This study guide is to Karl Marx’s “Capital” (volume One) and exists primarily for use in collaboration with David Harvey’s series of online lectures; it is means as a companion to his videos as well as your own independent conclusions. First and foremost this guide is a tool which is intended to be utilized to expand your initial conception of Marx’s theories as well as confirm the basic principles. It is not an “end all” piece which will grant its reader mastery.
This guide covers the first volume of Karl Marx’s Capital. The remaining volumes will be covered in their own entries. So for the moment this guide will take you through the whole first entry from beginning to end.
In creating this guide I have written all of the questions and answer myself. None are taken from other sources without credit given to where demanded. Throughout the text there may dwell mistakes so if such are found please report them so they may be eliminated. This guide is under the fair use clause and may be freely distributed with credit attributed to its author.
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Introduction (By Earnest Mandel)
I have provided a short Q&A section for comrade Mandel’s introduction (available in the Penguin translation) since I believe it provides an intriguing start to the piece as a whole. Explained in modern and comprehensive language, understanding the introduction can provide a decent launching pad towards understanding the whole premise of volume one.
Q1: Earnest Mandel explains that since Marx wrote Capital some of his prophecies, so to speak, have come true; what were these developments?
A1: Namely that in the beginning capitalism was surrounded by large swathes of independent farmers, and handicraftsmen yet when momentum picked up capitalist modes of production had spread throughout the entire world thus realizing truth to Marx’s formulations on the nature of capital.
Q2: In what manner was Marx more an economist of the twentieth century than of the nineteenth century?
A2: This relates to question one somewhat in regards to his insights into how capital would grow. When Marx wrote capital it was within the nineteenth century yet his outlook predicts modern events related more to the twentieth century. This is seen in the various crises and attempts by the bourgeoisie to integrate the working class into late capitalism thereby signaling to all the end of capitalism’s progressive period.
Q3: What was Marx’s fundamental aim in writing Capital?
A3: Simply put his aim was to “lay bare” the laws and entire social-structure governing the capitalist mode of production; this included, of course, its rise, processes, and decline.
Q4: Why is Capital not “pure” economic theory?
A4: Pure economic theory implies tid-bits of truth inherent within all modes of production, a common strain of thought and insight which melds perfectly across all the varying producing processes. This goal is impossible due to the extremely wide berth of topics and the manner in which different societies produce in conflicting manners. Instead Marx limits himself to a single mode of production, i.e: the capitalist mode of production. If one was to attempt to utilize the aforementioned manner of using a single conceptual framework to look at all the modes of production one would inevitably slide into what Mandel calls “the science of social structures”, or more commonly known as Historical Materialism.
Q5: According to Mr. Mandel Marx states that his goal is to critique the laws which govern the capitalist mode of production, does this mean that Marx is only concerned with capitalist modes, or does he have an interest in other modes as well?
A5: No, Marx does not exclusively limit himself to the capitalist mode of production since it would be impossible to give his readers an accurate picture of his Historical Materialist outlook if he limited himself to simply the capitalist mode. Marx begins his analysis of the capitalist mode of production with the commodity. Expanding upon this he goes into the various values (exchange, use, etc). Yet to truly understand the concept of a commodity as it exists under bourgeois society one should be aware of at least the basic formulations of pre-capitalist society. As such Marx takes a slight detour by explaining Simple Commodity Production in pre-capitalist societies. Understanding this one is able to understand the differences in producing in these societies as compared to capitalist societies as the laws governing each epoch are radically divergent.
Q6: Why is Capital unusable as a guide to understanding the laws of motion which drive countries such as North Korea, China, Cuba and Vietnam?
A6: This is due to the time of writing which in Mr. Mandel’s era the countries in which he lists were socialist societies. This meant that the rule of the commodity had been overthrown, hence, Capital was not able to provide glaring insights as commodity production only survived in these parts of the world in part. This does not mean, however, that Capital cannot explain and provide details concerning the dynamics of the laws of motion governing non-capitalist societies.
Q7: Is Capital solely a revolutionary guide inseparably from advocating the overthrow of capitalism?
A7: No, Capital is not only a revolutionary guide. Marx did not write Capital out of petty desires, namely to fight a system which he may or may not have had the best luck in surviving. Marx wrote Capital because he believed that scientific socialism needed to rest upon a basis of objective analysis. He sought to uncover the objective laws of motion and indeed despised anyone who twisted empirical data to suit his own needs. As Mr. Mandel explains, “precisely because Marx was convinced that the cause of the proletariat was of decisive importance for the whole future of mankind, he wanted to create for that cause not a flimsy platform of rhetorical invective, but a rock-like foundation of scientific truth.”
This is proven in modern times by several reactionary Marxists who use Marx’s mode of analysis yet decline to advocate for the overthrow of capitalism. While many who read Capital are able to connect the dots and understand the liberation of the working class, this does not mean it is an exclusive end-path for all its readers. So though this development may be a contradiction to some ignorant comrades it does in fact prove Marx correct and honest in utilizing his method in a non-bias manner.
Q8: What relation does Marx’s dialectics have in regards to Hegel’s?
A8: This is a complicated yet simple answer. For simplicity’s sake, however, I will stick to the answer provided by Mr. Mandel and say that Marx’s dialectics were revolution in their world outlook. Marx borrowed from Hegel yet only to the extent where he was able to build upon Hegel’s shortcomings. This is to say where Hegel’s dialectics were Idealistic, Marx’s were materialistic. Applying his materialist outlook on economics proved to be a monumental event. Basing his work on a scientific foundation, one rooted in logical and historical terms, Marx was able to show the long term laws of motion in the capitalist mode of production (the movement of economic categories, the commodity and its inner-contradictions, to capital accumulation as well as its breakdown).
Q9: What was Karl Marx’s plan for all the volumes of Capital?
A9: Though the general outline of Capital seems abstract we can discern through all the commentators that Marx had intended to write a great deal of content. This series of writings were to deal with the state, credit, debts and loans, crises, international trade and the world market plus more. While only 1/8 of these writings were produced and the nature of rough drafts and dates greatly confuse what specifics Marx was trying to convey, we understand that fundamentally Marx intended to examine the whole of the capitalist mode of production instead of focusing only on what he was able to write in the volumes henceforth published.
Q10: What was Karl Marx’s plan for the first volume of Capital?
A10: Essentially to lay bare commodity production and how it relates to the capitalist mode of production. As Mr. Mandel explains:
“I.Starting point: elementary form of capitalist wealth: the commodity.
(a) The commodity and the realization of its exchange-value; or the process of exchange.
(b) The process of exchange and the means of exchange: money
(c) Money, necessary mediator in the process of circulation of commodities.
II. Money transforming itself into Capital, i.e, value searching for an accretion of value, surplus-value; the nature of surplus-value.
III. The production of surplus-value: absolute surplus value.
IV. The production of surplus-value: relative surplus-value (from manufacturing to the modern factory system).
V. Relations between wages, productivity of labor and surplus-value; the rate of surplus-value.
VI. How the value of labor-power is transformed into wages, their different forms and variations.
VII./VIII. The accumulation of capital, i.e, capitalist wealth in its totality: its consequences for labor. The origins of Capitalism (the ‘primitive accumulation of capital’).”
From here the final verdict for the volume is that when the capitalist machinery have developed to the point negating its historical purpose (to wipe away feudalism and develop productivity) then the machines cease to become progressive and in fact become reactive and destructive.
Q11: In what manner is the Marxist Labor Theory of Value the same as Adam Smith’s “Invisible Hand”?
A11: These two constructs are the same inasmuch as they explain the exact same principle. To Adam Smith the “Invisible Hand” of the market regulated prices and value; Karl Marx’s Labor Theory of Value explained the same things only in concrete, scientific terms. This is seen in the creation of Abstract Social Labor determining value of commodities, a leap forward over anything produced by either Mr. Smith or Mr. Ricardo. Ultimately the Labor Theory of Value deals with the deeper forces governing value; it deals with, as Mr. Mandel exposed: “not how Sammy runs, but what makes him run.” For this reason it is why we have Socially Necessary Labor time detailing not the societal worth of an item but purely its economic value.
Q12: What is Surplus-Value and how does it originate?
A12: Surplus-value is capital as represented by the money form. This originates when the capitalist extracts from the worker more labor-power then the worker produces for wages; this extra bit is appropriated to the capitalist’s personal wealth as well as placed back into circulation within the factory system, spent to purchase machines which enable the capitalist to reduce the value of a commodity thus enabling him to extract more surplus-value from his workers (this because the workers are still working the same amount of time per day/shift).
Q13: Briefly explain what comprises Marx theory of Capital.
A13: Along with his Labor theory of value and his theory of surplus-labor, Karl Marx’s theory of Capital is a cornerstone of his overall examination of the capitalist mode of production. While many bourgeois economists have tried in vain to distort Marx’s theory of capital by twisting, lying, and misinforming on the subject, to the serious student who understands and follows Marx the theory remains unchallenged and just as valid as it did when Marx first wrote it. In this sense we must understand that capital originally represents itself through the money commodity in motion yet more precisely it, as Mr. Mandel explains: “Capital, under the capitalist mode of production, is therefore value constantly increased by surplus-value, which is produced by productive labor and appropriated by the capitalists through the appropriation of the commodities produced by the workers in the factories owned by the capitalists.” This all rests on a foundation of private property, of course, without which the whole edifice of capitalism, but more exactly capital, would crumble.
Q14: In the English language what two different words represent two different aspects of labor?
A14: This question is included here for more precise students wishing to learn all they can about the grammatical nuances of capital, yet as Mandel explains “work” is designated towards use-value producing labor, while exchange-value oriented labor is called “labor”. In the end, a small bit of fascinating info for the dedicated student of Capital.
Q15: Briefly explain Capital accumulation.
A15: Capital accumulation is the process in which competing capitals contend to ultimately increase economic growth of the national economy through the means of reducing labor costs; thus we mean, in its simplest form, that the accumulation of capital is surplus-value interacting with existing competing capitals to wage class warfare against the working class so as to maximize profits. It is important to note that the accumulation of capital has a degree of interrelation with crisis theory in the sense that a single monopolized trust encompassing the whole world cannot be allowed to occur less the accumulation process stagnates (ergo where the period growth and decline of capital in the form of “depressions” and “recessions” comes into play).
Q16: How are Marx’s theory of labor-value and his theory of wages interconnected?
A16: These two theories are connected via their relation to one another within the capitalist mode of production; when wages decrease it is due to the value of labor-power while at the same moment class struggle directed towards a higher means of subsistence for wages does not increase the wages themselves but rather preserves the value of the labor-power at hand. This aspect is important because the capitalist mode of production aims to reduce wages to the absolute minimum (the minimum being the bare bones necessary requirement for the worker to live and reproduce, or sometimes called the law of general relative impoverishment). Yet it is vital to remember that what Marx deals with here is not the actual movement of real wages but rather the inner-processes which govern them; weather wages are high or low the situation for the worker tends to lead to the aforementioned poverty as the price of other commodities and means of subsistence go ever higher in relation to his labor-value. So even if his wages are “high” his labor-power, producing more than he receives (especially for those productive workers), can fall thus increasing the worker’s misery and hardships.
Q17: How is the value of Composite and Simple labor determined?
A17: As explained above the value of simple labor, otherwise known as unskilled labor, is determined by the labor-power produced by the worker in accordance with various factors (production, training, output, etc). So while one would imagine the process for determining Composite, or skilled, labor would be similar it is actually somewhat different. The difference comes in the form of the education needed to produce such skill. Mr. Mandel explains it as such:
“The higher value produced by an hour of skilled labor… results from the fact that skilled labor participates in the ‘total labor output’ of society (or a given branch of industry) not only with its own labor power but also with a fraction of the labor power necessary to produce its skill. In other words, each hour of skilled labor can be considered as an hour of unskilled labor multiplied by a coefficient dependent on the cost of schooling.”
In this manner the skilled worker nearly has an addition “tool” which while not value-producing takes part in the product production.
Q18: Briefly describe Marx’s theory of money.
A18: As explained by Mr. Mandel (74) Marx overcomes Ricardo’s inconsistencies by integrating his theory of money into his explanation on value. This means that qualitative aspects come to the forefront. Most specifically this is seen in exchange: commodity production realizes itself through sales and so appears as an interpersonal relation between things, hence people are unaware that when purchasing commodities they are actually confronted with social-relations from the means of production. So some time later (78) we see that in regards to abstract social labor money becomes the only means of recognition, of exchange for proletarians. This is because money was born from the process of exchange in conjunction with the circulation of precious metals; thus the money form becomes integrated into social-relations insofar as it becomes intertwined with capital circulation and accumulation (which in turn leads back to commodity production).
Q19: List the three signs of a capitalist society.
A19: (1) The means of production are owned by a minority by which the majority must sell their labor-power in exchange for a means of subsistence (2) That these means of production are organized into separate firms, competing amongst each other and (3) Each firm is compelled to extract the maximum surplus-value from their employees’ thereby increasing alienation and capital.
Those three points are the primary signs which indicate a capitalist economy. While capitalism has seemingly changed over-time leading some bourgeois scholars to conclude that capitalism has fundamentally changed into something “more and different”, the inescapable fact remains that such points (as those listed above) have remained unaltered over the course of Capital’s lifespan and so remain as valid today as they did yesteryear.
Preface(s) & etc…
I have provided short study guides to the various pre-and-post-faces mostly for historical reasons, so that the reader might be acquainted with some of the justifications for why Marx wrote Capital in the manner in which he did.
Q20: In what year was the first volume of Marx’s capital published?
A20: Capital was the continuation of Marx’s first book (“A Contribution to the Critique of Political Economy”) published in 1859. Marx then published Capital in 1867. The reason for the delay was due to his illness.
Q21: Why did Marx primarily use England as an example for the capitalist mode of production?
A21: This was because at the time of writing capitalism was highly developed in England, more so than in another other country in Europe. Taking England as his primary example of a capitalist economy, however, it is important to note that his theories apply to the whole of the European working class and that nothing terribly exceptional could be attributed to England in regards to class struggle or the formation of commodity production.
Q22: Why does Marx devote time to detailing English (Anglo-Saxon) history?
A22: Essentially because he believes it will lessen the birth-pangs of the capitalist process of production when the results of a fully developed capitalist economy asserts itself onto the mainland; to illustrate he uses the example of North America (specifically the United States) where he names the American Revolutionary War as the “tocsin” for the European Middle Class, and the American Civil War the same for the European Middle Class. As one cannot “leap over the natural phase of development” it should be detailed so as to perhaps shorten and lessen the pain which will inevitably come. Obviously Marx is predicting a great collusion between the U.S and England in terms of economic and eventually imperialist policy.
Q23: In the beginning of the post-face to the second edition Marx tells of his revisions; most notably what was this revision?
A23: To slim down the explanation we can say that Marx completely revised the first chapter, altered substantially the third, while renovating the seventh to a high degree. The reason for these changes was so that his readers might understand his theory of value, as well as the Fetishism of the Commodity, more concisely and easily. This is seen again the preface to the third edition where Engels, acting on Marx’s behalf after his death, makes several revisions to the text in an effort to clarify and simply.
Q24: How is Marx’s dialectical method different from Hegel’s so that we know Marx was not merely another Hegelian in wolf’s clothes?
A24: Marx himself explains this simply by saying: “For Hegel, the process of thinking… is the creator of the real world, and the real world is only the external appearance of the idea. With me the reverse is true: the ideal is nothing but the material world reflected in the mind of man, and translated into forms of thought.” This would be the difference between mystification and scientific deduction.
Q25: In the preface to the French edition why does Marx express a “downside” to the publication of Capital?
A25: Comrade Marx expresses a downside to the publication of Capital due to the manner in which he has written capital, a manner which is drastically different from his then contemporaries. He feared that the French public, always, like the American public, eager to understand “cause and effect”, or as Marx phrases it “general principle and intermediate questions”, will be off-put by its convoluted manner.
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Capital, Volume One.
Part One: Commodities and Money
Chapter 1: The Commodity
I.The Two Factors of the Commodity: Use-value and value (substance of value, magnitude of value)
Q26: What is a commodity?
A26: A commodity is something which satisfies a human want, desire, or need. It is an external object within the physical plane; it is not imaginary yet so as long as it slates a specific need-weather real or artificial-it does not matter.
Q27: What is use-value?
A27: Use-value is the usefulness of a thing or of a commodity. The use-value is inherent within the object thereby making the use-value independent of the labor required to produce said object. As Marx mentions, “Use-values are only realized in use or consumption. They constitute the material content of wealth, whatever its social form may be.” Hence for this reason when examining use-value we assume to deal with definite quantities of the object (“dozens of watches, yards of linin, or tons of iron” as Marx said).
Q28: What is Exchange-Value?
A28: Exchange-value is purely a quantitative relation, “in which use-values of one kind exchange for use-values of another kind.” It is important to remember that this strain of value differs depending on the time and place (meaning an exchange-value will have a higher or lower exchange value in different parts of the world during different eras; meaning straw huts have a higher value in poverty stricken African nations then they do in rich industrialized nations). So we see that the exchange relations concerning exchange-value must match up: to give an example-a bagful of diamonds is equal to the exchange value of X tons of steel.
Q29: How do we determine what amount is equal to another when dealing with exchange-values?
A29: Marx says that in order to find the solution to precisely this question our “common element” of analysis cannot be “geometrical, physical, or [a] chemical…” commoditized property (as he says that such considerations only come into question when dealing with use-values). Ergo, in order to deduce the exchange-relationship between X-amount of diamonds and Y amount of steel we must discover the value of an object or commodity.
Q30: What is value?
A30: Abstract human labor objectified, simply put. It follows from this that use-values only have values due to this objectification for if it didn’t possess any such objectification then it would be of no value.
Q31: How do we measure value?
A31: This is the vital bit to remember: namely that we unearth the measure, or magnitude, of value by looking at the amount of labor-power contained within (time=quantity of labor).Here we progress to discovering that the labor-time is not merely time crystallized but the amount of socially-necessary labor-power required to produce any given article or commodity.
Q32: Give a concise definition of socially Necessary Labor Time.
A32: All labor-power is, according to Marx, one homogenous mass composed of uncountable units of individual labor-power with each such unit equal to one another; this holds true so as long as the amount of time needed to produce an article is consistent to the development of the means of production, the local advancement of science, (etc) demanded to produce a commodity.
“Socially necessary labor-time is the labor-time required to produce any-use value under the conditions of production normal for a given society and with the average degree of skill and intensity of labor prevalent in that society.”
So essentially, this means that Socially Necessary Labor Time can be equated as the same with the only condition being equalization of the production means and skill of the worker.
Q33: How does the introduction of new production methods lower the value of Labor-time?
A33: Marx gives the example of the power-loom which reduced by one-half, the required labor to convert X amount of yearns into woven fabric. The weaver in question, though only needing half the time to produce said product, created more of the product hence causing the value to fall one-half since it represented only a fraction of its former social labor. So we see when the labor time required producing two separate commodities matches, the value is also the same. So it flows from this conclusion that the more labor-time required to produce an commodity equates to a higher value, thus if something takes a long time to produce-such as mining for diamonds-then the value of those diamonds will be greater then something which takes a relatively short amount of time to produce-such as creating bricks-and remains conclusive even if the quantity of bricks outmatches the quantity of diamonds-more labor contained within equals more value.
To illustrate Marx uses the example of a diamond mine:
“According to Eschwege, the total produce for a Brazilian diamond mine for the eighty years ending in 1823 still did not amount to the price of [one and a half] years’ average produce of the sugar and coffee plantations of the same country, although the diamonds represented much more labor, therefore more value. With richer mines the same quantity of labor would be embodied in more diamonds, and their value would fall… In general, the greater the productivity of labor, the less the labor time required to produce an article, the less the mass of labor crystallized in that article, the less it value. Inversely, the less the productivity of labor, the greater the labor-time necessary to produce an article, the greater its value. The value of a commodity, therefore, varies directly on the quantity, and inversely as the productivity, of the labor which finds its realization within the value.”
Q34: Can a thing be a use-value without being a value?
A34: Yes it can. This is seen in nature where “air, virgin soil, [and] unplanted forests…” satisfy a human need, want, or desire without being a product of manufacture. Hence while it cannot be a commodity, since it has no abstract human labor realized within, it still can serve as a use-value.
2. The dual character of labor embodied in commodities
Q35: Define “useful concrete labor” as well as its effects on commodities.
A35: Useful concrete labor is a somewhat clumsy term for labor which gives commodities their use-value. To take this concept further we may look at the quantity of use-values as compared to the varying periods of time “…if productivity rises…the same change in productivity which increases the fruitfulness of labor, and therefore the amount of use-value produced by it, also brings about a reduction in the value of this increased total amount, if it cuts down the total amount of labor-time necessary to produce the use-values.” In this manner we see that useful concrete labor has similar connotations in regards to question 26 so as far as value is dependent on productivity insofar as it interrelates to increases and decreases in the amount of labor-time.
Q36: Can use-values exchange for use-values of a similar purpose?
A36: No, two similar use-values cannot exchange each other and satisfy a need other than the purpose of its originating useful labor. Marx says that “If the use-values were not qualitatively different, hence not the products of qualitatively different forms of useful labor, they would be absolutely incapable of confronting each other as commodities”. So this is to say each use-value must be exchanged for something of another different use-value; one cannot exchange useful labor aimed at warmth for similar useful labor and expect to be fed as well.
Q37: How does nature effect production in regards to the “two elements”?
A37: Marx explains how there are two elements of commodities: those of the material world provided by nature and those of human labor. He says that the materials provided by nature exist without human intervention. Therefore while humans may extract those natural materials and utilize them within the production process this production may not proceed faster than the materials given by nature.
Q38: What is multiplied Simple Labor?
A38: This concept relates to topics covered later one but arise now, namely that of complex labor and simple labor. Here Marx is referring to multiplied simple labor as complex labor. The reason he does so is because so-called complex labor is merely simple (average) labor multiplied so that a smaller quantity of labor is considered equal to a larger quantity of simple labor. For the purposes of this chapter, however, Marx relents on this topic and says that “…in the interests of simplification, we shall henceforth view every form of labor-power as simple labor power;” This concept then is combined with use-value and productive activity to make a complete whole.
3. The value-form, or Exchange-value
Q29: Is the value of a commodity material or immaterial?
A29: The value of a commodity is immaterial; meaning, “…not an atom of matter enters into the objectivity of commodities as values”. The value of a commodity does not lie within the matter itself as it lies within the labor expended to produce it (AKA the social-relation).
Q30: What is relative value and equivalent value?
A30: Both of these concepts are used to relate the value of one commodity to the value of another. Because one cannot compare the worth of a commodity within equal measures of the same commodity it is required that you possess another different commodity from the first. So it follows that relative value is the value of what you have in relation to the equivalent (X amount of corn equals Y amount of iron). When looking at these two values, however, we must be careful to remember that labor-time and productive measure can affect the value-relation between the two commodities; i.e if the productivity for commodity A rises (say new manufacture methods becomes available) then it could potentially be worth twice as much as commodity B. So these values are not constant and depend wholly on the ever shifting abstract labors contained within.
Q31: In the expression: 20 yards of linen=1 coat, which is the relative value and which is the equivalent?
A31: This is an example taken from Capital (140) and so it is easy to solve. The twenty yards of linen is the relative value with the coat being the equivalent value. As Marx explains: “Whether a commodity is in its relative form or… the equivalent from depends entirely on its actual position in the expression of value. That is, it depends on whether it is the commodity whose value is being expressed or, the commodity in which value is being expressed.” So in this sense one must be careful to read such statements in the same manner as if one was solving mathematical formulas.
Q32: Marx lists three peculiarities, in doing so what does he intend to impress upon the reader?
A32: The three peculiarities listed in this section deal with Marx’s concept of values of commodities which enter into a social-relation taking on their opposite’s expression of value precisely due to the contradictions inherent within. For instance: private labor is “private” yet it holds a social-form which has a specific use to society at large. So while the labor-power itself may be hired under private circumstances the end product will be something of use to the wider public. This same reasoning holds true for the other two peculiarities: the equivalent form of value becomes the appearance of its opposite because it must express itself in terms unrelated to its primary substance; that concrete labor becomes “the form of manifestation of its opposite, abstract human labor” because congealed within is abstract human labor personified only as a result of its congealed value-form. Hence each commodity contains within contradictory traits which are aftereffects from the total labor-process.
Q33: What is the simple form of value?
A33: Marx details this well, namely that: “…the simple form of value of a commodity is the simple form of appearance of the opposition between use-value and value which is contained within the commodity”. If this was a math problem one could subtract to find the difference (AKA: the simple value). This statement essentially means that if you have a winter coat its use-value is to keep you warm; however its value, represented by abstract and concrete human labor, may be high. So the question ‘do I sell it or use it?’ The simple form of value is ultimately whether it is useful to you and as such if it as value to you (the difference between keeping and selling it).
Q34: What is the expanded form of value?
A34: As said by Marx: “The expanded relative form of value is, however, nothing but the sum of the simple relative expressions or equations of the first form…” This means that the expanded form of value is what commodity A is in relation to the uncountable number of other commodity relations which is comes into contact with. The expanded form of value thus has a connection with the General Form of Value; representing itself as the value-relation in regards to several commodities, instead of one vaguely compared to the values of several, the General Form of Value thus is understood as the values of multiple different commodities placed against the value of a single commodity.
Q35: How is the transition to the money form and the general form of value related?
A35: These two constructions are related insofar as they are evolutions, of the universal money commodity being a natural outgrowth. The general form of value presupposes a single commodity possessing worth in relation to several commodities; that I has a General value. In this same manner a precious metal (Gold) can act as a universal equivalent (a general value) if it is able to be represented by a commodity which is a manifestation of its worth. So when this occurs our example of linen changes from “20 yards of linen=1 coat” to “20 yards of linen=.05 ounces of gold”. Which when translated would be represented by the money commodity in whatever amount corresponds to the amount of gold.
4. The Fetishism of the Commodity and its Secret
Q36: What is the “Fetishism of the Commodity” and how does it relate to bourgeois economics?
A36: The fetishism of the Commodity is an important section in Capital simply for its severe repercussions on Marx’s over all theory. Essentially it states that bourgeois economists have misread the value of a commodity thereby transforming it into something which it is not; they believe and see value as something not congealed through the labor process, from various forms of abstract labor, but through something which originates from the commodity itself via its natural origin and its grace of being an object (a modern example: a motorcycle is valuable because it is a motorcycle, something which is given a large amount of social-importance in sub-cultures, and not because of the amount of socially necessary labor which went into producing it). This theory is of especial importance to the bourgeois world due to their ability to ignore large tracts of Marx’s writings, because they utilize it to promote their ultra-individualism (“process of production having mastery over man” hence collective action is impossible) while brushing aside the validity of what Marx’s envisions of an “association of free men, working with the means of production held in common”. In smashing this reactionary and incorrect line of thought Marx employs the correct methodology in regards to labor and says: “Men do not therefore bring the products of their labor into relation with each other as values because they see objects merely as the material integuments of homogenous human labor. The reverse is true: by equating their different products to each other in exchange as values, they equate their different kinds of labor as human labor. They do this without being aware of it. Value, therefore, does not have its description branded on its forehead; it rather transforms every product of labor into a social hieroglyphic.” Later on humankind tries to decode these symbols and thus enters into a new age of human development, or, as Marx says, the Age of the Bourgeoisie and of class struggle.
Q37: Within the footnotes Marx lays out his conception of historical development; briefly explain this manner of worldview as well as its implications.
A37: While it is a reductionist argument, Marx attempts to persuade his reader that the mode of production prevalent in any given historical epoch (feudal, primitive communism, capitalist, etc) determines and influences all of society in regards to religion, law, and social customs. This is a fascinating piece of his beliefs in that continuing with this mode of thought we could analyze capitalist mode of production and trace how it has affected both the material and supernatural (the “here and now” and the “unseen”); with later mental excursions entering into socialist and communist modes of production. This theory, this outlook, if it is true, would have stupendous effects for how revolutionaries could affect capitalist society and how future forms of human organization could be built. In any case it is a vital cornerstone of understanding the world in the sense that even if it ends up being incorrect this reductionist mode still informs us a great deal in regards to history and economic theory.
Chapter 2: The Process of Exchange
Q38: Explain the alienable nature of the commodity in relation to exchange.
A38: By this passage Marx means that commodities cannot bring themselves to the market, they must have owners to do so for them. In this fact they automatically become something external or alienable to the owner as something which exists outside of them. From this process comes an acknowledgment of the owner’s right to private property.
Q39: During this process of exchange describe in what terms value comes into play.
A39: This is an important cornerstone of Marx’s over all theory to remember for it provides the basis of exchange becoming possible. Meaning, to the commodity’s owner the article he possesses has no use-value. Indeed it exists only as an exchange-value. This holds true for the other person: the item he is exchanging for holds a use-value for him and so must exchange for it. Yet before this action may occur the value (socially necessary labor time) inherent within the commodity must be realized, which can only happen through exchange becoming a repeated social norm.
Q40: What is the money form?
A40: The money form is the universal equivalent, or the commodity which manifests itself as a direct result of commodity circulation; it is that item which represents the value precious metals (silver, gold, etc) thus turning all commodities into subservient pieces which thus in turn arranges a comparison of it (the money form) and everything else (all other commodities).
Q41: In what manner does human labor relate to the money form?
A41: In a way this is an expansion of the fortieth question, yet to provide a decent answer we may say that human labor relates to the money form in that in order for the whole concept of the money form to work there must be value, or socially necessary labor time, behind the precious metals which the money commodity represents. Without this labor input it would be impossible to have a money-form acting as a commodity, as something which is exchangeable for other products: if this was not the case we would find ourselves within a feudal like society where money existed but whose “worth” was set by the royal family and possessed no actual labor behind it. The inevitable result of this would be the dissolution of all capitalist customs as well as our analysis.
Chapter 3: Money, or the Circulation of Commodities
1.The Measure of Values
Q42: What is the function of gold?
A42: To supply commodities with the material to express their value through the same magnitude, whether this is a quantitative or qualitative relationship. Thus we see it become a universal measure of value.
Q43: In what manner does an owner of a commodity understand its price?
A43: The owner of a commodity does not understand his commodity’s price. It is a mystery to him in the same manner that the Bermuda triangle is a mystery to conspiracy theorists. As such any owner must provide an arbitrary price tag to his commodity before taking it to market. Only once he has taken it to market, and seen the demand (or lack therefore) of it can he attribute a more accurate price in regards to its value in relation to the universal equivalent (gold, or the money form).
Q44: Why cannot gold and silver simultaneous express the same value?
A44: This comes back to socially Necessary Labor Time: gold is rarer than silver and takes more effort to extract from the gold; hence Silver possibly cannot express that same amount of value as the labor expended in order to extract it is wholly different from silver.
Q45: Why did the name of currencies lose the reflection of their actual weights and worth?
A45: Originally currencies took the name of their weight in gold, so for England this meant pound. Yet as the money form became more developed and other countries began to emerge with similar universal equivalents with varying amounts of gold, different names were adapted to represent different amounts of gold; this meant that the original “one pound of gold equals one money commodity” was no longer compatible and so the names lost all their meaning with their linguistic forbearers. Also in this equation one must consider the debasement of money by princes and kings affixing values as well as the introduction of silver.
Q46: What is price?
A46: Price is the money name of the labor objectified in a commodity. It is an exponent of its exchange ratio with money (though this does not mean that it is the exponent of its value, as superfluous labor and market fluctuations can render its value changed and hence the exchange ratio it posses with money changes). So this leads us to conclude that price is the social labor time inherent in the process by which value is created; however, it is vital to not forget that though this may be the case this does not exclude imaginary prices, from such concepts of honor or uncultivated land, from being sold on an eternal value basis (meaning, the value of the land is nothing because no human labor has gone into it but I can affix a general price based on the value of the labor expanded in neighboring areas). So in this sense price is both concrete as well as a shadow-value which may lurk beneath the surface. Finishing up we may say that though all commodities possess a certain amount of labor-time (IE value) within them and as such possess a price which is represented by gold (the money form, or universal equivalent) this does not follow that commodities are, in and of themselves, money; they represent the possibility of money while at the same time being essentially useless as universal equivalents before they are exchanged for paper notes (the money form) themselves (vis-à-vis, a bank).
Q47: How does the value of Gold falling or rising affect the price of commodities?
A47: As Marx explains handily, “A general rise in the price of commodities can result either from a rise in their values, which happens when the value of money remains constant, or from a fall in the value of money, which happens when the value of commodities remain constant.” Marx later explains the reverse I also true. So we see that the price of gold-high or low-has a reverberating effect on all commodities.
2. The Metamorphosis of Commodities
Q48: What is the “first metamorphosis of the commodity” or the sale as described by Marx?
A48: It is a process of exchange where the owner of a commodity sells his product to another person in exchange for the universal equivalent (money). To do so, however, the seller must take into account that his gross product represents a fraction of the total socially necessary labor expanded on the product by all sellers. Meaning: his commodity is part of a larger market which must compete with other vendors hawking the same product. If he succeeds in selling his product then he will gain a slighter larger slice of the total money commodity destined to be spent on a particular commodity (likewise, if he fails, he will go “out of business”). All of this thus points to the first process being one of commodities being exchanged for money, or as Marx describes it “C-M”, or Commodity-Money.
Q49: The second metamorphosis-purchase-is related to the overall structure of Marx’s argument in this section, how?
A49: Marx explains that a purchase is also a sale (C-M). That a person who buys a commodity is engaged in the same basic transaction as someone who sells a commodity, it is simply reversed. One of the key differences is only that for the buyer he pays with not another commodity, supposedly valued at the same level of the commodity he wishes to trade for, but with the universal money equivalent. This facet of exchange is related to the overall structure of Marx’s argument here in the sense that if forms a whole. Thus Marx explains:
“The complete metamorphosis of a commodity, in its simplest form, implies… [that] a commodity come face to face with money; the latter is the form taken by the value of the former, and exists over there in someone else’s pocket in all it hard, material reality. A Commodity owner is thus confronted with a money owner. Now as soon as the commodity has been changed for money, the owner becomes its vanishing equivalent form, use use-value or content exists here on the spot, in the bodies of other commodities. Money, the final stage of the first transformation, is at the same time the starting point for the second. The person who is a seller in the first transaction thus becomes a buyer in the second, in which a third commodity-owner comes to meet him as a seller.”
The above selection (206) was a lengthy segment yet essentially spoke of a C-M-C relationship; of a Commodity-Money-Commodity paradigm. This could mean anything which falls into that category such as: Desk-Money-Chair; one has a desk which he wishes to sell and thus receives money which he can use to purchase a new chair. Each stage of this relationship has its distinct features, meaning that C-M is different from M-C (as explained above). Yet when it is taken as a whole it forms a dynamic series of intertwined actions which ultimately serves to transform commodities into money thus facilitating the eventual capital circulation of a capitalist economy while facilitating in the more immediate sense the circulation of commodities (which leads to the circulation of capital).
Within this example the third person mentioned near the end is extremely important as this individual is the one who renders certain aspects of the equation to “fall out of circulation”. Marx says:
“The process of circulation, therefore, unlike the direct exchange of products, does not disappear from view once the use-values have changed hands. The money does not vanish when it finally drops out of the series of metamorphose undergone by the commodity. It always leaves behind a precipitate at a point in the arena of circulation vacated by the commodities. In the complete metamorphoses of the linen, for example, linen-money-bible, the linen falls out of circulation and money steps into its place. Then the Bible falls out of circulation, and again money takes its place. When one commodity replaces another, the money commodity always sticks to the hands of some third person.”
Ergo it is not a “never-ending spiral”: a commodity is a use-value to someone and so it is eventually consumed thus taking it out of circulation. Without this “third person” the world of commodities would incessantly clog the market rendering growth and transactions to a minimum, if not slow to a halt as seen in our yet only theoretical “gluts” (overproduction)/crisis.
Q50: Some classical political economists argued that there existed exchange equilibrium within the market which prevented crisis; is this true or false, why?
A50: This is a false assumption as well as an incorrect one. This conception of how the market works is based on the assumption that there is a constant and even rate of exchange, that there is always an even number of commodities being produced as well as sold-thus no crisis is possible. Obviously this is wrong. In any capitalist economy there are commodities which are never sold due to various conditions involving labor and the total output. While a possibility of a crisis is not promised it is highly likely as the “contradiction unity” from use-value and value (described above as unsold products), manifest as a crisis when certain conditions are realized.
Q51: How does the velocity of money relate to commodity price?
A51: This is a tricky question to answer simply for its convoluted dimensions. Yet for the sake of simplicity I will try to water it down to its basic formations without negating the deeper argument which Marx is trying to push.
Marx described the circulation of money as part of the velocity of circulation. The velocity of circulation was how much any given piece of money was used in a given day:
“Suppose the process of circulation of the… articles takes a day. The sum of prices to be realized is [$8], the number of times the [$2] turns over during the day is four, and the quantity of money in circulation is [$2]. Hence for a given period of time during the process of circulation, we have the following equation: the quantity of money functioning as the circulating medium=the sum of the prices of the commodities divided by the number of times coins of the same denomination turn over. This law holds generally.”
This means that prices of commodities are in part determined by not only the previous processes described in earlier chapters but also by the amount of times a specific sum of the universal equivalent is traded in a given day, which when divided by the total amount in circulation (of that type) will yield the price of commodities.
Marx says this process is a reflection of the rapidity with which commodities change form (see previous questions). So we thus see that to a healthy economic metabolism circulation is paramount for a functioning capitalist economy; ergo, when circulation stops, and people (for whatever reason) horde money and commodities remain unsold, the stage is set for a crisis (though more factors yet remain to be fulfilled).
Marx takes this a bit further by elucidating on the origins of determining by what quantity of money will circulate:
“The total quantity of money functioning during a given period as the circulating medium is determined on the one hand by the sum of prices of the commodities in circulation, and on the other hand by the rapidity of the alternation of the antithetical process of circulation.” Which amounts to, as he later explains: “These three factors, the movement of prices, the quantity of commodities in circulation, and the velocity of circulation of money can all vary in various directions under different conditions.” Thus he goes onto detail the specific fluctuations:
“With a general rise in the prices of commodities, the quantity of the circulating medium will remain constant, if the number of commodities in circulation decreases proportionally to the increase of their prices, or if the velocity of monetary circulation increases at the same rate as prices rise, the number of commodities in circulation remaining constant. The quantity of the circulating medium may decrease, owing to a more rapid decrease in the number of commodities, or to a more rapid increase in the velocity of monetary circulation, in comparison with the fall of prices of commodities.
With a general fall in the prices of commodities, the quantity of the circulating medium will remain constant, if the number of commodities increases proportionally to their fall in price, or if the velocity of monetary circulation decreases in the same proportion. The quantity of the circulating medium will increase, if the number of commodities increases more quickly, or if the rapidity of circulation decreases more quickly, than the prices fall.”
Now we see the specific fluctuations, how they relate to price as well as the velocity of circulation; thereby everything is tied into one another in some manner, thus we see Marx’s dialectic style remaining consistent with his earlier entries in Capital. In doing so not only does Marx prove his point but also disavows other classical political economists who held mistaken views which said that prices were solely determined by the quantity of the circulating medium.
Q52: Describe the relationship between gold and representative symbols.
A52: In truth this question is rather straight-forward in a sense that gold as expressed through the universal commodity-the money form-can be represented by materials other than what they represent. Meaning a silver coin can represent the value of gold, not silver. Marx explains it as such:
“Paper money is a symbol of gold, a symbol of money. Its relation to the values of commodities consists only in this: they find imaginary expressions in certain quantities of gold, and the same quantities are symbolically and physically represented by the paper. Only in so far as paper money represents gold, which like all other commodities has value, it is a symbol of value. (225)”
It is important to remember that though paper money represents value it is not credit-money as this is something yet unexplained as far as Marx is concerned. Taking the above passage further we are able to know that the value of the paper money depends on the amount of notes in relation to the amount of gold, Marx explains in in terms of ounces where if the amount of paper notes is twice the quantity of gold then the worth of 1/8 of its original pre-inflation value. This mathematical equation holds true for smaller and larger amounts of gold when talking about money to gold ratios.
Q53: What function does a reserve fund possess in capitalist society and how does it originate?
A53: A reserve fund is an economic phenomenon which results from hoarding commodities, of generating as much profit as possible with as little trading as possible. The function of this construction is to “serve as channels through which money may flow in and out of circulation, so that circulation itself never overflows in banks.” This is important to note because capital seemingly has no limits. If there was no such reserve fund than the ever increasing stock of capital would, during times of crisis, cause problems (“overflows”) within the banking system which in turn would endanger other aspects of commodity exchange. For this reason this is why gold is seen fetishized as fashioned into objects and buried or kept sealed within vaults.
Q54: In what manner does time serve as a possible catalyst for the means of a crisis?
A54: This is tied to the Means of Payment section where Marx asserts that when “commodities circulate but their equivalent in money does not appear until some future date.” This in turn is connected to a displacement of commodity-money ratio where in circulation of commodities outweighs that of money. To illustrate Marx uses an easy to understand example:
“The farmer, for example, sells his wheat for [$2], and this money serves thus as the medium for circulation. On the day when the payment falls due, he uses it to pay for the linen which the weaver has delivered. The same [$2] now serves as a means of payment. The weaver now buys a Bible for cash. This serves again as the medium of circulation, and so on. Therefore, even when the prices, speed of monetary circulation in economies in the use of the means of payment are given, the quantity of money in circulation no longer corresponds with the mass of commodities in circulation during a given period, such as a day. Money which represents commodities long since withdrawn from circulation continues to circulate. Commodities circulate but their equivalent in money does not appear until some future date. Moreover, the debts contracted each day, and the payments falling due on each day, are entirely inconsumable magnitudes.”
This is a contradiction and thus serves as the catalyst for a crisis when this payment process is interrupted via a means of artificially settling debts. Marx explains that during such a time the “use-values of commodities become valueless, and their value vanishes in the face in the face of their own form of value.” This is done in order to settle debts: one way or another the deficits must be resolved; in the modern world this takes the form of bankruptcy, which destroys your credit rating (related to the artificial means of settling debt) and drains all of one’s assets, if you own a business means a liquidation of your commodities. Above all it means a transformation of C-M-C into that of M-C-M+[delta] M where the end-result is not a commodity of equal value but money itself plus an additional sum which is brought forth via labor-power.
Q55: Describe the function of Gold and Silver within the World Market.
A55: According to Marx, within the world trading system commodities develop their value universally. Meaning that their value-form confronts other commodity value-forms as world money, or the value of this commodity in relation to other commodities (this relates to socially necessary labor). This is vital because while the value of a commodity can be recognized on an internal national scale where a single standard of measurement prevails, this is not so in the international trade where several standards of measurement prevails. This multiple function thus arises where we see both gold and silver function as the measure of value. Thus these two precious metals serve as means in which nations purchase when the exchange of products between nations is disturbed; this is what is meant by world money. So we see that this world money is in effect a means of the total worldly wealth.
 Scroll down and click on Capital, Volume one for a copy which corresponds to your preferred format.
 For more specifics on this phenomena see the “Fivefold movement points” on page 68-9 of the Pelican edition of Capital.
 For more on this topic see the table at the bottom of page 110.
 Originally Marx used the British pound to denote his example but due to reasons relating to my computer lacking the “pound” symbol I retreated to employing the American dollar.
 To ram this point home there is a footnote on page 232 where Marx delves into an example concerning scarcity which should be read by everyone who is looking to receive the most out of his work as this footnote truly places this concept into perspective in relations to “ebbs and flows”.