Second Draft of Critique of Political Economy. 1858

[Chapter Two, Money]

Source: MECW Volume 29, pp. 430-507.
Written: Marx August-October 1858.

[2) Money As Means Of Payment]

[B'-1] obtains. Every peculiarity of the relation between the two [parties to the exchange] has been obliterated (exchange value as such, the general product of the social circulation, is here alone involved), and similarly all the political, patriarchal and other relationships stemming from the particularity of the relation. Both relate to each other as abstract social persons, merely representing exchange value as such before each other. Money has now become the sole nexus rerum between them, money sans phrase. The peasant no longer confronts the landowner as a peasant with his rural product and his rural labour, but as the money owner, for through the sale the immediate use value has been alienated and has assumed an indifferent form through the medium of the social process. On the other hand, the landowner no longer regards him as an uncouth individual producing means of subsistence in peculiar living conditions, but as one whose product – exchange value become independent, the universal equivalent, money – is no different from anyone else’s product. Thus, the idyllic aura that covered up the transaction in its previous form is dispelled.

The absolute monarchy, itself already a product of the development of bourgeois wealth to a level incompatible with the old feudal relationships, is – in accordance with the uniform general power which it must be able to exercise at every point of the periphery – in need of a material instrument of that power: the universal equivalent, wealth in its constant battle-ready form in which it is completely independent of particular local, natural, individual relations. It needs wealth in the form of money. A system of services and deliveries in kind tends to impart, in accordance with their specific character, a particular character to their use as well. Money is alone capable of being immediately converted into any particular use value. So the absolute monarchy is actively engaged in converting money into the universal means of payment. That can be done only through forced circulation, which makes products circulate at below their value. For the absolute monarchy, the conversion of all taxes into money taxes is a vital matter. So, whereas the conversion of [feudal] services into money services at an earlier stage appears as the shedding of relationships of personal dependence, as a victory of the bourgeois society, which buys its way out of the shackling fetters with cash – a process which, on the other hand, appears from the romantic viewpoint as a substitution of hard and insensitive money relationships for mankind’s motley ties – in the epoch of the rising absolute monarchy, whose art of finance consists in the forcible conversion of commodities into money, money is itself attacked by bourgeois economists as imaginary wealth to which natural wealth is being forcibly sacrificed. So, whereas Petty, for instance, actually celebrates in money, as the material for hoarding, merely the general energetic drive for enrichment of the young bourgeois society in England, Boisguillebert, in the reign of Louis XIV, denounces money as the universal curse which causes the development of the real sources of the production of wealth to run dry, and whose dethronement alone can restore to the world of commodities, the true wealth and its general enjoyment, its good old rights. He could not as yet comprehend that the same black art of finance which threw men and commodities into the alchemistic retort in order to make gold, simultaneously caused all the relationships and illusions hemming the bourgeois mode of production to be vaporised, to leave simple money relationships, common exchange-value relationships, as a residue.

“In feudal time cash payment had not grown to be the sole nexus of man to man. Not as buyer and seller alone, but in many senses still as soldier and captain, as loyal subject and guiding king, etc. was the low related to the high. With the supreme triumph of cash, a changed time has entered” (Th. Carlyle, On Chartism, London, 1840, p. 58).

Money is “impersonal” property. I can carry it around with me in my pocket as the universal social power and the universal social nexus, the social substance. Money puts social power as a thing into the hands of the private person, who as such uses this power.

The social nexus, the social exchange of matter, itself appears in money as something entirely external, not having any individual relation at all to its possessor, so that the power he wields appears to be something quite incidental and external to him.

[B'-2] Without any further anticipation, this much is clear: With the development of the credit system there is an extraordinary spread of buying on time. To the extent that the credit system is developed, and hence production based on exchange value, the role of money as means of payment will increase, as compared with its role as means of circulation, as agent of purchase and sale. In countries with a developed modern mode of production, and therefore a developed credit system, money as specie effectively figures almost exclusively in retail trade and in petty trade between producers and consumers, while in the sphere of large-scale trading transactions it appears almost exclusively in the form of the universal means of payment. In so far as the payments are in balance, money appears as a transient form, a merely notional, imaginary measure of the exchange magnitudes of value. Its bodily involvement is confined to the settlement of relatively insignificant balances.

“To prove how little,” says Mr. Slater (of the firm of Morrison, Dillon et Co, whose transactions are amongst the largest of the metropolis) “of real money enters into the operations of trade,” he gives an “analysis of a continuous course of commercial transactions, extending over several millions yearly, and which may be considered as a fair example of the general trade of the country. The proportions of receipts and payments are reduced to the scale of £1,000,000 only, during the year 1856, and are as under, viz.:
In bankers’ drafts and mercantile bills of exchange, payable after date533,596
In cheques of bankers etc. payable on demand357,715
In country banknotes9,627
Bank of England notes68,554
Silver and copper1,486
Post-office orders933
Bills of exchange payable after date302,674
Cheques on London bankers663,672
Bank of England notes22,743
Silver and copper1,484
p. LXXI (Report from the Select Committee on the Bank Acts etc. 1 July 1858.)” [Marx quotes in English.]

The development of money as the universal means of payment goes hand in hand with the development of a higher, mediated form of circulation – that returns upon itself and that has already been taken under social control-in which the exceptional importance that money has on the basis of the simple metallic circulation, as it does, for instance, in hoarding in the strict sense of the term, is transcended. But then, if sudden credit upheavals should interrupt the mutual settlement of payments and upset the payments mechanism, it is money that is suddenly in demand as the real universal means of payment, with the requirement that the whole volume of wealth should have a two-fold existence: once as commodity and again as money, so that these two modes of existence are identical to each other. At such moments of crisis, money appears as exclusive wealth, which is manifested as such not in some merely imaginary depreciation, as it does in, say, the monetary system, but in the active depreciation of all real wealth. With respect to the world of commodities, value then continues to exist only in its adequate exclusive form – as money.

The further elaboration of this point is here irrelevant. What is relevant, however, is that moments of monetary crises proper bring out a contradiction that is immanent to the development of money as the universal means of payment. It is not as a measure that money is demanded in such crises, since as such its corporeal presence is a matter of indifference; nor is it as coin, for it does not figure as such in payments; but it is demanded as exchange value become independent, as a materially present universal equivalent, as the embodiment of abstract wealth; in the form, that is, in which it is the object of hoarding in the strict sense of the term, as money. Its development as the universal means of payment shrouds the contradiction that exchange value has assumed forms independent of its mode of existence as money; and on the other hand, its mode of existence as money is posited precisely as the definitive and solely adequate one.

In consequence of the balancing out of payments and their cancellation of each other as positive and negative amounts, money, as means of payment, can appear as a merely notional form of commodity, as in the case with its being the measure [of value], and in its functioning in the formation of prices. The collision occurs from the fact that – contrary to the arrangement, contrary to the general assumption of modern trade, and whenever the mechanism of these mutual cancellations and the credit system on which it partly rests are disrupted – it must instantly be present and to hand in its real form.

The law that the mass of money in circulation is determined by the aggregate price of the commodities in circulation is now supplemented as follows: by the aggregate price of the payments falling due in the given period and the economy practised in effecting them.

[B'-3] We have seen that the change in the value of gold and silver does not affect their function as measure of value, as money of account. By contrast, this value change becomes crucially important for money in its function as means of payment. What is to be paid is a determined quantity of gold or silver in which a determined value, i.e. a determined labour time, was objectified by, the time the contract was concluded. But, like all other commodities, gold and silver change the magnitude of their value with the change in the labour time required for their production, falling or rising in value as it falls or rises. Therefore, in the event that the realisation of the sale on the part of the buyer occurs later in time than the alienation of the sold commodity, the same quantity of gold or silver may contain a different, a greater or lesser, value than at the conclusion of the contract. Gold and silver retain their specific quality of money, that of always being the realised and realisable universal equivalent, of always being exchangeable for all the commodities to the extent of their own value, regardless of any change in the magnitude of their own value. However, the latter is, potentialiter, subject to the same fluctuations as is the value of any other commodity. Consequently, whether payment Is effected in a real equivalent, i.e. in the initially anticipated value magnitude, depends on whether or not the labour time required for the production of the given quantity of gold or silver has remained the same. The nature of money, as incarnated in a specific commodity, here comes into collision with its function of exchange value become independent. The great revolutions in all economic relationships which, in the 16th and 17th centuries, for instance, were caused by the fall in the value of the precious metals, or a similar but smaller-scale revolution in the ancient Roman Republic in the period between [the first silver denarius in 485 ab urbe condito ] and the start of the Second Punic War” caused by the rise in the value of copper, in which the plebeians’ debts were contracted, are well known. A demonstration of the influence of a rise or fall in the value of the precious metals, the material of money, on economic relationships implies an analysis of these relationships themselves, and so is not yet feasible at this point.

What is self-evident is that the fall in the value of the precious metals, i.e. of money, always goes to benefit the payer at the expense of the payee, and a rise in their value, the other way round.

The complete reification [Versachlichung], externalisation of the social exchange of matter on the basis of exchange values is strikingly manifested in the dependence of all social relationships on the production costs of metallic objects of natural origin which have no significance at all as instruments of production, as factors in the creation of wealth.

3) Money As International Means of Payment and Purchase, As World Coin

Money is the universal commodity, if only because it is the universal form which every particular commodity notionally or actually assumes.

As treasure and universal means of payment, money becomes the universal means of exchange on the world market, the universal commodity not only in concept, but also in mode of existence. The particular national form which it acquires in its function as coin is stripped from it in its existence as money. As such it is cosmopolitan. [The ancients were quick to note this cosmopolitan character of money: “What is his homeland, what is his tribe? He is a rich man.]

Since a social exchange of matter can occur through the involvement of gold and silver – which are use values for the needs of enrichment, abstract wealth independent of any particular requirements – even if only one nation [B'-4] is immediately in need of the use values of another, gold and silver tend to become exceptionally effective agents in the creation of the world market, and in the extension of the social exchange of matter across any local, religious, political and racial distinctions. Even among the ancients, the hoarding by the State is significant as a reserve fund mainly for international means of payment, as a battle-ready equivalent in the event of crop-failures, and as a source of subsidies in time of war (Xenophon). The great role of American silver as a link between America, from which it went to Europe as a commodity, thence to be exported as a means of exchange to Asia, especially India, there mostly to precipitate in the form of treasure, was the fact whose observation marked the start of the scientific struggle over the monetary system, since it led to the East India Company’s fight against the prohibition in England of the export of money (see Misselden).

In so far as gold and silver merely serve as means of exchange in this international commerce, they in fact perform the function of coin, but a coin stripped of its stamp, and one which, whether it exists in the form of coin or bar, is estimated only according to its metallic weight, and not only represents value, but is simultaneously such. That gold and silver in this determination of world coin do not, however, necessarily perform a circular movement, as they do in their capacity as coin proper, but may one-sidedly continue to act in such a way that one of the parties to the exchange always remains the buyer and the other always the seller, is also one of those observations which immediately suggested themselves in the infancy of the bourgeois society. Hence, the exceptionally important role the discovery of new gold- and silver-producing lands has to play in the history of the development of the world market, both in breadth and in depth, since the use value they produce, instantly the universal commodity, on the other hand, also immediately imparts to them together with the possibility, in virtue of the abstract nature of their product, the necessity of commerce based on exchange value.

just as with the development of productive relations in general, money develops as means of payment within a given national circle of the bourgeois society, so it also develops in its determination as international means of payment. But as in that narrower, so in this wider circle, its importance stands out strikingly only when the mechanism of the mutual settlement of payments is disturbed. The development of money in this determination has increased to such an extent since 1825-an increase which has, naturally, kept in step with the expansion and intensity of international commerce-that even the most outstanding economists of the preceding epoch, Ricardo, for example, still had no inkling at all of the volume in which ready money could be required as international means of payment for a nation such, for instance, as England. Whereas specific requirement in the specific use value in which the exchange value is incarnated is the prerequisite for exchange value in the guise of any other commodity, there is no such limitation for gold and silver as abstract wealth. Like the noble man of whom the poet dreams,’ gold (or silver) pays with what it is, and not with what it does. The possibility of functioning as means of purchase and means of payment is, naturally, always latent in it. Like the inert, assured being of the universal equivalent in which it is treasure, in no country is it limited by the need of it as means of circulation, by the volume in which it is required as means of circulation, or by any other need of its immediate use whatsoever. Its use value, abstract and purely social in itself, which it derives from its function of means of circulation, itself once again appears as some special aspect of its use as the universal equivalent, the material of abstract wealth in general. From its specific use value as metal, and hence as raw material for manufacturing, stems the totality of the various functions it can alternately fulfil within the social exchange of matter or in the performance of which it itself assumes the various forms of coin, bar, etc., thereby presenting itself as so many use values all of which reduce themselves to the various forms in which gold and silver as the abstract and therefore adequate being of exchange value as such confronts its being in some particular commodity.

Here we have to consider money only in its abstract determinations of form. The laws regulating the distribution of precious metals on the world market imply economic relationships in their most concrete form, something that still lies ahead of us. The same applies to all the circulation of money which it performs as capital, and not as universal commodity or universal equivalent.

On the world market, money is always realised value. What makes it a magnitude of value lies in its immediate materiality, in the weight of the precious metal. When it appears as coin, its use value coincides with its use merely as means of circulation, and so can be replaced by a mere symbol. As world coin, it is effectively demonetised. The externality and the establishment of the independence of the social nexus in money with respect to individuals in their individual relations clearly stand out in gold and silver [B'-5] as world coin (still national as coin). (Here money appears in effect as their [the individuals’] community existing as a physical object outside them.) Indeed, what the early forerunners of political economy in Italy’ celebrated was precisely this excellent invention which made a general exchange of matter in society possible without any individual contacts. As coin, money has a national, local character. if, as gold and silver, it is to serve as international means of exchange, it has to be melted down, and if it exists in the form of coin, this form is irrelevant, and the coin is reduced to its pure weight. In the most developed international system of exchange, gold and silver reappear in exactly the same form in which they already figured in primitive barter. As means of exchange, gold and silver, like the exchange itself, do not initially appear within the confines of some social community but at the point where it ends, on its border, at the few points of its contact with other communities. It appears to be posited, therefore, as the commodity as such, as the universal commodity which everywhere preserves its character of wealth. From the standpoint of this determination of form, its importance is similar in all places. So it is the material representative of universal wealth. In the mercantile system, for that reason, gold and silver are regarded as measure of the power of different communities.

“So soon as the PRECIOUS METALS become OBJECTS OF COMMERCE, AN UNIVERSAL EQUIVALENT FOR EVERYTHING, they become also the MEASURE OF POWER BETWEEN NATIONS.” Hence the mercantile system (Steuart [An Inquiry into the Principles of Political Oeconomy, Vol. 1, Dublin, 1770, p. 327]).

The determination of money-that of serving as international means of exchange and means of payment-is in effect not some kind of new determination in addition to its determination of being money in general, a universal equivalent and so both treasure and means of payment. The determination of universal equivalent contains the determination of money as universal commodity, in which capacity, it is true, money is realised only as world coin. In general, it is as international means of payment and means of exchange that gold and silver (as has been mentioned) first appear as money, and it is precisely from this appearance of theirs that the concept of them as a universal commodity is abstracted. The national, political limitation formally set on money generally as a measure (through the establishment of a measuring unit and its division into parts) which in coin may extend even to its content whenever the value tokens issued by the State are substituted for the real metal, all of this historically put in a later appearance than that form in which money appears as universal commodity, as world coin. But why? Because here it generally appears in Its concrete form of money.

To be measure and to be means of circulation are functions of money in the performance of which it assumes special forms of being only through these functions later becoming independent. Take, first, coin: initially it is nothing but a determinate weight-part of gold; the stamp is added as guarantee, as denominator of weight, so that it does not change anything yet; the stamp, the façon, i.e. the indicator of value, becomes an independent sign, a symbol of value and, through the mechanism of circulation itself, becomes substance instead of form; at this point, the State has to intervene because such a token must be guaranteed by society’s power become independent, by the State. But in actual fact, money operates in circulation precisely as money, as gold and silver; being coin is merely its function. In this function it is particularised and can be sublimated into a pure token of value which, as such, requires legally established and legally enforced recognition.

Second, take measure. Initially, the measuring units of money and their subdivisions are in fact mere weight-parts of money as metal; as money, it has the same measuring unit that it has as weight. The only difference is that as soon as the nominal value of these minted pieces of metal corresponding to the weight subdivisions begins to separate from the real value, the measure-serving subdivisions of gold and silver as gold and silver are separated from their measure-serving subdivisions as money; with the result that determinate weight-parts of the metal, to the extent that they function as measures of value, obtain their own names in this function.

So, in world trade, gold and silver are estimated only according to their weight, without regard to their stamp; in other words, there is an abstraction from them as coins. In international trade, they appear entirely in the form or formlessness in which they initially appeared, and wherever they serve as means of exchange, they also simultaneously serve as equivalent value, as realised price, as real equivalent, as they had initially served in internal circulation. Wherever they serve as coin, as mere means of exchange, therefore, they simultaneously also serve as full-fledged representative of value. Meanwhile, their other functions remain the same in which they serve as money in general, as the form of treasure (be it as materially assured stock of means of subsistence for the future or as wealth in general) or as universal means of payment independent of the immediate wants of the exchangers and meeting only their general want or even the absence of any. As inert adequate equivalent which can be withheld from circulation, because it is not the object of any definite want, money is [B ‘-6] stock, assurance of means of subsistence for the future in general: it is the form in which wealth is possessed by the want-free, i.e. in which the surplus, the part of wealth not immediately required as use value, is held, etc., It is assurance of future wants to the same extent as the form of wealth going beyond the bounds of want.

Hence, the form of money as international means of exchange and payment is, in fact, not some particular form of it, but only one of its uses as money; the functions in which it most strikingly functions in its simple and simultaneously concrete form as money, as a unity of measure and means of circulation, and simultaneously as neither. This is its most primitive form. It appears as a particular form only alongside the particularisation which money can assume in the so-called internal circulation as measure and coin.

In this character, gold and silver have an important role to play in creating the world market. Thus, the circulation of American silver from West to East; the metallic bond between America and Europe, on the one hand, and between America and Asia, Europe and Asia, on the other, since the beginning of the modern epoch... As world coin, money is essentially indifferent to its form of means of circulation, while its material is all-important. It does not appear for exchanging the surplus, but for balancing out the surplus in the overall process of international exchange. Here, the form directly coincides with its function of being commodity, as commodity that has currency in all places, as universal commodity.

It is a matter of indifference whether money here circulates in minted or unminted form. MEXICAN DOLLARS and IMPERIALS OF RUSSIA are merely a form of the product of South American and Russian mines. The English sovereign serves in the same way, since it pays no seignorage (Tooke [A History of Prices, and of the State of the Circulation, from 1839 to 1847 inclusive, London, 1848, p. 226]).

What is the relation between gold and silver and their direct producers in the countries where they are an immediate product, the objectification of a particular type of labour? In their hands, gold and silver are produced directly as commodity, i.e. as a use value which has no use value for its producer, but becomes such for him only through its alienation, through its being thrown into circulation. In his hands, it can only be treasure, because it is not the product of circulation, it has not been extracted from it, but has yet to enter it. It has first to be exchanged directly, in accordance with the labour time it contains, for other commodities alongside of which it exists, however, as a particular commodity. But, on the other hand, since it simultaneously has significance as a product of general labour, as its personification, which it is not as immediate product, it puts its producer in the privileged position of instantly appearing as buyer, instead of seller. In order to use the mined gold as money, he has to alienate it as a direct product, without being in need of the mediation required by the producer of any other commodity. He is a seller even in the form of buyer.

The delusion that money as universal wealth satisfying all wants can be pulled up by the cars directly from earth or river-bed is illustrated, for instance, in a naive form in the following anecdote:


Money transmitted as gold [or silver], in the form of [gold or] silver, can always be reconverted into means of circulation.

“MONEY HAS THE QUALITY OF BEING ALWAYS EXCHANGEABLE FOR WHAT IT MEASURES” (Bosanquet [Metallic, Paper, and Credit Currency, London 1842, p. 100]).


In the 16th century, in the infancy of the bourgeois society, gold and silver attracted the keen interest of States and the emergent political economy mainly as international money. The specific role which gold and silver play in international commerce was once again made perfectly clear and once again recognised by economists after the great gold outflows and crises of 1825, 1839, 1847 and 1857. Here gold is the absolute and exclusive international means of payment, value-for-itself, the universal equivalent. Value must be transmitted IN SPECIE, it cannot be transmitted in any other form of MERCHANDISE.


(Hence Fullarton is aware that value is transmitted in gold and silver as money, and not as commodities, that [B'-7] it is their specific function as money, and therefore he is wrong in saying that they are transmitted as capital, and so already introducing irrelevant relations. Capital can also be transmitted in the form of rice, TWIST, etc.)


“ANY OTHER ARTICLE” (which is of interest as a particular use value that is not Money) “MIGHT IN QUANTITY OR KIND BE BEYOND THE USUAL DEMAND IN THE COUNTRY TO WHICH IT IS SENT” (Th. Tooke, An Inquiry into the Currency Principle etc., 2nd ed., London, 1844 [p. 10]).

The economists’ reluctance to recognise money in this determination is a survival of the old polemic against the monetary system.

Money as universal international means of purchase and payment is not a new determination at all. Indeed, it is merely the same money in a universality of appearance which corresponds to the universality of its concept; it is, in fact, its most adequate mode of existence in which it manifests itself as universal commodity.

Depending on the various functions fulfilled by money, one and the same piece of money can change its place. Today, it can be coin, and tomorrow, money, i.e. inert equivalent, without changing its outward form of being. As the concrete existence of money, gold and silver thereby differ essentially from the token of value by which they can he substituted in the internal circulation: gold and silver coins can be melted down into bars, and thus preserve their indifferent form with respect to their local character as coin, or serve only as metallic weight, if they are transformed into money in the form of coin. They can, therefore, become raw material for articles of luxury, or be hoarded, or wander abroad as international means of payment, where they can again be converted into the form of the national coin, into any national coin. They retain their value in any of these forms.

That does not happen to a token of value. It is a token only where it is regarded as such, and it is regarded as such only where it is backed by the State power. That is why it is tied down to circulation and cannot revert to the indifferent form in which it Is always value itself, with the possibility of assuming any national stamp or, indifferent to the latter, of serving in its immediate form of being as means of exchange and material for hoarding, or even of being converted into a commodity. It is not tied to any of these forms but assumes any one, depending on the want or the trend in circulation. To the extent that, as a particular commodity, it ‘S not fashioned into articles of luxury, it exists above all in relation to circulation, and not only to internal, but also to world circulation, while always existing in an independent form and resisting absorption by it. Coin, isolated as such, i.e. as mere value token, exists only through and in circulation. Even when hoarded, it [value token] can be accumulated only as coin, because its power ceases at the country’s borders. Apart from the forms of hoarding which arise from the process of circulation itself, and are, strictly speaking, merely the latter’s points of rest, namely, apart from the formation of a stock of coin designated for circulation or a reserve for payments made in the same national coin, there can here be no question at all of any hoarding, i.e. of hoarding in the true sense of the word, because coin as a token of value lacks the essential element of hoarding, which is being not merely a symbolic value, but, apart from its social function, the immediate being of value itself, wealth, irrespective of any definite social nexus. That is why the laws which stipulate the token of value as such do not stipulate metallic money, because it is not tied to the function of coin.

It is clear, furthermore, that hoarding, i.e. the withdrawal of money from circulation and its collection at definite points, is multiform: a temporary piling up stemming from the simple fact of the separation of purchase and sale, i.e. from the immediate mechanism of the simple circulation itself; its piling up stemming from the function of money as means of payment; and finally, hoarding proper seeking to hold on to money and preserve it as abstract wealth or, at any rate, as an excess of the available wealth over the immediate want of it and as a guarantee for the future or as something that can hamper the unwitting blockage of circulation. The latter forms, under which [B'-8] the achievement of independence, the adequate being of exchange value is already seen only in its immediate reified form of gold, tend increasingly to disappear in the bourgeois society. By contrast, the other forms of hoarding which spring from the mechanism of circulation itself and which are the conditions for money’s fulfilling its functions are developed to a greater extent, although they assume a different form which is to be considered in the section on the banking system.

However, the simple metallic circulation shows that as a result of the various determinations in which money functions, or as a result of the process of circulation, the social exchange of matter, the available gold and silver precipitate in various forms as inert hoard, but in such a way that, while a part of the money existing as such hoard keeps changing its elements, with a constant change on the surface of the society in the portions of money which perform this or that function, passing from the hoard to circulation (national or international), being absorbed from circulation by reservoirs of hoard or fashioned into articles of luxury, the functioning of money as means of circulation is, nevertheless, never limited in consequence of these precipitations. The export or import of money alternately depletes or replenishes these various reservoirs, something that also results from the rise or fall in the aggregate price in the internal circulation, without the mass of money required for circulation itself rising above its mass or falling below it, because of the excess of gold and silver. That which is not required as means of circulation is withdrawn as hoard, just as hoard is absorbed by circulation as soon as it is required. That is why, among peoples with a purely metallic circulation, hoarding will be found in various forms, from individual to State, with the latter keeping watch over its State treasury. In the bourgeois society, this process is reduced to meeting the demands of the overall process of production and assumes other forms. It appears as a special business which was engendered by the division of labour in the overall process of production, and which is carried on, at the more naive stages of development, partly as the business of all private persons, and partly as the business of the State. Still, the basis remains the same; there is a constant functioning of money in various developed functions and even in the purely illusory one.

This consideration of the purely metallic circulation is all the more important, since all the speculations of the economists over the higher, more mediated forms of circulation depend on the view of the simple metallic circulation. It goes without saying 1) that when we speak of an increase or decrease of gold and silver, it is always presupposed that the value of the gold and silver remains the same, i.e. the labour time required for their production has not changed. The fall or rise in the magnitude of their value as a result of a fall or rise in the labour time required for their production is not some kind of peculiarity that distinguishes them from other commodities, however much that may harm their function as means of payment. 2) The motives which-apart from the fall and rise of prices and apart from the need to purchase commodities from sellers not requiring any commodities in return (as in time of famine or war)-open up the hoards or fill them up again, i.e. the operation of the interest rate, cannot be considered here where money is still being regarded as money, and not as a form of capital.

So, the mass of gold and silver present in a country must be and always will be, on the basis of the simple metallic circulation, and general trade resting on ready money, greater than the mass of gold and silver circulating as coin, although the relationship between the portion of money functioning as money and that functioning as coin will change in quantity, and the same money can alternately fulfil either function precisely as there is a change in the quantity and a substitution of each other in quality by the portions of money serving for national and international circulation. However, the mass of gold and silver is a constant reservoir for both streams of circulation, an outlet and inlet for them, serving as an inlet precisely because it serves as an outlet.


As exchange value, every commodity, however indivisible its use value, such as the use value of a house may be, can be divided into any number of parts. In its price, it exists as such a divisible exchange value, i.e. as value assessed in money. So it can be alienated in any way, piece by piece, for money. However immovable and indivisible, the commodity can, therefore, be thrown into circulation piece by piece, through the title to property [B'-9] in its several parts. Thus, money has an eroding effect on immovable, indivisible property.

“Money is a means by which property can be split up into innumerable fragments and devoured piecemeal through exchange” (Bray [Labour’s Wrongs and Labour’s Remedy, Leeds, 1839, pp. 140-411).

Without money there would be a mass of inexchangeable, inalienable objects, because money alone gives these objects an existence that is independent of the nature of their use value and its relations.

“When immovable and immutable things came to be in commerce amongst men, as well as things which were movable and made for change, money came into use as the rule and measure (SQUARE) whereby these things received estimation and value” ([E. Misselden,] Free Trade, London, 1622 [p. 21]).

“THE INTRODUCTION OF MONEY WHICH BUYS ALL THINGS BRINGS IN THE NECESSITY OF LEGAL ALIENATION” (i.e. OF FEUDAL ESTATES) (John Dalrymple, An Essay – towards a General History of Feudal Property in Great Britain, 4th ed. London, 1759, p. 124).

Indeed, all the determinations in which money appears – standard of value, means of circulation, and money as such – merely express the different relationships in which individuals take part in overall production or relate to their own production as social production. But these relations of individuals to each other appear as social relations of things.

“In 1593 the Cortes sent the following petition to Philip II: ‘The Cortes Of Valladolid requested Your Majesty in 1586 not to permit the further importation into this kingdom of candles, glassware, jewellery, knives and similar articles coming from abroad, which, though they are of no use to human life, have to be exchanged for gold, as though the Spaniards were Indians- (Sempere [Cons idirations sur les causes de to grandeur et de la decadence de to monarchie espagnole, Vol. 1, pp. 275-76]).

“All hide and secretly bury their money deep in the ground, especially gentiles” (non-Moslems) “who are almost the sole masters of trade and money, being held in thrall to the belief that the gold and silver they hide during then lifetime will serve them after their death” (Francois Bernier, Voyages contenant la description des etats du Grand Mogol etc., Vol. 1, Paris, 1830, p. 314). (At the Court of Aurangzeb.)

“These have one mind, and shall give their power and strength unto the beast... And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name” (Apocalypse. Vulgate).

The great and ultimate effect of trade is not wealth at large, but preferably abundance of silver and gold ... which are not perishable, nor so mutable as other commodities, but are wealth at all times and in all places.”

(Their imperishable character consists, therefore, not only in the imperishableness of then- material, but in that they always remain wealth, i.e. always abide in a definite form of exchange value.)

“Abundance of wine, corn, fowls, flesh, etc., are riches but hic et nunc,” (depending upon their particular use value), “so as the raising of such commodities, and the following of such trade, which does store the country with gold and silver, is profitable before others” (Petty, Political Arithmetick, London, 1699, pp. 178-79).

“Gold and silver alone are not perishable” (never cease to be exchange value) “but are esteemed for wealth at all times, and everywhere” //’the utility of particular use values is temporally and spatially determined, like the very wants which they satisfy// “whereas all other things are wealth, but pro hic et nunc” (l.c., p. 196).

“The wealth of every nation consists chiefly in the share which it has in the foreign trade with THE WHOLE COMMERCIAL WORLD, RATHER THAN IN THE DOMESTIC TRADE Of ordinary meat, drink, and clothes, which bring in little gold and silver, UNIVERSAL WEALTH...” ([ibid.,] p. 242).

Just as gold and silver are in themselves universal wealth, so the possession of them appears as the product of world circulation, and not of circulation confined to immediate natural-ethnic’ connections.

It may appear odd that Petty, who says that labour is the father, as lands are the mother of wealth,’ who teaches the division of labour and who, generally, in a boldly brilliant manner everywhere concentrates on the process of production instead of the individual product, nevertheless here appears to be entirely captive to the language and notions of the monetary system. [B'-10] One should not forget, however, that, in accordance with his premiss, as with the bourgeois premiss in general, gold and silver are only the adequate form of equivalent which always has to be appropriated only through the alienation of commodities and, so, through labour. Production for the sake of production, i.e. development of the productive forces of wealth without regard to the limits of immediate want or consumption is expressed by Petty as follows: to produce and to exchange not for the sake of transient acts of consumption in which all commodities are dissolved, but for the sake of gold and silver. It is the English nation’s energetic, heedless and universal drive for enrichment in the 17th century that Petty here expresses and simultaneously incites.

Firstly, the perversion of money: it turns from means into end, and degrades the other commodities:

“The natural matter of commerce is MERCHANDISE- The artificial Matter of commerce is money. Money, though it be in nature and time after merchandise, yet forasmuch as it is now in use” (in its present application) “has become the CHIEF.”

Thus, Misselden, a London merchant, in his work Free Trade. Or, the Meanes to Make Trade Florish, London, 1622, p. 7. He compares the switch of ranks between money and commodity with the lot of the two [grand]sons of the old Jacob, who laid his right hand on the younger, and his left hand on the elder (l.c.).

The contradiction between money as hoard and as commodities, whose exchange value ceases to exist upon the fulfilment of their object as use values, and the theory of renunciation:

“The general remote cause of our want of money is the great excess of this Kingdom, in consuming the commodities of foreign countries, which prove to us DISCOMMODITIES, rather than COMMODITIES, in hindering us of so much TREASURE, which otherwise would be brought in, in lieu of these TOYS, We consume amongst us a great abundance of the wines of Spain, of France, of the Rhine, of the Levant; the raisins of Spain, the corinths of the Levant, the lawns” (a sort of fine linen) “and cambrics” (another sort of fine linen) “of Hannault and the Netherlands, the silks of Italy, the sugars and tobacco of the West Indies, the spices of the East Indies; all which are of no necessity unto us, and yet are bought with ready money... Even the old Cato said: Patrem familias vendacem, non emacem esse oportet” (I.c., pp. 11-13).

“The more the stock is increased in wares, the more it decreases IN TREASURE” ([ibid.,] p. 23).

Concerning the non-refluent circulation on the world market, especially in trade with Asia:

“The other foreign remote causes of the want of money, are the trades maintained out of Christendom to Turkey, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendom within itself. For although the trades within Christendom are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendom. There is indeed a fluxus and refluxus, a flood and ebb of the monies of Christendom traded within itself: for sometimes there is more in one part of Christendom, sometimes there is less in another, as one country wants and another abounds: It comes and goes, and whirls about the circle of Christendom, but is still contained within the compass thereof. But the money that is traded out of Christendom into the parts aforesaid is continually ISSUED out and never returns again” (l.c., pp. 19, 20).

Dr. Martin Luther, the dean of German political economists, complains in a way similar to Misselden’s:

“It cannot be denied that buying and selling are necessary practices, which cannot be dispensed with and may surely be used in a Christian manner, especially as regards things that serve necessity and honour; for thus the patriarchs also sold and bought cattle, wool, corn, butter, milk and other goods. These are gifts of God, which He produces from the soil and shares among men. But foreign trade, which brings merchandise from Calicut [B'-11] and India and other places – merchandise such as exquisite silks and jewellery and spices, which are only for ostentation and serve no need-and drains money from the country and the people, should not be permitted if we had a government with a prince. But 1 do not want to write of this now, for 1 think that, eventually, when we have no more money, it will cease of itself, just as finery and gluttony; for all writing and preaching will be in vain until we are compelled by necessity and poverty.

“God has brought it about that we Germans must thrust our gold and silver into foreign countries making all the world rich while we ourselves remain beggars. England would surely have less gold if Germany refused to take her cloth, and the King of Portugal, too, would have less, if we refused to take his spices. If you calculate how much money is extracted, without need or cause, from the German territories during one fair at Frankfurt, you will wonder how it conies about that even a single farthing is still left in Germany. Frankfurt is the silver and gold drain through which everything that arises and grows, that is minted or struck here flows out of the German land; if the hole were plugged, one would not hear the present complaint that there is everywhere sheer debt and no money, that the entire country and all the towns are despoilt by usury. But never mind things will nevertheless continue in this way: we Germans have to remain Germans, we do not desist unless we have to” (Bucher vom Kaufhandel und Wucher, 1524).

Boisguillebert, who has as significant a place in French political economy as Petty in English political economy, one of the most impassioned opponents of the monetary system, attacks money in the various forms in which it appears as exclusive value in contrast to other commodities, as means of payment (with Boisguillebert, especially as taxes) and as hoard. (The specific being of value in money appears as the relative valuelessness, degradation of other commodities.)

The passages quoted from Boisguillebert’s writings’ are taken from a collection of his works in the Eugene Daire edition: Économistes financiers du XVIIIe siècle, Paris, 1843.

“Since gold and silver are not and have never been wealth in themselves, and since they have only a relative value, and only to the extent that they can procure the necessities of life for which they serve merely as pledge and valuation, having them more or less is a matter of indifference, provided they can produce the same effect” (Le detail de la France, 1697, Part 1, Ch. VII [Daire edition, p. 1781).

The quantity of money does not affect the national wealth, “provided there is enough of it to maintain the prices determined by the commodities necessary for life” (l.c., Part 11, Ch. XVIII, p. 209).

(Therefore, Boisguillebert formulates here the law that the mass of the circulating medium is determined by the prices, and not vice versa.)

That money is merely a form of commodity itself is made evident in wholesale trade, where the exchange occurs without the intervention of money, after the -merchandise is valuated”; “money is only the medium and the agency, whereas commodities that benefit life are the aim and Purpose” (l.c., p. 210).

Money must be only a means of circulation, and always mobile; it must never become hoard, something immobile; it must be “in continual movement, which is

only the case so long as it is mobile... ; but as soon as it becomes immobile ... all is lost” (l.c., Part 11, Ch. XIX, p. 213).

In contrast to the finance for which money appears to be the sole object:

The science of finance is nothing but a thorough knowledge of the interests of agriculture and of commerce” (l.c., Part Ill, Ch. VIII, p. 241).

Boisguillebert, in fact, turns his attention only to the material content of wealth, to enjoyment, to use value:

“True wealth ... [is] the complete enjoyment not only of the necessaries of life but also of all the superfluities and of all that can give pleasure to the senses” (Dissertation sur la nature des richesses, de l’argent et des tributs [Daire edition], p. 403).

“These metals” (gold and silver) “have been turned into an idol, and disregarding the goal and purpose they were intended to fulfil in commerce, i.e. to serve as pledge in exchange and reciprocal transfer, [B'-12] they were allowed to abandon this service almost entirely in order to be transformed into divinities to whom more goods, valuables and even human beings were sacrificed and continue to he sacrificed, than were ever sacrificed to the false divinities in blind antiquity which for so long were the whole cult and the whole religion for most peoples” (l.c., p. 395). “The misery of the peoples is due to the fact that the slave has been turned into a master or rather into a tyrant” (I.c.). This “usurpation” needs to be broken and “things restored to their natural state” (I.c.).

With the abstract greed for enrichment, “a great blow was dealt at once at the equivalence in which it- (money) “should be with all the other commodities so as to he ready to effect their exchange at any moment” (p. 399). “Thus the slave of commerce has become its master... This facility which money offers for the commission of any crime makes it redouble its earnings in proportion to the hold corruption takes of hearts; and there is no doubt that almost all the infamies would he banished from a State if one could do likewise with the fatal metal” (p. 399).

The depreciation of commodities for their conversion into money (sale at below their value) is the cause of all poverty (see l.c., Ch. V). In this sense, he says:

“Money ... has become the executioner of all things” (I.c., p. 413).

He compares the financial art of making money with the

“alembic that evaporates a frightful quantity of goods and commodities in order to obtain this fatal extract” (p. 419).

Through a depreciation of the precious metals “the commodities themselves will be restored to their just value” (I.c., p. 422). “Money ... declares war ... on the whole human race” (pp. 417-18).

(Similarly, Pliny, Historia Naturalis, Book XXXIII, Ch. Ill.)

By contrast:

Money as world coin:

“Intercourse between nations has spread across the whole globe to such an extent that one could say all the world has virtually become a single city in which a permanent fair of all the commodities is taking place, so that everyone, without leaving his home, can, by means of money, obtain and enjoy everything produced by the earth, the animals and human industry. A marvellous invention"’ (Montanari (Geminiano), Della Moneta; written ABOU 1 1683. Custodi’s collection, Parte Antica, Vol. 3, [Milan, 1804,] p. 40).

“What is his country, what is his tribe? He is a rich man” (Athenaeus, Deipnosophistae, Book IV, 49).

On the digging of gold in mines, Demetrius Phalereus says:

“Greed hopes to extract Pluto himself from the bowels of the earth” (I.c., VI, 23).

“But front money first springs avarice... This grows by stages into a kind of madness, no longer avarice but a positive hunger for gold” (Pliny, Historia Naturalis, Book XXXIII, Ch. 111, 14).

“Money! Nothing worse in our lives, so current, rampant, so corrupting.
Money – you demolish cities, root men from their homes,
you train and twist good minds and set them on
to the most atrocious schemes. No limit,
you make them adept at every kind of outrage,
every godless crime-money!”

(Sophocles, Antigone [295-301]).

Money, as purely abstract wealth-in which every specific use value is extinguished, and hence also every individual relation between possessor and commodity-comes under the power of the individual likewise as an abstract person, relating to his individuality as totally alien and extraneous. At the same time, it gives him universal power as his private power, a contradiction depicted, FOR INSTANCE, by Shakespeare:

[B'- 13]

“Gold? glittering, precious gold? ...
Thus much of this will make black, white; foul, fair;
Wrong, right; base, noble; old, young; coward, valiant.
Ha, you gods! why this? what this, you gods? why, this Will lug your priests and servants from your sides;
Pluck stout men’s pillows from below their beads:
This yellow slave
Will knit and break religions; bless the accurs’d;
Make the hoar leprosy ador’d; place thieves,
And give them title, knee, and approbation,
With senators on the bench: this is it
That makes the wappen’d widow wed again;
She whom the spital-house and ulcerous sores
Would cast the gorge at, this embalms and spices
To the April day again. Come, damned earth,
Thou common whore of mankind"
(Shakespeare, Timon of Athens [Act IV, Scene III]).

That which yields itself to all, and for which all is yielded, appears as the universal means of corruption and prostitution.

(Similarly in the comedy of Aristophanes “Plutus.”)

These have one mind, and shall give their power and strength unto the beast... And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name- (Apocalypse).

4) The Precious Metals as Vehicles of the Money Relationship

The process of bourgeois production initially takes possession of metallic currency as an existing and ready-made instrument, which, although it has been gradually transformed, always retains its basic construction. The question, therefore, why gold and silver, and not other commodities, serve as the material of money lies outside the confines of the bourgeois system. We shall therefore summarise only the most important aspects. The answer is simply that the specific natural properties of the precious metals, i.e. their properties as use values, correspond to the economic functions which make them more capable than all the other commodities of being the vehicles of money functions.

Like labour time itself, the object to be recognised as its specific embodiment must be able to express purely quantitative differences, thus presupposing identical, homogeneous quality. This is the first condition for the functioning of the commodity as a measure of value. If, for instance, one evaluates all commodities in terms of oxen, hides, corn, etc., one has in fact to measure them in ideal average oxen, average hides, and average corn, since there are qualitative differences between one ox and another, one lot of corn and another, one hide and another, there is a difference in the use value of the specimens of one and the same kind. This requirement of absence of qualitative differences regardless of time and place, and hence, the requirement of equality at equal quantity is the first requirement from this aspect.

The second, which also springs from the necessity of presenting a merely quantitative difference, is great divisibility and subsequent combination of the parts so that, depending on the magnitude of the value of the [B'-14] commodity, the universal equivalent can be cut up into parts, without thereby damaging its use value. Gold and silver, as simple bodies, with a purely quantitative division, can be brought to one and the same degree of fineness. Sameness of quality. Similarly divisible and recombinable.

It can even be said of gold that it is the earliest known metal, the first discovered metal. In the great gold sluices, the rivers, Nature itself undertakes the work of the art and hence requires on the part of man in finding it no more than very crude work and neither science nor developed instruments of production.


Gold is, besides, found in a purer state than all the other metals: in a native, crystalline form, in separate pieces: “separated from the usually occurring bodies,” seldom alloyed with any other, except silver. Gold “isolated, individualised.”



The washing and digging of gold are perfectly simple works, while MINING (so also GOLD-MINING) IS AN ART REQUIRING THE EMPLOYMENT OF CAPITAL and more COLLATERAL SCIENCES and ARTS than any other industry. //The washing of ore taken care of by Nature.//

Exchange value as such implies a common substance and the reduction of all the differences to merely quantitative ones. In the function of money as measure, all values are reduced first of all to merely different quantities of the standard commodity. That is the case with the precious metals, which, therefore, appear as the natural substance of exchange value as such.

“A peculiar feature of metals is that in them alone all relations are reduced to a single one, namely, their quantity, for they have not been endowed by Nature with any difference of quality either in their internal composition or in their external form and structure” (Galiani, l.c. [Della Moneta], pp. 126-27).


This merely quantitative difference is just as important for money as means of circulation (coin) and means of payment, since money, a single piece of money, has no individuality, and the important thing is that what has to be returned is merely an equal quantity of the same material, but not the same piece:


The differentiation of the functions performed by gold, whether as universal commodity, coin, raw material for luxury articles, material for accumulation, etc., enables them to indicate to the senses the succession of the form determinations of money. To this differentiation corresponds the fact that gold and silver can always be melted down and so again reduced to their purely metallic state, and from that state similarly to any other, i.e. that gold and silver, in contrast to other commodities, are not bound to the definite use form which is imparted to them. They can pass from the form of bullion to the form of coin, etc., and back again, without losing their value as raw materials, [B'-15] without damaging the processes of production and consumption.

As means of circulation gold and silver have the advantage over other commodities in that their high natural specific gravity – representing a relatively large weight in a small space-is matched by an economic specific gravity, the ability to contain (objectify) relatively much labour time, i.e. a large exchange value, in a small space. The latter naturally depends on their relatively rare occurrence as natural objects. Hence, facility of transportation, transfer, etc. In short, the facility of real circulation, which is, naturally, the first condition for their economic function as means of circulation.

Finally, as the inert being of value, as the material of hoarding, they are relatively indestructible, infinitely durable, not liable to be oxidised in the air (“treasures that neither moth nor rust cloth corrupt”), are refractory, with gold especially being insoluble in acids, except in free chlorine (aqua regia, a mixture of nitric and hydrochloric acids). As a main point, one should finally note the aesthetic properties of gold and silver, which make them the direct manifestation of affluence, ornament, luxury, and spontaneous festive moods, of wealth as such. Brightness of colour, malleability, facility of being worked with tools, and fitness for ornamentation and other purposes. Gold and silver are to some extent a native light brought forth from the underworld itself. Apart from the rarity of gold and silver, their greater softness, as compared with iron and even copper (in the hardened form in which it was used by the ancients), makes them unfit for use as instruments of production. But the use value of metals largely depends on their role in the immediate process of production. Gold and silver are also excluded from it, just as they are generally not indispensable objects of consumption.

“Money, must have a direct” (use) “value, but one based on a besoin factice. Its material must not be indispensable for man’s existence, since the entire quantity of money used as coin” //generally as money, [which] is also accumulated in the form of hoard// “cannot be individually employed; it must always circulate” (H. Storch, l.c. [Cours d’économie politique], Vol. II. pp. 113, 114).

(Equally, that part which is accumulated as hoard cannot be employed “Individually” because the whole point of accumulation is to keep it intact.)

That, consequently, is one aspect according to which the nature of the use value of gold and silver is reduced to being something superfluous, to riot entering either in the satisfaction of immediate want as object of consumption, or as agent in the immediate process of production. That is precisely the aspect according to which the use. value of money should not come into collision with its function of hoard (money) or means of circulation, in other words, the need for it as an individual use value should not come into collision with the need springing from circulation, from the society itself, the need for it as money in any of its determinations. That is only the negative aspect.

In his polemic against money, Peter MARTYR, who seems to have been very fond of chocolate, says, therefore, of the BAGS OF cacao which, among other things, served as money among the Mexicans:

“O blessed money which furnishes mankind with a sweet and nutritious beverage and protects its innocent possessors from the infernal disease of avarice, since it cannot be long hoarded, nor hidden underground” (De orbe novo).

On the other hand, gold and silver are superfluities not only in the negative sense, i.e. are objects which can be dispensed with, but their aesthetic properties which make them the material of luxury, finery and splendour, make them the positive forms of superabundance, or means of satisfying other than everyday wants and bare necessities. That is why they have use value in themselves apart from their function as money. But just as they are the natural representatives of purely quantitative relations-in virtue of the sameness of their quality-so also in their individual use they are the immediate natural representatives of superabundance and so of wealth as such, both because of their natural aesthetic properties, and also of their expensiveness.

Malleability is one of the properties that make gold and silver fit for use as material for jewellery. Dazzling to the eye. Exchange value is above all an overplus of necessary use values designated for exchange. This overplus is exchanged for what is superfluous as such, i.e. for what goes beyond the bounds of immediate necessity; for the festive in contrast to the everyday. Use value as such expresses above all the individual’s relation to Nature; exchange value, alongside use value, is his command over the use values of others, his social relation; and even initially, moreover, values of festive use going beyond the bounds of immediate necessity.

The white colour of silver, which reflects all the rays of light in their original mix; the red-yellow, colour of gold, which absorbs the whole mix of colours of a light beam failing on it and reflects red alone.

Add here what was said earlier about the mining countries.”

//lit his history of the German language, Grimm shows the connection between the names of gold and silver and then, colour.//

[B'-16] We have seen that gold and silver fail to meet the demand being made on them as exchange value become independent, as immediately present money, that of being an unchanging value magnitude. Here, their nature as a particular commodity, enters into conflict with their function as money. But as Aristotle already noted,’ they possess a more permanent value magnitude than do other commodities on average.

For the metallic circulation as such, apart from the general effect of the appreciation or depreciation of the precious metals on all economic relationships, the fluctuations of the value ratio between gold and silver are of particular importance, since they, continuously serve alongside each other as the material of money in one and the same country or in different countries. The purely economic causes of these successive changes -conquest and other political upheavals which had a great influence on the relative value of the precious metals in the ancient world lie beyond the bounds of purely economic examination- must be reduced to changes in the labour time required for the production of the same quantities of these metals. It itself depends, on the one hand, on the relative quantities in which gold and silver occur in Nature, and on the other, on the greater or lesser difficulty in procuring them in their purely metallic state. What was said earlier makes it clear that gold, whose extraction from rivers or from alluvial deposits does not require either mining or chemical or mechanical contrivances, was discovered, despite its greater absolute rarity’, before silver, and for a long time, despite its greater absolute rarity, remained relatively depreciated as compared to silver. That is why Strabo’s assertion’ that in one Arab tribe 10 pounds of gold was given for 1 pound of iron, and 2 pounds of gold for 1 pound of silver does not appear to be in any, way incredible. It is clear, on the other hand, that as the productive power of social labour develops, the technology, and hence simple labour, becomes clearer, and while the original surface sources of gold are depleted and the Earth’s crust increasingly opened up, the relatively rarer or more frequent occurrence of both metals will have a substantial effect on the productivity of labour, and gold will appreciate relative to silver. (However, it is not the absolute quantitative proportion in which the two metals occur in Nature, although an essential moment in the labour time necessary for their production, but the labour time itself that determines their relative value. That is why although, according to the Paris Academie des Sciences (1840), the [quantitative] ratio of silver to gold was estimated at 52: 1, their value ratio was only 15: 1.)

Given a definite development of the productive power of social labour – i.e. the less the significance, on the one hand, of the relative mechanical or chemical impediments to be overcome, and, on the other hand, of the relative remoteness of the gold- or silver-producing countries, the alternative discovery of new gold or silver deposits must be of ever more decisive significance, so that gold, as against silver, has the chance of being discovered not only in mines but also in alluvial deposits. It is quite probable, therefore, that there will now again be a reverse movement in the value ratio of the two, i.e. a fall in the value of gold as compared with that of silver. The discovery of silver mines depends on the advance of technology and civilisation in general. Given these, any changes in the discovery of rich silver or gold deposits become crucial. On the whole, we find a repetition of the same movement in the change of the value ratio between gold and silver. The first two movements begin with a relative depreciation of gold and end with its appreciation. The latter begins with its appreciation and seems to be heading towards a re-establishment of its original lower value ratio to silver. In ancient Asia, the ratio of gold to silver was 6: 1 or 8: 1 (under Manu it was even lower) (thus in China and Japan, the latter still existed in the early 19th century); 10: 1, the ratio in Xenophon’s time, can be regarded as the average ratio for the middle period of antiquity. In the late Roman period-the opening up of the Spanish silver mines by Carthage had roughly the same role to play in antiquity as the discovery of America had in the new period-the ratio is roughly the same as that after the discovery of America, i.e. 14 or 15: 1, although in Rome we often find an even greater depreciation of silver.

For the Middle Ages, the average ratio can once again be re-established as in Xenophon’s time, as 10: 1, although that is the period in which local fluctuations are extremely great. The average ratio in the centuries following upon the discovery of America is 15: 1 or 18: 1. The new discoveries of gold make it probable that the ratio will once again be reduced to 10: 1 or 8: 1, or that, at any rate, there will be a movement in the value ratio of the two metals in reverse to that since [B'-17] the 16th century. This is not yet the place for an examination of this special question in greater depth.

5) The Manifestation of the Law of Appropriation in the Simple Circulation

The economic relations of individuals who are subjects of exchange are to be considered here in the simple form in which they appear in the process of exchange described above, without recourse to more highly developed relations of production. Indeed, the economic determinations of form constitute the framework within which they enter into intercourse with each other (confront each other).

“The worker has an exclusive right to the value resulting from his labour” (Cherbuliez, Riche[sse] ou pauvre[te], Paris, 1841, p. 48).

The subjects of the process of exchange appear above all as proprietors of commodities. Since on the basis of the simple circulation, there is, after all, only one method by means of which anyone becomes the proprietor of any commodity, namely, through a new equivalent, the property in the commodity preceding the exchange, i.e. the property in the commodity appropriated not through circulation, the property in the commodity which, on the contrary, is still to enter circulation, springs directly from the labour of its possessor, with labour as the original mode of appropriation. The commodity, as exchange value, Is only a product [of labour], objectified labour. It is thereby above all the objectiveness of him whose labour is represented in it; his own objective being for others produced by himself. It is true that the production of commodities does not fall within the simple process of exchange as it unfolds at the various moments of circulation. Commodities are rather implied as finished use values. They must be to hand before the exchange begins, simultaneously as it happens in buying and selling, or at least as soon as the transaction is completed, as in the form of circulation in which money serves as means of payment. Whether simultaneously or not, they always enter into circulation as being to hand. The origination of commodities, and so also the original process of their appropriation, lies, therefore, beyond circulation. But since the equivalent of another can be appropriated only through circulation, i.e. through the alienation of one’s own equivalent, one’s own labour must be implied as the original process of appropriation, with circulation in effect merely as the mutual exchange of labour incarnated in diverse products.

Labour and property in the results of one’s own labour appear, therefore, as the basic prerequisite without which the secondary appropriation through circulation would not take place. Within circulation, property based on one’s own labour is the basis for the appropriation of the labour of others. Indeed, a close look at the process of circulation shows that its premiss is that the exchangers should appear as the proprietors of the exchange values, i.e. of quantities of labour time materialised in use values. How they became the proprietors of these commodities is a process running behind the back of the simple circulation and ending before it begins. Private property is a premiss of circulation, but the process of appropriation itself is not revealed, does not appear within circulation; it is rather preposited to it. In circulation itself, in the process of exchange, as it emerges on the surface of the bourgeois society, each gives only while taking, and takes only while giving. In order to do the one or the other, he must have. The procedure through which he has placed himself 1 it the position of having does not constitute any of the moments of circulation itself. The subjects are subjects of circulation only as private proprietors of exchange value, be it in the form of commodity or in the form of money. How they became private proprietors, i.e. how they appropriated objectified labour, is a circumstance which appears not to fall within the examination of the simple circulation at all. However, the commodity is, on the other hand, the premiss of circulation. And since from its standpoint, alien commodities, i.e. alien labour, can be appropriated only through the alienation of one’s own labour, the pre-circulation [B'-18] process of commodity appropriation necessarily appears from this standpoint as appropriation through labour. Since the commodity as exchange value is merely objectified labour, and from the standpoint of circulation, itself only, the movement of exchange value, alien objectified labour can be appropriated only through an exchange of equivalent, the commodity can, in fact, be nothing but the objectification of one’s own labour, and just as the latter is, in fact, the actual process of appropriation of the products of Nature, it equally appears as the juridical title to property. Circulation merely shows how this immediate appropriation, through the medium of a social operation, transforms property in one’s own labour into property in social labour.

That is why all modern economists have proclaimed, it, a more economic or more juridical manner, one’s own labour to be the original title to property, and property in the result of one’s own labour, the basic premiss of the bourgeois society. (Cherbuliez: see above. See also A. Smith.) This premiss itself rests on the premiss of exchange value as an economic relationship dominating the whole aggregation of relationships of production and commerce, and so is itself a historical product of the bourgeois society, the society of the developed exchange value.

On the other hand, since the examination of the more concrete economic relationships than those represented by the simple circulation seems to bring out laws contradicting [the said law of appropriation], all the classical economists, including Ricardo, may like to allow this view, springing as it does from the bourgeois society itself, the right to be called a universal law, but banish its strict reality to the golden age when no property existed as yet. That is to say, to an age preceding the economic fall of man, as Boisguillebert, for example, does.

That would produce the strange result that the truth about the bourgeois society’s law of appropriation would have to be transferred to a time when this society itself did not as vet exist, and the basic law of property, to the time of propertylessness. This illusion is transparent. Production initially rests on the primitive communities, within which private exchange appears only as a quite superficial and incidental exception. But with the historical disintegration of these communities, relations of domination and servitude, relations of violence at once set in, and they are in crying contradiction with the mild commodity circulation and its corresponding relations. However that may be, the process of circulation, as it appears on the surface of the society, knows no other way of appropriation, and if contradictions should arise in the progress of the examination, they must, like this law of the original appropriation through labour, be derived from the development of exchange value itself.

The law of appropriation through one’s own labour being assumed. and it is an assumption that is not arbitrary, but one which springs from the examination of circulation itself, there becomes apparent of itself, in circulation, a realm of bourgeois liberty and bourgeois equality based on this law.

While the appropriation of commodities through one’s own labour presents itself as the first necessity, the social process through which this product must first be posited as an exchange value and as such once again transformed into a use value for individuals, is the second. After the appropriation through labour, or the objectification of labour, the alienation of the product of labour, or its transformation into a social form, appears as the next law. Circulation is a movement in which one’s own product is posited as exchange value (money), i.e. as a social product, and the social product, as one’s own (as individual use value, an object of individual consumption).

It is now also clear that:

Another premiss of exchange relating to the movement as a whole is that the subjects of exchange produce while being subsumed under the division of social labour. After all, the commodities exchanged for one another are, in fact, nothing but labour objectified in various use values, i.e. objectified in various ways, being in fact merely the objective being of the division of labour, objectification of qualitatively distinct types of labour corresponding to the different systems of wants. When 1 produce a commodity, the assumption is that though my product has use value, it has none for me, that for me it is not an immediate means of subsistence (in the broadest sense), but an immediate exchange value; it becomes a means of subsistence for me only after it assumes in money the form of universal social product and can then be realised in any form of alien, qualitatively distinct labour. Hence 1 produce for myself only by producing for the society, each of whose members, for his part, works for me in another circle.

[B'-19] It is clear, furthermore, that the premiss about the exchangers producing exchange values implies not only a division of labour in general, but its specifically developed form. In Peru, for instance, labour was also divided; it was also divided in small SELF-SUPPORTING a Indian communities. But it is a division of labour which, far front being based on exchange value, on the contrary, implies a more or less direct communal [gemeinschaftliche] production. The basic premiss about the subjects of circulation

having produced exchange values, products directly posited in the social determinateness of exchange value, and so also subsumed under a definite historically shaped division of labour, incorporates a mass of other premisses which do not stem from the will of the individual or from his immediate natural character, but from the historical conditions and relations in virtue of which the individual already finds himself to be a social individual determined by the society; this premiss also includes the relations manifested in the individuals’ relations of production other than the simple ones in which they confront one another in circulation.

The exchanger has produced a commodity, and that for commodity producers. This implies: On the one hand, that he has produced as an independent private individual on his own initiative, only out of his own want and his own capability, out of himself and for himself – neither as a member of a naturally evolved community, nor as an individual taking part in production directly as a social individual – and accordingly he does not regard his product as an immediate source of existence. On the other hand, however, he has produced exchange value, a product which becomes a product for himself only through the medium of a determinate social process, a determinate metamorphosis. Consequently, he has produced in such a connection and under such conditions of production and relations of commerce which resulted only from an historical process but which appear for himself to be a natural necessity. The independence of individual production is, accordingly, supplemented with a social dependence that finds a corresponding expression in the division of labour.

The private character of the production of the exchange-value-producing individual itself appears as an historical product – his isolation, his self-establishment as an independent point within the production is determined by a division of labour which, for its part, rests on a whole range of economic conditions through which the individual is conditioned on every side in his connections with other individuals and in his own mode of existence.

In so far as the commodities an English farmer and a French peasant sell are products of the soil, they stand in the same economic relationship. But the peasant sells only the small surplus of his family’s product. He consumes the main part of it himself, and so regards the greater part of his product not as exchange value, but as use value, a direct means of subsistence. By contrast, the English farmer depends entirely on the sale of his product, i.e. on its being a commodity, and so on the social use value of his product. His production is, therefore, completely gripped and determined by exchange value. It is clear now what a supremely. different development of the productive forces of labour and its division, what kind of different relations of individuals within production are required, for instance, to have corn produced as mere exchange value and so going entirely into circulation; what kind of economic processes are required to turn a French peasant into an English farmer.

In his analysis of exchange value, Adam Smith still makes the mistake of accepting the undeveloped form of exchange value in which it still appears merely as a surplus over and above the use value turned out by the producer for his own subsistence, as its adequate form, whereas it is only a form of its historical manifestation within a system of production which it has not yet caught hold of as a universal form. But in the bourgeois society it has to be regarded as the dominant form under which any direct relationship of the producers to their products as use values disappears; all products present themselves as products for trade. Take a worker at a modern factory, say, a cotton mill. If he has produced no exchange value, he has produced nothing at all, since he cannot put his finger on any single tangible use value, and say: this is my product. The more many-sided the system of social wants, and the more one-sided the individual’s production, i.e. the greater the development of the social division of labour, the more decisive the importance of the production of the product as exchange value, or the character of the product as exchange value.

An analysis of the specific form of the division of labour, the conditions of production on which it is based, and the economic relationships of the members of the society to which these conditions of production are reduced, would show that the whole system of bourgeois production is the premiss for exchange value appearing on its surface as a mere point of departure, and the process of exchange, as it unfolds in the simple c circulation, as a social exchange of matter, simple but encompassing both the whole of production and the whole of consumption. It would transpire, therefore, that already other, more complicated relations of production, more or less conflicting with the liberty and independence of individuals, then- economic relationships, are the premiss that, as free private producers in simple relations of purchase and sale, they should confront each other in the process of circulation and should figure as its independent subjects. But from the standpoint of the simple circulation, these relationships (ire obliterated. When considering it itself, we find that the division of labour in fact appears in it only in the result (its premiss), that the subjects of exchange produce different commodities meeting different wants, and that while each depends on the production of all, all depend on the production of each, reciprocally supplementing each other, so that the product of each single individual, to the extent of its value magnitude, is a means for participation in the product of social [B'-20] production in general through the medium of the process of circulation.

The product is exchange value, objectified general labour, although it is, in the immediate sense, the objectification of the independent private labour of the individual alone.

That the commodity first has to be alienated, the coercion for the individual showing that his immediate product is no product for himself, but becomes such only in the social process of production and must assume this general and yet external form; that the produce of particular labour must assert itself socially as the objectification of general labour, assuming the form of a thing (money) which is exclusively assumed as the immediate objectification of general labour, and equally that through this VERY PROCESS this general social labour is posited as an external thing, as money-these determinations constitute the mainspring, the pulse-beat of circulation itself. The consequent social relations present themselves, for that reason, directly from an examination of the simple circulation, and do riot lie behind it as economic relations enclosed in the division of labour.

How does the individual certify his private labour as general labour, and its product, as general social product? Through the particular content of his labour, its particular use value, the object of another individual’s want, so that the latter gives tip his own product for. it as equivalent. //That this must assume the form of money is a point to be examined later to show that this transformation of commodity into money is itself an essential moment of the simple circulation.// Consequently, through his labour being a particularity in the totality of social labour, a particular complementary branch of it. As soon as labour possesses a content determined by social connection-and this is the material determinateness and premises – it counts as general labour. The form of the generality of labour asserts itself through its reality as a member of the totality of labours, as a particular mode of the existence of social labour.

The individuals confront each other only as proprietors of exchange values, as such individuals who have given themselves reified being for each other through their product, the commodity. Without this objective mediation, they have no relation to each other from the standpoint of the social exchange of matter under way in circulation. They exist for each other only as things, something that is merely further developed in the money relation, in which their community itself appears as an external and hence a casual thing with respect to all. That the social connection resulting from the collision of independent individuals appears with respect to them simultaneously both as objective necessity and as external bond in effect expresses their independence for which social being, though a necessity, is no more than a means, and therefore appears to the individuals themselves as something external, and in money, even as a tangible thing. They produce in and for the society as social individuals, but at the same time this appears merely as a means for objectifying their individuality. Since, on the one hand, they are not subsumed under any naturally evolved community and, on the other, are not consciously communal individuals subsuming the community under themselves, this community must also exist as an independent, external, casual thing [ein ... Sachliches] with respect to them as independent subjects. That is precisely the condition for their simultaneously being in some social connection as independent private persons.

Since, consequently, the division of labour //in which the social conditions of production under which the individuals produce exchange values can be summed up// in the simple process of exchange, in circulation, appears only as 1) non-production of immediate means of subsistence by the individual himself, by his direct labour; 2) as the being of general social labour as a naturally evolved totality fragmenting itself into a circle of particularities in such a way that the subjects of circulation possess complementary commodities and that each subject satisfies some aspect of the totality of an individual’s social wants, while the economic relationships stemming from this determinate division of labour are themselves obliterated, in our analysis of exchange value we have not gone on to analyse the division of labour, but merely accepted it as a fact identical with exchange value, a fact which, indeed, merely expresses in active form, as a particularisation of labour, that which the different use value of commodities-and without it neither exchange, nor exchange value would have existed -expresses in objective form. In effect, Adam Smith, like other economists before him, Petty, Boisguillebert, the Italians,’

asserting the division of labour as being correlative with exchange value, was saying the same thing. And Steuart grasped, before all the others, the division of labour and the production of exchange values as being something identical and, in commendable distinction from other economists, conceived it as a form of social production and social exchange of matter mediated by a specific historical process.

What Adam Smith says about the productive power of the division of labour is an absolutely extraneous standpoint which has no relevance to the matter either here or in the place where he expressed it, and is, besides, relevant to a definite stage in the development of manufacture, but not at all to the modern factory system in general.

The division of labour with which we are dealing here is a spontaneous and free division within the society taken as a whole, and manifesting itself as production of exchange values, and not the division of labour within a factory-its resolution and combination in a single branch of production, but rather a social division of these branches of production themselves, arising, as it were, without the participation of individuals. The division of labour within the society would correspond to the principle of the division of labour [B'-21] within a factory perhaps in the Egyptian rather than in the modern system. The repulsion from each other of the various branches of social labour and their transformation into free ones, independent of each other and bound up in a totality and unity only through internal necessity (and not as in that division, through a conscious resolution and conscious combination of the resolved parts) are totally different things determined by totally different laws of development, however great the correspondence between a given form of the one and a given form of the other may be.

While Adam Smith may have less than adequately comprehended the simple form of the division of labour in which it is only an active form of exchange value, and its other form in which it represents a definite productive power of labour, he was even less clear about the form in which the economic antagonisms of production-the qualitative social determinations subsumed under which the individuals confront each other as capitalist and wage worker, industrial capitalist and rentier, tenant farmer and ground-rent-collecting landlord, etc-themselves appear as the economic forms of a determinate mode of the division of labour.

If the individual produces his own immediate means of subsistence, as, for instance, it most often happens in countries where primitive agricultural relationships continue to exist, his production has no social character, and his labour is not social. If the individual produces as a private individual -so that this position of his is itself not in any sense a product of Nature but a refined result of a social process-the social character reveals itself in that in the content of his labour the individual is determined by the social connection and works only as its member, i. e. to satisfy the wants of all the others-so that social dependence exists for him-but he himself is engaged only in this or that labour of his choice; his particular relationship to particular [kinds of] labour is not socially determined; his choice is determined in a natural way in virtue of his natural capabilities, inclinations, natural conditions of production in which he finds himself, etc.; so that the particularisation of labour, its social fragmentation into a totality of all the particular branches in fact presents itself from the part of the individual in such a way that his own spiritual and natural particularity simultaneously assumes the form of a social particularity. From his own nature and its particular premisses springs for him the particularity of his labour-above all its objectification -which, however, [he] simultaneously regards as the assertion [Geltendmachung] of a particular system of wants and realisation of a particular branch of social activity.

The division of labour so comprehended as social reproduction of the particular individuality, which thereby simultaneously constitutes an element of mankind’s total development and simultaneously enables the individual, by means of his particular activity, to have gratification of the general production, the all-round social gratification, this concept, springing as it does from the standpoint of the simple circulation and so being confirmation instead of suspension of the freedom of the individuals, is still current in bourgeois political economy.

This natural distinction between individuals and their wants is the motivation for their social integration as exchangers. D’abord they confront each other in the act of exchange as persons mutually recognising each other as proprietors, as persons whose will permeates their commodities, with the reciprocal appropriation through the reciprocal alienation taking place only according to their common will, i. e. essentially by means of contract. This includes the juridical concept of person and also of the freedom which it contains. That is why in Roman law, servus is correctly defined as one who cannot acquire through exchange.

Furthermore, in the consciousness of the exchanging subjects all of this presents itself in such a way that in the transaction each is only an end to himself; that each is only a means for the oilier; and finally, that the reciprocity in which each is simultaneously means and end, attaining his own end only by becoming means for the other, and means for the other only in so far as he attains his own end-that this reciprocity is a necessary FACT implied as a natural condition of exchange but that as such it is indifferent to both subjects of the exchange and is of interest to either only in so far as it is his interest. This means that the common interest. which appears as the content of the exchange act as a whole, while being present as a fact in the consciousness of both parties, is not as such the motivation, but exists, so to say, only behind the backs of the individual interests reflected in themselves. If he so wishes, the subject can, of course, have the uplifting sense that the satisfaction of his unconcerned individual interest is precisely the realisation of the sublated individual interest, of the general interest. Front the act of exchange itself, each of the subjects returns upon himself as the ultimate end of the entire process, as the dominant subject. In this way, therefore, the subject’s complete freedom is realised. Voluntary transaction; no coercion on any part; becoming means for the other only as means for oneself or end for oneself; finally, the consciousness that the general or common interest is nothing but the all-sidedness of the egoistical interest.

If, therefore, every aspect of circulation is a realisation of individual freedom, the circulation process considered as such, i. e. in the determinations of its economic form, constitutes the full realisation of social equality (for the relations of freedom have no direct bearing on the economic determinations of the form of exchange, but relate only to its juridical form, or to its content, to use values, or wants as such). Subjects of circulation are, as such, above all exchangers, and that each of them is posited in this determination, that is, in the same determination, in effect constitutes their social determination. They confront each other in fact only as subjectivised exchange values, i. e. as living equivalents, as having the same value. As such, they are not only equal: there is even no [B''-1] difference between them. They confront each other only as possessors of exchange values and as those in need of exchange, as agents of the same general indifferent social labour. Moreover, they exchange exchange-values of equal magnitude, for it is presupposed that. there is an exchange of equivalents. The equalness of that which each gives an(] takes is here an explicit moment of the process itself. In the same way that they confront each other as the subjects of exchange, so they certify themselves in the act of this exchange. As such it is merely this certification. They are posited as exchangers and so as equals, and their commodities (objects) as equivalents. They exchange their reified being only as equivalents. They themselves are of equal value and in the act of exchange identify themselves as being equivalent and indifferent with respect to each other. The equivalents are the objectification of one subject for the other; which means that they themselves are of equal value and identify themselves in the act of exchange as being equivalent and indifferent to each other. In the exchange, the subjects turn out to be of the same value to each other only through the equivalents and identify themselves as such by exchanging the objectification in which the one exists for the other. Since they exist for each other only as subjects of equivalence, they are simultaneously indifferent to each other as being of the same value. They are not concerned with their other differences. Their individual particularity does not enter into the process. The physical difference in the use value of their commodities is extinguished in the ideal being of commodity as price, and to the extent that this physical difference is the motivation for exchange, they are a reciprocal want for each other (each representing the want of the other), a want that can be satisfied only by the same quantum of labour time. This natural difference is the basis for their social equality and posits them as subjects of the exchange. If subject A had the same want as subject B, and if his commodity satisfied the same want as the commodity of subject B, there would be no relation between them in the sense of economic relations (from the standpoint of their production). The reciprocal satisfaction of their wants by means of the physical difference of their labour and their commodity makes their equality a relation filled with social content, and their particular labour a particular mode of the existence of social labour in general.

Whenever money is involved, it is so remote from abolishing this relation of equality that it is, in fact, its real expression. Above all to the extent that money functions as the price-positing element, as measure, the function of money consists, also in form, in positing commodities as being qualitatively identical, in expressing their identical social substance in which there is only a quantitative difference. In circulation, the commodity of each then, in fact, appears as the same thing [as the commodity of the other] and is given the same social form of means of circulation in which any particularity of the product is extinguished and the proprietor of each commodity becomes the proprietor of the tangibly subjectified generally significant commodity. That money non olet applies here in the proper sense. Whether a thaler which one has in one’s hand has realised the price of manure or of silk is absolutely unnoticeable, and any individual difference has been extinguished in the hands of its possessor, since the thaler functions as thaler. Indeed, this extinction is all-sided, since all commodities are transformed into coin. At a definite moment circulation posits each not only as being equal to the other, but also as the same, and its movement consists in each alternately taking the place of the other from the standpoint of the social function. It is true that in circulation the exchangers also confront each other qualitatively as buyer and seller, as commodity and money, but, first, they change places, and the process consists both in the establishment of inequality and in the transcendence of the inequality, so that the latter appears to be merely formal. The buyer becomes the seller, the seller becomes the buyer, and each can become buyer only as seller. The formal difference exists for all the subjects of circulation simultaneously in the form of the social metamorphoses through which they have to pass. Besides, the commodity, notionally as price, is as good money as the money confronting it. In money, when it itself circulates so that it appears now in the hands of the one, now of the other, and is indifferent to the place of its appearance, the equality is expressed materially, and the difference no more than formally. As far as the process of exchange is considered, each confronts the other as possessor of means of circulation, as money itself. The specific natural distinction which lies in the commodities is extinguished and keeps being extinguished through circulation.

When we consider generally the social relation of individuals within their economic process, we simply have to keep to the form determinations of the process itself. But there is no other difference in circulation except that between commodity and money, and circulation is equally its ceaseless disappearance. Equality appears here as social product, just as generally exchange value is social being.

Since money is only realisation of exchange value, and a developed exchange-value system, a money system, the money system can, in fact, be only the realisation of this system of equality and freedom.

The use value of the commodity contains for the exchanger a particular, individual aspect of production (labour); but in his commodity, as exchange value, all commodities similarly present themselves as objectification of the social homogeneous labour pure and simple, and their proprietors as equally estimable and equally worthy functionaries of the social process.

[B''-2] It was earlier shown that as far as money appears in its third function, it sublates, as the general material for contracts, the universal means of payment, all specific differences between the performances and posits them equal. It makes all equal before money, but money is merely its own objectified social nexus. With money figuring as material for accumulation and hoarding, the equality may at first appear to be sublated since the possibility arises for one individual to enrich himself more, to acquire a greater title to general production than another. However, [in the simple circulation] no individual can extract money at the expense of another. He can take in the form of money only that which he gives in the form of commodity. The one enjoys the content of wealth, the other takes possession of its universal form. If one is impoverished and the other enriched, that is a matter of their good will, their thrift, industry, morality, and so on, and does not at all follow from the economic relations themselves, the relations of commerce, in which the individuals confront each other in circulation. Even inheritance and similar juridical relations which may extend the inequality arising in this way have no effect oil social equality. If the initial position of individual A is not in contradiction with these, the contradiction cannot, of course, arise from individual A taking the place of individual B and perpetuating the initial position. On the contrary, here the social law acquires force beyond the bounds of the [individual’s] natural lifetime: there is a consolidation of this social law in contrast to the accidental working of Nature, whose influence as such would rather be abolition of the freedom of the individual. Besides, since in this relation the individual is merely the individualisation of money, he is as such as immortal as money itself. Finally, hoarding activity is a heroic, religious idiosyncrasy, a fanatical asceticism which is, of course, not inherited as blood is. Since only equivalents are exchanged, the heir must throw the money into circulation once again if he is to realise it as gratification. If he fails to do that, he will simply continue to be a useful member of the society, taking from it no more than he gives. But the nature of things is such, however, that extravagance, the “charming leveller,”” as Steuart calls it, once again evens out the inequality, so that it itself puts in only a fleeting appearance.

That is why the process of exchange of exchange values developed in circulation not only respects freedom and equality, but is also their real basis, while they are its products. As pure ideas, they are idealised expressions of its various moments; being developed in juridical, political and social relations, they are merely reproduced in other degrees. This has also been historically confirmed. Not only was the trinity of property, freedom and equality first theoretically formulated on that basis by Italian, English and French economists of the 17th and 18th centuries. They were also first realised in the modern bourgeois society. The ancient world, for which exchange value did not serve as the basis of production and which, on the contrary, collapsed in consequence of its development, produced a freedom and equality of a totally opposite and essentially no more than local content. (in the other hand, since moments of the simple circulation were developed in the ancient world, among the free, at any rate, it is also clear that the definitions of juridical person, the subject of the process of exchange, were developed in Rome, especially in imperial Rome, whose history is precisely the history of the disintegration of the communal system of antiquity, as also the essential definitions of the law of the bourgeois society which, however, was necessarily above all brought to the fore as the law of the emerging industrial society as against the Middle Ages.

That is the origin of the error of the socialists, especially the French, who strive to prove that socialism is a realisation of bourgeois ideas, not discovered, but given historical currency by the French Revolution, and vainly try to demonstrate that exchange value originally (in time) or in its concept (in its adequate form) is a system of universal freedom and equality but perverted by money, capital, etc. Or they assert that up to now history has merely made unsuccessful attempts to put them through in a form corresponding to their true nature, and that now they, Proudhon, for instance, have discovered the panacea through which the true history of these relations is to be substituted for their perverted history. The system of exchange values, and the money system even more so, are, in fact, a system of freedom and equality. But the contradictions which appear in a deeper analysis are immanent contradictions, complications of that very property, freedom and equality which occasionally pass into their opposites. The hope, for instance, that exchange value should not develop from a form of commodity and money into a form of capital, or that labour producing exchange value should not develop into wage labour is as pious as it is stupid. What distinguishes these socialists from bourgeois apologists is, on the one hand, the sense of the contradictions of the system, and, on the other, the utopianism, the failure to understand the necessary distinction between the real and the ideal shape of the bourgeois society and the consequent desire to undertake the superfluous business of once again realising the ideal expression itself, the clarified and [B''-3] reflected image emitted by reality as such.

Contrasted to this concept, on the other hand, is the trivial argument that the contradictions in this view resting on the examination of the simple circulation which arise as soon as we go on to more concrete stages of the production process, descending from the surface to its depths, are, in fact, a mere semblance. It is, in fact, asserted and argued with the aid of abstraction from the specific form of the more developed spheres of the social process of production, of the more developed economic relationships, that all the economic relationships are merely so many more names for the selfsame relationships of the simple exchange, commodity exchange, and the corresponding determinations of property, freedom and equality. From everyday experience, for instance, it is taken that, alongside money and commodities, exchange-value, relationships also present themselves in the form of capital, interest, ground rent, wages, etc. Through the’ process of a very trivial abstraction, arbitrarily discarding now one, now the other aspect of the specific relationship, the latter is reduced to abstract determinations of the simple circulation, thereby proving that the economic relations in which individuals find themselves in those more developed spheres of the production process are merely relations of the simple circulation, etc.

That is just how Mr. Bastiat has put together his economic theodicy, the Harmonies economiques. In contrast to the classical political economy of Steuart, Smith and Ricardo, who have the strength of mind relentlessly to depict production relationships in their pure form, this feeble high-flown rhetoric claims to be a step forward. However, Bastiat is not the inventor of this harmonious view, but has, on the contrary, borrowed it from the American Carey.

Carey, for whose views the historical background was provided only by the New World, of which he is a member, in the highly voluminous works of his first period argued the existence of the economic “harmony” which is still everywhere a reduction [of all economic relations] to the abstract determinations of the simple process of exchange, by explaining everywhere the distortion of these simple relationships by the intervention of the State, on the one hand, and England’s influence on the world market, on the other. The harmonies in themselves are there. But in the non-American countries they are distorted by the State, and in America itself, by the most developed form in which these relationships appear, their world-market reality, in the form of England. [It is harmonious, for instance, if, within a country, patriarchal production gives way to industrial production, and the process of dissolution accompanying this development is conceived only in its positive aspect. But it becomes disharmonious, if England’s large-scale industry puts a terrible end to the patriarchal or petty-bourgeois forms of another country’s national production. The concentration of capital within a country and the dissolving effect of this concentration present themselves to him only in their positive aspect. But the effect of the concentrated English capital on other national capitals, which he exposes as England’s monopoly, is disharmony itself.] Carey finds no other means of restoring them than ultimately to call for help from hi’s denounced devil, the State, and to stand it as the guardian angel at the gates of the harmonious paradise, namely, protective tariffs. But since he is after all a researcher and not a writer of fiction, like Bastiat, in his latest work’ he is forced to go farther. America’s development over the past 18 years has dealt such a blow at his harmonious view that he now sees the distortion of the “natural” “harmonies,” to which he is still firmly attached, no longer in the external influence of the State, but in trade! A truly remarkable result this: to extol exchange value as the basis of harmonious production, and then to declare that the developed form of exchange, trade, abolishes this exchange value in its immanent laws!

[Carey is, in fact, America’s only original economist, and what makes his works so important is that the bourgeois society in its freest and broadest reality always provides them with their material foundation. In abstract form, he describes the breadth of American [economic] conditions and contrasts them with those of the Old World. Bastiat’s only real background is the pettiness of French economic conditions, whose long ears keep sticking out from his harmonies, and in contrast to these, he formulates the idealised English and American production relationships as “the demands of practical reason.” That is why Carey is rich in independent, so to say, bona fide studies of specific economic questions. Wherever Bastiat pretends, by way of exception, to descend from his glib and coquettish platitudes to an examination of real categories (for instance, in ground rent) there he simply rewrites Carey. So while the latter combats mainly the objections to his harmonious view, objections in the form in which they have been developed by the English classical economists themselves, Bastiat skirmishes with the socialists. Carey’s more profound view finds in political economy itself the contradiction which, as harmonist, he has to overcome, while the vain and stubborn rhetorician [Bastiat] discerns this contradiction as lying only beyond the bounds of political economy.]

That is the desperate form in which Carey expresses his belated conclusion that the development of harmonious exchange value is disharmonic.

[B''-4] 6) Transition to Capital

Let us now take the process of circulation in its totality:

Let us consider first of all the formal character of the simple circulation.

Indeed, circulation represents only a formal process mediating both moments-use value and exchange value-which directly coincide and directly fall apart in the commodity, whose direct unity it Is. The commodity keeps alternating each of these two determinations. So far as the commodity is posited as price, and while also being exchange value, its being as use value appears to be its reality, while its being as exchange value is merely its relation [to other commodities], its notional being. In money, although it is also use value, it is its being as exchange value that appears as its reality, since use value, when it appears as universal, is merely notional.

In the commodity, the material has price; in money, exchange value possesses material.

Both forms of circulation are to be considered: C—M—C and M—C—M.

The commodity which is exchanged for another commodity by means of money passes out of circulation in order to be consumed as use value. Its determination as exchange value and hence as commodity is extinguished. It is now use value as such. If, however, it is self -established against circulation in the form of money , it then represents only the substance-free universal form of wealth and becomes a useless use value, gold, silver, when it does not re-enter circulation as a means of purchase or means of payment. Indeed, there is a contradiction in that the exchange value become independent, i.e.. the absolute existence of exchange value, should be the form in which it is withdrawn from exchange. The only reality, economically, which hoarding has in circulation, is a subsidiary one for the function of money as means of circulation (in the two forms of means of purchase and means of payment)-the formation of reservoirs which make it possible to expand and contract the currency (hence the function of money as universal commodity).

There are two moments in circulation. First, equivalents, i.e. the same value magnitudes, are exchanged for each other; at the same time, however, the determinations of both sides change places.

The exchange value fixed in money, disappears (for the owner of the money) as soon as money, realises in the commodity as use-value; and the use value existing it, the commodity disappears (for its owner) as soon as its price is realised in money. Through the simple act of exchange, either of the two can lose Its determination in favour of the other only when it realises itself in the other. Neither can retain one determination while passing into the other.

Considered in itself, circulation is the mediation of preposited extremes. But it does not posit these extremes. It itself must be mediated as the totality of mediation, as total process. That is why its immediate being is pure appearance. It is the phenomenon of a process running behind its back. It is now negated in each of its moments: as commodity, as money, and as the relation of the two, as the simple exchange of the two, circulation.

The repetition of the process from both points, money and commodity, does not spring from the conditions of circulation itself. The act cannot again be rekindled of itself. Circulation does not, therefore, carry within itself the principle of self-renewal. It proceeds front preposited moments, and not from those created by itself. Commodities must be thrown into it again and again, and that from outside, as fuel into the fire. Otherwise, it flickers out in indifference. It would flicker out in money as an indifferent result, in so far as money, would no longer have any connection with commodities, prices, circulation, cease to be money and express a production relationship; leaving no more than its metallic being, with its economic being annihilated.

Money, as “universal form of wealth,” as exchange value become independent, confronts the whole world of real wealth. It is the pure abstraction of the latter, hence, fixed in this way, all imaginary magnitude. Wherever universal wealth appears to exist in an entirely material, tangible form, it has its existence only in my head, and is a pure chimera. As the material representative of universal wealth, money is realised only when it is thrown back into circulation, when it disappears in exchange for the particular species of wealth. In circulation, it is always real only, when it is given out. Should 1 want to hold on to it, it evaporates in my hands as a mere spectre of wealth. Making it disappear is the only, possible way of securing it as wealth. The dissolution of the stores in ephemeral gratifications is its realisation. It (:an now again be stored by other individuals, but then the process starts once again. The independence of money, with respect to circulation is mere appearance. So in its determination of consummate exchange value, money sublates itself.

In the simple circulation, exchange value in its form as money appears as a simple thing for which circulation is only an external movement, or which, as subject, is individualised in a particular material. Furthermore, circulation itself appears [B''-5] merely as a formal movement: realisation of the prices of commodities, exchange (eventually) of different use values for each other. Both are preposited as the point of departure of circulation: the exchange value of the commodity, and the commodities of different use value. The withdrawal of the commodity through consumption, i.e. its annihilation as exchange value, and the withdrawal of money, its becoming independent, which is again another form of its annihilation, likewise drop out of circulation. A definite price (exchange value measured in money, i.e. exchange value itself, the value magnitude) is preposited to circulation, which in money only gives it a formal being. But it does not originate in it.

//The simple circulation, merely the exchange of commodity and money (the exchange of commodities in mediated form), precisely because it is only mediating movement between presupposed points of departure, can (up to the formation of hoards) historically exist without exchange value taking hold of the production of a people, whether on the whole surface or in its depths. At the same time, however, historical development shows how circulation itself leads to bourgeois, i.e. exchange-value-positing, production and creates for itself a basis other than that from which it directly sprang. The exchange of surpluses is commerce creating exchange and exchange value. However, it extends only to the act of exchange itself and runs alongside production itself. But then if the appearance of exchange-seeking intermediaries (Lombards, Normans, etc.) is repeated and regular trade develops under which the producing peoples are engaged only in what could be called passive trade, in so far as the impetus to exchange-creating activity comes from outside and not from the inner structure of production, the surplus of production must no longer be an accidental, occasional one, but a constantly recurring surplus, so that the product itself acquires a tendency towards circulation and creation of new exchange values.

Initially, the influence is rather a material one. The range of wants is enlarged; the aim is to satisfy new wants, and hence the greater regularity and scale of production. The organisation of production within the country has itself already been modified by circulation and exchange value, but has not yet been taken hold of either over its entire surface or throughout its whole depth. That is the so-called civilising influence of foreign trade. The extent to which the movement positing exchange value seizes upon the whole of production then depends partly on the intensity of the said external influence, partly upon the level of internal development.

For instance, in England in the 16th century, the development of the Dutch industry made English wool production of great commercial importance, and, on the other hand, especially increased the need for Dutch and Italian commodities. In order to have more wool for export as means of exchange, arable land was converted into sheep-walks and the small-tenant system was broken up, producing that rather violent economic upheaval which Thomas More deplored (denounced).

So agriculture lost its character of labour for use value- as the immediate source of subsistence-and the exchange of its surplus ceased to be something indifferent and external for the internal structure of agricultural relationships. In some places, agriculture itself began entirely to be determined by circulation and transformed into production creating solely exchange values. In this way, not only was there a change in the mode of production, but also a disintegration of all the corresponding old, traditional relationships of population and production, economic relationships. So here the prerequisite for circulation was a production involving exchange value only in the form of surplus, a surplus over the use value; but it gave way to a production which can exist only in relation to circulation, with the creation of exchange value as its immediate object. This is an example of the historical retreat of the simple circulation into capital, into the exchange value as a production-dominating form.

The movement, therefore, gets hold only of the surplus of the production aimed at the creation of immediate use value and proceeds only within those limits. The less the whole internal economic structure of the society is still caught up by exchange value, the more they [participants in the exchange] appear as external extremes of circulation -firmly given in advance and taking a passive attitude to it. The whole movement as such appears independent with respect to them as intermediary trade whose carriers, such as the Semites in the interstices of the ancient world, and the Jews, Lombards and Normans in the interstices of the medieval society, alternately represent with respect to them the different moments of circulation- money and commodity. They are the mediators of the social exchange of matter.

At this point, however, we have nothing to do with the historical transition of circulation into capital. The simple circulation is, rather, an abstract sphere of the bourgeois process of production as a whole, which through its own determinations shows itself to be a moment, [B''-6] a mere form of appearance of some deeper process lying behind it, even resulting from it and producing it-industrial capital.//

The simple circulation, on the one hand, is an exchange of present commodities and merely the mediation of these preposited extremes, which lie beyond it. All activity is limited to exchange and the positing of the formal determinations through which the commodity passes as the unity of exchange value and use value. As such a unity, the commodity was preposited or some other determinate product was a commodity only as the immediate unity of both these determinations. Indeed, the commodity is such a unity, a commodity not in an inert (fixed) being, but only in the social movement of circulation in which, on the one hand, both determinations of the commodity – use value and exchange value – are allocated between the various parties. For the seller it becomes exchange value, for the buyer, use value. For the seller it is means of exchange, i.e. the opposite of direct use value, because it is use value for the other; in other words, it is negated direct, individual use value; on the other hand, however, as price its magnitude as means of exchange, its purchasing power is measured. For the buyer, it becomes use value as its price is realised, i.e. as its ideal being is realised as money. Only because the buyer realises the commodity for another in the determination of pure exchange value, the commodity for himself becomes a commodity in the determination of use value. Use value itself appears as two-fold: in the hands of the seller, it is merely a particular materialisation of exchange value, the existence of exchange value, and for the buyer, use value as such, i.e. an object satisfying particular wants; for both, the commodity appears as price. One of them, however, wants to realise it as price, as money; the other realises money in it.

It is specific for the being of commodity as means of exchange that the use value appears 1) as sublated direct (individual) use value, i.e. as use value for others, for the society; 2) as materialisation of exchange value for the possessor of the commodity.

The bifurcation and the alternation of the commodity in both determinations – commodity and money – is the main content of circulation. But the commodity, does not simply confront money; its exchange value appears in it notionally as money; as price, it is notional money, and money with respect to it is merely the reality of its own price. In the commodity, the exchange value is also notional determination, notional equation with money. It then acquires in money as coin an abstract, one-sided but fleeting existence as mere value; value then is extinguished in the use value of the purchased commodity. From the moment the commodity becomes simple use value, it ceases to be a commodity. Its being as exchange value is extinguished. But so long as it is in circulation, it is always posited in a two-fold way, not only in that it exists as commodity with respect to money, but also in that it always exists as commodity with a price, exchange value measured in the measuring unit of exchange values.

The movement of the commodity passes through various moments when it is price, becomes coin, and finally is transformed into use value. It is presupposed as use value and exchange value, for only then it is a commodity. But it realises these deternimations formally in circulation and, moreover, so that, firstly, as has been said, it passes through various determinations; and, secondly, so that in the process of exchange its being as use value and exchange value is always distributed between the two sides, between the two extremes of the exchange. In circulation, its two-fold nature is dismembered and it becomes in each of the conditions presupposed in it only as a result of this formal process. The unity of both determinations appears as a restless movement passing through definite moments and at the same time always two-sided. Always only in this social relationship so that the various determinations of the commodity are, in fact, no more than alternating relations in which the subjects of the exchange are in the process of exchange. This relation appears, however, as an objective relationship in which they are placed by the content of the exchange, by its social determinateness, independently of then- will. In price, coin, as money, these social relations appear with respect to these subjects as external and subsuming. The negation of the commodity in one of its determinat ions is always Its realisation in the other. As price it is already notionally negated as use value and posited as exchange value. As realised price, i.e. as money it is negated use value. As realised money, i.e. as transcended means of purchase, it is negated exchange value, realised use value. It is Initially use value and exchange value Only dunamei; only in circulation does it become posited as both, and circulation is the alternation of these determinations. While being the alternation and confrontation of these determinations, therefore, circulation is also always their equation to each other.

In so far, however, as we examine the form C—M—C, exchange value, whether in its form of price, or in its form of coin, or in the form of the equating movement, in the form of the movement of exchange itself, appears only as a fleeting mediation. Commodity is eventually exchanged for commodity, or more precisely, since the determination of the commodity is extinguished, it is use values of different quality that are exchanged for each other, while circulation itself merely served, on the one hand, to allow them to change hands in accordance with the want, and on the other, to allow them to change hands in accordance with the labour time they contain; [B''-7] to allow them to substitute for each other to the extent to which they are equally weighty moments of the general social labour time. Now, however, the commodities thrown into circulation have reached their goal. In the hands of their new possessor, each of them ceases to be a commodity; each of them becomes an object of want, and as such is consumed in accordance with its nature.

There, therefore, circulation comes to an end. Nothing remains but the means of circulation as a mere residue. But as such a residue it loses its form determination. It sinks into its matter that remains in the form of the inorganic ash of the whole process. As soon as the commodity has become a use value as such, it is thrown out of circulation and has ceased to be a commodity. That is why it is not from this aspect of content (substance) that we should seek further determinations of form. The use value becomes in circulation only that as what it was posited independently of circulation-an object of a definite want. As such an object, it was and remains a physical motive of circulation; but is left by it, as the social form, altogether unaffected. In the C—M—C movement, the physical matter appears as the actual content of the movement; the social movement, only as a fleeting mediation for the satisfaction of individual wants. The change of material of the social labour. In this movement, the sublation of the form determination, i.e. those springing from the social process, appears not only as the result but also as the goal; in much the same way as court proceedings appear to the peasant, though not to his lawyer. So in order to examine the further determination of form arising from the movement of circulation itself, we must keep to the side where the formal aspect, exchange value as such, is further developed, and is given a deeper determination through the process of circulation itself. That means the aspect of the development of money, the M—C—M form.

Being objectified in circulation, exchange value, as an objectified quantum of social labour time, proceeds up to its being as money in the form of hoard and universal means of payment. If money is now fixed in this form, its form determination is equally extinguished; it ceases to be money and becomes mere metal, mere use value, which, however, since it does not have to serve as such in its metal quality, is useless, i.e. it does not realise itself as the commodity does in consumption as use value.

We have seen how the commodity realises the moments it contains by continually denying one of them. From the standpoint of the movement of the commodity as such, exchange value exists notionally in it as price; the commodity becomes abstract means of exchange in coin, but in its final realisation in another commodity, its exchange value is extinguished, and it drops out of the process as simple use value, immediate object of consumption (C—M—C). That is the movement of the commodity in which its being as use value is the dominant moment, and the movement in fact consists only in that it assumes the want-corresponding form of the use value, instead of that in which it is a commodity.

If, however, we consider the further development of exchange value in money, we shall find that in the first movement [C—M] it reaches only its being as notional money, or coin, as unit [of value measurement] and number [of units]. But if we take both movements [C—M and M—C] together, it will transpire that money, existing in price only as ideal measuring unit, as imagined material of general labour, in coin-only as value token, as abstract and fleeting being of value, as materialised conception, i.e. as symbol-in its form, finally, as money, first, negates both determinations, but also contains both as moments, and simultaneously firmly establishes itself in a materialisation independent of circulation, in a constant, even if negative, relation to it.

What becomes, emerges, is produced in circulation, when its form itself is considered, is money itself and nothing else. Commodities are exchanged in circulation, but they do not originate in it. Money, as price and coin, is already an own product of circulation, but only formally. The exchange value of the commodity is the premiss of price, just as the coin itself is nothing but the self -established form of the commodity as similarly premissed means of exchange. Circulation does not create exchange value, just as it does not create its magnitude. For commodity to be measured in money, both money and commodity must relate to each other as exchange values, that is, as the objectification of labour time. In price, the exchange value of the commodity is given only an expression that is separate from its use value; similarly, the value token springs only from the equivalent, from the commodity as means of exchange. As means of exchange, the commodity must be use value, but it can become such only through alienation, since it is use value not for him in whose hands it is commodity, but for him who acquires it in exchange as use value. Its use value for the possessor of the commodity consists merely in its exchangeability, its alienability to the extent of the exchange value it represents. So, as universal means of exchange, it becomes mere use value in circulation as stable existence of exchange value, while its use value as such is extinguished. That the exchange value is posited as price, and the means of exchange as money, appears as a simple formal change [of determinations]. Every commodity as realised exchange value is the money of account for the other commodities, their price-giving element, just as every commodity is means of exchange (but here it comes up against the limits within which it is means of exchange, for it can be such only with respect to him who possesses the commodity which the exchanger wants, and would have to pass through a series of exchanges in order eventually to become means of exchange; apart from the CLUMSINESS of this process, it would once again come into [B''-8] conflict with its own nature as use value, for it would then have to be divisible into portions so as successively to satisfy all the different exchanges in the required proportions), means of circulation, coin. In price and coin, both determinations arc transferred only to a single commodity. This appears merely as a simplification [of the process of exchange]. In the relationships in which a commodity appears as the measure of value of all the other commodities, it is a means of exchange, an equivalent alienable against them; it can actually serve as an equivalent, as a means of exchange. The process of circulation merely gives these determinations a more abstract form in money as coin and means of exchange.

The form C—M—C, this stream of circulation, in which money figures only as measure and coin, appears therefore only as a mediated form of barter in whose basis and content nothing has changed. The reflecting consciousness of the peoples therefore perceives money in its determinations of measure and coin as arbitrary, as inventions conventionally Introduced for the sake of convenience; for the transformations undergone by the determinations contained in the commodity as a unity of use value and exchange value are no more than formal. Price is merely a determinate expression of exchange value, a generally, understandable expression [given] to exchange value in the language of circulation itself, just as coin, which can also actually exist as a mere symbol, is no more than a symbolic expression of exchange value, but as means of exchange remains precisely no more than a means for the exchange of the commodity, which is why no new content is brought in. It is trite that price and coin originate front commerce: they are, in fact, commerce-created expressions, the commercial expressions of the commodity as exchange value and means of exchange.

But things stand differently with money. It is a product of circulation which has grown out of it, as it were, contrary to initial agreement.

Money is not merely a mediating form of commodity exchange. It is a form of exchange value growing out of the circulation process, a social product which, in virtue of the relations into which individuals enter in circulation, creates itself. As soon as gold and silver (or any other commodity) have developed themselves as measure of value and means of circulation (as the latter, whether in bodily form or as symbol), they become money without the society’s aid or desire. Their power appears as a kind of fate, and the consciousness of men, especially in social orders declining because of a deeper development of exchange-value relations, rebels against the power which a physical matter, a thing, acquires with respect to men, against the domination of the accursed metal which appears as sheer insanity. It is in money, and in its most abstract and hence most senseless, incomprehensible form, the form in which all mediation is sublated, that this transformation of social interrelations into a solid, overwhelming, individual-subsuming social relationship first appears. And this appearance is all the harder in that it springs from the premiss of free, untrammelled, atomistic private persons linked with each other in production only by reciprocal wants. Money itself contains within itself the negation of itself as mere measure [of values] and coin.

//Considered in itself, the commodity should, in fact, be merely the being of exchange value for its possessor; for him, its materialisation only has the meaning of being the objectification of general labour time, which is exchangeable for any other objectification of it; is, consequently, immediate universal equivalent, money. This aspect, however, is concealed and appears only as one side.//

The old philosophers, and similarly Boisguillebert, regard this as a perversion, a misuse of money, which turns from slave into master, depreciates natural wealth and eliminates the equal measures of equivalents. In his De Republica, Plato wants forcibly to keep money as mere means of circulation and measure [of value], but not to allow it to become money as such. For the same reason, Aristotle regards the form of circulation C—M—C, in which money functions only as measure and coin-a movement which he calls economic-as natural and reasonable, and brands the form M—C—M, the chrematistic one, as unnatural and inappropriate.’ What is here being attacked is only exchange value which becomes the content and end-in-itself of circulation, i.e. the setting up of exchange value as something independent, and value as such becoming the aim of exchange and acquiring an independent form, at first still in the simple, tangible form of money. Use value is the aim of selling for the sake of buying; and value itself, of buying for the sake of selling.

We have seen, it is true, that money is, in fact, only a means of circulation suspended in its function, whether it will later enter circulation as means of purchase or means of payment. But its independent attitude with respect to circulation, its withdrawal from the latter, robs it of both its values: of its use value, since it does not have to serve as metal; of its exchange value, since it possesses this exchange value only as a moment of circulation, as an abstract symbol of the commodities’ own value reciprocally opposed to each other; as a moment of the movement of the form of the commodity itself. So long as money remains withdrawn from circulation, it is as worthless as if it lay buried in the deepest pit. But If it re-enters [B''-9] circulation, its intransience is at an end, the value it contains disappears in the use values of the commodities for which it is exchanged, and it once again becomes a mere means of circulation. That is one moment. Money comes out of circulation as its result, i. e. as adequate being of exchange value, as universal equivalent for itself and congealed in itself.

On the other hand: As the aim of exchange, i.e. as movement which has for its content exchange value itself, money itself, the only content [of the process] is an increase of exchange value, accumulation of money. But this increase is, in fact, purely formal. Here value does not conic from value, but value in the form of the commodity is thrown into circulation in order to extract it from there in the form of useless value as hoard.

“All say that you are rich; 1 assert that you are poor. For the proof of wealth is use of it.”

In content; therefore, enrichment appears as voluntary impoverishment. Only the absence of wants, the renunciation of wants, the divorce from use value of the value which exists in the form of commodity, makes it possible to pile it up in the form of money. The fact is that the real movement of the form M—C—M exists not in the simple circulation, where equivalents are merely transferred from the form of commodity into that of money and vice versa. If 1 exchange one thaler for a commodity with a value of one thaler, and this again for one thaler, it is a process which has no content. Only one thing should be examined in the simple circulation: the content of this form itself, i.e. money as an end-in-itself. It is clear that it occurs in such a form; apart from the quantity, the predominant form of trade consists in exchanging money for commodity and commodity for money. It may, and does, happen that not as much money as was set out may be the result of this process. In a bad deal, less may return than was given out. Only the principle should be considered here; the further determinateness does not belong in the simple circulation itself. In the simple circulation itself, the increase of the value magnitude, the movement in which the increase of the value itself is the aim, may appear only in the form of accumulation, through the phase C—M, a continuously resumed sale of the commodity, when money is not allowed to run its full course and once again to be transformed into commodity after the commodity has been transformed into money. That is why money appears not as the point of departure, as the form M—C—M requires, but always only as the result of the exchange. It is the point of departure only in so far as, for the seller, the commodity has the significance of price alone, as still only would-be money, and he throws it into circulation in this transient form in order to withdraw it from there in its everlasting form. The exchange value was, in fact, the premiss of circulation, i.e. money, and the result of circulation, in so far as it ends in the accumulation of money, is once again the exchange value’s adequate being and increase.

Money, therefore, even in its concrete determination as money, in which it is already a negation of itself as mere measure [of value] and mere coin, is negated in the movement of circulation in which it is posited as money. But what is negated here is merely the abstract form in which the exchange value becoming independent appears in money, and also the abstract form of the process of this becoming independent. From the standpoint of exchange value, the whole of circulation is negated, since it does not carry within itself the principle of self-renewal.

Circulation proceeds from both determinations of the commodity, from it as use value, and from it as exchange value. In so far as the first determination prevails, circulation ends with the use value becoming independent; the commodity becomes an object of consumption. In so far as the second determination prevails, circulation ends with the second determination, the exchange value becoming independent. The commodity becomes money. But the commodity passes into this latter determination only through the process of circulation, and it continues to be related to circulation. In this latter determination, the commodity further develops as objectified general labour time-in its social form. It is from this latter aspect, therefore, that there should be a further determination of social labour, which initially appears as the exchange value of the commodity, and then as money. The exchange value is the social form as such; its further analysis, therefore, is a further analysis of, or a deepening into, the social process which throws the commodity onto its surface.

If we now [knowing that] the independence of the exchange value results from the process of circulation, proceed from the exchange value as such, as we earlier proceeded from the commodity, we shall find that:

1) The exchange value exists in a dual form, as commodity and as money; the latter appears as its adequate form; but in the commodity, so long as it remains commodity, money is not lost, but exists as its price. Thus, the existence of the exchange value is doubled so that it exists once in use values, and once in money. Both forms, however, are exchanged for each other, and through this mere exchange as such the value does not perish.

2) If money is to be preserved as money., it must, just as it appears in the form of residue and a result of the process of circulation, [B''-10] be capable of re-entering this process, i.e. of not being converted in circulation into a mere means of circulation disappearing in the form of commodity in exchange for a mere use value. Money, while it is in one determination, should riot be lost in the other, i.e. it should remain money, also in its being as commodity, and, in its being as money, exist only as a transient form of commodity; in its being as commodity it should not loseits exchange value, and, in its being as money, its relation to use value. Its entry into circulation must itself be a moment of its stay-by-itself, and its stay-by-itself, entry into circulation. Thus, the exchange value is now determined as a process and not merely as a disappearing form of use value indifferent to this use value itself as physical content, and riot merely as a thing in the form of money; it is determined as relation to its own self through the process of circulation. On the other hand, circulation is itself no longer determined as a merely formal process in which the commodity passes through its various determinations, but the exchange value itself, and, to be sure, the exchange value measured in money must be premissed as posited by circulation, and as so posited by it appear as being premissed to it. Circulation itself must appear as a moment of the production of exchange values (as the process of production of exchange values). In the process of exchange value becoming independent in money, only, its indifference is in fact posited with respect to the particular use value in which it incorporates itself. The independent universal equivalent is money, whether it exists in the form of commodity or in the form of money. The process of exchange value becoming independent in money must itself appear only as a moment of the movement, as a result of circulation, but as one determined for starting it again, without congealing in this form.

Money, i.e. the independent exchange value arising in the process of circulation as a result of and simultaneously as a living impetus to circulation (only in the limited form of hoarding, it is true), has negated itself merely as coin, i.e. as a merely fleeting form of exchange value, as merely dissolving in circulation; it has also negated itself as independently confronting circulation. If it is not to petrify as a hoard, it must once again enter into circulation in the same way as it left it, and not as simple means of circulation, but so that its being as means of circulation, and so its transition into commodity were themselves only a change of form to reappear in its adequate form as adequate exchange value, but simultaneously as multiplied, increased exchange value, valorised exchange value. Value valorising, i.e. multiplying, itself in circulation is in general exchange-value-for-itself which passes through circulation as an end-in-itself. This valorisation, this quantitative increase of’ value-the only process which value can perform as such-appears in the accumulation of money only as the opposite of circulation, i.e. through its own sublation. Moreover, circulation must itself be posited as a process in which value is retained and valorised.

In circulation, however, money becomes coin and, as such, is exchanged for commodity. If this exchange is to be more than formal, if the exchange value is not to be lost in the consumption of the commodity, so that there is not merely a change in the form of the exchange value (once as its universal abstract being in money, and again, its being in a particular use value of the commodity), the exchange value must in fact be exchanged for a use value, and the commodity must be consumed as a use value, but in this consumption it must be retained as an exchange value, in other words, its disappearance must disappear, and must itself be merely a means for the emergence of a greater exchange value, for the reproduction and production of exchange value – productive consumption, i.e. consumption through labour in order to objectify labour, to create exchange value. The production of exchange value is in general only the production of a greater exchange value, a multiplication of it. Its simple reproduction modifies the use value in which it exists, just as the simple circulation does it, but without creating, without producing it.

The exchange value become independent implies circulation as a developed moment and appears as an uninterrupted process which posits circulation and from it keeps returning in itself in order to posit it once again. As self-positing movement, the exchange value no longer appears as a merely formal movement of preposited exchange values, but is at the same time a self-producing and self-reproducing movement. Production itself is here no longer present before its results, i.e. it is not preposited but appears as production which at the same time itself produces these results; but it posits the exchange value as no longer merely leading to circulation, but as one which simultaneously implies developed circulation in its [B''-11] process.

In order to establish itself as something independent, the exchange value would not only have to emerge as result from circulation, but would also have to be capable of re-entering circulation, to be retained in it, becoming commodity. In money, the exchange value has received an independent form with respect to the circulation C—M—C, i.e. with respect to its final dissolution in simple use value. But this form, when fixed, is only negative, fleeting, or illusory. Money exists only in relation to circulation and as a possibility of entering it. But it loses this determination as soon as it realises itself. It falls back to both its functions as measure and means of circulation. As mere money, it does not go beyond this determination. Simultaneously, however, it is posited in circulation that it remains money, whether it exists as such or as the price of the commodity. The movement of circulation must not appear as the movement of its disappearance, but, on the contrary, as the movement of its actual self-positing as exchange value, its realisation as exchange value. If commodity is exchanged for money, the form of exchange value, exchange value posited as exchange value, money, is congealed in this determination only so long as money is kept out of the exchange in which it functions as value, so long as it evades it, and is, consequently, a purely illusory realisation of value, its purely ideal realisation in the form in which the independence of the exchange value exists tangibly.

The same exchange value must become money, commodity, commodity, money, as the form M—C—M requires. In the simple circulation, the commodity becomes money and then commodity; it is another commodity which once again posits itself as money. -The exchange value is not retained in this change of its form. But in circulation it is already posited that money is both money and commodity, and is retained in the alternation of both determinations.

In circulation, the exchange value appears two-fold: once as commodity and again as money. If it is in the one determination, it is not in the other. This is true of any particular commodity; and equally of money as a means of circulation. But implicit in circulation as a whole is that the same exchange value, exchange value as subject, once posits itself as commodity, and again as money, and is in fact the movement aimed at positing itself in these two determinations and maintaining itself in each of these as its opposite, in the commodity as money, and in money as commodity. That is what is present in the simple circulation in itself, but is not posited in it.

Where these determinations in the simple circulation are positively independent of each other, as in the commodity becoming the object of consumption, circulation ceases being a moment of the economic process; where negatively, as in money, it becomes insanity, an insanity stemming from the economic process itself.

It cannot be said that the exchange value realises itself in the simple circulation, because the use value does not confront it as such, as use value determined by itself. Conversely, the use value as such does not itself become exchange value or becomes it only in so far as the determination of use values-that of being objectified general labour-is superimposed on them as an external scale. Their unity still immediately falls asunder, and their difference still immediately forms a unity. That the use value as such is mediated through the exchange value, and that the exchange value mediates itself through the use value, now has to be posited.

In the simple circulation, we had only two formally distinct determinations of exchange value-money and commodity price; and only two physically distinct use values-C-C, for which money, the exchange value, is merely a fleeting mediation, a form which these use values temporarily adopt. No real relationship was established between the exchange value and the use value. It is true that in the use value, the exchange value also exists as price (notional determination); it is true that in money, the use value also exists as its reality, its material. In the one case, it is the exchange value that was merely notional, and in the other, the use value. The commodity as such-its particular use value-is, therefore, merely a physical motive for the exchange, but as such it drops out of the economic form determination; or the economic form determination is merely the superficial form, the formal determination which does not penetrate into the sphere of the real substance of wealth and has no relation to that substance as such; that is why if this form determination as such is to be established in the form of hoard it [form determination] is imperceptibly transformed into a natural undifferentiated product, a metal, on which even its last relation to circulation is extinguished. The metal as such does not, of course, express any social relation; in it even the form of coin, the last sign of life of its social significance, has been extinguished.

Having emerged from circulation as its prerequisite and result, the exchange value must similarly enter it once again.

We have already seen in the examination of money, and it clearly appears in hoarding, that the growth of money, its multiplication is the only process of the form of circulation which is the end-in-itself for value, i.e. that value become independent and retaining itself in the form of exchange value (above all money), is simultaneously the process of its increase; that its retention of itself as value is simultaneously its advance beyond its quantitative limits, its expansion as a magnitude of value and that the process of the exchange value becoming independent has no other content. The maintenance of the exchange value as such by means of circulation appears simultaneously as its self-expansion, and this self-expansion is [B''-12] its self -valorisation, its active positing of itself as value-creating value; as value reproducing itself while preserving itself, but simultaneously positing itself as value, i.e. as surplus value. In hoarding, this process is still purely formal. In so far as the individual is concerned, this process appears as a movement without content converting wealth from a useful into a useless and, in terms of determination, unnecessary, form. In so far as the economic process as a whole is concerned, hoarding serves merely as a condition of the metallic circulation itself. So long as money remains hoard, it does not function as exchange value, it is merely imaginary. On the other hand, the expansion – the positing of itself as value, value which not only preserves itself through circulation, but originates from it, i.e. posits itself as surplus value-is likewise merely imaginary. The same value magnitude which earlier existed in the form of commodity now exists in the form of money; it is accumulated in the latter form, because it is abandoned in the other. If it is realised, it disappears in consumption. The preservation and expansion of value is, therefore, merely abstract, formal. Only the form of this is posited in the simple circulation.

As a form of universal wealth, as exchange value become independent, money is incapable of any other movement but the quantitative one: to expand itself. By concept it is the essence of all the use values; but its quantitative limits, as the limits of what is always merely a definite magnitude of value, a definite sum of gold and silver, is in contradiction with its quality. That is why rooted in its nature is a constant drive to go beyond its own limits.

(As consuming wealth, for instance in the epoch of the Roman emperors, money for that reason appears as boundless, insane dissipation, which tries to raise even the consumption of food to its imaginary boundlessness, i.e. one which treats money, as such a form of wealth, at the same time directly as a use value. Pearl salad, etc.)

For value, firmly established as value, its expansion, therefore, coincides with its self-preservation, and it preserves itself only by constantly driving beyond its quantitative limits, which contradicts its inner universality. So enrichment is an end-in-itself. The end-determining activity of exchange value become independent can only be enrichment, i.e. its own self-expansion; reproduction and not a merely formal one, but one in which it expands. But as a quantitatively determinate magnitude of value, money is also only a limited representative of universal wealth, or a representative of limited wealth which extends just so far as does the magnitude of its exchange value exactly measured according to it. Consequently, it does not at all have the capability which it should have had according to its general concept, the capability of buying all the objects of consumption, all the commodities, the totality of material wealth; it is not a “précis de toutes les choses.”

So, fixed as wealth, as the universal form of wealth, as value that counts as value, money is a constant drive to go beyond its quantitative limits; an endless process. Its own viability consists exclusively in this; it preserves itself as self-important value distinct from use value only when it continually multiplies itself by means of the process of exchange itself. The active value is only a surplus-value-positing value. The only function [of money] as exchange value is exchange itself. In this function, therefore, it must expand itself, but not through its withdrawal [from circulation] as in hoarding. In it money does not function as money. When withdrawn as hoard, it functions neither as exchange value nor as use value, is dead, unproductive hoard. No kind of action originates from it itself. Its expansion is an external addition from circulation, when the commodity is again thrown into circulation and value is converted from the form of commodity into the form of money, and then as the latter is hidden for safe-keeping, i.e. when money in general ceases to be money. Once it again enters circulation, it disappears as exchange value.

Resulting from circulation as adequate exchange value and independent but again entering circulation, in it and through it perpetuating and valorising (multiplying) itself, money is capital. In capital money has lost its rigidity and from a tangible thing has become a process. Money and commodity as such, just as the simple circulation itself, exist for capital merely as particular abstract moments of its being in which it just as continually appears, passing from the one into the other, and just as continually disappears. The process of becoming independent appears not only in the form that capital confronts circulation as an independent abstract exchange value-money-but also in that circulation is simultaneously the process of its becoming independent, that it stems from circulation as something become independent.

The form M—C—M clearly expresses that the establishment of the independence of money must appear as a process, equally as a premiss and a result of circulation. This form as such does not, however, receive any content in the simple circulation, and does not even appear as the movement of content-a movement of circulation for which the exchange value is not only a form, but also the content and the end itself, and which, for that reason, is the form of the exchange-value-in-process itself.

The exchange value become independent, money as such, always appears in the simple circulation only as the result, caput mortuum of the movement. It must equally appear as its premiss; its result, as its premiss; and its premiss [B''-13] as its result.

Money must preserve itself as money both in its form of money and in the form of commodity; the change of these determinations, the process in which it goes through these metamorphoses. must at the same time appear as a process of its production, as creator of itself, i.e. as augmentation of its value magnitude. When money becomes commodity, and commodity as such is necessarily consumed as use value and must disappear, this disappearance must itself disappear, this annihilation must annihilate itself, so that the consumption of the commodity as use value itself appears as a moment of the process of the sel f-re producing value.

Money and commodity, like their relation to each other in circulation, now equally appear as mere premisses of capital, as, on the other hand, the form of its being; equally as mere existing elementary premisses for capital, as, on the other hand, forms of its being and its results.

The intransience for which money strives as it negatively sets itself with respect to circulation (by withdrawing itself from it) is acquired by capital in that it preserves itself precisely by giving itself up to circulation. Capital as exchange value implying circulation, preposited to it and preserving itself in it, alternately assumes the form of both these moments contained in the simple circulation, but not as in the simple circulation, in which it merely passes from either form into the other, but so that in each of the determinations it simultaneously preserves the relation to the opposite moment. If it appears as money, it is now merely a one-sided abstract expression of it as universality; shedding this form as well, it sheds only its opposite-based determination (sheds the opposite-based form of universality). If it is posited as money, i.e. as this opposite-based form of the universality of exchange value, it is simultaneously posited within it that it must lose not universality as in the simple circulation, but its opposite-based determination, or that it assumes the form of money no more than fleetingly, i.e. is once again exchanged for the commodity, but a commodity which even in its particularity expresses the universality of the exchange value and so keeps changing its determinate form.

Commodity is not only an exchange value, but also a use value, and as the latter it must be appropriately consumed. When the commodity serves as use value, i.e. during its consumption, the exchange value must simultaneously preserve itself and appear as the end-determining soul of consumption. The process of the disappearance of the commodity must, therefore, appear at the same time as a process of the disappearance of its disappearance, i.e. as a reproducing process. The consumption of the commodity, therefore, is not aimed at ally immediate enjoyment, but itself appears as a moment of the reproduction of its exchange value. The exchange value, therefore, is, as a result, not only the form of the commodity, but appears as the fire in which its very substance is consumed. This determination stems from the very concept of use value. And in the form of money, capital, on the one hand, will appear no more than fleetingly as means of circulation, and, oil the other hand, only as a moment, as its fleeting positedness in the determinateness of adequate exchange value.

On the one hand, the simple circulation is an existing premiss for the commodity, and its extremes, money and commodity, appear as elementary premisses, as forms turning into capital according to possibility; or they are merely abstract spheres of the process of production of preposited capital. On the other hand, they return into it as into their abyss or lead to it. (The above historical example to be given here.)

In capital, money, the preposited exchange value become independent, appears not only as exchange value, but, being independent exchange value, as a result of circulation. indeed, no formation of capital takes place before the sphere of the simple circulation has developed up to a definite level, even if from altogether different conditions of production than capital itself. On the other hand, money is posited as positing circulation as the movement of its own process, the movement of its own realisation, as a self-perpetuating and self-valorising value. As premiss, it is here simultaneously result of the process of circulation, and as result, simultaneously also premiss of its determinate form, which was determined as the form M—C—M (at first only this stream of it). It is a unity of commodity and money, but their unity-in-process, and to the same extent to which it is neither commodity not- money, it is at the same time both the one and the other.

It preserves and valorises itself in and through circulation. On the other hand, the exchange value is no longer preposited as a simple exchange value, as it exists in the commodity in its simple determination, before it enters circulation, or, more precisely, as a merely implied determination, since the commodity becomes a fleeting exchange value only ]it circulation. It exists in the form of the objectivity [Gegenstandlicilkeit], but it is indifferent to whether it is the objectivity of the money or the commodity. It steins from circulation; so presupposes it. But it steins, at the same time, front itself as premiss with respect to circulation.

In the actual exchange of money for commodity, as expressed in the form M—C—M, i.e. in so far as the real being of the commodity is its use value, and the real being of the, use value is its consumption, from the commodity realising itself as use value must once again emerge the exchange value itself, with money and the consumption of the commodity appearing equally as the form of its preservation and as its self -valorisation. Circulation appears with respect to the exchange value as a moment of the process of its own realisation.

[B''-14] The real being of the commodity, its being as use value drops out of the simple circulation. So should it also he with the moment In the process of capital in which the consumption of commodity appears as a moment of the self -valorisation of capital.

So long as money, i.e. exchange value become independent, merely fixes itself with respect to its opposite, use value as such, It is, in fact, capable only of an abstract being. In its opposite, in its becoming use value, and in the process of the consumption of the use value, it must simultaneously preserve itself and wax as exchange value, i.e. transform the consumption of the use value itself-its active negation as well as its positing-into the reproduction and production of the exchange value itself.

In the simple circulation, every commodity appears alternately as exchange value or as use value. As soon as it s realised as the latter, ]It drops out of circulation. In so far as the commodity is fixed as exchange value, in money, it drives towards the same formlessness, but as falling within the economic relation. At any rate, the exchange relationship (simple circulation) is of interest to the commodities only in so far as they have exchange values. On the other hand, then- exchange value is merely of transient interest in that it suspends the one-sidedness of the use value-of being use value only immediately – for the individuals- i.e. carries the use value to its consumer; it changes nothing in the use value except that it posits it as a use value for others (for buyers). But in so far as the exchange value is fixed as such, in money, the use value now confronts it only as abstract chaos; and it is precisely through the separation from its substance that it peters out and drives out of the sphere of the simple exchange value, whose highest movement is the simple circulation, and whose highest accomplishment is money. Within the sphere itself, however, the difference exists only as a formal, superficial differentiation. Money in its highest fixation is itself once again commodity.

[B''- 16] Chapter Three. Capital

A) The Process of Production of Capital

1) The Transformation of Money into Capital

As a result of the simple circulation, capital exists above all in the simple form of money. However, the reified independence which holds it down in this form as hoard, as opposed to circulation, has disappeared. On the contrary, the being of capital in the form of money, adequate expression of the universal equivalent, merely implies that it is indifferent to the particularity of all the commodities and can assume the form of any commodity whatsoever. It is not this or that commodity, but can be metamorphosed into any commodity and continues to be in each of them the self-same value magnitude and to-itself-related value as its own end. Existing above all in the form of money, capital does not, therefore, remain opposed to circulation; on the contrary, it must enter into it. Nor is it lost within circulation as it passes from the form of money to the form of commodity. Its being as money is rather only its being as adequate exchange value which can pass into any commodity whatsoever. In any of these, it remains self-sufficient exchange value. But the exchange value become independent can be capital only when capital itself is established with respect to a third, in a certain relationship with a third.

//Its being in the form of money is two-fold: it can exchange itself for any commodity whatsoever, and, as universal exchange value, is not tied to the particular substance of any commodity; secondly, it remains money even when it becomes commodity; in other words, the material in which it exists is not an object for individual gratification, but materialisation of the exchange value which assumes this form only so as to preserve and expand itself.//

This third is not commodities. For capital is money which from its form of money passes into any form of commodity whatsoever, without being lost within it as an object of individual consumption. Instead of excluding money, the whole range of commodities, all commodities, appear as so many incarnations of money. As for the natural physical difference between the commodities, none prevents money from taking its place within it and making it a part of its own body, since none of them excludes the determination of money in the commodity. The whole reified world of wealth now appears as the body of money in the same way as gold and silver, and it is merely the formal difference between money in the form of money, and money in the form of commodity that makes it capable of equally assuming the one form or the other, and passing from the form of money into the form of commodity. (The process of becoming independent already consists in that the exchange value firmly maintains itself as exchange value, whether it exists in the form of money or in the form of commodity, and it passes into the form of commodity only in order to valorise itself.)

Money is now objectified labour, irrespective of whether it possesses the form of money or of a particular commodity. None of the reified modes of being of labour confronts capital, but each of them appears as a possible mode of its existence which it can assume through a simple change of form, passage from the form of money into the form of commodity. The only opposite of reified labour is unreified labour, and the opposite of objectified labour, subjective labour. Or, the opposite of past labour, which exists in space, is living labour, which exists in time., As the presently existing unreified (and so also not yet objectified) labour, it can be present only as the power, potentiality, ability, as the labour capacity of the living subject. The opposite of capital as the independent, firmly self-sufficient objectified labour is living labour capacity itself, and so the only exchange by means of which money can become capital is the exchange between the possessor of capital and the possessor of the living labour capacity, i.e. the worker.

The exchange value can become independent as exchange value in general only with respect to the use value confronting it as such. Only within the framework of this relationship can exchange value establish itself as such, as such be posited and function. In money, the exchange value should retain this independence through an abstraction from the use value, and this active abstraction – remaining in opposition to use value – would here in effect appear as the sole method for preserving and augmenting the exchange value as such. Now, however, the exchange value, in its being as use value, in its real, and not only formal being as use value, must preserve itself as exchange value – as exchange value in use value as use value – and create itself out of it. The real being of use values is then- real negation, their absorption, then annihilation in consumption. Consequently, it is in this their real negation as use values, in this negation immanent to themselves [B''-17] that the exchange value must certify itself its maintaining itself with respect to the use value, or, rather, make the active being of the use value the confirmation of the exchange value. It is not a negation in which the exchange value as price is merely a formal determination of the use value in which the latter is notionally sublated, while actually the exchange value only appears as a fleeting formal determination of the use value. Nor is it its fixation in gold and silver where a hard-and-fast substance appears as a petrified being of the exchange value. In actual fact, it is posited in money that the use value is mere materialisation, reality of the exchange value. But this is merely an imaginary tangible existence of its abstraction. But in so far as the use value as use value, i.e. the consumption of the commodity itself, is determined as the positing of the exchange value and as a mere means for positing it, the use value of the commodity is, in fact, the actualisation of the exchange-value-in-process. The real negation of the use value which exists not in an abstraction from it (not in a stoppage tensely opposed to it) but in its consumption, this real negation of it, which is at the same time its actualisation as use value, must for that reason become an act of self -assertion, self -actualisation of the exchange value. But this is possible only in so far as the commodity is consumed by labour, in so far as its consumption itself appears as the objectification of labour and so as the creation of value. That is why if it is to preserve and actualise itself, not only formally as in money but also in its real existence as commodity, the exchange value objectified in money must appropriate labour itself, exchange itself for it.

For money, use value is now no longer an article of consumption in which it loses itself, but only a use value through which it preserves and increases itself. No other use value exists for money (is capital. That is precisely the relation of capital as exchange value to use value. Labour is the only use value which can present an opposite and a complement to money as capital, and it exists in labour capacity, which exists as a subject. Money exists its capital only in connection with non-capital, the negation of capital, in relation to which alone it is capital. Labour itself is the real non-capital. The first step made by money to become capital is its exchange with the labour capacity so as by means of the latter to transform the consumption of the commodities, i.e. their real positing and negation as use values, simultaneously into their actualisation of exchange value.

The exchange through which money becomes capital cannot be its exchange with commodities [in general] but can only be one with its conceptually determined opposite, the commodity which is itself a conceptually determined opposite of it – labour.

The exchange value in the form of money confronts the exchange value in the form of the particular use value. But all particular commodities, as particular modes of the being of objectified labour, are equally expressions of the exchange value into which money can pass without being lost. It is, therefore, not through the exchange with these commodities, since it can now equally be assumed that it exists in the one form or the other, that money can lose its simple character. But through the exchange, first with the only form of use value which it is not immediately itself-namely, unreified labour-arid simultaneously with the immediate use value which is exchange-value-in-process for it – labour once again It is, therefore, only through the exchange of money, with labour that Its transformation into capital can be effected. The use value for which money as potential capital can exchange itself can only be the use value out of which the exchange value itself arises, produces itself and multiplies. And this is labour alone.

The exchange value can realise itself as such only by confronting the use value-not this or that-but the rise value correlated to itself. This is labour. Labour capacity itself is the use value whose consumption directly coincides with the objectification of labour, i.e. the creation of the exchange value. For money as capital, labour capacity is the immediate use value for which it has to exchange itself. In the simple circulation, the content of the use value was indifferent, [B''-18] dropped out of the economic determination of form. Here it is its essential economic moment. For the exchange value is determined as firmly established in exchange above all because it is exchanged with a use value confronting it in its own form determination.

The condition for the transformation of money into capital is that the owner of the money (-air exchange money for the alien labour capacity as a commodity. In other words, that within circulation the labour capacity is offered as a commodity for sale, since within the simple circulation the exchangers confront each other only as buyers and sellers. The condition is, therefore, that the worker offers for sale his labour capacity as a to-be-used commodity and, so, is a free worker. The condition is that the worker, first, disposes of his labour capacity as a free proprietor, and treats it as a commodity; to do so he must be a free proprietor of his labour capacity. And second, that he must exchange his labour no longer in the form of another commodity, of objectified labour, but so that the only commodity he has to offer, to sell, is his own living labour capacity contained in his living corporeality, and that, consequently, the conditions for the objectification of his labour, the reified conditions of his labour exist on the other side of circulation as alien property, as commodities located beyond his own self.

That the possessor of money-or money, since the former is for its so far only its personification in the economic process itself-finds the labour capacity on the market, within the limits of circulation, as a commodity,, this premiss from which we here proceed and from which the bourgeois society proceeds in its production process is evidently the result of long historical development, the outcome of many economic upheavals, and implies the decline of other modes of production (other social relationships of production) and a determined development of the productive forces of social labour. The determined past historical process contained in that premiss will be formulated even more determinately in the subsequent examination of this relationship. But this historical stage in the development of economic production-whose product itself is already the free worker – is the premiss for the emergence and even more so for the being of capital as such. Its existence is the result of a lengthy historical process in the economic formation of the society.

It is made quite definite at this point that the dialectical form of presentation is right only when it knows its own limits. The examination of the simple circulation shows us the general concept of capital, because within the bourgeois mode of production the simple circulation itself exists only as preposited by capital and as prepositing it. The exposition of the general concept of capital does not make it an incarnation of some eternal idea, but shows how in actual reality, merely as a necessary form, it has yet [B''-19] to flow into the labour creating exchange value, into production resting on exchange value.

It is essentially important to establish the point that the relationship, which here takes place as a simple relationship of circulation (initially still entirely belonging to it and going beyond the limits of the simple circulation only, through the specific use-value of the exchanged commodity), is only a relationship of money and commodity, equivalents in the form of both opposite poles as they appear in the simple circulation, within circulation, and that the exchange between capital and labour, once it itself exists as the simple relationship of circulation, is not the exchange between money and labour, but the exchange between money and living labour capacity.

As use value, the labour capacity is realised only in the activity of labour itself, but in much the same way as with a bottle of wine which is bought and whose use value is realised only in the drinking of the wine. Labour itself falls as little within the simple circulation process as does the drinking. The wine as a capacity, dunamei, is something drinkable, and the buying of the wine is appropriation of the drinkable. So is the buying of the labour capacity the appropriation of the ability to dispose over the labour.

Since the labour capacity exists in the vitality of the subject itself and manifests itself only as his own expression of life, the buying of the labour capacity, the appropriation of the title to its use naturally places the buyer and the seller in the act of its use in another relationship to each other than that in the buying of objectified labour existing as an object outside the producer. This does not affect the simple relationship of exchange. It is only the specific nature of the use value bought with the money-namely, that its consumption, the consumption of the labour capacity, is production, labour time which objectifies, consumption which posits exchange value; that its real being as use value is creation of exchange value-that makes the exchange between money and labour the specific exchange M—C—M in which the exchange value itself is posited as the aim of the exchange, and the bought use value is immediate use value for the exchange value, i.e. is value-positing use value.

It does not matter whether money is considered here as simple means of circulation (means of purchase) or as means of payment. In so far as someone selling me, for instance, the 12-hour use value of his labour capacity, his labour capacity for 12 hours, will in fact sell it to me only when, if I so insist, he has worked off 12 hours, i.e. has delivered his labour capacity sold for 12 hours at the end of the 12 hours, it is in the nature of this relationship that money here appears as means of payment; the buying and selling are not realised at once, simultaneously, by both sides. What is here important is only that the means of payment is the universal means of payment, money, and that for this reason the worker does not enter with the buyer-as a result of some particular primitive way of payment-into other relationships than those of circulation. He transforms his labour capacity immediately into the universal equivalent, and as its possessor maintains the same relationship- within the scope of its value magnitude-the same relationship in the general circulation as any other; similarly, the aim of his sale is universal wealth, wealth in its universal social form and as a possibility of all gratification.

[At this point, the manuscript breaks off. Written on the following page is only this title: – Productive and Unproductive Labour. – The final pages of this notebook are taken up by the subsequently written References to My Own Notebooks. – Ed.]