 Mae'r bobl ynstäun o'n meddwl o'ch cymorth am y cwmodau. Felly, mae yna ei fod yn allan, a rwy'n meddwl yna y cefnodol yw'r cymorth, neu'r cwmodau, ac mae'r bobl yw'r cymorth yn du fod sig ar hyn y cwmodau. Felly, mae'r cwmodau wedi cael eu cymorth yn gwahanol, mae wedyn yn cael ei gweld yn gweld yn siŵr, ac mae'n cael ei bod yn blaid â'r cymorth, mae'n cael ei gy natuurlijk, neu y cymorth yn gweld yn cael ei cymorth. Mae'n cael ei gweld yn cymorth yn cymorth .. bod y cymdeilio cymdeilio'r cymdeilio cymdeilio sydd yn ei wneud yn ygymell iawn. Mae'r cymdeilio o'r cymdeilio sydd yn ei wneud. Mae'r cymdeilio'r cymdeilio sydd yn ei wneud, ond yn rhan o'r cymdeilio cymdeilio yma yn y sefydliadau. Ac mae'n fwy o wybod. Mae'n gweithio yw'r cymdeilio sydd mewn ym mhwyngi a'r cymdeilio yma ym 398 miliwn cymdeilio. A that's mostly consumer goods. Think as well of all the raw materials, the actual machines and so on, that are sold around the world on the market. And we really are truly talking about an immense collection of commodities. The commodity therefore is like the basic cell of capitalism. You need to be understanding what a commodity is and, also crucially, what determines its value in order to be able to understand the rest of the functioning of the capitalist system. So, for all of the talk of commodities what actually are they? If you look in the business press like the financial times or in some kind of economics textbooks, you'll see reference to commodity markets, and by this they are talking about exchange of things like coal, oil, wheat, steel, and things like this. These are things that are really not finished goods but are inputs into later production processes. What Marx is understanding of commodity was actually much broader than this. It's not just unfinished goods. So byńk maker you've read in the business, press or economics textbooks… Firstly, Marks points out that commodity must be a product of labour… Now this can be a tangible good, something you can actually physically hold… Where it's like this book or the table… Or it can be a service provided, such as a haircut. Or I was going to repair your car, for example. Now for all the talk about Marks not being relevant in Britain… Or advanced capitalist countries now a days due to the decline of Heavy Industry … I say that is not true. Gwyddoedd, gyddoedd yma sydd wedi cymryd yn gwneud, yng Nghymru'r bod yn ysgrifennu'r busaidd Cymraen. Mae anodd oedd yn cael ei hunain ffordd o bach teimlo gydeg yna, mae hwnnw wedi gydag rhai gwir ystafell o'r plac fried oedl atdraethau, sefydliadol drwy gynllunodd. Al hyn yw'r cwrwch yn cael eu gwir ystafell cymraen yn cymryd wedi gweld y gwasanaeth, mae hwnnw yn cymryd ei bod yn cyfredig ystafell, ..n a new feature that separates commodities from other forms of goods and services produced in different modes of production. For example, if you take an early tribal society, they had to produce items necessary for their own existence. Things like clothing, tools, clothing, shelter and so on. These were socially produced with the wealth belonging to the entire tribe. Instead, there was no need for the exchange of goods between individual members of the tribe as they all would have simply taken what they needed of that stall of Commonwealth. Christopher Marx notes those, only the products of mutually independent acts of labour performed in isolation that can confront each other as commodities. Otherwise there's no need to exchange them if you can all take freely. So in order for commodity production to develop, it requires this emergence of a division of labour in society. So rather that everybody being involved with the joint production of Goodson a Tribe, you know, you get a specialisation. Some people become weavers, some people become cooks, some people become blacksmiths and so on and so on with all the different tasks that society performs. You get this division of labour. Now that doesn't happen overnight, but it takes a long process of development which I don't really have time to go into. However, although we've had commodity production in earlier forms of society, including slavery and feudalism, it's only under that commodity production formed only a very small part of the production of society. The vast majority of goods were produced either for personal consumption, for example in the case of peasant farmers who were produced for themselves and their own families, or they were directly appropriated by the ruling class themselves, so slave owners and feudal lords, without any exchange of return. It's only under capitalism that commodity production becomes generalised. The vast majority of goods and services are produced not for individual consumption but for exchange on the market. So how then are we to understand the value of a commodity? Marks explains that commodities have a dual nature and it makes a crucial distinction between on the one hand the used value of a commodity and its exchange value. Now he notes that all commodities, through their properties, must satisfy some kind of social need. They must be an object of utility, and in this sense they're a used value. If they weren't useful, nobody would buy them. You would find nobody to exchange them with. This used value is based on the physical properties of the object itself. So for example this table is useful because it is solid. It can support lots of weight. It's stable. It holds things up. It doesn't fall over. Alternatively this t-shirt is useful because it has the property of being able to retain heat and so on. It doesn't matter what kind of need that is satisfied or indeed how that need is satisfied. Marks says it doesn't matter whether it's a need arising from the stomach, such as the need for food to stop you starving, or from the imagination. So it's a need that's not necessary to keep you alive, but it can become a need. So take for example today a mobile phone or luxury goods such as jewellery. You don't need it to stay alive, but it becomes a need in any event. This puts to bed these ideas that somehow Marx's economics is not relevant today. It's simply your sword buying consumer goods that we don't really need. Marx explained it doesn't matter. Needs can be created. You can see this in the trillions of pounds spent on advertising agencies to try to convince us that we need certain products such as makeup or cigarettes or a razor with seven blades. Now once commodity production is developed you find that certain commodities exchange in certain definite ratios with one another. They have what Marx calls an exchange value. Now Marx gives the example in capital of a quantity of wheat exchanging for a certain quantity of iron. But it could be any commodities at all, whether it's tins of beans, loaves of breads, computers, cars, or anything else that's exchanged. Now what is it that makes these commodities exchange in certain ratios with one another? Why is it that I would have to exchange three tins of baked beans for one loaf of bread, or 300 loaves of bread for one computer? Now of course we're exchanging different use values. Are they all satisfied different needs and different ways? But it's not the usefulness of a thing that determines why it exchanges in these certain defined ratios. What makes a tin of beans useful? Primarily it's as quality as a food. It stops you from going hungry and starving. You might also consider things like its taste or its longevity. But why does it take three of them then to exchange for one loaf of bread? Is one loaf of bread more or less useful? How would you quantify it? Some people might say, well, bread is tastier. Others would disagree. It's subjective. But tin of beans last longer. But it could therefore be seen as more useful. But it's always cheaper than the loaf of bread. Why is that? But here we're talking about both beans and bread. They both ultimately satisfy the same need to keep us fed. But what about the computer or the car? It's obvious that their usefulness differs not quantifiably. You can't measure usefulness objectively according to some kind of single scale. You can't have a measuring device like a thermometer and put it against a commodity and then suddenly work out exactly how useful it is. The difference is qualitative. It's because they have different qualities that they satisfy different needs. What actually is it then that all commodities do have in common? If you disregard the specific useful functions of each of them, it's that they are all the products of human labour. How can we compare them quantifiably by the very fact that different amounts of labour have gone into their production? Marks wasn't the first to put forward the idea that labour is the source of value. As Rob explained, the classical economists before him, such as Adam Smith and David Ricciardo, also held to this view. But unlike them, Marks didn't look at value just from the point of view of the individual producer, such as the mason or the weaver, but he saw human labour as the abstract, i.e. society's labour in general. Now, as mentioned earlier, society characterized by commodity production is based on a division of labour. So different people perform different kinds of labour. This could be, for example, a carpenter, a mason, or a weaver, or whatever. And they all perform different concrete kinds of labour, joining, building, weaving, to produce different kinds of use values, so tables, houses and cloth. But when considering exchange value, since we're abstracting away from the different uses and considering commodities only from the view of their common social substance, i.e. labour, we also abstract away from them the different concrete kinds of labour that went into their production. The tables, houses and cloth are no longer the products of carpenter's, mason's and weavers, but of human labour in the abstract. And this flows from the dual nature of the commodities. On the one hand, it has a use value because labour of a specific concrete kind has gone into it, giving it certain physical qualities, but it has an exchange value since human labour in the abstract has gone into it. Note that when considering human labour in the abstract, we're reducing different kinds of labour involving different levels of skill down to a kind of simple average labour. And so more complex labour is simply considered as a different multiple of simple or unskilled labour. And simple average labour marks points out isn't something that's fixed and eternal throughout all of human history, but it varies between different countries and different cultural epochs. But if you consider it at one point of time, it is in society as given. The exchange value isn't something natural inherent to the commodity. You can't dissect a commodity, you can't cut it apart and find its value in there. You can't look at it under a microscope and discover it. However, it does exist. So not as a physical property of the commodity itself, but as a social property. And this should be obvious when you consider that use values such as clothes and tools have existed throughout human existence. But it's only under certain social conditions, a certain mode of production, you know, once they're exchanged as commodities that they acquire an exchange value. So this is a social property of these commodities. How can we determine it then? Well, I said the clue is in the name. It's through the act of exchange that this value becomes apparent. However, it's not based on the single act of exchange and nor is it determined by the labour of an isolated producer. So, if I produce coats for a living and I want to exchange these coats with someone who produces shoes, that single act of exchange that I swap a coat for a pair of shoes doesn't determine the value of coats and shoes in general. Under capitalism, where commodity exchange is universal and generalised, commodities are not exchanged between individuals, but through the medium of the market. The actual producers and consumers of commodities rarely, if in fact ever, actually meet each other in person. You don't get to ask the shopkeeper how much labour was spent in the production of commodities on the shelf. So you know, when you go into a shop like Tesco, you're confronted with many of the same commodities standing behind each other on the shelf, whether it's vegetables, meat, clothes or TVs. Therefore, the individual character of the actual specific labour that went into the production of each one of these items is lost. So, despite putting the name of a farmer on a packet of carrots, all you really see is just a bunch of carrots of various sizes and shapes or t-shirts or TVs, you don't know how exactly they were produced. So, how then do we measure and compare the general abstract human labour that went into their production? It's simply by its duration, it's by the time that it was spent in the production of these commodities. But note, since we're talking about exchange value, or rather from now on, I'll simply call it value of a commodity, it's not based on the actual individual labour that went into it, but it's based on the amount of labour required to produce such a given commodity in general. That's an important point, because the exchange value is therefore determined not by the individual labour that went into it, but by the socially necessary labour time required in general to produce such a commodity. Mark's notes that this is determined by the conditions of production, which are normal for a given society, including the average degree and skill of an intensity of labour prevalent in that society, i.e. what we call the productivity of labour. Such value is not something that's fixed and internal to a commodity, but it changes with time and place to certain historical and social conditions. So, for example, when you go into a shop, you don't ask or care about how much time when you're producing a particular article. All that matters, really, is the time required on average given the normal conditions of production. So, if you imagine that you're at a street market and there is a market stall with two boxes of peppers for sale, they're pretty much exactly the same peppers, but one was offered for sale for double the price of the other. Now, the seller says, well, these are more valuable since double the amount of time unfortunately went into their production. Unfortunately, we had a slower set of workers picking them and harvesting them, so that's why I'm going to charge more. Well, of course, you would say, no, thanks, I'm going to buy the cheaper ones and the ones produced by these slower workers are going to remain unsold. Hence, sellers on the market, which dares very much a global market, are forced to compete against this average level of skill, technology and organisation found in their branch of industry. If they don't, they're going to be forced out of business. So, nobody is therefore calculating exactly how much labour went into the production of each commodity. There's no one there from state trading standards to each stage of production with a stopwatch measuring the amount of time put into it. It's through competition on the market that forces commodities to be produced according to their socially necessary labour time. So, capitalism therefore produces a drive to develop the productivity of labour and we're going to consider this in much more detail in one of the later sessions today. But I think the important thing to understand now is that in doing so, if labour is more productive, if we're able to produce a greater mass of use values in the same duration of time, society becomes more wealthy. You know, we have more use values to go around. But at the same time, each individual commodity becomes less valuable in itself. It has a lower exchange value since less socially necessary labour time has gone into its production. So, for an example of this, you had the development of the power loon centuries ago. In a 10-hour day, for example, you were able to produce double the amount of cloth that could be woven previously by hand using a hand loon. So, if I take an arbitrary figure, you might get 100 square metres of cloth produced in a day rather than 50. Now, society is clearly wealthier in the fact that in one day's labour you now have double the amount of cloth produced. You have more use values. But the actual exchange value produced in one day, as in the value, is still the same. It's still the product of one day's labour. However, that value is now spread across double the amount of cloth. So, each square metre of cloth now represents half as much value as before. So, those using a hand loon don't get to sell their cloth at the old rate, i.e. for double its now current value, as that produced by a power loon. Now, only half of their labour represents the socially necessary labour time required for the production of cloth. And this is really something that mainstream economists don't understand or cannot explain, because they confuse use value and exchange value. Because they think everything is determined by its utility, how can something become less valuable but be just as useful? Now, this leads us onto the question of price, which we mustn't confuse with that of value or exchange value. If you look at the prices of commodities, they fluctuate. Sometimes they're increasing, sometimes they decrease. Also, at the same time, you can go into different shops and find different prices for exactly the same commodity. Does this mean that those specific commodities have different underlying values? I'll say, no, price is only the monetary expression of value. And it fluctuates around its value according to the laws of supply and demand. So, if supply is short and demand is high, prices will increase above their values. If supply is high and demand is low, prices will decrease below their values. And this very mechanism of supply and demand produces a certain equilibrium. You can see prices oscillating around an average providing that the productivity of labour and other factors remain constant. And that average, when supply and demand therefore cancel each other out over a given period of time, is linked, therefore, to the underlying value of the commodities. This question of price is frequently used by capitalist economists to try and rubbish Marx's economics and say it doesn't work. They say, well, what about things that no labour has gone into, like aversion forest? How can that have a price? Well, Marx never denied that it's possible for things that are not the product of labour to actually be offered as sale. And therefore, through their price, they take on a commodity form. But it takes a certain development of society of private property rights, of commodity production and of money for all this to even be possible. But once this is the case, all sorts of things can be offered for sale. For example, if you go back to the medieval period, the church used to actually sell what they called indulgences. And for a certain price, they would absolve you of any sin that you happen to commit. But I would say, if you take commodity production as a whole, these sorts of things are extremely rare and isolated and therefore are an unusual or fringe element of the economy. Likewise, how is it that certain items can fetch enormous sums of money, such as works of art or fine wines, which seem to have nothing to do with the amount of labour that actually went into their production? If we validate the labour theory of value, we have to be clear that here we are dealing with unique or extremely scarce items and they can't be produced through the application of more labour. Their price cannot be bought down through competition. As such, the demand can vastly outstrip the supply, leading to extremely high prices, i.e. monopoly prices. So Marx's labour theory of value, the value of commodities is determined by the socially necessary labour time that goes into their production. We are not dealing with isolated acts of exchange between individuals, such as at an art auction, but we are dealing with generalised commodity exchange over the course of the whole global market. Now, Marx spends a good deal of Chapter 1 explaining the development of the exchange value, how it in fact begins precisely with these isolated acts of exchange between individuals through the process of barter, where in fact the ratio of goods exchange can appear accidental. We are not dealing with isolated acts of exchange between individuals, but they can appear accidental all the way through to a general form of exchange value, where through the acts of millions of exchanges of commodities, the value of any one commodity can be expressed in relation to all others. This requires the development of money, which acts as a universal equivalent by a commodity that can be exchanged with all other commodities and therefore gives expression to their values. But with barter, the exact ratios that commodities exchanging can be more or less appear accidental. But with the generalisation of commodity exchange, each individual act of exchange loses its individual character and becomes one of thousands of exchanges on the markets. Therefore, these ratios average out. They begin to confront buyers and sellers on the market as prices, and importantly, these are not of their choosing, but appear as established facts, representing ultimately the socially necessary labour time that goes into their production, i.e. the exchange value. For example, when you go into a supermarket you don't haggle over the prices of the things that are on the shelves. Or even in areas of the market where you might be expected to haggle, the price that you haggle around isn't arbitrary. In fact, you come to generally know the going rate of things. Mark says, in the midst of the accidental and ever fluctuating exchange relations between the products, the labour time socially necessary to produce them asserts itself as a regulative law of nature. This law is not something that's timeless or imposed from without, but emerges from the interactions within. Once commodity exchange reaches a certain level of development, I become generalised. Importantly, Mark explains how this law becomes mystified, how it becomes obscured. Rather than understanding values, ultimately a social relation between people engaged in the production of commodities as part of a division of labour, it appears upside down as a relationship between things, i.e. the commodities themselves. This is what he refers to as commodity fetishism, fetish being an ethnographical term to describe how in early societies certain objects could become imbued with mystical properties, i.e. praying to like an idol, like a carving of a god, in order to summon that god to make it rain. You can see this in Christianity where people believe that certain relics, bones of saints or supposed pieces of the cross, have mystical powers. Once commodity exchange reaches a certain level of development, you have individual producers of commodities all bound together through the market, and despite their individual labour having a private character, they're in fact part of this social division of labour of society mediated through the market. But it's only through exchanging their commodities that they discover whether their individual labour is in fact part of the total necessary labour of society. If it's not, then their commodities remain unsold. Therefore in the minds of the producers it's not this relationship between people that's evident, it's the relationship between the things they produce, the commodities, the things they're trying to sell. The commodity exchange, due to some kind of mysterious characteristics of their own, they appear to develop a power over human beings. Their value appears to be something that's intrinsic to them as use values rather than because they're the product of human labour. So a coat therefore appears to have a certain value simply because it is a coat or a quantity of iron because it is a quantity of iron. Therefore excuse the fact that they both represent amounts of congealed human labour. This is particularly reinforced with the emergence of money. It appears as if iron metals such as silver and gold or pieces of paper possess a magical power inherent within them in that they can be exchanged with all other commodities. Now commodity producers therefore appear to all be blindly chasing money and it appears as if it has the mastery of over humanity. If you don't have money then obviously you can't survive. But since production isn't consciously planned the producers own products confront them as an alien power on the market. If there's therefore a glut of commodities on the market you can't sell your products because it's not within your control. You can see this with an economic crisis. It confronts us as a blind force throwing millions of people out of work leading to why it's been misery. Why? Because commodities cannot be sold in the market. It appears as if these commodities by themselves suddenly refuse to be sold and that there's nothing that we can do about it. Let's say Mark's point that's out it's only when you have a free association of people planning production collectively, i communism that this commodity fetishism will disappear. So instead of our relations being mediated through the exchange of commodities on the market we can consciously begin to plan production collectively and distribute these things according to need. And this is really the fundamental point touched upon by Mark's at the end of the chapter, namely that in uncovering the mystery of the commodity understanding exchange value as a social relation it becomes clear that it hasn't always existed but is specific to a certain relations of production, i commodity production. So in understanding that this law of value has a history it also has a beginning and undergrows a process of development and it's implicit that this law isn't timeless it's not a physical property of the commodities themselves but it has a transitory character and it's for this reason that Mark suggests that the various capitalist economists are unable to come to this conclusion as to accept that commodity production is not fixed and eternal means to accept that capitalism is also a transitory system of production and it means drawing revolution conclusions. So that's kind of a whistle-stop tour of chapter one. But I say that this can all seem a bit abstract and I say it's for that reason that this chapter can appear as one of the most difficult to get to grips with. But I say it's vital to build up these concepts that underpin the understanding of the system of a whole. Concepts such as what is a commodity the dual nature of a commodity it's use value, it's exchange value the socially necessary labour time price versus value, commodity fettersism and so on. These things are vital if we're to understand more complicated concepts such as capital surplus labour and profit that we'll consider throughout the rest of this day. So I haven't had much time to elaborate on examples but I think I hope we've got plenty of time to go into much more detail in the discussion and I'll leave it there. Thank you.