The exchange value of a commodity is determined by the amount of socially necessary labour time required in its production. I don’t think anybody would dispute that a coat that took two hours to produce would not be exchanged for a piece of gold that took say ten hours to dig up unless there were guns, whips, immanent fear of hypothermia or idiocy involved. If to acquire gold all that was needed was to bend one’s back and pick it up then it would have the value of dust and as little use value.
Commodities tend to have less and less socially necessary labour time expendend on their production as more is invested in machinery and less in wages which means of course that their exchange value is reduced. For the capitalist the profit he makes on any given commodity comes from the difference in what he invested to produce it and what he exchanges it for. We have already seen that what he exchanges it for is the amount of socially necessary labour time that was required in its production. Nobody is knowingly going to buy a commodity off the capitalist with money it took them two hours to earn if that commodity only took one hour to produce. But wait a minute. If what the capitalist sells for is objectively determined by the amount of socially necessary labour contained in his commodity where is the profit? After all he has to buy commodities like plant, machinery and a worker’s ability to work at their value which was itself in turn determined objectively by the amount of socially necessary labour time required in their production. Is our capitalist not just a necessary facilitator or an organiser of production? No, I’m afraid not. Our capitalist friend is a thief.
The use value to a capitalist of the commodity that the worker has to sell, the ability to labour, is that it produces a surplus value above its own exchange value i.e. the amount of socially necessary labour time required for its production. This surplus is what the capitalist pockets. Unfortunately for our capitalist he is compelled by competition to constantly reduce the amount of labour power he purchases and up the amount of plant and machinery he invests in. This increases productivity but devalues the commodity he is selling which means that each commodity is less profitable for him. He compensates himself by upping production and cornering the market which has the duel result of creating monopolies that can charge what they like and thereby snuff out economic growth and overproduction whereby they have produced more of a commodity than there are people who can afford it at a price that is profitable to the capitalist even though those people may desperately need what they are selling. In the midst of great wealth there is great want itself in turn created by the great wealth. Growth followed by stagnation and decline is the inevitable cycle of capitalism but with stagnation and decline obviously being the end result. Death comes to us all and capitalism is no exception.