3. Money
Money as distinguished from coin is the result of the circuit C—M—C and constitutes the starting point of the circuit M—C—M, that is the exchange of money for commodities so as to exchange commodities for money. In the form C—M—C it is the commodity that is the beginning and the end of the transaction; in the form M—C—M it is money. Money mediates the exchange of commodities in the first circuit, the commodity mediates the evolution of money into money in the second circuit. Money, which serves solely as a medium in the first circuit, appears as the goal of circulation in the second, whereas the commodity, which was the goal in the first circuit, appears simply as a means in the second. Because money itself is already the result of the circuit C—M — C, the result of circulation appears to be also its point of departure in the form M—C—M. The exchange of material is the content of C—M — C, whereas the real content of the second circuit, M—C—M, is the commodity in the form in which it emerged from the first circuit.
In the formula C—M—C the two extremes are commodities of the same value, which are at the same time however qualitatively different use values. Their exchange, C—C, is real exchange of material. On the other hand, in the formula M—C—M both extremes are gold and moreover gold of the same value. But it seems absurd to exchange gold for commodities in order to exchange commodities for gold, or if one considers the final result
M—M, to exchange gold for gold. But if one translates M—C—M into the formula — to buy in order to sell, which means simply to exchange gold for gold with the aid of an intermediate movement, one will immediately recognise the predominant form of bourgeois production. Nevertheless, in real life people do not buy in order to sell, but they buy at a low price in order to sell at a high price. They exchange money for commodities in order then to exchange these for a larger amount of money, so that the extremes M, M are quantitatively different, even if not qualitatively. This quantitative difference presupposes the exchange of non-equivalents, whereas commodities and money as such are merely antithetical forms of the commodity, in other words, different forms of existence of the same value. Money and commodity in the circuit M—C—M therefore imply more advanced relations of production, and within simple circulation the circuit is merely a reflection of movement of a more complex character. Hence money as distinct from the medium of circulation must be derived from C—M—C, the immediate form of commodity circulation.
Gold, i.e. the specific commodity which serves as standard of value and medium of circulation, becomes money without any special effort on the part of society. Silver has not become money in England, where it is neither the standard of value nor the predominant medium of circulation, similarly gold ceased to be money in Holland as soon as it was deposed from its position of standard of value. In the first place, a commodity in which the functions of standard of value and medium of circulation are united accordingly becomes money, or the unity of standard of value and medium of circulation is money. But as such a unity gold in its turn possesses an independent existence which is distinct from these two functions. As the standard of value gold is merely nominal money and nominal gold; purely as a medium of circulation it is symbolic money and symbolic gold, but in its simple metallic corporeality gold is money or money is real gold. Let us for a moment consider the commodity gold, that is money, in a state of rest and its relations with other commodities. All prices of commodities signify definite amounts of gold; they are thus merely notional gold or notional money, i.e. symbols of gold, just as, on the other hand, money considered as a token of value appeared to be merely a symbol of the prices of commodities.* Since all commodities are therefore merely notional money, money is the only real commodity. Gold is the material aspect of abstract wealth in contradistinction to commodities which only represent the independent form of exchange value, of universal social labour and of abstract wealth. So far as use value is concerned, each commodity represents only one element of physical wealth, only one separate facet of wealth, through its relation to a particular need. But money satisfies any need since it can be immediately turned into the object of any need. Its own use value is realised in the endless series of use values which constitute its equivalents. All the physical wealth evolved in the world of commodities is contained in a latent state in this solid piece of metal. Thus whereas the prices of commodities represent gold, the universal equivalent or abstract wealth, the use value of gold represents the use value of all commodities. Gold is, therefore, the material symbol of physical wealth. It is the précis de toutes les choses"(1) (Boisguillebert), the compendium of social wealth. As regards its form, it is the direct incarnation of universal labour, and as regards its content the quintessence of all concrete labour. It is universal wealth in an individual form.** Functioning as a medium of circulation, gold suffered all manner of injuries, it was clipped and even reduced to a purely symbolical scrap of paper.
Its golden splendour is restored when it serves as money. The servant becomes the master.* The mere underling becomes the god of commodities.**
a. Hoarding
Gold as money was in the first place divorced from the medium of circulation because the metamorphosis of the commodity was interrupted and the commodity remained in the form of a golden chrysalis. This happens whenever a sale is not immediately turned into a purchase. The fact that gold as money assumed an independent existence is thus above all a tangible expression of the separation of the process of circulation or of the metamorphosis of commodities into two discrete and separate transactions which exist side by side. The coin itself becomes money as soon as its movement is interrupted. In the hands of the seller who receives it in return for a commodity it is money, and not coin; but when it leaves his hands it becomes a coin once more. Everybody sells the particular commodity which he produces, but he buys all other commodities that he needs as a social being. How often he appears on the market as a seller depends on the labour time required to produce his commodity, whereas his appearance as a buyer is determined by the constant renewal of his vital requirements. In order to be able to buy without selling, he must have sold something without buying. The circuit C—M—C is indeed the dynamic unity of sale and purchase only in so far as it
* E. Misselden, Free Trade, Or, the Means to Make Trade Florish, London, 1622. "The natural matter of Commerce is Merchandise, WHICH MERCHANTS FROM THE END OF TRADE HAVE STILED COMMODITIES. The artificial matter of commerce is money, which has obtained the tide OF SINEWES OF WARRE AND OF STATE... Money, though it be in nature and time after merchandise, YET FOR AS MUCH AS IT IS NOW IN USE HAS BECOME THE CHIEFE" (p. 7). He compares the position of commodity and money with that of the descendents of "Old Jacob", who "blessing his Grandchildren, crost his hands, and laid his right hand on the younger, and his left hand on the elder" (I.e.).[75] Boisguillebert, Dissertation sur la nature des richesses: "Thus the slave of commerce has become its master.... The misery of the peoples is due to the fact that the slave has been turned into a master or rather into a tyrant" (pp. 395, 399). [Marx quotes in French.] is simultaneously the continuous process of their separation. So that money as coin may flow continuously, coin must continuously congeal into money. The continual movement of coin implies its perpetual stagnation in larger or smaller amounts in reserve funds of coin which arise everywhere within the framework of circulation and which are at the same time a condition of circulation. The formation, distribution, dissolution and re-formation of these funds constantly changes; existing funds disappear continuously and their disappearance is a continuous fact. This unceasing transformation of coin into money and of money into coin was expressed by Adam Smith when he said that, in addition to the particular commodity he sells, every commodity owner must always keep in stock a certain amount of the general commodity with which he buys. We have seen that M—C, the second member of the circuit C—M—C, splits up into a series of purchases, which are not effected all at once but successively over a period of time, so that one part of M circulates as coin, while the other part remains at rest as money. In this case, money is in fact only suspended coin and the various component parts of the coinage in circulation appear, constantly changing, now in one form, now in another. The first transformation of the medium of circulation into money constitutes therefore merely a technical aspect of the circulation of money.*
The first spontaneously evolved form of wealth consists of an overplus or excess of products, i.e. of the portion of products which are not directly required as use values, or else of the possession of products whose use value lies outside the range of mere necessity. When considering the transition from commodity to money, we saw that at a primitive stage of production it is this overplus or excess of products which really forms the sphere of commodity exchange. Superfluous products become exchangeable products or commodities. The adequate form of this surplus is gold and silver, the first form in which wealth as abstract social wealth is kept. It is not only possible to store commodities in the form of gold and silver, i.e. in the material shape of money, but gold and silver constitute wealth in preserved form. Every use value fulfils its function while it is being consumed, that is destroyed, but the use value of gold as money is to represent exchange value, to be the embodiment of universal labour time as an amorphous raw material. As amorphous metal exchange value possesses an imperishable form. Gold or silver as money thus immobilised constitutes a hoard. In the case of nations with purely metallic currency, such as the ancients, hoarding becomes a universal practice extending from the individual to the State, which guards its State hoard. In Asia and Egypt, during their early period, these hoards were in the custody of kings and priests and served mainly as evidence of their power. In Greece and Rome the creation of State hoards became a principle of public policy, for excess wealth in this form is always safe and can be used at any moment. The rapid transfer of such hoards by conquerors from one country to another and their sudden effusion in part into the sphere of circulation are characteristics of the economy of antiquity.
As objectified labour time gold is a pledge for its own magnitude of value, and, since it is the embodiment of universal labour time, its continuous function as exchange value is vouched for by the process of circulation. The simple fact that the commodity owner is able to retain his commodities in the form of exchange value, or to retain the exchange value as commodities, makes the exchange of commodities, in order to recover them transformed into gold, the specific motive of circulation. The metamorphosis of commodities C — M takes place for the sake of their metamorphosis, for the purpose of transforming particular physical wealth into general social wealth. Change of form — instead of exchange of matter — becomes an end in itself. Exchange value, which was merely a form, is turned into the content of the movement. Commodities remain wealth, that is commodities, only while they keep within the sphere of circulation, and they remain in this liquid state only in so far as they ossify into silver and gold. They remain liquid as the crystallisation of the process of circulation. But gold and silver establish themselves as money only in so far as they do not function as means of circulation. They become money as non-means of circulation.(1) The withdrawal of commodities from circulation in the form of gold is thus the only means of keeping them continuously in circulation.
The owner of commodities can recover as money from circulation only as much as he put into it in the form of commodities. Looked at from the standpoint of the circulation of commodities, the first condition of hoarding is constant selling, the incessant throwing of commodities into circulation. On the other hand, money as a medium of circulation constandy disappears in the process of circulation itself, since it is all the time being realised in use values and dissolved in ephemeral enjoyments. It must, therefore, be withdrawn from the stream of circulation; in other words, commodities must be retained in the first stage of their metamorphosis in order to prevent money from functioning as means of purchase. The owner of commodities who has now become a hoarder of money must sell as much as possible and buy as litde as possible, as even old Cato preached—patrem familias vendacem, non emacem esse." Parsimony is the negative pre-condition of hoarding, just as industry is its positive pre-condition. The smaller the proportion that is withdrawn from circulation as an equivalent for the commodities [thrown into it] consisting of particular commodities or use values, the larger the proportion that consists of money or exchange value.* The appropriation of wealth in its general form therefore implies renunciation of the material reality of wealth. Hence the motive power of hoarding is avarice, which desires not commodities as use values, but exchange value as a commodity. So as to take possession of superfluous wealth in its general form, particular needs must be treated as luxuries and superfluities. For instance, in 1593 the Cortes sent a petition to Philip II, which among other matters contains the following passage:
"The Cortes of Valladolid requested Your Majesty in 1586 not to permit the further importation into this kingdom of candles, glassware, jewellery, knives and similar articles coming from abroad, which, though they are of no use to human life, have to be exchanged for gold, as though the Spaniards were Indians." b
The hoarder of money scorns the worldly, temporal and ephemeral enjoyments in order to chase after the eternal treasure which can be touched neither by moths nor by rust, and which is wholly celestial and wholly mundane.
In the above-quoted work Misselden writes:
"The general remote cause of our want of gold is the great excess of this Kingdom in consuming the commodities of foreign countries, which prove to us DISCOMMODITIES, rather than COMMODITIES, in hindering us of so much treasure, which otherwise would be brought in, in lieu of those toys. We consume amongst us a great abundance of the wines of Spain, of France, of the Rhine, of the Levant, the raisins of Spain, the corinths of the Levant, the lawns (a sort of fine linen) and cambrics of Hannault, the silks of Italy, the sugars and tobacco of the West Indies, the spices of the East Indies; all which are of no necessity unto us, and yet are bought with ready money." *
Wealth in the shape of gold and silver is imperishable because exchange value is represented by an indestructible metal and especially because gold and silver are prevented from functioning as means of circulation and thus from becoming a merely transient monetary aspect of commodities. The perishable content is thus sacrificed to the non-perishable form.
"Suppose that money by way of tax be taken from one who spends the same in superfluous eating and drinking, and delivered to another who employs the same in improving of land, in fishing, in working of mines, in manufacture or to one that bestows it on clothes; even in this case there is always an advantage to the Commonwealth, because clothes do not altogether perish so soon as meats and drinks. But if the same be spent in furniture of houses, the advantage is yet a littie more; if in building of houses, yet more, etc.; but most of all, in bringing gold and silver into the country; because those things alone are not only not perishable, but are esteemed for wealth at all times, and everywhere; whereas all other things are wealth, but pro hie et nunc.(2)" **
An outward expression of the desire to withdraw money from the stream of circulation and to save it from the social exchange of matter is the burying of it, so that social wealth is turned into an imperishable subterranean hoard with an entirely furtive private relationship to the commodity owner. Doctor Bernier, who spent some time at Aurangzeb's court at Delhi, relates that merchants, especially non-Moslem heathens, in whose hands nearly the entire commerce and all money are concentrated — secretly bury their money deep in the ground,
"being held in thrall to the belief that the gold and silver they hide during their lifetime will serve them in the next world after their death".*** Incidentally, in so far as the hoarder of money combines asceticism with assiduous diligence he is intrinsically a Protestant by religion and still more a Puritan.
"It cannot be denied that buying and selling are necessary practices, which cannot be dispensed with and may surely be used in a Christian manner, especially as regards things that serve necessity and honour; for thus the patriarchs also bought and sold cattie, wool, corn, butter, milk and other goods. These are gifts of God, which He produces from the soil and shares among men. But foreign trade, which brings merchandise from Calicut and India and other places — merchandise such as exquisite silks and jewellery and spices, which are only for ostentation and serve no need — and drains money from the country and the people, should not be permitted if we had a government and princes. But I do not want to write of this now, for I think that, eventually, when we have no more money, it will cease of itself, just as finery and gluttony; for all writing and preaching will be in vain until we are compelled by necessity and poverty." *
Even in advanced bourgeois societies hoards of money are buried at times of upheaval in the social exchange of matter. This is an attempt to save social cohesion — for the commodity owner this cohesion is represented by the commodity and the adequate embodiment of the commodity is money — in its compact form
* Doctor Martin Luther, Bücher vom Kaufliandel und Wucher, 1524. Luther writes in the same passage: "God has brought it about that we Germans must thrust our gold and silver into foreign countries making all the world rich while we ourselves remain beggars. England would surely have less gold if Germany refused to take her cloth, and the King of Portugal, too, would have less, if we refused to take his spices. If you calculate how much money is extracted, without need or cause, from the German territories during one fair at Frankfurt, you will wonder how it comes about that even a single farthing is still left in Germany. Frankfurt is the silver and gold drain through which everything that arises and grows, that is minted or struck here flows out of the German land; if the hole were plugged, one would not hear the present complaint that there is everywhere sheer debt and no money, that the entire country and all the towns are despoilt by usury. But never mind things will nevertheless continue in this way: we Germans have to remain Germans, we do not desist unless we have to" [pp. 4-5.]
In the above-quoted work Misselden wants gold and silver to be retained at all events within the bounds of Chirstendom: "The other foreign remote causes of the want of money, are the trades maintained out of Christendom to Turkey, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendom within itself. For although the trades within Christendom are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendom. There is indeed a fluxus and refluxus, a flood and ebb of the monies of Christendom traded within itself; for sometimes there is more in one part of Christendom, sometimes there is less in another, as one country wants and another abounds: It comes and goes, and whirls about the circle of Christendom, but is still contained within the compass thereof. But the money that is traded out of Christendom into the parts aforesaid is continually issued out and never returns again" [pp. 19-20].
from the social movement. The social nervus rerum* is buried alongside the body whose sinews they are.
If the hoard were not constandy in tension with circulation, it would now simply be a heap of useless metal, its monetary soul would have disappeared and nothing but burnt-out ashes of circulation, its caput mortuum,(3) would remain. Money, i.e. exchange value which has assumed an independent existence, is by nature the embodiment of abstract wealth; but, on the other hand, any given sum of money is a quantitatively finite magnitude of value. The quantitative delimitation of exchange value conflicts with its qualitative universality, and the hoarder regards the limitation as a restriction, which in fact becomes also a qualitative restriction, i.e. the hoard is turned into a merely limited representation of material wealth. Money as the universal equivalent may be directly expressed, as we have seen, in terms of an equation, in which it forms one side while the other side consists of an endless series of commodities. The degree in which the realisation of exchange value approaches such an infinite series, in other words, how far it corresponds to the concept of exchange value, depends on its magnitude. After all, movement of exchange value as such, as an automaton, can only be expansion of its quantitative limits. But in passing one set of quantitative limits of the hoard new restrictions are set up, which in turn must be abolished. What appears as a restriction is not a particular limit of the hoard, but any limitation of it. The formation of hoards therefore has no intrinsic limits, no bounds in itself, but is an unending process, each particular result of which provides an impulse for a new beginning. Although the hoard can only be increased by being preserved, on the other hand it can only be preserved by being increased.
Money is not just an object of the passion for enrichment, it is the object of it. This urge is essentially auri sacra fames.(4) The passion for enrichment by contrast with the urge to acquire particular material wealth, i.e. use values, such as clothes, jewellery, herds of catde, etc., becomes possible only when general wealth as such is represented by a specific thing and can thus be retained as a particular commodity. Money therefore appears both as the object and the source of the desire for riches.* The underlying reason is in fact that exchange value as such becomes the goal, and consequently also an expansion of exchange value. Avarice clings to the hoard and does not allow money to become a medium of circulation, but greed for gold preserves the monetary soul of the hoard and maintains it in constant tension with circulation.
The activity which amasses hoards is, on the one hand, the withdrawal of money from circulation by constantly repeated sales, and, on the other, simple piling up, accumulation. It is indeed only in the sphere of simple circulation, and specifically in the form of hoards, that accumulation of wealth as such takes place, whereas the other so-called forms of accumulation, as we shall see later, are quite improperly, and only by analogy with simple accumulation of money, regarded as accumulation. All other commodities are accumulated either as use values, and in this case the manner of their accumulation is determined by the specific features of their use value. Storing of corn, for example, requires special equip-ment; collecting sheep makes a person a shepherd; accumulation of slaves and land necessitates relations of domination and servitude, and so on. Unlike the simple act of piling up, the formation of stocks of particular types of wealth requires special methods and develops special traits in the individual. Or wealth in the shape of commodities may be accumulated as exchange value, and in this case accumulation becomes a commercial or specifically economic operation. The one concerned in it becomes a corn merchant, a cattle-dealer, and so forth. Gold and silver constitute money not as the result of any activity of the person who accumulates them, but as crystals of the process of circulation which takes place without his assistance. He need do nothing but put them aside, piling one lot upon another, a completely senseless activity, which if applied to any other commodity would result in its devaluation.* Our hoarder is a martyr to exchange value, a holy ascetic seated at the top of a metal column. He cares for wealth only in its social form, and accordingly he hides it away from society. He wants commodities in a form in which they can always circulate and he therefore withdraws them from circulation. He adores exchange value and he consequendy refrains from exchange. The liquid form of wealth and its petrification, the elixir of life and the philosophers' stone are wildly mixed together like an alchemist's apparitions. His imaginary boundless thirst for enjoyment causes him to renouce all enjoyment. Because he desires to satisfy all social requirements, he scarcely satisfies the most urgent physical wants. While clinging to wealth in its metallic corporeality the hoarder reduces it to a mere chimera. But the accumulation of money for the sake of money is in fact the barbaric form of production for the sake of production, i.e. the development of the productive powers of social labour beyond the limits of customary requirements. The less advanced is the production of commodities, the more important is hoarding — the first form in which exchange value assumes an independent existence as money — and it therefore plays an important role among ancient nations, in Asia up to now, and among contemporary agrarian nations, where exchange value has not yet penetrated all relations of production. Before, however, examining the specific economic function that hoarding fulfils in relation to metallic currency, let us note another form of hoarding.
Gold and silver articles, quite irrespective of their aesthetic properties, can be turned into money, since the material of which they consist is the material of money, just as gold coins and gold bars can be transformed into such articles. Since gold and silver are the material of abstract wealth, their employment as concrete use values is the most striking manifestation of wealth, and although at certain stages of production the commodity owner hides his treasures, he is impelled to show to other commodity
Mr. Senior knows more about the subject: "Money seems to be the only object for which the desire is universal; and it is so, because money is abstract wealth. Its possessor may satisfy at will his requirements whatever they may be." Principes fondamentaux de l'économie politique, traduit par le Comte Jean Arrivabene, Paris, 1836, p. 221. [Marx quotes in French. The English passage is taken from Senior, Political Economy, 1850, p. 27.] And Storch as well: "As money represents all other forms of wealth, one needs only to accumulate it in order to obtain all other kinds of wealth that exist on earth" (I.e., t. II, p. 135).
owners that he is a rico hombre;(5) whenever he can safely do so. He bedecks himself and his house with gold.* In Asia, and India in particular, where the formation of hoards does not play a subordinate part in the total mechanism of production, as it does in bourgeois economy, but where this form of wealth is still considered a final goal, gold and silver articles are in fact merely hoards in an aesthetic form. The law in mediaeval England treated gold and silver articles simply as a kind of treasure-hoard, since the rough labour applied to them added little to their value. They were intended to be thrown again into circulation and the fineness of the metal of which they were made was therefore specified in the same way as that of coin. The fact that increasing wealth leads to an increased use of gold and silver in the form of luxury articles is such a simple matter that ancient thinkers clearly understood it,** whereas modern economists put forward the incorrect proposition that the use of silver and gold articles increases not in proportion to the rise in wealth but in proportion to the fall in the value of precious metals. There is therefore always a flaw in their otherwise accurate explanations regarding the use of Californian and Australian gold, for according to their views the increased employment of gold as raw material is not justified by a corresponding fall in its value. As a result of the fight between the American colonies and Spain[76] and the interruption of mining by revolutions, the average annual output of precious metals decreased by more than one-half between 1810 and 1830. The amount of coin circulating in Europe decreased by almost one-sixth in 1829 as compared with 1809. Although the output thus decreased and the production costs (provided they changed at all) increased, nevertheless an exceptionally rapid rise in the use of precious metals as articles of luxury took place in England even during the war and on the continent following the Treaty of Paris.[70] Their use increased with the growth of wealth in general.*** It may be regarded as a general law that the conversion of gold and silver coin into luxury goods predominates in times of peace, while their reconversion into bars and also into coin only predominates in turbulent periods.* How considerable a proportion of the gold and silver stock exists in the shape of luxury articles compared with the amount used as money is shown by the fact that in 1829, according to Jacob, the ratio was as 2 to 1 in England, while in Europe as a whole and America, 25 per cent more precious metal was used in luxury goods than in coins.
We have seen that the circulation of money is merely a manifestation of the metamorphosis of commodities, or of the transformation which accompanies the social exchange of matter. The total quantity of money in circulation must therefore perpetually increase or decrease in accordance with the varying aggregate price of the commodities in circulation, that is in accordance, on the one hand, with the volume of their metamorphoses which take place simultaneously and, on the other hand, with the prevailing velocity of their transformation. This is only possible provided that the proportion of money in circulation to the total amount of money in a given country varies continuously. Thanks to the formation of hoards this condition is fulfilled. If prices fall or the velocity of circulation increases, then the money ejected from the sphere of circulation is absorbed by the reservoirs of hoarders; if prices rise or the velocity of circulation decreases, then these hoards open and a part of them streams back into circulation. The solidification of circulating money into hoards and the flowing of the hoards into circulation is a continuously changing and oscillating movement, and the prevalence of the one or the other trend is solely determined by variations in the circulation of commodities. The hoards thus act as channels for the supply or withdrawal of circulating money, so that the amount of money circulating as coin is always just adequate to the immediate requirements of circulation. If the total volume of circulation suddenly expands and the fluid unity of sale and purchase predominates, so that the total amount of prices to be realised grows even faster than does the velocity of circulation of money, then the hoards dwindle visibly; whenever an abnormal stagnation prevails in the movement as a whole, that is when the separation of sale from purchase predominates, then the medium of circulation solidifies into money to a remarkable extent and the reservoirs of the hoarders are filled far above their average level. In countries which have purely metallic currency or are at an early stage of development of production, hoards are extremely fragmented and scattered throughout the country, whereas in advanced bourgeois countries they are concentrated in the reservoirs of banks. Hoards must not be confused with reserve funds of coin, which form a constituent element of the total amount of money always in circulation, whereas the active relation of hoard and medium of circulation presupposes that the total amount of money decreases or increases. As we have seen, gold and silver articles also act both as channels for the withdrawal of precious metals and latent sources of supply. Under ordinary circumstances only the former function plays an important role in the economy of metallic currency.*
b. Means of Payment
Up to now two forms of money which differ from the medium of circulation have been considered, namely suspended coin and hoard. The first form, the temporary transformation of coins into money, reflects the fact that in a certain sphere of circulation, the second term of C — M—C, that is M—C, the purchase, must
* In the following passage Xenophon discusses money and hoard, two specific and distinct aspects of money: "Of all operations with which I am acquainted, this is the only one in which no sort of jealousy is felt at a further development of the industry ... the larger the quantity of ore discovered and the greater the amount of silver extracted, the greater the number of persons ready to engage in the operation.... No one when he has got sufficient furniture for his house dreams of making further purchases on this head, but of silver no one ever yet possessed so much that he was forced to cry 'Enough'. On the contrary, if ever anybody does become possessed of an immoderate amount he finds as much pleasure in digging a hole in the ground and hoarding it as an actual employment of it.... When a state is prosperous there is nothing which people so much desire as silver. The men want money to expend on beautiful armour and fine horses, and houses and sumptuous paraphernalia of all sorts. The women betake themselves to expensive apparel and ornaments of gold. Or when states are sick, either through barrenness of corn and other fruits, or through war, the demand for current coin is even more imperative (whilst the ground lies unproductive), to pay for necessaries or military aid." (Xenophon, De Vectigalibus, c. IV [transi, by H. G. Dakyns, London, 1892, Vol. II, pp. 335-36].) [Marx quotes in Greek.] In Ch. 9, Book I of his De Republica, Aristotle sets forth the two circuits of circulation C — M — C and M—C—M, which he calls "economics" and "Chrematistics", and their differences. The two forms under the names SÏXT) and xspSos are contrasted with each other by the Greek tragedians, especially Euripides.
break up into a series of successive purchases. Hoarding, however, is either simply due to the separation of the transaction C—M which does not proceed to M—C, or it is merely an independent development of the first metamorphosis of commodities, money, or the alienated form of existence of all commodities as distinct from means of circulation, which represents the always saleable form of the commodity. Coin held in reserve and hoards constitute money only as non-means of circulation, and are non-means of circulation merely because they do not circulate. The distinctive form of money which we now consider circulates or enters circulation, but does not function as means of circulation. Money as means of circulation was always means of purchase, but now it does not serve in that capacity.
When as a result of hoarding money becomes the embodiment of abstract social wealth and the material representative of physical wealth, this aspect of money acquires specific functions within the process of circulation. When money circulates simply as a means of circulation and hence as a means of purchase, this presupposes that commodity and money confront each other simultaneously; in other words, that the same value is available twice, as a commodity in the hands of the seller at one pole, and as money in the hands of the buyer at the other pole. The simultaneous existence of the two equivalents at opposite poles and their simultaneous change of place, or their mutual alienation, presupposes in its turn that seller and buyer enter into relation with each other only as owners of actually existing equivalents. But the metamorphosis of commodities, in the course of which the various distinct forms of money are evolved, transforms the commodity owners as well or alters the social role they play in relation to one another. In the course of the metamorphosis of commodities the keeper of commodities changes his skin as often as the commodity undergoes a change or as money appears in a new form. Commodity owners thus faced each other originally simply as commodity owners; then one of them became a seller, the other a buyer; then each became alternately buyer and seller; then they became hoarders and finally rich men. Commodity owners emerging from the process of circulation are accordingly different from those entering the process. The different forms which money assumes in the process of circulation are in fact only crystallisations of the transformation of commodities, a transformation which is in its turn only the objective expression of the changing social relations in which commodity owners conduct their exchange. New relations of intercourse arise in the process of circulation, and commodity owners, who represent these changed relations, acquire new economic characteristics. In the same way as within the sphere of internal circulation money becomes nominal, and a mere piece of paper representing gold is able to function as money, so a buyer or seller who comes forward as a mere representative of money or commodities, namely one who represents future money or future commodities, is enabled by the same process to operate as a real buyer or seller.
All the distinct forms evolved by gold as money are merely manifestations of aspects latent in the metamorphosis of commodities, but these aspects did not assume a separate form in the simple circulation of money, in money as it appears as coin and the circuit C—M—C as a dynamic unity, or else they emerged merely as potentialities, as did for example the interruption of the metamorphosis of commodities. We have seen that in the course of the transaction C—M the commodity as a real use value and nominal exchange value is brought into relation with money as a real exchange value and only nominal use value. By alienating the commodity as use value the seller realises its exchange value and the use value of money. In contrast, by alienating money as exchange value, the buyer realises its use value and the price of the commodity. Commodity and money, accordingly, change places. The active process of this bilateral polar antithesis is in its turn separated while it is being carried through. The seller actually alienates the commodity but realises its price in the first place only nominally. He has sold the commodity at its price, but the price will only be realised at a predetermined later date. The buyer buys as the representative of future money, whereas the seller sells as the owner of a commodity available here and now. On the one hand, the seller actually hands over the commodity as use value without actually realising its price; on the other hand, the buyer actually realises his money in the use value of the commodity without actually handing over the money as exchange value. Just as formerly money was represented by a token of value, so now it is symbolically represented by the buyer himself. Just as formerly the value-token as a universal symbol entailed a State guarantee and a legal rate, so now the buyer as a personal symbol gives rise to private, legally enforcible, contracts among commodity owners.
Conversely, in the transaction M—C, money as a real means of purchase may be alienated, thus realising the price of the commodity before the use value of the money is realised, or before the commodity is handed over. This happens, for instance, in the well-known form of advance-payment; also in the form of payment used by the English government to buy opium from Indian ryots, and is largely used by foreign merchants living in Russia to buy goods produced in that country. In these cases, however, money functions only in the familiar form of means of purchase and therefore requires no new definition,* or any further discussion. With regard to the changed form which the two transactions M—C and C—M assume here, we shall only note that the purely conceptual distinction of purchase and sale as it appears directly in circulation becomes now a real distinction, since there is only money in one case and only commodity in the other; in each of them, however, only the extreme is actually available from which the initiative comes. Both forms, moreover, have in common the fact that in each of them one equivalent exists only by common decision of buyer and seller, a decision which is mutually binding and is given a distinct legal form.
Seller and buyer become creditor and debtor. Whereas the commodity owner as the guardian of a hoard was a rather comical figure, he now becomes terrifying, because he regards, not himself, but his neighbour as the embodiment of a definite sum of money, and turns his neighbour and not himself into a martyr to exchange value. The former believer becomes a creditor,3 and turns from religion to jurisprudence.
" I STAY HERE ON MY B O N D ! " b
In the changed form of C—M, in which the commodity is actually on hand and the money is merely represented, money functions first as the measure of value. The exchange value of the commodity is assessed in money as its measure, but the exchange value assessed by contract, that is the price, exists not merely in the mind of the seller, but is also the measure of the liabilities of the buyer. Secondly, money functions here as means of purchase, although it is merely its future existence which casts its shadow before it, for it causes the commodity to move from the hands of the seller into those of the buyer. On the settlement day of the contract, money enters circulation, for it moves from the hands of the former buyer into those of the former seller. But it does not come into the sphere of circulation as means of circulation or means of purchase. It fulfilled these functions before it existed, and it appears on the scene after ceasing to perform these functions. It enters circulation as the only adequate equivalent of the commodity, as the absolute embodiment of exchange value, as the last word of the exchange process, in short as money, and moreover as money functioning as the universal means of payment. Money functioning as means of payment appears to be the absolute commodity, but it remains within the sphere of circulation, not outside it as with the hoard. The difference between means of purchase and means of payment becomes very conspicu-ous, and unpleasantly so, at times of commercial crises.*
The conversion of products into money in the sphere of circulation appears originally simply as an individual necessity for the commodity owner when his own product does not constitute use value for himself, but has still to become a use value through alienation. In order to make payment on the contractual settlement day, however, he must already have sold commodities. The evolution of the circulation process thus turns selling into a social necessity for him, quite irrespective of his individual needs. As a former buyer of commodities he is forced to become a seller of other commodities so as to obtain money, not as a means of purchase, but as a means of payment, as the absolute form of exchange value. The conversion of commodities into money as a final act, or the first metamorphosis of commodities as the ultimate goal, which in hoarding appeared to be the whim of the commodity owner, has now become an economic function. The motive and the content of selling for the sake of payment constitutes the content of the circulation process, a content arising from its very form.
In this type of sale, the commodity moves from one position to another, although its first metamorphosis, its conversion into money, is deferred. On the buyer's side, however, the second metamorphosis is carried through, i.e. money is reconverted into commodities, before the first metamorphosis has taken place, i.e. before the conversion of the commodities into money. In this case, therefore, the first metamorphosis appears to take place later than the second. Hence money, the form of the commodity in its first metamorphosis, acquires a new distinctive aspect. Money, that is the independent development of exchange value, is no longer an intermediary phase of commodity circulation, but its final result. No proof in detail is needed to show that such purchases on credit, in which the two poles of the transaction are separated in time, evolve spontaneously on the basis of simple circulation of commodities. At first it happens that in the course of circulation certain commodity owners confront one another repeatedly as buyers and sellers. Such repeated occurrences do not remain merely accidental, but commodities may, for example, be ordered for a future date at which they are to be delivered and paid for. The sale in this case takes place only nominally, i.e. juridically, without the actual presence of commodities and money. The two forms of money, means of circulation and means of payment, are here still identical, since on the one hand commodities and money change places simultaneously, and on the other, money does not purchase commodities but realises the price of commodities previously sold. Moreover, owing to the specific nature of a number of use values they are really alienated not by being in fact handed over but only by being leased for a definite period. For example, when one sells the use of a house for a month, its use value is delivered only at the expiration of the month, although the house changes hands at the beginning of the month. Because in this case the actual transfer of the use value and its real alienation are separated in time, the realisation of its price also takes place later than the date on which it changes hands. Finally, owing to differences in the period and length of time required for the production of different commodities, one producer comes to the market as a seller before the other can act as a buyer, and if the same commodity owners repeatedly buy and sell one another's products, the two aspects of the transaction are separated according to the conditions of production of their commodities. This gives rise to relations of creditor and debtor among commodity owners. These relations can be fully developed even before the credit system comes into being, although they are the natural basis of the latter. It is evident however that the evolution of the credit system, and therefore of the bourgeois mode of production in general, causes money to function increasingly as a means of payment to the detriment of its function both as a means of purchase and even more as an element of hoarding. For instance in England, coin is almost entirely confined to the sphere of retail trade and to petty transactions between producers and consumers, whereas money as means of payment predominates in the sphere of large commercial transactions.*
Money as the universal means of payment becomes the universal commodity of contracts, though at first only within the sphere of commodity circulation.** But as this function of money develops, all other forms of payment are gradually converted into payments in money. The extent to which money functions as the exclusive means of payment indicates how deep-seated and widespread the domination of production by exchange value is.***
The volume of money in circulation as means of payment is first of all determined by the amount of payments due, that is by the aggregate prices of the commodities which have been sold, not of the commodities that are to be sold as is the case with simple money circulation. But the amount thus determined is subject to modification by two factors: first by the velocity with which a coin repeats the same operation, or the number of payments which constitute a dynamic chain of payments. A pays B, then B pays C
* Despite Mr. Macleod's doctrinaire priggishness about definitions, he misinter-prets the most elementary economic relations to such an extent that he asserts that money in general arises from its most advanced form, that is means of payment. He says inter alia that since people do not always require each other's services at the same time and to the same value, "there would remain a certain difference or amount of service due from the first to the second — debt". [Here and below Marx quotes from Macleod in English. The owner of this debt may need the services of a third person who does not immediately require his services, and "transfers to the third the debt due to him from the first". The "evidence of debts changes so hands — currency. ...when a person received an obligation expressed by metallic currency, he is able to command the services not only of the original debtor, but of the whole of the industrious community." [H. D.] Macleod, The Theory and Practice of Banking etc., Vol. I, London, 1855, Ch. I [pp. 23, 24, 29].
** Bailey, I.e., p. 3. "Money is the general commodity of contracts, or that in which the majority of bargains about property, to be completed at a future time, are made." [Marx quotes in English.]
*** Senior (I.e., pp. 116, 117) says: "Since the value of all things varies in a given period of time, one takes as means of payment the thing whose value varies least, which over the longest period maintains a given average capacity to purchase things. So money becomes the expression or representative of values." On the contrary, gold, silver, etc., become universal means of payment, because they have become money, that is the independent embodiment of exchange value. It is precisely when the stability of the value of money, mentioned by Mr. Senior, is taken into account, i.e. in periods when force of circumstances establishes money as the universal means of payment, that people become aware of variations in the value of money. Such a period was the Elizabethan age in England, when, because of the manifest depreciation of the precious metals, an Act was shepherded through Parliament by Lord Burleigh and Sir Thomas Smith to compel the universities of Oxford and Cambridge to provide for the payment of one-third of the rent of their lands in wheat and malt.
and so on. The velocity with which the same coin can act repeatedly as means of payment depends, on the one hand, on the interconnection of the commodity owners' relations as creditors and debtors, in which the same commodity owner who is a creditor in relation to one person is a debtor in relation to another, and so forth; and on the other hand, on the period of time separating the various dates on which payments are due. The series of payments, or of first metamorphoses carried out subsequently, is qualitatively different from the series of metamorphoses represented by the movement of money as means of circulation. The second series does not only appear in temporal succession, but it comes into being in this way. A commodity is turned into money, then into a commodity again, thus making it possible for another commodity to be turned into money, and so on: in other words, a seller becomes a buyer and another commodity owner thereby becomes a seller. This sequence arises fortuitously in the course of commodity exchange itself. But the fact that the money which A pays to B is then used by B to pay C, and then by C to pay D, etc., and that moreover payments rapidly succeed one another — this external relation is but a manifestation of a previously existing social relation. The same coin passes through various hands not because it acts as means of payment; but it is passed on as means of payment because these hands have already been joined. A far more extensive integration of the individual into the process of circulation is accordingly signified by the velocity of money as means of payment, than by the velocity of money as coin or means of purchase.
The aggregate of prices of simultaneous, and therefore spatially coexisting, purchases and sales is the limit beyond which the velocity of currency cannot be substituted for its volume. But this barrier does not exist when money functions as means of payment. If payments falling due simultaneously are concentrated at one place, which occurs at first spontaneously at the large foci of commodity circulation, then payments offset one another like negative and positive quantities: A who has to pay B may receive a payment from C at the same time, and so on. The amount of money required as means of payment thus depends not on the aggregate amount of payments which are due to be made simultaneously, but on the degree of their concentration and on the size of the balance left over after the negative and positive amounts have been offset against one another. Special devices for this type of balancing arise even if no credit system has been evolved, as was the case in ancient Rome. But consideration of
14-785 them is no more relevant here than is consideration of the usual settlement dates, which in every country become established among people of certain social strata. Here we shall merely note that scholarly investigations of the specific influence exerted by these dates on the periodic variations in the quantity of money in circulation have been undertaken only in recent times.
When payments cancel one another as positive and negative quantities, no money need actually appear on the scene. Here money functions merely as measure of value with respect to both the price of the commodity and the size of mutual obligations. Apart from its nominal existence, exchange value does not therefore acquire an independent existence in this case, even in the shape of a token of value, in other words money becomes purely ideal money of account. Money functioning as means of payment thus contains a contradiction: on the one hand, when payments balance, it acts merely as a nominal measure; on the other hand, when actual payments have to be made, money enters circulation not as a transient means of circulation, but as the static aspect of the universal equivalent, as the absolute commodity, in short, as money. Where chains of payments and an artificial system for adjusting them have been developed, any upheaval that forcibly interrupts the flow of payments and upsets the mechanism for balancing them against one another suddenly turns money from the nebulous chimerical form it assumed as measure of value into hard cash or means of payment. Under conditions of advanced bourgeois production, when the commodity owner has long since become a capitalist, knows his Adam Smith and smiles superciliously at the superstition that only gold and silver constitute money or that money is after all the absolute commodity as distinct from other commodities — money then suddenly appears not as the medium of circulation but once more as the only adequate form of exchange value, as a unique form of wealth just as it is regarded by the hoarder. The fact that money is the sole incarnation of wealth manifests itself in the actual devaluation and worthlessness of all physical wealth, and not in purely imaginary devaluation as for instance in the monetary system. This particular phase of world market crises is known as monetary crisis. The
summum bonum, the sole form of wealth for which people clamour at such times, is money, hard cash, and compared with it all other commodities — just because they are use values — appear to be useless, mere baubles and toys, or as our Doctor Martin Luther says, mere finery and gluttony. This sudden transformation of the credit system into a monetary system adds theoretical dismay to the actually existing panic, and the agents of the circulation process are overawed by the impenetrable mystery surrounding their own relations.*
Payments in their turn necessitate reserve funds, accumulations of money as means of payment. The formation of reserve funds, unlike hoarding, no longer seems an activity extraneous to circulation, or, as in the case of coin reserves, a purely technical stagnation of coin; on the contrary money has to be gradually accumulated so as to be available at definite dates in the future when payments become due. Although with the development of bourgeois production, therefore, the abstract form of hoarding regarded as enrichment decreases, the form of hoarding necessitated by the exchange process itself increases; a part of the wealth which generally accumulates in the sphere of commodity circulation being drawn into reserve funds of means of payment. The more advanced is bourgeois production the more these funds are restricted to the indispensable minimum. Locke's work on the lowering of the rate of interest** contains interesting information about the size of these funds in his time. It shows how substantial a proportion of the money in circulation in England was absorbed by the reserves of means of payment precisely during the period when banking began to develop.
The law regarding the quantity of money in circulation as it emerged from the examination of simple circulation of money is significantly modified by the circulation of means of payment. If the velocity of circulation of money, both as means of circulation and as means of payment, is given, then the aggregate amount of money in circulation during a particular period is determined by the total amount of commodity prices to be realised [plus] the total amount of payments falling due during this period minus the payments that balance one another. This does not affect at all the general principle that the amount of money in circulation depends upon commodity prices, for the aggregate amount of payments is itself determined by the prices laid down in the contracts. It is however quite obvious that the aggregate prices of the commodities in circulation during a definite period, say a day, are by no means commensurate with the volume of money in circulation on the same day, even if the velocity of circulation and the economic methods of payment are assumed to remain unchanged, since a certain quantity of commodities is in circulation whose prices will only be realised in money at a later date, and a certain amount of money in circulation corresponds to commodities which have left the sphere of circulation a long time ago. This amount of money depends in its turn on the value of the payments that fall due on this day, although the relevant contracts were concluded at widely varying dates.
We have seen that changes in the value of gold and silver do not affect their functions as measure of value and money of account. But with regard to hoarded money these changes are of decisive importance, since with the rise or fall in the value of gold and silver the value of the hoard of gold or silver will rise or fall. Such changes are of even greater importance for money as means of payment. The payment is effected at a date subsequent to the sale of the commodities; that is to say, money performs two different functions at two different periods, acting first as a measure of value, and then as the means of payment appropriate to this measure. If meanwhile a change has occurred in the value of the precious metals, or in the labour time needed for their production, the same quantity of gold or silver will have a greater or smaller value when it functions as means of payment than at the time it served as measure of value, when the contract was signed. The function which a specific commodity, such as gold or silver, performs as money, or as exchange value that has assumed an independent form, comes here into conflict with the nature of the specific commodity, whose value depends on variations in its production costs. It is well known that the fall in the value of precious metals in Europe gave rise to a great social revolution, just as the ancient Roman Republic at an early stage of its history experienced a reverse revolution caused by a rise in the value of copper, the metal in which the debts of the plebeians were contracted. Even without further examination of the influence which fluctuations in the value of precious metals exert on the system of bourgeois economy, it is clear that a fall in the value of precious metals favours debtors at the expense of creditors, while a rise in their value favours creditors at the expense of debtors.
c. World Money
Gold becomes money, as distinct from coin, first by being withdrawn from circulation and hoarded, then by entering circulation as a non-means of circulation, finally however by breaking through the barriers of domestic circulation in oder to function as universal equivalent in the world of commodities. It thus becomes world money.
In the same way as originally the commonly used weights of precious metals served as measures of value, so on the world market the monetary denominations are reconverted into corresponding denominations of weight. Just as amorphous crude metal (aes rude) was the original form of means of circulation, and originally the coined form was simply the official indication of metallic weight, so precious metal serving as world coin discards its specific shape and imprint and reverts to neutral bullion form; that is when national coins, such as Russian imperials, Mexican thalers and English sovereigns, circulate abroad their titles become unimportant and what counts is only their substance. Finally, as international money the precious metals once again fulfil their original function of means of exchange: a function which, like commodity exchange itself, originated at points of contact between different primitive communities and not in the interior of the communities. Money functioning as world money reverts to its original natural form. When it leaves domestic circulation, money sheds the particular forms occasioned by the development of exchange within particular areas, or the local forms assumed by money as measure of price — specie, small change, and token of value.
We have seen that only one commodity serves as a measure of value in the internal circulation of any country. But since in one country gold performs this function, in another silver, a double standard of value is recognised on the world market, and all functions of money are duplicated. The translation of the values of commodities from gold prices into silver prices and vice versa always depends on the relative value of the two metals; this relative value varying continuously and its determination appearing accordingly as a continuous process. Commodity owners in every sphere of domestic circulation are compelled to use gold and silver alternately for foreign commerce thus exchanging the metal current as money within the country for the metal which they happen to require as money in a foreign country. Every nation thus employs both gold and silver as world money.
Gold and silver in the sphere of international commodity circulation appear not as means of circulation but as universal means of exchange. The universal means of exchange acts however merely as means of purchase and means of payment, two forms which we have already described, but their relations are reversed on the world market. When in the sphere of internal circulation money was used as coin, i.e. as the intermediary link in the dynamic unity C—M—C or as the merely transitory form of exchange value during the perpetual motion of commodities — it functioned exclusively as means of purchase. The reverse is the case on the world market. Here gold and silver act as means of purchase if the interchange is only unilateral and therefore purchase and sale are separated. For example, the border trade at Kyakhta is in fact and according to treaty stipulations[77] barter, in which silver is only used as a measure of value. The war of 1857-58[78] induced the Chinese to sell without buying. Thereupon silver suddenly appeared as means of purchase. In deference to the letter of the treaty, the Russians turned French five-franc coins into crude silver articles which were used as means of exchange. Silver has always served as means of purchase for Europe and America, on the one side, and Asia, where it congeals into hoards, on the other. Precious metals, moreover, serve as international means of purchase when the usual equilibrium in the interchange of products between two nations is suddenly disturbed, e.g. when a bad harvest compels one of them to buy on an extraordinary scale. Precious metals, finally, are used as international means of purchase by the gold and silver producing countries, where they are direct products and also commodities, and not a converted form of commodities. With the development of commodity exchange between different national spheres of circulation, the function which world money fulfils as means of payment for settling international balances develops also.
International circulation, like domestic circulation, requires a constantly changing amount of gold and silver. Part of the accumulated hoards is consequently used by every nation as a reserve fund of world money, a fund which is sometimes diminished, sometimes replenished according to fluctuations in commodity exchange.* In addition to particular movements of world money which flows backwards and forwards between national(1) spheres of circulation, there is a general movement of world money; the points of departure being the sources of production, from which gold and silver flow in various directions to all the markets of the world. Thus gold and silver as commodities enter the sphere of world circulation and in proportion to the labour time contained in them they are exchanged for commodity equivalents before reaching the area of domestic circulation. They accordingly already have a definite value when they turn up in these areas. Their relative value on the world market is therefore uniformly affected by every fall or rise in their production costs and is quite independent of the degree to which gold or silver is absorbed by the various national spheres of circulation. One branch of the stream of metal which is caught up in a particular area of the world of commodities immediately enters the domestic circulation of money as replacement of worn-out coins; another is diverted into various reservoirs where coin, means of payment and world money accumulate; a third is used to make luxury articles and the rest, finally, is turned simply into hoards. Where the bourgeois mode of production has reached an advanced stage the formation of hoards is reduced to the minimum needed by the different branches of the circulation process for the free action of their mechanism. Under these conditions hoards as such consist only of wealth lying idle, unless they represent a temporary surplus in the balance of payments, the result of an interruption in the interchange of products and therefore commodities congealed in their first metamorphosis.
Just as in theory gold and silver as money are universal commodities, so world money is the appropriate form of existence of the universal commodity. In the same proportion as all commodities are exchanged for gold and silver these become the transmuted form of all commodities and hence universally exchangeable commodities. They are realised as embodiments of universal labour time in the degree that the interchange of the products of concrete labour becomes world-wide. They become universal equivalents in proportion to the development of the series of particular equivalents which constitute their spheres of exchange. Because the exchange value of commodities is universally developed in international circulation, it appears transformed into gold and silver as world money. Since as a result of their versatile industry and all-embracing commerce the nations of commodity owners have turned gold into adequate money, they regard industry and commerce merely as means enabling them to withdraw money in the form of gold and silver from the world market. Gold and silver as world money are therefore both the products of the universal circulation of commodities and the means to expand its scope. Just as the alchemists, who wanted to make gold, were not aware of the rise of chemistry, so commodity owners, chasing after a magical form of the commodity, are not aware of the sources of world industry and world trade that are coming into being. Gold and silver help to create the world market by anticipating its existence in their concept of money. Their magical effect is by no means confined to the infancy of bourgeois society, but is the inevitable consequence of the inverted way in which their own social labour appears to the representatives of the world of commodities; a proof of this being the remarkable influence which the discovery of gold in various new areas exerted on international trade in the middle of the nineteenth century. As money develops into world money, so the commodity owner becomes a cosmopolitan. The cosmopolitan relations of men to one another originally comprise only their relations as commodity owners. Commodities as such are indifferent to all religious, political, national and linguistic barriers. Their universal language is price and their common bond is money. But together with the development of world money as against national coins, there develops the commodity owner's cosmopolitanism, a cult of practical reason, in opposition to the traditional religious, national and other prejudices which impede the metabolic process of mankind. The commodity-owner realises that nationality "is BUT THE GUINEA'S STAMP", since the same amount of gold that arrives in England in the shape of American EAGLES is turned into sovereigns, three days later circulates as napoleons in Paris and may be encountered as ducats in Venice a few weeks later. The sublime idea in which for him the whole world merges is that of a market, the world market*
Endnotes
[75] A reference to the biblical legend of how Jacob, the father of ancient Hebrews, when blessing his grandchildren, Joseph's sons, contrary to tradition, laid his left hand on the elder, and his right hand on the younger, thus foretelling a more glorious future for the latter (Genesis 48: 1, 8-20).— 359, 447
[76] Marx is referring to the war of independence waged by the Spanish colonies in Latin America from 1810 to 1826, as a result of which most of them threw off Spanish domination.—368
[70] A reference to the Paris peace treaties concluded in 1814 and 1815 by the countries of the anti-French coalitions — Russia, Britain, Austria and Prussia, on the one side, and France, on the other.— 319, 368
[77] A reference to the Kyakhta Treaty, signed by Russia and China on October 21, 1727. It envisaged a duty-free border trade in Kyakhta, mainly barter, which considerably expanded the overall trade between the two countries.—382
[7 8] A reference to the so-called Second Opium War, actually started by Britain and France in 1856 but officially waged from 1857 to 1858, the aim being to turn China into a semi-colony. It ended with the China's defeat and the signing of the unequal Tientsin Treaty, which increased China's dependence on the colonial powers (their trade, diplomatic and military privileges were expanded, opium imports legalised, indemnities paid, etc.). In 1859 Britain and France resumed military operations (the Third Opium War), and in 1860 imposed on China the still more onerous Peking Peace Treaty.—382