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What is money

Marxist Theory · 2026-05-13

Core Argument

The article argues that money is not a thing or a timeless necessity but a historically specific social relation that emerges from commodity production and exchange. Its central thesis is that money's apparent mystical power — its capacity to dominate human life — can only be understood by tracing its origins in the dissolution of communal societies, its development through the expansion of trade, and its transformation under capitalism into a system where all social relations are subordinated to the accumulation of value. The article insists that money cannot be abolished or reformed away; it can only be transcended through the abolition of commodity production itself, which requires the overthrow of private ownership and the establishment of a planned socialist economy.

Theoretical Grounding

The analysis is rooted in Marx's value theory as developed in Capital, particularly the distinction between use-value and exchange-value, the labour theory of value, and the concept of socially necessary labour-time. It draws on Engels's Origin of the Family, Private Property and the State for the historical account of how commodity exchange emerged at the fringes of tribal societies and then rebounded internally, dissolving communal bonds. The article also deploys Marx's analysis of the credit system from Capital Volume Three, including the concepts of fictitious capital and the dual character of credit as both a motor of productive development and a system of gambling and swindling. Lenin's Imperialism, the Highest Stage of Capitalism provides the framework for understanding finance capital and the separation of ownership from production. Trotsky's The Revolution Betrayed is cited for the argument that money cannot be arbitrarily abolished but must wither away as the planned economy develops. The article situates itself within the Marxist tradition by rejecting both reformist proposals to regulate finance and anarchist schemes to circumvent the state, insisting instead on the necessity of working-class political power as the precondition for transcending the money system.

Conjunctural Relevance

The article was written in 2016, in the aftermath of the 2008 financial crash and the subsequent Great Recession. It directly addresses the monetary policies of the period — quantitative easing, negative interest rates, and talk of "helicopter drops" — arguing that these are desperate measures that reflect the system's inability to restore equilibrium. The article connects the eurozone crisis to the earlier gold standard, arguing that the single currency functions as a straitjacket forcing "internal devaluation" on weaker economies like Greece, Spain, and Portugal. It names the specific forces at work: German capitalism's dominance over the eurozone, the role of central banks in inflating asset bubbles, and the failure of both Keynesianism and monetarism to offer a way out. The article also engages with contemporary heterodox proposals — Positive Money's campaign for democratic control of banking, Jeremy Corbyn's "People's QE," Bitcoin and digital currencies — subjecting each to a Marxist critique that identifies their common failure: they treat symptoms rather than the underlying disease of private ownership and production for profit.

Where the Argument Continues

The article is the first part of a series on money and leaves several questions open for development. It gestures toward but does not fully elaborate the relationship between money and the tendency of the rate of profit to fall, which would require a deeper treatment of crisis theory. The discussion of the transition from socialism to communism — how money "withers away" — is necessarily schematic and could be developed through engagement with Trotsky's writings on the Soviet economy and the debates on value and planning in the early USSR. The article's treatment of imperialism as the highest stage of capitalism, while citing Lenin, does not explore the geopolitical dimensions of monetary rivalry in the current period — the challenge to dollar hegemony, the role of China, and the rise of alternative payment systems. These themes are taken up elsewhere in the IDOM corpus, particularly in articles on the eurozone crisis, the Chinese economy, and the geopolitics of the Ukraine war. The theoretical foundations of the labour theory of value and the critique of neoclassical economics are developed more fully in other IDOM articles on Marxist economics.

Connections

The article should be read alongside Marx's Capital Volume One, particularly the chapters on commodities, money, and the fetishism of commodities. Engels's Origin of the Family, Private Property and the State provides the historical anthropology that grounds the argument. Lenin's Imperialism, the Highest Stage of Capitalism is the essential companion for understanding the finance capital dimension. Trotsky's The Revolution Betrayed offers the most developed Marxist treatment of money and planning in a transitional society. David Graeber's Debt: The First 5,000 Years and Felix Martin's Money: The Unauthorised Biography are cited extensively and provide useful anthropological and historical material, though the article subjects their credit theory of money to a Marxist critique that insists on the primacy of the commodity form. Within the IDOM corpus, the article connects to pieces on the eurozone crisis, quantitative easing, and the political economy of the current conjuncture.

Key Quotes

  1. "Money, therefore, is not a thing, but a set of relations. The monetary system, in turn, is neither merely the cash and coins in circulation, nor the numbers in an accountant's books, but a system of social relations; an expression of the distribution of the wealth — produced by labour — within society."

  2. "The credit system has a dual character immanent in it: on the one hand it develops the motive of capitalist production, enrichment by the exploitation of others' labour, into the purest and most colossal system of gambling and swindling... on the other hand however it constitutes the form of transition towards a new mode of production."

  3. "In a communist society, the state and money will disappear. Their gradual dying away ought consequently to begin under socialism. We shall be able to speak of the actual triumph of socialism only at that historical moment when the state turns into a semi-state, and money begins to lose its magic power."

  4. "The problem, in short, is not the 'meddling' of the central banks, but the anarchy of the market, which arises out of private ownership; and no amount of utopian experiments will help."

  5. "Money cannot be arbitrarily 'abolished', nor the state and the old family 'liquidated.' They have to exhaust their historic mission, evaporate, and fall away."

  6. "What we see from the last 100 years... is that every monetary system or monetary policy eventually reaches its limit. Each of these international monetary systems... were able to take hold in a period of capitalist upswing and global geopolitical stability... But in each case, with the emergence of a world crisis, these strengths of the international monetary system eventually turn into their opposite and act as a suffocating straitjacket."