The Original Text of the Second and the Beginning of the Third Chapter of A Contribution to the Critique of Political Economy
The Original Text of the Second and the Beginning of the Third Chapter of A Contribution to the Critique of Political Economy[95]
[ Chapter Two. Money]
[ 2. Money as Means of Payment]
[...] [B'-l] obtains. Every peculiarity of the relation between the two [parties to the exchange] has been obliterated (exchange value as such, the general product of the social circulation, is here alone involved), and similarly all the political, patriarchal and other relationships stemming from the particularity of the relation. Both relate to each other as abstract social persons, merely representing exchange value as such before each other. Money has now become the sole nexus rerum[96] between them, money sans phrase. The peasant no longer confronts the landowner as a peasant with his rural product and his rural labour, but as the money owner, for through the sale the immediate use value has been alienated and has assumed an indifferent form through the medium of the social process. On the other hand, the landowner no longer regards him as an uncouth individual producing means of subsistence in peculiar living conditions, but as one whose product — exchange value become independent, the universal equivalent, money — is no different from anyone else's product. Thus, the idyllic aura that covered up the transaction in its previous form is dispelled.
The absolute monarchy, itself already a product of the development of bourgeois wealth to a level incompatible with the old feudal relationships, is — in accordance with the uniform general power which it must be able to exercise at every point of the periphery — in need of a material instrument of that power: the universal equivalent, wealth in its constant battle-ready form in which it is completely independent of particular local, natural, individual relations. It needs wealth in the form of money. A system of services and deliveries in kind tends to impart, in accordance with their specific character, a particular character to their use as well. Money is alone capable of being immediately converted into any particular use value. So the absolute monarchy is actively engaged in converting money into the universal means of payment. That can be done only through forced circulation, which makes products circulate at below their value. For the absolute monarchy, the conversion of all taxes into money taxes is a vital matter. So, whereas the conversion of [feudal] services into money services at an earlier stage appears as the shedding of relationships of personal dependence, as a victory of the bourgeois society, which buys its way out of the shackling fetters with cash — a process which, on the other hand, appears from the romantic viewpoint as a substitution of hard and insensitive money relationships for mankind's motley ties—in the epoch of the rising absolute monarchy, whose art of finance consists in the forcible conversion of commodities into money, money is itself attacked by bourgeois economists as imaginary wealth to which natural wealth is being forcibly sacrificed. So, whereas Petty,a for instance, actually celebrates in money, as the material for hoarding, merely the general energetic drive for enrichment of the young bourgeois society in England, Boisguillebert,b in the reign of Louis XIV, denounces money as the universal curse which causes the development of the real sources of the production of wealth to run dry, and whose dethronement alone can restore to the world of commodities, the true wealth and its general enjoyment, its good old rights. He could not as yet comprehend that the same black art of finance which threw men and commodities into the alchemistic retort in order to make gold, simultaneously caused all the relationships and illusions hemming the bourgeois mode of production to be vaporised, to leave simple money relationships, common exchange-value relationships, as a residue.
"In feudal time cash payment had not grown to be the sole nexus of man to man. Not as buyer and seller alone, but in many senses still as soldier and captain, as loyal subject and guiding king, etc. was the low related to the high. With the supreme triumph of cash, a changed time has entered" (Th. Carlyle, On Chartism, London, 1840, p. 58).
Money is "impersonal" property. I can carry it around with me in my pocket as the universal social power and the universal social nexus, the social substance. Money puts social power as a thing into the hands of the private person, who as such uses this power.
The social nexus, the social exchange of matter, itself appears in money as something entirely external, not having any individual relation at all to its possessor, so that the power he wields appears to be something quite incidental and external to him.
[B'-2] Without any further anticipation, this much is clear: With the development of the credit system there is an extraordinary spread of buying on time. To the extent that the credit system is developed, and hence production based on exchange value, the role of money as means of payment will increase, as compared with its role as means of circulation, as agent of purchase and sale. In countries with a developed modern mode of production, and therefore a developed credit system, money as specie effectively figures almost exclusively in retail trade and in petty trade between producers and consumers, while in the sphere of large-scale trading transactions it appears almost exclusively in the form of the universal means of payment. In so far as the payments are in balance, money appears as a transient form, a merely notional, imaginary measure of the exchange magnitudes of value. Its bodily involvement is confined to the setdement of relatively insignificant balances.*
* "To prove how little," says Mr. Slater (of the firm of Morrison, Dillon et Co, whose transactions are amongst the largest of the metropolis) "of real money enters into the operations of trade", he gives an "analysis of a continuous course of commercial transactions, extending over several millions yearly, and which may be considered as a fair example of the general trade of the country. The proportions of receipts and payments are reduced to the scale of £1,000,000 only, during the year 1856, and are as under, viz.:
Receipts £
In bankers' drafts and mercantile bills of exchange, pay-able after date "... 533,596 In cheques of bankers etc. pay-able on demand 357,715 In country banknotes 9,627 Bank of England notes 68,554 Gold 28,089 Silver and copper 1,486 Post-office orders 933
Payments
Bills of exchange pay-able after date 302,674 Cheques on London bankers 663,672
Bank
of
notes
Gold
Silver and copper
England
22,743 9,427 1,484 The development of money as the universal means of payment goes hand in hand with the development of a higher, mediated form of circulation — that returns upon itself and that has already been taken under social control — in which the exceptional importance that money has on the basis of the simple metallic circulation, as it does, for instance, in hoarding in the strict sense of the term, is transcended. But then, if sudden credit upheavals should interrupt the mutual setdement of payments and upset the payments mechanism, it is money that is suddenly in demand as the real universal means of payment, with the requirement that the whole volume of wealth should have a two-fold existence: once as commodity and again as money, so that these two modes of existence are identical to each other. At such moments of crisis, money appears as exclusive wealth, which is manifested as such not in some merely imaginary depreciation, as it does in, say, the monetary system, but in the active depreciation of all real wealth. With respect to the world of commodities, value then continues to exist only in its adequate exclusive form — as money.
The further elaboration of this point is here irrelevant. What is relevant, however, is that moments of monetary crises proper bring out a contradiction that is immanent to the development of money as the universal means of payment. It is not as a measure that money is demanded in such crises, since as such its corporeal presence is a matter of indifference; nor is it as coin, for it does not figure as such in payments; but it is demanded as exchange value become independent, as a materially present universal equivalent, as the embodiment of abstract wealth; in the form, that is, in which it is the object of hoarding in the strict sense of the term, as money. Its development as the universal means of payment shrouds the contradiction that exchange value has assumed forms independent of its mode of existence as money; and on the other hand, its mode of existence as money is posited precisely as the definitive and solely adequate one.
In consequence of the balancing out of payments and their cancellation of each other as positive and negative amounts, money, as means of payment, can appear as a merely notional form of commodity, as in the case with its being the measure [of value], and in its functioning in the formation of prices. The collision occurs from the fact that — contrary to the arrangement, contrary to the general assumption of modern trade, and whenever the mechanism of these mutual cancellations and the credit system on which it partly rests are disrupted — it must instantly be present and to hand in its real form.
The law that the mass of money in circulation is determined by the aggregate price of the commodities in circulation is now supplemented as follows: by the aggregate price(1) of the payments falling due in the given period and the economy practised in effecting them.
[B'-3] We have seen that the change in the value of gold and silver does not affect their function as measure of value, as money of account. By contrast, this value change becomes crucially important for money in its function as means of payment. What is to be paid is a determined quantity of gold or silver in which a determined value, i.e. a determined labour time, was objectified by the time the contract was concluded. But, like all other commodities, gold and silver change the magnitude of their value with the change in the labour time required for their production, falling or rising in value as it falls or rises. Therefore, in the event that the realisation of the sale on the part of the buyer occurs later in time than the alienation of the sold commodity, the same quantity of gold or silver may contain a different, a greater or lesser, value than at the conclusion of the contract. Gold and silver retain their specific quality of money, that of always being the realised and realisable universal equivalent, of always being exchangeable for all the commodities to the extent of their own value, regardless of any change in the magnitude of their own value. However, the latter is, potentialiter, subject to the same fluctuations as is the value of any other commodity. Consequently, whether payment is effected in a real equivalent, i.e. in the initially anticipated value magnitude, depends on whether or not the labour time required for the production of the given quantity of gold or silver has remained the same. The nature of money, as incarnated in a specific commodity, here comes into collision with its function of exchange value become independent. The great revolutions in all economic relationships which, in the 16th and 17th centuries, for instance, were caused by the fall in the value of the precious metals, or a similar but smaller-scale revolution in the ancient Roman Republic in the period between [the first silver denarius in 485 ab urbe condito] (2) and the start of the Second Punic War[39] caused by the rise in the value of copper, in which the plebeians' debts were contracted, are well known. A demonstration of the influence of a rise or fall in the value of the precious metals, the material of money, on economic relationships implies an analysis of these relationships themselves, and so is not yet feasible at this point.
What is self-evident is that the fall in the value of the precious metals, i. e. of money, always goes to benefit the payer at the expense of the payee, and a rise in their value, the other way round.
The complete reification [Versachlichung], externalisation of the social exchange of matter on the basis of exchange values is strikingly manifested in the dependence of all social relationships on the production costs of metallic objects of natural origin which have no significance at all as instruments of production, as factors in the creation of wealth.
Endnotes
[95] Marx wrote the original text of the first part of A Contribution to the Critique of Political Economy between August and October 1858, basing himself on the Index to the 7 Notebooks, which he had drawn up in June (see this volume, pp. 421-29). As Marx then planned, this part was to include a chapter on capital, besides the chapters on the commodity and on money. In November 1858, Mrs. Marx began a fair copy of the final text of Part One of A
[96] Contribution to the Critique of Political Economy, consisting already only of the
[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