Why does a tree catch fire so easily? Every tree holds in its cells the energy it has absorbed from the sun. We don’t think of trees as energetic, but in fact, to grow like they do, trees have to absorb and store an immense amount of energy. When touched by fire, that energy is released—the captured energy from the sun, stored in the cells, is released. A tree is a tree, a fixed thing in the world we can climb or sleep under or chop down for wood or sell. A tree is also a process, a relationship between different processes—the interaction of soil, water, energy, air, and animal life.
Soil is formed by the deposit and interaction of minerals, water, and organic matter, being churned up by rain, worms, ants and other animals, and wind. The seed of a tree falls into the soil and is fed by the soil’s nutrients and sunlight. The sunlight itself is part of a process—the thermonuclear reactions of the sun, the travel of the rays of sunlight to the Earth. Rain, too, is part of atmospheric and meteorological processes. All these processes interact to bring the seed into a sapling and the sapling into a tree. The tree itself contains bits of all of these process in its own process of growing.
A tree isn’t just a tree: it is a physical expression of and contains these processes, most of which we never see. What we see is what we get out of the tree. Wood, relief from the sun, comfort from the rain. What goes into making the tree, what we enjoy the tree for, and what we can get for a tree we might all think of separately, but they’re knotted together in a way that can’t be unravelled. Still, we understand these different parts of “tree-ness” pretty instinctively.
So it goes for Marx’s theory of value. Value is one of the most complicated concepts in Marx’s work, so we’ll go easy for this one. But there are three big categories of “value” that are important for us to understand in radical work: the labor value, use value and exchange value.
The stuff we buy and sell, the stuff of life—commodities—contains and expresses these three kinds of value: labor, use, and exchange values.
The labor value is the “socially-necessary labor time” (SNLT) necessary to make the commodity. In a capitalist economy, for example, a house is a commodity we buy and sell, and it has value based on the socially-necessary labor time to make it. By “socially necessary” Marx meant the “average” time the worker or workers would have to spend, using the average productivity and average tools in use at the time the house was built. All of the different bits needed to build that house also had to be produced themselves—the gypsum for the drywall, the wood for the frame, the concrete for the foundation, the architect’s time. There is labor time in these, too. The final house has a certain amount of “embodied labor” in it. With automation (labor-saving equipment), the SNLT goes down; but rarely do workers end up working less; to the contrary, the time-savings results in ever more production of commodities. Why? Well, because commodities have “use-values.”
The use value is more or less what it sounds like: it is what human beings get out of a commodity. In the case of the house, it has many use-values: a house gives us shelter, storage for our stuff, a sense of place; but it can also give us access to schools, and amenities by its proximity to cultural or natural centers. We get the use-value of a thing when we use it. We can assign a thing a use-value separately from its “labor value,” and our trusty tree helps us understand why: a typical forest tree required no human labor to come into being, but we would certainly value it for the shade or wood it would provide us. So “use-value” isn’t really tied to the “embodied labor” value—it isn’t built into the thing itself. It is a “relation” of the thing to the individuals who have a want for it. But there’s no doubt that commodities, the stuff of life, have a use-value.
In capitalist economies, commodities will also have an “exchange-value,” which, mercifully, is also what it sounds like: the worth of a thing in an exchange for another thing or things. This isn’t the same as its price (which is an important difference we’ll see in a minute). The exchange value is the value one commodity or quantity of commodities will get for another or other commodities. In capitalism, exchange-value gets reduced to price, but they are not the same thing.
The reason is that our work and ideas are commodities that we sell. The “socially-necessary labor time” that goes into a commodity is sold and paid for; we “commodify” our labor. The house has all that “embodied labor” in it; and when we sell the house, that embodied labor is being purchased. We look at the house and see shelter, and storage, and a school district; we look at the tree and see shade, and shelter, and wood; but running through those things are processes invisible to us. The house, like the tree, contains the energy spent to bring it into being. This is the labor running through it.
People want the house for the use-value, but cannot acquire it without exchange. The exchange value is related to—but not exclusively made up of—the socially-necessary labor-time, the “embodied labor” in the house. In the modern economy, this is expressed by the “price.” Although exchange value and price are not the same thing, in modern market economies, price is the basic way we see exchange value.
In fact, price is the thing that “hides” the embodied labor. Again, this is something we get instinctively. A rare comic book has a limited use value to a limited number of people, and its price won’t reflect the embodied labor in it. Similarly, a ratty house that happens to be in a good school district will have an exchange value-through-price higher than the embodied labor. Marx called this “commodity fetishism,” and it is a reason why we don’t “see” the labor value of commodities; it’s why an iPhone 7 that costs $220 to make (including all labor, marketing, taxes, etc.) can sell for $650.
If this all seems pretty technical and not very relevant for radical work, it certainly can be; and there is a lot of debate about how relevant Marx’s concepts of “value” are given modern advances in economic thought. But at their very basic levels, there is something very important to take away from the theories of value.
That is how commodities—not just things, but labor and ideas—have a use value that is distinct from its exchange value and/or price. Think of how in cities with thousands of people suffering homelessness, there are foreclosed homes boarded up, or second homes kept empty by absentee owners for short-term vacation rentals. The use-value of these commodities for people without them is intensely important, but it’s the exchange values that determine how they’re distributed.
In fact, it’s the wild-eyed chase for higher and higher exchange values (as “prices”), instead of the reasonable distribution of use-values, that leaves so many people with so little and so few people with so much. Those who own much can’t afford to let the use-values slip from their grasp, because it drives down the price. In fact, as with the case of boarded up homes, they’d rather destroy the use-values than make them available to those in need. Housing is an obvious example, but there are many others. The United States, and the West in general, produces use-values from clothing to food to housing to transportation, in surplus abundance, but finds ways to restrict them to only those who can afford the exchange value. This is the “artificial scarcity” that keeps us at each others’ throats.
Understanding value types helps us understand why our society doesn’t have to work this way. When we see cases of water held behind armed guard during a hurricane, we can point to that and say, we know what the social cost of producing that is; we know its value in use to people who don’t have it; why isn’t it being distributed rationally? Why is the entire distribution system of use-values built on the merciless drive for ever-higher exchange values?
When we understand the processes that went into making a tree and appreciate its uses, we’re a step closer to seeing the world as it really is.
Works Consulted and Further Reading
Karl Marx, Capital Volume I
Karl Marx, Capital Volume III
David Harvey, Seventeen Contradictions and the End of Capitalism
Brendan McCovey, “Law of Value 6: Socially Necessary Labor Time (YT: Law of Value 6: Socially Necessary Labor Time (1 of 2))” (Video)