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Created: January 31, 2002
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Commodity and Surplus Value

Copyright: Jeanne Curran and Susan R. Takata and Individaul Authors, March 2002.
"Fair use" encouraged.

This file offers an exchange that occured on Kapital_Gang, a list. It offers a good explanation of commodity and surplus value for a review of basic theory.

On Wednesday, March 27, 2002, Shane Hopkinson posted on Kapital_Gang@yahoogroups.com:

Subject: Re: [Kapital_Gang] Commodities Chapter One

Tom

Great to hear your comments about being part of the group. I have been a socialist activist for ten years here in Australia around the newspaper Greeen Left Weekly (http://www.greenleft.org.au/). I work as a sociologist (booo hiss).

tommythetraveler wrote:
Tom: What is a commodity?

Shane: A commodity is something that is produced on order to sell it (ie exchange it) rather than to use it.

Tom had written: A commodity is something of use and because of its use ability it has value.

Shane: It has use value (ie it is a useful object to satify some human need) and it has an exchange value (a value in terms of the number of other things it can be exchanged for (eg 1 bag of sugar for a a dozen potatoes).

Tom had written: The difference in the amount of value in a certain commodity is what it is made up of. Usually gold ore is less than 26K gold or silver. Pure gold or silver is worth more since it has been purified by labor.

Shane: No not really. The argument is that if two things are exchangable then there must be something in common that these objects embody that makes it possible to exchange different objects (like sugar for potatoes). The exchange value is not determined by the qualities of the object the way its use value is. What is exchanged is the labour time that commodities embody because this is what they have in common.

Tom had written: The difference between the amount of labor time, cost of raw materials equals the surplus value.

Shane: Not exactly. Its a bit tricky. Marx argues that the exchange value of a commodity is determined by labour time it takes the society to produce it, BUT under capitalism wage-labour is itself a commmodity so its value is determined in the same way. Labour is unique though in that it can produce more value than the capitalist pays for it. The difference in the amount of value paid to the labourer as against the amount embodied in the commodity is surplus value. In concrete terms the boss pays the workers as a group less value than they give him or her or they wouldn't employ you (or s/he is going broke).

Tom had written: At the point of finalized use-value when a commodity is sold in the open marker the owner of the commodity receives this difference between raw materails combined into the finished commodity resulting a social wealth contoled by the man or woman who has an interest in the final value is surplus value.

Shane: For Marx, the realisation of surplus value in the market is a separate issue. It is the exploitation of labour in production that creates the value - its realisation in the market is a derivative process. The capitalist is 'entitled' to this value because they own the means of production.

Tom had written: So a commodity has a real value which is based on the final product release to the market. The amount of labor that went into developing the final marketable item.

Shane: The surplus value is congealed labour-time embodied in the commodity which is realised in the market.

Tom had written: This social value is surplus value and is retained by the owner of the commodity which is realized when it is sold.

Shane:Yes. Surplus value is realised as profit in the marketplace.

I've been lucky enough to cover this stuff before. Hope this helps. I would appreciate it if you could tell me if you think that I have it straight or if my explanation is not clear.

Please let me have your thoughts
Comradely
Shane