From As use values, commodities are, above all, of different qualities, but as exchange

values they are merely different quantities, and consequently do not contain an atom of use
value.
To We see then that that which determines the magnitude of the value of
any article is the amount of labour socially necessary, or the labour time
socially necessary for its production.

As the world is celebrating 150 years of publication of Marxs Capital, Volume I, I have opted for the
same for this write up. I have identified passages from Section I from page no. ----to page no. ----- in
which Marx articulated his views about labour and value. Initially, I struggled to understand what has
been espoused in it but after a couple of readings I felt how simple the logic in it to develop a proper
perspective about understanding the world around. The reading made me to realize that how wrong
I am in some of my earlier understanding and what actually the reality is.

I was completely confused between the Use Value and Exchange Value even after my second reading
of Section I, Volume I of the Capital. Without Use Value how anything will have an Exchange Value? If
use is what is giving value for exchange, then how both of them are different? I was in puzzle as long
as I thought it is the use values of different products that are getting exchanged. I got clarity on this
matter when I realized that it is not the product one must focus on but the labour- the equalizing
value involved in it.

As Marx said, As use values commodities are ... different qualities (p.3). Since each of these
commodities satisfies our different needs, one need is not comparable to other. The Use value of
one is not comparable to the Use value of another. Each product has its own unique value.
Here Marx draws the contrast at first by pointing qualitative differences of
Use value which is an outcome of human production rooted in social
activity. But as an exchange values these commodities are merely
different quantities, and consequently do not contain an atom of use
value (p.3). In simple terms, products can never be exchangeable as use
values.

For example, when one feels hungry, theyll prefer having a piece of
bread by their side rather than a piece of gold. But when we put both
these things in the market for exchange to a third thing, say a trouser, a
piece of gold would get number of trousers whereas a piece of bread
cannot get even a single trouser. Despite having equal use value, gold is
having more exchange value a value that manifests itself as something
totally independent of their use value (p.4). It is not a geometrical, a
chemical, or any other natural property of commodities. Such properties
claim our attention only in so far as they affect the utility of those
commodities, make them use values. But the exchange of commodities is
evidently an act characterized by a total abstraction from use value (p.3)
Here Marx poses a question to us: 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 (p.4).

This understanding of labour as value corrected me from my earlier

misconceptions. I used to think that name of the company or branding is
what is deciding price of products. For example, the Iphone produced by
Apple company or TVs produced by Sony are having a premium due to
their brand value. As a use value any other mobile or TV produced by
other companies would serve the purpose with much cheaper price. But
still people are interested to spend extra money to possess these
products. So it is the brand value of these companies which is giving
extra premium to them.

And secondly, these companies are in a position to fix the price. I used to
think some arbitrariness in fixing the pricing of their products by the
companies who have branding value. For instance, the Iphone 7 which
was priced at 80,000 rupees in India when it was launched is now
available for less than 40,000 rupees after their new IPhone 8 was
launched. The use value of the Iphone 7 is same when it was launched or
now. Then why there was a change in the price? Why the company
charged more then? One of my uncles who is working in Intel once told
me that they are 10 years ahead in R&D but going incrementally without
deploying full potentiality to create value every year. Even though they
have a capacity to produce 5 or 6 GHz processor now, they release
processors in the market with moderate and gradual increase in their
speed than deploying available potentiality to generate more market for
their products.

Now after reading Marx, I realized how wrong I am or most of us who

think like that. Marxs concept of socially necessary labour time
provides clarity to understand the market pricing of products. The value
produced by labour is never constant but contextual to the social
conditions of science, technology, advancement in machinery,
innovations, skill levels, etc.: The labour time socially necessary is that
required to produce an article under the normal conditions of production,
and with the average degree of skill and intensity prevalent at the time
(p.4). Marx states further: We see then that that which determines the
magnitude of the value of any article is the amount of labour socially
necessary, or the labour time socially necessary for its production. Each
individual commodity, in this connexion, is to be considered as an
average sample of its class. Commodities, therefore, in which equal
quantities of labour are embodied, or which can be produced in the same
time, have the same value (p.4).

This is the anthropology of exchange of labour value: commodities priced

in money reflect the socially necessary labour time involved in the whole
economy. The Apple is pricing their products higher side because the
social labour involved in its products is higher than the products of other
companies. These premium companies are investing huge money in their
R&D, which means more human time is invested in producing high
quality products. When they are pricing their products high, they are
getting returning their continuous high investment on their R&D. People
are buying because of these premium features. If any other company
offers the same premium for lower price, people would not buy Apple
phones as a general case. So it is the investment on R&D that is what is
increasing the cost of Iphone. So is the case with Intel. They cant extract
the investment on their R&D if they come out to market with processor of
full potentiality.

Similarly, the lowering of Iphone 7 pricing after releasing of Iphone 8 is

due to increased technical skill of social labour or labour power. The
sophistication in social labour that produced Iphone 8 is higher than
Iphone 7. The advancement or higher value of social labour that
produced Iphone 8 lowered the social value of the labour power that
produced Iphone 7, hence reduced its exchange value the market price.