It is social labour that has transformed nature to create the means that humans depend on for a livelihood. So it is the amount of social labour incorporated in it that constitutes the underlying value of a commodity. The concrete labour of individuals is transformed through exchange in a commodity-producing society into a proportionate10 part of "homogenous", "social" labour-or "abstract labour". Marx calls this abstract labour the "substance of value". It finds expression in exchange value and determines the level around which the commodity's price will fluctuate on the market:
Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society's aggregate labour . . . And the form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products.11 All the diferent kinds of private labour, which are carried on independently of each other . . . are continually being reduced to the quantitative proportions in which society requires them.12
Neoclassical economists tried to develop a notion of value out of people's subjective judgements, with some even trying to incorporate labour as "disutility". Marx, by contrast, saw value as something objective, as indicating the proportion of total social labour "embodied"13 in it. But what that value is only comes to light as a result of the continual, blind, interaction of commodities on the market.14 The system as a whole forces its individual components to worry about how the individual labour they employ relates to labour elsewhere.15 He calls this process the operation of "the law of value".
Values, however, are not unchanging. All the time there is the introduction of new techniques or new methods somewhere in the system. This results in a change in the amount of socially necessary labour needed to produce certain commodities-and that changes their exchange value. The use values of objects remain fixed until natural processes of wear, tear and decay damage them. But the exchange value of things-the value that matters for the system as a whole-declines every time the technical advance somewhere in the system decreases the amount of labour required to make them.
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Understanding the System: Marx and Beyond