t also
have an exchange-value arising from the fact that the use-value
contained in it is social in its nature and exchangeable for other
exchange-values. With the unit of wealth thus defined, the subsequent
study of economics is immensely simplified.[165]

The trade of capitalist societies is the exchange of commodities against
each other, through the medium of money. Commodities utterly unlike each
other in all apparent physical properties, such as color, weight, size,
shape, substance, and so on, and utterly unlike each other in respect to
the purposes for which intended and the nature of the wants they
satisfy, are exchanged for one another, sometimes equally, sometimes in
unequal ratio. The question immediately arises: what is it that
determines the relative value of commodities so exchanged? A dress suit
and a kitchen stove, for example, are very different commodities,
possessing no outward semblance to each other, and satisfying very
different human wants, yet they may, and actually do, exchange upon an
equality in the market. To understand the reason for this similarity of
value of dissimilar commodities, and the principle which governs the
exchange of commodities in general, is to understand an important part
of the mechanism of modern capitalist society.

This is the problem of value which all the great economists have tried
to solve. Sir William Petty, Adam Smith, David Ricardo, John Stuart
Mill, and Karl Marx developed what is known as the labor-value theory as
the solution of the problem. This theory, as developed by Marx, not in
its cruder forms, is one of the cardinal principles in Socialist
economic theory. The Ricardian statement of the theory is that the
relative value of commodities to one another is determined by the
relative amounts of human labor embodied in them; that the quantity of
labor embodied in them is the determinant of the value of all
commodities. When all their differences have been carefully noted, all
commodities have at least one quality in common. The dress suit and the
kitchen range, toothpicks and snowshoes, pink parasols and
sewing-machines, are unlike each other in every other particular save
one--they are all products of human labor, crystallizations of human
labor-power. Here, then, say the Socialists, as did the great classical
economists, we have a hint of the secret of the mechanism of exchange in
capitalist society. The amount of labor-power embodied in their
production