Commodities

By Bredan Mcooney

It seems fitting that we begin our explorations of the economy by examining the commodity. Of all the elements of our economy, many of them abstract and hidden, commodities are the one element that is most concrete and familiar to us. Yet despite their familiarity, commodities contain some inner secrets, invisible to the naked eye, which, when revealed, will illuminate larger mysteries about the world we live in.

Commodities are everywhere. For instance, right now I am writing this in a cafe where I am eating a food commodity, sitting at a table commodity, wearing clothing commodities and using utensil commodities. When I finish here I will walk out of the building commodity onto the sidewalk commodity next to the street commodity where car commodities are whizzing back and forth in front of sign commodities which are telling me how much I need to buy drug commodities and beer commodities. In the course of an average day I interact with millions of commodities. It far out-distances my human interactions.

This is no accident. I need commodities to survive. I need food commodities, clothing commodities, housing commodities, etc. And so I spend most of my waking life working so that I can buy these commodities. You do to.

But while people have always worked to survive, people haven’t always worked for commodities. Yes, people have always eaten food, worn clothes and lived in houses… but food, clothes and houses haven’t always been commodities. In fact commodities only come about in a capitalist society and, though we sometimes forget it, capitalism hasn’t been around forever. But how can food sometimes be a commodity and sometimes not? What makes a commodity a commodity? And what does capitalism have to do with it?

Here’s a short definition of commodities: Commodities are objects or services which are made by wage-laborers, sold by capitalists and purchased by consumers.

We will expand upon this definition carefully, bit by bit, until it yields up all of its mysteries.

1. Commodities are made by workers for capitalists.Capitalists own productive capital. That is, they own capital that can be used to make commodities: factories, raw materials, machines, etc. But they need people to work in their factories, at their machines, with their raw materials. They hire workers to do the actual labor required to turn all this productive capital into commodities. Once a worker has made a commodity it does not belong to him or her. It is the exclusive property of the capitalist.

2. Capitalists sell commodities to consumers.The capitalist doesn’t want the commodity for his or her own use. (Does the owner of Genera Mills just want to eat a lot of cereal? Does Philip Knight, the ceo of Nike, just want to wear a lot of shoes?) Capitalists are not really interested in the particular commodities they are producing. They could be making pharmaceuticals, tennis shoes or widgets. Their primary concern is that they sell these commodities to consumers for money. The money they get from this sale goes to pay for the productive capital they just used and the workers they just hired. The rest is profit. Where does profit come from? That is a question for later. (see exploitation)

3. Consumers buy commodities from capitalists and use them.We are all consumers. We must buy in order to live. We must work in order to buy. Thus we live to work. Some commodities go straight to the consuming public. Other commodities like steel and corn are purchased by other capitalists to make more commodities. In the latter case, some commodities go through many transformations until they reach their final state. Once they reach this final state they are consumed- as food which is eaten, fuel which is used up, cars which are driven till they die, etc. Anything left over is thrown away. Thus do we get garbage, pollution, and second hand shops.

So commodities have three dimensions: The making, the selling/buying and the consuming. Each dimension is unique, telling us different things about both commodities and about the world around us. Yet they are all interrelated, meaningless without the other dimensions. Each dimension corresponds to a different way of measuring the value of a commodity. Now we will look closer at each of these three dimensions, or values, to see what sort of secrets they conceal.

Let’s start with the last one: consuming. Licking an ice cream cone, riding a bike, shooting a gun, watching TV- these are the ways we normally interact with commodities. They have value to us because we can use them. This is called “use value”. If we didn’t have a use for something, we wouldn’t buy it. And if no one had a use for something, capitalist wouldn’t hire workers to make it. Thus use-value is a very important dimension to the nature of the commodity. Yet use-values are subjective. I like hot sauce, you don’t. I like red cars, you like blue cars. I like scotch, you like gin. There are billions of different subjective preferences out there. That’s why we say that use-value is a heterogeneous concept. This will be an important point later.

Now we’ll jump to the first dimension I listed: making.All of these commodities have to be made by someone. If something doesn’t require work to exist then it isn’t a commodity. Sunlight- not a commodity. Weeds- not a commodity. Hugs- not a commodity. Water, watches, coal- all commodities. Commodities require labor. Thus do we get a second type of value: labor value. A pancake requires very little labor to make, thus it has a very low labor value. I’m eating a stack of pancakes right now and it cost me about 3 dollars. A car takes a lot of labor to make- many different persons labor together, performing very difficult tasks. The raw materials, machines, and power used to make cars are all products of labor too. These impart a fraction of their value to each commodity. Cars have a very high labor value. That’s why they are so expensive.

Let’s compare this to use-value. This morning I chose to get up and go to a cafe to eat some pancakes instead of going to buy a car. Pancakes have more use to me at the moment. Thus they have a greater use-vale to me. This has nothing to do with their labor-value. The fact that I wanted pancakes more than a car doesn’t make pancakes more expensive! So though use-value and labor vale are important aspects of commodities, they help us explain different things. This is why we will generally turn to labor value to help us explain our third dimension: selling/buying.

We call the dimension of selling and buying “exchange”. Like many other things we’ve discussed thus far, exchange at first seems like a pretty self-explanatory dimension. Yet it is here in the realm of the buyer and seller that the most mystification happens. It is here where the true nature of things are obscured from view. We must approach with caution.

You walk into a grocery store. You turn down the aisle, grab a bottle of ketchup and carry it to the checkout line. You pay the clerk money and you take the ketchup home and put it all over your hot dog.

That is exchange. What could be more familiar? Now you’re wondering where the mystery is…
Let’s expand the scenario by fleshing out some more details:

You walk into the grocery store with money in your pocket. The money is part of your wages- money you were paid for performing a specific type of work, say mowing lawns. In the grocery store you see aisles and aisles of very different commodities, all with different use-vales and all made by a very different type of labor. There are strawberries which were handpicked by migrant workers in California and shipped in trucks driven by Teamsters. There are plastic utensils made at a plastic factory in China by 12 year old girls. There are pans, and meat and yogurt. You could buy any of these things with your money but you are only interested in ketchup. You grab your ketchup and bring it to the checkout counter. You take out your money- money which represents your lawn-mowing- and pay it to the clerk. This money goes to Heinz to pay for the cost of the labor of the person who made the bottle, the person who made the ketchup and the person who put the ketchup in the bottle. (For now we leave out the middleman function which the grocery store and other retailers plays in getting this money to Heinz.)
This is exchange. Now we usually don’t think about that whole network of relationships when we go to buy ketchup. But there’s more. Now I will tell the story one more time, this time in a very abstract way:

You work. You exchange the work you do for the work other people do. This work is all embodied in commodities. Anyone’s work can exchange for any other person’s work because, unlike the realm of use-value, the realm of exchange is homogeneous.

This is how labor, exchange and use value all fit together into a coherent system. Now unless you are obsessive about this stuff like me, you probably don’t think about these abstract categories when you go to buy ketchup. You also probably don’t think about some of the paradoxes hidden in these abstractions. Did you see any paradoxes yet? Any mysteries waiting to be solved? Look closer and I will reveal them to you a little at a time.

Here’s one:Heterogeneous labor practices are exchangeable in a homogenous market place. In other words, very different types of work all all exchangeable with one another.

Think of it! Billions and billions of people working all over the world, performing very different types of labor. Billions of people all consuming things they didn’t make themselves. The act of exchange brings all of these labors and uses together. But why is possible to exchange anyone’s work for anyone else’s?

Well, the short answer is: Money. To understand the way money works, let’s first imagine a world with no money- a world where we would have to barter: Imagine a coal miner trying to barter a lump of coal for a toothbrush or for a sandwich. How much coal does it take to equal a toothbrush? How many toothbrushes equal a sandwich? Use-value isn’t really going to help us here. Yes, obviously the two parties can only trade if they both want to use what the other person has. But that doesn’t tell us how much of one commodity trades for the other. Instead we must turn to labor-value. Coal mining is hard and time consuming work. Making sandwiches is easy and fast. That makes coal worth more than sandwiches. So a fair trade might be: an hour of really intense sandwich making for an hour of really easy coal mining…. so maybe- 50 sandwiches for a bucket of coal.

In other words, if we can reduce commodities to the amount of labor it took to make them then it becomes easy to measure their exchange value. The labor becomes homogeneous when it is exchanged. We will talk more about this later in greater detail, but for now it’s safe to generalize and say that hard work is hard work. I measure the value of something by asking myself what it would take for me to make it myself. So the amount of labor- whether measured in time or sweat- becomes an abstract idea that can measure any commodity. (A few fancy sounding phrases come out of this like “the homogenization of labor” and “socially necessary labor time.” We’ll talk about these later.)

Now let’s bring money back in. Why don’t we barter? Can you imagine trying to figure out how many pencils are worth a biopsy? How many t-shirts are worth a taxi-ride? Eventually we would need some sort of abstract measure of value to compare all commodities against. This is what money does. The exchange value of all commodities are measured in money. Money stands between labor and commodities. It is a measure of value.

You may be curious as to how money came about. This will have to be a question for another time. So perhaps I will leave you with another paradox: Although we pay for labor with money wages, and although we buy the objects of labor with money, the actual money price of commodities don’t always directly correspond with their labor value. There are a few other forces (which we will have to get into later) that intervene in this process in a way that obscures the underlying labor value of commodities. Thus, though labor is central to the basic nature of commodities, that act of exchange has the appearance of being separated from labor. This is why I said that the realm of exchange is one of mystification and confusion. When we buy ketchup at the grocery store we don’t see the people making the ketchup nor do we associate the money we pay with the work that they did. We are just buying ketchup. Exchange separates us from the underlying realities of the labor all around us.

Wow. That is a really long definition for “commodity”. Let’s review a bit. We started with a definition of commodities: that they are made by workers, sold by capitalists, and bought by consumers. By examining this three step process, through the language of labor value, exchange value and use-value, we discovered many interesting things which we usually don’t think about though we participate in them every day. Labor creates all of the use-values around us. We can exchange these diverse use-values because we measure all commodities by the abstract amount of labor that went into making them. Money acts as our standard of measurement. But this act of exchange obscures the underlying reality of labor going on all around us.

But who cares about this underlying reality of labor? Who cares that labor creates all value? Well what do you think about the fact that our entire society is built on and based around people working, yet it’s the people who don’t have to work- the capitalists who just own capital and hire workers- who are the rich and powerful, while the people who actually do the work have to labor their lives away to scrape by? What do you think about the fact that although so much our lives are devoted to working, we never have control over any of that labor- it goes directly to a capitalist to sell for profit? And what of the fact that although everybody works and everybody consumes, often times it seems so hard to find a good job that allows you to buy the things you need to consume?

You see, within these academic sounding terms of use-value, exchange-value, and labor value lie the most important moral questions of our age.

We will have much time to ponder these questions later. To end I would like to leave you with a summary of some of the unanswered questions from above.

Where does profit come from?How exactly is heterogeneous labor measured to create this concept of “abstract labor”?Where did the concept of money come from anyway?How does money price become separated from labor value? What is the relationship between the two?

All these and much more await.