Karl Marx. About Communism. Grundrisse: Notebook I – The Chapter on Money.

The product becomes a commodity. The commodity becomes exchange value. The exchange value of the commodity acquires an existence of its own alongside the commodity; i.e. the commodity in the form in which (1) it is exchangeable with all other commodities, (2) it has hence become a commodity in general, and its natural specificity is extinguished, and (3) the measure of its exchangeability (i.e. the given relation within which it is equivalent to other commodities) has been determined – this commodity is the commodity as money, and, to be precise, not as money in general, but as a certain definite sum of money, for, in order to represent exchange value in all its variety, money has to be countable, quantitatively divisible.

Money – the common form into which all commodities as exchange values are transformed, i.e. the universal commodity – must itself exist as a particular commodity alongside the others, since what is required is not only that they can be measured against it in the head, but that they can be changed and exchanged for it in the actual exchange process. The contradiction which thereby enters, to be developed elsewhere. Money does not arise by convention, any more than the state does. It arises out of exchange, and arises naturally out of exchange; it is a product of the same. At the beginning, that commodity will serve as money – i.e. it will be exchanged not for the purpose of satisfying a need, not for consumption, but in order to be re-exchanged for other commodities – which is most frequently exchanged and circulated as an object of consumption, and which is therefore most certain to be exchangeable again for other commodities, i.e. which represents within the given social organization wealth ϰατ᾽ ἐξοχήν, [26] which is the object of the most general demand and supply, and which possesses a particular use value. Thus salt, hides, cattle, slaves. In practice such a commodity corresponds more closely to itself as exchange value than do other commodities (a pity that the difference between denrée and marchandise cannot be neatly reproduced in German). It is the particular usefulness of the commodity whether as a particular object of consumption (hides), or as a direct instrument of production (slaves), which stamps it as money in these cases. In the course of further development precisely the opposite will occur, i.e. that commodity which has the least utility as an object of consumption or instrument of production will best serve the needs of exchange as such. In the former case, the commodity becomes money because of its particular use value; in the latter case it acquires its particular use value from its serviceability as money. The precious metals last, they do not alter, they can be divided and then combined together again, they can be transported relatively easily owing to the compression of great exchange value in little space – for all these reasons they are especially suitable in the latter stage. At the same time, they form the natural transition from the first form of money. At somewhat higher levels of production and exchange, the instrument of production takes precedence over products; and the metals (prior to that, stones) are the first and most indispensable instruments of production. Both are still combined in the case of copper, which played so large a role as money in antiquity; here is the particular use value as an instrument of production together with other attributes which do not flow out of the use value of the commodity but correspond to its function as exchange value (including medium of exchange). The precious metals then split off from the remainder by virtue of being inoxidizable, of standard quality etc., and they correspond better, then, to the higher stage, in that their direct utility for consumption and production recedes while, because of their rarity, they better represent value purely based on exchange. From the outset they represent superfluity, the form in which wealth originates. Also, metals preferably exchanged for metals rather than for other commodities.

The first form of money corresponds to a low stage of exchange and of barter, in which money still appears more in its quality of measure rather than as a real instrument of exchange. At this stage, the measure can still be purely imaginary (although the bar in use among Negroes includes iron) (sea shells etc., however, correspond more to the series of which gold and silver form the culmination).

From the fact that the commodity develops into general exchange value, it follows that exchange value becomes a specific commodity: it can do so only because a specific commodity obtains the privilege of representing, symbolizing, the exchange value of all other commodities, i.e. of becoming money. It arises from the essence of exchange value itself that a specific commodity appears as the money-subject, despite the monetary properties possessed by every commodity. In the course of development, the exchange value of money can again exist separately from its matter, its substance, as in the case of paper money, without therefore giving up the privilege of this specific commodity, because the separated form of existence of exchange value must necessarily continue to take its denomination from the specific commodity.

It is because the commodity is exchange value that it is exchangeable for money, is posited = to money. The proportion of its equivalence with money, i.e. the specificity of its exchange value, is presupposed before its transposition into money. The proportion in which a particular commodity is exchanged for money, i.e. the quantity of money into which a given quantity of a commodity is transposable, is determined by the amount of labour time objectified in the commodity. The commodity is an exchange value because it is the realization of a specific amount of labour time; money not only measures the amount of labour time which the commodity represents, but also contains its general, conceptually adequate, exchangeable form. Money is the physical medium into which exchange values are dipped, and in which they obtain the form corresponding to their general character. Adam Smith says that labour (labour time) is the original money with which all commodities are purchased. [27] As regards the act of production, this always remains true (as well as in the determination of relative values). In production, every commodity is continuously exchanged for labour time. The necessity of a money other than labour time arises precisely because the quantity of labour time must not be expressed in its immediate, particular product, but in a mediated, general product; in its particular product, as a product equal to and convertible into all other products of an equal labour time; of the labour time not in a particular commodity, but in all commodities at once, and hence in a particular commodity which represents all the others. Labour time cannot directly be money (a demand which is the same, in other words, as demanding that every commodity should simply be its own money), precisely because in fact labour time always exists only in the form of particular commodities (as an object): being a general object, it can exist only symbolically, and hence only as a particular commodity which plays the role of money. Labour time does not exist in the form of a general object of exchange which is independent of and separate (in isolation) from the particular natural characteristics of commodities. But it would have to exist in that form if it were directly to fulfil the demands placed on money. The objectification of the general, social character of labour (and hence of the labour time contained in exchange value) is precisely what makes the product of labour time into exchange value; this is what gives the commodity the attributes of money, which however, in turn imply the existence of an independent and external money-subject.

A particular expenditure of labour time becomes objectified in a definite particular commodity with particular properties and a particular relationship to needs; but, in the form of exchange value, labour time is required to become objectified in a commodity which expresses no more than its quota or quantity, which is indifferent to its own natural properties, and which can therefore be metamorphosed into – i.e. exchanged for – every other commodity which objectifies the same labour time. The object should have this character of generality, which contradicts its natural particularity. This contradiction can be overcome only by objectifying it: i.e. by positing the commodity in a double form, first in its natural, immediate form, then in its mediated form, as money. The latter is possible only because a particular commodity becomes, as it were, the general substance of exchange values, or because the exchange values of commodities become identified with a particular commodity different from all others. That is, because the commodity first has to be exchanged for this general commodity, this symbolic general product or general objectification of labour time, before it can function as exchange value and be exchanged for, metamorphosed into, any other commodities at will and regardless of their material properties. Money is labour time in the form of a general object, or the objectification of general labour time, labour time as a general commodity. Thus, it may seem a very simple matter that labour time should be able to serve directly as money (i.e. be able to furnish the element in which exchange values are realized as such), because it regulates exchange values and indeed is not only the inherent measure of exchange values but their substance as well (for, as exchange values, commodities have no other substance, no natural attributes). However, this appearance of simplicity is deceptive. The truth is that the exchange-value relation – of commodities as mutually equal and equivalent objectifications of labour time – comprises contradictions which find their objective expression in a money which is distinct from labour time.

In Adam Smith this contradiction still appears as a set of parallels. Along with the particular product of labour (labour time as a particular object), the worker also has to produce a quantity of the general commodity (of labour time as general object). The two determinants of exchange value appear to Smith as existing externally, alongside one another. The interior of the commodity as a whole does not yet appear as having been seized and penetrated by contradiction. This corresponds to the stage of production which Smith found in existence at that time, in which the worker still directly owned a portion of his subsistence in the form of the product; where neither his entire activity nor his entire product had become dependent on exchange; i.e. where subsistence agriculture (or something similar, as Steuart calls it) [28] still predominated to a great extent, together with patriarchal industry (hand weaving, domestic spinning, linked closely with agriculture). Still it was only the excess which was exchanged within a large area of the nation. Exchange value and determination by labour time not yet fully developed on a national scale.

(Incidental remark: It is less true of gold and silver than of any other commodities that their consumption can grow only in inverse proportion to their costs of production. Their consumption grows, rather, in proportion with the growth of general wealth, since their use specifically represents wealth, excess, luxury, because they themselves represent wealth in general. Apart from their use as money, silver and gold are consumed more in proportion as wealth in general increases. When, therefore, their supply suddenly increases, even if their costs of production or their value does not proportionately decrease, they find a rapidly expanding market which retards their depreciation. A number of problems which appear inexplicable to the economists – who generally make consumption of gold and silver dependent solely on the decrease in their costs of production – in regard to the California-Australia case, [29] where they go around in circles, are thereby clarified. This is precisely linked with their property as money, as representation of wealth.)

(The contrast between gold and silver, as eternal commodities, and the others, which are not, is to be found in Petty, [30] but is already present in Xenophon, On Revenues, in reference to marble and silver. ‘οὐ μόνον δὲ ϰρατεῖ τοῖς ἐπ᾽ ἐνιαυτὸν ϑάλλουσί τε ϰαὶ γηράσϰουσιν, ἀλλὰ ϰαὶ ἀίδια ἀγαϑὰ ἔχει ἡ χώρα. πέφυϰε μὲν γὰρ λίϑος ἐν αὐτῆ ᾄφθονος, etc. (namely marble) ἔστι δὲ ϰαὶ γῆ, ἣ σπειρομὲνη μὲν οὐ φέρει ϰαρπόν, ὀρυττομένη δὲ πολλαπλασίους τρέφει ἢ ἐι σῖτον ἒφεφε.’) [31] (Important to note that exchange between different tribes or peoples – and this, not private exchange, is its first form – begins when an uncivilized tribe sells (or is cheated out of) an excess product which is not the product of its labour, but the natural product of the ground and of the area which it occupies.)

(Develop the ordinary economic contradictions arising from the fact that money has to be symbolized in a particular commodity, and then develop those that arise from this commodity itself (gold, etc.) This No. II. [32] Then determine the relation between the quantity of gold and silver and commodity prices, and whether the exchange takes place in reality or only in the mind, since all commodities have to be exchanged for money in order to be determined as prices. This No. III. [33] It is clear that, merely measured in gold or silver, the quantity of these metals has no influence on the prices of commodities; the difficulty enters with actual exchange, where the metals actually serve as instruments of exchange; the relations of demand and supply etc. But it is obviously as a measure that its value as an instrument of circulation is affected.)

Labour time itself exists as such only subjectively, only in the form of activity. In so far as it is exchangeable (itself a commodity) as such, it is defined and differentiated not only quantitatively but also qualitatively, and is by no means general, self-equivalent labour time; rather, labour time as subject corresponds as little to the general labour time which determines exchange values as the particular commodities and products correspond to it as object.

A. Smith’s thesis, that the worker has to produce a general commodity alongside his particular commodity, in other words that he has to give a part of his products the form of money, more generally that he has to convert into money all that part of his commodity which is to serve not as use value for himself but as exchange value – this statement means, subjectively expressed, nothing more than that the worker’s particular labour time cannot be directly exchanged for every other particular labour time, but rather that this, its general exchangeability, has first to be mediated, that it has first to take on an objective form, a form different from itself, in order to attain this general exchangeability.

The labour of the individual looked at in the act of production itself, is the money with which he directly buys the product, the object of his particular activity; but it is a particular money, which buys precisely only this specific product. In order to be general money directly, it would have to be not a particular, but general labour from the outset; i.e. it would have to be posited from the outset as a link in general production. But on this presupposition it would not be exchange which gave labour its general character; but rather its presupposed communal character would determine the distribution of products. The communal character of production would make the product into a communal, general product from the outset. The exchange which originally takes place in production – which would not be an exchange of exchange values but of activities, determined by communal needs and communal purposes – would from the outset include the participation of the individual in the communal world of products. On the basis of exchange values, labour is posited as general only through exchange. But on this foundation it would be posited as such before exchange; i.e. the exchange of products would in no way be the medium by which the participation of the individual in general production is mediated. Mediation must, of course, take place. In the first case, which proceeds from the independent production of individuals – no matter how much these independent productions determine and modify each other post festum through their interrelations – mediation takes place through the exchange of commodities, through exchange value and through money; all these are expressions of one and the same relation. In the second case, the presupposition is itself mediated; i.e. a communal production, communality, is presupposed as the basis of production. The labour of the individual is posited from the outset as social labour. Thus, whatever the particular material form of the product he creates or helps to create, what he has bought with his labour is not a specific and particular product, but rather a specific share of the communal production. He therefore has no particular product to exchange. His product is not an exchange value. The product does not first have to be transposed into a particular form in order to attain a general character for the individual. Instead of a division of labour, such as is necessarily created with the exchange of exchange values, there would take place an organization of labour whose consequence would be the participation of the individual in communal consumption. In the first case the social character of production is posited only post festum with the elevation of products to exchange values and the exchange of these exchange values. In the second case the social character of production is presupposed, and participation in the world of products, in consumption, is not mediated by the exchange of mutually independent labours or products of labour. It is mediated, rather, by the social conditions of production within which the individual is active. Those who want to make the labour of the individual directly into money (i.e. his product as well), into realized exchange value, want therefore to determine that labour directly as general labour, i.e. to negate precisely the conditions under which it must be made into money and exchange values, and under which it depends on private exchange. This demand can be satisfied only under conditions where it can no longer be raised. Labour on the basis of exchange values presupposes, precisely, that neither the labour of the individual nor his product are directly general; that the product attains this form only by passing through an objective mediation by means of a form of money distinct from itself.

On the basis of communal production, the determination of time remains, of course, essential. The less time the society requires to produce wheat, cattle etc., the more time it wins for other production, material or mental. Just as in the case of an individual, the multiplicity of its development, its enjoyment and its activity depends on economization of time. Economy of time, to this all economy ultimately reduces itself. Society likewise has to distribute its time in a purposeful way, in order to achieve a production adequate to its overall needs; just as the individual has to distribute his time correctly in order to achieve knowledge in proper proportions or in order to satisfy the various demands on his activity. Thus, economy of time, along with the planned distribution of labour time among the various branches of production, remains the first economic law on the basis of communal production. It becomes law, there, to an even higher degree. However, this is essentially different from a measurement of exchange values (labour or products) by labour time. The labour of individuals in the same branch of work, and the various kinds of work, are different from one another not only quantitatively but also qualitatively. What does a solely quantitative difference between things presuppose? The identity of their qualities. Hence, the quantitative measure of labours presupposes the equivalence, the identity of their quality.

(Strabo, Book XI. On the Albanians of the Caucasus: ‘ϰαὶ οἱ ἄνθρωνοι ϰάλλει ϰαὶ μεγέθει διαφέροντες, άπλοῖ δὲ ϰαὶ οὐ ϰαπηλιϰοί · οὐδἐ γὰρ νομίσματι τὰ πολλὰ ϰρῶνται, οὐδὲ ἀριθμὸν ἴσασι μείζω τῶν ἑϰατόν, ἀλλὰ φορτίοις τὰς ἀμοιβὰς ποιοῦνται.’ It says there further: ‘ἄπειροι δ ̓εἰσὶ ϰαὶ μέτρων τῶν ἐπ ̓ ἀϰριβὲς ϰαὶ σταθμῶν.’) [34]

Money appears as measure (in Homer, e.g. oxen) earlier than as medium of exchange, because in barter each commodity is still its own medium of exchange. But it cannot be its own measure or its own standard of comparison.

(2) [35] This much proceeds from what has been developed so far: A particular product (commodity) (material) must become the subject of money, which exists as the attribute of every exchange value. The subject in which this symbol is represented is not a matter of indifference, since the demands placed on the representing subject are contained in the conditions – conceptual determinations, characteristic relations – of that which is to be represented. The study of the precious metals as subjects of the money relations, as incarnations of the latter, is therefore by no means a matter lying outside the realm of political economy, as Proudhon believes, any more than the physical composition of paint, and of marble, lie outside the realm of painting and sculpture. The attributes possessed by the commodity as exchange value, attributes for which its natural qualities are not adequate, express the demands made upon those commodities which ϰατ᾽ ἐξοχήν [36] are the material of money. These demands, at the level to which we have up to now confined ourselves, are most completely satisfied by the precious metals. Metals as such [enjoy] preference over other commodities as instruments of production, and among the metals the one which is first found in its physical fullness and purity – gold; then copper, then silver and iron. The precious metals take preference over others in realizing metal, as Hegel would say. [37]

The precious metals uniform in their physical qualities, so that equal quantities of them should be so far identical as to present no ground for preferring this one to the others. Not the case, for example, with equal numbers of cattle and equal quantities of grain.

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