labor theory of value

Part I: The Basics of the Labor Theory of Value

The key to understanding the nature of the capitalist economy, according to Marx, lies in understanding the nature of the commodity. A commodity is something that is useful and that is produced in order to be exchanged for a different kind of commodity. Parents who make bread to feed their family are not producing commodities. Bakers who produce bread to sell on the market are producing commodities.

As Marx pointed out in Capital, commodities have not existed in all human societies. They were virtually absent in very early communal societies where members would share their wealth with one another or redistribute it by giving gifts to one another. They would not produce things in order to exchange them with other members of their community. An elder of a tribe might teach a youth how to fish but expect nothing in return. As societies became more complex, commodities became more prevalent. Capitalism is unique in that commodities entirely dominate the economy. Everything seems to have its price. People who are professional teachers expect to be paid and will refuse to teach without compensation.

Once the economy is overtaken by commodities, things

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