We have reached the conclusion that in a commodity economy the equalization of labor is carried out through the equalization of the products of labor. Individual acts of social equalization of labor do not exist in the commodity economy. This is why it is erroneous to present the problem in a way that suggests that someone equalized different forms of labor in advance, comparing them by means of given measuring units, after which the products of labor were exchanged proportionally, according to the already measured and equalized quantities of labor which they contained. Starting from this viewpoint, which ignores the anarchic, spontaneous character of the commodity capitalist economy, economists frequently thought the task of economic theory was to find a standard of value which would make it possible in practice to compare and measure the quantity of various products in the act of market-exchange. It seemed to them that the labor theory of value emphasized labor precisely as this practical standard of value. This is why their critique aimed to demonstrate that labor could not be accepted as a convenient standard of value due to the absence of precisely established units of labor with which to measure various forms of labor different from each other in terms of intensity, qualification, danger to health, etc.
The above-mentioned economists could not free themselves from an erroneous idea which had built itself a nest in political economy and which attributed to the theory of value a task which was not its own, namely to find a practical standard of value. In reality the theory of value has a completely different task, theoretical and not practical. It is not necessary for us to seek a practical standard of value which would make possible the equalization of the products of labor on the market. This equalization takes place in reality every day in the process of market exchange. In this process, spontaneously, a standard of value is worked out, namely money, which is indispensable for this equalization. This market exchange does not need any type of standard which is thought up by economists. The task of the theory of value is completely different, namely to grasp and explain theoretically the process of equalization of commodities which takes place regularly on the market, in close connection with the equalization and distribution of social labor in the process of production, i.e., to uncover the causal relation between both of these processes and the laws of their changes. The causal analysis of the actually realized processes of equalization of various commodities and various forms of labor, and not the finding of practical standards for their comparison - this is the task of the theory of value.
The essential confusion of the standard of value and the law of the changes of value in Smith's work led to great damage in political economy and can still be felt today. The great service of Ricardo consists of his having put aside the problem of finding a practical standard of value and placing the theory of value on a strict scientific basis of causal analysis of the changes of market prices depending on changes in productivity of labor. [1] His follower in this sense is Marx, who sharply criticized views of labor as an "unchanging standard of value." "The problem of an unchanging standard of value is in reality only an erroneous expression of the search for the concepts and nature of value itself" (Theorien uber den Mehrwert, III, p. 159). "The service of Bailey consists of the fact that, with his objections, he revealed the confusion of the 'standard of value' (as it is represented in money, a commodity which exists together with other commodities) with the immanent standard and substance of value" (Ibid., p. 163). The theory of value does not seek an "external standard" of value, but its "cause," "the genesis and immanent nature of value" (Ibid., pp. 186, 195). Causal analysis of the changes of value of commodities which depend on changes in the productivity of labor the analysis of these real events from qualitative and quantitative points of view is what Marx calls the study of the "substance" and "immanent standard" of value. "Immanent standard" does not here mean the quantity which is taken as a unit of measure, but a "quantity which is connected with some kind of existence or some kind of quality." [2] Marx's statement that labor is an immanent standard of value must be understood only in the sense that quantitative changes of labor necessary for the production of the product bring about quantitative changes in the value of the product. Thus the term "immanent standard" was transferred by Marx, along with many other terms, from philosophy to political economy. It cannot be treated as completely successful, since in a superficial reading this term makes the reader think mainly about a measure of equalization rather than of causal analysis of quantitative changes of events. This unsuccessful terminology connected with the incorrect interpretation of Marx's reasoning in the first pages of Capital has led even Marxists to introduce into the theory of value a problem which is foreign to it, namely that of finding a practical standard of value.
The equalization of labor in a commodity economy is not established by some previously determined unit of measurement, but is carried out through the equalization of commodities in exchange. Due to the process of exchange, the product as well as the labor of the commodity producer is subject to substantial changes. Here we are not speaking of natural, material changes. The sale of frocks cannot lead to any changes in the natural form of the frock itself, nor ill the labor of the tailor, nor in the totality of the already finished concrete labor processes. But the sale of the product changes its form of value, its social function or form. Sale indirectly affects the working activity of commodity producers. It places their labor in a determined relation with the labor of other commodity producers of the same profession, i.e., it changes the social function of labor. Changes through which the product of labor is subject to the process of exchange can be characterized in the following way: 1) the product acquires the capacity to be directly exchanged for any other product of social labor, i.e., it exhibits its character of being a social product; 2) the product acquires this social character in such a form that it is equalized with a determined product (gold) which possesses the quality of being directly exchangeable for all other products; 3) the equalization of all products with each other, which is carried out by their comparison with gold (money) also includes the equalization of various forms of labor which differ by the different levels of qualification, i.e., the length of training, and 4) the equalization of products of a given kind and quality produced in different technical conditions, i.e., with an expenditure of different individual quantities of labor.
The listed changes which the product undergoes through the process of exchange are accompanied by analogous changes in the labor of the commodity producer: 1) the labor of the separate private commodity producer displays its character as social labor; 2) the given concrete form of labor is equalized with all other concrete form of labor. This manyfold equalization of labor also includes: 3) the equalization of different forms of labor which differ in terms of qualifications, and 4) the equalization of different individual labor expenditures which are spent in the production of exemplars of productsof a given type and quality. This way, through the process of exchange, private labor acquires a supplementary characteristic in the form of social labor, concrete labor in the form of abstract labor, complex labor is reduced to simple, and individual to socially-necessary labor. In other words, the labor of the commodity producer, which in the process of production directly takes the form of private, concrete, qualified (i.e., different by a determined level of qualification, which in some cases may be said to equal zero) and individual, acquires social properties in the process of exchange which characterize it as social, abstract, simple, and socially-necessary labor. [3] We are not dealing with four separate processes of transformation of labor, as some analysts present the problem, these are different aspects of the same process of equalization of labor which is carried out through the equalization of the products of labor as values. The unified act of equalizing commodities as values puts aside and cancels the properties of labor as private, concrete, qualified and individual. All these aspects are so closely interrelated that in A Contribution to the Critique of Political Economy, Marx still did not give a clear enough distinction between them, and he erased the boundaries between abstract, simple, and socially-necessary labor (Critique, pp. 24-26). On the other hand, in Capital these definitions are developed by Marx with such clarity and rigor that the attention of the reader must grasp the close relation between them as expressions of different aspects of the equalization of labor in the process of its distribution. This process presupposes: 1) interconnection among all labor processes (social labor); 2) equalization of individual spheres of production or spheres of labor (abstract labor); 3) equalization of forms of labor with different qualifications (simple labor) and 4) equalization of labor applied in individual enterprises within a given sphere of production (socially-necessary labor).
Among the four definitions of value-creating labor (mentioned above), the concept of abstract labor is central. This is explained by the fact that in a commodity economy, as we will show below, labor becomes social only in the form of abstract labor. Furthermore, the transformation of qualified labor to simple labor is only one part of a larger process of transformation of concrete labor into abstract. Finally, the transformation of individual into socially necessary labor is only the quantitative side of the same process of transforming concrete labor into abstract labor. Precisely because of this, the concept of abstract labor is a central concept in Marx's theory of value.
As we have frequently pointed out, the commodity economy is characterized by formal independence among separate commodity producers on one hand, and material interrelations among their working activities on the other. However, in what way is the private labor of an individual commodity producer included in the mechanism of social labor and responsible for its motion? How does private labor become social labor, and how does the totality of separate, scattered private economic units become transformed into a relatively unified social economy characterized by the regularly repeating mass phenomena studied by political economy? This is the basic problem of political economy, the problem of the very possibility and the conditions of existence of the commodity-capitalist economy.
In a society with an organized economy, the labor of an individual in its concrete form is directly organized and directed by a social organ. It appears as part of total social labor, as social labor. In a commodity economy the labor of an autonomous commodity producer, which is based on the rights of private property, originally appeared as private labor. "We do not proceed from the labor of individuals as social labor, but, on the contrary, from special labor of private individuals which appears as universal social labor only by divesting itself of its original character in the process of exchange. Universal social labor is, therefore, no ready-made assumption, but a growing result" (Critique, p. 46). The labor of the commodity producer displays its social character, not as concrete labor expended in the process of production, but only as labor which has to be equalized with all other forms of labor through the process of exchange.
However, how can the social character of labor be expressed in exchange? If a frock is the product of the private labor of a tailor, then one may say that the sale of the flock, or its exchange for gold, equalizes the private labor of the tailor with another form of private labor, namely the labor of the producer of gold. How can the equalization of one private labor with another private labor give the first a social character? This is only possible in case the private labor of the gold producer is already equalized with all other concrete forms of labor, i.e., if his product, gold, can be directly exchanged for any other product and, consequently, if it plays the role of general equivalent, or money. The labor of the tailor, since it is equalized with the labor of the gold producer, is thus also equalized and connected with all concrete forms of labor. Equalized with them as a form of labor equal to them, the labor of the tailor is transformed from concrete to general or abstract. Being connected with the others in the unified system of total social labor, the labor of the tailor is transformed from private to social labor. The comprehensive equalization (through money) of all concrete forms of labor and their transformation into abstract labor simultaneously creates among them a social connection, transforming private into social labor. "The labor time of a single individual is directly expressed in exchange as universal labor time, and this universal character of individual labor is the manifestation of its social character" (Critique, pp. 26-27. Marx's italics). [4] Only as a "universal quantity" does labor become a "social quantity" (Ibid.). "Universal labor, and in this form social labor," Marx frequently said. In the first chapter of Capital, Marx lists three properties of the equivalent form of value: 1) use value becomes a form in which value is expressed; 2) concrete labor becomes a form of manifestation of abstract labor, and 3) private labor acquires the form of directly social labor (C, I, pp. 56-60). Marx starts his analysis with phenomena which take place on the surface of the market in material forms: he begins with the opposition between use value and exchange value. He seeks the explanation for this opposition in the opposition between concrete and abstract labor. Continuing with this analysis of the social forms of organization of labor, he turns to the central problem of his economic theory, the opposition between private and social labor. In the commodity economy the transformation of private into social labor coincides with the transformation of concrete into abstract labor. The social connection between the working activity of individual commodity producers is realized only through the equalization of all concrete forms of labor, and this equalization is carried out in the form of an equalization of all the products of labor as values. Inversely, the equalization of various forms of labor and the abstraction from their concrete properties is the unique social relation which transforms the totality of private economic units into a unified social economy. This explains the special attention which Marx gave to the concept of abstract labor in his theory.
[1]See I. Rubin, Istoriya ekonomicheskoi mysli (History of Economic Thought), 2nd Edition, 1928, Chapters XXII and XXVIII.
[2] O. Bauer, "Istoriya Kapitala," Sbornik Osnovnye problemy politicheskoi ekonomii (Basic Problems of Political Economy), 1922, p. 47. This is Hegel's well-known definition of measure. See Kuno Fischer, Geschichte der neuern Philosophie, Vol. 8, Heidelberg: C. Winter, 1901, p. 490, and G. F. Hegel, Samtliche Werke, Vol. III, Book I, Leipzig: F. Meiner, 1923, p. 340.
[3] In commodity production, i.e., production which is meant in advance for exchange, labor acquires the above-mentioned social properties already in the process of direct production, though only as "latent" or "potential" properties which must still be realized in the process of exchange. Thus labor possesses a dual character. It appears directly as private, concrete, qualified and individual labor, and at the same time as potentially social, abstract, simple and socially-necessary (see the next chapter).
[4] In A Contribution to the Critique of Political Economy, Marx called abstract labor "universal" labor.