Question 1 What did Marx mean with his formu - University of Utah

ECONOMICS 5080 QUESTIONS AND ANSWERS
ALL STUDY QUESTIONS
ECONOMICS DEPARTMENT, UNIVERSITY OF UTAH FALL SEMESTER 2007
Question 1 is 1 in 2005fa:
Question 1 What did Marx mean with his formulation “the value form is slight in content”?
[697] Gregory: straight forward. Marx is explaining that the value form as a whole is
straight forward or in other words not complex. Furthermore, he explains that the value form
in its simplest terms indeed has no relation to actual use-values, a form of value is simply
an expression of values. Hans explains in response to Sparrow’s response [2005fa:1947]
that the value form is simple in that it would take abstract thinking to break down its more
complex components. In other words, it is so straightforward it is difficult to discuss its
deeper more in-depth reasoning. Overall, the value-form is a “slight concept”, however the
individual components can be analyzed to a much further degree.
Hans: The value-form, i.e., the exchange relations on the market, are an expression of the fact that all commodities
are the products of human labor. Marx does not say that the value-form has no content, but that its content is slight.
Nevertheless this simple story, which the commodities tell us whenever they are exchanged, is difficult to decipher.
It is so small that one needs a microscope to see it (“microscope” meaning the very deep and abstract thinking Marx
applies expecially in the early chapters of Capital).
Message [697] referenced by [232]. First Message by Gregory is [98].
Question 8 is 2 in 1996sp, 1 in 1997WI, 1 in 1997sp, 1 in 1997ut, 1 in 1998WI, 1 in 1999SP,
1 in 2002fa, 2 in 2003fa, 4 in 2004fa, 5 in 2005fa, 8 in 2008SP, 8 in 2008fa, 8 in 2009fa,
9 in 2010fa, 9 in 2011fa, and 1 in Answer:
Question 8 Can one say that happiness is the only true wealth?
[9] Charles: I would agree with this statement. For some people wealth means a family,
for others, wealth has a dollar amount associated with it and others consider their good health
as wealth. Everyone strives for happiness during our lives. If someone is rich in regards to
money and has a very bad health, he would not have happiness. Also, an example is the
opposite. If someone is very healthy and has no money, they will not be happy either. Each
person decides its own level of happiness and wealth. If the person is satisfied and happy
with whatever they value as wealth, then one can surely say that happiness is the only true
wealth.
Message [9] referenced by [10] and [12]. Next Message by Charles is [21].
[10] Hans: How Many Resources do you need to be Happy? Charles, in [9], uses the
definition that wealth is things which are valued. If you use this definition, then there is
not much difference between wealth and happiness. Happiness is a person who has good
1
2 2007fa Econ 5080 U of Utah
feelings, and wealth consists of things which evoke good feelings. It is mainly a difference
of perspective.
I have problems with this point of view because it makes everything subjective. If you
feel good, you are in a good situation, and if you feel bad, you are in a bad situation. Charles
is consistent if he comes to the conclusion that we decide how happy and wealthy we want
to be.
I’d like to propose a different definition of wealth. Material wealth are those things which
enhance human life, things which people need to have a good life. I.e., wealth is not something
subjective but something objective. These conditions for a good life do not necessarily
make you happy, but if they are missing, then it is much more difficult to be happy.
If you use the objective definition of wealth, then the ugliness of our society stares you
into the face. Why have some people so many more resources at their disposal than others?
If you use the subjective definition, this society is more tolerable, because you can say that
these differences in resources do not matter, it all depends on one’s attitude.
The issue with happiness and wealth has been debated a lot in the archives. I can still
recommend my [1999SP:12] as a good starting point.
Message [10] referenced by [18] and [19]. Next Message by Hans is [14].
[12] SamHouston: Charles [9] is correct in his view of wealth if looking outside the
scope of capitalism. I do not understand much about the Marxian view of capitalism yet,
but wealth seems to be measured by way of commodity. Charles takes into account the idea
of individual agency to determine happiness. This may be true of individuals but Marx is
discussing societies and wealth within the scope of societies. Is happiness the source of true
wealth? We can look at this question in two ways.
1) If happiness is measured in terms of commodity (meaning an increase in commodity
equals an increase of happiness), and commodity equals wealth (as commodity increases,
wealth increases), then it would be fair to say that that happiness equals wealth.
2) If we are speaking of happiness as an individual emotion determined by agency, then
the only person to determine wealth would be the individual who determines his or her own
happiness level.
In the scope of the readings, I would say that happiness (the emotion) is not the only true
wealth given the definition of wealth in Annotations as anything that enhances human life.
Material wealth only comes from the increase of commodity because it is the commodity
(“the thing”) that enhances human life. The enhancement of human life through commodity
will lead to happiness. So in capitalism, happiness comes from commodity and is not a
determinant of wealth.
Hans: Lots of good thinking. In your last paragraph, you originally had “True wealth only comes from the increase
of commodity.” I changed it into “material wealth” because there are other forms of wealth which are not material
yet still fall under the definition ”something that enchances human life.” For instance, a society with strong family
ties and good, safe, and protective neighbohood relations can be considered a wealthy society because of its social
relations.
The rules are that your first submission in the same homework period is graded, and the second isn’t. But since
this is just the beginning of the Semester and you many not be familiar with this rule, I am making an exception
and am counting this as your graded email, instead of the brief comment [11].

U of Utah Econ 5080 2007fa 3
Message [12] referenced by [13] and [14]. Next Message by SamHouston is [67].
[13] Chapeye: bravo Sam Houston.
i agree with passage 2) from [12] quoted below. in terms of philosophy not economcis i
would like to add one thing though.
happiness: + real meaning in the life of society and person (or search thereof). this is
from A. Huxley’s preface to “Brave New World.” he shows a society where everyone seems
to be happy, having been conditioned to lie what s/he has. yet there’s no real meaning in
that happiness, no free search. Brave New World is considered an antiutopia showing the
extreme of capitalist CONSUMER society. this is not directly related to marxism though :)
2) If we are speaking of happiness as an individual emotion determined by
agency, then the only person to determine wealth would be the individual
who determines his or her own happiness level.
In the scope of the readings, I would say that happiness (the emotion) is not
the only true wealth given the definition of wealth in Annotations as anything
that enhances human life, true wealth only comes from the increase
of commodity because it is the commodity(“the thing”) that enhances human
life. The enhancement of human life through commodity will lead to
happiness. So in capitalism, happiness comes from commodity and is not a
determinant of wealth.
Hans: Nice additional point. It is ok to use abbreviated sentences sometimes, but you should not forget commas
and periods over it.
First Message by Chapeye is [6].
[18] Dyoung: graded A I agree with [10], but I would go further. Wealth may or may
not actually deliver the things that enhance human life, wealth is simply an accumulation of
capital. I would answer the question that happiness and wealth have been tied together in
the past, but I feel that they in reality are too different to be associated one with another.
Hans: Do you consider the association between wealth and use-values to be outdated? Marx would say that
this old-fashioned wealth is the content of material wealth in every society, while the modern dynamic and onedimensional
monetized wealth is the social form of this wealth in capitalism.
For example you say, “These conditions for a good life do not necessarily make you
happy, but if they are missing, then it is much more difficult to be happy.” I interpret this as
there are some things only attainable through wealth that ease your burdens in life and allow
you to be more happy or to accumulate happiness quicker. I feel that happiness is created
by a person depending on what makes them happy, so while this definition may work for
those people who need to have the latest fashion accessories to be happy, it won’t work for
someone who only needs a tent and the great outdoors to be happy. For them the amount of
wealth they have does not affect their accumulation of happiness.
Hans: Needing weatherproof homes with furniture, water and electricity is not the same as being addicted to the
latest fashion accessories.
Basically I am arguing that you make happiness subjective on wealth, while I feel it is
subjective on “happiness causing items” which may or may not be tied to wealth.
Hans: Marx’s definition of wealth not only covers extravagant things but very mundane items like bathtubs, water
heaters, mattresses.
4 2007fa Econ 5080 U of Utah
Also, if you look at wealth objectively then you don’t just see the ugliness of our society,
you also see the good things people can and do do with money.
Hans: Why not let those who create the wealth decide how it is to be used?
Message [18] referenced by [19]. Next Message by Dyoung is [110].
[19] Hans: Wealth is Use-Values, not Money. I am happy that Dyoung has the courage
to challenge my [10] in his [18]. This is a good way to learn. Just one short comment before
I have to run: Dyoung identifies wealth with money. Money is only the social form wealth
takes in our society. The content of wealth is use-values.
Next Message by Hans is [26].
Exam Question 10 is 3 in 1995WI, 6 in 1995ut, 6 in 1996sp, 4 in 1997sp, 3 in 1998WI,
3 in 1999SP, 6 in 2004fa, 7 in 2005fa, 12 in 2007SP, 10 in 2008fa, 10 in 2009fa, 11 in
2010fa, 11 in 2011fa, and 8 in 2012fa:
Exam Question 10 What is a commodity? Marx does not give the definition of a commodity
but an analysis. How would you define the thing he analyzes? (The answer can be given in
one sentence.)
[20] Chris: A commodity and the market. A commodity is something that has value
to those concerned in the marketplace. A commodity is an item that distinguishes itself in
its ability to sustain a marketplace through its many guises, whether being that of a finished
item that satisfies immediate urges to the consumer or production machines that produce or
can be exchanged. For Marx, the capitalist society is full of commodities, “the riches of
capitalist society are produced for and traded on markets”.
Raynold: A commodity is a product whose value depends on the amount of labor required. However, in order to
get a true value, you have to compare it with a like product. For example, you cannot compare a car to a desk. The
labor power to produce a car is more extensive because of the time and effort needed than that of a desk. You can
compare a BMW to a Nissan because they are both cars that require almost the same parts.
Message [20] referenced by [30]. Next Message by Chris is [83].
[21] Charles: What is commodity? Commodity is something that is in demand by the
society. It is related to electricity, metals, lumber, oil, gas and other things in regards to the
society as a whole. The commodity is the first thing that is needed by the society in order to
make or advance it to other goods.
Hans: The Annotations, i.e., the Study Guide, say in the paragraph just preceding this question here: “In English
business parlance, the word ‘commodities’ is used for products which are available from many suppliers, and which
are standardized, so that there is no reason, apart from price, for the buyer to prefer one supplier over another.” Marx
does not mean it this way. The word “commodity” is the translation of the German “Ware” which does not have
this connotation.
Message [21] referenced by [30]. Next Message by Charles is [27].
[23] Rob: A commodity is anything of value. Specifically, a commodity is anything with
“exchange value” such that it can be traded on an open market. The commodity must not
only have a use value, “the menu of of possible uses of the commodity”’ but the product
must, as Marx writes, “be useful for others.”
Hans: “Being useful for others” is not the only condition something has to satisfy for being exchangeable. In
many kinds of societies things which are useful for others are commonly not exchanged, perhaps because they are
not privately owned but collectively owned by the tribe, or because person using them does not have the right to
transfer ownership to others, etc.
Message [23] referenced by [30].

U of Utah Econ 5080 2007fa 5
[26] Hans: Wealth is Use-Values, not Money. Maybe Chris, Charles, and Rob thought,
“I know what a commodity is, I don’t have to read Marx for that.” That is not the point. The
word “commodity” can be used with many different nuances of meanings in many different
contexts. Here we are talking about Marx’s text. He uses the word “commodity” a lot
without ever defining it. What does he mean with the word “commodity?” That was the
question.
And the answer is, according to the Annotations: “a commodity is something produced
for sale or exchange.” Although this answer is given in the Annotations right before the
question, there seems to be a lot of resistance to this answer. People do not seem to think
that it is satisfactory. In [2005fa:582] I tried to address this.
By the way, this question is labeled “exam question” exactly because the answer is given
in the Annotations right together with the question. It would be too easy for a homework
question, therefore you cannot get a grade for it.
Next Message by Hans is [29].
[92] Hans: One-Sentence Answer. Since Desk [89] uses the wrong definition of commodities,
I’d like to repeat here the definition given in the Annotations in the paragraph
above question 10:
A commodity is something produced for sale or exchange.
This is the one-sentence definition of a commodity, as Marx uses the word in his text.
Next Message by Hans is [105].
Multiple Choice Question 21 is 14 in 1999SP, 14 in 2001fa, 14 in 2002fa, 16 in 2004fa,
21 in 2009fa, and 22 in 2010fa:
Multiple Choice Question 21 Which of the following paraphrases best captures the spirit
of Marx’s first sentence “the wealth of those societies, in which the capitalist mode of production
reigns, presents itself as an immense heap of commodities”?
(a) In capitalism, everyone tries to accumulate things.
(b) Nearly everything that is produced in capitalist societies is produced for sale.
(c) In capitalist societies only those are considered wealthy who own many commodities.
(d) The capitalist idea of being wealthy leads to excessive commodity consumption.
[14] Hans: Meaning of First Sencence. This question is not in the Annotations. It is one
of the multiple choice questions that might be asked at the first midterm. The correct answer
here is (b). I am sending you this question because SamHouston [12] seems to believe the
correct answer is (c). The starting point for Marx is how wealth is created, not what people
think about themselves.
Next Message by Hans is [17].
Question 27 is 21 in 1996ut, 19 in 2000fa, 23 in 2005fa, 27 in 2008fa, and 27 in 2009fa:
Question 27 How does Marx’s starting point differ from usual approaches to economics?
[22] Kibosh: graded A– Marx’s beginning emphasis on commodities is due to the relationship
between commodities and money. As the classes exist and grow the one thing which
combines them is their product. This product produces money. The worth of an employer
6 2007fa Econ 5080 U of Utah
is not in their possible production but in their current holdings. Just as any college student
cannot be considered a millionaire just for going to college. The same idea is applied. I saw
Marx allude to an emphasis on the amount of goods rather than the future possible holdings.
What we hold now is what we can base ourself on. It’s a similar theory, to me, when a
young adult or teenager talks about the money he or she stands to inherit when they graduate
or turn a certain age. My reply to them is a similar one that Marx would reply then. What
have you produced now? I saw Marx’s opening based upon commodities a factual current
understanding of a company’s production to date not based on future speculation.
Hans: Marx’s Capital is not a blueprint for a better society, but an analysis of capitalism. This may not be apparent
at the beginning, where he stresses that all value comes from labor. But later in the book Marx will say that, despite
the fact that the laborer creates all value, the laborer does not receive all the value he or she creates.
Message [22] referenced by [31], [288], and [341]. Next Message by Kibosh is [320].
[31] Hans: Future returns versus cost of the assets. Kibosh [22] explains the difference
between Marx and modern economics as follows: modern economics values capital by
future expected returns, while Marx looks at the value of the assets in the ground.
This is a good observation. In order to place it into context, I’d like to spin on the thread
started in [29]. Given what I wrote there, the question arises: how can the capitalists get
away with paying the workers a wage that is below the value the workers create? Answer:
because the capitalists own the means of production.
In a rational, non-exploitative society, the means of production should be owned and
controlled by those who work them and those who consume the things produced. This is not
the case in capitalism. One of the most important decisions in an economy is the investment
decision, the decision which production facilities should be expanded by how much. This
decision should be under democratic control, but in capitalism it is made in private board
rooms behind closed doors. The means of production are in control of a separate elite layer
of society, which benefits handsomely from their monopoly of an important resource needed
by society.
Means of production, in capitalism, therefore have a second function, an additional social
power on top of their natural powers to serve as instruments in a production process: they
are also the means by which their owners appropriate the labor of others. If you value means
of production by their expected future returns, you are putting a pricetag on this additional
social power which means of production only have in capitalism.
This is Marx’s explanation of the valuation by expected returns. I.e., expected returns do
have a room in his theory. But the cost of the facilities on the ground is primary, because
this is the barrier which separates the workers from the means of production. Means of
production are necessary for everybody and should not be monopolized by a subset of the
population as their private property.
I.e., if you are asking about Marx’s ideas about how capital should be valued, the most
concise answer would probably be: Marx does not think means of production should be
private property of anybody other than the producer.
But Marx’s Capital is not his blueprint for a better society. It is his analysis of present-day
capitalism.
Message [31] referenced by [288]. Next Message by Hans is [32].

U of Utah Econ 5080 2007fa 7
Exam Question 32 is 25 in 2002fa, 28 in 2004fa, 33 in 2007SP, 32 in 2008SP, 32 in
2008fa, 35 in 2011fa, and 32 in 2012fa:
Exam Question 32 Does the use-value of a commodity depend on the person using it?
[17] Hans: Learning how to Read. Stuart has taken this class in the past and is returning
as an observer. Therefore his answer [15] to question 54 is more focused on the readings
than the more general discussion we had so far. Stuart addresses some of the subtleties of
Marx’s text. It takes practice and experience with the text to be able to do this. Reading a
text and picking up on every turn of the author’s thinking is an important and difficult skill.
It is one of the skills I am trying transmit during this class.
My comment to the first half of Stuart’s answer is submitted as answer to question 33,
because it is more relevant for question 33 than for 54.
What is the difference between the use-value of a thing and the utility one gets from using
it? Both of these concepts refer to the same relation between a material object and human
life. If you call it “a use-value,” then you consider this relationship to be a property of the
thing, the usefulness “of” the thing. (I put the “of” in quotes because “usefulness” is not a
property of the thing itself, but it describes how the thing relates to human needs).
If you call this same relationship between the thing and human life the “utility obtained
from using the thing,” you consider it as an attribute of the human (a measurement of the
happiness the human gains from this object).
In short, one can say that Marx’s concept of use-value attributes the usefulness of a thing
to the thing, and the modern concept of a utility function attributes this usefulness to the user
of the thing. (But in reality, it is a relation between the thing and its user.)
So far, I just have elaborated on the first two sentences in Stuart’s paragraph about usevalue
in [15]. But then Stuart continues: “For example a book’s use-value will most likely
differ between a literate and an illiterate individual.” I’d like to emphasize that this is an
atypical use of the word “use-value.” Sometimes Marx talks about the use-value of a thing
for a given person, and he would probably agree that the use-value of a book for a literate
person is different than that for an illiterate person. But usually, Marx uses the word “usevalue”
for the menu of all possible uses of a thing, independently of any specific person. (I
said the same thing in [2004fa:174]).
Message [17] referenced by [256]. Next Message by Hans is [19].
Question 36 is 36 in 2008fa and 38 in 2012fa:
Question 36 Why is the usefulness for human life attributed to the thing as if it was a
property of the thing itself?
[709] Brian: Is a hammer useful, or is the human useful? The usefulness for human
life is attributed to the thing as if it was a property of the thing itself because the usefulness
for human life is very similar, even linked, to a property of the thing itself. The property,
intrinsic in nature, is only manifest when it is placed in relation to other things. The usefulness
for human life is “the manifestation of its properties in one particular relation, namely,
in its relation to humans.” Therefore the usefulness appears in the relation “between the
8 2007fa Econ 5080 U of Utah
thing’s properties and the human needs.” The usefulness for human life is therefore viewed
as a property of the thing because it is only manifested when the human utilizes the thing
according to their needs. The times that the thing is not being utilized according to human
needs, its’ intrinsic values, or properties, return to dormancy and are viewed as being nonexistent.
Take a hammer for example, by itself, the hammer has no usefulness, it simply
lays or hangs and is of no use to anyone, however, when taken in the hands of a human in
the process of hanging a picture, its usefulness is realized, driving the nail into the wall and
achieving the goal of hanging a picture on the wall. The goal has not been realized by the
human alone, nor by the hammer alone, but by the relationship between the human and the
hammer. When the hammer is returned to its place its usefulness again goes dormant until
the tool is again used to achieve a goal.
Next Message by Brian is [719].
[713] Kalmerico: Humans are only good if they make money. Human life is treated
no differently than what Marx refers to as the thing, which is a good or an article. In the
annotations it states that, “In the first phase, the human is the agent in control, in the second
phase, the human has become the consumer of the beneficial properties of the thing. The
individual’s ability to use external things to serve his or her needs has become a power of the
thing itself.” The power of the thing is great as humans need the thing to survive. The thing
can come in the form of food, clothing, shelter, or any other good that allows humans to
function in life. Workers are a slave to the thing as they use all their labor-power in creating
the thing, and then use their wage to buy the thing. Workers do not own the thing that
they themselves produce, the capitalist does. A quote from John Locke, found in Capital,
states that “The natural worth of anything consists in its fitness to supply the necessities,
or serve the conveniences of human life.” In other words, the use-value of humans supply
necessities. The labor-power of humans is bought and sold just like any other commodity
on the market, and humans sell their labor-power only to have the ability to earn a wage and
buy commodities for themselves to ensure their survival in a capitalistic society. Capitalism
is a very exploitative society where humans are slaves to the thing. In capitalism, a human
life is only worth the profit it creates, otherwise it is of no use to society and somewhat of a
burden.
Message [713] referenced by [715]. First Message by Kalmerico is [51].
[715] Walmart: Re: Humans are only good if they make money. I think this is a very
difficult question to answer, and perhaps the reason no one has chosen to tackle it in the
past. While I agree with Kalmerico’s points on labor power in [713], I feel that there has to
be something more to human life, as far as Marx is concerned. If non-human modifications
don’t create value in a commodity, then the attribute should be elevated above just the good
or the article. Unless the thing is a separate entity, which is consumed by humans in the
second phase, as told by the annotations, in which case the divisions are clear enough, and
no other concepts are violated by this line of thinking.
Hans: What are you saying? You didn’t make yourself clear.
First Message by Walmart is [104].
Question 43 is 43 in 2008fa and 46 in 2010fa:

U of Utah Econ 5080 2007fa 9
Question 43 Certain use-values are produced with the purpose never to be used. For instance
nuclear bombs which are developed for the sake of deterrence. It is true for these
use-values too that their use-value actualizes itself only in its use?
[24] Ben: graded A The Cuban missile crisis is a great example about this sort of use
value. If we didn’t have those missiles I don’t know what would have happened. But we did
have them ready to shoot just in case the Cubans followed through with their threats. I feel
this is a major reason why nothing did happen. We have nuclear missiles so if something
was to happen we could use them but by having them there and ready, this deters people
from attacking us.
I may be wrong but I feel it is also much like insurance whether its car, health, life or a
warranty on a computer. If you never make a claim on your insurance you never really use
it. But the security that you could make a claim when something happens is there for you
too use.
Lastly, by not using the nuclear bomb is a defense mechanism. The bomb is being used as
a defense through intimidation and power to other people. This fulfills the wants and needs
of security of everyone inside our society.
Hans: Intimidation and power characterize U.S. nuclear policy better than the protection against a threat. All in
all, good examples.
Message [24] referenced by [2008fa:617] and [2008fa:627]. Next Message by Ben is [50].
Question 54 is 33 in 1998WI, 55 in 2008fa, 58 in 2010fa, and 60 in 2012fa:
Question 54 The use-value of a commodity is the utility one gets from using it; the exchangevalue
is the utility one gets from using those things one can trade the commodity for. Right
or wrong?
[4] Ben: (graded A– weight 60%) Right. Let’s say I was right handed and had a pair
of right handed scissors. Being right handed, I would attribute a lot of use value for this
commodity. Now if I was left handed, the right handed scissors would have little to no use
value to me. Thus, the scissors would have more exchange value to me because of the things
I could receive from someone in exchange for them. So I might exchange these scissors to
someone that is right handed because the use value for those scissors are higher to them than
to me. I would then ask for something in return that has more use value or exchange value,
i.e., money, gold, jazz tickets, or left handed scissors that I could use.
Message [4] referenced by [5] and [233]. Next Message by Ben is [24].
[5] Hans: Right-handed scissors. Wrong. Question 54 is not a brief summary of the
assigned two pages of reading. On the contrary, it reasserts certain views which Marx is
trying to argue against. In two ways:
(1) Question 54 says that the exchange value can be reduced to the use-value of the other
thing. Marx says something very different, namely, that exchange-value is a second property
of each commodity which has very little relationship with its use-value. The exchange value
of a commodity does not come from its use-value. And it certainly does not come from the
use-value of the other commodity. It finds its expression in that other use-value, but it has its
source elsewhere.
10 2007fa Econ 5080 U of Utah
(2) Question 54 looks at exchange value and use value from a subjective and instrumental
point of view. It uses the definition: a commodity has exchange-value if it is desirable for me
because I can exchange it. This definition puts the individual at the center. When Marx says
that commodities have exchange value he refers to the social custom that they are commonly
exchanged with each other. Societies are thinkable in which not everything can be exchanged
against everything else, for instance where subsistence things are home-produced and only
certain not locally available commodities, like salt or spices, are exchanged.
What I am saying here is not hair-splitting, but I am trying to distinguish the innocentlooking
embryos of two completely different paradigms. I tried to say similar things in
[1998WI:28].
Ben, in [4], certainly has selected a question which is central to the readings. And his
example, that a left-handed person would want to exchange a right-handed scissor for a
left-handed scissor, supports his argument, because this is an example in which goods are
exchanged because they have comparable use-values. But if the person exchanges her scissor
for a Jazz ticket, then the exchangeability of these completely disparate things presupposes
specific social relations.
Message [5] referenced by [6], [210], [241], and [243]. Next Message by Hans is [10].
[6] Chapeye: Wrong. The first part is right (The use-value of a commodity is the utility
one gets from using it) but the second part is wrong (exchange-value is the utility one gets
from using those things one can trade the commodity for). Not to go farther, exchange value
doesn’t have anything to do with using things.
Hans: This is a good beginning for an answer, but much more needs to be said. Your answer came half an hour
after my substantial contribution [5], which you should not have ignored.
Message [6] referenced by [11] and [210]. Next Message by Chapeye is [13].
[11] SamHouston: The e-mail from Chapeye [6] briefly answers the question at hand but
does not satisfy my need to understand what an exchange value is. It only explains what the
exchange value is not. While the name “use-value” implies a commodity’s utility to society
or the individual, the exchange value seems to be a relationship between commodity and
commodity. The exchange value is useful tor knowing how much of commodity A can be
bartered for commodity B. This is a valuable distinction made on page 3 of the Annotations.
Message [11] referenced by [12]. Next Message by SamHouston is [12].
[15] Stuart: Use-Value, Exchange-Value and Utility. Both sentences are wrong.
The use value describes the material property of the commodity which makes it useful,
not the utility it may provide. However the use-value is similar to utility in the sense it is
subjective and is a relationship between the commodity and its user. For example a book’s
use-value will most likely differ between a literate and an illiterate individual.
The exchange-value of a commodity is independent of both its usefulness or the utility
it may provide. In contrast to use-value, exchange value is not subjective in nature and the
value has no relationship between its usefulness and the user. The exchange value is the
social relationship that allows commodities to be traded for other commodities or money,
but at the same time its value is not socially determined. At this point in the readings the
exchange value is somewhat mysterious in its origins. However we know that that it is

U of Utah Econ 5080 2007fa 11
not determined by an individual’s use, society or the commodities’ material properties but
instead by something else embedded in the commodity itself.
Hans: What you say about exchange-value is very good except one brief quibble: at this point we do not yet know
that exchange-value is determined by something embedded in the commodity itself. It is true, Marx introduces
the exchange-value in 126:1 as a second property which each commodity has in addition to its use-value. In this
way Marx establishes a link between the commodity and “its” exchange-value, and none of his readers will object,
because such a link is part of everyday experience. After all, if the commodity falls to the ground and breaks, then
its exchange-value goes out of the window.
But in the next few paragraphs immediately following the introduction of exchange-value, Marx brings other
everyday evidence, the notorious variability of prices, which seems to suggest that exchange-value is not intrinsic
but purely relative. I.e., our practical experience gives contradictory evidence about the nature of exchange-value.
It will be the result of some interesting inferences starting with this contradiction that the exchange-value is the
expression of something other than exchange-value embedded in the commodity itself.
Message [15] referenced by [17], [210], [256], [2010fa:290], and [2010fa:291]. Next Message by Stuart is [36].
[25] Scott: Correct. There must be certain criteria fulfilled in an exchange. The person
receiving the commodity and the person exchanging the commodity agree upon an exchange
of money or barter that both parties find fulfilling, otherwise they would not exchange. Example:
The use-value of a home is enormous, it will keep you warm, protected. Its exchange
value is also enormous. People are willing to pay enormous amounts of money in order to
produce homes, and others spend enormous amounts of money in order to own homes.
Hans: In Marx’s theory, the price of a commodity does not depend on its use-value but on its labor content.
Your submission comes at the tail end of a long discussion about this same question. In such a situation you are
required to refer to this earlier discussion, if only to explain why your approach is so much different.
Next Message by Scott is [39].
[174] MichaelM: Right and Wrong. Marx says in his book Capital, Volume 1, Chapter
1 that “the utility of a thing makes it a use value” and that “this property of a commodity
is independent of the amount of labour required to appropriate its useful qualities.” He also
states that “a thing can be a use value, without having value. This is the case whenever its
utility to man is not due to labour. Such are air, virgin soil, natural meadows, etc. A thing can
be useful, and the product of human labour, without being a commodity. Whoever directly
satisfies his wants with the produce of his own labour, creates, indeed, use values, but not
commodities. In order to produce the latter, he must not only produce use values, but use
values for others, social use values.”
One can see by Marx’s explanation that the use-value of a commodity IS the utility one
gets from using it regardless of the labor involved and as long as the use-value of the commodity
has a generally accepted utility for others in society, and not just for the producer.
Marx seemed to think that the exchange-value of a commodity represented its owner’s
purchasing power or what other commodities it would exchange for. This can be thought
of as a value or price of the commodity. This value or price of the commodity could then
be used to trade this commodity for another commodity that would obviously provide some
kind of utility to the new owner. So, in a round about way, an exchange-value can be thought
of as the utility one would get from using those things one can trade the commodity for.
However, this is not what Marx was trying to get across when he was describing his theories
about the exchange-value of a commodity. He was more focused on the kind of value that
the exchange-value represented.
Next Message by MichaelM is [201].
12 2007fa Econ 5080 U of Utah
[186] Dyoung: graded C+ Use-value and exchange-value. The use-value of a commodity
is the utility one achieves from using the commodity. If a person uses something, that
means that it has value because it can be used and should be used, it has utility to that person.
Exchange value is the value of that commodity expressed in terms or proportions of another
commodity. It is a quantitative relation.
Hans: You are not using the word “value” in the same way Marx uses it. Value is a central category for Marx, and
one cannot understand his reasoning if one substitutes a different meaning for this word.
Here is a remark about your last sentence only.
If Marx says in 126:2 that exchange-value manifests itself at first as a quantitative exchange relation, this does
not mean that the exchange-value is a quantitative relation. The thing which Marx finds most remarkable about
exchange-value has nothing to do with the quantities involved, but it is the fact that all commodities can be turned
into each other by the exchange. For instance he writes in 141:1:
Whether 20 yards of linen = 1 coat or = 20 coats or = x coats, ... it is always implied that the
linen and the coat, as magnitudes of value, are expressions of the same unit, things of the same
nature. Linen = coat is the basis of the equation.
From this qualitative equality underlying the quantities he infers that commodities must have something equal
inside them in order to be exchangeable.
Message [186] referenced by [2008SP:369]. Next Message by Dyoung is [375].
[193] Deborah: Use it or Lose it? The above statement is wrong. Use-value arises from
the physical traits of a commodity and this value actualizes itself only by use or consumption.
As Marx puts it “Use-values constitute the material content of wealth, whatever its social
form may be.” As is stated in the Annotations, “A thing which has properties useful for
human life, considered from the point of view of its possible uses by humans, is called
use-value.”
Exchange-value is a social relation – it is a commodity’s ability to be exchanged for
other commodities. The exchange-value cannot be derived from a commodity’s use-value.
A commodity’s exchange-value, which is dependent upon social interaction, is attributed to
the commodity itself.
The above statement implies that exchange-value is the utility that one gets from using
a commodity that one has exchanged something for. This is incorrect – using a commodity
arises from its use value and not from its exchange value; again, the exchange value is a
social relationship and not a physical interaction between the consumer and the commodity.
Also, when the above statement is just slightly off when it states that use-value arises when
one uses the commodity. The use-value is actualized when the commodity is used but the
use-value doesn’t necessarily arise when the commodity is used – the use-value is a part of
the physical properties of the commodity and is still present even if the commodity is not
being used.
Next Message by Deborah is [194].
[195] Chris: Wrong. The use-value of a commodity is the part of the commodity, within
materially, that determines the use of that commodity. Use-value is not dependent on the
utility a consumer receives from it. Exchange-value is a property of the commodity that
allows it to be traded or exchanged in the marketplace. Exchange-value is the amount a
commodity is worth on the open market.
Hans: You are saying “wrong” but then you are not explaining how the text in the question is wrong. You are only
giving your own alternative explanation. Your in-class answer was much better, there you say “The exchange-value

U of Utah Econ 5080 2007fa 13
is not something the trader gets from his commodity but what his commodity has in the marketplace.” This is a very
good way to put it, why didn’t you type that in?
Chris: I probably didn’t write that because with resubmissions of this sort I tend to affect the anwer whether or not
it was wrong. Obviously I was better off with the first answer.
Next Message by Chris is [238].
[196] Teight: When discussing use values it is best to look at them from a qualitative point
of view. A use-value is the quality that determines the use inherent of a given commodity.
This quality is brought to pass through the laborer during the labor process of the commodities.
An example of this would be that gloves provide warmth for an individual, which is the
use-value for that commodity. When discussing exchange values, Marx believes it should
be looked upon from a quantity point of view. This quantity is given through society with
the exchanging of goods. The exchange value is what can be traded for a given good after
the labor has been compensated. Exchange value is the property of the commodity.
Hans: You seem to be answering question 86, not 54. Your in-class answer had references to the question, but
your resubmission did not. Did you have the question text in front of you when you made the resubmission?
Next Message by Teight is [209].
[204] Ben: graded A– Wrong. Even though the definition of use-value is correct the definition
of exchange value is incorrect. Exchange value is the value of the commodity when
being exchanged for other commodities. If you are getting utility from using a commodity
that would just be use value all over again. But, exchange value is the value of someone
wanting what you have and that usefulness to them not the use itself. In response to the
question Right handed scissors jazz tickets would have a higher exchange value than scissors
because society has said jazz tickets have a higher exchange value.
Hans: That’s a good way to think of it: society decides the exchange-value, while individuals decise the use-value.
Next Message by Ben is [205].
[206] Marcellus: Where is it? “The usefulness of a thing makes it a use-value” (Marx,
126). Therefore when question 54 states that “the use-value of a commodity is the utility
one gets from using it,” this rings true. However when it says “the exchange-value is the
utility one gets from using those things one can trade the commodity for,” this is wrong. As
Hans points out in the discussion on page 18, “the exchange-value of a commodity does not
come from its use-value. And it certainly does not come from the use-value of the other
commodity.” Marx says, “exchange-value manifests itself as something totally independent
of . . . use-value. But if we abstract from . . . use-value, there remains . . . value. The
common factor . . . in the exchange-value of the commodity, is therefore its value” (Marx
128). And this value comes from, “the amount of labour socially necessary . . . for its
production” (Marx, 129). Simply put, exchange-value of a commodity is determined by the
amount of work put into it.
Hans: Your in-class answer has another good point demonstrating that exchange-value does not come from usevalue:
“the exchange-value arises when the commodity owner wants nothing to do with the commodity but exchange
it, although it better have utility for the person to whom it is being exchanged.”
Next Message by Marcellus is [207].
[210] Daniel: graded A Wrong. This statement assumes that a commodity’s exchange
value can be reduced to its use-value. This is not what Marx is trying to say. Exchange
value should be viewed more as a “second property of each commodity” (Hans [5]). This
statement claims that the “exchange value is the utility one gets from using those things
one can trade the commodity for.” This statement is false because it places the individual
14 2007fa Econ 5080 U of Utah
at the heart of value determination. Marx would disagree with this because he says that
society determines exchange value in the sense that they create a “social custom” when they
exchange commodities with each other. (Hans [5]). In other words the exchange value does
not come from its use-value or the use value of the other commodity but from a ‘social
custom.’ In short, “exchange value doesn’t have anything to do with using things” (Chapeye
[6]).
In a short conclusion, both of the statements in Q[54] are false because they assume
that the use value describes the utility a commodity may provide, and it assumes that the
individual can influence exchange value. In reality, ‘the use value describes a commodity’s’
material properties that make it useful (Stuart [15]), and exchange value is a relationship
between commodity and commodity which is determined by social customs.
Hans: The exchange proportions are not determined by social custom, but by the invisible movement of labor
between the different industries. In [2007SP:586] I referred to this as the “elephant in the room.”
Next Message by Daniel is [340].
[216] Dave: This is wrong. The beginning of the question states that “the use-value of
a commodity is the utility one gets from using it.” The word utility leads us to consider
the utility function which measures the satisfaction of a thing to the individual. As stated
in “Capital” Marx says that “the usefulness of a thing makes it a use-value”. How useful
a commodity is “to serve human needs”, as stated in the annotations, determines the commodity’s
use-value. According to Marx the usefulness of a thing can not be measured or
compared. This would lead us away from utility.
According to the annotations exchange-value is “that social relation or social custom
which allows commodities to be traded for each other or for money.” The question defines
exchange value incorrectly by using the word utility. The “utility” one gets from an item
being exchanged does not determine its exchange value. Exchange-value is found in the
commodity itself. This cannot be found in determining the utility or use-value of the item.
Next Message by Dave is [227].
[223] Jill: Upon further research of this question I find that I was not on the right track.
My understanding of use-value was much more concrete than that of exchange-value. The
correct answer is that the statement is wrong. The use-value of a commodity is not related to
utility one can gain from use of that commodity, but is the actual material qualities that make
up the commodity. The exchange-value is a secondary condition applied to each commodity
and does not refer at all to utility but instead to what that commodity can be exchanged
for in a social setting. Marx labels an item with an exchange-value because the items are
commonly exchanged with each other in the society, not because they can be exchanged for
other commodities. A commodity with exchange-value is desired solely for the ability to
exchange it; not for the utility it may provide.
Hans: Your last sentence correctly attributes a secondary utility to an exchange-value. But as I said it is secondary.
People use exchange-values for exchange whether or not they find them desirable because of this. One can argue
that they must not find them too desirable, because otherwise they would keep them.
Next Message by Jill is [224].
[225] Jeff: The statement that the use-value of a commodity is the utility one gets from
using it and the exchange-value is the utility one gets from using those things one can trade
the commodity for is wrong.

U of Utah Econ 5080 2007fa 15
A commodity is composed of two different types of values. The first is the commodity’s
use-value which represents the utility an individual would receive when using that commodity.
The other value is the exchange-value of the commodity, which is the value derived from
a commodity if a value is arrived at because an individual can exchange it. It is not derived
from the use-value of the commodity but is a secondary property of it. The exchange-value
is derived primarily by keeping the individual in the middle of the evaluation. It is more of
a social appeal to the commodity more so than anything else.
Hans: What do you mean by “keeping the individual in the middle of the evaluation”? Marx does not resort to
“social appeal” and also not to “how would I feel duly compensated” as you wrote in your in-class answer, but he
has very specific ideas where exchange-value comes from.
Next Message by Jeff is [228].
[226] Ricky: Wrong. The use-value is the menu of society’s all possible uses of a thing.
For Marx, it cannot be seen as dependent upon one individual. For example, if I don’t like
milk at all (i.e. it doesn’t increase my utility) it still has use-value because others can use it
and benefit from it. The use-value of milk does not hinge on my personal preference.
The exchange-value is an expression of the socially necessary labor-time in its production
that allows it to be exchanged for other commodities on the market. Again, it does not
depend upon the utility one potentially gets for the trade. If this were true, the exchangevalue
would vary enormously from person to person because individual utility of a good
varies enormously from person to person. Another problem with viewing the exchange-value
this way is the principle of buyers’ remorse. If exchange-value is based on the utility one
gets for the goods traded, why would anyone ever feel regretful for what they traded? The
fact that buyers’ remorse is a common, universal feeling refutes the notion of the exchangevalue
being so dependant upon utility. The concept of regret is unexplainable within the
mainstream economic framework. Marx would see this as a contradiction that should lead
us to examine what truths lay beneath the surface.
Accordingly, this question highlights an important distinction between Marx and mainstream
economics. For Marx, price is a reflection of the congealed abstract labor in a commodity.
For mainstream economics, price is a reflection of utility and individual preferences
for a good. This distinction may seem trivial but Marx builds off this distinction to
later criticize the gross inequalities inherent in capitalism. Hans expounds upon this point
[1998WI:28]. “The subjectivist point of view taken by modern utility theory, which reduces
everything to how you feel about it, deprives you of the theoretical tools to understand the
imbalances in the distribution of very real resources and power in capitalist society”. If
value, use-value and exchange-value are dependent upon utility, then social relations and
structures have no role in the cause / production of value. And if this is true, the social
relations and structures would not be responsible for the unequal distribution of value and
resources. For Marx, this is an illusion that allows the capitalistic system to persist despite
its gross exploitations and unfair wealth distributions.
Hans: Very good. Here and in [215] I broke up your paragraph because it was too long.
Next Message by Ricky is [389].
[231] Nogi: Wrong. Marx argues against exchange value being reduced to the use-value
of the commodity. The use value does not derive the exchange value. The exchange value is
16 2007fa Econ 5080 U of Utah
its own derivative of a commodity. The definition given focuses too much on the individual
utility of commodity owners to get the exchange value definition. In a society not one
commodity has exchange value for every other commodity.
Hans: I added the “owners” in “ individual utility of commodity owners.” Is that what you meant?
Next Message by Nogi is [234].
[233] Amy: Utility from use-value and exchange-value? Both statements are wrong.
The use-value as defined by Marx (p. 126) is “the usefulness of a thing” and in the
annotations (p. 1) use-value is defined as “the menu of possible uses of the commodity.” So
to say that the use-value of a commodity is the utility one gets from using it is not entirely
correct. A commodity can have use-values that bring utility to the user, but it can also have
use-values that bring disutility to the user. For example, let’s take [4] Ben’s comparison of
right- and left-handed scissors. A pair of scissors, regardless of if they are right-handed or
left-handed, has a use-value of cutting things. If someone who is right-handed owns a pair
of right-handed scissors they can use those scissors to cut a piece of paper, which brings
them utility. If that same person owns a left-handed pair of scissors, those scissors can still
cut a piece of paper even though the person cannot use them. Since the person cannot use
the left-handed scissors it brings them disutility. This shows that the use-value is not the
utility that one gets from using a commodity. This does not mean that use-values cannot
bring utility because from the above example it shows that it can. In conclusion, use-value
is all the possible uses of a commodity, those uses that bring utility to the user and also those
that do not.
The exchange-value of a commodity is the proportion in which use-values of one kind
[of commodity] exchange for use-values of another kind [of commodity] according to Marx
(p.126). In the annotations (p.18) it states that exchange-value is social, not individual,
it resides in the commodity itself and it is not attributed to the commodity by the owner,
but the commodity itself. By saying that exchange-value is the utility that one gets from
using those things that one can trade the commodity for contradict both what Marx and
the annotations say. The exchange value has nothing to do with the utility that trading the
commodity brings. It only has to do with what the commodity can be exchanged for. A
commodity can be exchanged for something that might bring the owner disutility. Even if
the owner does not exchange for that commodity, the exchange-value is still there.
I was entirely incorrect in my in-class answer when I said that the statements were wrong
because it implies that one can only get utility from the use-value or exchange-value of a
commodity. Although, there are other things that can bring utility from a commodity other
than the use-value or exchange value.
Hans: Thank you for pointing that out. I have the impression many class participants tried to gloss over the
mistakes in their in-class answers instead of pointing them out.
Next Message by Amy is [235].
[239] Brian: Wrong. The use-value of a commodity is the utility one gets from using
it. For example, a right-handed person receives a higher level of utility from utilizing a pair
of right-handed scissors but a left-handed person receives less utility from the same pair of
scissors, therefore less use-value. The exchange value, however, is not the utility one gets
from using those things one can trade the commodity for. If this was not the case, then it

U of Utah Econ 5080 2007fa 17
would hold true that a left-handed person could exchange his right-handed scissors for a
yacht and the exchangers would receive the same amount of utility.
Hans: Your example of the different utilities of the same scissor, i.e., the same use-value, for two people seems to
indicate that the use-value is not equal to utility.
I don’t get your last sentence. Are you saying that left-handed persons don’t like yachts? And I suspect you
mean “if this was the case” instead of ”if this was not the case,” but I can’t tell because I don’t get your argument.
Please explain, using the web-submission form in the html archives for this message.
Next Message by Brian is [240].
[241] JoshS: Use-Value and Exchange-Value. This question is both right and wrong.
First, “the use-value of a commodity is the utility one gets from using it;” is a true statement.
The commodity must provide some type of benefit to the individual using it to create a usevalue.
The second part of the statement, “the exchange-value is the utility one gets from
using those things one can trade the commodity for”, is wrong. The exchange-value of a
commodity is determined by what you can trade the commodity for. The exchange-value, as
mentioned by Hans [5], finds its expression in the use value of the commodity you can trade
for. Therefore, the exchange-value of your commodity is dependent upon your ability or
perceived ability to exchange that commodity. Your commodity then must have some utility
for another person in order for them to trade with you.
Hans: I.e., a commodity can only be an exchange-value if it is a use-value not just for your mother but for at least
part of the population out there. In this sense, being use-value for others is a condition for exchange-value.
Next Message by JoshS is [242].
[243] Milton: Commodity is not based on the utility one person receives. Wrong.
The commodity is the object and is not based on the utility one gets from it, but rather the
impact that society receives from it. As what Hans stated in [5], we don’t put the person in
the center of the trade but rather the society. Therefore my original answer stands in that the
exchange value isn’t the utility one receives but rather the quantitative value society chooses
for it. In that way you can exchange things that aren’t the same, like in the example from
Ben, right vs. left handed scissors.
Hans: I didn’t mean to say in [5] that one should look at everything from the point of view of society. The utility
which an individual gets from a commodity is not social but individual, and it is real. But Marx says that those
individual feelings do not make society. Society “chooses” the exchange-value according to the labor it has to put
into producing these things and not according to individual sentiments.
Next Message by Milton is [244].
[245] Chad: Use value vs Exchange Value. Wrong. Exchange value is both qualitative
and quantitative in nature. It is by Marx definition accidental and relative. In Marx definition
exchange value is what makes use value what it is. Use value is the utility one gets from
consumption but is not fully realized until consumption.
Hans: In Marx’s theory, exchange-value is not accidental and purely relative. And it certainly is not what makes
use value what it is.
Next Message by Chad is [247].
[246] Corey: graded A Is Value Utility. Use value is not utility, as Utility is related only
to an individual and use value relates to all the possible uses of the commodity. Therefore
it is part of the commodity, not part of the individual, whereas utility just is the use of that
individual. Exchange value is the social relationship a commodity exhibits when traded for
other commodities. It again relates to the commodity as a property of that commodity not of
the individual trading it.
Next Message by Corey is [248].
18 2007fa Econ 5080 U of Utah
[249] Gilmour: graded B– The first statement is correct. Use-value stems from the ability
of a commodity to be used by someone for their own specific reason. For example, I may
have a snow plow that is very useful to me during the winter months in Utah. However, while
this snow plow is a wonderful commodity in Utah, it is of no value whatsoever in southern
Florida where it does not snow. This leads us to the exchange value of a commodity. My
snow plow in Utah can be readily exchanged for another commodity because it has use-value
here. On the other hand, if I wanted to exchange my snow plow for another commodity with
someone in Florida, they would not trade with me because it is of no value to them. Just
because something has a use-value does not mean it has an exchange value. Another example
of this is homemade goods which are consumed in the home. While of great worth to the
individual in the home, it may have no real exchange value for someone else.
Hans: Why do you argue this? The question did not imply that something that has a use-value must necessarily
have an exchange-value.
Next Message by Gilmour is [250].
[256] Daru: Use-value, Exchange Value and Utility. Wrong, there is no utility or usevalue
attached to the exchange-value of a commodity. Hans points out (in [1998WI:28]) the
subtle difference between use-value as Marx defines it and the concept of utility associated
with modern economics. Marx finds use-value as something inherent in the commodity. It
exists because of its physical properties. Whereas, the utility is a more subjective concept in
modern economics that relies on the feelings of the consumer about the use it wants to obtain
from the commodity. Also Stuart (in [15]) states that both parts of the questions are wrong
and his logic is similar to Hans’s. He also considers use-value to be a material property of
the commodity. The closest, in his opinion, use-value comes to utility is that like utility
use-value is also a relationship between the commodity and its user. Hans also recognizes
this (in [17]). If the utility is defined as the usefulness of a thing that signifies a relationship
between a commodity and the needs of its users then Marx would not put use-value and
utility together. To him usefulness of a commodity is a property of the commodity itself. In
my answer to the question I considered the first part of the sentence right. I think I should
have explained how I was defining the concept of utility. In light of the above discussion and
taking utility as a concept in modern economics, I now agree with Stuart and Hans that the
first part is also wrong.
My opinion and explanation of the second part of the sentence remains unchanged. It
is wrong. To say that exchange-value is the utility “one gets from using those things one
can trade the commodity for” implies an idea completely different from Marx’s own. For
Marx exchange-value comes about when commodities are put in the market for exchange.
It is the peculiar environment of the market and social relations that arise from it that determine
the exchange-value of a commodity. Marx argues that exchange value is an outward
manifestation of value that is invested in a commodity behind the facade of the market. It
has no relation whatsoever with the use value of the commodity. This distinction for Marx
is extremely important since it differentiates the surface phenomena of commodities obtaining
exchange-value from what happens at the core of the society; its production process
that gives commodities their value. The statement in question implies that use-value and
exchange-value (and hence value) stem from the same idea i.e. utility – something Marx
would not have agreed with at all.

U of Utah Econ 5080 2007fa 19
Next Message by Daru is [264].
[257] Bosox: The value of a thing is just as much as it will bring. I am not able to set
what the exchange-value is but I am on the use-value for me. Use-value is conditioned by
the physical properties of the commodity and the exchange-value of a commodity does not
come from use-value. Use-value, commodity and exchange-value are not all encompassing
they do draw from each other but not at the same time.
Therefore with this finding the comment in the question is wrong.
Hans: Your first sentence is a quote from Butler which Marx disagreed with.
Marx’s theory of the relationship between use-value, value, and exchange-value is not that complicated. You
are expected to learn it instead of doing some handwaving.
Next Message by Bosox is [261].
[258] Jason: According to previous submissions and class discussions it is clear that the
use value of a commodity is the utility one gets from using it. In your annotations you state
that the use value is “menu of possible uses of the commodity.” It seems as though the use
value is directly connected with the particular commodity and not the user. In regards to the
exchange value it seems that it is defined not so much by the utility one gets from a given
commodity but what an individual can trade that commodity for. This phenomena is highly
influenced by society and how they value a given item.
Next Message by Jason is [350].
[259] Chased: Exchange Value is Utility? The first sentence is correct, however, the
second is false. The true statement being that use-value is the utility received from using the
good; definition of use-value.
The second sentence is not fully false, but is not true. Exchange-value is its relative
worth to society as a whole, not to the individual. If a commodity has no utility then it
cannot have any exchange-value, however it does not necessarily require utility to each and
every individual person. This sentence is not entirely true as not every person is able to trade
a good for its full utility but will be able to exchange for something of value.
Hans: Your theory of exchange-value as “relative worth to society as a whole” has nothing to do with Marx.
Next Message by Chased is [260].
[266] Ashley: One In NOT The Same. Wrong. The use-value of a commodity is the
“usefulness” that it serves to the comnunity. It is not the utility that one gets from using it.
By saying it is the utility that one gets from using it, it makes use-value subjective to the
person that has the commodity. Instead, use-value is the uses that the commodity itself gives
no matter whose possession it is in.
Exchange value is a whole different property of a commodity. It has nothing to do with
the uses of the commodity. Rather, the exchange-value in a commodity is the value that the
commodity can be sold or exchanged in the market for money or another commodity.
The exchange value has nothing to do with its uses. Instead, it is what is normally exchanged
for one another in the market/in society.
Hans: You had “usefulness that it serves to the commodity.” I changed “commodity” into “community,” assuming
it was a writing error.
Next Message by Ashley is [285].
[274] Gregory: Right. The “use value” of a commodity in a way describes the utility
and importance of the particular commodity in the sense of what function the commodity
20 2007fa Econ 5080 U of Utah
performs. For instance the “use value” of a winter coat relates to its ability to shelter the
body from cold and weather etc. Consequently, the “use value” of a coat in Russia may be
substantially greater than the “use value” of a coat in South Africa.
The “exchange value” of a commodity in the market relates to the measurement of one
commodity to another based on its overall worth to the consumer. This can be based on the
commodities’ “use value” or output of labor. Hence the exchange value is the value of a
commodity when being exchanged for another.
Hans: If you say exchange-value is based on the overall worth to the consumer, this has nothing to do with Marx.
Message [274] referenced by [438]. Next Message by Gregory is [438].
[279] Ryan: content A late penalty 1% Wrong. The common problem in these two
statements is that they rely on utility, and thus individual preferences to describe social phenomena.
Use-value is not the utility that an individual derives from the use of a commodity,
but rather is the menu of possible uses which a commodity can be put to. This says nothing
about preference and utility. It is concerned with practical application. Exchange-value is
the socially determined quantity of one commodity that can be exchanged for another. For
example, 20 yards of linen=1 coat says nothing about the utility one would gain through the
use of the coat. Instead it establishes, as Marx explains later, the amount of ‘value’, in the
form of abstract human labor, that is socially accepted to be in the linen in comparison to
that in the coat.
Next Message by Ryan is [280].
[284] Jessica: A Mona Lisa Painting. The definition of use-value is correct; it does
come from the utility one gets from using it. However, the definition for exchange value
is incorrect. It is not the utility that one gets from using those things one can trade the
commodity for but the value a commodity has in relation to other commodities, and the
value that commodity has in society. A perfect example of this is Dasani’s bottled water;
society says it would trade far more than regular tap water, ironically though Dasani is also
tap water. There is some utility involved in the exchange value that a commodity may have
but that isn’t the only criterion or even necessarily the main criterion. It is can also be based
on quantity, if there is only one Mona Lisa Painting in the entire world it may have a higher
exchange-value than if there were many of them. At its basic elements though, exchangevalue
is really a societal construction. In capitalism that construction is created by the upper
echelon of people and not through a democratic way.
Hans: You agree with Marx that value does not come from utility but is an irreducibly social relation, but your
value theory is different than Marx’s. The reality as seen by Marx is, to quote Naomi Klein, less sinister but more
dangerous than your conspiracy theory of value. Marx says that the upper echelon do not control the market either.
Chapter Six will show how the favorable market outcomes to the capitalists can be explained based on a labor
theory of value. There is indeed an undemocratic element in this: capitalist profits come from their control of the
social means of production.
Next Message by Jessica is [651].
[289] HTJY: Use Value, Exchange Value, Utility. “The use value of a commodity is the
utility one gets from using it.”
Wrong. Marx says, “The usefulness of a thing makes it a use-value. But this usefulness
does not dangle in mid-air. It is conditioned by physical properties of the commodity itself.....It
is therefore the physical body of the commodity...., which is the use-value or useful
thing.” (Capital, p126) Interpreting usefulness as utility, here, Marx clearly distinguishes the

U of Utah Econ 5080 2007fa 21
use-value (“the physical body of the commodity”) from its utility (what makes the commodity
a use-value). Thus, according to Marx, a use-value is an ‘article’ of usefulness, not the
usefulness or utility itself.
This distinction is important. The concept of use-value acknowledges that the utility of a
commodity is conditioned by the physical properties of the commodity itself. On the other
hand, the concept of utility is an attribute of an agent-object relation and emphasizes that
the utility of a commodity is determined by personal preference. The consequences of these
two different conceptions are by no means small. By abstracting value from the use-value of
commodity, Marxian economics was able to reveal social relations buried in the commodity.
By deriving value and price from personal preference as specified by utility, the orthodox
economics turned the economic science into a mere study of autonomous rational decision
makers who are unaware of social relations of production.
“The exchange-value is the utility one gets from using those things one can trade the
commodity for.”
(Note: Here, “commodity A” is a shorthand for “x amount of commodity A” and “commodity
B” is a shorthand for “y amount of commodity B.”)
Wrong. This statement, again, emphasizes that it is ultimately the personal preference
as specified by the person’s utility (function) of commodities that determines the exchange
value of a given commodity. According to Marx, however, what determines the exchange
value is not a personal substance such as utility but a social substance called value. To be
more precise, an exchange value of a commodity A is, in general, another commodity B that
the commodity A can be exchanged for in market. The crucial point is however that the
commodity B as an exchange value is merely a form of the appearance of value. Value, in
turn, is the totality of socially necessary labor concealed in the commodity B, as measured
by the socially necessary labor hours to required to produce B. Here, the social character of
value arises from the fact that its substance, i.e., labor, is not a specific labor of individuals
but the identical labor that is averaged from the pool of all the available labor in a given
society. It is this common substance that makes it possible not only to determine exchange
ratios but also, more importantly, to trace the social relations buried in the commodity.
Next Message by HTJY is [290].
[294] Tomb: use value and exchange value. The statement is true. What determines the
use-value of a commodity is the utility one gets from using it. That use-value also has a large
bearing on what the exchange value of a commodity is. Marx claims that use-value is the
“material carriers” of exchange value. However, the exchange value isn’t directly taken from
the use value of an item, but rather from the utility one gets from using those things one can
trade the commodity for. A great example would be if everyone was given bread for free.
Bread would have a use-value, but it would not have an exchange value because nobody
would be willing to trade another commodity for bread. Bread only obtains exchange value
if it can be exchanged for a commodity which has use-value.
Hans: With the term “material carrier” Marx meant something much weaker than the use-value determining the
exchange-value, as you said in your in-class answer, or it having a large bearing on the exchange-value as you
are saying here. On the contrary, the influence of use-value on exchange-value is very weak. The use-value is a
condition for the exchange-value without determining it. Just like the food you eat is a condition for you being alive
but does not determine what you do.
22 2007fa Econ 5080 U of Utah
Therefore when you say that “the exchange value isn’t directly taken from the use value of an item,” I agree.
But then you continue that it is taken from the use-value of the other things then my agreement stops. You should
simply look at exchange-value as a relationship between commodities. A commodity has a high exchange-value
if it can be traded for large amounts of other commodities. The use-value of these other commodities is not being
considered when you talk about exchange-value.
Next Message by Tomb is [295].
Question 58 is 59 in 2008fa, 62 in 2010fa, and 70 in 2011fa:
Question 58 In 126:2, Marx says that certain superficial evidence seems to indicate that
exchange-values are accidental and relative. How much truth is there to this? To what
extent are exchange-values indeed accidental, and to what extent are they indeed relative?
(This question requires familiarity with things Marx says later.)
[150] Chased: Marx states that “Purely Relative” means it does not come from the commodities
themselves but rather from their relationship to each other. While exchange values
can be determined by their relationship to others it is not purely accidental. For instance,
paying a doctor to come to your home rather than going to the hospital is going to cost more,
is the value associated with not leaving your home worth it. Alas, it is not a question of what
the worth is, but of the exchange-value. Their exchange values will differ because of their
relativity, but will this carry over to the remainder of the market? While these values can
change due to their relativity to another, they are not “purely relative.”
While it is spoken of exchange values as being accidental, this is completely different
from the contemporary model based upon supply and demand. Marx believes that these
“accidental” values are based off of the relativity of each commodity to another. I do not
believe this to be so. I am a believer in the contemporary model, where prices are based
off of the availability of goods and the wants of consumers. I also believe in the holder
of a commodity being able to “control” the commodity market. While it is not possible to
control consumers, there are very few things in the market, especially the exchange-value is
accidental.
Hans: It is ok to disagree with Marx, but you have to understand Marx in order to be able to disagree with him.
Message [150] referenced by [155]. Next Message by Chased is [153].
[155] Hans: Relativity of exchange-value. Don’t let Chased confuse you with his answer
[150]. Marx does not believe that exchange-values come from the relationship of the
commodities to each other. Look for instance at the price of a commodity, which is a form
of its exchange-value. When I talk about the price of milk, I do not talk about my price of
milk or someone else’s price of milk, but “the” price of milk. This price is associated with
milk and is not viewed as a relation between other commodity owners and the milk owner.
Nevertheless the price of milk varies over time, and it varies according to the store where
you buy the milk. This is the “superficial evidence” which prompts Marx to ask: wait a
minute, is it really true that milk has a price, it looks here as if the milk price is the result
of the relation between whoever is trading the milk, and there is no hope to scientifically
explain what this price must be since it simply depends on the circumstances. (This is what
Marx means by the word “accidental.”)
Marx says here that people commonly have two contradictory thoughts in their heads.
On the one hand, they consider the price of milk indeed to be the price “of” milk, but on the

U of Utah Econ 5080 2007fa 23
other, they are also not shocked if the price of milk in one store is different than the price
of milk in a different store – although this diversity contradicts the idea that this is the price
“of” milk. To us, this diversity is a familiar every-day occurrence, but when East Germany
switched from a socialist system to a capitalist system, people used to call the radio station
saying: “I just was in two different stores and they sold milk at two different prices; isn’t
one of these stores doing something illegal?” Under socialist price controls, they were used
to getting milk everywhere at the same price. This seemed to be natural to them, because
after all it was the same milk, and they were shocked to see that now the same milk was sold
at different prices.
Marx’s theory offers here the following explanation: we are not shocked about this contradiction
because we understand that both contradictory aspects have some truth in them.
The exchange-value of milk is commonly associated with milk and not seen as something
purely relative, i.e., newly generated in the interaction between each buyer and seller, because
it is the exterior manifestation of the value of milk. This value is indeed closely
associated with milk, because it is the socially necessary labor-time to produce this milk.
On the other hand, the variability of prices of the same good is also accepted because the
sellers compete on the markets. I.e., the value is not set by a direct organization of producers,
but the producers produce independently and then let their goods fight with each other on
the market. Prices are the results of these competitive battles. This does not mean that they
are entirely “accidental,” the value still shines through as the regulatory principle since every
producer has similar production costs. In Marx’s terminology, prices are the exterior surface
manifestations of the intrinsic value, and this manifestation is indeed relative, because it is
the exchange relation between the two commodities.
Chased makes a distinction between the intrinsic quality and its exterior surface manifestation
when he writes: “alas, it is not a question of what the worth is, but of the exchangevalue.”
But in his answer, if I understand it right, the intrinsic thing is the use-value, while
the exchange-value comes from the market power of the suppliers who “control” the market.
Marx does not believe that use-value has an influence on the price; in the long run, use-value
only has an influence on the quantities supplied. Instead, the intrinsic basis for pricing is the
ultimate cost of the commodity to society, which is its labor input. This theoretical disagreement
has important implications: in Marx’s theory, value is produced in production by the
workers, while in the neoclassical theory, value is produced on the market by the consumers.
Message [155] referenced by [2010fa:24]. Next Message by Hans is [157].
Question 63 is 64 in 2008SP, 64 in 2008fa, 66 in 2009fa, 67 in 2010fa, 61 in 2012fa, and
67 in Answer:
Question 63 The French economist Le Trosne wrote that the value of a thing consists in
its exchange-proportions with other things. Does Marx agree with this, or how would he
re-formulate this proposition to make it correct?
[131] Daru: Le Trosne doesn’t know the difference. Le Trosne’s statment can be broken
in two parts. He first mentions the “value of a thing” (and by ‘thing’ we here assume that
he means a ‘commodity’) and then defines it relative to the exchange proportions with other
commodities. Marx would not agree with this for the simple reason that he defines the two
24 2007fa Econ 5080 U of Utah
concepts differently. Every time Marx uses the word ‘value’ he is referring to the congealed
abstract labour expended on the commodity (Hans [105]). Le Trosne on the other hand
suggests that the value of a commodity exists only because it can be exchanged with some
other commodity/ies. Here to Marx, Le Trosne is only talking about the exchange value of
the commodity and not its value.
The exchange value of a commodity for Marx is an outcome of some social relations
that take pace in the marketplace. The exchange-value only provides producers with signals
about the quantity of a commodity to be produced. For Marx, the value of a commodity
makes it exchangeable (Hans [105]). From the last sentence it seems that Marx is agreeing
with Le Trosne and alludes to the same type of connection that Le Trosne has developed
between value and exchange value. It must be noted that Marx considers exchange value
to be only a superficial manifestation of value. Marx believes that although value in its
own right is a social relation stemming from production, he describes exchange-value as
form of value (Annotations page 76). Also, I think for him value exists independent of
exchange value of a commodity. The exchange value comes about only in the market place
i.e. only through some social relations that govern trading of commodities. If a commodity
is produced and consumed without being traded then it still contains value i.e. the congealed
abstract labor inside it. What it would not have is an exchange value since it has not been
put up for trading. Le Trosne’s statment on the other hand implies that if commodities are
not traded then they will not contain any value—an argument that Marx would not find
palatable. In summary, exchange value comes about due to social relations taking place
on the surface, whereas the value of a commoditiy exists due to the social relations that
exist behind the surface phenomena. This is a crucial distinction to Marx that Le Trosne’s
statment completely seems to miss or ignore.
Hence, if Marx were to rephrase Le Trosne’s statment he probably would have said ‘the
value of a commodity exists because of the congealed abstract labour present inside it.’ or
‘the value of a commodity makes it exchangeable.’
Hans: Very good, just one quibble: if the product is never traded but consumed by the producer then it is not
a commodity and has no value. The difference between Marx and Le Trosne is whether value is produced in
production (Marx) or in the market (Le Trosne).
Message [131] referenced by [208] and [263]. Next Message by Daru is [256].
[147] Caroline: What exactly is being traded for this Thing. A thing, or a commodity,
in Le Trosne’s view is only valuable in relation to other commodities. Marx would probably
dissect Le Trosne’s proposition, and disagree with part of it, because there are more values
in a commodity than just its “exchange-proportions with other things” (Hans’ annotations,
pg. 22).
Le Trosne does not specify what is actually being traded. What does one consumer
see in a commodity that drives them to exchange or purchase it? “The value of a thing
consists in its exchange-proportions,” but this begs for more interpretation. Marx would
probably argue that the exchange proportions of a thing, or commodity, consists of usevalues,
as well as its exchange values. They are interrelated, as Marx says in question 75 of
the annotations: “exchange-relations are characterized by an abstraction from use-values...if
use-value is in high demand,...then it commands a higher exchange-value.” Also, on page 18
of the annotations, there are explanations as to how they are related, but also independent in

U of Utah Econ 5080 2007fa 25
different contexts. “If a commodity loses its use-value then it also loses its exchange-value.”
However, if a commodity that has a use-value that becomes widely abundant to consumers,
then it may lose its exchange-value.
Again on page 18 of the annotations, the first claim of Marx’s introduction to exchangevalue
says if two individuals exchange “things which are commonly not exchanged, this does
not give these things exchange-value.” This claim would differ from Le Trosne’s proposition,
because he claims that a commodity’s value is contingent upon its exchange-proportions in
relation with other things. What are these “things” that he claims are being traded? If these
things are not commonly traded with each other, then there is no exchange-value.
Hans: Your answer addresses a basic difference between Marx and Le Trosne, which distinguishes different approaches
to science to this day. Marx has a depth view in which the empirical phenomena (here exchange-value)
are generated by invisible underlying forces (value, ultimately labor), while Le Trosne explicitly denies this depth
dimension but says: what we see on the surface is all there is.
You are reading the Annotations, but you still misunderstand some of it. The formulation in question 75: “If
a use-value is in high demand compared to supply, then it commands a higher exchange-value” is an objection to
Marx’s claim that exchange-value does not come from use-value. Just keep reading; the formulations will become
clearer as you understand Marx better.
Next Message by Caroline is [275].
[172] Poppy: Marx would not agree with this statement, for an obvious reason being that
it is too broad. Possibly it would be considered if Le Trosne stated, “the monetary value of
a thing consists in its exchange-proportions with other things relative to that which is being
traded.” This statement makes more sense and holds more merit, but ultimately Marx would
still disagree. His viewpoint on Value in relation to a commodity is not associated with the
exchange value, his point being that not all commodities need to have an exchange value
period to hold great value. This idea greatly contradicts La Trosne’s theory.
Some commodities are a necessity to just living, making them priceless/exchange less.
Luckily today, our Government is allowed to place price caps on such commodities, such
as Gas, Oil, Electricity. My commodity needs may or may not be different from the needs
of Marx during the time of his life, but he saw and presented that picture. One simple
“priceless” commodity is a coat. What does a coat give the person who wears it? Warmth
and possibly good health. There are thousands commodities just as this one that do not need
to be associated with an exchange-proportion when their value is determined. Obviously
the government does not place price caps on such commodities, because there are so many
laborers that can produce the coat, which in the end drives the monetary value of the coat,
which is in fact different than its value.
Ultimately, what is Marx telling us gives a commodity value? He is saying that value is
something relative and objective, which can lead to what? Comfort, happiness, wealth, etc.
All things which have no exchange value.
Hans: You do not understand how Marx uses the word “value.”
Next Message by Poppy is [173].
[189] JohnGalt: Rai de Le Trosne sans raisonnement d’abord. Marx would not agree
with the French economist Le Trosne’s assertion that “the value of a thing consists in its
exchange-proportions with other things.” Marx understood the existence of a distinction between
different forms of value, each of them unique, and would have criticized Le Trosne
for trying to combine them all into a single theory. Indeed, Marx’s theories of use-value
26 2007fa Econ 5080 U of Utah
and exchange-value are clearly elaborated and provide a very successful rebuttal to earlier
theorists. Use-value is derived from the utility a commodity provides to its owner. However,
this value form is not directly related or tied to exchange-value. Exchange-value is
determined by abstract labor that is itself a function of dynamic, socially-created human
interactions and relationships. This makes exchange-value entirely distinct from use-value
and not reliant upon use.
Marx does acknowledge one tie between these two value forms. In summary, this can be
reduced to an understanding that without use-value, commodities will not possess exchangevalue.
This suggests that a commodity which is completely used-up or consumed will
not find value in exchange. However the opposite of that statement is not true. Without
exchange-value, commodities can still have use-value and often do—especially in primitive
societies, which operate under different rules and ideas. Take for instance Marx’s anecdotal
example of Robinson Crusoe gathering breadfruit that grows plentifully on the trees. He
does not produce the fruit nor can he exchange it, but he can use it for his own benefit. Thus,
Marx would have suggested that Le Trosne was oversimplifying in his analysis of value and
reverting to a classical understanding of the term, which pays no heed to social relationships,
original labor or the artificial creation of markets and capitalist structures.
Hans: Marx and Le Trosne do not disagree about the use-value – exchange-value dichotomy which was shared by
the classical economists. Their disagreement is about surface and depth realities.
Next Message by JohnGalt is [393].
[208] Fred: Le Trosne On The Surface. Le Trosne is equating the value of a thing
(commodity) purely on its exchange value, or market value. In other words he is saying that
value is produced in the market. This would indicate that he is not concerned with intrinsic
values, or inputs to production as the source of value but rather thinks of value as a relative
thing, or what the market assigns to a commodity relative to other commodities. Marx
certainly does not agree with this assessment. To Marx, value is produced in production.
(Hans response to Daru [131]). Marx begins where Le Trosne ends. Marx begins his journey
into the source of value by looking at commodities themselves, and gets to the roots of value
by drilling down to the sources of the underlying “Value” Le Trosne calls relative. The
source of this value is labor. A commodity must have a use-value to be exchangeable. But
the relative value is arrived at by an equalized labor content Marx calls Labor Power, or the
“congealed abstract labor expended into the commodity” (Hans [105]).
Exchange Value is not derived from Use-Value, but is the Social Labor Power in the
commodity. So to Marx, the key to value is labor. It is labor that provides value to the
production process, more value than it receives in wages. This disparity is what allows
producers and owners of capital to receive their products value at market, and keep the
difference from what labor provided to value and what labor was paid. It is this disparity
that is exploiting labor, and this exploitation cannot be seen by just looking at the form of
value, or the surface expression of the market. Le Trosne is therefore missing this key to the
source of value, and is missing this exploitation to labor. So Marx would say that value is
produced in production, not in the market.
Next Message by Fred is [211].
[219] SamHouston: Le Trosne. Marx does not agree with Le Trosne’s evaluation of
the genesis of value. Value, in Marx’s view, does not come from other commodities but it

U of Utah Econ 5080 2007fa 27
is found inside the commodity itself. Value is the expression of exchange value; exchange
value is derived from labor. With this lineage of value, Marx would say that the value of a
commodity in the market is created by the abstract labor involved in production. The material
provided through class discussions gives another method of describing this by saying
that value comes from the production process. The reasoning behind this is that society has
determined how abstract labor should be allocated, thus giving value to the production process
of a given commodity. This differs from Le Trosne because he believed that the value
of a commodity was found in the market, or the relationship between two commodities in
the market.
Hans: Your sentence “value is the expression of exchange value; exchange value is derived from labor” has the
wrong order. It should read “exchange-value is the expression of value; value is derived from labor.”
Next Message by SamHouston is [220].
[221] Scott: Marx would not agree with Le Trosne. Marx went on to talk about how value
doesn’t completely rely on its exchange proportions, which is all Le Trosne is concerned
with. Nature plays a role in the value of an object, it is not necessarily valuable or unvaluable
just because a person said it is, Marx would also talk about the use value of an item, an
example would be air. Air cannot be exchanged, so therefore it has no exchange value, and
therefore no worth – according to Le Trosne, but just because it is all around us, does that
make it worthless? No – the use value of air is inmeasurable, no one would be alive without
it yet we don’t have to buy it. But since air is not made by man, and has no labor put into it –
as far as the human eye can see, it is a poor example. Rather let us use the example of a man
who builds a chair so he won’t have to stand all the time, he hand-makes the chair and takes
his time, but he has absolutely no intention to sell the chair, the chair contains use value, it
can be sat on, it contains abstract labor even though it won’t be sold, but it could be viewed
by Le Trosne as worthless since it will never be traded.
Hans: Marx’s concept of value is quite different than use-value. Despite its immense usefulness, air has no value
since no labor is in it. If brought to market, the leisurely hobby-produced chair has the same value as an equivalent
chair made with modern means of production.
Next Message by Scott is [222].
[263] Walmart: You made the answer very clear by writing in [131], “The difference
between Marx and Le Trosne is whether value is produced in production or in the market.”
Marx would reformulate Le Trosne’s proposition that “the value of a thing consists in its
exchange-proportions with other things” by saying that the labor put into creation of the
thing is the determining factor of value, and not what that thing can be traded for. When
speaking of a commodity (something produced to be traded or sold), the value comes from
the abstract labor. Le Trosne asserts that the value consists of what the thing can be exchanged
for.
This exchange value is simply an offspring of value, and originates from the forces and
social relations present in the market economy. If a commodity A is labor intensive and has
the same cost as commodity B, which is easy to produce, then the majority of producers
will switch their labor to B, which will flood the market with commodity B and drive down
its price. Commodity A, on the other hand, may increase in price due to fewer and fewer
people producing it. So just because at some point in time commodities A and B can be
traded for each other in a 1:1 ratio, it doesn’t mean value is determined by exchange. It
means the market is fluid and the forces are constantly acting upon it and affecting exchange
28 2007fa Econ 5080 U of Utah
values. The amount of human labor, however, that was required in creating the commodity,
will never change, since it’s an innate property, which cannot change, because the creation
has already occurred in the past, regardless of what interplay of forces is/was driving the
market.
Next Message by Walmart is [422].
Question 65 is 65 in 2007SP, 66 in 2008fa, and 65 in 2012fa:
Question 65 How is Barbon’s statement that nothing can have an intrinsic exchange-value
related to Butler’s statement that the worth of something consists in the amount of money for
which it can be exchanged?
[33] Dave: Barbon states that, “There is no difference or distinction in things of equal
value.... One hundred pounds worth of lead or iron, is of as great a value as one hundred
pounds worth of silver and gold.” So it does not matter what the items are, if they are equal
in value they are the same.
Butler’s statement, “For what is worth in any thing, but so much money as ‘twill bring?”
is closely related to Barbon’s in that an item of one thing or another has only the value it can
be exchanged for. Butler says that any one thing can only have the exchange-value as say x.
Let’s say “x” would be money. So one hundred pounds worth of lead is worth one hundred
pounds worth of gold, at point of purchase, regardless of the intrinsic differences of the two
items.
Both Barbon and Butler are saying the same thing in a way. Butler says that it does not
matter what the item is, money can get you so much of it. And Barton is saying that so much
money can get you any item of purchase, and it does not matter the intrinsic value of the
item, they are equal in exchange-value.
Hans: The Barbon quote you are using here is not the same which was asked about in the question. Your Barbon
quote, given in 127:4–128:1, says that the act of exchange equalizes the commodities, it makes the world of
commodities one-dimensional. It does not address the question whether the value of the commdities is inside the
commodities or is something relative. Regarding the Butler quote, I recommend my [2007SP:5].
Message [33] referenced by [168] and [170]. Next Message by Dave is [100].
[168] Fred: Intrinsic vs. Relative Value. Dave [33] did not discuss Barbon’s statement
about intrinsic value being non-existent. He does point out that commodities are equalized
at the market in order to be traded using Barbon’s quote from the text but the question was
referring to the quote in Annotations pg. 22 where Barbon states that nothing can have an
intrinsic value. This statement would indicate that Barbon sees value only as a relative thing
since it is being exchanged for something else. This is related to Butler’s statement in that
Butler is saying if two things are indeed traded the worth of the thing is manifest in what it
will bring, how much money, or what commodity can it be traded for, but as Hans stated in
[2007SP:5] this is meant as a satire. “Worth should be some intrinsic quality”. But what we
see in reality is more importance on the relative over the intrinsic. In other words, we judge
a person like a commodity, by their surface value or bank account rather than what is inside,
their intrinsic value.
So on the surface it appears that the two quotes are saying the same thing, but they are
not. It is as if Barbon is saying “there is NO intrinsic value”, and Butler saying “worth must
have intrinsic value, even if we are blind to it”. This is the argument Marx is making, that

U of Utah Econ 5080 2007fa 29
capitalism causes us to focus on illusions of what value is, rather than to consider it’s true
source.
Message [168] referenced by [170]. Next Message by Fred is [208].
[170] Hans: A person who has lots of money must be good. Fred’s [168] is a good
and necessary contribution to the exam preparation. The earlier answer [33] used the wrong
Barbon quote, therefore we know it is wrong. But what is the right answer? I think Fred
got it. According to the Barbon quote, all value is relative. According to the Butler quote,
intrinsic values exist, but people do not use them as their guideline but they use relative
values. E.g., women do not choose a husband by character strength (intrinsic) but by income
(relative). And in order not to see that they are doing this, they confound the two concepts
and say that intrinsic and relative value are one and the same thing.
Next Message by Hans is [213].
Question 66 is 47 in 2001fa, 48 in 2002fa, 50 in 2003fa, 55 in 2004fa, 55 in 2005fa, 66
in 2007SP, 67 in 2008fa, 69 in 2009fa, 70 in 2010fa, and 77 in 2012fa:
Question 66 Why does Marx write in 127:1 “the valid exchange-values,” instead of simply
“the exchange-values”?
[28] ZACH: I work for a lumber company and we are continually buying commodity
products to sell. The commodity products that we are selling to our customers have the same
valid exchange values as the same products being sold by our competition. The reason that
we are selling these products and that our competition is selling these products is because
of the valid exchange values of these products. The products are needed to build homes and
build a community and therefore are valued not only in the seller’s eyes but also the buyer’s
eyes as well.
Message [28] referenced by [32], [35], and [2008fa:58]. Next Message by ZACH is [60].
[32] Hans: Valid exchange-values. The thing left unsaid by ZACH in [28] is that the
lumber company sells their products at a higher price than their own costs. ZACH is arguing
that the marked-up price is not too high but that this is indeed the valid price for the
commodities sold.
Marx would agree with this. According to his theory, the markup does not come from
a too-high price but from a too-low cost: the workers, whose labor enables the product to
fetch this handsome market price, are paid much less than an equivalent of the value they
add to the product.
Message [32] referenced by [286]. Next Message by Hans is [37].
[35] AJoseph: graded B+ weight 50% Valid exchange-values. By writing there is “equal
content” in the exchange, Marx is re-affirming its validity, when many exchanges can be
dubious in nature. ZACH’s [28] is a good example, because lumber is something people
really need.
Message [35] referenced by [2008fa:58]. Next Message by AJoseph is [56].
[37] Hans: Quality and Quantity. One important aspect of Marx’s thinking unfamiliar
to most of his modern readers is the attention paid to the quality, rather than the quantity,
of things. Modern sciences have developed in a different direction: everything is quantified,
and the quality of things is rarely considered.
30 2007fa Econ 5080 U of Utah
When Marx says that the valid exchange-values of a commodity express an equal content,
his emphasis is on qualitative, not quantitative equality. Instead of qualitative equality one
could also say one-dimensionality. As long as you have enough money, you can buy everything
– i.e., all the different use-values produced in the economy are treated by the market
as just bigger or smaller quantities of the same stuff.
Marx’s argument, as I understand it, is: if the market treats everything in a one-dimensional
manner, then these things must also have one-dimensional nature in production. And then
he argues that this one-dimensional element in production is human labor. The same laborer
can produce many different things, and capitalists compete on the market place by directing
the labor they are employing to produce the most profitable goods.
Marx’s inference from the equality of commodities implied by their exchange to labor
as the equal substance inside the commodities which determined their prices has often
been criticized. But it makes sense if one formulates it as follows: if the market is onedimensional,
then production must be too, otherwise market and production would not fit
together.
Message [37] referenced by [2008SP:24]. Next Message by Hans is [44].
Question 67 is 277 in 1996sp, 56 in 2005fa, 68 in 2008SP, 68 in 2008fa, 71 in 2009fa,
and 72 in 2010fa:
Question 67 First give Marx’s arguments how one can come to the conclusion that exchangevalue
is not something inherent in the commodity. Then reproduce, in your own words,
Marx’s rebuttal that, despite these arguments, exchange-value seems to be something inherent
to the commodity after all.
[117] Daniel: graded A exchange-values, commodities, and contradictions. Marx argues
that exchange-value is independent of use-value. Thus, the exchange value can not
be derived from its use-value. “Use-values are the material carriers of exchange-value.” In
other words, a commodity may lose its exchange-value (example from text: bread growing
on wild trees) but it still has its use-value. However, if a commodity loses its use-value
then it also loses its exchange value. Labor becomes the primary determinant of whether
or not there is an exchange-value. If a ‘thing’ has a use value and requires labor to bring
that thing to its fullest potential, then the use value will carry an inherent exchange value.
However, if that thing can be obtained without labor all-of-a-sudden, then there is no longer
an exchange-value (while still maintaining its usefulness).
Exchange value is nothing more than the social relationship or custom in which commodities
may be traded while the use-value of something is its physical properties and those
properties alone. The two must be separated in order to understand what Marx is trying to
say. Exchange-value can not be inherent in the commodity because the commodity’s usefulness
(its use-value) is independent of exchange-value. Exchange-value becomes the result
of labor required to obtain a ‘thing.’ To elaborate more (and hopefully more clearly), a commodity
is as we already know, anything produced for sale or exchange. Thus, a commodity
becomes the elementary form of wealth based not on the wants or needs of that commodity
but based on whether or not it can be sold at a favorable price. This is the basis of exchange,
not use-value, and thus exchange value can not be inherent in the commodity.

U of Utah Econ 5080 2007fa 31
With all this said, now it is time to analyze the “negation of the negation” as the text so
eloquently puts it. Marx takes all that I have just said and poses a contradiction. Despite all
these arguments, exchange value does indeed appear to be inherent in the commodity. For
example, If I were making silk and I wanted to trade 3 yards of silk for x lbs of wheat then
one might say that that exchange is possible because I have a special relationship with the
wheat guy/gal. However, it is not that simple because I can trade my 3 yrds of silk for x
amounts of barley, buttons, or milk (just about anything) and the amounts will change. It
becomes implausible to say that I have a special relationship with everyone I can trade with!
So it appears as if the exchange value is inherent to the commodities in the sense that when
I trade different things I can get more or less or something.
The answer to this dilemma is what Marx calls “replaceability.” What this means, is that
none of the many different trades that I can make are “inherently favorable” to the others.
Here is the justification; I can trade silk for wheat, silk for buttons, and silk for milk; in the
end however the people I am trading with along with the different products I am trading for
are replaceable. All the trades are equal and fair, in content although their quantities may
differ.
In conclusion: The relationship between the buyer and seller is inconsequential. It is
the usefulness of the commodity alone that determines its exchange value (plus the labor
required to obtain it). Once these use-values are established then they can carry some kind
of exchange-value and that exchange value is not on an individual scale but a social scale.
Hans: Excellent, very careful reading. The only quarrel I have is: how do you argue the following sentence:
“Exchange-value can not be inherent in the commodity because the commodity’s usefulness (its use-value) is independent
of exchange-value”? Marx used the variability and relativity of exchange-values to argue that it cannot be
inherent to the commodities.
Message [117] referenced by [275]. Next Message by Daniel is [129].
[154] HTJY: Exchange-value appears to be something inherent in the commodity.
Marx presents on P126 in Capital a perspective from which exchange-value does not appear
to be inseparably connected with the commodity. In a closer scrutiny of the matter,
however, he presents another convincing perspective from which exchange-value appears to
be inseparably connected with the commodity.
If exchange-value is inseparably connected with the commodity, it should not depend
on the time and place in which the exchange occurs. For example, if a dozen of eggs was
exchanged for a gallon of milk in New York in May 2006, then the same exchange relation
must hold in San Francisco in May 2007. However, such a relation is not likely to hold in
general. Thus, this and other similar counter examples indicate that exchange-value is not
inseparably connected with the commodity.
Is exchange-value truly something not inseparably connected with the commodity? Marx’s
closer scrutiny of the matter suggests that the answer is no. Suppose that x amount of commodity
A is exchanged for y amount of commodity B or z amount of commodity C. Then,
since commodity B and commodity C each represent the exchange value of the same commodity
A, these two commodities are of the same magnitude. This implies that there exists
a common element of the same magnitude which is in both B and C. Moreover, B and C as
exchange values for A are merely modes of expression of the common element. Marx calls
the common element in commodities, value. Values are crystals of human labor power in the
32 2007fa Econ 5080 U of Utah
abstract expended to produce commodity. Thus, exchange-values are inseparably connected
with commodities in the sense that exchange-values are modes of expression of values which
are necessarily in each and every commodity.
Hans: Yes, very good.
Next Message by HTJY is [289].
[199] Tim: Replaceability. Marx argues that the exchange-values’ constant change with
time and place seem to be “accidental and purely relative” [126:2]. What Marx is getting at
is that the quantities of use-values exchanged vary from trade to trade and that there is no
constant, therefore exchange-value cannot be inherent in a commodity.
Marx’s rebuttal compensates for this “accidentality” and “pure relativity” by introducing
replaceability [127:1]. Replaceability justifies that no one trade made is better than the other,
that they are all “equal in content” (Annotations, pg. 24) which now makes exchange-value
something inherent in a commodity.
Hans: You say that the constant changes in exchange-value seem accidental. Marx said something a little different,
namely, that because of its constant changes the exchange-value itself seems accidental and not inherent in the
commodity.
Replaceability is part of Marx’s rebuttal. This rebuttal has three steps which can be considered a dialectical
negation of negation: (1) every commodity can be exchanged for many others, but (2) each of these trades are
replaceable with each other, therefore (3) they are only different ways of expressing something inherent in the
commodity.
Next Message by Tim is [202].
[200] Ozz: graded A– Exchange value arguments. Marx’s argument concerning the conclusion
that exchange values are not something inherent is explained simply in the difference
of quantity a certain commodity can be exchanged for in differentiating times and places.
Marx explains saying “Exchange-value manifests itself at first as the quantitative relation,
the proportion, which use-values of one sort are exchanged against use-values of another
sort...a proportion which constantly changes with time and place.” This signals that the commodity
might not hold an inherent exchange-value because if the proportions to which they
are traded are always changing then the exchange-value is not due to the commodity but to
the circumstances of the trade.
Marx’s rebuttal to this argument concerns the “expression of a deeper social relation located
underneath”. This deeper social relation consist of the social relationship of the commodity
in regards to other commodities and the use-values the commodity supplies. In the
commentaries, the example of the flashing car lights explains this concept very well. The
example makes clear of how cars flashing their lights at first could be mistaken, however;
after time one realizes it means to turn on your own head lights. This social relationship
between commodities signaling to each other their exchange value, which occurs over periods
of time, will eventually lead to a general exchange value that is thought to be inherent
in the commodity. Marx uses the word “replaceable” saying that the owners treat the various
exchange values of their commodities as “replaceable” expressions of the same thing.
Meaning that when one comes to believe that commodity X is usually traded for three units
of Commodity Y then you begin to realize that due to the social relations commodities can
seem to take on an inherent exchange value.
Hans: Are you thinking a social relationship is an attitude or fad where everybody thinks the same thing? Look at
my remark made about [149] for this. As you said in your in-class answer, the “thing” inherent in the commodities
is labor. They are all part of a social division of labor. These are real social interdependencies, not just attitudes.

U of Utah Econ 5080 2007fa 33
Next Message by Ozz is [203].
[251] Dannymangum: Exchange value not inherent. When Marx speaks of exchange
value he is talking about the value that the commodity has to someone else, as in someone
else in the market. Another way of stating this would be that the exchange value represents
its trade value. Marx says that the exchange value and use value are independent from one
another. This is important to see because Marx separates the commodity’s usefulness or use
value from its exchange value
This theory is pretty easy to see in the market. If exchange value were an inherent trait it
would have to hold constant. For example, if in 1983 I traded a Michael Jordan rookie card
for a snickers bar, holding the exchange value constant (inherent) I would accept that same
rate in 2007 after his super human career. (If I were to make that same trade today I would
be the dumbest man alive.)
Upon concluding this argument that exchange values are not inherent, Marx quickly
changes his tone and says that perhaps exchange values are inherent. He comes to this
conclusion by viewing what happens in the market. I.e. if I can trade one thing for a certain
amount of something else and then trade that one thing again for a certain amount of another
commodity the exchange value must be some sort of inherent because I have the ability to
trade one commodity for others at varying amounts. With the exchange value of a commodity
being perceived by the general public this public want must be categorized as some kind
of inherent value.
Hans: The price not only depends on demand but also on supply. In the long run, according to Marx, demand
determines the quantity produced and the labor input determines the price.
Next Message by Dannymangum is [253].
[275] Caroline: The Rebuttal. After reading Daniel’s response [117], I now remember
that in class Hans said something about “bread growing on wild trees” in reference to usevalue
and exchange-value. If there was a lot of bread available to those who wanted it, then
there would be no exchange-value in bread, because no one would have to trade something
for bread. The exchange-value may be lost, but there is still the use-value. Therefore,
exchange-value is independent of use-value; however, if there isn’t any use-value then there
isn’t an exchange-value.
On further review, “exchange-value seems to be something accidental and purely relative.”
According to the annotations, accidental means that it does not rely on anything in it
and that purely relative is the relation between commodities, and not from the commodities.
Then Marx turns the tables and says exchange-value stems from use-value. In the annotations,
the flashing of headlights from many people was an example to show that exchangevalue
is indeed inherent in a commodity. There may be conditions or a special relationship
between traders of commodities that facilitate the exchange process, but that commodity
they are trading can also be traded with someone else not in the same party. This does not
mean that a trader of a certain commodity has a lot of special relationships with other traders.
Just as in the flashing headlights, all the other blinking lights did not mean they all had special
relationships with each other, but “it signaled something about me.” Being able to trade
a commodity with many other traders, signals something about the commodity itself.
34 2007fa Econ 5080 U of Utah
Hans: Apparently you consider the two statements “exchange-value is inherent in the commodity” and “exchangevalue
stems from the use-value” as two ways of saying the same thing. They don’t. This has two implications for
your answer.
(1) You don’t give Marx’s point that the variability of exchange proportions is an argument against exchangevalue
being inherent. This point was in your in-class answer, and you should have taken it over.
(2) When Marx “turns the tables” he does not argue that exchange-value stems from use-value, but simply that
exchange-value is not relative but the expression of something inside the commodity. He continues to argue that
this something is not the use-value but the labor in the commodity.
Next Message by Caroline is [276].
Question 68 is 57 in 2005fa and 69 in 2008fa:
Question 68 What is the difference between mode of expression and form of appearance?
[40] Ryan: (graded A) This question seems to refer to the “muddy windshield” that Hans
spoke of in class. These two terms (“Ausdrucksweise” or “mode of expression” and “Erscheinungsform”
or “form of appearance”) are much more straightforward in German. I
will thus, with as much brevity as possible, break down these two terms:
Ausdrucksweise = mode of expression. The German term “Ausdruck” just like the English
term “expression” is the act of making something heard or seen. Most often used in
terms of language (“When in Rome...” is an expression) or in reference to facial cues (expressions).
Erscheinungsform = form of appearance. The German “Erscheinungsform” is more accurately
captured in the term used by Moore-Aveling: phenomenal form. An “Erscheinung”
is a phenomenon, or appearance in the sense that it is a sensory perception, most often used
in religious contexts when referring to the appearance of angels.
Ausdrucksweise, repeats the phrasing used in the previous passage “the valid exchangevalues,
express an equal content”, and Marx uses the term again here to maintain the parallel
nature of the two statements, but, uses the term “Erscheinungsform” to refine what he is
really trying to say. If the underlying social relations express themselves in the form of
exchange-values, it should be quite clear what these social relations are. If the forms simply
appear, however, the true source of exchange value is something which must be spotted
by an astute observer. From the other side, “Erscheinungsform” unlike “Ausdrucksweise”
implies that the result is implicit on the part of the capitalist. That labor is being exploited is
never expressed, rather it appears in forms such as the contradiction Marx points out in the
concept of exchange-value
Hans: Very good definitions of the word “expression.” To understand Marx’s use of the word “form of appearance”
on has to go back to Hegel: in Hegel’s terminology, a form of appearance is an expression in which all aspects of
the underlying essence are reflected. When transferred to the study of society, this completeness gains a new
meaning. The surface of society consists of individual activity and “interpersonal” relationships and interactions.
These activities are based on certain invisible social relations and reproduce those relations. If exchange-value is
the form of appearance of an underlying relation of production, this means exchange-value is a social relation on
the surface, which not only makes manifest the value in the commodities, but which also co-ordinates the many
individual activities in such a way that the underlying social relation of value is reproduced.
Next Message by Ryan is [114].
Question 69 is 58 in 2004fa, 69 in 2007SP, and 70 in 2008fa:

U of Utah Econ 5080 2007fa 35
Question 69 Is there other surface evidence, other than the variability of exchange proportions,
indicating that exchange-value is the expression of some deeper relation of production?
[27] Charles: Surface Evidence. I think there is, because in most cases the businessmen
already determine how much profit they want to make on their investments. They set their
goals before even getting into the business. They have many options to choose from. For
example, the stock market, savings, bonds and other form of investments. If they decide
to sell a specific product, that means that they want to make more than what they currently
can profit based on other forms of income. They take into account the production costs,
opportunity costs and anything else related to the production of the products. They try to
maximize their profits based on market demands and supplies. In many cases, the cost is
about the same to manufacture a product. The reasons there are differences in markup of the
final products is based on the desires of each businessman.
Message [27] referenced by [29]. Next Message by Charles is [46].
[29] Hans: Too good to be true. As evidence that market outcomes are driven by hidden
underlying mechanisms, Charles [27] brings the fact that capitalists have many opportunities
to make money, and the more money they want to make the more they will make.
I agree that capitalists seem to be making money just because they want to, which sounds
too good to be true and begs for a different explanation. The real wealth which the capitalists
pull out of the market must somewhere enter the market. This is indeed proof that something
hidden is happening. What is this hidden mechanism?
Later in the book, Marx will explain capitalist profits by the fact that wage workers produce
more wealth than their wages reimburse to them. The magical enrichment of the capitalists,
and the fact that those who work the most are the poorest, are two sides of the same
coin.
Message [29] referenced by [31], [44], and [197]. Next Message by Hans is [30].
Question 73 is 31 in 1995WI, 40 in 1996ut, 38 in 1997ut, 55 in 2002fa, 57 in 2003fa, 62
in 2005fa, 73 in 2007SP, 74 in 2008fa, 77 in 2010fa, and 90 in 2011fa:
Question 73 Marx argues that commodities are exchangeable only because they contain
some common substance. Bailey denies this. He compares the exchange-value of commodities
with the distance between points, which is not based on a commonality between the two
points but is purely relative: “As we cannot speak of the distance of any object without
implying some other object between which and the former this relation exists, so we cannot
speak of the value of a commodity but in reference to another commodity compared with it.
A thing cannot be valuable in itself without reference to another thing any more than a thing
can be distant in itself without reference to another thing.” . Comment.
[41] Marcellus: I think Bailey is wrong to assume that a commodity has to be compared
to another in order to determine the former’s exchange value. My reasoning behind this goes
as follows. If I was the owner of a bamboo production facility and after a week’s worth of
operations I had a warehouse full of bamboo, I could put an exchange value on it of equal
or greater value to the amount of money it cost me to manufacture it including the cost of
the equipment, the utility bills, and the cost of labor. Although it may be useful to know
36 2007fa Econ 5080 U of Utah
how much exchange value the lumberyard down the street places on its timber, it is not
necessary for me to put an exchange value on my bamboo. Therefore I agree with Marx and
the “common substance” between commodities, this substance being the cost to produce the
commodity.
Hans: Marx would of course agree with you that Bailey is wrong. But didn’t Bailey make a good case for his
conclusion? Where is the error in Bailey’s argument? If you answer question 73, you are expected to address this.
Message [41] referenced by [45]. Next Message by Marcellus is [103].
[43] Deborah: Exchange Value. Marx is pointing out that people would want only to
exchange commodities because of the “common substance” in each, where Bailey is pointing
out that exchange value arises when bringing the two commodities to each other. Each is
addressing exchange value but from different perspectives.
In his comment Bailey is pointing out that exchange value requires the presence of two
commodities. One commodity on its own would have no exchange value because there is
nothing to exchange it for: “we cannot speak of the value of a commodity but in reference to
another commodity compared with it.” In using the example of distances Bailey points out
that distance can only be calculated when putting two locations in reference to each other
(unless referencing one point to another, there will only be two points on a map and no
relationship). As pointed out in the Annotations, “Exchange value is that social relationship
or social custom which allows commodities to be traded for each other or for money.”
“A thing cannot be valuable in itself without reference to another thing any more than a
thing can be distant in itself without reference to another thing.” In everyday transactions,
people compare one commodity to another; for example, bread is exchanged for $2.00.
Without both sides of the equation there is no exchange – the exchange value lies in the
connection between the two points, to use Bailey’s example.
While Marx points out that commodities are exchangeable only because they contain
common substance, exchange value can only be realized when the actual exchange occurs.
Because exchange value is social in nature there must be more than just the individual involved
(thus two commodities).
Hans: You are saying: both are right, it depends on the perspective. Marx does not share this relativist view. If
there are two conflicting explanations of the same thing, he usually says one explanation is better than the other,
or that there is a third explanation better than both. Then he tries to find arguments to decide which explanation is
better.
Next Message by Deborah is [112].
[45] Hans: Cost is not value. Marcellus [41] gives a new argument why commodities
have a common equal substance. Marcellus says that this common substance is their cost.
Marx would not be satisfied with this, for several reasons:
(1) It is a circular argument. Costs are simply the values of other commodities. Marcellus
is in effect saying: my commodity has value because other commodities have value. This is
not an explanation why all commodities have value.
(2) If one equates value with cost, then one cannot explain why, in a normal situation,
commodities are sold at values above their cost.

U of Utah Econ 5080 2007fa 37
(3) By equating value with cost, Marcellus is assuming that the value the workers add to
the product is equal to the labor cost. This denies Marx’s explanation that profits come from
laborers being paid less than the value they create.
In Marx’s theory, that which adds value to the product is not the money the capitalist
has to pay for the labor, but it is the labor itself. Higher wages would therefore not lead to
inflation but to lower profits for the capitalists. Which, in Marx’s eyes, would be a good
thing. Marx does not believe in “trickle-down economics.” He thinks that the working class
is a better representative of the interests of society as a whole than the capitalists.
Message [45] referenced by [49], [113], [197], [286], [609], and [2008SP:370]. Next Message by Hans is [49].
[49] Hans: Cost is not value – more details. I wrote in [45]:
Higher wages would therefore not lead to inflation but to lower profits for
the capitalists.
In response to this, Chapeye emailed me the following question:
Could you explain this one please? I don’t remember this in any of the text
I read so far.
Intuitively, it would seem that higher wages for everybody would mean
higher prices, at least in the society where a classical law of supply and
demand works.
I agree, this was not in the assigned text so far. It was an anticipation of certain results
from later in the book in order to drive home the point that cost and value are not the same.
I also agree that modern mainstream economics comes to the conclusion that wages are
determined by the marginal productivity of labor. I.e., the wage level is determined by
technology, and the efforts of the workers to raise their wages are futile.
However there is also a branch in economics, called Neo-Ricardian economics (Piero
Sraffa), which can be thought of as a general equilibrium mathematical modeling of the
labor theory of value. Their mathematical models say: prices are higher than cost due to a
macro-economic effect, namely, due to the fact that the technology in the overall economy is
productive. If the economy is able to produce more outputs than inputs and therefore is able
to grow, then this also means that prices must be higher than costs. If you raise wages, you
are giving more of the newly produced value in the economy to the laborers, and therefore
less of it stays in the economy at large, and the markup of prices over costs decreases. In
these economic models, wages are not determined by technology, but they are decided by
extra-economic forces, namely, the distributional struggles between workers and capitalists.
Lower wages give higher rates of profit, and higher wages lower rates of profit, up to a
maximum wage which would correspond to a zero rate of profit. This would be the situation
where the entire net product goes to the workers, and nothing is left for the capitalists.
According to this theory, the best strategy for workers is to organize and to force the
capitalists to give them a greater share of the pie.
Message [49] referenced by [2007SP:10], [197], [286], [609], and [2008SP:370]. Next Message by Hans is [55].
38 2007fa Econ 5080 U of Utah
Question 74 is 75 in 2008fa:
Question 74 Does Marx assume that only equal values are exchanged on the market?
[34] Nogi: Marx believes that exchange proportions are reducible to the substance inside
the commodities themselves. He uses the example of exchange proportions of many
commodities against wheat and says the exchange proportion is considered the exchange
proportion of wheat and not the other commodities because they are reducible to the substance
inside the wheat itself. Therefore I would argue that Marx does believe that only
equal values are exchanged on the market.
Hans: Since the wheat can be exchanged for many different commodities, Marx argues that the origin of these
exchange values is not something relative, something between the wheat and each of these other commodities, but
that the exchange-values are the signals which these other commodities give about something that is inside the
wheat itself. Each of these other commodities is saying: “I am willing to trade places with the wheat because the
wheat contains labor just as I do.” I.e., the exchange-values are the surface signals about something that is going
on in the hidden sphere of production, they point to something other than themselves. This indirectness of the
exchange-value makes it possible that other factors can influence this signal too. In chapter Three, 195:2/o, Marx
says that exchange-value can also be a signal of other things, for instance of a discrepancy between demand and
supply. The indirectness is therefore an argument against the assumption that commodities have to be exchanged
at proportions quantitatively corresponding to their values.
Message [34] referenced by [36]. Next Message by Nogi is [87].
[36] Stuart: I could be wrong but ... I come to a different conclusion than Nogi [34].
Marx doesn’t seem to believe that only equal values are exchanged on the market. Marx
states that exchange proportions constantly change with time and place. However Marx
never says that exchange values themselves constantly change but instead the exchange proportions.
Marx seems to be addressing price volatility. External forces may cause the price
of a commodity to be set below or above its exchange value. My understanding is that the
Labor Theory of Value states that these discrepancies between prices and exchange-values
of a commodity average out to be equal in the end. This is significant because if this is true
then profits are not a result of pricing commodities above their values, but instead must come
from somewhere else.
Next Message by Stuart is [513].
[39] Scott: No, Marx sees that working class people are taken advantage of by the owners
of the society. The workers are disproportionally paid to the product that they produce. It is
clear to see by the wealth that is gradually acquired by the owners over time while the status
of the workers, who initially produced the goods that they became wealthy from, are in the
same position as before or they are in a worse position. Example: wages do not keep up with
the rate of inflation and therefore the workers’ pay purchases less and less over time.
Message [39] referenced by [44] and [124]. Next Message by Scott is [221].
[42] Yossarian: No. In a truly Marxian economy, the value added to a specific commodity
through labor would go directly back to those who added the value in the first place. As this
is not the case, Marx argues that labor is exploited and should be given the value of the
commodity that their labor adds to it. Instead, according to Marx, the workers are given (as
I believe Marx might have called it) “The Capitalist Shaft” or “Die Kapitalist-Welle” as it
were.
Hans: Don’t call it a “truly Marxian economy.” The law of value, according to which all value is created by labor,
holds in capitalism. It is not a good law because it concentrates too much on one factor of production, leaving out
environmental concerns.

U of Utah Econ 5080 2007fa 39
Marx’s goal is not a wage high enough so that profits are eliminated, but his goal is the abolition of wage-labor.
Laborers should collectively be their own bosses rather than working for the capitalist, and production should be
for use-value rather than for exchange-value.
Message [42] referenced by [44].
[44] Hans: Class Relations and Commodity Trade. In [29], I briefly summarized
Marx’s theory of profits: profits are the residual because workers produce more value than
they get paid. Much more needs to be said here, but in a nutshell that’s the story.
Scott [39] and Yossarian [42], conclude from this that the labor of the workers cannot be
sold at its value. Scott brings very good prima facie evidence that the worker does not get
the full value he or she produces:
It is clear to see by the wealth that is gradually acquired by the owners over
time while the status of the workers, who initially produced the goods that
they became wealthy from, are in the same position as before or they are in
a worse position.
Over the years, the capitalist gets richer and richer, while the workers stays at the same
level. That is good evidence that the worker’s labor enriches the capitalist and not the worker.
Yossarian argues that this contradicts the laws of commodity trade. According to these laws,
Yossarian says,
the value added to a specific commodity through labor would go directly
back to those who added the value in the first place.
How would this play itself out in the competitive interactions between workers and capitalists?
If a worker does not get the full value of his labor from the capitalist, he will quit and
sell his own products, in this way he can be assured that he does get the full equivalent of
his labor. But there is a hitch: the worker cannot sell his own products, because he does not
have access to the modern means of production which would allow him to stay competitive.
Here you see how the separation from the means of production prevents the worker from
getting the full equivalent for his labor. Our separation from the means of production is a
very basic fact of capitalist society. It is so fundamental that we are usually not even aware
of it. It is a very artificial situation that all the wealth of this society is owned by a small
elite, and the great majority of people just have enough money to get by. No wonder Scott
calls the capitalists the “owners of the society.”
Next Message by Hans is [45].
Question 80 is 44 in 1997ut, 69 in 2004fa, 80 in 2007SP, 81 in 2008fa, and 99 in 2012fa:
Question 80 Marx says that as use-values commodities do not contain an atom of value.
Would he also say that the labor process does not contain an atom of abstract labor?
[48] Teight: It would be inaccurate to say that Marx believes that abstract labor isn’t
included in the labor process. Any labor process requires some sort of abstract labor. Labor
power consists of what a laborer uses to process a given commodity. For example, the
muscles a person uses, or the smarts it takes to produce a given commodity. The labor
power used by a laborer can be used in any labor process regardless of the commodity.
40 2007fa Econ 5080 U of Utah
Furthermore, the labor process is the cost of a certain labor power. Labor process by a person
is the labor power performed by that person which could have produced several million other
labor processes.
Hans: What you say is correct, but you should work on your formulations. Your last sentence, for instance, could
be reformulated as follows (if I understand it right): “Every labor process is performed by a person whose laborpower
could have performed several million other labor processes.”
Next Message by Teight is [127].
Question 82 is 84 in 2008SP and 83 in 2008fa:
Question 82 Is Marx’s concept of “value material” attached to commodities, but separate
from their physical material, a metaphor? Is it a phantasy, an invention, which Marx needs
to hold his labor theory of value together? Is Marx going overboard here? Or does it really
exist?
[54] Ozz: graded A Marx concept of “value material” is a metaphor. The value that is
added to a commodity is perfectly represented by the idea of presenting it as a metaphor.
The addition of value to a certain commodity from labor is real although it is not physical.
A similar metaphor would be saying the service a person gave you was a blanket of comfort.
The service could have been only that of a talk and not actually physical but the metaphor
helps one understand the value of that service.
Now if this is a fantasy, or if he is going overboard, I would have to say no. The line
that he describes materiality that I enjoyed was “The materiality of human labor that is itself
abstract, lacking further quality and content, is, of necessity, an abstract materiality, a thing
made of thought.” While in Mexico I remember seeing there little souvenirs and when they
told me that they made them from hand, even if that was a lie or not, added an amount
of value to that certain product, even though I knew I could get the same thing made by
machine. This value I feel is what Marx was trying to explain when he talked of the value
“made of thought.”
Hans: I like your first paragraph. This is probably how most Marxists view the issue, although I personally have a
different view, see my [58]. I don’t like your second paragraph as much. My critique formulated in [55] applies to
it, since the labor in the commodity enters your utility function, rather than having its own effects.
Message [54] referenced by [58], [163], and [2008SP:27]. Next Message by Ozz is [93].
[58] Hans: Are Marx’s Metaphors Really Metaphors? Ozz is not alone when he says
in [54] that the value material is a metaphor. His “blanket of comfort” is an excellent example
how a social interaction can metaphorically be equated to a thing. Most conventional
readings of Marx have a similar interpretation; they take much of what Marx says in these
early pages to be metaphorical.
Question 82 is a challenge to this conventional interpretation of Marx. I think that Marx
takes those issues much too seriously, and he treats them much too consistently, for them to
only be a metaphor. My Annotations try to take the concept of a social substance seriously.
We are entering here the area of philosophy of social sciences which asks “what is a
society?” Margaret Thatcher famously remarked that “society does not exist,” meaning that
the word “society” allows us to talk about all the individuals in society in an abbreviated
fashion, but there is nothing other than these individuals which this word refers to. This is
the methodological individualist point of view.

U of Utah Econ 5080 2007fa 41
Marx had a different point of view, namely, that society consists of social relations. You
may wonder: how can one talk about social relations without the individuals which have
these relations? But one can! The social relation of father, husband, teacher, existed long
before any presently living father, husband, or teacher was born. Marx says that society
provides “character masks” into which individuals slip, sometimes temporarily (we all are
sometimes sellers and sometimes buyers), and sometimes on a more permanent basis (like
being a capitalist or a wage laborer).
Often such social relation take the form of rules which govern our interactions with other
individuals. But this is not the only possibility. The language we all use is also a social
relation, the school system trains us in certain behaviors which we need to live in this society.
Social relations come in many different shapes.
The social substance which Marx calls “value material” is an interesting addition to this
colorful menagerie of forms potentially taken by social relations. In a commodity society,
everybody is obligated to act as if the labor needed to produce a commodity is still attached
to the commodity as an invisible quasi-physical substance. This is what we have to pay for
when we buy the commodity, and the cost of things is a consideration for everybody using a
thing.
These are things I said this morning in the in-class session (and I will try to say similar
things next Tuesday evening), and I also tried to explain it in [2007SP:38]. I do not expect
you to buy this explanation and parrot it back to me – Ozz is getting full points for his
thoughtful answer – but I recommend to mull this over and consider it as a possibility.
Message [58] referenced by [54], [59], [163], [2008SP:27], and [2008fa:107]. Next Message by Hans is [59].
[162] Poppy: 1000 lbs of Feathers = 1000 lbs of Gold. Marx is separating the “value
materials” of commodities from their physical material, and using it as a metaphor to show
that his labor of value theory does hold merit. Marx disregards the exchange relationship of
commodities, and the use-value of the commodities, to have product of labor to only remain.
For example, Barbon states “One sort of wares are as good as another, if the value be equal.
There is no difference of distinction in things of equal value. One hundred pounds worth of
lead or iron is of as great a value as one hundred pounds worth of silver and gold.”
The above quote of Barbon makes sense to me and clarifies what Marx true reasoning
is behind separating “value Material” of commodities and physical material. As Barbon
mentioned, before humans came along, every medium on earth had the same value. i.e.
1000 pounds of iron = 1000 pounds of diamonds. The only reason why now diamonds or
gold are worth so much more, is because humans put a labor value into those commodities,
which now give it a material exchange value. This shows how the exchange value and use
value are born from the labor value.
I don’t think Marx is going overboard here, it is just driving home his labor theory of
value. Yes it does really exist.
Hans: You misunderstand the Barbon quote. One hundred pounds worth of lead is not the same as one hundred
pounds of lead. Rather, it is that amount of lead one can buy for one hundred pounds Sterling, the British currency.
Message [162] referenced by [163] and [169]. Next Message by Poppy is [172].
[163] Hans: Making Sense of Previous Answers. The exam is an opportunity for you
to show that you have followed the homework discussion. Question 82 had two answers.
42 2007fa Econ 5080 U of Utah
[54] argued that “value material” is a metaphor, it makes the production process easier to
understand from which the commodity obtained its value, but there is no “value material”
inside the commodities. [58] argued that we live in a society which forces each individual
to treat the labor-power used up in the production of a commodity as if it was still invisibly
present, and that therefore the “value material” is more than a metaphor, it is the form social
relations take in a commodity society.
Neither of these arguments is given in [162]; instead, Poppy begins his own argument.
The exam, and the present extra-credit assignment for exam preparations, is not the right
forum for this. You can fill out gaps in the previous answers, as [160] tried, but if the
question already received substantive answers, you cannot ignore them in the exam.
Next Message by Hans is [169].
[167] CMor: Worth the same if I say so. I agree with Poppy. Marx is using the “value
materials” as a metaphor to explain his value theory does hold true. Marx seems to push
his idea to an almost extreme point, but just far enough so it will make people think about it
instead of just reading over it or ignoring it. With the disregard of every other value except
the product of labor, he leaves a clear view of what he is focusing on and how he see it, in
order for everyone else to be able to easily grasp his thoughts on “value materials”.
The Barbon quote “One sort of wares are as good as another, if the value be equal. There
is no difference of distinction in things of equal value. One hundred pounds worth of lead or
iron is of as great a value as one hundred pounds worth of silver and gold.” was well chosen.
I too thought of this when reading this section and the question. If a number of items are
equal in one term of value and we are ignoring all the other terms of value, then no matter
what the items are they are equal. Everything has many terms of value because as humans
we have put it there. Marx is only using the simple ideas that we normally overlook or take
for granted. So, I do agree that it exists, and that Marx was showing it in a way that was
thought proking and needed.
Message [167] referenced by [169].
[169] Hans: No Need to Study if you Already Know the Answer. And if you think you
know the answer, and someone else just sent this same answer to the homework list, then
you know you are right, therefore reading the other answers is only a waste of time.
The problem with this argument is that wrong answers do not just fall from the sky but
have their reasons. Therefore it is easily possible that different people come to the same
wrong answer. For instance CMor [167] agreed with Poppy [162] because both were misreading
the Barbon quote in the same way. In CMor and Poppy’s reading, Barbon said that
100 pounds of lead is of as great a value as 100 pounds of gold. In other words, they thought
Barbon said that the things themselves have no value, all the value comes from us humans.
But Barbon said something different, namely, that 100 pounds’ worth of lead is of as great
a value as 100 pounds’ worth of gold. 100 pounds’ worth of lead is the amount of lead you
can buy with 100 pounds, the British currency. This is almost tautological, but Barbon wants
to make the point that there is no difference between things that have the same value. This
is a similar concept as Marx’s value materiality, that as values all things consist of the same
immaterial substance.
Next Message by Hans is [170].

U of Utah Econ 5080 2007fa 43
Exam Question 85 is 38 in 1995WI, 47 in 1995ut, 49 in 1996sp, 47 in 1996ut, 46 in
1997ut, 58 in 1999SP, 60 in 2001fa, 73 in 2004fa, 72 in 2005fa, 85 in 2007SP, 86 in
2008fa, 93 in 2010fa, 110 in 2011fa, and 108 in 2012fa:
Exam Question 85 What is value (according to Marx)?
[46] Charles: What is value according to Marx ? Marx does not relate value with a
worth of something. He does not say that commodities have value, but that they are values
“as crystals of abstract human labor.” For him, value is a social relation. He relates it to the
interaction of the individuals in the society and compares it to an object and social relation.
Hans: Everything you say is right. But it is more a commentary about Marx’s concept of value than a definition of
what value is. In Marx’s theory, value, i.e., that substance which makes commodities exchangeable, is congealed
abstract labor.
Next Message by Charles is [47].
[51] Kalmerico: Marx states that the value of a commodity can be extracted from its
exchange value. Therefore, one might conclude that the exchange value is derived from the
commodity’s perceived value. How does one determine the value of a particular commodity?
According to Marx, value is determined by the amount of human labor expended to produce
any given commodity. So it is abstract labor that gives a commodity its value, which is then
reflected in the exchange value, or price, in a particular market of a capitalist society.
Message [51] referenced by [55]. Next Message by Kalmerico is [52].
[55] Hans: Value is not a perception. Kalmerico [51] understands correctly that exchangevalue,
in Marx’s theory, is only a derivative from the more fundamental underlying concept
of value. But his formulation
“exchange-value is derived from the commodity’s perceived value”
(my emphasis) wrongly locates this value in the minds of the market participants. Marx
considers value not to be a perception or preference of the individuals making the exchanges,
but a social relation, a relation of interdependence of which they need not be aware.
In order to make this clearer, let’s play through an example. Assume commodities A and
B are exchanged for each other one-to-one, but commodity A contains twice the amount of
labor than commodity B. What happens?
If value were based on a perception, the owners of commodity A would say: “wait a
minute, if I exchange my commodity for commodity B I am not getting enough labor in return.”
Therefore they will be reluctant to make this exchange until the exchange proportions
have been adjusted.
Marx had a different mechanism in mind. Marx tries to resolve these fundamental issues
with the simplest example of a commodity economy, which would be petty producers, who
have produced the commodities in their own workshops, meeting up with the final consumers
on the market. The producer of commodity A would say: instead of producing commodity
A and exchanging it for commodity B I should be producing commodity B directly. This
will save me half the labor. Since B is more favored by the market than A, some producers
will switch away from producing A and/or into producing B, until there is a glut of B and a
shortage of A, so that their exchange proportion will be adjusted.
44 2007fa Econ 5080 U of Utah
Here you see why Marx says in 127:1 that exchange-value is the mode of expression of
some content distinguishable from it, because the adjustment takes place not in the market
but in production. And it is also obvious that such an adjustment of production is only truly
possible if all exchanges are mediated by money: then every producer can, among those
things he or she is able to produce, switch into producing that which has the highest market
price per labor hour performed. This transition to money will be discussed shortly, in Section
3 of Chapter One about the form of value. And Marx’s abstract criterion that the form of
value must be a true reflection of the substance of value, can be operationalized to mean: it
must give the producers the information they need to make the adjustments I just described.
Message [55] referenced by [54], [73], and [127]. Next Message by Hans is [58].
Question 86 is 39 in 1995WI, 48 in 1996ut, 47 in 1997ut, 59 in 1999SP, 65 in 2003fa, 74
in 2004fa, 73 in 2005fa, 86 in 2007SP, 87 in 2008fa, 90 in 2009fa, and 109 in 2012fa:
Question 86 Use-value is the quality of the commodity, and exchange-value is its quantity.
Right or wrong?
[47] Charles: Use-value is the quality of the commodity... Right.
Because in order for the commodity to be useful, in needs to have quality. When you
make a purchase, you always consider the quality of it. This is a good example of the saying
“you get what you pay for.” When you make a purchase as the exchange value, you relate
it to the quantity based on your needs and the purchase price. After the purchase, or the
exchange value, you need the quality to have a use value.
Hans: It is true that the quality of the commodity is in the foreground when you look at it as use-value, and
the quantity when you look at it as exchange-value. Nevertheless, the formulation in the question is misleading.
Everything has a quantity and a quality, but it is not true that everything has a use-value and an exchange-value.
There are societies in which things do not have exchange-values.
Next Message by Charles is [68].
[50] Ben: graded B– Marx says, “A use value or useful article, therefore, has value only
because human labour in the abstract has been embodied or materialized in it. How, then,
is the magnitude of this value to be measured? Plainly, by the quantity of the value-creating
substance, the labour, contained in the article. The quantity of labour, however, is measured
by its duration, and labour-time in its turn finds its standard in weeks, days, and hours.”
What I got from this was that use value is measured by how much labor is put into the
commodity. I feel that with more labor time comes a higher quality commodity.
Hans: It is sometimes true that more labor gives a better use-value, but it is certainly not universally true, and
measuring use-value by labor input seems a pretty stupid thing. In fact, Marx was not talking about use-value here
but about value. Those words must be carefully distinguished, see my [30].
Marx also said “Exchange value, at first sight, presents itself as a quantitative relation as
the proportion in which values in use of one sort are exchanged for those of another sort, a
relation constantly changing with time and place.”
What this means to me is that different quantities of certain commodities are equal to
other different quantities of certain commodities. Maybe this will help one apple is not
equal to a watermelon but 10 apples could be equal to a water melon.
Hans: Yes, you are understanding that sentence of Marx correctly. But I am not sure how this relates to the
question.

U of Utah Econ 5080 2007fa 45
Next Message by Ben is [204].
[52] Kalmerico: The statement is wrong for it assumes that exchange value cannot have
qualities and use value cannot have quantities. While it is true that use value deals with how
well a commodity functions, or how well it is built, etc. and exchange value is the price
(which suggests quantitative measurements), to state these as being the definition of their on
functions would be incorrect. Exchange value can have qualities also, which can be derived
from a social aspect of society as exchange proportions change with time and place.
Hans: Your first sentence formulates it very well.
Regarding your last sentence, Marx does not talk much about the quality of exchange-value, but he stresses the
quality of the underlying value and the labor which makes up this value. In his theory value is something real, it is
a social substance with its own quality that determines how it acts.
Message [52] referenced by [271]. Next Message by Kalmerico is [148].
[271] ZACH: Quality and Quantity. In doing some reading and research on this statement,
I still feel pretty comfortable with my answers, but would like to re-word some of it to
make more sense of the point I am trying to get across. I do feel the first part of this statement
is accurate. “The use-value of a commodity is the menu of possible uses of the commodity”
(taken from the annotations). If the commodity was not quality what would happen to the
“menu of possibilities”? They would diminish, they would not exist. For example, it takes
plywood and studs to build a home. If these pieces of lumber were not quality there would
be many problems associated with this lack of quality. One problem would be if the studs
were twisted then walls wouldn’t be straight and the whole house would be off square. Also,
if the plywood was rotten, then water would leak through and damage the house. Basically
the use-value is the quality of the commodity because without quality in a commodity, no
consumer will want to buy it.
As for the latter half of the statement, I don’t believe it is accurate. Exchange value has
to do with the price of the commodity, not the quantity. An oil company knows how much
a barrel of oil is worth in the market because of the demand for that oil. They know what
price they can get and that is the price they are going to ask for. The quantity has nothing
to do with exchange value. The exchange value is price and that price is determined by the
market of demand for that product and its use values.
Hans: If you want to know why this is a wrong answer read Kalmerico’s [52].
Next Message by ZACH is [272].
[321] Kibosh: content C+ late penalty 8% I’d like to expound and correct myself, I’ve
actually struggled with personal opinions of this question.
Marx states in Chapter 1
A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a
material thing, a use value, something useful. This property of a commodity
is independent of the amount of labour required to appropriate its useful
qualities
This speaks directly to the quality of a commodity. The use-value, according to this quote,
does not relate to how well the good is produced but the value of how useful the good is,
“independent of the amount of labor required.” This essentially says you can put together a
46 2007fa Econ 5080 U of Utah
product and regardless it’ll have value, supposing it is needed, somewhat useful and contains
substance.
After reading over former submissions, the book and other journals I believe that Exchange
value is a combination of quality and quantity. Exchange value tends to include
personal intrinsic value. Not only does it include a market value but opportunity cost that
the producer included. The exchange value includes the vested interest of making sure the
good was produced. One of the first questions in our semester asked (something along the
lines of): Is wealth the true happiness? A producer will trade time for happiness along his
indifference curve. This becomes an input to his exchange value. Essentially I see the producer
charging for his happiness lost because of leisure time lost. So the time and quality of
the good produced will be included into the exchange value of a good.
Hans: The argument given in [278] makes the exchange-value of a commodity independent of whether the producer
deliberately charges for his labor time or not.
Message [321] referenced by [328]. Next Message by Kibosh is [322].
[328] Hans: Use-Value Independent of Labor Input. Marx says the use-value of the
commdity comes from its physical properties, not from the labor put into the commodity.
In exam resubmission [321], Kibosh quotes the relevant passage from Marx, and concludes
from this that it doesn’t matter for the use-value whether it is the result of a shoddy rush job
or whether much labor was put in to perfect the product.
This is a misunderstanding. A shoddy rushed commodity almost certainly has a lower
use-value than one that is lovingly elaborated and costs a lot of labor. But this difference in
use-value does not come from the difference in labor put in but from the difference in the
physical characteristics of the commodities. Even though more labor gives better physical
properties, therefore a higher use-value of the commodity, this higher use-value comes from
the physical properties of the commodity, not the labor necessary to produce it.
Next Message by Hans is [329].
Question 87 is 87 in 2007SP and 89 in 2008SP:
Question 87 We know now that value consists of abstract labor. What does exchange-value
consist of?
[53] Melanie: graded B+ The exchange value of a commodity consists of the amount of
labor-time it is able to command. For example, if I exchange a television for an iPod, the
exchange value of the television is equal to the amount of labor-time used to produce the
iPod. Even though the use value of the television (or abstract labor-time used to produce
the television) is 4 hours labor time, the exchange value may be different. The exchange
value of the television will be equal to the amount of labor-time it is able to command when
exchanging it for another commodity. Therefore, if the television is traded for an iPod, and
the iPod took 10 hours of labor-time to produce, then the exchange value of the television is
10 hours of labor-time.
Message [53] referenced by [59]. Next Message by Melanie is [86].
[59] Hans: Not Every Question Makes Sense. Melanie’s [53] is consistent with the answers
given last Semester: Grindage in [2007SP:36] said that the exchange-value of something
consists in the things one gets in exchange, and Adam [2007SP:37] modified this by

U of Utah Econ 5080 2007fa 47
saying it consists in the value of the things one gets in exchange. This is a practically oriented
point of view: it does not really ask what exchange-value is, but looks at the practical
implications of the exchange-value, namely, that one gets things in exchange for one’s own
commodity.
Some study questions are in the text because I think I have the right answer and want to
test whether you get to this answer too. Others are in there because I think this is a logical
thing to ask for someone reading the text, whether or not I know the right answer. Question
87 is of this second kind. If Marx makes so much fuss about it what value consists of, does
this mean we should also be concerned what the other social relations, such as exchangevalue,
consist of?
Right now I am thinking, the answer is no. Value is special, because it is a social relation
that takes the shape of an immaterial substance in the commodities, as I tried to explain in
[58]. Because of this, it makes sense to ask what it consists of. Exchange-value is a social
relation which takes the form of the proportions in which different things can be exchanged
on the market. Maybe a Marxist would want to decompose it into what it would be if it were
only determined by the value in the commodity, and the deviations from this due to demand
and supply. I.e., it is possible to analyze it, to ask further questions about it. But unlike
value, exchange-value is not an immaterial substance, therefore the question what it consists
of does not make sense.
Next Message by Hans is [64].
Multiple Choice Question 88 is 502 in 1999SP, 62 in 2000fa, 75 in 2005fa, and 91 in
2009fa:
Multiple Choice Question 88 Which of the following family relations best correspond to
the relation between value, use-value, and exchange-value?
(a) If you are value, use-value is your daughter and exchange-value your son.
(b) If you are value, use-value is your brother and exchange-value your son.
(c) If you are value, use-value is your father and exchange-value your son.
(d) If you are value, use-value is your daughter and exchange-value your granddaughter.
[30] Hans: Relation between use-value, exchange-value, and value. The most important
thing to remember from the first homework period is that each commodity has two
different aspects: it is a use-value, i.e., a useful object, and it is an exchange-value, meaning
that it can be traded or sold on the market. These are two different aspects which cannot be
reduced to one another. One cannot derive the exchange-value from the use-value.
In the presently assigned readings, Marx also uses the word “value.” One might think,
wrongly, that this is the more general concept from which exchange-value and use-value are
special cases. But Marx is not using it this way. For him, value is the underlying concept
whose surface manifestation is the exchange-value, and there is no direct link between value
and use-value.
I.e., in the above multiple choice question, answer (a) is wrong and answer (b) is right.
Both value and use-value are inherent in the commodity, and exchange-value is the form
in which the value manifests itself. Just as [21], this multiple choice question is not in
48 2007fa Econ 5080 U of Utah
the Annotations and therefore not assigned as homework, but it could come up in the first
Midterm.
Let’s make a rule in this class: whenever you use the word “value” you have to distinguish
whether you mean use-value, exchange-value, or that thing which Marx calls “value” (which
is rolled out only in the readings assigned today until Monday).
If we don’t keep things organized this way, it is much more difficult to say intelligent
things about the commodity.
Chris says in [20]: “A commodity is something that has value to those concerned in the
marketplace.” Here we can only guess whether use-value or exchange-value are meant. Rob,
in [23], begins similarly vague but then corrects himself: “A commodity is anything of value.
Specifically, a commodity is anything with ‘exchange value’ such that it can be traded on an
open market.”
Message [30] referenced by [50] and [85]. Next Message by Hans is [31].
Question 89 is 55 in 1997sp, 49 in 1997ut, 65 in 2002fa, 67 in 2003fa, 77 in 2004fa, 76
in 2005fa, 89 in 2007SP, 89 in 2008fa, 92 in 2009fa, 96 in 2010fa, 115 in 2011fa, and
113 in 2012fa:
Question 89 Why is labor measured here by labor-time, and not by counting how many
movements were made, or by the drops of sweat of the laborer, or by the discomfort of the
laborer?
[57] Dannymangum: Labor Time. In assessing value we look at the amount of valueconstituting
substance found in the article. The value-constituting substance is labor, because
it is the one input that all commodities have in common, as it pertains to production.
In our measure of labor we look at the total labor that went into the commodity, not just
the final product. Since we must calculate every ounce of labor that went into the commodity
to determine its value, measuring anything other than duration of time spent would be
extremely problematic. Each stage of production has different areas of difficulty, whether
that be physically taxing or of a more intricate nature. The only measurable aspect that all
commodities have in common is time. The other pro time measuring argument would be the
ease in which it can be obtained. While counting beads of sweat or movements would take
painstaking measures to produce. Time is relatively easy to collect as well as an effective
source of measurement for our intents and purposes.
Hans: Instead of saying that time is the only feasible measurement, you should have said that time is the only thing
these labors have in common, and markets look for that what is equal in all labor (because they set the products
equal).
Message [57] referenced by [61] and [2012fa:82]. Next Message by Dannymangum is [138].
[61] Brian: Labor is best measured by labor-time because labor-time will be the same
for all laborers. Movements made would not be an equal indicator as some commodities
will require more movements than other commodities. Drops of sweat would not be an
equal measure of labor either, because, depending on the physical health of the laborer,
some laborers may sweat more than another; or some commodities may be more physically
demanding than other commodities. Discomfort of the laborer is an unfair measurement as
well, as some laborers will feel or can claim more discomfort than other laborers.

U of Utah Econ 5080 2007fa 49
Hans: Equality is important – not for reasons of fairness, but because markets set all products equal, and therefore
they are governed by what is equal in the products.
Much of what you said was already said in [57]. This affected your grade. You can only get credit for new
things which were not said in an earlier submission this Semester. The submissions must build on each other.
Message [61] referenced by [62] and [341]. Next Message by Brian is [121].
[62] Boston: Labor is measured here in Labor-time because measuring labor in time keeps
the measurement equal. It will be the same for all of the laborers. If you measured in drops
of sweat it would not be an equal measurement because some people sweat differently than
others. Also, if you measured labor in the movements that were made in would be unequal
because some people are faster than others and some products may take longer to move.
Measuring in labor-time seems to be the best way.
Hans: Everything you say is already in [61] which came 12 hours earlier than your answer. Indeed, your answer
reads like a sentence-by-sentence paraphrase of [61]. Everyone is expected to read the earlier answers and to build
on them rather than repeating them.
[65] Hans: Measurement of labor by time is an automatic market outcome. Any answer
which says that labor is measured by time because this is the fairest and least expensive
solution is wrong because the measurement by time is not a deliberate policy or management
strategy, but it is the spontaneous work of the market.
I’d like to point to my [2002fa:25] as a good explanation of the basics. My [2007SP:42]
adds to this that labor is one of the noblest human activities, and much of the discomfort we
feel does not come from labor itself, but from the fact that in capitalism, the labor process is
at the same time the exploitation of the laborer.
Message [65] referenced by [177], [197], [252], [341], and [2008fa:135]. Next Message by Hans is [75].
[177] BHales: Labor-Time. Marx’s choice to use time as a measure of labor is tied to
the idea of abstract labor. The transfer of time from one’s life to a particular commodity is
a direct transfer of his life to that commodity. As Oregonian states in [2002fa:32] “Time is
life. The real value of a product comes from the fact that a laborer spent that hour of his/her
time in its creation.” To measure the amount time spent living we do not use how many
movements someone has made in life, or the amount of sweat they have shed. It would only
make sense to use the same measure of life to measure labor.
Hans: Good. You must have realized that your in-class answer falls under those answers called wrong in [65].
Message [177] referenced by [341]. Next Message by BHales is [178].
[179] Charles: Marx looks at the commodity exchange and says: commodities are exchangeable
in our society because they all contain the same abstract human labor. Based
on Marx, since all the commodities in the society contain the human labor, it makes the
commodities be exchangeable.
Even though time is relevant to labor, one can not insist that time plays the leading role in
labor to determine the value of labor. If that’s the case, then the laziness of a person would
make the value of the product be more valuable.
The reason the labor is measured by labor-time and not by other factors is because labortime
is the activity associated with making the product. Marx says “labor creates value not
because of sacrifices but because labor is man’s normal life activity.” Because of that, the
labor-time is the best way to measure labor.
Hans: There were some good elements in your in-class answer which you dropped in the resubmission. Your
in-class answer reads:
50 2007fa Econ 5080 U of Utah
The reason labor is measured by labor-time and not by counting how many movements were
made or by the drops of sweat or the discomfort of the laborer is because the only thing that
is constant with everyone is the time. Everybody works differently, but everyone is exposed
to the time the same way. The number of movements, discomfort, or the drops of sweat are
all related to the characterisics of an individual employee. One has no direct relationship with
the commodity, which is produced by the labor. The onlu thing tht is associated and combines
all of the aspects of labor is if labor is measured by labor-time.
This equality was left out in your resubmission.
Next Message by Charles is [180].
[181] Melissa: graded A After doing some research on question 89, I don’t believe I was
looking at labor as abstract labor, I feel I made the same mistake many people made in the
archives. That being said the first point I would like to make is that when Marx started to
look into how to measure labor he first had to identify what labor he was looking at. When
I first answered this question I was answering the fact that labor time was the best way to
measure labor because I was looking at concrete labor not abstract labor. Marx is referring
to abstract labor and the question is really asking why measure abstract labor in labor time
and not by the number of movements or by the drops of sweat or by the discomfort of the
laborer.
First I would say that abstract labor is adding value to the commodity, this is what abstract
labor is. If you look at how a person can add value by building the commodity the only
answer you could come up with is by measuring labor time, and here is why. Let’s look
at the discomfort of the laborer first. If one is out shopping for a commodity to purchase
they do not look at how much discomfort the laborer was in at the time they created/built
the commodity, this would be a silly reason to purchase an item. How much discomfort the
laborer is in is not a social matter, this is an individual matter and adds absolutely no kind of
social value to the commodity. Therefore, you would not measure labor by the discomfort of
the laborer. This is also true for the drops of sweat the laborer had when they produced the
commodity. Sweat adds no social value to any commodity, one does not buy a commodity
because it had x amount of sweat drops while in production. This is also an individual
matter, not a social matter.
The best way to measure labor is by labor time because time has a value to everyone. If
I spent an hour making commodity A, that is one hour out of my life I will never get back.
One hour I will not be able to make commodity B, spend as leisure time or even to do other
chores. Everyone has a need for time and this need for time is recognized as value in a
commodity, abstract value. This is why the best way to measure labor is by labor time.
I do feel that my original answer is a good answer and would help explain why labor is
measured in labor time when looking at concrete labor; however, it is not the appropriate
answer when looking at abstract labor.
Hans: You are making the right distinction between concrete and abstract labor, and between individual and social
matters. Abstract labor is by nature social, not individual.
Next Message by Melissa is [237].
[197] Karly: It’s Labor-Time! In a Capitalist society, Marx makes the argument that
labor should be measured using time versus alternatives such as how many moves the laborer
made, or the drops of sweat or discomfort from the laborer. Measuring labor using time is
the only way to equally measure labor. In all forms of labor, whether it be a teacher or

U of Utah Econ 5080 2007fa 51
assembly line worker, time is consistent. An assembly line worker may experience more
discomfort and make more moves than the teacher, but does this mean they are producing
more? No, indeed it is simply the type of work which they are doing.
According to Marx, “labor is what determines the value of a product.” The higher amount
of labor time put into a commodity the higher the value will be. So, if a certain commodity is
produced with more discomfort by one laborer that another but in the same amount of time,
it should not have twice as much value but the same value because it took the two the same
amount of time to produce it.
Hans: Marx does not argue that labor should be measured using time, but he argues that the labor which creates
value is measured by time. Please re-read my [65]. Capital is not a blueprint for a better society!
Your in-class answer did not make this error but it talked about wages. There is a difference between the value
produced by a worker and the wages received by a worker. See my [29], [45], [49].
Message [197] referenced by [288] and [341]. Next Message by Karly is [198].
[217] Melanie: graded B Marx uses labor-time to measure labor because labor-time is the
only thing all the different kinds of labor have in common. It would be difficult to measure
labor using something such as “drops of sweat of the laborer”. In fact, some types of labor
may not involve sweat at all. The only measurable similarity found in all types of labor is,
thus, labor-time.
Hans [2002fa:25] quoted Marx who wrote in Contribution, 271:2/o: “variations in the
duration of labor are the only possible difference that can occur if the quality of labor is
assumed to be given.”
Hans: Your first few words “Marx uses labor-time to measure labor” start you on the wrong foot. Marx does not
decide how to best measure labor, but he is trying to find out how in a commodity society the quantity of value is
determined. His theory says that the labor that makes up value is measured by labor-time. The question asked you
to explain why it is labor-time and not some other measurement of labor.
Message [217] referenced by [252] and [626]. Next Message by Melanie is [218].
[229] Kalmerico: Measuring Exploitation. Labor is measured by labor time because
it is the one thing that all workers have in common, which in turn allows markets to set
all products equal. Measuring labor by drops of sweat would not necessarily be the most
accurate strategy because the differing physical make-up of each worker could cause some
to sweat profusely and others not at all. The same type of idea could be applied in regards to
a laborer’s discomfort. However, time is an unfortunate way to measure one’s labor because
it forces workers to be speedy and all alike in their production, which completely ruins
any chance of creativity or innovation occurring. It seems unlikely that someone randomly
decided to measure labor by time, but more likely that it is a spontaneous act of the market
and is the cause of much exploitation.
Hans: In the light of your last sentence this measuring should not be called a “strategy.”
Next Message by Kalmerico is [230].
[236] Harmon: Drops of sweat! Labor is measured in labor-time because it gives the
commodity its third value – the labor-value, or how much of a certain commodity is produced
in a given amount of time. If the value was measured by drops of sweat or amount of
discomfort the exchange rate would change, making it more profitable for the laborer and
higher priced for the buyer. Laborers must take pride in the commodities they are producing
and turn out a good product, but it is more profitable for the owner of the company to employ
laborers who turn out large amounts of good products in short amounts of time. Thus, the
52 2007fa Econ 5080 U of Utah
value of commodities (in this case) is measured by the amount of time it takes the laborer to
turn out that commodity, not his/her amount of sweat or discomfort.
Hans: We are not talking about it how the laborer gets paid, but how the market determines the quantity of value
of a commodity.
Next Message by Harmon is [363].
[252] Desk: Time being a critical factor. Time is the critical factor when Marx wishes to
discuss labor and labor value. Labor cannot be measured by the drops of sweat of a person
nor his discomfort because of time. I wish to use several examples showing the importance
of time. Time is something that everyone can relate to, no matter the situation no one can
avoid how time is essential in one’s life. Marx states that the measure of the value of things is
the duration of the labor on the average requisite, performed with the average amount of skill
and diligence, and in the normal industrial conditions at any given time. In this example we
will use the construction of a house. The builder pays the laborer for his labor-power at its
value, that is to say, by giving him the amount of money which, representing six hours labor,
permits him to build the house at a specific need; but as he thus obtains the free disposal
of this productive force for which he has paid, he acquires everything it produces during
the entire day. He will never pay the worker on the drops of sweat or the discomfort of the
worker for that reason. The employer has different methods of increasing his profits. The
first consists in multiplying the number of his workmen. The second method is to lengthen
the working day. The longer the laborer works beyond the necessary time which represents
his wages, the greater the profit he would have.
Hans: Your first sentence “time is the critical factor when Marx wishes to discuss labor and labor value” or your
fourth sentence “time is something that everyone can relate to” start you on the wrong foot. It is not Marx’s decision
or the employer’s decision to measure labor by time. Please look at my comment to [217] and my [65]. Some of
what you write seems to indicate that you are aware of this, other things are in contradiction with it.
Next Message by Desk is [254].
Question 90 is 57 in 1997WI, 57 in 1997sp, 63 in 1999SP, 65 in 2001fa, 66 in 2002fa, 68
in 2003fa, 78 in 2004fa, 77 in 2005fa, 90 in 2007SP, 92 in 2008SP, 90 in 2008fa, 93 in
2009fa, 97 in 2010fa, and 117 in 2011fa:
Question 90 Is it a character flaw to be lazy in an exploitive system?
[56] AJoseph: graded A weight 50% The Workers’ Slow Down. It depends on the
circumstances. One where it would not be, Marx’s quote in 129:2 alludes to an ideological
basis for the classic Workers’ Slow Down, where pretend laziness can help workers get a
larger share of the profit for the work that they do.
One may also think of chattel slaves injuring themselves or breaking tools on purpose, or
conscripted soldiers shooting themselves in the foot on the way to a battle at this point.
Hans: You started on the right foot, but much more can be said here. Perhaps those who are truly lazy are also
protesting, but in a self-punitive way? Perhaps they are opposed to capitalism but then blame themselves for it
rather than the system, just like the many gay people who are homophobic at the same time?
AJoseph: Thank you, yes, I suppose I took the examples to the extreme. Shortly after posting this regretted not
having read Marx’s son in law’s “The Right to Be Lazy,” to be able to cite it for more perspective a moderate form
of laziness.
Next Message by AJoseph is [686].
[60] ZACH: Lazy in an exploitive system? To paraphrase Marx on page 129:2, it might
seem that the lazier the worker the more the commodity would cost because it would take

U of Utah Econ 5080 2007fa 53
longer. But, as he says later in the paragraph, it is not how long it takes a worker to make
the product, but can the worker make it in the time frame that is socially acceptable to make
the product. Therefore, it is a character flaw to be lazy in an exploitive system. If a worker
is lazy and can’t produce what he/she is asked to in the allowed time that they are given by
their superior, then they usually will not keep their job. In our society today, which is an
exploitive system, it is important to be able to do your job as efficiently as needed because
companies today are always trying to beat the competition.
Hans: Your equation of lack of market success with a character flaw is a step Marx wouldn’t take. Against this I’d
like to sing praise to lazy people, who know that free time is more valuable than all the consumerist junk you can
buy in the stores.
Next Message by ZACH is [80].
[63] Fred: I say that being lazy in an exploitive system is a more a system flaw than
character, even though the argument could be made that an exploitive system breeds laziness
because of the inability of the laborer to break out and achieve more than wages. I think
Marx would say that labor is not able to break out, as the power is held by a few, and profit
motive keeps labor from receiving what it is worth in the product produced. The division of
labor allows greater efficiency in production and as labor becomes specialized, profits can
be maximized and a lazy worker will be seen by the profit motive as in-efficient, counter
productive, and will eventually reap negative rewards, even replacement.
Although I am new to Marx’s ideas, it seems that Marx is criticizing capitalism’s view
that labor is a commodity so to speak, that labor has other rewards and incentives that speak
to society as a whole. It is labor that is the engine in economy, and that is where the wealth
is produced. Society does better when labor does better. Pride in one’s work is in more than
just the paycheck. Being lazy is not tolerated, not because one can do as little as necessary to
get by, but because not doing an honest day’s work for pay is bad for production and society.
This attitude exists in reality. I have a son who spent 2 years in Russia, a country long on
a system more removed from capitalism. Here he is on a bus, and a drunken individual gets
on the bus and steals a lady’s ticket. At the next stop, an individual behind the drunk takes
the ticket back and as the doors open, literally does a round house kick knocking the person
out the open bus doors and on their back. The bus doors close and the bus pulls away. The
lady got her ticket back. Laziness is not a positive attribute in society, and Russians do not
like it, period.
Being lazy in this view is indeed a character flaw. Being lazy is not only bad for efficiency,
but for society as a whole. Perhaps that is part of what Marx is pointing out, that in an
exploitive system, laziness would tend to breed on the heals of profit motivated few, as a
flaw of the system more than character.
Next Message by Fred is [124].
[64] Hans: The Treacherous Fairness of Markets. According to what Marx has said
so far, it is easy to think that an economy in which prices are determined by labor content
is a fair economy. It is fair that those who are lazy lose their jobs, and the measurement of
labor by time, topic of question 89, is also the fairest practicable way to measure labor. This
reinforces the common consciousness that markets are a good thing.
54 2007fa Econ 5080 U of Utah
But assume now that a person has lower output than the average worker not because she
is lazy, but because she is handicapped in some way. Shouldn’t a handicapped person get
full credit for her labor time even if the output is lower?
I’d like to give you a second example where it is fair to value the same commodity at different
prices. This comes from my Thursday evening class on renewable energy policies. In
order to promote renewable energies, Germany has passed laws according to with electricity
generated by wind turbines or by photovoltaic (PV) panels can be sold to the utility companies
at a higher price than electricity generated by coal-fired power plants. This price is
deliberately set at such levels that homeowners installing PV panels on their roofs can make
a modest return on their investment, and likewise with farmers who erect a wind turbine on
their fields. Each technology has its price, and the price is guaranteed long enough so that
investment pays off.
This has been an incredibly successful policy, which not only placed German way ahead
of the EU-wide goals for renewable energy, but which also made Germany a major international
supplier of wind turbines and PV cells. A report documenting this success is at
http://www.erneuerbare-energien.de/files/pdfs/allgemein/application/pdf/erfahrungsbe
Why is this so successful? Because it promotes all technologies at the same time and
therefore allows them all to go on a learning curve and become more efficient. Here in the US
one often hears the critique that this policy picks winners and losers, i.e., that policy makers
are trying to do something that it better left to the markets. The kind of policies one finds in
the US try to be more cost-conscious, therefore they go for the cheapest renewable energy.
But this means that these policies only promote wind power, while other technologies, such
as geothermal or solar, are neglected for now. In the long run this is a more costly and less
effective policy. One can even turn the table and argue that the policies emphasizing the
cheapest renewable energy are in fact the ones that pick winners, while the German “Feed-
In tariffs” try to promote all technologies equally. Equality makes sense because renewable
energy must always be a diversified portfolio, one needs solar energy for the days when the
wind doesn’t blow, and wind for the nights when the sun doesn’t shine.
Next Message by Hans is [65].
Question 108 is 108 in 2008fa:
Question 108 If the product is different, then the labor producing this product must be
different as well. Isn’t this obvious? Why does Marx act as if this was a scientific insight?
[74] Poppy: Zwieschlächtiges Schwert. Yes it makes sense and seems obvious, however,
Karl Marx was the first to state and acknowledge that the nature of a laborer was twofold,
just as it was known for a commodity.
Marx views all human labor as homogenous or in the abstract. Meaning, if you took labor
out of any product or commodity, it would continue to remain a raw medium of nature. He
acknowledges that labor, depending on what is being made or produced, is different, simple
or hard, both of which should be added to the quantitative value of the produced product.
He uses the example of coats and linen, where the labor to make the coats and linen are
qualitatively different. He continues to state that the coat would be more complicated to

U of Utah Econ 5080 2007fa 55
make than weaving linen, which obviously means more labor would be involved in making
the coat. Any labor value should be added to the produced product, so in this case, more
labor value would be added to the price of the coat.
Marx sums this section up by stating that smaller quantity of complex labor ends up being
equal to a larger quantity of simple labor.
Hans: The discovery Marx was so proud of was not that weaving labor is different than tailoring, but that the labor
which produces use-value is different from the labor which produces value. He called the first labor concrete labor,
and the second abstract labor.
I.e., your first paragraph is right. But the first sentence in the second paragraph is wrong. Only the abstract
labor is homogeneous. Concrete labor isn’t homongeneous, there are many qualitatively different kinds of concrete
labor.
Message [74] referenced by [2008fa:628]. Next Message by Poppy is [162].
Question 114 is 100 in 2005fa, 113 in 2007SP, 114 in 2008fa, and 119 in 2009fa:
Question 114 Coat and linen are qualitatively different use-values. Are they exchanged
because their use-values are different, or because the labors in them are different?
[71] JohnGalt: Who Needs A Coat When It’s Summer? Precisely because coats and
linen are produced by different classes of labor, they possess different use-values. Without
both of these components, coats and linen, or any other two distinct commodities would not
be able to be traded. First, this is because without different classes of labor no distinct commodities
would be produced. This leads to the second dilemma, a lack of labor distinction
would fail to allow use-value to be created. Thus, the relative values of commodities, such
as could be produced, would be unable to be determined.
It is therefore essential to recognize that distinctions in use-value or labor are related
and necessary and have been so as the capitalist system has developed. One cannot wholly
exist without the other in order for this system to function seamlessly. Because of this, an
infinite amount of differentiation and variation must exist to bring forward the use-value of
an increasing array of commodities that are both desired and offered in the market which
facilitates their trade.
Message [71] referenced by [77]. Next Message by JohnGalt is [145].
[77] Hans: Causality Disentangled. Marx argues: whenever there is commodity production,
a social division of labor must be underneath. This is pretty obvious, and we can just
leave it at that. But Marx tries to be very precise, and my Annotations try to identify each
step in his derivation. If you read the text closely, you find two statements which seem to be
at odds with each other. In 132:3, Marx says:
Were these two objects not qualitatively different use-values ..., they could
not face each other as commodities.
And in 132:5/o he says:
Use-values cannot confront each other as commodities, unless they are produced
by qualitatively different useful labors.
Question 114 tries to get clarity about this: is it the first or the second? JohnGalt [71]
stresses that qualitatively different use-values cannot exist without qualitatively different
56 2007fa Econ 5080 U of Utah
useful labors. This is right. But even if the differences in use-values come from differences
in labor, the use-value differences can have their own effects – to say otherwise would
be the error of reductionism. Indeed, if you look at the exchange process itself, only the
use-values are present; the labor is somewhere in the background but is usually not talked
about. Therefore I would say: the exchange directly requires different use-values, and since
different use-values presuppose different labor processes, one can conclude from this that
exchange is also based on different labors.
I think this is how Marx meant it. The first sentence gives the direct effect, and the second
the direct and indirect effect. This is a small point, but my Annotations try to follow Marx
even in these small matters, so that we know we are not missing something profound.
Message [77] referenced by [2008fa:166]. Next Message by Hans is [81].
Question 118 is 51 in 1995WI, 61 in 1995ut, 63 in 1996ut, 71 in 1997sp, 66 in 1997ut,
92 in 2003fa, 103 in 2004fa, 118 in 2008fa, 126 in 2010fa, 146 in 2011fa, and 145 in
2012fa:
Question 118 (a) Why is it necessary for the exchange of commodities that they contain
qualitatively different kinds of useful labor?
(b) Can commodity production exist without division of labor?
(c) Can division of labor exist without commodity production?
(d) How does commodity production influence the division of labor?
[126] Jeff: Commodity Production. a) Marx argues that it is important to have qualitatively
different kinds of useful labor because that is what gives things its value. These
different values allow for things to be exchanged based on the wants of individuals and how
much the commodity is valued.
b) According to Marx, commodity production is not possible without the division of labor
c) Yes, division of labor can exist without commodity production
d) Because commodity production is not possible without division of labor, the more
advanced the commodity manufacturing is, the more specialized the division of labor will
become.
Hans: Your b), c), and d) are right, but a) isn’t.
Next Message by Jeff is [225].
Question 120 is 79 in 1999SP, 94 in 2003fa, 105 in 2004fa, 106 in 2005fa, 119 in 2007SP,
and 130 in 2010fa:
Question 120 When Marx wrote that labor is the father and the earth the mother of usevalues,
should he also have included produced means of production in addition to nature
and labor?
[66] Josh: No. Marx did not include produced means of production in addition to nature
and labor, because the produced means of production is a product of labor.
Marx states “Labor, then, as the creator of use-values, as useful labor, is a condition
of human existence which is independent on all forms of society; it is an eternal natural

U of Utah Econ 5080 2007fa 57
necessity which mediates the metabolism between man and nature, and therefore human life
itself.”
Man’s labor is necessary for its existence. Without labor on all levels there would be
no advancing civilization or even to the next generation. Labor is what connects nature’s
products with useful products that we use everyday. Without labor that pavement street
would be a jumble of rocks. Labor is the intermediary process between the trees outside and
a binder full of paper.
Marx uses the example of the coat “The use-value coat and linen are combinations of, on
the one hand, productive activity with a definite purpose, and, on the other, cloth and yarn;
the values coat and linen, however are merely congealed quantities of homogenous labor.”
Produced means of production are simply a product of man’s labor. Take a manufacturing
machine for example. Someone had to make the metal; someone had to make the metal into
gears; someone had to put the gears together to make the machine. Produced means of
production is simply compounded labor. There are few modern commodities of use-values
that don’t require some sort of produced means of production. Modern products are made
with produced means of production by using less inputs (labor) than before, thus they are
made faster and less expensive.
Hans: You are stressing the importance of labor; but in all your examples the laborers are working with produced
means of production (machinery, tools, materials), without which they would not have been able to produce the
product. Is it ok to ignore that fact?
Message [66] referenced by [67] and [75].
[67] SamHouston: Child Birth. No. I enjoyed Josh’s commentary in [66] for his correct
analysis of labor as the father of use-value. An additional element to this question is whether
or not produced means of production should be included in the equation for use value. Josh
correctly pointed out that all produced means of production are the product of labor and
nature. However, in the production process, the produced means are part of the creation of
use-value. This is where we should examine whether or not produced means should be part
of the equation because obviously they contribute to use-value. But, the produced means of
production seem to take on part of the task of labor and mixes with nature to produce a usevalue.
The produced means of production substitute machine labor for man’s labor, but is
not independent of labor. The laborer uses produced means of production, effecting the total
amount of labor needed in the creation of a commodity. The produced means of production
effect the outcome of labor (or how much labor is required to produce a commodity which
has an effect on the use-value of the commodity) but is not independent of labor. To say that
Labor+Nature+Produced means of Production=Use Value adds an unnecessary ingredient to
the table because Labor already accounts for the input of produced means of production.
Hans: You make a good argument, but it is based on and extends Josh’s erroneous interpretation that Marx considered
labor the principal source of use-values.
Message [67] referenced by [75]. Next Message by SamHouston is [130].
[73] Jason: In regards to this question which Marx poses when he draws a correlation
between the father being the labor and the mother being the use-values. I believe that Marx
should have included the concept of produced means of production as well as nature and
labor because in the readings Marx brings up several important points. When you look at
commodities or products and analyze everything that goes into their production one will
58 2007fa Econ 5080 U of Utah
discover that in order to produce a finished product a laborer must take different elements
that are found in nature and reformulate them into a desired outcome. In addition one would
discover that not all products are regarded as having the same use value as another product
might have. Take for example a diamond and a sweat shirt. Everyone knows that in our
culture today people have the notion that a diamond is extremely valuable. However for
the majority of people a sweater would be seen as something with not very much value.
There is a question however that can be asked in that if an individual who was extremely
cold was presented with a diamond and a sweater what that individual would choose. That
individual may select the sweater because he or she might view the sweater as being more
valuable at that time while a diamond could not satisfy his or her needs. One must take
into consideration that in order to obtain a diamond one must spend an enormous amount of
labor in order to obtain that diamond where as a sweater doesn’t require near as much labor
to obtain as does the diamond. There have been many technological advances in recent times
which have aided in the time it requires for a product to be made therefore the amount of
labor is substantially reduced which increases productivity.
Hans: If someone who is extremely cold gives a diamond for a sweatshirt, this is an individual emergency and not
an equilibrium situation. Assume there is a cold spell and demand for sweatshirts is so high that they rise in price:
then more sweatshirts will be produced until the price of sweatshirts is again in line with other things. In Marx’s
theory, demand and supply determine the quantities of the things produced, not their price. I also tried to explain
this in [55].
But you didn’t read the question right. The mother is not use-values but the earth. And Marx was talking about
the origin of use-values, while you were discussing the origin of exchange-values.
Next Message by Jason is [255].
[75] Hans: Can Nature be Useful Without Labor? Yes! Josh writes in [66]: “Marx did
not include produced means of production ... because the produced means of production is
a product of labor.” When I first read this, I thought it was an oversight, because produced
means of production clearly are a product of labor and the earth, just like everything else.
Apparently, SamHouston thought the same thing; when he quoted the above sentence in
[67], he added “and nature” although Josh had not included nature. (When Marx writes in
his metaphor “the earth,” he really means all of nature.)
But reading on in Josh’s answer, Josh really seems to be serious with his exclusive emphasis
on labor. The whole submission [66] is a praise of labor. It also brings the following
Marx quote: “The values coat and linen ... are merely congealed quantities of homogenous
labor.” Does this mean Marx holds the view that that what makes things valuable only comes
from labor, that nature without labor is only, as Josh says, a “jumble of rocks”?
No, Marx wanted to say something completely different. He wanted to say that exchange
relations between commodities are only governed by labor content, not by nature’s contribution
to the use-values. On the other hand, his sentence with the father and the mother affirms
that nature does contribute to use-values.
Next Message by Hans is [77].
Question 126 is 701 in 2003fa, 110 in 2004fa, and 111 in 2005fa:
Question 126 Carefully explain the meaning of the statement: “The dissolution of all commodities
into labor-time is no greater an abstraction, and is no less real, than the dissolution
of all organic bodies into air.”

U of Utah Econ 5080 2007fa 59
[722] Daru: Commodities are nothing but Air! Reading up past submissions revealed
that people attempted to explain the two issues in the question in the sequence they appear.
I shall here try to do it in reverse. I think it would be easier to understand the question this
way rather than the more common approach as used by student in previous submissions.
All organic bodies are primarily arrangements of Carbon (C) and Hydrogen (H) atoms
in different combination. One particular arrangement yields methane, another propane and
yet another butane. There are numerous other combinations possible as well that result
into different organic compounds, all having both similar and different characteristics and
properties. The important point here is that all these organic compounds are essentially made
up of Carbon and Hydrogen atoms. Hence, one can argue that organic compounds can be
“abstracted” simply to arrangements of Carbon and Hydrogen atoms. This is only a mental
abstraction; we all know it in our heads (Hans [2005fa:1954]).
But there is one further abstraction that can be made here, which in my opinion is more
real than the mental abstraction made earlier. Every time organic compounds combust, they
burn to give off Carbon-di-Oxide and Water and disappear into thin air. This what Marx
means by “dissolution of all organic bodies into air.” This is more real than the mental abstraction
because it takes place in reality - organic compounds cannot combust with us just
imagining it in our heads. I think burning of organic compounds and its constituents dissolving
into air is also real because it is a common occurrence in nature itself. Lightening during
storms sometime burn trees - organic compounds burning and dissolving into air. One can
therefore say that combustion or burning of organic compounds transforms them into a mixture
of gases and dissolve in the most common mixture of gases - air (Hans [2005fa:1954]).
There is nothing ‘great’ about this abstraction because, as I alluded, it takes place in nature
all the time and as Hans [2005fa:1954] puts it, this abstraction does not go beyond reality
itself. I think the idea of organic compounds dissolving into air is settled here. We shall
move to the other important issue at hand.
The question remains: how dissolution of all commodities into labour-time is an abstraction
in the first place and also not a greater but just as real an abstraction as “dissolution of
organic bodies into air.” The first part here can be answered in the Marx explanation of the
exchange process. We will not delve into great detail about the exchange process here since
a lot has already been said about it elsewhere. Essentially, Marx said that when commodities
are exchanged they must have something in common that makes them exchangeable. He argued
against the notion that it must be their use-values and instead explained that its value
of the two commodities that is common between them and makes them “exchangeable.”
Value, in commodities, results only because the (socially necessary) labour-time invested
in it. So, all commodities are essentially products of labour (time) invested in them. For
Marx this abstraction does not end here. Since, his this first attempt of abstracting commodities
into labour-time posits a new challenge to him. We ‘know’ that labour invested
in the commodities is not the same. The labour performed to carve wood into a table top
is different from labour expended to write a poem. If they are different then how can they
be the same. For that is what Marx intended them to be with his idea of abstracting all
commodities into labour-time. Our casual use of the word labour in two different process
above hides something about the labour expended here. For Marx, I would only be talking
60 2007fa Econ 5080 U of Utah
about concrete labour here. The specific activity performed to produce a particular type of
commodity. Hence, labour time being spent on a piece of wood to carve it into a table top is
only concrete labour i.e. activity specifically desired to produce the table top. The same is
true for labour spend in writing a poem - it only represents the concrete-labour. Workers (or
humans in general) can only perform concrete labour. Every activity that they perform at the
workplace is concrete labour (Hans [2005fa:1954]). Marx equalizes this concrete labour in
all commodities by saying that it is nothing but abstract human labour i.e. all labour is essentially
manifestation of human muscle power and its intellectual ability. That is why to him
all labour or concrete labour can be termed as abstract labour power and all commodities can
therefore be dissolved into labour time because the commodities in essence represent only
human abstract labour power.
Now the second, part; how is this abstraction real? This is to say that how this abstraction
is not like a mental abstraction but has some real effects. I think it is real because abstract
human labour is real - all humans have muscle power and ability to think and act. Obviously
it exists in varying degrees in humans but that is not of any concern here. The fact remains
that my muscle power, weak or strong, is real because it produces real effects when utilized
- carving of wood into table top is a case in point. This is why Marx states that abstraction
of commodities into labour time is just as real as organic compounds dissolving into air. It
is not any greater abstraction than combustion of organic compounds because it does not
go beyond reality i.e. the commodities would have have existed without the labour time
invested in them (Hans [2005fa:1954])
In many ways my above answer is only a summary of Hans’s [2005fa:1954]. I have
ignored Hans’s [2004fa:34] since he incorporated it in his 2005 explanation. I read other submissions
as well by Copenhagen [2004fa:31], BonzoIsGod [2005fa:1846], Geo [2005fa:1869],
Sonja [2005fa:1953] and Garfield [2003fa:267-2]. However, I found all these lacking at
many levels and thought it best to construct my own argument out of what Hans has discussed
in his submission of 2005fa.
Well, I guess this is it, my last submission to the group. Finals start from Monday or may
be for some of you they have already started. In any case I wish all of you all the best in
your exams and hope all of us do well.
Hans: For the abstraction to be real it is not sufficient that abstract labor itself is real. Commodity prices can
be considered so-to-say the “ash” generated by the real social process abstracting all commodities to the abstract
human labor required to produce them.
First Message by Daru is [96].
Question 131 is 92 in 2001fa, 115 in 2004fa, 129 in 2007SP, and 140 in 2009fa:
Question 131 The exchange of commodities poses a dilemma: what are the grounds for
treating tangibly different commodities as equals? This dilemma is then also echoed on the
level of the labors producing these commodities, and on the level of labor-powers. On each
of these three levels the dilemma has a different resolution. Describe these three different
resolutions.
[151] Milton: How to exchange different commodities. First of all we have to talk
about commodities. Commodities themselves aren’t valued by their quality but by their

U of Utah Econ 5080 2007fa 61
quantity. Meaning that you can’t compare apples to oranges. You have to put them into
the same terms. To do that you have to disregard the quality of an object and only use the
quantity. Now the quantity of an object is determined by how many simplified commodities
it is. That way you can compare the work of a schooled Dr., with a janitor. While you
can’t compare their product, by importance, etc... You can put them into terms of quantity.
While the doctor might not do any more, maybe even less then a janitor, if the janitor tried
to be a doctor no matter how much time you gave him he couldn’t do it. In this way you
could say that the commodity (product) is in quantity much more than the janitor, due to
perhaps how long it would take the janitor to complete the same task. Second, looking at
the labors producing the commodities is explained in the way we calculate the commodity’s
exchange value. If we are using the above as a measure of the commodity, then the labor
that produced the commodity doesn’t matter because we are looking at it from the point of
the unskilled laborer to get an equal quantity for trade. Third, looking at what is produced
not the product or value that the laborer receives, we can say in the words of Lucretius “out
of nothing, nothing can be created.” Therefore the labor-power is the same across the board,
unless there is a surplus-value added. For example if the janitor and the Dr. work 8 hours
a day then they are both fulfilling their labor for their employer (capital measurement is
fulfilled), it is only when they are able to increase productivity by changing a process or
receiving better equipment that they shorten the typical labor then flow into Surplus value.
Therefore they are then able to quantifiably produce more.
Hans: This question will not be on the exam because this answer is entirely wrong, and correcting it would require
me to re-tell several pages of Marx’s arguments.
Milton, I have the impression that you read Marx without following it too closely, and then you knitted together
your own theory from bits of pieces you remembered from Marx’s text supplemented by your own thinking. I don’t
want to discourage your own thinking, but you should use more of your smarts to try to understand what Marx was
saying. This is a big-picture question which takes a global view of Marx’s tedious arguments, and it can only be
answered if you understand these steps.
Next Message by Milton is [243].
Question 134 is 76 in 1997ut, 131 in 2007SP, and 147 in 2010fa:
Question 134 Is Marx’s appeal to experience regarding the reduction of complicated to
simple labor a circular argument?
[68] Charles: Complicated to Simple Labor a Circular Argument. I think it is a
circular agreement based on the following reasons. It is almost impossible to determine if a
specific job is complicated or simple to the person. At first, almost everything is complicated
when you are just learning the job. I think everyone can relate to this when it was their first
day at work. After a while, when they get used to and familiar with the job, it becomes
simple. Almost every products has complicated and simple labor associated with it. Even if
you take 2 different products, both of them would have labor associated with them, and both
of them would be traded in the society.
Hans: Marx did not mean to say that simple labor is easy. Simple labor is labor that can be done by everyone in
society without special training, while complicated labor often requires years of training.
Next Message by Charles is [69].
[72] Tim: Yes. Marx says that markets assume all labor to be equal and that it only differs
quantitatively despite the fact that labor can and does differ qualitatively. The lack of laws to
62 2007fa Econ 5080 U of Utah
account for this discrepancy and the markets’ longevity obviously void the qualitative view
and perpetuate the fact that all labor can be expressed through multiples of simple labor.
Hans: You are on the right track, but you are missing one step in Marx’s argument. Since the labors are so different,
Marx concludes that the equal substance behind the exchange-values is not the concrete labor, but the abstract labor,
the expenditure of human labor-power in the commodities. This would resolve the problem of finding something
equal in the commodities if all labor-powers were equal. They are mostly equal, much more equal than the labors,
but there are still qualitative differences between them. Instead of explaining how these qualitative differences
are reduced to merely quantitative differences, Marx says, we do not need to know this, because we know from
experience that this reduction happens. Isn’t this a circular argument since this is the same experience which Marx
is trying to explain?
Your writing style is much too condensed. You must explain things in such a way that someone who does not
already know the answer can understand it.
Message [72] referenced by [123]. Next Message by Tim is [123].
Question 135 is 144 in 2009fa and 148 in 2010fa:
Question 135 Just as a horse has muscles and bones in it, a commodity has useful labor
and abstract labor in it. Explain. Is this also true for a product which is not a commodity?
[69] Charles: Labor and Abstract Labor in Commodity. A product may be a commodity
or it may not be a commodity, but it sure will have useful labor and abstract labor in it
depending how it can be related to the society.
Let’s look at something which is not a main commodity in the market (meaning it is not
being traded) and also there has been no labor associated with making that product. The
product I have in mind is the “rock”. You can find rocks all over the place. Not a single
minute of labor has been spent on creating the rock. Even though there has been no input
of labor associated with the rock, there is an enormous use of labor associated with the rock
when it is used for other purposes. The rock can be used for landscaping, construction,
decorations, gravel, scientific research and many other things. I would agree that even if
there is a product which is not considered a commodity, it can still have labor and abstract
labor associated with it directly or indirectly.
Hans: If you dig a rock out of the ground in your backyard and make it part of a decorative garden display, then
you are not producing a commodity (because it is not intended for sale), and you are applying concrete labor to the
rock. One can say that this concrete labor ”enters” the rock, because due to this concrete labor, the rock is no longer
buried in the ground but it is cleaned and decoratively placed among some flowers.
In this whole process you are also using your labor-power. Perhaps you are spending part of your weekend
doing this, you like the manual work after a week of office labor, it relaxes you and you can sleep better, and you
look forward to a refreshing beverage afterwards.
If you were an employee of a landscaping firm, then this abstract labor would also add to the price of the
landscaping service sold by this firm, and in this way, one can say that also the abstract labor and not only the
concrete labor ”enters the rock.” It enters the rock in a different way than the concrete labor: it is manifested in the
exchange-value of the rock, not the use-value of the rock. But if you do the labor in your own free time, then only
the concrete labor enters the rock. The abstract labor, the use of your labor-time, is used up without entering the
rock, just like the beverage you drink afterwards is used up without entering the rock.
Next Message by Charles is [85].
Question 141 is 86 in 1998WI, 93 in 1999SP, 98 in 2000fa, 98 in 2001fa, 138 in 2007SP,
145 in 2008SP, 143 in 2008fa, 150 in 2009fa, 155 in 2010fa, and 174 in 2012fa:
Question 141 If the first chapter is such a systematic discussion of value, why is it then
called “Commodities” and not “Value”?

U of Utah Econ 5080 2007fa 63
[76] Ashley: Commodities Are Like Paintings. A commodity is an article of trade or
commerce. The value is the substance of that commodity. In economics, we discuss how
important commodities are in society, but in order to truly understand what a commodity is,
we need to understand the meaning of it, the value, which is what is most important. The
value is the different labors and uses that make up the commodity which, at most times,
is overlooked. Most people look at the total package, not at what its contents are. I like
to compare this subject to a painting. Everybody “aaaahhhh’s” at the picture when it is
complete, but they don’t know the work that goes in to each stroke by the artist, however,
without the strokes, there would be no painting. The same goes for a commodity. The
commodity is the painting as a whole, and the value is like the strokes. It is impossible
for one to exist without the other, and at the same time, the strokes (value) are what’s most
important.
Commodities are the MAIN subject of this chapter, we are just going into detail about its
components, and that’s why it’s the title of the first chapter.
Message [76] referenced by [81]. Next Message by Ashley is [265].
[80] ZACH: Problem with the word ‘Value’. There is a problem with the word value. I
believe that the reason the first chapter is called commodities and not value is because some
people don’t value things the same as others. For example, an oil company doesn’t “value”
a piece of plywood as much as a lumber company does. Plywood is definitely a commodity,
but it has no value to the oil company. This piece of wood makes the lumber company a lot
of money when sold in large quantities, yet that plywood’s value is zero for the oil company.
That is why the first chapter was called commodities, because each company can relate to
commodities and what their “value” is to that specific company. Not every commodity is
valued the same.
Message [80] referenced by [81] and [401]. Next Message by ZACH is [270].
[81] Hans: Cancerous Value. Value, in Marx’s theory, is not a subjective attitude which
varies from person to person as ZACH says in [80]. It is also not primarily the meaning
of the commodity, as Ashley says in [76], although there is some truth in it: value is some
immaterial substance inside the commodities. Value is at the same time something inside
the commodities and a social relation.
The problem with value is that in capitalism, value is not static but it is moving. It
jumps from commodity to commodity and becomes bigger and bigger. Its self-aggrandizing
movement, which can be compared with a cancer, is the main driver of the economy. Marx
hasn’t said this yet in the assigned readings, he will say this in Chapter Four. What drives the
capitalist economy is therefore not the greed of the capitalists but the inner necessity of the
social relation “value” to accumulate, to become bigger and bigger and to be concentrated
in fewer and fewer hands.
Marx holds that social relations, generally, cannot be explained by individual motivations
but they have their own dynamic. The topic of the whole book Capital is the anatomy of the
social relation “value,” the explanation how it can and why it must accumulate relentlessly.
Since social relations cannot be derived from individuals, it would be wrong to begin such
an anatomy-book with individuals. Instead, Marx begins with the commodity, because the
64 2007fa Econ 5080 U of Utah
commodity is a simple and concrete object which gives us the entry point into the social
relation “value.”
Message [81] referenced by [83], [178], [188], [220], [2012fa:132], and [2012fa:456]. Next Message by Hans is
[90].
[83] Chris: value as the components of the whole “Commodity”. Marx entitled his first
chapter “Commodities” because commodities are at the heart of everything he discusses on
capitalism. The in-depth discussion on values helps us to understand what makes a commodity,
what makes an object more than something that merely satisfies needs or wants but
makes it worth something in an exchange market, what gives it exchange-value. Before reading
the first chapter I would have wrongly asserted that anything that has use or a use-value
should accordingly be held to be a commodity but Marx discusses in length the exchange
values and a commodity meant something different to me after that. If Marx had stepped
right into commodities and overlooked what values meant to them he would have left a large
gap in an already deep subject.
Hans: Chris, in the long message [81] I wanted to say that the true subject of Marx’s work is indeed value, and the
first chapter is called ”commodity” because the commodity is a good starting point for studying value.
Chris: So I think I turned this around then. He starts with commodities because it is an easy way to begin an
earnest discussion of value which drives capitalists.
Hans: Exactly.
Next Message by Chris is [115].
[173] Poppy: The first Chapter of Capital is called “Commodities” despite the heavy focus
and discussions on value. This is because Marx wants to introduce his strong theory/view of
what the relationship between both Commodities and Value truly is. His viewpoint is new
and somewhat liberating to what other economists and possibly most people first assume
when comparing the two. Previously and currently the relationship is thought to be linked to
its exchange-worth, however this is contradictory to what Marx tell us. A commodity’s value
heavily depends on what service or need it provides, not necessarily on what its exchange
proportion is. Thus, making the importance of a commodity is its relationship to its value.
They go hand in hand.
Because it is too easy, and can be quickly comprehended, that the relationship between
commodities and value is determined by its exchange-proportion to other commodities, it
was important that Marx introduced this book with A: commodities, and by B: strongly
associating them to their values, and explaining exactly what their value really meant.
Hans: You are right that Marx distinguishes between value and exchange-value, but value in his theory is not
determined by importance but by labor content.
Next Message by Poppy is [437].
[178] BHales: Commodities vs. Value. Marx labels the first chapter “Commodities”
because it gives him a good entry to explaining the social relation tied to value. Once a
person can understand the concept of a commodity, it becomes easier for him to understand
value and its social relation. As Hans said in [81] “value is some immaterial substance inside
the commodities. Value is at the same time something inside the commodities and a social
relation.”
Hans: You seem to say that “commodity” is a more fundamental concept than “value,” just as integers are more
fundamental than rational numbers and therefore must be studied first. But this is not the case. “Value” is the more
fundamental concept.
Next Message by BHales is [311].

U of Utah Econ 5080 2007fa 65
[180] Charles: The reason the first chapter is called “Commodities” and not “Value”
is to make us understand how the value is determined on each commodity. Value follows
the commodity. Value is something inside the commodity. We need to understand the true
definition of commodity in order to relate the value to it. Also, the value may change on
the commodity depending on the society and its needs. If Marx started the chapter with
value, then there would be different interpretations of that depending on the person reading
it. Because of that, he started the chapter with the commodity because it would make it
easier for us to relate to it and then enter into the value characteristic of it.
Next Message by Charles is [296].
[188] JohnGalt: Capitalism without commodities – It just doesn’t work. The first
chapter of Kapital is entitled “Commodities” rather than value precisely because Marx understands
the commodity to be the most basic and fundamental element of capitalism. It
is the underlying premise upon which the entire theory and system is based. Because of
this, he had to understand commodities and transfer that knowledge and understanding to
his readers.
Using commodities, Marx was also able to tie his work to those of his predecessors and
contemporaries in the relatively new field of political economics. This tied his ideas to many
of those espoused by economic giants such as Ricardo and Smith. This foundation lends
greater accessibility to his arguments and establishes credibility.
Marx’ first task is to derive an understanding of the commodity in its most basic form.
He uses a critical analysis of the commodity’s many aspects to lay a strong foundation for
his theories of value (and later labor). Instead, Marx creates a clear and rational argument
that he hones through close inspection and scrutiny of his initial subject, the commodity.
This allows him to expand to labor, value and the other aspects of capitalism – which is
itself a theory and practise built upon the commodity and its production, consumption and
exchange.
With his expert analysis, Marx is able to level serious charges against the capitalist system
and make clear its many weaknesses and flaws. He easily does this by exposing the
dominance of the market over men, rather than man over the market. Thus, man is enslaved
and oppressed by the creation of other men, yet he has no cognizance of this.
Without a solid base and understanding of the nature of commodities, Marx’ critique
would not be possible. Because of his analysis, today our understanding of capitalism is
more thorough. Society has become less passive in response, realizing that they have an
obligation to challenge the accepted relationships to achieve different outcomes.
Hans: The most basic and fundamental element of capitalism is value, not the commodity. The commodity is only
the door Marx has to pass through to get to value – while your flowery language says that the entire building is
an elaboration of the door. I used the word “entry point” in my last sentence of [81], apparently this has not been
understood. Perhaps my more detailed explanation in [2007SP:132] will help?
Message [188] referenced by [409]. Next Message by JohnGalt is [189].
[218] Melanie: graded B+ Even though Marx spends most of his ink in chapter one discussing
value, he still titles his first chapter “Commodities” because values are contained
in commodities. These commodities are the carriers of social relations, and to understand
capitalism we must understand the underlying social relations which come from value in
66 2007fa Econ 5080 U of Utah
the commodities. His approach differs from many economists who start a discussion of
capitalism with utility, which is an individual thing.
Marx’s entire argument about capitalism rests on his labor theory of value. He argues that
workers are not paid the full value of the commodities they produce, and thereby they are
exploited. The capitalists gain profits because they do not pay the workers for the full value
they produce. Marx argues that this value in commodities, which is derived from abstract
labor, is what drives capitalists, and therefore, capitalism.
Hans: You say a lot of right stuff but you are not quite giving an explanation why the chapter is called “commodity.”
You were closest to such an explanation when you said “these commodities are the carriers of social relations.” I
think you should have said that commodities are the visible and tangible carriers of invisible social relations, which
makes them a good entry point for these social relations because they are visible and tangible.
Next Message by Melanie is [308].
[220] SamHouston: Commodity or Value. As with any scientist, Marx begins his study
of capitalism by looking at the basic unit of the capitalist system, the commodity. In the
commodity, we can see how value, or the driving force of capitalism, functions (see [81]).
In order to properly analyze the system, Marx needs a starting point. Since value is fluid
and not concrete, the commodity is the best way for Marx to analyze value and capitalism.
Value represents a social relation, and the commodity is the carrier of that social relation.
Just as Red Blood Cells are the carriers of oxygen to the entire organism, commodities carry
the social relations (value) in the market. The commodity is only a carrier and without the
commodity, value could not exist in the market. Marx wisely chooses to begin his analysis
of Capitalism with commodity, because the commodity gives a understanding of the overall
driving force in Capitalism.
Next Message by SamHouston is [331].
[222] Scott: Commodities are the most easily recognizable things in the capitalistic society,
this is why Marx begins his dissection of capitalism with it. He could have started with
the production or demand, but he chose to unravel the complexities of it all with commodities,
everywhere you look in a capitalistic society you are surrounded with goods that are
for sale, goods that have a certain price that has been put on it by society. Why he didn’t
title the 1st chapter with values is because he wanted to be able to easily show something, 20
yards of linen for example, and how its uses are not necessarily tied to value as a commodity,
but its commodity value to society and the role and price level that has been assigned to the
commodity, it does not stay the same from period to period, it or in some cases day to day
in terms of money but it will have an exchange value no matter what.
Hans: Marx says he could not have started with production in general because he exactly wants to know how
production in capitalism is different than in other epochs. He could not have started with demand because demand
is too much a derived concept, it depends on many other social relations. Commodities are much simpler. “Easily
recognizable” is also a good reason.
Next Message by Scott is [537].
[230] Kalmerico: Marx Order. Commodities and the exchanging of commodities are
the basis of capitalism. Commodities contain value, use-value, and exchange value and in
order to understand these different forms of value, the concept of commodities must first be
established. The commodity is simple and concrete while value deals with social relations.
Hans: I.e., the commodity is the entrance door to these invisible social relations.

U of Utah Econ 5080 2007fa 67
I would not say commodities are the “basis” of capitalism. The basis of capitalism is the profitmaking at the
expense of the wage laborers. This is an exploitative process which is difficult to understand because it takes the
form of an equal commodity exchange. Commodities are a surface category.
Next Message by Kalmerico is [392].
[232] Harmon: Chapter Titles. Commodities are the cornerstone of economics. In
order to build a firm foundation you must start with that cornerstone and continue building
from there. Value, on the other hand, is a broad topic. If the chapter was called “Value”,
it would be unorganized because there would be too much information in that beginning
chapter. Many commodities have different aspects to them. Therefore, commodities need
to be explored in the first chapter before values can be assigned to them. The first chapter
is called “Commodities” because it talks about the different values of commodities and not
vice versa.
Hans: Marx’s concept of value is not broad but very simple: it is congealed abstract labor. See my comments
to [697] about that. This value is not assigned to the commodities, but commodities get this value when they are
produced.
Next Message by Harmon is [236].
[237] Melissa: graded A Which comes first... The first chapter is called “Commodities”
because to build on the ideas of value and where value comes from you need a solid base.
The solid base is the commodity, the commodity is something concrete. I do believe that
commodities and values are closely related and they build on each other. Starting with the
discussion on commodities gives the readers a better understanding of the abstract ideas of
what “value” is. You start with the basic and move out from there.
Next Message by Melissa is [397].
[254] Desk: Commodity First. Commodities are the cornerstone of what Marx wants us
to understand. He does not just give a definition but an analysis of what a commodity is. In
Marx’s theory, a commodity has value, the fact that it has value implies straightaway that
people try to economise its use. A commodity also has a use value, an exchange value and a
price. It has an order and commodity is an ideal starting point.
Hans: It is good that you said Marx analyzes the commodity. Marx gets to the important underlying concepts by
this analysis. The commodity is something simple and visible; it is the entrance door to the hidden motive powers.
The metaphor “cornerstone” does not really capture this.
Next Message by Desk is [314].
[262] Walmart: The idea of value comes from commodities being produced, sold, and
traded on the market. The explanation has to start with commodity because that is the
concept Marx uses throughout the rest of his work to explain the parts of a system. The
concepts are all related because they have a central theme, which is the commodity. It is
also convenient to start with commodity because a commodity has value as its essence. The
value comes from the abstract labor which was put into the creation of that commodity.
The exchange-value comes from the interplay of social relations of the market. Important
aspects of market economy (wages, costs, profits, demand, and so on) all stem from this
basic explanation of commodity, whose analysis points to value. The title and structure of
his analysis paints a much clearer and connected picture of capitalism, as opposed to starting
from an important aspect with many premises without explanations.
Hans: “Value” is the concept capturing the essence of capitalism better, while “commodity” has more to do with
the form which this essence takes.
Next Message by Walmart is [263].
68 2007fa Econ 5080 U of Utah
Question 150 is 66 in 1995WI, 75 in 1995ut, 79 in 1996sp, 85 in 1997WI, 87 in 1997sp, 83
in 1997ut, 113 in 2002fa, 116 in 2003fa, 131 in 2005fa, and 156 in 2008SP:
Question 150 Why can commodities not express their values in their own use-values? (Note
that we are not asking here why the value of a commodity is not determined by its use-value.
The expression of value is not the same as the determination of value.)
[721] Tomb: commodities and expressing use value. Commodities cannot determine or
express their values through their own use values for a couple of reasons. First, a commodity
obtains use value because someone has a use for that commodity. But that is not how it
obtains its value on the open market. Its value is expressed as exchange value on the open
market because another person has a use value for the product. Only through exchange can
commodities express their values.
Hans: Despite the hint in the question that the expression of value should not be confused with its determination,
you are writing “commodities cannot determine or express their values” as if this was the same thing, and you talk
about a commodity “obtaining” its value.
In section 3 of chapter One, Marx discusses how value is expressed, i.e., how the invisible fact that commodities
have socially necessary labor in them makes itself felt in the interactions of the commodity traders.
First Message by Tomb is [294].
Question 162 is 69 in 1995WI, 77 in 1995ut, 80 in 1996sp, 81 in 1996ut, 87 in 1997WI, 90
in 1997sp, 86 in 1997ut, 142 in 2005fa, and 186 in 2010fa:
Question 162 What does Marx understand to be the riddle of money? And how does he
solve this riddle in section 3?
[82] Melissa: graded A Riddle this... Marx understands that the riddle of money is that
money can buy everything. Marx also understands that there is a link between money and
production. A commodity is given its value by looking at how much of society’s limited
labor hours has been exhausted. What the consumer gets out of it or what the consumer as
an individual feels the value should be, does not play a part in assigning the commodity’s
value.
I agree with Sms [1995WI:546] from the 1995WI archive that Marx solves the riddle by
looking at the “...analysis of the relative form of value and the equivalent form of value, and
their divisions between different commodities.”
Hans: In other words (making your second paragraph less abstract), money can buy every commodity because it
is the commodity’s own equivalent form of value split off into a specialized commodity (gold).
Next Message by Melissa is [149].
Question 163 is 125 in 2003fa, 142 in 2004fa, 143 in 2005fa, 160 in 2007SP, 166 in
2008fa, and 188 in 2010fa:
Question 163 Why doesn’t Marx say that the simplest value relation is that between commodity
and money?
[78] BHales: Commodities and Money. In TimJim’s assertion in [2005fa:243] he addresses
why the simplest value relation is not between money and commodity. TimJim states
that money is just a median form of exchange between two items. I agree with this assertion.
The simplest form of exchange is the direct exchange between two commodities. In societies
before currency existed, direct exchange was the simplest form of exchange between

U of Utah Econ 5080 2007fa 69
two commodities. Money was created, for one, as a store of value because some commodities
are perishable. So one could produce a commodity now and receive exchange for it at a
later date. Taxes and inflation of money add to the complexities of commodity and money
exchange.
Marx reduces things to their simplest forms to explain his theories. It would only be
logical then, for him to reduce the exchange of commodities to their roots of direct exchange
rather than exchange a commodity for money and then the money for the desired commodity.
This provides the framework for Hans response to Tiny in [2005fa:79] where he replies that
“money itself is worthless.”
Hans: By “money is worthless” I meant to say that money does not have a use-value. Money is value in a form
which is no longer tied to some particular use-value.
Next Message by BHales is [116].
Question 170 is 85 in 1995ut, 87 in 1996sp, 88 in 1996ut, 94 in 1997WI, 92 in 1997ut, 99
in 1998WI, 107 in 1999SP, 134 in 2003fa, 150 in 2005fa, and 182 in 2009fa:
Question 170 In the Simple or Accidental form of value, which commodity plays an active
role, and which a passive role? Explain what it means in this situation to be active or
passive.
[132] Trashkicker: Active vs. Passive. In the in-text example, if 20 yards of linen =
one coat, then the linen plays the active role while the coat plays the passive role. The
linen is active because it has no value to the producer other than the ability to exchange for
another good. Therefore, the linen weaver must use the linen to act as a means for obtaining
something else.
From the weaver’s view, we express the exchange as it costs 20 yards of her linen to buy
one coat, not the other way around. The entire exchange is in terms of the linen, not the coat.
Hence, the coat plays the passive role.
From the coatmaker’s standpoint, the coat would play the active role, and the linen the
passive. This is because he would be using his coat to acquire the linen, and the trade would
be expressed in terms of the coat.
Message [132] referenced by [142]. First Message by Trashkicker is [118].
[136] Harmon: Personality Traits. In the simple form of value the commodity that plays
the active role is the commodity that expresses its value in the form of another commodity.
For example, in the expression 20 yards of linen = one coat, the first commodity, linen, plays
the active role and the coat plays the passive role. The first commodity in the expression acts
as the form of value and the second commodity acts as the equivalent form in trade, but the
two commodities can be switched in the expression so that the coat acts as the active role
and the linen as the passive role.
It all depends on what is of necessity. If someone had too many coats and needed to
exchange them, the coats would play the active role. In order for a commodity to play the
active role it needs to be represented first in the equation and show its relative form of value
through the commodity on the other side of the expression. “Active” means to be engaged in
trying to trade something you have for something you need, i.e. the active commodity is the
70 2007fa Econ 5080 U of Utah
one you are trying to get rid of. “Passive” means the opposite, that it is the first commodity
you are trying to get, not the second, i.e. the passive object is the commodity you need.
Hans: Even the commodity you need is for its owner in the active form. The only commodities which one does
not have to get rid of is either one which one is consuming, or money.
Message [136] referenced by [142]. Next Message by Harmon is [137].
[142] Corey: graded A The simple form of value. While both Trashkicker [132] and
Harmon [136] both addressed this but I feel I have something to add. The 20 yards of linen
has no particular use value to the weaver, other than it represents the time and effort she used
to create it. So the need to exchange this linen for a good that she can use is what makes
the linen active. This is an asymmetrical equation, for we are looking at this equation only
from the weaver’s view, hence the simple form of value. It is the process of exchanging the
products of her labor for a needed good. In other words, the weaver is “actively” looking
for something to exchange her linen for, therefore the linen becomes active. She only knows
of the time and effort it took to create the linen, she does not know of the time or effort
expended to create the coat. Because she does not know this the coat is passive. It is the
good that she is willing to trade her time and effort (expressed as 20 yards of linen) for.
Therefore the simple form of value for the weaver is; 20 yards of linen (her time and effort)
= the use value of 1 coat.
Next Message by Corey is [143].
Question 186 is 170 in 2004fa, 164 in 2005fa, and 203 in 2009fa:
Question 186 The relationship “20 yards of linen are worth 1 coat” says that 20 yards of
linen have the same value as 1 coat, but it says nothing about the value of the coat itself.
Right or wrong?
[84] MaxWar: “20 yards of linen are worth 1 coat”. In the relationship “20 yards of
linen are worth 1 coat” the value of coat is given as a use-value, not a magnitude of the value
of the coat. The use-value is the measure used by the individual to determine if the linen
produced is worth the value of wearing the coat. Magnitude of value would involve a better
understanding of the materials and labor to determine if such a trade would be effective. In
determining the value of the coat one would have to calculate the labor and materials used
with magnitude of value, which is not used in this phrase. The market forces the individual
to part with the linen to acquire the coat, without necessarily getting a value of the coat. So
the phrase “20 yards of linen are worth 1 coat” does not give a value for the coat.
Hans: Right.
Question 197 is 107 in 1996sp, 118 in 1997sp, 121 in 1998WI, 143 in 2001fa, and 178 in
2004fa:
Question 197 Repeat in your own words the three peculiarities of the equivalent form.
[152] MichaelM: possible examples of the ”three peculiarities” Marx describes the first
peculiarity as being when use-value becomes the form of appearance of its opposite. This is
saying that this reversal happens only when two commodities enter into value relation with
one another, such as a book and paper.

U of Utah Econ 5080 2007fa 71
Marx describes the second peculiarity with the definition: concrete labor is the expression
of abstract labor. This means that abstract labor such as writing a book expresses the concrete
labor which would be the printing of the book which then creates the value for paper.
Marx defines the third peculiarity: a privately produced commodity in equivalent form
counts as its opposite, directly social labor. An example of this might be a mining company
that mines gold and so has direct social powers meaning they can directly exchange for all
other commodities.
Hans: Your third point is good, the other two are worthless. Just to avoid confusion by the readers, abstract and
concrete labor are not the same as mental and physical labor, and paper has value even if it is not printed or written
on.
Message [152] referenced by [161] and [201]. Next Message by MichaelM is [174].
[160] Melissa: graded A– This is peculiar. In Marx’s words the three peculiarities of the
equivalent form are as follows:
1- “Use value becomes the form of appearance of its opposite, value”.
2- “Concrete labor is the expression of abstract labor.”
3- “A privately produced commodity in its equivalent form counts as its opposite, directly
social labor.”
How I interpret these three peculiarities is as follows:
1-For my example I am going to use the two commodities flour and bread. Both of these
commodities have their own different use value. Let’s say the baker wants to exchange a loaf
of bread for one pound of flour. By accepting this offer and exchanging one pound of flour
for one loaf of bread, the market now has an idea of how much labor is required to produce
one pound of flour, it is equivalent to one loaf of bread. The bread has an equivalent form of
one pound of flour.
2-If the bread and the flour are exchanged it is for the fact that both commodities require
human labor. The baker would not exchange his bread for something that does not have
human labor in it, such as water.
3-Now let’s say that the baker is producing bread for his own use, to better his family and
social status. If he bakes too much bread and exchanges it for another commodity, the bread
now has social worth. It can be exchanged socially to “purchase” other commodities, acting
like money.
Hans: I am struck that you use water as example for a commodity that has no labor in it. A lot of labor is necessary
before water can come out of the faucet in your home. The most critical issue of global warming for Utah is that the
area will become increasingly arid. The winter snowpack in our mountains is a gift of nature which will be difficult
and expensive to replace. Water is a precious, and potentially a very expensive, commodity.
Ashley: While reading this submission, I thought of the same thing that Hans thought of. How can water be an
example of something that does not require labor? I see it as having the same characteristics as flour in terms of
using labor. I think the point that you were trying to make is that if you were to go to a lake or an ocean, it doesn’t
cost anything for you to take water there, however, you can’t get flour just anywhere. It requires labor to make flour
because it doesn’t come like that in its natural form. It’s not like water where you can drink it in its natural form.
Flour has to be made. Is that what you were trying to say?
Other than that, I agree with what you are saying. You can figure out the value of one item in comparison
to another when it is exchanged in the market. Along the same lines, if a baker produces bread, and has excess
amounts of it, it’s a great idea for them to use it as a social worth.
72 2007fa Econ 5080 U of Utah
Hans: Good work, Ashley, trying to understand how Melissa came to say what she was saying. This is part of
“immanent critique:” if someone comes to a conclusion other than your own, you are trying to understand why that
person came to that conclusion.
Message [160] referenced by [161] and [163]. Next Message by Melissa is [181].
[161] Hans: Spontaneous Mirroring and Spontaneous Mystification. In section 3 of
the first chapter, Marx describes how the commodity owners, by exchanging their commodities,
spontaneously mirror the inner structure of their relations of production on the surface
of the market. Two examples of this mirroring:
(1) The invisible commonality and inner measure in all commodities, their value (congealed
abstract labor), is reflected on the surface as their exterior common measure in money.
(2) At the beginning of this class I admonished you that whenever you think of commodities
you must be aware that each commodity has two separate aspects, its use-value and
its exchange-value. Now you can see this inner separation reproduced in the separation of
the world of commodities into the ordinary commodities (use-value) and money (exchangevalue).
Such mirroring is not unusual. Examples can be found in all sciences and in real life
where things, through their activity, reveal their inner structure. It is much more unusual if
things can be effective for a long time without revealing themselves. Capitalism is unusual
in this second sense. It is a social order which can only thrive because and as long as
individuals in capitalism do not understand their own social relations. That is why Marx
explores in section 4 of the first chapter the limits of this spontaneous mirroring, i.e., the
mystification inherent in the commodity relations.
This mystification does not start in section 4. Already in section 3, Marx shows that the
development of the value form has a contradictory character: it reveals the inner relations
more and more accurately on the side of the relative form of value, but at the same time it
mystifies them if one looks at the other pole, the equivalent form of value. Let me explain.
If an ordinary commodity expresses its value in a certain amount of the general equivalent,
it reveals the structure in which it is embedded. It says that it has something in common
with all other commodities that has nothing to do with its use-value. It says that in this relationship
with other commodities its labor does not count as useful labor but abstract labor.
And it says that this labor will only get social credit if it fits into the social division of labor.
But if you look at it from the other side, from the side of the money commodity (gold),
then the underlying social structure is mystified rather than revealed. Now it is the special
use-value of the commodity, namely, it being gold, which gives it value, i.e., direct access
to every other commodity. The private labor producing gold does not need to pass the test
whether it fits into the social division of labor, but it gives immediate social powers. This
labor has these powers not because it is the expenditure of abstract human labor, but because
it is the specific concrete labor of producing gold.
I just repeated the three peculiarities of the equivalent form. In view of this dissonance
between form and content of the private labor producing gold, it is not surprising that this
weirdness has been eliminated since Marx wrote Capital. Today we are no longer in a
commodity money regime. The value of money is no longer guaranteed by the labor going

U of Utah Econ 5080 2007fa 73
into the production of gold coins, but by monetary policy. But the main weirdness remains to
this day, that what Marx has called in one of his drafts the fourth peculiarity of the equivalent
form: now as before, social relations go through things. Marx’s discussion of the fourth
peculiarity has, in later drafts, been expanded into the entire section about the fetish-like
character of the commodity.
A brief comment about the previous answers. Both answers got the third peculiarity
right, that private labor immediately counts as social labor. The producer of gold does not
first have to sell his commodity, he can immediately buy. Regarding the other two peculiarities,
Melissa [160] switched from the equivalent form, which is mystified, to the dialectical
opposite relative form, where the underlying relation is revealed rather than mystified. This
is a mistake, but since Melissa was trying to think along in Marx’s paradigm, she still obtained
a good grade. MichaelM [152] on the other hand showed that he had no idea about
basic concepts like abstract labor, which gave him a much greater grade penalty.
Next Message by Hans is [163].
[201] MichaelM: Marx defined the three peculiarities of the equivalent form as:
1) “Use-value becomes the form of appearance of its opposite, value.”
2) “Concrete labor is the expression of abstract labor.”
3) “... a privately produced commodity in equivalent form counts as its opposite, directly
social labor.”
To help me understand what the first peculiarity meant, I looked through some past submissions
and liked how Hades described this first peculiarity in [1997sp:265-4]. From his
explanation I understand the first peculiarity to mean that the use-value of a commodity, such
as a backpack, expresses its intrinsic properties (its ability to hold things) and its equivalent
form expresses the value of the item in relative form (it is the thing other commodities are
compared to).
Hans: Your last sentence above explains the concepts of use-value and of equivalent form. Starting with these
definitions, you will find the three peculiarities if you ask in more detail how the value of the item in relative form
is expressed. The first peculiarity is that the value of the item in relative form, i.e., the congealed abstract labor, a
homogeneous jello-like mass, is expressed by the use-value of the commodity in equivalent form, i.e., by the ability
to hold things if that commodity is a backpack.
The second peculiarity means that the concrete labor within a commodity expresses the
socially accepted amount of labor for that particular commodity (the abstract labor).
Hans: No, you are dealing here with two commodities. The abstract labor in the commodity in relative form is
expressed by the concrete labor of the commodity in equivalent form.
I will stick with my previous description of the third peculiarity that I gave in [152], that
an example of this would be a mining company that mines gold and so has direct social
powers meaning they can directly exchange for all other commodities.
Hans: Yes, although they put private labor into the gold they mined, this labor immediately counts as socially
accepted labor, therefore they can use this gold to buy things with. Usually one can only buy after selling, but the
gold miners can buy without selling first.
Next Message by MichaelM is [377].
[264] Daru: Peculiarities of the Equivalent Form. In resubmitting my response to
the question I have greatly benefited from the discussions of VonMises [2001fa:506], Hans
74 2007fa Econ 5080 U of Utah
[1997sp:112] and the discussion about these peculiarities in Annotations (pages 112-119).
However, in explaining the two peculiarities, I have continued with my example of 20 yards
of linen = 1 coat used in the exam to explain the first peculiarity.
Marx note following three peculiarities of the equivalent form: 1. That use value meets its
opposite in the exchange process i.e. value. My use of the word ‘meets’ here is in the same
league as Marx’s ‘becomes the form of appearance.’ This is something that I did not mention
in my original response in the exam. This is to say that in the equation 20 yards of linen =
1 coat, the exchange for weaver takes place primarily because the two commodities share
something in common, i.e. the abstract human labour or value present in them. However,
the weaver doesn’t see it this way. He is only aware of the use-value of coat. Therefore,
to him the coat which is linen’s equivalent form here, represents an equality of use-value to
value
2. the second peculiarity of the equivalent form is that concrete-human labour, that gives
use-value to a commodity, meets its opposite in the abstract human labour that gives value to
a commodity. Here again ‘meets’ implies ‘becomes the form of manifestation of ’ as Marx
has used it (Annotations: page 118). Here, I shall attempt to provide an explanation of this
– something that I haven’t done in the exam. In Marx’s ‘relative-equivalent form of value’
the equivalent form is something with which the relative form can be exchanged. We know
that linen, as the relative form, expresses value. In the exchange process, coat’s use-value
becomes a manifestation of the value of the linen. However, the use-value of the coat is
result of concrete labour present in i.e. the specific activity of human labour that made a coat
here in this example. This concrete-labour, in the exchange process becomes a manifestation
of the relative form that represents the abstract human labour.
3. third peculiarity is the private form of labour meeting its opposite in social form of
labour. In Marx’s own words the peculiarity of the equivalent form is that “private labour
takes the form of its opposite, namely labour in its directly social form” (page 151, Capital
Volume 1, Fowkes’ Translation). In my exam response I completely missed the word ’“directly”.
Marx has not used this word without a purpose. The word directly means that in
the exchange process the coat can be directly used to obtain linen. The coat, therefore, acts
as money and can be used to buy linen directly. Here the labour that produces the coat is
private labour but as the equivalent form it is considered as directly social labour. It becomes
social precisely because it can be used directly to buy other commodity and represents the
social labour in other commodities.
Next Message by Daru is [433].
[290] HTJY: Three peculiarities of the equivalent form. Three peculiarities of the
equivalent form.
Consider a value equation: commodity A = commodity B.
(Note: Here, “commodity A” is a shorthand for “x amount of commodity A” and “commodity
B” is a shorthand for “y amount of commodity B.”)
(i) Outside of this value relation, the commodity B is a use-value with its useful physical
properties that is specific to it. But as soon as the commodity B enters a value equation
and is related to another commodity A as an equivalent of A, it becomes a value form of

U of Utah Econ 5080 2007fa 75
commodity by which the value of the commodity A is expressed. But the commodity B
in its natural form is a use-value since all commodities are use-values. Hence says Marx,
“The first peculiarity ... is ... that use-value becomes the form of appearance of its opposite,
value.” (Capital, p148)
(ii) The value relation equates the value of the commodity A created by the abstract labor,
say, m with its equivalent of the commodity B in its natural form created by the concrete
labor, say, n. Thus, in value relation, the concrete labor n becomes a tangible expression
of the abstract labor m. Hence says Marx that the second peculiarity is that “concrete labor
becomes the form of manifestation of its opposite, abstract human labor.” (Capital, p 151)
(iii) By (ii), the concrete labor n now counts as the identical abstract labor. But the former
is a private form of labor carried out by private individuals while the latter is a social form
of labor derived by averaging out all the concrete labor available in the given society. Hence
says Marx that the third peculiarity is that “private labor takes the ... social form.” (Capital,
150:4/o)
Hans: The three dots in your last Marx quote skip over the word “directly” or “immediately.” This is an important
word which you should not have skipped. Private labor in capitalism is social labor, but not directly social labor
because it first has to pass the test of the market. The labor producing the commodity in equivalent form does not
have to pass through this test. The linen weaver’s willingness to exchange her linen for the coat is proof that the
labor in the coat fits into the social division of labor, that its product is needed by others.
Next Message by HTJY is [293].
Question 212 is 130 in 1998WI:
Question 212 When Marx talks about the “defects” of the Simple form of value, in what
respect are they defects?
[694] Deborah: Simply Defective. In explaining the Simple Form of Value, Marx points
out defects in the expression – in relative form of value and in the equivalent form of value.
“..and therefore also only places A in an exchange relation with one particular different kind
of commodity, instead of representing A’s qualitative equality with all other commodities.”
[154:2] “.. A commodity there corresponds to the Isolated equivalent form of another commodity.”
[154:2]
In the relative form of value, Marx points out that the simple form of value “represents
value as something that is different from its use-value, but not as something that is qualitatively
equal for all commodities.” (Annotations) What an individual will accept in exchange
for their commodity is not equal across the board – not everyone will accept the same goods
for the same trades. Annotations gives the example of an orchestra in which every musician
plays his/her own melody. There is not a coherent “signal” in this form. In the equivalent
form of value, the two commodities being exchanged are only equivalents for each other –
not with other commodities (the goods are poor incarnations of value).
In the archives, Hans points out in his remarks to [1998WI:116] that Commodity A does
not receive its value from Commodity B, instead it receives its value from labor, but it
expresses its value in relation with Commodity B.
Hans: Yes, the market relations through which value is expressed must be distinguished from the production
relations which give value to the commodities. Commodities receive value in the production process, and they
express their value in their exchange relations with each other. Market relations will only then be successful in
76 2007fa Econ 5080 U of Utah
directing the production process, if this expression (or reflection) of the underlying production relations on the
market is accurate. Marx points out two respects in which the expression of value through a Simple exchange
relationship is inaccurate: One of these two criticisms is directed at the relative form of value, the other at the
equivalent form of value.
Regarding the relative form, he says that the relative form of value distinguishes the value of a commodity
from its use-value (which is good), but it fails to convey the fact that the value of all goods are the same (which
is bad). Only an expression which conveys this same-ness (and therefore allows the values of all commodities
to be compared with each other) can give the right signals to the producers so that they know what is in demand
and should be produced. (This will then be resolved with money, which is indeed a common denominator for all
commodities.)
Regarding the Equivalent form, Marx’s criticism is that the commodity in the Equivalent form can be directly
exchanged only for the commodity in the Relative form. Again, with money this is alleviated, because money can
be directly exchanged against everything. The situation that every commodity could be directly exchanged against
every other commodity is not possible, because commodities are produced privately and spontaneously, and it is
never certain if a given commodity meets a social need or not.
First Message by Deborah is [43].
[714] Walmart: Faulty Forms. When Marx talks about the “defects” of the Simple form
of value, in what respect are they defects?
Marx says that while the expression as a whole is not defective, two poles of it contain
defects. “The expression of the value of commodity A in terms of some arbitrary other commodity
B merely distinguishes the value of A from the use-value of A, and therefore also
only places A in an exchange relation with one particular different kind of commodity, instead
of representing A’s qualitative equality with all other commodities and its quantitative
proportionality to them.” In other words, the expression of value does not play an equalizing
role for every commodity on the market.
The second place where the same defect is visible is in the relative form of value of a
commodity corresponding to the equivalent form of another. The examples Marx offers is
the relationship between linen and a coat. In the relative expression of value of the linen, the
coat possesses the form of equivalent, the form of direct exchangeability, only in relation to
linen. This is not true of commodities other than linen.
Hans: Regarding your first sentence: the expression as a whole is defective too; but these defects will be ironed
out in the development to the Money form of value.
In the last sentence of your first paragraph you had “expression of use-value”; I changed it to “expression of
value.”
Instead of your very last sentence, you should have said: “This is a defective expression, since the labor in the
coat is not only equal to the labor in the linen but to all labor.”
Next Message by Walmart is [715].
Question 216 is 223 in 2008SP, 221 in 2008fa, 234 in 2009fa, 261 in 2010fa, 225 in
2011fa, and 235 in 2012fa:
Question 216 How does it become plain here that it is not the exchange of commodities
which regulates the magnitude of their values, but rather the reverse, it is the magnitude of
the value of commodities which regulates the proportion in which they are exchanged?
[101] Tyler: ambiguity of values. This ambiguity of values: “There are a thousand
different kinds of value, as many kinds of value as there are commodities in existence.” Is
the reason we have adopted the concept of fiat money. Rather than basing the price of a good
on barter, we have a set price for a good. Therefore everyone will pay for the product with

U of Utah Econ 5080 2007fa 77
paper money rather than trading by products of person’s occupation (corn, coats, etc.). It is
easier to simply say this product costs five dollars rather than listing out trade values for all
other commodities (five bushels of corn, two coats, etc...)
Hans: The problem with your explanation is: why do people say “this product costs five dollars” instead “this
product costs five hundred dollars” etc. Marx argues that one has to begin with a barter system, and that money
develops out of this barter system. This development is not due to a social contract (everybody agrees to use paper
dollars), but it is a gradual modification of the already existing social relations involving the barter.
Message [101] referenced by [2010fa:186]. Next Message by Tyler is [342].
[102] Harmon: Linen Gone Wild. In order to determine the relationship between the
actual value of a commodity and its exchange value we must examine the circumstances in
which the commodities are traded. If, for example, 20 yards of linen are exchanged for a coat
in one part of the city, but in another part are exchanged for 10 lbs. of tea, one might assume
that the value of linen changes with the circumstances in which they are traded, consequently
giving the linen multiple exchange values. According to Marx, however, this is not so, but
the value of the linen remains constant regardless of who is buying or trading for it. For
example, it is true that linen is worth one coat or 10 lbs. of tea whether you trade your linen
at a coat factory or the grocery store; the exchange value remains the same. In a different
part of the city, 20 yards of linen would not be worth 20 lbs. of tea because the proportion
of tea to linen would be too high. The value of the linen itself determines the quantity of
the other commodity being traded for it, not the other way around. In other words, from the
value of 20 yards of linen the exchange proportion in coats or tea is established.
Hans: I assume with “the proportion of tea to linen would be too high” you mean that in terms of demand and
supply, too much tea and too little linen is produced. You are making an important point. If exchange proportions
are determined by value rather than value by exchange proportions, then it can happen that there is a discrepancy:
the exchange proportions which correspond to values may be different than those actually observed. These discrepancies
engender their own adjustment: if the exchange-value of linen is less and the exchange-value of tea is more
than what would correspond to the value relations, then less linen and more tea will be produced. That’s why it is
still correct to say that value determines exchange proportions, despite the discrepancies.
Message [102] referenced by [2011fa:119]. Next Message by Harmon is [108].
[103] Marcellus: Mona Lisa, Venus De Milo. The action of exchanging commodities
does not create value in itself. As an example, say two neighbors were having a garage sale
across the street from one another and visited each other’s houses. The first neighbor, Liona,
found an old painting of a woman that almost resembled herself, while the second neighbor,
Andrew, found an armless statue that brought him nostalgia. Liona and Andrew decide to
exchange their commodities. They don’t know where the painting or the statue came from;
they just assume the trade is fair. Then, five years down the road both Liona and Andrew
trade their painting and sculpture with Bruce down the street, and both receive a pair of skis.
It is obvious here that there is no standard against which to weigh the magnitude of these
commodities values (each exchange is haphazard), and each time they are exchanged, the
true exchange value is not known. This leads to my next point.
According to Marx, value is created by “the ‘value-forming substance’, the labour, contained
in the article.” (Marx, 129). If Alex had known that it took DaVinci a month of hard
human labour to paint the Mona Lisa, he would have realized his painting was worth not
one pair of skis, but ten. And if Liona knew that it took Alexandros two months of blood
sweat and tears to carve the Venus de Milo, she would realize her sculpture was also worth
78 2007fa Econ 5080 U of Utah
ten pairs of skis as well as five season passes. Following is an illustration to make this more
clear.
Mona Lisa = ten pairs of skis
Venus de Milo = ten pairs of skis, five season passes
Mona Lisa and Venus de Milo for Bruce who knows the true exchange
value = 1 case of rare French Bordeaux
As Bruce knows, exchanging commodities does not determine the magnitude of value. It
is the magnitude of value of the works of art he obtained that enabled him to obtain twelve
bottles of fine French wine. As he enjoyed his first sip he thought, “if they only knew.”
Hans: Excellent illustration of what it means that value is not determined by exchange-value but vice versa.
Message [103] referenced by [124], [2008SP:136], [2008fa:256], and [2011fa:272]. Next Message by Marcellus is
[206].
Question 218 is 170 in 2002fa, 173 in 2003fa, 198 in 2004fa, 195 in 2005fa, 215 in
2007SP, 223 in 2008fa, 236 in 2009fa, 229 in 2011fa, and 239 in 2012fa:
Question 218 Which characteristics of value are expressed better in the Expanded form of
value than in the Simple form, and what are the defects of the Expanded form?
[88] Karly: Marx should use chocolate instead of linen. The expanded form of value
is necessary in that a commodity has more than one value, unlike the simple form of value
which can only express the commodity in one commodity of another kind. If we take the
example of linen, the simple form of value would only allow linen to be equal to one other
commodity. However, we must realize that weavers have multiple needs. Expanded form
of value allows for linen to be equal to multiple commodities, therefore meeting all of the
weaver’s needs.
The main defects of the expanded form of value are: it is not unique, simple nor uniform.
Commodities are not always equal everywhere at the same time. Another thing to keep in
mind is: in real life we are only using one use-value at a time, the expanded form of value
uses multiple use-values at one time, therefore making it complex. The final defect is: the
value of the commodities Marx uses are very abstract, and in reality these commodities are
qualitatively unequal.
Hans: It is Bailey, not Marx, who says that a commodity has more than one value. Marx makes fun of Bailey and
corrects him: instead of several values there are only several expressions of the same value.
Of course it is a good thing that the weaver can exchange the linen with many different commodities. But
Marx says this is not only good for the weaver but through this spontaneous action the weaver also gives a better
expression of the value of her linen than if she were to exchange her linen only with one different commodity.
Message [88] referenced by [90], [93], and [198]. Next Message by Karly is [141].
[90] Hans: One Situation where More is Actually Better. The linen weaver has many
different needs, therefore she exchanges her linen for more than one other commodity. While
doing this, she expresses the value of her linen in more than one different use-value.
Marx says that overall this is a better expression of the value of the linen than its expression
in just one different use-value. This may be surprising, because linen has only one
value. What is gained by expressing this one value in a multitude of different use-values?

U of Utah Econ 5080 2007fa 79
The first improvement is that, in Marx’s words, “every such expression says that it is the
linen’s value which appears in the use-values coat, corn etc.” I.e., value no longer seems to
be something between linen and coat, but the many equivalents are the signals of something
that resides in the linen alone (just as with the blinking cars).
Secondly, the linen-weaving labor is now equated not just to one kind of labor (tailoring
coats), but to many different labors – which reflects the underlying fact that value does not
come from the specific kind of labor, but from that what is equal in all labors.
Thirdly, by relating the linen to many different commodities, the linen weaver indicates
that value is a social relation spanning all of society.
Fourthly, this surface behavior shows that the value of linen is not only different from the
use-value of linen, but different from any use-value.
Also quantitatively, the exchange proportions between two specific commodities may be
subject to an accidental error term, but if one looks at the proportions with many different
commodities, the regulating principle shines through.
Marx shows here how the spontaneous activity of the commodity traders on the market
reveals the contours of the underlying structure which guides this market activity and makes
it necessary. Marx also shows that this expression has its defects, i.e., that the fit between
surface and underlying structure is not perfect. (I will not go over these defects right now,
others are invited to do this.) This sets the stage for the transition to the general form of
value, which remedies these defects.
Karly, in [88], looks at it in the opposite direction: he asks whether the value forms meet
the needs of the transacting parties. This is not Marx’s concern right now, although he will
do this later, in chapter Two. Marx’s way of reasoning is very different than what you would
find in modern social sciences, and a close reading is necessary. If you don’t get it right on
your first attempt, don’t be discouraged. It is difficult. Just keep trying.
Message [90] referenced by [211] and [2008fa:270]. Next Message by Hans is [91].
[93] Ozz: content A– form 90% Labor comparison and the Expanded form of value.
Karly [88] covered what defects the expanded form of value had very well and her comment
on the lack of simplicity summarizes it well. She said “the expanded form of value
uses multiple use-values at one time, therefore making it complex.” The explanation of the
benefits of the Expanded form of value was missing one important aspect, the allowance to
compare labor processes. When taking a commodity, such as linen, and expressing the value
of it with multiple other commodities, such as corn and iron, you are comparing the human
labor that it took to produce that linen and comparing it to that same human labor that it took
to produce the iron or corn. I think how Marx states it makes it the clearest. He wrote “For
the labor which creates it is now explicitly represented as labor which counts as the equal
of every other sort of human labor, whatever natural form it may possess, i.e., whether it
be objectified in a coat, in corn, in iron, or in gold.” Thus an important benefit is the ability
to compare the labor processes of producing different commodities. To answer the rest of
the question, the other defects are the lack of uniformity: the relative form of value of a
certain commodity is different from that of every other commodity, and Incompleteness: the
80 2007fa Econ 5080 U of Utah
representation of value is never-ending because of the unlimited amount of commodities to
compare with.
Hans: Your writing style is too much like informal speech. The sentence “I think how Marx states it makes it
the clearest” should not appear in a written text. There are other formulations in your answer which could have
benefited from some careful editing.
Next Message by Ozz is [200].
[198] Karly: Forms of Value..... The expanded form of value is necessary in that a commodity
has more than one value, unlike the simple form of value which can only express
the commodity in one commodity of another kind. If we take the example of linen, the
simple form of value would only allow linen to be equal to one other commodity. However,
we must realize that weavers have multiple needs. Expanded form of value allows for
linen to be equal to multiple commodities, therefore meeting all of the weaver’s needs. The
expanded form of value allows for the producer to compare the value of their commodity
with many other commodities. It is a good thing the weaver can exchange linen with many
commodities.
The main defects of the expanded form of value are it is not unique, simple nor uniform.
Commodities are not always equal everywhere at the same time. Another thing to keep in
mind is in real life we are only using one use-value at a time, the expanded form of value
uses multiple use-values at one time, therefore making it complex. The final defect is the
value of the commodities Marx uses are very abstract, and in reality these commodities are
qualitatively unequal.
Hans: This is just your [88] again, but you did not pay attention to the remarks I made there. When Bailey said
that a commodity has more than one value he was facetious, he thought he had demolished the concept of value.
Let me also reformulate my second comment there, perhaps my criticism was too subtle: the fact that the linen
weaver has many needs is not a better expression of the characteristics of value. It is only the reason why the Simple
form of value progresses to the Expanded form.
Next Message by Karly is [302].
[211] Fred: Pros and Cons of the Expanded vs Simple Forms of Value. Marx starts
with the Simple Form of Value, i.e. 20 yards of linen = 1 coat, and progresses to an Expanded
Form of Value where this evolution of exchanges are tending to be expressed in a
common commodity, such as a cow. Now this common commodity is being exchanged not
just for a coat, or linen, but for rice, beans, etc., indeed any commodity could be exchanged
and all of their values are being expressed in the cow. That is the advantage, value is no
longer something between just two commodities, but one commodity and many equivalents
signaling of “something” that resides in the common commodity alone. (Hans [90]), so there
is one equivalent for all. A second characteristic better expressed now is linen (or cow) is
equated to more than just one kind of labor, (not just coats) but to many labors, indicating
that value comes form what is equal in all labors, not just one specific kind of labor. (Hans
[90]). Thirdly, this shows that value is a social relation as these different labors are equated
at the exchange level; and Fourthly, the Expanded Form shows that value is different from
use-values (Hans [90]) as the one commodity linen or(cow) is being exchanged for many
different commodities with different use values, where the values are being equalized for
exchange, indicating a congealed abstraction of labor, or social labor power.
Marx identifies three defects of the Expanded Form.

U of Utah Econ 5080 2007fa 81
One is a lack of uniqueness. The equivalent of the same commodity is not always the
same everywhere and the market has a potential of seeing an infinite stream of new and
different commodities. In the expanded form value is not unique. It should be.
Second is a lack of simplicity. The expanded form is no longer simple because it now
consists of many commodities. As a result, the human labor in the commodity is no longer
portrayed. To equalize the commodities value at market, labor is now expressed as an abstraction
of the human labor or “labor hours.” Quality is replaced with quantity. Value in the
expanded form is not simple. It should be.
Third is a lack of uniformity. Commodities are varied and can be difficult to group together
to an equivalent quantity for the base commodity (i.e. cow). It is also not uniform
because the expanded form of cow has linen as one of the equivalents but cannot have cow,
and the expanded form of linen has cow as one of the equivalents but cannot have linen.
(Hans’s response to DCortado [2007SP:138]). This lack of uniformity gives rise to the need
for a common commodity that can be easily equated to all commodities, such as money
(gold) (that may not have use value in and of itself). Value in the expanded form is not
uniform. It should be. (This leads to the evolution of the General Form).
Hans: Very good. But in your first paragraph you are switching back and forth between the Expanded and the
General form of value. If the owner of the cow expresses the value of his cow in many different commodities,
this is the Expanded form – and that is the first thing that happens, because the cow owner has many needs. But
from this follows that his trading partners express the values of their motley commodities in pieces of cow. This
is already, potentially, the General form of value. I say here “potentially” because in order to become the indeed
General form, general agreement is necessary that all values are expressed in cows.
Next Message by Fred is [287].
Question 219 is 154 in 2001fa, 199 in 2004fa, 224 in 2008fa, 264 in 2010fa, and 240 in
2012fa:
Question 219 Why doesn’t Marx go from the Simple form of value directly to the General
form of value by letting everyone express their values in the same commodity?
[87] Nogi: The reason why Marx does not go from the Simple form of value to the
General form directly is stated in 158:1. Marx says “The two previous forms only got as
far as expressing the value of a commodity as something distinct from its own use-value or
physical body”. Marx goes on to say in 158:2 that the first form produces equations like
1 coat = 20 yards of linen and 10 lbs of tea = 1/2 ton of iron. The values of the coat and
tea are expressed in something like linen or iron. Marx says that this form only appears
when products of labor are converted into commodities by accidental occasional exchanges.
In 158:3 Marx says that the second form distinguishes the value of the commodity more
completely from its own use value. Marx also says that the Expanded form of value comes
into actual existence when a particular product of labor is habitually exchanged for various
other commodities.
Hans: You repeat several things said by Marx, but only your last sentence has anything to do with the question
asked: Marx goes from the Simple form of value to the Expanded form of value because the Expanded form of
value occurs spontaneously when one main product, for instance cattle in a nomad society, is habitually exchanged
for many other products. Only after this spontaneous development, which links all the exchanges in a society
together, is it possible to come to an agreement that everybody should measure the value of their goods in one
specific excluded commodity (gold).
82 2007fa Econ 5080 U of Utah
Next Message by Nogi is [231].
[272] ZACH: Simple form to General Form. On my original answer I was obviously
not thinking of the same thing the question was asking. Marx didn’t go from Simple form of
value to general form of value because he realizes how the Simple form just basically flows
easily into the Expanded form of value. As I did say somewhat in my initial response though
was that people won’t always have the same opinion on the same commodity. There are
different expressions that come because of the Simple form which means that the expressions
won’t be the same for the same commodity, rather for different commodities.
Next Message by ZACH is [327].
Question 222 is 172 in 2002fa, 175 in 2003fa, 202 in 2004fa, 219 in 2007SP, 227 in
2008fa, and 267 in 2010fa:
Question 222 In 158:4, Marx writes the following about the general form of value: “Only
this form, therefore, has the effect of relating the commodities with each other as values, or
enables them to appear to each other as exchange-values.” Why didn’t he write: “or enables
them to appear to each other as values”?
[96] Daru: ”Exchange-Value” or just ”Value” For Marx, commodities only acquire
their value by the labour invested in them (Ann: page 80-83). Hence, in effect when an
exchange takes place, what is held equal between the two commodities is not their exchangevalue
but the labour invested in them (inferred from Marx, Ann: page 87). Two commodities,
when exchanged are not (necessarily) similar in their use-value but contain within them the
same value (i.e. labour) invested in them. This suggests that whereas value is more intrinsic
part of the commoditiy, its exchange-value arises only on the surface through some social
relations or interaction taking place in the marketplace or the society in general. Thus, the
exchange value does not (have to) reflect the value of the commodity but only the social
relations through which it arises.
When Marx states “Only this form...” he is obviously using the word “this” in relation
to two other forms of value that he describes earlier, namely; Simple and Expanded form
of value. It is not that Simple and Expanded forms of value cannot serve the purpose of
exchange-values, but Marx notes defects in them, particularly in the Expanded form of value.
The General form of value as a means of an exchange overcomes the incompleteness, lack
of uniformity and lack of uniqueness in the Expanded form of the value. It does so by
differentiating “the value of every commoditiy not only from its own use-value, but from all
use-values. Hence, the value is expressed as that which this commodity has in common with
all commodities.”
Coming to the key point here, i.e. why Marx uses “exchange value” instead of just “value”
in the sentence? I think Marx, in this sentence, alludes to two different processes of how
commodities are linked to each other. His use of the word “appear” implies that commodities
relate to each other only in a superficial way through the exchange value. This is to say that
the exchange-value only relates the two commodities (being exchanged) at the surface. At
the heart of this surface phenomenon lies the true relationship between the two commodites;
the equivalence of the labour invested in them i.e. their value. Here, Marx is also pointing
out the two different processes taking place in a capitalist society. The production process at

U of Utah Econ 5080 2007fa 83
the core of the society provides a commodity with its value and the superficial process that
takes place in the market place (with its particular environment and social relations) give it
its exchange-value. This distinction is important to Marx as it highlights the (exploitative)
workings of a capitalist society. Had Marx used the word “value” instead of “exchange
value”, the distinction between the surface and the heart would have collapsed. This, in my
opinion, would have defeated his objectives of highlighting the exploitation (of the working
class) that takes place in a capitalist society.
Message [96] referenced by [158]. Next Message by Daru is [131].
Question 223 is 144 in 1999SP, 160 in 2001fa, 173 in 2002fa, 176 in 2003fa, 203 in
2004fa, 200 in 2005fa, 220 in 2007SP, 228 in 2008fa, 241 in 2009fa, 268 in 2010fa, 234
in 2011fa, and 244 in 2012fa:
Question 223 Describe the joint work of all commodities which is necessary to appropriately
express the value of one commodity.
[85] Charles: Joint work of all commodities and their combined value. The value
of one commodity does depend on the joint work of all commodities. The final value of
the product is the combination of all the labor, parts, engineering, etc... associated with
making the product. All of the products in one commodity are passive until they have to be
exchanged or bought. The final value of the commodity is given by the person purchasing
it for the first time or making an exchange for another commodity. That’s when everything
comes together as a joint work in order to express the value. We also have to consider that
almost all the commodities will have an item which will determine the main value of the
product. Linen would be for the coat, lumber would be for the house, engine for the car,
etc... Even though there are many other items associated with making a coat, building a
house or a car, they are more likely to be passive until the time comes for everything to be
considered in order to express the value of the commodity.
Hans: Charles, you have creative ideas, and it is interesting to read how you see things. But most of your answers
have very little to do with Marx’s theory. For instance, your answer here discusses how the use-value of each
commodity draws on the use-values of its components, while Marx is discussing how the value of a commodity is
expressed in the surface interactions. You should have learned by now not to confuse value and use-value, see my
[30].
Message [85] referenced by [105]. Next Message by Charles is [179].
[89] Desk: The Value of a Commodity. When I look at the definition of commodity
according to Marx I see that a commodity is something for which there is demand, but which
is supplied without qualitative differentiation across a given market. Every commodity has a
certain value attached to it which requires work at a given point. That is where the joint work
of all commodities comes into play when you express the value of one commodity. Thomas
Cooper explained something great with one simple phrase “Take away from a piece of bread
the labor bestowed by the baker on the flour, by the miller on the grain brought to him, by the
farmer in plowing, sowing, tending, gathering, threshing, cleaning and transporting the seed,
and what will remain? A few grains of grass, growing wild in the woods, and unfit for any
human purpose.” This statement describes perfectly what is meant by the joint work of all
commodities which is necessary to express the value of one commodity. Marx explains that
all commodities express values in the General equivalent, this general equivalent commodity
is directly exchangeable with all commodities. If you take an ordinary commodity to market,
84 2007fa Econ 5080 U of Utah
two questions must be resolved for a change to go through: (1) does your trading partner
need your commodity and (2) how much of his own commodity is he going to give you for
your commodity. (159:2) In the case of this piece of bread, everyone is reliant on every one’s
commodity, the trade must take place. There will be shared values given to reap the reward
in the end. This also is why you will pay more for the one commodity (bread) while you do
not see the joint work that takes place to make it possible.
Hans: You are saying several loosely related things in your answer, but the right answer to question 223 is not
among them. Look at [2005fa:815] for instance.
Message [89] referenced by [92]. Next Message by Desk is [252].
[98] Gregory: “The joint work of all commodities...” We all know that every commodity
consists of a “value” that is determined individually by its process of labor and value of
use to the consumer. Consequently, determination of a single trade variable (i.e. currency in
the form of paper money or gold) is neccessary for the universal trade of commodities. Understanding
that all commodities have a determined use value that allows the commodity to
be qualitatively and quantitatively compared to others, the need for a “universal commodity”
to represent all commodities on a larger scale is greatly evident. Although we as consumers
know that paper money has little to no actual use value, in relation to the joint work of
all commodities, it performs the ultimate function necessary for the trade and exchange of
commodities in the market. Marx explains that in his General form of value “10lbs.of tea =
20yds. of linen, 40lbs.of coffee = 20yds. of linen, therefore 10lbs of tea = 40lbs of coffee.
In other words 1lb. of coffee contains only a quarter as much of the substance of value, that
is, labor, as 1lb of tea.” In concern to the joint work of all commodities, this indicates that
they are all in direct correlation due to their values determined by labor and use, which are
ultimately represented by the value of one universal commodity. If the exchange of commodities
in the market and their values were determined solely by the individual based on
their personal use value for that particular commodity, the result would be a market with
little uniformity or structure. In this case, commodities would have little or no joint work.
In conclusion, my understanding is that Marx’s General form of value is the joint work of
all commodities that are ultimately measured to one single commodity.
Message [98] referenced by [105] and [182]. Next Message by Gregory is [144].
[105] Hans: Value and Use-Value must be distinguished. Charles’s answer [85] describes
how the use-value of a complex product (coat, house, car) depends on the use-values
of its components. This is not only true for commodities but for all complex products, and
it is not what Marx means. When Marx says “value” he means the congealed abstract labor
inside the commodities, which makes them exchangeable.
Gregory [98] is better because it does stay on the value-side of commodities, instead of
discussing their use-values. Gregory sees correctly that the “joint work of all commodities”
is the willingness to accept one and the same commodity as the general equivalent. But there
are still some differences between what Marx says and what Gregory says:
(a) Gregory says that that which makes commodities exchangeable, its “value,” is “determined
individually by its process of labor and value of use to the consumer.” There are
two mistakes in this. (i) In Marx’s theory, the value is determined only by labor content,
not by the use-value. Use-value and demand determine how much of the commodity will be
produced, but not the price. Here Marx differs from mainstream economics. (ii) Although

U of Utah Econ 5080 2007fa 85
this seems to be an individual determination (all one needs to determine the value of a commodity
is a stopwatch), the case of the lazy or unskillful laborer shows that this is really a
social determination: the relevant labor time is not the actual labor time used to produce that
specific commodity, but the socially necessary labor-time for this kind of commodities.
(b) Gregory says that this general equivalent is money which has no intrinsic value, while
Marx was thinking about gold money, i.e., one commodity (gold) selected to serve as money.
(c) Gregory says that money is necessary so that the commodities can be exchanged.
Again, this is a part of mainstream theory where Marx’s theory differs, as Ricky explained
in [94]. Marx thinks that the primary function of money is to serve as a carrier of information
for the producers. When Marx uses the words “express the value of the commodities”
he means: how do the private producers get the information necessary so that they know
whether they should use their labor and material resources for product A or product B? Observing
the many barter relations, between linen and coat, or coffee and tea, will not help
here. For this they need the monetary prices of the goods and compare these with their own
costs, either monetary costs for the purchased inputs, or their own labor inputs.
By the way, such theoretical differences can have important policy implications. If the
most important function of money is informational, then it is very important that the dollar
is not devalued if it wants to remain the world currency. OPEC countries will not continue to
price their oil in dollars if the dollar continuously loses value. If you look at money mainly
as a means of circulation, the inflation of the dollar will not matter.
Message [105] referenced by [131], [182], [208], and [2008SP:332]. Next Message by Hans is [109].
[182] Daniel: graded B There are a few different factors that go into the determination
of value in a commodity. We call the combination of these factors the ”joint work of all
commodities.“ In order to descibe this joint work we must examine the value of commodities
which makes them exchangeable. ‘When Marx refers to value within a commodity he is
talking about the congealed abstract labor inside the commodities.’ (Hans [105]). It is this
labor that represents part of the joint work required, in order to give value to a commodity.
Hans: You are saying here and in your third paragraph that the abstract labor which gives commodities value is a
social thing. This is right, but it is not what Marx meant with the joint work at this place. The quote in your next
sentence defines this joint work, and this quote talks about something completely different than the rest of your
answer.
The joint work of all commodities is the ”willingness to accept one and the same commodity
as the general equivalent (Gregory [98]).
Thus, the analysis of this joint work of commodities comes down to the labor force.
When determining labor time one must further analyze the means of measuring labor-time.
How much labor is going into the product? As Hans says in his [105], labor time is not the
actual labor time used to produce the commodity but the “socially necessary time” to make
the commodity. This takes labor and value off the shoulders of the individual and hands it
over to society as a whole. It factors in laziness and the unskilled laborors and thus creates a
more accurate measurement of the amount of joint-work (on the social scale).
Next Message by Daniel is [210].
[184] Dyoung: graded B– The ”value” of value. In looking over my answer for this
question, I see that I needed to explain myself a lot better.
86 2007fa Econ 5080 U of Utah
The joint work of all commodities is that they find a way to appropriately express their
exchange-value, or the value of one commodity in reference to another commodity. This has
little to do with the use-value. There needs to be an expression of value for all commodities,
the value here would be made up from the ‘crystals of labor’ embedded in the commodity.
It is this congealed labor which makes them exchangeable. The expression of this labor can
be in the form of money or another commodity such as gold, which can be used for money
as a medium of exchange. This is helpful so that producers can determine prices and so that
laborers can determine wages.
Hans: You are wrong to say that commodities need to express their exchange-values. Rather, they need to express
their values. The value of a commodity is something intrinsic, it is not something “in reference to another
commodity.” Roughly speaking, this value is the labor inside the commodity. This value must be expressed. The
commodity’s exchange-value is one way of expressing it. But the commodity’s price, its exchange-value expressed
in money, is a better way. For this better way the joint work of all commodities is necessary.
Next Message by Dyoung is [186].
[207] Marcellus: They’re All Related. The joint work of all commodities shows how all
commodities are related – by their abstract human labor. 20 yards of linen = 1/2 ton iron =
40 lbs. coffee = 2 coats, etc. This joint work is necessary to appropriately relate the value all
commodities to each other. Once all commodities have been related, it becomes possible to
relate all commodities to a single commodity such as gold, which can then be the equivalent
against which all commodities are exchanged.
Hans: You are saying that the joint work consists in tying all commodities together in the Expanded form of value.
This is not quite the same as Marx. He called the next step the “joint work,” namely, the selection of one commodity
in which all others express their values. Not the Expanded form itself but its reversal requires a co-ordinated act.
Only if everyone together unites on linen can we have the equations 1/2 ton iron = 20 yards of linen, 40 lbs. coffee
= 20 yards of linen, 2 coats = 20 yards of linen, etc. My [2003fa:117] tried to argue why this better deserves the
name “joint work” than the step you describe.
Next Message by Marcellus is [299].
[209] Teight: The value of a given commodity depends on the labor that is used to produce
it. To be able to see a commodity’s true value one must rely on the cooperation of all
commodities. Marx believes that all commodities must meet in the middle when it comes to
a certain exchange so that one can determine the value. During Marx’s time, this medium of
exchange was gold, but has since been changed to the dollar. The labor is what determines
the value of a given commodity. For example, an artist that paints on a canvas has no value
with a blank piece of canvas. However, with each brush of the paint brush the artist creates
value for the given commodity, or the painting. After the painting is finished the artist
depends on the market and the exchanging of other commodities to determine the exchange
value. The one thing that all these commodities have in common, besides the time the laborer
put into producing them, is the medium exchange in the market place.
Hans: Your last sentence should have said: the labor which all these commodities have in common needs a common
expression in the prices of the commodities. What does this have to do with the question asked? These prices
arise almost spontaneously. Very little cooperation is necessary. The only thing that is necessary is that a general
equivalent is agreed on (for instance gold).
Next Message by Teight is [379].
[215] Ricky: The example Hans gave of driving his car with its headlights off is a good
metaphor to describe the joint work of all commodities that is necessary to appropriately
express the value of one commodity. In his example, Hans thought that the first car to flash
their lights at him was someone who recognized him. In other words, Hans believed the

U of Utah Econ 5080 2007fa 87
flashing was a signal of a special relationship between him and that specific person. He was
confused, however, when subsequent cars kept doing the same thing. It was after several
cars flashed their lights that he realized what had happened – his own lights were off. Hans
understood that the flashing did not signify a special relationship between him and the other
cars, but merely was the similar act of different cars telling him the same thing about himself.
It was something about Hans that caused the cars to flash, not a special relationship Hans
had with them.
This illustrates how Marx sees the joint work of other commodities (i.e. other cars) in expressing
the value (i.e. Hans’s lights off) of one commodity. For Marx, the exchange-value
is not determined by a special relationship between two goods. It is an exterior expression of
the congealed abstract labor in the commodity. It is imperative to understand that for Marx,
commodities don’t get value from each other. The market relations between commodities
merely give them a stage to showcase their intrinsic values. Deere [2002fa:75] explained
the joint work of the commodities using Marx’s theory of the Simple and Expanded form
of value. In the Simple form, all of the commodities align their value with a common commodity.
In Marx’s writings, he uses the gold standard as an example. Linen, wheat, iron and
all other commodities align their values against that of gold. Then this “commodity commonality”
becomes the measuring stick which expresses value in the world of commodities.
Hans [2003fa:117] further distinguishes this joint effort of selecting one use-value for all
commodities to express their value in from the separate work of each commodity to merely
express its value in some way. Moreover, as Neolib [2003fa:224-7] explains, the market of
exchange could not function without this joint work. “In order to facilitate exchange, it is
self-evident why commodities cannot express themselves on an individual basis. The market
demands a uniform commodity in which to express value in, as otherwise value would
become subjective.”
Hans: Excellent. But if all commodities express their values in a common commodity this is not the Simple form
of value but the General form of value.
Message [215] referenced by [226]. Next Message by Ricky is [226].
[224] Jill: In my first response to this question I was possibly too detailed in my example
and did not include the main point. The joint work of all commodities is necessary to
express the value of one commodity because they all must use the same value system. A
value must be placed on each commodity based on the materials and labor that went into
creating it. The society must have an agreed upon measure of worth in order for anything
to have an accurate value. For example, a society that chooses to measure the value of their
commodities in feathers would then have a standard item to relate the labor and material
cost to and commodities in that society would be exchanged much more fairly than another
society in which eggs may be valued in feathers but linen is valued in gold. There must be a
common measure for which all items are held accountable.
Next Message by Jill is [413].
[228] Jeff: In the original answer that was proposed on the exam, an incorrect approach
was taken to explain the concept of joint work on all commodities.
The core of this concept is that not everything can be equated, value wise, easily or at all.
Therefore, there must be one set commodity in which all things can be equated to. This set
commodity is called the general equivalent. So looking at the this scenario, the joint work is
88 2007fa Econ 5080 U of Utah
found in the efforts that are put into the commodity to make it what it is as well as the general
equivalent itself. This is due to the key component of the argument that it is necessary to
have one centralized unit of comparison to be able to properly assess value relative to other
commodities. Therefore, with the central unit of measure and having all other commodities
compared to this one general equivalent, one would be able to see the joint work that is
required to be able to properly asses the value of a commodity.
This analysis is the correct one of the concept of joint work to properly express the value
of one commodity. It is based on centralizing the measurement of value to one commodity
and having all other commodities compared to it. When this is done, joint work of all the
commodities allows for a proper valuation of a commodity.
Next Message by Jeff is [410].
[234] Nogi: Joint work for value of one. Marx seems to equate this question to the
amount of labor put into the joint commodities in order to express the value of one commodity.
In the example Marx uses he says the commodities not only qualitatively equal as values
in general but also as values whose quanities can be compared. What I think he meant in
regaurds to this question is that the value can be determined by the labor put in to produce
the commodity but all the joint commodities will have varying degrees of value because different
amounts of labor was put into them. Therefore this must be taken into account when
determining the value of one commodity from its joint commodities.
Hans: Wrong. Marx is discussion the expression of value, not its determination. There are a number of answers
like yours in the archives, and I always comment that they are wrong.
Next Message by Nogi is [349].
[235] Amy: Expression of all commodities values by one commodity. In order to
exchange a commodity, one must first recognize the value of the commodity. In the simple
form of value one recognizes that 20 yards of linen is worth 1 coat. This establishes that 20
yards of linen has the same value (abstract labor) as 1 coat. Then to progress to the expanded
form of value one has to recognize not only is 20 yards of linen = 1 coat but that it is also
equal to 10 lbs. tea or = 40 lbs. coffee or = 1 quarter of wheat or = 2 oz. of gold or = 1/2 ton
of iron or = etc. (Capital, p 155) The joint work of all commodities establishes the general
form of value where X amount of Commodity A = W amount of Commodity B and Z amount
of Commodity C also = X amount of Commodity A. All commodities have to first express
their value in the simple form before they can express their value in the expanded form.
Once all commodities have been expressed in expanded form then they all have to agree
on one commodity that will represent them all. One would want to choose a commodity
that has consistent quality and quantity, for example gold. Different amounts of gold equal
different amounts of different commodities. It takes the joint work of all commodities to
determine a general expression because all commodities have to express their value in that
said commodity and every new commodity that comes onto the market must also express
their value in that commodity. By having one commodity that expresses the value of all
other commodities it makes it easier to compare the value of commodities.
Hans: You are not making it clear enough that the transition from the expanded to the general form of value
implies a reversal. Expressing the value of my commodity in all other commodities (one in relative form, many in
equivalent form) is not the same as expressing all commodities in one general equivalent (many in relative form,
one in equivalent form).
Next Message by Amy is [269].

U of Utah Econ 5080 2007fa 89
[244] Milton: Quantitative not qualitative. To express the value of a commodity you
can’t look at the quality of those items because they are different, incomparable commodities.
Therefore to put the values side by side you have to put the value into terms of quantity,
before you can compare the commodities. Doing that you will find the base value and put
all commodities in terms of that base value. Once a base value is established then as said
by SueGirl in [2005fa:815] the joint commodity is one like gold that society agrees on as a
commodity with enables them to express equality between their values. Therefore all commodities
will express their value in terms of that chosen joint commodity. Thus enabling
them to be exchanged as equal.
Hans: The thing which makes the commodities comparable is the labor inside the commodities. Gold is only the
exterior expression of that inner commonality.
Next Message by Milton is [337].
[248] Corey: graded A Woefully mistaken. Oh how wrong I was in class, it is not the
relationship between the commodities that helps to express one’s value, but the agreement
of all commodities jointly to be expressed in one medium that allows for the expression of
the value of each commodity. For Marx at the time he was writing that medium was gold.
It could be said in our time that the medium is the dollar. Therefore we must have this
agreement between all commodities, to be exchanged to a common medium, for value to be
expressed.
Hans: You are too modest. Your in-class answer had an interesting idea. You argued that even individual exchange
relations are social because the total of these exchange relations must be transitive.
Regarding your last sentence: In Marx’s theory, the agreement is that all commodities agree their values to be
measured in one commodity. From this follows that this agreed-on commodity is also directly exchangeable for all
other commodities, but this is a second step.
Next Message by Corey is [465].
[253] Dannymangum: Joint work. Marx has gone through great lengths to differentiate
the two sources of value, use value and exchange value. But in order to derive the general
form of value it will take the aid of the joint work of all commodities. Marx states this as
“a commodity gains a general expression of its value only when, at the same time, all other
commodities express their value in the same equivalent.” To prove this point Marx gives us
the example that 10 lbs. of tea can be exchanged for 20 yards of linen, and 40 lbs of coffee =
20 yards of linen. By combining these two results together we can see that 10 lbs of tea = 40
lbs of coffee. Thus it is through the joint work of all commodities, or through the comparing
of commodities trade values, that we see the expression of the general form of value.
Hans: Use-value and exchange-value are not sources of value. In Marx’s terminology, labor is the source of value,
and exchange-value is the surface manifestation of value. Use-value is a different dimension, very much unrelated
to what Marx calls ‘value’.
You argue correctly that for an appropriate representation of value all commodities have to compare themselves
to one and the same equivalent. But the only joint part of this is that they all must agree on this equivalent. Once
this equivalent is decided, the expression of each value in this equivalent is no longer a joint act but can be done
individually.
Next Message by Dannymangum is [396].
[255] Jason: First of all it is important to note that all commodities need to use a specific
method to be able to specify their values. As we talked about in class, in today’s society we
use the modern day monetary policy, in that we use bills and coins. I’m sure back in the day
people used a myriad of ways to exchange. According to a past submission this phenomena
is the joint work of commodities. As was stated before, the value of exchange is highly
90 2007fa Econ 5080 U of Utah
influenced by members of society. Commodities can be used as a means of exchange. For
example if I scratch your back you will need to scratch mine type of scenario. In addition
another point to consider is that the more means of exchange one owns, the ability that
person has of being able to obtain more commodities increases.
Hans: Yes, specific methods are needed to appropriately express values. To be more precise, money is needed.
How is money the result of the joint work of all commodities?
Next Message by Jason is [258].
[260] Chased: Joint work of commodities. It is possible to express a commodity’s value
by the amount of labor contained to produce it. There is, however, a dissent in the neoclassical
economy of how capitalists believe that the labor is only the base for the price with
market variations determining the true price. This is one of Marx’s unhappinesses with he
capitalist theory in that the profits are not redistributed to the workers.
Commodity exchange-values, while not “purely relative” are in fact related. Without
other commodities in the market place one is not able to assert a “value” for those goods as
there would be nothing else to compare them to. If there were few goods on the market the
relative value would increase until there was a saturation.
Hans: You are describing the dissent well. Capitalists think if the market is willing to purchase their product above
their cost, then the difference legitimately belongs to them. Marx says that this difference between price and cost is
due to the fact that workers produce more value than they get paid. In his theory, profits are a flow of wealth from
the workers to the capitalists.
Regarding your second paragraph, in Marx’s theory value is inherent in the commodity and not relative, i.e., in
need of a comparison, as you describe it.
Just for your info, all this is strictly off topic. It has nothing to do with the joint work asked about in the question.
Message [260] referenced by [286]. Next Message by Chased is [471].
[273] Gregory: The joint work required of all commodities necessary to express the value
of a single commodity is the following. In the economy it is appropriate to hold one single
commodity to represent all commodities with the purpose to carry out the transaction of all
commodities in the market. In our country this single commodity is currency in the form of
the paper bill or coin (i.e. in the past perhaps gold or silver). Marx explains the exchange
of commodities through what he calls the “simple form of value.” An example would be 20
yards of linen is equivalent to 10 pounds of wheat which is ultimately measured to gold.
Each commodity is measured to others based on their qualitative and quantitative values,
output of labor, and “use value” in the market. This is the joint work that comes together
in scale to ultimately be represented by one single “universal commodity” with little or no
actual use value.
Hans: For Marx, the main purpose of money was not to carry out transactions, but to serve as a measuring stick
for the values of the other commodities. The basis of this measurement is only the socially necessary labor time
in the commodities, and not the mixture of what you call “qualitative and quantitative values, output of labor, and
“use value” in the market.”
Next Message by Gregory is [274].
[280] Ryan: content A late penalty 1% To explain the joint work of all commodities, I
will begin by explaining the deficiency of the simple form of value, as explained by Marx.
When linen is exchanged for coats, this is a single arbitrary exchange relation. When this
is combined with the idea that commodities are only exchangeable because they possess
the common substance of abstract human labor, it grants a very limited view of what the
value of linen actually is. The expanded form improves this by showing the relationship

U of Utah Econ 5080 2007fa 91
of the abstract human labor in linen compared to the same quality in innumerable other
commodities. But still this does so only in a system of 1 to 1 exchanges. In the general form
this is remedied by expressing all commodities, and thus the amount of abstract human labor
in all commodities in terms of a single commodity. This gives us a measuring stick by which
we can more accurately and appropriately express the value of a single commodity. In part
because we are thus aware of how much labor is in the inputs of a given commodity. Also
the value, in terms of labor, is made socially applicable through this process, because it can
be easily compared with the value of all other commodities in an economy. So it is the joint
work of all commodities that allow us to express the value of a single commodity.
Hans: You are explaining well the Simple, Expanded, and General forms of value. I especially like your observation
that the General form of value is desirable because it allows to measure the inputs into the commodity in the
same equivalend at the commodity itself. But you do not explain what the joint work of all commodities is.
Next Message by Ryan is [313].
Question 225 is 126 in 1997ut, 175 in 2002fa, 178 in 2003fa, 205 in 2004fa, 202 in
2005fa, 222 in 2007SP, 230 in 2008fa, and 236 in 2011fa:
Question 225 How does the General Equivalent form of value express the labor represented
in value not only negatively but also positively?
[86] Melanie: content A– form 95% In the General Equivalent form of value, the commodity
acting as the “general equivalent” will have the role of equating the labor-time value
contained in every other commodity. For example, if we set “linen” as the “general equivalent”
in society X, then the value of all other commodities in society X can be related to
the value of “linen”. Therefore, the labor-time used to create the linen can be related to the
labor-time used to create all other commodities in society X. Marx states, “The innumerable
equations of which the general form of value is composed equate the labor realized in the
linen with the labor contained in every other commodity. They thus convert weaving into
the general form of appearance of undifferentiated human labor....It is the reduction of all
kinds of actual labor to their common character of being human labor in general, of being
the expenditure of human labor power” 159:2/o.
In other words, the labor represented in value is expressed positively because now commodities
can be related to each other by their true labor-time value. Without this common
commodity to relate all other commodities values to, one might accidentally value things
unrealistically to each other. The General Equivalent form provides a better and more consistent
way to relate the values of commodities to each other.
Message [86] referenced by [91]. Next Message by Melanie is [217].
[91] Hans: For Marx, Quality More Important than Quantity. In [86], Melanie says:
it is a good thing every commodity measures its value in one and the same equivalent, because
this makes the exchange proportions more consistent and prevents accidental over- or
undercharging.
Melanie’s focus on the quantitative aspect of the exchange relation fits together well with
the way we do sciences nowadays: everything is quantified. Marx’s old-fashioned thinking
pays much more attention to the qualities of things than is customary nowadays.
92 2007fa Econ 5080 U of Utah
But it is useful for us to exercise our underused qualitative thinking-muscles a little bit.
What does the qualitative dimension of the exchange-relation look like?
Say the linen weaver barters some of her linen with a coat, some other linen with tea, and
shoes, etc. Every time she says to herself: I am giving my linen away for coat (tea, shoes)
because I never meant to keep the linen for myself anyway. I always produced it to get
something other than linen for it. This is a negative expression of value, because the value
of the linen is expressed in something other than linen.
Now assume a different scenario in which the linen weaver sells all her linen for gold
coins before buying coat, tea, and shoes with these gold goins. Here the linen weaver says:
the labor I am putting into the linen gives me gold coins. This is a positive expression of the
value of the linen.
This positive expression has an unintended consequence. Because now the linen weaver
may think: oh this gold is so useful, I will keep some of the gold for a rainy day. And she
sticks a few gold coins into her mattress. Value suddenly becomes a goal rather than only
an intermediary step on the way to the next use-value. This is an important shift in the linen
weaver’s motivation. I.e., the qualitative way of looking at things gives us insights which we
miss if we only look at the quantities.
Message [91] referenced by [2008fa:282] and [2011fa:107]. Next Message by Hans is [92].
Exam Question 227 is 118 in 1995WI, 127 in 1996sp, 138 in 1997sp, 130 in 1997ut, 147
in 1999SP, 156 in 2000fa, 163 in 2001fa, 177 in 2002fa, 180 in 2003fa, 207 in 2004fa,
203 in 2005fa, 223 in 2007SP, 238 in 2011fa, and 248 in 2012fa:
Exam Question 227 The difference between the Money form (under the gold standard) and
the General equivalent form is small; nevertheless it has important implications. Elaborate.
[97] Harmon: Money, Money, Money. It is true that the Money form of commodity
exchange and the General form of exchange differ only slightly. We have studied Marx’s
comparisons between 20 yards of linen, 1 coat, 10 lbs. of tea, etc, thus explaining the
general form of exchange. In this adoption of 2 ounces of gold as another exchange value
for 20 yards of linen, we see no change in the General form. The difference between this
and the Money form is a “social implication”. When a society as a whole decided to make
those quantities of gold equal to other commodities and use them universally as a form of
trade, monetary exchange was born. In other words, now one commodity, gold, could be
used as a quantitative object of trade for any other commodity. This beginning of monetary
standardization held great consequences for future trade, as we can presently see in the
everyday use of coin and dollars.
Hans: The General equivalent form and the Money form do not just differ by adding gold to the equivalents of
wheat. Wheat has many equivalents only in the Expanded form. The General form is a reversion of the Expanded
form. In the General form, commodities express their values in one equivalent, for instance linen. The Money
form differs from the General form by the fact that everywhere and always this equivalent is the same commodity,
gold. You are right that this has important social consequences. But the fact that money is used every day does not
describe these consequences, because a General equivalent which is not money would also be used every day.
Next Message by Harmon is [102].
Question 228 is 221 in 2007SP, 235 in 2008SP, 246 in 2009fa, and 249 in 2012fa:

U of Utah Econ 5080 2007fa 93
Question 228 Compare Marx’s derivation of money with the derivations of money in modern
Economics
[94] Ricky: Marx’s derivation of money represents one of the most striking contrasts
between Marxian and traditional economics. Prior to Marx, mainstream economists (i.e.
Ricardo, Hume) viewed money as merely a way to facilitate market exchanges. Money was
nothing more than a practical way to deal with the difficulties that arise in bartering. Marx
criticizes this oversight by writing that the task of understanding the origin of money has
never been attempted by bourgeois economics (Marx 1867, pg. 139). Marx’s derivations
of the necessity of money in a commodity market are based on his labor theory of value.
All commodities share a common property - abstract labor. Marx believes that the amount
of abstract labor in each commodity must take some socially recognizable form. He concludes
that this observable form must be money, pointing out that the key characteristics
of money, namely homogeneous quality and specific quantities, are derived from the same
characteristics of abstract labor. In summary, main stream economists see money as a form
of circulation. Marx sees money as a measure of value.
Message [94] referenced by [105]. Next Message by Ricky is [135].
[95] Gilmour: content B form 95% Marx’s derivation of money is stemmed from the use
value of differing commodities. These commodities are compared to gold. For example,
20 yards of linen is equal to 2 oz of gold. Also he denotes that these commodities can be
compared to one another. 20 yards of linen is equal to 1 coat, 1 coat is equal to 10 lbs of
tea. In this way, Marx implies that any commodity with value can be exchanged for another
commodity. The two parties must agree on the value of each commodity in trading however.
This makes money almost limitless in form. It can be a precious metal, or a bushel of wheat.
In the modern economy, gold has much value, but it is not traded directly for other commodities.
Rather it is used as more of a store of value, however it does not regulate how
much money is in the market. Today’s money is classified as currency, travelers checks,
demand deposits, and other checkable deposits as denoted by the Federal Reserve. This first
set denotes M1 money. M2 is equal to M1 plus small denomination time deposits, savings
deposits and money market deposit accounts, and money market mutual fund shares. We see
that money today is based upon faith that it will be accepted by the general public. There is
more money in the world than is actually backed by gold. This money is created by banks
and businesses in the forms of loans, stocks, bonds, etc. Commodities can still be traded
but not on a large scale as was the case in past centuries. If I wanted to go to the store to
buy shoes, I couldn’t expect the vendor to accept payment in wheat. They would expect
currency, or more conveniently a debit card. Money has changed greatly in the way it is
classified and used.
Hans: Most of your answer describes how the modern monetary system differs from the gold standard prevalent
at Marx’s time. This is correct, but this is not the topic of question 228. Question 228 wants you to explain in what
way modern theories of money are different from Marx’s theory of money.
You say a few things about Marx’s theory of money, but they are wrong. Marx does not derive money from the
use-values of differing commodities. Marx sharply distinguishes barter without money from a monetized exchange,
while your answer sounds as if he identified them.
Next Message by Gilmour is [139].
94 2007fa Econ 5080 U of Utah
[502] Hans: Marx versus modern monetary theory. Kibosh’s [495] is based on the
mainstream theory of money, which is quite different than Marx’s theory:
(a) Money is not a societal value placed on a piece of paper in order to make it a means
of exchange. Instead, money is first of all a measure of value. At Marx’s time because it was
a value (congealed abstract labor) itself, namely gold, and nowadays because the Federal
Reserve pursues policies to preserve its value.
(b) Let me say it again with different words. In mainstream economics one occasionally
hears the aphorism that “money is what money does.” I.e., it is not important what money
is, it is only important what people agree to do with it. Marx did not subscribe to this
notion. In the background of Marx’s arguments is always: if something has the powers to
do something, then this is always because of what this thing is. (I could go on with the
implications of this: people are not the only things in the world which can do something, but
things generally act.)
(c) Money is not a mere intermediary but it has become an object which is desired in its
own right. Marxists would call it reductionist to “reduce” money to what it can buy. Money
is more than the goods it can buy.
(d) The value of money represents labor time and not “strength” or “opportunity cost.”
That’s why it is called the labor theory of value.
Message [502] referenced by [2012fa:195]. Next Message by Hans is [509].
Question 233 is 121 in 1995WI, 98 in 1995ut, 131 in 1996sp, 133 in 1996ut, 181 in
2002fa, 185 in 2003fa, 212 in 2004fa, 208 in 2005fa, 228 in 2007SP, 238 in 2008fa, 251
in 2009fa, 278 in 2010fa, and 247 in 2011fa:
Question 233 Which evidence prompts Marx to say, at the beginning of the Commodity
Fetishism section, that the commodity is “complicated” or “mysterious”?
[99] Amy: The mystery behind why Marx says that the commodity is “complicated”
or “mysterious.” What prompts Marx to say that the commodity is “complicated or mysterious”
is that the social relations encapsulated in the commodities are not understood or
controlled by the commodity owner. Marx gets evidence to support his conclusion only after
an analysis of a commodity. The analysis determines that a commodity is complicated
because it has many determinations, one needs the powers of abstraction to grasp them, and
money can be compared to the god of commodities. Then he expands on these ideas to
explain how a commodity is complicated and/or mysterious.
A commodity is complicated because it has many determinations, which I think means
that a commodity can be anything from something that is produced and used to trade for
other commodities or it can be something that is produced and sold for money.
Hans: Your analysis so far was good, but your last sentence took the wrong turn. “A commodity has many determinations”
basically means that it has use-value and exchange-value. Your next sentence captures this better, but
please note: the determinations of a commodity are not only relevant for what we do with the commodities, but
also for the evolution of the commodity relations themselves, for instance the development of money out of the
commodity.

U of Utah Econ 5080 2007fa 95
There are many different determining factors that help one decide what to do with their
commodities, some of which the commodity owner are unaware of.
A commodity is mysterious because one needs the powers of abstraction to grasp them,
meaning that when you look at a commodity, there is a lot more to it than what initially
meets the eye. There are many underlying factors that have made that commodity what it is;
human labor, environmental factors, different uses, etc.
Hans: Here you are only talking about the production of the use-value. For this use-value to be a commodity you
need private production, the equalization of labor, equal rights on the market place etc.
And there are many more possibilities of what one can do with the commodity. Take an
article of clothing for example, let’s say a shirt. When you first look at it you just see shirt.
You notice the color, the style, possibly the material. But when you take time to analyze the
shirt and think about what went into making it, or what options you have of using it, your
possibilities are limitless.
Hans: Again you are looking too much at the use-value of the commodity and not the social relations of which
the commodity is the material expression. Perhaps you could have said at this point that it is an organization of
production which does not specify which use-values are necessary for the survival of society, but everything is
guided by market success.
You have to take into account that the shirt was made maybe in a factory, where they
could use child labor.
Hans: Now you are talking. The relation between you and the producer is shrouded by the commodity, you don’t
know whether the gleaming thing on the shelf is produced by child labor or under other oppressive conditions.
There are many different materials that are used to make the shirt. The fabric it is made
out of, the thread used to sew it together, etc. It becomes a lot more complicated now. And
the mystery comes from what you can do with the shirt. What outfits that you can come up
with, different ways to embellish the shirt, other uses for the shirt other than as a clothing
item, etc. Once you take all of this into consideration a commodity can be complicated
and/or mysterious.
Hans: You have to distinguish more consciously between those properties the commodity has as a use-value, and
those which come from the social relations in a commodity society.
Next Message by Amy is [133].
[107] Jeff: Complicated and Mysterious. When considering Marx’s argument in the
beginning of this section, he attempts to realize where the value of the commodity really
is located. He uses the example of the wood before being turned into a table. Before the
manufacture of the table, the piece of wood was not seen as an important commodity. Its
value became apparent only after it had been made into a table. All that happened is the
form of the wood has changed. Intrinsically the piece of wood has not changed at all. Marx
also says that the table does not have unusual qualities (i.e. the capability to move on its
own) which it acquired only after it was made, also leading to the question of where is this
value acquired from. Therefore, he attempts to analyze where the value comes from. This is
the mystery he is referring to.
When considering how a commodity becomes valued after it slightly changes form without
any change in intrinsic value, one would wonder if maybe its value is arrived at from its
96 2007fa Econ 5080 U of Utah
instrumental value that it delivers. Neither the time nor the effort put into making this commodity
add to its value. But the result of all three components put together yield a valuable
commodity. This is the mystery that Marx discusses early on in his Fetishism section.
Hans: With the example of the table Marx tried to illustrate that the use-value of the commodity is not mysterious
– because the production of the table as a use-value only changes the form of a naturally existing object (wood). But
the table becomes mysterious when it is a commodity, i.e., produced for sale. When it is exchanged, its use-value
becomes the measure of value for other commodities. This is what Marx means with the table standing on its head
in relation to other commodities. Another example might be: for a furniture business the table becomes part of their
capital which needs to make profits. (But Marx has not yet introduced capital, that’s why he does not bring this as
an example here.) The mysterious aspects of commodities have to do with their value and exchange relations, not
with their use-values.
Message [107] referenced by [109]. Next Message by Jeff is [126].
[109] Hans: Mystery of the Commodity. Although Jeff says otherwise in [107], there
is no mystery in Marx’s mind about the source of value. In his theory, commodity prices
come from labor content. Here Marx differs from mainstream economics, which says that
commodity prices come from the marginal utility of the consumers. In Marx’s theory, the
utility of a commodity determines how much of the commodity will be produced, but it does
not determine the price.
The mystery, for Marx, is rather: if the market rewards the producers for their labor, why
do they not know this? Why do they think the value of the commodity somehow comes out
of the commodity itself and not from their labor? Jeff wrote expressly: “Neither the time
nor the effort put into making this commodity add to its value.”
Our social relations are not transparent to us. This is a problem. If we do not see what is
going on in society, we are not the masters of our own relations, but the pawns.
Next Message by Hans is [113].
[115] Chris: An oasis of relations. The mystery for Marx is not the use-value, which
is something “obvious and trivial” as we can view this as something that satisfies needs in
itself or becomes this through human labor. We can understand this, as Marx says, as when
altering a piece of wood into a table, it has changed but it is tangible, we can see it and touch
it.
The mystery also does not arise from the determinants of value such as labor, quantity of
labor and such. So where does this “mystery” arise from?
The mystery lies in the fact that commodities reflect back an objective reality that is
not controlled by the producers, the social relationships within commodities can take on
many forms. Marx uses the example of the eye and the light of an object, where the eye
and the object have physical reality with each other, there is a physical reaction between
the object and the eye. The commodity form of the products of labor, and the value with
which it represents itself does not involve itself with the physical properties or itself as a
physical object. It is therefore the interactions between people that give commodities a
relationship between themselves. This is a weird idea that although commodities do have
physical properties and can be objects such as a table, it is not these physical properties that
wholly determine them but the social relations between people in society.
Next Message by Chris is [195].

U of Utah Econ 5080 2007fa 97
[119] MichaelM: Is the commodity ”mysterious” still? The evidence that prompts
Marx to say that the commodity is “complicated” or “mysterious” are the different “social
relations” within the commodities themselves that Marx could see that are not generally
understood by one side or the other of this relationship.
I do not think that these “social relations” within commodities were much different when
Marx was alive than the ones happening today. However, I do think that during his time these
“social relations” within commodities were more “mysterious” and “complicated” than they
are today.
Because information is so easily accessible today, these “social relations” within commodities
are easier to recognize and understand. For example, I can research a particular
commodity online and within a few minutes find out more about who and where the commodity
was made. This then allows me a better understanding of the “social relations”
related to that commodity. In Marx’s time, my guess is that this information was more difficult
to come by and so made the “social relations” within the commodity more difficult to
not only understand, but even to notice.
Hans: You are too modest with your requirements of social involvement. Knowing who and where the commodities
are made is simply not enough. We all know who is delivering our electricity, it is Rocky Mountains Power
for 80 percent of Utahns. It is also known where this electricity was generated: about 90 percent from coal fired
power plants. We know that the greenhouse gasses from these plants destroy our climate, yet you do not see much
hurry in switching to renewable energy, or even promoting energy conservation. Instead, lots of foot-dragging and
evasiveness. Something is wrong with the social relations governing production.
Computer information technology has made a difference in one branch of production: the free software movement.
This is a fertile network of direct co-operation of consumers and producers of the software. Other paradigms
are possible than private production for profit.
Next Message by MichaelM is [152].
Question 234 is 213 in 2004fa, 209 in 2005fa, 229 in 2007SP, 241 in 2008SP, 239 in
2008fa, and 252 in 2009fa:
Question 234 If the commodity, empirically, is not mysterious, but its scientific analysis
says that it is mysterious, doesn’t this mean that the scientific analysis is wrong?
[114] Ryan: graded A Another etymological look at things. In saying that the scientific
analysis is wrong, one would make the same error that Marx attributes to most other political
economists, namely, ignoring the underlying social relationships that are at the core of the
economy. Just like the example from [2004fa:108] with the boy and the question whether or
not he had ADHD. Empirical evidence cannot capture the same broad scope of issues that
the scientific analysis is able to. The scientific is not wrong, it is more accurate by taking
more into account than the empirical analysis.
I take some issue with the translation of the German term ‘Geheimnis’ as ‘Mysterious’.
Although ‘mystery’ implies that this ‘Geheimnis’ is difficult to understand and must be
investigated to be discovered, it only partly carries the full meaning of the German term.
A ‘Geheimnis’ is literally, as it is translated by Moore-Aveling, Fowkes, and in the French,
a secret. It is something that is explicitly ‘Geheim gehalten’ or ‘kept secret’. Although I
can see why the emphasis would be placed on the mystery of it all, and thus the need for a
deeper sort of analysis in order to fully comprehend it, I feel it loses the implication that there
98 2007fa Econ 5080 U of Utah
is a pernicious nature to the fetish like character of commodities. It wrongly displaces our
perspective on how we relate with one another in the economy and must keep its ‘Geheimnis’
in order to maintain this control. Should the secret get out, commodities would lose their
fetish-like character.
Message [114] referenced by [2009fa:523]. Next Message by Ryan is [279].
Question 239 is 191 in 2003fa, 218 in 2004fa, 214 in 2005fa, and 234 in 2007SP:
Question 239 In what respects is, according to Keynes, individual behavior irrational?
[104] Walmart: Irrational behavior in the time of troubles. Irrationality of human behavior
can be seen in producers’ response to markets facing the problem of falling demand.
There are many instances throughout our modern history which show that when demand for
a commodity falls, the firm increases output! This not only increases the speed at which
the price of that commodity will fall, but also tells us there is no rational effort to control
the market, free or not. Between all the producers, prices should be manually increased and
inventories shrunk. This may seem like it’s advocating monopoly, but a “cartel” or a union
over an industry will minimize the need for the inevitable government intervention, especially
when it concerns a “sensitive” group. Farmers for decades have been paid by the U.S.
government “not to farm”. Ignorance amongst too many small independent producers gives
us the simplest view of irrational behavior in the market.
Hans: Interesting take on this question. But you may have a point. When labor is cheap, the workers work more
in order to make up for it. They cannot remove their commodity from the market even if it is underpriced, because
they need to live. Here the irrational behavior is forced on them.
Next Message by Walmart is [262].
[111] RemyClaudette: spinning like a toy top. I thought this question though simply
asked was one of the most interesting. The class is about Marx but the question bridges the
theories of one other giants of economics. Keynes is not classical, he is his own school of
thought just like Marx. Just like Marx built a school of thought reacting to the de-humanizing
aspects of Capitalism, Keynes spun an entire school of thought centering around the apparent
breakdown of Capitalism- The Great Depression.
Both Marx and Keynes did not see Capitalism at its best. Marx saw wage slaves and
children dying in the streets. He reacted with compassionate anger. At times when reading
Capital one can almost hear his voice booming louder and louder in righteous indignation.
He saw the only solution as eventual revolution. Marx believed that no rational individual
once one really understood Capitalism could subscribe to it.
Keynes saw breadlines and starvation as well. His reaction, however, seems more subdued.
Though he would revolutionize economics, Keynes was not seeking a revolution as a
solution. Keynes was looking for a defribullator, to shock the system back into functionality.
In admitting the system was broken Keynes opened the door to challenge one of classical
economics principle assumptions. One of the supports of classical dichotomy is that people
act rationally. Rational meaning reasonably or with decent judgment. I do not flush my
money down the toilet and expect it to come flying back at me. Rational, unfortunately, does
not always mean logically or in my best interest. It is at this point the system breaks.

U of Utah Econ 5080 2007fa 99
Most economist regardless of their school of thought can acknowledge our economy functions
in a circular fashion. My spending becomes your earnings and in turn your earnings
become my spending. The system spins round and round like a toy top. For reasons we do
not always understand the top occasionally loses momentum slows to stop and falls on the
floor. Usually the top does not just crash to the floor, we can feel it losing speed. To carry
the metaphor as the top loses speed one is earning less and less and rational individuals as
they earn less and less hoard more and more to carry themselves through the lean times.
Sadly this is a Chinese-finger trap. The more one saves, the less one spends, the less
everyone else earns the more they save and they cycle continues like water washing down a
drain until there is nothing left and the system stagnates. Saving, which all respects appears
to be a rational choice is not in mine or societies best interest. Liquidity is the grease that
keeps the system moving. Even though saving is rational my rational choice helps breaks
the system which is not in my best interest.
Keynes also carries this idea over into his theory of “price stickiness”. We have to remember
that Keynes lived through the Great Depression. The concepts of inflation and deflation
were ever present. Keynes sensibly reasoned that it is easier for prices to go up, to inflate
than in it is to go down or deflate. None of us complains when our wages increases, each of
us wants to see a higher bottom line. However none or very few us want to see our paychecks
shrink. We will resist deflation even it means a return to market equilibrium and the same or
a higher purchasing power. It is rational to want a higher number on our paychecks, it is not
always in our best interest.
A society cannot function in a hyper inflation economy it is too volatile. There is a chain
of producers and suppliers in our country. There are people who produce cotton to sell to
the fabric factory which sells shirts to the retail clothing outlet ( a gross over simplification
I understand but one gets the idea). Said retail clothing outlet has competitors. When prices
start to run-away and escalate out of control, no one wants to be the first to cut prices. Every
part of the chain has another part of the chain to pay, if one cuts prices profit diminishes or
disappears.
We live in a profit seeking society, no one wants to realize diminishing profits or disappearing
it is not rational. Even given that price cutting would lead to others cutting their
prices and an eventual downward price adjustment which is in my best interest no one wants
to be the first. Losing money is not rational. It is another scenario where behaving rationally
is not in my best interest.
Keynes is splitting hairs in a sense but he is saying that even though we behave rationally
or rationality is not always in our best interests. Basically our behaving rationally is
not rational. He is opening the door for challenging a basic tenant of classical economics.
Admitting that the system can break and allowing that classical assumptions do not always
hold true is a large step. And it is one step closer to Marx.
Next Message by RemyClaudette is [478].
Exam Question 241 is 184 in 2002fa, 193 in 2003fa, 220 in 2004fa, 236 in 2007SP, 248
in 2008SP, 246 in 2008fa, 287 in 2010fa, and 270 in 2012fa:
100 2007fa Econ 5080 U of Utah
Exam Question 241 Why does Marx explore the mysterious character of the commodity,
which is bland and abstract, instead of picking up one of the many striking outwardly mysterious
phenomena of capitalism?
[120] JoshS: Bland and Abstract. From my short time reading Karl Marx, homework
submissions, and Hans’s annotations to Das Kapital, I’ve come to the conclusion that Marx
is not only concerned with the mysterious phenomena of capitalism, but seeks to explain
all aspects of capitalism. If Marx were to only discuss and expound on the exciting and
titillating aspects of capital, his book would be half as long and I don’t think it would be the
work that it is. We have this class and discussion based on Marx and his thorough discussion
of all aspets of capital.
When a child wants to become a musician and play wonderfull music, that child must
first learn all the basics of tempo, rythm, note reading, etc. So it is with Marx. He seeks to
explain everything about the nature of capitalism to have a full, precise knowledge of it.
Hans: Such a general answer is always true. In the given situation Marx has more specific reasons to go back to
the basics.
Next Message by JoshS is [122].
Question 242 is 123 in 1995WI, 134 in 1996sp, 137 in 1997ut, 164 in 2000fa, 186 in
2002fa, 194 in 2003fa, 221 in 2004fa, 249 in 2008SP, 247 in 2008fa, 260 in 2011fa, and
272 in 2012fa:
Question 242 Whether the commodity is “mysterious” or not is a value judgment which
can neither be proved nor disproved. Do you agree? What would Marx say about this?
[110] Dyoung: graded B– The mystery of commodities: why are they mysterious? I
agree, but mostly because I am an antagonist. In many aspects commodities could be considered
to have a mysterious component that adds to their value. I don’t think this goes for
all commodities. There are also many commodities that seem to be free of mystery, it simply
takes x amount of labor and other costs to create the commodity, so therefore the commodity
costs y. There are things that in some way change commodities so they have more or
less value, besides supply and demand, things that are created socially, for example brand
name items cost more simply because of the brand name. . . this is what I feel creates the
mystery. I don’t agree that all commodities have this “mystery” component and that’s why
I feel that it would be a value judgement, which if it is then a value judgement each person
is deciding based on their own view of each commodity, and it becomes impossible to say
which commodities have this “mystery” component and which do not.
Marx would disagree with this statement. To him, it was very important to understand
why they are mysterious. And I think his interpretation of the mystery factor is that each
commodity contains the development of capital and money, yet each commodity is also
influenced externally by the characters of capital and money. Each is in the commodity
intrinsically, yet each also can act on the commodity to further determine the commodity’s
value.
Hans: Even if the value of a commodity is not propped up in your mind by a marketing campaign, alone the fact
that commodities can be exchanged for each other, or bought and sold, is mysterious. The commodities are active
in these transactions because the prices are not set by the commodity owners, but seem to reside in the commodities
themselves. This is basically things telling people what to do, not the other way around.

U of Utah Econ 5080 2007fa 101
Message [110] referenced by [113]. Next Message by Dyoung is [184].
[113] Hans: According to the Labor Theory of Value, Costs are Smaller than Value.
Dyoung [110] gives the following description of the process by which commodities are
valued: “it simply takes x amount of labor and other costs to create the commodity, so
therefore the commodity costs y.” This suggests that the value of a commodity is determined
by its cost (with labor costs being a large part of this cost). This is not the same as Marx’s
labor theory of value! According to Marx’s theory, workers add more value to the product
than they get in wages. I.e., the labor costs systematically underestimate the value created
by direct labor. I tried to say this already in [45]. This is one of the most basic things you
need to understand about Marx’s theory (or any classical labor theory of value, for instance
Ricardo). Don’t expect a good grade if you don’t understand this.
Message [113] referenced by [570], [609], and [2008SP:370]. Next Message by Hans is [125].
Question 243 is 175 in 2001fa, 190 in 2002fa, 196 in 2003fa, 223 in 2004fa, 218 in
2005fa, 238 in 2007SP, 248 in 2008fa, 290 in 2010fa, 263 in 2011fa, and 275 in 2012fa:
Question 243 What is an “essential” property of something? What can be said in support
of Marx’s claim that labor is “essentially” expenditure of human brain, nerves, muscles,
sense organs, etc.?
[108] Harmon: Cake batter. An essential property of something is what needs to go into
that product to make it work, or what distinguishes it from other products. For instance, an
essential property of cake is flour, i.e. without adding flour to cake batter the end product
would not be cake. Much the same, without labor commodities could not exist. It goes
without saying that commodities are not limited to just one essential property. In support of
Marx’s claim that labor is essentially the expenditure of human brain, nerves, muscles, etc.,
each laborer plays a vital role in the production of a commodity. One laborer’s function is
not considered greater than another’s. Again I will use the cake example: when you bake a
cake you need flour and eggs in order for it to work, but neither the egg, nor the flour plays
a greater role than the other. As in the production of commodities, the labor of the human
brain is no more important than that of muscles or nerves.
Hans: You are making a good point with your last sentence. Thinking cannot produce things by itself. Production
can only be done by physical interaction with the world, which requires effort. Production is the taming of natural
forces in order to make them beneficial for humans. It is amazing that it is possible at all; but the price we have
to pay for it is that we have to work on it. Without this effort, this expenditure of our bodies as physical force,
production would not be able to produce useful things. This is why Marx writes here “essentially.”
Just as breads and cakes are essentially flour (they would not be breads or cakes without flour), so production
is essentially the expenditure of human labor-power.
Message [108] referenced by [2012fa:630]. Next Message by Harmon is [136].
Question 248 is 228 in 2004fa:
Question 248 The armchair socialist (Kathedersozialist) Adolf Wagner wrote that Marx
“finds the common social substance of exchange-value . . . in labour.” Marx, in his Notes
about Wagner, [mecw24]534:1, strenuously objects. What, if anything, is wrong with Wagner’s
formulation?
[124] Fred: Value is a Complex Thing. I liked what Marcellus said in [103]. According
to Marx, value is created by “the ‘value-forming substance’, the labour, contained in the
102 2007fa Econ 5080 U of Utah
article.” (Marx, 129). This value at the exchange level is not representative of the whole
picture of the source of value. Wagner is failing to see the dual nature of Value that Marx
pointed out with Use-Value and Exchange Value, two different things that cannot be derived
one from the other.
The value of the product at the exchange level is from an “abstract labor”. I admit I have
had a hard time wrapping my head around these ideas, but it seems that Marx is basically
saying that Value is not a straight forward representation at the market. Value is a complex
thing. When a product rises to the level of exchange, the value it takes on is from an
“abstract labor”. This must occur because the market is “equalizing” the products’ Value.
The problem is that the Value in the product represents the labor used to produce it. But
this value is not returned to labor. This is what Marx is objecting to. If as Wagner says the
common social substance of exchange-value is found in labor, he is not seeing that there is
more to value than just exchange, or the sources of value. Use Value and Exchange Value
contain different labor, and only this abstract labor is manifest at the market, so there is a
disparity. This disparity in value is not returned to the laborer, but accumlates to the few
(owners of production) and away from the many (labor). If what Wagner is saying were
true, the manifestation of value at market would be reflected back to labor, and there would
be no disparity as labor would be completely part of the exchange process at market. There
would be no exploitation of labor. Clearly, Marx disagrees with this, strenuously.
Hans: You are arguing, like Scott [39], that commodities are not traded at their values because the workers do not
get the full equivalent of the value they produce. But these two things are not necessarily connected. If the worker
does not get a full equivalent, this simply means that the cost to the capitalist is lower than the value, i.e., he can
sell the commodity at a profit.
Marx’s complaint with Wagner was about a much more subtle point: labor does not determine exchange-value
but labor determines value, and exchange-value is the form in which value makes itself felt on the surface of the
economy. Marx objected that Wagner went from labor directly to exchange-value. I do not understand why Marx
was making such a fuss about this.
Message [124] referenced by [286]. Next Message by Fred is [164].
Question 256 is 134 in 1995WI, 111 in 1995ut, 144 in 1996sp, 146 in 1996ut, 159 in
1998WI, 166 in 1999SP, 187 in 2001fa, 201 in 2002fa, 208 in 2003fa, 236 in 2004fa,
231 in 2005fa, 251 in 2007SP, 261 in 2008fa, 275 in 2009fa, 303 in 2010fa, and 277 in
2011fa:
Question 256 How does Marx’s use of the term “fetishism” compare with its modern dictionary
definition?
[112] Deborah: Unquestioning Reverence or Disposable? Fetish: an object regarded
with awe as being the embodiment or habitation of a potent spirit or as having magical
potency; any object, idea, etc, eliciting unquestioning reverence, respect, or devotion; a
fixation. – dictionary.com
Fetishism: excessive attachment or regard; blind devotion. – dictionary.com
“There the products of the human brain appear as autonomous figures endowed with a life
of their own, which enter into relations both with each other and with the human race. So
it is in the world of commodities with the products of men’s hands. I call this the fetishism

U of Utah Econ 5080 2007fa 103
which attaches itself to the products of labour as soon as they are produced as commodities,
and is therefore inseparable from the production of commodities.” -Marx (pg 165)
There are some similarities in the way that Marx uses fetishism and its modern dictionary
definition. Marx notes that commodities are endowed with a life of their own, which enter
into the relations both with each other and with the human race. This corresponds with the
dictionary definition that objects are regarded as being the embodiment of a potent spirit
or having a magical potency. Thinking of commodities as having a life of their own is
equivalent with endowing and object with a spirit.
Regarding the unquestioning reverence, respect or devotion, or a sense of fixation, I am
not convinced that Marx’s use of the word coincides with this part of the definition. There is
no indication that these commodities/objects are raised to a level in which they are revered or
respected. While there may be a driven in our culture (especially in regards to consumerism)
to acquire commodities, I do not think that we raise the commodities up to a level beyond
what they really are – objects.
As is pointed out in the Annotations, there are exceptions to this idea, in that there are
minority sections of the community in which material possessions may become so important
because they are an individual’s link to society and give those individuals a sense of power
to own these objects. For the most part, while as a society we are driven to consume more,
we do not have an unquestioning reverence for these commodities. In fact, the consumerism
aspect of our society almost has the opposite effect in that there is no devotion or reverence
for any specific commodity – we have a disposable culture in which if something is broken
do not fix it, just get a new one.
Hans: Your last paragraph has a very good observation: the disposable culture means that the objects themselves
are not really important. Perhaps one can say that what matters is the demonstrated ability to afford these objects.
Next Message by Deborah is [193].
[116] BHales: Fetishism. The modern definition is:
An inanimate object worshiped for its supposed magical powers or because it is considered
to be inhabited by a spirit. A course of action to which one has an excessive and
irrational commitment.
As mentioned by Bronco in [2007SP:168], fetishism in modern terms is in most cases
directed towards a man-made product. He gives the example of the allure of owning a BMW.
Dani adds in [2007SP:189] that Marx’s reference to fetishism attaching social properties to
commodities that they don’t naturally possess. Consumers believe these characteristics give
them power or a certain status in society. Commodity fetishism is the exploitation that
occurs to provide consumers with the many commodities we possess. The exploitation in
other countries in order for consumers to obtain cheap commodities (i.e. gasoline, Walmart
goods) is what Marx meant by Commodity Fetishism.
Hans: This exploitation is not driven by the consumers. Consumer demand is held up as a convenient excuse for
the predatory practices of our businesses abroad, practices about which they try to leave the consumers in the dark.
Message [116] referenced by [122]. Next Message by BHales is [177].
[122] JoshS: Different Meanings of Fetishism. There are a couple of modern definitions
of the term fetishism. BHales [116] defines it as having magical powers, and other definitions
connotate a sexual aspect to the term. If we strip away (pun not intended) the sexual aspect,
104 2007fa Econ 5080 U of Utah
I derive a modern definition as an excessive attachment or regard for an object. Marx on the
other hand is using the term to mean the commodities having a life of their own. Discussing
this topic with a friend we formulated an example of Marx’s definition. When you go to
Walmart and see an ipod, you see an ipod and not the labor that went into producing that
ipod. To you the ipod magically appeared in the Walmart store. The ipod has taken on a life
of its own. It magically appears in Walmart stores for us to consume.
Hans: This reward in a situation where you lack control is manipulation.
Next Message by JoshS is [241].
[125] Hans: Consumerism is a Red Herring. According to www.answers.com/topic/redherring,
a red herring is “something that draws attention away from the central issue.” The
problem in this country is not the greed of the consumers. Rather the problem is the institutionalized
greed of the big corporations, the systematic exploitation in the work place. For a
minority, this exploitation makes it incredibly easy to get rich. And the masses, who work
all day and then discover that their paycheck only entitles them to a fraction of the wealth
they have produced, go to Walmart in order to get back what was robbed from them. Some
of them, who try to get out of poverty by an act of responsibility, find themselves fighting
in Iraq and other places. They think they are defending their right to go to the shopping
mall, but they are really letting themselves be butchered for the exorbitant profits of the big
corporations.
There is something profoundly wrong with such a social arrangement. And Marx has
a profound critique of it. He says that we live in a de-humanized society in which things
rule over people. Let me say it again: the undue fascination of people with consumer goods
is only a minor aspect of it. The more important aspect is the senseless profit motive in
production. We live in a society which sacrifices even our environment, the future of our
children and grandchildren, on the altar of profits. A deeper disconnect between use-value
and exchange-value is barely conceivable.
Let me say it a third time: the problem is not your fascination with your car or plasma TV
or computer. And the remedy is not to be a more responsible consumer. This situation cannot
be remedied by individuals eliminating flaws in their own behavior. It requires a change in
the social structures we live in. Almost nobody says that this is even an option, but it is. It
requires organizing, resisting, fighting against those who keep this system working. This is
the only way how we can defeat the fetish-like character of commodities and regain control
over our own social relations.
Message [125] referenced by [118] and [203]. Next Message by Hans is [128].
Question 257 is 135 in 1995WI, 112 in 1995ut, 145 in 1996sp, 152 in 1997WI, 159 in
1997sp, 152 in 1997ut, 202 in 2002fa, 209 in 2003fa, 237 in 2004fa, 232 in 2005fa, 264
in 2008SP, 278 in 2011fa, and 291 in 2012fa:
Question 257 Modern advertising specialists know that consumers often buy a certain
product not because they need this particular article, but because they are trying to compensate
for other unmet needs. These compensatory demands are important for the economy
because they are insatiable. Advertising addresses them whenever it suggests that social
recognition, happiness, etc. are connected with the possession of a certain object.

U of Utah Econ 5080 2007fa 105
Is this what Marx meant by the “fetish-like character of the commodity,” or does it contradict
it, or would Marx’s theory give rise to amendments of this theory?
[118] Trashkicker: Old School Fetish-like Characters. The parallel between advertising
towards compensatory demands and the “fetish-like character of the commodity” is
headed in the right direction. Although Marx may not have known what he was essentially
predicting by his “fetishism” theory, he certainly explained it well. This must mean that
people in the nineteenth century were worried about society’s perception of them as we are
today.
Let’s imagine that I took a time machine back to 1867 when Volume I was first published,
and purchased a pair of women’s boots that took the shoemaker 15 hours to hand-craft. After
hopping back into the machine with my brand new shoes, I headed back to 2007. After I
get home, I am flipping through advertisements in the newspaper. I see two different pairs
of boots: one pair, almost identical to mine, is found in a Walmart ad; the other is a pair
of boots from Nordstrom’s with a caption that says “as seen on Famous Actress”. I am
then looking through my Fashion Magazine and see the Nordstrom’s boots being worn by
Famous Actress on a date with her new, and also famous boyfriend, Super Actor. Then,
when I get to work the next day, my rival co-worker happens to be wearing the Nordstrom’s.
Considering I lied about the time machine and told everyone that my boots were a family
heirloom passed generation to generation and somehow managed to stay unworn until
they happened upon my feet, do you think they would think less of my boots than my coworker’s?
Would it make a difference that they’re an antique because they look so much like
the Walmart pair?
Which pair of shoes would be envied more by society? My antique, hand-crafted boots
made over 100 years ago? Or the $200 pair of boots that are advertised as the new and cool
shoes to wear?
Does the true value lie in the appearance of value of the commodity? Are the Nordstrom’s
shoes better than just any old piece of leather sewn to a rubber sole because Famous Actress
wore them?
Hans: What I said in [125] about consumerism also applies to the celebrity-appeal or other symbolism associated
with commodities: they are red herrings. The concern whether your co-workers will envy you for your boots is
silly entertainment compared with the real problems created by the fetish-like character of our economy, see my
[128].
Next Message by Trashkicker is [132].
Question 258 is 146 in 1996sp, 263 in 2008fa, and 305 in 2010fa:
Question 258 Mark Blaug writes in p. 268:2: “Commodity ‘fetishism’ refers to the tendency
to reify commodities, to treat what are in fact social relations between men as if they
were relations between things.” Right or wrong?
[123] Tim: I agree with Homer’s comment from [1996sp:221] and would like to add that
currency also perpetuates reification of commodities because it can “define, symbolize and
manipulate relationships between things that people make in abstraction from the social and
technical relations involved,” see
106 2007fa Econ 5080 U of Utah
http://en.wikipedia.org/wiki/Relations of production
Hans: As in [72] you are not explicit enough. You should have briefly summarized those aspects in [1996sp:221]
you agree with. We are discussing profound and subtle issues, therefore it is necessary to be very specific. Do not
assume your discussion partner knows what you mean.
Homer argued that reification comes from the contradiction that on a deeper level people are very dependent
on each other, due to the division of labor, but in their market transactions they act as if they were independent and
autonomous. You are adding that the monetary character of those surface transactions also add to the reification.
You have a point.
Money is a unifying force in the atomistic market transactions, which represents the inner connection between
all market participants. This inner connections enters their practical activities as the properties of a thing, rather
than a social relation between people. The reification involved in the use of money is therefore very much related
to Homer’s explanation of reification.
Message [123] referenced by [128], [202], [2008fa:287], and [2008fa:299]. Next Message by Tim is [199].
[128] Hans: It’s not just a matter of attitude. Mark Blaug is famous, but I disagree with
his characterization of commodity fetishism. In the section about the fetish-like character
of the commodity, Marx formulates his deepest critique of capitalism. The bottom of it all
is not just that we reify our social relations, i.e., consider them or treat them as relations
between things, or that our minds are distorted as Homer said in [1996sp:221]. The bottom
is that our relations in fact go through things and therefore take on a seemingly objective
necessity and rigidity which they should not have.
Apologies for harping again on the environmental crisis, but it makes the issues frighteningly
clear. At the present time we are in a situation where our economic activity in fact
runs up against objective constraints, namely, the finite capacity of planet earth to absorb
our pollution. Urgent and effective action is needed. We have the technology and the resources
to switch away from fossil fuels. But we are hardly doing anything, we are dragging
our feet. Why? Because the profitability of certain entrenched corporations is considered
a more important constraint than the real abyss we are facing. Money forces us to abstract
from that what really matters, as Tim says in [123]. The objectivity of our monetized social
relations is the prison preventing us from doing the actions “outside the box” necessary to
pass on a livable planet to future generations.
Message [128] referenced by [118], [2008fa:287], and [2008fa:299]. Next Message by Hans is [155].
[194] Deborah: Fetishism is the endowment of a good with a spirit or its own life force.
Treating social relations between men as if they are relations between things is a fetishism.
Marx states as much when he describes the fetishism of commodity producers: “There the
products of the human brain seem to be independent beings endowed with a life of their own,
which enter into relations with each other and with the human race. So it is in the realm of
commodities with the products of people’s hands.”
Men impose their views that the commodities interact with each other even when they
know it is their labor that has created the commodity (in combination with nature). As
clarified in the Annotations, “Capitalistic social relations can only maintain themselves if
most of the people most of the time ‘forget,’ in their practical actions, that the powers of the
things which they are trying to advantage of originate in their own activity.” Marx refers to
fetishism as a “false consciousness:” “This I call the fetishism, which sticks to the products
of labor as soon as they are produced as commodities, and which is therefore inseparable
from the production of commodities.”

U of Utah Econ 5080 2007fa 107
Hans: Your second sentence was, both in the in-class answer and the resubmission: Treating social relations
between things as if they are relations between men is a fetishism. I assume that this was a writing error and you
agree with Blaug, therefore I changed it.
Next Message by Deborah is [399].
[202] Tim: Oblivion. Marx would disagree with Blaug because in Marx’s eyes commodity
fetishism is the fact that a pearl or a diamond worn as jewelry that have no use-values but
have high exchange-values have a greater demand in today’s society than a shovel or an axe.
Hans: This is not at all what commodity fetishism is about. In Marx’s theory, pearls and diamonds do have usevalues,
and they have higher prices than shovels and axes because more labor is needed to produce them.
Your in-class answer was better. Exploitation on the workplace has to do with commodity fetishism, although
it is not identical with it. Apparently your subject line “oblivion” was inspired by the in-class answer, but you must
have decided in the last minute to change your answer.
And what happened to the subtle insights you yourself had in [123] about this question? Did you forget all this
again?
Next Message by Tim is [333].
[203] Ozz: graded A– Wrong. Mark Blaug’s statement does not explain commodity
fetishism. Marx explains that the roots of commodity fetishism are found in the mysterious
“dissonance between the commodity form of the product on the surface and the underlying
social relations in the core which these surface forms regulate.” This fetish;-like character
of a commodity is the character that draws us to obsess about it. This is a lot deeper than
just the obsession of materialistic things, but the obsession for profits. This materialism or
consumerism is just a red herring for the deeper fixation.
Commodity fetishism stems from the division of labor and the exchange agents of the
commodity. Due to this division the laborers receive less than what value they produced
in the commodity. This creates a profit for the capitalists who did nothing to add value to
the commodity. This profit that is obtained leads to the non-stop fixation of seeking such
profits from these commodities, thus producing more and subjecting the laborer to produce
with out receiving what is deserved. This profit is what creates commodity fetishism and in
[125] Hans explains why this is such a great problem. He elaborates on how this commodity
fetishism is leading to the eventual destruction of our own earth because of the profits that
are gained from a few of the large corporations. This real life example shows the reality of
this commodity fetishism and that it stems from profits gained from commodities produced
from an underpaid labor force.
Hans: Mark Blaug’s quote had nothing to do with consumerism. Putting the blame on the capitalist’s obsession
for profits is better than consumerism, but it still does not quite hit the mark. In Marx’s view, profits are a social
imperative, not an individual obsession. The scary thing about the fetish-like character of commodities is that social
relations have their own life which is stronger than the intentions of individuals. Our failure to react to the threat of
global warming shows how powerful those social imperatives and constraints are.
Message [203] referenced by [2008fa:299]. Next Message by Ozz is [286].
[205] Ben: graded A– Right. In a capitalist society we try to “keep up with the Joneses”
and are so worried about getting what we want besides what we need. So our wants become
needs. Blaug was right but he didn’t take it far enough. I agree with Homer [1996sp:221] in
the idea about the mason who makes a dozen bricks for a violin. What he is really doing is
exchanging his labor for the violin maker’s labor. Not just the relation between exchanging
of commodities. As a capitalist society we don’t notice this and our view becomes distorted
108 2007fa Econ 5080 U of Utah
because of our need for wants. This causes the alienation of the labor force and in the end
will cause a separation of wealth which we can see happening in our society right now.
Hans: Your in-class answer said that we compete with each other rather than work together. This clarifies the link
between consumerism and Marx’s main concern, that social relations go through things.
Message [205] referenced by [2008fa:299]. Next Message by Ben is [212].
[227] Dave: This statement is Right. In describing the fetishism of commodities Marx
says that, “There the products of the human brain appear as autonomous figures endowed
with a life of their own, which enter into relations both with each other and with the human
race. Fetishism of commodities takes these commodities and gives them a life of their own.”
The example I like to use is naming one’s car. In naming the car a personality is given to it.
The fetishism is that these commodities take on relationships not only with the human race
but with each other.
Hans: The relations which the commodities have with each other are their exchange relations. They are not based
on people’s attitudes toward the use-values, but on the labor which society invests in them.
Next Message by Dave is [301].
[238] Chris: In my exam answer I answered that Blaug was wrong and that was not
wholly right. In the marketplace people gather to trade their commodities to one another for
other commodities. We view this whole exchange as a relation between this commodity and
that. This is what Blaug was saying about how we reify commodities. What we in fact do
when we gather in the market for trade is indeed a social relation between men, whereas we
trade our expended labors to each other. We, as a people, rely on each other every day for
many aspects of work and are never really alone within the scope of our commodity trading
– but in the end we believe that we alone do our own work and it is only that commodities
that matter in the end. As I said in the exam our society does treat commodities as a “fetish”
in that we are so consumed in the relationships between commodities and ourselves that we
are willing to strip the earth bare so as to get every resource out of the ground. Keep an eye
on the opening of the Northwest Passage to the north and how much the world is clamoring
to get their hands on this new area for resources and you can understand our utter fascination
with commodities.
Next Message by Chris is [332].
[240] Brian: Right. Commodity fethishism does transform the social relationships between
men as if they were relations between things. For example, a man goes to buy an LCD
TV from another man. As the transaction completes, the man buying the TV is not a man to
the man selling it, he is now a buyer and the man selling the TV is now a seller to the man
purchasing the TV. Neither of them are just men anymore, they are now buyers and sellers
of commodities.
Hans: and most of their connection goes through the commodities. On the market they are independent competitors,
while in reality they are in an intricate web of dependency.
Next Message by Brian is [415].
[242] JoshS: Commodity Fetishism. According to Maxist views, Mark Blaug’s statement
is incorrect. Marx states that we treat social relations as if they were relations between men,
but the fact is that social relations are relations between things or commodities. It is men
who improperly assign relations between people.
Hans: You cannot fix Blaug by just turning him upside down. His error is too subtle for this. The thing Blaug fails
to say in this quote is that in our society social relations, which are ultimately relations between people, go through

U of Utah Econ 5080 2007fa 109
things. The price of a thing is a property of this thing. This is fact, not reification. Fetishism is then the belief that
these things have their social properties by nature.
Next Message by JoshS is [653].
[247] Chad: Commodity Fetishism. Correct.
Hans: Did you expect a passing grade for this one-word answer?
First Message by Chad is [245].
[250] Gilmour: graded B– To start off, reification is the practice of giving something more
meaning than it really has. Commodity fetishism gives rise to the thought that commodities
themselves have inherent human-like qualities and form social relations between commodity
and commodity. This is a fallacy, for a non-living thing can not have a personality all its
own. Social relations between commodities seem to rise from the value and importance
people place on them. There can be no relation between humans and commodities, for a
commodity can not reciprocate any setntiment towards a person. This case holds strong that
there can be no social relation between commodities. However there is relation between
commodities in the sense that commodities can be similar to others and used for similar
purposes.
Hans: The definition of reification is: to consider something as a material object which isn’t one, here to consider
the social attributes of the commodity as its natural attributes.
You are right, commodities cannot have feelings. But this does not prevent social relations between humans
from going through the commodities.
Next Message by Gilmour is [336].
[261] Bosox: Right. It is easier to look at a commodity as a social relation as a thing
instead of between men. As one thinks of it as a thing then exchange-value is easier to
negotiate versus as thinking of it as between men. Once you place the commodity between
men then one starts to be more considerate one with each other and knowing that time was
spent in creating this commodity whereas if it is a thing it is disposable and that time and
labor are no longer an issue. Commodities need to be treated as a social relation between
man, with this there would be more of a thought process of cause and effect.
Hans: Good vision of a non-fetishist society.
Next Message by Bosox is [439].
[265] Ashley: Commodity As A Living Thing. Wrong. The fact here is that yes, we
treat commodities as if they were living things, however, it is not a question subjective. It
is objective. Commodities have some sort of control over society where the social relations
involved is not a matter of attitude or choice. In capitalism, commodities have so much
power that it’s a matter of fact what will happen. Society really doesn’t have a choice
because certain commodities are considered more important and more powerful than others
as if they were human beings. Society is so obsessed with commodities that they are giving
them human characteristics. In conclusion, I am agreeing that commodity fetishism is partly
social relation between things, but it is far more than that. We have social relations with
commodities that gives them control over our society.
Hans: The power of these commodities does not come from it that individuals find them too important. It comes
from the fact that individual relate to each other through commodities and forget over this what society really
consists of.
Next Message by Ashley is [266].
[276] Caroline: Not a tendency. What I have deduced from the responses of this question
in the installment is that it is not more of a tendency to reify commodities, but more like an
110 2007fa Econ 5080 U of Utah
unintended effect. Social relations between people undergo things (as said in the installment)
and “therefore take on a seemingly objective necessity.”
In the annotations, on page 169, “people feel how much power things have, and they want
to retrieve some of this power for themselves by owning these things,” and this statement
reinforces that people’s social relations do go through things, which lead them to want to
reify commodities.
I suppose having power has evolved in social relations as a coveted asset. These are the
‘things’ that people go through. This leads people to believe that by garnering as much of the
objects or commodities that give off the impression of power, then power itself will basically
be emanating from that individual. Therefore, Blaug is incorrect in his comment.
Hans: You say, and I agree, that people have a special attitude towards commodities (they covet things too much)
because their social relations go through these things, while Blaug seems to argue that people’s attitude towards the
commodities causes social relations to go through things.
Next Message by Caroline is [400].
[283] Jessica: keeping up with the Jones. Right. Commodity fetishism is the social
relation of people to commodities. In capitalist cultures, there is a prevalence of the notion
that having more things which are expensive is the most important thing in life, this is a
major part of fetishism. Marx argues that commodity fetishism results in people not being
in control of the economic system they live in. He goes further to state it is the relationships
between people, which then changes as society begins to value goods instead of labor. Marx
surpasses Blaug by showing that eventually the relationships are between things entirely and
people are not a part of the equation. I believe that Mark Blaug was right but also that he
doesn’t go far enough.
According to Homer [1996sp:221], it isn’t just this relationship moving from valuing
labor to valuing commodities, it is more than that. It is of people not even thinking of
labor, they buy a violin and forget the labor that went into making it. Marx’s fetishism
goes farther than Mark Blaug because our relationships no longer go through people but
through things, things to things not men to things. The commodities are then locked into a
certain pattern, they control the market instead of relationships and real people controlling
the market. People in a capitalist system then lose our perception and become distorted,
driven not by needs but by the desire for an abundance of things.
This distortion causes us to value the commodity to be less than the laborer, leading to
the exploitation of the working class. This is a central theme to Marx, that this fetishism is a
huge problem because it devalues the laborers.
Hans: Very good, just one correction. The origin of fetishism, according to Marx, is not the capitalist culture of
consumerism, but the fact that in a commodity society the social relations between people are turned into market
relations which people do not control.
The main flaw in Blaug’s formulation is that he makes it sound as if fetishism was based on the wrong individual
attitudes and behavior. Marx says that fetishism is based on an unfortunate structure of social relations.
Next Message by Jessica is [284].
[295] Tomb: Commodity fetishism. Marx would definitely disagree with the statement.
Commodities are not a product of the social relationships between men. They are the product
of relations between things. A commodity can ultimately be broken down into the abstract
labor that is used in making the product. The material relations comes from the person but

U of Utah Econ 5080 2007fa 111
the social relations come from the thing itself, which is created by abstract labor. Marx states
“this fetish-like character of the world of commodities has its origin in the peculiar social
character of the labor which produces them.”
Hans: Blaug is no dummy and you shouldn’t expect him to say something obviously wrong. Only certain nuances
in his characterization are wrong. Your answer points to those wrong nuances, but in a way which makes you sound
wrong and him right.
Of course commodities are produced by men and women who stand in social relations with each other. You
sound like a fool if you deny that. But the thing which Blaug did not emphasize enough is that those social relations
go through the commodities. That is not an attitude but an objective fact in a commodity society. So you do have a
correct point, but you overstated your point and if that would have been a debate you would have lost the argument.
You are also right that Marx ties the fetish-like character of the commodity to the double character of labor. But
what you say about abstract labor shows that you misunderstand the concept. The commodity as a thing is not the
product of abstract labor but of concrete labor. Only the value of the commodity is produced by abstract labor.
Next Message by Tomb is [319].
Question 263 is 139 in 1995WI, 116 in 1995ut, 156 in 1997WI, 163 in 1997sp, 165 in
1998WI, 172 in 1999SP, 243 in 2004fa, and 269 in 2008SP:
Question 263 Give everyday examples of “material relations of persons” and “social relations
of things.”
[100] Dave: Squeaks and flags. There are many examples of material relations of persons
and social relations of things. A material relation of a person can be found in the relation
they have with their car. A lot of us have cars that we give names to. For example, the first
car that I owned was a red Geo Metro. The car was a piece of crap, but it was my car and it
had a name. I named it Squeaks. It was a car and I gave it a name. I personified it. I talked
to it like it was real. A living thing. And when I sold it, somehow, and finally, I was sad and
I missed it. I think this is an example of a material relations of persons. Squeaks was just a
car. It was nothing more than material that was put together. And yet I thought it had some
sort of personality, a living thing.
A social relation of a thing can be found, I think, in the flags of nations. For example, the
American flag has a very strong social meaning to our country. Its represents our past, our
present and our future in a way. And yet it is only fabric of different colors woven together.
It is nothing more than material. Yet our country identifies with it. We put our hand over our
hearts and pledge our allegiance to it.
Now, in no way do I think that naming ones cars is foolish and wrong. Nor, do I think that
our flag, or any other nations’ flag, is unimportant and not a serious thing to consider. But I
think that these are good examples of what Marx was saying when he stated, “It is nothing
but the definite social relation between men themselves which assumes here, for them, the
fantastic form of a relation between things.”
Hans: Marx was not talking about flags. He did not mean social relations between people and things, but social
relations between things only. For instance, the relation that 20 yards of linen can be exchanged for a coat is a
social relation between things. This is a social relation which does not depend on the people making the exchange
but on the things themselves. The people are here considered “price-takers.”
By the way, the Marx quote this question refers to is:
“To the producers therefore, the social relations between their private labors appear as what
they are, i.e., not as direct social relations of persons during their labor processes themselves,
but rather as material relations of persons and social relations of things.”
112 2007fa Econ 5080 U of Utah
The relation between you and your car is a material relation of persons even if you don’t talk to your car. Society
assigns the car to you as your private property. Your relation to the producers of the car is not a direct relationship
of division of labor between the labor you perform in your job and the labor of the car workers, but it is reduced
to everybody having to respect everybody else’s private property, and to the rules how to transfer private property
between people.
Next Message by Dave is [216].
[121] Brian: Material relations of persons and social relations of things... An everyday
example of material relations of persons would the relationship between the owner of
a manufacturing plant and the employees on the manufacturing floor. The relationship only
exists between the persons because of material mediums, the owner with his funds to pay
salaries and the employees with their input into labor. An everyday example of social relations
of things is the relationship between a buyer and seller. They come together and form
a relationship based solely on the desire to purchase or sell a thing.
Next Message by Brian is [239].
Question 272 is 157 in 1996sp, 163 in 1997WI, 170 in 1997sp, 172 in 1998WI, 179 in
1999SP, 190 in 2000fa, 200 in 2001fa, 214 in 2002fa, 222 in 2003fa, 252 in 2004fa,
267 in 2007SP, 278 in 2008SP, 290 in 2009fa, 318 in 2010fa, 296 in 2011fa, and 309 in
2012fa:
Question 272 Explain Marx’s metaphor that “value does not have it written on its forehead
what it is.” Later in the commodity fetishism section, Marx uses the same metaphor “written
on the forehead” again in a slightly different context. Compare what he says that second
time with what he says here.
[129] Daniel: graded A– Not on the forehead? Then what is it? Marx continues to
use complicated metaphors with multiple meanings. So let’s pick this one apart and try to
understand the differences....
“Value, therefore, does not have it written on its forehead what it is.” This is the first
reference that Marx uses the forehead metaphor with. The first and most obvious analysis
of this statement is that value is not obvious. It does not jump out and show itself but
rather, remains hidden and mysterious behind what Marx calls, “myopic manipulation of
socially empowered objects.” ... people in society are not happy with “the process they are
engaged in.” They feel as if something is missing and Marx points out that they are looking
for answers in the wrong places. He claims that individuals look at their dissatisfactions
as a “chain of riddles” when in actuality they are, as I just stated, due to those ‘socially
empowered objects’. Value, in turn, becomes the first of these riddles that Marx explains.
Individuals should use scientific tools to solve these problems and think beyond the obvious.
He refers to those problems as “hieroglypics.”
Hans: Let me try to say these things a little more clearly. In the above example, taken from 166:2/o, the forehead
sentence simply says that it is not obvious that value comes from labor.
Why is this not obvious? Because the producers do not say: I exchange my product for your product because
I consider your labor in your product to be equal to my labor in my product. Instead, this equalization is the
unintended outcome of a process in which they try to get the better of each other but which usually ends in a draw.
What implications does this non-obviousness have? That they have to use scientific methods to understand their
own social actions.
You properly identified the second occurrence of the forehead metaphor in 173:1/oo, but your explanation that
“forms” refers to value and its magnitude is exactly wrong. Marx complains in this sentence that people do not

U of Utah Econ 5080 2007fa 113
look at the form but only at the substance and magnitude of value. I.e., they are interested to see what aspects of the
production process are regulated by the value relation, but they do not want to know how this regulation is carried
out. This lack of curiosity is especially remarkable since one can see already from the beginning (this is where
Marx uses the forehead metaphor) that this regulation (through market interactions) is one in which the individuals
in society do not master the production process which their market activity regulates:
In the second reference to his forehead metaphor Marx states, “These forms [refers to
value and its magnitude], which have it written on their foreheads that they belong to a
social formation in which the production process has the mastery over men...” and so on.
Here he again refers to the same mataphor but, in a slightly different context. Where he
was refering to value as one of the “hieroglypics” in the first example, he now uses the
metaphor to point to theoretical problems within society. He has established by this point
in his writings, that the political economy has analyzed value and its magnitude (though
somewhat incompletely). He goes on to say that the economy has uncovered the concealed
content within these ‘forms’. However, he changes pace by suggesting that no one has yet
asked the “why?”. Why does this content take place at all? Why is labor expressed in value
and why “the measure of labor by its duration is expressed in the Magnitude of the value of
the product.”
Once again, Marx never ceases to confuse and frustrate the reader. However, if we look
closely at this metaphor I think we can guess at what he is trying to say. The main point
is that Marx is saying the bourgeois political economy has failed to ask those apropriate
questions (why?). The forms of magnitude and value are still written on our foreheads in
the sense that they belong to a social formation that is “nature-imposed” and “self-evident”.
These problems have arisen due to theological and religious influences in individuals that
are as he puts, “nature-imposed.”
Message [129] referenced by [2008SP:215] and [2011fa:597]. Next Message by Daniel is [182].
Question 275 is 217 in 2002fa, 225 in 2003fa, 255 in 2004fa, 250 in 2005fa, 270 in
2007SP, 281 in 2008SP, 321 in 2010fa, 299 in 2011fa, and 312 in 2012fa:
Question 275 Marx criticizes in 166:2/o that even after the discovery of labor as the the
substance of value, this was generally considered an “immutable fact.” What else should
people have thought and done?
[130] SamHouston: Immutable. The view that labor as the source of value is an immutable
fact seems to be derived from the idea that the labor of the commodity is part of
its nature. The labor is something that society can see in the commodity. The nature of the
commodity exhibits the labor that was involved in producing it. The need to see the social
value of labor is not considered because the social value is not exhibited in the physical
properties of the commodity, while the actual labor involved to produce is. A coat could
not be produced without the proper tailoring. The consumer can see the tailor’s work in the
commodity. This gives society the idea that the value is derived from the tailor putting in labor
not from deeper society relations that the commodity carries. It makes sense for society
to look to the physical characteristics of a commodity for value. This is something they can
rationally look to for evidence of value.
What else should people have thought and done? They should have thought “Why does
labor change the value of the commodity?” From the Marxian view, there is something
114 2007fa Econ 5080 U of Utah
in labor that brings value to a commodity. That something is a constant social relation
throughout all labor that has determined that society should allocate a certain amount of
labor to a specified commodity. People should be asking, why does society devote more
labor to this commodity than this other commodity.
Hans: Very good. Even after finding out that labor creates value, they still do not consider this a social property of
the commodity but a natural property, since they see the effects of labor in the use-value of the commodity. Their
error is that the use-value is the result of concrete labor, while the labor which creates value is abstract labor.
Next Message by SamHouston is [219].
Question 277 is 160 in 1996sp, 173 in 1997sp, 165 in 1997ut, 194 in 2000fa, 205 in
2001fa, 219 in 2002fa, 227 in 2003fa, 257 in 2004fa, 252 in 2005fa, 272 in 2007SP, 283
in 2008SP, 281 in 2008fa, 323 in 2010fa, 302 in 2011fa, and 315 in 2012fa:
Question 277 Commodity producers do not exchange their products because they consider
the labor in these products to be equal and therefore believe the fruits of the labor should
be distributed on an equal basis. Marx claims that, on the contrary, the market interactions
induce them to unknowingly equalize their labors. Describe the process by which they
equalize their labors, and the goals which they pursue in this process.
[133] Amy: Equalization of labor. Commodity producers equalize their labors unknowingly
by trying to develop the most efficient way to produce their product. Producers are
focused on generating the greatest amount of product in the least amount of time. The
higher the quantity of output for a given amount of time is better. This forces the producers
to also increase quality because they have to find a better way to produce that commodity.
By increasing the quality of production they are also increasing the quality of the product.
There are only so many ways that one can increase quantity, and once one producer has figured
out the best way to do it, other firms follow with similar techniques. This starts to make
human labor equal, as stated in the text “one-sided interest in quantity leads [commodity
producers] to act in such a way that they give their labor the qualitative character of equal
human labor” (notes about 167:1/o). The goals that the commodity producers are trying to
achieve is greater productivity. They are trying to stay ahead of their competition. By taking
what they know about a production process that is effective and making adjustments to it
they can increase their quantity and quality of their own product, thus making more money
for them.
Hans: It is unclear how this would lead to more money for them. Marx basically says that their efforts to be more
efficient than the other fail since they end up equal. Chapter Twelve will address the question whether and how this
can lead to higher profits.
Message [133] referenced by [286] and [2008SP:344]. Next Message by Amy is [233].
Question 278 is 150 in 1995WI, 127 in 1995ut, 161 in 1996sp, 163 in 1996ut, 174 in
1997sp, 220 in 2002fa, 228 in 2003fa, 258 in 2004fa, 273 in 2007SP, 284 in 2008SP, 282
in 2008fa, 303 in 2011fa, and 317 in 2012fa:
Question 278 Someone says: The law of value cannot hold. We are free people, we do what
we want. We are not forced to price our commodities by their labor content. Explain to this
person, along the lines of the argument Marx uses here, that this myopic attempt to assert
one’s freedom leads to unfreedom.

U of Utah Econ 5080 2007fa 115
[145] JohnGalt: Freedom is not merely the opportunity to do as one pleases. Marx
correctly claims that we are not free people; we have submitted our will and our ability to act
to the power of human-created and driven social forces. These forces, whether as actors we
choose to recognize them or not, act independently and continuously to provide equilibrium.
Thus, they are able to determine the actions and exchanges created in the market. Men seek
to control them and restrain their power, when in fact, it is them acting on men and any
attempt to restrain them is actually another part of the social dimension.
According to Marx, attempting to assert one’s freedom by seeking to “do what we want”
will lead to a significant reduction in freedom. This is precisely because of the “dialectical
conversion of quantity into quality.” This is the struggle to escape from the constraints, which
dictate that exchange rates are not driven by labor processes, but instead are largely focused
on use values. Thus, in order to maximize their productive and reward capacities, men
should focus on those areas of industry which have the highest marginal rate of return and
seek to innovate to gain advantages over competitors. By engaging in this rational process,
humans further integrate themselves into the social division of labor. When people choose
instead to separate or extricate themselves from the accepted social division of labor and the
market system, they remain subject to the laws of the market. But by choosing to remain
outside of the system, they refuse to commoditize the products of their labor and relate their
labor to the general and abstract. Thus, the social movement, in combination with their own
abandonment of the accepted rules and structures, restricts and constrains their ability to
act or have any effect or place within society or the market, eventually isolating them and
greatly limiting personal and market freedom.
Hans: Very good, but Marx sees a way out of this dilemma. There is no individual escape, but individuals have to
work together to shape their social relations according to what they consider right. Arguably this is true freedom.
Next Message by JohnGalt is [146].
Question 279 is 177 in 1998WI, 196 in 2000fa, 221 in 2002fa, 229 in 2003fa, 259 in
2004fa, 254 in 2005fa, 274 in 2007SP, 285 in 2008SP, 283 in 2008fa, 297 in 2009fa, 325
in 2010fa, 304 in 2011fa, and 304 in Answer:
Question 279 Isn’t there a blatant inconsistency in Marx’s text? At the beginning of paragraph
167:1/o, the fixity of commodity prices is stressed, while towards the end of the same
paragraph 167:1/o, Marx emphasizes that they fluctuate continually.
[146] JohnGalt: There is consistency in the inconsistent. There is no inconsistency in
Marx’ text although there certainly does appear to be one. Indeed, there is a logical pattern
that he follows to arrive from one extreme to the other. Initially, Marx indeed stresses the
fixity of the commodity as being necessary, almost seeming to be inherent in its nature.
However, he recognizes that this fixity is the product of the social relationships and practises
that underlie and form the foundation for society.
It is precisely because these rates are fixed by such social interactions that society can
thus forget about this. Thus, commodities will fluctuate as people seek to use the social
constraints to their own advantage and allow the fluctuations to occur for their own marginal,
short-term benefit. They will eventually move from a quantitative focus to a qualitative focus
that will change the scope of the commodity and increase the range of price fluctuation as
more value is capable of being added and new processes of production are developed.
116 2007fa Econ 5080 U of Utah
Marx thus asserts that the labor value of these commodities is essential to causing them
to fluctuate. This also, is a social relationship. Because the market will eventually catch up
with innovation, fluctuations are only short-term and fleeting. They are subject to the social
forces as well and this is their fixity, not the exact trade rate.
Hans: You are stressing that the blind competitive groping leads to technological improvement which seems a
desirable goal. Therefore one might say this blindness leads to something good. But if one thinks of the modern
technology which leads to climate catastrophe perhaps one can see that the dazzling new technologies are just a
distraction from the irrationality of the system itself.
Next Message by JohnGalt is [188].
Question 280 is 222 in 2002fa, 230 in 2003fa, 260 in 2004fa, 255 in 2005fa, and 275 in
2007SP:
Question 280 What is the law of value? What does all this talk about “escaping” or “outwitting”
the law of value mean?
[127] Teight: Law of Value. According to Marx’s definition, value is the social property
that makes things exchangeable in a commodity society. Furthermore, there is a law of value
that suggests that a given good is as valuable as the social labor time that it took to produce
such a good, or the labor time which the good contains. Notice, that the law of value and
social labor are correlated in order to reach a certain outcome. Due to the fact that the law of
value is socially persuaded, the only way to “escape” a socially persuaded bind is to become
educated and aware of your surroundings and environment. Escaping the law of value would
require separating an individual’s social life from the individual that they are, thus making it
very difficult to escape the law of value.
Hans: The law of value is not the result of persuasion, but it is the unintended effect of competition in the market
place, as described in [55]. People try to escape the link between labor-time and exchange-value all the time, by
finding ways to produce the same thing with less labor, or by finding the use-value everybody wants. Marx says
that this is exactly the mechanism by which they force the law of value on each other. Everybody’s eagerness to be
the technology leader leads to it that everybody uses the same technology, and their search for the most desirable
commodity makes sure that every desirable commodity is supplied in ample quantities.
Next Message by Teight is [196].
[134] Caroline: There’s almost no escaping. The law of value can be compared to the
law of gravity, in that it is a continuous force that can not be won over. In a competitive
market, producers obviously want to generate profit from their products, but they want to
compete in every aspect of their production and business, in relation to other producers in
the same market. To maximize a producer’s profits, they would like to keep the cost of
production low, but simultaneously be able to sell this low-cost product at a cutthroat price,
that can also bring in a profit. In Hans’ annotations to Karl Marx’s Capital, on page 181,
“commodity producers...only pay attention to the quantity of value and not its quality,” which
gives their “labor the qualitative character of equal human labor,” and this points out what
producers are willing to compromise - quality for quantity. This is how they try to “escape”
or “outwit” the law of value.
However, this process will catch up to them - the market will catch up. This is the law of
value. It is almost like a cycle to which there is no end. Consumers buy products with the
thought in mind that they will get their money’s worth from the purchase of a product. If
quality is essentially abandoned, then the consumption of a good will go down. Producers

U of Utah Econ 5080 2007fa 117
would have to think of a solution, and one solution could be that they invest in their good by
raising the quality. The rise in quality could possibly remove the producer from “the qualitative
character of equal human labor,” and putting them at the forefront of other competitors,
or it could set them back in the market, depending on this “rise” in quality. Producers either
redeem their product and instill confidence in the consumer, or their changes would affect
them negatively.
In order for a commodity or product to be viable, there must be some sort of value that
can be derived from it. There must be something in it for the consumer to want to purchase
a commodity. Producers can not be the only winners of the market. Sometimes sacrifices,
on behalf of the producer, must be made in order for their commodity to be coveted.
Hans: Lots of good thinking, but you didn’t get the main idea that the individual competitiors, by trying to escape
the law of value, in fact force each other to abide by it.
Next Message by Caroline is [147].
[322] Kibosh: graded D Before monetary basis came into play the world was built upon
what you “had.” This differs from our stocks, bonds and nifty bank accounts. Marx brings to
the forefront of discussion the law of value. The law of value bases itself around the belief
that you should buy low and sell high. However, Marx speaks of this unpaid surplus of labor
included. We value our time so greatly that unless we feel like we have made a fortune, it
may not be consciously worth it. You could expound upon this, bringing up commodities,
addition of value to existing goods. However, what we must understand is that a good is
only as valuable as we perceive it. And in as much, our value will hold on that good.
Next Message by Kibosh is [326].
Question 282 is 179 in 1998WI, 198 in 2000fa, 209 in 2001fa, 224 in 2002fa, 232 in
2003fa, 262 in 2004fa, 257 in 2005fa, 277 in 2007SP, 285 in 2008fa, 299 in 2009fa, 327
in 2010fa, and 306 in 2011fa:
Question 282 Where else should one start science if not with facts? How did Marx himself
come to his findings?
[139] Gilmour: graded A– Science should start with a resolve to know what the cause
is for anything being the way it is. Science is the process of formulating theories to better
understand the world and all its grandeur. Theories are expanded upon and worked over
and over until they are proven either correct or incorrect. However, both results will bring
the seeker to a knowledge of a truth, and thus a fact of science. When a fact is gathered,
one might say that they know how or why things are the way they are. Another side of
this conclusion is that if one has the facts about something, why then would they need to
theorize about it to prove its worth. Facts are the conclusion of science, and not the fountain
of scientific research. Facts of science will lead to a better understanding of the world and
how we can benefit from it.
Hans: You start out, correctly in my mind, that the purpose of science to know the causes of things, which is
different than saying its purpose is to predict future facts. You are also right that pre-existing theories are an
important input to science. Scientists have to learn how to think and work in a given science. But then you reverse
yourself and say that the purpose of science is facts, and that once one knows the facts nothing else needs to be
known. There is a difference between the view that the purpose of science is to predict facts, and that the purpose
of science is to discover causes.
118 2007fa Econ 5080 U of Utah
Marx suggested that people’s everyday thinking leads them to question the activities of
their lives. They try to solve the riddles of their lives, yet once solved, new mysteries spring
to life from the ones once answered. He also suggests that their resolve was to better their
stance in the market place. By understanding the science of crop, one could then produce
a higher quality commodity and thus enrich themself by producing more at a better quality.
Science also stems from the very thoughts of who one was and why they were here. Marx
also suggests that science began when a question needed answering, but this was already
too late. One should be asking the question of how they could improve their knowledge the
world around them to benefit their life.
Hans: You are trying to derive the answer to the question from Marx’s own writings, and my interpretations of it.
That’s a good approach. But this is a difficult question. I try to show in [157] how to answer it.
Next Message by Gilmour is [249].
[157] Hans: Beginning point of science. This is one of the non-didactic questions. A
didactic question is a check whether you understand the material; this question here is simply
a question anybody might have who is reading the text, without there necessarily being an
obvious answer.
If Marx warns that the observable finished surface forms conceal rather than reveal, then
it is logical to ask: where else should science start if not with observable facts, and how can
we know which facts conceal and which reveal?
Marx does not tell us explicitly how to answer this, but he demonstrates it by the example
of his own scientific method in Capital. Yes he starts with observable empirical things or
facts, namely, the commodity. But the commodity is chosen carefully as a simple tangible
thing which allows us to drill down to underlying concepts such as use-value and exchangevalue,
and then from exchange-value he drills down further to value. Only after we know
about value, the hidden commonality which the commodities receive during the production
process, can we understand money. Money is the corresponding exterior measure in the circulation
process mirroring this inner measure of value originating in the production process.
Marx sees research as a developmental process in which one cannot make the second step
before the first step. We cannot skip on the surface from commodity to money. Starting with
the commodity we first have to dig down to value before we can understand money.
When Marx says that the money form conceals rather than reveals, or elsewhere that
the money form is “blinding,” i.e., so shiny that it makes us blind trying to look at it, the
simplest way to explain this is to say that money has too many uses. Money is an incredibly
useful thing, and for its understanding it is necessary to know which of these uses or, in
Marx’s terminology, “functions,” did it have first, and which additional uses derive from
its original use. From Marx’s point of view, the original function of money is to serve as
“measure of value,” and its other functions as “means of circulation” and as “money,” i.e.,
and independent store of wealth, only come after this. And the transition from money as
money to money as capital is an additional step. This is how Marx will proceed in chapters
Three to Six, and we will follow this development in detail. It is a thoroughly evolutionary
process, in which each step in the process gives rise to the next step, and no steps can be
missed.
Message [157] referenced by [139]. Next Message by Hans is [158].

U of Utah Econ 5080 2007fa 119
Question 284 is 168 in 1996ut, 181 in 1998WI, 200 in 2000fa, 211 in 2001fa, 226 in
2002fa, 234 in 2003fa, 264 in 2004fa, 279 in 2007SP, 308 in 2011fa, and 322 in 2012fa:
Question 284 In 169:1, Marx calls the superficial understanding of the agents in capitalist
society, their forms of thought, “socially accepted” or, in a more literal translation, “socially
valid” and “objective.” Shouldn’t he have called them “false” instead of “valid” and
“subjective” instead of “objective”?
[148] Kalmerico: Capitalism: a false society. The superficial agents in a capitalist society
should be labeled “false” and “subjective” as they serve as a cover-up for the underlying
exploitation that is taking place. The value of a commodity is a direct result of labor exploitation,
in which the worker only receives a small portion of the value he/she created
through their labor with the rest of the value going to the capitalist. Another false reality
is the idea we are in control of our own wealth and well-being, when in all actuality most
people are separated completely from the means of production and must sell themselves as
workers to the few wealthy capitalists. In fact, it would be safe to say that one has no control
over his/herself in a capitalist society and we are just slaves to the system. However, this
fact is not recognized by most as the majority only view capitalism on its surface level.
Hans: Your very good explanation makes it even more mysterious why Marx calls these forms “valid.” Perhaps
because this falseness is an integral part of the social structure, rather than being an individual error.
Next Message by Kalmerico is [229].
Question 285 is 157 in 1995WI, 134 in 1995ut, 167 in 1996sp, 227 in 2002fa, 235 in
2003fa, 260 in 2005fa, 280 in 2007SP, 290 in 2008SP, 302 in 2009fa, 330 in 2010fa, and
309 in 2011fa:
Question 285 Why does Marx call Ricardo’s exchange between primitive fisherman and
primitive hunter a “Robinson Crusoe story”?
[137] Harmon: Stranded. Robinson Crusoe performs many useful labors in order for
him to function on the island. He keeps track of three things in his books: useful objects
he possesses, various operations necessary for those objects’ production, and labor-time that
these products have cost him. The relations that Robinson has made in his books between
production time, magnitude of difficulty, and usefulness of the products set up the identity of
value. Thus, the fishermen and the hunter exchange their goods depending on the labor-time
it took each of them to catch or kill their commodities. The stories between Ricardo and
Crusoe both show a form of value based on labor-time.
Hans: Ricardo is, like Marx, a classical economist who adhered to the labor theory of value. In his mind, Robinson
is not the only one who measures value by labor-time, but value is measured by labor-time in every commodity
society. Therefore sorry, your interpretation why he called this a Robinson Crusoe story is incorrect.
Next Message by Harmon is [232].
Question 290 is 180 in 1997WI, 187 in 1997sp, 232 in 2002fa, 240 in 2003fa, 295 in
2008SP, 307 in 2009fa, and 335 in 2010fa:
Question 290 Explain Marx’s statement that labor in medieval society did not take a social
form different from its natural form.
[143] Corey: graded A The social and natural forms of labor. Since Marx is referring to
medieval times I feel he is referring to class distinctions. The labor you performed is directly
120 2007fa Econ 5080 U of Utah
related to the class you where born into, i.e. serf, craftsman, lord. Specifically referring to
the exploitation of the serfs during this time. It is for subsistence that the serf works to grow
enough to pay rent (in kind) for the field, and still have enough to feed his family. What a
serf’s labor produces is not sold but is used by the serf’s family. So you are naturally born
into a labor class that determines your labor activities, i.e. you are told what to do. Therefore
labor’s social form becomes the same as its natural form.
Hans: Yes, this is the right explanation. In the Middle Ages, society regulated the individuals, while in capitalism
it regulates the individuals’ labors.
Message [143] referenced by [2009fa:456], [2009fa:477], and [2010fa:450]. Next Message by Corey is [246].
Question 297 is 277 in 2004fa, 272 in 2005fa, 292 in 2007SP, 302 in 2008SP, 300 in
2008fa, 314 in 2009fa, and 342 in 2010fa:
Question 297 Can labor be measured in other ways than in time?
[135] Ricky: How to measure labor. The concept of human labor is very important
in Marxian economics. For Marx, labor measured in time is the determinant of value in a
commodity. Marx would define labor-time as the period in which human creative energy
(labor power) is expended in the production process. The measurement of labor in terms of
time is common in nearly all economic perspectives. However, there are other potential ways
of measuring labor. For example, one could measure labor in terms of output. The amount
of goods or services produced would be a reflection of the total labor expended. One modern
example of this is any type of job paid strictly on commission. We all likely know someone
who has sold door-to-door products. That person is typically paid on the amount of goods
sold rather than the amount of time spent knocking on strangers’ doors. Yet the number of
items sold may or may not be an accurate measure of expended labor. If a salesman knocks
doors all day long but does not close a deal, his output would not be an accurate measure
of the energy he expended. Moreover, a talented salesman may sell more total goods than
an amateur to the same number of people. The talented one could have sold (produced)
more, but expended the same amount of labor as the amateur. Therefore the same amount
of expended labor could hypothetically produce differing amount of outputs. The same
criticism could apply to labor-time. It is very probable that two laborers who both work
the same amount of time would expend different amounts of labor power. The economic
principle of labor productivity reconciles the concepts of labor-time and labor-output. Labor
productivity is the ratio of goods or services to labor hours spent in the production process.
Yet it is likely that any measure of labor is, at best, a rough estimate of the real amount of
labor power expended.
Message [135] referenced by [140], [2008SP:176], and [2008fa:358]. Next Message by Ricky is [215].
[140] Corey: graded A Productivity, labor, and the single mother. Ricky [135] has
brought up an interesting method of measuring labor in terms of output. Productivity is a
classic method being used by manufacturers today. Workers are often paid a piece rate. In
other words they are paid by how much they produce. Productivity is used to try to maximize
production, but it completely ignores experience and opportunity cost of the worker. Clearly
an experienced worker will produce more than an inexperienced worker but does that mean
they are expending different amounts of labor? No, in fact someone who is learning may be
expending more labor to produce a unit than the experienced worker, as the process is more

U of Utah Econ 5080 2007fa 121
difficult in the beginning. This also says nothing of one’s capacity to learn or perform the
labor in question. However, allowing time for learning needs to be taken into account as part
of the productivity measurement.
Now what of the opportunity costs? As a father I value my time with my family above
all other activities. Time taken away from my family is looked at by me much differently
than my leisure time. Therefore I would measure labor that took away from these times
differently. Furthermore, what of a single mother that has to leave her children? Clearly
there is a higher opportunity cost for her that should be taken into account when measuring
her labor. This is why I feel there is much more to labor than the simple productivity ratio
put forth by Ricky [135].
Message [140] referenced by [144] and [2008fa:358]. Next Message by Corey is [142].
[144] Gregory: various dipsticks to determine labor. Indeed, labor, productivity, and
output can be illustrated through various measurements. For example, I have a friend who
works for a medical supply company. He is responsible for replacing damaged and non functional
medical equipment to thousands of physician offices, hospitals, clinics etc. throughout
the United States. As a whole, the largest body of the company is made up of customer service
representatives. Each customer service rep holds their own private accounts with clients
that are established and continuously added through time and persistence. Subsequently, if I
am service rep at this company holding an account with a physician’s practice in Salt Lake
City, whenever that particular office requires to be replaced I will receive the commission for
that order. In this case your output and productivity in terms of producing profit for the firm
and commission for yourself depends on other firms and their particular needs. Obviously,
in this business, labor can not be measured by time spent.
Corey [140] states “clearly an experienced worker will produce more than an inexperienced
worker but does that mean they are expending different amounts of labor? No, in fact
someone who is learning may be expending more labor to produce a unit than the experienced
worker, as the process is more difficult in the beginning.” This goes hand in hand with
the example I am providing. While the experienced rep who holds numerous accounts may
be selling more equipment, the new guy may very well be expending more labor trying to
establish accounts. Consequently, although he is not accumulating equivalent commission
he is expending more labor. In conclusion, there are times when measuring labor by time is
an accurate depiction (i.e. a ford assembly line). However in many cases other “dipsticks”
are necessary to accurately measure labor.
Next Message by Gregory is [273].
[153] Chased: Pay per widget. Throughout time it has been acknowledged that the
production is what matters most to a firm. I use “firm” loosely, meaning anyone who is
selling something. From the kid with the lemonade stand to the farmer to big business. What
every firm wants from their labor is the most production, whether it be actually producing a
good or as customer service.
I agree wholeheartedly with Gregory and Corey in that time is not an accurate measurement
of labor. There are many companies that pay their employees on a commission for
goods or services sold as well as a per widget wage. Many firms have found that they get the
most productivity per dollar from paying their producing employees on a per output wage.
122 2007fa Econ 5080 U of Utah
Time is such an abstract notion as a lot can be accomplished in a short time as well as
nothing with all the time in the world. Understandably, time is the easiest measure of labor,
but not the most accurate.
Next Message by Chased is [259].
Question 301 is 242 in 2002fa, 251 in 2003fa, 282 in 2004fa, 276 in 2005fa, 296 in
2007SP, 319 in 2009fa, 347 in 2010fa, 326 in 2011fa, and 341 in 2012fa:
Question 301 What is Marx’s difference between bourgeois economists and vulgar economists?
[138] Dannymangum: Bourgeois v. Vulgar. Growing up I had a neighbor who a few
years older than myself that was intrigued with everything that moved mechanically. While
he partially enjoyed fixing items such as lawnmowers and dishwashers, what really gave him
satisfaction was taking objects apart while they were still functioning, just to see how the
structure and movements of the appliance worked. So is the same with Bourgeois economists
(classical economists). The bourgeois have peeled the proverbial onion and through much
research and study have investigated the central structure of Economic systems. While Marx
might not always agree with classical economists he still looks to them with much respect
because of their willingness to demand why questions to preexisting thought processes, and
then proceeding to challenge or go in accord with the existing thought depending on their
personal findings.
Marx views vulgar economists in a completely different light. It appears that Marx views
them as a somewhat lazy specimen. He views their opinions obsolete. It would be like
listening to a recorder because all they do is repeat preexisting thought. Never branching out
to find their own conclusions to economic questions.
Message [138] referenced by [2009fa:315]. Next Message by Dannymangum is [251].
Question 306 is 301 in 2007SP and 311 in 2008SP:
Question 306 Why does Marx say in footnote 38 to paragraph 177:3–4 that the commodities
diamond, pearl, etc., only seem to possess relativity as exchange-values? Are exchangevalues
not relative by definition?
[141] Karly: A diamond is a girl’s best friend. Marx states that commodities only seem
to possess relativity as exchange values because commodities’ values will differ between
individuals. For example, a pearl may be much more valuable to a certain individual than to
another, therefore creating its exchange value.
I believe exchange values are not relative by definition based on the fact of each individual’s
considered values.
Message [141] referenced by [149]. Next Message by Karly is [197].
[149] Melissa: graded C Diamond in the rough... Marx says in footnote 36 to paragraph
177:3–4 that the commodities diamond, pearl, etc., only seem to possess relativity as
exchange values because the value is recognized in a social process, as “. . . expressions of
human labor” (a little later in the same footnote). Since the value is being recognized as a
social process, the exchange value would be subject to the consumer.

U of Utah Econ 5080 2007fa 123
I agree with Karly [141] that exchange values are not relative by definition, as it is the
consumer who decides the exchange value. Each consumer will have a different exchange
value depending on how they view the value of the commodity.
Hans: Apparently, when you read “value is a social relation” you think: value depends on what people say it is.
Some social relations indeed depend a lot on what individuals do and think: fashions, the question which book
becomes a bestseller and which doesn’t, developments of language, etc. For the sake of the present argument
I call them “soft” social relations. But there are also “hard” relations which originate in society, i.e., they are
social relations, but they are much less under the control of the individuals. The question how much labor-time
is necessary to produce a certain good is such a “hard” social relation. When Marx talks about the commodities’
“relativity as mere expressions of human labor” he is thinking exactly about this “hard” labor proportion between
the two commodities. This is their true relativity. It is reflected on the surface in the exchange proportions between
the goods. When Marx calls these surface relations “seeming” he means two things: (1) they are visible, while the
underlying relationship is not clearly visible. (2) but they are only the reflection of the underlying relation.
Message [149] referenced by [200]. Next Message by Melissa is [160].
[158] Hans: Gotcha. This question tries to understand a subtlety in Marx’s formulations.
Why does Marx call the relativity which commodities have as exchange-values an only
seeming relativity, as opposed to their true relativity which they have as values? I think the
answer lies in what Daru said in [96] in response to a different terminological question. This
question here only attracted, like fly paper, answers from class participants who do not know
the difference between exchange-value, use-value, and value in Marx’s theory. It will not be
on the exam.
Next Message by Hans is [161].
Question 315 is 297 in 2004fa, 290 in 2005fa, and 320 in 2008SP:
Question 315 Explain the difference between personal and private property.
[319] Tomb: Personal and private property. Personal property is things such as clothes,
books, car, and even one’s home. Someone is able to exclude others from using this property
because they are part of their person or persona. Commodity exchange is a tool that is
used to gain access to others’ property. This is done by excluding others from using things
belonging to you. Only if they give you some of their property will you give them some
of yours. Private property becomes the means to access others’ property. Private property
is a social relation in which the owners of commodities relate to each other, and their wills
reside in the objects.
Hans: The definition of what counts as personal property in a society, the agreement to respect the personal property
of others, and the enforcement of this agreement is a social relation too. Both private and personal property
are social relations. But personal property has a universal justification: every society which allows individuals to
flourish must protect their personal property. Private property, on the other hand, is the precondition for the transfer
of resources from one to the other through exchange. Not every society does that, and it has certain flaws I tried to
explain in [2005fa:767].
Message [319] referenced by [483]. Next Message by Tomb is [323].
[478] RemyClaudette: private vs. personal property. The questions asks to explain
the difference between personal vs. private property. Private in our society almost always
equates to business. Usually if a sentence in legal text or even the newspaper uses the phrase
“private property” the word “business” can be easily substituted and the meaning maintained.
“Private” is usally all the stuff out in the economy not owned by the government. Personal
property is all the stuff an individual owns that has been taken out of economic circulation.
The purse that I bought was considered private property when it was in the store I purchased
124 2007fa Econ 5080 U of Utah
it from. When I purchased it and took it home it became personal property. The purse is
private property when it is owned by a business or individual using that purse as a commodity
to be sold or to make something else. The purse is personal property when it is purchased by
someone, they take it home and out of circulation. However if the purse is bought with the
intention to sell it on ebay it is still private property because it is being used for profit and in
circulation.
Message [478] referenced by [483]. Next Message by RemyClaudette is [503].
[480] Poppy: Black and White Response. Private Property is the means in which to
access others’ property.
Personal Property is one’s possessions, in which they have the right to exclude others
from using.
Message [480] referenced by [483]. Next Message by Poppy is [503].
[483] Hans: Private property gets too much justification from personal property.
Both [478] and [480] are good and thoughtful answers to the question, which try to clarify
the only answer [319] originally given. The shortness of Poppy’s [480] is not a lack of
information but a plus: Poppy tried to boil it down to its essentials. If you want to be a little
less terse, I can still recommend my [2005fa:767].
Next Message by Hans is [485].
Question 320 is 302 in 2004fa, 295 in 2005fa, and 325 in 2008SP:
Question 320 Do the persons represent commodities because they are commodity owners,
or are they commodity owners because they represent commodities?
[301] Dave: Commodities and Commodity owners. According to Marx, owners of commodities
only exist to represent those commodities. That would answer the question rather
simply. People are commodity owners because they represent commodities. As indicated in
the annotations, Marx does not mean that, “people are nothing other than representatives of
the commodity relation....”, but that for now at this point we need to see that at the surface
they are owners of commodities because they represent commodities. Further more it is
noted that owners of commodities are the keepers of the commodities. That although they,
the commodities, “cannot go to the market by themselves in order to exchange themselves”,
they are the main “actors” in the market. It would seem that this statement would set the
commodities in front of the owners, so to speak. That as a result of the commodities existing
in the world there are commodity owners. This strengthens the stand point that people are
commodity owners because they represent commodities.
Message [301] referenced by [304]. Next Message by Dave is [381].
[304] Hans: Can Such a Simple Answer be Right? If you assume, as Dave [301] did,
that people only exist for the sake of their commodities, then many of Marx’s formulations
make more sense. But how can that be? We are not the product of our commodities, the
commodities did not make us so that we can carry them to the market.
Remember that Marx’s point of departure are the capitalist social relations, not individual
people. Marx’s explanation of capitalism is the following: When people thrown into these
relations do what seems to make sense, then the effect is that they are just the willing executioners
of the blind tendencies of capital accumulation. They are not the masters of their

U of Utah Econ 5080 2007fa 125
own social relations but they do what the social structure prescribes to them. The absurdity
of this is frighteningly clear at the present time, when we know that the economy needs to
stop growing. We have to cut consumption and production and switch to renewable energy,
otherwise we will create a terrible ecological catastrophe for all of humankind. We are not
doing this because we act as the zombies of capital. Perhaps reading Marx will help us to
wake up.
How can we escape those social constraints? We have to do things differently than the
business-as-usual “what seems to make sense.” We have to deliberately try to steer against
capital’s tendencies. And we have to organize. We cannot do it individually but we have to
co-ordinate our actions collectively.
Here is an email I just got on a different mailing list:
Scientist: Global greenhouse gas emissions already beyond ‘worst-case’ scenario. Associated
Press October 9, 2007
Sydney, Australia: Strong worldwide economic growth has accelerated the level of greenhouse
gas emissions in the atmosphere to a dangerous threshold scientists had not expected
for another decade, according to a leading Australian climate change expert.
Scientist Tim Flannery said a report by the United Nation’s Intergovernmental Panel on
Climate Change due to be released in November will contain new data showing that the level
of climate-changing gases in the atmosphere has already reached critical levels.
“What the report establishes is that the amount of greenhouse gas in the atmosphere is
already above the threshold that can potentially cause dangerous climate change,” Flannery
told Australian Broadcasting Corp. late Monday. “We are already at great risk of dangerous
climate change, that’s what these figures say, it’s not next year or next decade, it’s now.”
Flannery is not a member of the IPCC, but said he based his comments on a review of
the technical data included in the panel’s three working group reports published earlier this
year. The IPCC is due to release its final report synthesizing its findings in November.
According to Flannery, whose recent book “The Weather Makers,” made best-seller lists
worldwide, new and improved scientific data showed that the amount of carbon dioxide and
other greenhouse gas emissions had reached about 455 parts per million by mid-2005, well
ahead of scientists’ previous calculations.
“We thought we’d be at that threshold within about a decade, that we had that much
time,” Flannery said. “I mean, that’s beyond the limits of projection, beyond the worst-case
scenario as we thought of it in 2001,” when the last major IPCC report was issued.
A spokesman for Australia’s IPCC delegate Ian Carruthers said he was not able to comment
on the contents of the November report because it was still in draft form.
The recent economic boom in China and India have helped to accelerate the levels of
carbon dioxide and other greenhouse gases in the atmosphere, but strong growth in the developed
world has also exacerbated the problem, Flannery said.
126 2007fa Econ 5080 U of Utah
“It’s a worldwide issue. We’ve had growing economies everywhere, we’re still basing
that economic activity on fossil fuels,” he said. “The metabolism of that economy is now on
a collision course clearly with the metabolism of our planet.”
The new data will likely give added urgency to the next round of U.N. climate change
talks on the Indonesian island of Bali in December, which will aim to start negotiations on a
replacement for the 1997 Kyoto Protocol, which expires in 2012.
Flannery said that with the level of greenhouse gas emissions already so high, the talks
should also focus on preserving tropical forests in countries like Indonesia, Brazil and Papua
New Guinea.
“We can reduce emissions as strongly as we like. Unless we can draw some of the standing
stock of pollutants out of the air and into the tropical forests, we’ll still face unacceptable
levels of risk in 40 years time,” he said.
Trees absorb carbon dioxide and dense tropical forests are believed to be particularly
efficient at this.
Rad-Green mailing list
http://lists.econ.utah.edu/mailman/listinfo/rad-green
Message [304] referenced by [2008SP:273]. Next Message by Hans is [307].
Question 331 is 336 in 2008SP, 350 in 2009fa, 360 in 2011fa, 373 in 2012fa, and 360 in
Answer:
Question 331 Is it true that exchange is the ultimate proof that a commodity is useful? What
if the consumer who acquires the commodity in exchange takes it home and discovers that it
is not useful after all?
[296] Charles: Useful exchange commodity. I would agree that the exchange is the
ultimate proof that commodity is useful. Even if the person who acquired a commodity
finds out that he may not be able to use it, he always has the option of exchanging it again.
Therefore, the commodity would have a use value or an exchange value. Nobody is forced to
purchase a commodity against their will. There are no regulations or constraints as to how
the person would choose or use the commodity. When an exchange has taken place, that
means there has been a use value established by both parties before the exchange has taken
place. There has to be a need which would satisfy the owner. If the need exists, then there
was a use for the commodity. If the need disappears later, the commodity can be exchanged
for another thing as long as there is a need from the new commodity after the exchange.
Message [296] referenced by [297], [299], and [303]. Next Message by Charles is [298].
[297] Hans: Can Someone Spin this On? I find Charles’s answer [296] interesting.
He has some valid thoughts but didn’t take them far enough. Does someone want to try to
continue his train of thoughts?
The format of this class works best if someone starts an answer, the next person takes
what is valid from the first answer and adds what the first person didn’t see, etc., until we
have cobbled together a complete answer.
Next Message by Hans is [303].

U of Utah Econ 5080 2007fa 127
[298] Charles: Addition. Let me be the first one to add to this and show my point of
view.
When you have a child, a child bed (crib) can be a very useful commodity to have in the
house. The child bed is something that has a use value for the parents and for the child.
After few years, that commodity has no use and is not needed by anyone in the household.
Unless there is the possibility of another child. If the crib is not needed anymore, it may lose
its use value but at the same time it becomes a potential for an exchange value. The crib can
be sold or exchanged for something else which would bring a new commodity with a new
use value.
Message [298] referenced by [299], [300], and [303]. Next Message by Charles is [300].
[299] Marcellus: The exchange determines the answer. I would like to add my commentary
to this question. I also believe that the exchange is the ultimate proof that a commodity
is useful – one can’t be absolutely sure until the commodity is in his or her possession.
I think Charles [296] slightly misunderstood the question though. First of all, let’s
say a mother purchases a commodity that she thinks will be useful to her and it turns out
that it isn’t, maybe because it is defective, or maybe because her husband brought home the
same commodity earlier. If it is defective, she does not have the option of exchanging it with
another commodity because it will have no use-value to anybody, while she may have the
option of returning it. If her husband bought the same commodity earlier that day, she could
make him return it, perhaps because she told him she was going to get what they needed
and he just didn’t listen. What I am saying is a reason needs to be established why the
commodity is not useful. This is part of what Charles missed in his first answer.
In his second response [298] about the crib, he misses the point of the question. The
question asks, “what if the consumer who acquires the commodity in exchange takes it
home and discovers that it is not useful after all?” Charles essentially writes that the crib
becomes useless once the child has grown up, but this is obvious. The question asks, what
if the mother takes home the crib and discovers it is useless? Once again a reason has to
be established why it carries no use-value? Is a leg broken? Did daddy buy the same crib
earlier?
To conclude, the exchange is the ultimate proof that a commodity is useful. Until consumers
have the commodity in their possession, they can only assume that it will be useful.
If it is indeed useful, great. If they discover that it is not, a reason has to be established. Then
they can act upon that reason.
Hans: When I wrote “what if the consumer discovers that it is not useful after all?” I meant this as an argument
that it might be premature to consider the purchase the proof that the commodity is useful. You apparently thought
I wanted to know what the consumer should do in this case.
Message [299] referenced by [303]. Next Message by Marcellus is [354].
[300] Charles: Exchange value and use value (3rd post by Charles). The examples
that were given by Marcellus to my posts had nothing to do with what I was talking about.
Those examples were more related to the exchange of a product at the store. Of course if
something is broken you take it to the store and exchange it. That’s not what Marx has in
mind when he talks about the “exchange value”.
128 2007fa Econ 5080 U of Utah
Marcellus does have a point with the approach of the ultimate exchange value but not all
the time it works like that. Not all the time the product is useful if it has an exchange value.
If everything needs to have a use value then how would the collectors play a role in these?
When a stamp collector buys a stamp, it is solely for their enjoyment. The same example
can be used for car collectors, gun collectors, etc. . . Most of those things are broken from
the beginning, yet people still buy them. The car doesn’t run because so much work needs
to be done on it because of the age, the gun does not fire because of so many missing parts,
but people still purchase them. Some examples can be brought on wine collectors who pay
thousands of dollars just for the fact to make them feel good that they have it. They will not
exchange it and there is no way they can drink it because of the age. But yet, they still make
the purchase because it gives them the satisfaction of owning something that no one else
may have. That is the ultimate exchange value for them. The use value for them becomes
the satisfaction of being the sole owner of that product with no intention of exchanging it
later on.
I don’t think any person buys a product without first realizing what kind of “use” they
will get out of it. When they buy something and it turns out to be broken, they exchange it
for the same thing. If someone buys a table, bring it home and one of the legs is broken,
they still have to exchange it for the same thing. Just because it is broken, it does not mean
that now they would exchange it and get a sofa instead. Because of that, the return/exchange
policy is the same for all the products and it does not play a role in this discussion. So what
would happen if the stores did not offer the return/exchange policy? People would still buy
the product and be more careful before the purchase to make sure nothing is broken.
For my second response [298], Marcellus says that I missed the point of the question, but
the example that is given is related to the exchange of the product at the store again. With
the leg broken or the daddy bought the same thing. Why was the crib bought in the first
place? Before the purchase, they knew what the use value would be for them. You don’t
buy something then take it home and see how you can use it. There is always a basic human
need or a human want on the commodity before it is purchased.
Based on all these examples, I don’t think that Marcellus’s post was strong enough to
argue on my point of view. I am not saying that Marcellus is wrong and I am right, but based
on the example that was given, I think for now I am going to stay with my point of view and
I don’t think that I misunderstood the question.
Message [300] referenced by [303]. Next Message by Charles is [356].
[303] Hans: Use-Values as Treasures. Charles agrees with Marx that the exchange is the
right criterion for the usefulness of a commodity. In his third submission [300] Charles says
that some things are not bought to be used. They are bought as treasures whose possession
is cherished, and then perhaps later they will be sold again. Therefore use or consumption
cannot be the criterion.
Charles’s earlier answers seem to be steps in which this latest position was developed. His
[296] brings two arguments. (1) If the customer in the store decides to buy the commodity
then this means by definition that there is a need for this commodity, otherwise he would
not have bought it. After all, he did not have to buy it. (2) And when the commodity no
longer fulfills this need, then there is the option to exchange it again. In a sense this means

U of Utah Econ 5080 2007fa 129
commodities can never become useless, since there is always e-bay. In [298], Charles gives
the example of a child bed (crib), a commodity which is useful only for a limited time, but
which can be sold afterwards.
Marcellus [299] dismisses the example with the crib. He says it is obvious that the child
outgrows the crib. I think Marcellus has a point. It is part of the use-value of a baby crib
(and baby clothes, toys, etc.) that babies outgrow them. The purchaser of the crib knows this
when he or she buys the crib, and proceeds with the purchase anyway. It is safe to assume
that the crib is purchased for its use-value, not its exchange-value. The fact that the buyer
may expect to sell the crib on a garage sale after its use does not change this, because the
baby’s need for a crib outweighs this consideration by far.
Even if the crib is not one of the things bought for their exchange-value, Charles gives
several examples in [300] where the commodity is obviously bought because the purchaser
wanted to own a valuable thing, rather than because of its use-value. I agree that this can
be a motivation for making purchases, but as I understand Marx, this is not his reason for
saying that the ultimate proof of the usefulness of a commodity is its sale.
Here is why I don’t think Marx is talking about commodities as treasures. Marx looks at
social relations in a developmental fashion, and in chapter Two he is at the very beginning, he
is not even talking about money yet. The original purpose of exchanges is to turn something
which one has produced in a division of labor, and which one does not need, into something
one can use or consume. In order to facilitate this exchange, money is developed. After
money has been established and is widely used, people will want to hold money not only
as a means of exchange but as the incarnation of wealth. Antique cars or ancient bottles of
wine are also incarnations of wealth, they are money in an aesthetically more pleasing form.
Marx gets to this in chapter Three, but right now he is in chapter Two, where the derived
benefits of money as the incarnation of wealth do not yet exist.
As in many other situations, note that I am trying to refute here an answer that goes in the
wrong direction, but I am not giving my version of an answer which I consider correct.
Let me reformulate the question. If you read the question in its context, you see that
Marx says here that the exchange of the commodity is the ultimate proof that the labor
producing the commodity “counts,” i.e., fits into the social division of labor. Is this true? One
might think that only the use of the commodity can prove whether the labor “counts.” Marx
himself implied this with his statement in 126:1 that “use-value actualizes itself only by use
or consumption.” Isn’t this in contradiction with his present statement that the exchange is
already the proof?
Message [303] referenced by [316]. Next Message by Hans is [304].
[313] Ryan: graded A Which came first, the Chicken or the Use-Value? The confusion
with this question, as near as I can tell, lies in trouble with the second half of the question,
which originated in not fully answering the first half. So I will focus on the first half and
attempt to include an answer to Hans’s reformulation.
Commodities are not produced for use-values (i.e. they are not produced to be used by
their producer), by Marx’s definition they are produced for exchange. How do we prove
whether a commodity is useful? As implied in Hans’s reformulation, this is not only a
130 2007fa Econ 5080 U of Utah
question of whether the commodity can be used (as has been the topic of discussion on this
question) but also whether the labor can be deemed useful-labor, or whether it “fits into the
social division of labor”. Were it only the former, then one could simply rely on Marx’s
earlier statement that “use-value actualizes itself only by use or consumption”. But in order
for a commodity to be used, it must first come into the hands of the consumer, this can
only happen if it has first been exchanged. In order to be exchanged the amount of socially
accepted labor in the commodity must be determined in relation to another commodity. This
is what Marx is saying in the paragraph 179:1 leading up to this question:
“It follows that commodities must be realized as values before they can be
realized as use-values.”
He then explains that labor is only socially acceptable if the labor “is expended in a
form which is useful for others.” We are thus stuck in what he called “a defective circle
of problems.” In order for something to be exchanged it must be created with useful labor,
and thus contain use-value, but because the producer is not deriving use-value from his own
products, in order for the commodity to be useful it must be exchanged.
So, is exchange the ultimate proof that a commodity is useful? Yes, because in a capitalist
society the commodity is only truly proved to be useful once it is exchanged. Regardless as
to whether it was useful before the exchange.
Hans: Very good. Even things that are clearly needed by society, for instance health services to treat widespread
curable illnesses, do not fit into the capitalist division of labor if the people who are ill cannot pay for these health
services. This is why you find Cuban doctors in many poor countries.
Message [313] referenced by [316]. Next Message by Ryan is [388].
[316] Hans: Loose Ends. Ryan [313] gave a good basic answer to this question: in a
market economy, not only the need but also the ability to pay determine whether a good
should be produced. This justifies saying that the exchange is the ultimate proof, not the use.
This is a good and valid answer to the question (although it is not what I had in mind). I
am glad someone took this up, since I said in [303] that this question was not yet properly
answered.
In the original formulation of the question I had a much more trivial use-case in mind.
Assume the consumer who acquires the commodity in exchange takes it home and discovers
that it is not useful after all. Does this make the labor that produced the good socially
unnecessary, even though the product was sold? This still has not been resolved.
Message [316] referenced by [2008SP:858]. Next Message by Hans is [317].
Question 360 is 267 in 2001fa and 395 in 2011fa:
Question 360 Is Marx’s claim in Contribution 286:3/ooo still valid today that the commodity’s
“second existence as exchange-value itself can only be another commodity, because it
is only commodities which confront one another in the exchange process”?
[212] Ben: graded B+ Is Marx still valid today? Marx’s claim is still current today. The
value of a commodity and the exchange value which is also a commodity. For example, a
penny made of copper with the government seal has an exchange rate of 100th of a dollar.
But, it also has value as copper. Today there are legal restrictions on the practice of melting
down pennies to get copper. Our society chose coins with a commodity value much less than

U of Utah Econ 5080 2007fa 131
their monetary values to discourage the melting down of coins. This does not mean there is
no value when a penny is melted down to copper, there is just not as much value as a penny
would be worth. Another example is the fact that if I put my dollar in the bank the bank will
pay me 2% of my penny in a year so they can use my penny today. So what I am doing is
using my dollar as a commodity, so people that need it today can have a dollar and pay me a
dollar and 2% for the availability of my dollar.
Hans: Even if a penny happened to have a copper value of exactly one cent, this would not make the current
monetary system a commodity money.
And you are right that it is possible to use money as a commodity by lending it, but again this has nothing to do
with the question whether we live in a commodity money system.
Message [212] referenced by [213]. Next Message by Ben is [335].
[213] Hans: Opportunity for better Understanding. Ben [212] tried to resolve this
question by the assertion that modern money is still a commodity. But the overwhelming
consensus is that today’s money is not a commodity. It is as simple as that. What does this
mean for Marx’s claim that money must be a commodity? Is that claim wrong or do we
misunderstand it? And if it is wrong, where is it wrong? We have been trying to understand
how Marx comes to his conclusions. If one of his conclusions is wrong, this is an opportunity
to see the limitations of his method.
Next Message by Hans is [278].
Question 363 is 306 in 2003fa, 358 in 2007SP, 399 in 2011fa, and 414 in 2012fa:
Question 363 Why is “labor money” not money?
Question 364 is 306 in 2003fa, 358 in 2007SP, 399 in 2011fa, and 414 in 2012fa:
Question 364 Explain why in a modern capitalist society prices are not and cannot be
measured by labor time.
[285] Ashley: “Paper Money” is Money. Although labor is necessary in making a
commodity and each commodity should be exchanged for the amount of labor time put into
it, it’s just not so. One reason why is because it is so hard to measure and equalize labor
when exchanging commodities. Not only would it be tedious, one wouldn’t know if the
other is telling the truth about how much labor time went into each commodity (especially
being in a capitalist world where everyone is in it for themselves). Another reason is because
money is the universal means of exchanging commodities and money does not and never was
represented by labor. It is true that labor-time is the driving force and money is its “form
of appearance,” and it is this reason why “labor money” is not money. Commodities are
not exchanged in the market with “labor money.” They are exchanged with paper money
therefore “labor money” is not money because it’s not a means of exchange.
Hans: Ashley, in order to answer question 363 you are answering question 364. With this you are throwing out the
baby with the bath water, because even if prices were determined by labor-time (and Marx thinks that even under
capitalism prices are determined by labor time) labor-money would still not be possible.
Answering question 364, you give three reasons why prices are not (point c) and cannot be (points a and b)
determined by labor input:
(a) this would require tedious bookkeeping
(b) one cannot rely on people reporting their labor input truthfully.
(c) things are exchanged against paper money which does not contain labor and has nothing to do with labor.
132 2007fa Econ 5080 U of Utah
Let me repeat at the end, since this is so important: you misunderstand Marx if you think he is arguing that
commodities should be exchanged in proportion to the amount of labor time put into them. Marx is arguing that in
a capitalist society labor content does determine commodity prices.
Message [285] referenced by [288] and [341]. Next Message by Ashley is [414].
[288] Hans: Capital is not a blueprint for a better society. I said this in my notes to [22]
and in [31] and in [197]. Ashley [285] didn’t get it. She also makes the same error which
two other homework submissions just made one day before she submitted her answer, which
I tried to explain in [278]. Sorry, I cannot give a passing grade for this kind of participation.
Next Message by Hans is [297].
Question 370 is 343 in 2005fa, 364 in 2007SP, 390 in 2009fa, and 420 in 2010fa:
Question 370 Why do the commodity owners write the price on their price signs and not
the labor-content of the commodity they are producing?
[269] Amy: Reasons for prices. There are several reasons why commodity owners write
the price of their commodity on their price signs instead of the labor-content. First, it would
be somewhat difficult to determine exactly how much labor-content a said commodity has.
Other producers of that product might take into account different things, thus resulting in
a different labor-content price. This would make it so there were many different prices
for the same commodity. Also Marx says that the value of a commodity is determined by
the commodity itself and not by the owner. So regardless of what the owner thinks the
commodity is worth, it has already been pre-determined.
Second, the annotations (p.239) say that “in the negotiations between the buyer and seller,
only the properties of the product itself are discussed; the labor spent by the producer is
treated as if it was the private affair of the producer.” I think this means that people aren’t
really interested in what labor has gone into the commodity but what the properties of the
commodity itself are. So in the exchange market labor is overlooked. The price written on
the price sign is the amount at which the owner is willing to trade that commodity. It may or
may not have anything to do with the amount of labor put into the commodity.
Hans: Everything is very good except your last sentence, where you are pouring out the baby with the bathwater.
See my [278] about that.
Message [269] referenced by [278], [286], [287], [575], [579], and [642]. Next Message by Amy is [372].
[286] Ozz: graded B Price Tags and Labor content. Price tags are used by the commodity
owners to express a specific thought of value of a commodity. Marx explains why they
do this instead of using the labor-content of the commodity. Amy in [269] explained the
difficulties of the labor content; however, missed the importance of the labor-content in the
exchange process and the setting of prices. First when an exchange of commodities is being
held the negotiations are about the properties of the product and not the abstract labor that
creates the value in the commodity. Marx explains saying “The labor spent by the producer
is treated as if it was a private affair of the producer.” This distancing from talking of labor is
one of the reasons why the thought of price is written on the commodity. On the other hand
during the exchange process labor-content, although not talked about, is the force that plays
the most important role and decides whether profits are made or lost. When price is set the
commodity owner tries to put the price at the highest point he can to maximize profits. If the
price that is received for the product is higher than the labor put into the product profits are

U of Utah Econ 5080 2007fa 133
made. If labor-content was written on a commodity instead of price there would be no room
for profit because that would be the exact value of the commodity and what the holder put
into the commodity.
Hans: Everything is very good except your last two sencences. They repeat an error which you should no longer
make after my explanations in [32], [45], [49], in my comments about [124], in my [133], and also in my remarks
to [260].
Secondly, and to explain a bit more of the difficulties of labor content measuring, by
placing a price it represents the amount of money or gold that one must pay to receive such
product. By placing labor content, in contrast would not be a statement of the worth of
the commodity using the general equivalent but merely a measure of labor. This does not
solidify the amount which the commodity owner must receive in return for the commodity
which a price tag does.
Message [286] referenced by [575] and [642]. Next Message by Ozz is [347].
[570] ZACH: Buyers and Creditors to Sellers and Debtors. As referred to in my original
answer I feel that the reason that the owners of commodities write the price of the commodity
on their signs instead of the labor content is because of their desires to maximize profits. If
the owners of these commodities were to put the labor content on their signs then they would
not get a dollar more than what they paid to produce it.
Hans: This was your in-class answer, and it is wrong. The labor theory of value does not say that the value of a
commodity is equal to its cost! I tried to explain this in [113].
I would like to add, as it refers to in the annotations, once the owner puts his/her price on
the commodity they are simply committing to that price and hoping someone will pay that
amount for their commodity. They are most likely looking at the supply and demand of the
commodity they produce, as well as the labor content put into it, and then coming up with a
price that they feel is worth market value.
Hans: Yes, and read my [278] how this can still lead to prices proportional to labor content.
Next Message by ZACH is [571].
[575] Daniel: graded B+ price tags and value. Commodity owners write the prices of
their commodities instead of the labor content on the price signs for a couple of reasons.
First, price is a monetary representation of value. It only represents the commodities’ value
that society has accepted as ‘fair.’ In addition, the value of a commodity is difficult to
determine by the owner because the value is determined by the commodity itself (Amy’s
[269]). The value is predetermined regardless of what the price tag says. The only way
for the price to remain the same for a given period of time, is if social forces accept it and
determine that it is fair and accurate.
Marx also talks about the negotiations between buyers and sellers in a strictly ‘commodity
properties’ sense. In other words, the commodity itself is all that is discussed between buyers
and sellers and people are not very interested in the labor that has gone into producing its
value. The actual labor content reamains a hidden secret. The owner can not determine
labor value because the value laborers have put into the commodity can not be determined!
It is kept from them and is one of the reasons that supports the injustice of capitalism. That
relationship between laborer and seller is strictly a private matter that does not transfer over
to the sale (Ozz [286]). Although the labor force is the largest determinant of value, it is not
discussed on the open market.
134 2007fa Econ 5080 U of Utah
Hans: You are explaining profits by the sellers overcharging because the buyers do not know how low the costs
really are. This cannot be the explanation! If every seller overcharges, then the price level rises generally. And if
the technology is such that the economy can grow, then costs will always be lower than prices.
Next Message by Daniel is [576].
[591] MichaelM: What is hiding in that price? This is yet another way capitalists exploit
workers and the value of their labor. Consumers do not seem to care too much about how
much labor it took to produce a particular commodity since what really matters to them is
the dollar amount since that has more of an effect on their survival. Because of this fact,
the capitalist can hide how much profit he is making from the commodity. Like Hans and
Bubba mention in [2005fa:942] of the Fall 2005 semester, the capitalist does not need to try
and figure out how much labor it took to produce the commodity, he only needs to adjust the
price level to the amount society computes for him.
Hans: This was the right answer. Perhaps one might add: even if the transactors themselves do not care about the
labor content, the producers do, and their reactions to the market are the “elephant in the room” which move prices
towards labor values.
What comes now is not the right answer to this question here:
A great example of how profits can be hidden in price tags is in the pharmaceutical industry.
I work in a pharmacy and so know the wholesale and retail pricing of many different
medications. Just today an order was placed for a certain generic medication which cost
the pharmacy $2.30 for one bottle. This is after the manufacturer who made it sold it to a
wholesale company who now sold it to us. So it is literally costing the manufacturer pennies
to make. However, the retail pricing to the public is around $80! From the point of receiving
the product in the pharmacy until it reaches the patient, the only real labor involved is some
counting and sticking a label on the bottle. One could argue about other labor may be contributed
as well, but it doesn’t take a genius to figure out what kind of profit margin is being
made. And where is the profit going? To the capitalist of course! There is no way the public
would pay this high amount if they actually knew this information and the labor involved,
but because the price on the price tag hides all of this information, society has chosen to pay
this amount for it.
Hans: Your example from the pharmacy suggests that capitalist profits come from charging more than the value
of the product. This may be true in the pharmaceutical industry, but Marx says: even if the capitalists sell their
products at their values, they still make a profit.
Next Message by MichaelM is [610].
[596] Harmon: Labor content. The labor content is not what is being sold, but the labor
content is the “elephant in the room (annotations pg239).” The elephant in the room is the
hidden value of the commodity which the consumers do not see, since it is only visible in the
minds of the commodity owners. Therefore, there has to be a price tag on the commodity to
show the exchange relation it has with gold. The commodity is what is being sold not the
labor content, because it is difficult to determine how much labor content a commodity has,
since it may differ from where the commodity was manufactured.
Next Message by Harmon is [597].
[600] SamHouston: The price is right. The price tag of a commodity has little to do with
the value of the commodity. It is an expression of the commodity owner’s proclamation to
the world of the value of the commodity. He hangs a price tag and commits to the buyers to
exchange his commodity to anyone who is willing to pay the price whether or not the price is
a reflection of the social value. Having the commodity owner place a tag on the commodity

U of Utah Econ 5080 2007fa 135
also facilitates the market notion of supply and demand. If the commodity owner can put
a price on the commodity that is higher than the socially accepted value, then there comes
an increase of supply. If the price decreases, then the supply will decrease and the demand
increases.
An example that is worth noting is the example of the “fire sale” where the commodity
owner prices the commodity below the social value of the commodity, This is according
to the independent agency of the commodity owner. Not placing the social value of the
commodity of the price tag gives the owner of the commodity the ability to play with the
prices according to his perception of the value of the commodity and gives him the chance to
trade his commodity for the amount of money that is acceptable to him for his commodity.
Next Message by SamHouston is [699].
[607] Jill: Commodity owners use price instead of labor power because consumers are
not influenced by the amount of labor put into a product; they are only concerned with
the amount of gold (or other money value) they must exchange for the commodity. Marx
explains this as “The labor spent by the producer is treated as if it was a private affair of the
producer.” In other words, it is up to the producer to place a fair price on their product based
on what they perceive the value of the labor required to be worth. Producers must also keep
in mind that other producers of the same product may place a lesser value on their labor
and may have their product at a lower price. Applying a price to their product also allows
producers to make a profit with their sales. They can overestimate the value of the labor or
match the competitor’s price regardless of the cost of their own labor.
Next Message by Jill is [608].
[609] Scott: Commodity owners do not write the labor content of the commodity they
have produced on the for sale signs because if they, the capitalist, did this the purchaser
would give them exactly that, the labor content price! The capitalist would not gain a profit
because he would have paid the laborer exactly the cost of what it took to make the good.
The capitalist would be unable to receive the difference that was made in the product, which
was put there by the laborer. The capitalist would not be able to gain from the production
process, from owning the production process and so he would have to find some other way
to gain his money.
Hans: In Marx’s theory, prices are determined by labor content, and capitalists make profits. How? By not paying
laborers as much money as their labor produces. I tried to explain this in more detail in [45], [49], and [113]. This
is a very basic part of the theory.
First Message by Scott is [25].
[613] Kalmerico: Unspoken Labor Power. Three main reasons why commodity owners
don’t write labor-content on signs is because: 1) The money system allows for efficiency.
Money allows for a direct exchange between buyer and seller and including labor content
would add complications. 2) Capitalist production is a private process. Labor content is
only the business of the capitalist (seller), and they are more interested in portraying their
commodity’s use-value. 3) To reveal the surplus value would have a negative effect on the
seller because they would lose some of their negotiating power. Hans also described this as
the “elephant in the room.” While neither the buyer nor the seller discuss labor content, they
are both still aware of its presence.
Hans: With the “elephant in the room” metaphor I meant to say: after they determine a market price in the best
way possible based on the commodity itself without discussing non-pertinent issues such as the commodity’s labor
136 2007fa Econ 5080 U of Utah
content, the competition of the suppliers will increase or decrease the supply according to whether this price is
above or below its value.
Next Message by Kalmerico is [615].
[620] Amy: Why prices on price signs? A commodity owner writes the price and not
the labor content on their price signs because everyone measures labor differently. Some
owners might factor in things that they consider labor, increasing their labor content and in
return increasing their price. Secondly, it is not the owner that determines the price of the
commodity in the market. The price has already been determined by the commodity before
it enters the market. Lastly, when a buyer and seller negotiate the price of a commodity
they talk about its actual properties, not the labor content of the commodity. People buy
commodities for their properties, what will have use-value for them, and they are not as
much concerned with the labor that went into making the commodity.
Hans: The three reasons you give contradict each other. If the labor content does not play a role in the purchase
decision, then the fact that everybody measures labor differently does not matter.
Next Message by Amy is [621].
[623] Melissa: graded A Commodity owners write the price on the price signs as opposed
to the labor content for a couple of different reasons. To start, the laborers know they add
value to the commodities they are building and they know the wage they make for building
those commodities. This being said, it would become very apparent to the laborer just how
much profit the capitalist is making off their hard work. Another reason the commodity
owner does not write the labor content on the price signs is the fact that the commodity
owner is trying to make a profit. If the labor content is advertised the commodity owner will
only make back the money they invested in the product and not gain any profit. The price
of the commodity is determined by the social norm because of this the commodity owner
would be throwing away any profits he could make off the commodity. The last reason I will
discuss is the fact that not all commodities are created equally. Some commodity owners
may have machines or new innovations that decrease or increase the amount of money the
commodity costs to create. With this it would be difficult to justify the price difference for
commodity A selling for X amount of money sitting next to commodity B selling for Y
amount of money. Since, as I mentioned earlier the price is set by the social norm, both
commodities will sell at the same price. In the above example one commodity owner will be
forced to sell his commodity for a lesser value and not make as much profit. Thus the price
is displayed on the price sign and not the labor content.
Hans: Your first point is valid. If money were denominated in labor hours, then the workers would realize that
they get only 1/2 hour’s wage for every hour worked, and they would not agree to this.
Your second point is invalid. Profits in general do not come from overcharging in the market, but from underpaying
wages. Capitalists would still make profits, even if all prices were directly proportional to labor content.
Interestingly, this was added in your resubmission; the original answer had only the valid points one and three.
Your third point is valid again. If capitalists were obligated to disclose the (direct and indirect) labor content of
their commodities and were allowed only to charge this and not more, then a big part of the incentive for technical
innovation would fall away. Marx said in 195:2/o that the discrepancy between price and value is not only an
accident or disturbance, but a necessary element of a market economy.
Next Message by Melissa is [625].
[642] Melanie: content B– late penalty 1% Price Signs Hide The Truth. Commodity
owners write price signs and not labor-content signs for the commodities they produce because
the commodity owner wishes to express a specific thought of value of a commodity.

U of Utah Econ 5080 2007fa 137
The commodity owner (seller) wishes not to draw attention to the actual labor-content of
a commodity. Amy in [269] quotes the Annotations saying, “In the negotiations between the
buyer and seller, only the properties of the product itself are discussed; the labor spent by the
producer is treated as if it was the private affair of the producer.” Although the labor-content
of the commodity is not discussed when using price signs, it is the underlying factor that
determines whether profits are made or lost. If the commodity owner can sell his commodity
at a price higher than that of the labor put into producing the commodity, profits are made.
If not, profits are lost. As Ozz in [286] puts it, “If labor-content was written on a commodity
instead of price there would be no room for profit because that would be the exact value of
the commodity and what the holder put into the commodity.”
Hans: In Marx’s theory profits are not a portion of the price in addition to the labor content, but they are the
residual which the capitalist gets because the workers are not paid a full equivalent of the labor they contribute to
the commodity.
Therefore, by using money prices the commodity owner, or capitalist, can aquire more
profits while keeping their exploitive tactics more hidden.
Next Message by Melanie is [662].
Question 371 is 230 in 1997ut, 298 in 2002fa, 350 in 2004fa, 376 in 2008fa, 391 in
2009fa, 408 in 2011fa, and 424 in 2012fa:
Question 371 By putting a price tag on a commodity, does the seller declare, assert, that
this commodity contains as much labor as the corresponding amount of gold?
[270] ZACH: Commodities worth Gold. Assuming that we are comparing the commodity
to gold, then I believe that yes. As the book says, “although invisible, the value of iron,
linen and corn exists in these very articles: it is signified through their equality with gold,
even though this relation with gold exists only in their heads, so to speak.” If I am understanding
correctly, then whatever the owner of the commodity feels his commodity is worth,
in his head, compared to gold, that is the price he/she is going to charge for that commodity.
If gold is the value that we are comparing the commodity to, then the owner is of course
going to try and charge the full amount for the commodity that he feels it is worth.
Message [270] referenced by [278], [287], and [579]. Next Message by ZACH is [271].
[278] Hans: How does the labor theory of value work in practice? ZACH [270] thinks
that in Marx’s paradigm with gold money, people determine the prices of commodities by
asking themselves: “how much gold has the same labor content as my commodity?” Amy
[269] knows that this is an absurdity – nobody does this – therefore she concludes that
exchange-values are not determined by labor.
Both answers make the same mistake. They do not see that labor content can determine
exchange-proportions even if the labor content is not on the mind of the commodity owners
making the transaction. In [2007SP:586] I called it the “elephant in the room” and explained:
If market prices are above the value determined by this labor content, more
suppliers will tend to appear on the market until the discrepancy between
values and prices disappears, and if market prices are below value, supply
will diminish.
138 2007fa Econ 5080 U of Utah
I.e., independently of the will of the commodity traders, the demand-and-supply situation
in which they are embedded causes prices to be proportional to labor values.
Message [278] referenced by [269], [287], [288], [321], [341], [563], [570], and [611]. Next Message by Hans is
[288].
[532] Brian: Yes. By placing a price tag on a commodity, the seller declares or asserts
that the same amount of labor that went into producing the commodity is equivalent to the
amount of labor going into the production of the gold that will be received in the purchase
of the commodity. Admittedly, if the seller believes that a high amount of labor went into
the production of the commodity and posts a corresponding price but the buyer interprets the
price to be to high, the buyer will not purchase the commodity, and following the “elephant
in the room” explanation, the demand for the commodity will go down, causing the supplier
to either lower his price or leave the market. The truth still exists that the seller of the
commodity asks the price that most appropriately declares the amount of labor that went
into the production of the commodity.
Hans: The seller / producer knows how much labor is in the product, and this, along with the other costs of the
product, will definitely affect the price he is going to ask. But he compares his costs not with the labor going into
the production of gold (which he does not know) but with the use-values which he can buy with this gold. The
answer to this question is therefore “No.”
Next Message by Brian is [567].
[563] Milton: price containing value of labor. Yes, when putting a price tag on a
commodity, the owner is asserting that the commodity contains as much labor as the socially
accepted amount of gold, which is the medium of exchange. Labor is the defining measure
of value therefore to put a price tag on an item is saying that equivalent value of labor is
equal to the corresponding amount of gold. Hans explains this in his “elephant in the room”
concept. To sum it up, “the demand-and-supply situation in which they are embedded causes
prices to be proportional to labor values.” [278]
Hans: With the elephant-in-the-room metaphor I tried to explain how labor-time matters in an exchange even if
neither of the two traders has enough information to compare the two labor-times.
Next Message by Milton is [564].
[579] Dyoung: graded A No. In-class answer: The seller is only giving the perceived
exchange value of the product/commodity. Oftentimes the labor is only a portion of this
exchange value, the rest is affected by other market conditions such as supply and demand.
In the above, it appears I made the same mistake as did Amy [269] and ZACH [270].
As Hans pointed out, labor content can determine exchange proportions even if the labor
content is not on the mind of the commodity owners making the transaction.
Because the commodities are in a supply and demand situation, their prices are affected
by supply and demand. If no one is supplying and prices are high, and there is profit to be
made, producers will come out of the woodworks to get in on those profits. You see that all
the time, whenever something new and cool comes out, it is only weeks before a cheaper
knock-off is available. The reverse is true too. If the product is priced below value, then
suppliers will not produce it. In these cases we can see, that labor values are proportional
to prices, or else society’s supply and demand system will balance that out. Labor value is
taken into consideration either directly or indirectly.
Next Message by Dyoung is [581].

U of Utah Econ 5080 2007fa 139
[595] Tomb: putting a price tag on a commodity. By putting a price tag on a commodity
the seller does not declare or assert that the commodity contains as much labor as the
corresponding amount of gold. Labor content determines exchange proportions even if the
amount of labor put into a commodity isn’t thought about by the commodity owner. Marx
states:
“If market prices are above the value determined by this labor content, more suppliers will
tend to appear on the market until the discrepancy between values and prices disappears, and
if market prices are below value, supply will diminish.”
This simply means that commodity sellers are not price makers, rather they are price
takers. The demand and supply situation in the market they are in causes prices to be proportional
to labor values.
Next Message by Tomb is [660].
[611] Nogi: exam resub- the weight of gold. Hans refers to this as the “elephant in
the room”. In [2007SP:586] Hans says “If the market are above the value determined by
this labor content, more suppliers will tend to appear on the market until this discrepancy
between values and prices disappears, and if the market prices are below value, supply will
diminish.”
I think that by putting a price tag on a commodity the seller is trying to assert that value
of the commodity relative what they believe its worth or close to the market price. The seller
might believe the labor put into building the commodity corresponds to certain amount of
gold but this is irrelevent because the value of the commodity is predetermined because labor
content can determine exchange-proportions even if this is not on the minds of the sellers
making transactions as Hans said in [278].
Hans: They also look what others do, but basically they decide, based on what they know money can buy, that
it is worth to them to sell their commodity at a given price. The link between these prices and labor content is
established by suppliers trying to spend their labor on those products which give them the highest price per labor
hour spent.
Next Message by Nogi is [614].
[626] Jason: In regards to this question, it has been stated before in a past submission
[217] that when a seller puts a price tag on a commodity that he/she is in essence establishing
the worth of the commodity. According to Marx, it is his belief that the amount of human
labor contained in a given item should possess the same quantity of the money commodity
as does the amount of labor as the given item. Hans states that labor is invisible and that it
does not enter the interaction of the economic agents directly (p226). The manufacturer of
a given product must price that product so as to be able to sell it. Because this is true the
producer will attempt to price the item at the highest price that the item can sell for, or which
people would be willing to pay in order to gain a profit.
Hans: Everything is good except your sentence about Marx’s belief. The labor theory of value is not a normative
theory about what should be the prices, but it is a theory trying to explain the actual prices in an actual capitalist
economy.
Next Message by Jason is [630].
[629] Caroline: Seller does not declare commodity’s labor=gold. In my response to
this question, I wrote in class that by putting a price tag on a commodity the seller does not
declare that the commodity contains as much labor as the corresponding amount of gold.
140 2007fa Econ 5080 U of Utah
I elaborated on the “elephant in the room” as Hans referred to it; however, upon further
review of his answer, this should be added: the participants – commodity owners – do not
have labor content in mind when they price their goods, but because of the market situation
in which they participate, this forces them to price their goods “proportional to labor values”
(Hans’ response to [371]).
If the price at which a seller decides to sell their good is higher than the value derived
from the labor content, then more suppliers will emerge. Until the difference between price
and labor content level out and when the price is below the value, then there will not be as
much supply. In my response in class, I wrote that once the price reflects labor content, then
there will not be as much supply, but it is actually when the price is below that value then
supply will decrease.
Hans: Thank you for openly discussing the mistakes in your in-class answer instead of glossing over them, as
many others do.
Next Message by Caroline is [632].
[633] Bosox: It would take more time in figuring out if your commodity was worth the
corresponding amount of gold in labor because they would not be able to determine the
amount of labor that was invested in making the gold. When one sets the price there are
other factors to look at. One wants their commodity to sell so they will make sure not to set
the price too high but also they will make sure not to set the price too low. In order to have
prices proportional to labor value one would need to take a closer look at the demand and
supply situation. Supply will diminish if the market price is below value and increase if the
market price is above value. More and more suppliers will be approaching the market place
but only until there is an equilibrium that will bring the market back and the discrepancy
between value and price has disappeared.
So no the seller does not assert that there commodity contains as much labor as the corresponding
amount of gold. They are hoping to take it to market to make a profit and this
will be determined if there are setting their price too high or too low.
Next Message by Bosox is [634].
[658] Chased: Backwards. The question is asked backwards. The market determines the
price tag on a commodity with the seller ensuring that the product being sold is equated to
the proper amount of gold.
But, to answer the question directly, yes, the seller is asserting that the good has the
appropriate amount of gold to labor by taking into account all labor and surplus-labor from
the good’s inception through its sale. The seller, being a capitalist, must make the effort to
earn his appropriate amount of gold through his attempts to sell the commodities.
Hans: Do you mean: the capitalist has to make sure, through packaging, marketing, etc., that the good actually
fetches the price which the market holds for it?
First Message by Chased is [150].
Question 372 is 241 in 1998WI, 299 in 2002fa, and 351 in 2004fa:
Question 372 Marx says that under the gold standard the magnitude of the price of a commodity
is that amount of gold which contains the same amount of socially necessary labor
as the commodity. However the person who purchases the commodity has, as a rule, no

U of Utah Econ 5080 2007fa 141
idea how much labor his gold coin represents. Which mechanism did Marx postulate for the
dependence of the price level on the labor content of gold?
[287] Fred: When gold goes up. The price level is dependent on the labor content of
gold because this labor content is expressed at the very first market transaction with the gold
producers. If for some reason gold has become harder to produce, more labor has gone into it
and the gold producers will require or get a greater magnitude of commodities in this initial
exchange. Now in future transactions the producers of other commodities may not know
how much labor the gold represents, they don’t need to. Gold is the generally accepted
commodity equivalent in the market, so it still represents all commodities values; therefore,
this increase will work its way through the economy. The gold piece in their hand now has
an increased value because there was an increase in labor content to produce it. The bearer
of the gold coin will now also be able to get a larger magnitude of commodities with it. In
this way the price level is still dependent on the labor content of gold.
In reading the previous question 371 Zach’s [270] mentions that commodity owners will
try and charge what they “feel” the commodity is worth, but it seems rather that it is the
market “telling” them. If the market sees a higher value than the owner “feels” it has, because
of his costs and labor to produce are lower than market, other producers will rush to supply
the undervalued commodity to usurp the surplus value, but the increase in supply will drive
down the market to the true labor content value, and price and value are now equalized. Hans
[278] discusses this as the “elephant in the room.”
Amy’s [269] at the end mentions that the price may or may not have anything to do with
the labor put into the commodity. But as seen above, it is indeed precisely the labor content
in the commodity that is determining the exchange-value or price for the same reasons as
this question (372) answered above. Hans also points this out in his [278] that labor content
can determine exchange proportions, as correlated with the above mechanism that Marx
postulates in answering this question, in other words, price level is still dependent on the
labor content of gold.
Hans: Excellent. This is also a good example how to engage the answers of your peers. I hope others will emulate
this.
Next Message by Fred is [352].
Question 376 is 280 in 2001fa, 381 in 2008fa, 396 in 2009fa, 413 in 2011fa, and 431 in
2012fa:
Question 376 If the value of gold changes over time, does this impair its role as standard
of prices? Does it impair its role as measure of value?
[293] HTJY: Changes in the value of gold over time do not impair its roles as standard
of prices and measure of value. According to Marx, changes in the value of gold over
time do not impair its roles as standard of prices and measure of value.
Gold as standard of prices is a fixed amount as specified by a specific weight. Its functioning
as standard of price is assumed to satisfy the property that the relation between
different quantities of gold is isomorphic to the relation between their values. For example,
two ounces of gold carry twice the value of one ounce of gold.
142 2007fa Econ 5080 U of Utah
Now, suppose that the value of gold has fallen by 100% over a period of time. Assume that
an ounce was and still remains to be the standard of price. It holds trivially that the weight
of one ounce of gold is invariant under this change of the value of gold. Moreover, there is
no reason to support that the functioning of gold as standard of price no more satisfies the
property that the relation between different quantities of gold is isomorphic to the relation
between their values; so, two ounces of gold still carry twice the value of one ounce of gold.
Thus, changes in the value of gold over time do not impair its role as standard of prices.
Gold as measure of value expresses the values of commodities in terms of its weights. The
functioning of gold as measure of value is assumed to satisfy the property that the relation
between the values of commodities is isomorphic to the relation between their prices as
expressed by the corresponding weights of gold. For example, if the value of commodity M
is twice that of commodity N, then the price of M is twice that of N as expressed in terms of
the weights of gold.
Assume that there were three commodities A, B, and C in which the value of C was
twice that of B and the value of B twice that of A. Assume further that their prices were ten,
twenty, and forty ounces of gold respectably. Now, suppose that the value of gold has fallen
by 100% over a period of time. Then, the new prices for the commodities A, B, and C are:
twenty, forty, and eighty ounces of gold, respectably. Observe that, although the value of
gold and hence the price of the commodities have changed, the relation between the values
of the commodities remain unaltered and so are the relation between their corresponding
prices as expressed in terms of the weights of gold. That is, the value of B is still twice that
of A and the price of B is still twice that of A, etc. Thus, changes in the value of gold over
time do not impair its role as measure of value.
Hans: Two points. (1) What do you mean with the value of the commodity falling 100%? Wouldn’t that imply it
falls to zero, which puts us into a completely different ballgame? I know Marx in his text even talks about the value
falling 1000%, but I always considered that an exaggeration.
(2) You are not explaining why the relations of the values between gold and the commodities are unchanged
when the value of gold falls. This is a somewhat surprising point which needs to be explicitly argued.
HTJY: (1) I am glad that you have brought up this subtle point. When I was reading “If the value of gold fell by
1000 per cent, ...” (Capital, 192:2/o), I myself had the exact same question as you did and had to stop reading and
think for a while about whether Marx was making a mistake. Here is how I resolved the puzzle.
When the value of gold falls by 100%, it surely falls to 0. Why then does Marx even talk about the value of
gold falling by 1000%? The key to resolving this seemingly erroneous thought is to realize, or rather not to forget,
that Marx uses value in two different contexts. The whole point of conceptualizing value is so that
(i) we can identify social relations of production buried in commodity
(ii) we can set the exchange ratios between commodities
If we use the word value in the context of (i), we are considering value (of a commodity) by itself without making
a comparison to the value of another commodity. Thus, in this case, if the value of a commodity falls by 100%,
it certainly does fall to zero since the value of the commodity stands for a quantity of abstract human labor that
constitutes the commodity. On the other hand, if we use the word value in the context of (ii), we are considering the
value of a commodity only as a part of a value equation. In this context, it is entirely valid to talk about the value
of a commodity falling by 1000%. For example, consider a value equation:
1 bottle of coconut wine = 1 ounce of gold
Suppose that the value of gold falls by 100%. Now here is the key observation: a decrease in the value of gold
requires that the value equation be modified so that 1 bottle of coconut wine is equal to MORE, NOT LESS, than
1 ounce of gold! So, the decrease in the value of gold by 100% requires that the value of 1 bottle of coconut wine

U of Utah Econ 5080 2007fa 143
be equal to the original 1 ounce of gold + an extra of 100% of 1 ounce of gold, i.e., 1 ounce of gold; this is the
meaning of “the value of gold falling by 100%” IN THE CONTEXT OF (ii). The new value equation is:
1 bottle of coconut wine = 2 ounces of gold
Similarly, if the value of gold falls by 1000%, the new value equation will be:
one bottle of coconut wine = 11 ounces of gold
I stated earlier on Q376: “Assume that there were three commodities A, B, and C in which the value of C was twice
that of B and the value of B twice that of A. Assume further that their prices were ten, twenty, and forty ounces
of gold respectably. Now, suppose that the value of gold has fallen by 100% over a period of time. Then, the new
prices for the commodities A, B, and C are: twenty, forty, and eighty ounces of gold, respectably.” This statement
can be understood in a similar fashion.
Marx’s statement on p. 192:2/o that “If the value of gold fell by 1000 per cent, 12 ounces of gold would continue
to have twelve times the value of one ounce of gold ... ” can be understood similarly too. Consider x ounces of gold
at t1 (i.e., at time 1) and x ounces of gold at t2 (i.e., at some later time 2). We can think of these as representing two
different values. Suppose that the value of gold has not changed between t1 and t2. Then, we have the following
two trivial fixed cases of value equation:
1 ounce of gold at t1 = 1 ounce of gold at t2
12 ounces of gold at t1 = 12 ounces of gold at t2
Now suppose that the value of gold has fallen by 1000% between t1 and t2. Then the new value equations are in
the light of the above discussion:
So, we have at t1,
At t2,
1 ounce of gold at t1 = 11 ounces of gold at t2
12 ounces of gold at t1 = 132 ounces of gold at t2
12 ounces of gold = 12 * (1 ounce of gold)
132 ounces of gold = 12 * (11 ounces of gold)
Dividing both sides of the last equation by 11, we have:
12 ounces of gold at t2 = 12 * (1 ounce of gold at t2)
This is the meaning of “If the value of gold fell by 1000 per cent, 12 ounces of gold would continue to have twelve
times the value of one ounce of gold.”
(2) To explain “the relations of the values between gold and the commodities” in this context amounts to
verifying that an isomorphism holds between ‘the relation between the values of commodities’ and ‘the relation
between their prices’ when the value of gold changes, as I showed in the answer. Unfortunately, the time now is too
late to continue the discussion. I will try to get back to the statement I just made either on Sunday or after Monday.
By thoroughly going through the answer one more time, I am hoping to either verify it or discover errors in it.
p.s. Thank you for making me stay up unusually late at night!
Hans: This is an excellent explanation of the 1000 percent!
Message [293] referenced by [2008fa:613]. Next Message by HTJY is [387].
Question 383 is 249 in 1998WI, 324 in 2003fa, 362 in 2004fa, 377 in 2007SP, and 420 in
2011fa:
Question 383 Discuss the phenomena which Marx refers to as “quantitative and qualitative
incongruities between price and value”
[314] Desk: Phenomena. “The price-form, however, is not only compatible with the possibility
of a quantitative incongruity between magnitude of value and price, i.e., between the
former and its expression in money, but it may also conceal a qualitative inconsistency, so
much so, that, although money is nothing but the value-form of commodities, price ceases
144 2007fa Econ 5080 U of Utah
altogether to express value. Objects that in themselves are no commodities, such as conscience,
honour, etc., are capable of being offered for sale by their holders, and of thus
acquiring, through their price, the form of commodities. Hence an object may have a price
without having value.”
“Every price must be reducible to a value, because price, in and for itself, is nothing but
the monetary expression of value. The circumstance that the actual price of a commodity
may stand above or below the level corresponding to its value does not alter the fact that
prices are an expression of the values of the commodities, even though the expression is in
this case quantitatively too large or too small–quantitatively incongruent. But here in the
price of labor the lack of congruence is qualitative”.
As stated in Capital Marx is claiming that every price is reducible to value. The paragraph
above simply states that, the piece here is showing the relationship of quantitative and
qualitative incongruities between price and value. Incongruity in this case meaning the quality
of disagreeing; being unsuitable and inappropriate. As stated above, conscience, honor
and other commodities show and define these relationships.
Hans: Honor and conscience are not commodities, although they can take the form of commodities if someone is
willing to sell his honor or conscience.
You bring the right Marx quotes and a passable definition of “incongruity.” Therefore you did all the preparatory
work. You should have given a much more detailed explanation in your own words what your quoted passages
mean.
Next Message by Desk is [315].
Question 389 is 394 in 2008SP, 410 in 2009fa, 427 in 2011fa, and 445 in 2012fa:
Question 389 Describe the contradictory and mutually exclusive relationships in the process
of exchanging commodities.
[308] Melanie: graded A– Mind Boggling. In this section Marx examines the paradoxical
nature of the exchange of commodities. He tells us that the contradictions that exist
within the process of exchange provide the structure for “social metabolism” i.e. the transfer
of commodities from hands in which they are non-use-values to hands in which they are
use-values. Commodities can only exist as “exchange-values” for a seller and “use-values”
for a buyer. Money can only exist as “use-values” for a seller and “exchange-values” for a
buyer. Therefore, in order for a commodity to be both a “value” and a “use-value” it must
be produced for exchange. This dualistic phenomenon involving money and commodities is
directly related to Marx’s concept of “use-value” and “value”. It is this dualistic and contradictory
phenomenon that allows commodities to exchange on the market. Commodities need
the ability to be a use value when purchased and an exchange value when sold to circulate
through the market.
Purchase = Sale
M−>C C−>M
M=ex-value M=use-value
C=use-value C=ex-value
Message [308] referenced by [310]. Next Message by Melanie is [370].

U of Utah Econ 5080 2007fa 145
[310] Hans: Making Abstract Contradictions More Concrete. From [308] I get the
impression that Melanie is reading the text, and she is not understanding everything in the
text (which happens to all of us reading such a difficult text), and then she is spinning the
main points, or the points she still remembers, together into a somewhat coherent theory. But
this spinning together of remembered fragments often misses important transitions. Marx
has discovered some things which are not easy to re-discover, especially since the theoretical
development has moved in a different direction. One could say that modern social science
is one big effort to prove that Marx was wrong by steering away from and avoiding those
insights which make him right.
Therefore you (not only Melanie but many others) have to read the text even more closely;
don’t read over it too fast but try to stick with it until you have understood it a little better. I
think Melanie would also benefit from coming to class more often, because I try to explain
those things in class which she seems to be missing.
Just a couple more specific points: (1) Melanie says that “the contradictions that exist
within the process of exchange provide the structure for ‘social metabolism’.” I would rather
say first of all that every kind of society has a ‘social metabolism’, but different societies
achieve it through (Marx would use the phrase “mediate it by”) different social relations and
activities. Those social relations and activities through which it is mediated in a commodity
society are contradictory. I.e., where Melanie wrote that the contradictions provide the structure
for social metabolism, I would say that the social structure which provides the social
metabolism is contradictory.
(2) When Melanie describes the contradictions themselves, there are some points I can
agree with. Each commodity is both use-value and exchange-value, but there is a contradiction
between use-value and exchange-value. This contradiction between the use-value and
exchange-value of each commodity is then externalized into the contradiction between ordinary
commodities (which are actual use-value and potential exchange-value) on the one hand
and money (which is actual exchange-value and potential use-value) on the other. Melanie
is kind of describing this but she is not giving a cogent argument for it.
Marx gives a very abstract and hard-to-understand argument in the first chapter. When
he looks at the exchange-process, this same contradiction becomes much more concrete and
tangible. That was the topic of the question: to describe in concrete and understandable
ways how the exchange is a contradictory process. As I said, Melanie hasn’t done this yet;
perhaps someone else would like to give it a try.
Next Message by Hans is [312].
[504] Charles: Commodity Exchange. A commodity exchange is a trade where there
becomes a mutual benefit for both parties when one exchanges his commodity for someone
elses. The exchanged commodity can be money, can be labor can be products or anything
else the parties have agreed to exchange.
Hans: “Mutual benefit” is not the same as “contradictory and mutually exclusive.” When Marx wrote “we saw
that the process of exchanging commodities contains contradictory and mutually exclusive relationships,” he meant
that there are two relationships involved in the exchange which contradict each other and which are “mutually
exclusive,” i.e., each excludes or precludes the other. These are the two purposes (a) and (b) in my [509].
Message [504] referenced by [507]. Next Message by Charles is [505].
[507] Bosox: In respone to Charles. I would like to add to Charles comment from [504]
146 2007fa Econ 5080 U of Utah
Marx states in chapter 2 “for the owner, his commodity possesses no direct use-value.
Otherwise, he would not bring it to market. It has use-value for others; but for himself
its only direct use-value is as a bearer of exchange-value, and consequently, a means of
exchange.”
A commodity for one person can be contradictory because it has no use-value for the
individual but it will have use-value only with exchange-value, so that they may pick up
another commodity that will serve them with use-value. This is why it is contradictory and
mutually exclusive: I can not have a commodity and have it serve as use-value for me at
the same time of having exchange-value. To use the term utility one would have to take a
look at their utility curve to make a better decision on whether or not it is a use-value or an
exchange-value. Marx in chapter Two stated “They can only bring their commodities into
relation as values, and therefore as commodities, by bringing them into an opposing relation
with some one other commodity, which serves as the universal equivalent.”
Hans: Yes, exchange-value and use-value are in contradiction to each other. You are looking for the answer in the
right place, and you bring relevant quotes. Making it a compelling and coherent explanation is not a trivial matter,
it still requires a lot of thought, and I don’t have the time right now to try to fill in the missing links. But overall
this seems to be the sketch of an explanation which is similar to my [509].
One more note: even if you can look at your utility function and ask: is this thing more useful to me as a means
of exchange, or for my own consumption, this does not resolve the contradiction. It is only a practical way of
dealing with it.
Next Message by Bosox is [588].
[509] Hans: Contradictions of exchange. Marx refers here back to chapter Two, where
he discussed the exchange process. In chapter Two he said that everybody who takes a
commodity to market has two conflicting purposes in mind:
(a) they want the realize the value of their commodity, i.e., they want to get a fair return
for their commodity, not give away the farm.
(b) in exchange for their own commodity they want to get a commodity which suits their
needs.
These purposes are contradictory. (a) is purely social, it depends on how well their commodity
fits into the social division of labor, i.e., how much others need their commodity. (b)
is purely individual, only the trader himself can decide whether a use-value is something
they want or not.
The contradictory character of these purposes can also seen as follows. Assume someone
has a very specific use-value in mind, which is only offered by one other seller in the market.
Then they are in a poor bargaining position; they cannot say: if you demand too much in
exchange for your commodity, then I’ll go to some other supplier. On the other hand, if they
are not very choosy about the use-value they want to acquire, they can go from stand to stand
until they find someone who is willing to give them a lot for their commodity (even if that
“lot” may not quite be the right color etc.) I.e., you can either focus on (a), then you have to
neglect (b), or vice versa. A strategy which promotes both (a) and (b) at the same time is not
possible.
Marx says that this contradiction is not resolved, but it is given room to move, in the
circulation of commodities involving money. Instead of making one transaction, C-C, which

U of Utah Econ 5080 2007fa 147
has to satisfy two contradictory goals, now the trader has to go through two transactions,
each of which specializes in one of these goals:
C-M, the sale, only has purpose (a), to realize the value of C. C can be offered to anyone
who needs C, regardless of what these other commodity producers produce, since they do
not pay with their product but with money.
M-C is then the purchase. This is (b) because now the individual can directly choose
the best use-value which is offered to him at a reasonable price. He no longer has to worry
about the social dimension of the exchange, since the money in his hands is proof that his
own commodity did fit into the social division of labor.
This is one of the points where Marx differs from mainstream economics. Mainstream
economics says the exchange is inconvenient or impossible because of the double coincidence
of wants. It says nothing about realizing value, because it does not have a concept of
value separate from use-value. In Marx’s framework, the contradiction is not between two
different use-values, but between the value and the use-value of the same commodity.
Which framework is better? I think Marx’s framework is. Assume two traders make
an exchange in which the double coindicence of wants happens to be no problem. A loves
the use-value of B’s commodity, and B loves the use-value of A’s commodity, and both
are willing to make the trade. What is wrong with this? They have no idea whether their
individually decided exchange has anything to do with the market relations of the two traded
commodities. I.e, the double coincidence of wants is not the whole story; the value of the
commodities is always the hidden elephant in the room.
This here is the answer. You can safely ignore the previous answers to this question.
Message [509] referenced by [504], [507], [510], [577], [2008fa:697], and [2009fa:873]. Next Message by Hans is
[510].
[560] Poppy: The contradictory and mutally exlusive relationships in the process of exchanging
commodities boil down to the fact that the “value” of a commodity, is not the same
as its “use-value”. Two people that bring a commodity to the market for exchange are both
looking to get a fair return, or realize a fair value. They also want to find a commodity that
will give them what they need. Having both objectives in mind is not possible per Marx,
hence the contradiction. If one decides to focus on finding the one special commodity that
they need to suit their needs, they will need to neglegt trying to get the best value or the best
fair return for their product that they are exchanging. The same is true the other way around.
There is some level of resolution though to this contradiction through M-C exchange, instead
of just C-C exchange.
In any exchange however, both parties participating will benefit from the trade, how or
why else would the trade take place? It is plausible though that one was diligently focused
on getting a high “Value”, while the other was looking for a high “use-value”.
Hans: Direct barters without the help of money are rare.
Next Message by Poppy is [562].
[577] Fred: CC vs MCM condradiction in commodity exchange. The contradictory and
mutually exclusive relationship in the process of exchanging commodities comes from what
148 2007fa Econ 5080 U of Utah
Marx has identified as two different values in the same commodity, creating contradiction in
the exchange process. They are:
a) The value expressed at market during exchange, or exchange value. The goal of the
exchanger here is to actualize or realize the full value of the commodity. This value would
be represented by their labor time and effort to produce the commodity. (As Hans says in
his [509], “they want a fair return for their commodity, don’t give away the farm”).
b) The commodity they receive in exchange must meet a need and be useful to the recipient.
This is the use-value.
The first goal (a) is a social exchange where the commodity depends on its value to
society or how it fits with the needs of society and the social division of labor as mentioned
by Hans [509]. The second goal (b) is an individual decision on use-value, where only the
exchanger can determine if the commodity is useful to them or not, and to what magnitude.
These two goals are in conflict. We have been talking about a C-C transaction, and if
you focus on (a), what you receive may not have very much of a use-value to you. On the
other hand, if you focus on (b), and you really need a commodity or have a great use-value
for it, you may have to sacrifice price or value in what you are giving up (give it away so to
speak) relative to the labor time required for the product you are receiving simply because
your need for it is so great. You can focus on (a) or (b), but not both at the same time.
The resolution to this conflict is through the use of money where the transaction is split
into two separate events, or the C-M-C process. In the C-M or sale part of the process, you
can focus on (a) and realize the full value of your commodity – C – without regard to what
the others are producing who receive your C because they are paying with M, money. Now
in the second part of C-M-C or the M-C, you can focus on (b). You take your money and
focus on getting the C for which you have the greatest Use-Value without worrying about
how your C given up fits into the social relation of the exchange because your M already
says that it has a social meaning or you wouldn’t have been able to sell it in the first place.
In this splitting up of the exchange process through the use of money or the C-M-C
process, the contradiction is resolved because (a) is focused on independent of (b), and vice
a versa. Both goals in (a) and (b) can now be realized without sacrificing one for the other.
Hans: Very good. The contradiction is not entirely resolved; it is still there in a different form: because now you
have two transactions, sale and purchase, which are independent from each other although they belong together.
Next Message by Fred is [580].
[622] Walmart: mutually exclusive. The process of exchanging commodities tends
to have contradictory and mutually exclusive relations due to two factors influencing each
producer. One is the need to know that their produced commodity will get a fair return on
the market. Two is the commodity one has produced has to be exchanged for a commodity
one wants. The first one depends on how needed their commodity is in general. The second
is the individual’s use-value for the desired commodity, how badly they want it is going to
determine whether or not they will pay through the nose for it. Someone who isn’t too picky
has the freedom to take their money elsewhere and potentially get a better deal, especially if
it involves paying less for something that’s not quite perfect. Two factors cannot be fulfilled
simultaneously, it’s either one or the other.

U of Utah Econ 5080 2007fa 149
Involving money helps this somewhat. Instead of exchanging commodities straight up,
the producer sells his commodity for money (first requirement is satisfied), and then uses
the money to buy what he wants (second requirement is satisfied, the money is spent on
the best deal based on use-value, and money which is spent is proof that his own produced
commodity has a place on the market).
Take an example of two producers who wish to exchange their commodities. They find
the use-value of each other’s commodity to be acceptable, so they make the trade and both
are happy in the end because both factors are also satisfied. The other’s interest in the
commodity doesn’t necessarily guarantee a place in the market for it, though, the acquisition
of the desired product leaves both of them content.
Hans: Both of them may be content, but they never know whether their exchange was done at the socially prevalent
exchange proportions.
The 2007fa archive had to be used to clear up the last sentence of this difficult concept
explanation, hence the deviation from the concluding sentence of my written response.
Next Message by Walmart is [655].
[631] JohnGalt: A Para-what? There are forces which act in direct contradiction to each
other during the process of commodity exchange. This is essential to understand, because it
can be somewhat alleviated by the introduction of money into the system.
The two goals are obvious. First, commodity owners have opposing goals. They want to
have confirmation of the social value of their labor in society. This means that they want to
see the greatest possible array of exchange options, with many buyers and sellers to justify
his production.
At the same time, however, the commodity owner wants to get the greatest use-value from
the exchange. Thus, he wants the exchange for something that will give him a greater usevalue
than the commodity he possesses. This indicates that he desires an exchange where
the market is exclusive and he holds bargaining power to get exactly what he wants.
If the market is broad, with many sellers and buyers, the commodity owner will have
more options but receive a lesser use-value in exchanging his commodity because there will
be many available options that are nearly identical.
However, if the market is too narrow, he may be limited in finding people who want to
exchange with him and he with them. He may not even find anyone willing to barter at all
if the market is too exclusive and demand for his good or supply of goods he is interested in
trading for is too limited.
This paradox has been somewhat uneasily tempered with the introduction of money to
replace the process of barter. Money acts both as a store of value and a medium of exchange
that permits the commodity owner to buy and sell when it is desirable to do so. This
eliminates the necessity of making an immediate trade that might be less than desirable.
Hans: Marx would say that it is not the function of money as store of value that matters here, but its function as
a measure of value. Usually, the money does not stay long in the hands of the seller before he makes a purchase
again. I.e., storage of value is not the issue.
Next Message by JohnGalt is [664].
150 2007fa Econ 5080 U of Utah
Question 394 is 244 in 1997ut, 253 in 1998WI, 263 in 1999SP, 278 in 2000fa, 292 in
2001fa, 388 in 2007SP, 400 in 2008fa, 415 in 2009fa, and 461 in 2012fa:
Question 394 Which difficulties may the commodity producer encounter when trying to sell
the commodity?
[323] Tomb: Difficulties a commodity producer encounters in exchange. Many things
may occur in a marketplace what will make it difficult for a producer to sell a commodity:
(1) The labor aims to satisfy a new need.
(2) A particular operation splits off and becomes its own trade: A smaller commodity
which may have been part of a larger operation may branch off and establish itself as an
independent commodity.
(3) A product is replaced by a substitute: A cheaper or higher quality product may come
along that makes another commodity obsolete.
(4) The labor itself is useful but the need for this kind of product has already been satisfied
by other suppliers: If other people have already supplied the marketplace with a certain
commodity any additional supply will be useless.
According to Marx in these situations discussed above the commodity can still probably
be sold, but at a much lower price than is optimal for the seller.
A few other situations might arise that could affect the amount of money a seller can get
for a certain commodity:
(6) Changes of production elsewhere could greatly affect the price: If a better method of
production is invented elsewhere it could dramatically affect the price a seller can get in the
marketplace.
(7) Overproduction in the market could cause all producers to drop their prices. Marx
claims this is tantamount to them producing at a below-normal productivity.
Hans: Most of your answer is copied verbatim from the Annotations. There are at least two interesting issues
which would deserve discussion and commentary:
(a) What is the difference between (4), where one producer supplies too much to the market, and (7), where all
producers supply too much to the market? If there is excess supply, how can you distinguish between (4) and (7)?
(b) Marx says here that a general oversupply is equivalent to the situation where the productivity of all producers
falls. This is surprising. Usually he says that the fall in prices due to a market oversupply is a fall of prices below
the value, while a fall of prices due to changes in productivity corresponds to a fall in the value itself.
Message [323] referenced by [587]. Next Message by Tomb is [473].
Question 396 is 279 in 2000fa, 318 in 2002fa, 373 in 2004fa, 390 in 2007SP, 401 in
2008SP, and 402 in 2008fa:
Question 396 Compare the sale of a commodity, i.e., its exchange for money, with the barter
of two ordinary commodities.
[311] BHales: Money Commodity exchange. In a C-C exchange, the exchange is more
use-value oriented. One producer is looking to exchange a commodity he has produced for
another commodity that is more useful to him. This exchange has little to do with what else
is occurring in the economy.

U of Utah Econ 5080 2007fa 151
On the other hand, in a M-C exchange, the buyer brings his money in exchange for
a commodity. This exchange is not directly based on use-value. With the money received
from the exchanged, the seller will later purchase another commodity from another producer
(typically not the same person he exchanged with originally) and the money tends to flow
through the economy from person to person. This flow affects the economy outside of the
direct exchange.
Money brings a new aspect of exchange the C-C does not, money as a store of value. In
other words I can exchange a commodity I dont need now for money to purchase another
commodity later on.
Message [311] referenced by [312] and [599]. Next Message by BHales is [318].
[312] Hans: The Day Care Center Theory of Exchange. Mainstream neoclassical
economics has a simple explanation of the barter between two commodities. You are willing
to make the trade if and only if your trading partner’s commodity gives you more utility than
your own. The trade actually occurs if both partners are willing to make the trade.
I call this the Day Care Center theory of exchange because it fits the situation when two
children decide to trade their toys. This theory seems convincing only because we have little
direct experience with direct barter. Most of our market transactions involve money, and
things which we barter are things that are left over from consumption, not things which we
produced for the barter.
Now put yourself into the situation of a Medieval artisan, who produces things during the
week and takes these things to the market on Saturdays in order to trade his product for the
things he needs to live on in the next week. And assume that the transactions on the market
do not involve money but are pure barter transactions.
In this situation, I would argue that the artisan producer/trader does not compare usevalues
when he trades. For him, the commodity offered for trade is not a use-value foregone,
because he can easily reproduce it in his workshop. Rather, it represents labor expended
during the week. His goals on the market are not only to find the best use-values for consumption
next week, but also to decide what he should be producing next week, whether his
production plan and inventory needs adjustment.
Using Marx’s terminology this means that the exchange has two goals: on the one hand,
the artisan needs to come home with the most desirable use-values, and on the other he
needs to realize the value of his commodities. “Value” means here labor-time: he needs to
get something back from the exchange that is equal in labor content to the things he brought
– because if he doesn’t, he should in the future produce different things than in the past.
In chapter Two, Marx describes how these two goals are in contradiction with each other.
This contradiction leads to the splitting up of C-C into C-M-C, Commodity – Money –
Commodity, i.e., first sale and then purchase. The difference between the barter of two
commodities and the sale of one commodity is that the sale does not have two conflicting
goals, realization of value and selection of use-value, but it has the singular goal of realizing
the value of the commodity sold. The desired use-values enter the consideration only in the
subsequent purchase.
152 2007fa Econ 5080 U of Utah
After giving you the right answer to this question, I’d like to comment on what is right
and wrong in BHales’s [311]. His second sentence, “one producer is looking to exchange a
commodity he has produced for another commodity that is more useful to him,” shows that
his starting point is the daycare center theory of value. This is a big handicap because the
wrong framework can prevent you from seeing certain things.
Despite starting on the wrong foot, the things he is saying also have some right elements.
The first sentence “in a C-C exchange, the exchange is more use-value oriented” gives the
impression that a C-C exchange is only or primarily use-value oriented. This is the big oversight
of neoclassical theory which does not recognize that the exchange has two conflicting
goals, use-value and value. But this sentence also indicates that in the sale, the conflicting
use-value goal is eliminated – which is a correct and important characterization of the sale.
The third sentence, “this exchange has little to do with what else is occurring in the economy,”
is a fallacy. The exchange seems to be an individual decision, but market competition
ties all exchanges together. Individual exchanges are components in a quite sensitive social
interaction. But the correct element in this sentence is that in the barter, the interaction is
implicit and does not have an institutional framework to become effective.
Money provides this framework, because it allows all commodities to express their values
in the same denominator. BHales brings a different argument for the social effectiveness of
money: because with each sale/purchase, the money migrates to the seller and enables him
to buy. BHales and neoclassical economics look more at the mechanics of the circulation
process, while Marx sees it as the mediator of underlying relations of production.
Message [312] referenced by [546], [550], [555], and [636]. Next Message by Hans is [316].
[538] Corey: graded A Sale or barter. In a barter system you are looking to satisfy two
different criteria. First you have created a good through your labor power and are looking to
convert that labor power into value. Second you are looking to satisfy your own use-value.
Your good has a use value to you but it is relatively low as you probably have enough of it for
your own requirements, hence you are looking to trade the excess for a good with a greater
use-value for you. If you simply trade with someone you encounter a unique situation. You
are assigning your good a value (so much of my good for so much of someone else’s). Is
this value the socially acceptable value? Is this good the good you need the most (of highest
use-value to you) or is it just an available good you can trade for? Now it may be hard to
find an acceptable trade that satisfies both a socially acceptable value for your labor power
and a good with high use-value for yourself.
Now if you sell the good you have turned the 2 criteria into one. By exchanging your
good for currency you are simply looking for the socially acceptable value of your good
(labor power). Because this currency expresses the relationship of your good to other goods
the value is easily defined. You then can take this currency and exchange it for a good you
have a high use value for. These “form changes” as Marx calls them, straighten out the issues
of the barter system by allowing you to both see the true value of your good, and purchase
the good with highest use-value for you, without having to compromise either.
Next Message by Corey is [539].
[540] Jeff: When understanding the exchange of a commodity either by sale or barter, it is
first important to note that this exchange will take place if and only if the commodity that the

U of Utah Econ 5080 2007fa 153
individual will try to obtain will provide to him more utility than he currently has. Having
prefaced this, the main difference between the sale and barter of a commodity is that in the
sale of a commodity the individual only has to realize the value of the commodity whereas
in the barter of a commodity, the individual has to realize the value and select its use-value.
These two are in essence contradictory goals that the individual must go through in order to
barter for the product he/she desires which is done if it were a sale.
When a person if bartering, he has to find something that will give him more utility
than he currently has. Once he finds this commodity, he must understand the value of that
commodity in order to be able to offer the owner of that commodity something that will also
give him more utility that is equal in value. In the sale of the commodity, the individual
only has to understand the value of the commodity in order to compensate the owner for
the commodity. The owner of that commodity then takes the money and finds something
that will give him more utility and use the money to purchase it. This is the main difference
between the sale of a commodity and its barter.
Hans: If the seller quotes too high a price, then the competition of other sellers will correct this. In barter, such
competition is much more difficult because the commodity accepted in exchange differs between the different
traders offering a given commodity.
Next Message by Jeff is [542].
[544] Ricky: There are some important differences between the sale of a commodity
(Marx denotes this as C-M) with the bartering of two ordinary commodities. Bartering is
a process that involves two conflicting goals. Marx, in 199:3, describes this as follows.
“The process of exchange is therefore accomplished through two opposite yet mutually
complementary metamorphoses – the conversion of the commodity into money, and the
re-conversion of the money into a commodity”. First, the producer of a good is looking
to realize the value of the good he produced by trading for a good/service of equal value.
Secondly, he is selecting use-values to satisfy wants/needs. In the archives, Hans explains
this with the example of the medieval merchant. Neo-classical economics overlooks the first
goal, making the barter process seem like the trading of toys that children do in daycare.
The problematic aspect of bartering is that it tries to fulfill these two conflicting goals at the
same time. The sale of the commodity, i.e. its exchange for money, simplifies the process
because it only focuses on the first goal, the realization of value. C-M allows the person to
realize value (money to Marx is a measure of value) and then M-C will allow the person to
select use-value(s).
Next Message by Ricky is [682].
[546] BHales: Sale of Commodity. According to Marx, there are two goals of a commodity
exchange. On the one hand is the exchange for a gain in use-value or utility. The other
goal of exchange would be to realize the “value” or labor time of his commodity. Marx
explains that these goals are a contradiction leading to a Commodity-Money-Commodity
exchange.
The difference between the sale of a commodity and the direct exchange is that the sale
of a commodity does not involve contradicting goals. The sale of a commodity only involves
the realization of value. As Hans says in [312] “Money provides an institutional framework
for the commodities to express their values in the same denominator.”
154 2007fa Econ 5080 U of Utah
Hans: This was not a literal quote but a paraphrase, therefore you should have left off the quotations marks.
For instance, you could have written: Hans says in [312] that money provides an institutional framework for the
commodities to express their values in the same denominator.
Next Message by BHales is [547].
[548] Ryan: graded A In the barter of two commodities, C -¿ C, the commodity owner is
seeking two different ends. First, he wants to receive the highest possible exchange-value in
return for the commodity. That is, he desires to maximize his exchange-value. Second, he
wants to receive the greatest possible use-value in exchange for his product. In maximizing
his use-value, he may have to sacrifice exchange-value, or vice-versa. For example, the
person with the purple bike he desires may not be willing to offer him an equal exchange
of value, whereas the person with the shabby pink bike may be more willing to give him
a better deal. He must either sacrifice the use-value of the purple bike for a better rate of
exchange, or sacrifice the exchange-value in order to receive the purple bike. However, the
sale of a commodity for money, C -¿ M, allows the commodity owner to focus solely on the
maximization of his exchange-value. He can then worry himself with the use-value in the
purchase portion of his exchange, M -¿ C.
Next Message by Ryan is [549].
[550] Marcellus: Shall I barter, or shall I sell? The exchanging of two commodities in a
barter transaction as compared to the sale of a commodity are two very different processes.
To begin with this analysis, barter may at first seem like a simpler transaction, when in reality
it is quite bothersome, namely because two goals have to be met at the same time as Hans
says in his [312]. For example, say a basket weaver spends his time making baskets during
the week. Not only he, but the entire town knows how much time it takes to weave a basket,
which is more or less an hour. Now, when he goes to the market on the week-ends he has
two purposes in mind, both to realize the value of his basket while at the same time receiving
a good in return that is useful for him that also contains an hour’s worth of labor. Even if it
contained more, such as two hours, he could give two baskets. However, his baskets have to
be useful for others in society, or else his labor would bear no fruit as he couldn’t exchange
anything. Although this process seems simple enough, nowadays we have a system that
splits our transactions into two processes, which actually makes life less complex.
In this system of exchange, money is the commodity which can be exchanged for all
commodities that are not itself, and one doesn’t need to be a commodity producer to have a
means of sustenance. A man can be paid money, which is congealed labor in and of itself,
and then buy whichever commodities he deems fit for himself and his way of life. To stay
with the example of the basket weaver, say he wove fifty baskets per week and was paid
fifty dollars for his labor-power. On the week-end he could buy whichever commodities
he pleased without having to worry whether or not vendors would accept his money, as
compared to his baskets. He only has to do one step at a time in this system (first get paid,
and then buy necessary goods) rather than barter. As Hans alludes to in his [312], with the
introduction of money, barter is no longer necessary.
Next Message by Marcellus is [551].
[555] Dannymangum: Ca coute combien? In order to compare the two sales/barters
of a commodity we must first define the reason or purpose for barter or sale of a given
commodity. As Hans states in [312]: “the artisan (producer of a good) needs to come home

U of Utah Econ 5080 2007fa 155
with the most desirable use values, (and) he needs to realize the value (labor time) of his
commodities.
After giving us the purpose for exchange Marx shows us that the difficulty with barter
exchange is found in the aforementioned purpose of the exchange. With direct barter exchange
the producer is trapped in the conundrum of realizing his commodity’s value, while
also trying to come home with another product with the most desirable use values. A sale of
a commodity for money relieves us of this problem in that, we are no longer found between
these two polarizing forces, but rather we are just given the task to realize the value of our
commodity. After we have realized the value of our commodity through the sale, we are
then able to use those funds in the purchasing of other goods that permit us to bring home
our other goal of obtaining products with the most desirable use values.
Next Message by Dannymangum is [639].
[566] Tim: Barter and Exchange for Money. The barter of two commodities differs
from exchange for money because in the former you are forced to find a commodity that
contains an equal amount of use-value as the one you are bartering, which could take a long
time. When you exchange for money this is not the case because money allows us to buy
everything. Exchange with money requires that the laborer sell enough of his labor-power
in order to pay the price of the commodity, which was actualized by the labor put into the
commodity in order to produce it and whether or not it can be exchanged on the market.
Hans: As Marx sees it, the purpose of barter is not an “equal amount of use-value,” but the best possible use-value
which contains an equal amount of value. Marx would say that your analysis throws value and use-value together.
It ignores the first rule that must be followed whenever you want to say something about commodities: be very
clear about it whether you are talking about the use-value or about the value and/or exchange-value aspect of the
commodity.
Exchange with money does not require the previous sale of labor-power, i.e., L-M-C, but it could also the the
previous sale of some other commodity, i.e., C-M-C.
Next Message by Tim is [643].
[599] Ben: graded B The exchange of a commodity for money and the barter of a commodity
for a commodity are similar. The way they are similar is that with each transaction
you are trying to be better off than before. Also the fact that with both C-C and C-M-C it is
different means to the same ending commodity. The way they are different is the efficiency
the sale or exchange is done. With the sale/transaction the seller can sell to whoever he
wants because he and the rest of society accept money as a commodity of exchange. This
allows a wider market for his goods. With a commodity for commodity exchange you are
limited to only those that want what you have and have what you want. This efficiency I’m
talking about is much like what BHales [311] said “Money brings a new aspect of exchange
the C-C does not, money as a store of value. In other words I can exchange a commodity I
don’t need now for money to purchase another commodity later on.”
Hans: You are summarizing here the mainstream neoclassical theory of the exchange act. It does not talk about
value at all, only use-value. Marx claims that value is an important part of the picture.
Next Message by Ben is [627].
[636] Daru: Sale and Barter. In answering this question I have greatly benefitted from
Hans [312], [2007SP:597] and [2000fa:110], Pele [2007SP:590] and Dean [2000fa:182]
In my answer to the above question in the exam, I mentioned that barter surfaces two
opposing interactions. I think a better way to put this would be that every exchange (as
156 2007fa Econ 5080 U of Utah
barter is only a way of exchanging) process must resolve two contradictions from the point
of view of the ‘exchanger’. When a commodity is produced both use value and value are
produced. The use-value produced is useless to its producer but he has produced it hoping
that he would be able to exchange it for a commodity that he finds useful. Here comes
value produced by the producer. The commodity produced also has value but it will only be
actualized during the exchange process. In other words the socially necessary labour time
invested in the commodity (its value) must find its match in the exchange process. Here arise
the two contradictions that I referred to earlier and these are:
(i) when exchange takes place the owner of commodity A intends to exchange her commodity
with another. She does so because A has no use-value for her. From this perspective,
she will only exchange when she finds a commodity that she wants or finds useful. In other
words, she can find a commodity that can satisfy some want of her. This is a completely
individual or personal requirement for exchange to occur.
(ii) the exchange must also actualize the value of commodity A. This will take place only
when commodities exchanged have equal socially necessary labour time invested in them,
i.e. they both have same value. Although the producers can never be sure of whether the
value in their respective commodities have met their exact match in the exchange process, for
simplicity let us assume that the exchange takes place only when they “think” or “feel” the
other commodity has the same value as theirs. We know (thanks to Marx) that this actualization
of value in exchange is an entirely social phenomena. We also know that actualization
of value has nothing to do with personal notions of it as it is completely governed by social
relations peculiar to the market.
Hence, when exchange takes place the owner of the commodity must resolve these above
contradictory phenomena. Barter tries to deal with the two contradictions simultaneously
and, as Hans puts it in [2000fa:110], “trips over its own feet.” Although barter resolves both
contradictions in one go, it is complicated and time consuming. Owner of commodity A
must find a commodity that he wants and then figure out the quantity of the other commodity
that makes value of the two commodities equal.
Sale is different. It does not try to resolve two contradiction simultaneously. When the
owner sells commodity A, it readily actualizes its value i.e. we find out how much socially
necessary labour is present in it. The owner of A can then use the money to buy the use-value
she needs from the seller of commodity B or some other seller.
Hence, sale is different from the barter in the sense that unlike barter, sale does not try to
resolve the two contradictions simultaneously. It does it in two distinct steps.
Next Message by Daru is [637].
[656] Gregory: When exchanging a commodity for a commodity i.e. a barter, it is in fact
different than selling a commodity for currency. In a barter you are dealing with the fact one
person holds a commodity that holds a use-value to the other, and vice versa. In this situation
the two would decide that those values are simliar thus exchanging the commodities for one
another. When selling a commodity for an amount of money you are considering a value of
that commodity based on the labor it took to produce and the cost of that labor. This makes
it necessary for an exchange of money to cover that cost and create a profit in some cases.
Hans: In Marx’s theory, use-value is not the only issue to be resolved in a barter of commodities.

U of Utah Econ 5080 2007fa 157
According to the labor theory of value, the value of a commodity comes from its labor content, not from the
cost of that labor.
Next Message by Gregory is [691].
Question 397 is 403 in 2008fa, 418 in 2009fa, and 468 in 2012fa:
Question 397 What does Marx mean with the aphorism: “Money may be dirt, although dirt
is not money.
[302] Karly: Dirty money. Marx states that in a capitalist society gold takes the role of
money. It is exchanged for any commodity, and the reason almost all market participants
have gold is because they have exchanged the product they produced for money. They
then go on to exchange the gold for another commodity, but gold “always represents the
actualized price of some commodity”(annotations 273).
This being said, any commodity can be transformed into money. Money may be dirt,
meaning the dirt was exchanged for money in return. In fact, money may be many things.
However, dirt is not money, it is only exchanged for money. The commodity, dirt in this
case, may have been transformed into money but you cannot transform money into dirt.
Hans: I think we agree on the first part. “Money may be dirt” means that the money a person has in her pocket
may have been obtained from selling a variety of things, including dirt. If so, the money is the value form of the
dirt.
But I disagree with your last sentence “you cannot transform money into dirt.” You can transform money into
every use-value, including dirt, by buying these use-values. Buying is a much less problematic act than selling. I
interpret the second part, “dirt is not money,” to mean that one cannot buy things with dirt. This is true even if the
dirt is valuable and can be sold for money – but dirt is a commodity which can often not be sold. It is necessary,
not optional, to turn dirt, and every other commodity, into money before the value of the commodity becomes
accessible to its owner.
Message [302] referenced by [325], [500], and [2012fa:832]. Next Message by Karly is [425].
[320] Kibosh: graded C Money is money. I believe the point Marx is trying to make is
related to the universality of money. He states that from the physical appearance of money
you can not tell what it may be changed/traded for. We may know what in today’s standards
it is equal to. However, the physical look of a dollar doesn’t tell what the future of that
dollars value is. The money is shown as a sale of some good to acquire another. It is merely
an intermediary note of current value.
I think Marx’s statement “money may be dirt” could be changed to “money is not only
dirt” but it is every commodity in the world. This is true because everything has a value,
whether this value is intrinsic or professed by society/market values.
Hans: According to Marx, the price of a commodity has nothing to do with its “intrinsic” or “society” value, but
only with its labor content.
Message [320] referenced by [325]. Next Message by Kibosh is [321].
[325] Hans: Who Would Want to Buy Dirt? Acording to Kibosh [320], “money may be
dirt” means that one can buy everything, even dirt, with money. Karly’s earlier answer [302]
had a different interpretation: it means that money does not reveal where it comes from, it
may have been obtained from the sale of dirt. If Kibosh arrives at such a symmetrically opposite
conclusion than an earlier answer, I am looking for an explanation why your argument
is better – if only in order to show you are aware of the earlier answer.
158 2007fa Econ 5080 U of Utah
In the given case it can be argued that the earlier interpretation is better than Kibosh’s. As
Kibosh himself says, it is not very significant that one can buy dirt with money. Often one
can get it for free. But it is significant that a given shiny gold coin could be the transformed
form of dirt. That is the message which Marx wanted to convey.
Message [325] referenced by [326], [2008fa:680], and [2009fa:584]. Next Message by Hans is [328].
[326] Kibosh: past – present or present – future. From reading [325] I believe there are
different time periods which we are talking about. Maybe I should have used this as more of
a reply.
In reading I come to a similar conclusion on the orgin of purchase power/money of an
“owner.” However, I wanted to look at what I feel Marx is leading to in regards to the
transfer of that money to future commodities. If we only focus on obtaining money/power
in the struggle for wealth we come to a dead end. I wanted to focus on the continuing pursuit
of the capitalistic approach.
I feel this question may have opened up a few questions which could lead to a good
discussion.
Hans: You are right that in the analysis of a complex system (here capitalism) one should not only look at its
momentary functioning but also at those mechanisms which guarantee the survival and reproduction of the system
itself. Marx is doing this starting with chapter Twenty-Three. This does indeed open a new area of discussion.
But when Marx said “money may be dirt” he was not thinking of the mechanisms which allow capitalists to
remain capitalists over time or the reproduction of the capitalist system.
Next Message by Kibosh is [416].
[495] Kibosh: graded C cheap money. Money is the societal economic value placed on a
piece of paper or agreed upon medium of exchange.
The value which money represent not only puts a number on a purchase but allows one
to sell his labor to achieve another good.
Essentially the value of money is the intermediary place from the producers work and
selling of their good to purchasing goods which will sustain them with substance.
The Value of money represents their work, time, strength and opportunity cost which was
forfeited to gain other goods. That being said the value of money is what is used to purchase
goods and services
Message [495] referenced by [502]. Next Message by Kibosh is [536].
[500] Hans: Trust me. Kibosh has answered this question three times now, and he made
it clear that he did not like my answer. Still I know Marx well enough that I can say with
some confidence: that what I already said in my notes to [302] is what Marx meant. To say
it again:
“Money may be dirt” means: the source of the money may be the sale of dirt.
“Dirt is not money” means: one cannot buy things with dirt.
Message [500] referenced by [2008fa:685], [2008fa:976], [2008fa:986], [2008fa:1112], [2009fa:871], and [2009fa:1033
Next Message by Hans is [502].
Question 413 is 402 in 2004fa, 410 in 2007SP, 419 in 2008SP, 421 in 2008fa, 437 in
2009fa, 473 in 2010fa, 475 in 2011fa, and 496 in 2012fa:

U of Utah Econ 5080 2007fa 159
Question 413 Explain the individual motivation for hoarding money. Do these hoards have
a function for the economy as a whole or only for the individual?
[331] SamHouston: Hoarding Money. The purpose for hoarding money is illustrated
well by the example of the miser as found in annotations pages 295-296. The miser sees the
value of money in purchasing commodities. Every commodity can be bought (and sold) with
a price. The problem is that the amount of money available to the miser is limited. He must
increase his power of purchase through hoarding money. Money becomes more useful to an
individual than a commodity because money can be exchanged for limitless use-values.
Hoarding money interrupts the flow of money in the market but it gives the gold producers
a demand to produce more gold so enough money can be coined for exchange in the market
(at least under the gold standard). The Hoarding of money not only allows the individual to
increase his power in purchasing commodities, but also keeps the flow of gold into capitalist
markets.
Hans: Your answer is on the right track except that you are the victim of a bad translation. The German word
translated here with “hoard” is “Schatz,” literally “treasure.” It connotes that money drawn out of circulation represents
wealth, but does not connote the exaggerated focus on wealth implied by the word “hoard,” as in “hoarding
in the face of a coming disaster.”
In other words, misers aren’t the only hoarders or the most typical hoarders. On the contrary, they take the act
of hoarding, which can have very legitimate reasons, to an extreme.
Your second paragraph gives economic implications of the types of hoarding described in your first paragraph.
With a broader definition of hoarding, it will turn out that some of this hoarding can be beneficial and necessary for
the economy.
Message [331] referenced by [2008fa:1129]. Next Message by SamHouston is [390].
Question 420 is 280 in 1997sp, 269 in 1997ut, 276 in 1998WI, 287 in 1999SP, 323 in
2001fa, 352 in 2002fa, 367 in 2003fa, 409 in 2004fa, 417 in 2007SP, and 427 in 2008SP:
Question 420 Explain how, by the circumstances of commodity circulation, buyers and
sellers may develop into debtors and creditors, and give examples.
[327] ZACH: Buyers and Sellers to Debtors and Creditors. I hate to use the example
of the lumber industry but that is what I know. In the circulation of commodities at our
store, we have buyers who do nothing but buy the commodity. They watch the market of the
specific commodity and try to buy at the right time so that they can sell the commodity to our
customers at a fair market price. Once we buy the product, which we buy in a large quantity,
we then sell the commodity to all our customers which makes us then become creditors. We
will buy the product at a certain price, a price where our buyers feel the price is fair, we
will then go sell a mass quantity to our customers and give them terms and dating on the
product. The terms and dating basically mean that we, the company I work for, become a
bank waiting to collect on the debt we are owed. Basically we sell the commodity to our
customer at a certain price, if their terms are thirty days then that company has thirty days to
sell what they bought from us and pay their debt to us. That is how sellers become creditors.
But at the same time we the buyers are also debtors to the mills that we bought the product
from. We also have terms and dating with the mills that we buy the commodities from
and hopefully our terms and dating are longer than the terms and dating that we give our
customer so that we are paid in time to pay our debts to our creditors. That is how buyers
and sellers develop into debtors and creditors.
160 2007fa Econ 5080 U of Utah
Message [327] referenced by [329] and [571]. Next Message by ZACH is [383].
[329] Hans: Why is Everybody Doing it This Way? ZACH [327] gives a real-world
example where sales and purchases between businesses are not paid in cash but have clearly
defined and sometimes substantial payment terms. Now we know that it happens but we still
don’t know why. Why is this such a common occurrence?
Message [329] referenced by [334] and [571]. Next Message by Hans is [334].
[336] Gilmour: content B+ form 95% In the exchange of commodities today, many people
offer differing ways to pay for their commodities as well as different terms of purchase.
Those who buy the commodity may purchase it by a promise to pay the seller directly in
multiple payments, thus making themselves debtors and the sellers become creditors. Also
the buyers of commodities may purchase an item with credit. A third party company pays
the bill for the commodity while the buyer makes payments to them at a specified interest.
In this way buyers are becoming debtors by purchasing commodities indirectly or on the
promise to pay. For example, if I were to purchase a car, I obviously will have to take out a
loan to finance it. In this way a bank or credit union will pay the full bill for my purchase
and I will make payments to them at interest. I have now become a debtor and the bank has
become a creditor to me.
Hans: You say it’s obvious that a buyer of a car becomes a debtor. Question 420 wanted you to spell out the
reasons regardless, even if they seem obvious to you. Much of the early chapters of Capital tries to understand
institutions (most important example: money) or behaviors (such as hoarding or buying on credit) which people
living in a capitalist society use or engage in every day, and which are therefore familiar from a practical point of
view.
Think of it this way: how would you explain someone from Mars or an inquisitive child why we do things the
way we do them? My [334], which came over ten hours before you sent your answer, addresses this, although it is
submitted for a different question.
Next Message by Gilmour is [411].
[553] Karly: debtors and creditors done over! There can be certain times when a buyer
takes on the role of a debtor, and a seller that of a creditor. This can take place when money
functions as means of payment, meaning the commodity is already placed in the buyer’s
hands before they have paid. The seller now holds the credit of the commodity they gave
the buyer. Now, say for instance the seller still owes someone else for the commodity, they
then take on the role of a debtor until they are paid and can repay their debt. A more simple
example than my in-class answer is that of a car. People buy a car, a large commodity, but
hardly anyone can pay for a car when they receive it. They then promise the seller they
will make future payments to pay off the car, becoming the debtor and the seller a creditor.
The debtor/creditor relation often takes place in international markets due to obstacles such
as location, or currency exchange. In these types of exchanges, it is often necessary for
the buyer to pay first, or the seller to distribute first. International markets make it almost
impossible to have a simultaneous exchange. The debtor/creditor relation is necessary for
these exchanges to even take place at all.
Next Message by Karly is [683].
[571] ZACH: buyers and sellers to creditors and debtors. As referred to in the annotations,
the way that buyers and sellers become creditor and debtors is due to the circulation of
commodities. As commodities circulate and change hands, a buyer of a commodity would
become a debtor, but would quickly turn around and sell the commodity thus becoming a
seller and a creditor. In my industry we will take a piece of plywood for example. We will

U of Utah Econ 5080 2007fa 161
buy the plywood from the mill at a certain price, thus we are buyers and are going into debt
to the mill we are buying the commodity from. The mill gives us credit and dating to pay
for the product so that we don’t have to pay for the plywood right away. We will then turn
around and sell that same plywood to our customers for a price higher than what the mill
sold it to us for, we will give our customer a little less credit and a little less dating terms so
that they have to pay us sooner than we have to pay the mill. Thus we become sellers and
creditors while still being buyers and debtors.
Hans: My answer to this is again my answer to your original [327], namely, as I said in [329], why is it done this
way?
Next Message by ZACH is [605].
[583] Charles: Debtors and Creditors. When two people or companies are involved in
purchase, a transaction happens in which a payment has to be made. At first, since the two
entities are not familiar with each other, a cash payment may be required when the product
is purchased. When some time has passed by and now the buyer and the seller trust each
other, a “trust relationship” develops. This relationship establishes a debtor and a creditor. If
the terms are acceptable to both parties, the buyer may pay for the product after some time
or when the product is sold. That is if the buyer purchased the product for resale. There
are many businesses now that offer 30 or 60 days credit to their good clients. This makes
is possible for the company to sell more products and this makes the buyer purchase more
products.
Another example of the debtors and creditors is the credit card company. Hans in [334]
gives a very good example of the transactions of the credit card company. Because of the
capitalistic nature of our banks and credit card companies, they have taken advantage of
the “trust relationship” of the debtors and creditors in order to charge fees and make some
money during the transactions. Hans’s example of the international purchase of the goods
and the fee which is charged by the credit card company is a very good example of that. The
credit card company has accounts internationally, so it does not matter for them if the person
buys a product with the euro or the dollar. Their final budgeting should even out because of
their worldwide clientele. What they have done is to charge a fee for the purchase and also
a fee for the international transaction.
Hans: A trust relationship is one necessary condition, but originally it was not the profit motive but simply the
inconvenience of having to pay cash for every single one of a series of repeated transactions which leads to the
function of money as means of payment and the credit relationship connected with it.
Next Message by Charles is [584].
Question 426 is 283 in 1998WI, 294 in 1999SP, 312 in 2000fa, 360 in 2002fa, 375 in
2003fa, 417 in 2004fa, 433 in 2008SP, and 488 in 2010fa:
Question 426 Why is means of payment, and not means of purchase, the predominant function
of international money?
[333] Tim: Debtor and creditor. The
means of payment has become the predominant
function of international money be-
cause in Marx’s time, currency could not
be exchanged simultaneously with the purchase
being made. Today’s credit cards and
(As Submitted:) Debtor and creditor
The means of payment has become the pre-
dominant function of international money
because currency could not be exchanged simultaneously
with the purchase being made
162 2007fa Econ 5080 U of Utah
online transacting make this possible, but in Marx’s time, although today we have
for the sake of Marx’s view just bear with credit cards and online transacting that make
me. A microcosm of this can be illustrated, this possible but for the sake of Marx’s view
when I purchase a guitar online. The company
ships it and I get a bill later that I will just bear with me. A microcosm of this can
eventually have to pay off. Just as in inter- be illustrated, when I purchase a guitar onnational
trade the goods are shipped by the line the company ships it and I get a bill
creditor and payment is made later by the
debtor. later that I will eventually have to pay-off
and just like international trade the goods
are shipped by the creditor and payment is
made later by the debtor.
Hans: Tim’s original text is in the right column, my reformulation in the left.
Message [333] referenced by [334] and [337]. Next Message by Tim is [440].
[334] Hans: How Can You Trust the Recipient of Your Goods to Pay You? Tim’s
[333] has a partial answer to the question (about domestic, not international, circulation) I
asked in [329] – why is the practice so widespread that payment is made after the goods
change hands? As Tim says, “because currency cannot be exchanged simultaneously with
the purchase being made.” A more complete explanation would be: if sales and purchases
are made repeatedly and a trust relationship is developed between seller and buyer, and if
cash payment is either inconvenient, or if for some reason the money is available only after
a delay, then money is paid after the goods change hands. In Marx’s terminology this means
that money is used as means of payment. “Trust relationship” not just means that seller
and buyer are honest, but also that it is in the self-interest of the buyer to pay for the past
shipment, because otherwise he or she will no longer be able to receive future shipments.
Regarding the international payments, Tim argues: here it is even more inconvenient to
have cash payments, since seller and buyer are so far apart, therefore payments are made on
credit terms. This is part right and part wrong. Yes cash payment is very inconvenient, not
just because of the distance, but also because a currency exchange is necessary. But there is
no trust relationship, on the contrary, it is extremely difficult to take a delinquent debtor to
court in a different country. Advance payment is infeasible for similar reasons, because then
there is no guarentee that the goods will ever be shipped. Here it is nontrivial how to resolve
the trust issue.
Tim mentions a credit card. How is the trust issue resolved with a credit card? The seller
can rely on getting his money from the credit card company, because the credit card company
would be unable to continue functioning as a credit card company if it had a reputation not
to pay the sellers. And if the buyer does not pay the credit card company the credit card
balance, then the credit card company gets extremely high rates of interest. Yes delinqency
is high on this end, but interest rates are even higher, therefore the credit card company can
make a profit.
A different, more outmoded and nowadays only rarely practiced method is COD, cash on
delivery, where the postal carrier only hands over the good if the final recipient pays cash
for it. Therefore no trust is necessary between buyer and the postal carrier, but the producer

U of Utah Econ 5080 2007fa 163
trusts the postal carrier to either send money or send the merchandise back. At Marx’s time,
they had similar mechanisms involving “bills of exchange.”
And since I am at it, a more recent development is private sellers on e-bay, amazon, etc.,
who are trusted by the buyers only if they have a good reputation. A seller who hasn’t
established their reputation yet must sell at lower prices.
I am going into these details to show the importance of invisible underlying mechanisms
which make certain familiar surface procedures possible, for instance buying mail ordered
merchandise by credit card.
Now let’s go back to the international sphere. If you order merchandise from overseas
and then pay your credit card bill, then this is not the same money which the credit card
company pays the seller. It cannot be, because you are paying dollars, while the seller gets
Euros, for instance.
Does this mean the credit card company has to change your dollars into Euros? Not
necessarily, because the same company also has card holders in Europe who buy things
from the US. Therefore only the balance between exports and imports has to be exchanged
on a currency exchange (but of course the credit card company charges you the fees anyway
as if they had to exchange your full payment).
This same mechanism is not only true for the credit card company, but also for the country
as a whole, i.e., for the central banks. They don’t have to ship back and forth dollars and
Euros for every transaction, but only for the balance of the transactions. This is why Marx
says that the primary function in the international sphere is not means of purchase but means
of payment. Money serves as means of purchase (as opposed to means of payment) in
international trade only if you buy the things in person during a trip to Europe
Message [334] referenced by [336] and [583]. Next Message by Hans is [339].
[337] Milton: Debtor and creditor, response of value. I agree with Tim’s [333], however
I would like to add a little bit. Tim predominantly talks about the currency exchange, but I
want to look at it from a value perspective. Going back to what the commodity is, everything
has a value. To exchange the commodity you need values to match, therefore in order to trade
something for full value you need to look at the exchange of the payment not the method of
purchase. The purchase doesn’t matter as long as the payment value matches the value of the
trade. So in looking back at Tim’s example, if you purchase something online from a foreign
country, it doesn’t matter that the means of purchase was the internet but that the value of
what he pays the creditor is the same as the value of the commodity (guitar) he purchased.
Hans: Regarding your last sentence please look at [339]. As Marx used the terms ”means of purchase” and ”means
of payment,” the internet can never be a means of purchase.
Message [337] referenced by [341]. Next Message by Milton is [338].
[338] Milton: Addendum. I apologize I didn’t read Hans’s answer following Tim’s,
therefore I would like to respond now to Hans’s answer.
Hans to be quite frank what you said makes sense but doesn’t at the same time.
Going back to my value example, it doesn’t matter if you purchase the item on e-bay
from a merchant that you trust or don’t as long as you received the item that you order; for
if you don’t you can dispute the transaction with the credit card company also. Therefore
164 2007fa Econ 5080 U of Utah
regardless of the trust issue at the day’s end you are looking at getting what you paid for.
Now if as you say, Money is the means of purchase then how is that different from means of
payment. To me it isn’t clear what the means of payment is then. The net import exports?
No, the means of payment is that at the end of the day you received value equal to the
exchange for the value given.
Continuing on, back in Marx’s time there wasn’t the internet to make the purchases or
credit cards with which to make the payment, rather, the trade commodity for something
of equal value. In the international sphere if Spain wants olive oil from Italy and Italy
wants bulls from Spain, then when looking at the means of purchase compared to means
of payment, the difference would be that it doesn’t matter with what means of purchase the
transaction gets made but rather that the means of payment is complete. I trade a certain
number of bulls for a certain amount of olive oil. We don’t have to look at the method for
how that trade is done, for ex, if Spain wants to purchase the olive oil with gold and then
sell the bulls for gold, it doesn’t matter that Gold was the means of purchase, but what is
important is that the means for payment (value for value) was received.
I believe that is what Marx means, exchange values are equal. I believe I have given
adequate information to support my claim however to say it in a different way I would like
to add this. When we talk of International money, we mostly talk of a specific amount
because we are pin pointing a specific time. Therefore if we take international money as a
commodity, then we have to put a value to it. Once that value is established then the only
thing we are looking at in international trade is that values traded are equal. In short it is what
we talked about before the first exam, therefore I don’t really care what means of purchase
is used, but rather the means of payment, meaning that means of payment is the exchange of
commodities and not how that commodity is exchanged.
Hans: Milton, none of the answers which you have submitted so far make sense. I recommend that you consult
some of the literature explaining Marx’s theory to you, because the assigned readings do not seem to do it for you.
Message [338] referenced by [341]. Next Message by Milton is [371].
[339] Hans: Means of Purchase versus Means of Payment. If you don’t understand
Marx’s distinction between money as means of purchase (or means of circulation) and
money as means of payment, there is no hope you can answer this question correctly.
If money is used as means of purchase, then it changes hands at the same time as the
commodity changes hands. There is no debt or obligation before the purchase and none
after. If the money is not there, the purchase does not happen. Money does not function here
as money, i.e., as independent form of wealth, but as one of the forms the commodity takes
on and then strips off again in its so-called “metamorphosis.” Money is here subordinate to
the commodity.
If money functions as means of payment, then the commodity has already changed hands,
and the buyer is now obligated to pay. If the buyer does not have the money, he or she can
be sued. Although this is merely a modification of the sale, usually necessitated by practical
requirements, money has here a much more prominent role: it functions now as money.
When the commodity changed hands, the buyer did not pay cash but obligated himself or
herself to a transfer of wealth in its independent monetary form at a specific future date. This
date has now arrived.

Message [339] referenced by [337]. Next Message by Hans is [341].
U of Utah Econ 5080 2007fa 165
Question 431 is 422 in 2004fa, 398 in 2005fa, 430 in 2007SP, 470 in 2009fa, and 507 in
2010fa:
Question 431 Is it right to say that M−C−M is incomplete because it ends with money,
and the money is nothing by itself but must be spent?
[340] Daniel: graded C M-C-M? is that complete? M-C-M is not incomplete. The
dilemma in this case is that M-C-M ends in trading for money and it is uncertain whether
or not this cycle can end with money. The first stage is M-C; money is traded for a commodity.
In the traditional sense, one would usually stop right here because they now have
a commodity that can be used. However M-C-M looks at the modern capitalist approach in
which many people take that commodity and sell it again and thus, giving us two acts: the
first being purchase and the second being sale.
In this case the first act of purchasing is done solely with the intent of selling. Obviously,
this would be done with the intent of making a profit. Marx has a problem with this though,
because it is the classic scenario of making money from money. I think Marx views this is
manipulation of the value of money to make more money. In a capitalist sense, M-C-M is
a complete cycle because it allows one to make a profit by manipulating markets and trade.
Thus, a capitalist would argue that they now have the means to gain more commodities.
M-C-M makes sense in a capitalist market and it is obvious in our modern world that
money can and will be manipulated to yield more money. So it becomes apparent that the
cycle of money leading to more money is indeed a complete cycle. From Marx’s point of
view it becomes harder to explain this phenomenon and yet, it is either complete or not
complete. It can not be different for two separate forms of economies.
If someone bought a rug for $100 and then sold it for $110 then that would be a case of
M-C-M. Obviously they would want to sell it for more than they bought it for or the whole
cycle would be useless. (However, if one bought the $100 and stopped there it would not be
useless. They would have traded money for an equal amount of commodity. This represents
the differences in capitalism versus Marxism. Marx says the trade is a good trade if you
end with the same amount of value. In capitalism we end with more.) To explain this one
must discover the root of increased value appearing seemingly out of nowhere. How does a
commodity sell for 100 and then turn around and sell for 110? Although no additional labor
went into the $100 rug, labor was put into making a profit. The person who bought the rug
had to either know someone or discover a different market that would be willing to buy the
rug for more. Although no physical labor went into improving the rug, mental labor did go
into maximizing the value of the rug. This proves that M-C-M is complete.
Hans: Because of your good second submission [345], the penalty for your implication that Marx’s Capital was
discussing an utopian fair society is not as big as it would have been otherwise.
Message [340] referenced by [341], [342], [348], and [352]. Next Message by Daniel is [345].
[341] Hans: Miraculous Markets, Doing Everything Exactly Right. Several things
could be said about Daniel’s [340], but I’d like to just pick out one aspect of it. In [340],
Daniel repeats an error which was made by several others this Semester, namely, he thinks
166 2007fa Econ 5080 U of Utah
Marx’s Capital describes Marx’s ideas what a better, fair society should look like. This error
has taken several forms.
Message [22] thought: in Marx’s vision of a fair society people should be valued by what
they actually have done, not their future potential.
Message [285] thought: in Marx’s vision of a fair society, market prices should be proportional
to labor content. (In [278], I tried to explain how this proportionality comes about
as a spontaneous result of competitive markets.)
Messages [61], [177], and [197] thought: in Marx’s vision of a fair society labor should
be measured by labor time. (I tried to correct this misconception in [65].)
Milton’s [337] and [338], and now Daniel’s [340] thought: in Marx’s vision of a fair society
market exchanges should involve equal values. Again, Marx sees this as the tendential
outcome of competition in actual markets, not his preferred outcome in an ideal society.
I tried to point out and correct this error whenever it appeared. But since it keeps reappearing
nevertheless, I have to resort now to serious grade penalties. I am curious whether
this punitive approach will make a difference.
It is remarkable that the same mistake happens over and over again, i.e., that spontaneous
market outcomes are considered to be fair and desirable. Marx’s theory can explain this.
According to Marx, the principle of a market-mediated production system is the equalization
of labor. But if we live in a society which equalizes labor we simply learn, absorb from many
cues in our environment, that it is fair to equalize labor. Therefore, everything the market
does because it equalizes labor seems fair to us too.
I’d like to repeat that this is by no means the only thing that needs to be said about
message [340]. But I wanted to get this one recurrent mistake out of the way so that we can
have a more intelligent discussion.
Next Message by Hans is [348].
[342] Tyler: graded C weight 50% M-C-M=Incomplete. I disagree with Daniel in [340].
Yes it is right to say that M-C-M is incomplete because it ends with money. Money has no
value by itself. The only value of money is its purchasing power. Money alone is fiat and
has no intrisic value in itself.
Hans: When Marx wrote Capital, money was gold, i.e., it had value and was worth saving or hoarding for its own
sake. Today, money is no longer gold, but it is a stable enough store of value that it, too, is worth saving and can be
the goal of the capitalist all by itself.
Message [342] referenced by [345]. Next Message by Tyler is [407].
[343] Chris: I want $2 for my $1. Is M-C-M incomplete? In the world of the capitalist
this equation is not incomplete because it is the goal of the capitalist to come out ahead. With
this equation it is saying that the capitalist uses his or her money to increase their money.
Money is their capital and it is the job of the commodity to bring more of this in. M-C-M’ is
the better way to look at this because the capitalist does not want the same amount of money
returning to them but more than they put out, increased profits, or the transaction will not
be worth the expenditure. C-M-C on the other hand is what every consumer goes through
every day, we have to use our money to buy commodities, whether these are good for us or
not. Note every consumer goes through the process of M-C-M however because this usually

U of Utah Econ 5080 2007fa 167
requires a lot of capital, i.e. money. The process of M-C-M is seen every day with private
investment where companies or individuals use their money to buy up those commodities
that will bring in profit. These capitalists must find a commodity whose use-value that has
the property of being a source of value. I do not believe that M-C-M is incomplete but at
times this process can be stalled by decreasing profits for the capitalist.
Message [343] referenced by [348]. Next Message by Chris is [344].
[345] Daniel: graded as part of [340] Re: M-C-M=Incomplete. That is a fair agument
in [342], Tyler, and I respect your opinion, but I was wondering if you could account for the
fact that the M-C-M setup actually occurs in markets and appears to work efficiently. My
answer earlier obviously was a little off so, I have not accounted for it either. However, I am
still convinced that the system is complete because I have seen it work in a capitalist society.
Whether money has intrinsic value or not, something deeper is going on here.
Message [345] referenced by [340] and [352]. Next Message by Daniel is [403].
[348] Hans: This is a Trick Question. Yes, M-C-M is incomplete, but not for the reasons
suggested in the question. Marx’s argument on 252:2/o is: the second M, although bigger
than the first, is again some sum of money, just as the first M, and has as much drive to
increase its magnitude as the original amount of money. Therefore the movement M-C-M
has to be repeated over and over again.
This is a simple argument; no equations, no utility functions, etc. But the argument is
not that money is only a stand-in for future purchases. This would be a reductionist way of
looking at money: it would reduce money to what it can buy, which excludes the possibility
that the capitalist’s goal is money itself, whether or not this money will at some time be used
do buy consumption goods for the capitalist.
This question has triggered a good discussion about an important issue which were not
directly asked in the question itself. This issue is: how is M-C-M’ possible, with a larger
M’ than the original M, if everything is bought sold at its value? Daniel [340] says that the
capitalist puts more labor in when he found a different market where the commodity can be
sold at a higher price. But this would only be a temporary gain until those markets have
adjusted to each other. Chris [343] gives here Marx’s explanation: the capitalist is buying
a commodity whose consumption creates more value than it costs. This commodity is the
workers’ labor-power: in production, these workers create more value than they receive as
wages or salaries. Daniel was therefore looking at the wrong place; he thought profits were
made in circulation. According to Marx, profits are made in production.
Message [348] referenced by [352] and [534]. Next Message by Hans is [361].
[516] Dave: graded B I think it is not right to say that M-C-M is incomplete. “But
alongside this form we find a second, specifically different form: M-C-M, transformation
of money of commodities and reconversion of commodities into money; buying in order to
sell.” [Capital]. This form is used for the circulation of capital. According to Marx, “Money,
which follows this latter course in its movement, transforms itself into capital, becomes capital,
and, according to its determination, already is capital.” In this aspect I think that M-C-M
is complete. It is complete so far as the creation of new capital.
Next Message by Dave is [518].
[521] Gilmour: graded A M-C-M is incomplete. It is true to say that M-C-M is incomplete
as noted in the annotations and subsequent discussions. The first M is the driving force to
168 2007fa Econ 5080 U of Utah
purchase a commodity which will then be sold for more money. While the second M is of
greater value than the first, it will have the same tendency as the first to build upon itself.
Namely, the second M will be used to acquire another commodity which will then be sold
for a profit. This third M will be greater than both the first and second. This process will
continue to be repeated over and over so that the equation will look like M-C-M-C-M-C-
M.... This is why the simple equation of M-C-M is incomplete. It is a process that continues
on and on.
Next Message by Gilmour is [522].
[523] Chris: No, it is not right to say that M-C-M is incomplete. This little formula, may
it be called that, is what the capitalist does to come out ahead. The capitalist uses his money
to make more money. You can look at it this way M-C-M’, where money in the last stage is
more than M in the beginning. The capitalist makes investments with his money, his capital,
and hopes to increase this M. The capitalist does this by acquiring a commodity whose usevalue
has the property of being a source of value. The capitalist buys up the labor-power of
laborers and this is where he increases his M. When times are tough though the capitalist
will think twice about investing this M.
Next Message by Chris is [524].
[534] Teight: Upon further studying the question, I came to the conclusion that M-C-M is
an incomplete transaction. According to Marx, both the second M, although bigger than the
first, and the first M in the transaction are sums of money. Hans says in [348] that because
of this, the second M “has as much drive to increase its magnitude as the original amount
of money”. Since this is the case, the transaction M-C-M would repeat itself over and over
again. The answer I defended on the exam was assuming that the capitalist’s main goal was
to create money itself. A capitalist that is in the real estate business is only looking to make
money through his investment of fixing up a house. Making an assumption such as this can
alter the entire meaning of the question, thus the reason I was wrong in saying that M-C-M
is not incomplete. However, assuming that this isn’t the case, M-C-M is incomplete.
Hans: Your in-class answer was arguing, correctly, against the implication in the question that money by itself is
nothing. Therefore, M-C-M is incomplete for a different reason.
Next Message by Teight is [639].
[545] Ozz: graded A M-C-M incomp. Saying that M-C-M is incomplete is right; however,
it is not because it ends with money, and the money is nothing by itself but must
be spent. The reason why M-C-M is incomplete is because the changing money for more
money (essentially that is what is happening) leaves you with M again. There is then a drive
to exchange the new M again to get an even greater M. When changing from M-C-M the
goal is money and not the commodity produced, this is why there is the drive from the new
M to an even greater M. This means that M-C-M just ends up repeating itself over and over
again because of the drive to gain a greater amount of M, money.
First Message by Ozz is [54].
[558] Kibosh: graded B Yes, it is correct to state that M-C-M is incomplete this is for a
few reasons and with a few different outcomes which should be addressed.
First, starting with money is impossible. No worker is naturally born with money in his
hand. We have to make our money, whether by hard work or inheritance, the money must
derive from some sort of commodity, labor.

U of Utah Econ 5080 2007fa 169
Second, when we attempt to run the role of money coming first we realize that it never
ends as money, regardless of attempts. This is true because you must purchase commodities
(goods) to sustain life and in turn this brings the energy necessary to make more money.
We see as it was stated in [2004fa:275] that when people hold onto money, such as the
bank runs of the great depression, the economy collapses due to no investment and no circulation
of money and growth.
Third, the cyclical pattern of C-M-C.............. with a continuation is what truly makes our
world turn in the economic sense. Investment with surplus value, that sustains life followed
by capital repayment of investment which goes to reinvestment and its the growth of money.
This is what our economy needs to continue.
Hans: M-C-M is incomplete in more than one ways. You correctly point out one of the ways how it is imcomplete:
it does not say where the original money comes from. Marx will address this in chapter Twenty-Six. But once
a capitalist has the capital, he does not have to create value through his labor to add to its value, but he simply
buys labor-power and means of production and then consumes the goods bought. This is why Marx says: the value
increases itself, it “valorizes” itself, instead of saying that the capitalist adds to the value through his labor.
You are describing a small capitalist who creates capital through his own labor, then earns surplus-value from
this capital, and uses part of the surplus-value to live. Marx would say this is a mixed form between wage-laborer
and capital.
Next Message by Kibosh is [561].
[616] Ashley: Not Complete. Yes, it is right to say this is incomplete but not because
money is nothing by itself but must be spent. The reason is because the second M in the
sequence has the same purpose as the first, to increase its value. Hence, the sequence keeps
on repeating itself, and it is incomplete if it ends with M.
Next Message by Ashley is [617].
[619] HTJY: M-C-M is incomplete because ... In my original answer to the question, I
claimed that
It is right to say M-C-M is incomplete but not because “it ends with money, and the
money is nothing by itself but must be spent.”
To be more precise, I should have claimed that
M-C-M is incomplete because “it ends with money, and the money is nothing by itself
but must be spent.” But there is another reason why M-C-M is incomplete which is the focus
of Marx.
Then I would proceed as I did in the original answer:
The motivation for advancing the first M is so that commodities can be purchased, put
into a production of another commodity, and then exchanged for more money (the second
M) in market. M-C-M here is incomplete because the second M triggers no less motivation
for the capitalist to run another round of M-C-M, and still another after that, and so on.
Hans: It is simply not true that “money is nothing by itself but must be spent,” even though the mainstream theory
of “money as a veil” says exactly that. They are making the error of reductionism.
HTJY: Oops! I wasn’t very careful at refining my intuition. The intuition I had in mind, refined and expressed
carefully this time, is:
If money were nothing by itself but must be spent, M-C-M would be incomplete because it ends with M which
is not spent yet. But, assuming the capitalist mode of production, M in the M-C-M process is not “nothing by
170 2007fa Econ 5080 U of Utah
itself but must be spent.” ..... M-C-M here is incomplete because the second M triggers no less motivation for the
capitalist to run another round of M-C-M.
How would you like this answer?
I sometimes feel a sense of grief in you when students are simply not getting some of the fundamental Marxian
concepts you are trying to convey. And then I am amazed by the amount energy you spend nearly everyday to
correct our nonsense. But I am happy to be one of the struggling students today because now I see what I did
wrong. Thank you for the correction.
About ‘money as a veil’. When one claims that money is a veil, he means: an economy is a large barter system
and money is merely a tool that facilitates commodity exchange; money in this sense is merely a veil for a ‘real’
economy (a large barter system) and is not an independent force in the economy. So I thought money in Marx is
a veil for the real economy. But is it? That is, in Marx: (i) is an economy merely a large system of commodity
exchange?; (ii) is money merely a tool that facilitates commodity exchange?
If the answers are yes and the concept of ‘money as a veil’ given above is correct, then money is indeed a veil
in Marx. In such a case, doesn’t the statement ‘money is nothing by itself but must be spent’ has more to do with
the distinction between ‘money as money’ and ‘money as capital’ than with ‘money as a veil’?
‘Money as money’ is “nothing by itself but must be spent.” But ‘money as capital’ is not “nothing by itself but
must be spent;” it is something that expands itself by going through M-C-M process.
How would you like this claim?
Hans: Marx would perhaps say that money as a means of circulation is a veil. One can even see that it is, because
in its function as means of circulation gold coin can be replaced by worthless paper. But money as means of
circulation is only one function of money, and not even the most basic function of money. The most basic function
is measure of value.
When Marx talks of money as money, he means money as the independent existence of abstract wealth, as in
its functions of a hoard, means of payment, or world money. These are the functions where money is exactly not a
veil.
Capitalism would not be possible in a barter society without money. This is another proof that money is not
a veil. Nevertheless, Marx does not often use the expression “money as capital” because being capital is not a
function of money. Even it it is a phase in the circuit of of capital, money still only performs the functions of means
of purchase, means of payment, or hoard (reserve). The thing that acts as capital is not money but value, which
goes through many different phases: money, means of production or labor-power, and products for sale.
Next Message by HTJY is [624].
[653] JoshS: M-C-M Complete? It is correct that M-C-M ends with money, but then it is
used again to gain money. Money is a commodity and people use it to gain more of it. Money
is not value of other commodities. Money is a commodity that people use as a common way
of exchanging other goods and services. If you don’t see money as a commodity, the M-
C-M would be incomplete. Marx would say that M-C-M is complete because money is the
commodity that the individual is after.
Hans: Your sentence “money is a commodity that people use as a common way of exchanging other goods and
services” defines money as a means of circulation. For Marx, the first function of money is measure of value, not
means of circulation.
Next Message by JoshS is [654].
Question 436 is 211 in 1996sp, 211 in 1996ut, 288 in 1998WI, 300 in 1999SP, 337 in
2001fa, 366 in 2002fa, 381 in 2003fa, 426 in 2004fa, 401 in 2005fa, 433 in 2007SP, 442
in 2008SP, 460 in 2009fa, 497 in 2010fa, 530 in 2012fa, and 497 in Answer:
Question 436 If someone first buys a car, and after two years trades it in for a new car, is
that C−M−C or M−C−M?
If someone first buys a house, then after ten years decides to move and sells his house for a
profit, is this C−M−C or M−C−M?

U of Utah Econ 5080 2007fa 171
If a farmer raises wheat, then at the end of the year sells his crop and with the proceeds buys
the materials to raise next year’s wheat, is that C−M−C or M−C−M?
[354] Marcellus: This MC Be Up to Me. Generally speaking, when people buy cars,
they buy them for their use-value, which at its most basic form is to get from point A to
point B. With this in mind these people expend their labor to get paid and then buy a car,
or in other words, they sell their labor as a commodity (C) and take their money (M) to buy
another commodity (C), or C-M-C. Even though they may trade it in for a new car two years
down the road, they are still taking their car (C) and trading it for another car (C), which has
the same use-value as the former.
In the case with the house the results can swing either way. For the people who just want
to own a house, the equation for them is C-M-C, because they use their labor which they
sell as a commodity (C) to make money (M) to buy their house which is another commodity
(C), or put more simply C-M-C. Whether they sell ten years after the purchase for a profit is
irrelevant, especially if they decide to move into a new house.
However, there are investors who purchase homes with the intention of selling for a profit
ten years (or however many years) down the road. In their case, they take money (M) to buy
a house (C), and eventually sell for money (M). Whether they make a profit or not depends
on the market, nevertheless, their intentions are capitalist.
In the case with farmer John, his intentions are solely M-C-M. He sells his crop for
money (M), buys materials for next years harvest (C), and then sells the harvest for money
(M). Clearly, he is doing this to keep a business alive. Otherwise he would sell his crops and
buy things other than to keep his farm sustainable year after year.
Hans: These are perfectly reasonable answers. But my [2005fa:1007] regarding the home purchase might be
something to think about, see also my earlier [2004fa:284].
Next Message by Marcellus is [362].
Question 440 is 198 in 1995WI, 216 in 1996sp, 216 in 1996ut, 233 in 1997WI, 297 in
1997sp, 286 in 1997ut, 323 in 2000fa, 342 in 2001fa, 385 in 2003fa, and 515 in 2011fa:
Question 440 What is capital?
[352] Fred: Value in Motion. Capital is Value in Motion. (Annotations pg. 328) The
“value” mentioned here is a “surplus-value” that is captured in the continuous cycle M-C-
M’. Here M is expanded to M’. There is more being taken out of the system than was put in
originally. M’= M + Delta M where Delta M is the change or increase in M. Consider a bank
who loans money, and receives more at the end of the loan period than it originally lends.
This increase is interest, and represents the Delta M. So the bank is pulling out more than
it put in. It continues this process, which brings us to the “Motion” part of the definition,
which is the recurring or repeating cycle of M-C-M’. It is continuous and so it grows, and
expands on itself. M’ wants back in the game as much as the original M did. In this way it
is self-expanding. This motion comes from the Reflux talked about in Annotations pg. 323-
324 where the money flows back to the person who originally spent it. Like a Yo-Yo it keeps
coming back, and put back in, and coming back, etc. Marx recognized that something deeper
is going on in the M-C-M cycle or people wouldn’t be participating in it. This “something”
is that people are getting more out than they are putting in. This M’, M-Valorized, this
172 2007fa Econ 5080 U of Utah
“Something Extra”, this “Surplus-Value”, coming out of the process is capital. In the M-
C-M’ cycle the commodity is purchased with the intent of selling it at a higher price thus
expanding M to M’. Here again, there is something extra, a “Surplus-Value” coming back to
the original person.
One cannot look at this and not wonder, “Where is this Surplus coming from?” In the
end, as mentioned in Hans [348] it is from labor in the production process, where the value
manifest at M’ is a result of labor not getting the surplus. Relating back to Q 431 and Daniel’s
[340] and her [345] that indeed the M-C-M cycle is incomplete because M wants back in
the game, (see Annotations pg. 324 at the bottom) “the very condition in which money
is expended in M-C-M creates the condition for its Reflux” without which the process is
incomplete, since “the final phase, the sale, is missing.” So unless the process is continuous,
it is incomplete. This “continuous” aspect is the motion talked about in the definition of
capital, and the valorization of M to M’ indeed points to something deeper going on, and
that something deeper is capital.
Hans: By saying “that something deeper is capital” you give it a name but you are not explaining it. The explanation
is, as you say a little earlier, “labor not getting the surplus,” i.e., labor producing more value than its
reimbursement in the wage.
Message [352] referenced by [366] and [576]. Next Message by Fred is [358].
Question 445 is 182 in 1995ut, 217 in 1996sp, 234 in 1997WI, 294 in 1998WI, 306 in
1999SP, 344 in 2001fa, 373 in 2002fa, 387 in 2003fa, 442 in 2007SP, 452 in 2008SP, 455
in 2008fa, and 474 in 2009fa:
Question 445 Why does monetary wealth have the urge to multiply itself? (Do not describe
at this point how it does it but why in modern society the unlimited accumulation of wealth
is such an overriding and powerful objective.)
[350] Jason: In [2003fa:328], Young Celtic uses a quote that I believe is very applicable
to this question. “Money gives access to all use-values, i.e. qualitatively it is universal.
This qualitative universality comes in conflict with its quantitative boundedness since money
always exists as a limited sum of money,” (Hans’ Annotations pg 722-723). He goes on to
say that economics is the study of how people will react to times of scarcity and plenty.
Obviously people will cater their lifestyles and behaviors to the various financial situations
that they find themselves in. In regards to Hans quote because Money gives access to all
use-values one must strive to increase their monetary wealth in order to acquire more and
more use values. Young Celtic mentions competition. I would agree with this, that there
is competition between different use-values. Not every individual will be able to acquire a
given use-value. However there are those that will be able to acquire many more use values
than others because of their ability to obtain the needed financial resources.
Hans: The discussion in 2003 which you are quoting here came to the conclusion that the desire to get more
and more money had two different reasons: on the one hand, structural, because money has the ability to buy
everything, and on the other hand, individual motivations of the consumers to have a newer car on the driveway
than the neighbor.
Next Message by Jason is [433].
Question 463 is 306 in 1998WI, 340 in 2000fa, 402 in 2003fa, 451 in 2004fa, 470 in
2008SP, 529 in 2010fa, 545 in 2011fa, 569 in 2012fa, and 529 in Answer:

U of Utah Econ 5080 2007fa 173
Question 463 Does Marx argue in 258:2/o that capitalist profits are middleman’s profits,
and if buyer and seller sold directly to each other, there would be no profit?
[364] Ozz: graded A– M-M’ not just for a middle man. Marx, in chapter 5, begins his
analysis of M-C-M’ by talking about a seller A, a capitalist K, and a buyer B and how, by the
lack of communication of A and B, the capitalist is changing M into M’. Here Marx is not
arguing that capitalist profits are middle man’s profits but merely using an image to express
what he is trying to describe. The profit that a capitalist receives is due to the fact that he
is charging a higher price than what it costs him because its use-value to another can be
valued at this higher price. To clarify on page 354 in the commentary it states “the mark up
over the cost price, which one observes in capitalism, is the remuneration for the productive
services which commodity trade performs by moving the goods into the hands of those who
have more use-value for them.” Since the capitalistic profits are made by the markup pricing
over the cost incurred, if a buyer and seller sold directly to one another there would still be
a profit to be made.
Hans: Your quote from the Annotations is my summary of Condillac’s theory of profits, which Marx vehemently
argues against! But even if you don’t have the right theory of profits, you agree with Marx in one point: profits
are not made by gymnastics in the circulation process, but they depend on the value of the goods being traded.
Marx is telling the comical story of A and B kicking the capitalist K out of their commodity exchange, as if K
was an unnecessary middleman, only in order to make the point that profits cannot be derived from circulation.
Therefore you shouldn’t take the thing with the middle man too seriously. As answer to question 364 you should
say: no, the capitalist is not a middle man, Marx is only joking here. I recommend reading [2000fa:132] for a better
understanding of the question.
Next Message by Ozz is [421].
Exam Question 467 is 307 in 1998WI, 341 in 2000fa, 359 in 2001fa, 391 in 2002fa, 405
in 2003fa, 454 in 2004fa, 431 in 2005fa, 463 in 2007SP, 474 in 2008SP, 477 in 2008fa,
549 in 2011fa, and 573 in 2012fa:
Exam Question 467 Is exchange (direct barter) a transaction in which both sides gain more
than they give up?
[356] Charles: Exchange transaction gain. I think that the answer to this question would
depend on the circumstances of the people who are making the exchange. There are times
that some people have to sell something with a loss due to many factors in their lives. If
something like that happens, then the transaction was a gain for only one person during the
deal. If someone has to sell their car because they need the money for a medical emergency,
then the seller of the car does not gain during the transaction. In fact, a transaction like that
may cause much more benefit for the person making the purchase because of the seller’s
need to sell. They may sell it for less than what it is worth just so they can come up with the
money as soon as possible. Only the person who bought the car gained from this transaction.
The second part of it is that if the purchaser of the car now decides to sell the car to someone
else, then that transaction can easily be a gain for both parties during the transaction. If
the new purchaser of the car thinks that the money that they have to spend on the car has a
good use value, then this transaction would be a good gain on both sides.
Message [356] referenced by [361]. Next Message by Charles is [357].
174 2007fa Econ 5080 U of Utah
[361] Hans: The benefits of a scientific framework. Charles [356] says it depends on
the circumstances whether both sides gain in an exchange or not. He backs it up with two
examples, one where the gain is only one-sided, and one in which both sides gain. He tells
his story well, and I can believe that the readers might mutter to themselves: yes, some
exchanges are beneficial to both parties, and others are only beneficial to one of the parties.
This is like throwing up one’s hands and saying: one never knows. Some are, some aren’t.
If you are wondering what I’m up to, I’d like to drive home the point that sometimes it is good
to have a nice framework which tells us how to think things through. For instance, when
Marx talks about the commodity, he always distinguishes between value (and its surface
expression exchange-value) on the one hand, and use-value on the other. Applying this
distinction to the exchange, the first question to ask about any exchange, regardless of the
use-value, is: is this an equal exchange, are two things of equal value exchanged for each
other? This is definitely something you’d like to know before making judgment about who
benefits.
If someone has to sell a car in order to pay medical bills, then chances are he or she will
not get full value for his car. It seems to be entrenched in this society that the worse you are
off, the more the sharks are nibbling at you. We can hardly even imagine that it could be
otherwise, that society gives a break to those in need.
Therefore the sale of the car is a loss. And what do you do with the too-low amount of
money you did get? “Having to pay medical bills” does not look like an exchange to me.
This is probably not even a voluntary decision. You ended up in a hospital somehow, and
now you are saddled with intractable bills. This is a situation where every other developed
country in the world has some kind of general insurance, but not here in the USA.
But I am digressing. Let’s assume we are actually looking at a voluntary exchange, not a
fire sale because of a medical emergency. On average, exchanges are done at equal values.
I.e., on average, there is no loss or gain in terms of value. Then the second question: what
about the use-value? Here both parties can and usually will gain.
This is the “correct” answer for this Exam question, see my [2005fa:1791] for instance.
In terms of value, it is a zero sum game, and in terms of use-value, both sides gain. I wanted
to encourage you to look at things scientifically, and to take advantage of the theoretical
framework Marx has prepared for us. But as it turns out, this leads to many uncomfortable
reflections about the nature of our society. Maybe it is better just to throw up your hands and
say, yeah, some exchanges are favorable for both parties, others are not.
Next Message by Hans is [365].
[508] MichaelM: Thank you! No, Thank you! I take calls at work all day long from
consumers placing orders for commodities. Just about every call ends with me saying ‘thank
you’ and the consumer in return saying ‘thank you’. I think that this type of mutual appreciation
is present during a ‘direct barter’ transaction as well. This example shows that both
sides do gain from the transaction. I cannot think of many situtations where one party would
trade with another if they did not feel like they would benefit from doing so. However,
whether one party gains more than they give up is a little tougher to see.

U of Utah Econ 5080 2007fa 175
Hans clarifies this type of exchange in [2005fa:1791] and describes what is gained in
terms of use-value and exchange-value. He said that “as far as use-values are concerned,
both parties gain; but as far as value is concerned, an exchange is a zero-sum game: whatever
one party gains is lost by the other and vice versa.” I am glad that I came accross this answer
because it helped me see whether one party really gains more than they give up from an
exchange. Hans goes on to say that “profits cannot come from exchange but are based on
the exploitation of the laborers”. From Hans’ comments and my initial thoughts I have
come to the conclusion that the use-value gained from an exchange by both parties is easy
to notice, but the exchange-value that is not gained and in a sense hides the exploitation of
workers is not really that noticeable initially.
Message [508] referenced by [510]. Next Message by MichaelM is [527].
[510] Hans: Invisibility of value. MichaelM’s answer [508] is right on. I especially liked
his observation that the use-value aspect of the exchange obscures the value-aspect. I just
had parallel thoughts in [509] when I said that value is the “elephant in the room.”
I think this will be the last submission before the exam. I will update the archives now,
and in 15 minutes or so from now I recommend that you download installment 2 from
http://marx.economics.utah.edu/das-kapital/pdf/l2mo/i2.pdf
for printing. I haven’t given most grades yet for the extra credit, but I responded to each
submission and I don’t expect many more changes.
Next Message by Hans is [574].
Question 473 is 503 in 2009fa, 540 in 2010fa, and 556 in 2011fa:
Question 473 Ramsay asks: “who are the consumers?” This is a rhetorical question, obviously
he had an answer in mind. Which answer?
[371] Milton: Consumers are the buyers, buyers are the consumers. From what I can
tell from the reading the book is that the consumers are the buyers and the buyers are the
consumers.
Marx pages 264-269 in the book talks about the reality that if a consumer is raising the
price of the same commodity that he bought, in essence he is robbing from the seller, because
although he sold the commodity for more money, no value was added. The result changes
M-C-M to M-M, money exchanged for more money.
Assuming then that this isn’t happening then when one has a commodity in exchange for
another and they are traded, the surplus-value of the market hasn’t changed. This is the case
in all exchanges. The “surplus-value cannot arise from circulation, and therefore that, for
it to be formed, something must take place in the background which is not visible in the
circulation itself.” In that case the only consumption is when the object is itself consumed,
like food, or if the object is consumed in the transformation of the commodity into something
else. Therefore the consumer is the buyer and the buyer then becomes the consumer.
Hans: Your explanations are so unclear that one can only guess what you mean. For instance you write: “if a
consumer is raising the price of the same commodity that he bought, in essence he is robbing from the seller,
because although he sold the commodity for more money, no value was added.” My guess is that you mean: “if
someone buys a commodity and then re-sells it at a higher price, in essence he is robbing from his buyer, because
although he sold the commodity for more money, no value was added.” You cannot call that person a consumer
176 2007fa Econ 5080 U of Utah
because he or she is not consuming the commodity but re-selling it. And he or she is robbing from the buyer, you
must have written “seller” by mistake. There is similar unclear and sloppy writing throughout your submission.
And in your last paragraph you have an un-attributed quote. You should say where this quote is from.
Message [371] referenced by [378] and [629]. Next Message by Milton is [446].
[378] Hans: Surplus-Value cannot be created in circulation. Marx’s argument that
surplus-value cannot be created in circulation has two prongs.
(1) First Marx argues that surplus-value cannot be created by every seller selling commodities
at too high a price. Why not? Because after they have sold, they must buy and
therefore pay the inflated prices to the other sellers.
(2) Now assume that not all sellers sell at too high prices but there is one seller smart
enough that he is able to sell his stuff at too high prices without others being able to sell
to him at too high prices. This is a shift of value from the other market participant to him,
and cannot explain the general M-C-M’ in capitalism, in which all capitalists make profits
simultaneously.
From the impossibility to create surplus-value in circulation Marx concludes that the
surplus-value which we see happening in capitalism must come from a process that is only
partly inside circulation but that in part takes place outside circulation. In other words, the
capitalists do not make their profits on the market, but they make them in production and
then realize them on the market.
The Ramsay quote in question 473 refers to a variation of point (1). Ramsay says: “it
is absurd to say that profits are paid by the consumers because who are the consumers?” I
think he means that everybody is a consumer. If prices are too high for everybody, this just
raises the general price level but does not yield profits.
Milton’s answer [371] that consumers are buyers is passable, because this reduces Ramsey’s
argument to the related point (1) above. But Milton does not explain point (1) but
makes some unclear mumblings which seem to be related to point (2) rather than (1). This
is why I am writing this message here clarifying that Marx uses two different arguments
against surplus-value coming from a process taking place in circulation alone.
Message [378] referenced by [2009fa:664]. Next Message by Hans is [386].
Question 478 is 313 in 1998WI, 398 in 2002fa, 413 in 2003fa, 463 in 2004fa, 440 in
2005fa, 472 in 2007SP, 509 in 2009fa, 546 in 2010fa, and 562 in 2011fa:
Question 478 What is the difference between a shoemaker, who adds to the value of his
leather by turning the leather into shoes, and a capitalist, who adds to the value of his
money by investing it?
[357] Charles: The shoemaker and the investor. If you look at the final results of their
wants and needs, there isn’t a difference between the shoemaker and the capitalist who is
an investor. Both of them spend their time and labor with the intention of gain from their
transactions. The difference is between labor and time. The shoemaker uses labor to achieve
its goal and the investor uses time to achieve his goal. Of course time and labor are dependant
on each other. The only difference is that the shoemaker depends more on his labor to make

U of Utah Econ 5080 2007fa 177
good quality shoes in order to be able to sell them and the investor depends more on time in
order for his investment to grow.
Hans: So if the husband waits in the waiting room while his wife is giving birth to a new baby, you say he is
helping with the birth because he is putting in his time?
Ozz: This formulation that the investor is making his money grow because time is passing is very wrong. First of
all there are many investors that at times do not get returns. This means that returns are not based on time but on
the surplus capital that the capitalist, or otherwise known as the investor, gets from the laborer who is producing
value and only receiving a portion of what he produces. Thus the shoemaker creates value with his labor, but the
investor adds to the value of his money by repressing a laborer.
Message [357] referenced by [363], [366], and [584]. Next Message by Charles is [359].
[363] Harmon: Leather shoes! I agree with Charles [357] in the fact that the shoemaker
and the capitalist both want gain in their transactions. I disagree that they both spend time
and labor. For the investor there is not much labor going into the money he invested. All he
is doing is waiting for the interest to build up. He is not profiting the consumer. Meanwhile,
the shoemaker put his labor into the leather by transforming it into shoes which can then
be profited on the market and benefit the consumer. In conclusion, the difference is that
the shoemaker is not just benefiting himself with an increase in profit, but he is making
something that is now a new commodity and using the true nature form of making a living
which is M-C-M.
Hans: Do you really mean M-C-M or do you mean C-M-C? The shoe maker makes a commodity C, sells it to get
M, and then can buy his own stuff C. Therefore he puts something in which benefits others. The investor originally
puts in M, but then withdraws a larger amount M’.
Message [363] referenced by [366] and [367]. Next Message by Harmon is [445].
[366] Hans: Stop and go Value. Since Harmon [363] was so gentle with his critique
of Charles [357], I’d like to say it once more explicitly. According to Marx’s theory, the
investor is not contributing to the increase of his investment. Elsewhere Marx makes fun of
the “abstinence theory” which tries to explain profits by the abstinence of the capitalist. In
the case of the investor, the value grows by itself, by exchanging itself for labor and cashing
in the difference. This is value in motion, as Fred said correctly in [352], i.e., capital. In the
case of the shoemaker, by contrast, the value is not in motion. Here it is the shoemaker who
increases the value of the materials by his labor. This is a non-capitalist relation.
Message [366] referenced by [576], [597], and [2009fa:660]. Next Message by Hans is [374].
[367] Charles: Shoemaker and investor. It is true, as Harmon says in [363], the profit
of the shoemaker depends on his labor and the profit of the investor depends on the time.
For the shoemaker, the labor is more intensive than for the investor. At the same time, the
investor adds labor to his time by studying the market, researching the company profiles in
order to invest. The shoemaker starts at C-M-C because he first has to sell his commodity
in order to get money and the investor starts as M-C-M because he needs the money to get
the commodity. The shoemaker needs the investor to buy his product at the end. There is
a difference between someone who puts their money in a saving account and waits for the
interest to build up, and someone who is a real investor. The shoemaker needs mostly labor
to add value to his product. The investor adds value to his investment by labor also but in a
different way. They have to study the market very carefully before making the investment
because if something goes wrong, there goes his whole investment. For the shoemaker, if
the shoe does not sell, he can make another kind of shoe with the same leather.
Hans: You would get much better grades if you’d first briefly summarize Marx’s answers to these questions before
coming up with alternative answers which you find more convincing.
178 2007fa Econ 5080 U of Utah
Next Message by Charles is [368].
[552] Karly: shoemaker and investor done over! The difference between a shoemaker
and a capitalist is the shoemaker is adding value to the leather by adding labor and his means
of production to make shoes. The capitalist is not adding any value himself to the money he
invests, therefore not contributing in any way to the gains of his investments. However, the
producer he is investing in is adding value by using the money to gain interest. He is once
again using exploitation to gain money through someone else’s labor.
Next Message by Karly is [553].
[562] Poppy: In-class answer: There is no difference between the shoemaker and the
capitalist that is investing his money. The shoemaker himself could be called capitalist
because he like the “capitalist” are trying to increase the “value” and “use-value” of their
commodities.
After further research I have realized that I have mistakenly, like Mill, thrown the word
capitalist around where it is not appropriate. Marx finds the situation in which the capitalist
can realize an increase in value, by doing nothing, humorous. When compared at this level,
the shoemaker is different than the capitalist, even though they both have the same goal in
mind. The shoemaker’s value is not in motion, he has to input his labor in order to increase
the value of his commodities, where on the contrary, the capitalist does not.
Next Message by Poppy is [572].
[576] Daniel: graded A shoemakers and investors. The difference between the shoemaker
and the investor is that the shoemaker improves his commodity in order to improve
trade on the market and gain more commodities. When the shoemaker does this he completes
the C-M-C model and ends up with more commoidties in the end because he added
value to his commodity.
The investor however, starts with money and invests in a commodity in order to make
more money. This is a case of M-C-M in which he trades his commodity with the goal
of making more money. In other words, he is not increasing the value of his investment
(Hans [366]), he is only manipulating the corruptness of capitalism in order to increase his
bankroll.
The investor is using “value in motion” (Fred [352]) whereas the shoemaker is not. The
shoemaker managed to use labor in order to improve his commodity and thus increased the
value. The investor only manipulates value in motion in a capitalist system.
Hans: If you say “manipulates” you are still giving too much credit to the investor. The system itself makes value
a moving quantity by separating the workers from the means of production and forcing them to work longer than
the labor content of their wages. The investor just picks the fruit of this social relation.
Next Message by Daniel is [646].
[584] Charles: Shoemaker and Investor. The difference between the shoemaker and the
investor is the labor and the time. The shoemaker first would have to make a commodity
by using his labor. His labor would add value to his original investment in the commodity.
Now, the shoemaker has the option of selling his commodity at a higher price in order to
make a profit.
The investor is mostly dependent on the time. All he does is to invest money in the market
and after that he has to rely on time in order to withdraw more money from his investments.

U of Utah Econ 5080 2007fa 179
Marx’s theory is that the investor is not contributing in order for his investment to grow. The
value of the money for the investor is in motion, but for the shoemaker, it is not in motion.
The value of the shoemaker’s product is increased by his labor and not by time like the
investor’s money.
Hans: In a note to your [357], Ozz objected to the notion that time increases value. He is right. Time does not
do anything. According to Marx, the investor’s capital increases because the social relations in capitalism move
value from the labor of the workers to the property of the capitalists. The investor only has to choose the right
investments, and the social relations will do the rest. He think it is done by time, but in reality it is done by the
social relations which force the workers to perform unpaid labor.
Next Message by Charles is [594].
[597] Harmon: Shoemaker. The difference is that a shoemaker is profiting the market and
the capitalist is profiting himself. For example, the leather that was turned into shoes by the
labor of the shoemaker can be sold as a commodity to profit someone in need. The investor
is using the ”abstinence theory” [366] and is not putting any labor into his investment and
only profiting himself.
Next Message by Harmon is [604].
[598] SamHouston: Shoemaker v capitalist. In order for the shoemaker to increase the
value of his commodity, he must add labor to it, i.e. turn the leather into a shoe. This does
not add value to the leather, but the labor involved in the creation of the final product adds
value to the commodity “shoe.” It is only through the investment of labor that the shoemaker
can increase his income, but the value of the commodity is equal with labor content involved.
The capitalist increases the value of his money by the investing it in a system of exchange
that will bring additional value to his money. Instead of producing a commodity to be sold,
the capitalist purchases the commodity “labor power.” Through his purchase of labor power,
the capitalist provides the laborer with means of production. Giving the laborer the means
of production allows the laborer to expend his labor. The capitalist will then pay the laborer
a wage that reflects the amount of money required for the laborer to reproduce his labor
power instead of for the labor performed. This allows for the exploitation of the laborer
who doesn’t receive the full wage for his labor. The capitalist receives the social value of
the commodity but only has to pay for the recapitulation of the labor power of the laborer.
Contrast this to the shoemaker, the shoemaker receives the social value of his commodity
which is derived from the labor he puts into his commodity.
Hans: Your in-class answer also had some good observations which were left out in the resubmission.
Next Message by SamHouston is [600].
[608] Jill: A shoemaker adding leather to his product is adding value in exchange value.
He is now able to use the money he spent on the improvement to sell his shoes at a higher
price and in return receive more money than selling the leather alone. He is adding value to
the actual commodity he is selling for increased profit. The capitalist investing his money is
not actually adding value to the initial investment, but is gaining other funds entirely. The
capitalist is also taking a risk with his investment while the shoemaker knows the added
value of turning leather into shoes. Marx sees the actual labor of creating the shoe as adding
value; whereas the capitalist is consciously refraining from any actual labor to increase the
value of his investment.
Hans: The shoemaker is taking a risk too; he may not be able to sell his shoes.
If the investor “refrains from labor” then it might be worth while to say where the profit on his investment comes
from.
180 2007fa Econ 5080 U of Utah
Message [608] referenced by [Answer:19]. Next Message by Jill is [707].
[615] Kalmerico: The lazy rich capitalist. By changing leather into a shoe, the shoemaker
is adding value through his labor, time, and inputs. The capitalist does none of these
things when he/she invests, but instead makes money off of other people’s labor. The main
difference between the shoemaker and the capitalist is who provides the labor.
Next Message by Kalmerico is [652].
[640] Melanie: content A late penalty 1% Shoemakers and Capitalists. The shoemaker
is producing a commodity to be sold for money to exchange for another commodity: C-M-C.
The end goal for this shoemaker is a commodity he can use to exchange for other goods. The
capitalist, on the other hand, takes his money and invests it in the production of commodities
to be sold for more money by extracting surplus value from the exploitation of labor: M-C-
M’.
The capitalist does not contribute to the growth of his investment to create more value.
The shoemaker, on the other hand, must inject his own labor-power to produce value.
Next Message by Melanie is [642].
Question 481 is 415 in 2003fa, 465 in 2004fa, 443 in 2005fa, 491 in 2008fa, 566 in
2011fa, and 591 in 2012fa:
Question 481 Why does Marx say at the and of chapter Five: “hic Rhodus, hic salta”?
[360] Ben: graded A Prove It! “Hic Rhodus, hic salta” in this context means that the
money owner who is the very bottom of the food chain as well society, need to ask, not only
“jump here” or show me the results right now; but, what we should ask is how the producer
reached their result. We must ask because capitalists have hidden the way and means of their
production from the public.
As Hans says, “The statement is implying that the true nature of social relations in capitalism
is hidden to the individuals acting in this framework. It is as if these relations happened
on the island of Rhodes and not here”.
It makes sense that the capitalists would hide their production from the public, think of
what would happened if everyone here knew exactly how Nike shoes were made, or in what
condition the laborers who made those shoes, worked under. These conditions are often
forgotten, however if we were able to see, right before our eyes, we couldn’t just glance at
them, we would be compelled to act, as our society is now different than the one that Marx
was in, though even then the capitalists hid the horrid working conditions from the general
public.
We have child labor laws and work week hours for the protection of the workers but those
are only in developed nations like here in America, and not in underdeveloped, or developing
nation, which is why so frequently manufacturing plants are outsourced to countries with lax
labor laws, to exploit their workers for our goods. Hence Marx knows that a fundamental
part of capitalism is keeping the buyer away from the production process so that they cannot
see the labor value of the commodity. Throughout Chapter 5 Marx defines the M-C-M’
process; however this process would not work if the prices for commodities were related to
the value of the labor. His use of “Hic Rhodus, hic salta”, is a commentary on the wayward

U of Utah Econ 5080 2007fa 181
notion of the separation of the production process in the capitalist system, from the ever
seeing eye of the public’s conscience.
Hans: I give you full points for this although your answer is not quite right. If something is hidden this does not
necessarily mean someone is consciously hiding it or locking it away. See my [365].
Message [360] referenced by [365]. Next Message by Ben is [556].
[365] Hans: Hidden in Plain View. The hidden thing about capitalism, which prompts
Marx to say to the capitalist: “hic Rhodes, hic salta,” i.e., show us how you are doing it, is
not the horrid sweatshop conditions inside many factories, as Ben surmises in [360]. Marx
will discuss such conditions, which were even worse during his time, in chapters Ten and
Fifteen. But the hidden thing about capitalism which Marx discusses in chapters Four, Five,
and Six, is not hidden by locks but by the seemingly egalitarian market structure which hides
exploitation. It is the secret where profits come from. Workers are not aware that their labor
produces a much higher value than they get in wages. This is something which you are not
allowed to see, and not allowed to say. The labor theory of value, which explains profits this
way, is deeply discredited in modern economics.
Message [365] referenced by [360] and [2008fa:762]. Next Message by Hans is [366].
Question 491 is 311 in 1997ut, 321 in 1998WI, 322 in 1999SP, 377 in 2001fa, 425 in
2003fa, 453 in 2005fa, 485 in 2007SP, 498 in 2008SP, 501 in 2008fa, and 524 in 2009fa:
Question 491 One of the conditions under which the money owner can purchase laborpower
in order to do M−C− M ′ is, according to Marx, that the labor-power must be sold
by the worker him- or herself. Why this latter requirement?
[381] Dave: No slave labor-power as a commodity. Marx is addressing labor-power
as a commodity. In doing so he gives two specific conditions in which labor-power can be
a commodity. For the money owner to purchase labor-power in order to do M - C - M’
one of the requirements is that the laborer has the opportunity to sell his or her labor. “The
Laborer himself must be the one who sells the labor-power. The laborer can do this only if
he has free disposal over his or her person.” (Relations in which the labor-power is sold by
someone other than the worker are ruled out, because they presuppose that the seller of the
labor-power is able to force the worker, whose labor-power he sold, to do the work – perhaps
in the form of this worker being a slave.) Annotations pg. 374
For labor-power to appear as a commodity in the market the laborer can not be forced to
sell his labor. There must be free exchange of that labor by the laborer or there can be no
capital. “Capital can only then fully develop if all relations that are not based on commodity
exchange are removed or, at least, marginalized.” Annotations pg. 375
Hans: Your first paragraph already gives the answer, the second paragraph is not necessary. But you should have
made it clearer that the direct power of the slave owner over the slave, which enables him to force the slave to work
for him, is against the spirit of commodity trade. Commodity trade is based on independent individuals making
formally free decisions. The worker must agree to be hired by the capitalist. This decision is only free in form, not
in content, because the workers are cut off from the means of production and therefore are in a situation where they
have no choice but entering an exploitative relationship. But it is very important that this economic coercion takes
the form of a voluntary contract.
Perhaps that is what you wanted to say in the second paragraph, but if you did, it was not clear enough.
Next Message by Dave is [516].
182 2007fa Econ 5080 U of Utah
Question 492 is 249 in 1997WI, 313 in 1997ut, 323 in 1999SP, 357 in 2000fa, 378 in
2001fa, 411 in 2002fa, 427 in 2003fa, 477 in 2004fa, 454 in 2005fa, 486 in 2007SP, 499
in 2008SP, 502 in 2008fa, 525 in 2009fa, 578 in 2011fa, and 604 in 2012fa:
Question 492 Why are the conditions for terminating employment regulated by law instead
of being left to the free market? Does this mean that the state protects the workers against
the capitalists?
[375] Dyoung: graded A Labor laws, a necessary evil. The conditions for terminating
employment are regulated by law, to ensure that a laborer doesn’t forever sell his laborpower
in one lump sum to an employer. Marx explains that for a buyer-seller relationship to
continue, the laborer must always have labor to sell. In other words if he sold all his labor
at once he would only make one lump amount of money (which would not be sufficient
reimbursement for all that labor over time), and the interaction between buyer and seller
would stop because everything (all the labor) was already purchased. The Laborer would
then become a commodity not the owner of a commodity (labor). Since this lump sale of
labor must not occur, it is in the best interest of the laborer to have the state intervene and
regulate the sale of labor. In my opinion this also benefits the buyer of labor because it
ensures that there will always be labor available to purchase.
Does it mean that the state protects the workers against the capitalists? Yes in a way it
does, it protects both parties from making a mistake that would end the system and instead
regulates the current process so that it has longevity. In the long run it may hurt both buyers
(capitalists) and sellers (laborers). As buyers will have to offer more money for the same
amount of labor if there are few sellers available; Sellers may have to work more hours for
less or do less desirable work if there are few buyers available. But it is still in the best
interests of both to keep their options open then they can make the changes that will be most
beneficial. Hiring cheaper labor when it becomes available, or selling specialized labor in
order to make more money, etc.
Hans: You are treating the labor market like every other market without looking at the real human lives attached
to the commodity “labor.” A Marxist would say that the word “slavery” should not be avoided in the case of your
“lump sale of labor,” because it describes the situation the worker as a human being finds himself in. Although
a Marxist would be opposed to reverting to slavery, he would not think that ending the system is a necessarily a
mistake.
Next Message by Dyoung is [530].
Question 499 is 281 in 1996sp, 328 in 1998WI, 419 in 2002fa, 435 in 2003fa, 485 in
2004fa, 462 in 2005fa, 494 in 2007SP, 506 in 2008SP, 509 in 2008fa, 532 in 2009fa, 569
in 2010fa, and 611 in 2012fa:
Question 499 Which two sets of conditions must be satisfied for labor-power to be a commodity?
[372] Amy: Condition for Labor-power to be a commodity. The first condition that
must be met for labor-power to be a commodity is the possessor of the labor-power has to
make their labor available for sale and sells their labor-power as a commodity. The individual
selling their labor-power can only sell their labor-power in limited quantities. If they sell
their labor-power all at once then they become a commodity. The person who bought all
of their labor-power becomes the new commodity owner and the individual is no longer the

U of Utah Econ 5080 2007fa 183
owner of the commodity. The individual who has the labor-power as a commodity has to be
“the free proprietor of their own labor-capacity.” (Capital, p 271)
The second condition that must be met in order for labor-power to be a commodity is
that the labor-power they possess must be marketed as something in the individual. Their
labor-power is not something that is objectified.
MichaelM: Amy’s first condition is correct in that she mentions two of the three things necessary for labor-power
to be a commodity when a laborer is free to sell their labor. However, she forgets to mention the fact that both the
buyer and seller of the labor-power must be “legally equal.”
I do not understand what Amy is trying to explain when defining the second condition. It does not seem to
relate to what I understand the second condition to be according to Marx [377].
Next Message by Amy is [429].
[377] MichaelM: Condition One: The first condition that Marx says is needed in order
for labor-power to be a commodity is that the laborer must be free to sell their labor-power.
This first condition implies three things. First, that the laborer, not anyone else, is the only
one able to sell their own labor-power. Second, that the seller and buyer of the laborer’s
labor-power must be “legally equal” since the price of labor-power will be determined by
market forces. Third, that the laborer can only sell their labor-power temporarily so that the
first two implications can remain in force.
Condition Two: The second condition that Marx says is needed in order for labor-power
to be a commodity happens when the laborer is forced to sell their labor-power instead of
selling their product for the following reasons. First, if the worker does not have access to
pre-existing products needed for production such as raw materials, instruments of labor, etc.
Second, if workers do not have things to consume (means of sustenance) before and during
production. And third, the fact that when producing a commodity, the producer cannot
benefit from the labor in that product until is has been produced and sold. So the worker
must be able to sustain himself until the commodity produced is sold.
Hans: Your answer is very good, but you are ignoring Amy’s previous answer. How does Amy’s answer compare
to yours? Is she saying something different than you or the same thing?
It would also have clarified your answer to indicate that Marx thinks people should have more democratic access
to the means of production.
MichaelM: I thought about comparing Amy’s answer with mine in this answer, but decided to just respond to her
comments directly on her answer page.
Your second comment about Marx’s view that people should have more democratic access to the means of
production is something I have been thinking about a lot during and after answering this question. I think that
people in the US economy have some access through grants, loans, inheritance, etc. to the means of production.
However, when Marx says that people should have more democratic access to the means of production, is he
implying that the government should play a bigger role in providing people access to the means of production?
Hans: It should be impossible for individuals to own large-scale means of production. Here it is nontrivial to
decide what legal rights there should be. There are two possibilities. The means of production can either be the
collective property of the workers, or they can be owned by society at large (the state) and somehow administered by
the workers for the good of everybody. In this collective ownership it is important the the empowering supervisory
functions are not monopolized by some professionals but evenly distributed to everyone.
Message [377] referenced by [372] and [543]. Next Message by MichaelM is [394].
[486] Chris: I must be free to sell myself to you? The first condition for labor-power
to be a commodity on the market is the possessor of the labor-value, the person wherein
the labor-power resides, has to offer it for sale or sell it as a commodity. The owner of
this labor-power must be wiling only to sell their labor-power for a period of time and not
184 2007fa Econ 5080 U of Utah
indefinitely. If the owner were to sell his labor-power completely then he would be as a slave
to the capitalist who bought his labor-power.
The second condition is that the laborer is willing, or more appropriately desperate, to
sell his labor-power because he is not in a position to sell the commodities that his labor is
put into and thus to make a living he sells the only things he has, himself.
For a man to sell anything other than his labor-power he must have the means of production.
A man must sell his labor-power because he lacks the things that would allow his
labor-power to be realized.
Capitalism thrives on this lack of the workers’ ability to acquire the means and thus they
are at the whims of the capitalists if the want to provide for themselves or their families. It is
this point that Marx fought against, he believed in the workers rights to be able to access the
means of production and that no man had the sole right to own something that could only be
worked with many laborers.
Message [486] referenced by [488]. Next Message by Chris is [523].
[488] Hans: The right to sell yourself. Chris’s [486] is the right answer, but I’d like to
add the following to his first condition: the worker must have the right to enter a wage labor
contract. Serfs in the middle ages didn’t have that right; they were supposed to work on their
own land or on the lord’s land, that’s it. If they wanted to do other kinds of work, they had
to run away into the cities. If they didn’t get caught for a while they finally became free
because “city air made you free” at that time.
Today, children don’t have the right to enter wage contracts, for their own protection, and
some husbands don’t want to allow their wives to work. I am mentioning all this to show
that it is not a matter of course that a person has the right to enter a wage labor relationship.
Message [488] referenced by [565] and [2008SP:494]. Next Message by Hans is [492].
[518] Dave: The two conditions that must be satisfied for labor-power to be a commodity
are: 1) Labor power has to be sold by the laborer. Otherwise they would be forced to do so
and that would be incompatible with the free exchange of commodities. “...labor-power can
appear on the market as a commodity only if its possessor, the individual whose labor-power
it is, is also the one who offers it for sale.” [Capital]. 2) The laborer has to be forced to sell
his or her labor power instead of selling his or her product. “The second essential condition
which allows the money owner to find labor-power in the market as a commodity is this,
that the owner of labor-power, instead of being able to sell commodities in which his labor
has been objectified, must rather be compelled to offer for sale as a commodity that very
labor-power which exists only in his living body.” [Capital]
Next Message by Dave is [535].
[520] Deborah: Labor Power Commodity. The two conditions that must be fulfilled in
order for labor power to be a commodity are: 1) The freedom of the laborer to sell his or
her labor-power; 2) The laborer will only sell the labor power if deprived of the means of
production.
The subconditions of the laborer’s ability to sell the labor power are: 1) the laborer must
be the one to sell the labor power; 2) the seller and buyer must be legally equal in order for

U of Utah Econ 5080 2007fa 185
the price to be determined by market forces; and 3) the worker cannot sell him/herself once
and for all – the laborer can only sell himself temporarily.
The subcondition of the laborer to sell labor power instead of the products require: 1) the
worker needs access to pre-existing products; 2) the worker must have things to consume
before producing; 3) the producer has to wait until it is sold before he/she can benefit from
the labor in the product.
Hans: Put a “not” in front of this last set of subconditions.
Next Message by Deborah is [535].
[524] Chris: The first condition that must be met is that the laborer must be free to sell his
labor-power, not compelled by other forces. This labor-power must not be sold as a lump
sum either, it must be doled out so that the laborer controls his own labor-power, in a sense,
and the capitalist is not the outright owner of it. The second condition is that the laborer
must be willing to, and have the right to, sell his labor-power. He must be in a position
where he cannot sell the products that contain his labor because he does not have access to
the means of production. It sounds like the laborer has a choice in the matter but he has to
sell his labor-power so that he may provide for himself and his family.
Next Message by Chris is [536].
[533] Teight: As I said on my exam, one of the main conditions that must be satisfied
is that the possessor of the labor-power must be willing to make their sale available for
purchase as a commodity. The possessor can only sell their labor power in limited quantities
or else it would be considered a commodity if he/she sold it all at once. The buyer and the
seller of the labor power must be legally equal. The second condition is that the seller cannot
be forced to sell their labor power, such as slave labor.
Hans: If the possessor sold his labor-power once for all, he would be the commodity rather than the commodityowner.
And you are forgetting that the seller cannot have the option to sell a product rather than his labor-power.
Next Message by Teight is [534].
[539] Corey: graded A Commodity of labor power. The first condition that must be
satisfied is that the worker must be free to sell their own labor power. They must be the ones
who own it (they cannot be slaves or serfs). The worker must be the ones who bring it to
the market for sale. (I put “they must be willing to sell” in class but I feel this is a better
explanation.) Second they cannot produce a final good for sale on the market, as they do
not have access to the means of production. Therefore they are compelled to sell their labor
power for subsistence.
Next Message by Corey is [568].
[541] Ozz: graded A Labor-power Exam Resub. The two conditions that must be satisfied
for labor-power to be a commodity are that the laborer selling his labor power must be
free to sell his labor-power, and that the laborer must be deprived of the means of production
or something that stops the laborer from producing the product himself. In order that these
two conditions are met certain requisites to these conditions have to be present also.
Freedom of the laborer to sell his labor-power depends on three requirements. Fist, the
laborer himself must be able to sell his labor-power by himself, and no third party could sell
it for him. Second, the buyer and seller have to be held legally equal. Third, the seller must
only sell his labor for temporary periods of time.
186 2007fa Econ 5080 U of Utah
Marx explains in greater detail how the laborer is deprived of the means of production by
clarifying what the laborer must have in order to sell commodities and not his own laborpower.
First the laborer would need pre-existing products. Secondly, the laborer must consume
before and during production. Marx clarifies this point by saying “not even a builder
of castles in the air, can live on the products of the future”. Lastly the producer cannot benefit
from his product until after production and exchange. If the laborer does not meet these
requirements to produce for himself, he then must sell his labor-power. Thus, labor-power
becomes a commodity.
Next Message by Ozz is [545].
[543] Ricky: The 6th chapter of Das Kapital discusses a new aspect of labor-power,
that it can actually become a commodity in certain situations. Before giving examples in
history where labor-power becomes a commodity, Marx gives two sets of conditions that
are prerequisite for this phenomenon to occur. First, the laborer must be allowed to sell
his labor-power. MichaelM [377] insightfully gives three implications of this. The first is
that no one else is able to sell the worker’s labor-power. In other words, the laborer must
not be a slave. Many students throughout the class archives have described this ability as
the worker’s “freedom”. I personally view this as ironic because in a capitalistic society
the worker must sell his labor-power for a wage or suffer the alternative – starvation. The
worker’s decision is hardly free of duress. I like Hans’ description of this as “the ability
to obligate himself” [2004fa:311] better. Another implication of the first condition is that,
given the market forces determining a labor contract, the seller and buyer of labor-power
must be legally equal. The final is that, in order to keep the previous implications in place,
the laborer is only able to sell his labor-power temporarily.
The second set of conditions is that the laborer must not have the option of selling the
product of their own labor. In general, this occurs when the means of production are privately
owned by a few, elitist capitalists. Because the laborer does not have access to the necessities
of production, such as raw materials, tools and other instruments of labor, he is incapable of
producing and selling the products of his labor on his own. Instead, the social structures of
capitalism force him into a situation where he must sell his labor-power in order to satisfy
his level of sustenance. Otherwise the worker would never sell his labor-power but rather
the product of his labor. Wight [1996sp:340-1] gives a good summary of both conditions.
First the laborer must be “free to” sell his labor and, secondly, the laborer must be “free
from” constraints resulting from the ownership of any means of productions. The social
structures of capitalism are what bring about the lamentable conversion of labor-power into
a commodity.
Next Message by Ricky is [544].
[549] Ryan: graded A There are two basic requirements, according to Marx, that must
be filled in order for labor-power to be a commodity. First, the worker must be the one to
sell his own labor power. He must be free to enter into and leave contracts with employers
without their direct coercion. Second, the worker must not be able to sell the products of his
labor. He must be separated from the means of production so that he has nothing else to sell
in order to survive than his labor-power.
Next Message by Ryan is [704].

U of Utah Econ 5080 2007fa 187
[565] Tim: Two conditions. The two conditions that must be met in order for laborpower
to be a commodity are, (1) labor-power must be willingly sold by the laborer to the
capitalists, and (2) the laborer can not have access to the means of production, which makes
him dependent on subsistence from the capitalists.
Hans: You fail to mention that the worker must have the right to sell his labor-power. I explained in [488] that this
is not a matter of course.
Next Message by Tim is [566].
[587] Tomb: 1) Freedom of the laborer to sell his or her labor-power.
1a) The laborer himself must be the one who sells the labor power. The laborer can do
this only if he has free disposal over him or herself.
1b) Since the price of labor-power is to be determined by market forces, seller and buyer
of labor-power must be legally equal.
1c) The laborer cannot sell him or herself permanently. It must be only temporarily.
2) If the laborer were able to sell a finished product instead of his labor-power he would.
This is because the finished product is much more valuable. He will therefore only sell his
labor-power if she is deprived of the following necessary conditions for doing the production
himself:
2a) For any production, the worker needs access to preexisting products.
2b) Workers must have things to consume before producing.
2c) If the product is a commodity, the producer has to wait until the commodity is produced
and then sold before he can benefit from the labor in that product.
Hans: This is the second time, after [323], that you simply copy long passages from the Annotations into your
answer. You are required to say those things in your own words.
Next Message by Tomb is [592].
[614] Nogi: exam resubs- labor-power to a commodity. The first condition that must
be satisfied for labor-power to be a commodity is that that laborer must be free to sell their
labor-power. The second condition that must be satisfied is when the laborer is forced to sell
their labor-power instead of selling their commodity for a variety of reasons including not
having access to production materials or means of subsistence.
Next Message by Nogi is [666].
[624] HTJY: Conditions for Labor Power to be a Commodity. Two sets of conditions
that must be satisfied for the labor-power to be a commodity are:
1. The laborer must have freedom to sell her labor power. This requires that:
(i) the laborer herself must be the one who sells the labor power
(ii) the seller and the buyer of the labor power must be legally equal if the price of labor
power is to be determined by market forces
(iii) for (i) and (ii), the laborer must be prevented from selling her labor power once and
for all.
188 2007fa Econ 5080 U of Utah
2. The laborer wouldn’t be selling her labor power if she can produce goods by herself.
She will sell her labor power only if at least one of the following necessary conditions for
own-production is not satisfied:
(i) the laborer has access to pre-existing production
(ii) the laborer has things to consume before production
(iii) the worker can wait until her product is sold and benefit from the sale.
First Message by HTJY is [154].
[635] Daru: Labour-Power as a Commodity. The two conditions are:
(i) that the person must be free to sell his/her labour-power as a commodity. This implies
that when the worker sells her labour-power, she must do it herself. Someone else cannot
do it on her behalf. Therefore, labour-power sold under slavery cannot be considered under
this case. This is essential as Marx makes an important distinction between the person who
does the work i.e. the possessor of labour-power and the person who legally owns labourpower.
The owner of labour-power and the immediate possessor of the labour-power are two
different persons under slavery (Hans’s response to Karlwho [2005fa:1100])
(ii) the second condition states that for (i) to take place, the person selling labour-power
must be ‘desperate’ to do so. I.e. selling her labour power is the only option she has.
This can only happen in a society governed by a mode of production in which the seller
of labour-power has no control or exercises no ownership rights over means of production.
Capitalist society achieves precisely that by giving complete control and ownership of means
of production to a few individuals or a small class/section of the society. The possessor of
the labour-power then has no choice but to sell her labour-power to the capitalist.
Note: In the above answer I recognize that Marx states that workers are unaware that they
are selling their labour power. Capitalism makes it look like as if they are only selling their
labour. Since I am attempting to present this in its true light, the use of the term labour-power
is deliberate everywhere.
Next Message by Daru is [636].
[654] JoshS: How labor-power is a commodity. Labor-power is a commodity when
certain criterion are meet. First, labor-power must be utilized or purchased by a buyer. A
self-employed person is not selling labor and therefore labor-power is not a commodity.
Although a self-employed person inputs labor into his/her work, he/she is selling a product
or service which is the commodity. The self-employed person does not sell labor-power.
On the other hand, a worker will sell his/her labor to an employer. The labor-power is a
commodity that is bought and sold between worker and employer.
First Message by JoshS is [120].
Question 523 is 48 in 1995WI, 56 in 1995ut, 60 in 1996sp, 58 in 1996ut, 65 in 1997sp,
347 in 1998WI, 348 in 1999SP, and 441 in 2002fa:
Question 523 Labor-power creates products. The value of the products comes from the
value of labor-power, and the use-value from the use-value of labor-power. Is this a correct
rendering of Marx’s theory?

U of Utah Econ 5080 2007fa 189
[379] Teight: The mystery of labor power. There are many parts of this assessment that
are false, starting with the opening sentence. The first sentence in this question is completely
wrong. It has been known that labor-power doesn’t create products, but rather the labor itself
produces products. When we discuss labor power we are talking about the potential labor
or the ability to work, not the actual work itself. Therefore, the value of a given product is
determined by the labor of its content. It is inaccurate to say that the value of the products
comes from the value of labor power. It would be more accurate to say that the use value
of products comes from the use value of labor powers. When a consumer decides to make
a purchase on a commodity they are basing their decision on the fact that the value of the
product is bigger than the value of the labor power.
Hans: You seem to have paraphrased [1998WI:368] without fully understanding it. You should have said “the
value of the product is determined by the labor content of the product” instead of “... by the labor of its content.”
Also the “therefore” at the beginning of that sentence does not make sense. And your last sentence was in the
original “The capitalist buys labor power not because of the use value of the product, but because the value of the
product is larger than the value of the labor power.” You should read the archives in order to help you understand
the answer, and then you should formulate this answer by yourself without looking at the archives. Then these
logical lapses will not happen.
Next Message by Teight is [418].
Term Paper 529 is 508 in 1997sp, 908 in 1998WI, 908 in 1999SP, 908 in 2001fa, and 539
in 2008fa:
Term Paper 529 Essay about Chapter Eight: Constant and Variable Capital
[359] Charles: Chapter 8 discusses the elements of the various factors in the labor process
and how the different things build up together to form a final value for a product.
The main aspect of the whole process is that the value is added to any product as soon as
that product is touched by a labor. No matter what the commodity is, every time a labor is
added to that product, the value rises accordingly. At the same time, the value of the labor
does not change every time it is added to the commodity. Over all, the labor is preserved in
each transaction and everything comes together to form the final value of the product. The
labor just gets added to the product and gets transferred from one stage to another.
When the laborer is working on a product, they don’t try to add value and provide labor
at the same time. When they add labor, the value is automatically created. Therefore, value
and labor are mutually associated with each other. During the production process, the use
value of many objects may be suspended until the final product comes together and that’s
when all the characteristic of the product come together to reveal the true use value of the
product.
Since value exists in the objects, it has the tendency to lose its value if it loses its use
value. This does not mean that the value of labor will be lost during the production process
also. The good thing about the labor value is that it can be used for something else. Based
on the needs and the use value of a product, the labor can be changed to accomplish in a
different way in order to create a new use value for the product.
Many examples can also be for machinery, which is used to help with labor and add more
value to the product. Of course, all the machines have a life span and the benefit of that
is the rapid manufacturing of a product. If in one week you can produce 1000 units and
190 2007fa Econ 5080 U of Utah
now because of the machinery you can produce 2000 units in the same time, your cost per
product goes down but it never loses its use value or exchange value.
These are many characters of different functions that get added together during different
times of the process in order to be combined together to come up with the final value.
Message [359] referenced by [374]. Next Message by Charles is [367].
[374] Hans: Machines Do Not Create Value. At the beginning of chapter Eight, Marx
spends several paragraphs, in his excruciatingly slow and thorough way, to discuss the simple
fact that in the production process, the value of the means of production is transferred to the
end product.
Marx deals here with a problem which in the minds of a modern economist does not even
exist. Nowadays one would simply include the transfer of value into the definition of value.
One would say: “the value, i.e., the labor content of a commodity, is not only the value newly
created by direct labor, but also the labor content of the materials, and the depreciation of
the machinery, used to create the commodity.” One would consider this a definition, and one
would think that a proof is neither necessary nor possible for this.
For Marx, this is not primarily a matter of definition, but in his mind, it only makes sense
to define value in this way if such a value transfer is actually happening during the labor
process. The labor process not only creates new value but also transfers the value of the
means of production to the end product. And Marx takes a careful look at the labor process
in order to understand how labor does this. This is relevant for his overall theory because
he concludes that machines do not produce new value, they only transfer the value to the
end product which they already have. They are called “constant” capital because the overall
magnitude of value remains constant as they transfer value to the end product.
I will not discuss here Marx’s findings about how the production process achieves this
value transfer (namely, the transfer of old value is done by the concrete labor, while new
value is produced by the abstract labor), or the supportive arguments he gives to show that
this is the right answer. At this point I only want to comment about it why Marx asks such
questions which a modern economist would never dream of asking.
Nowadays we consider theories as ways of thinking about the world, and therefore the
definitions matter, because they carve up reality into tractable chunks. But you can never
prove a definition, definitions are good if they help us to understand things and to practically
deal with reality. The proof is in the pudding, so to say. Marx is a more uncompromising
realist in this respect. In the background of his methododogy is the question: why are certain
definitions useful while others aren’t? His answer: those definitions are useful which carve
up reality at those places where reality itself has its joints. I.e., our definitions attempt to
capture a structure which already exists before we came with our definitions. Only those
definitions which are conformant with reality are useful, because they allow us to trace
how reality itself works. In the terminology of modern philosophy they are called “real
definitions.”
This view of definitions is the reason why Marx takes so much pride in such simple
discoveries as the double character of labor in a commodity-producing society. This is not

U of Utah Econ 5080 2007fa 191
just a way of looking at the labor process, but this is how the labor process itself is split into
two in an economy based on private production for the market.
Charles only covered those few first paragraphs of the chapter in his term paper [359],
but he did not understand what Marx was doing. Instead of seeing that Marx was investigating
how labor transfers value in the production process, he thinks Marx makes a series
of pronouncements about the nature of labor and value, and tries to reproduce those pronouncements.
Most are innocuous, but one of them is importantly wrong. Charles writes:
If in one week you can produce 1000 units and now because of the machinery
you can produce 2000 units in the same time, your cost per product
goes down but it never loses its use value or exchange value.
If you use Marx’s concept of value rather than the modern utility function, the value per
product, and therefore also its exchange-value, does go down if machinery allows you to
produce 2000 units instead of 1000 units per week. This is important to understand. Many
workers think the capitalist can sell the product above its cost because the machinery adds
value to the product. As Marx sees the reality of modern market economies, machinery
is sterile. It transfers its own value, but does not create new value. The workers do not
understand that the difference between final sales price and cost is due to their own unpaid
labor.
Message [374] referenced by [2008fa:144] and [2009fa:678]. Next Message by Hans is [376].
Exam Question 536 is 395 in 2000fa, 420 in 2001fa, 453 in 2002fa, 469 in 2003fa, 521
in 2004fa, 495 in 2005fa, 537 in 2007SP, 544 in 2008SP, 575 in 2009fa, 658 in 2011fa,
and 687 in 2012fa:
Exam Question 536 How are the minimal and maximal bounds of the working-day determined?
[392] Kalmerico: A worker’s boundaries. A worker’s day is broken up into two parts:
time spent on necessary labor and time spent on surplus labor. In a capitalist society a
worker’s day cannot be comprised only of necessary labor, otherwise the capitalist would not
profit. Necessary labor is the time it takes for a worker to produce his/her wage, while surplus
labor is extra or “free” labor. A maximum bound for a working day has two determinants
according to Marx, physiological bounds and moral bounds. Physiological bounds have to
do with a worker’s need for sleep, food, cleanliness, etc., and without an adequate amount
of these needs a worker’s performance and/or ability to function at his/her job will decline
drastically. Moral or cultural bounds refer to a worker’s need to satisfy social and intellectual
wants. These maximum bounds must be provided in order to ensure a worker’s health and
longevity at performing the task required of him/her. A minimum bound would be the labortime
of a worker needed in order for a capitalist to break even, as far as profits are concerned.
Yet even this cannot be the minimum bound because capitalists are not looking to break even
– they are looking to profit. There must always be surplus labor in order for capitalism to
function.
Message [392] referenced by [395]. Next Message by Kalmerico is [442].
[395] Hans: The Simplicity of Chapter Ten is Deceptive. The simple arithmetic of
necessary and surplus-labor in chapter Ten is based on assumptions which contradict the
192 2007fa Econ 5080 U of Utah
day-to-day experience of every hourly employee. If you are an hourly employee, then the
basic fixed number is the hourly wage. The question how many hours and how many shifts
you work is much more flexible and variable, and the total income is then hourly wages
times hours worked.
In Marx’s discussion, on the other hand, the basic fixed number is the total daily or weekly
income. This is given by something which has nothing to do with the work performed,
namely, by the daily or weekly reproduction cost of the laborer. This is assumed “given,”
and it is not negotiable. The issue of contention between capitalist and laborer is only how
long the laborer has to work in order to get this income. The hourly wage is then the total
income divided by this length of the working-day. I.e., the longer the worker has to work,
the less he or she gets per hour.
Why does Marx make these assumptions which contradict the surface experience of arguably
the most proletarian workers? Because Marx contends that this is the inner order in
which these quantities are really determined. Basically Marx says: if you are a worker, then
your income is fixed, it is just enough so that you can pay your bills but not more. If you
try to raise your income by working more, you are hurting yourself, because in the long run
longer hours will cause your hourly wage to fall.
I tried to explain this also in [2005fa:1216], and also [2007SP:1090] is relevant here. For
the question at hand and message [392] this means: the minimum length of the working-day
is not the break-even point for the capitalist. In order to calculate the break-even point you
need the hourly wage, but this depends on the length of the working-day.
Rather, the minimum length is the time it takes for the worker to produce a value equal
to the value of labor-power. Let’s go through the math. Assume the weekly reproduction
cost of the worker and his family is $800, and the value produced by one hour of labor is
$40. Then the minimum length of the workweek is 20 hours. But Marx hastens to add that
the workweek can never be 20 hours, it must always be longer. Why? If the worker works
only 20 hours a week, then he must receive $40 per hour, in order to get $800 per week
which he needs to pay his bills. I.e., he receives exactly the value he produces, and nothing
is left for the capitalist. The capitalist has no motivation to hire the worker at this high wage.
Therefore the work week must always be longer and the wage correspondingly lower. For
instance the work week is 40 hours and the hourly wage is $20. Then the worker can pay his
bills too, and the capitalist gets a handsome profit of $20 for every hour the worker works.
Message [395] referenced by [2008SP:505]. Next Message by Hans is [402].
Question 537 is 454 in 2002fa, 470 in 2003fa, 522 in 2004fa, 538 in 2007SP, and 688 in
2012fa:
Question 537 What is the source of the paradox that on the surface, the worker robs the
capitalist during every minute he rests, while in reality the capitalist robs the worker?
[393] JohnGalt: What is a Paradox except a series of false assumptions - capitalism is
built upon them. The source of the paradox is that “capital is dead labor, that, vampirelike,
only lives by sucking living labor, and lives the more, the more labor it sucks.” Only
because of the relationship between capital and labor is this paradox possible, which forms

U of Utah Econ 5080 2007fa 193
the foundation of our modern capitalist system. Thus, on the surface the worker appears to
rob the capitalist for every minute that he rests, but in reality the opposite that is true. It is
the capitalist who continuously robs the laborer. According to the fiction of capitalism, the
capitalist has purchased the laborer’s time and labor-power through a mutually concluded
agreement. This is a fallacy. The capitalist holds much greater bargaining power and thus
has much more force to exert over labor. Capitalists will use this additional power to suck
as much capacity out of labor as possible while giving as little back as necessary.
Despite this inequitable exchange, it is given that labor is a commodity that is purchased
or exchanged. During this agreed-upon labor-time, the capital, and therefore its owner as
representative of that capital, are reinvigorated through the worker’s labor-power. The laborer
is drained of vigor and force by the capital/capitalist, while receiving remuneration
that provides only the basic necessities to continue working for the capital/capitalist until
vigor has been entirely drained or it has become too difficult to tap into. Then it is discarded
in favor of new labor or new technology or a combination of both.
When the laborer rests, he appears to be robbing the capitalist and his capital of their
productive capability and the capital’s ability to generate a surplus for its owner. As the
purchaser of labor-power, the capitalist seeks to obtain the maximum benefit possible from
his purchase of this commodity. He will try to extract the full use-value.
Only if the commodity of labor-power is sufficient to produce profits can capitalists be
satisfied and continue to production. Because they hold the key to the means of production,
capitalists have an additional advantage that allows them to rob their workers.
Hans: Your second-to-last paragraph almost gives the explanation which I like best, but not quite. In capitalism,
the inequitable and exploitative relationship between capitalist and laborer takes the surface form of a voluntary
and equal exchange. This is the contradiction which gives rise to the paradox mentioned in the question. Say
the worker is exhausted from the capitalist’s insatiable demands to work and perform more and more in order to
increase the capitalist’s profits, and takes a break. Then the capitalist can act as if there was no exploitation, as if
this was an equitable exchange of labor for a wage, and reproach the worker for not fulfilling his part of the bargain,
namely, work for the wage. The superficially equitable exchange of labor for a wage is such a good cover-up for
the exploitation mediated by it, that it even gives the capitalist opportunity to add insult to injury when the worker
takes a break. I tried to say similar things in [2004fa:336].
Message [393] referenced by [2012fa:936]. Next Message by JohnGalt is [628].
Question 538 is 396 in 2000fa, 421 in 2001fa, 455 in 2002fa, 471 in 2003fa, 523 in
2004fa, 497 in 2005fa, 539 in 2007SP, 640 in 2010fa, 660 in 2011fa, and 689 in 2012fa:
Question 538 How long is the working-day from the point of view of the capitalist?
[385] Desk: The working day. The working day from the view of the capitalist is unique.
The reason it is so unique is because the “capitalist is not greedy; he represents the social
force of value in motion, self aggrandizing value”. (10.1) “As a capitalist, he is only capital
personified. His soul is the soul of capital.” Capital’s drive is to create surplus-value, and
make the means of production absorb as much surplus labor as possible. If a worker uses
his disposable time for himself, he is effectively robbing the capitalist, because the capitalist
lives on surplus labor. Thus, the capitalist tries to get the maximum possible benefit from
the worker’s use-value.
194 2007fa Econ 5080 U of Utah
However, the worker has his own view about how much he should work. His labor-power
is different from other commodities, because it creates value. From the worker’s perspective,
the capitalist’s demands reflect an excess expenditure of labor-power. For example, a
capitalist could potentially use so much labor-power in a day that it would take three days
to restore it. The capitalist wants to seek the greatest possible benefit out of his commodity
and the working day from the capitalist point of view is as long as it takes.
Message [385] referenced by [386] and [394]. Next Message by Desk is [420].
[386] Hans: Carefully Read Every Word. Message [385] shows that Desk did not read
the text carefully enough. Three examples:
(1) Desk writes: “The working day from the view of the capitalist is unique.” Marx says
something slightly different, namely, that the capitalist’s view of the working day is unique.
The capitalist has his own view of the working-day, and the worker has a different view. By
“view” Marx means here that what each considers their rights. The capitalist has certain
rights regarding the length of the working-day, the worker has certain rights too, and these
rights contradict each other.
(2) Desk writes: “The capitalist is not greedy.” This is wrong although I did say it in the
Annotations. I will change this in the next edition. I wanted to point out that Marx does not
argue: the capitalist insists on a super-long working-day because he is greedy, but he says,
roughly, that capital is greedy and the capitalist works in the name of capital. In other words,
Marx makes a two-step argument:
(a) The capitalist is the personification of capital, i.e., his actions are determined by the
needs of capital.
(b) Capital has the need to expand itself.
Capital itself is the driving agent, not the capitalist.
(3) Desk writes “If a worker uses his disposable time for himself, he is effectively robbing
the capitalist, because the capitalist lives on surplus labor.” This is not Marx’s argument, and
this is not enough grounds for calling it a robbery. If the gazelle runs away from the hungry
lion she is not robbing the lion. No, Marx has a different argument: The capitalist bought the
commodity labor-power and paid for it. Therefore he considers it his legal right to consume
the labor-power. This is the point of view from which the worker’s unscheduled break looks
like robbery.
Marx was a meticulous writer and every word counts.
Next Message by Hans is [395].
[394] MichaelM: The length of the working-day. I agree with part of Desk’s answer in
[385] where he says that the working day for the capitalist is as long as it takes, but would
like to add a bit more to it. I think what Marx is trying to say is that the capitalist will
work a worker as much as he/she can in a day without jeopardizing the worker’s ability to
come to work and perform well the next day. Desk also mentions surplus value which is
very important to the capitalist, but does not explain it much. The importance the capitalist
places on surplus value is the main reason the length of the working day is of such great
concern to the capitalist. Surplus value is the profit the capitalist makes from the worker’s
labor once the worker has worked long enough to pay their own wages. So if it only takes

U of Utah Econ 5080 2007fa 195
a worker two hours to pay their own wages, then anything longer than that is profit to the
capitalist and so it makes sense that they will work the worker as long as they can that day.
I have found it interesting in my personal work experience watching worker’s ability to
perform well and work long hours change as the capitalist is willing to meet certain desires
of the worker. For example, I work in a department right now where we answer phones
all day long. One of my co-workers was having a difficult time with this kind of work and
could barely make it through an eight hour work day. When these concerns were brought to
the attention of the boss (capitalist), the worker was asked what could be done to help him
overcome these problems. His answer was to have an extra day off during the week and to
work longer hours the other four days. The capitalist agreed with this request and the worker
started his new schedule with a much better attitude and was able to work an extra two hours
a day. From this example, the capitalist and worker found a way where the capitalist could
still work the worker as long as they possibly could (as long as the law permits), but also get
better performance from the worker during that time because the worker was happy. Again,
this is mainly because the capitalist was able to see that his surplus value would increase by
doing so.
Hans: Interesting example. The worker is exploited as much as before, but in a different form, and he declares
himself happy. This shows how important the form of the exploitation is.
Chris: I have seen this ability by the capitalist to still exploit workers after the workers have just about had enough
of their job. My brother is working a job where he sits in front of the computer all day long, all week long. When
he began the job he was hired as a subcontractor where he did not receive any benefits and wasn’t sure whether the
job would last. He worked for more than a year at this before he started thinking about graduate school and getting
away from his mind-numbing job. Of course once he started talking about this he was hired on permanent and
received a raise. He was happy and thought his job was better after this. He is still doing the same thing as before,
but for more money but now they can work him more hours because he is salary and overtime is not an issue for
the company anymore. The capitalists found a way to keep him around, keep him happy and exploit him more than
they were before. Sounds great, I can’t wait to get out of school!
Next Message by MichaelM is [479].
Question 546 Discuss the points of view of capitalist and laborer in the dispute around the
length of the working-day. Why can this dispute only be resolved by force?
[387] HTJY: The Dispute between Capitalists and Workers over the Length of Working
Day. The law of commodity exchange entitles capitalists to keep the length of working
day as long as possible while, at the same time, the law entitles workers to keep the working
day to a normal length. Marx argues that the struggle between capitalists and workers over
the length of working day can be settled only by force since each side is equally supported
by the same law.
The length of working day (necessary labor time + surplus labor time) has no minimum
value since the length of surplus labor time is never reduced to zero in the capitalist mode of
production. The maximum length of working day is determined by the time which workers
need to reproduce their labor-power and fulfill their intellectual and social needs. What then
determines the length of working day within these restrictions?
First, let’s consider the length of working day from the point of view of capitalists. In an
M-C..P..C’-M’ process, a capitalist purchases input commodities, turns them into an output
commodity, then exchanges it for money in the market. According to the labor theory of
196 2007fa Econ 5080 U of Utah
value, the source of the capitalist’s surplus-value lies in the fact that the value embodied in
the output commodity by the use of the labor power is greater than the value of the labor
power itself purchased by the capitalists. The extra labor performed by the worker in excess
of the necessary labor is the surplus labor. The surplus labor embodied in the commodity
forms the surplus value. The capitalist’s right to this surplus value is based on the law
of commodity exchange, a part of which states that a buyer of a commodity has a right
to “extract the maximum possible benefit from the use value of his commodity.” (Capital,
342:1) The capitalist bought the labor power as a commodity at its daily value. Thus, by the
law, he has the right to extract maximum surplus value from it by maximizing the use value
of the labor power; the daily use value of the labor power is the daily labor performed by the
worker. From the capitalist’s point of view, maximizing the surplus value means maximizing
surplus labor time and hence maximizing the working day.
Now, let’s consider the length of working day from the the point of view of workers.
Workers understand that the capitalist has a right to maximize the use value of the labor
power which they are selling. In return, the workers receive a daily wage that is equivalent
to the value of commodities necessary to reproduce their daily labor power. Now suppose
that the capitalist uses the labor power of each worker for 18 hours a day. This deadly
amount of daily work will certainly deteriorate the labor power quickly up to the point
where the workers will not be able to reproduce their daily labor power with the given wage
compensation. The capitalist paid less than what is required to produce the labor power
commodity or, in other words, the capitalist paid for one day’s use of labor power but used
it for more than one working day. This violates the law of commodity exchange because the
capitalist paid less money for the labor power than what is necessary to produce it. Thus,
the workers have a right to request a normal working day that is in coherence with their
capability to reproduce daily labor power given the current wage compensation.
The law of commodity exchange entitles the capitalists a right to keep a longer working
day and the workers a right to keep a normal working day. Thus, the question of what
determines the length of working day within the restrictions mentioned earlier cannot be
settled on the ground of an economic principle acceptable to both parties. When two parties
have a conflicting interest over an issue that affects both of them and it cannot be resolved
on an established principle, what is left as a means to resolve the conflict is a ‘use of power’,
i.e., ‘force’ since one’s power is a claim that “I am stronger than you. Give me what I want
from you. Here is the proof that I am stronger than you.” The proof is, of course, the force.
Marx’s labor theory of value, together with his conclusion that the law of commodity
exchange favors neither workers nor capitalists and hence the length of working day can
only be determined by force, provides an interesting insight into capitalism. According
to the labor theory of value, it is the workers who produce the surplus value. But it is
the capitalists who appropriate and distribute the surplus value. Most workers in capitalist
society do not question why the fruits of their labor must be appropriated by the capitalists.
Indeed, they are taught at school “the science of economics” which simply takes the workercapitalist
relation over surplus value as given, makes no note of it, and then presents itself as
if it were an “objective” science. What Marx is claiming is that there is nothing intrinsic or
objective about the worker-capitalist relation over surplus value. It is rather a relation that

U of Utah Econ 5080 2007fa 197
has resulted from a long historical process of class struggle involving use of power. Here
lies our hope in the fact that the capitalist class relation is not only an unfixed relation but
also an unjust relation and hence it has to and will change as the historical process furthers.
Hans: Very good. Just one remark about your sentence “workers understand that the capitalist has a right to
maximize the use value of the labor power which they are selling.” Despite the surface form of an equal commodity
exchange, the relationship between worker and capitalist is a one-sided exploitative relationship where the capitalist
receives surplus-labor from the worker without paying for it. This is a glaring injustice, and many workers sense
that there is something wrong. But despite it being an injustice, it is not against the law. The capitalists have the
right to exploit the workers based on the same laws which gave them private property rights over the means of
production in the first place. The workers cannot appeal to those laws in order to do away with exploitation, but
Marx shows here that the workers can appeal to those laws in order to do away with the murderous long working
days they had to endure in the 19th century.
Next Message by HTJY is [391].
Question 549 is 507 in 2005fa and 652 in 2010fa:
Question 549 What are the main differences distinguishing capitalism from earlier forms
of exploitation?
[389] Ricky: the boundless thirst for surplus labor. For Marx, capitalism did not start
the exploitation of the working class; it merely altered the appearance and the extent to
which that exploitation took place. Exploitation stems from surplus-labor. Marx explains
that earlier forms of exploitation had an innate limit. This limit existed because production
was motivated by use-value. In such a system, surplus-labor existed to the extent that it
satisfied a given set of wants. The main difference of a capitalist system is that the production
process becomes driven by exchange-value not use-value. This erases any natural
limit to surplus-labor because the interest of the capitalist is the infinite sale of the product
by means of its exchange-value rather than satisfaction of a finite need with a use-value. In
other words, surplus-value transforms from a means to an end in and of itself. This creates
what Marx refers to as a “boundless thirst for surplus-labor” [344:2/o]. Ryan’s [388]
elaboration of Marx’s cotton example gives a great historical illustration of this. A Marxist
would find a terrible irony in the paradoxical situation of the modern laborer being politically
emancipated and economically enslaved simultaneously.
Hans: Your second sentence “exploitation stems from surplus-labor” uses one poorly-defined term to clarify another
poorly-defined term. It would have been useful to give Marx’s definition of surplus-labor here.
The paradoxical situation mentioned in your last sentence is only possible because exploitation is not overt but
hidden. More will be said about this in chapter Nineteen.
Next Message by Ricky is [431].
Question 550 How did pre-capitalistic forms of exploitation change when they came into
contact with capitalism (slave-labor, corvée-labor)?
[388] Ryan: graded A– The plague of Capitalism. According to Marx, pre-capitalistic
forms of exploitation become more severe and brutal when they come into contact with
capitalism. In the example of slave labor in America, he states that it maintained a somewhat
patriarchal quality so long as its purpose was too fill its own needs, i.e. it was focused on the
use-values of the products it produces. However when it came into contact with capitalism
the focus changed from use-value to exchange-value and the “civilized horrors of over-work
198 2007fa Econ 5080 U of Utah
[were] grafted on” to these older forms. [344:2/o] The slaves’ lives were used up, sometimes
in only 7 years, to fill the capitalists’ endless thirst for surplus labor.
Summing up: capitalism changes the focus from use-values to exchange-values. This
creates an endless desire for more production on the part of the owner of the means of
production, and the workers, now slaves not by direct coercion, but by free sale of laborpower,
are mercilessly used to produce as much as possible with no regard for their wellbeing.
Hans: “Contact with capitalism” means that the products produced by slaves were sold on a capitalist market. The
slaves were still slaves by direct coercion, your second paragraph is wrong about this, but this coercion was now
used much more brutally.
Message [388] referenced by [389]. Next Message by Ryan is [430].
Question 565 is 499 in 2003fa, 552 in 2004fa, 570 in 2007SP, 605 in 2009fa, and 717 in
2012fa:
Question 565 Is it true today that the laborer is for 24 hours a day nothing else than laborpower?
[408] Daniel: Laborer= worker all day, every day. Yes. The laborer is nothing more
than a laborer for 24 hours a day... for all intents and purposes.
Marx claims that capitalists limited work days in order to make more capital. In other
words, he claims that capitalist governments “forcibly limited the work day” to benefit themselves
and he gives two reasons why. The first being, pressure from the work force to improve
conditions and the second being to preserve the “vital” force of the nation. Marx
believes that we reached a point in which it would be counter-productive to continue treating
labor the way we used to and we would actually make more capital by giving way to the
labor movement and thus, not undermining the productivity of workers. This all supports
the fact that the capitalist is always in control and the laborer does not know the value in
which he creates. Today, we are merely in a period in which capitalists believe that if they
don’t overwork their workers and give them adequate time off, then they themselves will
make more capital in the long run.
To make this “24 hour” claim is to accept that the laborer is at the mercy of the capitalist
and will work when, where, and how long the capitalist wants. By saying the laborer is
nothing more than a laborer all the time, is to say the employer has complete control over
that worker’s life. It is hard to picture a boss in our society today having complete control
over their employee’s life but in theory it makes sense. We had slaves not too long ago,
we had harsh working conditions in our past, and we had children working in mines (for
example), with no regard for human conditions. It is in a capitalist’s nature to do whatever
it takes to make the most.
So, are bosses today really letting their employees off at the end of the day because
they think they will be more productive the next day? Does the modern capitalist limit the
work day to ten hours because they believe by the 11th hour their workers will not be as
productive?
Subconsciously the answer is yes, however I don’t believe this is how a modern factory
owner thinks. (This may be due to the fact that they can only think short term and not

U of Utah Econ 5080 2007fa 199
always long-term). Their actions do represent those underlying capitalist forces that pushed
to maximize gain. Capitalist economies are constantly adapting and changing in order to
make the most profit possible and although it doesn’t appear as if workers are laborers around
the clock today, they only enjoy their new benefits because the capitalist system has allowed
it.
Hans: You originally had in your first sentence: “for all intensive purposes.” I corrected it, see
http://wiki.answers.com/Q/Is the saying ‘all intents and purposes’ or ‘all intense purposes’
Your sentence “it is in a capitalist’s nature to do whatever it takes to make the most” psychologizes a social constraint.
Whether an individual capitalist is callous and greedy or not, the problem is that the capitalist system
rewards anti-social behavior and cares for people only if this increases productivity and profits.
BTW, this is the answer to a homework question which was no longer assigned when you sent it. Therefore it
will not receive a grade.
Next Message by Daniel is [479].
Question 573 is 506 in 2002fa, 524 in 2003fa, 577 in 2004fa, 529 in 2005fa, 578 in
2007SP, 581 in 2008SP, 585 in 2008fa, 614 in 2009fa, 677 in 2010fa, 697 in 2011fa, and
726 in 2012fa:
Question 573 According to Marx, the only way to increase profits is to shorten the portion
of the day during which the workers produce an equivalent of their wage, and to extend
that portion of the day when they create unreimbursed new value for the capitalist. Are the
capitalists aware of it that all their cost cutting measures, if successful, go at the expense of
their workers?
[401] ZACH: Expense of the Laborer. I don’t think that is a worry for capitalist. Capitalists
are about making money and if that means decreasing the labor power, which means
decrease the time that society had deemed normal to produce a commodity, then that is what
they will do. What capitalist need to realize is that they are not dealing with machines, they
are dealing with humans. At one point in the book it gives an example of a boot maker. If a
boot maker can only make one pair of boots in one working day, in order to shorten the labor
power of that boot maker it is necessary to buy him more efficient tools or machinery. It is
not possible for that boot maker’s boss to tell him to start making two pairs of boots per day
because of the lack of tools and machinery he has. In order to shorten labor power the capitalist
needs to invest more into the commodity production. Also, by lengthening the surplus
power hours of a worker it is going to cause an attitude in the worker that he is not getting
paid what he is worth and therefore will seek to find a new place of employment where his
skills are used for a full day. Basically, the capitalists want to make more money on their
investments and feel that they need to always try and increase production in a shorter and
shorter amount of time, while the laborers are trying to keep up with the socially expected
time that has been given them to produce what they are paid to do.
Hans: You asked me how you should study for the upcoming exam, and I just briefly looked over all our submissions
until now. I think you, and some others in this class, do not fully appreciate how different Marx’s labor theory
of value is from mainstream economics. For instance, in [80], you use a subjective concept of value, while for
Marx, value is not subjective but a social relation independent of individual attitudes or preferences. In the present
question, you do not seem aware of the concept of relative surplus-value. I recommend you study my [423]. The
essays I send to the class look at Marx’s theory from various angles, and I recommend that you take time to study
them. I also recommend everyone to come to class whenever they can.
Message [401] referenced by [404]. Next Message by ZACH is [570].
200 2007fa Econ 5080 U of Utah
[404] BHales: Greedy Capitalists. I agree with ZACH [401], capitalists are aware that
they are cutting costs at the expense of their workers. Capitalism exists to gain profits. If it
weren’t for profits capitalism wouldn’t exist.
An example of capitalists cutting costs at the expense of their employees would be to put
them on salary for the purpose of making them work overtime and holidays without having
to pay them overtime or holiday. Laying off workers and cutting back on benefits are also
common practices in cost cutting.
As mentioned in [2004fa:363] there are two different points of view to look at. The
capitalist may look at increasing workload or responsibilty as a possibility for a worker to
prove oneself for promotion. While the worker would see the same situation as exploitation.
Marx would argue that an increase in productivity or workload on the worker’s part should
lead to an increase in pay.
I believe the capitalist is aware of the exploitation but that he may justify it, or try to
add a benefit that may make him be able to sleep at night. Overall I don’t necessarily think
that capitalists are deliberately cutting costs at the expense at the worker. Rather it is a sink
or swim mentality and at this point he has to do what he can to gain profits. Business is
business and is never intended be taken personally.
Hans: Marx does not think that “an increase in productivity or workload on the worker’s part should lead to an
increase in pay.” On the contrary, he says that wage is the price of labor-power, i.e., it reimburses the worker for his
or her reproduction costs, and is not at all based on how much value the worker produces.
Next Message by BHales is [529].
[407] Tyler: graded A Invisible hand. Capitalists should be fully aware that their cost
cutting measures go at the expense of their workers. In capitalist thinking, the number one
goal of corporations ought to be increasing profits which, in turn, increases shareholder’s
wealth. When the profits are increasing and shareholders are happy, everything else will fall
into place, relating back to Adam Smith’s theory of the “Invisible Hand.” When corporations
act in their own self-interest everyone will benefit. When profits have increased enough,
corporations can expand their production operations, thus increasing the need for more labor.
After more labor has been employed corporations can begin taking care of employees and
giving them increasing benefits and time off....
Message [407] referenced by [2008fa:798], [2008fa:806], and [2008fa:815]. Next Message by Tyler is [447].
[414] Ashley: A Capitalist Way Of Thinking. The capitalists are aware that their cost
cutting measures are at the expense of their workers, but they don’t care. A capitalist’s point
of view is that they are out for themselves, and solely that. They will do whatever it takes
to make a profit, even if it’s at the expense of their workers. Even if they were to increase
the worker’s wage by the hour from A to B, the capitalist would make sure it’s still less than
what they were originally getting paid from A to B. By doing this, the capitalist is giving less
than what the value of the worker actually is. The workers aren’t getting full value for their
labor. The capitalist wants an increase of surplus labor (B to C.) This is the only way profits
can occur without extending C. If a capitalist cared about people’s feelings, there wouldn’t
be such a big debate and so much protest about this capitalist world. In a capitalist world,
everyone is out for themselves. They don’t look for what’s good for the country, or other
people. They want to make money, profit, at anyone’s expense. In conclusion, the capitalists

U of Utah Econ 5080 2007fa 201
are aware of the expense of their workers, but they have other priorities on their mind, like
profits, that take precedence over their workers, and that’s what’s most important to them.
Next Message by Ashley is [469].
Question 575 is 580 in 2007SP, 587 in 2008fa, 616 in 2009fa, 679 in 2010fa, 699 in
2011fa, and 728 in 2012fa:
Question 575 Turgot wrote: “In every kind of labor, it must happen, and it does in fact happen,
that the wage of the worker is limited to what he needs to secure his own subsistence.”
Why is this so? Is this still valid today?
[400] Caroline: Wage of the worker is limited by capitalists. Turgot’s statement is still
valid today. Capitalist systems set the wages for their laborers based on whether or not they
are acquiring surplus value from the labor-power of their employees. These wages are low,
and reasonably so from the standpoint of the capitalists; in order to amass the profits they
desire, the wages must be maintained at a level that will not interfere with profit growth.
It makes one wonder why these laborers would continue to work for capitalists, and
receive low wages in return. To help answer this doubt, Hans says in his responses to
[2007SP:807] and [2007SP:817] in Spring 2007 that basically the unemployed contribute
to the capitalists’ ability to set the tone for the wages. The working force employed at capitalists’
facilities would rather work for lower wages than lose their jobs rendering them
unable to secure their own subsistence.
Another possibility as to why employees come back to work is that the wages are low
enough to cause them to be in an unsettling financial situation. This feeds the capitalist
profit engine, so to speak, through surplus labor supply.
Capitalists will look at the present economy to get an idea of how high or low to set
wages in order for laborers to be able to provide for themselves, but simultaneously ensuring
that profits continue or increase during this time. Due to capitalists’ cupidity, they will
assess wages that are suitable or barely adequate for their employees so that profits can be
maximized.
Hans: The capitalists cannot directly control the wages. The wages are set by the market. But there are certain
market mechanisms which are very favorable for the capitalists. (1) If profits fall because wages are too low, then
capitalists can reduce their investments, thus slowing down demand for additional labor. Workers cannot slow down
their supply of labor if wages are too low, since they have to eat and to pay bills. (2) Investment in labor-saving
equipment also reduces the demand for labor. The structure of the entire system favors therefore the capitalists.
Message [400] referenced by [2008fa:799]. Next Message by Caroline is [431].
Question 578 is 284 in 1997WI, 528 in 2003fa, 581 in 2004fa, and 534 in 2005fa:
Question 578 Are the social conditions of the labor process the same thing as the relations
of production?
[396] Dannymangum: I am America and so can you! From the outset social conditions
of the labor process and the relations of production appear to be similar, but upon a more
intense review the two differ moderately. When discussing the social conditions we are
drawing lines to the necessity of blatant and necessary interaction between laborers in order
to increase productivity. Whereas the relations of production is more of the social structure
202 2007fa Econ 5080 U of Utah
of the studied unit, perhaps more clearly described as the societal/business infrastructure
and their relations as participants in the infrastructure to each other. For example President,
Executive V.P., Director and so on . . .
As a summary, social conditions of the labor process are the direct person to person
interaction during the process. Whereas, relations of production are the point to the structural
interaction not the personal interaction.
Hans: Relations of production not only comprise the structure of the business in which the employees learn by
doing and talk to each other in order the increase productivity, but broader social structures: property laws, access
to education, etc.
Next Message by Dannymangum is [454].
[410] Jeff: Social Conditions of Labor Process. For purposes of Marx’s discussions,
“social conditions of the labor process” refers to something slightly different than relations
of production. The social conditions of the labor process refer to the overall increase in
productivity to raise the surplus-value. Social relations of production is, on the other hand,
the relationship between the people in the production process themselves. This is reflective
of how the people in the production process attempt to increase their production. This notion
refers to the direct link between the people in the production and their attempts at increasing
production where social conditions of the labor process refers to the overall increase in
production as a means to increase the surplus-value. This is the key distinction between the
two concepts although they are not too different.
Hans: The relations of the people in the production process are by Marx sometimes called “relations in production.”
This is not the same as the relations of production which also refer to the ownership relations of the factors of
production, and many other broader social relations. The social conditions of the production process are somewhere
between the relations in production and the relations of production.
Next Message by Jeff is [443].
Presubmission of Term Paper 583 is 834 in 2002fa, 586 in 2004fa, 539 in 2005fa, 592
in 2007SP, 591 in 2008SP, 595 in 2008fa, and 624 in 2009fa:
Presubmission of Term Paper 583 How do modern intellectual property rights fit together
with Marx’s theory of capitalism?
[479] Corey, Daniel, Jill, Melanie, MichaelM, and SamHouston: Intellectual Property
Rights Essay - Draft for feedback. The premise of intellectual property rights is to protect
ideas and innovations of workers as a commodity of the corporation they work for. When
a worker begins their employment, they sign an agreement that all processes, innovations,
products, ideas and so forth, produced by the employee for the purpose of their employment
become the property of the employer. These ideas are protected by patents, copyrights,
and trademarks. Instead of producing commodities as the laborers did in Marx’s time, the
laborer now produces ideas and services. The capitalist pays the employee an hourly, weekly,
monthly, or yearly salary for the time the laborer spends in producing ideas. This allows the
worker to provide the necessities of life which will allow the laborer to reproduce the labor
power necessary for repeating the processes day in and day out. The worker has no claim
on his work, even though his work may be as simple as an idea. Due to the contract signed
by the employee, the employee’s work becomes property of the employer. The capitalist
can therefore make certain that the product of the employee is his and his alone by securing

U of Utah Econ 5080 2007fa 203
copyrights. At this point, the idea produced by the employee becomes a commodity to be
sold on the market.
Hans: The fact that the ideas the worker gets while working for the company belong to the company is confirmation
of Marx’s thesis that the worker has sold his entire labor-power, instead of specific services, to the company. Of
course the company comes up with all kinds of “good reasons” why this must be the case, see your next paragraph:
The capitalist’s success still relies heavily on exploiting their workers and alienating them
from their “human value”. In the modern market, industries can only succeed if their employees
sign a contract stating that any invention or technological improvement they create
while employed by that company are the property of that company to do with as it sees fit. It
is easy to see why a capitalist would want to do this as they are paying the worker to work for
them and giving them the exposure to an environment and the experience needed to generate
these new ideas/inventions. The capitalist provides the means of production and the worker
produces the commodity.
Another reason why the capitalist would want to do this is to protect themselves. Having
the worker agree to this would put up strong barriers to keep the worker from leaving and
selling his idea to another capitalist for higher wages or to keep the worker from becoming
a capitalist themselves and becoming a competitor. Signing the contract gives the employer
full legal rights over the work of the employee and obtaining copyrights gives the capitalist
the ability to sell his commodity on the market. This is an exploitation of the worker and
something that restricts their emancipation and enlightenment. The laborer can no longer
use that same idea in another industry without being held legally liable.
Hans: Taking away ideas from someone else is not as easy as taking away material commodities. That is why the
capitalists have to set up specific legal frameworks to do this, and also invent extra excuses why they should be
allowed to do it.
In some instances, employers require that laborers sign a “no compete” agreement. This
agreement says that the employee contracts not to work for another company in competition
with the employer for a given period of time after termination. The contract provided upon
receipt of employment makes certain that the employee stays a laborer and the employer the
Capitalist.
Hans: Very good paper, because you show the class character of the treatment of information in a capitalist system.
My comments show the Marxist take on the things you are describing. I personally would have formulated it
much more sharply. The things which you are describing so matter-of-factly are for me outrageous examples that
the capitalist system not only steals material products but also ideas and information from the producers and shoves
them to the capitalists.
I don’t understand why you capitalize Capitalist. I keep downcasing it in the archives, and you people keep
sending in your emails with the holy Capitalist Capitalized.
Melanie: I think the ideas presented in this book are great, but the writing could be more clear. I’ll work on making
some edits and adding some thoughts.
Next Message by Corey is [527], Next Message by Daniel is [527], Next Message by Jill is [527], Next Message
by Melanie is [527], Next Message by MichaelM is [508], and Next Message by SamHouston is [527].
[527] Corey, Daniel, Jill, Melanie, MichaelM, and SamHouston: Marx vs. Intellectual
Property Rights. The premise of intellectual property rights is to protect ideas and innovations
of workers as a commodity of the corporation they work for. Instead of producing
tangible products, nowadays many workers labor to produce intangible products. These are
products of thought i.e. commodities called “intellectual property”. More often than not
when a worker sells his labor power to a capitalist or corporation, the worker must agree
204 2007fa Econ 5080 U of Utah
to grant all rights to his ideas, products, innovations, and inventions to the capitalist. In
other words, the intellectual property developed by the worker automatically becomes the
capitalist’s property.
The capitalist pays each worker an hourly, weekly, monthly, or yearly wage for time
spent producing ideas. This wage allows the worker to provide the necessities of life, which
in turn allow the laborer to reproduce the labor power necessary for repeating the processes
day in and day out. The worker has no claim on his work, even though he developed it. It
is also important to note also that some companies even go beyond the workplace and have
employees agree that any idea they have at anytime while employed (even outside of the
workplace) is considered the property of the employer! Due to the agreement made by the
worker and capitalist, the product of the worker’s thought becomes a commodity to be sold
on the market to fetch surplus value for the capitalist employer.
The capitalist’s success still relies heavily on exploiting the worker by paying him a
subsistence wage and robbing him of his “human value”. It is obvious to see why a capitalist
would feel justified in exploiting an employee this way as they are paying the worker to work
for them and giving them the exposure to an environment and the experience necessary to
generate any new ideas or inventions.
Another reason why the capitalist would want to mandate these contracts is to protect
themselves. Workers bound by these agreements would run into strong barriers that would
keep them from leaving and selling their idea to another capitalist for higher wages or keep
them from becoming a capitalist themselves and becoming a competitor. Signing the contract
gives the employer full legal rights over the work of the employee and obtaining copyrights
gives the capitalist the ability to sell his commodity on the market. This is an exploitation
of the worker and something that restricts their emancipation and enlightenment.
The laborer can no longer use that same idea in another industry without being held legally
liable.
In some instances, another way the capitalist protects themselves is by requiring that
laborers sign a “no compete” agreement. This agreement says that the employee contracts
not to work for another company in competition with the employer for a given period of time
after termination. The contract provided upon receipt of employment makes certain that the
employee stays a laborer and the employer the capitalist.
An real example of how an individual’s ideas and research may be taken from them
in a different situation would be when college professors and academics are exploited by
capitalists in the form of publishing companies. Many articles academics write for learned
journals are owned by the publishers of those journals. You may think the academics get paid
for their efforts, but that is simply not true. They must assign the copyright to the publisher
in order to publish their article or book. Without permission they can’t even distribute the
article they’ve written to their own students!
To sum it up, the transfer of intellectual property rights to capitalist employers furthers
the exploitation of workers and does not make intellectual developments commonplace for
all to enjoy.

U of Utah Econ 5080 2007fa 205
Chris: I thought this paper had a good subject that highlights the plight of the worker versus the capitalist. What I
thought could be added to the thought about intellectual property rights was the emerging ideas about these rights
and the internet. We have seen an explosion in the news about peer to peer sites on the internet and the damage that
these are doing to the intellectual property rights of musicians, this is also true for movies and other items that are
downloaded. One thing I found interesting was Hans comment about books and how they should not be confined to
certain people or companies but free to all, we should all have the right to access this information at will. All of these
items such as books, songs, or any other thing falling under the intellectual property label that were created by the
laborer are still under the control of the capitalist. Marx believed in the idea that man could find self-actualization
in labor, that one could find a sort of freedom, but when these expressions of freedom are controlled by captitalists
they easily becomed commodified. Capitalism seeks out this creative labor and integrates it into production through
intellectual property law. There are many ways to see error in the proliferation of intellectual property law. We
see the citizens of developing countries dying by the millions because they cannot access medicine that is under
patent, and therefore expensive, when this medicine could be made generically and sold for much less. I believe if
the laws on intellectual property were lessened we would see more creativity undertaken throughout the world as
those without the means were able to access ideas from their colleagues and expand upon them.
Next Message by Corey is [538], Next Message by Daniel is [575], Next Message by Jill is [607], Next Message
by Melanie is [569], Next Message by MichaelM is [589], and Next Message by SamHouston is [598].
Question 584 is 237 in 1996sp, 289 in 1997WI, 354 in 1997sp, 515 in 2002fa, 535 in
2003fa, 588 in 2004fa, 541 in 2005fa, 592 in 2008SP, 596 in 2008fa, 625 in 2009fa, 688
in 2010fa, 708 in 2011fa, and 737 in 2012fa:
Question 584 Why can we gain a scientific understanding of “the sphere of competition”
only after having grasped the inner nature of capital?
[399] Deborah: The Big Picture. Similar to how Capital started out with understanding
the commodity before moving on to larger things, we must gain an understanding of the inner
nature of capital before moving on to competition. We have to understand the essentials, the
elements, before we move on to the “the big picture.”
As Marx says, “A scientific understanding of competition is possible only after the inner
nature of capital has been understood...” As Marx often points out, what we see is not
often an accurate reflection of what is truly occurring: “just as the apparent motions of the
heavenly bodies can be understood only by someone who is acquainted with their real motions
– which are not perceptible to the senses.” Marx repeatedly delves deeper into apparent
paradoxes for this very reason. A deeper look is required before we can address the larger
picture.
We cannot understand competition until we understand what is being competed for and
with. Marx is pointing out here that we have to understand the essentials before we move
on to the big picture otherwise we may make assumptions that would not be correct, or
appropriate.
Message [399] referenced by [409], [2008SP:516], and [2008fa:827]. Next Message by Deborah is [436].
[409] Hans: Building Blocks. Deborah [399] says that one has to start with the basics
and do the big picture later, therefore Marx starts with the commodity, and gets to the sphere
of competition later. I will try to explain here that things are much more complex than that.
(1) the most basic relationship in a capitalist society is not the commodity but value.
Nevertheless, Marx does not start with value, he even says it would be wrong to start with
value.
206 2007fa Econ 5080 U of Utah
(2) Far from being the big picture, the sphere of competition is a sideshow in which
everything looks upside down. Marx says that the fundamental tendencies of capitalism do
not come from the interactions of people on the market (what he calls competition). Rather,
the market only reflects and mediates the essential relations which are located elsewhere,
namely, the relations organizing production in capitalist society.
(3) Points (1) and (2) are related. The commodity, which lives on the market, is our
starting point because it simple, visible, and familiar; it enters everyone’s daily activity. In
my remarks to [188] I called it the door we have to pass through to get to that what really
drives everying, namely, value. The word “value” is used here in the same way as Marx
uses it; value is congealed abstract labor, in [2003fa:133] I called it CAL because the word
“value” is so easily misunderstood. Anyway, there is a disconnect between the place we start
our investigation and that what really matters. The sphere of competition suffers under the
same disconnect. It is the arena in which the individual agents in capitalism interact. But
Marx says these actions do not determine the social outcomes, but the individuals are like
marionettes on the stage. The thing that pulls the strings in the background are the hidden
relations of production which are beyond the control of the individuals.
Message [409] referenced by [416], [2008SP:516], [2008fa:827], [2008fa:1087], [2009fa:740], and [2011fa:638].
Next Message by Hans is [417].
Question 585 is 589 in 2004fa, 542 in 2005fa, 595 in 2007SP, and 593 in 2008SP:
Question 585 Is it necessary or useful for the capitalists themselves, in order to be more
successful in competition, to know about the inner laws of “capital in general”?
[415] Brian: Yes, It is necessary! It is necessary and useful for capitalists, in order to be
more successful, to know about the inner laws of the “capital in general.” By understanding
the inner laws of “capital in general,” capitalists can better manipulate the capital. By better
manipulating the capital, capitalists can make better use of it, making it more useful. As an
easy relation to why it is important for capitalists to understand the inner laws of “capital in
general” would be an example of why it is important for scientists and engineers to understand
the laws of physics, math, and other complex sciences. Scientists that understand the
“inner laws” of these complex sciences can better manipulate these sciences to work to their
advantage, naturally making their objective easier to obtain. Capitalists who understand the
inner laws of “capital in general,” will be able to use the natural forces of capital, thereby
making the accumulation of more capital a naturally easier task.
Hans: From this answer one would expect that you are recommending to your capitalist friends to read Capital.
Are you?
Message [415] referenced by [417]. Next Message by Brian is [463].
[417] Hans: The necessity to remain dumb about the system. How could one disagree
with Brian’s answer [415]? Well, let me try:
(1) If Marx is right, the individuals in capitalism do not control their social relations. Not
because they lack the knowledge to do this, but this is built into the structure of the system
itself. Of course, such a pronunciation must be taken with a grain of salt. It is a theoretical
approximation to say they have no control at all. In reality they have a little control, but not
much.

U of Utah Econ 5080 2007fa 207
But if you take this theoretical point of view of no control seriously, if follows that even
an understanding of the fundamentals of capitalism will not enable a capitalist to be a better
capitalist. Here is an example for this which seems plausible to me: a capitalist who knows
that his profits come from the unpaid labor of his employees cannot take advantage of this
knowledge to influence his own profits. For his competitive interactions, his labor costs
are indistinguishable from other costs. Marx’s distinction that labor is variable capital and
materials constant capital is a macro-economic effect, as I tried to explain in [402], but it
does not make itself felt on the level of an individual capitalist.
(2) Marx even goes one step further than (1) and says: capitalism can only work because
people are unaware of the character of their own social relations. In other words, any correct
social science is subversive. If the capitalists use correct knowledge for their own strategizing,
they saw off the branch on which they are sitting. They lift the ideological fog which
hides the unappetizing truth about their profits. Even if it may help in some situations, they
are wiser not to wake up the sleeping dog.
There is a strange asymmetry. Better knowledge about the fundamentals of capitalism
makes it easier to fight capitalism and to work towards its abolition, but this same knowledge
is much less useful to strengthen capitalism itself. This is why the dominant power has
to dumb itself down; it has to insist on keeping everything foggy, introduce creationism
into schools and deny global warming. The contending powers, China, India, Europe, by
contrast, put much greater emphasis on education – not necessarily because they want to
overthrow the system, but they want to change the power constellation within the system.
Chris: I like the last paragraph of this. It is true that more knowledge about the fundamentals of capitalism make
it easier to fight it, I can see this in me where I have read only the beginnings of Marx but I am already looking at
our capitalistic society in a much better light. Introduce creationism into our schools and you have children that
don’t know how to view the world with a critical eye, they will only look at it from the point of others. Deny
global warming because it keeps people spending no matter what the cost. As Marx writes, the only way to battle
capitalism is not by me alone but for society to wake up – and the capitalists do not want this.
Message [417] referenced by [2008SP:514] and [2011fa:636]. Next Message by Hans is [423].
Question 586 is 205 in 1995WI, 238 in 1996sp, 237 in 1996ut, 290 in 1997WI, 355 in
1997sp, 354 in 1997ut, 363 in 1998WI, 364 in 1999SP, 477 in 2001fa, 516 in 2002fa, 536
in 2003fa, 590 in 2004fa, 543 in 2005fa, 596 in 2007SP, 598 in 2008fa, 627 in 2009fa,
690 in 2010fa, 710 in 2011fa, 739 in 2012fa, and 690 in Answer:
Question 586 Do the workers after introduction of new machinery produce more value per
hour?
[397] Melissa: graded A Workers get new machines! No, workers do not produce more
value per hour given the introduction of new machinery. Since value is a social relation,
adding new machinery would not enable the workers to add more value per hour. Adding
new machinery will hopefully increase output, but given the number of hours worked in a
day will not change, neither will the value per hour added by the workers.
However, given that value is a social relation, there would be an opportunity for the first
capitalist company who introduced new machinery to see the value per hour increase. This
is only until the rest of the capitalist companies decrease the amount of time it takes to create
208 2007fa Econ 5080 U of Utah
the commodity by implementing the same machinery, bringing the capitalist companies back
to a level playing field. Hans explains this very well in [2001fa:320].
Ozz: This is a great answer to this question. Another point that is not mentioned here is the addition of value made
by the machine due to the labor that was put into making the machine. Production using a machine uses less labor
time per unit of what you are producing, thus less value it has. However, the labor that was used up in making
and maintaining the machine is also a part of the labor that it takes to produce the final product. This means that
although the machine doesn’t create more value per hour, the time put in to make the machine translates into more
value in the final product.
Hans: You are right, Ozz: in addition to creating new value, the workers’ labor also transfers the already-existing
value of the machines to the product. We should not forget this, even if Marx focuses his attention on the newly
created value.
Message [397] referenced by [402], [406], [2008fa:795], [2008fa:1064], [2008fa:1157], [2009fa:911], [2009fa:1076],
and [2011fa:1041]. Next Message by Melissa is [398].
[402] Hans: Now They Don’t, Now They Do. In the first paragraph of [397], Melissa
says: since value is a social relation, the introduction of more efficient machinery does not
enable the workers to create more value per hour than they did before the introduction of
this machinery.
In the second paragraph, she says: since value is a social relation, workers in the first
firms which introduce more efficient machines do create more value per hour than before.
But after the competitors have introduced the machines as well, the workers in the innovating
firms cease to produce more value than the other workers, and everybody produces just as
much value as they did before the introduction of the more efficient machines.
This correctly summarizes the Marxian theory about this issue. The first paragraph gives
the long-term result without describing the adjustment path to it, while the second paragraph
shows the short term effects and adjustment path. To avoid misunderstandings, I’d like to
add that Marx never says for a minute that the machines themselves create value. Machines
transfer the value inside them, i.e., the labor time needed to produce them, to the end product,
but do not create new value.
Coming back to Melissa’s answer, what struck me is that Melissa prefaces both the long
term and the short term scenarios with the remark that value is a social relation. How can
the same reason have two opposite effects?
The important issue here is that “value” is a society-wide cost category. I.e., things have
high value if their cost to society is high, and things have low value if it is low. I will first
apply this principle to two more general issues which are not directly focused on the question
at hand, and then I will talk about the question specifically.
(1) One of the cornerstones of Marx’s labor theory of value is that value is not created
by use-value but by labor, and furthermore not by concrete labor but by abstract labor. The
value of a good (which shows up in its price) is not the use-value, and it is also not the
skills and good ideas of the worker producing it, but it comes from the fact that you had to
spend your time producing it. Why not the use-value? Well, if something has a high usevalue,
society will just produce more of it. Why not your hard-earned skills and knowledge?
Because you are not special. There are millions and millions of laborers, most employed at
tasks that are below their skill levels – they would be able to do it too. The only thing that
matters on a social level is the labor-time: if you spend your time on this thing you cannot

U of Utah Econ 5080 2007fa 209
spend it on something else instead; this is what gives this thing exchange-value. By the way,
is not only your private labor-time; the time society had to spend to give you the requisite
education for this job shows up in the value too.
(2) Machines do not create value. This is again due to the fact that the limiting factor
is not how many machines society has, but how much labor it has. If a certain machine
were to create products that have a higher value than depreciation (in addition to the value
transferred to it by the materials and that newly created by direct labor), then society would
re-allocate its labor to produce more of this machine. For society, labor is the constraint, not
the availability of any one use-value produced by labor.
(3) Workers using more sophisticated machinery do not create more value per hour but
often even less value per hour, because the sophisticated machines in capitalism are designed
in such a way that you don’t need special education to operate them. After all, the capitalist
wants to stay in control, and not give the worker too much control but wants them to be
replaceable.
(4) How about the innovating capitalist who produces a certain product with a new and
more efficient machine? If you look at the surface of the economy, at the market interactions,
then the following is happening. This product is indistinguishable from the other products
produced with the old technology, therefore it will also share their value. Only over time, as
the competitors catch on and also use the better technology, will this extra value be competed
away. Here the sentence “value is a social relation” matters because it is not your private
cost, but the social cost of producting the object, which determines the value.
(5) But Marx is never satisfied with explanations that stay on the surface. The market is
the sphere of competition, and Marx is always digging down for something underneath of
which the market is the reflection. In this case he argues that the workers operating the new
machine are indeed special: what they do cannot be duplicated by other workers, because
the other workers do not have this new machine. That is why they, temporarily, produce
more value per hour than the rest of the workers doing other tasks.
Message [402] referenced by [406], [417], [423], [2008fa:144], and [2010fa:866]. Next Message by Hans is [409].
[406] Daniel: graded A Yep! I still don’t get it. I am having trouble wrapping my mind
around this issue of new machinery not producing more value per hour, and I thought there
may be others confused as well....
Fundamentally, I understand that machines do not produce value (they merely transfer
value) and that labor and workers do. In Melissa’s [397] she says that “workers do not
produce more value per hour...since value is a social relation.” Hans emphasizes this stating
that it is correct because the product itself does not change and thus its value is the same.
Hans: If new machinery is developed and introduced, then the value of the products declines, even though the
products are the same. As you say later, there may be a delay, an interim time when the old value still persists, but
in the long run the value declines.
So far, I understand but I am lost when we add the second part of the question which is
value per hour. That is what I don’t get and this is why... Each individual product is not
changed when a machine makes it and so, we can agree that a product made by a worker and
a machine is equal in value. However, I am looking at the overall value of products made
in a given set of time. If a worker can make 20 car engines with the help of a machine in a
210 2007fa Econ 5080 U of Utah
10 hour day, whereas a worker without that machine can only make one, was there not more
value created by the worker who had the machine? Although each engine still maintains
the same value, the worker who has the machine’s assistance created more equal valued
machines per hour than the worker without a machine. So can we not add up the value of
the engines? Was more value not created in that 10 hour day by the labor with a machine?
(We are of course comparing these two situations with no variables. Each worker regardless
of machine, works the same amount of hours in the day and they are equally skilled at their
job. Machines merely assist a worker to produce more of the same product.)
So, if the answer (as Hans stated in his [402]) is that workers indeed, do not create more
value per hour after the introduction of new machinery, then I am missing something or
looking in the wrong place, because what I see is more value coming from the workers with
machines than without.
Maybe the answer lies in the statement, “value is a social relation.” Value is created by
labor and determined by society. The fact that a capitalist can create more value per hour
due to new machinery may just be an introductory period in which value still needs to be
adjusted.
Perhaps, the value per hour created by a capitalist with new* machinery is possible, but
only until the rest of the capitalists catch up and get that machinery themselves. Thus, it
would not be accurate to say that new machinery helps the labor create more value per hour,
it just represents the beginning of a change or shift in the value of the engines (from the
example above). The increase in value is merely a social lagging mechanism that doesn’t
represent the actual marketplace until the competition gains the same technology and creates
an even playing field. Although the machine’s assistance did create more value, it was in
actuality not accurately representing society’s interpretation of that value. It takes time for
society to react. Eventually, as competition catches up with the new technology and the cost
to society is altered due to increased production they will in effect, cancel out each other’s
original added value.
This adds depth to one of Marx’s cornerstones which Hans says in his [402] when he says
“value is not determined by use-value but by labor.” Ideas, innovations, and skills all help in
production but it really just comes down to the hours that the labor spent to produce it that
gives it value.
hmmm... Perhaps I just answered my own question.
Next Message by Daniel is [408].
[411] Gilmour: content C form 95% After the introduction of machinery, the workers
do not produce more value per hour on the product itself. If a company is producing an
item at a cost to them of $10 before the introduction of the new machinery and afterwards
they can produce the exact same product at a cost of $5 they have not increased the value
of the commodity. However, through this specialization they have made the company more
efficient in the sense that it can produce the same product at twice the rate as previously
possible. For example, if a chair maker can produce ten chairs an hour at a rate of $10
each, their cost is $100 per hour. Now enter the new machinery. The manufacturer can now
produce twenty chairs an hour at a cost of $5 each for a total cost of $100 per hour. The

U of Utah Econ 5080 2007fa 211
chairs are the exact same and the final price is still the same. However the new production
process yields more chairs per hour which means that the producer can make and sell more
chairs. This however has not increased the value per hour of the chairs. Another thought to
consider is the law of supply and demand. Suppose this chair maker was a specialty one.
With the exclusivity of their chairs they are able to charge a higher price. If the supply
doubles making them more readily available, and the demand does not change, the producer
will need to charge less for each chair in order to sell more to the public. New machinery
does not guarantee an increase in the value per hour, in fact it may make the value decrease.
Hans: Gilmour, what is your definition of value per hour? If a chair maker produces 10 chairs per hour, the cost of
each chair is $10, and the sales price is $12, what is then, according your calculation, the value per hour? And then,
if the chair maker gets new machinery which enables him to produce 20 chairs per hour, the cost of each chair being
now $5, and the sales price still $12, what is, according your calculation, the value per hour in the new situation?
Gilmour: Value per hour is the value of a commodity made up of its intrinsic value and the labor put into it. Value
per hour in regards to the production has doubled in this case due to the ability of the company to produce twice as
many chairs per hour than it could before. However, this does not increase the value of the chairs if the price stays
the same. It does however increase the spread of production costs and selling price which brings more money into
the company. With the addition of the new machinery, the company is able to increase its production rate per hour
thus increasing its ability to sell more. This does not mean that the product now has more value, it only means that
the company has become more efficient.
Hans: Thank you for the clarification. Unfortunately it shows that you have the wrong conception of value. Earlier
I was not quite sure because you had said originally that the value per hour remains the same.
According to Marx, value is determined by labor-time. Therefore if a labor-saving machine is introduced,
then the value of each piece of the output will in the long run decrease. Only in the intermediate time, while the
adjustment is going on, will the capitalists get extra surplus-value. Marx says this extra surplus-value does not
come from the new machine itself but from the workers operating the new machine.
Next Message by Gilmour is [428].
Exam Question 588 is 218 in 1995ut, 242 in 1996sp, 293 in 1997WI, 365 in 1998WI, 366
in 1999SP, 453 in 2000fa, 479 in 2001fa, 518 in 2002fa, 538 in 2003fa, 592 in 2004fa,
545 in 2005fa, 598 in 2007SP, 596 in 2008SP, 600 in 2008fa, 712 in 2011fa, and 741 in
2012fa:
Exam Question 588 What is extra surplus-value? How is it related to relative surplusvalue?
[416] Kibosh: (graded C) kinda like the cherry on top of good ice cream. extra surplus
value is the exceeding of “normal” value gained from a product due to technology with no
labour on behalf of the laborer. This is as if you mowed 2 lawns with the work of mowing
one due to technology. However, the surplus value can vanish as soon as the technology
becomes widely known and accepted by the market in general. So essentially extra surplus
value is never constant or permanent. Also according to Marx’s remarks this extra surplus
value cannot exceed the social value. If you are to sell an item you cannot sell it for beyond
what society deems as useful, regardless if the article is necessary in society or not.
Extra surplus value is related to relative surplus value because it is all gained above what is
constituted by normal work days. Extra surplus is the value gained by exclusive technology
and such, where relative surplus is gained caused by greater work hours, pay decrease. I
find relative surplus value to be a more capitalistic word. It to my understanding has almost
the connotation of exploitation of workers. These two types of surplus can also be related
because they are what monopolistic businesses and capitalists want.
212 2007fa Econ 5080 U of Utah
Hans: You have the wrong definition of relative surplus-value. Greater work hours increase absolute surplus-value,
not relative surplus-value. You also have the wrong definition of social value. Value does not come from usefulness,
but from cost to society. See my [409].
Next Message by Kibosh is [462].
Question 596 is 370 in 1999SP, 544 in 2003fa, 551 in 2005fa, and 700 in 2010fa:
Question 596 Marx says that an increase in productivity will increase surplus-value not
only through the cheapening of the workers’ means of subsistence, but through other avenues
as well. Describe some of these other avenues.
[412] Nogi: alternate avenues of increase in surplus-value. Another avenue that increased
productivity will increase surplus-value would be greater capital accumulation by
the owner of the means of production via increased profits. Also decreased consumption of
intermediate goods. The lower consumption of fixed goods. Lower consumption of utilities.
Hans: Greater capital accumulation is a consequence of higher surplus-value but not the source of it. Decreased
consumption of intermediate goods, fixed goods, utilities are efficiency increases which affect surplus-value in the
long run only by a cheapening of the workers’ means of subsistence.
Next Message by Nogi is [491].
[413] Jill: Reducing a worker’s value. If surplus value is defined as the difference
between the wages paid to the laborer and the actual value of their product it is logical to
conclude that an increase in productivity by each worker increases the surplus value for the
capitalist. Each worker is paid the same wage but is producing more value for their time.
Surplus value is increased for the capitalist with increasing production by reducing the worth
of the laborer. With increased productivity and technology there are fewer laborers needed
and fewer paychecks to come out of the surplus value. The worker’s value is decreased with
just the knowledge that they can be easily replaced by a machine or a less-skilled worker.
Message [413] referenced by [423]. Next Message by Jill is [479].
[423] Hans: Capitalism and Technology. Jill’s [413] seems obvious: machines create
profits because they produce more in the same time. Of course, Marx would not agree with
this, because it contradicts his theory of exploitation. Marx says that profits come from labor,
while Jill says they come from machines. If Marx is right, there is a mistake in Jill’s simple
and obvious observation. Is there one?
Marx would say yes, there is a mistake. Jill confuses use-value and value. It is true, machines
create more use-value per time, but the value created in the presence of the machine
is not increased. I explained this at length in [402], which was sent just a day before Jill’s
answer.
If we accept Marx’s labor theory of value, we run into a different problem: if a workingday
of 8 hours creates the same amount of value in a highly mechanized industry as in an
industry with few machines, why do the capitalists introduce machines? Capitalism differs
from earlier social formations by its relentless technical innovation. But the labor theory
of value does not seem able to explain why capitalists innovate so much, since machines
do not create surplus-value. To answer this, we need the concept of extra surplus-value.
Those capitalists who introduce the new technology first increase their profits because at
the beginning they can still sell their products at the old price. But this is only a temporary

U of Utah Econ 5080 2007fa 213
effect. About the issue of extra surplus-value, no clear answer was given this Semester. Look
at [2007SP:996] or [2005fa:1186] if you haven’t understood it yet.
Does this mean the capitalist efforts to increase their profits are doomed in the long run,
that they are fooled into introducing machines by elusive short-run effects which disappear
after a while? This is the main question of chapter Twelve. The answer is: although extra
surplus-values are competed away quickly, technological innovation has an unexpected
side-effect which benefits all capitalists in the long run after all. This side effect is: higher
productivity allows those goods to be produced in a shorter time which go into the reproduction
of labor. I.e., it shortens the necessary part of the working-day and in this way
increases profits. This unexpected but for the capitalists fortuitous side effect is called “relative
surplus-value.”
Phew, capitalism just narrowly escaped the fate of being made obsolete by the technology
which itself promotes. Does this mean, capitalism and technology will live together happily
ever after? The answer for this is in volume 3 of Capital: although the rate of exploitation
increases with increasing technology, this technology brings with itself another problem for
capitalism: bigger machines and more materials per laborer mean that the constant capital
increases in relation to the variable capital. More and more capital in constant, i.e., sterile,
and a smaller and smaller portion of the capital increases its value. This means, the
rate of profits declines. Capitalism is therefore indeed digging its own grave by increasing
technology.
By the way, this long email is only a response to a wrong answer to this question.
Nowhere in this answer am I mentioning the right answer to question 596. So far there
have been no right answers to this question this Semester and also not in any of the preceding
Semesters.
Message [423] referenced by [401]. Next Message by Hans is [424].
Presubmission of Term Paper 601 is 515 in 1997WI, 515 in 1997sp, 915 in 1997ut, 915
in 1999SP, 815 in 2002fa, 815 in 2004fa, 815 in 2005fa, 589 in 2007SP, 609 in 2008SP,
613 in 2008fa, 642 in 2009fa, 705 in 2010fa, 725 in 2011fa, and 755 in 2012fa:
Presubmission of Term Paper 601 Essay about Chapter Fifteen: Machinery and Large-
Scale Industry
[462] Chris, Gregory, Karly, and Kibosh: term paper presubmission. The development
of machinery opened up the world of industry to capitalists and Marx focuses on the
machine in relations to the laborer in chapter 15. Marx delves into whether these machines
helped lighten the day’s work for any laborer or in fact gave the capitalist more power. Marx
poses this question by beginning the chapter with a quote from John Stuart Mill’s “Principles
of Political Economy” that states, “It is questionable if all the mechanical inventions yet
made have lightened the day’s toil of any human being” (492:1) Were machines invented for
the purpose of easing the burden of the day’s labor from the shoulders of the worker or do
they further the oppression of the working man?
Hans: Despite the Mill quote at the beginning of the chapter, the purpose of chapter Fifteen was not to answer the
question whether machines help lighten the day’s work for any human being. On the contrary, Marx thought this
was the wrong question to ask. It is an idealistic question. Machines are wonderful labor-saving devices. But this
214 2007fa Econ 5080 U of Utah
does not mean humans introduce machines for the purpose of saving labor for everybody. On the contrary, they
introduce machines in order to increase exploitation.
According to Marx, the incorporation of machinery into the daily life of a laborer was not
to lighten the load of the laborer but to increase the productiveness of the labor. Machinery
was introduced so as to cheapen commodities and decrease that part of the day that a laborer
works for himself, thus lengthening that part of the day that he gives to the capitalist. It is
from this working of machinery that provides the capitalist their surplus value.
Hans: The above was Marx’s summary of the results. In order to derive these results, he takes a careful look how
machines do this. For this detailed investigation, he needs a definition of machinery.
What we need to see now is how the machine came about; at what point did the tools of
handicraft convert into machines and what distinguishes one from the other. There are some
who do not see any essential difference between the tool and the machine, seeing one as only
a more advanced version of the other. A tool for a laborer is something that he might use to
help himself with and a machine is just a more complicated version of this tool. For others a
machine is that which has its motive power from something besides man. Marx agrees that
a machine is indeed many different tools together or the simple mechanisms of tools but he
disagrees that this encompasses the entire idea of a machine.
Marx has no different ideas about what a tool is, it is powered by the motive power of the
worker to help in his daily tasks but he does not see the machine as only a more complicated
tool. Marx saw a machine as coming to life when tools were taken out of the hands of
man and fitted into that of a mechanism. Man is no longer producing with his hands and
his tools, the machine is now using his tools, but is now relegated to that of “tending” the
machine and making sure it is running properly. Machines were built on the purpose of not
only increasing production for the capitalists but to slowly replace the jobs of the laborers.
Whereas a man is limited by his ability to use one tool at a time a machine is able to wield
many tools at the same time. The laborer is no longer needed for those jobs that the machine
can do with his tools. Marx made no distinction for a machine whether its motive power was
that of man or nature.
Hans: By looking at the machines of his time, Marx could see what the purpose of machinery is: machines are
like laborers with many arms holding many tools at the same time. I.e., the purpose of machinery was to replace
workers.
Next Message by Chris is [481], Next Message by Gregory is [472], Next Message by Karly is [481], and Next
Message by Kibosh is [467].
[481] Chris, Gregory, Karly, and Kibosh: Sections 1 and 2 of Chapter 15. I. The
Machine
The development of machinery opened up the world of industry to capitalists and Marx
focuses on the machine in relations to the laborer in chapter 15. Marx delves into what a
machine is and how the capitalist introduced the machine into the factory. Marx begins the
chapter by introducing a quote from John Stuart Mill’s “Principles of Political Economy”
that states, “It is questionable if all the mechanical inventions yet made have lightened the
day’s toil of any human being” (492:1) Were machines invented for the purpose of easing the
burden of the day’s labor from the shoulders of the worker or do they further the exploitation
of the working man?

U of Utah Econ 5080 2007fa 215
To first understand what a machine does for the capitalist Marx had to detail what a
machine is and how it distinguishes itself from a tool. First we are to understand that a tool
is an implement that a worker uses with his own labor to help him in his daily tasks. To many
people, the tool and the machine don’t have much differentiation between them, the machine
being only a more advanced version of the tool, with man being the motive power of the tool
and not of the machine. For Marx, this was too simple of a definition. A machine, for Marx,
is begun when the instruments of man, his tools, are given to a mechanism to perform a task
and thus takes the job of man. Marx agrees that a machine is indeed many different tools, or
the simple mechanisms of tools but that this does not encompass the whole of a machine.
According to Marx, the incorporation of machinery into the daily life of a laborer was not
to lighten the load of the laborer but to increase the productiveness of the labor. Machinery
was introduced so as to cheapen commodities and decrease that part of the day that a laborer
works for himself, thus lengthening that part of the day that he gives to the capitalist. It is
from this working of machinery that provides the capitalist their surplus value. Man is no
longer producing with his hands and his tools, the machine is now using his tools, but is now
relegated to that of “tending” the machine and making sure it is running properly. Machines
were built on the purpose of not only increasing production for the capitalists but to slowly
replace the jobs of the laborers. Whereas a man is limited by his ability to use one tool at a
time a machine is able to wield many tools at the same time. The laborer is no longer needed
for those jobs that the machine can do with his tools.
The advancement of industry, particularly through that of the machine, began to displace
man and removed the necessity of handicrafts and the specialization of labor. The workers
begin to use their labor-power, not on handicrafts, but to the machine by servicing it and
through this creating more surplus value might be taken from the workers. Marx argues that
as soon as the tools of man leave his hand and become part of a mechanical apparatus, the
motive mechanism acquired its own independent form and was no longer tethered by the
restraints of man. The motive mechanisms become larger with the number of machines and
it the totality of the whole begins to grow.
II. Machines and Value
We have now learned that tools are necessary in order to utilize physical forces in order
for any productivity to come out of them. For example, to obtain the use of water we must
have a water-wheel. With the development of the machine, we still have the tool. It is now
the machine who handles the tool, and the newfound capital puts the laborer to work with
the machine itself. The laborer is now free to become productive in a way they could not
before, without the company spending excess amounts on labor.
As any other component of capital, machinery creates no new value to itself. Machinery
does not add any new value to the product it is producing, it only adds value in proportion
to the value of the machine. It loses value by its daily wear and tear, but transfers that value
into its product. Keep in mind, there is a vast difference between the simple value of the
machine and the value transferred from the machine to the product in a given time. Because
of the tendency for machines to have much longer lives than tools, this difference will be
much greater as well.
216 2007fa Econ 5080 U of Utah
The amount of a product produced depends on how fast a machine or tool is producing
it. Marx uses the example that a laborer may strike a hammer seventy times per minutes,
but a machine may perform the same action 700 times a minute (Marx 512). This would
explain why machines transfer so much more value into a product than a simple tool: they
are performing a higher volume of labor. Also, the value transferred into the product depends
on the overall value of the machinery. Marx then proceeds explain how when a commodity
is produced by machinery, its value in proportion to the product increases, but absolute value
decreases.
Hans: Machines do not perform a higher volume of labor, and they do not transfer “so much more value into a
product than a simple tool.” They only transfer their own value into the end product, and since they are producing
so many products and are themselves so long lived, the value transferred to each individual product is quite small.
The next thing discussed is the cost to produce a machine. If you couple the cost it takes
to produce the machine with the money saved by using this machine, Marx suggests you
have nothing but a transfer of your expenditures. As long as the labor put into making the
machine is smaller than the value a laborer would be adding to the product, the machine
will prevail in saving extra labor. This is because Marx measures the productiveness of a
machine by the human labor-power it produces. He demonstrates with the example of the
invention of the “churka” by Dr. Forbes, which separates wool from seed. This machine
allows sixteen oxen, a few boys and girls and the machine itself to do what before took 750
people (Marx 514).
It is important to remember that in a communist society the difference between the value
of the machine and the value of the labor-power replaced by it will always vary. This is due to
numerous reasons including different countries’ divisions of the day’s work into necessary
and surplus labor, and actual wages can go above or below a worker’s value of his laborpower.
Hans: Marx is not talking about a communist society in chapter 15, but about capitalism. Are you still thinking
that Capital is a blueprint for a better society? You are making some basic mistakes here.
Message [481] referenced by [536]. Next Message by Chris is [486], Next Message by Gregory is [536], Next
Message by Karly is [536], and Next Message by Kibosh is [495].
[536] Chris, Gregory, Karly, and Kibosh: The development of machinery opened up
the world of industry to capitalists. Marx focuses on the machine in relation to the laborer
in chapter 15. Marx delves into what a machine is and how the capitalist introduced the
machine into the factory. Marx begins the chapter by introducing a quote from John Stuart
Mill’s “Principles of Political Economy” that states, “it is questionable if all the mechanical
inventions yet made have lightened the day’s toil of any human being” (492:1) Were machines
invented for the purpose of easing the burden of the day’s labor from the shoulders of
the worker or do they further the exploitation of the working man?
To first understand what a machine does for the capitalist, Marx had to detail what a
machine is and how it distinguishes itself from a tool. First we are to understand that a tool
is an implement that a worker uses with his own labor to help him in his daily tasks. To many
people, the tool and the machine don’t have much differentiation between them, the machine
being only a more advanced version of the tool, with man being the motive power of the tool
and not of the machine. For Marx, this was too simple of a definition. A machine, for Marx,
is begun when the instruments of man, his tools, are given to a mechanism to perform a

U of Utah Econ 5080 2007fa 217
task, the mechanism thus taking the job of man. Marx agrees that a machine is indeed many
different tools, or the simple mechanisms of tools but that this does not encompass the whole
of a machine.
According to Marx, the incorporation of machinery into the daily life of a laborer was not
to lighten the load of the laborer but to increase the productiveness of the labor. Machinery
was introduced so as to cheapen commodities and decrease that part of the day that a laborer
works for himself, thus lengthening that part of the day that he gives to the capitalist. It is
from this working of machinery that provides the capitalist their surplus value. Man is no
longer producing with his hands and his tools, the machine is now using his tools, while
the worker is relegated to “tending” the machine and making sure it is running properly.
Machines were built on the purpose of not only increasing production for the capitalists but
to slowly replace the jobs of the laborers. Whereas a man is limited by his ability to use one
tool at a time, a machine is able to wield many tools at the same time. The laborer is no
longer needed for those jobs that the machine can do with his tools.
The advancement of industry, particularly through that of the machine, began to displace
man and removed the necessity of handicrafts and the specialization of labor. The workers
begin to use their labor-power, not on handicrafts, but to the machine by servicing it and
through this creating more surplus value might be taken from the workers. Marx argues that
as soon as the tools of man leave his hand and become part of a mechanical apparatus, the
motive mechanism acquired its own independent form and was no longer tethered by the
restraints of man. The motive mechanisms become larger with the number of machines and
it the totality of the whole begins to grow.
We have now learned that tools are necessary in order to utilize physical forces in order
for any productivity to come out of them. For example, to obtain the use of water we must
have a water-wheel. With the development of the machine, we still have the tool. It is now
the machine who handles the tool, and the newfound capital puts the laborer to work with
the machine itself. The laborer is now free to become productive in a way they could not
before, without the company spending excess amounts on labor.
As any other component of capital, machinery creates no new value to itself. Machinery
does not add any new value to the product it is producing, it only adds value in proportion
to the value of the machine. It loses value by its daily wear and tear, but transfers that value
into its product. Keep in mind, there is a vast difference between the simple value of the
machine and the value transferred from the machine to the product in a given time. Because
of the tendency for machines to have much longer lives than tools, this difference will be
much greater as well.
The amount of a product produced depends on how fast a machine or tool is producing
it. Marx uses the example that a laborer may strike a hammer seventy times per minutes,
but a machine may perform the same action 700 times a minute (Marx 512). A machine
transfers its own value into an end product, and because it produces so many more products
and is so long lived, it actually transfers quite a small value into each individual product.
Also, the value transferred into the product depends on the overall value of the machinery.
Marx then proceeds to explain how when a commodity is produced by machinery, its value
in proportion to the product increases, but absolute value decreases.
218 2007fa Econ 5080 U of Utah
The next thing discussed is the cost to produce a machine. If you couple the cost it takes
to produce the machine with the money saved by using this machine, Marx suggests you
have nothing but a transfer of your expenditures. As long as the labor put into making the
machine is smaller than the value a laborer would be adding to the product, the machine
will prevail in saving extra labor. This is because Marx measures the productiveness of a
machine by the human labor-power it produces. He demonstrates with the example of the
invention of the “churka” by Dr. Forbes, which separates wool from seed. This machine
allows sixteen oxen, a few boys and girls and the machine itself to do what before took 750
people (Marx 514).
It is important to remember that in a communist society the difference between the value
of the machine and the value of the labor-power replaced by it will always vary. This is due to
numerous reasons including different countries’ divisions of the day’s work into necessary
and surplus labor, and actual wages can go above or below a worker’s value of his laborpower.
Hans: I asked about this paragraph in my note at the end of [481].
The effect the machine has on the individual laborer is one that is both drastic and revolutionary.
Additionally, one would say that the introduction of the machine in the capitalist
society permanently altered the labor-market. “In so far as machinery dispenses with muscular
power, it becomes a means of employing laborers of slight muscular strength, and whose
bodily development is incomplete” (Marx 517.2). For now the labor necessary to produce
commodities in the market was no longer limited to a laborer who possessed certain particular
attributes. Therefore there would no longer be discrimination between laborers based on
gender or age. Now entire households are fully capable of the labor needed in the capitalist
society.
The introduction of the machine in many ways forced the entire household to become
part of the labor-market. Marx explains that labor power is measured not only by the time
it takes the adult laborer to fulfill his task, but also the time it takes to properly support his
household. The machine has now permitted the entire household to maintain a role in the
labor market thus shortening the amount of time needed to produce a commodity which
results in a gain for the capitalist. “To purchase the labor power of a family or four workers
may, perhaps, cost more than it formerly did to purchase the labor-power of the head of
the family, but, in return four days’ labor takes the place of one, and their price falls in
proportion to the excess of the surplus-labor of four over the surplus-labor of one” (Marx
518:1). Consequently, all members or the household must continue in the labor-market in
order to maintain their household.
In a way, the machine has now transformed the head of the household into the least valuable
attribute to the labor-market. His old duties of performing labor to earn a necessary
wage to support the household are altered to managing the household in the labor market.
“Now he sells wife and child. He has become a slave dealer” (Marx 519). This trade of
women and children throughout the labor-market created other negative outcomes for the
household. Even with the introduction of the factory acts, children would lose out on elementary
education. Mothers would be absent in the household resulting in infants and
younger children becoming subject to malnourishment. “As shown by an official medical

U of Utah Econ 5080 2007fa 219
inquiry in the year 1861, the high death rate are, apart from local causes, principally due
the employment of mothers away from their homes, and to neglect and mal-treatment, consequent
on her absence, such as, amongst others, insufficient nourishment, unsuitable food,
and dosing with opiates” (Marx 520:1). In the capitalist society it seems the introduction
of the machine has allowed the opportunity for an increase in surplus-value to override the
value of the household and family.
The introduction of the machine has allowed entire households to become a part of the
labor-market. Its effect on the capitalist society is most likely unrivaled by any other introduction.
Subsequently, the effect of the machine on the individual laborer, household,
market, and family is one of great magnitude.
In terms of machinery and the factory, we must take into consideration the change in
production rather than focusing on the laborer. In reality it allows the exploitation of human
material by the capital good. The implementation of technology in the factory brings about
the unrestrained abilities, which it creates by handling from the specialized workmen. We
learn that these workmen do not always have to be men, the creation of the factory brings
about the workforce of women and children.
Workers are divided into groups which are based around the comparative machines which
they work on. Years of experience go into working at a machine. This arms the worker with
the knowledge of the movements of the machine. This specialization allows for workers to
stay within a similar field but the ability to switch from machine to machine giving them
accuracy and speed without the drudgery of the constant monotony that comes with working
one machine.
Although this allows for freedom of stress in the workplace the factory also minimizes
the worker’s chance to grow both mentally and by way of actively. The worker’s scholarly
growth is stunted by the regular everyday activities. Also due to strict working conditions
operators are expected to work long hours.
To summarize, we have discussed the general definition of the machine and how a capitalist
uses it to their benefit as surplus value. This led us to the value of a machine, or
otherwise said as how a machine gives value to the product it produces. We then go into
how machinery affects the laborer. We then conclude with looking at machines and factory.
Next Message by Chris is [659], Next Message by Gregory is [559], Next Message by Karly is [552], and Next
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Presubmission of Term Paper 602 is 614 in 2008fa, 643 in 2009fa, 706 in 2010fa, and
757 in 2012fa:
Presubmission of Term Paper 602 Essay about Chapter Sixteen: Absolute and Relative
Surplus Value
[503] Milton, Nogi, Poppy, and RemyClaudette: Marx begins by giving his outlook
on the labour process. The process when looked at abstractly and independent from its
historical forms, is a process between man and nature, where if one looks at the end result
being the product, you can see that the instruments of labour and the object of labour are
means of production. He then concludes that the labour itself is productive labour. This
220 2007fa Econ 5080 U of Utah
way of determining what productive labour is, is insufficient to cover the capitalist process
of production from the standpoint of the simple labour process. Marx states that this point
must be developed further.
When an individual appropriates natural objects for his own sustainability he is the lone
supervisor of his labour. Later on this will not be true for the individual, but will be supervised
in the labour process by others. Marx describes how when a man operates upon nature
he must call upon his muscles by control of his brain. He says in the labour process mental
and physical labour are united but will later become separated and this will cause hostile
antagonism. Marx then goes on to state that a transformation takes place where the product
that was once produced directly from an individual producer, is now a social product that
was produced by a combination of workers. This in turn will change the concept of productive
labour, and the concept of the productive worker. The individual worker no longer needs
to produce the product entirely; he is but one organ in the collective labour. Marx says that
the original definition for productive labour still holds true when looking at the collective
labourers as whole but not individually.
Marx states that with the concept of capitalist production where it is not merely for the
production of commodities but in fact for the production of surplus-value, the concept of
productive labour becomes narrower. Since the worker is no longer producing for himself
but for capital, it is required for him to produce surplus-value. The worker is considered
productive if he produces surplus-value which increases capital for the capitalist. Marx
uses the example of a school headmaster who works himself into the ground to enrich the
owner in addition to educating the students. Marx says that the concept of the productive
worker does not just imply the relationship of the worker and the product of his work, but
it labels the worker as the direct means of the capitalist valorization. Marx says that to be a
productive worker is not luck but misfortune because the classical political economist made
surplus-value the distinguishing characteristic of a productive worker. Marx then points out
that the Physiocrats say the agricultural labour is the only productive means of labour, since
this alone yields surplus-value.
Hans: “To be a productive labor is not luck but a misfortune” is a very memorable phrase by Marx. Why does
Marx say this? He develops his answer in three steps:
(1) In every society, the social relations of production determine which labor is recognized by society as productive
labor rather than some private pastime.
(2) In a class society only that labor is recognized as productive that creates the surplus-value appropriated by
the ruling classes.
(3) In capitalism, therefore, every productive laborer is “stamped” “as the direct means of creating surplusvalue.”
In other words, every laborer who is considered a productive laborer in capitalism is exposed to social
forces which try to make him or her work harder and to pry the benefit of the labor away from him or her. It is as if
he or she wore a T-shirt which says: “exploit me.”
This is a different answer than the one you are giving. Marx quotes the political economists only for an indirect
confirmation of this step (2): the political economists know (2) because they call only those laborers productive
who are creating surplus-value. As an example, Marx gives the Physiocrats: in their theory, all surplus-value in the
economy comes from agriculture, therefore they say that only agricultural laborers are productive.
The extension of the working day past the point where a worker yields the exact equivalent
of his labour-power is how absolute surplus-value is produced. This is the foundation of
the capitalist system and the starting point of relative surplus-value. Marx says to produce
relative surplus-value the working day is divided into two parts, the necessary labour and the

U of Utah Econ 5080 2007fa 221
surplus labour. The capitalist will prolong the surplus labor part of the day by shortening the
necessary part through producing the equivalent of the wage labour in a shorter time. The
production of absolute surplus-value is entirely dependent on the length of the working day,
whereas the relative surplus-value completely changes the mechanical procedure of labour
and the groupings into which society is separated.
Marx continues to talk about a formal subsumption of labour under capital. Then it is
replaced by real subsumption.
Hans: Marx never defines formal and real subsumption very well, but if you use these terms in your survey you
must tell the reader what Marx’s definition seems to be.
In the next sentence you abruptly switch to Marx’s description of a situation in which there was not subsumption
at all yet of the production process under capital:
Producer has yet to become formally subordinate to capital, therefore capital has not
yet acquired a direct control over the labour process. Independent producers carry their
own handicrafts the traditional way and then there steps in the usurer, and he feeds on the
independent producer. This leads to capitalism
Formal subsumption of labour under capital suffices for the production of absolute surplusvalue.
Methods of producing relative surplus-value are the same as methods of producing
absolute surplus-value. The unrestricted prolongation of the working day turned out to be
a very characteristic product of large-scale industry. Now capitalist mode of production
ceases in general to be a mere means of producing relative surplus-value as soon as it has
conquered an entire branch of production. It acts as a special method of producing relative
surplus-value in two respects: so far as it continues to proselytize and market revolutionizes
by methods of production.
After this, Marx focuses on absolute and relative surplus-value. Their difference may
seem illusory – every absolute surplus-value is relative and vice versa – however the difference
between the two is felt when the rate of surplus-value is raised. If the productivity
and intensity of labour-power is constant then surplus-value can be raised in two ways: day
lengthened, productivity same (absolute) or vice versa (relative).
Hans: I edited your paragraph above. You had originally:
Marx continues in talking about the absolute and relative surplus-values. What Marx is saying is that the two
look like they are illusionary however the difference between the two is felt when looking at raising the rate of
surplus-value. Labour-power and if it is constant then two things could happen it change the surplus-value: day
lengthened, productivity same or visa versa.
Marx never said that relative and absolute surplus-value seem illusionary, only that their difference seems illusionary
– because absolute surplus-value requires productivity high enough to make necessary labor less than total
labor, and relative surplus-value requires the total workday to be longer than the necessary labor.
If a worker has no extra time because all his time is spent providing for his family, then
there could not be a surplus-value. Hence there would be no capitalists, etc. Naturally we
provide for ourselves but if we break it and socialize our labour then we will be able to
provide for the existence of another. Marx continues on to say that in the beginning that
productivity was small but so was needs, so as society grew so did productivity of labour.
Marx continues by building a foundation for his larger point. He starts by stating “the
productivity of labor remain fettered by natural condition” (pg. 647). Here is he pointing to
the obvious to have a solid foundation for his later ascertation. Marx is saying that human
222 2007fa Econ 5080 U of Utah
beings’ ability to produce can be limited by the surrounding environment. He divides these
external limitations into two categories of natural wealth in the means of subsistence and
natural wealth in the instruments of labor. Natural wealth in the means of subsistence is
natural resources that directly aid us in survival. Marx uses the example of fertile soil, honey
bee combs and caves could be other examples. Natural wealth in the instruments of labor
are natural resources we can harness to aid ourselves in survival. Marx uses the example of
navigable waters, solar power is another more modern example.
After establishing that our environment can restrict our productivity of labor he makes
the inverse argument. The more natural resources we have at our disposal the better. Marx
goes one step further and adds the fewer requirements we have for “satisfaction” or survival
the better too. The more resources one has at one’s disposal, and the less resources one
requires for oneself, the more time one can spend on other pursuits. The less labor consumed
on oneself the more one can apply oneself to other projects. Marx uses an example from
Diodorus, the ancient Egyptians.
Hans: Although Marx says in Grundrisse that the only true wealth is free time, here he does not seem as much in
favor of free time. In a natural setting where you can pick food from trees, people will not be motivated to develop
their productive powers and therefore they are the prisoners of their own primitive conditions.
Marx paraphrases Diodorus’s example of the ancient Egyptians to support the latter point.
I shall take the liberty of paraphrasing Marx’s paraphrasing of Diodorus. The argument goes
as such the ancient Egyptians living along the fertile Nile River enjoyed an easy existence.
Food was abundant around them, they did not have to spend much time growing crops or
gathering sustenance. The climate is very accommodating, not much is required in the way
of clothing, shoes are not really needed at all. Children are cheap to have and raise. The
Egyptian population grows large. Having a large population of people who require very
little and are surrounded by lots the Egyptian people have extra time for whatever pursuits
they desire. Hence, all the gigantic monuments. Egypt had a large population with a lot of
disposable labor time, they could build massive public projects.
In reading the text Marx appears be supporting this argument. But then in typical Marx
fashion he does a volte-face and says not quite true. He begins by saying, “but it by no means
follows, inversely, that the most fertile soil is the most fitted for the growth of the capitalist
mode of production. The latter presupposes the domination of man over nature” (pg. 649).
Nature is fickle and man cannot tame her. Or not completely. It is not those who possess a
surplus of natural wealth in the means of subsistence who thrive to capitalist heights. It is
those who possess the means to control the natural wealth in the instruments of labor. The
capitalist’s true arena is in the dams, the irrigations canals, and the steam engine.
Marx ends this section with a very important quote. He asserts, “It is the necessity of
bringing a natural force under the control of society, of economizing on its energy, of appropriating
or subduing it on a large scale by the work of the human hand that plays the most
decisive role in the history of industry” (pg. 649). His point stands it is those who control
the natural wealth in the instruments of labor who succeed in a capitalist realm.
Favorable natural conditions in various part of the world, doesn’t really equate to surplus
labour, or surplus value, and a surplus product. In the very beginnings of a new society it
would, in that if you were in a warmer climate, you would need fewer clothes, you wouldn’t

U of Utah Econ 5080 2007fa 223
have to cultivate the ground just as you would in a colder climate, but as there are industry
advances, these natural limits of the land or climate will begin to diminish. We see this is
in Western-civilization, where one can sell their own labour to furnish a surplus product and
provide a profit to their employer.
Continuing in the same paragraph, Marx has us consider the civilization on the islands
of the East Indies, where there are not very many industrial advances. In this society before
capitalism is introduced, one only needs to work 12 hours a week to provide for all of his
needs, because the lands in which he lives on it so bountiful, leaving him an abundance of
leisure time. Marx does not explain in detail as to why, but states that if capitalism were
introduced, the labourer would perhaps have to work six days a week to provide for all of
his needs, leaving him now only one day of rest.
Marx touches on how Ricardo refers to the productivity of labour, as a determinant of
the value of a product, and not as an existence of a surplus value. Ricardo’s school on the
other hand, teaches that labour is the originating cause of product. Then Marx refers to
John Stewart Mill, who built on Ricardo’s theory. Mill thought that profit was derived from
products that last longer than the time that was necessary to produce them. Marx points out
that Mill is confusing the duration of labour time with the duration of its products. Mill also
asserts that there could be a profit without an exchange taking place.
Hans: This needs a little clarification: Marx agrees with Mill that profits are not generated in the market, but
nevertheless he says, against Mill, that exchange is necessary for the existence of profits – namely, the purchase of
labor-power!
Marx disagrees with Mill’s thoughts on the rate of surplus value. Mill gave an example
of a 20% profit on wages for an entire country that would be realized by the capitalist.
However, Marx points out that Mill failed to include the original capital investment, and
when it is included, the capitalist in fact will realize a profit, but it will be much less than
20%.
Hans: The rate of surplus-value is not the same as the rate of profit. rate of surplus-value is surplus-value divided
by variable capital, while rate of profit is surplus-value divided by total capital advanced. Since the denominator is
bigger, the rate is smaller.
Marx infers that Mill’s statements concerning the labourer, are that the worker who advances
to himself not only the means of subsistence but also the means of production is in
reality his own wage labourer. He goes on to say that the low level American worker is a
slave to himself, because he does forced labour for himself, instead of doing it for someone
else.
Mill, at the end, actually comes to the conclusion that the labourer, or worker, is actually a
capitalist, because he is contributing his labour to his employer, and receives it back interest,
i.e. his paycheck. In a sense what Mill is saying is that capitalist buy labour power from
other capitalists.
Hans: Marx makes here jokes about Mill’s inappropriate use of the word “capitalist.”
General: In addition to my comments I also corrected typos etc. throughout the paper. For instance, John
Stuart’s surname is Mill, not Mills. Please carefully proofread your paper before resubmitting it, I don’t want to
make the same corrections twice.
Message [503] referenced by [537] and [557]. Next Message by Milton is [557], Next Message by Nogi is [557],
Next Message by Poppy is [557], and Next Message by RemyClaudette is [557].
224 2007fa Econ 5080 U of Utah
[529] BHales and Desk: Chapter 16 Termpaper. : : P : Desk and BHales
The Working Day. . .
The mystery of surplus value is one that has been studied many times throughout history,
according to Frederich Engels:
Whence comes this surplus-value? It cannot come either from the buyer buying the commodities
under their value, or from the seller selling them above their value. For in both
cases the gains and the losses of each individual cancel each other, as each individual is in
turn buyer and seller. Nor can it come from cheating, for though cheating can enrich one
person at the expense of another, it cannot increase the total sum possessed by both, and
therefore cannot augment the sum of the values in circulation. (...) This problem must be
solved, and it must be solved in a purely economic way, excluding all cheating and the intervention
of any force — the problem being: how is it possible constantly to sell dearer than
one has bought, even on the hypothesis that equal values are always exchanged for equal
values?[1]
Understanding surplus value is essential when looking at the working day. As Marx
explains, the capitalist uses his money (M) to purchase two commodities (C) Labor Power
(LP) and Means of Production (MP). The laborers transform the means of production into a
new commodity (C), that are sold for more money (M1). Marx refers to surplus value as the
difference between M1 and M. Surplus value is the source of profit.
Surplus value does not arise directly from exchange. Although some may be able to
profit by exchange by simply marking up the price, this is not possible for all sellers. For
example, all sellers are also buyers and if he chooses to charge 15% to his buyers, his gains
would be lost to his supplier and no one would profit from the exchange. Also, competition
tends to increase in any industry where large profits are present; this eliminates the ability
to raise prices to gain profits because there are so many sellers that a buyer would just
purchase the commodity from another seller. Marx continues to explain that, “Capitalistic
production is not merely the production of commodities, it is essentially the production of
surplus value.” Capitalists aren’t so much concerned with the quantity of products they are
producing; rather the amount of surplus value that workers are creating. Surplus value is the
difference between the value added by the workers and the value of their labor power.
Since the new value is not due to unequal exchange, it must exist due to new value created
during production. Surplus value can also be derived as the difference between the value of
the output and the value of the inputs. Lets take the example of a clock factory; the parts,
electricity, and machinery come together to form a clock. The inputs, by themselves do
not add new value, but once fused together, new value is created. As Marx says, a new
commodity that’s value is to create new value. Value is not something that exists within a
commodity; rather value is a social relation between commodity producers that appears as
exchange value.
Surplus value is comprised of two types of value, absolute and relative surplus values.
Absolute and Relative Surplus Value are very important when looking at the working day.
If we look at absolute value according to Marx, it can be tied with increasing the amount
of time worked per worker in a specefic pay period. Absolute surplus value occurs where

U of Utah Econ 5080 2007fa 225
the working day is prolonged past the point where the worker has produced the equivalent
of his labor power. Marx periodically emphasizes and discusses the length of the working
day or week, but this day and age the concern is about the number of hours worked per year.
Most employers will look at the ratio of the effective hours worked to the hours needed to
supply a day’s labor. For example, in Argentina before the revolution, as productivity rose,
the working classes forced a reduction in the workweek, from 60 hours to 50, 40 etc, yet
were expected to get the same amount of work done. Marx explains that absolute surplus
value “forms the groundwork for the capitalist system, and the starting point for production
of relative surplus value.”
Another important point to address is the importance of wages. Relative surplus value is
obtained by reducing wages or increasing productivity amongst workers, although relative
surplus value is generally temporary. For example if wages fall below a certain level, eventually
the capitalist will not be able to find sufficient labor power. A new technology may
enable a worker to become more productive. Thus the capitalist may temporarily see increases
in relative surplus value, until this technology spreads to other capitalists throughout
the industry and this relative surplus value will cease to exist. The exploitation of workers
in order to extract surplus value causes class struggle. This will eventually lead to a strike,
unhappiness in a community or even warfare as we have seen many times before.
Marx simply states it as such in Capital Chapter 16. . .
Relative surplus-value is absolute, since it compels the absolute prolongation of the
working-day beyond the labor-time necessary to the existence of the laborer himself. Absolute
surplus-value is relative, since it makes necessary such a development of the productiveness
of labor, as will allow of the necessary labor-time being confined to a portion of
the working-day. But if we keep in mind the behavior of surplus-value, this appearance of
identity vanishes. Once the capitalist mode of production is established and become general,
the difference between absolute and relative surplus-value makes itself felt, whenever there
is a question of raising the rate of surplus-value. Assuming that labor-power is paid for at
its value, we are confronted by this alternative: given the productiveness of labor and its
normal intensity, the rate of surplus-value can be raised only by the actual prolongation of
the working-day; on the other hand, given the length of the working-day, that rise can be
effected only by a change in the relative magnitudes of the components of the working-day,
viz., necessary labor and surplus-labor; a change which, if the wages are not to fall below the
value of labor-power, presupposes a change either in the productiveness or in the intensity
of the labor.
It has been stated various times that Marx himself considered his theory of surplus-value
his most important contribution to the progress of economic analysis. It is because of Marx’s
contributions and studies that his array of sociological and historical thought enables him
the ability to place the capitalist mode of production in his historical context, and to find the
root of its inner economic contradictions and its laws of motion in the specific relations of
production on which it is based. (Marx letter to Engel) This is one of Marx’s greatest pieces
of work throughout Capital.
Sources:
226 2007fa Econ 5080 U of Utah
1. Theories of Surplus Value (1863)
Hans: This is a good essay, but you are a little shaky about the difference between relative and extra surplus-value,
and you do not say enough about chapter 16 (except a long unexplained quote).
Next Message by BHales is [546] and First Message by Desk is [89].
[535] Dave and Deborah: Surplus Value drives capitalism’s growth. Chapter sixteen
delves into the labor process and expands upon how surplus value arises in a capitalist society.
This chapter reviews how individuals come together in the production process, how
capitalism will eventually become the norm in every society that it encounters, and labor
surplus on the individual level will build societies. Finally, Marx refutes the views of classical
economists that capitalism was ever present in society. This chapter shows the rise of
capitalism in societies and the conditions that help to foster its growth.
Initially laborers began as their own supervisors: “When an individual appropriates natural
objects for his own livelihood, he alone supervises his own activity.” Eventually, as
societies grow, labor begins to become more specialized and socialized; laborers come together
in the creation of products, often taking over a specific step in the production process.
“The product is transformed from the direct product of the individual producer into a social
product, the joint product of a collective labourer, i.e. a combination of workers, each of
whom stands at a different distance from the actual manipulation of the object of labor.”
Marx goes on to say that “It is sufficient for him to be an organ of a collective laborer, and
to perform any one of its subordinate functions.” As these laborers begin to work together in
increasing numbers, and a class of capitalists (owners) form over the means of production,
the drive for increasing surplus value begins. Because capitalists profit from the amount of
surplus labor that is produced, surplus-value becomes the driving force. “Capitalist production
is not merely the production of commodities, it is, by its very essence, the production
of surplus-values,” and later, “the only worker who is productive is one who produces surplus
value for the capitalist.” Marx points out that this drive for surplus value is not industry
specific and in fact occurs in every sphere of industry.
Hans: According to chapter Thirteen, capitalism is not the consequence of a co-operative labor process, but on the
contrary its reason. In order to make more profits, capitalists hired many workers at the same time, and then these
workers started to co-operate under the capitalist’s supervision.
After describing how capitalists profit from the surplus value produced by workers, Marx
describes what surplus value is – in its absolute and relative forms. Absolute surplus-value
is the prolongation of the working day beyond the point at which the worker would have
produced the exact equivalent for the value of his labor-power. This forms the general foundation
of the capitalist system and is the starting point for relative surplus-value. Marx
presupposes that the working day is split into two parts – necessary labor and surplus labor
(recall chapter 12). In order to increase surplus labor, the portion of the day containing necessary
labor must be shortened. Marx tells us here that the production of relative surplus
value completely revolutionizes the technical processes of labor. Here Marx also points out
that this process also changes how society is structured and how classes form. We begin to
see classes divided into the workers and the capitalists who own the means of production
and profit from the surplus.

U of Utah Econ 5080 2007fa 227
Marx continues to build on the creation of surplus value in capitalism by describing how
labor is eventually subsumed under capital. This incorporation of labor under capital becomes
the course of things and will spread from one society to another. “Once capitalist
mode of production has become the established and universal mode of production, the difference
between absolute and relative surplus value makes itself felt whenever there is a
question of raising the rate of surplus value.” The alternatives for increasing the rate of surplus
value is to increase the length of the working day in absolute terms or to change the
productivity or intensity of labor.
Once the role of surplus value has been determined in capitalism, Marx expands on the
growth of said capitalist societies. Marx points out that only after a certain level of productivity
has been attained, workers will not have free time at their disposal and without this
free time there is no surplus labor which in turn would lead to no capitalists. “It is only
when men have worked their way out of their initial animal condition, when therefore their
labor has been to some extent socialized, that a situation arises in which the surplus labor
of one person becomes a condition of existence for another.” It is at this point that Marx begins
to describe how capitalism has not always “been” (as some classical economists would
say) but was formed and grew with the socialization of men. “The existing productivity of
labor, from which it proceeds as its basis, is a gift, not of nature, but of a history embracing
thousands of centuries.”
Hans: This miminum level of productivity is the prerequisite not only of capitalism but of any form of exploitation.
(And Marx hopes that further increases in productivity allow the societies to finally rid themselves of exploitation.)
As society grows and changes, the natural bounty surrounding men remains important.
Initially it is the “natural wealth in means of subsistence,” the natural resources, that men
can command that lead to surplus labor. As society progresses it is the “natural wealth in
instruments of labor,” the population or amount of surplus labor available, becomes the most
important aspect of production. It is pointed out that the lower the subsistence requirements
and the great levels of natural resources available, the smaller amount of labor time that
is necessary for the maintenance and reproduction of the producer. “The gigantic building
projects owed less the size of the population than to the large proportion of it that was freely
disposable.” Later Marx writes, “The less his [the worker’s] necessary labor time, the more
surplus labor he can provide... the smaller the portion of it required for the production of the
necessary means of subsistence, the greater the portion available for other work.”
Marx begins to wrap up his discussion of relative surplus value and how it assists the
growth of capitalism by describing how favorable natural conditions provide the possibility,
but not the reality, of surplus labor, surplus value, and surplus product. “It is the necessity
of bringing a natural force under the control of society that plays the most decisive role
in the history of industry.” It is the combination of what nature offers and what man does
with it that helps production and capitalism to grow – it is the ability of man to change his
surroundings. Marx points out to us that the conditions that affect surplus labor are natural
limits and that they determine the point at which labor for others can begin.
Marx ends this chapter by refuting the writings of Mill and Ricardo and their views on the
formation of capitalism. Specifically refuted is the idea that capitalism has always existed
and always will.
228 2007fa Econ 5080 U of Utah
This chapter shows how surplus value is the driving force of capitalist production. It
is the combination of natural resources and the innovation of men that increase production
and help spread capitalism. Marx points out that capitalism is a social organization and has
become more organized over the centuries.
Hans: Your term paper understands better than the others that the topic of this chapter was the character of the
production process which creates surplus-value for the capitalists, the role played by technology and nature in this.
First Message by Dave is [33] and Next Message by Deborah is [641].
[537] Scott: Chapter 16 Executive Summary. Absolute and Relative Surplus-Value
In this chapter Marx tackles the Labor process, he starts by stating that the productive
labor from the view of the simple labor process cannot totally explain and cover the capitalist
style of production, and that we must develop a new way of considering the labor process.
The labor process which is purely individual, as it is the individual that must procure the
natural objects which must fulfill his wants, but the person also supervises the entire activity
from the use of his muscles and the brain in producing and using the final product. But as
the product moves forward, steps into a hostile antagonism, there is no longer the individual
and the individuals product but rather a social product which has been produced using a
collective labor, which is made up of productive laborers. In this new situation, the worker
is no longer involved from the start to the finish, the worker should now be considered of an
‘organ’ of the collective labor, performing one of the many task involved in the production
process.
Still moving forward, the idea of the productive laborer narrows, the capitalist production
doesn’t only include the commodity but the production of surplus value, before this point
it was only a side effect. But now in a capitalist production process it is a requirement- as
Marx put it the self-valorization of capital, where ‘To be a productive worker is therefore not
a piece of luck, but a misfortune.’
With the introduction of surplus value, the working day is now split into two sections,
where the first part is the process of necessary labor, and the second the process of surplus
value. A—B—C, where A-B= necessary labor, and from B—C=surplus labor. Necessary
labor, which the capitalist wishes to shorten in order to receive more surplus value, can only
be shortened by methods for producing equivalent of wage labor in shorter time. The production
of absolute surplus value, is based on the length of the working day, whereas the
production of relative surplus value, would need a change of the technical process of labor
involved and the grouping of society, and is relative, and needs changes in development of
the productivity of the laborer, with the working day is restricted to certain hours. Methods
of producing relative surplus value are also methods of producing absolute surplus value,
like prolonging the working day, and is absolute in that it requires more of the labor time
necessary to the existence of the worker. When the capitalist mode of production has control
over the entire production, it stops being a productive relative surplus value. Once the capitalist
establish the mode of their production, difference of absolute and relative labor makes
itself seen whenever there is a question regarding the role of surplus value.
Assuming that labor power is paid for in full, two scenarios could be played out, Scenario
1- labor productivity and the normal degree of the time given, the role of surplus-value can
be raised only by prolonging the working day in absolute terms. In scenario 2, if the length

U of Utah Econ 5080 2007fa 229
of the working day is restricted, the role of surplus value can be raised only by change of the
A-B-C ratio, such as a change in productivity or intensity of the labor, and wages are not to
fall below the value of labor power.
Unless society has attained a certain economic status, the worker has no free time, which
means that he also has no surplus labor. In a society such as this, there are no owners of
society, no land owners, no slave owners. The economic existence for one person cannot
rest on another, but and when this point is reached, social productivity is advanced past what
had been used by the entire race for preceding millennia.
Nature of man, and the nature of the world to which he is born or calls home provides 2
stage of development in its resources, One is the natural wealth that is provided for means of
subsistence, Marx gives the example of fruitful soil and rivers teeming with fish. The second
stage is natural wealth in the instruments of labor, for example wood, coal, or metal. At the
beginning of civilization, it is the first stage that the human race calls upon for his success
as a species, it provides the means of life. Later on as man progresses to a higher stage
of development it is the second stage that plays a increased role, and provides avenues for
capitalism to progress. The better the land is for plants, and the better the climate zone, the
smaller the amount of labor time necessary for subsistence labor required on the producers
part. Marx gives and example of how this was seen early one, and how it was the case in
early Egypt. The smaller the population that is required for necessary subsistence labor, then
the greater the population that available for other tasks, such as in the Egyptian example of
great building works. But this does not mean that the most plentiful the place the most likely
to be dominated by man, proved by the fact that the origin of capitalism is not the tropical
region but the temperate region, where the variety of the natural products leads to a social
division of labor, where is drives man on to increase is capacities of labor, and a driving
force of bring the natural world under his control and economize on its energy and subduing
it on a large scale, Marx gives examples here of different countries which regulate the flow
of rivers and the creation of canals. So as Marx says “Favorable natural conditions provide
in themselves, only the possibility of surplus labor.” But it affects surplus labor only has
natural limits determine the point at which labor can begin, and as industry advances, these
natural limits recede.
Hans: Your sentence structure is atrocious.
As in western Europe, the worker can only purchase the right to work, by performing
surplus labor for others, which makes it easy to believe it a inherent quality of humans to
labor for surplus labor, But Marx tells a story of a East Indies, where food literally grows
on trees, and that necessary labor only amounts up to twelve hours a week! He the ponders
on a situation were a capitalist style of production came into play, and the, as Marx
put it, “The good fellow” would have to work 6 days a week, in order to be able to get one
days worth of product, The bounty of nature does not explain the remaining 5 days which
he has to provide surplus labor, but rather explains why necessary labor would be limited
to one day a week. Historically developed productive forces of labor and naturally conditioned
productive forces appear as productive forces of the capitol into which the labor is
incorporated.
230 2007fa Econ 5080 U of Utah
For the rest of the chapter Marx looks carefully at what the bourgeois economist and their
specific schools of thought think towards surplus labor, while the majority believe that it is
dangerous to look to closely at this issue, some have. Marx starts of with Ricardo, who does
not think about the origins of surplus value, but merely believes it to be an inherit part of
capitalism production. Ricardo looks for ways to explain the magnitude of the surplus value,
coming to conclusions that the productive power of labor is the original cause of profit. Next
Marx describes the Mercantilists thoughts on surplus value, where they have come to the
conclusion that the excess profit of the price of the product over its cost of production are
from the act of exchange-from the sale of the product above its value.
Next Marx moves to John Stuart Mills, Mills starts of saying exactly what has been said
before- cause of profit is labor produces more that is required for its support. Mar ignores
this and moves on to statements that Mills said to distinguish himself from the others. He
starts of by saying that profits because food, clothing, materials, and tools last longer than
the time took to produce them. Which as Marx points out is confusing duration of labor
time with duration of its products. Marx gives examples proving this wrong, how a baker
and his products only last a day versus a machine shop whose products last decades. Next
Mills attempts explaining the mercantilism view of profits, and points out the flaws in the
thinking of profit from exchange. Mills nows attempts to say that profits of 20% is due to
labors producing 20% more than there wages, giving a proportion of 20:100- Marx counters
with an example of how this is just plain wrong, he give a capitalist advance of $500, $400
is in the means of production and $100 to wages, and if value of surplus value is 20% the
raise in profit would be 20:500, not 20% but 4%. Mills assumes through out the process that
there is a separation of class between capitalist and laborers, ad that it is the capitalist that
advances the whole expense of the production of products, including the labor. But Mills
says that capitalist does not do this out of necessity but rather that if they did not do it than
the laborers would do so, Marx counters this with the fact that a peasant would do labor for
himself. Mills continues talking that capitalism would continue to exist even if it did not
exist, and proceeds to tell of how it would not exist even if it did exist! He then continues
that a laborer is in reality a capitalist himself, because he works gratuitously for a week in
order to receive it at the end of the week. Marx end the chapter with saying the bourgeois
believes themselves to be of great intellects, even though he has proved much of of there
thinking wrong.
Hans: This is just a paraphrase of the original version of [503], before I commented it and changed Mills to Mill,
done on the quick, with careless punctuation and writing style.
Next Message by Scott is [606].
[557] Milton, Nogi, Poppy, and RemyClaudette: Chapter 16 Term Paper- Absolute
and Relative Surplus-Value. **This is an updated version of term paper [503] with your
suggested changes made**
Marx first gives his outlook on the labour process. The process when looked at abstractly
and independent from its historical forms is a process between man and nature where if one
looks at the end result being the product, you can see that the instruments of labour and
the object of labour are means of production. He then concludes that the labour itself is
productive labour. This way of determining what productive labour is is insufficient to cover

U of Utah Econ 5080 2007fa 231
the capitalist process of production from the standpoint of the simple labour process. Marx
states that this point must be developed further.
When an individual appropriates natural objects for his own sustainability he is the lone
supervisor of his labour. Later on this will not be true for the individual will be supervised
in the labour process by others. Marx describes how when a man operates upon nature he
must call upon his muscles by control of his brain. He says in the labour process mental
and physical labour are united but will later become separated and this will cause hostile
antagonism. Marx then goes on to state that a transformation takes place where the product
that was once produced directly from an individual producer is now a social product that was
produced by a combination of workers. This in turn will change the concept of productive
labour and the concept of the productive worker. The individual worker no longer needs to
produce the product entirely; he is but one organ in the collective labour. Marx says that
the original definition for productive labour still holds true when looking at the collective
labourers as whole but not individually.
Marx states that with the concept of capitalist production where it is not merely for the
production of commodities but in fact for the production of surplus-value, the concept of
productive labour becomes narrower. Since the worker is no longer producing for himself
but for capital, it is required for him to produce surplus-value. The worker is considered
productive if he produces surplus-value which increases capital for the capitalist. Marx
uses the example of a school headmaster who works himself into the ground to enrich the
owner in addition to educating the students. Marx says that the concept of the productive
worker does not just imply the relationship of the worker and the product of his work, but
it labels the worker as the direct means of the capitalist valorization. Marx says that to be
a productive worker is not luck but misfortune because in all societies the social relations
determine which work is deemed productive labor. In a society ruled by class the labor that
creates surplus-value is the only labor that is labeled productive. It is no coincidence that
this surplus value is appropriated by the ruling class. In capitalism the labor that is forced
upon the worker is the kind that will only exploit the worker through taking away the value
of the said worker’s labor.
The extension of the working day past the point where a worker yields the exact equivalent
of his labour-power is how absolute surplus-value is produced. This is the foundation of
the capitalist system and the starting point of relative surplus-value. Marx says to produce
relative surplus-value the working day is divided into two parts, the necessary labour and the
surplus labour. The capitalist will prolong the surplus labor part of the day by shortening the
necessary part through producing the equivalent of the wage labour in a shorter time. The
production of absolute surplus-value is entirely dependent on the length of the working day,
whereas the relative surplus-value completely changes the mechanical procedure of labour
and the groupings into which society is separated.
Producer has yet to become formally subordinate to capital, therefore capital has not
yet acquired a direct control over the labour process. Independent producers carry their
own handicrafts the traditional way and then there steps in the usurer, and he feeds on the
independent producer. This leads to capitalism
232 2007fa Econ 5080 U of Utah
Formal subsumption of labour under capital suffices for the production of absolute surplusvalue.
Methods of producing relative surplus-value are the same as methods of producing
absolute surplus-value. The unrestricted prolongation of the working day turned out to be
a very characteristic product of large-scale industry. Now capitalist mode of production
ceases in general to be a mere means of producing relative surplus-value as soon as it has
conquered an entire branch of production. It acts as a special method of producing relative
surplus-value in two respects: so far as it continues to proselytize and market revolutionizes
by methods of production.
After this, Marx focuses on absolute and relative surplus-value. Their difference may
seem illusory – every absolute surplus-value is relative and vice versa – however the difference
between the two is felt when the rate of surplus-value is raised. If the productivity
and intensity of labour-power is constant then surplus-value can be raised in two ways: day
lengthened, productivity same (absolute) or vice versa (relative).
If a worker has no extra time because all his time is spent providing for his family, then
there could not be a surplus-value. Hence there would be no capitalists, etc. Naturally we
provide for ourselves but if we break it and socialize our labour then we will be able to
provide for the existence of another. Marx continues on to say that in the beginning that
productivity was small but so was needs, so as society grew so did productivity of labour.
Marx continues by building a foundation for his larger point. He starts by stating “the
productivity of labor remain fettered by natural condition” (pg. 647). Here is he pointing to
the obvious to have a solid foundation for his later ascertation. Marx is saying that human
beings’ ability to produce can be limited by the surrounding environment. He divides these
external limitations into two categories of natural wealth in the means of subsistence and
natural wealth in the instruments of labor. Natural wealth in the means of subsistence is
natural resources that directly aid us in survival. Marx uses the example of fertile soil, honey
bee combs and caves could be other examples. Natural wealth in the instruments of labor
are natural resources we can harness to aid ourselves in survival. Marx uses the example of
navigable waters, solar power is another more modern example.
After establishing that our environment can restrict our productivity of labor he makes the
inverse argument. The more natural resources we have at our disposal the better. Marx goes
one step further and adds the fewer requirements we have for “satisfaction” or survival the
better too. The more resources one has at one’s disposal, and the less resources one requires
for oneself, the more time one can spend on other pursuits. The less labor consumed on
oneself, the more one can apply oneself to other projects, however it is true that when more
time is readily available, the less inclined we are to develop other productive powers. Marx
uses an example from Diodorus, the ancient Egyptians.
Marx paraphrases Diodorus’s example of the ancient Egyptians to support the latter point.
I shall take the liberty of paraphrasing Marx’s paraphrasing of Diodorus. The argument goes
as such the ancient Egyptians living along the fertile Nile River enjoyed an easy existence.
Food was abundant around them, they did not have to spend much time growing crops or
gathering sustenance. The climate is very accommodating, not much is required in the way
of clothing, shoes are not really needed at all. Children are cheap to have and raise. The

U of Utah Econ 5080 2007fa 233
Egyptian population grows large. Having a large population of people who require very
little and are surrounded by lots the Egyptian people have extra time for whatever pursuits
they desire. Hence, all the gigantic monuments. Egypt had a large population with a lot of
disposable labor time, they could build massive public projects.
In reading the text Marx appears be supporting this argument. But then in typical Marx
fashion he does a volte-face and says not quite true. He begins by saying, “but it by no means
follows, inversely, that the most fertile soil is the most fitted for the growth of the capitalist
mode of production. The latter presupposes the domination of man over nature” (pg. 649).
Nature is fickle and man cannot tame her. Or not completely. It is not those who possess a
surplus of natural wealth in the means of subsistence who thrive to capitalist heights. It is
those who possess the means to control the natural wealth in the instruments of labor. The
capitalist’s true arena is in the dams, the irrigations canals, and the steam engine.
Marx ends this section with a very important quote. He asserts, “It is the necessity of
bringing a natural force under the control of society, of economizing on its energy, of appropriating
or subduing it on a large scale by the work of the human hand that plays the most
decisive role in the history of industry” (pg. 649). His point stands it is those who control
the natural wealth in the instruments of labor who succeed in a capitalist realm.
Favorable natural conditions in various part of the world, doesn’t really equate to surplus
labour, or surplus value, and a surplus product. In the very beginnings of a new society it
would, in that if you were in a warmer climate, you would need fewer clothes, you wouldn’t
have to cultivate the ground just as you would in a colder climate, but as there are industry
advances, these natural limits of the land or climate will begin to diminish. We see this is
in Western-civilization, where one can sell their own labour to furnish a surplus product and
provide a profit to their employer.
Continuing in the same paragraph, Marx has us consider the civilization on the islands
of the East Indies, where there are not very many industrial advances. In this society before
capitalism is introduced, one only needs to work 12 hours a week to provide for all of his
needs, because the lands in which he lives on it so bountiful, leaving him an abundance of
leisure time. Marx does not explain in detail as to why, but states that if capitalism were
introduced, the labourer would perhaps have to work six days a week to provide for all of
his needs, leaving him now only one day of rest.
Marx touches on how Ricardo refers to the productivity of labour, as a determinant of
the value of a product, and not as an existence of a surplus value. Ricardo’s school on the
other hand, teaches that labour is the originating cause of product. Then Marx refers to
John Stewart Mill, who built on Ricardo’s theory. Mill thought that profit was derived from
products that last longer than the time that was necessary to produce them. Marx points out
that Mill is confusing the duration of labour time with the duration of its products. Mill
also asserts that there could be a profit without an exchange taking place. Marx agrees and
disagrees with Mill’s theory. Profits are not produced in the market, however exchange is
needed to generate profits.
Marx disagrees with Mill’s thoughts on the rate of surplus value. Mill gave an example
of a 20% profit on wages for an entire country that would be realized by the capitalist.
234 2007fa Econ 5080 U of Utah
However, Marx points out that Mill failed to include the original capital investment, and
when it is included, the capitalist in fact will realize a profit, but it will be much less than
20% because the rate of surplus-value is not equal to the rate of profit. The rate of profit is
surplus-value divided by the total advanced capital, thus the denominator is bigger, making
the rate much less.
Marx infers that Mill’s statements concerning the labourer, are that the worker who advances
to himself not only the means of subsistence but also the means of production is in
reality his own wage labourer. He goes on to say that the low level American worker is a
slave to himself, because he does forced labour for himself, instead of doing it for someone
else.
Mill, at the end, actually comes to the conclusion that the labourer, or worker, is actually a
capitalist, because he is contributing his labour to his employer, and receives it back through
interest, i.e. his paycheck. Marx finds Mill’s conclusion humorous, in how freely he throws
the word “capitalist” around.
Hans: Thank you for incorporating my remarks into your text.
Next Message by Milton is [563], Next Message by Nogi is [611], Next Message by Poppy is [560], and First
Message by RemyClaudette is [111].
Term Paper 603 is 917 in 2000fa, 917 in 2001fa, 817 in 2002fa, 817 in 2004fa, 614 in
2007SP, 611 in 2008SP, 644 in 2009fa, and 758 in 2012fa:
Term Paper 603 Essay about Chapter Seventeen: Changes in Wages and Surplus Value
[489] Chased and Ozz: Term Paper Presubmission. Chapter XVII Changes of Magnitude
in the price of Labor-Power and in Surplus-Value
The Value of Labor power, also known as wage, is the first thing that Marx begins to
re-explain in the opening of the chapter stressing that it is equal to the quantity of the “necessaries
of life habitually required by the average laborer.” By re-stressing the importance of
this concept he is building a foundation on which he can begin to elaborate his argument on
the changing price of labor. In order to make his argument, Marx states that he will leave
out two certain factors of change (the expenses of labor power that differ with each mode of
production and the diversity of labor power between men and women, children and adults)
and that he will also be making 2 assumptions. The two assumptions made are first, the
commodities are sold at their values, and second, the price of labor-power occasionally rises
above its value, but never falls beneath it.
Given these assumptions Marx begins to formulate his argument by first establishing the
three determinants of the price of labor power. These three determinants, or circumstances
as Marx calls them, are: the length of the working day, the normal intensity of labor, and the
productiveness of labor. Formulating these three circumstances into different combinations
of variables and constants Marx begins to clarify the changes in Magnitude in the price of
labor-power. The majority of Chapter XVII is dedicated to the chief combinations of these
three factors.
“I. Length of the working day and Intensity of labor constant; Productiveness of labor
variable.”

U of Utah Econ 5080 2007fa 235
Starting out with these assumptions Marx explains that there are three laws that determine
the value of labor-power. The first of these three laws states that a working day of given
amount of hours will always produce the same amount of value. This value will always be
a constant, no matter the productiveness of labor, or the price of the commodity produced.
The second states that the surplus-value and labor-power are negatively correlated or that
when surplus-value increases a unit and value stays the same, labor-power must decrease
one unit also. The third of these laws is that a change in surplus-value presupposes a change
in that of the labor-power.
Given these three laws Marx explains how the productiveness of labor, being the variable,
changes the magnitude of labor-value. Marx explains saying “a change in the magnitude of
surplus-value, presupposes a movement in the value of labour-power, which movement is
brought about by a variation in the productiveness of labour.” This variation in the productiveness
of labor is what eventually leads to the developing change in value, which is then
divided by either the laborers, through extra labor-value, or the capitalist, through extra surplus
value.
Hans: In your last sentence you are doing a little handwaving, because Marx’s almost tedious and trivial argument
suddenly becomes difficult and complicated. I don’t blame you for it, I have never seen anyone making sense of
this passage (other than my on Annotations in akmc.pdf). Marx is not easy to follow, and until now you have done
an excellent job.
But here is my own interpretation of this passage of the chapter. Despite the result that an increase in the
productivity of labor increases surplus-value, he wants to emphasize that productivity is not the direct cause of
surplus-value (but the link between productivity and surplus-value goes through the detour of relative surplusvalue).
How can he show that surplus-value is not the direct result of productivity? By showing that an increase of
productivity of 1 percent does not increase surplus-value by 1 percent (or something close to 1 percent), but that a
more complicated relationship holds.
Then Marx goes through some more intricate arguments which have, among others, the interesting outcomes
that the capitalists’ efforts to increase their profits can temporarily lead to higher real wages for the workers! How
that? If prices fall, as they must, when productivity rises, but wages do not fall immediately by the same amount,
then workers can buy more things with their wages.
“II. Working-day constant; Productiveness of labor constant; Intensity of labor.”
The Intensity of labor is the expenditure that the laborer puts into a commodity. The
increase in the intensity of labor results in the increase of value that the labor is producing.
This increase that the laborer is producing is again divided amongst the capitalist and laborer
in the form of either surplus-value or an increase in the value of labor power. Though they
may both increase simultaneously the addition to the labor may not be an addition if the
extra payment received from his increase in intensity does not cover the wear and tear it has
on the laborer.
Hans: If you look at the chapter carefully, you will see that every single of the three laws which Marx derived in
the first scenario where productivity changes is invalidated in the case where intensity of labor changes.
“III. Productivity and Intensity of Labor Constant; Length of Working Day Variable.”
In this example it is possible to change the length of the working day by either lengthening
of shortening the time spent at work. Leaving the other two variables constant, reducing
the length of the work day leaves the labor-power’s value the same as it was before. This reducing
of the length of the work day will reduce the surplus labor and surplus value dropping
it below its value.
236 2007fa Econ 5080 U of Utah
The other option in changing the workday is to lengthen it. If the labor-power stays the
same with a longer workday then the surplus-value will increase relatively and absolutely.
The relative value of labor-power will fall even though it will not absolutely. With the
lengthening of the workday and the nominal price staying the same, the price of labor-power
possibly could fall below its value. The value is estimated to be what is produced by the
worker and a longer workday will affect the production and therefore the value.
It is fine to assume the other variables stay constant, but a change in the work day with
the others constant will not result in the outcomes supposed here. A change in the work day
by the capitalists will most definitely affect the productivity and intensity of the labor.
Hans: I think this last remark was made by Marx after deriving the result that a shorter workday will decrease
surplus-value and therefore exploitation. Marx says that this hardly ever takes place, because a shorter workday
also leads to intensification of labor, so that the capitalists still get their surplus-value.
“IV. Simultaneous Variations in the Duration, Productivity and Intensity of Labor.”
In the real world it is almost never possible to isolate each of the aspects of labor. Two
or even three of the variables may vary and in different aspects. One may move up while
another moves down, or in the same direction. The combinations are endless, but may be
characterized by the first three examples. However, Marx limits his analysis to two cases.
“(1) Diminishing productivity of labor with a simultaneous lengthening of the workday.”
This example is one where workers are working longer hours paying less attention or dedication
on the job and productivity is in turn reduced; or productivity decreases, increasing
the workday to achieve the same output. Therefore, the magnitude of these changes will
continue on its path causing longer and longer workdays with lower productivity until the
system can sustain no more.
“(2) Increasing intensity and productivity of labor with simultaneous shortening of the
working day.” Productivity and intensity are closely related and offer similar outcomes.
Higher productivity and intensity will increase the workers output allowing for the workday
to be shorter as they will achieve their necessary subsistence. The working day can
shrink multiple times so long as the other elements live up to their sides of the bargain.
Hans: Again you are handwaving about some interesting passages in which Marx, among others, speaks about
socialism.
The price of labor-power is affected by many things that can be broken down. The three
main elements of intensity, productivity and length of workday were broken down and analyzed
separately and then together. From the examples presented it is possible to see what
would happen in any and all situations.
Hans: Despite my criticisms this is an excellent paper already. You did some close reading, got the overall structure
right, and the passages you skipped over are admittedly quite difficult. When you do your final submission, you
should let the reader know where there are some obscure but potentially interesting passages. As I said, if akmc.pdf
I am trying to follow Marx’s argument in detail.
Message [489] referenced by [531]. Next Message by Chased is [531] and Next Message by Ozz is [490].
[530] Dyoung, Kalmerico, and Melissa: graded A Marx begins chapter seventeen with
the explanation that the value of labor power is determined by the consumption of the average
laborer, and though this may change by time and place it is treated as a constant
magnitude, with only the value of this quantity changing. There are also two other parts that

U of Utah Econ 5080 2007fa 237
make up the whole of labor value, the cost of developing that labor, and the labor differential
between laborers, whether they be men, women, or children.
Surplus labor and price of labor power are determined by three circumstances: (1) the
length of the day; (2) the normal intensity of labor, where a given quantity of labor is expended
in a given time; (3) the productive power of labor, sometimes the same amount of
labor produces a dissimilar amount of product.
In this paper we are assuming, as Marx does, that commodities are sold at their value;
and that the price of labor-power rises occasionally above its value, but never sinks below it.
In chapter 17 Marx discusses four different combinations of these factors; this essay will
focus on two of those combinations found in sections two and three.
Section two holds the length of the working day and the productivity of labor constant
with the intensity of labor being the variable. More intense labor leads to more products,
working day being held constant. If the magnitude of intensity increases the value of laborpower
remains unchanged, as each article costs the same amount of labor as before. This is
a different outcome than you would see if productivity increased, because that would cause
prices to fall. If there was increased productivity, you could produce the same quantity in
less time than it was previously done. Marx states “Hence, if the length of the working day
remains constant, a day’s labor of increased intensity will be incorporated in an increased
amount of value, assuming no change in the value of money, and an increased amount of
money.” Capital pg. 661. Therefore, increased intensity on a working day leads to an increase
in profits for the capitalist, or an increased amount of surplus value. For example, in
a given industry “capitalist 1” would receive higher profits in a working day if the intensity
of his workers were higher than that of “capitalist 2’s” workers. The difference in profits
seen by capitalist 1 as opposed to capitalist 2 is directly related to the degree of intensity
beyond the normal social level reached by the workers of capitalist 2. This increase of value
for capitalist 1 is an increase in surplus value, as the value of labor-power is the same. The
increase in surplus value is related to the increase in products produced in the working day,
which further exploits the laborer.
Section three holds the productivity and intensity of labor constant with the working day
being variable. There are three laws pertaining to this section. The first law states that value
and the length of the working day are directly related. The second law states that the changes
in the relationship of the magnitude of surplus value to the value of labor-power arise from
changes in surplus labor, and consequently surplus-value. The third law states that every
change in absolute value of labor-power is always the effect and never the cause of changes
in surplus value.
Hans: These three laws are the exact opposite of the three laws Marx developed earlier when he varied productivity
and kept intensity and length constant.
Given the three different laws Marx presents two different scenarios, the shortening of
the work day and the lengthening of the work day. In the first scenario, shortening of the
working day, the capitalist will see a reduction in surplus labor and surplus value, holding
productivity and intensity of labor constant. The capitalist would not shorten the working
238 2007fa Econ 5080 U of Utah
day holding productivity and the intensity of labor constant because it completely undermines
the capitalist system. By shortening the working day the capitalist is forfeiting the
profits they could have gained from the surplus value from a normal working day. This
would, according to the third law, also create a change in the absolute value of labor-power.
Hans: Marx says here that the capitalist would have to depress the price of labor-power below its value in order to
preserve his profits, not that the value itself falls.
Marx says here that the shortening of the workday is always accompanied by increases in intensity and/or
productivity. You said this only indirectly, it should be said in this direct manner.
The second scenario, lengthening the working day, allows the capitalist to gain more
profits from an increase in surplus value. This forces the value of labor power down, further
exploiting the worker. The surplus value coming from the additional hours worked by the
laborers disappears in the value of labor-power, as the laborer is paid the same daily rate.
It does not disappear all together, just for the laborer, the capitalist takes in all the surplus
value that was created. If it were an hourly wage system instead of a daily wage system,
the capitalist will incur additional expenses as he still has to pay for the labor power for
the additional hours the laborers put in, but the capitalist is still compensated by the surplus
value.
These two sections discuss the two cases where surplus value and the price of labor
power may simultaneously increase either by equal or unequal quantities. The two cases
include lengthening the working day and an increase in the intensity of labor. The bottom
line that Marx seems to be pointing toward in this chapter is that no matter how you shake
it, the laborer is always exploited in the capitalist system. Any advantageous situations
that are created for the laborer are either more advantageous for the capitalist or are falsely
appearing to be advantageous to the laborer. Marx uses this chapter as a critical examination
of the supposed benefits of capitalism, and he is very precise and thorough in expunging
any claims that the capitalist system is beneficial to the worker. While this is true, it is not
necessarily a harmful system to the worker, it is just always more beneficial to the capitalist,
and thus creates inequality. This supports Marx’s usage of examples and possibly shows
where he is headed in his discussion and ideas. . . to a more beneficial system for everyone.
Next Message by Dyoung is [578], Next Message by Kalmerico is [613], and Next Message by Melissa is [623].
[531] Chased and Ozz: graded A Final term paper. This is the updated version of
presubmission [489]
The Value of Labor power, also known as wage, is the first thing that Marx begins to
re-explain in the opening of the chapter stressing that it is equal to the quantity of the “necessaries
of life habitually required by the average laborer.” By re-stressing the importance of
this concept he is building a foundation on which he can begin to elaborate his argument on
the changing price of labor. In order to make his argument, Marx states that he will leave
out two certain factors of change (the expenses of labor power that differ with each mode of
production and the diversity of labor power between men and women, children and adults)
and that he will also be making 2 assumptions. The two assumptions made are first, the
commodities are sold at their values, and second, the price of labor-power occasionally rises
above its value, but never falls beneath it.
Given these assumptions Marx begins to formulate his argument by first establishing the
three determinants of the price of labor power. These three determinants, or circumstances

U of Utah Econ 5080 2007fa 239
as Marx calls them, are: the length of the working day, the normal intensity of labor, and the
productiveness of labor. Formulating these three circumstances into different combinations
of variables and constants Marx begins to clarify the changes in Magnitude in the price of
labor-power. The majority of Chapter XVII is dedicated to the chief combinations of these
three factors.
“I. Length of the working day and Intensity of labor constant; Productiveness of labor
variable.”
Starting out with these assumptions Marx explains that there are three laws that determine
the value of labor-power. The first of these three laws states that a working day of given
amount of hours will always produce the same amount of value. This value will always be
a constant, no matter the productiveness of labor, or the price of the commodity produced.
The second states that the surplus-value and labor-power are negatively correlated or that
when surplus-value increases a unit and value stays the same labor-power must decrease one
unit also. The third of these laws is that a change in surplus-value presupposes a change in
that of the labor-power.
Given these three laws Marx explains how the productiveness of labor, being the variable,
changes the magnitude of labor-value. Marx explains saying “a change in the magnitude of
surplus-value, presupposes a movement in the value of labour-power, which movement is
brought about by a variation in the productiveness of labour.” This variation in the productiveness
of labor is what eventually leads to the developing change in value, which is then
divided by either the laborers, through extra labor-value, or the capitalist, through extra surplus
value.
“II. Working-day constant; Productiveness of labor constant; Intensity of labor.”
The Intensity of labor is the expenditure that the laborer puts into a commodity. The
increase in the intensity of labor results in the increase of value that the labor is producing.
This increase that the laborer is producing is again divided amongst the capitalist and laborer
in the form of either surplus-value or an increase in the value of labor power. Though they
may both increase simultaneously the addition to the labor may not be an addition if the
extra payment received from his increase in intensity does not cover the wear and tear it has
on the laborer.
“III. Productivity and Intensity of Labor Constant; Length of Working Day Variable.”
In this example it is possible to change the length of the working day by either lengthening
of shortening the time spent at work. Leaving the other two variables constant, reducing
the length of the work day leaves the labor-power’s value the same as it was before. This reducing
of the length of the work day will reduce the surplus labor and surplus value dropping
it below its value.
The other option in changing the workday is to lengthen it. If the labor-power stays the
same with a longer workday then the surplus-value will increase relatively and absolutely.
The relative value of labor-power will fall even though it will not absolutely. With the
lengthening of the workday and the nominal price staying the same, the price of labor-power
240 2007fa Econ 5080 U of Utah
possibly could fall below its value. The value is estimated to be what is produced by the
worker and a longer workday will affect the production and therefore the value.
It is fine to assume the other variables stay constant, but a change in the work day with
the others constant will not result in the outcomes supposed here. A change in the work day
by the capitalists will most definitely affect the productivity and intensity of the labor.
“IV. Simultaneous Variations in the Duration, Productivity and Intensity of Labor.”
In the real world it is almost never possible to isolate each of the aspects of labor. Two
or even three of the variables may vary and in different aspects. One may move up while
another moves down, or in the same direction. The combinations are endless, but may be
characterized by the first three examples. However, Marx limits his analysis to two cases.
“(1) Diminishing productivity of labor with a simultaneous lengthening of the workday.”
This example is one where workers are working longer hours paying less attention or dedication
on the job and productivity is in turn reduced; or productivity decreases, increasing
the workday to achieve the same output. Therefore, the magnitude of these changes will
continue on its path causing longer and longer workdays with lower productivity until the
system can sustain no more.
“(2) Increasing intensity and productivity of labor with simultaneous shortening of the
working day.” Productivity and intensity are closely related and offer similar outcomes.
Higher productivity and intensity will increase the workers output allowing for the workday
to be shorter as they will achieve their necessary subsistence. The working day can
shrink multiple times so long as the other elements live up to their sides of the bargain.
The price of labor-power is affected by many things that can be broken down. The three
main elements of intensity, productivity and length of workday were broken down and analyzed
separately and then together. From the examples presented it is possible to see what
would happen in any and all situations.
Next Message by Chased is [657] and Next Message by Ozz is [541].
Question 605 is 77 in 1996ut, 83 in 1997WI, 363 in 1997sp, 361 in 1997ut, 525 in 2002fa,
545 in 2003fa, 599 in 2004fa, 552 in 2005fa, 625 in 2007SP, 613 in 2008SP, 617 in
2008fa, 648 in 2009fa, 711 in 2010fa, 730 in 2011fa, 760 in 2012fa, and 711 in Answer:
Question 605 Your employer gives you your paycheck. How do you know your pay is based
on your labor and not your labor-power (and why does it matter)?
[425] Karly: What exactly is a paycheck based on? Marx states that although the
worker sells their labor-power when they are hired, the worker is actually paid according to
the labor they performed. Although the worker sells and is hired based on his labor-power,
he then has to provide the labor before he will get paid. Workers are paid based either on
output or time. If your wage was based on labor power, it would have to be based on living
expenses, or something other that output and hours worked.
[2007SP:879] refers to the example Hans uses in the Annotations. I feel they misinterpreted
it. Since it is not practical to pay the seller of wine depending on how drunk you get,
they conclude that it is also not practical for an employer to buy the worker’s labor-power

U of Utah Econ 5080 2007fa 241
and pay the worker based on how much they work. I believe Marx is stating the exact opposite:
that it is not practical regarding wine, but is practical regarding labor-power. You have
to be there to provide the labor, for the employer to consume your labor.
Message [425] referenced by [427] and [428]. Next Message by Karly is [462].
[427] SamHouston: How do I know? The fact is you do not know that your paycheck
comes from your labor. If it came from your labor, you would be able estimate the value of
your paycheck by the value of the commodity produced. This is not the case. A worker in
the factories may produce an automobile but only get paid a small fraction of the value of
the automobile. More than likely, your paycheck is not based on the commodities produced
at all. Marx makes the point that the capitalist pays the laborer enough so that the laborer
can subsist and reproduce labor power for the next day’s labor. If the laborer was being paid
for his labor, the capitalist would not be able to accumulate surplus-value.
Karly in [425] made the excellent point that labor is required by the laborer in order for
the capitalist to consume the labor power. Paychecks are often created through a fixed sum
of money attached to the hours of labor. This gives the laborer the idea that his paycheck is
coming from a contractual agreement that his labor is worth a certain amount of money per
hour (or day, week, month, etc). This may be important because it disguises the fact that the
laborer is being exploited. He purchased the labor power (the ability to work) but only pays
for the actualization of labor power into labor.
Hans: The workers know the price of the car, but they do not know their contribution to this price. And they
probably think that machines create value too, and they don’t think their labor can produce much value since they
don’t have much education.
In your original submission you had capitalized the capitalist but not the laborer, and you are not the only one
who capitalizes the capitalists. (I fixed it in the archives.) Does this have anything to do with it that laborers think
they do not produce much value?
Next Message by SamHouston is [479].
[428] Gilmour: content C form 95% How is our pay based? When we receive our
paychecks does it really matter if the money is based on the labor itself or on the laborpower?
I believe it does. Obviously there are enormous variations in the pay rates of all
currently employed workers. A custodian may make $10/hour while the CEO of the same
company may make $10 million a year. Imagine now that the CEO just happens to be the
best custodian in the whole building. With years of experience from their younger days they
have mastered the art of sweeping and mopping as well as cleaning everything else like it
were new. Will the company be willing to pay this person his enormous CEO wages to mop
the floor every night? I believe that the world will pay you what it thinks you deserve. On
the other hand, the custodian could in theory run the company and make all the executive
decisions that the CEO makes, however they do not have the formal education and training
that is required of such a lofty position. Labor power is essentially the amount and quality of
work that one is able to sell to their employer. It is therefore irrelevant to think that a CEO
would spend time cleaning when they have the training to do a much more important task.
Marx states that although the worker is hired based on their labor-power, the worker is
actually paid according to the labor they performed. While this is a true statement, the labor
that the person is performing is based on the labor-power they possess. Labor-power comes
from experience and allows an individual to sell themselves for more. This is one reason
it is hard for elderly people to find jobs. Imagine a 55 year old man is laid off from his
242 2007fa Econ 5080 U of Utah
engineering job. He has at least 30 years of experience under his belt and can command a
higher wage than someone who is fresh out of college. Other engineering firms know that
this man is experienced and will demand to make more money. Also the fact that he is 55
means that he can retire sooner which means retirement package expenses and more risk
of bad health. The labor-power that this man possesses is much greater than the younger
individual and can thus justify a higher paycheck. Labor-power enables us to command
certain amounts of wages, however the labor that we perform is what we are paid for. The
labor-power we possess is a gauge for society to judge us on what they think we deserve to
be paid. Karly [425] mentions that you have to be there to provide the labor, for the employer
to consume your labor. Once again while we are paid based on the labors we perform, it is
our labor-power we possess that determines how much we are paid. That is why my boss
makes more than I even though we do the same job. This can be said of millions of workers
in the U.S.
Hans: Marx explains a CEO’s huge salaries as follows: In order to be able to appropriate the unpaid labor of his
workers, the capitalist has to do two things: (1) he has to own the means of production, and (2) he has to operate the
business in such a way that it is profitable. Often these two functions are not combined in the same person, but the
owner hires people to to the operative aspects of being a capitalist. The salaries they draw is part of the profits, i.e.,
it is not an equivalent for the value they themselves create, but it is a share of the unpaid labor they help extracting
from the workers. This is quite a different explanation than saying they are paid for their importance, their skills,
or because society thinks they deserve that much.
Message [428] referenced by [435] and [443]. Next Message by Gilmour is [476].
[434] Jason: In regards to this question, it is not difficult to understand and know that
when I receive a paycheck from my employer, I’m not receiving or being compensated to
the extent of my labor power. I know this because my employer says, I will give you 15%
of the commissions that you bring in, whether it is new or renewal business. What happens
to the rest of the commissions that came about through my labor-power? The remaining
portion of the commissions go straight to the company which is money that I could have
had if I were in “charge”. Because of this I’m only being paid for my labor and not my
labor-power. For a capitalist, this is their goal, to be able to exploit their labor force and
use that force to achieve his or her own desires. Take for example Larry Miller is a wealthy
individual and well known throughout the state of Utah. Do you think that Larry obtained
his wealth all by himself? The answer to that question is no. Larry has is “employees” work
for him, which ultimately is to the benefit of Larry. Sure Larry pays his employees for their
labor but not necessarily for their labor power. In the readings it says that “capitalism could
not function if exploitation were not hidden.” This statement is true, many employees believe
that they are receiving a large amount of money for what they do at work. However they
really are not which is an important fact to consider when taking into account what you’re
really being paid.
Hans: Many of your explanations are a rough approximation of the explanations of Marx, but you are using the
wrong words to express these ideas. You have the words labor and labor-power interchanged, and you are not
saying how the value of labor-power, i.e., the amount which the capitalist does pay, is determined.
Message [434] referenced by [435]. Next Message by Jason is [464].
[435] Hans: Labor-Power is the Ability to Work Possessed by Every Human Being.
Gilmore [428] and Jason [434] have the wrong definition of labor-power. This is one of the
recurrent errors in this class, I already tried to explain this in [2003fa:400]. Here is an edited
version of that earlier email which bore the subject line “Empowered or Impoverished?”:

U of Utah Econ 5080 2007fa 243
The word “labor” sounds much less powerful than the word “labor-power.” Many class
participants seem to have been influenced by this sound. For them, labor is “exertion of
muscle and nerve,” while labor-power is empowered labor, i.e., labor enriched by knowledge
and experience.
Marx takes an exactly opposite view. “Labor” is the miraculous activity by which humans
affect nature according to their designs. It is the noblest activity of humanity – but in capitalism
the laborers are crippled because they do not have access to the means of production.
These means of production are monopolized by the capitalists, and the non-property-owners
are left with mere labor-power, i.e., potential, unrealized labor, which is nothing unless it is
sold. (In earlier manuscripts Marx had not used the word “Arbeitskraft” (labor-power) but
“Arbeitsvermoegen” (the ability to work, not meaning special skills but the ability which every
healthy human being has). The capitalists force the workers to work for them, degrading
labor into drudgery and exploitation, while enriching themselves at their expense. To add
insult to injury, they blame the workers for not having enough skills, after they have done
everything to prevent the workers from acquiring these skills.
Message [435] referenced by [448], [2008SP:522], and [2012fa:649]. Next Message by Hans is [444].
[443] Jeff: Gilmour Objection. In response to Gilmour in [428], Hans indeed does claim
that the labor that the person is performing is based on the labor-power they possess which
is derived from experience and allows an individual to sell themselves for more. However, it
cannot be applied to explain the differences in the wages of a CEO and the janitor who works
for the CEO. The labor power in this case for each is completely different. The CEO has
to make big decisions that will affect the lives of many people in his company. This could
include the decisions on how much to raise wages, whether or not to buy new equipment,
and other executive decisions. The janitor on the other hand has to make the decision of how
much to clean and when something is sufficiently not dirty in order to move on to another
task. Although the job is important to make sure that people are able to work in a cleaner
environment, the bottom line is that the load that the CEO has is infinitely larger and should
be compensated as such.
In addition, the statement that people get paid what they deserve is correct and needs to
be analyzed. The CEO has to have something capability and capacity for this kind of work
in order to get to the position he is in. Without the capability and the skills needed for the
job, the CEO could not perform his job well and would be replaced. Therefore, there is
another dimension of the deserving statement. Not only is one getting what he/she deserves
because of the work that they do, but they also are compensated for the qualifications they
bring with them to the job. This is very important to understand clearly and is what I believe
Marx intended to say.
Chris: I am not sure I understand the last paragraph in this. So you are saying that everyone is paid what they
deserve, or what people think they deserve. I think the comparing of compensation between a janitor and a CEO
can be a little difficult. A janitor is just a laborer, he works with his hands and the capitalist pays him for his
labor-power. On the other hand there is the CEO who runs a company. A CEO does have a hard job but they work
within the realm of the capitalist, it is the capitalist who picks them for this job and most likely the CEO owns a
large portion of the production process through stock options. I do not believe we see payments to CEOs these days
as being doled out for what the CEO deserves but more as because they control the means of everything they feel
entitled to eat up all the surplus value the company is creating. When we see CEOs that are compensated 10s of
millions of dollars a year when their companies are not performing is ridiculous and even when they end up being
244 2007fa Econ 5080 U of Utah
forced out they usually walk with large golden parachutes that are sometimes worth 100s of millions of dollars.
CEOs often receive these payments as if they had worked for a company for 40 years when in reality they have only
worked for three. The lovely brotherhood of capitalists, the board of a company, usually made up of exCEOs, pats
each other on the back to make sure they all make obscene amounts of money.
Hans: About your very last sentence: in case you were trying to infer from the homework answers what Marx
himself said, this is not a good strategy. Some of the homework answers exemplify the pervasive false consciousness
about capitalism which Marx describes not only in chapter Nineteen but throughout the book Capital.
Message [443] referenced by [444]. Next Message by Jeff is [452].
[444] Hans: The decision-making-power theory of value. Jeff [443] defends the income
of a CEO on the grounds that “the load that the CEO has is infinitely larger and should be
compensated as such.” Jeff describes this load as follows:
The CEO has to make big decisions that will affect the lives of many people
in his company. This could include the decisions on how much to raise
wages, whether or not to buy new equipment, and other executive decisions.
A Marxist would agree that these decisions are important and that they are made by
CEOs. Marxists also see a connection between the importance of the decisions and the pay
received by the CEO. The reason the CEO gets so much money for his or her decisions
is that the capitalists want the CEO to identify with the capitalist class and represent their
interests in these decisions. The decisions how much of the current product to distribute in
form of wages, how much to invest, and where to invest, are some of the most important
economic decisions. Marxists advocate that they should be made by a democratic process,
instead of being made by a very privileged minority who consider themselves as much part
of the capitalist class as the billionaires.
The janitor is paid so little not because janitor’s labor is less important or has less decisionmaking
power. According to Marx’s theory, the pay of janitors and other working class jobs
is determined by the standard of living of janitors (which itself evolved over time as the
result of labor struggles etc.), i.e., it is determined by something which has nothing to do
whatsoever with the work they perform.
Next Message by Hans is [448].
Question 608 is 224 in 1995ut, 248 in 1996sp, 299 in 1997WI, 372 in 1998WI, 373 in
1999SP, 461 in 2000fa, 488 in 2001fa, 527 in 2002fa, 547 in 2003fa, 602 in 2004fa, 555
in 2005fa, 620 in 2008fa, 651 in 2009fa, 734 in 2011fa, and 608 in Answer:
Question 608 If it looks like a duck and walks like a duck and quacks like a duck, then it
is a duck. What the laborer is selling the capitalist is paid as if it was her labor, and what
the laborer gives the capitalist during the day is her labor. Why does Marx not draw the
obvious conclusion from this that the laborer is selling her labor, but insist that she is selling
her labor-power?
[440] Tim: Labor-power not labor. Labor-power is what the capitalists use to measure
our efforts and is what is responsible for the surplus value created by the laborer and paid to
the capitalist. If we could weave baskets and sell them on our own we would be selling our
labor and making more money, but the inaccessibility to the means of production perpetuates
the capitalists’ exploitation of the laborer.

U of Utah Econ 5080 2007fa 245
Hans: What is responsible for the capitalist’s profit as well as the other parts of the value of the end product is its
labor content, not the labor power. Labor power is only potential labor, it is the capability to work. Labor-power
by itself does not create value; it only creates value if combined with means of production. Since the workers do
not have access to means of production that are large-scale and efficient enough that the products can compete on
the market place, they must sell their labor-power, i.e., basically they must rent themselves out. All they can get for
this on the market place is enough money to pay their bills. In other words, Marx insists on making the distinction
between labor and labor-power because this is the explanation why the workers get so much less in their paycheck
than the value they create.
Next Message by Tim is [565].
Question 610 is 604 in 2004fa, 557 in 2005fa, 630 in 2007SP, 618 in 2008SP, 717 in
2010fa, 737 in 2011fa, and 767 in 2012fa:
Question 610 Marx says that labor cannot have value because it is the source which gives
everything its value. How can labor give something which it doesn’t have?
[418] Teight: giving a gift that you don’t have. Marx says that “labor is the cause of
value in commodities, but cannot in itself have value.” The analogy your student, Jedi, uses
in [1999SP:286] gives us a better understanding of this concept. He says that “the sun cannot
have a shadow, yet is the cause for everything else to have a shadow”. Marx also says that
labor cannot have value “because that which gives things value cannot itself have value”.
Labor is the one thing that products have in common. The value of products is determined
by the labor that is put in to produce a given good. If labor had value then there would be no
need to exchange other products since they all derive from labor.
Hans: I inserted the reference to the original shadow-quote.
Next Message by Teight is [533].
Question 611 is 490 in 2001fa, 529 in 2002fa, 550 in 2003fa, 606 in 2004fa, 558 in
2005fa, 619 in 2008SP, 622 in 2008fa, and 766 in 2012fa:
Question 611 Why is it an absurd tautology to say that the value of a 12-hour working day
is determined by the 12 working hours contained in it?
[422] Walmart: Absurd tautology defined. First, let’s define tautology. As per dictionary.com
it is the needless repetition of an idea, esp. in words other than those of the
immediate context, without imparting additional force or clearness.
The text calls it absurd because that which gives things value cannot itself have value.
Engels gives a description that has helped me understand it by saying that labor can no
more have any particular value than heat can have any particular temperature. The text gives
more examples, but some of them are flawed, in my opinion, or add unneeded layers to
the argument. For instance, the example of sun being the cause of shadows but cannot in
itself have a shadow is technically incorrect. A shadow is detected through the difference in
intensity of light. Thus, a sun will have a shadow when a bigger, more intense sun shines
its light on it. But I digress. The text adds further content to this logic with the idea that
production (which requires labor) allows labor to become materialized (product) through the
means of production.
Hans: Interesting thought about the sun. The sun metaphor assumes that light sources and dark bodies are different
things, while you correctly see that every massive body radiates heat and is therefore a source of light.
Message [422] referenced by [424]. Next Message by Walmart is [612].
246 2007fa Econ 5080 U of Utah
[424] Hans: Can a tautology be absurd? Walmart [422] gives a definition of tautology
and explains why something that gives value cannot have value. But it is not clear from his
explanation why Marx calls it an “absurd tautology” that the value of labor is determined by
that labor. How can a tautology be absurd? I tried answers to this in [2005fa:1321] and in
[2003fa:522]. If you plan to write an answer, please read those first.
Next Message by Hans is [426].
[430] Ryan: graded A Some definitions and another stab at one of the “toughies”.
Walmart, quoting dictionary.com, defined a “tautology” as the “needless repetition of an
idea, esp. in words other than those of the immediate context, without imparting additional
force or clearness.” This definition misses the context in which Marx uses it. A tautology is,
in logical/philosophical terms:
A statement which is necessarily true because, by virtue of its logical form, it cannot be
used to make a false assertion. http://www.philosophypages.com/dy/t.htm
So what Hans is asking is can a statement, which by definition cannot be false, be absurd,
or thus logically incomprehensible?
What is (A) the value of a 12 hour day of labor, why (B) 12 hours of labor of course!
This cannot be false unless one is able to find a difference between the value of the 12
hours of labor in A and the 12 hours of labor in B, or if one is able to prove that labor has no
value.
Marx does the former explicitly in several places throughout Capital, and in the excerpt
for Capital II in the annotations Engles claims to do the latter. I am not fully convinced by
Engels that something which produces a quality in something else cannot also have that quality.
As Walmart points out, the sun can in fact have a shadow. As pointed out in [2003fa:484]
those who give out PhD’s also have PhD’s, and one of my own, which I think may come
closer to what Engels was attempting:
A cord of a specific diameter and of a specific substance pulled to a specific tension,
when plucked will produce a note. That cord cannot be said to have a note of its own, it only
produces that note. Should that cord be placed in a wooden container along with other cords
of like material and diameter, of different lengths all tuned to different notes, then it is said
of that string that it is a specific note. If I press the corresponding key on a piano, that cord
will be struck and produce the desired note. Is the cord that note? Not technically, but within
the system it is accepted that that cord produces that note and thus the key on the piano can
be named according to the note and it is accepted that the note will be produced.
In a way, Engels has a point, middle C is not the note, but socially it is seen as such. In
any case this is not the most powerful argument, instead...
What if middle C produces an A, a vibration of a significantly lower frequency? The
piano would be obviously out of tune and the owner would call a piano tuner to fix the
offending cord. Capitalism fails to do this. The value created by a worker in 12 hours is not
the same amount given to him in return for the 12 hours he works. This is truly absurd and
nonsensical.

U of Utah Econ 5080 2007fa 247
So, in conclusion... The tautological statement is absurd and nonsensical because A does
not equal B; it is only socially perceived to do so.
Next Message by Ryan is [548].
Question 613 is 633 in 2007SP, 621 in 2008SP, 625 in 2008fa, 656 in 2009fa, 719 in
2010fa, and 739 in 2011fa:
Question 613 If labor cannot have value, does this mean labor is not a commodity?
[441] Bosox: The dictionary defines a commodity as “anything that can be bought and
sold.” If this is true then labor is a commodity and has that power to be bought and sold. But
with the case of trying to place a monetary amount to what labor is worth, it is hard to say
that it is a commodity and therefore the monetary comes into play of the value of the item
that has been produced by the laborer so it is not that the laborer is not worth the same as the
value as the commodity but with there being value to a commodity and a laborer produced it
they therefore receive a portion of that of what was received from the purchase. In my mind
labor is a commodity but only as a source to produce a good and with that good a value that
somebody is willing to exchange another value or commodity for whether that being money
or another commodity.
Hans: I tried to show in [451] that a subtle question like this cannot be answered by looking up the dictionary, but
by following the development of Marx’s argument. In addition, the writing style of your answer is not acceptable.
Next Message by Bosox is [470].
[451] Hans: Is the definition of a commodity broad enough to include labor? At the
beginning of chapter One, Marx worked with the definition that any product that is produced
for sale or exchange is a commodity.
In chapter Six he says that it is characteristic of capitalism that labor-power is a commodity.
This is an extension of the definition of a commodity, because clearly labor-power is not
produced for exchange. But labor-power has all the other characteristics of a commodity.
Most importantly, it is of no use to its owner (since the owner does not have access to the
means of production) and therefore has to be sold.
In chapter Nineteen Marx brings up another particularity of the commodity labor-power:
its sale looks like the sale of labor. The most important implication of this is that the price of
labor-power poses as the price of labor. In order to argue conclusively that that which on the
surface looks like the price of labor does not come from labor itself (but from labor-power),
Marx argues that this price cannot be based on the value of labor, because labor does not
have value.
Question 613 links into this last argument and is wondering about something which is not
discussed by Marx: if labor does not have value, does this mean it cannot be a commodity?
This is one of those questions which might occur to a reader of the text but which the text
does not give an unambiguous answer. I think that on the surface, labor is traded as a
commodity, certain amounts of labor are contracted and delivered and paid for. The legalities
with payroll taxes, minimum wage, the worker’s right to quit etc. already indicate that more
is going on underneath, but one can probably defend the notion that labor is a commodity.
But if one does this one should never forget: even if labor is treated like a commodity, it is
not the commodity which capitalists and laborers trade with each other in the labor contract.
248 2007fa Econ 5080 U of Utah
Even if the labor contract talks about labor, it is in essence the contract through which the
worker sells his labor-power. It is the paperwork through which the capitalist class owns the
working class.
Message [451] referenced by [441], [2008SP:527], [2008fa:845], and [2008fa:867]. Next Message by Hans is
[456].
Exam Question 614 is 226 in 1995ut, 250 in 1996sp, 248 in 1996ut, 301 in 1997WI, 367
in 1997sp, 491 in 2001fa, 530 in 2002fa, 551 in 2003fa, 607 in 2004fa, 560 in 2005fa,
634 in 2007SP, 626 in 2008fa, 720 in 2010fa, 740 in 2011fa, and 769 in 2012fa:
Exam Question 614 Why can the laborer not use her labor-power to produce commodities
and sell them, instead of selling her labor-power?
[484] Harmon: The laborer can not benefit from her labor, because she does not have the
means of production. If she had the means of production, like the capitalist, then she could
sell her commodity.
Message [484] referenced by [485]. Next Message by Harmon is [596].
[485] Hans: Labor-power and means of production. Harmon’s [484] is exactly right.
In order to clarify the last two words, an extended version would be:
The laborer can not benefit from her labor, because she does not have the means of production.
If she had the means of production, like the capitalist, then she could sell her
product and get full value for it. Since she doesn’t, she has to sell her labor-power for a
wage that is just enough for her to continue living in poverty.
Next Message by Hans is [487].
Question 616 is 465 in 2000fa, 493 in 2001fa, 532 in 2002fa, 553 in 2003fa, 609 in
2004fa, 562 in 2005fa, 636 in 2007SP, 628 in 2008fa, 659 in 2009fa, 722 in 2010fa, and
742 in 2011fa:
Question 616 Do Marx’s arguments that labor cannot have value also imply that services
(i.e., a haircut) cannot have value?
[419] Chris: A hat or a haircut? Marx’s arguments do not imply that services do not
have value. When I receive a haircut, or a massage, I am paying for a service that has a
value to me. I do not pay the barber or masseuse for their labor but I pay the owner of the
establishment where they practice who in turn pays them. The service that I received was a
commodity and therefore has value. You could say that if my hair was wild I might go out
and buy a hat, a commodity, to cover it up or on the other hand I might get a haircut and
clean it up. Both the hat and the haircut would have value to me and it would just depend on
which I wanted. The barber and the masseuse both produce something that I want, a haircut
or a Swedish massage. I work in the service industry, a restaurant, and fully know that my
services produce value but I am not being paid for the labor. Within the restaurant industry
in Salt Lake the capitalists, or investors, of restaurants make good for themselves because
they do not have to pay a minimum wage to the servers because tips “cover” the workers’
wages and thus they are able to get away with paying a ridiculously low sum for wages while
making more money.

U of Utah Econ 5080 2007fa 249
Chris: Some of the questions for Marx look so easy to answer when you look at them but you must make sure of
what they are asking. I misread the question here and went straight into the idea of a service having use-value, not
value, and this is why this is the wrong answer. Got it.
Chris: In the service industry I work not as a server but as a busser and therefore my job is not to make the guest
more comfortable but to keep the floor running. I am not paid on my ability to cajole the guests into giving me
more money.
Message [419] referenced by [438] and [449]. Next Message by Chris is [458].
[420] Desk: Value Proposition. Marx’s arguments about labor not having value are not
by any means implying that services do not have value. Chris makes a great point stated
earlier today when mentioning the haircut or massage, both items having great value to him
which are services. Although I do not agree with the statement that you are not paying the
barber or masseuse but the owner who then pays them. I think in most cases you are right
but you are paying both them and the owner. The way these individuals make their wages is
by the type of service you feel they are offering you. They are only paying their rent with
the cost and their tips show the value they bring. “Because if the worker gives labor, then the
laws of commodity exchange cannot explain why the capitalist gives the worker less labor
back than he receives.” Marx. Labor has value. If I can offer you something and thrill you
then you are paying me and rewarding me yet both bring value to me one to cover and one
to exceed.
Hans: If your base wage pays your rent, then you are at least not homeless if the tips are down, and your food
is probably covered too if you work in a restaurant. So you can stay alive, even though you bear a good part of
the business risk of your employer. This is a far cry from getting an equivalent of the value created by your labor,
which is over $40 per hour, according to the calculations in [2007SP:1090].
Message [420] referenced by [421] and [449]. Next Message by Desk is [529].
[421] Ozz: graded A Labor and Service. Marx’s argument that labor cannot have value
does not imply that a service, such as a haircut, does not have value. A service is a commodity
in that the service provided has a use-value to the person receiving the service. Just as
any other commodity its value comes from the labor that is put into it to produce the service.
Desk in [420] stated that labor does have value because it produces something that is of value
for other people. Marx on the other hand says that labor itself does not have value but the
productions of labor do have value. The analogy of the sun being the producer of shadows
but it never having a shadow itself explains clearly how a commodity receives value from
labor put into it, but that labor itself has no value. At the top of page 456 it explains why
something such as a service, produced by a laborer would still be considered a commodity.
“If the laborer had access to the means of production (which would allow him to give
his labor an ‘independent existence’), then he would not be a laborer but sell his product.”
A service if it is produced with an “independent existence” becomes a commodity and not
just labor. However, if the service is being performed by somebody that is being hired, this
person will not receive the wage equal to the value of his service, but the wage for the labor
power it takes for him to reproduce his labor. This lower wage that is paid to the laborer,
instead of the full value of the service, is what leaves behind profits for the capitalist.
Message [421] referenced by [438], [449], and [2008fa:844]. Next Message by Ozz is [489].
[438] Gregory: “The Value of My Service” I believe the notion that services can not
have a value would be inaccurate. Furthermore, I would claim that services, in many ways,
are a commodity in the same sense that a yard of linen is. In both cases the consumer is
exchanging currency for a commodity that serves the function of the consumer’s particular
250 2007fa Econ 5080 U of Utah
need. For example, I may be purchasing a jacket, a commodity, to protect my body from cold
weather. Subsequently, I may be purchasing a haircut to maintain a presentable appearance
at work. In both scenarios the jacket and the haircut have a particular value to me.
In addition, a service just like any commodity holds a certain “use-value.” In an earlier
submission [274] dealing with use-value I wrote that the use-value of a winter coat in Russia
will likely be far greater than that in South Africa. In the same sense the use-value of a
haircut in America will likely be greater than that in a third world country where appearance
and hygiene is not as valuable to the consumer.
Like Chris [419] I too am a waiter in the restaurant service industry. Also, I too am aware
that my services hold a value to the consumer. If I were only receiving my hourly wage of
$2.13 an hour I would be receiving a pay far less than the value of my services. However,
on average I make equivalent or more than a laborer who receives ten dollars per hour. I
strongly agree with desks comments that “the way these individuals make their wages is by
the type of service you feel they are offering” (Desk [421]). This can be illustrated through
tips, and the fact that some servers consistently make more than others in the same amount of
time. Also, this can be illustrated through “regulars,” customers who request certain servers
upon every visit. The whole idea behind the “tip” is to express gratitude due to the fact the
service performed fulfilled a task that had a certain “value” to the consumer.
Message [438] referenced by [449]. Next Message by Gregory is [462].
[449] Hans: The Mystification of Waiters’ Tips. On the one hand, Marx’s theory of
value and of wages is simple and plausible, on the other it seems to contradict our everyday
experience. Let me explain.
On the one hand, every worker feels it in his or her bones that the employer’s profits come
at the expense of their labor. This is plausible. But on the other this means that profits do
not come from the use-value of the products sold. The price of a good is not a measurement
of its use-value. Of course, a good has to have use-value in order to be sold, but this does
not mean that its price is determined by its use-value. Just as you are required to wear shirt
and shoes when you show up for work, but this does not mean your paycheck is determined
by the quality of your shirt or shoes.
Of course, everyday evidence seems to confirm that prices are determined by use-value:
if a good is in high demand then its price goes up. Marx would say this ignores the longerterm
and therefore less visible adjustments of supply to demand. Neoclassical economics,
by contrast, do not go past this surface appearance but they say that prices are indeed determined
by use-value; they always find an excuse to make the supply curve upward sloping.
Marxists say that in capitalism, the inequitable exploitation of the worker in the production
process is mediated and masked by seemingly equitable market transactions. Therefore the
superficial approach of neoclassical economics frames things in such a way that the fundamental
economic fact of capitalism, the production of profits by the unpaid surplus-labor of
the wage-laborers, cannot arise as an issue. The main culprit here is not the evil economists,
but the structure of the capitalist system itself: it hides the true nature of capitalist social
relations.

U of Utah Econ 5080 2007fa 251
Marx’s theory of wages is even less intuitive. Marx says that wages have nothing to
do with the labor performed, but they are a cleverly disguised payment of a cost-of living
allowance for those whom the capitalists consider their private property. This has some
startling implications; for instance, if a worker wants more money, working more is the
worst possible strategy. A better strategy would be to organize so that the working class,
collectively, has the strength to fight for a decent standard of living.
Now if you are a waiter, your everyday experience contradicts Marx’s theory of wages.
You are forced to rely on tips, and the tips depend on how comfortable you can make the
customer feel, i.e., they clearly depend on the use-value of your service. A Marxist would
say things are organized this way to force you to use your labor-power for the benefit of your
employer.
Kudos to Ozz [421] who framed question 616 in a Marxian framework, after Chris [419]
and Desk [420] had based their answer on the neoclassical idea that value comes from usevalue.
Gregory [438] references both wrong answers before him but leaves Ozz’s right
answer unmentioned. This shows that Marx’s probes into the hidden depth struture of capitalism
are quite unintuitive.
Next Message by Hans is [450].
Question 618 is 217 in 1995WI, 253 in 1996sp, 304 in 1997WI, 377 in 1998WI, 378 in
1999SP, 495 in 2001fa, 534 in 2002fa, 555 in 2003fa, 611 in 2004fa, 563 in 2005fa, 638
in 2007SP, and 744 in 2011fa:
Question 618 Why can the inequality in the exchange between worker and capitalist not be
explained by the fact that the worker represents living labor, and the capitalist objectified
labor?
[442] Kalmerico: From living to objectified labor. Marx has already established that
there exists a definite inequality in the exchange between the worker and the capitalist. However,
this inequality cannot be explained by the fact that the worker represents living labor,
and the capitalist objectified labor as the only difference between the two is the form they
assume, and not the quantity. An example that is similar to Hans example of the ice cube is a
clay pot. One has the same amount of clay before and after, yet the clay takes on a different
form when it is molded into a pot. Therefore one can conclude that objectified labor was
once living labor in a past time period, just as a clay pot was once a pile of clay.
Next Message by Kalmerico is [530].
Question 629 is 543 in 2002fa and 564 in 2003fa:
Question 629 How does the fact that the “value of labor” is only an incongruous expression
of the value of labor-power lead to it “by itself” that the value of labor must be different than
its value-product?
[429] Amy: Value of labor doesn’t equal value-product. The capitalists are always
about making a profit. The capitalist will exploit the worker by paying them a portion of
their labor-power that they provide; the value of labor. The value of labor is expressed
by the formula: daily value of labor-power divided by the number of hours the laborer is
working. Since most workers can create more labor-power hours than the hours worked the
252 2007fa Econ 5080 U of Utah
capitalist is making a profit. In order to make a profit the value-product must be more than
the value of labor. Therefore, the value of labor and the value-product will differ because
of the value of labor is not equal to the amount of labor-power that gives the commodity a
value-product.
Message [429] referenced by [448]. Next Message by Amy is [620].
[448] Hans: The riddle of the biased surface form. It is a fact of life that things often
appear different than what they really are. But with the value of labor there is not only a
difference but a systematic bias. The surface category “value of labor” is always smaller,
usually quite a bit smaller, than the basic category from which one should think it is derived,
namely, the value produced by that labor. For instance, if the value of a certain type of labor
is $15 per hour, then this $15 is not an approximation of the value produced by that labor,
but the value produced by this labor is perhaps $30 per hour.
In order to explain this bias, Marx makes three steps:
(1) The “value of labor” is not the surface representation of the value produced by labor,
but it derives from the value of labor-power. It is the value of labor-power, i.e., the reproduction
cost of the laborer, pro-rated (spread out) over the use-time of that labor-power.
(2) But the capitalist buys labor-power for one purpose only: in order to get more value
out of the laborer than the price he paid for it.
(3) Therefore he is only willing to hire the laborer if each labor-hour costs him less than
the value the worker produces during this labor-hour.
That is why it is necessary that the price of labor is always less than the value produced
by that labor.
Amy [429] is using similar words than Marx, but her definitions for these words do not
seem to be the same than Marx’s. She seems to make the same error I warned about in
my subsequent message [435]. She seems to say that capitalists make profits because they
pay the worker only part of the value of their labor-power. But Marx argues: even if the
capitalists pay the workers the full value of their labor-power, they still make a profit. The
decisive difference is not, as Amy says, that “most workers can create more labor-power
hours than the hours worked” – which I understand to mean that they can work longer hours
than their 8-hour workday, but the decisive difference is that workers can create a bigger
value than the value of the things they need to survive at the standard of living which they
are allowed in capitalism.
One more thing: In order to understand chapter Nineteen, one also has to understand
chapter Six.
Next Message by Hans is [449].
Exam Question 630 is 221 in 1995WI, 258 in 1996sp, 257 in 1996ut, 373 in 1997ut, 544
in 2002fa, 621 in 2004fa, 573 in 2005fa, 642 in 2008fa, 673 in 2009fa, 758 in 2011fa,
and 787 in 2012fa:
Exam Question 630 How is the “value of labor” derived from the value of labor-power?
Compare the “value of labor” thus obtained with the value of the product of the labor.

U of Utah Econ 5080 2007fa 253
[439] Bosox: Labor-power is calculated upon a certain length of the worker’s life, which
is associated, in turn, with a certain length of the working day.
The cause and effect with this idea is that my labor-power will increase with every increasing
hour of labor that is performed. But when you take the quote from Marx “the value
of labor is in fact the value of labor-power, as it exists in the person of the worker, and it is
as different from its function, labor, as a machine is from the operations it performs.” as it
exists in the person which to me is saying that labor-power is whatever the worker feels he
is putting out in the workforce, therefore those co-workers who feel they are performing at
the highest labor-power they in fact are but that makes it seem that we as individuals will be
able to dictate what labor-power we will put out instead of it being what the job description
says for us to do. A machine knows no difference and so will place 100% of his labor-power
in a day whereas an individual will most likely will not place 100% in a day but less.
The value of labor-power is not equal to value of labor. “its value-product depends not on
its own value but on the length of time it is in action” as humans we may peek at a different
level so this statement is not always true some are able to last longer and start to perform
better as time goes on where as others will lag at the end of the working day so as Hans said
in spring of 2007 “for production, more than labor is needed.”
Hans: What the Marx sentences you quote are saying to you is quite different than what Marx himself wanted
to say. When Marx uses terms like “labor-power” or “value-product” he has very specific definitions in mind.
Your submission shows that someone who does not know these definitions can come up with the most amazing
mis-interpretations of Marx’s words.
Next Message by Bosox is [441].
[490] Ozz: graded A Value of Extra Credit. The value of labor-power is the amount that
it takes for a laborer to reproduce his production process, or in other words his cost of living.
This value of labor power, which is less than the value created by the laborers labor, is the
wage that the capitalist must pay his laborer for producing in order that he may be able to
continue to produce for him. The value of labor is then the amount that the capitalist has to
pay in order for the laborer to work X amount, which payment is derived from the value of
labor-power or the cost of living for the laborer. As stated before the value of labor, since it
is derived from the value of labor power, is less than the product of the labor that was put
into the commodity. This is true firstly because the value of labor power is derived from the
cost of living and not the actual value of the product being produced, and secondly because
the capitalist, in order to receive a surplus value, has to pay the laborer something less then
the actual value that was created by the laborer.
Message [490] referenced by [492]. Next Message by Ozz is [531].
[492] Hans: Yes. Ozz’s [490] is the right answer and it would be a clear A in the exam.
The only thing that should be said a little more explicitly is that the value of labor is the
value of labor-power divided the ordinary number of hours worked. Ozz correctly says that
this must always be less than the value produced by the worker. Why? I would try to explain
it as follows: the capitalist will not allow the worker to go home before more value has been
produced than the capitalist has to pay the worker as wage.
Next Message by Hans is [493].
Question 633 is 653 in 2007SP, 645 in 2008fa, 740 in 2010fa, 762 in 2011fa, and 791 in
2012fa:
254 2007fa Econ 5080 U of Utah
Question 633 Would capitalism be possible if exploitation was not hidden but clearly visible
to everybody involved?
[437] Poppy: Exploitation! Per Marx, capitalists could not function if exploitation was
clearly visible to all.
If all mystifications of the capitalist were made clearly visible to all, then laborers would
run out and do just that, try to become capitalists themselves, and produce their own goods.
This would be an attempt to increase their own wage labor. However, what this would do, is
take away the surplus-value in goods for the buyer of the laborer, and the basis of capitalist
production would vanish, as stated in the annotations.
Therefore capitalism would not be possible without exploitation. The level of exploitation
though that a laborer encounters has a lot to do with one’s own decisions in life on what to
study and learn. We can not blame capitalist for exploiting the general laborers, chances are
if they explained the business model to their average worker, they would not comprehend or
have the network or wherewithal to piece it all together on their own.
Message [437] referenced by [450]. Next Message by Poppy is [480].
[450] Hans: How can exploitation be overcome? The process described by Poppy in
[437] is not conditional on capitalist relations becoming apparent and obvious; indeed, it
is taking place right now. Many people try to escape a working-class existence by becoming
small business owners themselves, for instance by opening restaurants. Bush is giving
speeches praising the “ownership society,” in which people do not have to depend on their
labor for income but everyone is an investor as well. But this solution cannot work for
everyone. Not because the workers don’t have the skills or connections to become capitalists.
The reason is more deep-seated, and Poppy hints at it. Should this exodus out of
the working-class become so widespread that it affects labor supply and wages, then profits
decline, investment stalls, unemployment rises, until wages fall to a level favorable to the
capitalists again. The capitalist system depends on the majority of the working people being
desperate enough that they accept low wage jobs, and the capitalists use their control over
the means of production and over the investment process to keep wages low.
Although commodity production seems to represent the principle that labor is the only
way to gain property, in capitalism the opposite is the case: being a laborer is like being
caught in a treadmill which produces wealth for others but not for the laborer him- or herself.
If workers realized that they are caught in this treadmill due to the capitalists’ control over
the means of production, they would organize, expropriate the capitalists, and democratically
control the means of production themselves.
This was the way out as conceived by Marx. What happened instead was a break in the
solidarity of the world-wide working class, the separation of the world into poor and rich
countries, and racism and immigrant-bashing inside the rich countries. A classical workingclass
revolution is only possible if capitalism can no longer play the workers in the rich
countries against those in the poor countries. Ironically, globalization, which is promoted by
the capitalists themselves, may slowly create the conditions for international solidarity.

U of Utah Econ 5080 2007fa 255
Before this dialectic can play itself out, the environmental crisis generates its own revolutionary
impulses. In the best-case scenario, a broad mass organization of people concerned
about the environment will use electoral majorities and cultural shifts to impose sustainable
environmentally responsible production on the capitalist system. If they succeed, the system
will be capitalist in name only and will eventually become socialism. If they fail, capitalism
will bring us environmental catastrophe with medieval standards of living, in the South starvation
and drowning by the billions, in the North environmental segregation and fascism,
and throughout the globe wars for the dwindling resources of water, food, and energy.
Message [450] referenced by [2008fa:851] and [2008fa:854]. Next Message by Hans is [451].
Question 646 is 668 in 2007SP, 655 in 2008SP, 659 in 2008fa, 690 in 2009fa, 754 in
2010fa, 776 in 2011fa, and 805 in 2012fa:
Question 646 Why a separate chapter about the time wage? Wasn’t the time wage already
discussed in chapter Nineteen?
[454] Dannymangum: Why more wage talk? On page 477 of the annotations we read,
“Chapter (19) showed that the wage of labor is the transformed form of the price of the
labor power.” Marx showed us how this transformation occurs in chapter 19 as the capitalist
extracted all available labor possible by minimally paying the laborer while they selling their
labor exert full labor power. 477 of the annotations then continue to demonstrate that just by
“knowing the essence behind the wage form does not yet fully define the shapes which this
form can assume.” Essentially chapter 19 gives us the generating factors behind the wage
but fails to explain its various shapes and diverse forms.
This is the purpose for chapters 20 and 21. These aforementioned chapters will take on
the role of defining and structuring the wages’ two main shapes: time wage and piece wage.
To sum things up: Nineteen gives us the depths leading up to the surface, where twenty
and twenty-one help us to see other aspects of the surface.
Next Message by Dannymangum is [554].
Question 652 is 674 in 2007SP, 662 in 2008SP, 666 in 2008fa, 697 in 2009fa, 761 in
2010fa, 783 in 2011fa, and 812 in 2012fa:
Question 652 How can the price of labor be reduced even without changing the weekly
pay?
[445] Harmon: You are not done yet! The most effective way to lower the cost of labor
is to increase the number of hours the employees work in a day without increasing the daily
wage. The more hours you can have the employees work in one day, without causing a
negative effect on product or well-being, the lower the cost of labor will be.
Hans: Can you explain that with the well-being? Do you mean jobs which are so much fun that the workers would
do them voluntarily in their free time?
Harmon: By well-being I mean the physical aspect. You can not overwork the employee because your product
will not be up to its full potential.
With this question I thought of other aspects which could possibly reduce the price of labor, but I was unclear.
For instance, you can have an employee that works twice as hard as an average employee and ends up producing
more. The more commodities you have the more money you make, but you still pay the employee the same daily
wage.
256 2007fa Econ 5080 U of Utah
Hans: Yes, speedup is also a reduction in the price of labor. The limit to all this is not the worker’s well-being
itself, but the worker’s ability to perform. You are using the term “well-being” as a euphemism for performance.
Next Message by Harmon is [484].
[447] Tyler: graded A Positioning of Machinery. Although I agree with Harmon that
increasing the number of hours worked in a day without pay is one way to decrease the price
of labor, I don’t believe it’s the most effective way. The most effective way to reduce the
price of labor would be to position the corporation’s machinery in such a way that it requires
the laborers’ attention. Therefore, laborers cannot afford leisure time because machinery
would not function properly and output will be lower without constant surveillance of the
laborers. Thus it would be easier to spot laborers who are slacking and they could be replaced
more quickly.
Hans: You originally had written “capital” where the text now says “machinery.” The design of the machinery is
indeed an important factor in getting more labor out of the workers. This does not make the day longer but makes
it more strenuous. For the capitalist this means he gets more labor at the same rate, i.e., he pays less for each unit
of labor. Instead of “slacking” in the last sentence I think it would be better to say “who cannot keep up.”
Message [447] referenced by [2008fa:882]. Next Message by Tyler is [586].
[468] HTJY: Tactics to reduce the price of labor without having to raise the weekly
payment for workers. Capitalists can implement many different business tactics to reduce
the price of labor without having to raise the weekly payment for workers.
Assuming that the number of working days per week is 5, we have: [the price of labor] =
[the weekly wage] / [the length of working day * 5]. Thus if the capitalist wants to reduce
the price of labor without having to raise weekly payment, she has two options: (i) increase
the length of working day; (ii) make the workers work harder so that the result has the same
effect as increasing the length of working day.
Here are few tactics the capitalist can implement in order to achieve (i):
1. Promote a work ethics/culture so that workers “think” (or more precisely, are manipulated
to think) that working longer than the contracted length of working day is not only the
norm but is a good deed especially when the firm is not doing well. Rewarding the “hard
workers” will be one way to promote such an institution-wide work culture.
2. Whether it is true or not, tell the workers that the factory will have to be closed down
and moved to another country in Asia, Eastern Europe, or South America, unless they are
willing to work longer hours and more days for the same wage, due to the competition with
cheap foreign products produced by cheap foreign labor. Assuming that workers have more
to lose than the capitalist, the bargaining power of the workers will be significantly weaker
than that of the capitalist. Thus the workers are likely to have to work more for the same
wage although the capitalist will anyway move the factory to another country in a near future
if the market forces him to do so.
Here are few tactics the capitalist can implement in order to achieve (ii):
3. Introduce new technology that makes workers work harder. For example, reduce time
interval between certain processes in production lines so that the corresponding workers will
have to work more in a given time.

U of Utah Econ 5080 2007fa 257
4. Monitor workers for shirking. Make the cost of shirkers high enough so that workers
have an incentive for no-shirking.
5. Introduce a grading system that evaluates the work of each and every workers. Base
promotion heavily on the work grade. This will motivate (or more precisely, force) the
workers to work harder.
The list can go on. But I will stop here. Otherwise, I will give the readers an impression
that I will make a good capitalist while the truth is that I won’t. But I will at least have a
potential to become a masterful capitalist if I master Marxism and keep my heart not within
myself.
Message [468] referenced by [2009fa:774]. Next Message by HTJY is [590].
[473] Tomb: How can the price of labor be reduced? The price of labor can change for a
few reasons. This is because the price of labor is particularly important because the capitalist
is more interested in the price of labor and not the wage. Marx gives three examples of a fall
in the price of labor. First scenario is when the working day length is increased but the daily
and weekly wage stays the same. The second scenario involves constant hourly wages and a
lengthening of the work day. In this scenario the price of labor will either remain constant or
possibly fall. The third scenario is especially relevant in today’s society. The price of labor
drops when the quantity of labor provided by the head of the family is augmented by the
labor of the other members of his family.
All of these scenarios have one thing in common which is that they are methods of lowering
the price of labor which are independent of any reduction in the nominal daily or weekly
wage.
Hans: Good summary of Marx’s argument.
Message [473] referenced by [2012fa:1034]. Next Message by Tomb is [587].
Question 653 is 675 in 2007SP, 663 in 2008SP, 667 in 2008fa, 698 in 2009fa, 762 in
2010fa, 784 in 2011fa, and 813 in 2012fa:
Question 653 Is it true that the laborer is only interested in what he receives, i.e., the overall
daily wage income, and not interested in what he gives, i.e., the overall daily labor?
[446] Milton: Workers care about pay but may also care about the daily labor. No it
isn’t true.
There are two ways in which wages can be measured: either by the duration of the labour
(time-wages), or by its product (piece-wages).
Given that time-wages is “daily value of labour-power”/“working day of a given number
of hours” you would say the original question is True, because the laborer receives a day’s
pay regardless of how much he produces. Therefore he doesn’t care what he gives but rather
only what he receives.
Hans: If the worker gets same amount of pay whether the working day is long or short, this does not mean he does
not care how long the working day is. Also you have to make a distinction here: in some situations the length of
the work day makes no difference, for instance if you are on a salary. In other situations, when you are on a time
wage or piece wage, a longer work day will get higher income in the short run, but Marx says that even here, in the
long run these gains will be eroded again, so that the worker has a similar income as before but is stuck with longer
working hours.
258 2007fa Econ 5080 U of Utah
Now looking at piece-wages, which is a pay based upon what he creates. If the laborer
receives wages based on this, then the original question is False. The laborer does care what
he gives, because the more he gives the more he gets paid.
Hans: Piece wages are only a different form of time wages; i.e., if the worker produces too much, then in the
longer run the piece rate will decline, just as with a longer work day the hourly rate declines.
Message [446] referenced by [466]. Next Message by Milton is [466].
[452] Jeff: Means v. Ends. In adding to what Jenna in [2007SP:905] has said in the
Spring of 2007 response, it is true that the laborer is only interested in what he/she receives.
When one goes to work, he does not go intending to produce a commodity that can later be
sold by his employer for a profit. Nor is he go to work to produce a commodity that will
contribute to society. Although the product itself may have such characteristic, it is not for
that reason the individual manufactures such commodity.
A person, however, goes to work to be able to acquire sustenance. He goes in order to
provide for a family or himself. Indeed, a person is disadvantaged because he has to comply
with rules of the economy in order to be able to survive. Society has created a system where
one has to have money in order to be able to survive and the person must work in order to
buy those things needed. It is for this reason, the person works. If the person works in order
to see the end result, then the statement made would be false. For instance, a person may
manufacture a chair, but if it is made to be sat on, then the individual is looking to the final
result. It should also be noted however that the person is not selling the commodity either.
If, howevr, the individual was making a chair to sell for profit, then he is not interested in
the chair itself in as much as he is interested in how much he can get when selling the chair.
It is in this manner that the statement the laborer is more interested in the income received
rather than the final product that is made would be consider true.
Next Message by Jeff is [540].
[453] Caroline: More interest in income than labor. For the most part it is true that a
laborer would be more interested in their daily wage income than their overall daily labor.
Laborers in capitalist companies work primarily for one thing: the ability to provide for
themselves and in some cases for their families as well. Laborers’ daily wage is taken into
account more often than daily labor, because that is what laborers use to maintain their
subsistence. If they do not have a source of daily wage income then they cannot stay afloat
and survive. Capitalists see this as a vulnerability in their laborers and exploit this to keep
workers coming back to their jobs. Basically, from Jenna’s response [2007SP:905] in the
Spring 2007 archives, it “produces a sense of insecurity and dependence” in the laborer.
Laborers are dependent on the capitalists for continued daily wage income. This forces
capitalists’ employees to focus their attention on daily wage income and not their daily labor
as much. However, a component to survival is staying strong and healthy so that they can
work on a consistent basis. In other words, labor-power depends on the daily wage income;
the daily wage income is what feeds the labor-power of the laborer. Therefore, laborers do
have some interest in their overall daily labor. Another point that may make laborers become
interested in their overall daily labor is quality time with their family. They may want to
spend more time with their family than spend it at a capitalist profit-churning company.

U of Utah Econ 5080 2007fa 259
Overall, laborers have the dependency on a capitalist company hanging over their heads.
They are more likely to be interested in their daily wage income because it provides the
means of survival. Laborers are vulnerable to the possibility of not having a way of subsistence
which coerces them to work at capitalist companies for that daily wage income.
Hans: Is quality time with their family the only use of their time they are allowed to prefer to working?
Message [453] referenced by [474] and [632]. Next Message by Caroline is [629].
[456] Hans: Anybody interested in having free time? There was a good discussion
about this question, but nobody said something which seems obvious to me: of course the
laborer cares about it how long the workday is. They rather go home after 7 hours than after
10, this gives them 3 extra hours of free time!
The problem is, if wages are very low, then they cannot afford working “only” 7 hours.
They work longer not because they suddenly take a liking to work, but because they are
desperate. The capitalists benefit from this but they do not want to be too blunt about it.
Instead of admitting: the workers are so desperate that they come in to work longer hours if
we lower the wage, they rather say: oh the workers don’t care about it how long the workday
is. I tried to say something similar in my comments to Madsjim’s [2007SP:922].
Message [456] referenced by [466], [474], [482], and [551]. Next Message by Hans is [474].
[461] Gilligan: I think a lot really depends on the type of labor you are participating in.
A doctor may feel more interested in the product of his labors compared to a person who
works at McDonald’s. Many people do work “overtime”, not because they love what they
do but because they need the money. I find myself in a position where my hours put into
my job do not directly correlate to my pay. I am on a salary so I am at my leisure to leave
at anytime I feel free. The problem is, if I don’t get my project completed by the deal line,
I will be in big trouble. I don’t necessarily love my job but I could do it for hours instead
of 7. I do think that capitalist try to put a positive spin on labor/hours but everybody knows
that people will generally work more not because of the love of the job but for the love of
the money.
Hans: Good point. Our culture is such that you have to say you like your job, that’s why you work so long, you
cannot say it is because of the money. You don’t want to appear greedy. Interesting reversal again that the worker,
who is pressured by the greedy capitalist to perform more and more unpaid labort, feels that they are greedy and
not the capitalist. They should feel bad because they give in to the capitalist’s pressure instead of organizing and
insisting on their rights, not because they are greedy.
[466] Milton: Hans, I am having a little time understanding this one. My original
response in [446], I almost changed my answer at the end because even if you are working
harder because of piece-wages you still only care about the end result. I.e. what you take
home. But was I missing the biggest piece that makes the answer True because I missed
what you said in [456]? I mean I thought about time in the first place because that is exactly
what I would want. More time at home, but I didn’t know how to add it in. Please help me
understand.
Message [466] referenced by [474]. Next Message by Milton is [503].
[472] Gregory: How important is my role? I believe whether or not the laborer is
interested overall in what he or she gives in daily labor directly correlates to the importance
that laborer’s role plays in the company and final output. For example, a dishwasher at a
restaurant is more than likely to be interested in what they are receiving in terms of hours and
hourly wage. In most cases they would be concerned with how many hours they work solely
260 2007fa Econ 5080 U of Utah
to receive a larger paycheck. However, at the other end of the spectrum the general manager
of the restaurant may put in long hours that exceed their pay due to the fact the success of
the restaurant is much more likely a direct reflection of their individual performance. Also,
the long hours might be a deciding factor on whether or not they reach bonus.
Another example that comes to mind would be a salesman who makes a majority of their
salary from commission. In that case I would consider it vital they put forth an effort that
does not run on a time table. Furthermore, in sales or many other positions the more given
in daily labor results in higher output. This ultimately propels the growth of the company
which yields job security.
Overall, I believe employees who work for salary as opposed to hourly wage will more
likely be interested and concerned with what they give in a work day.
Hans: You are touching on an important aspect which has been missing in the whole discussion, but you are not
making it explicit enough. You should have stressed that the work of a general manager or salesman is infinitely
more interesting than that of a dishwasher. Such issues are hardly ever discussed by Marxist intellectuals, because
they don’t want to lose their privileges. They want to be the managers in the socialist society they are promoting,
not the dishwashers. The solution is Albert and Hahnel’s ”balanced job complexes,” according to which every
worker spends part of his time to do rewarding work, and part of his time to do repetitive and boring work.
Message [472] referenced by [2008fa:1131]. Next Message by Gregory is [481].
[474] Hans: Reading between the lines. Milton said in [466] that he didn’t see where to
put into his answer that the worker prefers to have more free time. Perhaps the holdup was
that he didn’t want to speak against the authority of Marx and Economics professor Senior?
Let’s look at the footnote to which question 653 refers. Professor Senior, whom Marx
has castigated before for speaking nonsense, says: “The laborer is principally interested
in the amount of wages.” In order to show how wrong this is, Marx makes that explicit
what Senior elegantly implies by a gaping absence in his sentence, i.e., Marx is reading
Senior “between the lines.” Marx completes Senior’s sentence as follows: “The worker is
principally interested in what he receives, the nominal sum of his wages, not in what he
gives, the quantity of labor!” There is an exclamation point at the end of this sentence, i.e.,
Marx expects the reader to immediately say that this is of course nonsense. Marx says here
basically: the worker trades his labor against wages, and you are telling me that he is only
interested in one half of the transaction, what he gets, and not in the other, what he has to
give for it?
The answer to question 653 is therefore: no, this is not true, Marx thought it was an
obvious absurdity. Now if you want to know why Senior pronounces such an absurdity, go
to my [456]. Senior was even more subtle than the capitalist whom I made up in [456].
Instead of saying: “oh the workers don’t care about it how long the workday is” he said
“The laborer is principally interested in the amount of wages.” And the difficulty of you all
to understand this text shows that even today, 150 years after Marx wrote Capital, we are
not allowed to think that we have a right to our free time, but we must work all we can for
the capitalist. We get a little time off if we spend it for “quality time with the family” [453],
but other than this our time and capability to work belongs to the boss.
Message [474] referenced by [554] and [2008fa:904]. Next Message by Hans is [482].
[476] Gilmour: graded B Is the laborer only interested in what he receives? The
answer to this question is obviously no as pointed out in Hans’ annotations and the fact

U of Utah Econ 5080 2007fa 261
that Marx added an exclamation point at the end of this phrase. “The worker is principally
interested in what he receives, the nominal sum of his wages, not in what he gives, the
quantity of labor!” Marx did not mean this phrase as a matter of fact, rather as an awe of
stupor that someone would think this way. It is true that we all look forward to a paycheck
and we do in fact work for it. However, what we must give in return for that wage is just as
important to our work as the paycheck is to us. More importantly what we give in return for
our wage can greatly determine our own happiness. If one is willing to perform a labor which
they detest for a large wage, they will not be happy with the job for too long and would rather
be willing to change to a job which they enjoy even if it means receiving a lower wage. N. W.
Senior state, “the laborer is principally interested in the amount of wages.” Marx completely
disagrees with this statement as noted above when he added to this phrase by Senior.
What we give in labor is a trade off for what we will receive in wages. However what
we give in return for our wages can greatly outweigh our wages if we are not pleased with
the labor we are performing. I thought once that I wanted to become an investment banker.
When I learned of the 80 hour work week it instantly changed my mind to ever pursuing
that career. When the representatives at Bear Stearns told our small group about the payoffs
and the benefits it still did not sound like the correct career path for me. We asked them how
they rated their job satisfaction on a scale of 1-10 both men said either a 9 or 10. When we
asked them about their personal and family life satisfaction they both quickly responded that
it was either a 2 or 3. To me and I think to Marx this is a perfect example of the absurdity
of Senior’s statement. Neither one of these men were happy with their personal/family time
because their job ate up so much of their week. Even though both men greatly enjoyed what
they gave, they felt that their job required too much of their time. This is a prime example of
why wages are not the main driving factor of why we work. The trade off between what we
give and what we receive needs to be balanced. If a man works 8 hours a day for $100 dollars
a day and then his boss requires him to work 10 hours a day for the same $100 dollars, this
trade off for the worker has become imbalanced. While he may enjoy what he does, he will
not be happy doing more labor for stagnant pay. I think that Marx was implying that we
must agree with both the working conditions and the wages we receive in order for us to
perform the job.
Message [476] referenced by [482]. Next Message by Gilmour is [521].
[477] Melanie: graded B We care about giving. It is absolutely absurd to say that “the
laborer is only interested in what he receives.” As Hans and Gilmour pointed out, Marx
believes the laborer is concerned with both what he receives and what he gives. Laborers
are concerned with what they give in labor hours and the intensity of the labor. Examples of
this can be seen in the real world.
Gilmour gave the example of the two investment bankers who worked 80 hours a week
and had high work satisfaction but low family/personal life satisfaction. However, I think
this example isn’t the best example to illustrate what Marx is saying. Instead, this example
bodes well for N.W. Senior’s argument. Why? Because these two men still worked as
investment bankers for their wage despite what they were giving in terms of time. They
WERE more interested in what they were receiving and not as interested in what they were
giving. Had Gilmour said these men quit their jobs once they realized what they were giving
in terms of time, I think it would have been a good example.
262 2007fa Econ 5080 U of Utah
If laborers were truly only interested in what they receive in daily wage income and not
what they give in time and labor intensity, then all of us would work sun up to sun down for
that high daily wage. It seems that many citizens are concerned with what they give in labor
hours. Proof of this can be seen through the passage of and constant increases in minimum
wage laws. These laws were surely created because of laborer’s interest in what they give in
overall daily labor. Laborers want more leisure time with family, and increasingly laborers
worry about long and harsh work days on their health.
Message [477] referenced by [482]. Next Message by Melanie is [479].
[482] Hans: How to answer it in the exam. The first long paragraph in Gilmour’s [476]
is an excellent answer which would on the exam get a clear A. It gives the “right” answer as
it evolved out of the class discussion, freshly formulated in Gilmour’s own words.
Gilmour’s second long paragraph gives Gilmour’s own new thought about the issues,
which have little relationship with the earlier discussion. This impresses me much less. You
had ample opportunity to do this during the homework assignments; in the exam I want you
to show that you followed the homework discussion and learned from it.
If you wanted to say more than what’s given in Gilmour’s first paragraph, you should
explain how Senior arrived at saying something this absurd, and the related issue why much
of the homework discussion failed to recognize its absurdity but took it “as a matter of fact.”
Answer: Workers are in a bind and if wages fall they are forced to work longer hours in
order to earn enough to feed their families; therefore it seems as if they didn’t care how long
the hours are. (I tried to explain this in [456].) Apparently it also has become a cultural thing
to pretend that one doesn’t care. (This is a new thought but bringing new thoughts which
round out the previous discussion is ok.)
Melanie’s [477] is a response to Gilmour which makes additional points about Gilmour’s
second long paragraph. Her points are alright, but I think she overlooks Gilmore’s main
blunder. Gilmore writes:
what we give in return for our wages can greatly outweigh our wages if we
are not pleased with the labor we are performing.
This is a subjective conception of value, which is an entirely alien element for Marx. If
you say something like this in the exam or in the homework, this will greatly diminish your
grade. By now I am expecting you to be able to differentiate the two.
Please note that the purpose of the present extra credit period is not a continuation of the
homework debate but a contribution to everybody’s exam preparation. Many other questions
in Installment 2 would be much more in need of clarification than question 653 which we
pretty much beat to death. I made this extra-credit opportunity riskless for you because I
want you to help each other learning for the exam. Had Melanie pointed out the subjectivevalue
blunder in Gilmour’s [476], then it would have been justified for her to send yet another
email about question 653. But as it stands, [477] is not terribly helpful for the exam.
Next Message by Hans is [483].
[522] Gilmour: graded A The laborer is interested in not only their wages but also
what they must give in return. The answer to this question is an obvious no as pointed
out in the annotations and the fact that Marx adds to Senior’s statement and finishes it with

U of Utah Econ 5080 2007fa 263
an exclamation point. “The worker is principally interested in what he receives, the nominal
sum of his wages, not in what he gives, the quantity of labor!” Marx did not mean this
statement as a matter of fact, rather as an awe of stupor that someone would really think
this way. What we give in return for our paycheck is just as important to us as our wages.
More importantly, what labor we perform can greatly affect our happiness. As I said in my
original submission to the homework discussion and in the in class exam answer, if one is
willing to perform a labor which they detest for a large wage, they will not be happy with
the job for too long and would rather be willing to change to a job which they enjoy even if
it means receiving a lower wage. N.W. Senior states, “the laborer is principally interested in
the amount of wages.” Marx completely disagrees with this statement as noted above when
he added to this phrase by Senior.
Message [522] referenced by [2008fa:904]. Next Message by Gilmour is [647].
[542] Jeff: In light of interpretations which people have put forth of Marx’s positions, it
can be seen that Marx obviously says it is an absurdity to think that the worker only cares
about what he receives and not what he gives. The basis of this argument rests on the fact
that the worker is concerned with what he puts in. But what does he have to put in to be
able to get his return on the investment of his own labor? In this manner, the worker would
consider whether or not his input is worth what he will get back (i.e. wages). Although
sometimes the worker is not concerned about the final product, he still cares about the labor
that he is inputing in order to get the wage that he is looking for. This is the correct answer
unlike what I had said to be correct on the test.
Next Message by Jeff is [651].
[547] BHales: Do Laborers Care. Of course the laborer is not only interested in what
he receives! While he is concerned with what he receives in terms of wages, it is not the
only factor considered when deciding whether to labor. The laborer is conscious of what
he has to give to get his wage. For example, if a capitalist offers $500 a day for labor, he
will have prospective laborers lining up at the door to receive employment. However, upon
finding out that the labor requires the laborer to hold a 100 lb weight above his head for 8
hours straight; one might reconsider what he is giving rather than receiving before making a
decision to labor.
First Message by BHales is [78].
[551] Marcellus: There are two sides to a coin. Laborers are interested both in what
they receive and give. What they receive are their daily wages, which provide them with
their means of sustenance – a very important necessity for survival.
However, equally if not more important is what laborers give: their labor-power. First,
it is important to note that as laborers give their time, they are not compensated fully for
the value they create – only a portion of that value. Hence, they are exploited, and would
probably prefer to own their own means of production by which their labor would be fully
compensated. Second, as Hans points out in his [456], free time interests workers very much.
It is in this free time where workers intellectually, physically, mentally, and emotionally
enhance themselves, which are both physical and mental means of sustenance as well. While
workers give their labor-power, they deepen the capitalists’ pockets. Besides, it only makes
sense that a person would rather work eight hours per day rather than eighteen. Workers are
both interested in what they receive as well as what they give.
264 2007fa Econ 5080 U of Utah
Hans: This is so obvious that the question arises: why would anybody ever think otherwise?
Next Message by Marcellus is [603].
[554] Dannymangum: Quality of Life. Of course this is not true. However, the capitalist
wants us to think this is true. Let’s imagine for a moment that we receive $300k a year in
salary at our job. Sounds great doesn’t it? Now for the kicker this job requires you to work
18-hour days, seven days a week with absolutely no holidays. Still want it? If you do you’re
nuts. Let’s now imagine that there is another job that pays $90k a year that only requires a
40 hour work week and allows you a month of vacation a year. Even though it pays 210K
less, you’re still going to take it over the other because of your increased quality of life.
Hans really drives this point home in his [474] where he states that: the worker trades his
labor against his wages, and you’re telling me that he is only interested in one half of the
transaction, what he gets, and not the other(?) This statement puts the following equation in
my mind: wages/labor = quality of life. The most wage we can receive for the least amount
of work gives us more time to do what we enjoy.
Next Message by Dannymangum is [555].
[561] Kibosh: graded B– The laborer is essentially interested in the income they receive
from a day’s work. However, the worker must balance work with income. We all have bills
and essential life costs. This is all part of our wage and capitalists know this. We work to
sustain our living abilities with the minimal amont of time spent at work. According to Marx,
we are paid just enough to live our lives at our socio-economic status and factory/business
owners know this.
One thing which I don’t think is fully addressed is the worker’s interest in what he accomplishes.
If the minimal, or below, output is given the worker is in jeopardy of losing his
job and therefore his livelihood. It is a balance of the essential work and leisure.
This question is fairly basic but could diverge into many different categories which would
be a good topic for a term paper but not so much an exam resubmission. So the answer is
Yes.
First Message by Kibosh is [22].
[564] Milton: No it is absurd to think that the laborer is only concerned with what he
receives! If that were true then he wouldn’t care about how long he worked because he
would be getting paid. He wouldn’t care about his free time, he wouldn’t care about what he
did. The laborer definitely cares about what he gives because his happiness, for one might
say that he values a job he likes over one he doesn’t just for the money. Meaning he would
rather work a job he likes for less money than to work a job he dislikes for more.
Hans: If you feel the need to start a sentence with “meaning,” in order to explain your preceding sentence, then
you should work on re-formulating the preceding sentence instead. There was enough time in the exam to do this.
First Message by Milton is [151].
[567] Brian: After reviewing the question and the material, I don’t believe that there is a
straight true or false answer to this question. I think that it is dependent on the individual,
on the job or both. If there exists a situation in which the laborer loves his job but hates the
amount of pay, it could be interpreted that the laborer is more interested in what he gives,
the overall daily labor, than what he receives, the overall daily wage income. If the opposite
situation exists, the laborer hates his job, but loves the amount of pay, it could be interpreted
that the laborer is more interested in what he receives, the overall daily wage income, than

U of Utah Econ 5080 2007fa 265
what he gives, the overall daily wage. As an interpretation of how the world currently works,
I would say that my original answer is correct, that most people labor in a job in which the
laborer takes pleasure in seeing that their labor input in a commodity results in a pleasure to
the consumer of the commodity. A craftsmen takes pleasure in his craft bringing a higher
utility to the consumer, an artisan takes pleasure in the consumer’s appreciation of his art.
Hans: Even if a worker does not like his work, he is still interested in his work, although it is a negative interest.
Not being interested would mean not to care what the work is like and how long the workday is, etc. With this
interpretation of the word “interested,” the answer is “no” even if the worker does not take pleasure in his work.
Marx added an exclamation point to this sentence, i.e., he expected the reader to immediately recognize that it is
false.
Next Message by Brian is [709].
[581] Dyoung: graded A I care about more than just money. The laborer is often times
only interested in what he receives because capitalism blinds him to how much value his
labor creates. He only sees his labor as a standard comparable to other laborers, so they (the
laborers) are more concerned with what they receive, their compensation, because that is
what they see in capitalism.
My original answer only captures part of the answer to the question.
Laborers are working to provide a means of living for themselves and or their families.
A big concern for them is how much compensation they are receiving because they have
needs and want to fulfill. Society blinds them to the amount of value their labor actually
produces, but most laborers are more concerned with just getting by and having food on
the table more than they are concerned with the amount of value they produce versus their
compensation. In the homework answers to this question, several other valid points were
brought up. Since a laborer is “judged” by his employers on what he produces, and that
affects his compensation, a laborer is concerned with both, making the best product in order
to receive the best compensation. Employees also care about working conditions, hours that
they work, how much free time they have, and the benefits. I know for me those kind of
things are weighed along with compensation when finding a job. The answer to the question
is no, it is not true that laborers are only concerned with compensation, what about free time,
and what about how much we have to do to earn that compensation. We want to make money
and are willing to work for it, but not at the expense of everything else we enjoy. We are not
happy unless we have more of ourselves left over after giving what we need to at work. I am
not happy when my job requires some overtime because I know that I then miss out on a lot
of activities I could participate in with my wife and kids.
Next Message by Dyoung is [685].
[617] Ashley: Laborer’s Interest. No, it is not true that the laborer is only interested
in what he receives. The laborer is interested in both what he receives and what he gives
because he would much rather spend less hours of his day making a higher wage. However,
because his wages aren’t high, they need to work longer hours, not because he likes to work,
but because they have to. Capitalists like to say that the workers don’t care how long the
workday is, but that isn’t so. The workers just don’t have a choice because they can’t afford
it.
Next Message by Ashley is [651].
[627] Ben: graded A I do not think this is true. There are things that go into play with this
question. One, whether or not the laborer is paid by what he produces. I have a job where I
266 2007fa Econ 5080 U of Utah
get paid by the piece and I try and get in and out of work as fast as possible. If I was to get
paid by salary then I would probably take my sweet time getting to work and leaving early
and probably doing just enough not to get fired.
Also, the laborer needs to be aware of what the capitalist is making off of his laborers’
production and the market for his production capabilities. If the capitalist is making excess
profits off of the laborer and the laborer knows it. The laborer has three choices here. Negotiate
for himself, organize with the co-workers or market, or go work for someone else, for
a better wage.
These two reasons are why the laborer is interested in what he gives.
Hans: According to Marx, it is a basic law in capitalism that wages are just a reimbursement of the worker’s cost
of living. Such economic laws cannot be invalidated just by talking to your boss.
Next Message by Ben is [651].
[630] Jason: In regards to this question Jenna in her submission [2007SP:905] states
that for the laborer it is all about income. The laborer is not concerned about what his/her
contributions are for the day or week of work all he/she wants is to increase their overall
income. Jenna says several things in her submission that I agree with as far as increasing
the overall income. One of those ways is to increase the price of labor, in other words
being paid more. However with all of this being said it is the capitalist that is calling the
shots, because it is he/she that owns or oversees the means of production which makes the
laborer dependent upon the capitalist and how much he/she is willing to pay to the laborer.
In essence there is a constant battle that goes on to which there is no real solution because
the capitalist wants to obtain the greatest profit while the laborer whats to increase his/her
income.
Next Message by Jason is [687].
[632] Caroline: Weaklings. It is mostly true that the laborer is more interested in their
daily wage income than their overall daily labor. Daily wage income is what laborers get
to see; it is tangible to them. Laborers use their daily wage income to maintain their subsistence.
If they do not have a daily wage income, then they will not be able to survive.
Capitalists capitalize on this weakness and exploit their laborers. Laborers are basically dependent
on capitalists and therefore this coerces them to return to work for their daily wage
income.
In my homework response [453], it is mentioned that labor power is somewhat contingent
upon daily wage income. The reason for this is that the wage income provides subsistence
which provides laborers nourishment to keep them healthy so that they can continue to work.
Ultimately, laborers are more likely to be interested in their daily wage income because
it provides a means of survival.
Hans: You are bringing an interesting additional argument nobody else has said so far: the wage is much more
easily to see and to talk about than the pain of hard work and long hours, therefore it may seem more real to them.
Your in-class submission had many interesting details which you probably thought were too small points to
type back in. They are not. They would have made a good addition to the archives.
If you would find time to make another resubmission where you just type in your in-class answer, I would
appreciate it.
Next Message by Caroline is [717].

U of Utah Econ 5080 2007fa 267
[634] Bosox: It is true that the laborer is only interested in what they receive. The reason
for this is the laborer needs to pay the bills and place food on the table for the family.
The laborer will work longer hours if the wages are lower. This does not mean they enjoy
working or even enjoy their job but it is only a means to provide. Desperate times calls for
desperate measures.
Hans: You are saying: although the laborer cares, he or she has no other choice but to act as if they didn’t care.
Next Message by Bosox is [647].
[650] Gregory: I would say that whether or not the laborer is interested in what he/she
gives in overall daily labor depends on the importance of that laborer’s role in relation to the
overall function of the company. For example, a dishwasher at a restaurant is more likely
to only be concerned with the amount of hours they work and their wage in order to receive
a larger paycheck. However, the General Manager of the same restaurant will most likely
put in hours that far exceed their wage. This is due to the fact that the overall success of
the restaurant is far more a direct reflection of their individual performance. I also include
the example of a salesman working for a manufacturing company. The more effort and time
given in order to receive commission results in more sales, business, and growth for the
company. This results in job security and allows time and daily wage to be removed from
the equation.
Hans: Managers also have more interesting work than dishwashers.
Next Message by Gregory is [656].
[657] Chased: intensity. The laborer is only interested in what he gives to the firm if it is
beneficial to him. If working harder/more intensely will not benefit the worker then he has
no reason to work harder. If the worker knows he will gain no more if he works as hard as he
can than if he were to sit on a milk crate, he will sit on a milk crate. However, he does know
that his wage will suffer if he does not produce. Therefore, his interest extends to achieving
the highest wage possible for his efforts.
Hans: Your definition of “interested” seems to be that only a person who is willing to do a certain thing is interested
in that thing. The word “interest” is often colloquially taken this way. But its original meaning is more like “care
about.” The person sitting on a milk crate cares about intensity of labor, that’s why he minimizes this intensity for
himself if he can get away with it.
I can only say here to everybody: read more. There is a certain laxness in modern spoken language. Only
someone who reads can see that modern spoken language is just a subset of what can be expressed in English.
Message [657] referenced by [2009fa:782]. Next Message by Chased is [658].
Question 657 is 679 in 2007SP, 702 in 2009fa, 766 in 2010fa, 790 in 2011fa, and 820 in
2012fa:
Question 657 In Chapter Twenty, Marx mentions two abuses connected with the wage
which he thought would be abolished with the legal limitation of the working-day but which
weren’t. Which are those?
[460] Ricky: Abuses of wages. Chapter 20 of Capital deals with time-wages. For Marx,
wages are not determined by fixed economic law, but rather are manipulated by the capitalist
to maximize his/her profits. Theses “abuses” occur because, given the derivation of the
average price of labor put forth by Marx, the daily wage remains constant despite changes
in the price of labor. One scenario is which this could take place is if the average working
day increases. The price of labor in this case would decline while the daily wage remains
268 2007fa Econ 5080 U of Utah
unchanged. Marx may have believed that a legally fixed limitation of working hours could
resolve the problem. Instead, what resulted was the formation of the hourly-wage which, as
explained by KT in [2007SP:919], allows the capitalist to further squeeze his/her workers
for additional labor. The second abuse may come from the dichotomy of working hours into
“normal-time” and “overtime”. As explained in the Annotations, this abuse manifests itself
in two forms. First, it undermines the normalization of the working-day. Secondly, overtime
depresses the value of work in normal-time and creates a dependence of the worker on overtime
pay.
Hans: Ok.
Next Message by Ricky is [543].
Question 658 is 680 in 2007SP, 668 in 2008SP, 672 in 2008fa, 703 in 2009fa, 767 in
2010fa, 791 in 2011fa, and 821 in 2012fa:
Question 658 How does Marx argue that longer hours are associated with a lower overall
daily wage?
[463] Brian: Simple Mathematics. Marx employs simple mathematics in order to argue
that longer hours are associated with a lower overrall daily wage. The price of labor is
determined by the equation: daily value of labor-power divided by the working day of a
given number of hours. As the number of hours (denominator) increases, the daily value of
labor-power will increase as well but not at the same rate. This increase at a diminishing
rate occurs because as the length (or number) of hours grows, the mind and/or body of the
laborer becomes exhausted and worn, this exhaustion and wear will cause the value of the
labor-power to drop. For example, a laborer inputs 8 hours in the working day and total
value of labor-power is 100, the price of labor is 100/8 = 12.5, if the laborer increases his
labor to 12 hours, and the value-labor increases to 136, the price of labor is 136/12 = 11.33.
Accounting for the exhaustion and wear, we can see that while both the daily value of laborpower
and the working day of a given number of hours increase, the price of labor will
decrease at an increasing rate.
Message [463] referenced by [487]. Next Message by Brian is [532].
[487] Hans: Right formula wrong justification. Brian’s [463] says that wages fall if the
working day gets longer because the longer workday makes the workers more exhausted,
which affects the quality of their labor.
This is the wrong explanation! Brian assumes that the worker gets paid according to the
quality of their labor, although Marx vehemently argues against this. Marx says something
quite different: the worker gets paid enough so that he or she can pay their bills and show up
for work on the next day. The traditional consumption bundle which the workers are allowed
to get depends on the nation, on the history of past class struggles etc., but Marx takes them
as a given in his discussion of the economic market mechanisms. Wages are tied to the hours
of work only as an incentive to induce the workers to work. That’s how Marx arrives at the
formula that the hourly wage is the pre-determined daily wage divided by the hours worked
during the day.
Next Message by Hans is [488].
Question 659 is 669 in 2008SP:

U of Utah Econ 5080 2007fa 269
Question 659 Why are wages low in industries where the working-day is long?
[470] Bosox: “The competition thus created between the workers allows the capitalist
to force down the price of labor, while the fall in the price of labor allows him, on the
other hand, to force up the hours of work still further.” The way that I perceive this is like
a monopoly situation, well at least this is how I can explain it. With a monopoly I am able
to drive up the prices because there is nobody or no other company that I am competing
against, whereas with low wages in longer working days the competition has now changed
from a company stand to an individual one. I being the worker will work the longer days
because I know that if I don’t I will lose my job and will be replaced by somebody else, I
will compete against myself to do at least 1.5 time more than I normally would do maybe
even twice the amount, but this is in a market place that has a surplus of labor. “A part of
the price of the commodity consists of the price of labor. The unpaid part of the price of
labor does not need to be reckoned as part of the price of the commodity. It may be given to
the buyer as a present.” 689/o I don’t think that the buyer will be given as a present but the
employers, they are the ones setting the wage and with this they are setting the wages low
and making the employee work the longer hours and with this the excess monetary value
will go towards the employer. In my mind this is the same concept as globalization were a
major company will set up overseas and pay wages that are lower than the wages that they
would have paid had they setup in theor country. With this the owners are able to make more
money and the employee is working longer hours and not making a higher wage. So with
this it is not a matter of how long you are willing to work but how willing are you to work.
Hans: Your Marx quote with the present is very relevant. Low wages are built into the price structure, which
makes it even more difficult for the workers to get a fair pay. In the 1970s, when I worked on the Assembly line for
Chrysler, the UAW supported the United Farm Workers, but many workers I talked to did not support this because
they did not want the food prices to go up. And the Walmart goers today, will they support the Chinese workers
when they try to raise their wages?
Next Message by Bosox is [507].
[471] Chased: Simple. I disagree with Bosox. It is not due to competitiveness in the
workplace but competitiveness outside of work. It is about total daily wages. In the race to
keep up with the neighbors it is imperative that you make enough money to provide for the
family and have the toys they have. This will push workers regardless of wage to work longer
hours if they need more “stuff”. Those occupations that make a low hourly or even salaried
wage will make up for it by working longer hours. This need stems from the capitalist’s
need for workers to work for lower wages. In order to survive and earn a decent living it is
necessary to work longer hours at the lower wage.
Hans: You are explaining why low wages lead to long hours, while the question asked why long hours lead to
low wages. For this second part of the question, it is indeed the competition on the workplace. Marx says that the
workers who are willing to work longer compete against themselves and therefore allow the capitalists to lower the
hourly wage.
Next Message by Chased is [489].
Question 661 is 683 in 2007SP, 671 in 2008SP, 675 in 2008fa, 706 in 2009fa, 770 in
2010fa, 789 in 2011fa, 819 in 2012fa, and 770 in Answer:
Question 661 What is the difference between surplus labor time and overtime?
270 2007fa Econ 5080 U of Utah
[465] Corey: graded B+ Overtime or paid surplus labor? Marx states that the capitalists
do not recognize surplus labor time (Annotations p. 495), which is the unpaid labor given
within a normal work day after the employee has earned his day’s pay. The capitalist believes
this is included in the normal work day, which is paid for in a day’s wages. Overtime,
however is the extension of the normal work day. Therefore the capitalist offers additional
pay for this extension beyond the limits of the normal work day. This “overtime” is paid
for beyond a day’s wage. In this overtime also exists surplus labor, or labor that is not paid
for. So surplus labor is unpaid labor and overtime is additional labor that is paid for by the
capitalist.
Hans: Surplus labor is part of the normal work day. The employers think there is no surplus-labor because they
think that all labor is paid labor. They say for instance: “I pay $20 for each hour, there is no unpaid labor.” Marx
says: each hour produces a value of $40; therefore if the capitalist pays $20 of it, then half of each hour is surplus
labor.
Message [465] referenced by [491], [493], and [580]. Next Message by Corey is [479].
[491] Nogi: overtime and surplus labour differences. The difference between surpluslabor
time and overtime is that the worker is paid more for working overtime. Once the
worker gets past the designated amount of hours required of him for necessary labor time
of the day, he gets paid more to continue working build up absolute surplus-value. Surpluslabor
time is just a prolonging of the work day and the worker is paid no more than his usual
wage and does not have the option to not work where overtime labor usually has that option
Hans: Your criterion “the worker is getting paid more for working overtime than for working surplus-labor time”
is not very informative, since the worker is getting paid nothing at all for the surplus-labor time. It also makes
overtime look too good; you should have said, as Corey did in [465], that overtime, despite the overtime premium,
still contains surplus-labor time, i.e., unpaid labor.
Message [491] referenced by [493]. Next Message by Nogi is [503].
[493] Hans: Apples and Oranges. This simple-minded question is amazingly difficult to
answer. All three answers in the archives, [465], [491], and [2007SP:921], are respectable
efforts. The difficulty lies in the fact that overtime labor is a surface category, while surpluslabor
is not.
Overtime labor is labor in excess of the usual working-day. It usually gets higher pay.
This is clearly visible to both capitalists and workers.
Surplus-labor is invisible. Since the worker’s wage is less than the value produced in
that time, every hour, or every minute or second, contains surplus-labor, namely, labor for
which the worker effectively does not get paid. Overtime labor also contains surplus-labor,
although a little less than the straight-time hours (is that a word?), due to the overtime premium.
Message [493] referenced by [580], [589], [2010fa:773], and [2012fa:1082]. Next Message by Hans is [500].
[580] Fred: Surplus labor time vs overtime. To understand surplus labor time consider
the A-B-C model representing total labor time. The A-B part represents the reproduction
cost of labor or necessary labor time, which is all the capitalist is going to pay labor, and
which is the minimum the worker must have to pay bills and subsist at a certain standard of
living, but at a low enough rate to ensure a return to work the next day. The B-C part is where
the worker provides labor time beyond the A-B necessary labor time, is called surplus labor
time and is not obvious or on the surface. Capitalists will only pay labor their reproduction

U of Utah Econ 5080 2007fa 271
cost, the A-B or necessary labor time. Any more than that eats into their profits. Any less
and they have no labor, labor would not return to work.
If this A-B part is $800, and labor produces $40 in one hour, labor would need to work
20 hours. Capital will never pay this $40 per hour to labor because there would be no profit
for them. So labor must work more hours. If labor works 40 hours at $20/hr instead of only
20 hours at $40/hr, they are still getting their $800 but now working twice as long to get it.
So, the first 20 hours of work they produce a value equal to their necessary living expenses,
the A-B part, but are only paid half of that value. This means that to get their full $800
they must work the other 20 hours or B-C part that becomes the surplus labor or profit for
the capitalist. Effectively 20 hours of the 40-hour week is going unpaid relative to the value
being produced by labor. So, if labor produces $40 per hour and is only paid $20 per hour,
than 1/2 of each hour is surplus labor time. (Response from Hans to Corey’s [465]). Labor,
however, thinks they are being paid in full for their labor time, unaware of this 20 hour per
week exploitation, and the capitalists treat labor as if they are being paid in full. It is this
exploitation or surplus labor that provides the capitalist with their profits. This is hidden in
the arrangement. It is not obvious or on the surface. Surplus labor time is invisible. Hans
[493].
Overtime is labor that is in addition to the ordinary working day. Overtime is on the
surface since the higher premium pay per hour is obvious both to labor as well as to the
capitalist. There is still a surplus value, just not as much due to the premium on wage being
paid with the overtime (Hans [493]). The worker still produces $40 for every hour worked,
but now instead of being paid $20 with $20 going to profit, they are being paid maybe $25
with $15 going to profit. The profit or surplus labor time is still present with overtime, just
at a smaller magnitude.
Next Message by Fred is [582].
[589] MichaelM: overtime vs surplus labor time. Surplus labor time is the amount
of labor done by a worker after he has worked long enough to cover the cost he costs the
capitalist. Like Hans mentions in [493], this type of labor is invisible and is basically labor
for which the worker is not paid. Because overtime generally costs the capitalist more than
the usual time labored by the worker, there is still surplus labor to be had by the capitalist
during overtime work, but the amount is not as high as during regular work hours (before
overtime kicks in).
Next Message by MichaelM is [591].
[606] Scott: The difference between surplus labor time and overtime is that surplus labor
is created in the normal, in our case, 8 hour work day. The 8 hour workday is split into two
parts, the first being where the laborer performs his necessary labor, producing the value that
is earned and kept by the laborer. The second part of the day is surplus labor, that which is
earned but not kept by the laborer but rather the owners of the means of production.
Overtime is work that is done after the 8 hour day, or past the socially regulated normal
workday, and the worker is paid a different amount for the work he is producing at that point,
in our case today it is time and a half or some other variance that is socially enforced.
Next Message by Scott is [609].
272 2007fa Econ 5080 U of Utah
[618] Walmart: everpresent surplus labor time. Overtime is generally extra hours of
work at an increased wage. The problem with surplus labor time is that it’s invisible to the
worker and completely non-existent in capitalists’ eyes. It is contained in the worker’s every
day, hour, and minute worked. If the worker gets paid $10 an hour while producing $20 in
that hour, then a half of every hour that is worked is surplus labor. Overtime also contains
surpus labor time, though the difference seems less profound due to the extra money made.
Hans: The difference is a smaller number (quantitatively less). If you say “less profound” the reader expects a
qualitative difference.
2007fa archive was used, reading the answers made me restructure my answer and focus
on simplicity, answering the question, and providing an example, as opposed to answering
it on the test with good/bad comparison and tying it in with other related concepts (i.e.
necessary labor).
Next Message by Walmart is [622].
[621] Amy: Surplus labor time vs. Overtime. I do not think that I explained enough
in my in-class answer. In surplus labor time the employer is paying a daily wage to the
employee. The employer sees is as he is paying them for every hour they work and there is
no surplus. But let’s say that the employee makes $15/hr, and can produce $30/hr worth of
product. The surplus labor time is the extra $15/hr of labor that he supplies that he is not
getting paid for. Surplus labor is hidden in the average work day.
Overtime is an extra wage that is paid beyond the daily wage when an employee works
longer than the average working day. In overtime the employer sees that he is paying his
employee more for more work and the employee knows that he is getting paid more. Even
though the employee is making more money he is still supplying surplus labor time during
his overtime, just not as much.
Next Message by Amy is [651].
[625] Melissa: graded A The difference between surplus labor and overtime is that surplus
labor is embedded in the working day. It is labor that is unpaid by the capitalist. Within
the normal scheduled shift the laborer works, there is time that the laborer is producing
commodities worth more than what the capitalist is paying him, this is where the surplus
labor comes in. For example the laborer works for a $10 an hour wage but is producing $20
an hour worth of commodities; you could safely say that the laborer is not getting paid for
1/2 of the time he is at work. If the capitalist buys a new machine that cuts the run time in
half you could have a laborer working for $10/hr. but producing $40/hr. in commodities now
increasing the amount of surplus labor you have in a given day without adjusting the length
of the working day. Overtime on the other hand does increase the working day as well as the
pay the laborer receives for the additional hours worked. Most overtime is paid at time and
1/2 so the incentive to earn more money per hour is there, however, this does not mean that
surplus labor is gone. Surplus labor still exists when a laborer is working overtime.
Hans: This example with the machine is confusing. The price will stay the same only at the beginning, but with
the generalization of the more efficient production method, prices will fall. Value is created only by labor, not by
machines.
Next Message by Melissa is [706].

U of Utah Econ 5080 2007fa 273
[628] JohnGalt: I work hard for the money. The distinction between surplus labor time
and overtime is startlingly simple. In fact, it seems too obvious. But what underlies the distinction
is transparency and openness in the labor process that is a contractual arrangement
between labor and capitalist.
Overtime is a process that is transparent to both the worker and the employer. Because
of this, laborers can and do demand higher wages for the additional hours they work on top
of the regular working day. The process is completed by mutual agreement between the
two parties participating in the labor contract. Both groups have at least a semblance of
symmetry of information that allows them to make rational decisions on overtime and both
parties come to the conclusion that they will benefit from the overtime worked. The laborer
will benefit more from the extra money earned than from the leisure time he gives up by
working. The capitalist will benefit from extra production that creates additional profits for
him. These profits must be substantial enough to offset the increased wage rates.
Surplus labor time, however, is opaque. This is vital to the capitalist system of production
because it allows for the continued exploitation of laborers. This exploitation is essential
for capitalism to function, because the system is based on false assumptions. For instance,
laborers are led to believe that they are free, when they are not. In fact, laborers are governed
by the market and they have only one commodity which they can sell, their labor-power.
The surplus labor time, then, is the time the laborer works for the capitalist rather than
solely as compensation for his labor expended. The time the laborer works for himself
goes to pay his wages. That is, the absolute minimum necessary to sustain the laborer
mentally and physically so that he can return to work the next day. This is the critical point
of exploitation.
Surplus labor time is the time worked for the capitalists’ profit. This time in added to
the working day. Therein lies the greatest myth that underlies the foundation of capitalist
society. It indicates that laborers receive compensation that is requisite for how much they
produce. This is not so. Capitalists must always seek to increase the amount of the working
day spent in surplus labor. They do this by keeping wages low and utilizing technology to
increase productivity and reduce labor costs. This process continues on a global scale today
because of capital mobility and a lack of information.
Hans: What you say in the last paragraph is a more complex process than meets the eye. Capitalists try to escape
the bond between prices and labor-time by increased efficiency, trying to sell a good which contains less labor-time
at the same price. But after a while the market catches up with them, prices fall, and their extra surplus-value
vanishes. Yet, if this efficiency decreased the labor time contained in the wage goods, all capitalist profit anyway
by an increase of their relative surplus-value.
Next Message by JohnGalt is [631].
Question 670 is 691 in 2007SP, 680 in 2008SP, 779 in 2010fa, and 834 in 2012fa:
Question 670 Which advantages does the form of piece-wages have for the capitalists?
What does it mean for the relation between the workers?
[458] Chris: The harder I work the richer I become? I agree with Oola [2007SP:896]
that piece wages are good for a capitalist but bad for the worker. Piece wages are paid out to
the workers on the basis of how much they produce for the company, each worker receives
274 2007fa Econ 5080 U of Utah
their pay based on their output for the day. In this style of pay it might feel like the worker
indeed has a little control over how much they make. The advantages to the capitalists for
this type of wage is therefore that the worker will increase his productivity to increase his
or her wage. When the worker is working during the day it is advantageous to the capitalist
because productivity is high and when the worker is not working it is still advantageous
because the worker is not being paid. Another advantage I could see with the piece wage
is that the capitalists would not have to monitor the workers as often because the workers
have to produce in order to be paid, it would not be in their best interest to not produce at
work. Piece wages can bring forth competition between workers because those that produce
the most would be paid the most and this would not be conducive for a lot of cooperation
or camaraderie. When workers become more productive than others this might bring forth
changes in the levels of output that must be met in order to receive wages. A capitalist is
always going to be a capitalist and slower workers, although they are only being paid for
what they produce, take up space on the floor or on machines, and this might lead to slower
workers being let go.
Hans: And the piece wage documents exactly who the slower workers are.
Next Message by Chris is [462].
Question 673 is 694 in 2007SP, 682 in 2008SP, and 781 in 2010fa:
Question 673 Why is piece wage the wage form most appropriate for capitalism?
[464] Jason: In a capitalist society a piece wage is by far the most appropriate payment
method by a capitalist. While reading through the Annotations the point is made very clear
that if an employee is being paid by the amount of pieces he or she produces, he or she is
being paid a flat rate per piece produced. If a worker produces a small quantity of items he
or she will not receive very much compensation due to the flat rate per piece. However if an
employee produces many items in a short amount of time of course he or she will be earning
more just because of the sheer number produced. At the same time the capitalist is paying
more but is also earning more and more profit faster thus making the piece method the best
formula for a capitalist.
Hans: There is an additional point: if the workers can make a better income due to piece wages, then the piece
rate will be lowered over time. Every experienced worker knows that, and this dovetails exactly with Marx’s wage
theory, according to which the total daily or weekly wage depends on the worker’s cost of living and not on how
much the worker works.
Next Message by Jason is [626].
Question 674 is 695 in 2007SP, 683 in 2008SP, 687 in 2008fa, 718 in 2009fa, and 807 in
2011fa:
Question 674 How do piece-wages change if productivity rises?
[455] Melissa: graded A– More work, less money. To help explain the change in piecewages
as productivity increases we need to have a clear picture as to what piece-wages
are. Piece-wages pay the laborer by the piece produced as opposed to the time the laborer
worked. Piece-wages are used to get the most work out of the laborer as possible. While
doing this it appears to the laborer that the capitalist is purchasing the product and not the
laborer’s labor power. Now we can see that if the wage rate decreases the laborers will need
to increase the intensity of work or lengthen the working day to be able to make the same

U of Utah Econ 5080 2007fa 275
wage, thus driving productivity up. As you can imagine, laborers will fight against this pay
cut for many different reasons. One of these reasons being that it is apparent to the laborer
that they are making less money for producing more, while the price the capitalist is charging
has not decreased. This makes it obvious to the laborer that their hard work is only adding
to the pockets of the capitalists and has no benefit to them.
Hans: I’d like you to distinguish better between increases in intensity of labor or other attacks on the labor cost,
and genuine increases in productivity due to better technology.
Next Message by Melissa is [530].
Question 675 is 696 in 2007SP, 684 in 2008SP, 688 in 2008fa, 719 in 2009fa, 783 in
2010fa, 808 in 2011fa, and 838 in 2012fa:
Question 675 If the capitalists make higher profits due to technical innovation, should the
workers get part of this?
[467] Kibosh: content A form 95% SHOULD??? I found this question interesting in
the fact that the word “should” was used. The normative use of the word denotes a feeling
of, almost, moral obligation. However, we realize, in capitalism there typically isn’t that
compassion to an employee.
I don’t see how the capitalist’s use of a new technology benefits the regular employee,
in fact I would find the regular employee to be neglected. This new technology will often
require less skills and the employee’s pay will go down due to the decrease of skill required
to produce the skill. Oftentimes in today’s world we have developed profit sharing and other
incentives to boost productivity.
This brings a level of indirect piece wage to a company, allowing production workers to
attach themselves monetarily to the task at hand.
So the answer I believe is profits of capitalists should be shared with employees to increase
productivity. The employees must be trained on the technology, which weeds out
many unfamiliar workers. Although this monetary raise should be a portion of the marginal
increase due to the technology because the cost of the capital while also bringing to hand the
added risk of using that technological good (not knowing the reliability and overall increase
in output) until actual use.
Message [467] referenced by [2012fa:1341]. Next Message by Kibosh is [481].
[469] Ashley: No piece from pie. No, workers should not get paid for the higher profit
that capitalists get through technical innovation unless it was partly through their direct labor.
Just because the capitalists get paid higher profits, it doesn’t mean the workers get paid more.
Technical innovations is usually always due to an advanced computer or electronical device,
not through direct human labor. For example, if a certain technical innovation requires
more labor per worker, then each worker should absolutely get paid more because of the
innovation. However, the technical innovation was discovered/invented by human labor, but
does not require any effort of human labor thereafter, each worker should not be paid more
just by the advance in technical innovation. They should not get a piece of that pie.
Chris: I do not agree with this assessment by Ashley. With technical innovation it seems logical that higher
productivity will follow. Higher productivity will lead to more wealth and this should not go only to the capitalist.
The workers are a part of the whole process and therefore they should share in higher profits. The question should
not be “should they” but rather “will they.” The last part of this is a little confusing also. You say that the technical
276 2007fa Econ 5080 U of Utah
innovation does not require any effort of human labor thereafter. Technical innovation is not necessarily that which
completely eliminates the worker, it might be something simple that makes the worker able to complete a task in
half the time and thus producing more commoditities for the capitalist.
Hans: What you say, Ashley, is based on the mainstream economics view which says that machines create value.
What would a Marxist say who believes all value, including the capitalist profits, comes from labor?
Message [469] referenced by [2010fa:740]. Next Message by Ashley is [616].
Question 676 is 638 in 2004fa, 587 in 2005fa, 697 in 2007SP, 720 in 2009fa, and 785 in
2010fa:
Question 676 Marx writes: “the labor process, in the capitalist mode of production, appears
only as a means for the process of valorization.” Why does he use the word “appears”
here, and why did he put an “only” into this sentence? Shouldn’t he have said “the labor
process is means for the process of valorization”?
[568] Corey: graded A The truth is not always as it “appears” Marx here is showing yet
another example of how capitalism obscures the truth from laborers. If you take the words
“appears” and “only” out of the sentence it would change the sentence to say that labor
process is the process of adding value. Although this may be true in a universal societal level,
Marx here is making a statement on capitalism. As Hans states in his notes to [2004fa:492]:
The meaning of the sentence Marx uses here is “the social relations in capitalism are such
that the labor process, which is an eternal necessity for any society, is only allowed to take
place if it makes money for the capitalists.” Therefore under capitalism the labor process
is only allowed to take place if you are able to draw the surplus value from the product
of labor as profit for the capitalist. Removing either word from the sentence removes this
meaning and understanding of the unique relationship the labor process has under capitalism.
Furthermore it would hide the truth that Marx is getting at that the labor process is socially
necessary but yet the capitalists are the only class benefiting from it occurring.
Hans: In chapter Tenty-Three, 718:1/o, Marx says that individual consumption is unproductive for the laborers.
This is simular to what you say in your last sentence, that the workers do not benefit from production.
Message [568] referenced by [582]. Next Message by Corey is [679].
[582] Fred: What Lurks Beneath. By using the words “appears” and “only” instead
of saying “the labor process is means . . . ”, Marx is once again pointing to the complete
and utter profit motivation of capitalism, (they are not giving jobs to be benevolent, or even
because it is socially necessary). He is making a statement about the invisible source of
surplus value or profits that is not obvious and lurks beneath the surface not wanting to be
discovered for fear of labor coming to an understanding of their exploitation and separation
from the means of production, which could lead to disputes, disruption, and even the possible
demise of the profit making system itself.
In capitalism value comes uniquely from the labor process. The word “only” is used here
to indicate this unique source of valorization or creation of surplus value, the source of profit
[2004fa:492].
The word “appears” means more than meets the eye. It refers to a social form underlying
the labor process that is necessary for social survival ([2007SP:1112], response by Hans).
The word “appears” indicates something deeper; something below the surface is going on.
Part of that something deeper is valorization or the creation of surplus value, the source of

U of Utah Econ 5080 2007fa 277
capitalist profits. Also, in a capitalist system, labor is only allowed if it makes money for the
capitalist [2004fa:492]. So although it “appears” that capitalism is allowing labor because it
is a social necessity for survival, what slithers beneath the surface is that capitalism does not
allow labor because it is necessary for society to survive, but rather valorization or the means
of profits is the true and overriding motive. Corey’s [568] makes a good point when he says
that “the labor process is socially necessary but yet it is only the capitalist class benefiting
from it”, and comments from Hans to that statement about individual consumption being
unproductive for the laborers, and workers not benefiting from production. Now we can
finally see how it is that we can have so much poverty amidst so much plenty.
Message [582] referenced by [2009fa:964] and [2010fa:935]. Next Message by Fred is [601].
[602] Hans: Doing something holy for profane reasons. I’d like to give two other
examples first, before addressing the situation in question 676.
(1) It is very important for humans that we eat: this gives us the energy needed to live and
the materials for our metabolism. But if you ask why any specific human beings are eating,
you will see that their motivation often has little to do with these basic benefits. Instead, they
eat because they are hungry and they eat what tastes good (even if they know it is not very
nutritious).
(2) This is also true for procreation. People form families and have children not because
they know that society must continue, but because they fall in love and enjoy sex.
In these situations our instincts get us to do things which are generally good for us and
others. The pleasure which we have eating could be considered the form in which the necessity
to eat imposes itself on us. Marx might say here: the need to maintain a metabolism
“appears” as the feeling of hunger and the good taste of the food.
Similarly one can say that production is a very important activity in every society. One
might even say, production is the most important thing we do as a society. But in capitalism,
production is not done because it is such an important and also powerful and empowering
social activity, but it is “only” done in order to make a buck for the capitalist. The implications
of this “only” were very clear in the Great Depression: once profits could no longer be
made, production ceased although the need for the products continued. Unused resources
and productive capacity, unemployed workers, and unmet needs existed side by side because
the thread that would stitch them all together, profits, was broken.
This is, as I read Marx, what he means when he says that in capitalism, production appears
only as a means for making profit. By “appear” Marx means here the social form, a surface
mediation which induces the individuals to do the things society needs.
Message [602] referenced by [2009fa:964] and [2010fa:935]. Next Message by Hans is [677].
Exam Question 677 is 559 in 2002fa, 698 in 2007SP, 788 in 2010fa, 814 in 2011fa, and
844 in 2012fa:
Exam Question 677 How is the capitalist motivated to see to it that the social conditions
of reproduction are met?
[592] Tomb: why capitalists want the social conditions of reproduction to be met.
A capitalist wants the social conditions of production to be met because this ensures his
278 2007fa Econ 5080 U of Utah
profit. In capitalism, to sustain long term production there must not only be production,
but reproduction. Meaning the raw materials and means of production must be replaced in
order to sustain production. Societal conditions ensure that this happens. For example, there
must always be workers willing to sell their labor to produce products. The labor supply is
consistent because there is use value in other goods in society which causes the workers to
want to work. As long as the social conditions of reproduction are met profits are going to
be sustained long term.
Hans: You are saying, rightly, that the capitalists benefit from the continuance of the capitalist system. But this
alone does not mean that they will see to it, i.e., take actions to ensure that the system continues. The free-rider
problem is important here. Are there incentives built into the capitalist system which induce the capitalists to do the
various things necessary that the system of production can continue tomorrow? Marx says, yes there are. Whenever
a capitalist cares for the longevity of his own firm, he also does things necessary so that the social production process
can continue.
Next Message by Tomb is [595].
Question 679 is 561 in 2002fa, 584 in 2003fa, 590 in 2005fa, 700 in 2007SP, and 692 in
2008fa:
Question 679 Marx claims that the mere repetition, or continuity, of the capitalist production
process dissolves certain illusory characteristics possessed by this process in isolation.
Give concrete examples of such illusory characteristics, either those which Marx is discussing,
or others.
[588] Bosox: Hans stated in his annotation “The socialist countries did not have very
strong mechanisms in place enforcing that social production would be reproduction: there
were many half-finished investment projects started by one planner but not finished by his or
her successor: In capitalism, a capitalist has strong motivation to see his investment projects
through: if he does not succeed, he may go bankrupt.” Repetition is only a mode of operation
within capitalism but only for temporarily time frame. Here are four examples of the process
in isolation given by Montecarlo [2007SP:1175]
1) Advances made to the worker return to the capitalist when the laborer purchases the
commodities of production.
2) The worker does not see that the capitalist pays him out of the stockpile that the laborer
has produced.
3) Capital uses labor power to valorize capital.
4) Capitalists ensure the reproduction to the capitalist system or risk bankruptcy.
In looking at these examples it appears that the laborer is unaware of the ongoings of
the process of reproduction, and with every step that has been taken the laborer is getting
further behind while the capitalist is getting further ahead. (Tito [2003fa:580]) “workers are
continually exploited and kept in an inferior position and how workers must work to survive
where as the capitalist contributes only to build personal surplus value”.
The thing that I don’t understand is even though one individual may have in excess of
(M) and with this (M) decides to purchase a shop (C) and then with this is able to hire out
laborers and with this is able to produce a commodity with use-value for the consumer and
is able to receive (M’). This is all fine and dandy but the item that I am struggling with and

U of Utah Econ 5080 2007fa 279
this is because of the way I think but what gives the one with (M) in the first place to exploit
the laborer to make a revenue to better himself whereas he is the one that financed it but is
not the laborer? Is it not the laborer that has made the capitalist richer with giving him more
revenue in his pocket and the laborer producing more commodities for the capitalist to sell?
I see the steps and I see that there are certain characteristics that are lost when there is
isolation and the capitalist is getting a bigger revenue while the laborer is fighting to stay
in the job to make ends meet. I think that I have answered my own question with the idea
that the capitalist is helping the laborer out by allowing him to work to make the ends meet
whereas the ends might not meet without a job. “The rich, who consumes the products of the
labor of others, can only obtain them by making exchanges” (purchases of commodities).
“They therefore seem to be exposed to an early exhaustion of their reserve funds...But, in
the social order, wealth has acquired the power of reproducing itself through the labor of
others” (Sismondi, Nouveax Principes d’economie politique, 1819 vol. 1, pp.81-2)
Next Message by Bosox is [633].
Exam Question 681 is 399 in 1999SP, 494 in 2000fa, 523 in 2001fa, 563 in 2002fa, 643
in 2004fa, 592 in 2005fa, and 819 in 2011fa:
Exam Question 681 Why is the part of the capital advanced for wages called “variable
capital”?
[578] Dyoung: (graded B) Variable Capital Advances. This question seems simple,
but I believe that as Marx puts it, the transaction is veiled by the fact that exploitation is not
visible, and instead it seems as if the capitalist were advancing the wage to the worker. When
in reality as Marx also says, wages are paid after the worker has already produced more than
an equivalent for them; the capitalist advances the worker nothing. I see it like renting,
when I rent an apartment I pay money to begin with, before I can live there, but in my last
apartment they had a special where they would waive that fee as a “move in now” special.
Every time I pay I am not paying for the month that I just finished using the apartment, I am
paying to use it next month. It is not a direct correlation with wages, but a similar situation.
When I am paid by my employer he is not paying me for what I will produce for him, he is
instead paying me for what I have produced for him, I would not get a raise if I said I will
do great next year, he gives me a raise if I did good last year. The wages are variable based
on how well the employer can sell the product I produce, and how well I have produced for
him in the past. That’s how I understand it.
Message [578] referenced by [585]. Next Message by Dyoung is [579].
[585] Hans: Variable Capital. The first paragraph of my [2001fa:371] gives a good
explanation of this question which I recommend you to read here. There are other answers
to that effect in the archives, see for instance the first paragraph of [1999SP:351], or
[2000fa:193] or [2005fa:1505]. But many answers in the archives, and also today’s Dyoung
[578], tried to infer the answer to this question from the context in chapter 23. This is not
possible. I added a remark to this effect into the question now, so that this error won’t be
made in future classes.
Dyoung compares the wage payment with the payment of rent. The timing of the wage
payment is the opposite of the timing of rent payment. Rent must be paid prior to occupancy,
280 2007fa Econ 5080 U of Utah
at the beginning of the month, so that the renter does not move out on the 25th. Wages are
paid after the worker has delivered his labor, because otherwise the worker might not show
up for work.
Next Message by Hans is [593].
Question 684 is 646 in 2004fa, 595 in 2005fa, 705 in 2007SP, 697 in 2008fa, 729 in
2009fa, 796 in 2010fa, and 822 in 2011fa:
Question 684 Does the capitalist, who started a business with his own capital, preserve this
capital while consuming surplus-value, or does he consume his original capital and replace
it with accumulated surplus-value?
[572] Poppy: Can you have the cake and eat it too? NO! The Capitalist consumes his
original investment right from the onset, because basically what he is doing, is loaning his
money out to a company, that can or can not make money for him. So at that moment that he
loans his capital, he loses every bit of value that he had. From this point forward, the value
of his present capital will be the surplus value that is left after he pays the laborers. The
surplus value accumulated over a number of years, then becomes his original investment.
The original capital advance, divided by the surplus value annually consumed, will equal
the number of years in which the Capitalist will make his original investment back.
Hans: You bring up a good point. But a Marxist would give it a different spin than you do. By distinguishing
between the company and the capitalist’s private account, the capitalist gets around the logic that any consumption
should be funded from his own money rather than the money he got from the unpaid labor of his workers.
Message [572] referenced by [574] and [2008fa:1079]. Next Message by Poppy is [573].
Question 685 is 526 in 2001fa, 566 in 2002fa, 589 in 2003fa, 647 in 2004fa, 698 in
2008fa, 730 in 2009fa, and 853 in 2012fa:
Question 685 Explain the following passage: “After the capitalist has consumed the equivalent
of his original capital, the value of his present capital merely represents the sum total
of surplus-value appropriated by him without payment. Not a single atom of the value of his
old capital continues to exist.”
[569] Melanie: graded A– No Real Advances. To explain this passage I wish to pose the
following example:
A new capitalist has $10,000,000 (either by inheritance or some other method). With this
money the capitalist purchases a toy making factory in Taiwan. This toy making factory
creates a yearly surplus-value of $1,000,000 by exploiting Taiwanese workers in the factory.
Each year the capitalist consumes half of the surplus value ($500,000), and saves or
reinvests the other half of the surplus value ($500,000). Thus, after 20 years, the capitalist
consumes the total value of his original ten million dollar investment ($500,000× 20 years
= $10,000,000). He has now been paid back the equivalent of his original capital investment.
But what becomes of the other $500,000 per year the capitalist has saved or reinvested
into the factory? This other $500,000 per year for the last 20 years ($500,000× 20 years=
$10,000,000) represents the amount of surplus-value appropriated by the capitalist.
After 20 years, the capitalist consumes the value of the original capital ($10,000,000),
and, therefore, the value of the original capital ceases to exist. The other $10,000,000 of

U of Utah Econ 5080 2007fa 281
value created (surplus-value) is acquired by the capitalist of no merit to himself except having
$10,000,000 in the first place.
In other words, as Marx stated, “after the capitalist has consumed the equivalent of his
original capital, the value of his present capital merely represents the sum total of surplusvalue
appropriated by him without payment. Not a single atom of the value of his old capital
continues to exist.”
Message [569] referenced by [573] and [574]. Next Message by Melanie is [640].
[573] Poppy: Roll the dice baby! Melanie’s [569] statement/answer is correct. I would
however like to make the answer more simple. Marx is saying that when a capitalist makes
an investment into a company, that original investment and/or any future investments will
be lost. It will however be replaced by surplus value as the years go by, and the hopes
of the capitalists are of course to increase the original amount invested. If by chance the
company goes under before the surplus value replaces the original investment, the capitalist
will obviously lose. Depending on when it went down, he may or may not have lost a
significant amount.
Hans: The original investment will only be “lost” because the capitalist eats it.
Message [573] referenced by [574]. Next Message by Poppy is [688].
[574] Hans: Disappearing Capital. In the scenario of Melanie [569], the balance sheet
would say: after 20 years, the capitalist has a capital of $20,000,000: of this, $10,000,000
are his original capital, and $10,000,000 are reinvested surplus-value (“retained earnings”).
Besides, during these 20 years, the capitalist also has consumed $10,000,000, i.e., half of
the surplus-value received.
Marx claims that this calculation is wrong. The capitalist’s consumption should be subtracted
from his original capital. I.e., after 20 years, his capital of $20,000,000 is exactly
the surplus-value produced by his workers during these 20 years, and his consumption of
$10,000,000 used up all the capital he originally advanced.
The capitalist therefore appropriated $20,000,000 of surplus-value, not $10,000,000 as
Melanie said. And he can no longer say that he has the right to appropriate surplus-value
because he has advanced $10,000,000 of capital, because after year 20, none of his original
capital is left. He has eaten it all. The factory is still there because it has been replaced by
accumulated surplus-value. I.e., the workers should be the ones who have the right to further
surplus-value.
Poppy’s [572] shows an accounting trick how the capitalist gets around the logic that
any consumption should be funded from his own money rather than the money he got from
the unpaid labor of his workers. Accountants distinguish between the company and the
capitalist’s private account. The capitalist has loaned his capital advance to the company
and therefore no longer has access to it.
Poppy [573] is asking what happens if the plant goes under. Say one morning, the capitalist
wants to go to his office, and on the place where the plant used to be is just a meadow
with a goat on it. After year 20 he can say: “I didn’t lose anything, because I ate my entire
$10,000,000. The only thing I lost was the accumulated surplus-value of my workers.”
Using accumulated surplus-value as capital certainly has its advantages.
Next Message by Hans is [585].
282 2007fa Econ 5080 U of Utah
Question 691 is 653 in 2004fa, 602 in 2005fa, 712 in 2007SP, 700 in 2008SP, 704 in
2008fa, and 803 in 2010fa:
Question 691 Explain the sentence: The capitalist profits, not only by what he receives from
but also by what be gives to, the laborer.
[556] Ben: graded A– Double Dipping. The sentence says that the capitalist profits from
what the laborer gives to the capitalist. When the laborer produces something that’s worth
20 dollars, the capitalist pays the laborer 5 dollars for his labor and pays 5 dollars for the
material, thus coming to 10 dollars in cost. The capitalist then adds a 50% markup to get to
$20 in value. So when the capitalist gives the laborer 5 dollars the capitalist gets a product
worth 10 dollars, which the capitalist can sell for 20 dollars. So, what the laborer gives to
the capitalist is a profit of 10 dollars.
The sentence also says that the capitalist profits as well from what he gives the laborer.
In the above example, the capitalist gives the laborer 5 dollars; just enough to survive until
the next day when the laborer comes back to work and does it all over again. This cycle
of living from paycheck to paycheck forces the laborer to stay and keep working for the
capitalist. This is how the capitalist also receives profit by giving to the laborer.
The double dipping of the capitalist into the laborer’s pockets is still evident today. I
loved the idea that Kase stated in his response to Chris’s answer in [2007SP:1080], “. . .
the wage the capitalist gives to the laborer can be reinvested into the company through the
laborer purchasing something in market. If a laborer is employed at Smith’s and he purchases
his groceries at Smith’s than he is reinvesting back into the company and benefitting the
capitalist.” Kase could have added that the capitalist would give the laborer a discount on
their product like many companies do. The laborer would feel as if treated even better by
getting paid and receiving a discount from the capitalist. The laborer would less likely leave
the capitalist because of these incentives. I used to work at Papa Murphy’s Pizza and the
discount was about 10 or 15%. This was enough of a discount for me to buy pizza and
put my wages back into the company through employee purchases, but low enough for the
owner to still make a profit from my labor and my purchase.
Hans: You are still overlooking something very fundamental: the worker uses the wage to maintain his laborpower.
Gregory explains this well in [559].
Next Message by Ben is [599].
[559] Gregory: feed your fish. What Marx is explaining when he makes this comment
is really rather straight forward. The capitalist is profiting by what he gives overall to the
laborer. Furthermore, the wage the capitalist gives in return for labor is ultimately a gain
for the capitalist. Marx explains this wage is needed to allow the laborer to obtain the
“necessities” in life. The laborer uses the wage the capitalist provides to feed, cloth, and run
a functional household. Subsequently, this allows the laborer to properly reproduce bringing
new “fresh” laborers to the labor market. Marx explains “The capital given in exchange for
labor-power is converted into necessaries, by the consumption of which his muscles, nerves,
bones, and brains of existing laborers are reproduced, and new laborers are begotten” (Marx
717). Simply stated, just as a machine needs care and maintenance, so does the laborer.
The capitalist is receiving the capital given in return for labor-power back in the form of a
healthy, functional, and populated labor-market. If the laborer was incapable of obtaining

U of Utah Econ 5080 2007fa 283
the “necessities”, eventually he would have nothing to offer the capitalist in terms of laborpower.
Message [559] referenced by [556]. Next Message by Gregory is [650].
[590] HTJY: The Capitalist Art of Setting Wage. Chris in [2007SP:1080] and Yoda
in [2007SP:1148] explain that the capitalist profits from what he receives from the laborer
because the value the laborer adds to the product exceeds the wage the worker receives from
the capitalist to reproduce his labor power; and, moreover, needless to say, because it is the
capitalist who gets to keep the product. There is no confusion about this point.
However, regarding the explanation of the claim that the capitalist also profits from what
he gives to the laborer, both Yoda and Chris miss the central point of Marx. Chris, for example,
explains that the capitalist profits by what she gives to the worker because: (i) by giving
wage to the laborer, the capitalist may appear generous to the worker and, consequently, the
worker may develop incentive to work harder; (ii) giving to the laborer maintains the productivity
of labor. Chris’ claim holds fine. However, what Marx had in mind is, as clearly
expressed by Hans following the two posts, that the capitalist profits from giving wage to the
laborer because the fact that the worker (or the working class) is reproduced, i.e., that he (or
the working class) is ready to be used as a crucial component in the next run of the capitalist
reproduction and accumulation process. In other words, the giving helps the capitalist social
relations of production perpetuate.
I would like to add few insights to some aspects of perpetuating the capitalist mode of
production. More precisely, I will discuss the importance, from the capitalist’s point of view,
of setting the wage level right, so that it prevents the working class from revolting while, at
the same time, it prevents the the working class from becoming affluent and progressive
middle class. I will also discuss the importance, again from the capitalist’s point of view, of
controlling how the working class spend their wage as the standard of living increases; the
working class must not be allowed to spend their money in a way that help them develop
a critical mind and attitude toward the capitalist social relations of production. These two
aspects are of utmost importance to the capitalist class if the capitalist is to continue to
dominate the society.
It is important to begin the discussion with the realization that the capitalist social relations
of production is, by no means, meant to be permanent except by the will and the
desire of the capitalist class. Reproducing, and hence, perpetuating such an exploitative social
relation requires a lot of the resources of the capitalist class to be directed to oppress
the resistance, real of imaginatined, of the exploited. Although we may not recognize such
forces of oppression around us, they are everywhere: in the education we get, in the things
we watch on TV, in the things we read, etc. One example of such forces that is the focus of
this discussion is wage control. (The money that workers receive as wage is a purchasing
power; with the money workers can claim their right for goods to consume.) In capitalist
system, the wage is a subsistence wage; and the level of subsistence wage is subject to the
norms of the society. The capitalist has an incentive to lower the norm of the subsistence
wage. But what will happen if it is too low? The society will be flooded with workers who
work hard but cannot feed their family, educate their children properly, have time and energy
left to cultivate themselves, etc. This social uneasiness will stimulate the working class, who
284 2007fa Econ 5080 U of Utah
have been otherwise successfully kept away from seeing the social reality, to discover the
covert forces of the exploitative social relation. The real danger here is that the workers may
not simply ask for a higher wage. The workers may be united to revolutionize the foundation
of the society; this means the very fabric of the capitalist society will be in danger. Whoever
is holding the “real” power in the capitalist society, I conjecture, is aware of this possibility
and fears it much, if not the most. Hence, it is important for the capitalist to keep the wage
not too low that workers think they are getting what they deserve after days and years of
hard working.
But how much wage should the working class get paid? The capitalist wonder. Given the
fact that productivity has been rising rapidly in the recent centuries and that some portion of it
must be consumed by workers for the economy to run, and given many other considerations,
it is not avoidable for the standard of living for the working class to rise. One may think
that the capitalist has an incentive to pay high wage to the workers to increase productivity.
But the matter is not so simple from the capitalist’s point of view. It does not take much
insight to see that the capitalist do not want to pay every workers high wages because their
profits, and hence their political power, will be significantly diminished. But here is a much
more serious reason why the capitalist would not want to pay high wages to the majority
of workers. Capitalist society is a class society. And as a class society, it has its own
class structure and class dynamics. The fact that the capitalist class dominates the society
presupposes that there is no other dominating class in the society. It also means that any
class dynamics that promotes a rise of new dominating class will be, have to be, prevented
at all cost. One such possibility that must be prevented is a rise of a progressive middle
class as the majority of the society. Such class, by its progressive nature, will not be willing
to form a coalition with the capitalist ruling class. Moreover, by their progressive nature,
they will be deeply concerned with the well being of people in general and lower working
class in particular. And, most dangerously, they think and they think that the capitalist social
relations of production must be significantly modified at minimum if we, as a whole, are
not going to finalize our already-begun self-destructive path. From the capitalist’s myopic
and selfish perspective for self-preservation, even a small possibility of such a progressive
majority middle class being formed must be not born. One sure way to prevent such a
possibility is to prevent the existence of the very middle class itself, regardless of whether
it is going to turn progressive or not. So, where does the capitalist see a possible source of
a rising middle class? The answer is, of course: in the well-paid working class. Thus the
capitalist class has a strong motivation to preserve the wages for the working class at a level
not too high to prevent them from forming a majority middle class.
So the wage for the majority of workers should be not too low and not too high from the
capitalist’s self-interested perspective. But this is not the end of the capitalist thinking. An
equally important thing to be addressed is the issue of controlling spending habits. What
workers consume not only reflects what they are but also affects what they may become. If
their habit is such that they spend their income that is allocated to cultivate their well being,
for drinking, buying a nicer car, and doing other “fun stuff,” they would pose no threat to the
capitalist class, especially when it’s the capitalist class who own and provide the “fun stuff
to the mass.” On the other hand, if the workers’ habit is so that they spend their valuable

U of Utah Econ 5080 2007fa 285
financial resources for educating themselves and socializing with other thoughtful individuals,
they would pose a serious threat to the capitalist class, especially when they can rise to
become the progressive middle class and lead a progressive social movement. So, it is in the
interest of the capitalist class to promote a culture that creates “fun-seeking” consumers and
prevents critical and socially conscious individuals from being mass-produced; needless to
say, from the capitalist’s point of view.
Well, this is about all that I have to share with the class today. I am writing now after
spending the entire Thanksgiving break days and nights studying articles by non-orthodox
economists including a neo-Marxist named Baran and a soul-breaking mainstream economist
named Lal and some other relevant materials. So, my mind can’t think in any other
critical way than the way it is thinking now. I apologize you if I have said nonsenses. But
then you would have opportunities to express your critical view. So, I would feel sorry to
you but not terribly sorry if I have said nonsenses. This may or may not be my last post
for the class, depending on whatever else may have left for me to add. In any case, I’d like
to thank you all for sharing your valuable thoughts with everybody including myself. Good
luck with your finals.
Hans: Very interesting. It is definitely legitimate to think along the lines you do. My own hunch is that the
ruling class in the U.S. tries to prevent rebellion by inviting the working class to participate to a limited extent in
the plunder of the poorer nations and of nature. The way out of poverty is not higher wages but cheap goods at
Walmart’s produced under sweatshop conditions overseas, and cheap gasoline and coal-fired electricity.
Next Message by HTJY is [619].
Question 697 is 578 in 2002fa, 602 in 2003fa, 661 in 2004fa, 608 in 2005fa, 718 in
2007SP, 706 in 2008SP, 710 in 2008fa, 742 in 2009fa, 835 in 2011fa, and 865 in 2012fa:
Question 697 Explain how capitalist production, just by the fact that it is happening, reproduces
the separation between the worker and the means of production.
[586] Tyler: graded B– Capitalists are always looking for more efficient methods to produce
their products. Also, capitalists know that out of the two main inputs that are used
in the production of their products–capital and labor–capital will depreciate and eventually
become obsolete. Therefore, much effort is put into training the labor class, and due to reproduction
the skills acquired from this training begin to accumulate. This training is an
integral part of capitalist production, and as long as this production takes place, this training
will take place. Thus, capitalist production, just by the fact that it is taking place, makes a
separation between workers (who are changed by the training) and the means of production.
Hans: The accumulation of skills in the workforce is a counterexample to the separation, since it allows the workers
to benefit from capital accumulation. Usually only the capitalists benefit, while the workers stay where they are. A
good answer to this question is [2007SP:1145].
Next Message by Tyler is [643].
Term Paper 699 is 297 in 1996sp, 524 in 1997WI, 524 in 1997sp, 924 in 1997ut, 924 in
1998WI, 924 in 2000fa, 924 in 2001fa, 824 in 2002fa, 824 in 2003fa, 824 in 2005fa, and
721 in 2007SP:
Term Paper 699 Essay about Chapter Twenty-Four: Transformation of Surplus Value into
Capital
286 2007fa Econ 5080 U of Utah
[726] Brian, Qwert, and Ryan: Termpaper submitted on the interactive web site.
Division of surplus-value into capital and revenue. The abstinence theory.
According to Marx’s writings in chapter 24, surplus-value will act both “as a fund for
satisfying the capitalist’s individual consumption requirements,” and “as a fund for accumulation.”
One part will be utilized for the subsistence of the capitalist and his family, paying
for everyday necessities such as food, clothing, hygiene products, etc. The other part will be
utilized as a fund for accumulation, which may be reinvested or recapitalized into the firm in
order to provide future profits. The reinvestment of funds to provide future profits benefits
both the capitalist and the employees. The capitalist will use part of his future surplus-value
to pay for the everyday necessities and for reinvestment into the company. The effects of
the funds that are reinvested into the firm not only affect the future well-being of the capitalist
and his family, but also affect the future of the company and its employees. If the
capitalist is greedy now and hoards a large amount of the surplus-value for himself, the lack
of funding into the company may cause the company to fail. The failure of the company
causes the employees to be laid off, thereby reducing the amount of surplus-value that each
employee receives, which will in turn reduce the amount of surplus-value they have to utilize
for consumption and accumulation.
The capitalist, however, does not concern himself with the well-being of his employees,
but is concerned for his future well-being and the well-being of those closest to him.
The capitalist, observing the dual nature of the surplus-value, and understanding that the
amounts that will be used for consumption or accumulation are determined by themselves,
will utilize a minimum amount of funds for consumption and a maximum amount of funds
for accumulation, thereby providing the basis for future accumulation. The drive for future
accumulation will cause the capitalist to focus on the means of accumulation, production.
Increased production will lead to increased amounts of raw material going into the production
of the good, in turn, increasing the cost of the means of production. Increased cost for
the means of production will require the capitalist to increase the amount of “funds for accumulation.”
Increasing the amount of “funds for accumulation” will require more production,
which then restarts this cycle of accumulation, converting the capitalist into a tool of the
capital in order to accumulate more capital.
The capitalist is now employed by his capital. Individual consumption driven down, the
accumulation of capital is driven up to secure the future of the company. The capitalist now
abstains from utilizing large amounts of capital for consumption and personal sacrifices are
made to accumulate more, and the accumulation of more will result in more sacrifices. The
sacrifices are not always made by the capitalist however, and as an attempt to reduce costs
to increase the amount of capital for accumulation, the wages paid for labour-power are
reduced. Again, the capitalist ripple effect comes into play; decisions made by the capitalist
regarding the use of funds for consumption or accumulation will have a ripple effect on the
wages of the workers. A reduction in the wage paid for labour-power limits the amount of
funds that the worker has to utilize for his consumption and for his accumulation. Because
the overall income of the worker is reduced, but the price for consumption commodities
stays constant, both due to the avarice of the capitalist, the funds available for accumulation
are reduced. The amount spent on consumption commodities will deplete the amount left

U of Utah Econ 5080 2007fa 287
for accumulation, making it more difficult for the worker to accumulate a sufficient amount
of funds that can be expended on the “enjoyments of life.” The worker, observing that he
has fewer funds that can be employed for accumulation, will work more hours or more jobs
in order to increase the funds for accumulation. The capital, acting through the will of the
capitalist, will transform him into less than a miser and closer to a usurer or money-glutton.
As the capitalist, gluts himself on more funds he begins to develop “[t]wo souls, [which] alas,
do dwell within his breast; The one ever parting from the other.” These two desires push him
to both the accumulation of more funds and to the expenditure of funds for enjoyment.
The developing appetites of the capitalist cause him to shout from the rooftops, “Accumulation
for the sake of accumulation, production for the sake of production,” believing that
only by increased accumulation and production can the funds for consumption and accumulation
increase. In addition, only by increased production can the capitalist satisfy both his
appetites for accumulation and his appetite for expenditure. The worker is now diminished in
the view of the capitalist from a human being to a human doing, a machine. The machine of
labour-power is therefore exploited in order to increase the amount of surplus-value, thereby
increasing the coveted surplus-capital. Malthus, as noted in Capital, found that even if it was
not necessary for all of the capitalists to be both accumulators and enjoyers of accumulation,
it was still necessary to maintain the wages of workers at a minimum in order to keep them
‘industrious.’ In addition, by limiting the wages of the worker, the capitalist guarantees that
he will be able to receive a higher surplus. Take for an example the worker, now earning less,
is unable to purchase all of the goods that are being produced by his own hands and those
his fellow workers. Due the reduction of wages, the consumption of the community that
the workers live in will fall, but, due to efficiency, production will increase, and the amount
of surplus commodities that can be sold to neighboring communities will increase. Taking
into account the fact that the neighboring communities that are purchasing the commodities
are not employed by the capitalist, so no wages are being paid to these consumers, he will
experience a higher amount of return for his investment, thereby increasing his funds for
both accumulation and consumption.
During all of this process, the capitalist views himself through gilded glasses. He seems
himself near a saint, viewing his abstinence from all of the luxuries in life for the sake of his
creation and its employees and their well-being. The capitalist observes the sacrifice that is
made both by himself and by his employees, but views both as an abstinence for the greater
good, for the furthering of the creation and the increasing of capital for accumulation and
consumption.
The circumstances which, independently of the proportional division of surplus-value
into capital and revenue, determine the extent of accumulation, namely, the degree of exploitation
of labour-power, the productivity of labour, the growing difference in amount between
capital employees and capital consumed and the magnitude of the capital advanced.
Surplus value, the lifeblood of capital, grows as long as the value of products decreases
more slowly than the productivity grows. When productivity increases, it takes less time to
produce a given item and thus there is less value in that item. As long as the productivity
increases proportionately faster, that is so long as they are producing enough that the profits
continue to rise, then surplus value increases; earlier in Das Capital we named this relative
288 2007fa Econ 5080 U of Utah
surplus value. Inherent in this process is the fact that wages will never increase proportionately
to productivity. Yet again, accumulation is only increased by robbing the laborer of
the value he creates. Productivity is often increased through the introduction of a new technology
or innovation, perhaps a machine. Old capital is replaced by new more productive
capital each time the former reaches the limits of its use, or when the introduction of the new
machine can lead to sufficient increases in productivity to persuade the capitalist to invest.
By increasing production in multiple spheres, technology and science cause increases for
capitalists throughout the system. Also, these innovations incorporate the social advancement
made during the depreciation of the old capital. Depreciation theoretically becomes
negligible, however, should it be felt, Marx explains that the cost will be immediately passed
on to the worker.
Marx uses the example of an Englishman and a Chinaman spinning wool as an example
of the difference that technology makes, and then takes that example to make broader statements
about how classical economists have been led astray. The Englishman spins much
more in a given time, although they produce the same value. This means there is much more
capital to be used by someone else in England than in China. The natural property of living
labor to transmit old value while creating new; along with the productive forces of social
labor appear to be intrinsic qualities of capital. As the stages of accumulation increase, the
complementary service of past labor increases. The past labor embedded in the commodities
disguises itself as capital, and thus the classical economists believe it should be rewarded.
And thus the owners of capital reward themselves through the use of unpaid labor from the
past. As capital increases, there are ever more buildings and machines and such, which wear
out slowly, thus the difference between capital employed and capital consumed decreases.
This accelerates accumulation further.
Earlier in the chapter Marx discussed the idea of abstinence on the part of the capitalist.
Given a degree of exploitation, the surplus value is determined by the number of laborers
being exploited in proportion with the magnitude of capital employed. As capital increases
through continued accumulation, both the accumulation-fund and the consumption fund can
increase. Therefore it is possible for the capitalist to live a more luxurious life while being
more abstinent. Marx thus shows the absurdity involved in the idea of abstinence.
Marx takes great offense to the idea of what he deems the “so-called labor-fund”. The idea
developed out of the misconception that capital is a fixed magnitude, along with the dogma
of capitalist such as Jeremy Bentham. It is not fixed; it is an elastic constantly fluctuating
portion of social wealth. The labor power, science, and the land embodied in the capital make
up its elastic powers. Land in this sense is according to Marx, all the conditions of labor
furnished by nature and not man. For Bentham, the labor-fund, the means of subsistence
for laborers (their wage), is fixed by natural laws and is unchangeable. Not only the fund,
but also the number of workers required is given and a level of efficiency is also given.
Marx points out, however, that the number of laborers is not fixed, the number of laborers
required to produce a given value is not fixed, and the price of that labor is not given. In fact
Marx showed in the preceding section how the capitalist can bypass these assumed givens,
to increase the percentage of the value created that flows into his accumulation fund. The
facts of this dogma, as they pertain to the plight of the workers are as follows: the laborer has

U of Utah Econ 5080 2007fa 289
no right to interfere in the process, and only under very special circumstances does he have
the right to enlarge the fund at the expense of the capitalist. Marx uses one more apologetic
to illustrate this fallacy. Prof. Fawcett claims that the circulating capital of a country is its
wage-fund. If one would like to find the average wage of a worker he need only to divide
the capital by the number of workers. Marx decries this as a silly tautology. Prof. Fawcett
further claims that very little capital remains in the country, but rather that most of it is
exported to other countries. Marx concludes the chapter with the observations that in this
paradigm, not only are the workers being exploited, but the products of their labor, which
was stolen from them, is shipped overseas. And that if such a large proportion of capital
is being shipped overseas, then a portion of their so-called labor-fund is also being shipped
abroad.
First Message by Brian is [61], First Message by Qwert is [726], and First Message by Ryan is [40].
Term Paper 700 is 926 in 2000fa, 926 in 2001fa, 826 in 2002fa, 826 in 2003fa, 826 in
2004fa, 826 in 2005fa, 724 in 2007SP, 708 in 2008SP, 744 in 2009fa, 811 in 2010fa, 838
in 2011fa, and 868 in 2012fa:
Term Paper 700 Essay about Chapter Twenty-Six: Secret of Original Accumulation
[651] Amy, Ashley, Ben, Jeff, Jessica, and ZACH: Term Paper for Chapter 26 from the
Busybees. Amy, Jessica, Jeff, Ben, Ashley, and ZACH
Summary:
Capitalism seems to turn in a “vicious circle”. To have the accumulation of capital certain
portions of capitalism must already exist, there must be surplus value and to achieve a surplus
value there must be capitalistic production. Which means that to have the accumulation
of capitol there must already exist “considerable masses of capital and of labor-power in the
hands of producers of commodities”. As Montecarlo, Will and Danny [2007SP:1276] put
it, “Each operates on the basis that there is an existing polarization of wealth and poverty”.
The only way it was possible is that some portions of capitalism must have existed before
capitalism did, we know that capitalism has not always existed, therefore some portions of
capitalism must have existed in enough quantity that enabled the new capitalist system to
begin. The necessary ingredients of capitalism that existed before capitalism was a labor
supply and capital, taken from the feudal system whose serfs were without an economic system.
He states, “The economic structure of capitalist society has grown out of the economic
structure of feudal society. The dissolution of the latter set free the elements of the former.”
Group Reaction:
It should be mentioned at this point that there are two groups of thought in our group.
The first group is called “The Berlin Wall Fell” and the other is called “The slavery of the
masses”, group members found themselves sometimes in both groups and sometimes in only
one group. Regardless we felt as a group that the discussion, i.e. reaction to the text deserved
to be included with our summary of the chapter. After each summary the group has written
the two responses. We asked the question, Do you agree with Marx or disagree and why?
290 2007fa Econ 5080 U of Utah
The Slavery of the Masses: Marx is absolutely correct in his representation thus far of the
exploitation of the masses. Capitalists just took up where feudalist lords had been. Capitalists
used the wealth of the feudal system and the labor of the serfs who had no-where else to
make them slaves all over again, the difference is that now the serfs don’t know that they are
not free, they must work. At least with the feudal system the working class knew that they
were subservient and didn’t have illutions that they could work hard enough to break into
that group of elites.
The Berlin Wall Fell: Marxism exists in a vacuum, it is an idealistic economic system
that can’t be practiced because it is only one piece of a much larger puzzle. What political
system would fit with this economic one? We would argue that while capitalism did come
from Feudalism it wasn’t predestined to become capitalism, it could have gone to socialism
or communism as other parts of the world did. The people who found themselves without
an economic system chose capitalism, they chose to be individualistic instead of community
based, because there is less freedom of choice within Marxism. One must work for the good
of all, in capitalism one may or may not work, and the effect is felt on more of an individual
basis.
The Slavery of the Masses: We’re going to have to agree to disagree about freedom of
choice, you are obviously delusional. The people didn’t choose capitalism because of more
freedom, they just took the next system that came along that seemed practical. They took
a system that seemed like it could work, not the one that would be the best for them in the
long run.
The Berlin Wall Fell: We will give this summary point to Marx only because it is true
that certain things had to be in place before capitalism could begin. As for “the slavery of
the masses,” the freedom of choice of those who were first capitalists is something that we
cannot determine from our limited knowledge but which is a major difference in our ways
of thinking.
Summary:
As Marx further explains the origins of capitalism, he parallels The Story of Original
Sin and explains that Adam bit the apple, and because of that move sin was put into the
world, to every person. Marx relates this story to capitalism, as the starting point of capitalism
is like the starting point of sin (his satanic portrayal of capitalism is noted). The
mythical beginning of capitalism though is that originally there were two kinds of people,
“one, the diligent, intelligent, and above all, frugal elite; the other lazy rascals, spending
their substance, and more, in riotous living.” Marx argues that this is absolutely ridiculous,
the real way that capitalism came about was not peaceful and loving but “that conquest,
enslavement, robbery, murder, briefly force, play the great part”. More than its murderous
start and continued forced exploitation, Marx explains the capitalist system the laborer must
have the “complete separation of the laborers from all property” so that the laborer never
has the chance to recognize the means of production, their own labor. Truly then what Marx
means by primitive accumulation is “the historical process of divorcing the producer from
the means of production.”
Group Reaction:

U of Utah Econ 5080 2007fa 291
The Berlin Wall Fell: Relating the origin of sin to the origin of Capitalism is a bit far
fetched, it’s propagandist but not practical. Where was the Adam that bit the apple? Who
was that first capitalist? The only thing that seems to be similar is that they both began.
Capitalism absolutely began by non-peaceful means, except it seems when the Berlin Wall
Fell. We would argue though that it wasn’t capitalism that caused the fighting but the political
system that seems most likely to be with joined with it, a democratic republic. The
dissolution of the USSR seems to be one of the most recent examples of the implementation
of capitalism, after the collapse of its previous economic and political system the people
through non-violent means choose capitalism, or at the very least their leaders choose it and
as the regular citizen did not revolt or protest it can be summarized that they did not object to
the new system, so long as it provided stability. We believe the more likely biblical story that
capitalism follows is that of Esau and Jacob, Esau selling his birthright for a mess of pottage.
People who sell themselves short, by not having some property and by not understanding
that yes they are used in the capitalist system have sold their birthright. The problem though
is that while Marxism perhaps envisions a better way, right now there is no Jacob who knew
better than to be a capitalist.
The Slavery of the Masses: Just so that the reader understands what just happened, our
theological foes admitted that those who are in the capitalist system are being used. What
about freedom of choice? That is why we agree with Marx, just as with Adam when he bit
the apple and everyone had sin, so everyone that exists in the capitalist system is exploiting
someone or being exploited, it can’t be helped. The main point in Marx comparing the
two original beginnings is not to say that they are the same story only that they seem valid
because of their mythological nature and therefore we tend to romanticize them, when really
the beginning of capitalism was bloody. It seems to us like splitting hairs to differentiate
between what caused the contention, the new political system or the economic one, we
believe it was the economic one, because it is possible to have the Marxist system and a
democratic republic, or even a true democracy, such as in ancient Greece.
Summary:
In Marx’s last paragraph of the chapter he argues that the secret of original accumulation,
what he calls primitive accumulation, is really just the violent removal of “great
masses of mean. . . forcibly torn from their means of subsistence.” Orestes and Dani, in
[2007SP:1237], present the idea that “capitalism has a perpetual need for something like
‘primitive accumulation’.” That capitalism not only runs circularly but that to increase the
labor supply the proletariat must continue to be moved off of their land. We believe this
also makes sense with the idea of colonization, as a new mass of people is available to work
in the capitalist system. Marx then makes the claim that throughout history this pattern of
removal from property of the proletariat arises in different countries, although it always has
different specificities and starts and concludes at different times.
The Group Discussion:
The Slavery of the Masses: Not only is capitalism circular but the violent tendencies of
original accumulation, which is really just primitive expropriation, continue to occur as capitalism
grows or tries to grow to new markets. The footnote in this chapter is also interesting
292 2007fa Econ 5080 U of Utah
in that gardening made a re-emergence after capitalism suffered a major defeat in the cities
of Northern Italy. We couldn’t agree with Marx more that this expropriation is the “basis
of the whole process” of capitalism. Without a labor force, who is willing to work for others
and receive low wages, not because they choose it but because they are forced into it,
capitalism could not succeed.
The Berlin Wall Fell: It cannot be disputed that capitalism grew from violent beginnings,
but that is not the course that it must follow. We refer to our earlier example, where was the
violence when the Berlin Wall fell and capitalism began to infiltrate the former USSR. There
have been revolts and some political upheaval but in a historical context it has been very
minor. This would suggest that capitalism does not always have to be violent, that peaceful
means also work, when people choose capitalism. We are not arguing that capitalism is the
best just the best that actually works. We disagree with Marx’s concluding statement in this
chapter, not all countries have a violent expropriation.
Hans: Wow, that was lots of fun to read!
I hope it won’t offend your religious sensibilities to say that in Marx’s mind, the original sin is as much a
blatant example of a non-explanation of sin, as the fable of the industrious and the lazy rascals is a non-explanation
of capitalism.
Next Message by Amy is [665], First Message by Ashley is [76], First Message by Ben is [4], Next Message by
Jeff is [667], First Message by Jessica is [283], and First Message by ZACH is [28].
Term Paper 701 is 932 in 2000fa, 932 in 2001fa, 832 in 2002fa, 832 in 2003fa, 832 in
2004fa, 832 in 2005fa, 727 in 2007SP, 709 in 2008SP, 745 in 2009fa, 839 in 2011fa, and
869 in 2012fa:
Term Paper 701 Essay about Chapter Thirty-Two: Historical Tendency of Capitalist Accumulation
[643] Tim and Tyler: graded A In Chapter 32 Marx talks about the birth of capitalism,
its rise to power, and its eventual fall by means of a proletarian revolution and the birth of
socialism.
Marx’s first line poses the question, “What does the primitive accumulation of capital, i.e.
its historical genesis, resolve itself into?” He answers with “the dissolution of private property
based on the labor of its owner.” Essentially a change of form from slaves and serfs into
wage-laborers for the greedy capitalists. What was once private property is now capitalist
private property because of exploitation, the work force becomes proletarians whose labor
is transformed into capital. The definition of primitive accumulation is the expropriation of
the means of production, the peasants’ land, away from the original producers, the peasants,
which Marx explains as the “first negation”.
The expropriation of the means of production away from the many peasants and their
private property to the few capitalists was allowed by the state and thus capitalism was born.
The peasants now assume the role as the proletariat and the capitalists begin their exploitation
because the peasants now depend on the capitalists for subsistence. This is where Marx
would say that capitalism begins its own demise. It starts with big corporations consuming
smaller ones, then through capitalism’s ever-growing need to centralize the means of
production the number of capitalists decreases and globalization sets in.

U of Utah Econ 5080 2007fa 293
Marx says “the monopoly of capital becomes a fetter upon the mode of production which
has flourished alongside and under it.” (Capital, 929) The quote says it all, the capitalists
have trained, united and organized an ever increasing working class who finally see the
capitalists for the usurpers they really are. The inevitable revolt by the proletariat is what
Marx calls the “negation of the negation”, which consists of the means of production being
put back into the hands of the society instead of the capitalists and thus socialism is born.
Chapter 32 clearly illustrates the future of capitalism by first expropriating the means of
production away from the many peasants to the few capitalists, then the capitalists exploit
the proletariat and each other leaving just a few capitalists to cash in, the ever increasing
proletariat becomes trained, unified and organized, and thus a revolution is born, socialism
comes into power and the means of production are given back to society.
Next Message by Tim is [645] and Next Message by Tyler is [701].
[647] Bosox and Gilmour: graded A Group Bilbo chapter 32 summary
In chapter 32 of Capital, Marx gives us a historical background of the formation of capitalist
societies. Marx begins by describing private property. He then speaks on labor and
small scale industries. Marx describes private property as the antithesis of social, collective
property, and that it only exists where the means of labour and the external conditions of
labour belong to private individuals. Marx argues that through the centralization of production,
the capitalist is able to control the means of production while exploiting the worker.
Marx also states on page 927, “The private property of the worker in his means of production
is the foundation of small-scale industry, and small-scale industry is a necessary condition
for the development of social production and of the free individuality of the worker himself.”
He goes on to say though that this is only actualized where the worker himself is the
sole proprietor of his own labor, meaning that he set the production in motion himself. For
example, the peasant owns his own land which he cultivates, or the artisan owns the tools
with which he crafts his art.
While Marx describes the capitalist society, he also gives a foreshadow of its own destruction
from within. He states on page 928 paragraph 1, “At a certain stage of development,
it brings into the world the material means of its own destruction. From that moment, new
forces and new passions spring up in the bosom of society, forces and passions which feel
themselves to be fettered by that society.” The forces and passions of the workers seem to be
restricted by the society. A fetter is literally a chain or shackle for the ankles. Marx uses this
to describe the conditions of the workers as being enchained in their condition from which
there is no escape. However, the workers will begin to revolt and lead a charge against
those that oppress them and exploit their labors. There is great power in numbers, and the
proletariat will soon realize this.
Marx goes on to say, “It has to be annihilated; it is annihilated.” Its annihilation, the
transformation of the individualized and scattered means of production into socially concentrated
means of production, the transformation, therefore, of the new dwarf-like property
of the many into the giant property of the few, and the expropriation of the great mass of
the people from the soil, from the means of subsistence and from the instruments of labour,
this terrible and arduously accomplished expropriation of the mass of the people forms the
pre-history of capital.” As Gza [2005fa:1570] summarized in fall 2005, “The property of the
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many will be centralized into the large properties of the few. Private property is the crux
of the capitalistic mode of exploitive production.” Marx speaks of the small-scale industries
being consumed by the larger ones. As one capitalist consumes another they become larger
and larger, creating a monopolistic society in which the large number of workers are controlled
by a few number of capitalists. We see here that the once able bodied individual
who produced their own goods for their own gain, is now selling their labor to the capitalist
rather than selling the commodity that they produce. The worker has now become fully dependent
upon the capitalist for their subsistence. In this way the capitalist is able to exploit
the laborer as was discussed earlier in Capital. The power of the bourgeoisie (middle class)
to produce is now in the hands of the capitalist, who by centralizing the production, now
controls all the power of that which is produced by their laborers.
Looking at this from the perspective of the capitalist, one would think that they are in
complete control of the market. However, this centralization of many workers under a few
capitalists can bring its own destruction. Not only are the proletariat dependent upon the
capitalist, but the capitalist is dependent upon the proletariat. Were it not for their interdependence,
both sides would suffer. This was the case in the middle ages when the peasants
and serfs were dependent upon the land they cultivated for their masters for their own subsistence.
However, the masters were just as dependent upon the serfs and peasants to provide
them their needs.
Marx continues with the realization that, “the further socialization of labour and the further
transformation of the soil and other means of production takes on a new form. What
is now to be expropriated is not the self-employed worker, but the capitalist who exploits
a large number of workers.” The exploitation and taking away from another is allowed under
the laws of capitalist production itself. Through the centralization and technological
advancements, the capitalist is further allowed to exploit the workers by making the means
of production limited to a certain manner. Marx explains though that “the centralization of
the means of production and the socialization of labour reach a point at which they become
incompatible with their capitalist integument.” In other words, the system will eventually
fail, and as he further states, “the expropriators are expropriated.”
In the first part of the chapter there is an expropriation of the mass of people by a few
individuals. At the end of the chapter it is the complete reversal. Those who were once
expropriated, have now become the expropriators of a few. And thus the power of production
is given back into the hands of the individuals.
Message [647] referenced by [678]. Next Message by Bosox is [710] and Next Message by Gilmour is [703].
[649] Harmon: Gravediggers! “What does the primitive accumulation of capital resolve
itself into?” [Marx 927] I believe there is no resolution, but it is a continuous process which
cycles through growth and negation.
To get an understanding of this chapter we need a place for our cycle to begin. The first
stage of the cycle is private property because the owner is also the laborer of the land. He
works freely and does not need to be concerned with division of labor, various stages of
production, or fragmentation of holdings. Small industries are built and continue to flourish
as long as “the worker is the free proprietor of the conditions of his labour, and sets them
in motion himself” [Marx 927]. Thus, because the owner of the property is also doing all

U of Utah Econ 5080 2007fa 295
the work, he is also reaping all the benefits, which he can then put back into the property to
make it grow; leading us to our next stage of the cycle.
The second stage is accumulation. As defined by Webster, accumulation is “to gather or
pile up, especially little by little.” The small business or property now begins to accumulate
and expand. Though this seems good for the owner, it means there is a loss of means of production
for other owners who are forced into a social control. Now we have the beginning of
capitalism. In addition, as this process of accumulation continues to progress, the properties
and businesses grow until there are only a few owners and many workers.
Now we come to our third stage, negation. Here the workers sell their labor and in return
are treated unfairly. As the number of workers increases and as they are continually placed
in the same unfair working conditions the workers begin to feel that they should be working
to further themselves and should be making more as the company grows. This leads to the
workers realizing their potential power, uniting to form unions, and finally breaking down
the barrier between proletariat and Capitalist to bring about a revolution. This revolution
forces the capitalist to break up the land and means of production and distribute the pieces
to the workers. Now the workers can start the vicious cycle over by trying to expand their
own newly acquired properties.
To recap, the three stages of the capitalist cycle are private property, accumulation, and
negation. These stages state simply the continuous and complicated process of building and
rebuilding the commercial market. Marx states it best, “What the bourgeoisie, therefore,
produces, above all, are its own gravediggers. Its fall and the victory of the proletariat are
equally inevitable.” [Marx 930]
Hans: Your second step, the transition from private property to accumulation, is already a negation. Accumulation
is only possible with the use of wage-labor, and wage-labor can be found on the market only if the immediate
producers have been torn away from their means of production. I.e., Marx calls it a negation because it leads from a
state in which the workers privately own their means of production to a state where there is still private property, but
this time the means of production are owned by the capitalists. The expropriation of the capitalists and transition to
a socialist society is then the negation of a negation.
First Message by Harmon is [97].
[660] Tomb: capitalist accumulation. Marx discusses a very interesting topic in chapter
32 of Das Kapital. The topic of the chapter is historical tendency of capitalist accumulation.
Private property only exists when the means of labor and the means of production belong
to private individuals. The laborer is the foundation of industry, which is an important
condition for the development of social production. The capitalist system functions best
when the laborer has individual freedom and can sell his labor as he chooses. He discusses
the annihilation of the old form of production, the system of subsistence, as the beginning
of capital. What was once the land and soil of many becomes consolidated into the hands
of the few with industry being the backbone of this whole process. A person’s self-earned
private property, which was based on the individual laborer and the conditions of that labor,
was replaced by capitalistic private property. The backbone of this capitalistic property and
capitalism rests on the exploitation of the laborer, or wage-labor.
When the transformation of the old system to capitalism begins the laborer is no longer
working for himself, but instead he is working for the capitalist who is exploiting many
workers. Expropriation of the entire old system occurs. This occurs because of the laws
296 2007fa Econ 5080 U of Utah
of capitalist production and by the social laws that come along with it. Expropriation also
occurs amongst other capitalists, with the means of production being controlled by an even
smaller group of capitalists. Through this process the capitalists develop great economies of
scale through the labor process and technical innovation. They essentially use all the means
of production to create large economies of sale. Marx attributes this process of capitalization
and industrialization, where capitalists monopolize as much of the production process
as they can, as the cause of oppression and exploitation of the working class. Marx mentions
another very important thing that happens from the process of capitalization. This is
the growth of the working class and the discontent amongst them. The centralization of the
means of production and the socialization of labor eventually reach a point where they become
incompatible with the capitalist system. This is when the capitalist system will reach
a breaking point. The working class will revolt against the capitalists.
Next Message by Tomb is [721].
Term Paper 702 is 933 in 2000fa, 933 in 2001fa, 833 in 2002fa, 833 in 2003fa, 833 in
2004fa, 833 in 2005fa, 730 in 2007SP, 710 in 2008SP, 714 in 2008fa, 746 in 2009fa, 813
in 2010fa, 840 in 2011fa, and 870 in 2012fa:
Term Paper 702 Essay about Chapter Thirty-Three: Modern Theory of Colonization
[639] Dannymangum and Teight: In Chapter 33 Marx begins by clearing up a common
confusion found in the political economy, the principle of private property. There are two
individual types of private property. The first is the labor of the producer himself (individual
effort). The second is found in the exploitation of others. The common confusion is as Marx
states “(political economy) forgets that the (second) is not only the direct antithesis of the
former, but grows on the formers tomb and nowhere else.”
What Marx wishes to demonstrate in this chapter is that capitalism is not a natural process.
To demonstrate this scenario Marx begs us to view the difficulties in establishing
capitalism in a true colony. To further drive the point home he begins by showing us why
it is that capitalism works in Western Europe a.k.a the motherland. To better understand
Marx’s survey it is necessary to remember that in order for capitalism to function the capitalist
must own the means of production, but even this is not capitalism until the capitalist
exploits the producer of labor.
The condition that is necessary for capitalism to take root is taking the ownership of the
means of production out of the hands of the majority of the people. This is precisely the
condition that existed/exists in Western Europe. Capitalism flourished in the motherland as
few held the means of production and the supply of wage laborers were many.
In the colonies this fertile soil of capitalism was not present at that time, to the chagrin of
many English capitalists who had visions of reaping great profits in the colonies. Capitalism
found difficulty in functioning due to the absence of the necessary aforementioned mixture:
ownership of the means of production by few and an abundance of suppliers of labor. The
newly formed colonies hosted an abundance of land and relatively few wage laborers. This
accessibility to land allows all members of society to own land, and thereby being owners of
their own means of production. For example a wage laborer would arrive on American soil,
work for a short while at decent wages and then buy his/her own land and begin laboring

U of Utah Econ 5080 2007fa 297
on their proper land leaving the capitalist to fend for himself, or as better stated by Marx:
“(the) producer of labor employs labor to enrich himself instead of the capitalist” (Capital,
pg. 931).
Increased land ownership is not the only barrier to capitalism, it has a byproduct. With
an ever increasing amount of wage laborers buying land and leaving their wage jobs. This
greatly depletes the supply of wage laborers in the market. For capitalism to function it
is necessary that there is a large supply of wage laborers. The greater the spread between
demand and supply of laborers the more profits the capitalist will gain. However, if supply
is close to equilibrium with demand the laborers will be able to demand higher wages,
preventing the capitalist from great gains.
To portray political economists’ attempts to combat these barriers to capitalism Marx provides
us with E.G Wakefield’s playbook of sorts to overcoming these colonization capitalism
barriers. To circumvent these barriers Wakefield suggests that the government must set “an
artificial price upon the virgin soil, a price independent of the law of supply and demand, a
price that compels the immigrant to work a long time for wages before he can earn enough
money to buy land and turn himself into an independent farmer.” This action would limit the
number of land owners and would also keep a healthy supply of wage laborers by “(setting)
the land price. . . high enough to prevent laborers from becoming independent landowners
until others had followed to take their place” (Capital, pg. 939). Marx describes this high
price as nothing but a ransom that the worker must pay to get permission to retire from the
wage labor market. By performing this operation the government can essentially eliminate
a labor class from owning its own means to production. This act ensures that capitalists’
profits will grow as he exploits the laborer. By forcing him to extend the amount of hours
worked for the capitalist, the greater he contributes to the surplus value of that capitalist.
This is a cycle of exploitation that the capitalist will run over and over again.
Throughout Wakefield’s theory Marx continuously interjects his comments pointing to
the abuses of the capitalist system found even within Wakefield’s text. One of the more
memorable instances is found on (pg. 938) as Wakefield unwittingly “depicts the mass of
the American people as well to do, independent, enterprising and comparatively cultured,
whereas the English agricultural laborer is a miserable wretch, a pauper.
Through this chapter we see that capitalism is not a seamless self-generating process
that just naturally occurs, but rather is an artificial exploitive system that requires heavy
state intervention to take root in freshly colonized lands. But once implemented it has the
power to prevent self-means of production to the masses, leaving them left in a capitalistic
dependent rut.
Next Message by Dannymangum is [723] and Next Message by Teight is [681].
Question 704 Is it correct to argue that constant capital is also a source of surplus-value
because the capitalists are able to exploit their laborers only because they have control over
the means of production?
[645] Tim: Incorrect. Constant capital is one of two forms of capital that are invested into
production, which to me would seem like a sunk cost. I don’t think it’s correct to say that
298 2007fa Econ 5080 U of Utah
constant capital is a source of surplus-value, but rather I would say that it plays an integral
role in accumulating the surplus-value. Without the constant and variable capital costs you
wouldn’t have anything to produce with and no one to produce. Essentially, surplus-value is
the residual that the capitalists have exploited out of the proletariat, money in their pockets,
and constant/variable capital is the investment into the means of production, sunk costs.
First Message by Tim is [72].
[646] Daniel: graded A Why yes! Variable Capital is the answer. No, it is not correct
to argue that constant capital is a source of surplus value. Marx says that there are two types
of capital: constant and variable. Constant capital includes all the capital laid down for
materials and supplies (ie. machines) which give the capitalist the ‘means of production.’
Variable capital however, is the capital that goes towards the labor-power. The value of
constant capital stays the same during production because it becomes a standardized system
in which X amount of materials are required to produce Y amount of commodities. The
variable capital however, is determined by the sum of wages given to labor which varies as
workers work more or less. Because the capitalist does not fully compensate workers for the
value they put into commodities, there arises surplus-value for the capitalist. (Annotations)
Thus far, I have merely paraphrased Marx/Hans and defined the two types of capital.
These definitions are important for understanding this question though. The reason it does
not make sense that constant capital could be a source of surplus value, seems simple. Capitalists
gain surplus-value through the exploitation of workers. Their means of production
(paid for with constant capital) does not add value to the commodity, it only provides the
ability to create commodities of value. It is the labor, as we have learned all semester, that
give value to the commodity. So, the question at hand is whether constant capital is a source
of surplus-value or not. It is not because surplus value is only possible because the laborers
gave it value, and they did not receive fair compensation from the capitalist. To say, constant
capital could affect the surplus-value would be to discredit the laborer, because they are the
true (and only) source of the surplus. Constant capital goes into making the process possible
but does not go into adding value to commodities. It is the workers alone who do that and
thus, in conclusion: it is variable capital alone that is the source of surplus-value.
First Message by Daniel is [117].
Question 707 is 319 in 1997WI, 387 in 1997sp, 384 in 1997ut, 582 in 2002fa, 606 in
2003fa, 665 in 2004fa, 612 in 2005fa, 736 in 2007SP, 736 in 2008SP, 741 in 2008fa, 774
in 2009fa, 842 in 2010fa, 871 in 2011fa, and 905 in 2012fa:
Question 707 The capitalist depends on the worker for profit, and the worker depends on
the capitalist for survival. Does this mean that workers and capitalists have the same interests?
[604] Harmon: Survival of the fittest! The worker is trying to survive and the capitalist
is looking to profit, therefore their interests are different. The capitalist does not care about
the survival of the worker, because he knows there are other workers willing to do the labor.
The capitalist only cares about his profit. The interest of the worker is in the wages he
receives from his labor; he does not care about how much the capitalist will profit. However,
I like Chris’s assertion in [2007SP:1296] “both the capitalists and the workers depend on

U of Utah Econ 5080 2007fa 299
each other for their survival.” This statement shows that they may have different interests,
but they need each other to survive.
MichaelM: I agree with what Harmon is saying. To add a bit more, I think that the capitalist’s interests will never
really be the same as the worker’s (except in rare circumstances), but I think that the worker may falsely think his
interests are the same as the capitalist’s. For example, a worker may work harder and more productively to increase
profits for the company with the hope that his work will be rewarded with higher wages or a share in the resulting
profits. This could result in a benefit to the worker, but in reality, the worker only created more surplus-value for
the capitalist and did nothing for himself. Does that make sense? The worker may continue to do things that are
in line with the capitalist’s interests, but it will never really benefit the worker in the way he originally thought it
might. I hope someone can make sense of the point I am trying to make here.
Message [604] referenced by [637], [678], and [2008fa:1214]. Next Message by Harmon is [649].
[605] ZACH: more money more problems. I believe that in a certain way yes, workers
and capitalist have the same interest. A worker wants to be able to survive and thrive in
his/her environment as does the capitalist. Now they differ obviously in the way that they
achieve their goals, but both are trying to make their situations better. A worker wants to
make more and more money to be able to provide a better life for them and their families,
while the capitalist is investing his/her money to be able to do make more money and better
their lives.
In summary, both want the most money possible for the situations they are in, more
money is the common interest among the two. They will both spend the money differently,
but both have the same interest of getting more money.
Hans: In this answer, the only difference between capitalists and workers is that they are in different “situations”
and that they “spend their money differently.” The capitalists invest and the workers consume. A Marxist would say
here that there is a connection between the wealth which the capitalists draw from their investments, and the lack of
wealth which the workers draw from their labor. The situation of dependence in which the workers find themselves
is not an accident or the consequence of individual capabilities or choices, but it is systematically created by socioeconomic
system which needs this dependence for its functioning. If this is the case, then one can no longer say
workers and capitalists have the same interests.
Message [605] referenced by [637]. Next Message by ZACH is [651].
[637] Daru: Conflict or Unity of Interests? On the surface the question seems simple
and deserves a simple answer: No the interests of the two are not same. Ideally, this should
follow a short explanation of why it is so and one may get a nice looking grade for it. To that
extent, I think Harmon’s [604] answer is appropriate and ZACH [605] seems to have missed
the point altogether. Howsoever, I believe the question is perhaps slightly more complicated
and deserves a more comprehensive reply. I shall attempt to do exactly that here.
Throughout the length of this semester, we have seen Marx repeatedly pointing out the
obvious and then reminding us why and how not to take it as the real picture. In other words
Marx repeatedly makes the distinction between what appears to be true and what really is –
for him the facade is only an indication to go behind it and see what happens at the core of
various processes.
I think the true picture, here, might be revealed by pondering over the three quotes that
Hans borrows from Wage, Labour and Capital in the paragraphs preceding Question 707
in Annotations. The third quotes “Hence, increase of capital is increase of the proletariat,
that is, of the working class” can confuse us very easily. Some may strongly argue that this
statement is precisely what shows that the interests of the workers and the capitalists are the
same. Others may counterargue, as Harmon does, by saying that the worker’s main interest
300 2007fa Econ 5080 U of Utah
is to survive, and the capitalist does not share this concern of the worker since he/she is only
interested in his/her profits. Hence, the interests of the two oppose each other and cannot be
the same. What this simple explanation does not tell us is why these interests oppose each
other. Hans, after mentioning the third quote from Wage Labour and Capital quickly moves
to point out that Marx followed it up by saying that “Hence, Increase in capital..... ”is a
contradictory identity. Although, the question mentions ‘workers’ and ‘capitalists,’ it does
not refer to individuals here. It is talking about the two different classes in a capitalist society.
When Marx says that increase in capital is increase of the proletariat, he is actually referring
to the two different classes in the society. He states that this is contradictory identity because
the interests of the two classes here, i.e. the proletariat and the capitalists, are contradictory
in nature. This separation or distinction between the individual and the class is important
here. In the context of one-to-one relationship, the interests of a single worker may (or may
not) match with interests of a single capitalist. However, Marx’s idea is not to explain these
one-to-one relationships but the relationship that exists between workers and capitalists as
two distinct classes with different class interests.
Capital has to increase - this is reflected in capitalists incessantly worrying about his/her
profits. Marx states that “capital can only grow by exchanging itself for labour power, by
calling wage labour to life.” The use of word ‘only’ is important as it excludes every other
possibility for capital to grow. It can only grow if it can exchange itself for more labour
power – by employing labour power that has hitherto been unemployed. This is the interest
of the capitalists in the workers – it requires their labour-power for capital to grow. The
workers on the other hand do not require the capitalists in the same way for the growth of
the working class. Instead, they only exchange their labour power for capital to increase
capital – not primarily to increase themselves! Hence, Marx’s statement “by strengthening
the power whose slave it is.” Even then it is not necessary that this exchange will take place.
For if the price of labour-power is too high, the capitalists would simply not hire them.
This does not mean that capital would stop increasing. It would only slow down the speed at
which it was increasing. This is where the contradiction and conflict of interests lies between
the two classes. Had the interests been the same, the two classes would have always worked
in unison and protecting interests of one would have automatically meant protecting the
interests of the other. Yet, this is not the case. Let’s assume that for simplicity’s sake the
interest of the working class is only to survive. When capitalists refuse to hire workers in
times of higher labour-power price, they only protect their own interests. Workers certainly
do not benefit from this. The capitalists will only start hiring workers when the prices has
fallen to a suitable or agreeable level. Hence, the interests of the two are not the same but
different and contradictory.
Well, this is what I think about it. I hope I have been able to present a more comprehensive
picture. If not you can blame it on my inability to find stronger brands of black tea in Salt
Lake City. I somehow haven’t been able to develop a taste for coffee here.
Message [637] referenced by [678]. Next Message by Daru is [690].
[678] Hans: The Dialectics of Working Class and Capital. Daru makes the correct
observation in [637] that an answer to the question “do workers and capitalists have the same
interests?” should not look at capitalists and workers as individuals, but this is a question
about the capitalist class and the working class.

U of Utah Econ 5080 2007fa 301
Here is another preliminary remark before we can try to answer this question. If we find
that the working class and the capitalist class need each other, this does not preclude that
they are also opposed to each other. There is a word for this: two things A and B form a
“dialectical contradiction” if they at the same time need each other and are incompatible
with each other.
In an early work, the 1844 Holy Family, Marx and Engels described the relationship
between capital and working class as follows: (I first give my summary and then a long
quote from Marx and Engels)
(1) capital needs the working class to maintain itself and to accumulate.
(2) but the people in the working class need to abolish their servitude, and therefore the
working class, in order to flourish.
This asymmetry, that capital needs labor but labor does not need capital, was recognized
by MichaelM in his comment about Harmon’s [604], by Therock in [2007SP:1295], and also
by Bosox and Gilmour in term paper [647]. Superficially, just the reverse seems to be the
case. The individual worker seems desperately dependent on capital, and capital seems very
powerful, almost invincible, in the market. Capital’s inherent dependence on the working
class is therefore not easily recognized. But let’s go on with the summary of Marx and
Engels:
(3) By its continued accumulation, capital will impoverish the working class and drive it
to recognize its own abasement. Therefore the working class will rise up and abolish capital.
(4) The working class cannot free itself from its own fetters without also abolishing “all
the inhuman conditions of life of society today which are summed up in its own situation.”
I.e., the victory of the proletariat will not lead to rule by another class but to the abolishion
of class rule, to a class-less socialist society. Although this was written in a very early work,
this general notion of the role of the proletariat was maintained by Marx and Engels through
their entire lives.
Here is the quote from Marx and Engels, from
http://www.marxists.org/archive/marx/works/1845/holy-family/ch04.htm
Proletariat and wealth are opposites; as such they form a single whole. They are both
creations of the world of private property. The question is exactly what place each occupies
in the antithesis. It is not sufficient to declare them two sides of a single whole.
Private property as private property, as wealth, is compelled to maintain itself, and thereby
its opposite, the proletariat, in existence. That is the positive side of the antithesis, selfsatisfied
private property.
The proletariat, on the contrary, is compelled as proletariat to abolish itself and thereby its
opposite, private property, which determines its existence, and which makes it proletariat.
It is the negative side of the antithesis, its restlessness within its very self, dissolved and
self-dissolving private property.
302 2007fa Econ 5080 U of Utah
The propertied class and the class of the proletariat present the same human self-estrangemen
But the former class feels at ease and strengthened in this self-estrangement, it recognizes
estrangement as its own power and has in it the semblance of a human existence. The class
of the proletariat feels annihilated in estrangement; it sees in it its own powerlessness and
the reality of an inhuman existence. It is, to use an expression of Hegel, in its abasement the
indignation at that abasement, an indignation to which it is necessarily driven by the contradiction
between its human nature and its condition of life, which is the outright, resolute and
comprehensive negation of that nature.
Within this antithesis the private property-owner is therefore the conservative side, the
proletarian the destructive side. From the former arises the action of preserving the antithesis,
from the latter the action of annihilating it.
Indeed private property drives itself in its economic movement towards its own dissolution,
but only through a development which does not depend on it, which is unconscious and
which takes place against the will of private property by the very nature of things, only inasmuch
as it produces the proletariat as proletariat, poverty which is conscious of its spiritual
and physical poverty, dehumanization which is conscious of its dehumanization, and therefore
self-abolishing. The proletariat executes the sentence that private property pronounces
on itself by producing the proletariat, just as it executes the sentence that wage-labour pronounces
on itself by producing wealth for others and poverty for itself. When the proletariat
is victorious, it by no means becomes the absolute side of society, for it is victorious only
by abolishing itself and its opposite. Then the proletariat disappears as well as the opposite
which determines it, private property.
When socialist writers ascribe this world-historic role to the proletariat, it is not at all, as
Critical Criticism pretends to believe, because they regard the proletarians as gods. Rather
the contrary. Since in the fully-formed proletariat the abstraction of all humanity, even
of the semblance of humanity, is practically complete; since the conditions of life of the
proletariat sum up all the conditions of life of society today in their most inhuman form; since
man has lost himself in the proletariat, yet at the same time has not only gained theoretical
consciousness of that loss, but through urgent, no longer removable, no longer disguisable,
absolutely imperative need – the practical expression of necessity – is driven directly to
revolt against this inhumanity, it follows that the proletariat can and must emancipate itself.
But it cannot emancipate itself without abolishing the conditions of its own life. It cannot
abolish the conditions of its own life without abolishing all the inhuman conditions of life
of society today which are summed up in its own situation. Not in vain does it go through
the stern but steeling school of labour. It is not a question of what this or that proletarian,
or even the whole proletariat, at the moment regards as its aim. It is a question of what the
proletariat is, and what, in accordance with this being, it will historically be compelled to do.
Its aim and historical action is visibly and irrevocably foreshadowed in its own life situation
as well as in the whole organization of bourgeois society today.
Message [678] referenced by [2008fa:1214]. Next Message by Hans is [680].
Question 715 is 327 in 1997WI, 395 in 1997sp, 392 in 1997ut, 589 in 2002fa, 613 in
2003fa, 672 in 2004fa, 619 in 2005fa, 744 in 2007SP, 749 in 2008fa, 782 in 2009fa, 851
in 2010fa, and 914 in 2012fa:

U of Utah Econ 5080 2007fa 303
Question 715 Why is it more beneficial for capital to keep the working class in a state of
“easy and liberal dependence” than to exert the maximum of surplus-value from them?
[610] MichaelM: yet another way the capitalist tricks the worker. Just as the worker
needs the capitalist, the capitalist needs the worker. A capitalist may own all the means of
production in the world, but would not benefit from it unless he has a worker to work for
him. Thus it is not necessarily the means of production which make the capitalist rich, but
the worker. This statement is debatable, but that is not what I mention it for. I mention this
to argue that the reason it is more beneficial for capital to keep the working class in a state
of “easy and liberal dependence” than to exert the maximum value of surplus-value from
them is so that the capitalist will continue to be able to have workers work for him. Like others
have mentioned in previous semesters when answering this question, the capitalist will
do what is necessary to keep the worker satisfied, whether through pay, vacation, benefits,
working conditions, etc., but will not satisfy them too much. The reason they do this is to
keep the worker working for them. If they do not do enough the worker will leave, but if
they do too much, the worker may leave. If the capitalist was to work the worker so hard
as to exert the maximum amount of surplus-value from them, the worker would most likely
not continue to work for the capitalist. As Slick mentions in [2004fa:514], keeping workers
happy by performing this balancing act can provide the capitalist the opportunity to exploit
the worker in yet another way. Because the worker trusts the capitalist in this state, the
capitalist may be able to extract more surplus-value from that worker by implementing new
technologies or innovations for the worker to use without the worker objecting. Who knows,
the worker may feel so comfortable as to be the one to suggest new ideas that would make
himself more productive for the capitalist without exerting much more labor. This definitely
benefits the capitalist if indeed the idea proves to be more productive, but my experience
in the labor force has shown no real benefit for the worker. So in short, my answer is that
capitalists know they cannot make money with their means of production without the worker
and so do what is necessary to keep the worker. In this case, they make sure they work them
enough, but not too much.
Message [610] referenced by [662]. First Message by MichaelM is [119].
[662] Melanie: graded A Cozy Workers. We must remember that profits for the capitalist
rely on laborers. Without laborers there can be no profits. Eden states, “Persons of independent
fortune owe their superior advantages by no means to any superior ability of their own,
but almost entirely to the industry of others.” I would correct Eden here by saying, “but entirely
to the industry of others” omitting the “almost”. But how does the capitalist keep the
laborer industrious?
Avatar [2005fa:1595] reminds us of an old saying which applies perfectly to this question:
“You can shear a sheep many times, but you can only skin him once.” Mandeville further
explains this by saying, “The only thing then that can render the laboring man industrious,
is a moderate quantity of money, for as too little will, according as his temper is, either
dispirit or make him desperate.” I don’t agree with MichaelM [610] who says, “The capitalist
will do what is necessary to keep the worker satisfied, whether through pay, vacation,
benefits, working conditions.” I don’t think laborers received much vacation and benefits
during Marx’s time. We only have them now because of the victories of the working class
304 2007fa Econ 5080 U of Utah
over the past century. I also don’t think it is always the case, or even mostly the case when
MichaelM [610] says, “If they (the capitalist) do not do enough, the worker will leave.” I
think most often the worker will just not be as productive.
The capitalist wants his laborers to feel satisfied and even grateful for the wage they
receive. It would not be smart for the capitalist to pay his workers so little that they begin to
wonder whether or not they are receiving just compensation for the value they are producing.
Keeping the worker in a state of “easy and liberal dependence” is yet another method the
capitalist uses to keep the exploitation of his workers secret and hidden from plain view.
If the capitalist were to exert the maximum of surplus-value from the worker, this will
reduce the productivity of the worker over the short and long run. In the short run, the worker
will become angry and discouraged, and will not strive to please his capitalist employer. In
the long run, the worker will become less physically able to perform his labors. He will also
not have enough resources to raise children i.e. the next generation of laborers, which the
capitalist desperately needs to continue the expansion of his profits. Thus, the advantage of
the capitalist to keep the worker in a state of “easy and liberal dependence” is not only to
keep laborers industrious, but also to ensure a constant supply of laborers down the road.
Message [662] referenced by [669], [680], and [2010fa:1038]. Next Message by Melanie is [689].
[669] Jeff: Power of Collectivity. Melanie (As Submitted:) Re: [662] Cozy Work-
writes in [662] that the capitalist may not ers. In response to what Melanie stated on
want to pay the laborer a very low wage
because it may lead to the laborer ques-
[662] regarding the working class, I believe
tioning why he is there. However, assume
that all capitalists were to act in this man-
a key part that needs to be emphasized is
ner: minimizing cost collectively to increase the productivity of the individual. Melanie
their profits. Can it be said then the laborer writes that the capitalist may not want to
has much say in what happens to his job? pay the laborer a very low wage because
Of course not. Rather, even if the laborer it may lead to the laborer questioning why
he is there. However, assume that all capitalist
were to act in this manner: minimiz-
would look for another job somewhere else, ing cost collectively to increase their profits.
he would not be able to be paid more than Can it be said then the laborer has much say
what he was already making. Therefore, it
does no good for the laborer to react to such
in what happens to his job? Of course no.
actions by the capitalist. Rather, even if the laborer would look for
another job somewhere else, he would not
be able to be paid more than what he was
already making. Therefore, it does no good
for the laborer to react to such actions by the
capitalist.
However, applying the same concept to
the laborers. What if the laborers collectively
agreed to decrease their productivity
The same concept can be applied to the
laborers. They do not have control over their in an attempt to make a higher marginal

U of Utah Econ 5080 2007fa 305
wage, but they have control over the effort wage, thereby giving them more money for
they put into their work. What if the laborers
collectively agreed to decrease their effort
in an attempt to make a higher marginal less work? Would the employers then have
to respond by raising wages in order to in-
wage, thereby giving them more money for
crease productivity? Of course. This is the
aspect that was neglected in Melanie’s re-
less work? Would the employers then have sponse, that the laborers may have the same
to respond by raising wages in order to increase
productivity? Of course. This is the amount of power as the capitalist if and only
if they act collectively. Otherwise this initiative
would not work. Therefore, the fo-
aspect that was neglected in Melanie’s recus should be on productivity and only that
sponse, that the laborers may have the same when analyzing situations like this.
amount of power as the capitalist if and only
if they act collectively. Otherwise this initiative
would not work. Therefore, the focus
should be on productivity and only that
when analyzing situations like this.
Hans: Your original message lost a lot of its punch because you rolled out productivity too early. I edited it in an
attempt to make it clearer. Please let me know if I mis-interpreted your original intent.
Message [669] referenced by [680], [2008fa:1257], [2008fa:1269], and [2009fa:1216]. Next Message by Jeff is
[670].
Question 717 is 398 in 1997sp, 395 in 1997ut, 675 in 2004fa, 621 in 2005fa, 746 in
2007SP, 746 in 2008SP, 751 in 2008fa, 784 in 2009fa, 853 in 2010fa, 882 in 2011fa, and
916 in 2012fa:
Question 717 What does Marx use the metaphor of a golden chain for? Why does he say
the chain has become heavier?
[652] Kalmerico: In the chains of capitalism. Marx uses the metaphor of the golden
chain to portray the worker’s connection to the capitalist. Conditions can improve for the
worker through higher wages or a better working environment and can extend the chain.
The worker may be happier and less stressed, but none the less they are still a slave to the
capitalist. The use of gold in the metaphor could be used to represent money, thus portraying
the chain as a “life line” connecting the worker to the capitalist, as the capitalist provides
the means to keep the worker alive. In this sense the capitalist is able to provide comfort to
the worker (even though he is imprisoning him), as the worker knows that if he sticks by the
capitalist and follows his rules he will have the means to provide for himself.
Message [652] referenced by [671]. Next Message by Kalmerico is [713].
[664] JohnGalt: A chain is still a chain. The “golden chain” metaphor that Marx utilizes
indicates that he perceives the status of the laborer as unchanging in quality. He began as an
individual exploited by capitalism and will end in the same condition, no matter how much
better he is treated.
306 2007fa Econ 5080 U of Utah
The chain, whether golden or made of some less lustrous ore, is the force that binds and
constrains the laborer. A chain is still a chain, no matter what metal it is made from, and it
has only one purpose: to bind.
The chain made of gold, however is superb symbolism. It recognizes the increased capacity
for consumption and accumulation for the worker-slave as capital continues to expand
and increase. The gold symbolizes the rise in the quantity of goods that the worker can
consume and the appearance of wealth. But the quality of that status is the same. The
worker remains chained, completely dependent on the capitalist who controls the means of
production. He is still a slave and always will be if the social relations remain the same.
It is of great consequence that Marx chose gold, the brilliant, but exceptionally heavy
metal to describe this chain. The golden chain may symbolize a more opulent state of slavery,
but to maintain that level of “luxury” the slave must be even more oppressively burdened.
This burden comes in the form of exploitation of the worker’s labor and of his consumption
possibilities which are also determined by the capitalist class. Thus, the worker literally
fashions this chain for himself. All the while he is told that he is creating a better and more
prosperous life for himself. Instead, he is becoming more indebted and binding himself more
tightly.
The laws of society do not protect the worker from this condition, instead they promote
this. This is not what is taught in schools but it is the truth. Laws are created to protect
existing social relationships and property rights. This benefits those in power and ensures
that they retain their elevated positions.
First Message by JohnGalt is [71].
[666] Nogi: gold chain metaphor. Marx
says that under the conditions of accumulation,
when they are the most favorable
(As Submitted:) gold chain metaphor
Marx is talking about how under the conditions
of accumualtion when it is the most
for the worker, the worker’s dependence on favorable for the worker the dependence the
capital becomes acceptable or at least bearable.
Marx also remarks that the domination
and exploitation of the worker doesn’t worker has for capital acceptable or at least
get more intense but more extensive. Un- bearable. He also points out how the domider
these favorable conditions the worker nation and exploitation of worker doesnt get
is able to acquire more money, but the reprieve
does not change how they are being more intense but more extensive. Under this
exploited anymore than a mere slave’s situation
is changed when the slave is fed better favorable conditions the worker is able to
food. Marx then concludes that the length acquire more capital but the reprieve does
not anymore change how they are being ex-
and weight of the gloden chain is forged by ploited anymore than a mere slave. He then
the worker himself, meaning in this situation
that the worker has more length but it concludeds that the length and weight of the
is getting heavier. He might think he is getting
more capital for himself but really he is
becoming more of a slave to capitalism. gloden chain is forged by the worker himself
meaning in this situation maybe the worker

U of Utah Econ 5080 2007fa 307
has more length but it is getting heavier. He
might think he is getting more capital for
himself but really he is becoming more of
a slave to capitalism.
Hans: If the worker can buy more and accumulate some savings, this does not mean the worker suddenly has
capital. Your entire little essay was formulated very carelessly.
Next Message by Nogi is [668].
[671] Jeff: Gold Chain. I agree with Kase in [2007SP:1288] of Spring 2007 when trying
to understand the gold chain symbolism. It is true that the laborer believes he is better off,
he is in actuality still chained to the capitalist. The capitalist controls him completely. Marx,
when referring to how the chain is heavier, means that although the worker is still “chained”,
the chain becomes stronger and stronger and the capitalist has even more control over the
worker as the chain gets heavier (i.e. the worker becomes more and more dependent upon
the capitalist for survival). This is the meaning I believe Marx was trying to relay when
proposing the symbol of the gold chain, more so than what Kalmerico said in [652].
Next Message by Jeff is [684].
Question 718 is 331 in 1997WI, 399 in 1997sp, 396 in 1997ut, 593 in 2002fa, 617 in
2003fa, 676 in 2004fa, 622 in 2005fa, 785 in 2009fa, 854 in 2010fa, 883 in 2011fa, and
917 in 2012fa:
Question 718 Does it make sense for the working class to fight for higher wages if the
capitalist, for economic reasons, usually maintains the upper hand in such conflicts?
[668] Nogi: workers fight for nothing. No it does not make sense for the worker to fight
for higher wages. Marx says that in the best case scenario of wages being raised all that
would happen is that the worker gets a small decrease in the amount of unpaid labor he has
to do. Marx also says that by their very nature wages require the worker to perform unpaid
labor. It can go a couple of different ways. The price of labor will keep rising as long as
it doesn’t get in the way of the capitalist’s accumulation. If wages rise and it does interfere
with accumulation, then the price of labor will fall to meet with the capital’s requirements
for self-valorization. It always appears that the capitalist will come out on top, so it is useless
for the worker to fight for higher wages.
Hans: You say yourself that sometimes a rise in wages does not interfere with capital accumulation. Then why not
fight for better wages, even if it does not mean the end for capitalism?
Message [668] referenced by [670]. First Message by Nogi is [34].
[670] Jeff: workers may have a chance. I disagree with Nogi in his analysis [668] of
question 718. The employee may very well have an edge in demanding higher wages but it
must be done collectively even though the management may seem to have the advantage.
Assume that in the car industry, rather than producing 5 cars per day per worker that
workers now produce 2 cars per day per worker. Also assume that the loss in revenue of
such a decrease leads to a decrease by half in the profits of that company. Now looking at
this scenario, would the company rather increase the wages slightly, not so much that it will
decrease profits, but to a point where productivity may rise higher than what was originally
given to the employees? This would of course make perfect sense. Not only will the workers
stay and work harder, but it will also lead to a higher productivity because they are happy
308 2007fa Econ 5080 U of Utah
with the wages they are getting and working hard to maintain that position, since the demand
for that job will subsequently rise after the rise in the wages.
Expanding on the latter point, it may also be easier to find people to work and maintain
high levels of productivity. This is primarily because they know that there may not be another
industry that pays wages equal to what they are receiving. It also should be noted, as
mentioned earlier, that more people will want the job and so the replacement of the workers
who don’t have high productivity becomes very easy.
So, I disagree with the point that laborers should not fight because it is useless. If done
collectively, there is a strong influence on management to raise wages. However, management
always has the upper hand in these matters regardless. But it does not mean that it
should automatically be seen as a failed attempt by the laborers before they even start.
Hans: And even if they lose their labor struggles, Marxists would say that the struggle itself creates forms of
organization for the workers that can make a difference in the future, and that the workers learn from their struggles.
Message [670] referenced by [680], [2009fa:1129], [2009fa:1145], [2011fa:1091], and [2012fa:1486]. Next Mes-
sage by Jeff is [671].
Question 727 is 559 in 2001fa, 756 in 2008SP, 761 in 2008fa, 794 in 2009fa, 863 in
2010fa, and 896 in 2011fa:
Question 727 What is the right answer to the question: “How has the worker” (and not only
the worker but mankind as a whole) “been able to pass from being the master of capital—as
its creator—to being its slave?”
[603] Marcellus: Two Dimensional Appearance, Three Dimentional Reality. There
may have been a time when workers were the masters of their capital. Such a time may have
occurred in a truly barter society where people survived by using their labor and time to make
what they knew best and what society generally wanted. They then would take the results of
their labor and trade them for a means of sustenance. In this way, all of the value they created
was realized for themselves when their exchanges took place on the market. However, with
the introduction of money as the general equivalent of exchange, it was no longer necessary
to trade commodities for commodities which could be a burdensome process. For example,
as every commodity owner may not have accepted cotton as payment, every commodity
owner could now accept money because money could buy any commodity.
The right amount of money could also buy means of production as well as another important
commodity “labor-power.” But this is no longer called money; it is called capital
because it uses money to make more money, and this is its sole intention. So, as everyone in
the barter society aforementioned labored to live in relative equality, the new capitalist society
is now divided into classes with different intentions; there are the majority laborers who
create valuable products and are paid a wage below the value they create. Their intentions
are to provide for themselves and their families. And then there are the minority capitalists
who own the means of production which tend to be expensive and out of the ordinary
laborer’s reach. The capitalists’ intentions are also to provide for themselves, but as many
times over as they have laborers working for them and creating surplus-value. They then
give the laborers just enough money to survive so they are forced to come back to work the
next day. When looked at from this point of view it is evident how the system has become

U of Utah Econ 5080 2007fa 309
tweaked, making the majority of people tools for the rich. And as this system presses on, the
capitalists’ coffers will ever-expand while the ordinary folks continue to live from paycheck
to paycheck.
To sum up, it is the separation of the realization of value of sold commodities from the
labor that created them which makes mankind the slave to capital, and it is done in such a
way that it is hidden from view. When people get their paycheck, they think it is for the
labor and time they put into their job, which it is. They just create much more value than
they are compensated for.
Hans: The step from money to capital is not as immediate as you depict it. Capitlist production presupposes also
the expropriation of the direct producers from the means of production, so that they had to sell their labor-power
instead of being able to sell their labor.
On the other hand, Marx would say that commodity production itself is not as benign and beneficial as you say.
Social relations of production which are mediated through commodities inherently have the mysterious qualities
Marx called the “fetish-like character of commodities.” Indeed, the present question 727 could be reformulated as:
why does the fetish-like character of commodities come from?
Next Message by Marcellus is [725].
Question 730 is 435 in 1999SP, 530 in 2000fa, 561 in 2001fa, 603 in 2002fa, 627 in
2003fa, 761 in 2007SP, 759 in 2008SP, 764 in 2008fa, 797 in 2009fa, 866 in 2010fa, 899
in 2011fa, and 929 in 2012fa:
Question 730 In 773:1, Marx discusses an empirical phenomenon in which technical progress
“expresses” itself. Which phenomenon is that? Why does Marx speak here of an expression?
[679] Corey: graded A– Productivity or technical progress? The empirical phenomenon
being described here is that as technology progresses the ratio of the mass of means of
production to labor power increases, thus increasing the productivity of labor. Think of
raised glazed donuts. If you have donuts being made in the traditional manner you must
mix the ingredients, roll out the dough, cut the donuts, let them raise, cook them, mix the
glaze, and finally glaze them. This is a very time consuming process, and if you are trying
to produce enough to sell you will need many people working to keep the process flowing.
Now think of Krispy Kreme with their continuous donut line. You insert the ingredients
for the dough on one end, the ingredients for the glaze on the other, and the machine does
the rest. Perfect glazed donuts come out the other end. Now one person can produce the
same amount as a kitchen full of people. However the mass of the means of production
have significantly increased. You have much more infrastructure and less labor to support
production in the latter. Marx is talking about an expression here because you are “seeing”
more technical progress, but what really is happening is that you have increased productivity.
Increased productivity expressing itself through technical progress.
Hans: Let’s go with the definition: A is an expression of B if A is a visible process whose occurrence indicates
that the underlying process B, which can not be directly seen, is happening. For instance, Tom’s attendance at
church is an expression of his religiosity. In our case, the underlying process is technical progress, the evolution
of the production process due to learning by doing etc which leads to more products with the same labor effort, or
to higher quality or new products. One sign that this technical progress is happening, i.e., one expression of it, is
the increase in the technical composition of capital. You are writing that this increase increases the productivity of
labor, i.e., it is a cause of technical progress. Marx remarks that this is not always the case; increased machinery is a
cause of increased productivity, but increased volume of materials used in the production process is a consequence
of increased productivity. In either case it is an expression of increased productivity.
310 2007fa Econ 5080 U of Utah
Message [679] referenced by [2008SP:830] and [2010fa:1171]. First Message by Corey is [140].
Question 736 is 609 in 2002fa, 633 in 2003fa, 692 in 2004fa, 767 in 2007SP, 770 in
2008fa, 872 in 2010fa, and 905 in 2011fa:
Question 736 Describe the mechanisms of repulsion and attraction of individual capitals
in the course of accumulation.
[684] Jeff: According to Marx, during the course of accumulation, two things occur:
repulsion and then attraction. During the first step, repulsion, competition occurs between
small firms in the market that are providing the same products and/or services. This occurs if
the demand for a certain product increases and then firms all begin to produce that demanded
commodity in order to make a profit. This causes repulsion.
In the next stage as Marx describes it, attraction between the competitors in the market
occurs. Capitalists find that it may be more profitable for them if they were to put together
all the small firms into one large manufacturing firm. This attraction leads to the creation
of a large firm with economies of scale which will lead to the accumulation of more capital.
Thus, the capitalist finds it better for his firm to operate in this manner.
Hans: Competition is not a mechanism of repulsion but of attraction, because the larger capitals usually win, and
the losers in competition are often gobbled up by the winners.
Message [684] referenced by [685]. First Message by Jeff is [107].
[685] Dyoung: graded A– The laws of attraction. The mechanisms of repulsion and
attraction of capitalists in the course of accumulation are very simple if you look at it from
a distance. I would say that my interpretation of the reading leads me to believe that they
all hinge on one principle, profit. In the Annotations, we only have a few facts and all the
mechanisms are not entirely fleshed out. In competition, big capitalists win because their
larger size makes them more efficient. Smaller capitalists must compete more fiercely for
profits due to inefficiency. Also in this competition, the cheapness of commodities depends
on productivity of labor and the scale of production, which again tips the scales in favor of
the big capital businesses. The mechanism of attraction is that when there is no large capital
working in a certain area, many small capitals will enter the production market in that area.
They must compete fiercely for their profits because of the rising minimum size of capital,
big capital will enter the market eventually and either drown out these small capitals, or
simply buy them to make the big capitals bigger. The reverse would also be true, if there is
falling profit, big capital will leave, and make room for small capital, until that area or field
becomes profitable again. So, repulsion and attraction all follow the profit, big capital and
small capital alike are attracted to profit and repulsed by loss.
Hans: Just like Jeff [684], you think that competition is repulsion. Repulsion, for Marx means, accumulation of
capital through tearing off of new firms from already existing firms, or through the formation of new firms. A
greater number of firms leads to fiercer competition, but competition itself is described by Marx as one of the main
mechanisms of attraction of capital.
Next Message by Dyoung is [700].
[724] Hans: Not like rabbits. The “accumulation of capital” is a macro concept looking
at the population as a whole. Marx says in Capital that the capital population grows through
reinvestment of profits. For some issues it is important to look at it on an individual scale.
What does the overall accumulation of capital mean for an individual firm?

U of Utah Econ 5080 2007fa 311
To get a better handle on this, let’s look at an analogous situation in biology. Say the
wildlife biologists have discovered that in a certain area the rabbit population has grown.
What does this mean for individual rabbits? It does not mean that all the rabbits hopping
around are suddenly bigger. Newborn or young and immature rabbits contribute to
the growth of the rabbit population by getting bigger themselves. But after a certain age,
they cease to grow, and instead, female rabbits give birth to new rabbits periodically.
The accumulation of capital is different. Much of it is indeed the growth of individual
firms. Unlike rabbits, which cease to grow after a certain age, capitalist firms can continue
to grow indefinitely. Marx calls this growth the “concentration of capital.”
On the other hand, there is also a process analogous to giving birth. Sometimes a firm
splits into two or more firms. This is the process Marx calls the “repulsion” of capital. It
is as if the dollar bills could not stay in one pile, but they repelled each other. Marx’s main
example is the splitting up of a family enterprise among its heirs. More modern situations
would be a firm outsourcing certain inputs to specialized suppliers instead of producing them
in house, or by employees leaving and founding their own firm, or by new firms springing up
in a new unproven technology before the big players enter the field, or just one big concern
splitting off one subordinate branch of production so that they can concentrate on the main
area of their business.
Thirdly, there is a process which has no analog in biology, and that is the centralization of
capital. Different capitals often merge. Paradoxically this may be due to competitive battles
between firms: the loser in this competition either goes under or is gobbled up by the winner.
Message [724] referenced by [687] and [2008fa:1236]. Next Message by Hans is [727].
Question 738 is 611 in 2002fa, 635 in 2003fa, 694 in 2004fa, 641 in 2005fa, 769 in
2007SP, 767 in 2008SP, 772 in 2008fa, 805 in 2009fa, 874 in 2010fa, 907 in 2011fa, and
937 in 2012fa:
Question 738 How do competition and credit help in the process of centralization?
[681] Teight: Monopolies are evil. Many people in the economic industry view monopolies
as devilish corporations that eliminate competition. Walmart is often the “whipping boy”
by protesters because it eliminates small businesses that can’t compete with their low prices.
Centralization needs competition because it creates more efficient production that requires
larger scales. Credit provides the financial funds that businesses need to keep investing in
production. Competition and credit work in unison to continue the process of Centralization.
Hans: Your argument is that competition requires centralization (because competition requires higher efficiency,
which requires larger scale production). The question was the reverse, how competition generates centralization
(by the winner in competition swallowing up the loser).
By the way, Walmart is often criticized because much of its “efficiency” consists in low wages: they fire
employees before they become eligible for health insurance, hire undocumented workers, force workers to work off
the time clock, etc. Wages, health insurance, pension benefits, should not really be considered a cost of production.
They are a benefit of production.
Message [681] referenced by [682]. First Message by Teight is [48].
[682] Ricky: Credit and Centralization. I agree with Teight [681] that competition and
credit “work in unison to continue the process of Centralization”. I would, however, like to
expound on his slim explanation of credit. Credit definitely plays a big role in the financial
312 2007fa Econ 5080 U of Utah
investments of businesses. Teight explains, “Credit provides the financial funds that businesses
need to keep investing in production”. In other words, credit funds the continuance
of production. This is true but this alone does not push the process of centralization. Credit
allows production not only to continue but to also expand. Credit facilitates large-scale production
(a precursor to centralization) that would not otherwise be possible. As explained by
Hans [2002fa:436], this speeds up the capitalist development. Several small wealth owners
are able, thanks to credit, to combine their wealth and thus become one big capitalist. The
individual capitalist is no longer forced to grow by the slow process of accumulation. The
small-capitalist stage is bypassed. Thus Credit is indeed, as Marx described it, “the specific
machine for the centralization of capitals”.
First Message by Ricky is [94].
[687] Jason: In response to this question I went to the annotations and looked over submission
[2007SP:1356] which I thought addressed the question in a straightforward and easy
to understand manner, and I agree with Bronco’s comments. First of all, competition is a
very important component in a capitalist society. A capitalist will use his/her resources in
society in order to compete at a very high and successful level. Take for example Larry H.
Miller, he owns several car dealerships not just in Utah but throughout the country. If Larry
owns all of the dealerships in Salt Lake City let’s say, no one else would be able to compete
with him, everyone would have to buy a car from him unless they were willing to travel a
greater distance. The fact of the matter is that because there is competition, it forces people
to look for ways to have a greater advantage over the other individuals that would like
to take the business. Once a company can gain an advantage over its competition it forces
its competitors to look elsewhere in order to maintain their business. Those in power will
stay in power until someone else can surpass them and outdo them because of their ability
to compete. In regards to the credit system. This system allows multiple entities to come
together and benefit from each other. People can borrow money which helps them to grow
their operations at a faster pace. The lender of the money is compensated with interest over
time. If it were not for the credit system people would have to earn their own capital and
allow it to accrue which can take a long time.
Hans: You seem to be saying that those who are already big have higher ability to compete. This is true, but this
does not explain the link between competition and centralization. I said some relevant things about this question in
[724].
Next Message by Jason is [692].
Question 739 is 418 in 1998WI, 442 in 1999SP, 568 in 2001fa, 612 in 2002fa, 636 in
2003fa, 695 in 2004fa, 642 in 2005fa, 770 in 2007SP, 774 in 2008fa, 807 in 2009fa, and
909 in 2011fa:
Question 739 What is the centralization of capital? Show how accumulation leads to centralization.
Which effects of accumulation are enhanced by centralization?
[688] Poppy: Accumulate What? 1. Centralization of capital is where two companies
join to create a product that they would not be able to produce otherwise alone, possibly due
to the lack of knowledge and/or capital.
2. Accumulation leading to centralization can best be described by Marx’s example of
the following:

U of Utah Econ 5080 2007fa 313
In a market, there is one company that focuses solely on producing steel. There is another
that focuses solely on wood production. These two companies decide to join so that they
can produce railways. When they do this, they are centralizing their accumulation of capital
to make one product that is bigger than what they could have produced on their own. This is
an example of a Joint Stock Company.
3. Both accumulation and centralization are effects of accumulation, therefore both are
enhanced.
Hans: “Centralization ... is where” is not the right way to define a term.
Message [688] referenced by [727]. Next Message by Poppy is [716].
[727] Hans: Vernunftehe. When I was a child, growing up in Germany, the adults around
me sometimes said about a couple getting married: “This is a ‘Vernunftehe’.” ‘Marriage of
convenience’ is not a good translation for ‘Vernunftehe’. It should rather be ‘marriage of
reason’. Little boy Hans always wondered what the adults meant by this: shouldn’t every
marriage be reasonable? The adults always admonished him to be reasonable (vernünftig).
What was wrong with a marriage of reason?
Poppy’s [688] reminds me of this. She defines centralization of capital as the process
where two capitalists go together in order to produce something which they could not have
produced individually. Basically she is saying every centralization of capital is a “marriage
of reason.” Marx has a different view. He tries to identify anonymous economic forces
that drive individual capitals to centralize. This is an explanation of the many cases of
centralization by broad social forces rather than by individual choices.
First Message by Hans is [5].
Question 743 is 417 in 1997sp, 646 in 2005fa, 774 in 2007SP, 778 in 2008fa, 880 in
2010fa, 913 in 2011fa, and 943 in 2012fa:
Question 743 Does the surplus-population arise from capital’s inability to keep pace with
the growth of the population?
[695] Amy: Surplus-population because of profit-maximizing. Surplus-population
does not arise from the capital’s lack of ability to keep pace with the growth of the population.
Surplus-population arises from capitalism itself. Capitalists are only concerned about
making the most profits for themselves. With the development of new technologies and more
efficient ways of production the need for workers decreases. The invention of better means
of production makes is so that the capitalist can decrease the amount of laborers and still
be able to increase their profits at the same cost to them. In Marx’s terms, it is the change
in proportion of constant to variable capital. The ratio changes from 1:1 to something more
like 2:1 or 3:1, etc. For example if the ratio of constant to variable capital changes from
1:1 to 3:1 only 1/3 of the capital growth is turned into labor-power and 2/3 of the capital
growth in turned into the means of production. Since there is a decrease in the demand for
workers this creates the surplus-population. The surplus-population is a result of capitalists
adjusting to the changes in production and technology the best they can while maximizing
their profits, even if this means hurting the laborers.
Message [695] referenced by [703] and [2008fa:1249]. First Message by Amy is [99].
314 2007fa Econ 5080 U of Utah
[703] Gilmour: graded B+ As Marx has stated, “Surplus-population arises from capitalism
itself.”
Hans: This is a quote from Amy [695], not from Marx.
We see an ever increasing change in production. As Hans stated in [2007SP:1395], “the
capitalist do not introduce machinery in order to create an excess supply of labor...capitalists
introduce that technology which is most profitable for them.” The capitalist are competing
with each other in order to advance their own cause. The capitalist is in it to increase their
own profit. Hans also summarized in the annotations that the surplus population arises for
four main reasons.
(1) Increase in centralization leads to increase in the scale of production and technical
progress. This can go on even if capital itself does not grow.
(2) Technical innovation in new capitals also forces the old capitals to introduce the new
technology.
(3) Organic composition increases in more industries
(4) Intermediate pauses become shorter.
Hans: Everything you are saying indicates that capitalism generates the surplus-population through its own activity,
even though the surplus-population is usually not the purpose of this activity. This is quite different than
saying, as in the question, that the population grows too fast and capitalism cannot keep up. (You should have said
something like this yourself.)
Message [703] referenced by [710]. First Message by Gilmour is [95].
Question 744 is 573 in 2001fa, 618 in 2002fa, 642 in 2003fa, 701 in 2004fa, 647 in
2005fa, 775 in 2007SP, and 779 in 2008fa:
Question 744 Why does the rise in the organic composition outpace the growth of capital?
[701] Tyler: graded A faster growth than capital? Marx gives several mechanisms
which cause the increase of the organic composition to be faster than the accumulation of
capital:
1) Centralization or the merging of individual capitals increases the scale of production 2)
Technical innovation of new capital forces original capital to innovate as well 3) An increasing
number of industries are taken over by increasing organic composition 4) Intermediate
pauses become shorter
Which, according to Marx, lowers the value of labor because of the technological advances
of capital. Expanding upon the first mechanism, the accumulation of capital is driven
by capitalists seeking quantitative gains. However, these increases in the scale of production
must be accompanied by cooperation of workers and improved training of workers: Both of
which will result in qualitative gains. The qualitative gains will result in an efficient, well
trained workforce which will further increase the quantitative gains. Therefore, the cycle
will repeat itself since further qualitative gains will be needed to accompany the perpetual
qualitative gains.
First Message by Tyler is [101].

U of Utah Econ 5080 2007fa 315
Question 745 is 424 in 1998WI, 448 in 1999SP, 619 in 2002fa, 643 in 2003fa, 702 in
2004fa, 648 in 2005fa, 776 in 2007SP, 780 in 2008fa, 813 in 2009fa, and 915 in 2011fa:
Question 745 What does capital need this surplus-population for? (How come it produces
exactly what it needs?)
[692] Jason: First of all, as was mentioned in a prior submission [2005fa:1796] by ADHH,
capitalism requires a significant amount of laborers in order to function. If capital increases
that will force there to be an increased need for more laborers. One point that I liked from
ADHH was that he mentioned that with the increased amount of technology, there is an increased
need for laborers. However with the increase in technology there will be a gradual
decrease in the need for laborers, because various machines and tools can be used to replace
some laborers over time, which will create an increased level of competition amongst the
labor force. With this phenomenon there will be a surplus labor supply which is beneficial
to the capitalist in that the laborers want to work and with the decline in the need for laborers
because of the advance in technology the labor force is forced to accept whatever the capitalist
is willing to give him/her for their labor. For the laborer, it is either he/she works for
the wage that the capitalist is willing to pay or he/she receives nothing because the capitalist
has the surplus labor force to fall back on and will find someone who is willing to work for
the wage he/she is going to pay.
Hans: Very sloppy writing.
It may seem as if the capitalists can pay whatever wages they please. This is so because the labor movement at
the present time is extraordinarily weak. Things could also be otherwise.
Next Message by Jason is [705].
Question 749 is 623 in 2002fa, 647 in 2003fa, 706 in 2004fa, 652 in 2005fa, 780 in
2007SP, 779 in 2008SP, 784 in 2008fa, 886 in 2010fa, and 949 in 2012fa:
Question 749 Which violent means did capital use in its infancy to sweep away the bounds
imposed on its accumulation by the natural limits of the exploitable working population?
[708] Melissa: graded A– Violence is not the answer. Where to start? The capitalists
used many different violent means in its infancy, some still used today. One of the violent
means, turning one laborer against the next laborer, this is one that was used and is still being
used today. If the pool of laborers is quite higher than the number of laborers needed, you
will have people who will do anything to keep a job or get a job. Including work for a lesser
wage, or working longer hours. Both of these will result in more profits in the Capitalists
pocket. Child labor is another violent mean, capital used in its infancy. A Capitalist could
pay a child far less than what he would have to pay an adult to do the same work. Laws
that have been put in place to restrict some of these violent means have certainly helped the
issue. However, you really wouldn’t have to look too hard to find some form of them still
being used today. You hear more often of companies “ranking” their employees. I feel this
is just another violent means the capitalist can use to exploit the laborer even more. Hanging
the worry of a lay-off or firing over the laborer’s head makes them work harder to get the
higher ranking. We certainly have come a long way, but we still have a ways to go...
Hans: You are right to call these contemporary means violent. They are violent in essence, although not outwardly
violent. A Marxist would say that this inherent violence of the system is the reason for the hight incidence of crime
and war in a capitalist system.
Nevertheless it would be informative to compare today’s means with those from the infancy in capitalism.
316 2007fa Econ 5080 U of Utah
In its infancy, capitalism was indeed outwardly bloody and violent. None of the answers in the archives so far
give describe these methods, except for a brief allusion in my comment about [2005fa:1834].
Message [708] referenced by [710]. First Message by Melissa is [82].
[710] Bosox: To start off I think we need to touch on surplus population. “A surplus
population of workers is a necessary product of accumulation or of the development of
wealth on a capitalist basis.” Marx pg 784
Taking from the notes of Gilmour in [703] he quotes Hans’s summary of the four steps of
surplus population:
(1) Increase in centralization leads to increase in the scale of production and technical
progress. This can go on even if capital itself does not grow.
(2) Technical innovation in new capitals also forces the old capitals to introduce the new
technology.
(3) Organic composition increases in more industries.
(4) Intermediate pauses become shorter.
With this surplus of population this is a start to the violent means to capitalism in its
infancy. The “Reserve Army” there begins to be the beginning of wage labor which is the
mode of production where the worker sells their labor power as a commodity. As stated by
Hans in [2005fa:1834]: “laws which forced the peasant dispossessed by the enclosure movements
into wage labor relations” Enclosure is in the beginning stages of a new development.
This is at the point where violent means that where used in the infancy stages of capitalism.
“The mass of social wealth, overflowing with the advance of accumulation and capable of
being transformed into additional capital, thrusts itself frantically into old branches of production
whose markets suddenly expand, or into newly formed branches, such as railways,
etc., which now become necessary” Marx
As stated by Melissa in [708] she states many other forms of violent that have occurred in
the infancy stages of capitalism and are still being used today. One comment that she used
that I agree with but only to an extent and that quote is “You hear more often of companies
‘ranking’ their employees. I feel this is just another violent mean the capitalist can use
to exploit the laborer even more.” After thinking about this quote I guess I do agree with
Melissa because we “rank” each other so that we hope to get more productivity out of each
other then if we did not do this, and if we can get more out of the employees for the same
price the I as the capitalist will be able to receive more to place in my pocket.
Hans: This is written down in a hurry, in a style not appropriate for written communication. The Industrial Revolution
which Marx discusses is not the “infancy” of capitalism. You should have explained what the enclosure
movement is. Do you know what it is? Your quote with masses of social wealth thrusting themselves into railroads
etc. has nothing to do with enclosure.
Next Message by Bosox is [711].
Question 754 is 433 in 1998WI, 583 in 2001fa, 628 in 2002fa, 652 in 2003fa, 711 in
2004fa, 657 in 2005fa, 784 in 2008SP, 789 in 2008fa, 823 in 2009fa, 891 in 2010fa, and
954 in 2012fa:

U of Utah Econ 5080 2007fa 317
Question 754 Why does the capitalist have the motive to get the same labor-time out of a
smaller number of workers? Which economic facts did Marx refer to, and which additional
economic facts go in the same direction nowadays?
[699] SamHouston: Capital. The capitalist has the motivation to keep his workforce
small because it requires the capitalist to invest in less capital as means of production. It
may be that the wages for laborers in a small group equals the wages for laborers in a
larger group, but less means of production would be required to satisfy the small group as
opposed to the large group. Wages are not the consideration of the capitalists. In order for
the commodity to be produced, certain steps must be followed. Each step requires a certain
amount of labor time, whether by one worker or by ten workers. It is in the capitalist’s
best interest to look at the production process and find the balance of minimum workers for
maximum output with the available constant capital.
Marx analyzes the capitalist motives in a proportional manner. As the supply of workers
increases, the demand for constant capital will increase. There is also a ‘benefit’ to the
worker for the capitalist to keep the labor pool small. If a laborer has to share labor time
with another laborer in the production process, this takes wages from the laborer. It is an
the economic benefit to the laborer to be required to spend more time laboring. In our day,
we have the motivation of overtime pay. If a laborer works more than 40 hours a week, the
employer is required to pay at least time and a half. In many “blue-collar” industries, the
laborers find overtime pay as a economic benefit. For many workers, they feel that overtime
is the only way to survive in the world.
Hans: It is not right to say that the capitalist wants to keep his workforce small. You better say: if he has the choice
to get the same amount of labor from a lower number of workers working longer hours rather than a bigger number
of workers working shorter hours, he chooses the lower number of workers. You are giving the right reason: lower
constant capital. Nowadays additional reasons are that many fringe benefits (health insurance) do not increase with
more hours.
First Message by SamHouston is [11].
Question 764 is 466 in 1999SP, 592 in 2001fa, 661 in 2003fa, 720 in 2004fa, 832 in
2009fa, 935 in 2011fa, and 965 in 2012fa:
Question 764 How can the accumulation of capital decrease instead of increase the demand
for labor? How can a rise in unemployment increase the supply of labor instead of just
changing the composition of the given supply?
[704] Ryan: graded A The topsy turvy capitalist labor market. If capital is accumulated
in the form of new technology, such as machines, which increase productivity, then more
workers can be “set free” as the apologists put it, and thus increase the number of workers
in the “reserve army”. This effect will reach all sectors which compete with the firm that
accumulated the specific form of capital, because they will be forced to follow suit to remain
competitive. As the ratio of unemployed workers to employed workers increases, the supply
of labor available for hire increases in relation to the demand. Thus, demand can decrease
when capital is accumulated.
The second half of this question is more complicated. There is a tendency in the archives
to describe movement along the supply curve rather than a shift. The answer that the students
318 2007fa Econ 5080 U of Utah
in the previous semesters have come to, is that the supply increases, the curve shifts to the
right, because each of the workers who still is employed will increase the intensity with
which he works to ensure that he does not lose his job, given the newly increased competition
brought about because of an increase in unemployment. Because each worker performs more
labor, the labor supplied increases as well. I would like to add to this the long term effects
that Marx makes mention of. If the increase in unemployment is due to new machines, as in
the first half of this question, then:
“Not only are the workers directly turned out by the machines set free,
but so are their future replacements in the rising generation, as well as the
additional contingent which, with the usual extension of business on its old
basis, would regularly be absorbed.” [792:2/oo]
The long-run labor supply curve shifts when all future workers who would have been
employed and the workers who would otherwise have found a job as the demand in that
sector no longer have a chance for employment there. This shift will be maintained as long
as the capitalist can ensure it, as near as I understand it, this is the despotism of capitalism.
Message [704] referenced by [2009fa:1201] and [2012fa:1588]. Next Message by Ryan is [726].
Question 771 is 473 in 1999SP, 599 in 2001fa, 644 in 2002fa, 668 in 2003fa, 727 in
2004fa, 673 in 2005fa, 802 in 2007SP, 801 in 2008SP, 806 in 2008fa, 839 in 2009fa, 909
in 2010fa, 942 in 2011fa, and 972 in 2012fa:
Question 771 What is worse: the misery of idle impoverishment or the torture of work?
[707] Jill: Tortured vs. Impoverished. The first thought to me would be that the torture
of work is worse than idle impoverishment because at least the impoverished are able to
make their own decision and live with the results. Laborers suffering the torture of work are
only increasing the wealth and power of the capitalists and are willingly exploiting themselves
with only a meager wage as a reward.
After further readings, however, I am not convinced that Marx would agree with my initial
response. In order for a worker to suffer from exploitation they must be aware that they are
being exploited. This is not always the case in a capitalist setting; the worker may be aware
that his working conditions and requirements are taking him away from his other obligations
and freedoms; however, he realizes that the wage he receives is enough to provide the things
his family needs whereas without the job his family would suffer. This is an example of how
idle impoverishment is worse than the torture of working.
Message [707] referenced by [718]. First Message by Jill is [223].
[718] Poppy: Misery. I agree with [707]’s general thought on this matter, however I
would not go as far to say that those that know they are being “exploited” by a capitalist
are in torture. Marx was not going in that direction. Marx agrees that impoverishment is
definitely worse than not being able to work, but explains that the impoverished that are not
working, have experienced great life trials, like being an orphan, widowed, or injured while
employed in the work force. He is not talking about the lazy or those that choose to be
idle, he is talking about those that would like to work, but can’t due to physical or mental
restrictions, and they are the one’s who are in misery only because they can not afford to
provide the needs for themselves and/or family.

U of Utah Econ 5080 2007fa 319
First Message by Poppy is [74].
[719] Brian: Idle Impoverishment vs. Torture of work. The idle impoverishment is
equivalent to the tortue of work because the torture of work will lead to the idle impoverishment
and vice-versa. As the worker inputs more labor into the production of the commodity,
more labor-surplus is created thereby increasing the amount of commodities produced. The
increase in commodities produced will increase the demand for the commodities but will
drive the price of the commodity down. The capitalist will earn less per commodity produced
and will either need to lay off workers for a short time or will need to decrease the
amount of their pay while decreasing output. The worker becomes more idle in his job while
becoming more impoverished financially. The decreased amount of commodity output will
increase the demand for the commodity which, in turn, will drive the price of the commodity
up. Increased demand and price will encourage the capitalist to re-hire or increase his labor
force causing the workers to return to the torture of work.
Next Message by Brian is [726].
Question 772 is 803 in 2007SP, 807 in 2008fa, 840 in 2009fa, and 973 in 2012fa:
Question 772 Does it follow from this argument that overpopulation is not the problem with
world poverty today?
[716] Poppy: Pauperism. Yes is does follow from this argument. Overpopulation is not
the problem with poverty today. Marx states that capital controls the population, because
capital pays for the labour. Labourers only work if the capitalist have wage labour for them
to generate income.
As the capitalist accumulates more and more wealth, which keeps them boys at work and
amongst other things, they have smaller amounts of time to focus on raising families. Marx
does not flat out state this, but overpopulation does not cause poverty. It is poverty that leads
to over population, which happens to be a cyclical problem. This is because the uneducated
are just that, uneducated. They do not have the skill set to know what repercussions will
occur by their actions.
Hans: What you are doing is called “blaming the victims.”
Message [716] referenced by [2012fa:1554]. Next Message by Poppy is [718].
Question 773 is 446 in 1999SP, 617 in 2002fa, 641 in 2003fa, 700 in 2004fa, 674 in
2005fa, 804 in 2007SP, 803 in 2008SP, 808 in 2008fa, 841 in 2009fa, and 944 in 2011fa:
Question 773 The only way the worker can improve his lot in society is to increase the
productive powers of his labor. Right or wrong?
[680] Hans: Can too much labor be harmful for your income? In response to Melanie’s
[662], Jeff writes in [669] that it does not do much good for a worker to quit in response to
low wages, because other capitalists will pay equally low wages. Jeff proposes a different
strategy. Even if workers do not have control over their wages, they do have control over
the effort they put into their work. If all workers agreed to slow down until they get higher
wages, they might be successful in raising their wages. In [670], Jeff says once more the
same thing.
320 2007fa Econ 5080 U of Utah
Unions sometimes use this as part of their campaigns to gain a better wage contract.
Sometimes they tell their members to strictly follows the rules with everything they do,
knowing that this would slow down the work process so much that the capitalist is placed
under pressure. It also seems to me that the tactic Jeff is describing here is used spontaneously
in a response to extraordinarily low wages. A worker who gets a very low wage will
often say: “if you don’t pay me enough, you won’t get much work out of me either.”
I’d like to put this out as an additional question. Does anybody have experiences with,
or thoughts about, deliberate slowdowns as a response to low wages or a means to enhance
wages? Please speak up, using question number 773 for it. It will count as a graded homework
independently of other submissions you have recently made. If you want it as an
ungraded submission, you can always write ug after the question number.
This is an extra assignment similar but not identical to the discussion I invited in [2005fa:1416
which brought some interesting responses. The question which I’d like you to discuss this
time has also been discussed in [2004fa:585], and there must be other relevant messages
buried in the archives. If you find more links please let us know.
Next Message by Hans is [696].
[683] Karly: Work harder or easier???? I agree with Franky [2004fa:585], to a certain
extent, in regards to this question. He states that due to “displacement of workers by
machinery” or capital replacing employment as Marx states, it won’t matter what a worker
does in regards to his productivity. I think that the factor of machinery definitely plays a
part, but I still believe a laborer can strive to increase the productive powers of his labor to a
certain extent as well. I, however, would like everyone to think about this: Maybe, if there
are increasingly low wages, maybe the worker should prove that he deserves a higher wage
by working extra hard, and showing he is worth the extra money. I bring this up because
this is actually what I did at my work and I ended up making more than anyone else in the
business.
If a laborer’s wages have dropped so low that they decide to put less effort into their work,
chances are they may be able to get a higher wage somewhere else. This all depends on if
the market is competitive, and also if other workers in the same market are doing the same
thing or not. Hans discusses Unions, which is a perfect example of something like this, and
unions obviously work. This is due to all of the workers working together to gain a better
wage contract. Jeff’s theory does seem to make the most sense, because if all the workers do
agree to decrease their productivity, chances are the capitalist will give in and increase the
wages. Eventually they will need more labor than they are getting.
Hans: Interesting observation: when the worker slows down due to insufficient wages, this sends the message to
the capitalist that the worker knows he or she can get a higher wage elsewhere.
Message [683] referenced by [698]. First Message by Karly is [88].
[691] Gregory: work harder.. In response to Hans questioning on whether anyone
had any experiences or thoughts on deliberate production reduction in order to receive a
higher wage my opinion is this. I agree with the idea Karly had, that if a laborer’s wage
is in fact too low, perhaps the solution to receiving a higher wage is working harder and
producing more thus proving your worth. When a single laborer or entire workforce decide
to produce less in order to force the capitalist to provide a higher wage, the result could
be negative for the laborer(s). When the laborer produces less it results in a decrease in

U of Utah Econ 5080 2007fa 321
revenue and profit for the capitalist. Why would this decrease in cash flow influence the
capitalist to pay a higher wage? If not for the union the laborers would most likely simply
be replaced. I believe by increasing your production thus generating more revenue and
profit for the capitalist would be the best way of displaying your case for a higher wage.
Subsequently, I believe the capitalist would be eager to pay a more attractive wage for a
guaranteed long term production increase. Throughout this discussion I can’t help but think
about the growing problem of illegal immigrants working in the United States. Obviously,
this makes sense, laborers who are able to give competitive production for a wage they
have no choice but to accept. However, I must admit I am not a huge fan of the union.
In today’s United States we are predominantly a service based economy, and no longer
the manufacturing powerhouse we were only three decades ago. Consequently, if workers
decided in the small manufacturing companies struggling to survive that they were going to
decrease their production in hopes of a higher wage, these companies would simply go out
of business.
Hans: A Marxist might say here: if a company can only make money by paying substandard wages, then maybe
they should go out of business. But the real threat is not that the company goes out of business but that they relocate
into a part of the world where wages are lower.
Why should service workers not join unions? After all, there are many service jobs which cannot be outsourced.
The retail workers at Walmart should form unions and fight for nice high wages. Their jobs cannot be transferred
to other countries.
By the way, “illegal immigrants” is a pretty loaded term. I think “undocumented immigrants” or simpley
“undocumented workers” would be better words to use.
Message [691] referenced by [698]. Next Message by Gregory is [697].
[698] Fred: Slowing Down to Increase Your Lot In Society. Karly’s [683] states that
increasing productive powers of labor can lead to increased wages. Karly mentions personal
experience with working harder and getting more money for doing so. Gregory’s [691]
agrees with Karly’s idea of working harder for more money. I think they are only talking
about the short run. Work as hard as you want, you are still in the long run only going to
get necessary labor time wages and you will still be exploited. It will not improve your lot
in society. It is the nature of the beast. It is a predator-prey mechanism as stated by Hans in
[2004fa:585].
My experience with this was having worked 15 years in a manufacturing plant here in
Salt Lake City making X-Ray tubes for medical service equipment. I worked on swing
and weekend shifts. I took great pride in working hard, always received high reviews from
management, and was actually at the top of my pay grade. This means the last 3 years of
work, I was making good money relative to starting over, (or if I were to go elsewhere),
and worked with no increases beyond cost of living increases based on inflation, but these
increases were less than inflation. I was let go, (they called it a R.I.F., or reduction in force),
but then 3 other people were hired at entry-level positions in my place shortly thereafter.
My shift experienced great animosity from other shifts because we were producing at a
higher rate than they were. However, on the weekends we were not interrupted by engineers
needing equipment to run their tests on, or from special projects needing to be moved to
the front of the line. We should have been producing more. But all the other shifts saw
was that it made them look bad. They went to great lengths to get us to slow down. Our
levels of production became the standard, and wages were not increased. Because we were
322 2007fa Econ 5080 U of Utah
producing more, other shifts were being expected to do the same. However, no one got any
more money for it! The end result was that I was let go, with excellent reviews and 15 years
of service. I tell you Marx is right. What Hans has talked about in this class has validity
to it. Increasing your productive powers by working harder at a manufacturing plant is not
going to improve your lot in society. I am now self-employed.
Engineers were making more money, although not a lot, as I was making more than
incoming engineers during my last 8 years, (but working swing and weekend shifts to do
so). Engineers are also salary and expected to work a minimum of 50 hours (even though
contracted at a 40 hour salary rate) and to be on call when needed.
I believe the movement to slow down here was because the workers realized they would
not get any more money for their extra efforts or harder work, and it was the only way
they could increase their lot in society through not being so exhausted at the end of the day,
having a less strenuous day, and thus being more relaxed after the work day was over for
their leisure time.
First Message by Fred is [63].
[717] Caroline: Can not improve status. The worker can not increase productive powers
of his labor to improve his lot in society, and therefore question 773 is wrong. Marx says
“. . . the higher the productive powers of labor, the greater is the pressure of the workers
on the means of employment, the more precarious therefore becomes the condition for their
existence. . . ” The worker would think that increasing their productive powers of labor would
justify a possible raise in their daily wages, but capitalists would just exploit their workers.
The increased productive power of labor would only benefit the ravenous capitalist.
I agree with what Rudy says in [2005fa:1799], and what Corinthiano states in [2007SP:1416]
In attempting to sum up what Corinthiano said, Corinthiano adds that it is actually quite injurious
to the worker, because workers would expend more energy, which may cause them
to incur pain, but the capitalists will only look at it as a benefit to them. This extra boost in
the productive powers of a laborer will only be advantageous to the capitalists.
There are exceptions as to how a worker can improve his/her lot in society. Hans’
comment in [2005fa:1799] to Rudy’s response also showed that by being tough and hardworking,
things could change for the worker and they could become a part of the capitalists.
However, capitalists are conniving, and if they paid attention, they would acquire this
worker into their capitalists circle. They would not want a potential competitor, so instead
they would make this standout worker a part of the capitalist sphere.
Next Message by Caroline is [720].
Question 775 is 475 in 1999SP, 601 in 2001fa, 729 in 2004fa, 806 in 2007SP, 805 in
2008SP, 810 in 2008fa, 913 in 2010fa, and 946 in 2011fa:
Question 775 Define and discuss the law of the absolute impoverishment of the working
class. Does it apply today?
[723] Dannymangum: It’s a Mad, Mad World. Annotations page 619 reads, “as capital
accumulates the situation of the worker, be his payment high or low must grow worse.” This
is precisely the law of absolute impoverishment of the working class. The working class is

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stranded in a never-ending cycle, the cycle of exploitation. The capitalist does not earn great
profit through individual skill, but rather by exploiting the worker. As his desired wish for
profits increase the heavier the exploitation that occurs between capitalist and laborer. Marx
describes this phenomenon best when he states: “Accumulation of wealth at one pole is,
therefore at the same time accumulation of misery, the torment of labor, slavery, ignorance
brutalization and moral degradation at the opposite pole, i.e. on the side of the class that
produces its own product as capital.” Simply stated: The richer the rich get through their
exploitive ways, the more misery, heartache and poverty can be felt by the laborers who are
exploited.
Unfortunately this disease persists today. There are countries that survive by selling their
cheap labor to our capitalists. While these big business reap enormous profits the laborer
struggle along living on just dollars or something less a day. But it is not just monetary
loss that these laborers feel. In [2004fa:618] Bobcat states that many deal with “mental
impoverishment (occurs) as a manager comes so bogged down in procedure that he loses his
creativity. Spiritual impoverishment (occurs) where the cruelty of the capitalist causes men
to be callous and rude.”
The law of absolute impoverishment is the malady that brings hardship into the world
and it appears to be infecting globally with little hope for an imposed cure.
Hans: Don’t workers nowadays live much better than workers 100 years ago? Is Marx right with his postulate of
“absolute impoverishment”?
First Message by Dannymangum is [57].
Question 777 is 383 in 1997WI, 648 in 2002fa, 672 in 2003fa, 731 in 2004fa, 678 in
2005fa, 808 in 2007SP, 807 in 2008SP, 812 in 2008fa, 845 in 2009fa, 915 in 2010fa, and
948 in 2011fa:
Question 777 “The poor and idle are a necessary consequence of the rich and active.”
Right or wrong?
[702] Chris: Who is idle? The first thought when reading this question is that it is correct,
that the “poor and idle” are a necessary consequence for the rich and active. It is from the
poor working man that the rich accumulate all their wealth.
Hans: That would mean the poor are a necessary condition, not a necessary consequence of the rich. It is a
consequence only for your thinking about it: if you see a rich and idle elite then you can conclude from this that
there must be others who work without getting the benefit of their labor.
But this wealth is not accumulated from the “idleness” of the poor, a capitalist does
not accumulate surplus-value from people who do not work or are idle. The rich receive
their wealth upon the backs of the working class who do not have access to the means of
production. Capitalism is based upon the exploitation of the laborer but if the laborer is
not working then there is nothing to exploit, you can’t accumulate wealth off of idleness.
It can also be argued that the last part of the question, “rich and active”, is not necessarily
true. Capitalists do not have to be active to accumulate their riches, as long as they own the
means of production they don’t even have to work. The large inequalities of wealth that we
see in the world today are caused by the fact that the poor are industrious, we all have to
work, and through this work we make a select few people extremely wealthy and then we
can read about their wealth in Forbes. So I believe that this sentence is wrong in the fact that
324 2007fa Econ 5080 U of Utah
capitalists become rich when the poor are active and it is detrimental to them when the poor
are idle.
Hans: If one puts everything you say together then the aphorism should read: the rich and idle are a necessary
consequence of the poor and active. Right?
Chris: In a capitalist society that would read right. The rich are not always idle but in comparison to the wealth
they amass they can be considered idle.
Hans: Good point.
Message [702] referenced by [2010fa:1131]. First Message by Chris is [20].
Question 780 is 386 in 1997WI, 456 in 1998WI, 480 in 1999SP, 734 in 2004fa, 681 in
2005fa, 810 in 2008SP, 815 in 2008fa, 848 in 2009fa, 918 in 2010fa, and 951 in 2011fa:
Question 780 What is the General Law of Capitalist Accumulation?
[700] Dyoung: (graded B+) Capitalist Accumulation = Worker Exploitation. The General
Law of Capitalist Accumulation, according to my understanding of Marx, hinges on
worker exploitation.
In [2004fa:596], Rugdoctor talks about the relation between pauperism and the relative
surplus population. The pauperized population is a mix of people that are later called the
“Industrial Reserve Army”; they are people who are unemployed or partially employed, and
this Army of people constantly changes in size and composition depending on the needs of
capitalists for labor. Marx says, “The more extensive the pauperized section of the working
class and the industrial reserve army, the greater is official pauperism” (Marx 798:1).
As capitalists acquire more capital, they also gain more power over the pauperized sections
of the working class. They gain the ability to work their workers to exhaustion and
death, because there are always more workers to take the place of the ones lost. Since this is
the case, we can summarize the General Law of Capitalist Accumulation is that as capitalists
get more and more wealthy, the poverty and conditions for workers steadily decreases.
Hans: You are just giving a sound byte with the result. I would have preferred you saying something about the
economic mechanisms which see to it that capital always finds a relative surplus population on the market.
First Message by Dyoung is [18].
Question 785 is 821 in 2008fa:
Question 785 What is wrong with “appropriation by alienation”?
[164] Fred: A De-Humanized Society. On page 629-630 of the Annotations Marx is
reminding us that use-values do not change with economic relations. For example, the usevalue
of wheat is the same regardless of how it came to be in your hand, whether “grown
by free labor, slaves, or if it fell from the sky like snow”. Wheat as a commodity contains
both use-value and exchange value. Marx says that these two are at odds with each other,
because exchange value cannot be derived from use-value, and has exchange value only to
the extent that the wheat in your hand means nothing more to you than a means to acquire or
appropriate something else, like linen or a coat. You have alienated yourself from the “usevalue”
of wheat. To you it is now merely a commodity. You must do this to exchange it, other
wise you would keep it. In so doing you now appropriate use-values of other commodities.
It seems that this “appropriation by alienation” is also a signal to society for quantities of
production, and here the value of wheat is expressed at the market in its most simple, abstract

U of Utah Econ 5080 2007fa 325
and alien form,it’s exchange-value. The wheat’s use-value is there for society, but not for
you the owner. So it seems fair enough to get something only if you give up something.
Right? So what is the problem? Marx point is that this “atomizes individuals”, and this is
not the normal state of humankind. I will only give you something if I get something in
return. If you have nothing to give me, than you get nothing. What is in it for me? At this
point it is no longer “what is best for Society”, but what can I get out of the deal? We are
alienated from society. This is what I see as the problem Marx is pointing to. In a commodity
driven society, we are De-Humanized by “appropriation by alienation”.
Hans: This is a very good answer. Only one point: Marx in his text makes a sudden jump from circulation to
production, i.e., he assumes: if appropriation by alienation govern circulation, it also governs production, and
therefore the social fabric of society in general (even inside the family).
Next Message by Fred is [168].
Term Paper 786 is 811 in 2008SP, 816 in 2008fa, 849 in 2009fa, 920 in 2010fa, 953 in
2011fa, and 983 in 2012fa:
Term Paper 786 Term Paper on the Externalities of Capitalism, i.e., on the positive or
negative local and global impacts of production in the name of profits.
[431] Caroline, Marcellus, and Ricky: Externalities of Capitalism. Capitalism is an
economic system that is characterized by the private ownership of the means of production
and free market transactions driven by the forces of supply and demand. Since the rise of
the industrial revolution, capitalism has been the dominant economic system in the world.
Central to capitalism is the pursuit of profit in a competitive sphere. Supporters of capitalism
are quick to assert that this free market competition brings about the greatest degree of
productivity, as well as record-breaking growth rates. Critics, including Marx, argue that
the profit chase inherent in capitalism creates a bias toward short-term gain even when those
gains prove extremely costly in the long run. Capitalism’s record setting growth may have
come at a terrible cost.
Now, capitalist markets are based on the assumption that voluntary exchange leads to
transactions that are mutually beneficial for both parties. However, market transactions may
at times have impacts on individuals or groups not involved in the original economic exchange.
These impacts, either positive or negative, on a third party are referred to as externalities.
In other words, these externalities are created by capitalist industry and dealt with
by society. In this paper we will review a few of these impacts.
To begin we would like to discuss the creation of jobs. As capitalists naturally want to
make more profit, they need growth, and growth creates jobs for people. For example when
an auto manufacturing plant is built, many people from different industries are hired to first
of all construct the facility including architects, engineers, construction workers, etc., and
when the job is completed many more people are hired to run the plant. This has a positive
impact on the local economy. But we must keep in mind it is not the economy capitalists
have in mind when in comes to business. Their most basic concern is profit, and as we have
seen in the U.S. automobile industry, plants are closing down to be outsourced to where the
labor is less expensive. Although jobs are still being created, this is not happening with the
interests of a certain group of workers in mind. It doesn’t matter who does the work as long
as the job gets done. But what are the jobless workers supposed to do when they have no
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means to provide for themselves or their families? They are going to be upset with their
bosses, which leads to our next externality.
Capitalism creates class divisions. As mentioned at the beginning of this paper, capitalism
is basically the private ownership of the means of commodity production. To stay with our
example of the auto manufacturing plant, how much does it cost to build one? We believe it
would be safe to say hundreds of millions of dollars, yet how many people have that kind of
money in their bank account? Maybe the lucky trust fund baby who has had money passed
down in the family through the generations. But the average citizen is kept away from
those kinds of resources because they work for the people who own the means of production
making them richer while they just go on with their ordinary lives. Just imagine even a well
paid businesswoman who makes a decent $500,000 per year trying to compete with someone
like Kenneth C. Griffin of Citadel Investment Group who made over a billion dollars in 2006.
There is simply no competition as Griffin would most likely just buy-out the competition
with an attractive offer, if not just squashing it outright. This has serious implications. If the
minute minority of the rich control the majority of the resources, they are the ones who make
the majority of decisions for the majority of people, and their decisions are in the interest
of profit. And as they have the control, they create a huge divide between themselves and
ordinary people. Although it may seem that we live in a democratic society, the truth is that
we live in a capitalist society. Is this fair that the minority of people control the majority of
resources? Absolutely not, especially when this control leads to the diminishing of the few
resources this Earth has left.
This is the next externality of capitalism we would like to discuss – the whittling away
of the Earth’s natural resources. In order to produce a commodity for sale, one needs raw
materials whether making something as simple as a pencil or as complex as an automobile.
Sticking with the automobile industry, cars are made to function with hundreds, if not thousands
of different pieces. Here is a list of just a few materials possibly needed to make a
functional vehicle: steel, aluminum, copper, sand, porcelain, and fossil fuels. When it comes
to metals, as an example copper, there is only so much copper that can be mined from Kennecott
or any other mine for electrical wires - once it’s gone it’s gone. As for sand, there is
not an endless supply of glass that could be made for windshields and windows. Porcelain
for spark plugs is finite. But the major resources concerning the world today are the fossil
fuels, the stuff that powers our automobiles, yet wreaks havoc on the global environment
at the same time. Although it may be a blessing to consume all of the worlds fossil fuels
– then we wouldn’t have to worry about burning them anymore – the point is that in this
ever-growing capitalist world, resources are being consumed at a rate much faster than they
can be replaced, which is supremely bad if humans wish to continue living here on Earth.
Nature cannot continue to feed the insatiable capitalist machine forever.
And finally, perhaps the most detrimental externality of capitalism is pollution and its
effects, including acid rain, soil erosion, air and water contamination, ozone depletion and
global warming. It is almost always more costly for businesses to be environmentally responsible
than not. The additional resources needed to safely dispose of waste, reduce harmful
emissions, conserve energy, etc., diminish the amount of profit gained. This often spells

U of Utah Econ 5080 2007fa 327
doom for the business in the competitive sphere of capitalism. The environmentally responsible
business will most likely, in terms of profits, be behind those firms that don’t worry
about it. The capitalist competition, therefore, acts as a sort of suicide pact by which businesses,
forced to focus on short-term gains, run up fatal amounts of long term costs which
will ultimately bring about the demise of the entire system.
Pollution from a local perspective, i.e. Salt Lake City, is easy to see. All one has to do
is look out into the sky to find a thick and dense layer of brownish grayish muck that the
Wasatch Front’s million or so people breathe. Where did this muck come from? Simply
put, it is an externality of capitalism. More specifically it is an externality of the automobile
industry. When people have somewhere to go, for the most part they drive. Although there
is a portion of the population that uses public transportation and energy efficient vehicles,
the reality is this source is just not feasible or affordable for everyone. People have to drive.
And in order to pay for their cars they have to work. In other words, the system that we
live in makes us dependent on the automobile industry. And although this industry on the
surface may enjoy making cars, their real motive is to make profits, regardless if the air in
Salt Lake City is polluted by their exhaust pipes.
But Salt Lake City is just a small portion of the larger picture when it comes to pollution.
One major problem we have in the world today is global warming, or the gradual rise of the
Earth’s average temperature due to carbon emissions released by the burning of fossil fuels.
There has been a lot of coverage in the media recently concerning this issue and for good
reason. If global warming continues to go unchecked there will be detrimental environmental
effects including flooding, mass migration, droughts, and other unusual weather patterns.
But what do these concerns matter, as long as money is being made?
So what are the solutions to these effects of capitalism, or are they even possible to resolve
within the capitalist system? Companies can’t be forced to stop growing, creating jobs,
or outsourcing. Money can’t be taken from the rich and given to the poor. If a company like
Kennecott owns land with copper, they can’t be forced to stop mining it. And people can’t
be forced to ride a bicycle in the middle of winter to cut carbon emissions. Right wing libertarians,
ever resistant to governmental regulation, propose that an educated consumer base
could remedy these problems. By refusing to buy from businesses that use harmful production
processes, well-informed consumers would provide enough incentive for companies
to be responsible. However, this proposal seems very unrealistic. How can a society, who
can barely get the majority of its people to vote, expect its entire people to investigate every
source from which they consume? Even if the motivation were there, the costs of spreading
such information to every consumer would be astronomical. Besides, by the time the public
becomes aware of environmental negligence or by the time the data is conclusive, the damage
is likely to have been already done. And if this were such a feasible solution, why hasn’t
it been occurring? It is troubling to consider that the World Health Organization estimates
that 1/5 of the U.S. population still thinks that cigarettes are not addictive.
All in all, these externalities illustrate examples where free markets fail to lead to efficient
outcomes. Unbridled capitalism is unsustainable. In these situations capitalism needs
regulation to help fix some of the failures of free markets. Examples of regulation are the
imposition of fines or taxes, tradable emission permits, production quotas, or better defined
328 2007fa Econ 5080 U of Utah
property rights. All of these measures try to internalize the cost of externalities and these
measures are vital to sustainable economic development. But this is the big question. Is
capitalism – even with governmental regulation – sustainable, especially in a globalized
world where companies can move their production facilities to where there are limited or no
regulations?
To conclude it seems as if capitalism is a self destructive system. We have seen in less
than 150 years of industrialization drastic changes on the face of the planet, where for the
previous millions of years, life was relatively simple and only changed with the seasons.
In 150 years we reproduced exponentially to have a population of over six billion people.
We have consumed close to half of the world’s attainable oil reserves, not to mention other
resources. We have detrimentally polluted the environment. And we live in a world society
where over a billion people are poor and maybe fifteen percent of the population controls
eighty-five percent of the resources. Unless there is a major enlightenment between both
the poor and the rich on how to remedy these overarching tribulations through sustainable
development – rather than mere growth – the next 150 years are going to be a scary time to
be a citizen of the world.
Next Message by Caroline is [453], Next Message by Marcellus is [511], and Next Message by Ricky is [460].
[433] Daru, Fred, HTJY, and Jason: Negative Externalities of Production, Their Nature,
and Implications. Externalities are an intrinsic part of production and consumption.
We will discuss several examples of negative externalities of production that occur in the
capitalist market economy. The nature of negative externalities of production and their implications
on the efficiency and the future of capitalist market economy are also addressed.
The discussion will not address externalities of consumption and positive externalities.
Externalities from Coal-Fired Electric Utility Plants and Surface Mining
The Pollution and Poisoning of Our Planet and Ourselves: Why is 50% of electricity
in the U.S. generated from coal-fired power plants? The reason is that coal is the most
abundant, cost effective, nonrenewable energy resource in the United States. It is the most
profitable means of providing energy and profits matter in a capitalist system. 73% of coal
is underground mined (Miller 48). An externality from this process is the human cost and
exploitation of miners. We saw an example of this recently with the Crandall Canyon Mine
disaster in southern Utah. Similarities exist between this mine collapse and the Sago Mine
tragedy in West Virginia that took the lives of 12 miners. Little has changed. “Many of the
glaring safety faults exposed in that disaster are once again raised: the absence of emergency
communications equipment, the lack of adequate escape provisions, the refusal of the owners
to equip miners with adequate emergency oxygen supplies...” (Grey 1). Why no changes?
Because safety is expensive, it eats into profits, the almighty profits, and miners are viewed
as a replaceable commodity.
Surface mining is an alternative to underground mining and is the most efficient way to
extract coal; however, it means strip mining. Strip mining rapes the environment and leaves a
desolate wasteland behind; consequently, environmental coalitions have effectively curtailed
this method (Miller 50). Raping the environment in the name of progress or “profits” is
another externality of the mining industry. We have a glaring example here in Salt Lake City
with the Kennecott Copper Mine, an open mine that has decimated the Oquirr mountain

U of Utah Econ 5080 2007fa 329
where it was dug. It is large enough to be seen from space. We accept it because it provides
jobs and is even viewed as a great achievement!
Here are more externalities from coal-fired power plants. Four main pollutants emitted
from coal plants are: (1) Sulfur dioxide, which causes respiratory health issues and acid
rain, (2) Nitrogen Oxides, which cause respiratory problems, crop damage, and contributes
to smog formation, (3) Mercury (Hg) where biological processes in soil transform it into
highly toxic methylmercury, and (4) Carbon dioxide which is the most abundant greenhouse
gas (CEC 3-8). Mercury poisoning is becoming a large concern to our health. The social
cost from this externality is tremendous.
Perhaps the most insidious social cost from methylmercury is developmental impairment
to children. This threat is worse to unborn fetuses since they are exposed to higher concentrations
of the toxin as it passes through the placenta. Mercury is also known to cause blindness,
seizures, inability to speak and heart disease (Harper 2). The problem with methylmercury
is that it only takes a small amount in the body to be toxic. It only takes one gram of mercury
disposed in a 20-acre waterway to render the fish there unfit for human consumption
(Hindu 1). Coal emissions from U.S. power plants alone emit 44,231 kg (44,231,000 grams)
of mercury per year into the atmosphere (CEC 3). Coal-fired emissions are a major source
of mercury pollution making its way into the fish we eat. As larger fish eat smaller fish,
the concentration of methylmercury builds up in their tissue. This is why larger fish, such
a tuna, have higher concentrations of mercury than smaller fish. Anything eating the fish
will assimilate the toxins. Incredibly the Bush administration’s response was “Stop Eating
Tuna”. It is imperative that these externalities from coal-fired power plants be controlled
at the source. But how? In a capitalist system, the change is going to have to come from
society and a social activism.
Government is supposed to represent society, and involvement is needed as it sets and enforces
emission standards. President Clinton initiated MACT (Maximum Achievable Control
Technologies), which uses the 12 cleanest plants in an industry as a standard for all
plants in that industry. Clinton’s plan would reduce emissions 90% by the end of 2007, but
President Bush pursued ways around MACT and his “Clear Skies Legislation” pushed the
date to the end of 2018 with only a 70% reduction. This allows an additional 500 tons of
mercury to be released into the atmosphere (Rellick 3). How can we accept this?
Not everyone did accept it. The EPA received over 680,000 negative responses to the
lowering of the emission standards, setting an all time record for the number of comments the
EPA received on a given issue (Rellick 5). Individual states are fighting the lower emissions
standards. Pennsylvania was one of the first, with nine more following their lead.
Within a capitalist system offending companies need to be made to pay the social costs
of their externalities; these costs need to be returned to their doorstep so true lower profits
are reflected and motivation for change results.
Alternatives to Dangerous Coal Fired Emissions
Near Zero Emissions is an alternative that provides for a way for power plants to operate
with very little or near zero pollution, but it sequesters carbon dioxide in the ground and is
330 2007fa Econ 5080 U of Utah
still a potential threat if released (ENR 20). Hydroelectric power is a clean alternative, but
comes with environmental issues such as we see with the Glen Canyon Dam.
A great alternative exists with what Hans discussed in class with how Germany is creating
a way for people to use solar power cells, getting money or credits back from the power
utility, which effectively puts the cost where it belongs, back to the utility that caused the
negative externality in the first place by reducing their profits so they see the “true” cost of
production.
Wind powered generators offer an alternative as well, but there are some bird deaths and
negative aesthetics to the landscape. Another alternative is converting coal to natural gas
since natural gas is significantly cleaner than coal. Peabody Energy Corp. has this ability
but this process has been cost prohibitive. As fuel prices skyrocket, this becomes more
attractive (Tomich).
One more alternative is a Clean Coal Technology Program (CCTP) that uses fuel cells.
These cells take hydrogen and oxygen in combination to make electricity and water. This is
a combustionless reaction, so no emissions occur. Coal is transformed into petroleum coke,
but it’s 5.5% sulfur. At the Wabash plant, sulfur is transformed from a problem to an asset.
About a railroad tank car a day of sulfur is sold to a broker where it ends up as fertilizer
(Winters 42-44). This alternative allows for the continued use of coal, an abundant resource,
and at the same time generates minimal or no emissions; therefore, the problem of pollution
and mercury poisoning is also resolved. Mines can also be made safe, if “Profit is not God”.
If the social pressure is great enough, change can be made to happen and companies can
be made to comply and made to bear the cost of their externalities of production. Social
activism can perhaps mutate capitalism.
War as an Externality – Profit from War is Good for the Economy
The capitalist system is all about growth. In this system debits do not always equal
credits. With war, debits would be the social cost, human loss, use of tremendous resources
and funds that could be used elsewhere in society. When these debits are not counted in the
total equation, it becomes profitable and in this way war is considered good for the economy.
The social conscious is pushed aside, and we pay for this externality with our precious ones,
even our own blood. For profit. For economic growth. This kind of system is incapable
of measuring social reality, because to do so would cause it to be exposed, and therefore
vulnerable to change. A system that depends on war, will want to ensure its market.
Consider that a person in a third world country whose goat has a kid means another
year of education for their child. Consider that one nuclear sub = 26 developing countries
Educational Budget! Money spent on just 2 weeks of armaments could provide safe water
for the entire world! (Marilyn Waring). When the ugly social cost of war is not part of
the economic equation so all that matters is “growth” and that becomes God, than nothing
changes and the result is slavery to that system.
Observations in the Dominican Republic
In regards to capitalism and what constitutes its definition, we learn that the exploitation
of people and things is a common practice in the communities where it is practiced. A few

U of Utah Econ 5080 2007fa 331
years ago I had the opportunity of living in the Dominican Republic for a period of two
years. The lifestyle and living conditions of these people was something that I never had
seen before. One of the major employment markets that exists in the Dominican Republic
is the manufacturing of clothing for big brand name companies, for the most part from the
United States. During my frequent visits to the town markets I saw clothing that was tagged
“Wal-Mart,” Eddie Bauer, Levi’s. We see these brand names on a daily basis, and most likely
we own a few articles of clothing from these various companies. In regards to capitalism,
the owners of these companies desire to be as profitable as possible. In order to achieve this
they continuously look for places where they can find the cheapest labor. For a capitalist this
is a good thing and should be seen as a great business opportunity. The workers however
are forced to work long hours and are paid very, very little. Most of the people that work
in these factories live in little wood houses with tin roofs that could easily be destroyed by
a hurricane or other natural disaster. The food that they eat is often times not the healthiest.
These people are forced to live in these situations because they have nowhere else to turn for
help, all the while the big textile companies are making money hand over fist at the expense
of their laborers.
Often times for an everyday person these types of practices are easily overlooked. However
for a capitalist they could care less about anyone else, all they are concerned with is
number one. Profit is their God.
Observations – The Pakistan Experience
We have mentioned elsewhere in the paper that besides exploitation of labor in modern
times environment seems to be one of the biggest casualties of capitalism. In other words, in
a blind pursuit of profits, capitalist producers worry little about the damages to the environment
that the production process causes. In this section we will see how the livelihoods of
many fishermen in Pakistan’s largest coastal city are in danger because of the damage to the
marine-ecosystem caused by dumping of industrial pollution in the sea. Also, we will see
how deep fishing trawlers with their unsustainable fishing practices puts marine environment
at risk and affect the livelihoods of the poor fishermen.
Pakistan has a 700-mile coastline with over a million households dependent on livelihoods
associated with fishing sector. With over 15000 fishing vessels, the fishing sector
employs 125000 fishermen (Shaheen et al, 2005). An overwhelming majority of the fishing
population lives along the 205-mile long Karachi coastline (Shaheen et al, 2005). An
important source of livelihood for the many poor fishermen in Karachi are the vast mangrove
forests that exist near the shore. These mangrove forests act as hatcheries or breeding
grounds for fish particularly for shrimps (Shaheen et al 2005). For past many decades the
mangrove forests have increasingly come under threat. A WWF study estimates that Pakistan
once had eight different types of mangrove species around the coastal area, most of
which are extinct now (WWF, cited November 03, 2006). Whereas there were different reasons
for these shrinking mangrove forests, an important one among others is the inflow of
industrial and city effluent directly into the sea.
Karachi is a city of over 10 million people. A city as big as this is served only by three
waste treatment plants that can only partially treat the total sewage produced by the city
332 2007fa Econ 5080 U of Utah
(ADB-IUCN, 2003). Karachi has two main rivers that pass through these industrial estates
and around 6000 small and large industrial units empty their untreated industrial waste into
the rivers (ADB-IUCN, 2003). The ADB-IUCN report also mentions that besides these
industrial estates, the largest steel mill in the country, the nuclear power plant located near
creeks, and the two oil refineries in the city also discharge their untreated water into the
sea directly. Also, a United Nations Industrial Development Organization’s (UNIDO) study
states that out of the total industrial and non-industrial waste produced by the city, a good
70% end up in the marine water without being treated (Aftab et al, 2000). Needless to say
that these highly polluting practices adversely affect the marine habitat and ecology and the
livelihoods of numerous fishermen associated with it. The effects range from destruction of
mangroves or the fish breeding grounds to poisoned stocks of adult fish. These effects are
most visible around the surroundings of Baba and Bhit islands near Karachi where natural
habitats have almost been destroyed because of dumping of untreated waste into the sea
(Birwani et al, 1999). Also, local fisherfolk communities state that dumping on untreated
industrial waste into the sea has significantly contributed toward reducing the catch to onefourth
of the original level (Birwani et al, 1999).
Another important factor affecting marine habitat and thus the livelihoods of poor fishermen
are the practices of deep-sea fishing trawlers. These fishing trawlers employ unsustainable
fishing practices by using destructive nets and target fishing. Shaheen et al note:
Analysis
“Deep-sea trawlers use a variety of nets; trawl liners, bag type trawl nets
that scrape the ocean floor, hooked rope nets (used by long liners). The
combination of these nets and winches causes considerable ecological damage.
Also, the trend towards target fishing results in unwanted dead fish
being thrown back into the sea, which is both wasteful and harmful to the
ocean ecology.”
We have seen above several examples of negative externalities of production caused by
profit-making activities under the capitalist mode of production. The environmental crisis
is for the most part a direct result of the negative externalities. Given the enormous scale
and destructiveness of the current and coming environmental crisis, we can hardly miss a
question: how is it possible that we have allowed externalities to “safely” escape the market
economy and to accumulate around us “almost” unnoticed by most people until a recent
decade? The answer is found in the nature of capitalist market economy and the teachings
of the dominant neoclassical economic theory. Further questions naturally follow. Can
capitalist market economy solve the problems of externalities? Or will it eventually have
to be transformed into a different way of organizing economy to be able to solve the ever
intensifying problems of externalities? We will address these three questions in the rest of
the paper.
Processes of production usually involve production of unwanted by-products unless technology
has been perfected to eliminate all the unwanted. These unwanted by-products become
externalities when their effects fall on people other than the producer and the buyer.
The escape of these externalities from the capitalist market economy occurs at two different

U of Utah Econ 5080 2007fa 333
levels. First, the system of capitalist market economy itself is not structured to effectively
manage negative externalities and hence easily allows externalities to permeate the society
unless carefully designed regulations are brought into practice. For example, the price of a
car, if properly accounted all the production cost occurred, must include the cost of cleaning
up the pollution that was created during the production. However, the producers and the
buyers of cars interact though the price mechanism of market in which the producers have
natural incentives to maximize the price while lowering the cost and the buyers have natural
incentives to minimize the price. These incentives result in a solution that transfers the
costs of pollution to others while distributing the resulting benefits to the producers and the
buyers. This transference of costs to others in the transaction between the car sellers and
buyers occurs with little or no resistance because “those who pay these costs, and thereby
enlarge the car maker profits and car consumer benefits, are ‘easy marks’ for car sellers and
buyers because they are geographically dispersed, and because the magnitude of the effect
on each of them is small and unequal. Individually, they have little incentive to insist on
being a party to the transaction.” (Hahnel, p94) This is a typical example of how the incentives
of economic actors interacting through price mechanism in the capitalist market
economy promote the escape of externalities from the market rather than internalizing the
cost of externalities and promoting an effective management of externalities.
The problem of externality is not specific to the capitalist economy; it is an intrinsic part
of any economic system under limited technology. What makes the problem of externality
worse in the capitalist market economy is the teachings of the dominant neoclassical economic
theory and policies based on the teachings. This forms the second level at which the
escape of externalities from the market occurs. One of the fundamental assertions of the
neoclassical economics is that market is efficient. This assertion requires that there are no
externalities and pubic goods. Thus the neoclassical economics tends to treat externalities as
exceptions to efficient markets. (Hahnel, p92) “The fact is, however, that most of the millions
of acts of production and consumption in which we daily engage involve externalities. In a
market economy any action of one individual or enterprise which induces pleasure or pain
to any other individual or enterprise ... constitutes an externalities. Since vast majority of
productive and consumptive acts are social, i.e., to some degree they involve more than one
person, it follows that they will involve externalities.” (Hunt) These observations by Hahnel
and Hunt have important implications. If one adopts the neoclassical view and believes that
the problems of externalities are rather exceptions to efficient markets, the desired policy to
solve the problems of externalities will likely be based on a narrow vision while, if Hunt is
right, it indeed requires a much broader vision. The result will be an inadequate treatment of
the problems of externalities and, consequently, much of the externalities will be unpriced
and remain external to the market.
The inability of the capitalist market economy to internalize the costs of negative externalities
implies that solutions to the externality problems require extra-market correction mechanisms.
Typical such mechanisms involve industrial regulations, taxation, and/or subsidies.
Will this modified market economy be able to put a right price tag on negative externalities?
Given Hunt’s insight that externalities are common, not exceptional, phenomena, the answer
to this question will depend on, in the first place, whether we can properly grasp the whole
range, depth, and structure of the externalities. Hunt claims that “the policy presumptions for
334 2007fa Econ 5080 U of Utah
resolving external diseconomies by assigning property rights or using governmental taxing
and subsidy powers are doomed to failure, or at best, limited success unless the viewpoint of
contextual wholes is adopted and one analyzes all aspects of the underlying incentive structure
in the competitive system.” (Hunt) Now here is an interesting question. Suppose that the
scale and intensity of environmental crisis caused by accumulated externalities have developed
so enormously that the natural environment is at the threshold of catastrophic changes.
The desperate urgency of such environmental crisis will require people to adopt equally urgent
changes in the way they produce and consume goods and services. Such changes are
likely to involve fundamental changes in the existing incentive structure of producers and
consumers rather than relatively simple and minor changes in it. But if producers had to
change over time so that it is no more in their or anyone else’s interest to make production
decisions based on profit incentives and market prices, and if consumers had to change over
time so that it is no more in their or anyone else’s interest to make consumption decisions
based on market prices and incentive to consume more goods, then will the prevailing economic
system still be a capitalist market economy? This is indeed a question that was raised
and answered by Professor Ehrbar several times in class in this semester. He believes that the
changes that we will have to make will eventually transform the current capitalist economy
into a socialist economy. Such transformation requires active participations by the majority
of people unless people want to react to the crisis passively and allow its destructive process
to progress more rapidly. We will conclude the paper with an open discussion of what stops
people from taking actions.
Conclusion
Environmental crisis is probably the most grave consequence of negative externalities of
production and consumption. In contrary to some of the environmental debates, there may
be not much conflicts regarding the existence and seriousness of the current and coming
environmental crisis if we look the situation through the eyes of scientific mind. Similarly,
there may be not much conflicts regarding what we need to do now if we base our thoughts
on honest observations of facts and our own rational mind. What stops us from seeing the
truth and taking actions now is our vulnerability to political influences manipulated by the
dominant class combined with the lack of our skills and spirit, long-lost since the first days
of capitalism, to unite our compassionate selves and act together for a common interest.
Apparently, the existence of the myriad of people who either still feel no sense of crisis or
feel the crisis but are unable to act indicates that getting ourselves away from manipulated
political influences and united under a common good is a difficult task. Is it really so difficult
a task to carry out? If it is, what make it so difficult? We like to leave these questions open
for you to think about.
Sources
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Securing Rights in Environmental Law and Policy. Pakistan Institute of Labour Education
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Aftab, Z. et al. Industrial Policy and Environment in Pakistan. UNIDO, December 2000
Ed. Stedman-Edwards, Dr. Pamela; Pakistan: Mangroves http://www.panda.org/downloads/

U of Utah Econ 5080 2007fa 335
CEC 2004 Commission for Environmental Cooperation. Ed. Paul J. Miller, Chris Van
Atten 2004.
“North American Power Plant Air Emissions.” ISBN: 2-923358-11-2
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EBSCO. J. Willard Marriott Library, University of Utah. 9 Nov. 2005. Path: Environmental;
Document. Keyword: Mercury Poisoning. http://epnet.com
GREY – Worlds Socialist Website –
“The Utah mine disaster: A tragic consequence of government-industry collusion” By
Barry Grey 8 August 2007. http://www.wsws.org/articles/2007/aug2007/utah-a08.shtml
Hahnel, Robin. 2002. “The ABCs of Political Economy: a modern approach.” Sterling,
Virginia: Pluto Press.
Harper, Scott. “Virginia inspectors seek source of mercury in Hampton-area river.” Virginia
Pilot, July 19, 2004 VP-Toxic River 20040719 Lexis Nexis. J. Willard Marriott Library,
University of Utah. 9 Nov. 2005. Path: Environmental; Document. Keyword: Mercury
Poisoning. http://www.lexisnexis.com
336 2007fa Econ 5080 U of Utah
Winters, Jeffrey. “Coal Cell.” Mechanical Engineering Dec. 2003, Vol. 125 Issue 12,
P42-44, 3p. Academic Search Premier. EBSCO. J. Willard Marriott Library, University
of Utah. 9 Nov. 2005. Path: Environmental; Document. Keyword: Mercury Poisoning.
http://epnet.com
Marcellus: It has become all too obvious that there are serious environmental challenges that the world is facing
today. What is not so obvious is where these challenges are coming from. Daru et al. explore in their paper on
the Externalities of Capitalism the system of capitalism itself and analyze some of its ugly side effects and possible
solutions.
One of the foremost problems we face on a global scale is global warming as Daru et al. point out. The
emissions of CO2 from coal fired power plants and elsewhere are slowly raising the average temperature of the Earth
worldwide. One possible solution to this issue the authors mention is the sequestration of CO2 underground, and
although they state that it may be harmful if released, we have limited options as time is of the essence. According
to the Salt Lake Tribune 19 November 2007, here in Utah scientists and researchers have begun a project of carbon
sequestration where they will compress the CO2 into a near-liquid form at pressures of about 2,200 psi. They will
inject 3 million tons of it over the next four years deep into the water-bearing sandstone formation, which is about
200 to 300 feet thick and covered by an impervious layer of shale.
“The formation we are injecting into holds carbon dioxide that’s been there for millennia. It’s
static. The difference is when we inject it, it will be moving around,” McPherson [engineering
professor] said. “Over time, it dissolves into the brine. Over hundreds of years, it will
mineralize.”
Hindu Staff Reporter. “Capital Faces Mercury Poisoning Threat.” The Hindu, July 3,
2004, Kasturi & Sons Ltd (KSL), Asia Africa Intelligence Wire. Lexis Nexis. J. Willard
Of course only time will tell if this is a feasible solution.
Another idea for reducing carbon emissions, similar to what Daru et al. and Hans have proposed, is placing
solar panels and windmills wherever possible especially in big cities. Driving down the street one can see from time
to time solar panels that power radar detectors in school zones. Besides putting panels on roofs of houses as well,
why not use them to power billboards. They could also be placed between floors on the outsides of skyscrapers
where there are no windows, or maybe scientists could even come up with a transparent solar panel that acted as a
Marriott Library, University of Utah. 9 Nov. 2005. Path: Environmental; Document; Mer-
tinted pane of glass. When driving on the freeway, why not turn those gigantic light posts that provide nighttime
cury Poisoning. http://www.lexisnexis.com
vision into windmills that can still provide light. And what would be the harm making telephone poles multi-use. A
smaller, less noisy wind turbine could be added to the hundreds of thousands of light and telephone polls throughout
Hunt, E. K. and d’Arge, Ralph C. 1973: On Lemmings and Other Acquisitive Animals:
the country. Daru et al. state that “there are some bird deaths and negative aesthetics to the landscape.” After doing
Propositions on Consumption. Journal of Economic Issues, Vol. II No. 2, 337-353.
a report on windmills last semester, I can confirm that the bird deaths are indeed minimal, and in my opinion,
Miller, Saunders. The Economics of Nuclear and Coal Power. New York: Praeger
windmills against a clean blue sky are far more pleasant to the eye than a nasty inversion with advertisements.
In response to the externality of the polluting of oceans and fish populations as a result of profit, they are also
Publishers, Inc., 1976. University of Utah Marriott Library general collection level 1, call
no. HD 9698.A2 M535.
being depleted. As the consumer base grows ever-larger it seems that not even profits can keep up. In order for
the capitalist machine to work, the means of production have to be continuously replenished, and when resources
are depleted, so go profits. I remember when I was young my father used to cook up one of my favorite dishes
Rellick, Gerald, PhD. “George Bush On Mercury Pollution: Don’t Eat Tuna Fish.”
– abalone. Although this was not the least expensive meal, abalone now sells for around $60 per pound, far too
expensive to justify for a single meal. This is because abalone was oversold, and is an example of how the pursuit
Intervention Magazine. April 3, 2005. http://www.interventionmag.com Keyword: Mer-
of profit justifies devouring resources.
cury Poisoning.
Moving on, I would also like to point out that I don’t believe war is an externality of capitalism, although I do
agree that profits are made unethically in the name of war, especially in the defense industry of arms and protection.
http://www.interventionmag.com/cms/modules.php?op=modload&name=News&file=article&sid=1 Blackwater is the glaring example of a business that depends solely on the chaos of war; without Iraq this
company would not have pocketed billions of dollars in contracts for the protection of U.S. government officials.
Tomich, Jeffrey. “COAL: Peabody to build Ill. Gasification plant.” Environment and Energy
Publishing, LLC Greenwire November 3, 2005 Spotlight Vol. 10 No. 9 Lexis Nexis. J.
Willard Marriott Library, University of Utah. 9 Nov. 2005. Path: Environmental; Document.
Keyword: Mercury Poisoning. http://www.lexisnexis.co
Besides war being a zero sum game, dependence upon the war machine economically speaking will eventually
lead to the demise of the war creator. Say for example when a country spends one twelfth of its entire GDP on
making useless bullets and bombs, and it continues to do so, one day all it will have are bullets and bombs. What it
will not have are good educational facilities, roads, bridges, and other infrastructure, not to mention sour relations
with other countries who fear its military might.
Waring, Marilyn – “Counting for something,” Recognizing Women’s Contribution to the
Global Economy Through Alternative Accounting Systems. J. Willard Marriott Library,
University of Utah. E-Reserve Course Materials – Hande Keklik
To comment on some of the solutions of Daru et al. I will start with their comment about capitalists paying the
costs for their externalities. This is difficult to enforce, as if costs for the capitalists rise, so do the prices of the
commodities they sell. Just look at the price of gasoline. When it costs more to ship goods, it costs more to buy
them. Capitalists simply push costs onto consumers, as their main concern is profit.

U of Utah Econ 5080 2007fa 337
Daru et al. also mention “the problem of externality is not specific to the capitalist economy; it is an intrinsic
part of any economic system under limited technology.” I would therefore ponder if they feel more sophisticated
technology is a solution to negative externalities. At this point in time, it is pressing that new innovation deals with
the issues at hand, but this is the immediate future. If we don’t act now we will be tremendously sorry later. In the
long run though, I believe the key is being harmonious with the Earth. Even with new technology, once it becomes
old it is useless and thrown out, and the Earth will not keep giving without getting something useful in return. There
has to be a balance between what we take and what is provided. In other words, we need equilibrium.
Once again it is obvious capitalism has left an open wound and is digging deeper. Daru et al. ask why are
people not taking action? Capitalism definitely has a strong hold on people’s perceptions about change, but as more
and more of its externalities rise to the exposed surface, more and more people are demanding change, both through
community and individual actions. Change is absolutely necessary, but the future will tell how well this transition
takes place.
Next Message by Daru is [635], Next Message by Fred is [577], Next Message by HTJY is [468], and Next Message
by Jason is [434].
Question 888 is 0 in 2005fa, 0 in 2007SP, 888 in 2008SP, 888 in 2008fa, 888 in 2009fa,
888 in 2010fa, 888 in 2011fa, and 888 in 2012fa:
Question 888 Free Discussion
[307] Hans: The sun sets early on the American Century. This article from the October
2007 Le Monde Diplomatique was sent to the rad-green mailing list:
The American Century only began 60 years ago. But it seems already to be over, with the
disaster of Iraq forcing some of the United States ruling elites to realise that its hegemony
has been severely weakened. But nobody seems to know what to do next, or even how to
behave
By Philip S Golub
The disastrous outcome of the invasion and occupation of Iraq has caused a crisis in
the power elite of the United States deeper than that resulting from defeat in Vietnam 30
years ago. Ironically, it is the very coalition of ultra-nationalists and neo-conservatives that
coalesced in the 1970s, seeking to reverse the Vietnam syndrome, restore US power and
revive the will to victory, that has caused the present crisis.
There has been no sustained popular mass protest as there was during the Vietnam war,
probably because of the underclass sociology of the USs volunteer army and the fact that
the war is being funded by foreign financial flows (although no one knows how long that
can continue). However, at the elite level the war has fractured the national security establishment
that has run the US for six decades. The unprecedented public critique in 2006 by
several retired senior officers over the conduct of the war (1), plus recurrent signs of dissent
in the intelligence agencies and the State Department, reflects a much wider trend in elite
opinion and key state institutions.
Not all critics are as forthright as retired General William Odom, who tirelessly repeats
that the invasion of Iraq was the greatest strategic disaster in United States history (2), or
Colonel Larry Wilkerson, Colin Powells former chief of staff, who denounced a blunder
of historic proportions and has recently suggested impeaching the president (3), or former
National Security Council head Zbigniew Brzezinski who called the war and occupation a
historic, strategic and moral calamity (4).
338 2007fa Econ 5080 U of Utah
Most public critiques from within the institutions of state focus on the way the war and
occupation have been mismanaged rather than the more fundamental issue of the invasion
itself. Yet discord is wide and deep: government departments are trading blame, accusing
each other of the loss of Iraq (5). In private, former senior officials express incandescent
anger, denounce shadowy cabals and have deep contempt for the White House. A former official
of the National Security Council compared the president and his staff to the Corleone
mafia family in The Godfather. A senior foreign policy expert said: Due to an incompetent,
arrogant and corrupt clique we are about to lose our hegemonic position in the Middle
East and Gulf. The White House has broken the army and trampled its honour, added a
Republican senator and former Vietnam veteran.
No doves. None of these, nor any of the other institutional critics, could be considered
doves: whatever their political affiliations (mostly Republican) or personal beliefs, they
were and some are still guardians of US power, managers of the national security state,
and sometimes central actors in covert and overt imperial interventions in the third world
during the cold war and post-cold war. They were and some are still system managers of a
self-perpetuating bureaucratic national security machine first analysed by the sociologist C
Wright Mills whose function is the production and reproduction of power. As a social group,
these realists cannot be distinguished from the object of their criticism in terms of their willingness
to use force or their historically demonstrated ruthlessness in achieving state aims.
Nor can the cause of their dissent be attributed to conflicting convictions over ethics, norms
and values (though this may be a motivating factor for some). It lies rather in the rational
realisation that the war in Iraq has nearly broken the US army (6), weakened the national
security state, and severely if not irreparably undermined Americas global legitimacy (7) its
ability to shape world preferences and set the global agenda. The most sophisticated expressions
of dissent, such as Brzezinskis, reflect the understanding that power is not reducible to
the ability to coerce, and that, once lost, hegemonic legitimacy is hard to restore.
The signs of slippage are everywhere apparent: in Latin America, where US influence is
at its lowest in decades; in East Asia, where the US has been obliged, reluctantly, to negotiate
with North Korea and recognise China as an indispensable actor in regional security; in
Europe, where US plans to install missile defence capabilities in Poland are being contested
by Germany and other European Union states; in the Gulf, where longstanding allies such as
Saudi Arabia are pursuing autonomous agendas that coincide only in part with US aims; and
in the international institutions, the UN and the World Bank, where the US is no longer in a
position to drive the agenda unaided. Transnational opinion surveys show a consistent and
nearly global pattern of defiance of US foreign policy as well as a more fundamental erosion
in the attractiveness of the US: the narrative of the American dream has been submerged
by images of a military leviathan disregarding world opinion and breaking the rules. World
public opinion may not stop wars but it does count in subtler ways. Some of this slippage
may be repairable under new leaders and with new and less aggressive policies. Yet it is hard
to see how internal unity of purpose will be restored: it took decades to rebuild the shaken
US armed forces after Vietnam and to define an elite and popular consensus on the uses of
power. The mobilisation of nationalist sentiment to support foreign adventures will not be
so easy after Iraq. Nor can one imagine a return to the status quo in world politics.

U of Utah Econ 5080 2007fa 339
The invasion and occupation of Iraq is not the sole cause of the trends sketched. Rather,
the war significantly accentuated all of them at a moment when larger centrifugal forces were
already at work: the erosion and collapse of the Washington Consensus and the gradual rise
of new gravitational centres, notably in Asia, were established trends when President George
Bush went to war. Now, as the shift in the world economy towards Asia matures, the US is
stuck in a conflict that is absorbing its total energies. History is moving on and the world is
slipping, slowly but inexorably, out of US hands.
Destined to act as hegemon. For the US power elite this is deeply unsettling. Since the
mid-20th century US leaders have thought of themselves as having a unique historic responsibility
to lead and govern the globe. Sitting on top of the world since the 1940s, they have
assumed that, like Great Britain in the 19th century, they were destined to act as hegemon
a dominant state having the will and the means to establish and maintain international order:
peace and an open and expanding liberal world economy. In their reading of history
it was Britains inability to sustain such a role and the USs simultaneous unwillingness to
take responsibility (isolationism) that created the conditions for the cycle of world wars and
depression during the first half of the 20th century.
The corollary of this assumption is the circular argument that since order requires a dominant
centre, the maintenance of order (or avoidance of chaos) requires the perpetuation of
hegemony. This belief system, theorised in US academia in the 1970s as hegemonic stability,
has underpinned US foreign policy since the second world war, when the US emerged
as the core state of the world capitalist system. As early as 1940 US economic and political
elites forecast a vast revolution in the balance of power: the US would become the heir and
residuary legatee and receiver for the economic and political assets of the British Empire
the sceptre passes to the United States (8). A year later Henry R Luce announced the coming
American Century: Americas first century as a dominant power in the world meant that
its people would have to accept wholeheartedly our duty and our opportunity as the most
powerful and vital nation and exert upon the world the full impact of our influence as we
see fit and by such means as we see fit. He added that in any sort of partnership with the
British Empire, America should assume the role of senior partner (9). By the mid 1940s the
contours of the American Century had already emerged: US economic predominance and
strategic supremacy upheld by a planetary network of military bases from the Arctic to the
Cape and from the Atlantic to the Pacific.
The post-war US leaders who presided over the construction of the national security state
were filled, in William Appleman Williamss words, with visions of omnipotence (10): the
US enjoyed enormous economic advantages, a significant technological edge and briefly
held an atomic monopoly. Though the Korean stalemate (1953) and the Soviet Unions nuclear
weapons and missile programmes dented US self-confidence, it took defeat in Vietnam
and the domestic social upheavals that accompanied the war to reveal the limits of power.
Henry Kissingers and Richard Nixons realism in an era of decline was a reluctant acknowledgement
that the overarching hegemony of the previous 20 years could not and would not
last forever. But Vietnam and the Nixon era were a turning point in another more paradoxical
way: domestically they ushered in the conservative revolution and the concerted effort of
the mid-1980s to restore and renew the national security state and US world power. When
the Soviet Union collapsed a few years later, misguided visions of omnipotence resurfaced.
340 2007fa Econ 5080 U of Utah
Conservative triumphalists dreamed of primacy and sought to lock in long-term unipolarity
(11). Iraq was a strategic experiment designed to begin the Second American Century. That
experiment and US foreign policy now lie in ruins.
Britains long exit. Historical analogies are never perfect but Great Britains long exit from
empire may shed some light on the present moment. At the end of the 19th century few
British leaders could begin to imagine an end to empire. When Queen Victorias Diamond
Jubilee was celebrated in 1897, Britain possessed a formal transoceanic empire that encompassed
a quarter of the worlds territory and 300 million subalterns and subjects twice that
if China, a near colony of 430 million people, was included. The City of London was the
centre of an even more far-flung informal trading and financial empire that bound the world.
It is unsurprising that, despite apprehensions over US and German industrial competitiveness,
significant parts of the British elite believed that they had been given a gift from the
Almighty of a lease of the universe for ever.
The Jubilee turned out to be final sunburst of an unalloyed belief in British fitness to rule
(12). The second Boer war (1899-1902) fought to preserve the routes to India and secure
the weakest link in the imperial chain, wasted British wealth and blood and revealed the
atrocities of scorched-earth policies to a restive British public. The South African War was
the greatest test of British imperial power since the Indian Mutiny and turned into the most
extensive and costly war fought by Britain between the defeat of Napoleon and the First
World War (13). The war that broke out in 1914 bankrupted and exhausted its European
protagonists. The long end of the British era had started. However, the empire not only
survived the immediate crisis but hobbled on for decades, through the second world war,
until its inglorious end at Suez in 1956. Still, a nostalgia for lost grandeur persists. As
Tony Blairs Mesopotamian adventures show, the imperial afterglow has faded but is not
entirely extinguished. For the US power elite, being on top of the world has been a habit
for 60 years. Hegemony has been a way of life; empire, a state of being and of mind.
The institutional realist critics of the Bush administration have no alternative conceptual
framework for international relations, based on something other than force, the balance of
power or strategic predominance. The present crisis and the deepening impact of global
concerns will perhaps generate new impulses for cooperation and interdependence in future.
Yet it is just as likely that US policy will be unpredictable: as all post-colonial experiences
show, de-imperialisation is likely to be a long and possibly traumatic process.
Footnotes: Original text in English
(1) See Retired generals speak out to oppose Rumsfeld, The Wall Street Journal, New York, 14 April 2006.
(2) Statement to Associated Press, 5 October 2005. Gen Odom was head of the National Security Agency
(NSA) under Ronald Reagan.
(3) Cited in Breaking Ranks, The Washington Post, 19 January 2006.
(4) Testimony before the Senate Foreign Relations Committee, 1 February 2007.
(5) Former CIA Director George Tenet, in his just released book At the Center of the Storm, blames the White
House for the strategic failures in Iraq and claims that there never was a serious debate about whether Iraq posed an
imminent threat or whether to tighten sanctions rather than go to war. This is only the latest skirmish in a conflict
between the CIA and the White House since at least 2003.
(6) Former Secretary of State Colin Powell on Face the Nation, CBC, 17 December 2006.
(7) Zbigniew Brzezinski, see note 4.
(8) Speech of the head of the National Industrial Conference board before the annual convention of the Investment
Banker Association, 10 December 1940. Cited in James J Martin, Revisionist Viewpoints (Ralph Myles,
Colorado Springs, 1971).

U of Utah Econ 5080 2007fa 341
(9) Henry R Luce, The American Century, Life, 1941, republished in Diplomatic History, vol 23, issue 2, spring
1999.
(10) William Appleman Williams, The Tragedy of American Diplomacy (Delta Books, New York, 1962).
(11) See Philip S Golub, Americas imperial longings, Le Monde diplomatique, English edition, July 2001.
(12) Cited in Elisabeth Monroe, Britains Moment in the Middle East, 1914-1956 (Chatto and Windus, London,
1963).
(13) C Saunders and IR Smith, Southern Africa, 1795-1901, The Oxford History of the British Empire, vol III,
New York, 2001.
Rad-Green@lists.econ.utah.edu
http://lists.econ.utah.edu/mailman/listinfo/rad-green
Next Message by Hans is [310].
[315] Desk: Countrywide. I have been researching the economics of Countrywide Financial
and found an interesting article. What are your thoughts regarding the situation
Countrywide is in? I agree with Mozilo that this will be great for Countrywide and they
have already seen an increase in profit share
NEW YORK (Reuters) - Countrywide Financial Corp. (CFC.N: Quote, Profile, Research)
Chief Executive Angelo Mozilo said on Tuesday the U.S. mortgage sector is entering
a “liquidity crisis,” but that investors and speculators are overreacting by punishing healthier
lenders as well as marginal ones.
“This is now becoming a liquidity crisis,” and “it’s going to get uglier,” Mozilo said on
CNBC television.
Mozilo said the winnowing out will be “great” for Countrywide, the largest U.S. mortgage
lender, which might pick up market share.
He said investors and speculators, who have punished shares of many companies with
mortgage exposure, have engaged in an “overreaction, a baby out with the bathwater.” Still,
he said the housing slowdown means “the economy will be impacted negatively, and the
(Federal Reserve) will move interest rates down.”
http://www.reuters.com/article/ousiv/idUSN135862720070313
Message [315] referenced by [317] and [358]. Next Message by Desk is [384].
[317] Hans: About the Discussion List. I appreciate Desk’s [315]. As announced in
my [305], you have two choices now to fulfill your class assignment that says that you have
to make contributions to the interactive web site. You either are invited to continue the
discussion on the interactive web site, or you can do an email discussion here by email,
using question number 888. In past semesters, these email discussions were sometimes
quite interesting. Desk submitted an interesting contribution about the current subprime
loan crisis.
Next Message by Hans is [325].
[318] BHales: Free discussion. In response to Desk’s discussion about Countrywide
financial and the current financial crisis; I feel the market conditions in the mortgage market
will normalize over time.
A large factor contributing to the current decline in the sub-prime mortgage market is the
issuing of credit to many who would not normally qualify for such loans. Many creditors
defaulted on their mortgages and therefore forced many lenders into bankrupcy.
342 2007fa Econ 5080 U of Utah
Given the factors, lenders will now tighten credit standards making qualifying for mortgages
even tougher. Given the uncertainty surrounding economic outlook, policy makers
will wait to make decisions regarding monetary policy and the prime interest rate will stay
the same through next year.
With the bankrupcy of many lenders, Countrywide may take a share of the market, but it
appears that a decline in home purchases and the difficulty in qualifying willing buyers will
negatively affect the market.
Message [318] referenced by [358]. Next Message by BHales is [382].
[332] Chris: Profit versus conservation. I wanted to have a discussion about fishing.
I was listening to NPR tonight and they had a very good issue concerning Blue Fin tuna.
Blue Fin tuna has been regulated in the fishing industry because it has been extensively
over fished. There is an international board that supposedly oversees the fishing of blue fin
to make sure that it is not fished into extinction. A single blue fin tuna, weighing several
thousand pounds can fetch tens of thousands of dollars on the open market. This fish is
regulated yet in the last year in Europe this tuna has been fished for between 25 and 50
percent above the regulated limit because it demands such a high price. At these levels of
fishing this tuna will become extinct! I want to hear what anyone else has to say about this
topic, whether it be about fish, polar bears, or anything concerning the environment. Can
captitalism be such a great thing if, as we are pulling the last tuna out of the water, we see
Polar bears drowning beside our boat? You tell me.
Next Message by Chris is [343].
[335] Ben: Countrywide. If I remember correctly I heard that countrywide was aware
of this situation and is preparing for it. They sold some of their company for capital to let
customers and investors know their not going anywhere. They have also started to tighten
up their loaning regulations Ive heard some people in California have had to pay 50% down
in order to loan. I think these are two very good ideas for countrywide I think people are
noticing this and thats why stock shares have gone up. People know this is a smart company,
there going to be around for awhile and they are going to be worth while to invest in.
Message [335] referenced by [358]. Next Message by Ben is [360].
[344] Chris: Petrodollar Warfare. I picked up interesting book recently “Petrodollar
Warfare” and suggest others pick it up as well. This book discusses the reasons for why we
are in Iraq, among other things and points out many things that are quite “conspiracy theory”.
Before beginning this book I have never heard about or really thought about how oil is traded
on the world market. Oil is only sold in the dollar, thus the “petrodollar”, and it because of
this fact that we can practically print money continuously because the world has to buy oil
in the dollar and thus must eat up what we print out for their reserves. With the dollar not
looking so good lately, and our wonderful knack for foreign policy, many oil producing
countries have looked to the euro as an ideal base for selling oil. The book discusses how
we entered this war so that we could take over the oil fields that are so necessary for us to
dominate. Pick this book up or look into the PNAC (Project for the New American Century)
and be scared about what our leaders think is the ideal way to head into the future. I would
like to hear what Hans thinks about this subject because I am sure you know a little more
about this than I do.
Message [344] referenced by [347]. Next Message by Chris is [351].

U of Utah Econ 5080 2007fa 343
[347] Ozz: Petrodollar Warfare and UN alliance. This is in reply to Chris [344] about
the Iraq war. I liked how you stated that they are conspiracy theories. I don’t know if you
watched the UN conferences leading up the Iraq invasion. A month prior to the invasion
of Iraq the UN met together on what to do about the threat Iraq posed to the world. At
the meeting a representative from Iraq spoke on the behalf of the countries and its current
policies. After he spoke and evidence was presented the decision was put up to a vote to enter
Iraq. All nations that participate in the UN unanimously voted to enter Iraq within a month
if certain conditions were not met. Three weeks passed after this conference and nothing
happened on the side of Iraq. When it came to actually backing up what they proposed only
a few certain countries, like the US and UK, actually did something. Since other European
countries were part of the war from the beginning, but did not back up their word, it does
not seem very plausible that the US just went in to obtain the oil fields to keep them under
dollar pricing.
Message [347] referenced by [349]. Next Message by Ozz is [364].
[349] Nogi: iraq war U.N. alliances. This is in response to Ozz [347]. Yes it is true
that the U.N. met a month prior to the invasion but they were fed false imformation about
Iraq buying yellowcake urainium from the country of Niger. We know this information
was confirmed as false by the CIA before the U.S. presentation to the U.N. and the Bush
Administration still went ahead and used this as their “Gulf of Tonkin Incident”. So does
it really matter if anyone in the U.N. helped out or not for an invasion that was approved
by the U.N. because of information that the bush administration knew was untrue but used
anyway?
Next Message by Nogi is [412].
[351] Chris: petrodollar Warfare. I did put in my discussions that the ideas sound a
litte “conspiracy theory” but that is not how I view them. The ideas are scary that it would
also be better to view them as just being that then to think that our government has agendas
that so dangerous. Many people do view these ideas as “conspiracy theory” and think the
war in Iraq is justified. It is scary that in such a “free” country as the United States we
are fed so much of our governments propaganda through our very clearly filtered media
establishment. Does anyone recall Saddam coming out before we invaded Iraq with the
possiblility of Iraqs oil going to the euro, well I don’t but this clearly was a huge statement
to our current administration but the media did not keep this in the mainstream for very long.
Next Message by Chris is [419].
[358] Fred: Big Banks Push $100 Billion to Avert Crunch. All this makes me a bit
nervous. Desk’s [315] talked about the sub-prime loan crisis. I came across an article in the
Wall Street Journal front page titled “Big Banks Push $100 Billion Plan to Avert Crunch”
(it is in the Saturday/Sunday October 13-14, 2007 issue). The article talked about loans
becoming more difficult for us to get, a point made by BHales in his [318] BHales. The
article talked about the response of Citigroup Inc. and other “BIG” Banks to the global credit
crisis, to back more than $100 Billion in shaky mortgage securities and other investments.
We’ve seen these “mortgage only loans”, and I have wondered why people would do them.
The answer is in part of our HW discussing the M-C-M model where people buy property
with the sole intention of selling in the short term at a profit. Well, they need loans to buy.
They want as small a payment as possible. Hence, the Interest only and expansion to subprime.
Easy money for the banks, easy money for everyone right? This house of cards has
344 2007fa Econ 5080 U of Utah
to come crumbling down at some point. What makes me nervous is when “BIG” banks
participate. The article talks about seven affiliated structured investment vehicles or SIVs.
Later in the article it points out that these SIVs are kept OFF the balance sheets so the banks
capital assets are lower so they don’t have to hold as much in reserves (an asset to reserve
ratio required by law). How do you size up the risks if they aren’t disclosed or even on the
balance sheets? Remember, it is Off-balance-sheet liabilities that played a major role in the
2001 collapse of Enron Corp.. Ben mentions the stock of Countrywide going up in [335]
Ben, but If big banks go down, others will follow and the ripple effect would be catastrophic.
Next Message by Fred is [433].
[362] Marcellus: Dirty Rotten Scoundrels. In response to the discussion about the subprime
lending crisis, I would like to add my comments, the first being sub-prime lending
businesses are dirty rotten scoundrels. Although they may appeal to a select savvy audience,
it has now become apparent that their practices have done much more harm than good for
the general population. But why?
Exactly what did these mortgages consist of? Mortgages are fairly simple to understand;
they are loans that have to be paid back at a certain interest rate. Therefore there are two
parts to a mortgage: the interest (where the lenders make their money) and the principal (the
balance of the mortgage). With this knowledge, the best mortgage would be the one with
the lowest interest rate, right? Well, possibly. From what I have understood, the sub-prime
companies were offering low rates of interest along with some other stipulations. I will now
dissect two main categories of sub-prime loans: interest only and adjustable rates.
Interest only loans are where the buyer of a property only has to pay back the interest due
to the lender every month and no principal. It is easy to see the problem with this right away.
If buyers are only paying interest, when do they ever expect to pay off the principal balance?
I believe one of the problems with these loans was buyers were expecting their property
values to go up as naturally as the sun shines on a cloudless day, only to sell at a huge profit
for the least amount of cost. This is just not the case as it is impossible to predict what will
happen to the market in the future. Also, when we get our bills at the end of the month, how
many of us actually have the discipline to pay more than we currently owe, especially when
that balance could be extended over thirty years or more? It is easy to say, “I’ll just wait till
next month when I’ll have more money.”
Adjustable rate mortgages typically lure buyers in with extremely low rates for a period
time, after which the company has the option to raise the rates as defined by the contract. As
I have had experience in the mortgage business, as well as was the proud owner of an ARM,
I have seen these interest rates rise at the maximum possible slope to the maximum possible
cap as once again defined by the contract. They just seem attractive at first because of the
initial low monthly payments coupled the expectation of a rise in property value, which once
again can’t be counted on.
So who is to blame? Initially it may seem like the customer’s fault for not being able to
pay the bill. But when there are headlines on a daily basis about “The Sub-Prime Lending
Crisis”, it seems to me that these companies not only dug a six foot grave for their customers,
but a twelve footer for themselves as well, and too deep to just hop on out. To knowingly
give an average every day citizen a loan that is nearly impossible to pay off, or becomes

U of Utah Econ 5080 2007fa 345
drastically more expensive as time rolls on to the point where the only options are to sell or
foreclose, in my opinion, is white-collar crime and should be against the law and penalized.
And to top it off, besides giving customers the shaft on their loans, they were lending to
people that were not credit-worthy to begin with. Call me crazy but this sounds like a hugely
profitable long-term business to get into.
From a personal perspective, I am a homeowner, I’ve got good credit, and I’ve now got a
good loan, which may worth be explaining here. As I didn’t just have the $156,000 sitting
in my bank account to buy my house outright – as most people don’t – I had to borrow,
but I borrowed after building up a good credit history as well as having some money saved
for a good down payment. My mortgage has a 30 year term with an interest rate fixed at
6.125%, meaning my payments will never go down, but they’ll never go up either. Also,
assuming that my property does not ever go up in value, I will still build equity every time I
make a payment, because I am making payments on my principal, as well as interest, until
eventually I will own it outright and never have to make a house payment again. This is
ideally what the general population wants when it comes to home ownership. But what to
we do now that we have this crisis on our hands?
With the mortgage companies, they should just be put out of business for their shady practices,
and strict guidelines should be followed when it comes to lending money to prospective
buyers, including letting their clients know exactly what their bill will look like every month
for the next thirty years. Basically mortgages should be typed in BIG BOLD PRINT.
From the consumer standpoint, those who are in default should not be bailed out; how
else are they going to learn from their mistake? Even though they may have been taken
advantage of, they should have took the time to really understand the possibilities of what
the fine print at the bottom of the page had nothing good to offer.
Next Message by Marcellus is [431].
[368] Charles: Banks. For many months, the banks have been blaming the borrowers
for the mess that was created. They say that people got to greedy and got loans without
considering the circumstances after few years. It is true, some people took advantage of
the different offers but overall, I think the banks played a big role in this also. Lets not
forget that they are the ones who started to offer these types of loans. When people apply
for mortgages, the banks are the ones who give the final approval. Most of the time it goes
through 3 different departments before the loan is approved. Processing, underwrighting
and a final audit or review. The bank checks peoples credit, income, assets and anything
else they need to. They were in a much better understanding of their new loans than anyone
else. Why did they approve the loans for so many people when it is obvious to see on their
loan application that after 3 years when the interest rate changes, these people will not be
able to make the payments. The banks should have been the first ones to notice that. They
could have approved the loans only for the people that would have been able to keep up
with the mortgage when their payments almost doubled. The banks make it look like they
lost millions of dollars but what about the interest rates that they have been charging on the
same house for about 50 years to different owners. They give you a loan for $200,000.00
and collect $600,000.00. Even if the homeowner defaults on the loan, they sell the house
and the most they may loose is about 20 percent which is insured anyway. On top of all that,
346 2007fa Econ 5080 U of Utah
the banks were charging people pre-payment penalties. I know some people that when they
noticed that they will not be able to make the payments and they wanted to sell the house,
they called the bank and asked them to waive the pre-payment penalty. The banks denied
the request. After 3 months the house started to go into foreclosure. The homeowners called
again and requested a short sale. A process where the bank agrees to accept an offer less
than what is owed. Even though they had a cash offer, the bank never responded back on that
offer. They let the house go into foreclosure and the bank got $35,000.00 less than what they
would have been able to get if they accepted the short sale offer and even more if they had
waive the pre-payment penalty. Based on this, I think the banks created this mess themselves
and they are not willing to change their policy in order to correct the situation. On top of
everything, they charge so many fees and penalties that it makes it almost impossible for the
homeowner to do anything.
Washington Mutual is one of the banks that I read about who refuses to work with its
customers to resolve any issues. Here are some articles on the web which may add to all
these.
http://www.consumeraffairs.com/finance/wa mutual mort.html
http://www.consumeraffairs.com/finance/wamu eq.html
Next Message by Charles is [504].
[370] Melanie: The Extreme Capitalist. Marx argues that in a capitalist society owners
of capital obtain profits by simply owning capital. Hedge fund manager Eddie S. Lampert
has made many rich people richer for the last twenty years. He has also managed to do
very well for himself. He is the prime example of a capitalist, an extreme capitalist. His
occupation is creating money from money, and his own wealth is derived from the same
process. Below is an article I read from Wikipedia.org:
Eddie was born July 19, 1962 and is an investor, financier, and businessman. He is the
chairman of Sears Holdings Corporation (SHLD) and founder, chairman of the board, and
CEO of ESL Investments.
Lampert graduated from Yale University in 1984 (B.A., economics, summa cum laude),
where he was a member of Skull and Bones and Phi Beta Kappa. He was an intern at
Goldman Sachs in July 1984, and worked in the firm’s risk arbitrage department from March
1985 to February 1988.
He left the bank to start ESL Investments, based in Greenwich, Connecticut, in April
1988. (The name ESL is derived from Lampert’s initials.) Richard Rainwater, whom he had
met on Nantucket Island, gave him $28 million in seed money and introduced him to clients.
In 2003, he was kidnapped from the parking lot of his office, but Lampert convinced his
captors to let him go after two days.
Lampert’s investment style can best be described as “concentrated value”, often focusing
on the retail sector. He has produced annual returns of 30% since forming his fund. Lampert
typically holds his investments for several years and usually has between three and fifteen
stocks. His investment style has drawn comparisons to the financier Warren Buffett. He

U of Utah Econ 5080 2007fa 347
has, in large part, been credited for forming and merging Kmartvand Sears, Roebuck and
Company into Sears Holdings Corporation.
His earnings in 2004 were estimated to be $1.02 billion USD, making Lampert the first
Wall Street financial manager to exceed an income of $1 billion in a single year. In 2006,
Lampert was the richest person in Connecticut with a net worth of $3.8 billion. As of 2007,
he retained that rank, with a net worth totaling $4.5 billion.
His earnings in 2006 were estimated to be from $1.0 billion to $1.5 billion USD.
(Wikipedia, “Edward Lampert”, 2007)
Next Message by Melanie is [477].
[376] Hans: Michael Albert to Speak about Participatory Economics. Michael Albert
is a life-long political activist who has written extensively about participatory Economics.
He is also editor of Z-magazine
http://zmagsite.zmag.org/
He will be in town on Sunday and Monday, October 28 and 29. He will give three
presentations, two of which are sponsored by the Economics Department.
On Sunday, October 28, in the afternoon, 2-3:30 pm, he will speak at the SLC Main
Library, 210 East 400 South, Fourth Floor Conference Room. Title: Beyond Capitalism,
A Vision to Guide and Inspire Us Now (organized by Questioning Minds, the organization
which first invited him).
On Sunday evening October 28, 6 - 8 pm at the Union Auditorium, University of Utah.
Organized by the Economics Department, University of Utah, Co-sponsors: Campus Committee
for Peace and Justice, Wasatch Coalition for Peace and Justice, We the People October
27 Committee. This will be a panel discussion together with Minqui Li and myself (Hans
Ehrbar), about the potential for political activity during these crisis times of US imperialism.
This event will be advertised by leaflets at the regional anti-war demo on Saturday (see
below), therefore we expect a broad activist audience.
On Monday noon-1:30 pm he will speak to Economics Students in the Rasmussen room.
It will be an open discussion covering everything from participatory economics to student
activism. Please plan to attend.
Here is more information about the big regional anti-war rally on Saturday, Oct 27. The
action starts at 11:00 AM at the Utah State Capitol Building where an Iraq War Veteran will
give the opening address for this day of action. We then march down the hill to the Federal
Building where more activities and speeches are scheduled at 12 PM. The event culminates
at Washington Square, 400 South State Street in Salt Lake City, where from 1 to 3 PM
nationally recognized speakers will address the gathering.
Next Message by Hans is [378].
[382] BHales: Mortgage Mess. In regards to Charles’ discussion of the current situation
in the mortgage market, I agree that banks are partly to blame for the collapse. I would also
offer the suggestion that brokers, not banks are more to blame for the current situation. The
housing bubble was a lucrative opportunity for many to cash in on.
348 2007fa Econ 5080 U of Utah
Brokers dont work for a specific bank, they work with many banks and lenders and submit
a loan to the lender that will pay them back the most. The mortgage market is very
competitive and banks and lenders are forced to loosen their standards and underwriting if
they want to obtain business and gain profits.
Typically, a broker can expect to earn anywhere from $500-$4,000 for each loan they
close. This involves maybe 10-15 hours of work total for the broker. As a result, many
unqualified borrowers are given loans by the means of fraud or altering financial statements.
Many brokers are generally not worried about the borrower, rather they are concerned with
earning their $2,000 for this loan. Consequently, borrowers are thrown under the bus when
their financial situations change.
Next Message by BHales is [404].
[383] ZACH: Two to tango in mortgages. Free Discussion shift 1 Sun, Oct 21 - Sat, Nov
10 Free Discussion.
I somwhat agree that the banks and brokers are at fault, but I also believe it takes two to
to get in the situations that so many people are in right now. In fact, to play devils advocate, I
would place most blame on the people that are borrowing the money. Looking at the situation
that has taken place here in Utah over the last couple of years, the people borrowing the
money are the ones putting themselves in the sticky situations. The lenders did not force the
borrowers to get into the loans they did. What the borrowers should have known and should
have realized was that eventually the interest rates would rise on their interest-only loans, or
their five year arms would run out and they would have to make a higher house payment.
When getting into a loan it takes a little planning and careful accounting of the individual’s
financial situation to know what they can afford and what they can’t. It is unwise to push
your financial capability to the limits because, like we see now, the future is unpredictable.
If you haven’t maxed your finances to get into a loan and a house that you really can’t afford
then when something does happen you can afford to keep the home. It is hard for me to
blame anyone but the homeowners because like any good business person, when the people
seeking loans come to the mortgage company looking for a loan, that mortgage company
will do whatever it takes to accommodate the request of the consumer and the consumer
ultimately signs the papers
Message [383] referenced by [398]. Next Message by ZACH is [401].
[384] Desk: Mortgage MESS. I agree with BHALES regarding his comments of the
mortgage mess, I just want to expand on one idea. We need to let the mortgage mess clean
itself out. We understand as a society that we made a mistake and the only practical solution
is clean house. The Federal Reserve can certainly make a difference by lowering interest
rates, which was done, in addition to the cut in the discount rate it’s already made. State
agencies are probably the best positioned to protect homeowners who have truly been the
victims of predatory lending. And proposals to crack down on abusive mortgage practices
and increase disclosures for borrowers are good safeguards to consider for the future. For
example you can no longer walk into a brokers office and say “I want a stated income 100%
loan.” That is a good thing and is good for the economy as a whole. Foreclosures will
happen. The days of easy money meant that many people borrowed much more than they
could afford, and keeping them in their dream houses will only penalize other taxpayers and
encourage more uncontrolled borrowing in the future.

U of Utah Econ 5080 2007fa 349
Message [384] referenced by [398]. Next Message by Desk is [385].
[390] SamHouston: Non-Profit Organizations. I am currently in a Political Science
Class that discusses the Management of Non-Profit Organizations. In our study of Marxism,
I began to ponder whether or not the Non-Profit organization fit the model of M-C-M’ or if
they were an exception to the capitalist society in which they live. Non-Profit organizations
are stuck somewhere in the middle of Private and Public entities but are strictly regulated (for
the most part) but the Public (government) sphere of the market. What does the class think
about the place for Non-Profit Organizations in society. What is the relation they carry?
Message [390] referenced by [391]. Next Message by SamHouston is [405].
[391] HTJY: Non-Profit Organizations. In response to SamHouston’s [390]:
You wrote:
“In our study of Marxism, I began to ponder whether or not the Non-Profit organization
fit the model of M-C-M’ or if they were an exception to the capitalist society in which they
live.”
You are assuming here that the M-C-M’ process is specific to capitalist society. Then you
are asking whether the activities of the NPO fit into the category of the M-C-M’ process,
i.e., whether the NPO is a capitalist institution. However, the M-C-M’ process by itself is
not a defining feature of capitalist society. What is specific to capitalism is the fact that it
is the wage workers who produce the surplus value (M’ minus M) while it is the capitalists
who appropriate it in the M-C-M’ process. The M-C-M’ process could have taken place, for
example, in a feudal society. The difference would be that now it is the peasants who work
while it is the lords who appropriate the M’ minus M. An NPO may or may not involve the
M-C-M’ process. But if it does involve, it is certainly not a part of the capitalist mode of
production since it does not involve an appropriation of the surplus value by a capitalist. It
will rather be a part of the socialist mode of production since the surplus value is redistributed
for the members of the society.
You wrote:
“What does the class think about the place for Non-Profit Organizations in society. What
is the relation they carry?”
You, and possibly others, have raised this and a similar question probably because people
tend to have this prejudice that a capitalist society accommodates only the capital mode of
production. Questions then arise when one encounters an NPO which clearly doesn’t appear
to be a capitalist institution: what is this exceptional case?; where does it fit into in a
capitalist society? The truth is, however, that a society does not have to accommodate only
one mode of production. It can and usually does indeed accommodate more than one mode
of production. The slave mode of production, for example, takes place in some capitalist
societies and the victims are usually illegal immigrants and other minorities. Thus, although
we may view a particular NPO as a result of reaction to some specific externalities of capitalism,
there is no logical ground in trying to fit NPOs into the capital mode of production.
The activities of NPOs are a part of the socialist mode of production that coexists with the
capitalist mode of production in capitalist society.
Message [391] referenced by [405]. Next Message by HTJY is [433].
350 2007fa Econ 5080 U of Utah
[398] Melissa: More Education..... I tend to agree with Zach in his [383]. I feel that the
individuals who bought these houses are just as much to blame as the mortgage companies
who financed them. What good is the biggest house on the block if you can’t pay for it? No
one made them sign the papers or buy the house, it was their own decision and now they have
to find a way to pay for it or the house will foreclose and they’ll be looking for something
else.
I think it is a great idea, as Desk mentions in [384], that state agencies step in to help
protect the consumers from being taken advantage of. What I think would also help is to
educate potential homeowners of the risks and responsibilities they will assume when those
papers are signed. I wonder how many people who are now at risk of foreclosing, really
understood the loans agreements they were signing. If they were better educated would they
be in a different situation now?
Next Message by Melissa is [455].
[403] Daniel: I sent this quite some time ago and it is in the archives but was not sent to
the class:
Here’s a quick bit of information that I learned from an Environmental Science class. Its
a common misconception that the ocean levels are rising because the global temperature is
rising and thus the polar ice caps are melting. Although this does have a slight effect in
rising ocean levels, it is actually thermal expansion that is having the greatest effect. As
temperatures rise the ocean’s H2O particles are actually expanding (think of a pot of water
that expands as it begins to boil). As a result we find that we have hotter summers and
colder winters (which can be seen even right here in salt lake city) as well as other natural
disasters such as all the hurricanes last year (way more than usual). I personally believe that
we are killing the planet at an exponential rate due to CFCs and CO2 getting put into the
atmosphere (which traps the suns heat close to the Earth).
Hans: This message is on the interactive web site. It would be nice if everything on the interactive web site were
automatically also sent to the email list, but the programming for this is not yet finished. But you will get credit
either way, whether you post it on the interactive web site, or whether you send it to the das-kapital mailing list
with question number 888.
Next Message by Daniel is [406].
[405] SamHouston: Intermountain Healthcare. In [391], HTYJ brought up an excellent
point of how NPOs are somewhat a socialist actor in our Society, but I raise the question
of NPO’s such as Intermountain Healthcare that recently built a Multimillion Dollar facility
(partially from donation and partially from provide). Apparently, someone is being exploited
in order for the organization to expand its empire. Many people misunderstand the meaning
of the non-profit as meaning that they do not earn money, that they are a socialist institution.
That is not the case. Under the tax code of 501(c)(3), these organizations are exempt from
paying taxes because of their “charity” work in certain outlined areas. It does not say that
their tax exempt status requires them to work entirely for the social good. I would contend
that non-profit organizations have a greater potential to exploit their workers and receive
government funding for it. People often work for non-profits because they want to serve
the greater good and are willing to work at wages below the market value. Many NPOs
also engage in for-profit enterprises in order to provided addition funding for their cause
even though many NPOs will never fullfill their mission(nor do they plan on it). Also,

U of Utah Econ 5080 2007fa 351
If you look at Intermountain’s annual report(available at their public website), it will show
revenues being in the billions. Here is an example of a company gaining capital and receiving
government grants because of its “charity” work. So I would be wary of saying that all NPOs
are socialist.
Next Message by SamHouston is [427].
[426] Hans: Pakistan’s General Anarchy. Here is an interesting article from the New
York Times, November 7, 2007:
http://www.nytimes.com/2007/11/07/opinion/07hanif.html
Op-Ed Contributor
Pakistan’s General Anarchy
By MOHAMMED HANIF
London
THE power grab last weekend by Pakistan’s president, Pervez Musharraf, cleverly timed
to stall the Western reaction for 48 hours, was essentially a coup against himself. Faced with
increasing demands to give up his position as military chief and confront the complexities
of civilian rule, General Musharraf decided to topple President Musharraf.
In an interview a couple of months ago, General Musharraf said that his army uniform
was his second skin: “How can I possibly take it off?” His comment was dismissed at the
time as old-school dictator-talk.
But a few weeks ago he submitted an affidavit in Pakistan’s Supreme Court stating that
if his election as president was not validated, he’d continue to work as the army chief –
indefinitely. As the Supreme Court contemplated this ultimatum, General Musharraf got the
jitters and decided to lock up most of the court’s judges, and also to pull the plug on every
independent news source in the country.
To understand the difference between the general and the president, one only has to look
at the lists of people detained and released on the night of the coup. The first people to be
arrested after the imposition of emergency were not the leaders of Pakistani Taliban, nor their
sympathizers in Islamabad. There was no crackdown on sleeper cells that have orchestrated
a wave of suicide bombings across Pakistan.
The people he has arrested in the last few days besides judges and lawyers have included
peace activists, teachers, artists – basically the kind of people who have done more than
anybody else to push ahead his avowed agenda of moving Pakistan away from religious
militancy.
On the night he declared the emergency, General Musharraf released 28 Taliban prisoners;
according to news reports, one was serving a sentence of 24 years for transporting two suicide
bombers’ jackets, the only fashion accessory allowed in Pakistan’s Taliban-controlled
areas. These are the kind of people who on their off days like to burn down video stores and
harass barbers for giving shaves and head massages.
352 2007fa Econ 5080 U of Utah
In what can be seen only as a reciprocal gesture, the Taliban released a group of army
soldiers it had held hostage – according to the BBC, each soldier was given 500 rupees for
good behavior.
Why do General Musharraf and his army feel a sense of kinship with the very people they
are supposed to be fighting against? Why are he and his army scared of liberal lawyers and
teachers but happy to deal with Islamist Pashtuns in the tribal areas?
The reasons can be traced back to the 1980s, when another military dictator, Gen. Zia
ul-Haq, launched a broad campaign to Islamicize Pakistani society and the armed forces in
particular. Back then, I was a cadet at Pakistan’s Air Force Academy, where I witnessed,
along with hundreds of other aghast cadets, a remarkable scene in which a new recruit, out of
religious conviction, refused to shave his beard. (Like most military training institutes in the
world, the academy’s first right of passage was to turn the civilian recruits into clean-shaven
jarheads.)
The issue was eventually referred to the Army high command in Islamabad, and as a
result procedures for training institutes were amended – the boy was allowed to keep his
beard and wear his uniform. The academy barber never recovered from the shock.
Within months there were other changes: evenings socializing to music and mocktails
were replaced by Koran study sessions. Buses were provided for cadets who wanted to
attend civilian religious congregations. Within months, our rather depressing but secular
academy was turned into a zealous, thriving madrassa where missing your daily prayers was
a crime far worse than missing the morning drill.
It is this crop of military officers that now runs the country. General Musharraf heads this
army, and is very reluctant to let go.
For those who have never had to live under his regime, the general/president can come
across as a rakish, daredevil figure. His resume is impressive: here’s a man who can manage
the frontline of the Western world’s war on terrorism, get rid of prime ministers at will, force
his political opponents into exile and still find the time to write an autobiography. But ask
the lawyers, judges, arts teachers and students behind bars about him, and one will find out
he is your garden-variety dictator who, after having spent eight years in power, is asking
why can’t he continue for another eight.
General Musharraf’s bond with his troops is not just ideological. Under his command
Pakistan’s armed forces have become a hugely profitable empire. It’s the nation’s preeminent
real estate dealer, it dominates the breakfast-cereal market, it runs banks and bakeries.
Only last month Pakistan’s Navy, in an audacious move, set up a barbecue business
on the banks of the Indus River about 400 miles away from the Arabian Sea it’s supposed to
protect.
It’s a happy marriage between God and greed.
For now, the general’s weekend gamble seems to have paid off. From Washington and the
European Union he heard regrets but no condemnation with teeth – exactly what he counted
on.

U of Utah Econ 5080 2007fa 353
General Musharraf has always tried to cultivate an impression in the West that he is the
only one holding the country together, that after him we can only expect anarchy. But in a
country where arts teachers and lawyers are behind bars and suicide bombers are allowed to
go free, we definitely need to redefine anarchy.
Mohammed Hanif, the head of the BBC’s Urdu Service, is the author of the forthcoming
novel “A Case of Exploding Mangoes.”
Next Message by Hans is [432].
[432] Hans: Farrooq Tariq: Musharraf Days Are Up. This is from the marxism mailing
list, see http://lists.econ.utah.edu/mailman/listinfo/marxism
Musharraf Days Are Up
By: Farooq Tariq
General Musharaf would have not thought of the political scenario that has emerged after
five days of the martial law he imposed on 3rd November. His hopes for a normality of
the situation have been dashed even after he has used the most vicious repression against
the advocates and political activists. More unpleasant surprises will come in future for the
military regime who was used to a rather stable political control until now.
After advocates, now students are emerging on the political opposition to the military
regime. Demonstrations took place on 7th November 2007 in most of the public and private
universities mainly in the main cities of Pakistan. “Student power rises from slumber”
was the headline of News International on 8th November. All the courts across Pakistan are
on stand still and Pakistan Bar Council has announced an indefinite strike till the new Provisional
Constitutional Order (PCO) is withdrawn. There have been daily demonstrations
by the advocates across Pakistan. This is an extra ordinary militancy shown by the middle
classes during this period.
Most of the news papers in Pakistan are full of stories of the arrests, demonstrations and
strikes of different actors of the society. But it is the fifth day; no private television channel
has been allowed to telecast their broadcasting in Pakistan. You can only watch songs,
dances, sports and religious readings on different channels but no news bulletin is allowed
apart from the official Pakistan Television.
The most surprising opposition to the military regime has come from Benazir Bhutto. She
was in negotiation with Musharraf regime for a power sharing formula. But the advocate
movements intervened in this unholy alliance forcing Benazir Bhutto to come up openly
against the military regime. Almost half of the arrested advocates belong to Pakistan Peoples
party. It left very little room for Benazir maneuvering playing games with the regime. She
asked the Pakistan masses to rise up against the martial law of general Musharraf. “Restore
the constitution or we will have long march from Lahore to Islamabad on 13th November”
she warned the regime. This resulted the arrests of Pakistan Peoples Party activists across
the country. They were spared by the regime in the first phase of repression started from 3rd
November.
The media organization of the bosses and employees are also joining the mass movement
after unprecedented repression against the electronic and print media by the regime.
354 2007fa Econ 5080 U of Utah
It was a black Monday on 5th November for the stock exchanges in Pakistan. The stock
exchange crash resulted a net loss of four billion dollars in one day, unprecedented in the
history of last 17 years of the exchange.
His close imperialist friends from US, UK and European Union have been forces to condemn
this imposition of emergency at least in word for the first time since 9/11. Any gross
violation of human rights in Pakistan since 9/11 was always an internal matter for the US
imperialism. Even Australian imperialism is also condemning the sorry state of affair of
Pakistan and terming Musharraf “a dictator” for the first time, a fact Pakistani people knew
for eight years. But it seems General Musharraf is trying to show his angry eyes even to
his bosses, the same way the religious fundamentalists are going out of the control of the
military regime in Pakistan. “You can never control a monster for long time” it seems from
the action of General Musharraf. Netherlands has suspended the aid to Pakistan and US is
reviewing its relationship with the military regime according to the reports printed here.
The movement is still growing in all sphere of life. This is despite an unprecedented level
of repression during the first five days of the emergency; the real name is a martial law. The
police entered the office of Human Rights Commission of Pakistan arrested over 80 social
and political activists who were discussion their strategy to oppose the military action. This
was unheard in past, that police will enter in this most prestigious independent building in
Lahore. Police went in the buildings of Lahore High Court and arrested over 700 advocates
from the chambers of the judges, libraries, bar rooms and canteen. This was not done even
under the most brutal martial law of General Zia Ul Haque in the eighties.
According to the home ministry in Punjab province, 1734 political activists, journalists
and advocates have been arrested during the first four days of the martial law. Similar figures
are stated by the administrations of the other three provinces. This is the most brutal
repression of the opponents of the Musharraf regime during the last eight years. The arrested
advocates and political activists have been charged with Anti Terrorist Act and they
have been sent to far off places from their home towns. No one can meet them.
Similar repressive treatment has been the case of those judges of the Supreme Court
and High Courts of Pakistan who have courageously refused to take oath under the new
Provisional Constitutional Order (PCO). They are put under house arrest and their children
are not allowed to go to schools. Doctors have been refused entries to their houses where
they were called for emergency treatments.
Police is raiding the houses of the advocates and political opponents of the military regime
on regular basis. Pakistan has become a police and military state in the real sense of the
term. Police is seen every where in the main cities. There has been an increase of thefts and
robberies during the last four days because police is only deployed to curb the opposition of
the regime.
General Musharraf is now having more opposition than ever among the general public in
Pakistan.
Musharraf is loosing his internal and external support on a fast speed. He has almost lost
the support of his most recent friend, Benazir Bhutto. The religious parties have been forced
to de-link their long lasting relationship with the regime. The old alliances and formations

U of Utah Econ 5080 2007fa 355
are in crisis. This is a real crisis of the Pakistan state. The regime is becoming more isolated
day by day. Now, it is only two political parties supporting the regime, it is Muslim League
Q and Muhajir Qaumi Moveemnt, both are partner of the military government. But both are
hated more and more by ordinary citizens of Pakistan.
The path of repression to control the opposition is loosing its weight day by day. The state
can not repress all growing voices against the regime. The implementation of neo liberal
agenda on a faster speed has been marked by daily price hikes and growing unemployment.
It is brutal rule of the free market resulting the monopolizing the economy. The growth of
capitalist economy has not touched to the bottom line and the bottom line is over 70 percent
of the 160 million populations.
Several activists of Awami Jamhoori Tehreek, the left alliance of seven political parties
and groups are under arrest including Nisar Shah,the chair person Labour Party Pakistan.
Abid Hassan Minto, the convener of AJT and president of National Workers Party has asked
all the left forces to join the movement and fight the military regime. The Left is not any
more an insignificant force in Pakistan. The student uprising against the regime is mainly
the work of the left wing forces and radical social activists.
The regime can not last long. The movement is on and is growing. The advocates unprecedented
courage has influenced many and they are taking the road of active opposition.
The opposition to military regime will be strengthening by the active solidarity of our
friends and comrades outside Pakistan. The pickets of the Pakistan embassies all over the
world will be one the most effective way of opposition. We are not alone, we know, but we
need to know more of it.
Farooq Tariq general secretary Labour Party Pakistan 40-Abbot Road Lahore, Pakistan
Tel: 92 42 6315162 Fax: 92 42 6271149 Mobile: 92 300 8411945, labourpartypk@yahoo.com
http://www.laborpakistan.org
http://www.jeddojuhd.com
Next Message by Hans is [435].
[436] Deborah: Another view on the Mortgage Mess. I found this article to be an
interesting view on the mortgage mess that has been widely discussed. The Bankruptcy
laws were recently changed to make getting out of credit card debt that much harder (read:
people are still responsible for their credit card debt even after filing Bankruptcy).
It looks like the responsiblity of credit card debts adds another facet to the foreclosures.
http://bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw
Next Message by Deborah is [520].
[505] Charles: Mortgage Mess Article. Few weeks ago, we were discussing the mortgage
mess. Some of us blames the banks, others blame the public and some blame both.
There is an article today on MSN that discusses the mess which was caused by our lending
institutions. The web-link is;
http://articles.moneycentral.msn.com/Investing/CompanyFocus/WhosToBlameForTheMo
356 2007fa Econ 5080 U of Utah
The article gives very good examples and facts regarding the CEO’s of many banks and
the approach which was given by them to contribute to all this.
Next Message by Charles is [512].
[511] Marcellus: What Are Our Options? Throughout this semester, we have made a
thorough investigation on capitalism and capitalists. The system of capitalism is in place to
make profits, and it does this at the expense of laborers, i.e., laborers create more value than
they are compensated for. It has also been hinted that the means of production should not
be controlled by the rich because they make decisions in their interest, not in the interest of
society at large. My question therefore is if the means of production were democratically
controlled by the laborers, would they do what is best for society, or would they become
mini-capitalists, driven to create more value for themselves regardless of the effects on society?
Message [511] referenced by [512] and [513]. Next Message by Marcellus is [514].
[512] Charles: What Are Our Options? Marcellus [511] is asking a very interesting
question. I think that the people would become mini-capitalists, and over time, everything
would turn back to the way it is now. The reason is that over time, the society will change
again. Instead of few big capitalists, there would exist many more smaller ones. Once they
get established, they would try to buy out each other. They would create more value for
themselves in order to last as long as possible against their competition. People usually care
about the society only if the status of that society has something in common with them. If
they can benefit from the society, then they are a part of it. Once they get to the point were
they have an advantage over the society, the society becomes a secondary thing for them.
Message [512] referenced by [514]. Next Message by Charles is [583].
[513] Stuart: Re: What Are Our Options? Marcellus stated in [511]
“My question therefore is if the means of production were democratically
controlled by the laborers, would they do what is best for society, or would
they become mini-capitalists, driven to create more value for themselves
regardless of the effects on society?”
This depends on what you mean by workers’ ownership of the means of production. Does
this mean being owned by society or just the workers at the particular factory? Generally
most Socialists (at least of the Marxist persuasion) mean ownership by society, this involves
some sort of planning to replace market allocation. However some “Socialists” (I use this
loosely here) advocate “Market Socialism”, which is more along the lines of what you are
thinking. Market Socialism would still use market allocation, but involve some sort of public
ownership of the means of production.
Of course another important question is what does ownership imply? To me this implies
having some say in the decision making process. The greater the degree of democracy and
participation, the greater degree of ownership. Without any say in the process, ownership is
more or less meaningless. In other words it exists in name only as it did in the USSR. Which
begs the question was the USSR a socialist economy? It was certainly a planned economy,
but to me that is not the same thing.
Message [513] referenced by [514]. Next Message by Stuart is [663].

U of Utah Econ 5080 2007fa 357
[514] Marcellus: What Are Our Options? When I mentioned workers owning the means
of production, what I had in mind was the elimination of profit, i.e., workers would receive
the full amount of the value that their labor produced. Also, when it would come to making
decisions within the business, I had in mind “majority rules” where each worker would have
a single vote in any decision.
With this in mind, I don’t believe there would need to be any planning of the economy
involved, as supply and demand could still dictate what societies needs would be, or as Stuart
stated in [513] “Market Socialism.”
To bring Charles point of view into this situation [512], even if one business bought
out another, the newly added workers still would own their percentage of the means of
production and still have “majority rules” decision power. In this system, it would not change
back to the way it is now because all workers would equally own their percentage of the
business, no matter how large or small the business, and all of the value they produced
would be divided equally.
The reason I brought up this question goes deeper than just social relations though. It
goes to the core of human beings. Is the nature of our soul inherently good or inherently evil.
When we look out into the world today, our perceptions are that there is both the benign and
the malignant. But in my opinion, I believe when it comes to humanity, the scale weighs in
the favor of our being able to live in harmony with our environment. Another way of saying
this is that I believe if the worlds humanly decisions were made on a truly democratic scale
- meaning every single person had a say - we would be capable of preserving what is most
dear to us - the house we live in. My proof you ask? We have been doing it for thousands if
not hundreds of thousands, or even millions of years. It seems that within only the last blip
of time, our way of living has been drastically altered for the worse at the expense of billions
of people for a few rich ones.
To conclude, when profit is the motivating factor, it seems that little else matters. If profit
was not a factor though, what would matter? I believe the continuation of life, just like it has
been going on since the Earth’s inception four billion years ago.
Next Message by Marcellus is [550].
[593] Hans: America in the Time of Empire. Published on Monday, November 26,
2007 by Truthdig.com
http://www.truthdig.com/report/item/20071126 america in the time of empire/
America in the Time of Empire
by Chris Hedges
All great empires and nations decay from within. By the time they hobble off the world
stage, overrun by the hordes at the gates or vanishing quietly into the pages of history books,
what made them successful and powerful no longer has relevance. This rot takes place over
decades, as with the Soviet Union, or, even longer, as with the Roman, Ottoman or Austro-
Hungarian empires. It is often imperceptible.
358 2007fa Econ 5080 U of Utah
Dying empires cling until the very end to the outward trappings of power. They mask their
weakness behind a costly and technologically advanced military. They pursue increasingly
unrealistic imperial ambitions. They stifle dissent with efficient and often ruthless mechanisms
of control. They lose the capacity for empathy, which allows them to see themselves
through the eyes of others, to create a world of accommodation rather than strife. The creeds
and noble ideals of the nation become empty cliches, used to justify acts of greater plunder,
corruption and violence. By the end, there is only a raw lust for power and few willing to
confront it.
The most damning indicators of national decline are upon us. We have watched an oligarchy
rise to take economic and political power. The top 1 percent of the population has
amassed more wealth than the bottom 90 percent combined, creating economic disparities
unseen since the Depression. If Hillary Rodham Clinton becomes president, we will see the
presidency controlled by two families for the last 24 years.
Massive debt, much of it in the hands of the Chinese, keeps piling up as we fund absurd
imperial projects and useless foreign wars. Democratic freedoms are diminished in the name
of national security. And the erosion of basic services, from education to health care to
public housing, has left tens of millions of citizens in despair. The displacement of genuine
debate and civil and political discourse with the noise and glitter of public spectacle and
entertainment has left us ignorant of the outside world, and blind to how it perceives us. We
are fed trivia and celebrity gossip in place of news.
An increasing number of voices, especially within the military, are speaking to this stark
deterioration. They describe a political class that no longer knows how to separate personal
gain from the common good, a class driving the nation into the ground.
“There has been a glaring and unfortunate display of incompetent strategic leadership
within our national leaders,” retired Lt. Gen. Ricardo S. Sanchez, the former commander
of forces in Iraq, recently told the New York Times, adding that civilian officials have been
“derelict in their duties” and guilty of a “lust for power.”
The American working class, once the most prosperous on Earth, has been politically
disempowered, impoverished and abandoned. Manufacturing jobs have been shipped overseas.
State and federal assistance programs have been slashed. The corporations, those
that orchestrated the flight of jobs and the abolishment of workers’ rights, control every
federal agency in Washington, including the Department of Labor. They have dismantled
the regulations that had made the country’s managed capitalism a success for ordinary men
and women. The Democratic and Republican Parties now take corporate money and do the
bidding of corporate interests.
Philadelphia is a textbook example. The city has seen a precipitous decline in manufacturing
jobs, jobs that allowed households to live comfortably on one salary. The city had 35
percent of its workforce employed in the manufacturing sector in 1950, perhaps the zenith of
the American empire. Thirty years later, this had fallen to 20 percent. Today it is 8.8 percent.
Commensurate jobs, jobs that offer benefits, health care and most important enough money
to provide hope for the future, no longer exist. The former manufacturing centers from Flint,
Mich., to Youngstown, Ohio, are open sores, testaments to a growing internal collapse.

U of Utah Econ 5080 2007fa 359
The United States has gone from being the world’s largest creditor to its largest debtor. As
of September 2006, the country was, for the first time in a century, paying out more than it
received in investments. Trillions of dollars go into defense while the nation’s infrastructure,
from levees in New Orleans to highway bridges in Minnesota, collapses. We spend almost
as much on military power as the rest of the world combined, while Social Security and
Medicare entitlements are jeopardized because of huge deficits. Money is available for war,
but not for the simple necessities of daily life.
Nothing makes these diseased priorities more starkly clear than what the White House
did last week. On the same day, Tuesday, President Bush vetoed a domestic spending bill
for education, job training and health programs, yet signed another bill giving the Pentagon
about $471 billion for the fiscal year that began Oct. 1. All this in the shadow of a Joint
Economic Committee report suggesting that the wars in Iraq and Afghanistan have been
twice as expensive than previously imagined, almost $1.5 trillion.
The decision to measure the strength of the state in military terms is fatal. It leads to a
growing cynicism among a disenchanted citizenry and a Hobbesian ethic of individual gain
at the expense of everyone else. Few want to fight and die for a Halliburton or an Exxon.
This is why we do not have a draft. It is why taxes have not been raised and we borrow to
fund the war. It is why the state has organized, and spends billions to maintain, a mercenary
army in Iraq. We leave the fighting and dying mostly to our poor and hired killers. No
nationwide sacrifices are required. We will worry about it later.
It all amounts to a tacit complicity on the part of a passive population. This permits the
oligarchy to squander capital and lives. It creates a world where we speak exclusively in
the language of violence. It has plunged us into an endless cycle of war and conflict that is
draining away the vitality, resources and promise of the nation.
It signals the twilight of our empire.
This column was originally published by the Philadelphia Inquirer.
Message [593] referenced by [641]. Next Message by Hans is [602].
[594] Charles: America in the time of empire. This article is so well written and I totally
agree with it. It is so true. This was the same route that the Soviet Union was taking when it
collapsed. The only difference was that they had no democracy and that’s why it took them
much sooner. They did not care about the quality of the cities, they did not care of the social
welfare of the society, the cities and the infrastructure were failing. While everything was
deteriorating, Kremlin was spending most of the budget on his military buildup. The life
was much simpler in the USSR than in the US but the quality of life had become extremely
poor. It seems that the USA is going in the same directions. You think that one country
would learn from the mistakes of the other countries.
Message [594] referenced by [612]. Next Message by Charles is [638].
[601] Fred: Education - Live Long and Prosper. I have read a lot of comments on
the open discussion forum about education. I am an older returning student coming back to
finish a goal set long ago, because I believe you fare better in life with an education than
without, and to set an example since I am asking it of my kids.
360 2007fa Econ 5080 U of Utah
When my children were young, we would on occasion rent the old TV version Star Trek
episodes because I liked how they would try and think their way out of situations rather
than just pull the trigger. I also liked Gene Rodenberry’s idea of a system without money.
In the show no one on earth needs money. The motivation for money and profit has been
replaced with a motivation to contribute to society by improving yourself and individual
talents. Education is available to all.
Many have said, “who needs an education, look at Bill Gates.” Although Bill Gates
dropped out of Harvard, he has said, “That is not something I recommend to others.” See the
article by Sanford Wexler titled “Bill Gates Goes Back to School” (http://cdmom.vergant.com/h
Indeed, education is important to Mr. Gates. There are similar examples of billionaires who
do have degrees and use them, such as Fred Smith, founder of FedEx. Although his economics
professor didn’t like his paper written in college at Yale on a delivery system in the
computer age, look at him now.
I think we also need to remember that examples like Bill Gates are outliers, meaning
they are not the norm. The vast majority of us are not going to be like Bill Gates or even
Fred Smith. The tendency of capitalism is to keep workers only at their necessary labor
time income, and the wealth to a few. Is this not exactly what we see? The percentage
of rich to the rest of us is a very small percentage. Education also allows us to converse
more intelligently with a better understanding for different situations or thought processes.
A recent news report on West Point military school talked about how a liberal education is in
their curriculum because it helps graduates make better decisions in battle, and makes them
better leaders. You are trying to put a price on knowledge because that is how we have come
to measure everything. Education can change the world!
Lastly I would like to say that an education could help you live longer. An AM radio talk
shows was talking about how to live to 100 or more and mentioned that stimulating your
mind actually helps you live longer and with a better quality of life. It is like exercise for the
body.
So “Live Long and Prosper.”
Message [601] referenced by [2008SP:8]. Next Message by Fred is [698].
[612] Walmart: Re: America in the time of empire. I, too, agree that the article [594]
is a very sobering wake up call to the nation’s sleeping residents. What I can’t agree with,
however, are Charles’ sweeping statements about the Soviet Union. The parallels may be
there, I’ll give you that, but when you start saying things such as “life was much simpler in
the USSR than in the US”, I’m not exactly sure what to think. What is the purpose of such
a statement? What supporting evidence are you providing? Did you live there during that
period? Do you have any idea what life was like for its people during that time? I am not
agreeing or disagreeing with your statements, I simply ask people to do their research before
spewing off their opinions masked as facts.
It’s one thing to agree with a popular article but it’s another to form a conjecture based
on unfounded speculations (which perhaps were formed from reading or hearing an equally
disturbing opinion of another judge?) and then introduce it as false doctrine into your peers’
minds.

U of Utah Econ 5080 2007fa 361
This shouldn’t be viewed as a personal attack on your beliefs, instead, see it as a plea for
some substantial backing to whatever it is you’re trying to say.
In my opinion, it’s too early for the population to do anything about the corruption. The
majority are still very comfortably living in their own little world to be protesting against
the government’s decisions. That’s the beauty of it. Do just enough to keep the population
“calm, as hindu cows”, while abusing their power to the maximum. Too many people are too
well off that they could care less about “starving kids in (insert country)”, or even their own
elected senator of their own state trying to solicit an undercover police officer in the men’s
bathroom for God knows what. The movie “V for Vendetta” has a very interesting way of
proving a point, especially if one starts to analyze the parallels.
Message [612] referenced by [638] and [641]. Next Message by Walmart is [618].
[638] Charles: America in the time of empire. In Regards to Walmart’s comments
[612].
When I say that the life in the USSR was simpler, I meant that the economic issues were
easier for the people because they had no idea of what was going on. There were no mortgages,
car payments, insurance or other things like that. Life generally was less stressful. At
the same time, the quality of life in the USSR was very low. The government cared more
about the quantity than the quality. Their buildings had problems, streets had problems,
stores and most of the infrastructure had problems. I don’t even want to mention the justice
system. Many people had to stand in line just so they can get some bread. Everything was
in limited quantities. On top of all that, imagine the quality of all those things if there is no
competition. I rather if my life is a little more stressful but I live in the US than less stressful
(money and economic related), and I live in the USSR.
I would advise Walmart to be a little more careful when trying to critique someone’s
answer. Before jumping to conclusions, make sure you understand the statements made by
someone else.
For your info, if you have read or heard things about the Soviet Union, I lived there until
1989. During WWII, by grandfather who at that time was only 12 years old, got sent to
Siberia for 6 years just because he said that the German fighter planes are faster than the
Russian planes. I had another relative who went to prison for saying that the Towels made in
the USA last longer than the towels made in Russia. There are so many other examples like
that I can give. More than half of my great-grandpas relatives got killed by the bolsheviks /
communists.
Walmart, does this make more sense to you now? Does this answer all your questions
that you had?
Message [638] referenced by [655]. Next Message by Charles is [661].
[641] Deborah: Re: America in the time of empire. The article [593] about the decline
of the “American Empire” and the subsequent discussion was very interesting to me. I
hadn’t personally thought about comparing the USSR with the United States but can see the
similarities there. The idea of the “decline of the American Empire” is one topic that many
of my friends and I have previously debated, and this idea was addressed quite succinctly in
this article. I completely agree with the article and what was stated, unfortunately.
362 2007fa Econ 5080 U of Utah
It really does seem that the US has overextended itself internationally. I think it was
pointed out in the article, but the demise is really happening from the outside in. There has
been a fundamental change in American society and abrupt shifts in what we as a society
appear to be. It’s unfortunate, and as was pointed out by Waltmart in [612], too many citizens
are too comfortable with where they are to perk up and take notice or to raise their voice.
Unfortunately, I have been observing this (the lack of public outcry and also the change in
what America “stands” for) and have done nothing as well.
Next Message by Deborah is [694].
[655] Walmart: Re: America in the time of empire. In response to Charles’s (my
blue-blooded comrade) [638].
Having credit to buy whatever it is you desire is what makes life simpler. What makes
it harder is when those debts accumulate and you’re not able to pay them. Though, in my
opinion, there’s still a way out, bankruptcy. I would almost call it an “easy” way out because
that’s the worst it can get for some people. You buy too much stuff, you can’t pay it off, you
declare bankruptcy, worst thing that happens, some of the things you shouldn’t have bought
in the first place get taken away from you and you can’t take out another loan for a few years.
This is easy street. There is no harsh punishment for being stupid with your purchases and
costing other people money. If you’re still of the opinion that life was less stressful in USSR
, then let me ask you this. What is more stressful to you, not being able to feed your family
(literally) if you can’t make enough money this month, or not being able to pay off your
credit card this month?
It seems you’re contradicting yourself in your USSR analysis. On the one hand, everything
about life is miserable for the individual, on the other, life is simple because there’s no
car insurance (everything should be in past tense, of course).
The quality of life is defined as what, in your mind? How happy you are in general? How
much stuff you can afford? What constitutes good vs. bad quality? Does a person who lives
a “simple” life care that his corrupt government is open about not caring about him as an
individual? How about a person who has a car, mortgage, insurance payments, and so on,
that sees his corrupt government do idiotic things and abuse its power, meanwhile masking
the fact that it’s showing the proverbial finger to its common man?
I do appreciate your advice, but I only jumped to one conclusion as a result of someone
spewing their biased opinion as fact, without citing their sources. Next time, do provide
some better arguments as to why life was simpler in the USSR , tragic as the fate of your
relatives is, it doesn’t add supporting evidence to your story. Though, I am curious now, why
did those “Towels last longer”?
Next Message by Walmart is [714].
[659] Chris: America in the Time of Empire. This article seems to be bringing about
animosity from a couple of people. I know it is a pretty intense article, I have pondered
many a night over a drink where I think the country is headed but never do I get riled up so
easily.
Next Message by Chris is [702].
[661] Charles: America in the time of empire. Since this is an economics class, I related
everything to economics and not the social life. Even though economics and the social life

U of Utah Econ 5080 2007fa 363
are related, when I say less stressful, I mean the finances. If you had the money, you bought
it, you didn’t have the money, you didn’t buy it. If you had the money by doing illegal things,
you were still skeptical about buying things so you don’t get caught. It is as simple as that.
Many other times, even if you had the money, you still could not buy the things that you
wanted. Everyone was living at the same level. Of course there were people who had good
connections in the Kremlin so these examples do not relate to them. It is difficult to compare
the US and the USSR. Everything was different. It is like comparing the lives of someone
who works for someone else and someone who has his own company. Here in the US, you
have options. It is up to you to make it work for you. In the USSR, there were no options.
If Walmart understands these, then there should be no more posts regarding what I said and
what he says. Both of us are saying the same things. I bring the examples in the USSR and
Walmart gives the examples in the USA.
Message [661] referenced by [Answer:10] and [663]. First Message by Charles is [9].
[663] Stuart: Re: America in the time of empire. While article [661] points out the
economic weaknesses of the United States which are certainly indications of decline, another
important factor is a nation’s ability to project its power not only economically but militarily
(although clearly the two are related). One can argue that the decline of the Soviet Union in
one sense allowed for a situation that gave the US greater ability to project its military might
but at the same time made justifying such large scale actions to its population more difficult.
Although the US government is representative and therefore may be more restricted in it’s
actions, given the opportunity (such as 9/11) the US government is very capable of fostering
an atmosphere of fear and ignorance that allows them to convince the US public that such
action is needed.
Additionally although the US military expenditures surpasses the combined military expenditures
of all other nations in the world, seldom are these expenditures questioned by
elected officials in either political party. I think one can make a compelling argument that
social welfare is in fact being ignored by the US government and is outweighed by its concerns
over US hegemony. Although many of us would like to think our “democracy” forces
our government to act in accordance to the will of its citizens, this is clearly often not the
case. The vast majority of Americans 65%-70% want the US to withdraw from Iraq, but
there is little serious political discussion among elected officials to enact policy in order to
make this happen.
The comparison with the USSR is also useful in the sense that it demonstrates that nations
with democratic checks on power can behave just as brutally towards other nations
as a superpower that doesn’t. During the cold war while the US government pretended to
advocate human rights and democracy (principles which I think most Americans believe in),
actions such as sponsoring and orchestrating the overthrow of democratic regimes, sponsorship
of dictatorships and acts that can only be described as terrorism suggest otherwise. I
think this is true for a number of reasons that are not previously mentioned such as a lack of
transparency that allows the US government to make false or misleading statements to the
public, regardless of what the intelligence information which is kept from the public may
say to the contrary. For example many claims made by the Bush administration to justify
364 2007fa Econ 5080 U of Utah
the invasion of Iraq were presented as facts to the American people, while intelligence information
that suggested otherwise was withheld. Clearly transparency which is essential to a
working democracy is difficult if not impossible when crucial information is monopolized.
First Message by Stuart is [15].
[665] Amy: Re: America in the time of Empire. I have to admit, I am one of those
people who are completely oblivious to the seriousness of the economic problems at hand.
It might be because of the idea that “ignorance is bliss.” Or it could be that I feel like there
is little that I can do to really make an impact. But after reading the article, I have started to
wonder if maybe I should pay a little more attention to the economic situation of the country.
So here are some of my thoughts on the issue.
One reason why I do not think that there is a major outcry from people in this country
about the economic situation is because as individuals they are in a similar circumstance.
The nation’s debt is incredibly high. But if you look at individuals within the US there is
a large portion of those people that are in debt themselves. I believe that those people are
more concerned about the debt that they have incurred on their own rather then the debt of
the nation overall. But without a doubt, if something is not done to correct the rising debt
problem among individuals and the nation things will only get more out of hand.
I think that the country is hiding behind the Iraqi war. Since we are not in power with
our financial status, we try and control outside forces by other means. Since the power lies
in the hands of a small number of elite people, there is little that can be done to change the
outcomes of their decisions. The rich will continue to get richer while the poor continue to
get poorer. The rich do not see the seriousness of the economic problem because they are not
directly affected. Honestly I think that the economic problems will only get worse before it
starts to get better.
Message [665] referenced by [667]. Next Message by Amy is [693].
[667] Jeff: The Age of Misinformation. Expanding on what Amy wrote in [665] about
the nature of the economy, I believe that a basic understanding of the general nature of the
conflict is essential in addition to understanding economic situations. The general public
has a problem of misinformation. Whether it is the government restricting or falsifying
information or the media just playing with what things are actually happening. Regardless
of what is going on, the people do not understand the nature or actual reasons of the current
war.
In addition, due to the fact that the war is so far away from home, it is difficult for people
to understand what is going on. Regarding the economy, there currently is no push by the
government for a fully funded war either by raising taxes or by selling bonds. It is rather
done on a budget as well as by borrowing from private entities. There is no overall push for
people to support the war. This may be related back to the lack of information which makes
it more difficult to justify the war, creating an impasse in its finance
So when looking at the current problem, it is more than just not understanding the economic
situation. It may be linked to an overall lack of information regarding everything
about the war which makes people lose interest after a while, again contributing to the lack
of involvement by the public in such important events our country is engaged in.
Next Message by Jeff is [669].

U of Utah Econ 5080 2007fa 365
[677] Hans: History in the Making. For live Internet Radio Coverage of Venezuela’s
Constitutional Reform Referendum this Sunday go to Radio Venezuela en Vivo at
http://radiovenezuelaenvivo.blogspot.com/
Here is a posting by Joaquin Bustelo to the marxism mailing list:
Chavez spoke to a huge crowd in Caracas late this afternoon. It was by a significant
amount the hardest speech I’ve ever heard from him, mostly to the effect of “Go ahead,
make my day.” (No, I’m not in Venezuela. I listened to it – most of it at any rate – at work,
where we have access to the satellite signals of the government VTV and the opposition
Globo channel).
Chavez has ordered the military to protect the oilfields and other installations and warned
that if there is any sabotage, any US-inspired disturbances Sunday night, oil shipments to
the U.S. will be cut off immediately. He singled out the bourgeois media and said that any
attempt to violate the law –which forbids publishing polls in the week before the election
and (alleged) election results before polls close– will lead to their immediate shutdown. He
warned international broadcasters –and CNN by name, and repeatedly– that this or any other
sort of shenanigans will be met with the expulsion of their staff from the country.
He’s also expressed very clearly the line he has taken especially since coming back from
abroad, that this referendum is an up-and-down, yes-or-no vote on the revolution and his
presidency. I’m sure the ultralefts will go, “Aha! Bonapartist plebiscite!” But sometimes
you’ve just got to call things by their right name. That is what the fight is about – not
whether the subordinate clause in article 53 is infelicitously worded.
And he made very clear what being with the revolution means – it means going against
the oligarchs, against Uribe, against the American imperialists, against the King of Spain,
against the European imperialists, and being in solidarity with progressive and revolutionary
forces throughout the world in general and with Fidel in particular.
He read and commented on Fidel’s latest column, which Walter I’m sure has already
forwarded to the list.
The rally was at the same place where the opposition held its event yesterday, which CNN
described as having been “hundreds of thousands.” Without having been there and knowing
the area, it is hard to judge, but VTV had no problem yesterday finding areas of this avenue
with very few people, even though the main area of the rally was full for what looked like
several blocks. VTV today made a point of scanning from what seemed to be the same
vantage point to show there were people much further back, and Chavez highlighted it also.
I did not see the opposition channel I have access to try to show that the crowd thinned out
after a few blocks; but I wasn’t monitoring them all the time.
Since Chavez came back from abroad and mounted what’s been in essence a ferocious
counter-offensive against the opposition, it seems to have wilted a fair deal. An adventurist
attempt to disrupt major traffic arteries a couple of days ago (they were going to leaflet
motorists was the claim ...) was dispersed with vigor, dispatch, and a good deal of tear
gas. Some of the students came with their own tear gas masks and tried to provoke an
366 2007fa Econ 5080 U of Utah
escalation by pelting the police with rocks, but the police responded only with more tear
gas. “Strangely,” an opposition TV mobile unit just “happened” to be nearby and filmed the
events, but it did not appear to have evoked the hoped-for outrage when it was broadcast,
perhaps because any idiot could see it was the opposition forces that provoked the incident
and tried to escalate it (unsuccessfully).
So now it is a question of waiting for the next right wing provocation. Chavez has
promised a no-holds-barred response and seemed to go way out of his way to make sure
everyone understood there was no wiggle room, he was consciously painting himself into a
corner. The deployment of army and other military units to guard oil fields and other strategic
installations has the added advantage of making a coup by some disloyal officers much
harder to carry out.
But the opposition has also painted itself into a corner. The impression I get is that they’ve
depicted this as the final, now or never, effort to turn back the revolution, and it won’t be easy
to get their hotheads to change course. Although Chavez and his supporters tend to present
this all as a conscious, coordinated plot, the truth is that there is a law of social struggles that
applies here to the opposition especially: when you set controlled forces into motion, you
also set uncontrolled forces into motion.
The next couple of days will tell the tale.
Joaquin
More info about the marxism mailing list at
http://www.marxmail.org/
Next Message by Hans is [678].
[686] AJoseph: 140th anniversary of ”Capital” The Marxist-De Leonist Socialist Labor
Party of America printed two articles marking the 140th anniversary of Capital’s first
printing in German, in the most recent issue of its journal, The People, available to read here
online:
http://www.slp.org/pdf/thepeople/nov dec07TP.pdf.
What do you all think?
First Message by AJoseph is [35].
[689] Melanie: Algae produced biodiesel fuel. I recently talked with a friend of mine
about alternative transportation fuels that would be better for the environment, and help
alleviate the United States’ dependency on foreign oil. He told me about biodiesel fuel
produced by high oil yeilding algae. The only reason I can see that we’re not utilizing this
new technology is because of our capitalist system. The cost will be great up front and will
surely not result in immediate profits. In a Marxian society, biodiesel producing algae ponds
would be a reality much faster than in our capitalist society. The following is an article I
found on the UNH Biodiesel website:
http://www.unh.edu/p2/biodiesel/article alge.html

U of Utah Econ 5080 2007fa 367
The Office of Fuels Development, a division of the Department of Energy, funded a program
from 1978 through 1996 under the National Renewable Energy Laboratory known as
the “Aquatic Species Program”. The focus of this program was to investigate high-oil algae
that could be grown specifically for the purpose of wide scale biodiesel production1. The
research began as a project looking into using quick-growing algae to sequester carbon in
CO2 emissions from coal power plants. Noticing that some algae have very high oil content,
the project shifted its focus to growing algae for another purpose - producing biodiesel.
Some species of algae are ideally suited to biodiesel production due to their high oil content
(some well over 50% oil), and extremely fast growth rates. From the results of the Aquatic
Species Program2, algae farms would let us supply enough biodiesel to completely replace
petroleum as a transportation fuel in the US (as well as its other main use - home heating
oil).
NREL’s research showed that one quad (7.5 billion gallons) of biodiesel could be produced
from 200,000 hectares of desert land (200,000 hectares is equivalent to 780 square
miles, roughly 500,000 acres), if the remaining challenges are solved (as they will be, with
several research groups and companies working towards it, including ours at UNH). In the
previous section, we found that to replace all transportation fuels in the US, we would need
140.8 billion gallons of biodiesel, or roughly 19 quads (one quad is roughly 7.5 billion gallons
of biodiesel). To produce that amount would require a land mass of almost 15,000
square miles. To put that in perspective, consider that the Sonora desert in the southwestern
US comprises 120,000 square miles. Enough biodiesel to replace all petroleum transportation
fuels could be grown in 15,000 square miles, or roughly 12.5 percent of the area of the
Sonora desert (note for clarification - I am not advocating putting 15,000 square miles of
algae ponds in the Sonora desert. This hypothetical example is used strictly for the purpose
of showing the scale of land required). That 15,000 square miles works out to roughly 9.5
million acres - far less than the 450 million acres currently used for crop farming in the US,
and the over 500 million acres used as grazing land for farm animals.
But how much biodiesel would we need to replace gasoline? The UNH Biodiesel website
explains:
First, we need to understand exactly how much biodiesel would be needed to replace all
petroleum transportation fuels. So, we need to start with how much petroleum is currently
used for that purpose. Per the Department of Energy’s statistics, each year the US consumes
roughly 60 billion gallons of petroleum diesel and 120 billion gallons of gasoline. First, we
need to realize that spark-ignition engines that run on gasoline are generally about 40% less
efficient than diesel engines. So, if all spark-ignition engines are gradually replaced with
compression-ignition (Diesel) engines for running biodiesel, we wouldn’t need 120 billion
gallons of biodiesel to replace that 120 billion gallons of gasoline. To be conservative, we
will assume that the average gasoline engine is 35% less efficient, so we’d need 35% less
diesel fuel to replace that gasoline. That would work out to 78 billion gallons of diesel
fuel. Combine that with the 60 billion gallons of diesel already used, for a total of 138
billion gallons. Now, biodiesel is about 5-8% less energy dense than petroleum diesel, but its
greater lubricity and more complete combustion offset that somewhat, leading to an overall
368 2007fa Econ 5080 U of Utah
fuel efficiency about 2% less than petroleum diesel. So, we’d need about 2% more than that
138 billion gallons, or 140.8 billion gallons of biodiesel.
What is the cost of creating this much biodiesel fuel? The UNH Biodiesel website gives
us the following cost estimate:
In “The Controlled Eutrophication process: Using Microalgae for CO2 Utilization and
Agircultural Fertilizer Recycling”, the authors estimated a cost per hectare of $40,000 for
algal ponds. In their model, the algal ponds would be built around the Salton Sea (in the
Sonora desert) feeding off of the agircultural waste streams that normally pollute the Salton
Sea with over 10,000 tons of nitrogen and phosphate fertilizers each year. The estimate is
based on fairly large ponds, 8 hectares in size each. To be conservative (since their estimate
is fairly optimistic), we’ll arbitrarily increase the cost per hectare by 100% as a margin of
safety. That brings the cost per hectare to $80,000. Ponds equivalent to their design could be
built around the country, using wastewater streams (human, animal, and agricultural) as feed
sources. We found that at NREL’s yield rates, 15,000 square miles (3.85 million hectares)
of algae ponds would be needed to replace all petroleum transportation fuels with biodiesel.
At the cost of $80,000 per hectare, that would work out to roughly $308 billion to build the
farms.
The operating costs (including power consumption, labor, chemicals, and fixed capital
costs (taxes, maintenance, insurance, depreciation, and return on investment) worked out to
$12,000 per hectare. That would equate to $46.2 billion per year for all the algae farms, to
yield all the oil feedstock necessary for the entire country. Compare that to the $100-150
billion the US spends each year just on purchasing crude oil from foreign countries, with all
of that money leaving the US economy.
I think algae produced biodiesel fuel is a great idea.
Message [689] referenced by [693] and [706]. First Message by Melanie is [53].
[690] Daru: Documentary - “Missing in Pakistan”. Watch “Missing in Pakistan”, a
short documentary on Pakistani citizens illegally and unlawfully rounded up by Pakistani
intelligence agencies. Come and see how Pervez Musharraf, the most valued ally of the
United States’ war on terror stifle political dissent. The documentary will be followed by a
short talk on Pakistan’s current situation by Fahd Ali and other Pakistani students at the U.
Venue: Room 161, Union Building, University of Utah Date and Time: Thursday December
06, 2007
The event has been sponsored by Campus Committee for Peace and Justice. For further
information contact 801-364-0667 or 713-858-3830
Next Message by Daru is [722].
[693] Amy: Algae-produced biodiesel fuel. In response to the algae produced biodiesel
fuel article [689], I agree with Melanie that biodiesel fuel is a great alternative. I also agree
with her when she says that the reason why we have not swiched to alternative fuels is
because of our capitalist society. I have a friend who works for a major car company and
we had the disscussion about how technology has advanced to the point where we should be
capable of providing alternative fuels. He said that the car company that he works for has the
capabilities of producing cars that run of alternative fuels and have even done a lot of studies

U of Utah Econ 5080 2007fa 369
and desinged a few cars that have never seen the market. From the way that it was explained
to my friend, the reason why these alternative fuel cars have not taken off is because the
companies are being compensated in some way by the oil companies to continue to make
cars that run off fossil fuels. Which if this is the case, the reason why there hasn’t been a
switch to alternative fuels is because the capitalists are controlling the market and deciding
not to move in that direction only to make more profits for themselves and in turn helping the
oil companies to continue to make profits as well. The car companies have already designed
cars that can run off atlernative fuels so that when fossil fuels run out the switch to alternative
fuels will not have as much of a devastating impact on the companies and they can continue
to make profits. I am not saying that this is exactly what is happening because this is only
what I have heard from outside sources. But it makes sense. The switch will only come
when those people in the oil bussiness can no longer make a profit.
On the other side of the spectrum, you would have to look at the impact of switching to
alternative fuels. There would be many people who would lose their jobs due to the switch.
But there would also be new jobs that are created. But how easy is it for those people who
lost their jobs to transition into the new jobs created by alternative fuels? Will there be extra
trainning or schooling involved? Is it even possible?
Message [693] referenced by [706]. Next Message by Amy is [695].
[696] Hans: The Road Well Travelled. By George Monbiot. Published in the Guardian
30th October 2007
http://www.monbiot.com/archives/2007/10/30/the-road-well-travelled/
http://www.zmag.org/sustainers/content/2007-11/19monbiot.cfm
A few weeks ago I read what I believe is the most important environmental book ever
written. It is not Silent Spring, Small is Beautiful or even Walden. It contains no graphs, no
tables, no facts, figures, warnings, predictions or even arguments. Nor does it carry a single
dreary sentence, which, sadly, distinguishes it from most environmental literature. It is a
novel, first published a year ago, and it will change the way you see the world.
Cormac McCarthy’s book The Road considers what would happen if the world lost its
biosphere, and the only living creatures were humans, hunting for food among the dead wood
and soot. Some years before the action begins, the protagonist hears the last birds passing
over, “their half-muted crankings miles above where they circled the earth as senselessly as
insects trooping the rim of a bowl.”(1) McCarthy makes no claim that this is likely to occur,
but merely speculates about the consequences.
All pre-existing social codes soon collapse and are replaced with organised butchery, then
chaotic, blundering horror. What else are the survivors to do?: the only remaining resource
is human. It is hard to see how this could happen during humanity’s time on earth, even by
means of the nuclear winter McCarthy proposes. But his thought experiment exposes the
one terrible fact to which our technological hubris blinds us: our dependence on biological
production remains absolute. Civilisation is just a russeting on the skin of the biosphere,
never immune from being rubbed against the sleeve of environmental change. Six weeks
after finishing The Road, I remain haunted by it.
370 2007fa Econ 5080 U of Utah
So when I read the UN’s new report on the state of the planet over the weekend, my
mind kept snagging on a handful of figures(2). There were some bright spots - lead has been
removed from petrol almost everywhere, sulphur emissions have been reduced in most rich
nations – and plenty of gloom. But the issue that stopped me was production.
Crop production has improved over the past 20 years (from 1.8 tonnes per hectare in the
1980s to 2.5 tonnes today), but it has not kept up with population. “World cereal production
per person peaked in the 1980s, and has since slowly decreased”(3). There will be roughly
9 billion people by 2050: feeding them and meeting the millennium development goal on
hunger (halving the proportion of hungry people) would require a doubling of world food
production(4). Unless we cut waste, overeating, biofuels and the consumption of meat, total
demand for cereal crops could rise to three times the current level(5).
There are two limiting factors. One, mentioned only in passing in the report, is phosphate:
it is not clear where future reserves might lie. The more immediate problem is water.
“Meeting the Millennium Development Goal on hunger will require doubling of water use
by crops by 2050.”(6) Where will it come from? “Water scarcity is already acute in many
regions, and farming already takes the lion’s share of water withdrawn from streams and
groundwater.”(7) One-tenth of the world’s major rivers no longer reach the sea all round the
year (8).
Buried on page 148, I found this statement. “If present trends continue, 1.8 billion people
will be living in countries or regions with absolute water scarcity by 2025, and two thirds of
the world population could be subject to water stress.” Wastage and deforestation are partly
to blame, but the biggest cause of the coming droughts is climate change. Rainfall will
decline most in the places in greatest need of water. So how, unless we engineer a sudden
decline in carbon emissions, is the world to be fed? How, in many countries, will we prevent
the social collapse that failure will cause?
The stone drops into the pond and a second later it is smooth again. You will turn the page
and carry on with your life. Last week we learnt that climate change could eliminate half
the world’s species (9); that 25 primate species are already slipping into extinction (10); that
biological repositories of carbon are beginning to release it, decades ahead of schedule(11).
But everyone is watching and waiting for everyone else to move. The unspoken universal
thought is this: “if it were really so serious, surely someone would do something?”
On Saturday, for some light relief from the UN report (who says that environmentalists
don’t know how to make whoopee?), I went to a meeting of roads protesters in Birmingham.
They had come from all over the country, and between them they were contesting 18 new
schemes: a fraction of the road projects the British government is now planning(12). The improvements
to the climate change bill that Hilary Benn, the environment secretary, anounced
yesterday were welcome. But in every major energy sector - aviation, transport, power generation,
house building, coal mining, oil exploration - the government is promoting policies
that will increase emissions. How will it make the 60% cut the bill enforces?
No one knows, but the probable answer is contained in the bill’s great get-out clause:
carbon trading(13). If the government can’t achieve a 60% cut in the UK, it will pay other
countries to do it on our behalf. But trading works only if the total global reduction we are

U of Utah Econ 5080 2007fa 371
trying to achieve is a small one. To prevent runaway climate change, we must cut the greater
part - possibly almost all - of the world’s current emissions. Most of the nations with which
the UK will trade will have to make major cuts of their own, on top of those they sell to us.
Before long we will have to buy our credits from Mars and Jupiter. The only certain means
of preventing runaway climate change is to cut emissions here and now.
Who will persuade us to act? However strong the opposition parties’ policies appear to
be, they cannot be sustained unless the voters move behind them. We won’t be prompted
by the media. The BBC drops Planet Relief for fear of breaching its impartiality guidelines:
heaven forbid that it should come out against mass death. But it broadcasts a programme -
Top Gear - that puts a match to its guidelines every week, and now looks about as pertinent
as the Black and White Minstrel Show. The schedules are crammed with shows urging us
to travel further, drive faster, build bigger, buy more, yet none of them are deemed to offend
the rules, which really means that they don’t offend the interests of business or the pampered
sensibilities of the Aga class. The media, driven by fear and advertising, is hopelessly biased
towards the consumer economy and against the biosphere.
It seems to me that we are already pushing other people ahead of us down The Road. As
the biosphere shrinks, McCarthy describes the collapse of the protagonist’s core beliefs(14).
I sense that this might be happening already: that a hardening of interests, a shutting down
of concern, is taking place among the people of the rich world. If this is true, we do not need
to wait for the forests to burn or food supplies to shrivel before we decide that civilisation is
in trouble.
Published in the Guardian 30th October 2007
References:
1. Cormac McCarthy, 2007. The Road, p55. Picador, London. Amazon
http://www.amazon.com/Road-Oprahs-Book-Club/dp/0307387895
2. United Nations Environment Programme, 2007. Global Environment Outlook: GEO4.
http://www.unep.org/geo/geo4/report/GEO-4 Report Full en.pdf
3. ibid, p86.
4. ibid, p110.
5. ibid, p110.
6. ibid, p83.
7. ibid, p110.
8. ibid, p99.
9. Alok Jha, 24th October 2007. Warming could wipe out half of all species. The
Guardian.
10. James Randerson, 26th October 2007. The edge of oblivion: conservationists name
25 primates about to disappear. The Guardian.
372 2007fa Econ 5080 U of Utah
11. David Adam, 23rd October 2007. Carbon output rising faster than forecast, says
study. The Guardian.
12. The organisation RoadBlock, which convened the conference, has lists of the government’s
new trunk road schemes.
http://www.roadblock.org.uk/
13. HM Government, March 2007. Draft Climate Change Bill.
http://www.official-documents.gov.uk/document/cm70/7040/7040.pdf
14. p93.
Message [696] referenced by [725]. Next Message by Hans is [724].
[705] Jason: With the increase in technology and the production of machines is there
really an increase in the need for more laborers?
What does everyone think about this?
First Message by Jason is [73].
[706] Melissa: Don’t be left behind. I agree with both Melanie [689] and Amy [693]
that biodiesel fuel is something that needs to be explored. With the price of gas going the
direction it’s going, I can’t image anyone opposed to having a couple more alternatives
out there. Right now there is a major monopoly and I think everyone could benefit form
additional alternatives. Amy is right that there would be a decrease in the number of jobs
needed in the oil/gas industry but there certainly would be jobs created and just as we have
in the past, we adapt and change our social norms. There certainly would be training and
additional schooling required but in today’s day in age everything is constantly changing. I
worked for a software company that supplied state of the art technology for clearing checks
for banks about five years ago. Today the company has totally changed the direction instead
of finding faster ways to clear checks their focus is on how to clear images and totally phase
checks out. Industries are constantly innovating and those who want to be successful in life
with evolve with what society is requiring. Those who choose not to will be left behind.
Message [706] referenced by [720]. Next Message by Melissa is [708].
[711] Bosox: Health Care. I recently read an article in the Kiplinger Letter dated November
30, 2007. I have attached it. It was interesting to me as I read it because I was seeing
with different eyes, now taking this class, just how capitalism is being used in today’s work
place. This article stated that many of the bigger companies are “bringing doctors, nurses
and even pharmacy services in-house.” At first I was thinking that is a good thing because it
will be more of a convenience for the employees to go and get to the doctors and not have
to spend time. But this is not the case. It is not that the employer (capitalist) is trying to
accommodate the employees (laborer) but making sure that the company is not paying for
sick leave to go to the doctors because they would have to take time off of work to go and
now they can take a shorter amount of time and then back to work producing commodities
for the capitalist to get gain. Also if I say that I am sick and need to go home they can just
send you to the in-house doctor.
This system is set up to make the capitalist look better off but instead it is to help the
capitalist with getting his pockets bigger.

U of Utah Econ 5080 2007fa 373
To go along with chapter 25 on the subject of surplus population “to burnish their familyfriendly
employment policies... more firms are adding infertility treatments to benefit plans.”
If we can get mom and dad to like the company maybe we can get them to get their children
into liking the company to work for in the future.
There is a lot of features that do help the laborer. If we can give incentive to the labor
to stay healthy then premiums will decrease because of less doctor visits and hospital stays,
and less out of pocket for you as an employee but lees out of pocket for the employer.
Is it better for the capitalist to provide these features or is it better for the capitalist to
have the employee take care of these issues on their own?
A hot new trend in health care: Clinics within companies. By bringing doctors, nurses
and even pharmacy services in-house, workers can receive fast medical attention without
having to leave work to visit far-flung doctors. Such facilities also encourage more employees
to participate in company-sponsored health coaching, screenings and other disease
management and prevention programs. In some cases, services are free. When there is a
charge, it’s below off-site rates.
Most employers use outside contractors to run the facilities. Among such clinic operators:
Comprehensive Health Services, CHD Meridian and Whole Health Management.
Clinic hours can be tailored to a company’s size and needs. Some big firms have full-time
operations.
Smaller businesses can simply have a nurse come in two days a week. Too small for
an on-site facility? Retail clinics can help. They’re spreading rapidly in strip malls and
other locations throughout the country. They treat many routine medical conditions on a
walk-in basis at fees below what regular doctor’s offices charge. A heavyweight ...Mayo
Clinic is jumping in, opening clinics in Minn. and Wis., for starters. Their fees will range
from $49 to $59. Some employers are promoting the use of retail clinics, lowering copayments
for employees and their dependents that go to them. To burnish their familyfriendly
employment policies ... More firms are adding infertility treatments to benefit plans.
But to cut costs and risks, employers are putting annual or lifetime caps on the treatments,
requiring a fertility center to inject a minimum number of eggs to achieve a birth. Companies
are also providing more programs for prenatal and well-baby care to women undergoing
infertility treatments as well as for other moms to help reduce pregnancy and neonatal bills.
Expect another crackdown on employers that hire illegal workers.
The Bush administration wants new rules in place by March, but business groups think
implementing a reliable system will take years. This time, federal regulators promise to consult
more with employers before deciding how to make them check Social Security numbers
and fire workers whose status isn’t verified. The new approach comes on the heels of a
previous effort that was overruled by the courts on grounds that the feds didn’t consider the
burden on small companies.
First Message by Bosox is [257].
[720] Caroline: Adding to what Melissa said in [706], I also believe that biodiesel fuel
would be a good alternative to gasoline. There are many problems associated with what we
use now. OPEC is always in the news. It monopolizes the industry and that is a problem.
374 2007fa Econ 5080 U of Utah
Among other problems, there are externalities involved, such as polluting the environment.
If we used another source of fuel, such as biodiesel fuel, then we would reduce carbon
emissions and the like in the atmosphere. The change from gasoline to biodiesel fuel would
be a great way to change the direction that the capitalists have chosen.
First Message by Caroline is [134].
[725] Marcellus: Nothing Is Left. It is refreshing to hear about an author taking the
initiative to write a fiction book about the potential consequences of certain reckless and
destructive behaviors. I have thought for some time now how I could contribute to societies
awareness about the environmental and political issues we face today, and writing a book is
one of the better ideas I came up with. Although nonfiction is not based on facts, fictional
books are still a representation of the world that we live in; after all this is all we know.
Besides, who’s to say that subjects, ideas, issues, etc. are not happening somewhere else in
this grandiose universe? If only there were a way to see the other worlds and learn from
their trials and tribulations. Besides, I am looking forward to reading Cormac McCarthy’s
book The Road which Hans sent [696] on this free discussion board, as one of my passions
in life is this world with all its beauty, as well as analyzing its abject crannies.
First Message by Marcellus is [41].
Compiled by Hans G. Ehrbar 2013-07-07 04:14:21.