[ The Origin and Essence of Money]
Commodity a = \ s. (i.e. equals l/x silver); commodity b = 2 s. (i.e. [2]/x silver). Therefore commodity 6= twice the value of commodity a. The value relationship between a and b is expressed by the proportion in which each exchanges against a definite quantity of a third commodity, silver; not against a value relationship.
Each commodity (product or instrument of production) = the objectification of a particular [quantity of] labour time. Its value, the proportion in which it is exchanged for other commodities or other commodities are exchanged for it, is equal to the quantity of labour time realised in it. If the commodity e.g. = l hour's labour time, it can be exchanged for all other commodities which are the product of 1 hour's labour time. (This proposition is based on the assumption that exchange value = market value; real value=price.)
The value of a commodity is different from the commodity itself. The commodity is value (exchange value) only in exchange (real or imagined). Value is not only the exchangeability of this commodity in general, but its specific exchangeability. It is at once the indicator of the ratio in which the commodity exchanges for others and the indicator of the ratio in which it has already been exchanged for others (materialised labour time) in the process of production. Value is a commodity's quantitatively determined [1-13] exchangeability. Commodities, e.g. a yard of cotton and a quart of oil, considered as cotton and oil, are of course distinct, possess different properties, are measured in different units, are incommensurable. As values, all commodities are qualitatively equal and only quantitatively different, hence they can be measured in terms of each other and are mutually replaceable (exchangeable, convertible into each other) in definite quantitative proportions.
Value is their social relationship, their economic quality. A book that has a certain value, and a loaf that has the same value, are mutually exchangeable, they represent the same value, only in different materials. As value, the commodity is at the same time an equivalent for all other commodities in a particular ratio. As value, the commodity is an equivalent; as an equivalent, all its natural properties are extinguished; it no longer bears any particular qualitative relationship to other commodities, but it is the general measure, the general representative, and the general means of exchange for all other commodities. As value it is money.
But because the commodity, or rather the product or instrument of production, is distinct from itself as value, it is also, as value, distinct from itself as a product. Its property as value not only can, but must, at the same time acquire an existence distinct from its natural existence. Why? Because, since commodities as values are only quantitatively different from each other, every commodity must be qualitatively distinct from its own value. Its value therefore must also have an existence qualitatively distin-guishable from it, and in the actual exchange this separability must become an actual separation, because the natural distinctions between commodities must come into contradiction with their economic equivalence; the two can exist alongside one another only through the commodity acquiring a dual existence, a natural existence and alongside it a purely economic one, in which it is a mere sign, a letter for a relationship of production, a mere symbol for its own value.
As value, every commodity is uniformly divisible; in its natural existence, it is not. As value, it remains the same, no matter how many metamorphoses and forms of existence it goes through; in reality, commodities are exchanged only because they are different and correspond to different systems of needs. As value, it is general, as an actual commodity it is something particular. As value, it is always exchangeable; in actual exchange it is exchangeable only if it fulfils certain conditions. As value, the extent of its exchangeability is determined by itself: exchange value expresses precisely the ratio in which a commodity replaces other commodities; in actual exchange, it is exchangeable only in quantities related to its natural properties and corresponding to the needs of the exchangers.
(In short, all the properties that are enumerated as particular properties of money are properties of the commodity as exchange value; [properties] of the product as value as distinct from the value as product.) (The exchange value of the commodity, as a special existence alongside the commodity itself, is money: the form in which all commodities are equated, compared, measured; the form into which all commodities are dissolved, and which dissolves itself in all commodities; the general equivalent.)
In calculations, accountancy, etc., we are constantly transforming commodities into symbols of value, fixing them as mere exchange values, abstracting from their material composition and all their natural properties. On paper, in the head, this metamorphosis is produced by a simple process of abstraction; but in actual exchange a real mediation is necessary, a means by which this abstraction is effected. In its natural properties, the commodity is neither continually exchangeable, nor exchangeable with every other commodity; it is not exchangeable in its natural identity with itself, but only as something different from itself, only posited as exchange value. We must first convert it into itself as exchange value, in order to compare and to exchange this exchange value with others.
In the most primitive barter trade, when two commodities are exchanged for one another, each is first equated to a figure that expresses its exchange value, e.g. among certain Negro tribes on the West African coast as equal to x BARS.[3] The one commodity is equal to 1 BAR, the other to 2 BARS. In this proportion they are exchanged. The commodities are first transformed in the head and in speech into BARS before they are exchanged for one another. They are valued before they are exchanged, and in order to be valued they must be brought into a definite numerical relationship to each other. In order to bring them into such a numerical relationship and to make them commensurable, they must obtain the same denomination (unit). (The BAR possesses a merely imaginary existence, and indeed in general a relationship can obtain a specific embpdiment, can itself be individualised, only through abstraction.) To cover the surplus of one value over the other, to liquidate the balance, payment in money becomes necessary in the most primitive barter trade as well as in present-day international trade.
Products (or activities) exchange only as commodities; commodities themselves exist in exchange only as values; only as such are they comparable. To determine the weight of bread that I can exchange for a yard of linen cloth, I first equate the yard of linen to its exchange value, i.e. to l/x labour time. Likewise I equate the pound of bread to its exchange value, l/x or [2]/x, etc., labour time. I equate each commodity to a third, i.e. [1-14] I posit it as unequal to itself. This third thing, distinct from the other two since it expresses a ratio, exists initially in the head, in the imagination, just as in general ratios can only be thought if they are to be fixed, as distinct from the subjects[33] which are in that ratio to each other.
When a product (or an activity) becomes exchange value, it is not only transformed into a particular quantitative ratio, a numerical ratio — namely into a number which expresses what quantity of other commodities is equivalent to it, is its equivalent, or in what proportion it is the equivalent of other commodities — it must at the same time be qualitatively transformed, converted into another element, so that both commodities become denominated quantities, in the same units, thus becoming commensurable.
The commodity must first be transformed into labour time, that is into something qualitatively different from itself (qualitatively different (1) because it is not labour time as labour time, but materialised labour time; labour time not in the form of movement, but in that of rest; not as process, but as result; (2) because it is not the objectification of labour time in general, which exists only in the imagination (is itself only labour separated from its quality, only quantitatively different labour), but is the definite result of a definite, naturally determined labour, qualitatively different from other labours) in order then to become comparable as a definite quantity of labour time, a definite magnitude of labour, with other quantities of labour time, other magnitudes of labour.
For mere comparison, for the valuation of products, for the notional determination of their value, it is enough to make this transformation in the head (a transformation in which the product exists simply as the expression of quantitative relationships of production). For the comparison of commodities, this abstraction is sufficient; for actual exchange, this abstraction must again be objectified, symbolised, realised through a token. The necessity arises as follows: (1) As we have already said, the commodities to be exchanged are both transformed in the head into common ratios of magnitudes, exchange values, and so valued against each other. If they are now to be actually exchanged, their natural properties come into contradiction with their determination as exchange values and mere denominated numbers. They are not arbitrarily divisible, etc. (2) In actual exchange, specific commodities are always exchanged for specific commodities, and the exchangeability of each commodity, like the proportion in which it is exchangeable, depends upon circumstances of place, time, etc.
But the transformation of a commodity into exchange value does not equate it with another specific commodity, but expresses it as an equivalent, the ratio of its exchangeability to all other commodities. This comparison, which in the head is carried out at a stroke, is effected in reality only within a definite sphere, one determined by demand, and only in successive steps. (For example, I exchange little by little an income of 100 thaler, in accordance with my needs, against a whole range of commodities whose sum is equal to the exchange value of 100 thaler.)
Hence, in order to realise the commodity at a stroke as exchange value and to give it the general effect of exchange value, its exchange for a particular commodity is not sufficient. It must be exchanged for a third thing which is not itself a particular commodity but the symbol of the commodity as commodity, of the commodity's exchange value itself; which therefore represents, say, labour time as such, say, a piece of paper or leather which represents a certain portion of labour time. (Such a symbol presupposes general recognition; it can only be a social symbol; in fact, it only expresses a social relationship.)
This symbol represents certain portions of labour time, represents exchange value in such portions as are capable of expressing by simple arithmetic combinations all reciprocal relationships of exchange values. This symbol, this material sign of exchange value, is a product of exchange itself, not the execution of a preconceived idea. (IN FACT, the commodity which serves as the mediator of exchange is only transformed into money, into a symbol, gradually. As soon as that has happened, a symbol of the mediating commodity can in turn replace the commodity itself. It now becomes the conscious token of exchange value.)
Hence the process is simply this: the product becomes a commodity, i.e. a mere element of exchange. The commodity is transformed into exchange value. In order to equate it with itself as exchange value, it is exchanged for a token which represents it as exchange value as such. As such symbolised exchange value, it can then be exchanged again in certain proportions with any other commodity. Through the product becoming a commodity and the commodity becoming exchange value, it acquires, first in our mind, a dual existence. This mental duplication proceeds (and must proceed) to the point where the commodity appears dual in actual exchange: as natural product on the one hand, as exchange value on the other. I.e. its exchange value acquires an existence materially separated from it.
[1-15] The determination of the product as exchange value therefore necessarily brings it about that the exchange value acquires an existence apart from the product, detached from it.
Exchange value detached from the commodities themselves, and itself existing as a commodity alongside them, is—money. In money, all the properties of a commodity as exchange value appear as an object distinct from the commodity, as a social form of existence detached from the commodity's natural form of existence. (This is to be demonstrated further by enumerating the ordinary properties of money.) (The material used to express this symbol is a matter of some consequence, however varied it has been historically. As society develops it also evolves — along with the symbol — the material that more and more corresponds to the symbol, though it later strives to free itself from that material again; a symbol, if it is not arbitrary, requires certain conditions as regards the material in which it is presented. Thus, e.g. the signs for words possess a history; alphabetic script, etc.)
The exchange value of a product thus produces money alongside the product. Just as it is impossible to abolish complications and contradictions arising from the existence of money alongside specific commodities by changing the form of money (although difficulties inherent in a lower form of money may be avoided by a higher form), it is likewise impossible to abolish money itself, so long as exchange value remains the social form of products. It is essential to understand this clearly, so as not to set oneself impossible tasks, and to know the limits within which monetary reform and changes in circulation can remodel the relations of production and the social relations based upon them.
The properties of money (1) as measure of commodity exchange; (2) as means of exchange; (3) as representative of commodities (for that reason as the object of contracts); (4) as universal commodity existing alongside the particular ones, all follow simply from its role as objectified exchange value separated from the commodities themselves. (By virtue of its property as a universal commodity in relation to all others, as the embodiment of their exchange value, money is also the realised and always realisable form of capital, the form in which capital is always acceptable, as is demonstrated by the bullion DRAINS. It was owing to this property that capital appeared historically first only in the form of money. It explains moreover the connection of money with the rate of interest and its influence thereon.)
The more production develops in such a way that every producer becomes dependent upon the exchange value of his commodity, i.e. the more the product really becomes exchange value, and exchange value becomes the immediate object of production, the more must money relationships develop, and with them the contradictions immanent in money relationships, immanent in the relationship of the product to itself as money. The need for exchange and the transformation of the product into pure exchange value progresses in the same measure as the division of labour, i.e. with the social character of production. But with the growth of the latter grows the power of money, i.e. the exchange relation establishes itself as a power external to and independent of the producers. What originally appeared as a means to promote production turns into a relationship alien to the producers. In proportion as the producers become dependent upon exchange, exchange appears to become independent of them; the rift between the product as product and the product as exchange value appears to widen. Money does not create this opposition and this contradiction; on the contrary, their development creates the apparently transcendental power of money.
(To be developed: the influence of the transformation of all relationships into money relationships; of taxes in kind into taxes in money, rent in kind into money rent, feudal military service into mercenaries, in general of all personal services into monetary dues, of patriarchal, slave, serf, guild labour into pure wage labour.)
The product becomes a commodity; the commodity becomes exchange value; the exchange value of the commodity is its immanent monetary attribute; this monetary attribute detaches itself from the commodity as money, assumes a general social existence separate from all specific commodities and their natural form of existence. The relationship of the product to itself as exchange value becomes its relationship to a money existing alongside it, or the relationship of all products to money existing outside all of them. As the actual exchange of products gives rise to their exchange value, so does their exchange value give rise to money.
The next question which confronts us is this: does not the existence of money alongside commodities contain from the outset contradictions inherent in this very relationship?
Firstly: The simple fact that the commodity has a dual existence, as a specific product which contains its exchange value in its natural form of existence as idea (in latent form), and then as revealed exchange value (money) which has discarded all connection with the product's natural form of existence; this dual existence in two distinct forms must lead to differentiation, and the differentiation to opposition and [1-16] contradiction. The same contradiction between the particular nature of the commodity as a product and its general nature as exchange value, which necessi-tated its being posited as dual, on the one hand as particular commodity and on the other as money, the contradiction between its specific natural properties and its general social properties, contains from the outset the possibility that these two separate forms of existence of the commodity are not mutually convertible. The exchangeability of the commodity exists as a thing alongside it in money, as something distinct from it, no longer immediately identical with it. As soon as money is an external thing alongside the commodity, the exchangeability of the commodity for money is immediately linked to external conditions, which may or may not be present. It is subject to external circumstances.
The commodity is demanded in exchange because of its natural properties, because of the needs of which it is the object; money, on the other hand, only because of its exchange value, as exchange value. Whether therefore the commodity is convertible into money, whether it can be exchanged for it, whether its exchange value can be realised, depends upon circumstances which have no immediate connection with it as exchange value and are independent of it. The convertibility of the commodity depends upon the natural properties of the product; that of money coincides with its existence as symbolised exchange value. It therefore becomes possible that the commodity in its particular form as product can no longer be exchanged for or equated with its general form as money.
By existing outside the commodity as money, the exchangeability of the commodity has become something different from the commodity, alien to it, with which it must first be equated, to which it is therefore d'abord unequal; while the equating itself becomes dependent upon external circumstances, therefore a matter of chance.
Secondly: As the exchange value of a commodity has a dual form of existence, as a specific commodity and as money, so the act of exchange consists of two mutually independent acts: exchange of the commodity for money, exchange of the money for a commodity, buying and selling. Since these have now acquired a form of existence distinct from one another in space and time and indifferent to one another, their immediate identity ceases to exist. They may correspond or not; they may coincide or not; disparities may occur between them. True, they will always seek to get into balance, but the earlier direct equality has now been replaced by
5-852 the continual movement towards equalisation, which of course presupposes continual inequality. It is possible that consonance between them may now be fully attained only by passing through the most extreme dissonances.
Thirdly: With the separation of buying and selling, the division of exchange into two acts independent of each other in space and time, there emerges another new relationship.
As exchange itself splits into two mutually independent acts, so the general movement of exchange is severed from the exchangers, from the producers of the commodities. Exchange for the sake of exchange is separated from exchange for the sake of commodities. An estate of merchants intervenes between the producers, an estate which buys only in order to sell, and sells only in order to buy again, aiming in this operation not at the possession of the commodities as products but merely at the acquisition of exchange value as such, of money. (A merchant estate can arise even under conditions of mere barter. But since it has at its disposal only the surplus of production on both sides, its influence on production itself remains utterly secondary, as does its whole significance.)
To the acquisition of independence by exchange value in money, divorced from the products, corresponds the acquisition of independence by exchange (trade) as a function divorced from the exchangers. Exchange value was the measure of commodity barter; but the object of the latter was the direct possession of the exchanged commodity, its consumption (whether this consumption consisted in its use as a product for the direct satisfaction of needs, or as a tool of production).
The purpose of trade is not directly consumption but the acquisition of money, of exchange values. This dual nature of exchange — exchange for the sake of consumption and exchange for the sake of exchange — results in a new disparity. The merchant in his exchange is guided merely by the difference between purchase and sale of the commodity; but the consumer must once and for all replace the exchange value of the commodity he buys. Circulation, exchange within the merchant estate, and the final stage of circulation, exchange between the merchants and the consumers, however much they must ultimately condition each other, are determined by quite different laws and motives, and the greatest contradiction can develop between them. This separation alone can be the cause of trade crises. But since production is geared directly to trade and only indirectly to [1-17] consumption, it must get caught up in this incongruity between trade and exchange for consumption just as much as, for its own part, it must produce it. (The relationships between demand and supply are completely reversed.) (The money business, in turn, becomes separated from trade in the strict sense.)
Aphorisms. (All commodities are transitory money; money is the eternal commodity. The further the division of labour develops, the more the immediate product ceases to be a means of exchange. The need arises for a general means of exchange, i.e. for a means of exchange that is independent of the specific production of any individual. In money, the value of things is separated from their substance. Money is originally the representative of all values; in practice it is the other way round, and all real products and all labour become representatives of money. In direct barter every article cannot be exchanged for every other article, and a particular activity can only be exchanged for particular products. The difficulties inherent in barter can be overcome by money only in so far as it generalises these difficulties, makes them universal. It is absolutely necessary that the forcibly separated elements which essentially belong together, should demonstrate by some violent eruption that theirs is a separation of what essentially belongs together., Unity is produced by force. As soon as the hostile separation leads to eruptions, the economists draw attention to the essential unity and ignore the alienation. Their apologetic wisdom consists in forgetting their own definitions at every decisive moment. The product as immediate means of exchange is still directly connected (1) with its natural properties, hence in every way limited by them; e.g. it can deteriorate, etc.; (2) with the direct need that another person has or does not have for this particular product, or might also have for his own product. Once the product of labour and labour itself are subjected to exchange, there comes a moment when they are separated from their owner. Whether they return to him from this separation in some other form becomes a matter of chance. In so far as money comes into the exchange, I am compelled to exchange my product for universal exchange value or universal exchangeability, and so my product becomes dependent upon general commerce and is torn out of its local, natural and individual boundaries. Precisely thereby it can cease to be a product.)
Fourthly: As exchange value in the form of money appears as the general commodity alongside all particular commodities, so exchange value, as money, thereby appears simultaneously as a particular commodity (since money has a particular existence) alongside all other commodities. Not only does this lead to the incongruity that, as it exists only in exchange, money confronts the particular exchangeability of commodities as universal exchangeability and immediately extinguishes it, while the two must nevertheless always remain convertible into one another; but money also comes into contradiction with itself and its determination because it is itself a particular commodity (even if only a symbol) and thus, in its exchange with other commodities, is again subject to particular conditions of exchange which contradict its universal unconditional exchangeability. (Here no mention at all yet of money as fixed in the substance of a definite product, etc.)
In addition to its existence in the commodity, exchange value acquired an existence of its own in money; it was separated from its substance precisely because the natural determinateness of this substance contradicted its general determination as exchange value. Each commodity is identical (or comparable) to another as exchange value (qualitatively: each represents only a quantitative plus or minus of exchange value). Hence this identity, this unity of commodities, differs from their natural distinctiveness, and therefore appears in money both as the element common to them and also as a third thing confronting them. But on the one hand, exchange value naturally remains an inherent quality of commodities while at the same time existing outside them. On the other hand, in so far as money no longer exists as a quality of commodities, as their general attribute, but is individualised alongside them, it becomes itself a particular commodity among the other commodities (subject to the determination of demand and supply; can be divided into particular types of money, etc.).
It becomes a commodity like other commodities, and at the same time is not a commodity like other commodities. In spite of its general determination it is one exchangeable among other exchangeables. It is not only the general exchange value, but at the same time a particular exchange value among other particular exchange values. Here a new source of contradictions which manifest themselves in practice. (In the separation of the money business from actual trade, the special nature of money emerges yet again.)
We see, then, how it is inherent in money to fulfil its purposes by simultaneously negating them; to make itself independent in relation to commodities; to turn itself from a means into an end; to realise the exchange value of commodities by separating them from it; to facilitate exchange by splitting it; to overcome the difficulties of the direct exchange of commodities by [1-18] generalising them; to render exchange independent of the producers to the same extent as the producers become dependent on exchange.
(It will later be necessary, before leaving this question, to correct the idealist manner of presentation which makes it appear as if it were merely a matter of the definitions of concepts and the dialectic of these concepts. Above all the phrase: the product (or activity) becomes a commodity; the commodity becomes exchange value; the exchange value becomes money.)
(The Economist, 24 January 1857. The following passage to be borne in mind when dealing with the BANKS'(1):
"So far as the mercantile classes share, which they now do very generally, in the profits of banks — and may to a still greater extent by the wider diffusion of joint-stock banks, the abolition of all corporate privileges, and the extension of perfect freedom to the business of banking,—they have been enriched by the increased rates of money. In truth, the mercantile classes by the extent of their deposits, are virtually their own bankers; and so far as that is the case, the rate of discount must be to them of little importance. All banking and other reserves must of course be the results of continual industry, and of savings laid by out of profits; and consequently, taking the mercantile or industrious classes as a whole, they must be their own bankers; and it requires only that the principles of free trade should be extended to all businesses, to equalise or neutralise for them the advantages and disadvantages of all the fluctuations in the money market.")
All contradictions of the money system and of the exchange of products under the money system lie in the development of the relationship of products as exchange values, of their role as exchange value or simply as value.
(Morning Star, 12 February 1857. "The pressure of money during last year, and the high rate of discount which was adopted in consequence, has been very beneficial to the profit account of the Bank of France. Its dividend has gone on increasing: 118 frs in 1852, 154 frs in 1853, 194 frs in 1854, 200 frs in 1855, 272 frs in 1856.")
The following passage also to be noted:
"The English silver coins [are] issued at a price higher than the value of the silver they contain. A pound silver of 60-62 sh. in intrinsic value (£3 on an average in gold) [was] coined into 66 sh. The Mint pays the market price of the day, from 5 sh. to 5 sh. 2d. the ounce, and issues at the rate of 5 sh. 6d. the ounce. There are two reasons which prevent any practical inconvenience resulting from this arrangement" (of silver tokens, not of intrinsic value): "first, the coin can only be procured at the Mint, and at that price; as home circulation, then, it cannot be depreciated, and it cannot be sent abroad because it circulates here for more than its intrinsic value; and secondly, as it is a legal tender only up to 40 sh., it never interferes with the gold coins, nor affects their value."
Advises France likewise to
issue subordinate coins of silver tokens, not of intrinsic value, and limiting the amount to which they should be a legal tender.
But at the same time:
in fixing the quality of the coin, to take a larger margin between the intrinsic and the nominal value than we have in England, because the increasing value of silver in relation to gold may very probably, before long, rise up to our present Mint price, when we may be obliged again to alter it. Our silver coin is now little more than 5% below the intrinsic value: a short time since it was 10% (The Economist, 24 January 1857).
Now, it might be thought that the issue of labour-time tickets overcomes all these difficulties. (The existence of such tickets naturally presupposes conditions which are not directly given in the investigation of the relationship of exchange value and money, and without which both can and do exist: "public credit", bank, etc.; but all this not to be further discussed here; since of course the supporters of the labour-time ticket consider it as the final product of the "series",[34] which, if it corresponds most closely to the "pure" concept of money, "appears" last in reality.)
To begin with: if the conditions under which the price of a commodity=its exchange value are assumed as fulfilled, i.e. balance of demand and supply, of production and consumption, in the final analysis PROPORTIONATE PRODUCTION* (the so-called relations of distribution are themselves relations of production), then the question of money becomes quite secondary, and especially the question whether blue or green TICKETS, metal or paper ones, are issued, or in what other form social book-keeping will be done. It is then the height of absurdity to keep up the pretence that investigations of the actual money relationships should be insti-tuted.
[1-19] The bank, ANY BANK, issues the labour-time tickets. Commodity a=exchange value x, i.e. x labour time, exchanges for money representing x labour time. The bank would have to purchase the commodity, i.e. exchange it for its monetary representative in the same way as e.g. now the Bank of England must give notes for gold. The commodity, the material and therefore fortuitous [form of] existence of exchange value, is exchanged for the symbolic existence of exchange value as exchange value. There is thus no difficulty in converting it from the form of a commodity into that of money. The labour time it contains only needs to be authentically verified (which, incidentally, is not as easy as testing the fineness and weight of gold and silver) and produces thereby directly its contrevaleur*: its monetary existence.
However we twist and turn the matter, in the final analysis it comes to this: the bank which issues the labour-time tickets purchases the commodity at its production costs, purchases all commodities, and what is more, such purchases cost the bank nothing except the production of slips of paper, and gives to the seller, instead of the exchange value that he possessed in a particular substantial form, the symbolic exchange value of the commodity, in other words a draft upon all other commodities to the amount of the same exchange value. Exchange value as such, of course, can exist only symbolically, although this symbol, in order to be usable as a thing — not only as imaginary form— possesses an objective existence; is not only an ideal notion, but actually represented in an objective way. (A yardstick can be held in the hand; exchange value measures, but it exchanges only by the yardstick passing from one hand to another.[35])
So the bank gives money for the commodity, money which is exactly a draft upon the exchange value of the commodity, i.e. upon all commodities of the same value: the bank purchases. It is the general purchaser, the purchaser not only of this or that commodity, but of all commodities. For its specific function is to convert every commodity into its symbolic existence as exchange value. But if it is the general buyer it must also be the general seller, not only the store in which all commodities are deposited, the general warehouse, but the owner of the commodities in the same sense as every other merchant.
I have exchanged my commodity a for the labour-time ticket b, which represents the commodity's exchange value, but only so that I may now change this b at will into any actual commodity c, d, e, etc. Now can this money circulate outside the bank, otherwise than between the possessor of the ticket and the bank? How is the convertibility of this ticket secured? There are only two possible cases. Either all possessors of commodities (products or labour) wish to sell them at their exchange value, or some wish to sell and others do not. If they all wish to sell them at their exchange value, then they will not wait for a buyer to turn up by chance, but will go immediately to the bank, hand over the commodity and receive for it the bank's symbol of exchange value, money: they exchange it for the bank's own money. In this case, the bank is at once general buyer and seller in one person.
Or the contrary is the case. Then the bank ticket is merely paper, it only claims to be the generally recognised symbol of exchange value, but has no value. For the distinguishing characteristic of this symbol is that it not only represents exchange value, but is exchange value in actual exchange. In the second case, the bank ticket would not be money, or would be money valid only by convention between the bank and its customers, not on the general market. It would be the same as a dozen meal tickets bought at a restaurant, or a dozen theatre tickets. Both represent money, but only at this particular restaurant or this particular theatre. The bank ticket would have ceased to conform to the requirements of money, for it would circulate not amongst the GENERAL PUBLIC but only between the bank and its customers. We must therefore drop the latter supposition.
The bank would therefore be the general buyer and seller. Instead of notes, it could also issue CHEQUES and instead of those run simple BOOK ACCOUNTS. Whatever the sum of commodity values which x had sold to it, he would have a claim on it for the same sum of values in other commodities. A second attribute of the bank would be necessary: to establish authentically the exchange value of all commodities, i.e. the labour time materialised in them.
But its functions could not end with that. It would have to determine the labour time in which the commodities could be produced with the average means of labour, the time in which they must be produced.
But even this would not be sufficient. It would have to determine not only the time in which a certain quantity of output must be produced, and secure for the producers such circumstances as would equalise the productivity of their labour (hence also to equalise and order the distribution of the means of labour), but also what quantities of labour time [1-20] should be expended in the different branches of production. The latter would be necessary because, in order to realise exchange value, to make its money really convertible, production in general would have to be secured, and in such proportions that the needs of the partners in exchange were satisfied.
That is still not all. The exchange that occurs on the largest scale is not that of commodities but that of labour for commodities. (More on this presently.) The workers would not sell their labour to the bank but would receive the exchange value of the whole product of their labour, etc. Strictly speaking, the bank would then be not only the general buyer and seller, but also the general producer. In fact, it would be either the despot governing production and managing distribution, or indeed nothing more than a BOARD to carry on the book-keeping and accounting for society working in common. The common ownership of the means of production is presupposed, etc., etc. The Saint-Simonians made their bank the papacy of production.
The dissolution of all products and activities into exchange values presupposes both the dissolution of all established personal (historical) relations of dependence in production, and the all-round dependence of producers upon one another. The production of each individual producer is dependent upon the production of all the others, as also the transformation of his product into means of subsistence for himself has become dependent upon the consumption of all the others. Prices are old; so is exchange; but both the increasing determination of the former by the production costs, and the increasing penetration of the latter into all relations of production only develop fully, and continue to develop ever more completely, in bourgeois society, the society of free competition. What Adam Smith in the true 18th-century manner placed in pre-history, what he assumed to have preceded history,(2) is rather its product.
This mutual dependence expressed in the constant need for exchange and in exchange value as the universal mediator. The economists express it thus: everyone pursues his private interest and only his private interest, and thereby unintentionally and unwittingly serves the private interests of all, the general interest. The point is not that, in pursuing his private interest, everyone serves the totality of private interests and thus the general interest is attained. This abstract statement could rather lead to the conclusion that everyone mutually hinders the assertion of the interests of everyone else, and instead of a general affirmation, a general negation results from this bellum omnium contra omnes.(3) The point is rather that private interest is itself already a socially determined interest and can be attained only within the conditions laid down by society and with the means provided by society, and is therefore tied to the reproduction of these conditions and means. It is the interest of private persons; but its content, as well as the form and means of its realisation, are given by social conditions that are independent of them all.
The absolute mutual dependence of individuals, who are indifferent to one another, constitutes their social connection. This social connection is expressed in exchange value, in which alone his own activity or his product becomes an activity or product for the individual himself. He must produce a general product—exchange value, or exchange value isolated by itself, individualised: money. On the other hand, the power that each individual exercises over the activity of others or over social wealth exists in him as the owner of exchange values, of money. He carries his social power, as also his connection with society, in his pocket.
The activity, whatever its individual form of manifestation, and the product of the activity, whatever its particular nature, is exchange value, i.e. something general in which all individuality, all particularity, is negated and extinguished. This is indeed a condition very different from that in which the individual, or the individual extended by a natural or historical process into a family and a tribe (later community), directly reproduces himself from nature, or in which his productive activity and his share in production are dependent on a particular form of labour and of the product, and his relationship to others is determined in this particular way.
The social character of the activity, as also the social form of the product and the share of the individual in production, appear here as something alien to and existing outside the individuals; not as their relationship to each other, but as their subordination to relationships existing independently of them and arising from the collision between indifferent individuals. The general exchange of activities and products, which has become the condition of life for every single individual, their mutual connection, appears to the individuals themselves alien, independent, as a thing. In exchange value, the social relationship of persons is transformed into a social [1-21] attitude of things; personal capacity into a capacity of things. The less social power the means of exchange possesses, the more closely it is still connected with the nature of the immediate product of labour and the immediate needs of the exchangers, the greater must that power of the community still be which binds together the individuals, the patriarchal relationship, the community of antiquity, feudalism and the guild system (see my Notebook, XII, 34b(4)).
Every individual possesses social power in the form of a thing. Take away this social power from the thing, and you must give it to persons [to exercise] over persons. Relationships of personal dependence (which originally arise quite spontaneously) are the first forms of society, in which human productivity develops only to a limited extent and at isolated points. Personal independence based upon dependence mediated by things is the second great form, and only in it is a system of general social exchange of matter, a system of universal relations, universal requirements and universal capacities, formed. Free individuality, based on the universal development of the individuals and the subordination of their communal, social productivity, which is their social possession
[Vermögen], is the third stage. The second stage creates the conditions for the third. Patriarchal conditions and those of antiquity (likewise feudal ones) therefore decline with the development of trade, luxury, money, exchange value, in the same measure in which modern society grows with them step by step.
Exchange and division of labour condition each other. Since each person works for himself but his product is nothing by itself, he must naturally engage in exchange, not only so as to take part in the general capacity to produce, but to transform his own product into means of subsistence for himself. (See my "Observations on Economy", p. V (13, 14).(5)) Of course, exchange as mediated by exchange value and money presupposes the absolute mutual dependence of the producers, but at the same time the complete isolation of their private interests and a division of social labour, whose unity and mutual complementarity exists as it were as a natural relationship outside the individuals, independently of them. The pressure of general demand and supply upon each other provides the connection between the mutually indifferent individuals.
The very necessity to transform the product or the activity of the individuals first into the form of exchange value, into money, and the fact that they obtain and demonstrate their social power only in this objective [sachlichen] form, proves two things: (1) that the individuals now only produce for and within society; (2) that their production is not directly social, not THE OFFSPRING OF ASSOCIATION distributing labour within itself. The individuals are subsumed under social production, which exists outside them as their fate; but social production is not subsumed under the individuals who manage it as their common wealth. There can therefore be nothing more incorrect or more absurd than to assume, on the strength of exchange value and money, control by the associated individuals of their collective production, as was done in the case of the labour-time ticket bank mentioned earlier.
The private exchange of all products of labour, capacities and activities, stands in contradiction to distribution based on the superordination and subordination (natural or political) of individuals to each other (exchange proper remaining a marginal phenomenon, or on the whole not affecting the life of entire communities, but taking place rather between different communities, by no means subjecting to itself all relationships of production and distribution) (whatever the character of this superordination and subordination: patriarchal, ancient or feudal). It also stands in contradiction to the free exchange of individuals who are associated on the basis of common appropriation and control of the means of production. (The latter association is not arbitrary: it presupposes the development of material and cultural conditions which need not be further elaborated at this point.)
Just as the division of labour produces agglomeration, combination, cooperation, the conflict of private interests, class interests, competition, concentration of capital, monopoly, joint-stock companies— all of which are antagonistic forms of the unity which calls forth the antagonism itself — so does private exchange produce world trade, private independence produces a complete dependence on the so-called world market, and the fragmented acts of exchange produce a banking and credit system whose accountancy [1-22] at least records the balancing of private exchange. However much the private interests within every nation divide it into as many nations as there are FULL-GROWN INDIVIDUALS in it, and however the interests of the EXPORTERS and the IMPORTERS of the same nation here conflict with each other — the rate of exchange creates the semblance of the existence of a national trade, etc., etc. No one will believe on such grounds that it is possible to abolish the foundations of internal or external private commerce by means of a reform of the stock-exchange. But within bourgeois society, based as it is upon exchange value, relationships of exchange and production are generated which are just so many mines to blow it to pieces. (A multitude of antagonistic forms of the social entity, whose antagonism, however, can never be exploded by a quiet metamorphosis. On the other hand, if we did not find latent in society as it is, the material conditions of production and the corresponding relationships of exchange for a classless society, all attempts to explode it would be quixotic.)
We have seen that, although exchange value = the relative labour time materialised in the products and although money=the exchange value of commodities separated from their substance, this exchange value or monetary relationship contains the contradictions between commodities and their exchange value, between commodities as exchange values and money. We have seen that a bank which directly produces the counterpart of the commodity in labour money is a Utopia. Although, therefore, money is merely exchange value detached from the substance of the commodity and owes its origin only to the tendency of this exchange value to posit itself in pure form, the commodity cannot be transformed directly into money, i.e. the authentic certificate of the quantity of labour time realised in it cannot serve as its price in the world of exchange values. How is THIS?
(Economists see clearly that one form of money — in so far as it is a medium of exchange and not a measure of exchange value — presupposes the objectification of the social nexus, namely, to the extent that money appears as a surety that one person must leave behind in the hands of another in order to obtain a commodity from him. Here the economists themselves say that men put in the object (money) a trust they would not put in one another as persons. But why do they thus put their trust in the object? Clearly, only because it is the objectified relationship of persons to each other; as objectified exchange value, and exchange value is nothing but a mutual relation of the productive activities of persons. Any other surety may be directly of use to its possessor as such. Money is useful to him only as the "movable surety of society",[37] but it is such a surety only because of its social (symbolic) character; it can possess a social character only because the individuals have alienated their own social relationship in the form of an object.)
In the current price lists, in which all values are measured in money, it seems as though the independence of the social character of things from persons, and also the trading activity conducted on this basis of estrangement in which the general relations of production and exchange appear to the individual, to all individuals, subject the things once again to the individuals. Since the increasing autonomy of the world market, IF YOU PLEASE (which includes the activity of every individual), grows with the development of monetary relationships (exchange value) and vice versa, and since the general interconnection and absolute inter-dependence in production and consumption grows simultaneously with the independence of consumers and producers and their indifference to each other; since this contradiction leads to crises, etc., simultaneously with the development of this estrangement there are attempts to abolish it on its own ground: current price lists, exchange rates, communication between commercialists by letters, telegrams, etc. (the means of communication of course develop simultaneously), by means of which each individual provides himself with information on the activities of all others and seeks to adjust his own activity accordingly. (In other words, although the demand and supply of all proceeds independently of all, each seeks to inform himself of the general state of demand and supply; and this knowledge influences their action. Although all this does not abolish the estrangement in the context of the existing point of view, it does bring about relations and connections which entail the possibility of overcoming the old standpoint.) (The possibility of general statistics, etc.)
(Actually this is to be developed further under the heading "Prices, Demand and Supply". Here we need only note that this survey of total trade and total production, so far as current price lists actually represent such a survey, does indeed supply the best evidence of how their own exchange and their own production confronts individuals as an objective relationship independent of them. In the world market the connection of the individual with all others, but at the same time also the independence [1-23] of this connection from the individuals, has itself developed to such a point that its formation already contains the conditions for its being transcended.)
Comparison in place of actual community and universality. (It has been said, and may be said, that the beauty and greatness lies precisely in this spontaneously evolved connection, in this material and spiritual exchange, which is independent of the knowledge and wishes of individuals and presupposes their mutual independence and indifference. And certainly this objective connection is to be preferred to the lack of any connection or to a purely local connection based on primitive blood ties, nature, and relationships of lordship and bondage. It is equally certain that individuals cannot subordinate their own social connections to themselves before they have created them. But it is absurd to conceive of that merely objective connection as a natural one, inseparable from the nature of human individuality (as opposed to knowledge and will derived from reflection) and immanent in it. It is their product. It is a product of history. It belongs to a definite phase in their development. The estrangement and isolation in which it still exists for them, show only that they are still in the process of creating the conditions of their social life instead of having started it from these conditions. It is the connection, the spontaneously evolved one, of individuals within certain narrow relationships of production.
Universally developed individuals, whose social relationships are their own communal relations and therefore subjected to their own communal control, are not products of nature but of history. The degree and the universality of development of the capacities in which this kind of individuality becomes possible, presupposes precisely production on the basis of exchange value, which, along with the universality of the estrangement of individuals from themselves and from others, now also produces the universality and generality of all their relations and abilities. During earlier stages of development, the single individual seems more fully developed because he has not yet worked out the fulness of his relations and has not yet set them over against himself as independent social powers and relations. It is as ridiculous to long for a return to that original fulness as it is to believe that the present complete emptiness must be permanent. The bourgeois view has never been more than the opposite of that Romantic view,[38] and so the romantic view will accompany it as a justified opposite till its blessed end.)
(Here the relationship of the individual to science can be taken as an example.)
(To compare money to blood — the word "circulation" suggested this — is about as valid as Menenius Agrippa's comparing the patricians to the stomach.[39])
(To compare money with language is no less incorrect.[40] Ideas are not transformed into language in such a way that their particular attributes are dissolved and their social character exists alongside them in language as do prices alongside commodities. Ideas do not exist apart from language. Ideas which must first be translated from their mother tongue into a foreign language in order to circulate and to become exchangeable would provide a better analogy; but then the analogy is not with the language but with its foreignness.)
(The exchangeability of all products, activities, relationships for a third, objective entity, which in turn can be exchanged for everything without distinction—in other words, the development of exchange values (and of monetary relationships) is identical with general venality, with corruption. General prostitution appears as a necessary phase in the development of the social character of personal inclinations, capacities, abilities, activities. More politely expressed: the universal relationship of utility and usefulness. Equating the incommensurate, as Shakespeare appropriately conceived of money.(6) The craving for enrichment as such is impossible without money; all other accumulation and craving for accumulation appears merely natural, restricted, conditioned on the one hand by needs and on the other by the restricted nature of the products (sacra auri fames(7)).)
(The money system, in its development, clearly already presupposes other general developments.)
When we consider social conditions which produce an undeveloped system of exchange, of exchange values and of money, or to which these correspond only in an undeveloped form, it is clear from the outset that individuals, although their relationships appear to be more personal, only enter into relations with each other as individuals in a particular determination, as feudal lord and vassal, lord of the manor and serf, etc., or as members of castes, etc., or as members of an estate, etc. In money relations, in a developed system of exchange (and this appearance leads democracy astray), the ties of personal dependence, distinctions of birth, education, etc. (all the personal ties at least appear as personal relationships), are in fact broken, abolished. The individuals appear to be independent (this independence, which altogether is merely an illusion and should more correctly be called unconcern, in the sense of indifference), appear to collide with each other freely, and to exchange with each other in this freedom; but they appear independent only to those who abstract from the conditions, the conditions of existence, in which those individuals come into contact with each other (and these in turn are independent of the individuals and appear, though produced by society, as it were, as natural conditions, i.e. beyond the control of the individuals).
The [1-24] determinateness which in the first case appears as a personal limitation of one individual by another, appears in the second case, in its developed form, as an objective limitation of the individual by relationships which are independent of him and self-sufficient. (Since the single individual cannot shed his personal determinateness but can overcome external relationships and subordinate them to himself, his freedom appears greater in the second case. A closer investigation of those external relationships and conditions shows, however, that it is impossible for the individuals of a class, etc., to overcome them en masse without abolishing them. A single individual may by chance cope with them; the mass of individuals dominated by them cannot do so, since the very existence of that mass expresses the subordination, and the necessary subordination, of the individuals to it.)
These external relationships, far from abolishing the "relationships of dependence", merely dissolve them into a general form; they are rather the elaboration of the general foundation of relationships of personal dependence. Here, too, individuals enter into relation with each other only as determinate individuals. These objective relations of dependence, in contrast to the personal ones, also appear in such a way that the individuals are now ruled by abstractions whereas previously they were dependent on one another. (The objective relationship of dependence is nothing but the social relations independently confronting the seemingly independent individuals, i.e. their own reciprocal relations of production which have acquired an existence independent of and separate from them.) Yet the abstraction or idea is nothing but the theoretical expression of those material relationships which domi-nate the individuals.
Relationships can naturally be expressed only in ideas, and so philosophers have seen the peculiarity of modern times in the individuals' being dominated by ideas, and have identified the birth of free individuality with the overthrow of this domination of ideas. From the ideological standpoint, this mistake was the easier to make because that domination of relationships (that objective dependence, which, incidentally is in its turn transformed into certain personal relationships of dependence, only divested of all illusion) appears in. the consciousness of individuals themselves to be the rule of ideas, and the belief in the eternal validity of these ideas, i.e. of those objective relationships of dependence, is OF COURSE in every way reinforced, sustained, drummed into people by the ruling classes.
(With regard to the illusion of the "purely personal relationships" of feudal times, etc., we must not of course for a moment forget: (1) that in a certain phase, these relationships themselves acquired within their sphere an objective character, as is shown by the development of landed property relationships, for example, out of purely military subordination. But, (2) the objective relationship in which they founder has itself a restricted, naturally determined character and thus appears as personal, whereas in the modern world personal relationships emerge purely as the outcome of the relationships of production and exchange.)
The product becomes a commodity. The commodity becomes exchange value. The exchange value of the commodity acquires a separate existence alongside the commodity, i.e. the commodity in the form in which (1) it is exchangeable for all other commodities; in which (2) it is therefore a general commodity and its natural particularity is extinguished; (3) in which is established the measure of its exchangeability, the particular ratio in which it equates all other commodities to itself — is the commodity as money, not indeed as money in general, but as a particular sum of money, for to represent exchange value in all its variability, money must be countable, quantitatively divisible.
Money, the common form into which all commodities transform themselves as exchange values, the general commodity, must itself exist as a particular commodity alongside the others, for they are not only mentally measured by it but must be traded and exchanged for it in actual exchange. The contradiction that arises from this is to be discussed elsewhere. Money does not originate by convention, any more than the State does. It arises from exchange, grows naturally out of exchange, is a product of exchange.
Initially that commodity will serve as money, i.e. will be acquired through exchange not as an object of need and consumption, but to be exchanged again for other commodities, which is most frequently acquired through exchange as an object of need, is therefore in general circulation; which therefore can most certainly be exchanged again for any other particular commodities; which, in other words, in a given social organisation represents wealth xai' e£,ox"f\v,(8) is the object of the most general demand and supply and possesses a special use value. For example, salt, hides, cattle, slaves. Such a commodity in its particular form as commodity in fact corresponds more with itself as exchange value than do the other commodities (unfortunately it is impossible in German to render adequately the distinction between denrée [goods] and marchandise [commodities]).
What stamps a commodity as money here is its special usefulness, whether as an object of consumption (hides), or as a direct implement of production (slaves). In the course of development, exactly the reverse will occur, i.e. the commodity which is least a direct object of consumption or implement of production will best represent precisely this aspect, that of satisfying the requirements of exchange as such. In the first [1-25] case a commodity becomes money because of its special use value; in the second case, it acquires its particular use value by serving as money. Durability, unalterableness, divisibility and reconstitutabili-ty, relatively easy transportability, because a large exchange value is contained in a small volume, all these properties make the precious metals particularly suitable at the later stage. At the same time they form a natural transition from the first form of money. At a somewhat higher stage of production and exchange, the instrument of production becomes more important than the products, and metals are (after stones) the first and most indispensable implements of production. In copper, which is so important as money in antiquity, two things are still combined: the special use value as an instrument of production, and the other properties which do not derive from the use value of the commodity but correspond to its role as exchange value (which includes means of exchange).
Later, the precious metals are preferred to the others, because they do not oxidise, etc., are of uniform quality, etc., and correspond better to the higher stage, in that their immediate usefulness for consumption, and production becomes less important, while their very scarcity makes them more representative of value founded purely upon exchange. From the outset, they represent surplus, the form in which wealth originally appears. Metals also more readily exchanged for metals than other commodities.
The first form of money corresponds to an early stage of exchange and barter, in which money still plays a greater role as measure than as actual instrument of exchange. At this stage, the measure can still be purely imaginary (however, the BAR used by the Negro is composed of iron(9)) (but cowries, etc., fit better into the series, which reaches its final peak in gold and silver).
As a result of the transformation of the commodity into general exchange value, exchange value becomes a particular commodity. But this is possible only if one particular commodity acquires over all others the privilege of representing, of symbolising their exchange value, i.e. of becoming money. The appearance of a particular commodity as the money subject of the money quality of all commodities, stems from the nature of exchange value itself. In the process of development, the exchange value of money can acquire again an existence separate from its material, from its substance, as in paper money, without, however, abolishing the privilege of this particular commodity, since the separate existence must continue to receive its denomination from the particular commodity.
Because the commodity is exchange value, it can be exchanged for money, equated with money. The ratio in which it is equated with money, i.e. the determinateness of its exchange value, antecedes its conversion into money. The ratio in which a particular commodity is exchanged for money, i.e. the quantity of money into which a definite quantity of the commodity is convertible, is determined by the labour time objectified in the commodity. As the realisation of a definite amount of labour time, the commodity is exchange value; in money the amount of labour time which it represents is both measured and given its general, exchangeable form corresponding to the concept. Money is the objective medium in which exchange values are immersed, and in which they acquire a form corresponding to their general determination. Adam Smith says that labour (labour time) is the original money with which all commodities are purchased/ With regard to the act of production, this remains always true (and likewise with respect to the fixing of relative values). In production every commodity is constantly being exchanged for labour time.
A form of money distinct from labour time becomes necessary precisely because the amount of labour time must be expressed not in its immediate and particular product, but in a mediated and general product, in its particular product as equal to and convertible into all other products of the same labour time; labour time embodied not in one commodity, but simultaneously in all commodities, and therefore in a particular commodity which represents all others.
Labour time itself cannot be money directly (to demand this would be the same as demanding that every commodity should be directly its own money), precisely because in fact it always exists (as an object) only in the form of particular products. As a general object it can only exist symbolically, again in a particular commodity which is posited as money. Labour time does not exist as a general object of exchange, independent of and separate (detached) from the natural particularities of commodities. It would have to exist as such if it were to fulfil the conditions of money directly. It is the objectification of the general, social character of labour (and therefore of the labour time contained in exchange value) that makes the product of labour an exchange value and gives the commodity its money quality, which, in turn, implies a money subject existing outside it and independently of it.
A definite labour time is objectified in a definite, particular commodity with particular properties and particular relations to needs. But as exchange value, it must be objectified in a commodity which expresses only its amount or quantity, is indifferent to its natural attributes, and therefore can be metamorphosed, i.e. exchanged, into any other commodity em-bodying the same labour time. As an object it should possess this general character, [1-26] which contradicts its natural particularity. This contradiction can be resolved only by being itself objectified, i.e. only by positing the commodity in a double form: first in its natural immediate form, then in its mediated form, as money. The latter is possible only by a particular commodity becoming, as it were, the general substance of exchange values, or by the exchange value of commodities being identified with a particular substance, a particular commodity distinct from all others; i.e. by the commodity having first to be exchanged for this general commodity, the symbolic general product or objectification of labour time, before it can, as exchange value, be exchanged indifferently for any other commodity, or be metamorphosed into it.
Money is labour time as general object, or the objectification of general labour time, labour time as a general commodity. Thus, if it appears very simple that labour time since it regulates exchange values, is in fact not only their inherent measure, but their very substance (for, as exchange values, commodities have no other substance, no natural characteristics), and can also serve directly as their money, i.e. be the element in which exchange values as such are realised, this apparent simplicity is deceptive. The truth is that the relationship of exchange values — of commodities as objectifi-cations of labour time equal to one another and equatable— contains contradictions which are objectively expressed in a form of money distinct from labour time.
In Adam Smith, this contradiction still appears as two aspects set side by side. Alongside the particular product of his labour (labour time as particular object), the worker still has to produce a quantity of general commodity (labour time as general object). The two determinations of exchange value appear to him externally side by side.* The inner essence of the whole commodity does not yet appear gripped and penetrated by contradiction. This corresponds to the stage of production with which Smith was confronted, where the worker still possessed a part of his subsistence directly in his product, and neither his entire activity nor the whole of his product had become dependent upon exchange, i.e. where subsistence agriculture (this or something similar is what Steuart calls it[41]) and also patriarchal industry (hand-weaving, domestic spinning tied to agriculture) still largely prevailed. At that stage, only the surplus is exchanged over a wide national area. Exchange value and determination by labour time [have] not yet fully developed on a national scale.
(Incidentally: It is less true of gold and silver than of any other commodity that their consumption can increase only in proportion to the reduction of their production costs. It increases rather in proportion to the increase in general wealth, since the use of gold and silver represents specifically wealth, surplus, luxury, because they themselves represent general wealth. Apart from their use as money, more silver and gold is consumed in proportion to the growth of general wealth. Therefore if their supply suddenly increases, even without their production costs or their value diminishing proportionately, they find a rapidly expanding market, which delays their depreciation. This explains a number of things about the Australian-Californian CASE,[42] which those economists who make the general consumption of gold and silver depend solely on a fall in their production costs cannot explain, and where they merely move around in a circle. This results directly from their representing wealth, therefore, from their property as money.)
(The contrast between gold and silver as the ETERNAL commodities and all others, which we find in Petty,(10) already hinted at in Xenophon, De vectigalibus, Ch. 1, with respect to marble and silver:
"And the pre-eminence of the land" [Attica] "is not only in the things that bloom and wither annually; she has other good things that last for ever. Nature has invested in her an abundance of stone", etc. (namely marble) ... "Again there is land that yields no fruit if sown, and yet, when quarried, feeds many times the number it could feed if it grew corn."(11))
(Note that exchange between different tribes or peoples — and this, not private exchange, is its first form — begins only when a surplus is purchased (obtained by trickery) from an uncivilised tribe, a surplus which is not the product of its labour but the natural product of the soil and of the region in which it dwells.)
(Analyse the ordinary economic contradictions which arise from the fact that money must be symbolised in a particular commodity, and then those which arise from the commodity itself (gold, etc.). This No. II. Then, since all commodities must be exchanged for money in order to be priced, whether this exchange occurs actually or only in the head, go on to determine the relation of the quantity of gold and silver to the prices of the commodities. This No. III. Clearly, as commodities are merely measured in gold or silver, the quantity of these metals has no influence upon the price of the commodities. The difficulty arises when exchange actually takes place, in so far as these metals actually serve as instruments of circulation; the conditions of supply and demand, etc. But whatever affects their value as an instrument of circulation obviously affects them as a measure.)
[1-27] Labour time itself exists as such only subjectively, only in the form of activity. In so far as it is exchangeable in that form (is itself a commodity), it is not only quantitatively but also qualitatively determined and differentiated, not at all general labour time equal to itself; it corresponds as subject as little to the general labour time that determines exchange value as particular commodities and products correspond to it as object.
Adam. Smith asserts that the labourer must produce a general commodity alongside his particular commodity, in other words, that he must give the form of money to a part of his product, more generally that he must convert into money all that part of his commodity which is not to serve him as use value but as exchange value.(12) Subjectively expressed, this only means that his particular labour time cannot be directly exchanged for every other particular labour time; its general exchangeability must first be mediated, it must acquire an objective form distinct from itself, if it is to acquire this general exchangeability.
The labour of the individual, considered in the act of production itself, is the money with which he immediately purchases the product, the object of his particular activity; but it is a particular money, which of course buys only this particular product. In order to be general money directly, it would have to be not particular but general labour from the outset, i.e. it would from the outset have to be posited as part of general production. Now, if this assumption is made, the general character of labour would not be given to it only by exchange; its assumed communal character would determine participation in the products. The communal character of production would from the outset make the product into a communal, general one. The exchange initially occurring in production, which would not be an exchange of exchange values but of activities determined by communal needs and communal purposes, would include from the beginning the individual's participation in the communal world of products. On the basis of exchange value, labour is posited as general labour only through exchange. On this basis [of the exchange of activities in production], labour would be posited as general labour prior to exchange, i.e. the exchange of products would not in any way be the medium mediating the participation of the individual in general production. Mediation has of course to take place.
In the first case, which starts from the independent production of individuals — however much these independent productions may be determined and modified post festum by their interrela-tions — the mediation takes place through the exchange of commodities, through exchange value, money, which are all expressions of one and the same relationship. In the second case the presupposition itself is mediated, i.e. communal production, community as the basis of production, is assumed. The labour of the individual is from the outset taken as social labour. Therefore, whatever may be the particular material form of the product that he produces or helps to produce, what he has purchased with his labour is not a definite particular product but a certain share in the communal production. Nor has he, therefore, a particular product to exchange. His product is not exchange value; it does not have to be first converted into a particular form to acquire a general character for the individual. Instead of a division of labour which necessarily arises from the exchange of exchange values, labour would be organised in such a way that the individual's share in common consumption would directly follow.
In the first case, the social character of production is established only post festum by the elevation of the products into exchange values and the exchange of these exchange values. In the second case, the social character of production is presupposed, and participation in the world of products, in consumption, is not mediated by exchange between mutually independent labours or products of labour. It is mediated by the circumstances of social production within which the individual carries on his activity.
Hence, to want to convert the labour of the individual (i.e. also his product) directly into money, into realised exchange value, means to define it directly as general labour, i.e. to negate the very conditions under which it must be transformed into money and exchange values and under which it depends on private exchange. This demand can only be satisfied under conditions in which it can no longer be advanced. For the fact is that labour on the basis of exchange values presupposes that neither the labour of the individual nor his product is directly general, but that it acquires this form only through objective mediation by means of a form of money distinct from it.
If we presuppose communal production, the time factor naturally remains essential. The less time society requires to produce corn, livestock, etc., the more time it wins for other production, material or spiritual. As with a single individual, the comprehensiveness of its development, its pleasures and its activities depends upon the saving of time. Ultimately, all economy is a matter of economy of time. Society must also allocate its time appropriately to achieve a production corresponding to its total needs, just as the individual must allocate his time correctly to acquire knowledge in suitable proportions or to satisfy the various demands on his activity. Economy of time, as well as the planned distribution of labour time over the various branches of production, therefore, remains the first economic law if communal production is taken as the basis. It becomes a law even to a much higher degree. However, this is essentially [1-28] different from the measurement of exchange values (of labours or products of labour) by labour time. The labours of individuals in the same branch of industry, and the different types of labour, are not only quantitatively but qualitatively different. What does mere quantitative difference between things presuppose? The sameness of their quality. Therefore quantitative measurement of labours [presupposes] their equivalence, the sameness of their quality.
(Strabo, Book XI, on the Albani of the Caucasus[43]:
The inhabitants of this country are unusually handsome and large. And they are frank in their dealings, and not mercenary; for they do not in general use coined money, nor do they know any number greater than one hundred, but carry on business by means of barter.(13)
He says further on:
They are also unacquainted with accurate measures and weights.) Money made its appearance as a measure (oxen were used for this purpose e.g. in Homer(14)) before it became a means of exchange, because in barter each commodity is still its own means of exchange. But it cannot be its own measure or standard of comparison.
Endnotes
[3] According to Bastiat, "the workers' pension fund" was to be made up of contributions by the workers themselves, for thus alone the necessary degree of "stability" could be ensured (Fr. Bastiat, Harmonies économiques, 2nd edition, Paris, 1851, p. 395).—11
[33] Here as in a number of other places Marx uses the term "subject" in its pre-Kantian sense, as the bearer of predicates, properties, determinations, characteristic features, relations.— 81, 124
[34] An allusion to Proudhon's quasi-Hegelian arguments, in Système des contradictions économiques, ou Philosophie de la misère, about abstract economic categories, and his alleged discovery of their dialectical interconnection, "their serial relation in the understanding". Marx attacked this metaphysical conception of Hegelian dialectics in The Poverty of Philosophy (see present edition, Vol. 6, pp. 162-65).—90
[35] Here Marx summarises John Locke's arguments on the fundamental difference between silver as a measure of value and standards like the ell or the quart: while the latter two may remain in the hands of the buyer or of the seller, silver coin not only measures the value of the thing bought, but always passes from the buyer to the seller (see Further Considerations Concerning Raising the Value of Money in The Works of John Locke, in four volumes, 7th ed., Vol. II, London, 1768, p. 92). Marx quotes this passage on page 34 of his seventh notebook (see present edition, Vol. 29).—91
[37] Characterising money as a "surety" or "movable surety of society" (Pfand or Faustpfand der Gesellschaft), Marx meant, first, Aristotle's words in his Ethica Nicomachea (Book V, Chapter 8, § 14) and, second, the definition of money given by John Bellers in his Essays about the Poor, Manufactures, Trade, Plantations, and Immorality... London, 1699, p. 13. Marx refers to Aristotle in his Index to the Seven Notebooks (see present edition, Vol. 29) and to Bellers in Capital, Vol. I, Chapter III (present edition, Vol. 35). The term "Faustpfand der Gesellschaft" occurs in J. G. Büsch's Abhandlung von dem Geldumlauf (Part I, 2nd ed., Hamburg and Kiel, 1800, pp. 298-99). Locke speaks of "money as a pledge". Cf. his Some Considerations of Consequences of the Lowering of Interest, and Raising the Value of Money (l69l),(The Works of John Locke, Vol. II, London, 1768, p. 15).—97
[38] In speaking about the Romantic embellishment of the individual's position in pre-capitalist society in contrast to capitalism. Marx is alluding to Adam Müller's Die Elemente der Staatskunst (Part II, Berlin, 1809. pp. 72-217), and to works by Thomas Carlyle, including his pamphlet Chartism (London, 1840, pp. 49-80).—
[39] According to tradition, the Roman patrician Menenius Agrippa persuaded the plebeians to return to Rome from the Holy Hill, to which they had withdrawn in 494 B.C. in protest against patrician oppression. He did so by telling them a parable about the limbs of the human body which had rebelled against the stomach. Agrippa compared society to a living organism, attributing to the plebeians the role of the hands and to the patricians that of the stomach. Refusal by the plebeians to feed the patricians, he said, was tantamount to the separation of the hands from the stomach and was bound to lead to the death of the organism, i.e. of the Roman state.— 99
[40] Apparently a reference to John Francis Bray's book Labour's Wrongs and Labour's Remedy, Leeds, 1839, p. 141.—99
[41] James Steuart distinguishes between "agriculture exercised as a trade" and "agriculture exercised as a direct means of subsisting" (An Inquiry into the Principles of Political Oeconomy, Vol. I, Dublin, 1770, p. 88).—106
[42] This refers to the discovery of rich gold fields in California in 1848 and Australia in 1851. As early as January 1850, eighteen months after the Californian discovery, Marx and Engels pointed to its vast importance for the commercial and industrial development of Europe, as well as of America and Asia — in particular, as stimulating the colonisation of new territories (see present edition, Vol. 10, pp. 502-06). The Californian and Australian discoveries spurred industrial and financial activity in the capitalist countries and to a certain degree contributed to the defeat of the European revolutions of 1848 and 1849.—106, 157
[43] The Albani—the name given by Pliny, Strabo and other ancient writers to the inhabitants of Albania, a country in the lower reaches of the Kura and the Aras in Eastern Transcaucasia.—109
[2] This refers to Chapter XIV in the second edition of Bastiat's book Harmonies économiques (there are 25 chapters in that edition). Since this section of the draft "Bastiat and Carey" begins on page 5 of the manuscript, while half of page 4 was left blank, it may be assumed that Marx originally intended to discuss Bastiat's book in greater detail, giving, in particular, an account of the preceding 13 chapters.—11