In political economy value is the amount of socially necessary labor time in commodities. A commodity is a product made to be exchanged, rather than consumed by the producer. The production of objects for exchange is the characteristic feature of commodity economy.
Human beings, rather than machines, are the source and determinant of value in commodities. In political economy, value is a shorthand way of saying exchange value. Exchange value expresses the ratio at which two different products of human labor exchange for each other. A commodity possesses a use value and exchange value.
Value, that is, exchange value, exists in human society where people are organized with a division of labor for the production of commodities. The sum total of social relations based on the exchange of commodities (buying and selling) is the value relation. The development of commodity production signifies the existence of value and sets the stage for the emergence of the law of value.
The law of value makes its first appearance under the slave mode of production. Under the bourgeois factory system (capitalism) the law of value allocates labor, resources and money into areas of maximum profitability as the driving inspiration for production.
(See, Commodity; Value, Law of.)
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