Simple commodity production

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Simple commodity production (

Origins

Simple exchange of commodities is as old as the history of

That is to say, simple commodity production is not specific to any particular mode of production, and might be found in many different modes of production, with various degrees of sophistication. It does not necessarily imply that all inputs or outputs of productive activity are commodities traded in markets. Thus, for example, simple commodity producers could produce some products for their own use on their own land, while trading another part of their products. They might buy or trade some tools and equipment, but also make some themselves.

From simple commodity production to capitalist production

The large-scale transformation of simple commodity production into capitalist production based on the wage labour of employees occurred only in the last two centuries of human history. It is preceded by the strong growth of merchant trade, supported by financiers who earn rents, profit and interest from the process. The merchants not only act as intermediary between producers and consumers, but also integrate more and more of production into a market economy. That is, more and more is produced for the purpose of market trade, rather than for own use. The initial result is known as "merchant capitalism", which flourished in Western European cities in the 17th and 18th century.

However, the transformation from simple commodity production into capitalist production accompanying industrialisation requires profound changes in property relations, because it must be possible to trade freely in means of production and labour power (the factors of production). Only when that trade becomes possible, can the whole of production be reorganised to conform to commercial principles. Marx describes capitalist society as "a society where the commodity-form is the universal form of the product of labour, hence the dominant social relation is the relation between men as possessors of commodities".^[1]: 152 He argues that "The capitalist epoch is... characterized by the fact that labour-power, in the eyes of the worker himself, takes on the form of a commodity which is his property; his labour consequently takes on the form of wage-labour... it is only from this moment that the commodity-form of the products of labour becomes universal."^[1]: 274 Thus, "...from the moment there is a free sale, by the worker himself, of labour power as a commodity... from then onwards... commodity production is generalized and becomes the typical form of production."^[1]: 733

For that purpose, many legal, political, religious and technical restrictions imposed on trade must be overcome. The unification of a "home market" among people in a country who speak the same language typically stimulated

Simple commodity production nevertheless continues to occur on a large scale in the world economy, particularly in peasant production. It also persists within industrialised capitalist economies in the form of self-employment by free producers. Capitalist firms sometimes contract out specialised services to self-employed producers, who can produce them at a lower cost, or provide a superior product.

Marxian economics

In Marxian political economy, simple commodity production also refers to a hypothetical economy used to interpret some of Karl Marx's insights about the economic laws governing the development of commodity trade: it refers to a market economy in which all producers own the resources (including the ability to work) that they use in production. No-one is a proletarian, selling his or her labor power to another. Instead, each is self-employed.

In this imaginary model, there is a direct correspondence between prices and the

Notes

• Frederick Engels, Afterword to Vol. 3 of Das Kapital.
• Ian Wright, "The Emergence of the law of value in a dynamic simple commodity economy", to appear in Review of Political Economy. https://web.archive.org/web/20051105080343/http://65.254.51.50/~wright/sce.pdf
• Ronald Meek, Studies in the Labour Theory of Value. New York: Monthly Review Press, 1975.
• Tom Brass and Marcel Van Der Linden (eds.), Free and Unfree Labour: The Debate Continues (International and Comparative Social History, 5). New York: Peter Lang AG, 1997.
• Arthur Diquattro, "The Labor Theory of Value and Simple Commodity Production". Science & Society, Vol. 71, No. 4, October 2007, 455–483.
• Christopher J. Arthur, "The Myth of ‘Simple Commodity Production’", 2005, in Marx Myths and Legends, https://www.marxists.org/subject/marxmyths/chris-arthur/article2.htm