Editing Simple commodity production (section)

==Different interpretations==

This historical, evolutionary viewpoint<ref>Ernest Mandel, ''Marxist Economic Theory''. London: Merlin Press, 1968, Vol. 1, pp. 63-68.</ref> is however not accepted by all Marxists. The historical role of simple exchange based on simple commodity production has been the subject of considerable controversy among Marxist scholars. It has been claimed by academics that Marx never had a concept of "simple commodity production" because he did not use those words.<ref>Michael Quante & David P. Schweikard (eds.), ''Marx-Handbuch. Leben - Werk - Wirkung.'' Stuttgart: J. B. Metzler Verlag, 2016, pp. 98–99.</ref> If that is true, then it seems that Engels's concept is really alien to Marx's thought. For example, the Italian Marx-scholar Roberto Fineschi alleges that [[Friedrich Engels]] (who was a successful businessman, and edited Volumes 1, 2 and 3 of Marx's ''Capital''<ref>Tristam Hunt, ''Marx's general: the revolutionary life of Friedrich Engels''. New York: Henry Holt & Company, 2010.</ref>) failed to understand the difference between circulation and production, so that Engels falsely equated Marx's concept of "simple exchange of commodities" with "simple commodity production".<ref>Roberto Fineschi, "Nochmals zum Verhältnis Wertform – Geldform – Austauschprozess". In: ''Neue Aspekte von Marx’ Kapitalismus-Kritik - Beiträge zur Marx-Engels-Forschung, Neue Folge''. Berlin: Argument, 2006, pp. 115-133.</ref> According to Rolf Hecker's interpretation, by contrast, Engels does not ''equate'' Marx's concept of simple exchange of commodities with simple commodity production, but instead ''replaces'' simple exchange of commodities with simple commodity production.<ref>Rolf Hecker, "Einfache Warenproduktion" [1997]. ''Rote Ruhr Uni'', 2024.[https://www.rote-ruhr-uni.com/cms/texte-und-vortrage/Einfache-Warenproduktion]</ref> Christopher J. Arthur claims that an economy or society fully based on simple commodity production has never existed in history, contrary to what Engels (allegedly) suggested.<ref>Christopher J. Arthur, ''The new dialectic and Marx's Capital''. Leiden: Brill, 2004, chapter 2. Christopher J. Arthur, "The Myth of ‘Simple Commodity Production’", Marx Myths & Legends, 2005.[https://www.marxists.org/subject/marxmyths/chris-arthur/article2.htm#n2]</ref>

Some Marxists believe that capitalist markets function in a "totally different way" from pre-capitalist markets, or they believe that the [[law of value]] applies only to industrial capitalism, and not to market systems which preceded industrial capitalism.<ref>[[John Weeks (economist)|John Weeks]], ''Capital and exploitation''. Princeton: Princeton University Press, 1981, p. 47.</ref> According to [[Helmut Reichelt]], for example, the law of value only applies when the whole of society is subsumed under the bourgeois form of the division of labour.<ref>Helmut Reichelt, "Zum Verhältnis von logischer und historischer Methode". In: Helmut Reichelt, ''Zur logischen Struktur des Kapitalbegriffs bei Karl Marx''. Frankfurt: EVA, 1970, chapter 3 section 1, pp. 126-136, at p. 130.[https://www.ca-ira.net/verlag/leseproben/reichelt-struktur_lp-methode/]</ref> [[Alex Callinicos]] argues that "the so-called historical interpretation of the labour theory of value" which claims that "it holds true in conditions of simple commodity production, prior to the development of capitalism", involves "a complete misunderstanding of Marx’s value theory".<ref>Alex Callinicos, ''Deciphering Capital: Marx’s Capital and its destiny''.  London: Bookmarks, 2014, p. 42.</ref> Following [[John Weeks (economist)|John Weeks]] and [[Robert Brenner]], Callinicos claims that if an independent producer produces his own outputs with his own means of production, and sells some of them in the village market, then no “commodity production” occurs at all, because his inputs for production are not commodities, and the production process is not subject to the laws of competition. Therefore, to call such production “simple commodity production” is simply wrong.<ref>[[Alex Callinicos]], ''Deciphering Capital: Marx’s Capital and its destiny''.  London: Bookmarks, 2014, p. 174-175.</ref> Engels aimed to give a consistent explanation of the evolution and development of the market economy, from simple beginnings to the complexities of modern capitalist markets, but his critics argue he disregards the qualitative transformation of the [[relations of production]] involved.<ref>The validity of this criticism is disputed, given that Marx and Engels both argue that the operation of the [[law of value]] is altered by the emergence of capitalist industry, precisely ''because'' of changing [[relations of production]] (see below). Something similar appears in foreign trade, among other things because the market value of the same product can vary in different countries (see the [[Big Mac index]]  [https://www.statista.com/statistics/274326/big-mac-index-global-prices-for-a-big-mac/].</ref>

The new anti-Engels interpretation is contrary to the traditional Marxist view, the latter which defines a commodity as a ''product of labour'' and not (as academic [[value-form]] theorists do<ref>Where value comes from is an important issue for [[value-form]] theorists. In the de-industrialized regions where value-form theorists live, very little commodity production occurs, there are few factories left, and therefore, in everyday life, it really seems like value spontaneously appears from digital platforms, markets, warehouses and shops. The actual manufacturing of the commodities occurs far away in other countries, and is invisible, while the commodity-form of the product seems to originate from where the consumer buys the product. The fact that products have to be ''produced'' - somewhere - becomes irrelevant, and is forgotten because they are supplied everywhere, and can be bought everywhere. The producers (including transport workers and retail service workers) become an abstraction. Labour historian [[Marcel van der Linden]] comments: "Take the jeans that I am wearing. The cotton for the denim is grown by small farmers in Benin, West Africa. The soft cotton for the pockets is grown in Pakistan. The synthetic indigo is made in a chemical factory in Frankfurt, Germany. The rivets and buttons contain zinc dug up by Australian miners. The thread is polyester, manufactured from petroleum products by chemical workers in Japan. All parts are assembled in Tunisia. The final product is sold in Amsterdam." - [[Marcel van der Linden]], "Rumors of the Death of the Working Class Are Highly Exaggerated". ''Jacobin'', November 5, 2022.[https://jacobin.com/2022/11/working-class-international-labor-global-north-south-capitalism]</ref>) as a ''product of exchange''. According to the traditional Marxist view, the simple exchange of commodities ''presupposes'' at least that the commodities are ''produced''. Otherwise there ''would not exist'' any commodities that could be exchanged. Historically speaking, the development of the simple exchange of reproducible commodities could never occur  without simple commodity production. Engels does not argue that the law of value ''disappears'' when commodity trade is regulated by [[prices of production|production prices]], but rather that the law of value is ''transformed'' and ''modified''. It is transformed, because:

*Originally (as already recognized by [[Adam Smith]]<ref>[[Adam Smith]], ''[[The Wealth of Nations]]'', ed. [[Edwin Cannan]]. London: Methuen & Co., 1904, Book 1, Chapter 6, p. 49.</ref>) the exchange-value of what a producer creates is regulated by his own necessary labour-time (with upper and lower limits).<ref>This simple system of production and trade can function long-term, only if it is compatible with the producer’s needs and survival requirements, and what consumers of his products can afford to give in return. There exists a maximum number of hours per day, that a producer can work to earn a livelihood from selling his own products (the absolute upper limit). But if he does not work enough hours, he does not earn enough, or does not earn anything (the absolute lower limit). These constraints determine how production will be organized, even irrespective of the presence and degree of market competition of the producer with other producers. The required quantity of labour is crucial for the success of the system of production and trade.</ref> But, in the end, what regulates the exchange-value of his production is ''a socially average labour-cost'', i.e. a value expressed as the normal price-level which is imposed on him as an objective external force (like "a law of nature") - regardless of whether his own labour-time is more or less than the normal social average.<ref>“It is [[Adam Smith]]’s great merit that it is just in the chapters of Book I [of ''[[The Wealth of Nations]]''] (chapters VI, VII, VIII) where he passes from simple commodity exchange and its law of value to exchange between materialised and living labour, to exchange between capital and wage-labour, to the consideration of profit and rent in general—in short, to the origin of [[surplus-value]] — that he feels some flaw has emerged. He senses that somehow—whatever the cause may be, and he does not grasp what it is—in the actual result the law is suspended: more labour is exchanged for less labour (from the labourer’s standpoint), less labour is exchanged for more labour (from the capitalist’s standpoint). His merit is that he emphasises — and it obviously perplexes him — that with the accumulation of capital and the appearance of property in land — that is, when the conditions of labour assume an independent existence over against labour itself — something new occurs, apparently (and actually, in the result) the law of value changes into its opposite.” – Karl Marx, ''Theories of surplus-value'', Part 1. Moscow: Progress Publishers, 1969, p. 87.</ref> Paradoxically, as Marx says, the more that the producers become dependent on exchange, the more exchange appears to become independent of them.<ref>Karl Marx, ''Economic Manuscripts of 1857–58'', in ''Karl Marx Frederick Engels Collected Works'', Vol. 28 (New York: International Publishers, 1986), p. 834.</ref>
*The simple exchange of labour-equivalents as the basis for balanced trade is gradually replaced by the more complex exchange of unequal labour-values, where fluctuating market-prices for products systematically diverge from average product-values, and their supply-cost contains a [[surplus value]] formed in production. The exchange-values of products are no longer directly regulated by labour-values, but by [[prices of production]] (although the [[law of value]] ultimately still sets limits on price fluctuations). What therefore determines commodity prices at this stage are the average cost-prices and the average profit yields from their production and sale (the rates and volumes of profit).
*While originally the commodities sold were a surplus to the requirements of the seller, alongside subsistence production, eventually the market sale of the commodities produced is the precondition and the only practical purpose of producing them. In contrast to ''partial'' commodity production, ''generalized'' (universalized) commodity production means that all the inputs of production are supplied as commodities, and all the outputs are sold as commodities - with the consequence, that the whole production process is reorganized to conform to commercial criteria. This is the economic background for the transition from the ''formal'' subsumption of labour and production under capital (extraction of absolute surplus value from wage-labour, by increasing hours worked up to the absolute upper limit) to its ''real'' subsumption (extraction of relative surplus value, by increasing the productivity of wage-labour with better means of production, tools and techniques).

Instead of postulating a "society of simple commodity producers", Engels was referring to the history of the gradual expansion of commodity-trade alongside subsistence production across thousands of years, to more and more sectors of economic life - until commodity production is generalized and the majority of commodities are produced "by means of commodities" in capitalist enterprises employing [[wage labour]]. Marx had briefly indicated this historical process himself in his 1864 manuscript ''Results of the immediate process of production''.<ref>Karl Marx, "Results of the immediate process of production", appendix in: Karl Marx, Capital, Volume I, Penguin 1976; also available in ''Marx Engels Collected Works'' (MECW), Vol. 34, 1994.[https://www.marxists.org/archive/marx/works/1864/economic/index.htm]</ref>

In the anti-Engels explanation, it is unclear what regulates commodity-trade in the pre-capitalist economy, if not the [[law of value]]. It is unclear how the law of value can "suddenly" appear out of nowhere, once most of production becomes commodity production through the growth of markets. Apparently, capital began to exist ''when wage-labour exists'', i.e. when peasants and serfs were thrown off the land and were forced to work for a wage from an employer, to make a living. Somehow, a mass of employers "suddenly" appears out of nowhere to employ a mass of unemployed workers in mechanized factories, in exchange for wages. But how this could have resulted from the situation that preceded it, remains a puzzle.

This mystery is solved only when [[labour history]] is studied. Long before the industrial capitalist appeared on the stage of history,<ref>In many different passages, Marx explains that capital first emerges from trade using money, and exists alongside trades & craft associations and guilds long before any capitalist production exists. He describes how businessmen gradually take over different sectors of production, and transform them into capitalist industries after overcoming all sorts of obstacles. See, for example, Marx, ''Capital, Volume 1'', Penguin edition 1976, chapter 11 on the "rate and mass of surplus-value", pp. 422-426.</ref> wage-labourers were already being hired - when officials of the early state paid soldiers for their services, temple officials employed contract labourers, and landowners hired farm workers.<ref>[[Jan Lucassen]], "Wage Labour", in: Karin Hofmeester & [[Marcel van der Linden]] (eds.), ''Handbook global history of work''. Berlin: De Gruyter, 2018, pp. 395-408.</ref> The first known workers' strike recorded in written history, on a [[papyrus]],<ref>The papyrus is displayed at the [[Museo Egizio]] in [[Turin]], [[Italy]].[https://collezionepapiri.museoegizio.it/en-GB/section/Papyrus-Collection/History-and-content/Highlights-Turin-Strike-Papyrus/]</ref> was staged more than three thousand years ago by building workers at the royal [[necropolis]] at [[Deir el-Medina]] in [[Egypt]], during the reign of [[Ramesses III|Ramses III]] (see also [[Deir el-Medina strikes]]).<ref>[[Ernest Mandel]], "Why I am a Marxist" [1978]. In: ''The legacy of Ernest Mandel''. London: Verso, 1999, pp. 232-259, note 24, at pp. 258-259; William F. Edgerton, "The Strikes in Ramses III's Twenty-Ninth Year", ''Journal of Near Eastern Studies'', Vol. 10, No. 3, July 1951, pp. 137-145; Manfred Gutgesell, ''Arbeiter und Pharaonen: Wirtschafts- und Sozialgeschichte im Alten Ägypten''. Hildesheim: Gerstenberg Verlag, 1989, pp. 83-97.</ref>