Karl Marx Commodity and Class Theory

Karl Marx Commodities, Karl Marx Commodity and Karl Marx Classes

Karl Marx Class Theory; Marx began by examining the exchange relationship between those who own the means of production, the capitalists, and those who sell only their labor in the market, the proletariat. He argued that one of the chief characteristics of capitalism was the separation of labor from the ownership of the means of production. Under capitalism, labor no longer owns its workshops, its tools, or the raw materials of the production process. Capitalism is therefore essentially a society of two classes, and one of the most important aspects of this society is the exchange, the wage bargain, that takes place between the capitalist and the proletariat. For this reason, Marx developed a theory explaining commodity prices, or exchange values. Because he was particularly interested in explaining the source of property incomes, he examined the forces determining the prices of the commodities produced by labor and the price labor receives as payment for its productive efforts.

Ricardian economic theory, and the orthodox microeconomic theory that followed, begin their analysis of the economy with the price of commodities. People often assumed, therefore, that Marx was interested in the same basic problem, namely, to explain the forces that determine commodity prices. Marx, however, was not primarily interested in developing a theory of relative prices. His interest was in wages, which he considered to be the most crucial element in the capitalist system, because they disclosed a contradiction that would help to explain the laws of motion of the capitalist system. For him, the labor theory of value was a means to a broader end—an understanding of the evolution of society.

According to Marx, in precapitalist economies human goods were produced primarily for their use value; that is, commodities were produced for consump­tion by the producer. One of the chief characteristics of capitalism is that commodities are produced by the capitalist not for their use value but for their exchange value. An understanding of capitalism, therefore, requires an under­standing of the exchange relationships that develop between owners of com­modities, the most important being the relationship between the capitalist and the proletariat.

This can be expressed in another way. According to Marx, the prices of commodities in a capitalist system represent two different sets of relationships: (1) quantitative relationships between commodities (two beavers exchange for one deer), and (2) social, or qualitative, relationships between individuals in the economy. Wages, as prices in the economy, represent both a quantitative rela­tionship and a social, or qualitative, relationship between the capitalist and the proletariat. Marx was interested in prices primarily insofar as they disclose these social relationships; he was only secondarily interested in prices as they reflect a quantitative relationship between commodities.