Use value

In Marx's critique of political economy, any labor-product has a value and a use value, and if it is traded as a commodity in markets, it additionally has an exchange value, most often expressed as a money-price.

1 Origin and definition
2 Transformation into a commodity
3 The role of use value in political economy
4 Use value and utility
5 Indifferent to use value?
6 See also
7 References

[edit] Origin and definition

These four concepts (value, use value, exchange value and price) have a very long history in economic and philosophical thought, from Aristotle to Adam Smith, and their meanings evolved. Marx comments for example that "in English writers of the 17th century we frequently find worth in the sense of value in use, and value in the sense of exchange-value." With the expansion of market economy, however, the focus of economists has increasingly been on prices and price-relations, the social process of exchange as such being assumed to occur as a naturally given fact.

Marx emphasizes that the use-value of a labor-product is practical and objectively determined, i.e. it inheres in the intrinsic characteristics of a product which enable it to satisfy a human need or want. The use-value of a product therefore exists as a material reality vis-a-vis social needs regardless of the individual need of any particular person. The use-value of a commodity is specifically a social use-value, meaning that it has a generally accepted use-value for others in society, and not just for the producer.

The concept is introduced at the beginning of Das Kapital, where Marx writes:

"The utility of a thing makes it a use value. But this utility is not a thing of air. Being limited by the physical properties of the commodity, it has no existence apart from that commodity. A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities. When treating of use value, we always assume to be dealing with definite quantities, such as dozens of watches, yards of linen, or tons of iron. The use values of commodities furnish the material for a special study, that of the commercial knowledge of commodities.[5] Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever may be the social form of that wealth. In the form of society we are about to consider, they are, in addition, the material depositories of exchange value." ([1])

This was a direct reference by Marx to Hegel's Elements of the Philosophy of Right, §63. See [2]. Marx adds that:

"A thing can be a use value, without having value. This is the case whenever its utility to man is not due to labour. Such are air, virgin soil, natural meadows, &c. A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities. In order to produce the latter, he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.) Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value." (Capital Vol. I, end of Section 1, Chapter 1)

[edit] Transformation into a commodity

The transformation of a use-value into a social use-value and into a commodity is not automatic or spontaneous, but has technical, social and political preconditions. For example, it must be possible to trade it, and to transfer ownership or access rights to it from one person or organisation to another in a secure way. There must also be a real market demand for it. And all that may depend greatly on the nature of the use-value itself, as well as the ability to package, store, preserve and transport it. In the case of information or communication as use-values, transforming them into commodities may be a complex and problem-fraught process.

Thus, the objective characteristics of use-values are very important for understanding (1) the development and expansion of market trade, and (2) necessary technical relationships between different economic activities (e.g. supply chains). To produce a car, for example, you objectively require steel, and this steel is required, regardless of what its price might be. Necessary relationships therefore exist between different use-values, because they are technically, materially and practically related. Some authors therefore write about an "industrial complex" or "technological complex", indicating thereby how different technological products are linked in a system. A good example would be all the different products involved in the production and use of motor cars.

The category of use-value is also important in distinguishing different economic sectors according to their specific type of output. Following Quesnay's analysis of economic reproduction, Marx distinguished between the economic sector producing means of production and the sectors producing consumer goods and luxuries. In modern national accounts more subtle distinctions are made, for example between primary, secondary and tertiary production, semi-durable and durable goods, and so on.

[edit] The role of use value in political economy

In his very influential text The Theory of Capitalist Development (1942), American Marxist Paul Sweezy claimed that:

"Use-value is an expression of a certain relation between the consumer and the object consumed. Political economy, on the other hand, is a social science of the relations between people. It follows that 'use-value as such' lies outside the sphere of investigation of political economy".

Curiously, Sweezy disregarded that in consuming (both intermediate and final consumption), producers and consumers might also be socially related.

Likewise, in his influential Principles of Political Economy, the Japanese Marxist Kozo Uno sums up the theory of a "purely capitalist society" in the three doctrines of circulation, production and distribution. Apparently it did not occur to him that even in the purest capitalist society, (final) consumption would have to occur as a necessary aspect of economic reproduction, and that capitalist relations extended to, and included, the way in which consumption was organised in capitalist society - increasingly substituting private consumption for collective consumption.

Marx himself explicitly rejected Sweezy's and Uno's interpretation, and in an important essay Roman Rosdolsky shows the important role of use value in Marx's economics. The fact is, that Marx himself had, in the introduction to his Grundrisse manuscript, defined the economic sphere as the totality of production, circulation, distribution and consumption. He did not however live to finish Das Kapital, and did not theorise how commercial relations would reshape the sphere of personal consumption in accordance with the requirements of capital accumulation.

It was only later that scholars such as Walter Benjamin, Fernand Braudel, Ben Fine, Manuel Castells and Michel Aglietta tried to fill this gap in Marx's unfinished work.

[edit] Use value and utility

Marx's concept of use-value seems akin to, but in reality differs from the neoclassical concept of utility.

Marx usually assumes in his analysis that products sold in the market have a use-value to the buyer, without attempting to quantify that use-value other than in product units (this caused some of his readers to think wrongly that use-value played no role in his theory). The neoclassicals, on the other hand, typically see prices as the quantitative expression of the utility of products for buyers and sellers, instead of expressing their exchange-value.

In neoclassical economics this utility is ultimately subjectively determined by the buyer of a good, and not by the intrinsic characteristics of the good. Thus, neoclassical economists often talk about the marginal utility of a product, i.e., how its utility fluctuates according to consumption patterns.

Marx rejects any economic doctrine of consumer sovereignty, stating among other things that "In bourgeois societies the economic fictio juris prevails, that every one, as a buyer, possesses an encyclopedic knowledge of commodities".

In summary, different concepts of use value lead to different interpretations and explanations of trade, commerce and capitalism.

[edit] Indifferent to use value?

Some have claimed that capitalists are basically "indifferent" to the use-value of the goods and services in which they trade, since what matters to capitalists is just the money they make; whatever the buyer does with the goods and services produced is, so it seems, of no real concern.

This is however a caricature based on a misunderstanding of business activity and the bourgeoisie as a class. The reason why capitalists can never be indifferent to use-values is because inputs (labour, materials, equipment) must be bought to produce outputs that:

will sell,
are legally permitted by the state to be sold,
do not destroy the reputation of the supplier (with its obvious effect on sales).

Often Marx just assumed in his argument that supply and demand will balance, and that products do sell. Even so, Marx carefully defines the production process both as a labour process creating use-values, and a valorisation process creating new value. He asserts only that "capital in general" as an abstract social power, or as a property claim to surplus value, is indifferent to particular use-values - what matters in this financial relation is only whether more value can be appropriated through the exchanges that occur.

In modern times, business leaders are often very concerned with total quality management in production, which has become the object of scientific studies, as well as a new source of industrial conflict, since attempts are made to integrate everything a worker is and does (both his creative potential and how he relates to others) in the battle for improved quality. In that case, it could be argued not just labour power but the whole person is a use-value.

In truth, from beginning to end, and from production to consumption, use-value and exchange-value form a dialectical unity. If this is not fully clear from Marx's writings, that is perhaps mainly because he never theorised the sphere of final consumption in any detail, nor the way in which commerce reshapes the way that final consumption takes place.