Capitalist Production The Commodity and Money

Capitalist Production The Commodity and Money. Marx began his analysis of capitalism with the commodity. Under capitalism everything, from a pin to a giant factory, and even man’s labour power, is bought and sold, taking the form of a commodity. The relations between people in society appear in the guise of relations between commodities. The commodity, as Marx said, is the economic cell-form of bourgeois society. Just as a drop of water reflects the world around it, so the commodity reflects all the fundamental contradictions of capitalism.

Marx’s investigation into the commodity and commodity production enabled him to explain the essence of the capitalist relations of production.

General Description of Commodity Production

Commodity production means the production of goods not for personal use, but for sale, for exchange on the market. By commodity production, says Lenin,

Is meant an organization of social economy in which goods are produced by separate, isolated producers, each specializing in the making of some one product, so that to satisfy the needs of society it is necessary to buy and sell products (which, therefore, become commodities) in the market.

Commodity production originated during the period of the disintegration of the primitive-communal system; it existed under the slave and feudal modes of production, though natural economy was dominant in both cases. Under this economy society consisted of a mass of uniform economic units, each of which performed all forms of work, beginning with the obtaining of various raw materials and ending with the processing of them for its own consumption. This type of economy, in which the surplus product was chiefly exchanged, prevailed until the rise of capitalism.

The development of capitalism dealt a crushing blow to natural economy. Under capitalism everything, including man’s labour power, took the form of a commodity. With the transformation of labour power into a commodity, commodity production became dominant and universal.

Once commodity production under capitalism had become the prevailing form of production, the relations between people in the process of production, i.e., their production relations, took the form of commodity relations. To illustrate this, let us take the fundamental production relation in capitalist society-the exploitation of the proletariat by the bourgeoisie. In order to exploit the worker, the capitalist has to hire him, while the worker has to sell his labour power, which is now a commodity. The capitalist pays the worker a wage, with which the latter buys his means of subsistence-commodities. Thus, the production relations between the worker and the capitalist are expressed not directly, but through commodities, and assume the character of commodity relations.

The capitalists sell products to one another and buy from one another raw materials, equipment and other commodities. The relations between the capitalists also assume the character of commodity relations.

Conditions for the rise of commodity production:-

Consequently, in capitalist society commodity production takes on a dominant, universal character, whereas relation between people appear as relations between things, commodities. Commodity production arises only where there are definite conditions for it.

The most important condition required for the rise and existence of commodity production is social division of labour. This means the making of different products is divided among separate people or groups of people. One group of people, for instance, weaves cloth, another makes footwear, a third household articles, a fourth tools, and so on. Clearly, in order to satisfy their personal requirements these people must exchange the results of their labour. In this way all the producers taken together form a large production unit whose members are dependent on one another.

But social division of labour is only one of the conditions required for the existence of commodity production. Another essential condition is the presence in society of different owners of the means of production. Take the following case. A man has made an article and wants to sell it to someone else. Can he do this? Yes, he can, but only if he is the owner of the means of production used to make the article and hence the owner of the article itself. For instance, despite the fact that there was a division of labour in the primitive communes, there was no commodity production and no commodity exchange. The members of the commune exchanged the results of their labour, but they did not sell them to one another; they could not do so, since the commune as a whole owned the means of production and the products of labour. It was a different matter when the product of one commune was exchanged for the product of another commune, In this case a change of ownership took place and the product of labour was a commodity.

Thus the basis of commodity production is social division of labour and the presence in society of several different owners of the means of production. Only when both these conditions are present do commodity production and an exchange of products emerge in the shape of purchase and sale.

Simple and capitalist commodity productions:-

Capitalist commodity production arises where there are definite social conditions and on the basis of simple commodity production. The most typical representatives of simple commodity production are the small peasants and handicraftsmen. They base their production on personal labour, i.e., they work themselves, and do not exploit the labour of others. Each simple commodity producer is the owner of his means of production, and he produces not for his own consumption, but for the market, for sale.

Simple commodity production is of a dual nature. On the one hand, as it is based on private ownership, the small peasant or handicraftsman is a man of property, and this brings him closer to the capitalist. On the other hand, as simple commodity production is based on personal labour, the commodity producer is a working man, and this brings him closer to the proletarian, who, unlike him, possesses no means of production. It is here that the working class and the peasantry have a common interest, and consequently are capable of forming an alliance.

Under certain social conditions, simple commodity production can be the point of departure and the basis for the rise of capitalist production. Two such conditions occur. First, the existence of private ownership of the means of production. We know that this condition emerged in. the period of the collapse of primitive society. Second, the transformation of labour power into a commodity. This occurred during the epoch of the disintegration of feudal society.

Simple commodity production is unstable, for among the peasants and handicraftsmen a process of stratification is continually taking place: some (the minority) grow richer, while others (the majority) grow poorer. In the above mentioned conditions these processes lead to the formation of a bourgeoisie and a proletariat in both town and country.

Capitalist commodity production, like simple commodity production, is based on social division of labour and private ownership of the means of production, but it is also founded on the exploitation of hired labour by the owner of the means of production, not on his own personal labour. With capitalist commodity production the capitalist does not work himself, having at his disposal both the means of production and money. With his money he buys labour power to set his means of production in motion. The transformation of labour power into a commodity means that, under capitalism, commodity production develops further and becomes universal. Commodity exchange, wrote Lenin, appears as the simplest, most ordinary, fundamental, most common and everyday relation of bourgeois (commodity) society, a relation that is encountered thousands of millions of times. We must therefore explain what the commodity-this cell form of capitalist society really is.