Exchange value

“ Why does not the exchange-value of the use-values increase, when their quantity increases in consequence of increased productive power of labour? Answer: the difficulty is met by calling use-value, exchange-value, if you please. Exchange-value is a thing that is connected one way or another with exchange. If therefore production is called an exchange of labour and means of production against the product, it is clear as day that you obtain more exchange-value in proportion as the production yields more use-value. ”

“ The idea of general exchange value originates in the fact, that there really are causes which tend to alter the value of a thing in exchange for things generally, that is, for all things which are not themselves acted upon by causes of similar tendency.
In considering exchange value scientifically, it is expedient to abstract from it all causes except those which originate in the very commodity under consideration. Those which originate in the commodities with which we compare it, affect its value in relation to those commodities ”

“ If true money is a commodity, like gold, then what determines the exchange value between goods and that commodity? Is the problem in any way different from that of obtaining the exchange value of any two commodities? ”

“ Exchange value is the proportion in which use values of different kinds exchange for each other. But the enormous mass of things that circulate in the world market exchange for each other in the most different proportions. ”

“ To enable the money price of a thing at two different periods to measure the quantity of things in general which it will exchange for, the same sum of money must correspond at both periods to the same quantity of things in general—that is, money must always have the same exchange value, the same general purchasing power. ”

“ As we have seen, given a world of commodities and with it a system of division of labor, commodity is but a developed form of exchange value; in the same manner, circulation implies a steady stream of exchange transactions which are being continually renewed on all sides. The second assumption we make is that commodities enter the process of exchange with a definite price or that they appear to each other in that process in a double capacity, really as use-values, ideally—in price—as exchange values. ”

“ But precisely on this ground do we hold the view that the current mode of reckoning in economy by exchange-value is not a dictum of the market, but, in spite of many peculiarities conditioned by the market, a dictum of economy itself. ”

“ So enormous did the evil grow, and so pervasive were its effects, that it absorbed all attention to the exclusion of everything else. What fixity of value between the different units of its currency is to the internal transactions of a country, a par of exchange is to its external transactions. A par of exchange between any two countries expresses the relative exchange values of their respective currencies in terms of each other. ”

“ To say that goods command a price because they have power in exchange is like saying that opium puts men to sleep because it has a dormitive power. Physicians now recognize that this is no solution of difficulties, that it is merely a repetition of the problem in other words. If we wish to explain exchange, we must seek the explanation in something anterior to exchange. If value is to be distinguished from ratio of exchange at all, it cannot be defined as "power in exchange." ”

“ The primary value of all property is its exchange value. If we had no money, one kind of property would be exchanged for another. Needing the calico on the merchant's shelf, you would exchange for it a bushel of potatoes or such property as you might have to offer. A sort of exchange value would be placed on all property. ”

“ Then there would be no measure of values, and only an exchange value would exist. If under these circumstances the arts and sciences progressed, the demand for silver and gold would cause other property to be exchanged for it, and as they are used in so many ways in the sciences and arts, and for domestic and ornamental purposes, it is reasonable to suppose they would have an exchange value equal to any other scarce property for which there was a demand. ”

“ If buying and selling are what count, if prices are forced up by the offer of money or credit for goods, and forced down as the amount of money and credit offered for goods is reduced, then one exchange must count for as much as any other of like magnitude in fixing prices. ”

“ For the present it is sufficient to say that exchange is a productive process, that exchange creates values, in as true a sense as manufacturing does, and that money facilitates exchange in as true a sense as coal facilitates manufacturing. There is, at any given time, a demand-curve for this money service, manifesting itself in the money market, a demand for the short time use of money as a tool of exchange, and the "prices" which come out of the interaction of demand and supply in the money market are the short time "money rates" including the "call rates." ”

“ In speaking of the exchange and the comparative value of money in different countries, we must not in the least refer to the value of money estimated in commodities, in either country. The exchange is never ascertained by estimating the comparative value of money in corn, cloth, or any commodity whatever, but by estimating the value of the currency of one country, in the currency of another. ”

“ The medium of exchange function overcomes the difficulties arising from low saleability of many goods, due to limited number of possible buyers, lack of divisibility, etc., etc.
The common measure of values aids greatly in determining the prices, the terms, at which exchanges may be made; the medium of exchange makes possible exchanges which could not be made at all in its absence.
The measure of value function does not add to the value of money. The medium of exchange function is commonly a cause of additional value for money. ”

“ Hence it comes to pass, that the exchangeable value of every commodity is more frequently estimated by the quantity of money, than by the quantity either of labor or of any other commodity which can be had in exchange for it. ”

“ Its money value, therefore, or price, will represent as well as anything else its general exchange value, or purchasing power; and from an obvious convenience, will often be employed by us in that representative character; with the proviso that money itself do not vary in its general purchasing power, but that the prices of all things, other than that which we happen to be considering, remain unaltered. ”

“ There is, indeed, a good deal to be said for the view that the conception of general exchange value could never have been formed without the previous existence of money; it has certainly support from the evidence of competent observers respecting the methods of exchange followed by savage communities. ”

“ It may be considered, therefore, as established, that when two countries trade together in two commodities, the exchange value of these commodities relatively to each other will adjust itself to the inclinations and circumstances of the consumers on both sides, in such manner that the quantities required by each country, of the articles which it imports from its neighbour, shall be exactly sufficient to pay for one another. ”

“ Things which would have been equal in value if the mode of exchange had been by barter, are worth equal sums of money. The introduction of money is a mere addition of one more commodity, of which the value is regulated by the same laws as that of all other commodities. ”

“ If we could ascertain the total value of all the exchanges effected in this country by means of money in any year, and could ascertain how many dollars’ worth of such exchanges can be effected in a year by one dollar in money, we should know how much money the country needed for the business transactions of that year. Any decrease below that amount will correspondingly increase the value of each dollar as an instrument of exchange. Any increase above that amount will correspondingly decrease the value of each dollar. ”

“ In cases where prices, or exchange relations, are not in accord with values, the term "ratio of exchange" is inapplicable, since there are no quantities to be terms of the ratio—except the pure abstract numbers of the commodities, each measured in its own unit, exchanged. ”

“ Products which may be mutually exchanged are commodities. The definite proportion in which they are exchangeable form their exchange value, or expressed in money, their price. The amount of these products can do nothing to alter their definition as being commodities, or as representing an exchange value, or as having a certain price. Whether a tree be large or small, it remains a tree. ”

“ The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labor which it enables him to purchase or command. Labor, therefore, is the real measure of the exchangeable value of all commodities.
The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. ”

“ Direct barter, the original natural form of exchange, represents rather the beginning of the transformation of use-values into commodities, than that of commodities into money. Exchange value has as yet no form of its own, but is still directly bound up with use-value. This is manifested in two ways. Production, in its entire organization, aims at the creation of use-values and not of exchange values, and it is only when their supply exceeds the measure of consumption that use-values cease to be use-values, and become means of exchange, i. ”

“ Then, the dollar will represent constant value, and will thus become the true medium of exchange—domestic exchange. The difference between exchange and redemption is, in exchange gold is supplied at the market price, and in redemption it is supplied at a given price. When, however, the given price equals the market price, there is little redemption, because there is little demand ”

“ These Exchanges thus made between man and man, are not contracted at the equal value of the moneys, according to their respective weights and fineness: First, because he that delivereth his money doth respect the venture of the debt, and the time of forbearance; but that which causeth an under or overvaluing of moneys by Exchange, is the plenty or scarcity thereof in those places where the Exchanges are made. ”

“ So long as foreign trade, and expence kept equal, exchange was at the par: but when a people imported for a greater value, or had other occasions abroad, more than their export, and the expence of foreigners among them would ballance; there was a necessity of sending out the ballance in money or bullion, and the merchant or gentleman who owed, or had occasion for money abroad, to save the trouble, expence and hazard of sending it out, gave so much per cent to another, as the trouble, expence and hazard was [Pg 39] valued at. thus exchange rose above the par, and became a trade. ”

“ It is in fact its purchasing power, or power in exchange. This in substance is the concrete definition of value given by all economists, and they all unite in stating that value is determined by the supply of a commodity relative to the demand for it; all other factors affecting value being secondary and acting through their effect on either supply or demand. ”