North American Indians and Australian aborigines were flummoxed when they saw European settlers buying and selling land. When the Russian revolutionary Victor Serge came to the West in 1936, he found it hard to explain to his 16 year old son, born and brought up in the Soviet Union, how big factories could be privately owned.
'This big building then... does it belong to one man, who can do just what he likes with it? Does this shop, with enough shoes for the whole of Orenburg, belong to just one owner?'
'Yes, son: his name is written there in lights. The gentleman probably owns a factory, a country house, several cars...'
'All for him? ... But what does he live for, this man? What is his aim in life?'
'His aim', I replied, 'is, broadly speaking, to make himself and his children rich...'
'But he's already rich! Why does he want to get any richer? In the first place it's unjust...' [Memoirs of a Revolutionary, p.324-5].
Imagine, however, how it would be if someone from the socialist future arrived in Britain today. I'll call her Avrio, from the Greek word for tomorrow. The food, the clothes and the furniture in the shops she all understands, even if some things look old-fashioned, but one thing is incomprehensible. 'What do they mean, these numbers stuck on things in the shops? What does it mean, bananas 40p per pound, broccoli 80p per pound, cheese 4 per pound?'
Today's person, Seemera, replies: 'They are prices.'
A: 'What are prices?'
S: 'The amount of money you have to pay for things.'
A: 'What do you mean, money?'
Seemera shows Avrio a five-pound note. 'That's money. For example, you could buy a pound of cheese, or five pounds of broccoli, or ten pounds of bananas with that.'
A: 'With that funny bit of paper? But it hasn't even got anything interesting to read on it. I can understand giving someone food because they're hungry, but what would you want this paper for?'
S: 'All right, forget about money for now. The prices represent the exchange-values of these different things - the proportions in which they exchange. One pound of cheese is equivalent in exchange to five pounds of broccoli or ten pounds of bananas.'
A: 'But I don't like broccoli at all. And anyway, what's the point of all this exchanging? If I had ten pounds of bananas, I'd keep a few for myself and put the rest into the common store.'
S: 'These prices aren't a matter of what you want or I want. They're an objective measure of what these different things cost.'
A: 'What do you mean cost?'
S: 'Well, the cost of cheese is the price of the milk it is made from, plus a part of the price of the machinery it is made with, plus...'
A: 'So the price is the cost, and the cost is a lot of prices! Very clear, thank you very much! What a complicated system!' A long silence follows, and then Avrio has a thought. 'I know! We work out how much of different sorts of food and clothing and things will be wanted, and how much labour will be needed for them, and some things cost more labour than others. We don't put labels with numbers on them, but we could, I suppose. Do you mean that these prices express the social cost of these things in terms of the amount of labour they take to produce?'
S: 'I suppose so...'
A: 'It must be! You must have some way of deciding how much labour is allocated to different things. If these numbers are about the cost of the goods, they must be about that.'
S: 'Yes, I suppose so. I suppose the only way all these different things can represent just more or less of some single social quantity is more or less of social labour time...'
A: 'But you don't seem sure. Maybe I'm not sure, either. Why do these labels say 40 pence or 4 pounds rather than, say, two minutes or twenty minutes?'
S: 'In our society nobody really does plan how much labour is spent on different things. It is all regulated by exchange on the market.'
A: 'Well, our planners often make silly mistakes, and we find we've worked at producing something that no-one really wants. Maybe your system is better. How does it work?'
S: 'You exchange things in the market. One person has thousands of pounds of bananas, another has heaps of broccoli, a third has lorry-loads of clothes. These are all exchanged in the market, and everyone goes away with the selection they want, a bit of this, a bit of that. If too much cheese has been produced, it can be exchanged only below the usual rate, so the cheese factories will cut back and less labour will be used on making cheese. If too little has been produced, then it can be exchanged above the usual rate, and the cheese factories will take on more labour to produce more. In this way, the amount of labour used in each line is adjusted all the time to fit with demand.'
A: 'I can imagine a few things going wrong with that.'
S: 'They do. But it works after a fashion.'
A: 'So the labour-cost of your products is represented only by the rate at which they exchange with other products?'
S: 'That's right. The exchange-value represents the labour-cost, but with all sorts of ups and downs due to supply and demand and other factors.'
A: 'What if cheese is produced by two different methods, one taking more labour-time than another?'
S: 'The exchange-value reflects social labour-time, the part of the total labour-time of society, used in production, so you have to measure according to average labour-time on average technology.'
A: 'You say all this is regulated by supply and demand, without anyone planning. So people are pushed out of jobs, and pulled into jobs, without having any control over it?'
S: 'Yes. Mind you, you don't mind so much losing one job if you can find another with similar conditions. You don't really care what you produce. What matters to you is getting a wage.'
A: 'That's weird. Isn't the whole point of work to produce something definite?'
S: 'Yes and no. You have to produce something that someone will buy. But exchange-value represents abstract labour, that is, labour you can measure as just so many hours, or as just the using-up of so much average labour-power'.
A: 'You don't have much of a life. It's the products of your labour that have a life, showing off their prices, exchanging to and fro, throwing you in and out of jobs with their exchange relations. You let yourselves be ruled by those funny bits of paper you call money'.
S: 'Yes. Shakespeare put it like this:
Thus much of this will make black white, foul fair
Wrong right, base noble, old young, coward valiant...
Why this
Will lug your priests and servants from your sides
Pluck stout men's pillows from beneath their heads:
This yellow slave
Will knit and break religions, bless the accursed;
Make the hoar leprosy adored, place thieves
And give them title, knee and approbation
With senators on the bench...'