It is wrong to speak of labor in so far as it is applied to the production of use-values as of the only source of wealth, namely, the material wealth produced by it. Being an activity intended to adapt materials to this or that purpose, it requires matter as a pre-requisite. In different use-values the proportion between labor and raw material varies greatly, but use-value always has a natural substratum. Labor, as an activity, directed to the adaptation of raw material in one form or another, is a natural condition of human existence, a condition of exchange of matter between man and nature, independent of all social forms. On the contrary, labor producing exchange value is a specifically social form of labor. Tailoring, e. g., in its material manifestation as a distinct productive activity, produces a coat, but not the exchange value of the coat. The latter is produced not by the labor of the tailor as such, but by abstract universal labor, and that belongs to a certain organization of society which has not been brought about by the tailor. Thus, the women under the ancient system of house industry made coats without producing the exchange value of the coats. Labor as a source of material wealth was known to Moses, the legislator, as well as to Adam Smith, the customs official.9

Let us consider now some propositions which follow from the determination of exchange value by labor-time.

As a use-value, every commodity owes its usefulness to itself. Wheat, e. g., serves as an article of food. A machine saves labor to a certain extent. This function of a commodity by virtue of which it serves only as use-value, as an article of consumption, may be called its service, the service which it renders as use-value. But as an exchange value, a commodity is always regarded as a result; the question in this case is not as to the service which it renders, but as to the service10 which it has been rendered in its production. Thus, the exchange value of a machine is determined not by the quantity of labor-time which it saves, but by the quantity of labor-time which has been expended on its own production and which is, therefore, required to produce a new machine of the same kind.

If, therefore, the quantity of labor-time required for the production of commodities remained constant, their exchange value would remain the same. But the ease and the difficulty of production are constantly changing. If the productivity of labor increases, the same use-value will be produced in less time. If the productivity of labor declines, more time will be required for the production of the same use-value. Thus, the labor-time contained in a commodity or its exchange-value is a variable quantity, increasing or diminishing in an inverse ratio to the rise and fall of the productivity of labor. The productive power of labor which is applied in the manufacturing industry on a predetermined scale depends in the agricultural and extractive industries also on natural conditions which are beyond human control. The same labor will yield a greater or less output of various metals, according to their more or less close occurrence in the earth’s crust. The same labor may be embodied in two bushels of wheat in a favorable season, and only in one in an unfavorable season. In this case, scarcity or abundance, as natural conditions, seem to determine the exchange value of commodities, because they determine the productivity of certain kinds of labor which depend upon natural conditions.

Unequal volumes of different use-value contain the same quantity of labor-time or the same exchange value. The smaller the volume of a use-value containing a certain quantity of labor-time as compared with other use-values, the greater its specific exchange-value. If we find that certain use-values, such as, e. g., gold, silver, copper and iron, or wheat, rye, barley and oats, form a series of specific exchange values which, though not retaining exactly the same numerical ratio, still retain through widely remote epochs of civilization the same rough proportion of relatively larger and smaller quantities, we may draw the conclusion that the progressive development of the productive powers of society has equally, or approximately so, affected the labor-time necessary for the production of the various commodities.

The exchange value of a commodity is not revealed in its own use-value. But, as the embodiment universal social labor-time, the use-value of one commodity bears a certain ratio to the use-values of other commodities. Thus, the exchange value of one commodity is manifested in the use-values of other commodities. An equivalent is, in fact, the exchange value of one commodity expressed in the use-value of another commodity. If I say, e. g., that one yard of linen is worth two pounds of coffee, then the exchange value of linen is expressed in terms of the use-value of coffee, viz., in a certain quantity of that use-value. This ratio being given, I can express the value of any quantity of linen in coffee. It is clear that the exchange value of one commodity, say linen, is not confined to the ratio of any one commodity, e. g. coffee, as its equivalent. The quantity of universal labor-time which is represented in one yard of linen is at the same time embodied in an endless variety of volumes of use-values of all other commodities. The use-value of any other commodity forms the equivalent of one yard of linen, in the proportion in which it represents the same quantity of labor-time as that yard of linen. The exchange value of this single commodity is, therefore, fully expressed in the endless number of equations in which the use-values of all other commodities form its equivalents. Not until the exchange value of a commodity is expressed in the sum total of these equations or of the different proportions in which one commodity is exchanged for every other commodity, does it find an exhaustive expression as a universal equivalent; e. g., the series of equations:

may be represented as follows:

1 yard of linen = 1/8 lb. of tea + 1/2 lb. of coffee + 2 lbs. of bread + 1 1/2 yards of calico.

Therefore, if we had before us the sum total of the equations, in which the value of a yard of linen is exhaustively expressed, we could represent its exchange value in the form of a series. As a matter of fact, the series is an endless one, since the circle of commodities, constantly expanding, can never be closed up. But while the exchange value of one commodity is thus measured by the use-values of all other commodities, the exchange values of all the other commodities are, in their turn, measured by the use-value of this one commodity.11

If the exchange value of one yard of linen is expressed in 1/2 lb. of tea, or 2 lbs. of coffee, or 6 yards of calico, or 8 lbs. of bread, etc., it follows that coffee, tea, calico, bread, etc., are equal to each other if taken in the same proportion in which they are equal to the third article, linen; consequently, linen serves as the common measure of their exchange values. Every commodity, as the embodiment of universal labor-time, i. e., as a certain quantity of universal labor-time, expresses in turn its exchange value in definite quantities of the use-values of all other commodities, and the exchange values of all the other commodities are, on the other hand, measured by the use-value of this one exclusive commodity. But as an exchange value, every commodity is at the same time the one exclusive commodity that serves as a common measure of the exchange values of all other commodities; and, on the other hand, it is but one of the many commodities in the entire series of which every commodity expresses directly its exchange value.

The value of a commodity is not affected by the number of commodities of other kinds. But the length of the series of equations in which its exchange value is realized does depend upon the greater or less variety of other commodities. The series of equations in which the value of coffee, e. g., is represented, indicates the extent to which it is exchangeable, the limits within which it performs the function of an exchange value. The exchange value of a commodity as an embodiment of universal social labor-time is expressed in its equivalence to an endless variety of use-values.

We have seen that the exchange value of a commodity varies with the quantity of labor-time directly contained in it. Its realized exchange value, i. e., its exchange value expressed in the use-values of other commodities, must also depend on the proportion in which the labor-time spent on the production of all other commodities is changing. If, e. g., the labor-time required for the production of a bushel of wheat remained constant, while that required for the production of all other commodities doubled, the exchange value of a bushel of wheat expressed in its equivalents would become half as large as before. The result would be practically the same as if the amount of time necessary for the production of one bushel of wheat had been reduced by one-half, and that required for all other commodities had remained unchanged. The value of commodities is determined by the proportion in which they can be produced in the same labor-time. In order to see what possible changes this proportion may undergo, let us take two commodities, A and B.

First case. Let the labor-time required for the production of commodity B remain unchanged. In that case the exchange value of A, expressed in terms of B, rises and falls with the rise and fall of the labor-time required for the production of A.

Second case. Let the labor-time required for the production of commodity A remain constant. Then the exchange value of A, expressed in terms of B, falls and rises in an inverse ratio with the rise and fall of the labor-time required for the production of B.

Third case. Let the labor-time required for the production of commodities A and B rise and fall in equal proportion. Then the expression of equivalence of A and B remains unchanged. If through some cause the productivity of all kinds of labor were to decline uniformly, so that the production of all commodities would require an equally increased quantity of labor-time, then the value of all commodities would rise, though the expression of their exchange values would remain unchanged, and the actual wealth of society would decrease, because it would have to expend more labor-time on the production of the same stock of use-values.

Fourth case. Let the labor-time required for the production of A and B rise and fall, but not uniformly; that is to say, the labor-time required for the production of A may rise, while that required for B may fall, or vice versa. All of which can be reduced to the simple case where the labor-time required for the production of one commodity remains unchanged, while that required for the other rises or falls.

The exchange value of any commodity is expressed in the use-value of any other commodity, be it in integral units or in fractions thereof. As exchange value, every commodity is capable of subdivision, like the labor-time embodied in it. The equivalence of commodities is independent of their physical divisibility as use-values, just as the sum of the exchange values of commodities is indifferent to the change of form which use-values have to undergo when converted into a single new commodity.

So far we have considered commodities from a two-fold point of view, as use-values and exchange values alternately. But a commodity as such is a direct combination of use-value and exchange value; and it is a commodity only in relation to other commodities. The actual relation between commodities constitutes the process of their exchange. It is a social process participated in by individuals independent of each other but the part they take in it is that of owners of commodities only. Their mutual relations are those of their commodities, and thus they really appear as conscious factors of the process of exchange.

A commodity is a use-value, wheat, linen, a diamond, a machine, etc., but as a commodity it is, at the same time, not a use-value. If it were a use-value for its owner, i. e., a direct means for the satisfaction of his own wants, then it would not be a commodity. To him it is rather a non-use-value; it is merely the material depository of exchange-value, or simply a means of exchange; as an active bearer of exchange value, use-value becomes a means of exchange. To the owner it is a use-value only in so far as it constitutes exchange value.12

It has yet to become a use-value, viz., to others. Not being a use-value to its owner, it is a use-value to the owners of other commodities. If it is not, then the labor expended on it was useless labor, and the result of that labor is not a commodity. On the other hand, the commodity must become a use-value to the owner himself, because his means of existence lie outside of it in the use-values of commodities not belonging to him. In order to become a use-value, the commodity must meet the particular want of which it is the means of satisfaction. Use-values of commodities are thus realized use-values through a universal change of hands by passing from the hands in which they were held as means of exchange into those where they become use values. Only through this universal transfer of commodities does the labor contained in them become useful labor. In this process of their mutual interchange as use-values, commodities do not acquire any new economic forms. On the contrary, even the form which marked them as commodities disappears. Bread, e. g., by changing hands from the baker to the consumer does not change its identity as bread. On the contrary, it is only the consumer that begins to regard it as a use-value, as a certain article of food, while in the hands of the baker it was only the bearer of an economic relation, a palpable yet transcendental object. Thus, the only change of form that commodities undergo while becoming use-values, consists in the fact that they cease to be, as a matter of form, non-use-values to their owners, and use-values to those who do not own them. To become use-values commodities must be universally alienated; they must