The Basics of Marxian Economic Analysis

According to Marxist notion of commodity, commodities are first of all the product of human labor and satisfy needs. Secondly production is not for private consumption but for exchange (selling).

In a Marxist perspective simple commodity production has the following characteristics:

There is division of labor with independent producersspecializing in a given production. As well, there exists private ownership of the means of production and of the product of labor.

Simple commodity production and the market economy

According to Marxist view, there is difference between simple commodity production and the modern capitalist production. The difference is that in market economy the production is based on individual labor of those who produce it as opposed in the simple commodity production. That is the simple commodity production gave way to the market economy. In the market economy as opposed to simple commodity production, commodity production has become in generalized form. That is even the labor power has become a commodity in the market economy.

Use Value

In a market economy, it can be said that the use value contains the exchange value of a commodity. For example, a cobbler working in the service of a feudal lord will make shoes for him. The cobbler may receive a salary. Nonetheless, the cobbler does not produce commodities. The products of his or her labor are not sold on the market. He/she produces only a use-value (but no value is produced, and no surplus-value).

In order to be able to be exchanged, a product must have a use-value. However, this can be realized only as a result of the exchange of a product.

Value

In a market economy, the exchange value appears first of all as a quantitative relation in which two distinct use-values are compared (a pair of shoes to a sack ofpotatoes, for instance). When the pair of shoes is tested on the market for the purpose of exchange against a sack of potatoes, this means that it is worth as much as the sack.

However, the use-values of different commodities cannot be directly submitted to a quantitative comparison because they are qualitatively different. The only commonfeature which makes these use-values comparable at the time of exchange is the fact that they are all the product of labor. One therefore finds at the root of the equality between a pair of shoes and a sack of potatoes, the social labor which was expended in order to produce them. The value is thus an indirect measure of the social labor which is necessary to produce the commodities. The exchange value of a commodity is the form of expression of its value.