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What are the key ways that Simmel's discussion of value differs from Marx's labor theory of value?

Georg Simmel (1858-1918), a German sociologist, published his thoughts on value as it relates to currency in "The Philosophy of Money" (1900).  Simmel's main theme in the work is the impersonal nature of money among people in society.  He argues economic exchange is a social interaction and money is the medium of the exchange.  Money is merely the token upon which both parties agree represents the exchange item, tangible or otherwise.  The impersonal nature of monetary exchange allows for growth of personal freedom, but can hinder personal growth due to social comparison. 


Simmel claims the impersonal nature of transactions limits the social interaction to the matter at hand; an exchange of goods or services.  The monetary system helps to overcome social isolation by creating a universal method of communication and understanding.  However, the dark side of value is the disparity which arises when one person feels socially outcast due to society deeming their contribution as lower value. 


Simmel's arguments can be easily understood when examining two groups of three people representing two socially isolated groups.  In each group there is a person to supply food, one to provide shelter and the third that performs entertainment.  In isolation, each member trades their skills as equal members.  When monetary value is ascribed to each skill, the two groups are no longer isolated and can exchange resources through trade.  However, if one entertainer is no longer considered useful the person can become a social outcast.  Simmel argues value can increase personal freedom but runs the risk of personal isolation.


Karl Marx (1818-1883) view on labor theory is different because he focuses on relational value with labor as the defining characteristic of trade versus money.  Marx assumes value is created in two ways; exchange value and use value.  Exchange value is the accepted cost of a good over an extended period of time.  Use value is the value placed upon a good depending on how useful the good is at any given point in time.  For example, a bucket of water may have no use value during a rainstorm, but an exchange value based on the need to store water long term.


Marx's view of value transforms into a labor theory on value because he claims people naturally assign value based on how hard they worked to produce the product.  Thus, money is merely a token of their labor rather than an actual evaluation of value.  Marx argues that labor is not necessarily comparable in brute strength, but in production time.  If a shirt and building a wall are exchanged for example and they take the same amount of time they are equal in labor value despite the carpenter working harder.


Marx and Simmel differ on the concept of value.  Simmel claims it is an impersonal designation designed to separate personal feelings and create individual freedom.  Marx argues it is connected to labor and people have an inherent connection to value.  They agree value is a driving factor in social relationship and exchange.  There mere presence of value alters the dynamics of the social relationship.

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