[ Money Circulation]
The circulation or turnover of money corresponds to an opposite circulation or turnover of commodities. A's commodity passes into B's hands, while B's money passes into A's hands, etc. The circulation of money, like that of commodities, sets out from and returns to an infinite number of different points. The turnover of money at the stage at which we are discussing it here, i.e. the stage of its direct circulation, does not set out from one centre towards the various points of the periphery, or return from those points to one single centre. This takes place only when circulation is mediated by the banking system, though this first spontaneous and natural circulation does consist of a mass of turnovers. But turnover in the proper sense begins only when gold and silver cease to be commodities. No circulation in this sense takes place between countries exporting the precious metals and those importing them, for in this case we have only a simple exchange, since gold and silver figure as commodities, not as money.
In so far as money mediates the exchange of commodities, i.e. in this case their circulation, and is therefore the means of exchange, it is the instrument of circulation, the "wheel of circulation''.(1) But in so far as it is itself circulated in this process, turned over, follows its own movement, it has itself a circulation, money circulation, money turnover. We must ascertain how far this circulation is governed by special laws. To begin with, it is clear that if money is the wheel of circulation for commodities, commodities are likewise the wheel of circulation for money. If money circulates commodities, commodities circulate money. The circulation of commodities and the circulation of money therefore condition each other.
There are three points to consider in relation to money turnover: (1) the form of the movement itself, the line it follows (its concept); (2) the quantity of money in circulation; (3) the velocity with which it accomplishes its movement, circulates. This can only be done in relation to commodity circulation. It is clear, to begin with, that commodity circulation possesses elements which are completely independent of money circulation and which, indeed, determine the latter, either directly or e.g. because the same circumstances which govern the velocity of commodity circulation also govern that of money circulation. The character of the mode of production as a whole will govern both, and more directly the circulation of commodities.
[On it depends] the number of people carrying on exchange (the size of the population); their distribution as between town and countryside; the absolute quantity of commodities, of products and of productive agents; the relative quantity of commodities put into circulation; the development of the means of communication and transport, in the double sense that it determines both the circle of those involved in exchange with each other, entering into contact, and the speed with which the raw material gets to the producer and the product to the consumer; finally the development of industry, which concentrates different branches of production in one place, e.g. spinning, weaving, dyeing, etc., thus making superfluous a series of mediating acts of exchange. Commodity circulation is the basic premiss of money circulation. How far the latter reacts back on the circulation of commodities, to be examined.
To start with, the general concept of circulation or turnover must be established.