[ Varia]

In the figurative language of the Peruvians, gold is "THE TEARS WEPT BY THE SUN" ([W. H.] Prescott [History of the Conquest of Peru, 4th ed., Vol. I, London, 1850, p. 92]).

"Without the USE of the TOOLS or the machinery FAMILIAR TO THE EUROPEAN, EACH INDIVIDUAL" (in Peru) "COULD HAVE DONE BUT LITTLE; BUT ACTING IN LARGE MASSES and UNDER A COMMON DIRECTION, THEY WERE ENABLED BY INDEFATIGABLE PERSEVERANCE TO ACHIEVE RESULTS" etc. (I.e. [p. 127]).

//The money used by the Mexicans (to a greater extent with BARTER and oriental landed property) [was]

"A REGULATED CURRENCY OF DIFFERENT VALUES. THIS CONSISTED OF TRANSPARENT QUILLS OF GOLD DUST; OF BITS OF TIN, CUT IN THE FORM OF A T ; AND OF BAGS OF CACAO, CONTAINING A SPECIFIED NUMBER OF GRAINS. 'O blessed money which furnishes mankind with a sweet and nutritious beverage and protects its innocent possessors from the infernal disease of avarice, since it cannot be long hoarded, nor hidden underground.' SAYS Peter Martyr (De orbe novo), (Prescott, [p. 123]).a

a Marx quotes in Latin.— Ed.

"Eschwege (1823) estimates the total value of the DIAMOND WORKINGS in 80 years

AT A SUM HARDLY EXCEEDING 1 8 MONTHS' PRODUCE OF SUGAR OR COFFEE IN BRAZIL" ([H.] Merivale [Lectures on Colonization and Colonies, Vol. I, London, 1841, p. 52]). "The FIRST" (BRITISH) "SETTLERS" (IN NORTH AMERICA) "CULTIVATED THE CLEARED GROUND ABOUT THEIR VILLAGES IN COMMON.... This CUSTOM PREVAILS u n t i l 1 6 1 9 i n Virginia" etc. (ibid., pp. 91-92). (Notebook, p. 52.^[98])

("The Cortes addressed the following petition to Philip II in 1593: 'The Cortes of Valladolid of the year '48 requested Your Majesty not to permit the further importation into this kingdom of candles, glassware, jewellery, knives and similar articles coming from abroad, which, though they are of no use in human life, have to be exchanged for gold, as though the Spaniards were Indians" (Sempéré, [Considérations sur les causes de la grandeur et de la décadence de la monarchie espagnole, Vol. I, Paris, 1826, pp. 275-76]).)="

" I N DENSELY PEOPLED COLONIES THE LABOURER, ALTHOUGH FREE, IS NATURALLY DEPENDENT ON THE CAPITALIST; IN THINLY PEOPLED ONES THE WANT OF THIS NATURAL DEPENDENCE MUST BE SUPPLIED BY ARTIFICIAL RESTRICTIONS" (Merivale, Lectures on Colonization etc., Vol. II, London, 1842, p. 314).//

[VII-45] Roman Money: the aes grave'0 was a pound of copper (emere per aes et libramc). This was the as.* In 485 A.U.C.d silver denarii = 10 as (initially, 40 of these denarii to the pound; in 510 [A.U.C.] 75 denarii to the pound; the denarius was still =10 as, but 10 as of 4 ounces). In 513 the as was reduced to 2 ounces; the denarius still =10 as, now represented only >/84 of a pound of silver. This figure, 1/84, applied until the end of the Republic, but in 537 the denarius was rated at 16 as of one ounce, and in 665 only at 16 as of half an ounce.... In the year 485 of the Republic the silver denarius=l franc 63 [centimes]; in 510=87 centimes; between 513 and 707=78 centimes. From Galba to the Antonines, 1 france

(Dureau de la Malle, [Economie politique des Romains,] Vol. 1, [pp. 15, 16, 448, 450]).

At the time of the first silver denarius, the ratio between 1 pound of silver and 1 pound of copper=400:l. At the beginning of the Second Punic War ^{[3 9]} it was 112:1 (I.e., Vol. 1, pp. 76-77, 81-82).

"The Greek colonies in Southern Italy drew silver from Greece and Asia, direct or via Tyre and Carthage, and minted silver coins from the sixth and fifth centuries B.C. onwards. Despite this proximity, the Romans proscribed the use of gold and silver for political reasons. The people and the Senate felt that so facile a means of circulation would be conducive to concentration, an increase in the number of slaves, and the decay of the ancient customs and of agriculture" (I.e., pp. 64, 65).

"According to Varro, the slave was an instrumentum vocale, the animal an instrumentum semi-mutum, and the plough an instrumentum mutum" (I.e., pp. 253, 254).

* as or Hira=12 ounces; I ounce=24 scrupula; 288 scrupula to the pound.

a Marx quotes in French.—Ed. b Heavy copper (measured by weight).— Ed. c Literally: to buy with the help of copper and scales; figuratively: to buy with due observance of the formalities.— Ed.

d From the founding of the city (of Rome).— Ed. e This and the following passages are partly in French and partly in German translation in the manuscript.— Ed.

(The Roman citizen's daily consumption [of bread] was somewhat more than 2 French pounds; that of a countryman 3 pounds. A Parisian consumes 0.93 pound of bread; a countryman in the 20 departments in which corn is the main source of nourishment, 1.70 pounds (I.e., [p. 277]). In present-day Italy, 1 lb. 8 ounces, where corn is the main source of nourishment. Why did the Romans eat relatively more? Originally they ate the corn raw or only softened in water; afterwards, they got the idea of roasting it. Later they picked up the art of grinding corn into flour, and at first ate the dough made from this flour raw. To grind the grain, they used a pestle or two stones knocked or rotated against each other.... The Roman soldier prepared a supply of this raw dough, puis, that would last him for several days. Then the winnowing-fan was invented, which screens the grain; a means was found for separating the bran from the flour; finally, leaven was added, and at first bread was eaten raw, until it was accidentally discovered that by cooking the bread it could be prevented from going sour and that it would keep much longer. It was not until after the war against Perseus, in 580, that bakers appeared in Rome (I.e., p. 279). "Before the Christian era, the Romans had no knowledge of windmills" (I.e., p. 280).)

"Parmentier has shown that in France the art of milling has made great progress since the time of Louis XIV, and that the difference between the yield of the old and the new method of milling amounts to V2 the bread supplied by the same grain. At first 4, then 3, then 2 and finally 1 V3 setiers of wheat were assigned for the annual consumption of an inhabitant of Paris. So the enormous disproportion between the daily consumption of wheat by the Romans and by us is easily explained; it stems from the imperfect methods of milling and bread-making" (I.e., p. 281).

"The agrarian law WAS A LIMITATION OF LANDED PROPERTY AMONG ACTIVE CITIZENS. THIS LIMITATION OF PROPERTY FORMED THE FOUNDATION OF THE EXISTENCE AND PROSPERITY OF THE OLD REPUBLICS" (l.C, [Vol. II,] p. 256). "The revenues of the State consisted of the returns from Crown land, payment in kind, statute labour, and a number of money taxes paid on the import and export of merchandise, or levied on the sale of certain commodities. This mode exists, almost without change, in the Ottoman Empire. At the time of Sulla's dictatorship and even at the end of the 7th century, anno 697, the annual receipts of the Roman republic totalled only 40 million francs.... In 1780, the revenue of the Turkish sultan was only 35 million piastres or 70 million francs.... The Romans and the Turks collected most of their revenues in kind. In the case of the Romans, the taxes amounted to Vio of the grain crop, V5 of the fruit; among the Turks, they varied from V2 to Vio °t the produce.... Since the Roman Empire was merely an immense agglomeration of independent municipalities, the greater part of the charges and expenses remained communal" ([Vol. II], pp. 402-05).

(The Rome of Augustus and Nero, without the suburbs, had only 266,684 inhabitants. Assumes that in the fourth century of the Christian era the suburbs had 120,000 inhabitants, and that 382,695 people lived within the Aurelian walls; a total of 502,695; plus 30,000 soldiers and 30,000 foreigners; all told roughly 562,000 people. Madrid, for 1 V^[2] centuries from the time of Charles V the capital of a part of Europe and of half the New World, had many correspondences with Rome. Its population, too, did not grow in proportion to its political importance" (I.e., [Vol. IJ pp. [370, 403,] 405-06).)

"The state of society in Rome at the time resembled that in Russia or in the Ottoman Empire, far more than that in France or in England: litde commerce or industry; immense fortunes alongside extreme poverty" (I.e., [Vol. II,] p. 214).

(Luxury only in the capital and at the residences of the Roman satraps.)

"From the destruction of Carthage to the founding of Constantinople, the relation of Roman Italy to Greece and the Orient was the same as that of Spain to Europe in the eighteenth century. In Alberoni's words: 'Spain is to Europe what the mouth is to the body: everything goes into it, nothing stays there'" (I.e., [Vol. II,] pp. 399-400).

Usury was initially free in Rome. The law of the Twelve Tables (303 A.U.C.) fixed interest on money at 1% per annum (Niebuhr says 10%).^[40] These laws were promptly violated. Duilius (398 A.U.C.) once again reduced the interest on money to 1%, unciarium foenus? Reduced to '/2% in 408; in 413, lending at interest was absolutely forbidden by a referendum held by the tribune Genucius. It is not surprising that in a republic in which industry and wholesale and retail trade were forbidden to citizens, trading in money was likewise forbidden (I.e., Vol. II, pp. [259,] 260, 261). This state of affairs lasted for 300 years, till the capture of Carthage. Then [the maximum chargeable] 12%; the usual rate 6% per annum (I.e., p. 261). Justinian fixed the interest rate at 4%. In Trajan's time, the usura quincunxh was the legal interest of 5%. In Egypt in 146 B.C., the commercial rate of interest was 12% (ibid., p[p. 261-J263).

[VII-46] The INVOLUNTARY ALIENATION of feudal landed property develops with usury and money:

" T H E INTRODUCTION OF MONEY, WHICH BUYS ALL THINGS, and hence the FAVOUR for the CREDITOR who loans MONEY to the landowner, BRINGS IN THE NECESSITY OF LEGAL ALIENATION for the advance" (John Dalrymple, An Essay towards a General History of Feudal Property in Great Britain, 4th ed., London, 1759, p. 124).

In medieval Europe: "Payments in gold were customary only in the case of some objects of trade, mainly costly objects. Gold changed hands for the most part outside the merchant circle, in gifts made by the Great, in the payment of certain high duties and heavy money fines, and in purchases of landed estates. Uncoined gold was not infrequently weighed, in pounds or marks (half-pounds) ... 8 ounces=l mark; one ounce was therefore=to 2 Lot or 3 carats. Until the time of the Crusades, the only gold coins known were the Byzantine solidi, the Italic tari, and the Arabian maurabotini" (AFTERWARDS maravedi). (Hüllmann, Städtewesen des Mittelalters, Part I, Bonn, 1826, pp. 402-04.)

"In the Frankish laws as well, the solidus figures merely as coin of account in which the value of agricultural products levied as fines was expressed. E.g., among the Saxons, the solidus was equivalent to a yearling bullock, in the condition in which it usually is in autumn.... In Ripuarian law,^[41] a healthy cow represented one solidus ... twelve denarii=l gold solidus" (pp. 405, 406). 4 tari=l Byzantine solidus.... From the thirteenth century onwards, various gold coins were minted in Europe: augustales (issued by Emperor Frederick II in Sicily: Brundisium and Messina); florentini or floreni (1252 in Florence); ... ducats or sequins (Venice, since 1285) (I.e., pp. 408-11).

"In Hungary, Germany and the Netherlands also, larger gold coins were minted from the fourteenth century onwards; in Germany, such coins were simply called gulden" (I.e., p. 413).

a An increase of one ounce.— Ed. b An interest of 5 ounces.— Ed.

in all larger payments. Coined silver, too, was weighed in such payments, since the coins were still almost totally composed of pure silver, and it was only a matter of weight. Hence the names pound (livre, lire) * and 'mark' in part signified imaginary coins or coins of account, and in part were transferred to real silver coins. Silver coins: denaren or kreuzer. In Germany, these denaren were called pfennigs (pennig, penning, phenning) from as early as the ninth century. Originally pending, penthing, pfentinc, derived from pfundig⁽¹⁾ in the old form pfiinding, as much as full-weight: hence pfundige denaren, abbreviated into pfiindinge. Another name for the denaren, from the beginning of the twelfth century in France, Germany, the Netherlands, and England, derives from the star [Stern, in German] which replaced the crosses stamped on the coin: sternlinge, sterlinge, Stärlinge. Denaren sterling=pfennigs sterling. In the fourteenth century, 320 of the Netherlands sterlinge composed a pound, 20 pieces to the ounce. Silver solidi in German were called Schädlinge, Schillinge. In the early Middle Ages, silver solidi were not real coins but the content of 12 denaren. 1 gold solidus=12 denaren or sterlinge, for this was the average ratio of gold and silver.

"Obols, half pfennigs, hälblinge were in circulation as small change.... As the small crafts became increasingly widespread, a growing number of trading cities and petty princes obtained the right to strike their local coin, which was therefore mostly small change. They admixed copper, this went further and further.... Thick pfennigs, gros deniers, grossi, groschen, groats, were first coined in Tours before the middle of the thirteenth century. These groschen were originally double pfennigs" (pp. 415-33).

"The fact that the Popes levied ecclesiastical dues upon almost all Catholic countries contributed not a littie, first, to the development of the entire monetary system in trade-plying Europe, and then, as a consequence, to various attempts to get round the Church ban (on interest). The Pope made use of Lombards for the collection of the pallium-fees from the Archbishops, and for exacting the other dues. They were the most important usurers and pawnbrokers, under Papal protection. Known ever since the middle of the twelfth century. Particularly from Siena. 'Official usurarii. In England, diey were called 'Romish-episcopal money dealers'. Some bishops, i.a. those of Basel, pawned their episcopal ring, silken vestments and the whole of the Church valuables to the Jews in return for a small sum, and paid interest. On the other hand, bishops, abbots and priests themselves engaged in usury by pawning the Church valuables, with Tuscan money-dealers from Florence, Siena and other cities for a share in the profits", etc. (see I.e. [Part II, pp. 36-45], Notebook, p. 39«).

Since money is the universal equivalent, the GENERAL POWER OF PURCHASING, everything is purchasable, everything is convertible into money. But it can be converted into money only by being alienated, by its owner giving it up. EVERYTHING IS THEREFORE ALIENABLE, or indifferent for the individual, external to him. The so-called inalienable, eternal possessions, and the immovable, settled property relations corresponding to them, therefore collapse before money. Furthermore, since money itself only exists in circulation and is exchanged for enjoyments, etc.— for values — which are all ultimately reducible to purely individual enjoyments, everything is valuable only in so far as it exists for the individual. The independent value of things — except in so far as it consists in their mere being for other purposes, their relativity, exchangeability — the absolute value of all things and relations is thereby dissolved. Everything is sacrificed to egoistic enjoyment. For, just as everything can be alienated for money, everything can be obtained for money. Everything can be had for "ready money", which as something existing externally to the individual can be got hold of BY FRAUD, VIOLENCE, etc. Hence everything is appropriable by everyone, and what the individual can or cannot appropriate is a matter of chance, since it depends upon the money he possesses. In this way, the individual in himself is posited as the lord of everything. There are no absolute values, since value as such is relative to money. There is nothing inalienable, for everything is alienable for money. There is nothing sublime, sacred, etc., since everything can be appropriated with money. The "res sacrae" and "religiosae", which can be "in nullius bonis", "nee aestimationem recipere, nee obligari alienarique posse", which are exempted from "commercio hominum",^[3] do not exist before money, just as all are equal before God. Beautiful the way the Roman Church itself acted as the chief propagandist for money in the Middle Ages.

"As the ecclesiastical law against usury had long since become a dead letter, [Pope] Martin in 1425 abolished it in name too" (Hüllmann, I.e., Part II, Bonn, 1827, p. 55). "In the Middle Ages, no country had a general rate of interest. First, the strictness of the clerics. Insecurity of the legal provisions for protecting loans. The interest rate was so much the higher in individual cases. The limited circulation of money, the need to make most payments in cash, [VII-47] the bill business being as yet undeveloped. Therefore wide divergences in interest rates and in the concept of usury. In Charlemagne's time, it was only considered usurious to charge 100% [or more]. In Lindau on Lake Constance, in 1344, local burghers took 216^[2]/^[3]%. In Zurich, the City Council fixed the legal interest rate at 43 '/»%. In Italy, 40% had sometimes to be paid, although the usual rate from the 12th to the 14th century did not exceed 20%. Verona decreed that 12 ^[1]I⁽²⁾% should be the legal rate. Frederick II fixed the rate at 10%, but only for Jews. He did not wish to speak for Christians. In Rhenish Germany, 10% was the usual rate as early as the 13th century" (I.e., pp. 55-57).

"Productive CONSUMPTION, where the consumption of a commodity is A PART OF THE PROCESS OF PRODUCTION ([S. Ph.] Newman, [Elements of Political Economy, Andover and New York, 1835, p. 296,] Notebook XVII, 10^[42]). " I T WILL BE NOTICED THAT IN THESE INSTANCES THERE IS NO CONSUMPTION OF VALUE THE SAME VALUE EXISTING UNDER A NEW FORM" (ibid.). Further "CONSUMPTION ... the APPROPRIATION

OF INDIVIDUAL REVENUE TO ITS DIFFERENT USES" (l.C, p . 2 9 7 ) .

" T O SELL FOR MONEY SHALL AT ALL TIMES BE MADE SO EASY AS IT IS NOW TO BUY WITH MONEY, AND PRODUCTION WOULD BECOME THE UNIFORM AND NEVER FAILING CAUSE OF DEMAND" (John Gray, The Social System etc., Edinburgh, 1831, p. 16). "After land, capital and labour, the fourth necessary condition of production is: the

INSTANT POWER OF EXCHANGING" (I.e., p . 18). " T O BE ABLE TO EXCHANGE IS FOR THE

MAN IN SOCIETY AS IMPORTANT AS IT WAS T O ROBINSON CRUSOE T O BE ABLE T O PRODUCE" (ibid., p. 21).

"According to Say, credit merely transfers capital, but creates none. This is true only in the case of loans made by capitalists to industrialists, but not of credit between producers in their mutual advances. What one producer advances to another is not capital; it is products, commodities. These products, these commodities, can and doubtless will become active capital in the hands of the borrower, i.e. instruments of labour; but in the hands of their owner they are, in fact, merely products for sale, and consequendy inactive.... One must distinguish between products, or commodities, and agents of labour, or productive capital. As long as a product remains in the hands of its producer, it is merely a commodity, or, if one wishes to put it this way, inactive, inert capital. Far from offering any advantage to the manufacturer who holds it, that product is a burden to him, a constant source of inconvenience, of overhead costs and losses: the cost of storage, maintenance and safeguarding, interest on the outlay, etc., not counting the deterioration or waste to which nearly every commodity is subject when it is not used for a long time.... If he, therefore, sells his commodity on credit to another industrialist who can apply it to his own kind of labour, the commodity is converted, for the latter, from inert merchandise into active capital. In this way, the productive capital of one party increases without any diminution in that of the other. What is more: if it is admitted that the seller, even though disposing of his commodities on credit, nevertheless receives for them bills of exchange which it is legal for him to have discounted at once, is it not clear that he thereby acquires the means to renew his own raw material and instruments of labour, enabling him to resume work? There is thus a double increase in productive capital; in other words, power acquired by both parties" (Charles Coquelin, Du credit et des banques dans l'industrie, Revue des deux mondes, Vol. 31, 1842, pp. 799-800).a

"[Suppose] that the whole of the merchandise for sale passes rapidly, without delays or obstacles, from the state of an inert product to that of active capital: what new activity in a country! ... This rapid transformation is precisely the benefit brought about by credit. This is the activity of circulation. In this way, credit can multiply the industrialists' business ten-fold. In a given period of time, the merchant or producer renewed his raw materials and products not once but ten times. Credit effects this by increasing everyone's purchasing power. Instead of this power being restricted to those who are able to pay at the given moment, credit confers it upon everyone whose position and morality offer a guarantee of future repayment; it gives it to whoever is capable of using the products by means of labour. Hence the first benefit of credit is that it increases, if not the sum of the

a Here and below Marx quotes from Coquelin in French, using German words occasionally.— Ed.

values possessed by a country, at least the sum of the active values. This is the immediate effect. From it flows an increase in the productive forces, hence also in the sum of values, etc." (I.e. [pp. 801, 802, 805]).

"LETTING IS A CONDITIONAL SALE, OR SALE OF THE USE OF A THING FOR A LIMITED TIME" (Th. Corbet, An Inquiry into the Causes and Modes of the Wealth of Individuals etc., London, 1841, p. 81).

"TRANSFORMATIONS TO WHICH CAPITAL IS SUBJECTED IN THE WORK OF PRODUCTION. CAPITAL, TO BECOME PRODUCTIVE, MUST BE CONSUMED" (S. P. Newman, Elements of Political Economy, Andover and New York, 1835, p. 80).

"ECONOMIC CYCLE ... THE WHOLE COURSE OF PRODUCTION, FROM THE TIME THAT OUTLAYS ARE MADE, TILL RETURNS ARE RECEIVED. IN AGRICULTURE, SEED TIME IS ITS COMMENCEMENT, AND HARVESTING ITS ENDING" ([ibid.,] p. 81). The distinction between FIXED and CIRCULATING CAPITAL is based on the fact THAT DURING EVERY ECONOMIC CYCLE, A PART IS PARTIALLY, AND ANOTHER PART TOTALLY CONSUMED (I.e.).

CAPITAL AS DIRECTED TO DIFFERENT EMPLOYMENTS (I.e. [p. 82]).

This belongs in the theory of competition.

"A MEDIUM OF EXCHANGE: In undeveloped nations, WHATEVER COMMODITY CONSTITUTES THE LARGER SHARE OF THE WEALTH OF THE COMMUNITY, OR FROM ANY CAUSE BECOMES MORE FREQUENTLY THAN OTHERS AN OBJECT OF EXCHANGE, IS WONT TO BE USED AS A CIRCULATING MEDIUM. Hence CATTLE are a means of exchange among PASTORAL TRIBES, DRIED FISH IN NEWFOUNDLAND, SUGAR in the West Indies, tobacco in Virginia, PRECIOUS METALS [have the] advantage: (a) SAMENESS OF QUALITY IN ALL PARTS OF THE WORLD; (b) ADMIT OF MINUTE DIVISION AND EXACT APPORTIONMENT; (c) RARITY AND DIFFICULTY OF ATTAINMENT; (d) THEY ADMIT OF COINAGE (I.e., p[p. 99,] 100 [101]).

The notion of capital as an entity which reproduces itself — as a value which perpetuates and augments itself by VIRTUE OF AN INNATE QUALITY — has led Dr. Price to prodigious fancies, which far outstrip the fantasies of the alchemists. Pitt took them seriously and, in his laws on the SINKING FUND (see Lauderdale), made them into the pillars of his financial wisdom.^[43] The following are a few striking extracts from Price:

[VII-48] "MONEY BEARING COMPOUND INTEREST INCREASES AT FIRST SLOWLY. BUT, THE RATE OF INCREASE BEING CONTINUALLY ACCELERATED, IT BECOMES IN SOME TIME SO RAPID, AS TO MOCK ALL THE POWERS OF THE IMAGINATION. ONE PENNY, PUT OUT AT OUR SAVIOUR'S BIRTH TO 5% COMPOUND INTEREST, WOULD, BEFORE THIS TIME, HAVE INCREASED TO A GREATER SUM, THAN WOULD BE CONTAINED IN A 1 5 0 MILLIONS OF EARTHS, ALL SOLID GOLD. BUT IF PUT OUT TO SIMPLE INTEREST, IT WOULD, IN THE SAME TIME, HAVE AMOUNTED TO NO MORE THAN 7 SHILLINGS 4 L/2 D. OUR GOVERNMENT HAS HITHERTO CHOSEN TO IMPROVE MONEY IN THE LAST, RATHER THAN THE FIRST OF THESE WAYS" (Richard Price, An Appeal to the Public, on the Subject of the National Debt, 2nd ed„ London, 1772, pp. 18-19).

(His grand idea: T h e Government should borrow at simple interest, and loan out that money at compound interest.^[3])

a See present edition, Vol. 28, p. 298.— Ed.

In his Observations on Reversionary Payments etc. ([2nd ed.,] London, 1772), his fantasy soars even higher:

" A SHILLING PUT OUT TO 6 % COMPOUND INTEREST AT OUR SAVIOUR'S BIRTH WOULD ... HAVE INCREASED TO A GREATER SUM THAN THE WHOLE SOLAR SYSTEM COULD HOLD, SUPPOSING IT A SPHERE EQUAL IN DIAMETER TO THE DIAMETER OF SATURN'S ORBIT" (I.e., p. XIII, note). "A State NEEDS NEVER, THEREFORE, BE UNDER ANY DIFFICULTIES; FOR, WITH THE SMALLEST SAVINGS, IT MAY, IN AS LITTLE TIME AS ITS INTEREST CAN REQUIRE,

PAY OFF THE LARGEST DEBTS" ( p p . XIII-XIV).

T h e worthy Price WAS SIMPLY DAZZLED BY THE ENORMOUS QUANTITIES RESULTING FROM GEOMETRICAL PROGRESSION OF NUMBERS. Since he considered capital, WITHOUT ANY REGARD TO THE CONDITIONS OF REPRODUCTION OF LABOUR, as A SELF-ACTING THING, merely as a number which multiplies itself, he was well able to believe that he had discovered the law of its growth in that formula (see above). Pitt, in 1792, in a speech in which he proposed increasing the sum allocated to the SINKING FUND, took Dr. Price's mystification quite seriously. (S=C (l+i) n 4 4).

In his Dictionary of commerce, 1841, McCulloch lists the properties of metal money thus:

"The material must be: (1) divisible INTO THE SMALLEST PORTIONS; (2) capable of being kept for AN INDEFINITE PERIOD without DETERIORATING; (3) easily TRANSPORTABLE from place to place by virtue of possessing GREAT VALUE IN SMALL BULK; (4) such that one piece of money, OF A CERTAIN DENOMINATION, should always be equal, in magnitude and QUALITY, TO EVERY OTHER PIECE OF THE SAME DENOMINATION; (5) ITS VALUE should be COMPARATIVELY STEADY" (p. 836 [MacCulloch, A Dictionary, practical, theoretical, and historical, of commerce and commercial navigation, London, 1847.]).

T h r o u g h o u t his polemic with Bastiat, in Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon, Paris, 1850, the whole argument of the worthy Proudhon hinges on the fact that lending appears to him to be something quite different from selling.

The lending of money at interest "is the ability of selling the same object over and over again, and receiving the price of it, over and over again, without ever giving up the ownership of what is sold"3 (p. 9, in the first letter of Chevé, one of the editors of La Voix du Peuple).

T h e different forms in which the reproduction of capital appears here prevent him from seeing that this continual reproduction of capital — the price of which constantly returns, and is over and over again exchanged for labour with profit, a profit which is over and over again realised in purchase and sale — constitutes its concept. H e is led astray by the fact that the

a Here and below Marx quotes from Proudhon in French.— Ed.

9* "object" does not change owners, as in purchase and sale; hence, au fond, by the form of reproduction, which capital loaned out at interest snares with fixed capital. In the case of house rent, of which Chevé speaks, the form involved is, directly, that of fixed capital. If circulating capital is considered in its entire process, it is evident that, although it is not the same object (e.g., a particular pound of sugar) that is sold over and over again, the same value is reproduced over and over again, and the alienation only concerns the form, not the substance.

Obviously, people who are capable of raising such objections are still confused about the most elementary concepts of political economy. Proudhon does not understand how either profit or, therefore, interest originates from the law of exchange of values. Hence he argues that "house", money, etc. should not be exchanged as "capital" but as "commodities ... at cost price" ([Gratuite du crédit, pp. 43,] 44).

The worthy young fellow does not understand the crucial point — that value is exchanged for labour, according to the law of values; and consequendy that, if he is to abolish interest, he would have to abolish capital itself, the mode of production based on exchange value, and therefore abolish wage labour, too.

Mr. Proudhon's inability to find even one distinction between loan and sale:

"Actually, the hatter who sells his hats ... obtains the value of them, neither more nor less. But the capitalist who loans out his capital ... not merely gets his capital back in full; he gets back more than his capital, more than he brought to the exchange; over and above his capital, he gets an interest" (p. 69).

Consequenüy, Mr. Proudhon's hatters do not reckon either profit or interest in their cost price. He does not understand that precisely by obtaining the value of their hats they obtain more than the hats have cost them, because a part of this value has been appropriated without equivalent in the exchange with labour. Here is also his great proposition, elucidated above^[3]:

"It is impossible, with interest on capital being added in commerce to the worker's wages to make up the price of the commodity, for the worker to be able to buy back what he himself has produced. Living by working is a principle which, under the rule of interest, is implicitly self-contradictory" ([I.e.,] p. 105).

In letter IX (pp. 144-52), the worthy Proudhon confuses money as means of circulation with capital, and on this basis concludes that the "capital" existing in France yields 160% (viz. 1,600 million in annual interest on the national debt, mortgages, etc., for a

See present edition, Vol. 28, pp. 352-62.— Ed.

capital of 1,000 million ... the sum of money ... circulating in France).

How little he understands about capital in general and its continuous reproduction is evident from the following assertions which he makes specifically about capital-money, i.e. money loaned out as capital:

"As, by the accumulation of interest, capital-money, from exchange to exchange, always returns to its source, it follows that the re-lending, always done by the same hand, always profits the same person" (p. 154).

"All labour must yield a surplus" [p. 200], (Everything should be sold, nothing should be loaned. That is the whole trick. Inability to see that the exchange of commodities rests upon the exchange between capital and labour, and the latter form of exchange involves profit and interest. Proudhon wants to cling to the simplest, most abstract form of exchange.)

Mr. Proudhon provides the following elegant demonstration:

"Since value is only a proportion, and all products necessarily bear a certain proportion to one another, it follows that from the social point of view products are always values and realised values; for society, the distinction between capital and product does not exist. The distinction is completely subjective to the individuals" (p. 250).

The antagonistic nature of capital, and the necessity for it of the existence of the propertyless worker, is naively expressed by earlier English economists, e.g. the REVEREND MR. Joseph Townsend, the father of the population theory, by the FRAUDULENT appropriation of which Malthus made himself into a great man. (In general, Malthus is a shameless plagiarist, e.g., his theory of rent is borrowed from the farmer Anderson.) Townsend fVII-49] says:

" I T SEEMS TO BE A LAW OF NATURE THAT THE POOR SHOULD BE TO A CERTAIN DEGREE IMPROVIDENT, THAT THERE MAY BE ALWAYS SOME TO FULFIL THE MOST SERVILE, THE MOST SORDID, AND THE MOST IGNOBLE OFFICES IN THE COMMUNITY. T H E STOCK OF HUMAN HAPPINESS is THEREBY MUCH INCREASED. The more delicate are thereby relieved from DRUDGERY, and are at liberty to pursue higher CALLINGS", etc. (A Dissertation on the Poor Laws. EDITION OF 1817, p. 39). "LEGAL CONSTRAINT to labour is ATTENDED WITH TOO MUCH TROUBLE, VIOLENCE, AND NOISE, CREATES ILL WILL, etc., WHEREAS HUNGER IS NOT ONLY A PEACEABLE, SILENT, UNREMITTED PRESSURE, BUT, AS THE MOST NATURAL MOTIVE TO INDUSTRY AND LABOUR, IT CALLS FORTH THE MOST POWERFUL EXERTIONS" (p. 15).

(This, IN FACT, provides the answer to the question: which LABOUR is MORE PRODUCTIVE, that of slaves or that of free workers? A. Smith did not need to raise this question, since the capitalist mode of production presupposes free labour. On the other hand, it is likewise the developed relationship of capital and labour that vindicates A. Smith in distinguishing between PRODUCTIVE and UNPRODUCTIVE LABOUR. Lord Brougham's insipid witticisms against that distinction, and the objections to it, intended to be serious, by Say, Storch, McCulloch, and tutti quanti⁽³⁾ rebound upon it. A. Smith went astray only by conceiving of the objectification of labour in somewhat too crude a fashion, as labour which fixes itself in a tangible object. But this is of little consequence in him, clumsiness of expression.)

For Galiani, too, the existence of WORKMEN is due to a law of nature. In his book, published in 1750, Galiani says:

"God ordains that men who carry on trades of primary utility are born in abundance" (Delia Moneta, Scrittori classici Italiani di Economia Politica, Parte Moderna, Vol. Ill, Milan, 1803, p. 78).⁽⁴⁾

But he also already has the correct conception of value:

"It is toil alone ... that gives value to the thing" ([ibid.,] p. 74).

True, there are also qualitatively different kinds of labour, not merely because there are different branches of production, but because labour may be more intensive or less intensive, etc. Of course, the way in which these differences are adjusted, and all labour is reduced to SIMPLE UNSKILLED LABOUR, cannot be discussed here yet. It is sufficient to state that this reduction is, in fact, completed by the positing of the products of all kinds of labour as values. As values, they are equivalent to one another in certain proportions; the higher sorts of labour are themselves estimated in terms of simple labour. This becomes clear immediately when it is considered that, e.g., Californian gold is the product of simple labour, and yet every kind of labour is paid with it. This means that the qualitative distinction is abolished, and the product of a higher kind of labour is, in effect, reduced to a certain quantity of simple labour. Hence, such calculations of the various qualities of labour are completely irrelevant and do not lessen the validity of the [general] principle.

"Metals are used as money because they are valuable; they are not valuable because they are used as money" ([Galiani,] I.e., [p.] 95). "It is the velocity of the circulation of money, and not the quantity of the metals, that causes the amount of money to be large or small" ([p.] 99). "Money is of two kinds: ideal and real. And it is used for two different purposes: to valuate things and to buy them. For valuation, ideal money is just as good as real money, and probably even better.... The other use of money is to buy the very things for the pricing of which it serves.... Prices and contracts are estimated in ideal money and realised in real"

(pp. 112 et sq.). "A peculiar feature of metals is that in them alone all relations are reduced to a single one, namely, their quantity, for they have not been endowed by nature with any difference of quality either in their internal composition or in their external form and structure" ([pp.] 126-27).

This is a very important observation. Value implies a common substance, and that all distinctions, proportions, are reduced to purely quantitative ones. This is the case with the precious metals, which therefore appear as the natural substance of value.

"Money ... as a standard measuring all things by reference to the needs of life — is that which is generally called the price of things" (152). "Ideal money itself is usually the money of account, that is to say, the medium used to stipulate, contract and valuate everything. This is due to the same reason why the coins which today are ideal are the oldest coins of every nation, and all of them were once real, and precisely because they were real they were used for calculation" (153).

(This is also the formal explanation of the ideal money of Urquhart, etc. The BAR of iron was originally real money to the NIGGERS," etc., and was then converted into an ideal money; but they still tried to maintain its previous value. Since, as they see from trade, iron varies in value against gold, etc., the ideal BAR, to maintain its value, expresses varying proportions of actual quantities of iron. A complicated method of calculation, which does honour to these gentlemen's power of abstraction.) (Castlereagh, in the debates set off by the Bullion Committee in 1810, put forward similar CONFUSED NOTioNs.⁽⁵⁾)

Galiani elegantly states:

"That infinity which (things) do not possess when progressing, they possess in circulation" (156).

About use value, Galiani says beautifully:

"Price is a relation.... The price of things is their proportion to our need ... it does not yet have a fixed measure. Perhaps it will be found. I, for my part, think it is man himself" ([159,] 162).

"Spain, at the time when it was both the greatest and the richest power, calculated with reals and with the very small maravedis" (172-73).

"In fact, he" (man) "is the sole and true wealth" (188). " Wealth is a relation between two persons" (221). "When the price of a thing, or its proportion with other things, changes in the same proportion relative to all things, it is an obvious indication that the value of this thing alone has changed, and not that of all the others" (154).

(The costs of PRESERVING capital, repairing it, must also be included in the calculation.)

"THE POSITIVE LIMITATION OF QUANTITY IN PAPER MONEY WOULD ACCOMPLISH THE ONLY USEFUL PURPOSE THAT COST OF PRODUCTION DOES IN THE OTHER" ([G.] Opdyke, [A Treatise on Political Economy, New York, 1851, p.] 300).

T h e merely quantitative distinction in the material of money:

"MONEY IS RETURNED IN KIND ONLY" (in the case of LOANS); "WHICH FACT DISTINGUISHES THIS AGENT FROM ALL OTHER MACHINERY ... INDICATES THE NATURE OF ITS SERVICE ... CLEARLY PROVES THE SINGLENESS OF ITS OFFICE" ([ibid., p . ] 2 6 7 ) .

" W I T H MONEY IN POSSESSION, WE HAVE BUT ONE EXCHANGE TO MAKE IN ORDER TO SECURE THE OBJECT OF DESIRE, WHILE WITH OTHER SURPLUS PRODUCTS WE HAVE TWO, THE FIRST OF WHICH (SECURING THE MONEY) IS INFINITELY MORE DIFFICULT THAN THE SECOND" (287-88).

" T h e BANKER DIFFERS FROM THE OLD USURER ... THAT HE LENDS TO THE RICH AND SELDOM OR NEVER TO THE POOR. HENCE HE LENDS WITH LESS RISK, AND CAN AFFORD TO DO IT ON CHEAPER TERMS; AND FOR BOTH REASONS, HE AVOIDS THE POPULAR ODIUM WHICH ATTENDED THE USURER" (F. W. Newman, Lectures on Political Economy, London, 1851, p. 44).

[VII-50] All hide and secretly bury their money deep in the ground, especially the gentiles, who are almost the sole masters of trade and money, being held in thrall to the belief that gold and silver they hide during their lifetime will serve them after their death (François Bernier, Voyages contenant la description des états du

Grand Mogol etc., Vol. I, Paris, 1830, p. 314).a

In its natural state, matter is always destitute of value. Only by means of labour does it obtain exchange value, become an element of wealth (McCulloch, Discours sur l'origine, [Us progrès, les objets particuliers, et l'importance] de l'économie politique etc., translated by Prévost. Geneva and Paris, 1825, p. 57).

Commodities in exchange act as each other's measure (Storch, Cours d'économie politique. Avec des notes, etc., par J. B. Say, Vol. I, Paris, 1823, p. 81). "In the trade between Russia and China, silver is used to evaluate all commodities, yet this commerce is carried on by trocsb" (p. 88). "Just as labour is not the source of the value of wealth, is it not its measure either" (I.e., p. 123). "Smith allowed himself to be persuaded that the same cause which makes material objects exist was also the source and measure of their value" (p. 124).

"Interest is the price which one pays for the use of a capital" (p. 336). Money must have a direct value, but one based on a besoin factice.c Its material must not be indispensable for man's existence, since the entire quantity of it which is used as money can never be individually employed; it must always circulate (Vol. II, pp. 113, 114). "Money takes the place of all things" (p. 133).

Vol. V., Considérations sur la nature du revenu national, Paris, 1824:

"Acts of reproductive consumption are not, strictly speaking, expenses, but merely advances, since they are paid back to those who make them" (p. 54). "Is there not a manifest contradiction in this proposition that nations enrich themselves by their abstinence or their privations, that is to say by voluntarily condemning themselves to poverty?" (p. 176).

"At the time when hides and furs served as money in Russia, the inconvenience attached to the circulation of so bulky and so perishable a currency gave rise to the idea of replacing them with small stamped pieces of leather, which thus became tokens payable in hides and furs.... They preserved this role until 1700" (namely, later, that of representing the fractional parts of the silver kopecks), "at least in the town of Kaluga and its environs, until Peter I" (in 1700) "decreed that they should be surrendered in exchange for small brass coins" ([Storch, Vol. IV,] p. 79).

A suggestion of the miracles worked by compound interest is already to be found in Jos. Child, the great opponent of usury in the 17th century (Traités sur le commerce etc., translated from the English (published in English in 1669), Amsterdam and Berlin, 1754, pp. 115-17).

" I N POINT OF FACT A COMMODITY WILL ALWAYS EXCHANGE FOR MORE LABOUR THAN that which has produced it; AND IT is THIS EXCESS THAT CONSTITUTES PROFITS" (McCulloch, The Principles of Political Economy, London, 1825, p. 221).

This remark shows how well Mr. McCulloch has understood Ricardo's principle. He distinguishes between the real value and the exchange value [of a commodity]; the former, (1), is the

QUANTITY OF LABOUR EXPENDED IN ITS APPROPRIATION OR PRODUCTION; t h e l a t t e r , (2), is [this commodity's] power of purchasing CERTAIN QUANTITIES OF LABOUR or other commodities (p. 211).

MAN IS AS MUCH THE PRODUCE OF LABOUR AS ANY OF THE MACHINES CONSTRUCTED BY HIS AGENCY; AND IT APPEARS TO US THAT IN ALL ECONOMICAL INVESTIGATIONS HE OUGHT TO BE CONSIDERED IN PRECISELY THE SAME POINT OF VIEW (I.E., P. 115). WAGES REALLY CONSIST OF A PART OF THE PRODUCE OF THE INDUSTRY OF THE LABOURER (P. 295). T H E PROFITS OF CAPITAL ARE ONLY ANOTHER NAME FOR THE WAGES OF ACCUMULATED LABOUR ( P . 2 9 1 ) .

" A PERIODICAL DESTRUCTION OF CAPITAL HAS BECOME A NECESSARY CONDITION OF THE EXISTENCE OF ANY MARKET RATE OF INTEREST AT ALL. AND, CONSIDERED IN THAT POINT OF VIEW, THESE AWFUL VISITATIONS, TO WHICH WE ARE ACCUSTOMED TO LOOK FORWARD WITH SO MUCH DISQUIET AND APPREHENSION, AND WHICH WE ARE SO ANXIOUS TO AVERT, MAY BE NOTHING MORE THAN THE NATURAL AND NECESSARY CORRECTIVE OF

AN OVERGROWN AND BLOATED OPULENCE, THE vis medicatrix BY WHICH OUR SOCIAL SYSTEM, AS AT PRESENT CONSTITUTED, IS ENABLED TO RELIEVE ITSELF FROM TIME TO TIME

OF AN EVER-RECURRING PLETHORA WHICH MENACES ITS EXISTENCE, AND T O REGAIN A SOUND AND WHOLESOME STATE" (John Fullarton, On the Regulation of Currencies, etc., London, 1844, p. 165).

MONEY— GENERAL POWER OF PURCHASING (Chalmers, [On Political Economy in Connexion with the Moral State and Moral Prospects of Society, 2nd ed., Glasgow, 1832, p. 164]).* EQUIVALENT VALUE IN CAPITAL. COMMERCE IS THE EXCHANGE OF CAPITAL FOR CAPITAL THROUGH THE MEDIUM OF MONEY, AND THE CONTRACT BEING FOR THE MEDIUM, MONEY ALONE CAN SATISFY THE CONTRACT AND DISCHARGE THE DEBT. IN SELLING, ONE KIND OF CAPITAL IS DISPOSED OF FOR MONEY FOR OBTAINING ITS EQUIVALENT SPECIFIED VALUE IN ANY KIND OF CAPITAL. INTEREST— THE CONSIDERATION GIVEN FOR THE LOAN OF MONEY,

IF THE MONEY BE BORROWED FOR THE PURPOSE OF PROCURING CAPITAL, THEN THE CONSIDERATION GIVEN IS A REMUNERATION FOR THE USE OF CAPITAL (RAW MATERIALS, LABOUR, MERCHANDISE, ETC.) WHICH IT OBTAINS. IF BORROWED FOR THE PURPOSE OF DISCHARGING A DEBT, FOR PAYING FOR CAPITAL PREVIOUSLY OBTAINED AND USED (CONTRACTED TO BE PAID FOR IN MONEY), THEN THE CONSIDERATION GIVEN IS FOR THE

USE OF MONEY ITSELF, AND IN THIS RESPECT INTEREST AND DISCOUNT ARE SIMILAR. DISCOUNT SOLELY THE REMUNERATION FOR MONEY ITSELF, FOR CONVERTING CREDIT MONEY INTO REAL MONEY. A GOOD BILL GIVES THE SAME COMMAND OVER CAPITAL AS BANK NOTES, MINUS THE CHARGE FOR DISCOUNT; AND BILLS ARE DISCOUNTED FOR THE PURPOSE OF OBTAINING MONEY OF A MORE CONVENIENT DENOMINATION FOR WAGES AND SMALL CASH PAYMENTS, OR TO MEET LARGER ENGAGEMENTS FALLING DUE; AND ALSO FOR THE ADVANTAGE TO BE GAINED WHEN READY MONEY CAN BE HAD BY DISCOUNTING AT A LOWER RATE THAN 5%, THE USUAL ALLOWANCE MADE FOR CASH. T H E MAIN OBJECT, HOWEVER, IN DISCOUNTING DEPENDS FUNDAMENTALLY UPON THE SUPPLY AND DEMAND OF LEGAL TENDER MONEY.... T H E RATE OF INTEREST DEPENDS MAINLY ON THE DEMAND AND SUPPLY OF CAPITAL, AND THE RATE OF DISCOUNT ENTIRELY ON THE SUPPLY AND DEMAND OF MONEY (The Economist, 13 March, 1858. Letter to the Editor).

[VII-51] Mr. K. Arnd, who is quite in his element when he argues about the "dog tax",^[45] has made the following interesting discovery:

"In the natural course of goods production there is just one phenomenon which, in countries where all available land is under cultivation, seems in some measure to regulate the rate of interest; this is the proportion in which the timber in European forests is augmented through their annual growth. This new growth occurs, quite independently of the exchange value of the timber, at the rate of 3 or 4 to 100" (Die naturgemässe Volkswirthschaft, gegenüber dem Monopoliengeiste und dem Communismus, Hanau, 1845, pp. 124-25).

This deserves to be called the forest-grown rate of interest.

" T H E REMAINING VALUE OR OVERPLUS WILL IN EACH TRADE BE IN PROPORTION TO THE VALUE OF THE CAPITAL EMPLOYED" (Ricardo, [On the Principles of Political Economy etc., p. 84]).

Speaking of interest, two things must be considered: Firstly, the division of profit into interest and profit. (Profit as the unity of the two is called GROSS PROFIT by the English.) The distinction becomes a tangible, palpable one as soon as a class of MONIED CAPITALISTS confronts a class of INDUSTRIAL CAPITALISTS. Secondly, capital itself becomes a commodity, or the commodity (money) is sold as capital. For instance, capital is said to adjust its price according to supply and demand like any other commodity. So it is this that determines the rate of interest. Therefore, here capital as such enters into circulation.

MONIED CAPITALISTS and INDUSTRIAL CAPITALISTS can only constitute 2 distinct classes, because it is possible for profit to be split up into 2 distinct branches of revenue. The 2 sorts of CAPITALISTS merely express that FACT; but there must be this division, this splitting-up of profit into 2 distinct forms of revenue, for 2 distinct classes of capitalists to arise.

The form of interest is older than that of profit. The rate of interest paid by COMMON AGRICULTURISTS in India is in no way an indication of the level of profit. It shows, rather, that the usurer appropriates both profit and a part of wages itself in the form of interest. It is a proceeding worthy of Mr. Carey's historical acumen to compare this interest with that prevailing in the English MONEY MARKET, the interest paid by the English capitalist, and to conclude from that how much higher "labour's portion" (labour's share in the product) is in England than in India." He ought to have taken for comparison the interest paid in England, e.g. in Derbyshire, by the HANDLooM WEAVERS whose material and instrument are advanced (loaned) to them by the capitalist. He would have found that the interest here is so high that in the end, after all ITEMS have been settled, the worker is still in debt, despite the fact that he has not merely returned the advances to the capitalist, but has also added his own labour to them gratis.

Historically, the form of industrial profit only emerges when capital has ceased to appear alongside the independent worker. Initially, therefore, profit appears as determined by interest. But in bourgeois economy, interest is determined by profit and is merely a part of it. Hence, profit must be sufficiently large for a part of it to be able to be detached from it as interest. The converse was the case historically. Interest must be depressed to such an extent that a part of the surplus gain can make itself independent as profit.

THERE IS A NATURAL RELATION BETWEEN WAGES AND PROFIT — NECESSARY LABOUR

AND SURPLUS LABOUR; BUT IS THERE ANY BETWEEN PROFIT AND INTEREST, SAVE THAT

WHICH IS DETERMINED BY THE COMPETITION BETWEEN THESE TWO CLASSES ARRANGED

UNDER THESE DIFFERENT FORMS OF REVENUES? B U T IN ORDER THAT THIS COMPETITION

EXIST, AND THE TWO CLASSES, THE DIVISION OF THE SURPLUS VALUE INTO PROFITS AND INTEREST is ALREADY PRESUPPOSED. Capital considered in general is not a mere abstraction. If I consider the total capital of a nation, e.g., in distinction from the totality of its wage labour (or also landed property), or if I regard capital as the general economic basis of one class in distinction from another class, I am considering it in general. It is the same as if, e.g., I considered man physiologically, as distinct from the animal. The real distinction between profit and interest exists as that between a MONEYED CLASS OF CAPITALISTS and an INDUSTRIAL CLASS OF CAPITALISTS. But the possibility of 2 such classes confronting each other, their existence as 2 classes, presupposes a diremption of the surplus value posited by capital.

(Political economy is concerned with the specific social forms of wealth or rather of the production of wealth. The substance of wealth, whether subjective, like labour, or objective, like objects for the satisfaction of natural or historically evolved requirements, appears at first as common to all epochs of production. Hence, this substance initially appears as a mere presupposition, which lies completely outside the sphere of political economy, and falls within that sphere only when it is modified by, or appears as modifying, the relations of form. All that is usually said about it in general terms, is confined to abstractions. These were of historical value in the early essays of political economy, in which the forms were laboriously extracted from the substance and fixed, with great effort, as the proper object of analysis. Later they become leaden platitudes, the more distasteful the greater the scientific pretension with which they are presented. This applies to all the idle chatter the German economists indulge in under the category of "goods".)

The important thing is that interest and profit both express relations of capital As a particular form, interest-bearing capital does not confront labour but profit-bearing capital. The relationship in which, on the one hand, the worker still appears as independent, i.e. not as a wage worker, while, on the other hand, his objective conditions already possess an independent existence alongside him, constituting the property of a particular class of usurers, necessarily develops — in all the modes of production more or less based upon exchange — with the development of merchants' wealth or monetary wealth in opposition to the particular and restricted forms of AGRICULTURAL or artisan wealth. The development of merchants' wealth itself can be regarded as a development of exchange value and hence of circulation and of money relationships in those spheres. On the one hand, this relationship of course shows that the conditions of labour — which to an increasing degree are derived from circulation and depend upon it — become independent of and detached from the economic existence of the worker. On the other hand, his economic existence is not as yet subsumed in the process of capital. Therefore the mode of production has not, as yet, essentially changed. If this relationship recurs within the bourgeois economy, it does so in backward branches of industry or in such as still [VII-52] resist extinction in the face of the modern mode of production. The most loathsome exploitation of labour still takes place within them, without the relationship of capital and labour in them constituting to any extent the basis for the development of new productive forces or the germ of new historical forms. In the mode of production itself, capital still appears here as materially subsumed in the individual worker or the worker's family— whether in handicraft industry or in small-scale agriculture. There is exploitation by capital, without the mode of production of capital. The rate of interest is very high because it includes profit and even part of the wages. This form of usury, in which capital does not seize hold of production, and therefore is capital only in form, presupposes the dominance of pre-bourgeois forms of production. But it is given a new lease of life, in subordinate spheres, within the bourgeois economy itself.

The second historical form of interest is the lending of capital to consuming wealth. It is historically important here as itself a moment of the origin of capital, since the revenue (AND OFTEN THE

LAND TOO) OF THE LANDED PROPRIETORS ACCUMULATES AND BECOMES CAPITALISED IN THE POCKETS OF THE USURER. It is one of the processes by which circulating capital or also capital in the form of money concen-trates in the hands of a class independent of the landed proprietors.

The form adopted by realised capital, as well as by its realised surplus value, is money. Hence profit (and not only interest) is expressed in money; because it is in money that value is realised and measured.

The necessity of paying in money — not merely of money for the purchase of commodities, etc.—arises wherever relations of exchange and money circulation obtain. It is not at all necessary that the exchange should be simultaneous. With money, it becomes possible for one party to yield up its commodity [at once], while the other makes its payment later. The need for money to that end (later developed in LOANS and DISCOUNTS) is historically one of the main sources of interest. We are not as yet concerned with this aspect; we must leave it until we come to discuss credit relations.

The distinction between BUYING (M—C) and SELLING (C—M):

"If I sell, I have (1) charged the profit on the commodity and obtained that profit; (2) received AN ARTICLE UNIVERSALLY REPRESENTATIVE OR CONVERTIBLE, MONEY, for which, MONEY BEING ALWAYS SALEABLE, I can at all times command every other commodity; THE SUPERIOR SALEABLENESS OF MONEY BEING THE EXACT EFFECT OR NATURAL CONSEQUENCE OF THE LESS SALEABLENESS OF COMMODITIES. It is otherwise with buying. IF HE BUYS TO SELL AGAIN OR SUPPLY CUSTOMERS, WHATEVER MAY BE THE PROBABILITY, THERE IS NO ABSOLUTE CERTAINTY OF HIS SELLING AT A REMUNERATIVE PRICE. But all who buy do not sell again, people also buy for THEIR OWN USE OR CONSUMPTION," etc. (Th[omas] Corbet, An Inquiry into the Causes and Modes of the Wealth of Individuals, London, 1841, pp. 117 et sq.).

The Economist, 10 April [1858]: "A PARLIAMENTARY RETURN MOVED FOR BY MR. JAMES WILSON SHOWS THAT THE MINT COINED IN 1857 GOLD TO THE VALUE OF £4,859,000, OF WHICH £364,000 WAS IN HALF-SOVEREIGNS. T H E SILVER COINAGE OF THE YEAR AMOUNTED TO £373,000, THE COST OF THE METAL USED BEING £363,000. T H E TOTAL AMOUNT COINED IN THE TEN YEARS ENDING THE 31ST OF DECEMBER, 1857, WAS £55,239,000 IN GOLD, AND £2,434,000 IN SILVER. T H E COPPER COINAGE LAST YEAR AMOUNTED IN VALUE TO £6,720 — THE VALUE OF THE COPPER BEING £3,492; OF THIS, 3,136 WAS IN PENCE, 2,464 IN HALF-PENCE, AND 1,120 IN FARTHINGS. T H E TOTAL VALUE OF THE COPPER COINAGE OF THE LAST TEN YEARS WAS £141,477, THE COPPER OF WHICH IT WAS COMPOSED BEING PURCHASED FOR £73,503."

"According to Thomas Culpeper (1641), Josiah Child (1670), Paterson (1694), Locke (1700), wealth depends upon the reduction, even if a forced one, of the interest rate of gold and silver. Abided by in England for almost 2 centuries" (Ganilh [Des systèmes d'économie politique, Vol. I, Paris, 1809, pp. 76-77]).

When Hume argued, in opposition to Locke, that the rate of interest was determined by the rate of profit,^[3] he was witnessing capital at a considerably higher stage of development; it was even more highly developed when Bentham, at the end of the 18th century, wrote his apologia for usury.b

(From Henry VIII to Queen Anne, reduction of interest by law.)

"In every country: (1) A PRODUCING CLASS,46 and (2) A MONIED CLASS, who live upon the interest of their capital" (J. St. Mill, [Essays on] Some Unsettled Questions of Political Economy, London, 1844, p. 110).

" I T IS BY FREQUENT FLUCTUATION IN A MONTH, AND BY PAWNING ONE ARTICLE TO RELIEVE ANOTHER, WHERE A SMALL SUM IS OBTAINED, THAT THE PREMIUM FOR MONEY BECOMES SO EXCESSIVE. 2 4 0 LICENSED PAWNBROKERS IN LONDON AND ABOUT 1,450 IN THE C O U N T R Y . T H E CAPITAL EMPLOYED IS ESTIMATED AT ABOUT 1 MILLION. It is t u r n e d round at least thrice in the course of a year and yields each time 33 1/%% on an average; so that the INFERIOR ORDERS of England yearly pay 1 million for A TEMPORARY LOAN of one million, EXCLUSIVE OF WHAT THEY LOSE BY GOODS BEING FORFEITED" (J. D. Tuckett, A History of the Past and Present State of the Labouring Population etc., Vol. I, London, 1846, p. 114).

a D. Hume, Essays and Treatises on Several Subjects, Vol. I.— Ed. b J. Bentham, Defence of Usury, London, 1787.— Ed.

"There are some labours which cannot be carried on except on a large scale, e.g. porcelain-making, glass-making, etc. Hence, these are never handicrafts. Some labours, like weaving, were already carried on on a large scale in the 13th and 14th centuries" (Poppe [p. 32]).

"In older times, all factories belonged to the handicrafts, and the merchant was merely carrier and deliverer for the handicrafts. This system was most strictly adhered to in cloth and linen manufacture. However, in many places the merchants gradually began to set themselves up as masters" (naturally, they were free from the old masters' guild prejudices, traditions and relation to the journeymen) "and took the journeymen into employment for daily wages" (Poppe, Geschichte der Technologie, Vol. I, Göttingen, 1807, pp. 70-71).

This was one of the main reasons why in England industry proper became established and developed in non-incorporated towns.

Commercial capital or money, as it makes its appearance as merchants' wealth, is the first form of capital, i.e. of value which originates exclusively from circulation (exchange) and is maintained, reproduced and increased in it, and hence the sole aim of this movement and activity is exchange value. Both movements [take place], buying in order to sell, and selling in order to buy, but the [VII-53] form M—C—C—M is dominant. Money and the increase of money is the exclusive aim of the operation. The merchant neither buys the commodity for his own need, for the sake of its use value, nor does he sell it in order to, e.g., discharge contracts stipulated in money, or to acquire other commodities for his needs. His direct aim is increase of value — increase in its immediate form as money. Mercantile wealth is first of all money as means of exchange, money as the mediating movement of circulation; it exchanges commodity for money, and money for commodity, and vice versa. Similarly, money appears here as an end in itself, but without for that reason existing in its metallic form. It is, here, the living conversion of value into the two forms of commodity and money: the indifference of value to the particular form of use value which it assumes, and simultaneously its metamorphosis into all these forms, which, however, appear merely as disguises.

If the activity of trade thus summarises the movements of circulation, and money as mercantile wealth, therefore, is, on the one hand, the first form of existence of capital, and appears so historically — this form appears, on the other hand, as directly contradictory to the concept of value. The law of trade is to buy cheap and sell dear. Hence not exchange of equivalents, with which trade as a particular branch of business would, in fact, be impossible.

Nevertheless, money as mercantile wealth — as it appears in the most different social forms and at the most different stages of development of the social productive forces — is merely the mediating movement between extremes which it does not domi-nate, and between presuppositions which it does not create.

A. Smith, [Recherches sur la nature et les causes de la richesse des nations,] ed. Gamier, Vol. II, Book III:

"The great commerce of every civilised society is that carried on between the inhabitants of the town and those of the country ... consists in the exchange of raw products for manufactured products, either immediately, or by the intervention of money" (p. 403).⁽⁶⁾

Trade always draws together; originally, production on a small scale.

"The town is a continual fair or market, to which the inhabitants of the country resort to exchange their raw products for manufactured products. It is this commerce which supplies the inhabitants of the town both with the materials of their work and with the means of their subsistence. The quantity of finished goods which they sell to the inhabitants of the country necessarily determines the quantity of the materials and provisions which they buy" (p. 408 [409]).

As long as "means of subsistence and of enjoyment" are the main aim, use value is dominant.

It is implicit in the concept of value that it is maintained and increased only by means of exchange. But existing value is first of all money.

"That industry, which aims at something outside the circle of absolute necessaries, was established in towns long before it could be commonly practised by the cultivators in the countryside" (p. 452).

"Although the inhabitants of a town ultimately draw their subsistence and all the means and materials for their industry from the countryside, those of a city near either the sea coast or a navigable river may draw them also from the most remote corners of the world, either in exchange for the manufactured products of their own industry, or by performing the office of carriers between distant countries and exchanging the products of one for those of another. Thus a city can become very rich, while not only the country in its immediate neighbourhood but the entire area in which it trades is poor. Each of those countries, taken singly, can afford it only a very small part of its subsistence and of what it needs for business; but all of them, taken together, can afford it a great quantity of subsistences and a great diversity of employment" (p. [452,] 453).

(The cities of Italy were the first in Europe to rise thanks to trade; at the time of the Crusades — Venice, Genoa and Pisa — partly owing to the transportation of people, and always owing to the transportation of provisions which had to be supplied to them. These republics were, one might say, the commissaries of those armies) (I.e.).

Merchants' wealth conceived of as continuously in exchange, and exchanging for the sake of exchange value, is IN FACT living money.

"The inhabitants of trading cities, by importing refined articles and expensive luxuries from richer countries, catered to the vanity of the big landed proprietors, who bought them eagerly, paying with great quantities of the raw produce of their lands. The trade of a great part of Europe at the time, accordingly, consisted in the exchange of the raw products of some countries for the manufactured products of the industrially more advanced ones" (p. [454,] 455). "When this taste became so general as to occasion a considerable demand, the merchants, to save the expense of carriage, sought to establish similar manufactures in their own country. This the rise of the first manufactures for distant sale" (I.e.). Luxury goods manufactures, sprung from FOREIGN COMMERCE, were established by merchants (worked up foreign materials) (p. 456 [457]).

Adam Smith speaks of a second type of manufactures, which "arise naturally, of their own accord, by the gradual refinement of the crude domestic crafts". They work u p HOMEGROWN MATERIALS (p. 459).

The trading peoples of antiquity were located, like the Gods of Epicurus, in the intermundia of the world,^[47] or RATHER like the Jews in the pores of Polish society. Most of the independent trading peoples or cities that attained a high level of development were engaged in the CARRYING TRADE, based upon the barbarity of the producing peoples, between whom they played the role of money (the mediator).

At the initial stages of bourgeois society, trade dominated industry; in modern society, the other way round.

Naturally, trade will have repercussions, to a greater or lesser degree, upon the communities between which it is carried on. It will increasingly subject production to exchange value, and force immediate use value more and more into the background, by making subsistence depend more upon the sale of the product than upon its immediate use. It dissolves the old relationships and thereby increases money circulation. At first, it embraces only the surplus of production; but gradually it seizes hold of production itself. However, the dissolving effect greatly depends upon the nature of the producing communities between which trade is carried on. E.g., it has hardly shaken the ancient Indian community and Asiatic relationships in general. Fraud in the exchange is the [VII-54] basis of trade as it appears independently.

But capital emerges only when trade seizes control of production itself, and the merchant becomes a producer or the producer becomes merely a merchant. Opposed to this are the medieval guilds, the caste system, etc. But the rise of capital in its adequate form presupposes capital as commercial capital, so that production, more or less mediated by money, is n o longer carried on for use, but for trade on a large scale.

Mercantile wealth as an independent economic form, and as the basis of trading cities and trading peoples, exists and has existed a m o n g peoples who are at the most different levels of economic development. A n d within the trading city itself (e.g. the ancient Asian, the Greek, and the Italian, etc., city of the Middle Ages), production may continue to exist in the form of guild production, etc.

Steuart "TRADE IS AN OPERATION BY WHICH THE WEALTH, OR WORK, EITHER OF

INDIVIDUALS, OR OF SOCIETIES, MAY BE EXCHANGED, BY A SET OF MEN CALLED MERCHANTS, FOR AN EQUIVALENT, PROPER FOR SUPPLYING EVERY WANT, WITHOUT ANY INTERRUPTION T O INDUSTRY, OR ANY CHECK TO CONSUMPTION. INDUSTRY IS THE APPLICATION T O INGENIOUS LABOUR IN A FREE MAN, IN ORDER T O PROCURE, BY THE MEANS OF TRADE, AN EQUIVALENT FIT FOR SUPPLYING EVERY WANT" ([An Inquiry into the Principles of Political Oeconomy,] Vol. I, [Dublin, 1770,] p. 166).

"WHILE WANTS CONTINUE SIMPLE AND FEW, A WORKMAN FINDS TIME ENOUGH TO DISTRIBUTE ALL HIS WORK; WHEN WANTS BECOME MORE MULTIPLIED, MEN MUST WORK HARDER; TIME BECOMES PRECIOUS; HENCE TRADE IS INTRODUCED.... The MERCHANT as mediator between WORKMEN AND CONSUMERS" (p. 171).

T H E COLLECTION (of the products) INTO A FEW HANDS is the INTRODUCTION OF TRADE (I.e.). The CONSUMER does not buy in order to sell again. The merchant buys and sells merely with A VIEW TO A GAIN (p. 174) (i.e. for value). "The most simple of all TRADE is that which is carried on by BARTERING the most necessary means of subsistence" (between the SURPLUS FOOD in the hands of the farmers, and the FREE HANDS) [p. 175]. Progress is due mainly to the INTRODUCTION OF MONEY (p. 176).

As long as reciprocal wants are SUPPLIED BY BARTER, there is not the smallest occasion for money. This is the simplest combination. When wants are multiplied, BARTERING BECOMES more difficult; UPON THIS, MONEY IS INTRODUCED. This is the COMMON PRICE of all things. A PROPER EQUIVALENT in the hands of those who WANT. This OPERATION OF BUYING and SELLING is somewhat more complex than the former tp. 177].

Hence (1) BARTER; (2) SALE; (3) COMMERCE...

The merchant must come into play as a mediator. What we previously called WANTS, is now represented by the CONSUMER; industry, by the MANUFACTURER; money, by the merchant. The merchant represents the money, BY SUBSTITUTING CREDIT IN ITS PLACE; and as money was invented to facilitate BARTER, SO the MERCHANT with his CREDIT is A NEW REFINEMENT UPON THE USE OF MONEY. This OPERATION of BUYING and SELLING is now TRADE; IT RELIEVES both parties of the whole TROUBLE OF TRANSPORTATION, and ADJUSTING WANTS TO WANTS, OR WANTS TO MONEY; the MERCHANT REPRESENTS BY TURNS THE CONSUMER, THE MANUFACTURER, and the money. To the CONSUMER he represents the whole body of MANUFACTURERS; to the latter, the whole body of CONSUMERS; and to both classes His CREDIT SUPPLIES THE USE OF MONEY (pp. 177, 178).

Merchants are SUPPOSED to BUY and SELL, not from necessity, but WITH A VIEW TO PROFIT (p. 201).

"Only the industrialist produces for the use of others, not for his own; these goods begin to be useful to him only at the moment at which he exchanges them. Thus they give rise to the need for trade or the art of exchange. They are only estimated in terms of their exchangeable value" (Sismondi, Etudes sur l'économie politique, Vol. II, Brussels, 1838, p. 161).a Trade has robbed the things, the riches, of their primitive character of usefulness: commerce has reduced everything to the opposition between use value and exchange value (p. 162). Initially, utility is the true measure of values; trade does exist then, in the patriarchal state of society; but it has not wholly absorbed society, it embraces only the surplus of everyone's production, not what is necessary for his existence (pp. 162, 163). By contrast, our economic progress is characterised by the fact that trade has taken upon itself the distribution of the totality of the wealth annually produced, and consequently has completely suppressed the character of wealth as use value, and will not permit any other but exchange value to exist (163).

Before the introduction of trade, an increase in the quantity of output constituted a direct increase of wealth. The quantity of labour by means of which useful things were obtained was of little consequence then. And, in fact, the utility of the thing required would in no way be diminished even if no labour at all were necessary to obtain it. Grain and linen would be no less necessary to those possessing them, even if they had fallen from the heavens. That is without doubt the true estimation of wealth — enjoyment and utility. But from the moment when men ... made their subsistence dependent upon the exchanges which they could carry out, or on commerce, they were forced to adhere to another mode of estimation, to exchange value, to a value which stems not from utility, but from the relationship between the need of the entire society and the quantity of labour sufficient to satisfy this need, or also the quantity of labour which could satisfy it at some future time (I.e., p. 266). In the estimation of values which people have sought to measure by the agency of money, the concept of utility is wholly set aside. It is labour alone, the effort necessary to obtain the two things exchanged for one another, that is taken into consideration (p. 267).

On interest, J. W. Gilbart says (The History and Principles of Banking, London, 1834):

"That a man who borrows money with a view of making a profit by it, should give some portion of his profit to the lender, is A SELF-EVIDENT PRINCIPLE OF NATURAL JUSTICE. A man usually makes a profit by means of TRAFFIC. But in the Middle Ages the population was purely agricultural. And under such conditions, as under feudal GOVERNMENT, there can be but little TRAFFIC, and hence little PROFIT. Therefore, the laws on usury in the Middle Ages were justified. Besides, IN AN AGRICULTURAL COUNTRY A PERSON SELDOM WANTS TO BORROW MONEY EXCEPT HE BE REDUCED TO POVERTY OR DISTRESS BY MISERY b " (p. 163). Henry VIII limited interest to 10%, James I to 8, Charles II to 6, Anne to 5 (164, 165). In those [VII-55] times the lenders were in fact, if not legally, monopolists, and hence it was necessary to place them, like other monopolists, UNDER RESTRAINT (p. 165). In our times, the rate of profit regulates the rate of interest; in those times, the rate of interest regulated the rate of profit. If the money-lender charged a high rate of interest to the merchant, the merchant had to set a higher rate of profit on his GOODS. Hence, a large sum of money was taken from the pockets of the buyers to be put into the pockets of the MONEY-LENDERS. This ADDITIONAL PRICE set upon the GOODS made the PUBLIC less able and inclined to buy them (I.e., p. 165).

"UNDER THE RULE OF INVARIABLE EQUIVALENTS, COMMERCE, etc., WOULD BE IMPOSSIBLE" (G. Opdyke, A Treatise on Political Economy, New York, 1851, p. 67).

" T H E POSITIVE LIMITATION3 OF QUANTITY IN THIS INSTRUMENT" (i.e. paper money) "WOULD ACCOMPLISH THE ONLY USEFUL PURPOSE THAT COST OF PRODUCTION DOES IN THE OTHER" (METAL MONEY) (I.e., p. 300).

Interest "If A FIXED SUM OF PRECIOUS METAL falls [in value], this is no reason why A SMALLER QUANTITY OF MONEY SHOULD BE TAKEN FOR ITS USE, for if the PRINCIPAL is of less value for the BORROWER, the interest is to the same extent less difficult for him to pay. In California, 3% per MONTH, 36% per annum, because of the UNSETTLED STATE. In Hindustan, with the Indian princes borrowing for UNPRODUCTIVE EXPENSES, the lenders, to counterbalance on the average the losses of capital, [charge] very high interest, 30%, HAVING NO RELATION TO PROFIT WHICH MIGHT BE GAINED IN INDUSTRIAL OPERATIONS" (The Economist, [No. 491,] 22 January 1853 [p. 89]). (The lender "CHARGES here INTEREST SO HIGH AS TO BE SUFFICIENT TO REPLACE THE PRINCIPAL IN A SHORT TIME, OR AT LEAST AS ON THE AVERAGE OF ALL HIS LENDING TRANSACTIONS, MIGHT SERVE TO COUNTERBALANCE HIS LOSSES IN PARTICULAR INSTANCES, BY THE APPARENTLY EXORBITANT GAINS ACQUIRED IN OTHERS" (I.e.).)

The RATE of INTEREST DEPENDS: (1) on the RATE OF PROFIT; (2) on the proportion in which the ENTIRE PROFIT is divided between the LENDER and BORROWER (I.e.).

ABUNDANCE OR SCARCITY OF THE PRECIOUS METALS, THE HIGH OR LOW SCALE OF GENERAL PRICES PREVAILING, DETERMINES ONLY WHETHER A GREATER OR LESS AMOUNT

OF MONEY WILL BE REQUIRED IN EFFECTING THE EXCHANGES BETWEEN BORROWERS AND LENDERS, AS WELL AS EVERY OTHER SPECIES OF EXCHANGE.... The only difference is THAT A GREATER SUM OF MONEY WOULD BE NEEDED TO REPRESENT AND TRANSFER CAPITAL LENT ... THE RELATION BETWEEN THE SUM PAID FOR THE USE OF CAPITAL AND THE CAPITAL EXPRESSES THE RATE OF INTEREST AS MEASURED IN MONEY (I.E. [PP. 8 9 -90]).

DOUBLE STANDARD.

Formerly in the countries where gold and silver were the LEGAL STANDARD, the circulating currency consisted almost entirely of silver, because from 1800 to 1850 THE TENDENCY WAS FOR GOLD TO BECOME DEARER THAN SILVER. GOLD h a d s o m e w h a t risen in relation to silver, and in France bore a PREMIUM as compared to its ratio to silver fixed in 1802. So in the UNITED STATES; in India. (In the latter, there is now a silver standard, as in Holland, etc.) The circulation of the UNITED STATES was the first to be affected. Large imports of gold from California, a premium on silver in Europe, EXTENSIVE SHIPMENT OF SILVER COINS AND REPLACEMENT BY GOLD. The UNITED STATES GOVERNMENT minted gold coins of as LOW a value as 1 DOLLAR. Substitution of silver for gold in France (The Economist, [No. 429,] 15 November 1851 [p. 1257]).

a i. e., in Opdyke's usage, limitation "by positive law".— Ed.

LET THE "STANDARD OF VALUE" BE WHAT IT WILL, "AND LET THE CURRENT MONEY REPRESENT ANY FIXED PORTION OF THAT STANDARD THAT MAY BE DETERMINED UPON,

THE TWO CAN ONLY HAVE A FIXED AND PERMANENT VALUE IN RELATION TO EACH OTHER, BY BEING CONVERTIBLE AT THE WILL OF THE HOLDER" ( The Economist [No. 215, 9 October 1847, p. 11581).

T H E ONLY WAY IN WHICH ANY CLASS OF COINS CAN COMMAND A PREMIUM IS THAT NO ONE IS OBLIGED TO PAY THEM, WHILE EVERYONE IS OBLIGED TO TAKE THEM AS A LEGAL TENDER (The Economist [No. 386, 18 January 1851, p. 59]).

Consequently, no country can have more than one STANDARD (MORE THAN ONE STANDARD OF THE MEASURE OF VALUE); for this STANDARD must be UNIFORM and UNCHANGING. No article has a uniform, unchanging value in relation to others; IT ONLY HAS SUCH WITH ITSELF. One piece of gold is always of the same value as another of exactly the same fineness, the same weight and the same value in the same place; BUT THIS CANNOT BE SAID of gold and ANY OTHER ARTICLE, e.g. silver {The Economist, [No. 37, 11 May] 1844 [p. 771]).

The English pound sterling is somewhat less than >/s of its original value; the German florins/g; Scotland, prior to the Union,^[48] had DEBASED its pound to ^[1]/^[36]; the French livre^/74 [of its original value]; the Spanish maravedi=less than Vi ooo> t n e

Portuguese re has suffered still more (Morrison, [Observations on the system of Metallic Currency adopted in this country, London, 1837,] p. 13).

Previous to the law of 1819,49 the CAUSES IN EXISTENCE DETERMINING THE BULLION PRICE, other than the circulation of bank notes were (1) THE MORE OR LESS PERFECT CONDITION OF THE COIN. If the circulating metallic coins are DEBASED below their STANDARD WEIGHT, the slightest TURN OF EXCHANGE CAUSING A DEMAND FOR EXPORTATION must raise the price of UNCOINED BULLION at least by the amount of the degradation of the COIN; (2) PENAL LAWS, which prohibited the MELTING and EXPORTING of COIN and permitted the TRAFFIC IN BULLION. Given an intensive demand for EXPORT, this afforded LATITUDE for the VARIATION OF THE BULLION-PRICE in relation to that of COIN even at times when paper was fully convertible. In 1783, 1792, 1795, 1796 ... 1816, the bullion price rose above the MINT PRICE, because the BANK DIRECTORS, IN THEIR ANXIETY TO PREPARE FOR THE RESUMPTION OF CASH PAYMENT, accepted gold at considerably above the MINT PRICE (Fullarton, [On the Regulation of Currencies, 2nd ed., London, 1845, pp. 7-9]).

The STANDARD can be in terms of gold, without there being a single ounce of gold in circulation (The Economist [No. 58, 5 October 1844]).

Under George III (1774) silver was legal TENDER only up to £25. The bank, too, was now legally obliged to pay only in gold (Morrison [ibid., p. 12]). Through Lord Liverpool (beginning of the 19th century) silver and copper were turned into purely representative coins (I.e. [pp. 14-15]).

The dissolving effect of money. Money is the means of splitting up property.

Urquhart's rubbish concerning the STANDARD OF MONEY:

" T H E VALUE OF GOLD IS T O BE MEASURED BY ITSELF; HOW CAN ANY SUBSTANCE BE

THE MEASURE OF ITS OWN WORTH IN OTHER THINGS? T H E WORTH OF GOLD IS TO BE ESTABLISHED BY ITS OWN WEIGHT, UNDER A FALSE DENOMINATION OF THAT WEIGHT—

AND AN OUNCE IS T O BE WORTH SO MANY POUNDS AND FRACTIONS OF POUNDS. T H I S is — FALSIFYING A MEASURE NOT ESTABLISHING A STANDARD\" (Familiar Words [London, 1856, pp. 104-05]).

[VII-56] A. Smith calls LABOUR THE REAL and MONEY THE NOMINAL MEASURE OF VALUE; describes the former as the original measure. ⁽⁷⁾

The value of money. John Stuart Mill

"Given the quantity of goods sold, and the number of sales and resales of these goods, the value of money depends upon its quantity, together with the number of times each piece of money changes hands in the process." "The quantity of money in circulation=the money value of all the goods sold, divided by the number which expresses the velocity of circulation." "Given the amount of goods and of transactions, the value of money is inversely as its quantity multiplied by the velocity of its circulation." But in all these propositions "only that quantity of money is meant which really circulates and is actually exchanged for goods". "The necessary quantity of money is determined partly by its production costs and partly by the velocity of its circulation. The velocity of circulation being given, the production costs are determinant; and the production costs being given, the quantity of money depends on the velocity of circulation" [J. St. Mill, Principles of Political Economy, Vol. II, London, 1848, pp. 17, 18, 20, 30].

Money has no other equivalent than itself or what is a commodity. Hence it degrades everything. In France at the beginning of the 15th century, even the consecrated Church vessels (chalices), etc., were in pawn to the Jews (Augier [Du crédit public, Paris, 1842, pp. 95, 101]).⁽⁸⁾

Money is not an object of direct consumption:

Currency never becomes an object of consumption. It always remains a commodity for sale [marchandise], never becomes one for consumption [denrée]. It directly possesses intrinsic value only for society; for every individual, it possesses exchange value. Therefore, the material of which it is composed must have value, but one based on a besoin factice,⁽⁹⁾ it may not be indispensable for man's existence, since the entire quantity of money which is employed as currency can never be individually employed; it must always circulate (Storch [Cours d'économie politique, Vol. II, Paris, 1823, pp. 109, 113-14]).

[VII-57] John Gray: The Social System: a treatise on the principle of exchange, Edinburgh, 1831.

"To SELL FOR MONEY should AT ALL TIMES be made as easy AS it is TO BUY WITH MONEY; PRODUCTION WOULD THEN BECOME THE UNIFORM AND NEVER FAILING CAUSE OF DEMAND" (p. 16).

I T IS THE QUANTITY THAT CAN BE SOLD AT A PROFIT, NOT THE QUANTITY THAT CAN BE MADE, THAT IS THE PRESENT LIMIT TO PRODUCTION (59).

MONEY SHOULD BE MERELY A RECEIPT, AN EVIDENCE THAT THE HOLDER OF IT HAS EITHER CONTRIBUTED A CERTAIN VALUE TO THE NATIONAL STOCK OF WEALTH, OR THAT HE HAS ACQUIRED A RIGHT TO THE SAID VALUE FROM SOME ONE WHO HAS CONTRIBUTED

TO IT... MONEY SHOULD BE NOTHING MORE OR LESS THAN PORTABLE, TRANSFERABLE, DIVISIBLE AND INIMITABLE EVIDENCES OF THE EXISTENCE OF WEALTH IN STORE (63-64).

AN ESTIMATED VALUE BEING PREVIOUSLY PUT UPON PRODUCE LET IT BE LODGED IN A BANK, AND DRAWN OUT AGAIN WHENEVER IT IS REQUIRED, MERELY STIPULATING, BY COMMON CONSENT, THAT HE WHO LODGES ANY KIND OF PROPERTY IN THE PROPOSED NATIONAL BANK, MAY TAKE OUT OF IT AN EQUAL VALUE OF WHATEVER IT MAY CONTAIN, INSTEAD OF BEING OBLIGED TO DRAW OUT THE SELF SAME THING THAT HE PUT IN.... T H E PROPOSED NATIONAL BANKER SHOULD RECEIVE AND TAKE CHARGE OF EVERY DESCRIPTION

OF VALUABLE, AND GIVE BACK ANY DESCRIPTION OF VALUABLE IN ITS STEAD (I.E., P . 6 8 ) .

" I F MONEY," says Gray, "BE OF EQUAL VALUE WITH THAT WHICH IT REPRESENTS, IT CEASES T O BE A REPRESENTATIVE AT ALL. I T IS ONE OF THE CHIEF DESIDERATUMS IN MONEY, THAT THE HOLDER OF IT SHOULD BE COMPELLED AT ONE TIME OR OTHER T O PRESENT IT FOR PAYMENT AT THE PLACE FROM WHENCE HE RECEIVED IT. B U T IF MONEY BE

OF THE SAME INTRINSIC VALUE AS THAT WHICH IS GIVEN FOR IT, NO SUCH NECESSITY EXISTS" ( 7 4 ) .

"DEPRECIATION OF STOCK SHOULD FORM AN ITEM OF NATIONAL CHARGE" (p. [115-] 116). " T H E BUSINESS OF EVERY COUNTRY TO BE CONDUCTED ON A NATIONAL CAPITAL" (171). "All land TO BE TRANSFORMED INTO NATIONAL PROPERTY" (298).

G r a y ( J o h n ) : Lectures on the Nature and Use of Money ( E d i n b u r g h , 1848):

"MAN COLLECTIVELY SHOULD KNOW NO LIMIT TO HIS PHYSICAL MEANS OF ENJOYMENT, SAVE THOSE OF THE EXHAUSTION EITHER OF HIS INDUSTRY OR [of] HIS PRODUCTIVE POWERS; WHILST WE, BY THE ADOPTION OF A MONETARY SYSTEM, FALSE IN PRINCIPLE, AND DESTRUCTIVE IN PRACTICE, HAVE CONSENTED TO RESTRICT THE AMOUNT

OF OUR PHYSICAL MEANS OF ENJOYMENT TO THAT PRECISE QUANTITY WHICH CAN BE PROFITABLY EXCHANGED FOR A COMMODITY, ONE OF THE LEAST CAPABLE OF MULTIPLICATION BY THE EXERCISE OF HUMAN INDUSTRY, OF ANY UPON THE FACE OF THE EARTH" (p. 29). What is required for a good system is (1) a system of banking, by the OPERATIONS o f w h i c h t h e NATURAL RELATIONSHIP OF SUPPLY AND DEMAND WOULD BE RESTORED; (2) a true measure of value, in place of the existing fiction (108).

(In this book , t h e i d e a of the e x c h a n g e b a n k is d e v e l o p e d i n e v e n greater detail, w i t h t h e p r e s e n t m o d e of p r o d u c t i o n b e i n g r e t a i n e d . )

"THERE MUST BE A MINIMUM PRICE OF LABOUR PAYABLE IN STANDARD MONEY" (p. 160). E.g., let us call THE LOWEST RATE OF WAGES PER WEEK, of 60-72 hours, THAT MAY BY LAW BE GIVEN by the name of 20s. or £1 standard (161). "SHALL WE RETAIN

OUR FICTITIOUS STANDARD OF VALUE, GOLD, AND THUS KEEP THE PRODUCTIVE RESOURCES OF T H E COUNTRY IN BONDAGE, OR SHALL WE RESORT T O THE NATURAL STANDARD OF VALUE, LABOUR, AND THEREBY SET OUR PRODUCTIVE RESOURCES FREE?" (p. 169). T H E AMOUNT OF THIS MINIMUM WAGE BEING ONCE FIXED..., IT SHOULD REMAIN THE SAME FOR EVER (174). "Only let gold and silver TAKE THEIR PROPER PLACE IN THE MARKET BESIDE BUTTER AND EGGS AND CLOTH AND CALICO, and then the value of the precious metals will interest us no more than that of diamonds", etc. (182 [183]). No OBJECTION to make TO GOLD AND SILVER USED AS INSTRUMENTS OF EXCHANGE BUT ONLY AS MEASURES OF VALUE... In a short time one would see how many ounces of gold or silver were obtainable in London, Edinburgh or Dublin in exchange for a HUNDRED POUND STANDARD NOTE ( p . 1 8 8 ) .

Interest.

AS THE CLASS OF RENTIERS INCREASES, SO ALSO DOES THAT OF LENDERS OF CAPITAL, FOR THEY ARE ONE AND THE SAME. For this reason alone, interest must have had a tendency to fall in old countries (Ramsay, [An Essay on the Distribution of Wealth, Edinburgh, 1836] p. 202).

"IT IS PROBABLE THAT IN ALL AGES THE PRECIOUS METALS [have] COST MORE IN THEIR PRODUCTION THAN THEIR VALUE EVER REPAID" (W. Jacob, An Historical Inquiry into the Production and Consumption of the Precious Metals, Vol. II, London, 1831, p. 101).

Value of money.

The value of all things, divided by the number of transactions in which they have figured in their passage from the producer to the consumer, is equal to the value of the ecus employed in their purchase divided by the number of times that these thaler have passed from hand to hand in the same period of time (Sismondi, Nouveaux principes d'économie politique etc. [2nd ed., Vol. II, Paris, 1827, p. 120]).

The false theory of price is developed most formally by James Mill (quoted according to the translation by J. T. Parisot, Paris, 1823. Élémens d'écon. pol.).^[50]

The most important passages from Mill are as follows:

"By value of money, is here to be understood the proportion in which it exchanges for other commodities, or the quantity of it which exchanges for a certain quantity of other things" (p. 128). "It is the total quantity of money in any country, which determines that portion. If we suppose that all the goods of the country are on one side, all the money on the other, and that they are exchanged at once against one another, it is evident that the value of money would depend wholly upon the quantity of it" (I.e.). "It will appear that the case is precisely the same in the actual state of the facts. The whole of the goods of a country are not exchanged at once against the whole of the money; the goods are exchanged in portions, often in very small portions, and at different times, during the course of the whole year. The same piece of money which is paid in one exchange to-day, may be paid in another exchange to-morrow. Some of the pieces will be employed in a [VII-58] great many exchanges, some in very few, and some, which happen to be hoarded, in none at all. There will, amid all these varieties, be a certain average number of exchanges, the same which, if all the pieces had performed an equal number, would have been performed by each; that average we may suppose to be any number we please; say, for example, ten. If each of the pieces of the money in the country perform ten purchases, that is exacdy the same thing as if all the pieces were multiplied by ten, and performed only one purchase each. The value of all the goods in the country is equal to ten times the value of all the money, etc." (pp. 129, 130). "If the quantity of money, instead of performing ten exchanges in the year, were ten times as great, and performed only one exchange in the year, it is evident that whatever addition were made to the whole quantity, would produce a proportional diminution of value, in each of the minor quantities taken separately. As the quantity of goods, against which the money is all exchanged at once, is supposed to be the same, the value of all the money is no more, after the quantity is augmented, than before it was augmented. / / it is supposed to be augmented one-tenth, the value of every part, that of an ounce for example, must be diminished one-tenth" (pp. 130, 131). "In whatever degree, therefore, die quantity of money is increased or diminished, other things remaining the same, in that same proportion, the value of the whole, and of every part, is reciprocally diminished or increased. This, it is evident, is a proposition universally true. Whenever the value of money has either risen or fallen (the quantity of goods against which it is exchanged and the rapidity of circulation remaining the same), the change must be owing to a corresponding diminution or increase in the quantity; and can be owing to nothing else. If the quantity of goods diminish, while the quantity of money remains the same, it is the same thing as if the quantity of money had been increased," and vice versa. "Similar changes are produced by any alteration in the rapidity of circulation. An increase in the number of these purchases has the same effect as an increase in the quantity of money; a diminution the reverse" (pp. 131, 132). "If there is any portion of the annual produce which is not exchanged at all, as what is consumed by the producer; or what is not exchanged for money; that is not taken into account⁽¹⁰⁾ because what is not exchanged for money is in the same state with respect to the money, as if it did not exist" (pp. 132, 133). "Whenever the coining of money ... is free, its quantity is regulated by the value of the metal.... Gold and silver are in reality commodities, products.... It is cost of production ... which determines the value of these, as of other ordinary productions" (pp. 136, 137).

The insipidity of this line of argument is obvious. (1) To assume that the quantity of commodities and also the velocity of circulation remain the same, and yet a greater quantity of gold or silver is exchanged for the same quantity of commodities (while the value of gold and silver, i.e. the quantity of labour contained in them, has not changed), is to assume EXACTLY what one wished to prove, viz. that the prices of commodities are determined by the quantity of the circulating medium and not the other way round.

(2) Mill admits that the commodities not thrown into circulation do not exist for money. It is equally clear that the money not thrown into circulation does not exist for the commodities. It follows that there is no fixed relation between the value of money in general and the quantity of it which enters into circulation. To say that the quantity of it actually in circulation, divided by the number of its turnovers, is equal to the value of money, is merely a tautological roundabout way of saying that the value of the commodity expressed in money is its price; because the money in circulation expresses the value of the commodities which it circulates — hence the value of these commodities is determined by the quantity of money in circulation.

(3) The confusion in Mill's views is clearly seen from his statement that the value of money diminishes or increases with "any alteration in the rapidity of circulation". Whether a pound sterling circulates once or 10 times in a day, in each exchange it expresses an equivalent for the commodity, is exchanged for the same value embodied in the commodity. In each exchange its own value remains the same, and hence does not change whether its circulation is slow or rapid. The quantity of money in circulation does change but neither the value of the commodity nor that of money.

"To say that a piece of cloth is worth £5, means that it possesses the value of 616,370 GRAINS OF STANDARD GOLD. THE REASON ASSIGNED ABOVE MAY BE PARA-PHRASED THUS: 'PRICES MUST FALL BECAUSE COMMODITIES ARE ESTIMATED AS BEING WORTH SO MANY OUNCES OF GOLD; AND THE AMOUNT OF GOLD IN THIS COUNTRY IS DIMINISHED'" (J. G. Hubbard, The Currency and the Country, London, 1843, p. 44).

(4) In his exposition of the theory, Mill initially assumes that the total quantity of money in a country is exchanged at once for the total quantity of commodities in that country. He then says that this is really the case, and that it is so above all because in practice precisely the opposite takes place: only portions of money are exchanged for portions of commodities, and only very few payments are ARRANGED BY PAYMENT ON THE SPOT-TIME BARGAINS. It follows that the total number of transactions or purchases made on any one day is quite independent of the [quantity of] money in circulation on this day, and that the quantity of money in circulation on a certain day is not the cause but the effect of a quantity of transactions executed earlier and quite independent of the money supply at the moment in question.

(5) Finally, Mill himself admits that with free money circulation, and we are concerned with it alone, the value of money is determined by its production costs, i.e., on his own showing, by the labour time contained in it.

[VII-59] Money matters. In Ricardo's pamphlet, Proposals for an Economical and Secure Currency; with observations on the profits of the Bank of England, London, 1816, there is a passage in which he topples his whole theory. It says:

"The amount of notes in circulation depends ... upon the amount required for the circulation of the country, which is regulated by the value of the STANDARD, the amount of payments, and the [degree of] economy practised in effecting them" (I.e., pp. 17, 18).

Under Louis XIV, XV and XVI in France, duties in kind were still levied on the rural population for government taxes (Augier [Du crédit public, pp. 128-29]).⁽¹¹⁾

Prices and the quantity of the circulating medium.

A mere RISE in prices is not sufficient to create a DEMAND for ADDITIONAL CURRENCY. This only the case if there is a simultaneous rise in production and consumption. E.g. the price of corn may rise, but its supply decline. Can therefore be handled with the same amount of CURRENCY.... But if prices rise because of rising demand, [the opening of] new markets, an increased SCALE OF PRODUCTION, in short, if a rise in prices is accompanied by a rise in the GENERAL SUM OF TRANSACTIONS, then this REQUIRES THE INTERVENTION OF MONEY TO BE MULTIPLIED IN NUMBER AND ENLARGED IN MAGNITUDE (Fullarton [On the Regulation of Currencies, 2nd ed., pp. 102-04]).

TRADE GOVERNS MONEY, not MONEY TRADE. T H E SERVANT OF TRADE must follow the VARIATIONS (in the prices) of the other commodities (Davenant [Discourses on the Publick Revenues, and on the Trade of England, Part II, London, 1698, p. 16]).

Under the feudal monarchs, the few articles that were purchased by the great mass of the people had fallen to such an extent that no piece of gold or of silver was small enough to pay for what the LABOURER needed for his daily subsistence... Hence, as in ancient Rome, the CURRENT MONEY was wholly composed of the INFERIOR METALS, COPPER, TIN, IRON (Jacob [An Historical Inquiry into the Production and Consumption of the Precious Metals, Vol. I, pp. 301-02]).

Jacob assumes that, in this century, ^[2]/ ^[3] of the gold and silver in Europe is in the form of other objects — UTENSILS and ORNAMENTS, not in that of COIN [ibid, Vol. II, pp. 212-13]. (Elsewhere he reckons the precious metal thus used in Europe and America at £ 4 0 0 million.)

Prices and the quantity of the circulating medium. Locke, The Spectator (19 October 1711), Hume , Montesquieu. Their theory is based on three propositions:

(1) The prices of commodities are proportional to the quantity of money in the country;

(2) T h e COIN and CURRENT MONEY in a country are the representatives of all the labour and commodities of it, so that in proportion as there is MORE OR LESS of this representation a greater or less

QUANTITY OF THE THING REPRESENTED GOES TO THE SAME QUANTITY OF IT;

(3) INCREASE COMMODITIES, THEY BECOME CHEAPER; INCREASE MONEY, THEY RISE IN THEIR VALUE (Steuart).a

Marks (small copper or silver money, COUNTERS) in contrast to MONEY OF INTRINSIC WORTH (I.e.).

(Many objects cannot be exchanged, alienated, without the aid of money.)

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

Coin. The silver and copper marks are REPRESENTATIVES OF FRACTIONAL PARTS OF THE POUND STERLING. ( Thus in a recent reply by the Lord OF THE TREASURY.)

Exchange Value. F. Vidal says (as does Lauderdale) (AND IN CERTAIN RESPECTS Ricardo):

"Real social value is value for use or consumption; exchange value merely indicates the relative wealth of each member of society in relation to the others" (De

la répartition des richesses etc., Paris, 1846, p. 70).⁽¹²⁾

On the other hand, exchange value expresses the social form of value, while use value is not at all an economic form of value but merely the being of the product, etc., for man in general.

//From the fact that the profit may be less than the surplus value, and hence that capital [may] exchange at a profit without being valorised in the strict sense, it follows that not only individual capitalists, but nations too may continuously exchange with one another, and continuously repeat the exchange on an ever-growing scale, without gaining equally thereby. One nation may continuously appropriate part of the surplus labour of the other and give nothing in exchange for it, except that here the measure is not as in the exchange between capitalist and worker.//

Money in its third determination as money. (Value-for-itself, equivalent, etc.) The importance of the role still played by money in this determination — even in its immediate form — becomes evident at times of crises, deficient harvests, etc., in short, every time one nation must settle its account with another on the sudden. Money in its immediate, metallic form then appears as the only absolute means of payment, i.e. as the only counter-value, acceptable equivalent. Therefore, the movement it then performs is directly contradictory to that of all other commodities. Commodities as means of payment, etc., are transported from the country where they are cheapest to the country where they are dearest. It is the other way round with money. At all times when it presents its specific nature, i.e. when money, in contrast to all other commodities, is required as value-for-itself, absolute equivalent, the universal form of wealth, in the definite form of gold and silver — and such times are always more or less times of crisis, whether of a general crisis or of a grain crisis — at all such times gold and silver are transmitted from the country where they are dearest — i.e. where the relative fall in the prices of all commodities has been the greatest — to the country where they are cheapest, where commodity prices are relatively higher.

" I T IS A SINGULAR ANOMALY IN THE ECONOMY OF THE EXCHANGES, AND ONE PARTICULARLY DESERVING OF REMARK, THAT ... THE COURSE OF TRANSIT (OF GOLD BETWEEN TWO NATIONS EQUALLY EMPLOYING GOLD AS A CIRCULATING MEDIUM) IS ALWAYS FROM THE COUNTRY WHERE FOR THE MOMENT THE METAL IS DEAREST TO THE COUNTRY WHERE IT IS CHEAPEST, A RISE OF THE MARKET PRICE OF THE METAL TO ITS HIGHEST LIMIT IN THE HOME MARKET, AND A FALL OF THE PREMIUM IN THE FOREIGN MARKET, BEING THE CERTAIN RESULTS OF THAT TENDENCY TO AN EFFLUX OF GOLD WHICH FOLLOWS A DEPRESSION OF THE EXCHANGES" (J. Fullarton , On the Regulation of Currencies etc., 2 n d e d . , [ p p . 1 1 9 - 2 0 ] ) .

[VII-60] Just as, in general, exchange begins where communities come to an end, and money as the measure produced by exchange itself, as means of exchange, and universal equivalent, acquires its specific significance not in internal trade, but in that between different communities, peoples, etc., in the same way, it was XCHT' è£oxT)va as international means of payment — for the liquidation of international debts — that money became in the 16th century, in the period of the infancy of bourgeois society, the exclusive interest of states and of the nascent political economy. The important role which money (gold and silver) in this third form still plays in international trade, only became fully clear and was recognised once more by economists as a result of the series of monetary crises in 1825, 1839, 1847 and 1857. The economists help themselves by arguing that on such occasions money is not required as means of circulation, but as capital This is correct. But it must not be forgotten that capital is required in the particular form of gold and silver, and not in that of any other commodity. Gold and silver play the role of absolute international means of payment because they are money as value-for-itself, independent equivalent.

" T H I S , IN FACT, IS NOT A QUESTION OF CURRENCY, BUT OF CAPITAL."

(It is, r a t h e r , A QUESTION OF MONEY, NOT OF CURRENCY, NOR OF CAPITAL,

BECAUSE NOT CAPITAL WHICH is INDIFFERENT TO THE SPECIAL FORM IN WHICH IT EXISTS,

BUT VALUE IN THE SPECIFIC FORM OF MONEY IS REQUESTED.)

"...ALL THOSE VARIOUS CAUSES WHICH. IN THE EXISTING CONDITION OF MONETARY AFFAIRS, ARE CAPABLE ... OF DIRECTING THE STREAM OF BULLION FROM ONE COUNTRY TO ANOTHER" (i.e. GIVING RISE TO A DRAIN OF BULLION) "RESOLVE THEMSELVES UNDER A SINGLE HEAD, NAMELY THE STATE OF THE BALANCE OF FOREIGN PAYMENTS, AND THE CONTINUALLY RECURRING NECESSITY OF TRANSFERRING CAPITAL" (BUT notabenef. CAPITAL IN THE FORM OF MONEY) "FROM ONE COUNTRY TO ANOTHER TO DISCHARGE I T . " F o r example, FAILURE OF CROPS. "WHETHER THAT CAPITAL IS TRANSMITTED IN MERCHANDISE OR IN SPECIE, IS A POINT WHICH IN NO WAY AFFECTS THE NATURE OF THE TRANSACTION" (AFFECTS IT VERY MATERIALLY]). F u r t h e r , WAR EXPENDITURE.

( W e are not c o n c e r n e d h e r e with t h e CASE OF TRANSMISSION OF CAPITAL

IN ORDER T O PLACE IT OUT T O GREATER ADVANTAGE AT INTEREST; l i k e w i s e t h a t resulting from t h e i m p o r t of A SURPLUS QUANTITY OF FOREIGN GOODS, which Mr. Fullarton cites, although this CASE is, of course, relevant if that

SURPLUS IMPORTATION coincides with crises.) (Fullarton, I.e., p p . 130, 132.)

"GOLD IS PREFERRED FOR THIS TRANSMISSION OF CAPITAL" //but in the case OF VIOLENT DRAINS OF BULLION there is no question at all of PREFERMENT// "ONLY IN THOSE CASES WHERE IT IS LIKELY TO EFFECT THE PAYMENT MORE CONVENIENTLY, PROMPTLY, OR PROFITABLY, THAN ANY OTHER DESCRIPTION OF STOCK OR CAPITAL."

(Mr. Fullarton incorrectly treats t h e TRANSMISSION of GOLD o r of other forms of CAPITAL as a matter of choice, whereas what is at

issue are CASES WHEN GOLD MUST BE TRANSMITTED IN INTERNATIONAL TRADE, just

as in internal trade BILLS MUST THEN BE ACQUITTED IN THE LEGAL MONEY, AND

NOT IN ANY SUBSTITUTE.)

"GOLD AND SILVER ... CAN ALWAYS BE CONVEYED TO THE SPOT WHERE IT IS WANTED WITH PRECISION AND CELERITY, AND MAY BE COUNTED UPON TO REALISE ON ITS ARRIVAL NEARLY THE EXACT SUM REQUIRED TO BE PROVIDED, RATHER THAN INCUR THE HAZARD OF SENDING IT IN TEA, COFFEE, SUGAR, OR INDIGO. GOLD AND SILVER POSSESS AN INFINITE ADVANTAGE OVER ALL OTHER DESCRIPTIONS OF MERCHANDISE FOR SUCH OCCASIONS FROM THE CIRCUMSTANCE OF THEIR BEING UNIVERSALLY IN USE AS MONEY. I T IS NOT IN TEA, COFFEE, SUGAR, OR INDIGO, THAT DEBTS, WHETHER FOREIGN OR DOMESTIC, ARE USUALLY CONTRACTED TO BE PAID, BUT IN COIN; AND A REMITTANCE, THEREFORE, EITHER IN THE IDENTICAL COIN DESIGNATED, OR IN BULLION WHICH CAN BE PROMPTLY TURNED INTO THAT COIN THROUGH THE MINT OR MARKET OF THE COUNTRY TO WHICH IT IS SENT, MUST ALWAYS AFFORD TO THE REMITTER THE MOST CERTAIN, IMMEDIATE, AND ACCURATE MEANS OF EFFECTING THIS OBJECT, WITHOUT RISK OF DISAPPOINTMENT FROM THE FAILURE OF DEMAND OR FLUCTUATION OF PRICE" ([ibid.,] pp. 132, 133).

H e therefore refers precisely to t h e suitability of gold a n d silver for b e i n g MONEY, t h e universal c o m m o d i t y of contracts, the standard of values, which can, at the same time, be converted into means of circulation ad libitum. The English have the good word currency for money as means of circulation ("coin" is not a suitable word to use for that purpose, since it itself is the means of circulation in a particular form) and money for money in its third determination. But since they have not properly investigated that determination, they declare this MONEY to be CAPITAL, although then they are again in fact compelled to distinguish money as this definite form of capital from capital in general.

"RICARDO APPEARS TO HAVE ENTERTAINED VERY PECULIAR AND EXTREME OPINIONS, AS TO THE LIMITED EXTENT OF THE OFFICES PERFORMED BY GOLD AND SILVER IN THE ADJUSTMENT OF FOREIGN BALANCES. MR. RICARDO HAD PASSED HIS LIFE AMID THE CONTROVERSIES WHICH GREW OUT OF THE RESTRICTION ACT, 4 9 AND HAD ACCUSTOMED HIMSELF SO LONG TO CONSIDER ALL THE GREAT FLUCTUATIONS OF EXCHANGE AND OF THE PRICE OF GOLD AS THE RESULT OF THE EXCESSIVE ISSUES OF THE BANK OF ENGLAND, THAT AT ONE TIME HE SEEMED SCARCELY WILLING TO ALLOW, THAT SUCH A THING COULD EXIST AS AN ADVERSE BALANCE OF COMMERCIAL PAYMENTS ... AND SO SLIGHT AN ACCOUNT DID HE SET ON THE FUNCTIONS PERFORMED BY GOLD IN SUCH ADJUSTMENTS, AS TO HAVE EVEN ANTICIPATED, THAT DRAINS FOR EXPORTATION WOULD CEASE ALTOGETHER SO SOON AS CASH PAYMENTS SHOULD BE RESUMED, AND THE CURRENCY RESTORED TO THE METALLIC LEVEL" (SEE Mr. Ricardos Evidence before the Lords' Committee of 1819 on the Bank of England, p. 186).

"[...] But after 1800, when paper completely superseded gold in England, OUR MERCHANTS DID NOT REALLY WANT IT; FOR, OWING TO THE UNSETTLED STATE OF CONTINENTAL EUROPE, AND THE INCREASED CONSUMPTION THERE OF IMPORTED MANUFACTURES, IN CONSEQUENCE OF THE INTERRUPTIONS GIVEN TO INDUSTRY AND TO ALL DOMESTIC IMPROVEMENT BY THE INCESSANT MOVEMENT OF INVADING ARMIES, TOGETHER WITH THE COMPLETE MONOPOLY OF THE COLONIAL TRADE WHICH ENGLAND HAD OBTAINED THROUGH HER NAVAL SUPERIORITY, THE EXPORT OF COMMODITIES FROM GREAT BRITAIN TO THE CONTINENT CONTINUED GREATLY TO EXCEED HER IMPORTS FROM THENCE, SO LONG AS THE INTERCOURSE REMAINED OPEN; AND, AFTER THAT INTERCOURSE WAS INTERRUPTED BY THE BERLIN AND MLLAN DECREES,51 THE TRANSACTIONS OF TRADE BECAME MUCH TOO INSIGNIFICANT TO AFFECT EXCHANGES IN ONE WAY OR THE OTHER. I T WAS THE FOREIGN MILITARY EXPENDITURE AND THE SUBSIDIES, AND NOT THE NECESSITIES OF COMMERCE, THAT CONTRIBUTED IN SO EXTRAORDINARY A MANNER T O DERANGE THE EXCHANGES AND ENHANCE THE PRICE OF BULLION IN THE LATTER YEARS OF THE WAR. T H E DISTINGUISHED ECONOMISTS OF THAT PERIOD, THEREFORE, HAD FEW OR NO REAL OPPORTUNITIES OF PRACTICALLY ESTIMATING THE RANGE OF WHICH FOREIGN COMMERCIAL BALANCES ARE SUSCEPTIBLE." ( T h e y b e l i e v e d that with war and OVERISSUE the INTERNATIONAL TRANSMISSION of BULLION would cease.) " H A D MR. RICARDO LIVED TO WITNESS THE DRAINS OF 1825 AND 1839, HE WOULD NO DOUBT HAVE SEEN REASON TO ALTER HIS VIEWS" (I.e., pp. 133-36).

[VII-61] PRICE IS THE MONEY VALUE OF COMMODITIES (Hubbard [The Currency and the Country, p. 33]).

MONEY HAS THE QUALITY OF BEING ALWAYS EXCHANGEABLE FOR WHAT IT MEASURES, AND THE QUANTITY REQUIRED FOR THE PURPOSES OF EXCHANGE MUST VARY, OF COURSE, ACCORDING TO THE QUANTITY OF PROPERTY TO BE EXCHANGED (J. W. Bosanquet,

Metallic, Paper, and Credit Currency etc., London, 1842, p. 100).

"I AM READY TO ADMIT THAT GOLD IS A COMMODITY IN SUCH GENERAL DEMAND THAT IT MAY ALWAYS COMMAND A MARKET, THAT IT CAN ALWAYS BUY ALL OTHER COMMODITIES; WHEREAS, OTHER COMMODITIES CANNOT ALWAYS BUY GOLD. THE MARKETS OF THE WORLD ARE OPEN TO IT AS MERCHANDISE AT LESS SACRIFICE UPON AN EMERGENCY, THAN WOULD ATTEND AN EXPORT OF ANY OTHER ARTICLE, WHICH MIGHT IN QUANTITY OR KIND BE BEYOND THE USUAL DEMAND IN THE COUNTRY TO WHICH IT IS SENT" (Th. Tooke, An Enquiry into the Currency Principle etc., 2nd ed., London, 1844, p. 10).

" T H E R E MUST BE A VERY CONSIDERABLE A M O U N T O F T H E PRECIOUS METALS APPLICABLE AND APPLIED AS THE MOST CONVENIENT MODE OF ADJUSTMENT OF INTERNATIONAL BALANCES, BEING A COMMODITY MORE GENERALLY IN DEMAND, AND LESS LIABLE TO FLUCTUATIONS IN MARKET VALUE THAN ANY OTHER" (p. 13).

Causes of rises in the price of bullion above MINT PRICE, according to Fullarton:

"COIN DEBASED BY WEAR TO THE EXTENT OF 3 OR 4% BELOW ITS STANDARD WEIGHT; PENAL LAWS WHICH PROHIBITED THE MELTING AND EXPORTATION OF THE COIN, WHILE THE TRAFFIC IN THE METAL OF WHICH THAT COIN WAS COMPOSED REMAINED PERFECTLY FREE. However, these causes themselves only had an effect in the event of an unfavourable rate of exchange. But from 1816 to 1821 [the market price of gold bullion] always fell to the BANK PRICE OF BULLION when the EXCHANGE was favourable to England; BUT it ROSE NO HIGHER, when the EXCHANGE was unfavourable, than TO SUCH A RATE AS WOULD INDEMNIFY THE MELTERS OF THE COIN FOR ITS DEGRADATION BY WEAR AND FOR THE PENAL CONSEQUENCES OF MELTING I T " (see Fullarton's book, pp. [7,] 8, 9). "FROM 1819 TO THE PRESENT TIME, AMID ALL THE VICISSITUDES WHICH THE MONEY HAS UNDERGONE DURING THAT EVENTFUL PERIOD, THE MARKET PRICE OF GOLD HAS ON NO OCCASION RISEN ABOVE 78S. PER OZ., NOR FALLEN BELOW 77S. 6D., AN EXTREME RANGE OF ONLY 6D. IN THE OUNCE. NOR WOULD EVEN THAT EXTENT OF FLUCTUATION BE NOW POSSIBLE; FOR IT WAS SOLELY OWING TO THE RENEWED DETERIORATION OF THE COIN, THAT EVEN SO TRIVIAL A RISE OCCURRED AS ^[1] LLIÀ. IN THE OUNCE, OR ABOUT 76 P.C. ABOVE THE MINT PRICE; AND THE FALL TO 77S. 6D. IS ENTIRELY ACCOUNTED FOR BY THE CIRCUMSTANCE OF THE BANK HAVING AT ONE TIME THOUGHT PROPER TO ESTABLISH THAT RATE AS THE LIMIT FOR ITS PURCHASES. THOSE CIRCUMSTANCES, HOWEVER, EXIST NO LONGER. FOR MANY YEARS THE BANK HAS BEEN IN THE PRACTICE OF ALLOWING 77S. 9D. FOR ALL THE GOLD BROUGHT TO IT FOR COINAGE" (i.e. the Bank pockets 1 Vgd. seigniorage, as the Mint does the job gratis for it); "AND AS SOON AS THE RECOINAGE OF SOVEREIGNS NOW IN PROGRESS SHALL BE

COMPLETED, THERE WILL BE AN EFFECTUAL BAR, UNTIL THE COIN SHALL AGAIN BECOME DETERIORATED, TO ANY FUTURE FLUCTUATION OF THE PRICE OF GOLD BULLION IN OUR MARKET BEYOND THE SMALL FRACTIONAL DIFFERENCE BETWEEN 77s. 9d. ALLOWED BY THE BANK, AND THE MINT PRICE OF 77s \0ll2d." (I.e., pp. 9-10).

The contradiction between money as MEASURE and equivalent, on the one hand, and as means of circulation. In the latter form — abrasion, LOSS OF METALLIC WEIGHT. Garnier observes that

"if a slighdy worn ecu were to be considered to be worth somewhat less than a quite new one, circulation would be continually checked, and every payment would provide an occasion for dispute" [Gamier, Histoire de la monnaie, Vol. I, p. 24].

(The materia] destined for accumulation was naturally sought and chosen in the realm of minerals. Gamier [ibid., p. 7].)

"IT BEING OBVIOUS THAT THE COINAGE, IN THE VERY NATURE OF THINGS, MUST BE FOR EVER. UNIT BY UNIT, FALLING UNDER DEPRECIATION BY THE MERE ACTION OF ORDINARY AND UNAVOIDABLE ABRASION (TO SAY NOTHING OF THE INDUCEMENT WHICH EVERY RESTORATION OF THE COINAGE HOLDS OUT TO THE WHOLE LEGION OF 'PLUGGERS' AND 'SWEATERS'), IT IS A PHYSICAL IMPOSSIBILITY AT ANY TIME, EVEN FOR A SINGLE DAY, UTTERLY TO EXTERMINATE LIGHT COINS FROM CIRCULATION" (The Currency Theory reviewed etc.. By a Banker in England, Edinburgh, 1845 [pp. 69-70]).

This was written in December 1844, COMMENTING UPON THE OPERATION

OF THE THEN RECENT PROCLAMATIONS RESPECTING THE LIGHT GOLD IN CIRCULATION i n a letter to The Times. (Hence a difficulty arises: If light gold [coin] is refused, the whole STANDARD is made insecure. If it is accepted, the door is opened to fraudulence, with the same result.) Concerning the above-mentioned proclamations, it is said that

"their EFFECT ... HAS VIRTUALLY BEEN T O DENOUNCE T H E WHOLE O F T H E CURRENT GOLD COIN AS AN UNSAFE AND ILLEGAL MEDIUM FOR MONETARY TRANSACTIONS" (I.e., pp. 68-69).

"By English law, if a gold sovereign is more than 0.774 GRAINS DEFICIENT in weight, it should n o longer pass as CURRENT. N O such law for silver m o n e y " (W. H . Morrison, Observations on the system of Metallic Currency adopted in this country, London, 1837, p. 54).

The CURRENCY Men^[52] assert THAT THE VALUE OF A CURRENCY DEPENDS UPON ITS QUANTITY (Fullarton, [op. cit.,] p. 13). If the VALUE of THE CURRENCY and, on the other hand, the prices and the mass of transactions are given (and also the velocity of circulation), OF COURSE only a definite quantity can circulate. Given the prices and the mass of transactions, and the velocity of circulation, this quantity depends exclusively on the value of the CURRENCY. Given this value and the velocity of circulation, it depends exclusively on the prices and the mass of transactions. This is how the quantity is determined. Hence, if representative money — mere tokens of value — is in circulation, the quantity of tokens that can circulate depends upon the STANDARD which they represent. It is wrongly concluded from this that their value is determined solely by their quantity. E.g., notes representing pounds cannot circulate in the same quantity as notes representing shillings.

[VII-62] Capital which yields profit is real capital, value posited as simultaneously self-reproducing and self-multiplying, and as a presupposition remaining equal to itself, distinct from itself as surplus value posited by capital. Capital yielding interest is in its turn a purely abstract form of profit-yielding capital.

10-785 When capital is posited as yielding profit, corresponding to its value (assuming a certain level of productive power), the commodity, or the commodity posited in its form as money (the form which corresponds to it as value become independent, or, as we may now say: realised capital), can enter into circulation as capital; capital can as capital become a commodity. In this case, it is capital loaned out at interest. The form of its circulation — or of the exchange through which it passes — then appears specifically different from that considered so far. We have seen how capital posits itself both in the determination of commodity and in that of money. But this occurs only in so far as both appear as moments of the circuit of capital, in which it is alternately realised. They are merely transitory and constantly reproduced modes of existence of capital, moments of its life-process. Yet capital as capital has not itself become a moment of circulation; capital itself as a commodity. The commodity has not been sold as capital, nor has money as capital. In a word, neither commodity nor money — and strictly speaking we have only to consider the latter as the adequate form — have entered into circulation as profit-yielding values.

Maclaren says^[53]:

"Mr. Tooke, Mr. Fullarton, and Mr. Wilson consider money as possessing intrinsic value as a commodity, and exchanging with goods according to that value, and not merely in accordance with the supply of pieces at the time; and they suppose with Dr. Smith that exports of bullion are made, quite irrespective of the state of the currency, to discharge balances of international debt, and to pay for commodities, such as corn, for which there is a sudden demand, and that they are taken from a fund which forms no part of the internal circulation, nor affects prices, but is set apart for these purposes.... Difficulty in explaining in what manner the bullion they say is set apart for this purpose, and has no effect on prices, can escape the laws of supply and demand, and though existing in the shape of money lying unemployed and known for the making of purchases, is neither applied for that purpose nor affects prices by the possibility of its being so applied."

The reply to this is, that the stock of bullion in question represents surplus-capital, not surplus-income, and is not available, therefore, merely to increase the demand for commodities, except on condition of increasing also the supply. Capital in search of employment is not a pure addition to the demanding power of the community. It cannot be lost in the currency. If it tends to raise prices by a demand, it tends to lower them by a corresponding supply. Money, as the security for capital, is not a mere purchasing power,—it purchases only in order to sell, and finally goes abroad in exchange for foreign commodities rather than disburse itself in merely adding to the currency at home. Money, as the security for capital, never comes into the market so as to be set off against commodities, because its purpose is to reproduce commodities; it is only the money which represents consumption that can finally affect prices (The Economist, 15 May [18]58).

"Mr. Ricardo maintained that prices depend on the relative amount of the circulating medium and of commodities respectively, that prices rise only through a depreciation of the currency, that is, from a too great abundance of it in proportion to commodities, that they fall either from a reduction in the amount of the currency, or from a relative increase in the stock of general commodities which it circulates. All the bullion and gold coin in the country is, according to Mr. Ricardo, to be reckoned currency, and if this increases without a corresponding increase in commodities, the currency is depreciated, and it becomes profitable to export bullion rather than commodities. On the other hand, if a bad harvest or any other calamity cause a great destruction of commodities, without any corresponding change in the amount of the circulation, the currency, whose amount was proportioned to the estimated rather than to the suddenly reduced market of commodities, again becomes redundant or 'depreciated', and must be diminished by exportation before its value can be restored. According to this view of the circulation, which is at the root of Lord Overstone's theory, the supply of circulating medium or currency is always capable of being indefinitely increased in amount, and diminishes in value according to that increase; and can be restored to its proper value only by exportation of the superabundant portion. Any issue, therefore, of paper money which might supply the gap caused by the exportation of the bullion, and so prevent the 'natural' fall of prices otherwise certain to ensue, is held by Mr. Ricardo's school to be an interference with the economical laws of price, and a departure from the principles which would necessarily regulate a purely metallic currency" (I.e.).

---

Endnotes

[98] The original text has only partly survived, including the last three quarters

[39] The Punic Wars (264-241, 218-201 and 149-146 B.C.) were fought by Rome and Carthage, the two biggest slave-owning states of antiquity, for domination in the Western Mediterranean and for the conquest of new territories and slaves. The wars ended in the destruction of Carthage.—212, 434

[40] The Laws of the Twelve Tables (Leges duodecim tabularum)—the most ancient legislative documents of the Roman slave-owning state. They originated from the plebeians' struggle against the patricians (the plebeians sought to deprive the patricians of their privileges to interpret legal customs) and were recorded in 451-450 B.C. They concerned private property, credit, family relations, prohibited marriages between patricians and plebeians and formed a basis of Roman law.—214

[41] Ripuarian law—a monument of common law of a Germanic tribe — the Ripuarian Franks, which was created from the 6th to the 8th century; it belongs to the so-called barbarian laws.—214

* Notabene: In Mexico, there existed money, but no weights; in Peru, weights, but no money.

(1) Weighing one pound.— Ed.

(2) The "sacred and religious objects", which can be "in no one's possession" and "can neither be put a value upon nor pawned or alienated", and which are exempted from the "trade of men" (Corpus iuris civilis, Digesta I, 5, 8, 9 and Institutiones II, 1, 7, 8).— Ed.

[42] Marx is referring to Excerpt Notebook XVII (December 1851-ApriI 1852).— 215, 217

9-785

[43] The reference is to the special tax-based sinking fund formed by the government of William Pitt Jr. in 1786 (see Note 29).—218

(3) All the rest.— Ed.

(4) Marx quotes this and the following passages from Galiani's book in Italian.— Ed.

a See p. XXIV of the Preface.— Ed.

(5) See this volume, p. 319.— Ed.

a The passages from Bernier and, below, from the French translation of McCulloch's book are quoted in the manuscript in French; those from Storch are partly in German translation and partly in the original French.— Ed. b Barter.— Ed. c Factitious need.— Ed.

CAPITAL ... SERVICES AND COMMODITIES USED IN PRODUCTION. MONEY-, THE MEASURE OF VALUE, THE MEDIUM OF EXCHANGE, AND THE UNIVERSAL EQUIVALENT; MORE PRACTICALLY: THE MEANS OF OBTAINING CAPITAL; THE ONLY MEANS OF PAYING FOR CAPITAL PREVIOUSLY OBTAINED FOR CREDIT; VIRTUALLY A SECURITY FOR OBTAINING ITS a See present edition, Vol. 28, p. 520.— Ed.

[4 5] In the book quoted here Arnd devoted a special paragraph to substantiate the lawfulness and expediency of the dog tax (§ 88, pp. 420-21).—226

a H. Ch. Carey, The Credit System in France, Great Britain, and the United States, London, Philadelphia, 1838, pp. 2 and 9.— Ed.

(6) Marx quotes Smith in French. From the words "Although the inhabitants of a town", he quotes in German translation, occasionally using French phrases.— Ed.

[47] The ancient philosopher Epicurus believed in an infinity of worlds, each originating and existing according to its own natural laws. The gods, though he believed in them, he saw as being outside and between the worlds, and not exerting any influence on either the development of the Universe, or human life.—233

a The excerpts from Sismondi are quoted by Marx in German translation, with a French word or phrase here and there.— Ed. h Gilbart has "by misfortune".— Ed.

[48] A reference to the Anglo-Scottish Union of 1707 which led to Scotland's final unification with England. As a result, the autonomous Scottish parliament was abolished, Scots were granted seats in the English parliament and all economic barriers that existed between the two countries were removed.—237, 310

[36] Here Marx criticises the views of the so-called "little shilling men", the Birmingham school of bourgeois political economy initiated by the banker Thomas Attwood. These views were set out in The Currency Question. The Gemini Letters, a book published anonymously by Thomas Wright and John Harlow, who called themselves Gemini. On this school, see also Volumes I and III of Capital (present edition, vols 35 and 37).—185, 319

(7) A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Vol. I, London, 1835, pp. 100, 101 and 105.— Ed.

(8) Marx quotes partly in French and partly in German translation. The passage from Storch that follows is in German translation, with a few occasional French words.— Ed.

(9) Factitious need.— Ed.

[50] As Marx points out, he is quoting Mill in German from the French edition of 1823. The double translation led to some divergences from the original. In this volume Mill is quoted according to the English edition of 1821.—240, 410

(10) The rest of the sentence is quoted in French in the manuscript.— Ed.

(11) Marx quotes partly in French and partly in German translation.— Ed.

The dissolving effect of money. Money is a means by which property (houses, other capital) can be split up into innumerable fragments and devoured piecemeal through exchange (Bray [Labour's Wrongs and Labour's Remedy, Leeds, 1839, pp. 140-41]). a See this volume, p. 164.— Ed.

(12) Marx quotes in French.— Ed.

a Above all.— Ed.

[52] " Currency principle" or " Currency theory" was advocated by some supporters of the quantity theory of money in the early 1840s in England. Its representatives — Loyd (i.e., Lord Overstone), Norman and others — asserted that the value and the price of commodities were determined by the quantity of money in circulation.— 249, 414

[53] A reference to J. Maclaren's A Sketch of the History of the Currency, London, 1858. Marx quotes, in English, a review of it that appeared in The Economist on May 15, 1858. Marx learned from the review that the book had come off the presses and became interested in it (see Marx's letter to Engels of May 31, 1858, present edition, Vol. 40, pp. 317-18). Subsequently Marx used Maclaren's book in his A Contribution to the Critique of Political Economy, Part One (see this volume, pp. 309, 398, 399).—250

[2] Marx dealt with the circuit and turnover of capital in the preceding part of Section Two of the "Chapter on Capital" (see present edition, Vol. 28, pp. 439-72), but then he interrupted his exposition of these problems and wrote a section about bourgeois theories of surplus value and profit (see Vol. 28, pp. 473-537). He did, however, return to the topic.— 7

[3] In his manuscript, to denote these categories Marx uses mostly the French terms "capital circulant" and "capital fixe", but sometimes he also uses the German ones "zirkulierendes Kapital" and "fixiertes Kapital", or the English "circulating capital", "floating capital", and "fixed capital".— 9, 201, 515, 526

[1] This is the concluding part of Marx's economic manuscript of 1857-1858. Consisting of seven large notebooks, which Marx numbered I-VII, the manuscript is the first rough draft of Capital. On the cover of the last, seventh, notebook, Marx wrote Political Economy, Criticism of in English and "Fortsetzung [Continuation]" in German. This implies that Notebook VII is a continuation of the preceding six notebooks and that Marx did not consider it to be the concluding one. The words Political Economy, Criticism of can be regarded as the author's title for the whole manuscript. The words "rough draft" are taken from Marx's letter to Engels of November 29, 1858 in which Marx calls his economic manuscript of 1857-1858 a Rohentwurf (Rough Draft). The manuscript is, indeed, a rough draft, for it is unfinished and breaks off in mid-sentence. A major part of the manuscript is included in Volume 28 of the present edition and begins with Chapter II—"Chapter on Money", followed by a long third chapter, "Chapter on Capital". Notebook VII contains the conclusion ot this chapter, followed by fragments intended as additions to the two chapters — on money and on capital. The Economic Manuscript of 1857-1858 is being published in the sequence given by Marx. The numbers of the notebooks are indicated in Roman numerals and the pages in Arabic ones, in square brackets. The square brackets in the manuscript are, therefore, replaced by oblique lines. Some passages have been transposed — as indicated by Marx in the manuscript or where there are obvious additions relevant to the preceding text. All such cases are mentioned in the footnotes, which also indicate passages crossed out by Marx and sometimes reproduce them. Where Marx, in quoting, gives references to pages of his excerpt notebooks, these have been supplemented, in brackets, with references to the pages of the editions Marx used. Where he merely gives the authors' names, the titles of the quoted works have been supplied. Foreign words and expressions, including Greek and Latin, are preserved when the author used them for stylistic or terminological purposes. English phrases, expressions and separate words are given in small caps. Quotations from English sources are given according to the editions used by the author. In all cases the form in which Marx quoted is respected. The language in which Marx quotes is indicated, unless it is German. The manuscript was first published in full in the language of the original (German) in Karl Marx, Grundrisse der Kritik der politischen Oekonomie (Rohentwurf). 1857-1858, Moscow, 1939-41 and reproduced by Dietz Verlag, Berlin, in 1953. In English, the manuscript was published in full in Karl Marx, Grundrisse. Foundations of the Critique of Political Economy (Rough Draft). Translated with a foreword by Martin Nicolaus. Penguin Books in association with New Left Review, London, 1973. Separate extracts had been published previously in Marx's Grundrisse, ed. David McLellan, Macmillan Press Ltd., London, 1971.—Title-page