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Aristotle (384—322 bc)

Adam Smith (1723—1790) moral philosopher and political economist

Karl Marx (1818—1883) revolutionary and thinker


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exchange value

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A quantitative relationship which expresses the worth of one commodity in terms of another commodity. For instance, if one pair of shoes can be exchanged for two chairs then the exchange value of a pair of shoes is two chairs and the exchange value of two chairs is a pair of shoes. When these exchange ratios are expressed in a money form (2 chairs = £40) then exchange value is the price of a particular commodity. From Aristotle, who was the first to develop the concept, to the Classical Economists such as Smith and Ricardo, the main problem lay in trying to discover the determinants of a commodity's exchange value. Utility, scarcity, and production costs of labour and capital were some of the solutions suggested. These debates culminated with the contribution of Marx who argued that exchange value was not an expression of the labour time embodied in an article, as Ricardo had asserted, but rather the ‘form’ taken by ‘value’ in exchange. ‘Value’ itself is the socially necessary labour time of society expended on a commodity: that is, a portion of the labour time of society as a whole, which cannot be discovered until the commodity has been put on the market for exchange. This implied that the exchange of one commodity for another was a social relationship between people which ‘appeared’ as a quantitative relationship between things, that is, commodities. Outside of Marxism, however, theorists ignore the social basis of exchange and see exchange value simply as an expression of price which is determined by the dictates of supply and demand.

Ian Fraser


Subjects: Social sciencesPolitics

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