Utility in the Labour Theory of Value
In response to endless examples of people making quips about mud pies or working hard to dig random holes, Marx's theory does not ignore utility.
The third sentence of Capital is:
A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another.
We start with utility. Utility is assumed for a commodity. Furthermore, on the first page of Capital Marx notes that the utility of an object is independent of the labour that goes into it:
A commodity, such as iron, corn, or a diamond, is therefore, so far as it is a material thing, a use value, something useful. This property of a commodity is independent of the amount of labour required to appropriate its useful qualities.
Obviously, iron that was hard to dig up is just as useful as iron that was easy to dig up. Literally first page stuff.
Marx then moves to exchange value:
Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of one sort are exchanged for those of another sort,[6] a relation constantly changing with time and place.
So we move from the subjective utility of objects to the proportions at which they exchange, dubbed exchange value. If exchange value is represented by the ratio at which commodities exchange, Marx then uses the term Value to refer to the "thing" which determines that ratio at which commodities exchange on a free market. The presence of a market is critical to Marx's model:
A thing can be useful, and the product of human labour, without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates, indeed, use values, but not commodities.
You can have something useful without bringing it to market. It would have utility, a use-value, but there is no exchange value and therefore Value (as being used here by Marx) present.
In order to produce the latter [commodities], he must not only produce use values, but use values for others, social use values. (And not only for others, without more. The mediaeval peasant produced quit-rent-corn for his feudal lord and tithe-corn for his parson. But neither the quit-rent-corn nor the tithe-corn became commodities by reason of the fact that they had been produced for others. To become a commodity a product must be transferred to another, whom it will serve as a use value, by means of an exchange.)
So a commodity must have utility, and it must be exchanged (and it would only be exchanged because it has utility!) for exchange value and therefore Value to be relevant. Utility and exchange are prerequisites to Marx's discussion of Value. The final word is:
Lastly nothing can have value, without being an object of utility.
Okay, not really the final word because he reiterates the fact that a commodity has utility again and again and again.
Here use-value is emphasised as a prerequisite:
Since the use-value of the commodity is postulated, the specific utility and the definite usefulness of the labour expended on it is also postulated; but this is the only aspect of labour as useful labour which is relevant to the study of commodities.
A commodity has a use value:
At first sight a commodity presented itself to us as a complex of two things – use value and exchange value.
Commodity is a use value:
The commodity, however, is the direct unity of use-value and exchange-value
Labour is not the sole source of use values:
We see, then, that labour is not the only source of material wealth, of use values produced by labour.
Commodities have a use value but must be exchanged:
His commodity... has use-value for others; but for himself its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange.
Objects of utility become objects with exchange-value:
The first step made by an object of utility towards acquiring exchange-value is when it forms a non-use-value for its owner, and that happens when it forms a superfluous portion of some article required for his immediate wants
Articles of utility become commodities through exchange:
As a general rule, articles of utility become commodities, only because they are products of the labour of private individuals or groups of individuals who carry on their work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact with each other until they exchange their products, the specific social character of each producer’s labour does not show itself except in the act of exchange
And significantly, exchange value is not based on the labour that went into that specific item, but based on the abstract level of productivity needed to produce that class of commodity:
The introduction of power-looms into England probably reduced by one-half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers, as a matter of fact, continued to require the same time as before; but for all that, the product of one hour of their labour represented after the change only half an hour’s social labour, and consequently fell to one-half its former value.