Lec 8

History of Economic Ideas
Lecture 8
Marx
• Labour is the Centre of Value
• Labour is essential for commodity production
• Necessary Productive tools and raw materials are

acquired from private property
• Commodities are produced for exchange and not for

use by capitalist producer
• All produced commodities are a part of unified system

of productive organism
Division of Labour
• Division of labour is the root of production
• Social division of labour
• Different parts of productive process are mutually

related
• Commodities of each individual producer appear in a

depersonalised form
• Commodities are circulated and evaluated in the

market
Circulation
• Exchange means circulation
• C-M
• Exchange: C-M-C1
• Society through market regulates the product of

labour, the commodities
• Rise and fall of Market prices lead to changes in the

allocation of the working activity of people
Circulation
• Commodity producers do not appear in a determined
space in the market; influence in the market depends
on to the extent commodities are supplied to the
market or takes commodities back from the market
• Human connections are maintained through

commodities
• Interconnection of the social labour is manifested by

the private exchange of the individual products of
labour
Circulation
• Direct and indirect production relation through exchange
• C-M- C1-M1-C2 …..
• Commodity producer is forced to take into account the

working activity of other members of the society to the
extent that it influences the movement of commodity
prices on the market
• Direct connection between individual commodity

producers is established in exchange and indirectly
influences their productive activity
Production and Circulation
• Capitalist process of production taken as a whole is a
synthesis of the processes of production and
circulation
• Exchange means a social form of the process of

reproduction which alternates with the phase of direct
production
• M-C-M1
• Production relations only take place through relations

between commodities
Creation of Value
• Money as a medium of exchange contested as money
value exposes the social relation that was in existence
before
• In commodity metamorphosis money M represents the

objective reflex of the prices of commodities
• Money is objectification of commodity
• Commodity thus has a dual existence

Commodity Fetishism
• Commodities have dual existence: Natural & Social
• Natural means material
• Social means functional
• Socially determined labour takes on Material traits
• Commodities take on Social Traits
• Close connection between social-economic &
material-physical
• Commodity Fetishism
Production Process
• Production relations are reproduced
• Correspondence between the material process of
production and and the production relations among
individual is achieved differently in different social
formations
• Commodity fetishism is indispensable
• Distinction between Social Division of Labour and
Technical Division of Labour
• Production relations exist through exchange
Production process
• The relation between commodity owners is a capacity in
which they appropriate the produce of labour of others
• Alienation of direct labour used in the commodity

production itself
• Social process of production is continuous and constant
• Transformation of Commodities to Money, Money to

Capital, Money Capital to Productive Capital continues
Production Relation
• The connection between the production relations among
people and the material process of production have the
same character in the capitalist society stratified into
classes
• Production appears as capital, labour as wage labour, land

as an object of exchange
• Different in Feudal Society, pre-capitalist society and

capitalist society
• Commodities are produced when agents of production

combine with factors of production
Fetishism
• Theory of Alienation
• Alienation from economic conditions
• Alienated material form of commodity production
• Power of capital dominates
• Material world and human relations in alienated form
• Economic categories are abstractions of social

relations of production
Labour
• Materialisation of social production relations
• Labour and labour-power
• Commodity production uses labour power
• Reified social production relation
• Towards labour theory of value
• Value theory stands on commodity fetishism

Labour
• Labour contains labour power
• Materialised labour: abstract labour
• Point of departure: exchange is a consequence
• Labour theory of value stands on the social relation of
production
• Creation of Surplus Value essential to commodity
production
• Critique of Political economy

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History of Economic Ideas

• Labour is essential for commodity production

• Necessary Productive tools and raw materials are

• Commodities are produced for exchange and not for

• All produced commodities are a part of unified system

• Social division of labour

• Different parts of productive process are mutually

• Commodities of each individual producer appear in a

• Commodities are circulated and evaluated in the

• Society through market regulates the product of

• Rise and fall of Market prices lead to changes in the

• Human connections are maintained through

• Interconnection of the social labour is manifested by

• C-M- C1-M1-C2 …..

• Commodity producer is forced to take into account the

• Direct connection between individual commodity

• Exchange means a social form of the process of

• Production relations only take place through relations

• In commodity metamorphosis money M represents the

• Money is objectification of commodity

• Commodity thus has a dual existence

• Alienation of direct labour used in the commodity

• Social process of production is continuous and constant

• Transformation of Commodities to Money, Money to

• Production appears as capital, labour as wage labour, land

• Different in Feudal Society, pre-capitalist society and

• Commodities are produced when agents of production

• Alienation from economic conditions

• Alienated material form of commodity production

• Power of capital dominates

• Material world and human relations in alienated form

• Economic categories are abstractions of social

• Labour and labour-power

• Commodity production uses labour power

• Reified social production relation

• Towards labour theory of value

• Value theory stands on commodity fetishism

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