the stuff that you just can have value and exchange value for. So I was stumbling on that. But one of the things that, to me, when I think about capitalism and I think about this argument, is that labor itself becomes a commodity, and that is why you have this pressure going on, is that it becomes fungible. The activity of labor is fungible because it's absent any kind of other value in the. Paying attention to human. Any of the human value. For instance.

18:53 Seth: Okay, I'm not sure where we are in the argument. I keep wanting to, but we're still

18:58 Wes: at the very beginning. So the.

19:00 Seth: I feel like we're throwing a bunch of, you know, this thing builds step by step. And I just would caution not to jump too far out on because, you know, we need to get from use value to exchange value and understand the difference between those two. Because the exchange it is exchange value is, you know, these are the two things we think of. And a huge part of what Marx is saying is when other economists have tried to solve the problem of labor value, they've done it in terms of these two other flavors of value. And they've gotten confused or they've isolated one and ignored the other. I mean, there's. So he's. He wants to be very clear about what these things are and how they're structured and how they contribute so that we can understand what the other piece of it is.

19:43 Wes: So he wants to say exchange value is determined by socially necessary labor time where socially necessary, he just means, because necessary labor time can change based on how good your conditions of production are, how skilled the worker is. So in a way, it's a way of thinking about average labor time needed to produce a certain thing or the products in general in a society, to give an historical epoch, all that stuff. So to do that, he's going to start out with this phenomenology, which we started with, and say, okay, well, it's not use value that can be a common equal unit between things, but if they're exchangeable, there's got to be something that's Equal. So what is that thing? That's the beginning.

20:28 Seth: Can I make one point about use value? Why it's not fungible in that respect. Why it's not the same way.127 the usefulness does not dangle in midair. It is conditioned by the physical properties of the commodity and has no existence apart from the latter. It is therefore the physical body of the commodity itself. It's independent of the amount of labor required to appropriate its useful qualities. We're always dealing with definite qualities in use value. Dozens of watches, yards of linen. And he says they're only. And they're only realized in consumption. So I want to just say that because, you know, I think it's something worth keeping in the back of your mind that there's a reason why use value is very particular because it's associated use value.

21:13 Wes: Yeah. It's grounded in qualitative difference. Qualitative physical differences between objects. It's grounded in the qualitative difference between types of use. Timekeeping for a watch, blending for a blender. As Mark pointed out, it differs in quantity depending on who you're talking about. Does someone have a use for it or not? So that's very important as well. So there are all sorts of obstacles to making that a saying, oh, this is the thing that we can divide up into units and say accounts for the exchangeability of things. So if I exchange the watch or couple of watches for a blender or however that works.

I'm not saying, oh, this is twice as useful as this other thing. And that's why they exchange it to. To one. That's not the way exchange value works. But it's also not going to be completely arbitrary. According to Marx. Although I think when he says it depends on labor time, that's not new to him. He's pivoting off of political economy. But this derivation that he's giving, I think is unique. So for exchange value we need something else. What is that thing? We need some other unit in common.

22:21 Mark: I think he refers somewhere here to Aristotle, the idea that it goes way back in history where they took exchange as exchange of different use values. As the model that money is just a thing that's thrown in there sort of for convenience because it's too hard sometimes to actually take the chickens to the person. You know, when you want to do a more complicated type of exchange. But it fundamentally takes advantage of the fact that I have a use for chickens. But you already have enough chickens or you don't care about chickens. And so it's we're cooperating.

It's a part of the division of labor. It's just natural that we each have different stuff and we each have different needs. And so we exchange. That's just comes right out of our. Just our nature as human beings. And he wants to abstract from that, to say, actually, yes, okay, ultimately, this cashes out to use value. That's why we're exchanging, doing all this exchange in the first place. But. But once we enter the world of exchange, money as this fungible thing that is transferable into any commodity and abstracts from all use values, actually becomes entirely central.

And so exchange value becomes this different thing which Wes, you had given, sort of the developed version. Right. That the exchange value of a commodity is its socially necessary labor. And just. I want to give a couple of the steps, the rough steps. Right. It's the idea. We know that the use value of something, as you were just saying, Seth, and what you read, it does not depend on how much work put into it. Like, if you have an apple tree in your backyard, you didn't. Maybe it just grew naturally. That could be just highly useful. And you put no effort.

23:55 Seth: Yeah. You breathe air and you do nothing.

23:57 Mark: Yes.

23:58 Seth: To earn that. Yeah, air has a use value.

24:00 Mark: But for commodities, we think, well, you had to have done something to it. And so this again goes all the way back to John Locke of like, as Mark says, nature is the mother of the commodity, but labor is the father of the commodity. So you got to put something together with nature. I mean, that's all you can really do. You can't build something from nothing. You need some natural resources. You need some starting stuff that you're processing, but then doing the processing. That is what gives it the economic value. Because you don't want to have to go through the bullshit to have tilled the soil and gotten the beans out of the soil.

So I'm going to do it for you. You're paying me for my labor. But then it seems like it would fall from that, that if you're a poor craftsman and it takes you longer to do the same thing, then actually your product would be more valuable. And we do kind of feel like that with certain kind of handicrafts. Like, ooh, this is, you know, handmade by artisans and blah, blah, blah. Like, so much labor went into this. But. But typically we don't care. Like, if it's a shoe, is it a functional shoe? Does it do the job a shoe is supposed to do? If it took four times as long, I don't care so we're going to just say it's the socially necessary time of labor that's congealed in that thing.

So that's sort of average. Just like we don't care about what is useful to what person. We don't care about exactly how much labor went to this shoe or this can of beans. We just care in general, given the state of technology, how much labor is necessary to go into that on average.

25:24 Wes: And he's not making a Lockean point about how we imbue things with value by giving them labor. He's rather, he's doing this a priori now. He thinks something is exchangeable. So quote on 127, I think valid exchange values of a particular commodity express something equal. If they're going to exchange a 2 to 1, there's got to be a common unit. What could that be? We know it's not use value. There must be, quote, some common element of identical magnitude. Each one of them is reducible to some third thing for the purpose of exchange value. This third thing is not a natural property.

It's not some chemical property. That's why I was bringing up, you know, U ones or vions or whatever. It's not chemical, physical. So what is it? He's doing a process of elimination here. And then the. On 128 he gets us to, well, there's only one thing that remains that they could have in common, which is being products of labor. So for the purpose of exchange value, we abstract from use value. We abstract from its material form, its constituents, how it looks from the object as a sensuous phenomenon, so to speak. And we also abstract from the qualitative nature of the labor involved.

Right? So it doesn't matter that one thing was weaving and another thing was tailoring for the purposes of exchange. We don't, that's like use value. We don't want those qualitative differences or we can't have those qualitative differences crop up in creating this commensurability between different exchangeable products. So it's, you know, if we want to think about labor being this common constituent, we have to think about it as, quote, human, human labor in the abstract. We're not going to be able to trade weaving for tailoring. We have to trade labor for labor, or socially necessary labor time, as it will turn out.

So I think that's the derivation. It's a process of elimination. Not the physical properties of the thing, not the use value, but labor time,

27:34 Mark: which involves another abstraction. I referred last episode to, well what about skilled labor versus unskilled labor? Well, somehow we can reduce this to a common denominator. We'll just say that, you know, one hour of skilled labor equals two hours of unskilled labor or something like that. So we can just talk about.

27:49 Wes: That's part of what socially necessary is supposed to do. There are lots of complications. Right. You went to school for 10 years to be able to learn how to do this. And I never went to school to learn how to do what I did. You know, he's bracketing out all those complications and saying, you know, we can account for those ultimately. But yeah, on paper it's not going to be so simple as I did two hours of ditch dicking and ditch dicking. Ditch digging. Ditch dicking is actually more expensive. But anyway. And you did two hours of doctoring that. Those are complications. We're not going to think about that right now.

28:23 Dylan: So for me, can we just recap. So we're getting from use value as the apparent value of a commodity, but no, it's not. And the thing that regulates the actual value of a commodity through exchange is socially necessary labor.

28:41 Seth: Well, yeah, you want to flesh that out a little bit here?

28:44 Dylan: Well, I mean, did I get from. I got the start and I got the end. Right?

28:48 Seth: You got the start and you got the end.

28:50 Dylan: Okay.

28:51 Wes: So the question of whether it actually in a way it ought to, or absent any interfering factors, if you want to think about our essentialism and dispositional properties episode. But Marx understands that that's not the way things are going to actually be exchanged in society. Right. That he understands that there's going to be deviations from this principle. So we have to keep in mind that we are functioning here right now in the abstract. How things are going to actually occur in society ultimately is different. Right now we're just doing an a priori derivation of what must be the common unit. And then we could get all kinds of disturbing factors that make it the case that things don't trade with each other per labor time involved.

29:38 Dylan: Yeah, I just trying to make sure I understood the terms of the argument and that's what I thought it was. I'm trying to avoid being discouraged and trying to focus on just understanding what he's saying. Because what was just described as a version of. And Mark already implicitly admonished me for not talking philosophically, talking physically. The philosophical point was this kind of thinking. It's exactly like talking about Galileo's account of motion. And what is the fundamental relationships that guide motion of a projectile Going through.

Across the earth. And the fact that if I do that, I won't get. I won't calculate where the ball lands exactly right. Why? Because there's all kinds of mitigating factors. There's wind resistance. There's the size of the ball. It gets affected by all those other things. But those, in principle, are also modelable. And that's the kind of thinking that feels like it's going on here. And where I get. Start getting all of those mitigating factors. Start to feel like they are a lot more fundamental than the notion of friction disturbing a ball going through the air.

The distinctions here, when I start pushing on it. Feel like the difference between exchange. Well, I said earlier that labor becomes a commodity. So the way in which all of these things transform into one another. The exchange itself is a kind of commodity. And so I get confused about what the distilled notion of the thing being carried around is in the analysis. If it doesn't hold up, you know, in this a priori derivation. That I can't carry it along later. So I just wanted to make sure that I got the argument through. Use value becomes. Actually is not the actual way to value a commodity.

It really is. The thing that we can carry through is socially necessary labor. And that's. Okay.

31:40 Wes: The way to put it, use value can't function as a principle of exchange. You can't.

31:47 Dylan: There you go.

31:47 Wes: Function as the principle that would explain the exchangeability of commodities. And we explained why it can't do that. Because we need a common denominator.

31:56 Dylan: So a common denominator that explains the exchangeability of things. Is socially necessary labor value in this argument.

32:03 Wes: Time, labor, time.

32:04 Dylan: Labor, time. Sorry. Thanks.

32:06 Wes: And it is puzzling, but.

32:07 Dylan: So I'm just trying to understand it.

32:08 Seth: This is exactly the reason I was like, let's go step by step. Because if you say that, it sounds outrageous and bizarre. And you get into the whole. How do we account for all the mitigating factors and all that kind of stuff? But I think it's really critical to start off with why is there a need of a solution to begin with? Like, why do we have to. How do we get to the point where we're like, oh, shit, there is something common. My answer to it is going to be labor value. Because part of what I came out of this whole thing with at the end was I think.

I don't know if this is how money actually came to be. But the whole concept here of some sort of common measure of value. That then gets codified or represented by money is absolutely. You know, then it just becomes we can have an argument about what that common unit of value is. Maybe it's not labor time, maybe it is. Maybe it's something else. But it feels to me like the argument that gets you there is certainly convincing. Right. So let me go back to the text first.

33:06 Wes: Well, before you say it, go back to the text. I just want to say it doesn't seem outrageous to me, which is surprising that I'm the one who doesn't seem outrageous to. Even if it's not correct. So what is he trying to do here? Is he trying to give a metaphysics? He's trying to say there really is a value in the thing, and that's determined by labor time, the motivation here. As we'll see, he does not like the traditional economic claim that there is no inherent value. That there is. It's not tied to anything except demand. It's just what people are willing to pay for it because they happen to really want that. Right?

33:41 Seth: Yes.

33:42 Wes: Now he's saying that is not actually the fundamental principle of how things could be exchangeable. No, I tend to think that he's wrong about that and the modern economists are probably right about that. But he would. Maybe he'd call me a dirty relativist or something. I don't know what this intuition that it ought to be expressed in something objective I'm very, very sympathetic to. So I'd like this as a starting point. We can figure out why it doesn't work or the extent of which it works. But I like it as a starting point.

34:14 Seth: Okay. Yeah. I would like to point out that he is. There's plenty of clues throughout the text and comments where it's like, there was clearly a school that thought commodity value was reducible to exchange value. And there was clearly a school, including some of his opponents, Adam Smith, most notably, who believed that labor. Adam Smith. There's a footnote where he clearly says, you know, Adam Smith is the one who came up with the idea, and he's the one who thinks labor is the common unit value. And Marx's complaint is that he doesn't have this sophisticated understanding of labor and a value enough to be able to explain it. And that's why there's the school of people who think that value is exchange value is because nobody has explained the labor theory of value side of it well enough. And he thinks that he's answering that.

35:02 Wes: Yeah, unfortunately, his criticisms are a little bit vague. So it's unclear to me, you know, other than they didn't include the social necessary labor time socially necessary qualification, which to me is a minor and obvious qualification. I don't see that as a huge critique of predecessors. But I come away from this and even after some secondary reading, not quite understanding completely what he's saying about previous people because unfortunately, it's not there in any detail in the text. So I just want to say that.

35:33 Seth: Yeah. All right. So we've talked about use value. Use value tied to the, let's say, material properties of the product independent of labor, or can be independent of labor. You can just pick up an apple and eat it. I mean, obviously there's labor in you.

35:47 Wes: Chewing something can be more useful to you than another thing, even if that thing took way less labor to produce than that other thing.

35:55 Seth: Right. And as Mark said, useful to someone for some reason. And uses are not exchangeable in the sense that you can't say that. You know, this hammer is twice as useful as this screwdriver.

36:11 Dylan: Okay.

36:12 Seth: In other words, two different uses are not. In a sense, you can create a quantitative look at utility, but you can't measure the use of two different things by a common measure. You have a word called usefulness.

36:25 Dylan: I would say that what you're saying, what you're trying to talk about is exactly the whole thing that's at issue.

36:33 Seth: Okay, tell me.

36:34 Dylan: The whole thing is how we have exchange of watches for blenders, or my thatching your roof for you cooking me dinner. On what basis? And how do we understand the valuation of that exchange that's going on?

36:49 Seth: That's the whole issue.

36:50 Mark: As a war, as the art of the deal, I'm going to intimidate you into it.

36:55 Seth: I completely understand what Dylan's asking here. And I say, okay, so I need something. Let's say I'm working in my garden. I need a shovel. You have a shovel, but you don't need a shovel. But you need something else that I have. And we come together and we say, hey, I need a shovel and you need a WI FI router, and I have an extra one or something like that. I'm like, I'm not using this. And you're like, I'm not using this. And it's like, well, those things have utility to us. So let's swap. Is that an example of you thinking utility driving the value of those products?

37:31 Dylan: Absolutely, yes.

37:32 Mark: That's the Aristotelian model.

37:33 Wes: Right? So, yeah. So I think this is tied to the idea that utility is a driver. It becomes something subjective, and so it becomes demand. And this is the Thing that Marx is arguing against, he doesn't see it merely as a matter of demand, which by the way, turns it into something completely subjective. Because one thing, right, that it just depends on what you want, whether something is. It depends on desire ultimately. So we reduce it and it could vary. This pebble, I just love pebbles and let's call them diamonds because it makes more sense and I'm willing to trade in an entire car for it.

It's use value, right? How do I measure that? It's really a matter of my demand, my desire. And yeah, so I think it's important to understand that when he makes this distinction between use value and exchange value, he wants to disassociate them. Because there is a way in which I think classical economics implies that exchange value pivots off of use value. He wants to get away from that. It obviously is a factor in the way things exchange in capitalist economies. Right. He's not denying that. He understands that it has to be. He's not denying supply and demand and all that, but he's saying that in the abstract that's something that happens under capitalism.

In the abstract, we just want to think about what could actually be a common denominator, not just how it works in capitalism. So if we want to think that there's something deeper here, then let's look for that and let's maybe bracket out whether we think that's the way things actually work and just say, okay, if we're going to do this abstract a priori derivation, what can we get? And then we can come back and critique it.

39:11 Dylan: That's why I was trying to say I wanted to get the front and back of the argument so far. Okay, I just want to understand it.

39:17 Seth: I agree.

39:18 Mark: Can I can just connect that to. Dylan earlier was making this comparison to physics. And I actually like this because we're dealing with the birth of social science here. So how abstract could we get from the empirical matters to say, well, here is the core model that if ceteris paribus, everything else being equal, which it never is. But then if you think that some of these things like the demand for something, because he does seem to imply that the demand in society will depend on people's actual needs. And yes, these change over time, our standard of living raises.

So what might be considered a luxury in one era becomes a necessity in the next era. I remember people in the 90s saying, oh, wi fi, that's not a necessity, you know, but now it is. To get things done, you kind of need wi fi to do almost anything, to order your pizza, to register, to vote, to whatever. So you might ask, does the fluctuations in demand by just fashion, does that. Is that fundamentally different in character than merely something that over time will even out like fads come and go. But there's generally going to be a value to things that is going to be trackable over time so that producers can determine how much to make.

But if you think that value is crazily irrational, that just something, you know, especially brand names like are Apple products really so far superior to the Android, to all the other? Or is there something just attached to that individual company, that individual name that just makes it so there are. You know, it's a de facto monopoly by one person putting out even an identical product to somebody else just because of their reputation.

40:56 Wes: But when you say these things, Mark.

40:58 Mark: Yeah.

40:58 Wes: These all could be reduced to subjective factors. Right. So Apple objectively has a better user interface. It's a smoother experience, let's say. Or just I pick up the phone and it turns on. And Android phones in general don't turn on. Right. If it were just as ridiculous as that. But maybe that's what I wanted, something that didn't turn on. So I can't ever find any objective measure if I really. This is the counter argument to Marx. Right. I'm never going to find an objective measure. It's always going to come down to that. Some people may just want bricks for phones.

41:31 Dylan: And this is where I want to trace the argument for why use value doesn't explain exchange. Right. But what you're going back to is the counter argument that, well, it is really use value.

41:42 Mark: Okay.

41:43 Seth: Okay.

41:44 Dylan: But we should follow the argument. Okay. I want to follow the argument. I just want to make sure I understand the components of it. Okay.

41:50 Seth: All right. What I'm trying to do is I'm trying to get consensus on the very basic building blocks of this thing because I do think he does raise the problem. He does position in such a way where there is a problem statement. So let's try a different tact around use value. So we're talking about use value. You have a coat.

42:08 Dylan: Do you think we're confused about this part?

42:10 Mark: Yeah, I'm just not sure why you keep.

42:11 Wes: I think we've gone over use value. Yeah.

42:14 Dylan: I'm not confused about the argument about going from use value to labor. I understand.

42:18 Seth: What I'm trying to do is you're telling me that you're like. It feels like everything's reducible to use value.

42:23 Dylan: Well, that's a Criticism. That's a criticism later. I'm willing to bracket that. Okay.

42:27 Seth: Oh, okay, you're bracketing that.

42:28 Dylan: I'm bracketing it right now. And because I think we should get through the whole argument.

42:32 Seth: Okay, let's do it. So let's move on. And we got use value. Let's talk about exchange value.

42:36 Wes: All right, so moving this is from page 128 to 29, right? So he's going to start using this word value. It's going to get a little bit confusing because we've got exchange value, use value. And now we're going to see this word value appearing everywhere where value ultimately is going to. Right. It appears as exchange value. That's the psychology of it. We don't look at something and say, oh, that's 10 units of labor time and that's one unit of labor time. Right. That's not what I'm doing in the grocery store when I'm looking at prices. The psychology, the, the appearance of value is exchange value.

But value per se seems to have the referent in labor time. So he'll say value quote is measured by quantity of labor, by duration of labor time. But it's important to keep that in mind. These three different terms, value, exchange value, use value, value has the referent of labor time. But it's sense if we want to do Frege, right, or the way it appears phenomenologically is not going to be as labor time. And then after that he gets into socially necessary labor, which I think we've already exchanged. Okay, Explained for the most part.

43:49 Mark: Yeah, I thought exchange value, he just shortens it and calls it value after that. But you're saying no, it's exchange value is the actual amount that you get when you sell it on the market. That is the exchange value of the product. But the analysis of that, that it is socially.

44:06 Wes: I initially thought that and then I got confused and so I did a bit of research and yeah, exchange value is not right. It is confusing and it's going to get even more confusing because we're going to find out, right. When we compare two commodities, the exchange value is expressed in a use value of another product. Just to give you a little foreshadowing. Let's not talk about that. But that's how confusing it's going to get. There's a real interesting psychology and phenomenology here that I think is valuable. It's objectively valuable no matter what we think of the overall theory.

But here we just get a little glimpse of that in this Distinction between value and exchange value. Just because value refers to labor time doesn't mean that's the way we experience it in the commodity. In a capitalist society we experience it as exchange value which has this weird life of its own. We intuitively understand what it means for something to be to say okay, this is worth $3 and not 10.

45:02 Dylan: Yeah. And you've used the example right? Now if I go over to my fancy organic store, a pint of strawberries costs $16 and I will say it's not worth $16. I'm not going to spend $16 on it. Right. So you're talking about that phenomenon.

45:20 Wes: So yeah. I don't say oh it didn't take that long to make these eggs or whatever.

45:25 Dylan: Yeah, yeah, yeah. So he says on 130 exchange value as exchange values all commodities are merely definite quantities of congealed labor time.

45:33 Mark: Yep. That's why I thought that that's how he's using value going forward because that's what he means by value.

45:40 Seth: Right.

45:40 Mark: Congealed labor time. That's it's just.

45:42 Wes: It's including in the abstract absent. So I think you know the part of the problem is again it doesn't appear to us as in our daily lives as labor time is what it is. Exchange value is reducible to value metaphysically. But that's doesn't right. Or at the level of essence. But of course as we know the phenomena are often conceal the essence. So that's why we need an analysis like this. Other people are going to right. Say well exchange value is just just how it appears and there's no deeper thing that it's related to or that it ought to be related to or however you want to put it.

46:20 Mark: All right, so we'll talk in our second half about to what extent we are people are confused about that as fetishism idea is this that we don't recognize the truth of his labor theory value in our everyday dealings with commodities. We'll get to that next time. If you become a Partially Examined Life supporter you could probably get that right now in your feed. If you do it through Apple. You still have to wait till next week but in any case you can look at the very very various options at partially examined life.com support otherwise everybody will just get it next week and hope you have a good week. Bye everybody.

46:52 Wes: Thanks Bye bye bye.