Exchange value

In political economy and especially Marxian economics, exchange value (German: Tauschwert) refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market. The other three aspects are use value, economic value, and price.

Thus, a commodity has:

These four concepts have a very long history in human thought, from Aristotle to David Ricardo, becoming ever more clearly distinguished as the development of commercial trade progressed but have largely disappeared as four distinct concepts in modern economics. This entry focuses on Marx's summation of the results of economic thought about exchange-value.

Strictly speaking, the exchange value of a commodity is for Marx not identical to its price, but represents rather what (quantity of) other commodities it will exchange for, if traded.

Exchange-value does not need to be expressed in money-prices necessarily (for example, in countertrade where x amount of goods p are worth y amounts of goods q). Karl Marx makes this abundantly clear in his dialectical derivation of the forms of value in the first chapters of Das Kapital (see value-form).

Actually, the word "price" came into use in Western Europe only in the 13th century AD, the Latin root meaning being "pretium" meaning "reward, prize, value, worth," referring back to the notion of "recompense", or what was given in return, the expense, wager or cost incurred when a good changed hands. The verb meaning "to set the price of" was used only from the 14th century onwards.

The evolving linguistic meanings reflect the early history of the growing cash economy, and the evolution of commercial trade. Nowadays what "price" means is obvious and self-evident, and it is assumed that prices are all one of a kind. That is because money has become used for nearly all transactions. But in fact there are many different kinds of prices, some of which are actually charged, and some of which are only 'notional prices.' Although a particular price may not refer to any real transaction, it can nevertheless influence economic behavior, because people have become so used to valuing and calculating exchange-value in terms of prices, using money (see real prices and ideal prices).

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