Capital, Marxist

Generally speaking, capital is any asset that can potentially be used as a source of income. In academic literature, it has been categorized far more extensively, especially in Karl Marx's economic writings. Marx does not see capital as a thing, that is, as an inanimate object, but rather as a series of socioeconomic relations that appear thing-like. Along with capitalism's key features of the private ownership of the means of production, wage-labor, and a market economy, Marx insists that capitalism, as a finite mode of production, is characterized chiefly by the production and exchange of commodities. Central to his class-based inquiry into political economy is an analysis of the value-extending process, the role of constant and variable capital, an account of concrete and abstract labor, the crucial distinction between socially necessary labor and surplus labor, and the circulation of capital.

For Marx, value is a social relation that assumes a particular material form. Capitalist social relations exhibit value relations in the form of commodities. Commodities are intended to be exchanged, so they have an exchangeability feature that he argues is its value. In quantitative terms, use values of various kinds are exchanged for each other. Commodities therefore are bearers of use and exchange values. As each particular product can be differentiated from others, the use [Page 85]values of commodities are qualitatively distinct. Yet the values of commodities are equal in qualitative terms; they vary in the magnitude of value they embody. So in one key respect they must possess an identical magnitude. The homogeneous property that commodities share is that they are all produced by labor. On this analysis, value is the objectification of labor, and this value appears as the exchange value of commodities. That is, value is expressed as exchange value. So for Marx, the magnitude of exchange value is not determined quantitatively by use value. He held that the time workers spend creating value, measured by hours in the working day, has two parts: necessary labor, time at work in which workers produce an equivalent in the wages needed to meet personal consumption; and surplus labor, where the remaining hours are worked for the benefit of the capitalist. The measure of value is accounted for by establishing the amount of labor, calculated through hours of the day, that is required to produce a given commodity. To summarize, the substance of value is objectified (abstract) labor, and the measure of value is socially necessary labor.

Marx draws a distinction between constant and variable capital. The former is the value of the means of production embodied in the product during the process of production; it is termed constant because it does not engender any quantitative alteration of value in the process of production. The latter is capital used to hire labor power, it is termed variable because it alone holds the capacity to create value; its quantity changes during the productive process—from the value of labor power to the value it produces, and the difference between the two is surplus value. Commodities have use value as well as exchange value, so the labor that produces them must also have a twofold character. The labor with a “definite aim” (Capital, vol. 1, ch. 1) is concrete labor, which is of a particular kind and produces a use value. The labor analyzed without its particular attributes, as simply the expenditure of labor power in general, is termed abstract labor—this labor is the source of the value of commodities.

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