[Below is an exposition of Marx's theory of value that I wrote many years ago. There is nothing original about it, but I do think I manage to put in plain English a concept that is too often shrouded in obscurity, even sometimes in the writings of the Master himself.--JC]
Commodities, according to Marx, exhibit a dual nature: on the one hand they are use-values, suited by their natural qualities to the fulfillment of certain human needs; they are, on the other hand, exchange-values, tradeable in definite proportions with other commodities. Marx further claims that use-value and exchange-value are incommensurable: the proportions in which commodities exchange cannot be derived from their useful qualities. What, then, endows them with exchangeability? When any two things are brought into quantitative proportion, they must be proportions of something common to them both. The common substance which is expressed in exchange-value Marx calls value. But to give it a name is not to say what it is. Having excluded use-value as a candidate for common substance, Marx concludes that there is only one thing commodities have in common: they all embody definite quantities of human labor.
But here our difficulties only begin. When we consider the various forms of human labor from the standpoint of their use-value-creating properties, they are as different one from another as the different articles of utility resulting from them. The skills, materials and technical processes required for the construction of a steam-engine bear little resemblance to those necessary to the production of a digital watch. To figure as the substance of value, these different forms of concrete labor must be reduced to a single homogeneous human labor, measured only by the duration of its expenditure. This is Marx's notion of abstract labor.
The concept of abstract labor has been a major difficulty in the interpretation of the labor theory of value. Is it simply a theoretical construct, invented by Marx for analytical purposes? If so, it would seem vulnerable to the following objection: Why (one may ask) are we justified in conceiving of labor abstractly? If the only answer is that labor, unless so conceived, could not figure as the substance of value, Marx might be justly accused of arguing in circular fashion. In what follows, we shall argue that the reduction of concrete to abstract labor takes place not merely in the mind of Marx, but in reality; that this reduction is necessary for the reproduction of capitalist society.
Marx states in "Capital" and elsewhere that human labor is distinguished from the life-activity of animals by its social character. A colony of bees may first appear to display a pattern of social cooperation. But the role of each bee is invariant. In human society, on the other hand, what each individual does depends upon what all others are doing. For individual A to spend his whole active life producing shirts, individuals B, C, D etc., engaged in other occupations, must provide for the wants of A. How this labor is deployed, moreover, varies from society to society, from historical period to historical period. Regarded from the standpoint of the whole, the activity of the human individual is an extension or modality of the activity of the entire social organism.
In all pre-capitalist societies the labor of the individual is a more or less direct function of the social body. Tasks are divided up and the social product distributed by communal decision, by the dictates of authority, by prevailing custom, or by some combination of these. There is no need to make a quantitative comparison of individual labor-times.
Under the capitalist mode of production, on the other hand, there is no communal, authoritative or traditional method for the allocation of labor or its product. While individual commodity producers cannot live without exchanging, and are therefore even more dependent upon society than individuals in the past, each works independently of the rest, and in his/her own exclusive material interest. Here the apportioning of labor must occur unconsciously, spontaneously, or, in Marx's phrase, "behind the backs" of the collective producers.
When an individual commodity producer exchanges his products on the market, it never crosses his mind that he is establishing a proportion between his own labor and that of other producers. Yet this is exactly what he does. He knows that it has taken him a certain amount of time to produce his wares. Should he fail to exchange all he has produced, he will have worked longer than necessary to meet existing social needs, and will reduce his labor-time accordingly. Should he succeed in exchanging all his commodities and not have received enough to meet his own requirements, he will not have worked long enough, and will expand his labor time. But should he exchange all his commodities and receive enough in return, he will continue producing on the same scale. When the exchanging parties are conceived not as individual producers, but as entire branches of production, the same phenomenon manifests itself through the migration of labor from one branch to another. If, in a given period, society has produced too many guns and not enough butter, gun producers will switch to the production of butter until the correct proportions are established. Thus the ratios in which commodities exchange also determine definite proportions among the labors of private commodity producers.
Marx demonstrates in his analysis of the forms of value that commodity production cannot acquire universal scope until a single commodity separates itself from the rest as a measure of value. The proportions in which commodities exchange against this money-commodity (usually a precious metal) also determine the ratio in which they exchange against one another. (If A = C, and B = C, then A = B.) If, as Marx argues, the proportions of exchange among commodities also determines the proportions among the labor-times of their producers, it follows that, when commodities are equated to money (i.e., given a price) private labor times are measured against the labor going into the production of the money commodity, and hence against each other. It is through this process that the various forms of social labor, despite their different concrete characteristics, are measured by a single standard, made commensurable to one another, and become fractional parts of the total labor-time at the disposal of society. Only by the reduction of concrete to abstract labor do the private labors of individuals come to count as social labor. And only through this reduction can capitalist society apportion labor to meet existing social demand.
Social labor does not arise or disappear with capitalism. Man is by nature a social laborer. The achievement of Marx's theory is to have demonstrated how the social character of labor asserts itself under capitalism through its opposite: the seemingly random exchanges among mutually indifferent commodity producers.
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