Every beginning is difficult, said Marx at the beginning of Capital. He then launched into one of the most excruciatingly difficult beginnings of any book, explaining the concept of a commodity. I’m going to try to simplify it.
Every object in capitalism is, in essence, an embodiment of class warfare, in the form of an object. Every object is in the grip of a conflict of social relationships, exists immersed in a sea of social relationships. Every object exists in relation to human beings, who get to use or interact with the object, but which human beings get to do this? Which are allowed? This is always the question, this is always the conflict.
Commodities have a use-value, or the basic qualities that make them useful to human beings. They also have their exchange value, or the price they fetch on the market.
The use-values of objects are what tempt political forces, such as governments or the working class, or just individuals, to seize objects for what they can do. The forces of the market will attempt to defend the rule of exchange-value or impose it on objects instead, led by an opposite coalition of people — the people who own the objects, or paid for them, or could profit from them, or sometimes the state in its role as defender of owners’ property rights.
So embodied in every commodity is the question: people or profits? Everything in capitalism with a price tag on it screams this question. Anything without a price tag also asks this question, because everything’s always under the threat of having a price tag placed on it, known as accumulation by dispossession. (It’s worth contending that classical Marxist exploitation, explained below, is critical here, and accumulation by dispossession, while vicious, is not the core accumulating force of the modern economy.)
This doesn’t mean we should have some kind of consumer guilt over everything we have, or own or buy. The vast majority of us deserve more than we have. We have a right to what we already possess, and those who have less than us deserve the level of possessions we ourselves have and more in addition.
The exchange value of commodities, according to Marx, is calculated by the necessary amount of labor-time it takes to make them. This can get compartmental: if machines were used in the process, a fraction of the labor-time used to build those machines goes into the cost, as the machines wear down over time. If a worker who made the commodity is skilled or educated uses their training on the related work, part of the labor-time (ie expense) of that worker’s education goes into the cost. A product or service can include being advertised or transported, which could include the cost of marketers (labor), truck drivers (labor), telephones (machines made by labor), and trucks (machines made by labor).
It’s vitally important to remember that in the Marxist sense services are commodities. If you see a mowed lawn, that’s a commodity. Anything people pay to have done, any condition of a building or surface or person people pay to have enacted, any situation people pay to have arranged, is a commodity. Healthiness is a commodity. Clean floors are a commodity. A ride in a taxi is a commodity. A dead or slandered opposition leader is a highly sought and well-priced commodity.
The base unit of the economy is an hour of the labor-time of an unskilled worker at a livable wage, or whatever unit of time you use to divide it up. The wages they are paid represent the labor-time of workers in other industries and fields, doing other kinds of work, which keep that worker alive in a standard work week. Exchange for exchange, the labor time equals out. This is definitely a very subjective definition (what is “livable”?), subject to the push-and-pull of opinion, class struggle, and raw human biological health needs.
But the economy grows, profits are made. Why is this? Because, as Marx explained, labor is the only commodity capable of adding more value to the production process than an investor paid into the labor costs themselves. You can pay for robots and automation but they eventually wear out, and they only put out the total value you purchase for them. Between their high up-front cost and gradual deterioration, it equals out and automation in reality only helps to get a temporary speed edge over competition; eventually the industry catches up, socially necessary labor time has just been redefined to involve a higher floor of automation, and all you’ve done is reduce the only real source of profits: human labor exploitation. The magic of human beings, despite their maintenance costs, is that they produce more value than you put into them. This is where exploitation and profits in capitalism in come from. Profits come from the fact that commodities (both products and services) are sold for a higher price on the market (even factoring for overhead) than the total value workers added to them during the work process.
This means that, though a product in total may be sold for $10 on the market with all total transport, advertising, and management costs covered, the actual production workers themselves were paid $5 per unit and in reality the overhead was only $2 per unit, netting the owners $3 of exploitation profits per unit. (This is the crudest possible hypothetical example.)
This is why Warren Buffet, progressive though he may be, invests in cheap labor businesses like KFC and Pizza Hut. He may be among the more decent of the bourgeoisie but he also knows how to invest profitably. He knows where profits really come from. This is also the entire point of racism in modern America: to have a cheap, low-wage, low-benefit black workforce to exploit in cheap labor industries and prison industries for hyperprofits.
Had to interrupt the battle to explain that. Back to killing Zerg.