Theory of the Fundamental Contradiction of a Commodity Economy Based upon Private Property

Marxist theory of the contradiction between private labor and social labor in a commodity economy society based upon private property. Marx used materialist dialectics to reveal the general laws of the simple commodity economy in Capital and in his other works. He put forth the theory that the contradiction between private labor and social labor is the fundamental contradiction of the commodity economy.

The commodity economy, i.e., the economic form of production for the purpose of exchange, arose under certain historical conditions. There are two basic conditions for the emergence of commodity production: the emergence of social division of labor and the establishment of property. As a result of the emergence of the social division of labor, producers and economic units specializing in the production of different commodities have been formed. In order to satisfy the needs of production and life, there arose a demand for the exchange of products by producers in all walks of life. The means of production and the products of labor belong to different owners. If one wants to obtain the products of another to satisfy his own needs, the products can only be exchanged. Therefore, the end of commodity production is not to satisfy needs of the producers themselves, but to exchange. In a commodity economy based upon private property, on the one hand, since the means of production and the products of labor are appropriated by private persons, the production is carried out in accordance with the interests and demands of private persons, each producer is independently engaged in production and operation, and the labor has a private nature, is private labor. On the other hand, commodity production is based upon social division of labor, and there is an all-round dependence among commodity producers: one’s production depends on the production and operation of all others; likewise, his products depend on the consumption of all others. That is, labor has a social nature, is social labor. Since individual production cannot know exactly the demand for labor and the actual supply of labor in all branches of social production, the labor expended by an individual in production can only be recognized by society after it has been exchanged in the market and the exchange value has been realized, and the individual labor can only be transformed into social labor. In other words, the transformation of private labor into social labor must be realized through market exchange. Here, there is the possibility that the producer will not realize the exchange-value of his products on the market, and thus the fundamental contradiction of the private commodity economy arises: the contradiction between private labor and social labor. This contradiction determines the essence of the commodity economy and runs through the process of development of the commodity economy from beginning to end. It is the root cause of the various inner contradictions of the commodity economy (i.e., the contradiction between use-value and value, the contradiction between concrete and abstract labor, the contradiction between individual and social value, etc., which are included in the commodity itself). Under capitalist conditions, the fundamental contradiction of the commodity economy has reached the point of serious antagonism and irreconcilability, and the contradiction between planned and purposive private labors and the deepening socialized large-scale production is intensely antagonistic, thus making the fundamental contradiction of the commodity economy further develop into the fundamental contradiction of capitalism, which is the root cause of the constant outbreak of the crisis of capitalism, and where the objective necessity of the replacement of capitalism by socialism lies.