> Mike writes, perceptively 'To my way of thinking, this quote could also be used to summarise Marx's defense of the labour theory of value.' Yes, indeed. The rest of the letter makes it clear that Marx is explaining to Kugelmann that the demand to 'prove' the labour theory of value is pointless, it is, he says, obvious from the fact that all societies need to distribute labour, and this society achieves it through exchange.
It's true that: "Labour-time, even if exchange-value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production." This labour is instrumental to the fully free end in itself activity that defines "the true realm of freedom." It has therefore to to be minimized order to maximize "free" time. It also has to be allocated to different activities in the proportions required fully to meet the needs of free activity in a minimum amount of time.
But in communist society "labour acquires a quite different, a free character" because "disposable time" in such a society is time for "the free development of individualities."
In such a society there is a "general reduction of the necessary labour of society to a minimum, which then corresponds to the artistic, scientific etc. developments of the individuals in the time set free, and with the means created for all of them."
For this reason "the time of labour of a man who has also disposable time, must be of a much higher quality than that of the beast of burden."
In particular, "labour in which a human being does what a thing could do has ceased" and the development of "the rich individuality which is as all-sided in its production as in its consumptions" means that the "labour" of this "rich individuality," i.e. the individuality of the "fully developed individual," "appears no longer as labour, but as the full development of activity itself, in which natural necessity in its direct form has disappeared; because a historically created need has taken the place of the natural one."
In this society "division of labour" in the sense of the specialization of individuals to specific activities disappears and "labour time ceases and must cease to be its [wealth's] measure."
The true principle of "right" actualized in "communism" in this sense is: "From each according to his ability, to each according to his needs!"
"Labour-time, even if exchange-value is eliminated, always remains the creative substance of wealth and the measure of the cost of its production. But free time, disposable time, is wealth itself, partly for the enjoyment of the product, partly for free activity which—unlike labour—is not dominated by the pressure of an extraneous purpose which must be fulfilled, and the fulfilment of which is regarded as a natural necessity or a social duty, according to one’s inclination." http://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch21.htm
"It is self-evident that if time of labour is reduced to a normal length and, furthermore, labour is no longer performed for someone else, but for myself, and, at the same time, the social contradictions between master and men, etc., being abolished, it acquires a quite different, a free character, it becomes real social labour, and finally the basis of disposable time—the time of labour of a man who has also disposable time, must be of a much higher quality than that of the beast of burden.” http://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch21.htm
“As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down, and the direct, material production process is stripped of the form of penury and antithesis. The free development of individualities, and hence not the reduction of necessary labour time so as to posit surplus labour, but rather the general reduction of the necessary labour of society to a minimum, which then corresponds to the artistic, scientific etc. development of the individuals in the time set free, and with the means created, for all of them.” (Marx 1973, pp. 705-6)
"The great historic quality of capital is to create this surplus labour, superfluous labour from the standpoint of mere use value, mere subsistence; and its historic destiny [Bestimmung] is fulfilled as soon as, on one side, there has been such a development of needs that surplus labour above and beyond necessity has itself become a general need arising out of individual needs themselves—and, on the other side, when the severe discipline of capital, acting on succeeding generations [Geschlechter], has developed general industriousness as the general property of the new species [Geschlecht]—and, finally, when the development of the productive powers of labour, which capital incessantly whips onward with its unlimited mania for wealth, and of the sole conditions in which this mania can be realized, have flourished to the stage where the possession and preservation of general wealth require a lesser labour time of society as a whole, and where the labouring society relates scientifically to the process of its progressive reproduction, its reproduction in a constantly greater abundance; hence where labour in which a human being does what a thing could do has ceased. Accordingly, capital and labour relate to each other here like money and commodity; the former is the general form of wealth, the other only the substance destined for immediate consumption. Capital's ceaseless striving towards the general form of wealth drives labour beyond the limits of its natural paltriness [Naturbedürftigkeit], and thus creates the material elements for the development of the rich individuality which is as all-sided in its production as in its consumption, and whose labour also therefore appears no longer as labour, but as the full development of activity itself, in which natural necessity in its direct form has disappeared; because a historically created need has taken the place of the natural one. This is why capital is productive; i.e. an essential relation for the development of the social productive forces. It ceases to exist as such only where the development of these productive forces themselves encounters its barrier in capital itself." http://www.marxists.org/archive/marx/works/1857/grundrisse/ch06.htm
Ted