The amount of labor put into a commodity is a measure of its
Why does Marx say that capitalists have more power than workers in the capitalist mode of production?
(A) The capitalists control the means of production.
(B) The structures of society favor the capitalists.
(C) Workers are only selling labor in the abstract.
(D) All of the above.
What does Marx say is the effect of the division of labor on the worker?
(A) Loss of imagination and character.
(B) Increased ambition.
(C) More leisure time.
(D) Fairer working conditions.
Which of the following statements is TRUE?
(A) Something can be a use-value without being a value, but it cannot be a value without being a use-value.
(B) Something can be a value without being a use-value, but it cannot be a use-value without being a value.
(C) Something can be a value without being a use-value, and it can be a use-value without being a value.
(D) Something cannot be a value without being a use-value, not can it be a use-value without being a value.
Which of the following models reflects circulation in the modern capitalist system?
What is the value of labor-power?
(A) The joy it brings to the individual.
(B) The amount of labor required to provide subsistence for the worker.
(C) The value of the commodities the worker produces.
(D) The amount of utility each laborer adds to society.
According to Marx, what is one of the simple elements of the labor process?
(A) The work itself.
(B) The object onto which the work is performed.
(C) The instruments of the work.
(D) All of the above.
According to Marx, what resolves the tension between workers and capitalists?
(C) Divine intervention
(D) All of the above.
During which century was Capital published?
(A) 19th century
(B) 18th century
(C) 17th century
(D) 20th century
Who published the last two volumes of Capital after Marx’s death?
(A) Vladimir Lenin
(B) Friedrich Engels
(C) Joseph Stalin
(D) John Stuart Mill
Which of the following is a component of the “means of production”?
(A) Methods of working (skills, forms of cooperation, division of labor, etc.).
(B) Applied knowledge (science, etc.).
(C) The instruments of production (tools, machines, etc.).
(D) All of the above.
The “mode of production” consists of each of the following EXCEPT
(A) inevitable domination by capitalists.
(B) the relations of production.
(C) the means of production.
(D) None of the above.
Whose interests does the modern state serve?
(A) The workers’ interests.
(B) The Church’s interests.
(C) The aristocracy’s interests.
(D) The capitalists’ interests.
What country did Marx study in preparation for Capital?
(B) United States
In modern society, who owns the means of production?
(A) The military.
(B) The Church.
(C) The capitalists.
(D) The workers.
What kind of value does a forest have?
(D) All of the above
Where was Marx from?
(B) The United States
What common element do commodities with an exchange relation have?
(A) Demand curve.
(B) Labor input.
(C) Social utility.
(D) Personal usefulness.
What does Marx mean by surplus value?
(A) The component of a commodity’s value that exceeds the value of its inputs.
(B) The value of tax-exempt commodities.
(C) The wages a worker receives in a capitalist economy.
(D) The social utility that comes from consuming the commodity.
In the C-M-C circulation, what is the function of money?
(A) A means of exploiting workers.
(B) A constantly increasing end in itself.
(C) A medium of exchange.
(D) All of the above.
Which of the following thinkers had the greatest impact on Marx?
Which of the following is NOT a trait of the C-M-C circulation?
(A) The final product is a use-value.
(B) There is no reflux of money.
(C) It has both a C-M and an M-C component.
(D) The final product is an exchange-value.
What role did manufacture play in the development of capitalism?
(A) It hindered its development.
(B) It came about once capitalism had developed, and therefore had no role.
(C) It encouraged its development.
(D) None of the above.
What must a worker’s wage be in order for him to be paid at value?
(A) It must equal the value of the commodities the worker produces through his labor.
(B) It must equal the amount of money necessary for him to remain a functional worker.
(C) It must equal the social value of the commodity the worker is producing.
(D) It must equal whatever the worker and capitalist agree to in a free and equal exchange.
Which writer had concerns similar to Marx’s about the impact of the division of labor on human character?
(B) G.W.F. Hegel
(C) Edmund Burke
(D) Adam Smith
How is it that M’ is bigger than M in the M-C-M’ model of circulation?
The M-C-M’ circulation appears at first to be paradoxical. It describes a circulation where a capitalist purchases a group of commodities (for example labor and raw materials) at their value, and then later sells them at their value, for a profit. Where might this extra money come from? The answer comes from the idea of surplus value. Surplus value is the excess (M’) that the capitalist ends up with at the end of an M-C-M cycle. The commodities the capitalist buys are being paid for in full-value (M-C). Therefore, in order to gain surplus value we must be able to create value through the use-value (consumption) of one of those commodities. This is the only way that we could end up with more M than we started with (C-M’). This actually happens with labor-power. Labor-power’s value is the amount of money it takes to keep the worker functioning. However, in the capitalist’s consumption of the labor-power, he can receive total value greater than the value of the labor-power. Therefore, when the product is sold for its value, the capitalist receives a profit. This is exploitative of the worker, but the worker has no choice because he doesn’t own any means of production, and therefore doesn’t have the option of working for himself.
According to Marx, is there room for compromise between the interests of the workers and the interests of the capitalists?
Marx sees little room for compromise, and is in fact critical of socialists who believe that the evils of capitalism can be eliminated through reforms that preserve the essential structure of the system. The interests of capitalists conflict directly with those of workers. By his nature, a capitalist seeks ever- expanding profit. This, however, can only be achieved through exploiting the surplus-value of a worker’s labor. To remove the exploitation would be to eliminate the capitalists. Thus, compromise is not possible. Furthermore, the entire social system protects and preserves the interests of the capitalists. The legal institutions and social structures have been made by the capitalists, and therefore are intended to preserve their own mode of production. When capitalism is overthrown, which Marx believes will happen, this overthrow will have to be a violent destruction of the entire social system.
What is the labor theory of value? What are the potential criticisms of this theory?
The labor theory of value begins with the concept of exchange-value. Exchange- value reflects the relationship between different goods, how much of one good is worth another one. However, if these goods can be compared at all, there must be something common between them. For example, what could make a desk worth two chairs? Marx’s answer is that both required the same amount of labor-power to produce them. This labor-power is the value that the desk and chairs share. Their exchange-value comes from this value. Marx uses this theory of value in his discussion of the exploitation of the worker and the circulation of capital. One potential criticism of this theory is that is doesn’t adequately account for all kinds of exchange-values. Marx says that there are some things with use- value that don’t have value because there was no labor input. Things like forests would be examples of such use-values. However, in reality such things do have exchange values. Marx does not really address how these things fit into his overall theory. One could also argue that Marx does not leave sufficient room for consumer demand in his labor theory. Depending on the popularity of a given commodity, its exchange-value would likely vary considerably. While the amount of labor input would have to have some impact on exchange-value, practical experience would seem to suggest that it is not the sole influence.
Does Marx respect capitalists at all? What positive traits does he attribute to capitalism?
Many of Marx’s predictions in Capital, such as the fate of the worker and the capitalist system, have not corresponded with history. To what extent has the course of events refuted Marx’s theories? Is there still a place for Marx in contemporary dialogue?
Some economists present capitalism as part of human nature. Marx would disagree. Explain why and evaluate the force of his arguments.
What is the impact of modern labor on the character and well-being of the worker, according to Marx? How much of his theory depends on his beliefs about the situation of workers?
What is the division of labor? What is its impact on workers?
What do you see as the greatest strength and the greatest weakness in Marx’s theory? Explain.
Chapter 1: The Commodity (Section one)
In this section—which is subtitled “The Two Factors of the Commodity: Use- Value and Value (Substance of Value, Magnitude of Value)”—Marx introduces us to his analysis of commodities. A commodity is an external object that satisfies a human need either directly or indirectly. He says that useful things can be looked at from the point of view of quality and quantity. They have many attributes and can therefore be used in many ways. He uses the term use-value in relation to commodities’ quality. “The usefulness of a thing makes it a use-value.” A commodity’s use-value is a trait of the thing itself, and is independent of the amount of labor needed to make the commodity useful.
Exchange-value is the proportion by which use-values of one kind exchange for use-values of other kinds. It is a constantly changing relation, and is not inherent to the object. For example, corn and iron have an exchange relation, which means that a certain amount of corn equals a certain amount of iron. Each must therefore equal a third common element, and can be reduced to this thing. The common element cannot be a natural property of the commodity, but rather must be abstracted away from its use-value. Discarding use-values, only one property remains—the commodities are the products of abstract human labor. They are “congealed quantities of homogenous human labor.” This common factor in the exchange-value of the commodity is its value.
Thus, a use-value only has exchange-value when it consists of abstract human labor. This is measured by the amount of labor-time socially necessary to produce it. A commodity’s value would stay constant if the labor-time also stayed constant. With greater productivity, it takes less labor to produce a commodity, and thus, less labor is “crystallized” in the product, leading to a decrease in value. “The value of a commodity, therefore, varies directly as the quantity, and inversely as the productivity, of the labor which finds its realization within the commodity.” Something can be a use-value without being a value. This occurs when something’s usefulness is not produced through labor. However, nothing can be a value without also being a use-value; if something is useless, so is the labor contained in it.
Marx presents several definitions that will be important throughout his work, so it is very important to be clear on their meanings. A use-value corresponds to the usefulness of an object, and is internal to that object. For example, a hammer is a use-value because of its contributions to building. Its use-value comes from its usefulness. In contrast, a hammer’s exchange-value comes from its value relative to other objects. For example, a hammer might be worth two screwdrivers. An object doesn’t have an exchange value in itself, but only in its relationship with other objects.
However, the fact that the hammer and screwdriver can be exchanged at all suggests that there must be something common between them, some means of comparison. Marx says that this is the object’s value. Value means the amount of labor it takes to make the commodities. This labor theory of value is very important to Marx’s theory. It implies that the price of commodities comes from how much labor was put into them. One implication of this is that objects with natural use-value, such as forests and other natural resources, do not have value because no labor went into them. One problematic question, then, is how such natural resources can have exchange-value (people do spend money on them) without benefiting from labor. It is also important to consider how Marx’s conception of the roots of exchange value differs from modern economic theory. In modern theory, something’s exchange value is rooted in people’s subjective preferences. While the amount of labor required would be linked to the supply curve of a commodity, its exchange value is also determined by the demand curve. Marx focuses exclusively on labor.
This section also gives a general sense of Marx’s approach in Capital. Here he dissects one aspect of the modern capitalist system and presents a schema for understanding why it functions as it does. Later Marx will analyze things like the role of money and the capitalist. While this book makes many historical and sociological arguments, it is largely a book of economic theory and its implications.
Chapter 4: The General Formula for Capital
Marx says that capital’s starting point is with the circulation of commodities. The ultimate product of this commodity circulation is money. We see this every day, when capital enters various markets in the form of money. Marx distinguishes two kinds of circulation. C-M-C (commodities transformed into money which is transformed back into commodities) is the direct form of circulation. In this case we sell commodities in order to buy more, and money acts as a kind of middle-man. However, there is also another form, M-C-M. In this case, we buy in order to sell; money is capital. The first phase transforms money into a commodity, the second transforms a commodity into money. Ultimately, then, we exchange money for money.
Marx then compares C-M-C and M-C-M. They are similar in that both have M-C and C-M phases, involving commodities and money, and buyers and sellers. However, in the case of C-M-C, the final product is a use-value, and thus gets spent once and for all. There is no “reflux” of money because it is lost in exchange for the product bought. In M-C-M the seller gets his money back again; the money is not spent, but rather advanced. This reflux of money occurs regardless of whether a profit is made, by the nature of the process. Use-value is the purpose of C-M-C, while exchange-value is the purpose of M-C-M. Money is indistinguishable, and it seems absurd to exchange it for itself. It is distinguishable only in amount. Thus, in M-C-M what really occurs is M-C-M’, where M’ = M + excess. This excess is called surplus-value. The original value adds to itself and converts the surplus value to capital.
Since M-C-M is buying in order to sell, the cycle is endless. Both M and M’ have the “same vocation, to approach, by quantitative increase, as near as possible to absolute in wealth.” In the end, money is again the starting point, and from M’ we go to M” and so on. Thus, the possessor of money becomes the capitalist. He is a capitalist in so far as the increase of wealth is the sole force behind his actions—in this role he is “capital personified and endowed with consciousness and a will.” His aim is boundless enrichment. M-C-M’ is the general formula for capital, as it appears in the sphere of circulation.
Marx introduces here the idea that money plays a very different role in modern capitalistic society than it does in traditional society. C-M-C uses money as a unit of exchange. An example would be a person who sold a hat for $30, and then used that money to buy corn. The money is instrumentally useful in trading commodities. Thus, the person with the hat doesn’t have to find someone who would like to buy it with corn. Rather, he can sell the hat to someone for money, and then buy the corn from someone else with that money. The ultimate purpose of C-M-C, then, is to consume use-values (in this case the corn).
M-C-M’ represents modern capitalism and is very different. Its ultimate purpose is the accumulation of money. There is a never-ending cycle, because the end product is simply more money. Here, money is properly thought of as capital. It is an end in itself, and is put out into the market to buy goods in order to sell them for more money. Notice that according to Marx, by definition a capitalist’s goal is boundless enrichment. Insofar as a capitalist is not working towards that goal, he is not a capitalist.
One thing to consider when thinking about Marx’s characterization of capitalism is where this capitalistic ethic came from. Marx says that capitalists have an endless need for more money, and that the system of capitalism requires and perpetuates this attitude. Even if this is true, however, it does not explain how capitalism developed in the first place. What made people view M’ as an end in itself? Where does this thirst for profit come from? Marx’s description does not spend a lot of time explaining how people could have come to develop these ideas. This limitation is a potential theoretical difficulty.
Chapter 6: The Sale and Purchase of Labor-Power
Marx here addresses the problem of how money is transformed into capital. He says that he must explain how someone can buy commodities at their value, sell them at their value, and also make a profit. The change in value cannot occur in the money itself, or in the resale of the commodity. Rather, the change must occur in the first act of circulation (Money to Commodity, or M-C). The commodity’s use-value must be a source of value whose consumption is a creation of value. This occurs in the case of labor-power.
However, there are necessary social conditions in order for labor-power to be a commodity. First, the individual must be selling his labor-power as a commodity. This means he must own his own person, and he and the owner of money must meet in the marketplace as legal equals. In order to treat his labor as his property, he must be willing to put it at the buyer’s disposal. This means that the laborer alienates himself from his labor, in order to claim his rights to it. Second, a person must not be able to sell the commodities that his labor has created. Rather, he must be forced to sell his own labor-power. This will only happen when the laborer does not own the means of production. For example, a person can’t make boots without leather. He also can’t make boots if he can’t afford to buy food until the boots are finished. In these cases, the person will have to sell his labor-power to someone else, who will provide the leather or the food.
While Marx will not explore here why it is that some people own money while others only own their own labor-power, he does observe that this situation is not natural. It is “the product of many economic revolutions, of the extinction of a whole series of older formations of social production.” Furthermore, the existence of capital is rooted in historical pre-conditions that took all of the world’s history to develop. It “announces from the outset a new epoch in the process of social production.”
How, then, is labor-power’s value determined? Labor-power’s value comes from the amount of labor-time needed to produce and reproduce itself. “The value of labor-power is the value of the means of subsistence necessary for the maintenance of its owner.” There are therefore historical and moral elements to this definition, because we have to define what subsistence means. The means of subsistence must be paid for by the worker’s income. If the price of labor-power falls below the cost of subsistence, then it falls below its value, since the labor-power cannot be maintained at a normal rate.
Marx spends a lot of time discussing the ways in which capitalism is rooted in social institutions. Capitalism is not natural, but rather depends upon social structures, such as property laws. One social factor that is very important for Marx’s theory is that the workers don’t own the means of production. Because of this, they must sell their labor to others. It is precisely because workers do own their own labor that they are able to give up all claims to it, by selling it as property. As a result, they don’t own the commodities they produce; somebody else owns their labor and the products of that labor. The result is that workers become alienated from their labor—they do not control or own what they create. In Marx’s framework, labor-power is a commodity in the market. Its value is determined in the same way as for other commodities, and it is used by capitalists as another commodity in the production process.
Marx’s labor theory of value becomes very important when looking at the commodity of labor-power. A hammer’s value comes from the amount of labor put into it. What, then, is labor-power’s value? Marx applies the definition of value—its value is the amount of labor needed to produce and sustain labor-power. Or more simply, it is the amount of labor needed to keep the laborer alive and functioning at his capacity. Let’s say that a worker needs $100/week to survive and function. The value of his labor-power is, therefore, $100/week as well. A worker’s “price” (his wage) must be at least $100/week in order for the worker to be paid at value. This concept will be very important in later chapters, when Marx will try to show that it is possible to exploit labor.
The amount of labor put into a commodity is a measure of its