What is use value?
According to Marx every commodity has two characters – one is use value and other is exchange value. The use value of a commodity refers to the satisfaction or utility that an individual derives from the use of the commodity.
What is exchange value?
The exchange value of a commodity is the amount of other commodity which is obtained in exchange for one unit of this commodity.
What about money?
Money is the special commodity and functions as universal exchange equivalent.
Relationship between use value and exchange value
Use value means a relation between consumer and object consumed and is a subjective relation. But if a commodity does not have use value it cannot be exchanged. So use value is necessary for the existence of exchange value.
Quantitative and Qualitative
The relation between the producers is qualitative aspect while the relation between the products is qualitative aspect
Abstract Labor
Abstract labor is labor in general. It is not unreal or myth. Marx considered labor as a substance of value so abstract labor is the expenditure of human labor power.
Difference between value and price
Value is measure of the exchange relationship of means of production specially labor. But price also measures the exchange relationship but in terms of money of the commodities.
Working day
It is the time required to produce the labor power by the laborer on his own.
Necessary labor
It is the amount of labor that is required to produce the means of subsistence.
How circulation of money capital creates surplus value?
When a capitalist produces commodity he goes to the market with money to purchase labor power and means of production. Then the inputs are transformed into outputs and he again returns to the market to sell the finished products . By selling the products it gets converted to money. So the capitalist starts and ends with money . To gain profit the money at the end must be grater than the money at the beginning . The difference between the money at the end and at the beginning is the surplus value.
Constant Capital
It is the capital equal to expenditure on materials plus depreciation i.e the value of the materials and machinery used up is constant capital.
Variable capital
It is the capital equal to the expenditure on wages and salaries. It means that labor power creates it own value and produces an excess or surplus value which is variable capital.
What is the rate of surplus value
The rate of surplus value is the ratio of surplus value to variable capital. It is also known as the rate of exploitation and is the ratio of surplus labor to necessary labor.
References
Mandel, E. (1979). Introduction to Marxism. London: Ink Links.
