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Essay / The role of money according to Marx - 1631
The role of money according to MarxThe use value of a good or service is created by all societies, capitalist and non-capitalist. Their use values are not specifically measurable in a numerical sense; it is a community's level of demand, or social necessity for certain goods or services. The exchange value of goods or services is unique to capitalist production. Exchange value is the value of a good or service in relation to another good or service. Understanding use value and exchange value broadly defines two types of economies: subsistence economies and surplus production economies. Subsistence economies aim to meet needs for social good, while surplus-producing economies aim to meet social needs (real or perceived) and create surplus profits. It is important to remember that a good or service becomes a commodity under capitalism because it is produced with the intention of being exchanged for profit. “in commodity production, production necessarily implies exchange; exchange is a necessary step in the process of reproduction” (Shaikh 1977). However, all commodities, in addition to having an exchange value, also retain their use value. Goods that have use value can also have exchange value when appropriated by private industry. An example of this is the water industry in Bolivia, which was owned and maintained by the government and provided as a service to the public. When the water industry was privatized, the water service was given an exchange value for which citizens had to pay. Through a recent renationalization process, the water industry was brought back under government control and retained its use value while losing its exchange value. The value of labor power is the ability of a worker to perform his or her work. Labor power is a commodity under capitalism. Specifically, an important aspect of capitalism is free wage labor – in which a worker owns his labor and can sell it to whomever he wants at a certain wage, since he has no other commodities to sell. Like any other commodity, labor power, once used, must be renewed. The value of labor power is the value of a worker's livelihood, the set of goods that workers consume. The value of labor power is different from the salary of a worker, because wages can fluctuate according to different market conditions, while the value of labor power is a value defined in a historical and cultural context to renew the capacity of a worker to do a job every day..