This is seen in a striking manner when they treat of banking, where the commonplace
definitions
of money will no longer hold water.
Marx - Capital-Volume-I
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computing what cost him just as much labour and time which in effect is no more than exchanging one man's labour in one thing for a time certain, for another man's labour in another thing for the same time. ? (l. c. , p. 39. ) [The English language has the advantage of possessing different words for the two aspects of labour here considered. The labour which creates use value, and counts qualitatively, is Work, as distinguished from Labour, that which creates Value and counts quantitatively, is Labour as distinguished from Work - Engels]
17 The few economists, amongst whom is S. Bailey, who have occupied themselves with the analysis of the form of value, have been unable to arrive at any result, first, because they confuse the form of value with value itself; and second, because, under the coarse influence of the practical bourgeois, they exclusively give their attention to the quantitative aspect of the question. --The command of quantity . . . constitutes value. ? (--Money and its Vicissitudes. ? London, 1837, p. 11. By S. Bailey. )
18 The celebrated Franklin, one of the first economists, after Wm. Petty, who saw through the nature of value, says: --Trade in general being nothing else but the exchange of labour for labour, the value of all things is . . . most justly measured by labour. ? (--The works of B. Franklin, &c. ,? edited by Sparks. Boston, 1836, Vol. II. , p. 267. ) Franklin is unconscious that by estimating the value of everything in labour, he makes abstraction from any difference in the sorts of labour exchanged, and thus reduces them all to equal human labour. But although ignorant of this, yet he says it. He speaks first of --the one labour,? then of --the other labour,? and finally of --labour,? without further qualification, as the substance of the value of everything.
19 In a sort of way, it is with man as with commodities. Since he comes into the world neither with a looking glass in his hand, nor as a Fichtian philosopher, to whom --I am I? is sufficient, man first sees and recognises himself in other men. Peter only establishes his own identity as a man by first comparing himself with Paul as being of like kind. And thereby Paul, just as he stands in his Pauline personality, becomes to Peter the type of the genus homo.
20 Value is here, as occasionally in the preceding pages, used in sense of value determined as to quantity, or of magnitude of value.
21 This incongruity between the magnitude of value and its relative expression has, with customary ingenuity, been exploited by vulgar economists. For example - --Once admit that A falls, because B, with which it is exchanged, rises, while no less labour is bestowed in the meantime on A, and your general principle of value falls to the ground. . . If he [Ricardo] allowed that when A rises in value relatively to B, B falls in value relatively to A, he cut away the ground on which he rested his grand proposition, that the value of a commodity is ever determined by the labour embodied in it, for if a change in the cost of A alters not only its own value in relation to B, for which it is exchanged, but also the value of B relatively to that of A, though no change has taken place in the quantity of labour to produce B, then not only the doctrine falls to the ground which asserts that the quantity of labour bestowed on an article regulates its value, but also that which affirms the cost of an article to regulate its value' (J. Broadhurst: --Political Economy,? London, 1842, pp. 11 and 14. ) Mr. Broadhurst might just as well say: consider the fractions 10/20, 10/50, 10/100, &c. , the number 10 remains unchanged, and yet its proportional magnitude, its magnitude relatively to the numbers 20, 50, 100 &c. , continually diminishes. Therefore the great principle that the magnitude of a whole number, such as 10, is --regulated? by the number of times unity is contained in it, falls to the ground. [The author explains in section 4 of this chapter, pp. 80-81, note 2 (note 33 of this document), what he understands by --Vulgar Economy. ? - Engels]
22 Such expressions of relations in general, called by Hegel reflex categories, form a very curious class. For instance, one man is king only because other men stand in the relation of subjects to him. They, on the contrary, imagine that they are subjects because he is king.
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23 F. L. A. Ferrier, sous-inspecteur des douanes, --Du gouvernement conside? re? dans ses rapports avec le commerce,? Paris, 1805; and Charles Ganilh, --Des Syste`mes d'Economie Politique, - 2nd ed. , Paris, 1821.
24 In Homer, for instance, the value of an article is expressed in a series of different things II. VII. 472- 475.
25 For this reason, we can speak of the coat value of the linen when its value is expressed in coats, or of its corn value when expressed in corn, and so on. Every such expression tells us, that what appears in the use values, cost, corn, &c. , is the value of the linen. --The value of any commodity denoting its relation in exchange, we may speak of it as . . . corn value, cloth value, according to the commodity with which it is compared; and hence there are a thousand different kinds of value, as many kinds of value as there are commodities in existence, and all are equally real and equally nominal. ? (--A Critical Dissertation on the Nature, Measures and Causes of Value: chiefly in reference to the writings of Mr. Ricardo and his followers. ? By the author of --Essays on the Formation, &c. , of Opinions. ? London, 1825, p. 39. ) S. Bailey, the author of this anonymous work, a work which in its day created much stir in England, fancied that, by thus pointing out the various relative expressions of one and the same value, he had proved the impossibility of any determination of the concept of value. However narrow his own views may have been, yet, that he laid his finger on some serious defects in the Ricardian Theory, is proved by the animosity with which he was attacked by Ricardo's followers. See the Westminster Review for example.
26 It is by no means self-evident that this character of direct and universal exchangeability is, so to speak, a polar one, and as intimately connected with its opposite pole, the absence of direct exchangeability, as the positive pole of the magnet is with its negative counterpart. It may therefore be imagined that all commodities can simultaneously have this character impressed upon them, just as it can be imagined that all Catholics can be popes together. It is, of course, highly desirable in the eyes of the petit bourgeois, for whom the production of commodities is the nec plus ultra of human freedom and individual independence, that the inconveniences resulting from this character of commodities not being directly exchangeable, should be removed. Proudhon's socialism is a working out of this Philistine Utopia, a form of socialism which, as I have elsewhere shown, does not possess even the merit of originality. Long before his time, the task was attempted with much better success by Gray, Bray, and others. But, for all that, wisdom of this kind flourishes even now in certain circles under the name of --science. ? Never has any school played more tricks with the word science, than that of Proudhon, for --wo Begriffe fehlen, Da stellt zur rechten Zeit ein Wort sich ein. ? [--Where thoughts are absent, Words are brought in as convenient replacements,? Goethe's, Faust, See Proudhon's Philosophy of Poverty]
26a In the German edition, there is the following footnote here: --One may recall that China and the tables began to dance when the rest of the world appeared to be standing still - pour encourager les autres [to encourage the others]. ? The defeat of the 1848-49 revolutions was followed by a period of dismal political reaction in Europe. At that time, spiritualism, especially table-turning, became the rage among the European aristocracy. In 1850-64, China was swept by an anti-feudal liberation movement in the form of a large-scale peasant war, the Taiping Revolt. - Note by editors of MECW.
27 Among the ancient Germans the unit for measuring land was what could be harvested in a day, and was called Tagwerk, Tagwanne (jurnale, or terra jurnalis, or diornalis), Mannsmaad, &c. (See G. L. von Maurer, --Einleitung zur Geschichte der Mark, &c. Verfassung,? Munchen, 1854, p. 129 sq. )
28 When, therefore, Galiani says: Value is a relation between persons - --La Ricchezza e una ragione tra due persone,? - he ought to have added: a relation between persons expressed as a relation between things. (Galiani: Della Moneta, p. 221, V. III. of Custodi's collection of --Scrittori Classici Italiani di Economia Politica. ? Parte Moderna, Milano 1803. )
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29 What are we to think of a law that asserts itself only by periodical revolutions? It is just nothing but a law of Nature, founded on the want of knowledge of those whose action is the subject of it. ? (Friedrich Engels: --Umrisse zu einer Kritik der Nationalo? konomie,? in the --Deutsch-Franzo? sische Jahrbu? cher,? edited by Arnold Ruge and Karl Marx. Paris. 1844. )
30 Even Ricardo has his stories a` la Robinson. --He makes the primitive hunter and the primitive fisher straightway, as owners of commodities, exchange fish and game in the proportion in which labour time is incorporated in these exchange values. On this occasion he commits the anachronism of making these men apply to the calculation, so far as their implements have to be taken into account, the annuity tables in current use on the London Exchange in the year 1817. The parallelograms of Mr. Owen appear to be the only form of society, besides the bourgeois form, with which he was acquainted. ? (Karl Marx: --Zur Kritik, &c. . ? pp. 38, 39)
31 A ridiculous presumption has latterly got abroad that common property in its primitive form is specifically a Slavonian, or even exclusively Russian form. It is the primitive form that we can prove to have existed amongst Romans, Teutons, and Celts, and even to this day we find numerous examples, ruins though they be, in India. A more exhaustive study of Asiatic, and especially of Indian forms of common property, would show how from the different forms of primitive common property, different forms of its dissolution have been developed. Thus, for instance, the various original types of Roman and Teutonic private property are deducible from different forms of Indian common property. ? (Karl Marx, --Zur Kritik, &c. ,? p. 10. )
32 The insufficiency of Ricardo's analysis of the magnitude of value, and his analysis is by far the best, will appear from the 3rd and 4th books of this work. As regards value in general, it is the weak point of the classical school of Political Economy that it nowhere expressly and with full consciousness, distinguishes between labour, as it appears in the value of a product, and the same labour, as it appears in the use value of that product. Of course the distinction is practically made, since this school treats labour, at one time under its quantitative aspect, at another under its qualitative aspect. But it has not the least idea, that when the difference between various kinds of labour is treated as purely quantitative, their qualitative unity or equality, and therefore their reduction to abstract human labour, is implied. For instance, Ricardo declares that he agrees with Destutt de Tracy in this proposition: --As it is certain that our physical and moral faculties are alone our original riches, the employment of those faculties, labour of some kind, is our only original treasure, and it is always from this employment that all those things are created which we call riches. . . It is certain, too, that all those things only represent the labour which has created them, and if they have a value, or even two distinct values, they can only derive them from that (the value) of the labour from which they emanate. ? (Ricardo, --The Principles of Pol. Econ. ,? 3 Ed. Lond. 1821, p. 334. ) We would here only point out, that Ricardo puts his own more profound interpretation upon the words of Destutt. What the latter really says is, that on the one hand all things which constitute wealth represent the labour that creates them, but that on the other hand, they acquire their --two different values? (use value and exchange value) from --the value of labour. ? He thus falls into the commonplace error of the vulgar economists, who assume the value of one commodity (in this case labour) in order to determine the values of the rest. But Ricardo reads him as if he had said, that labour (not the value of labour) is embodied both in use value and exchange value. Nevertheless, Ricardo himself pays so little attention to the twofold character of the labour which has a twofold embodiment, that he devotes the whole of his chapter on --Value and Riches, Their Distinctive Properties,? to a laborious examination of the trivialities of a J. B. Say. And at the finish he is quite astonished to find that Destutt on the one hand agrees with him as to labour being the source of value, and on the other hand with J. B. Say as to the notion of value.
33 It is one of the chief failings of classical economy that it has never succeeded, by means of its analysis of commodities, and, in particular, of their value, in discovering that form under which value becomes exchange value. Even Adam Smith and Ricardo, the best representatives of the school, treat
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the form of value as a thing of no importance, as having no connection with the inherent nature of commodities. The reason for this is not solely because their attention is entirely absorbed in the analysis of the magnitude of value. It lies deeper. The value form of the product of labour is not only the most abstract, but is also the most universal form, taken by the product in bourgeois production and stamps that production as a particular species of social production, and thereby gives it its special historical character. If then we treat this mode of production as one eternally fixed by Nature for every state of society, we necessarily overlook that which is the differentia specifica of the value form, and consequently of the commodity form, and of its further developments, money form, capital form, &c. We consequently find that economists, who are thoroughly agreed as to labour time being the measure of the magnitude of value, have the most strange and contradictory ideas of money, the perfected form of the general equivalent.
This is seen in a striking manner when they treat of banking, where the commonplace definitions of money will no longer hold water. This led to the rise of a restored mercantile system (Ganilh, &c. ), which sees in value nothing but a social form, or rather the unsubstantial ghost of that form. Once for all I may here state, that by classical Political Economy, I understand that economy which, since the time of W. Petty, has investigated the real relations of production in bourgeois society in contradistinction to vulgar economy, which deals with appearances only, ruminates without ceasing on the materials long since provided by scientific economy, and there seeks plausible explanations of the most obtrusive phenomena, for bourgeois daily use, but for the rest, confines itself to systematising in a pedantic way, and proclaiming for everlasting truths, the trite ideas held by the self-complacent bourgeoisie with regard to their own world, to them the best of all possible worlds.
34 --Les e? conomistes ont une singulie`re manie`re de proce? der. Il n'y a pour eux que deux sortes d'institutions, celles de l'art et celles de la nature. Les institutions de la fe? odalite? sont des institutions artificielles celles de la bourgeoisie sont des institutions naturelles. Ils ressemblent en ceci aux the? ologiens, qui eux aussi e? tablissent deux sortes de religions. Toute religion qui n'est pas la leur, est une invention des hommes tandis que leur propre religion est une e? manation de Dieu -Ainsi il y a eu de l'histoire, mais il n'y en a plus. ? [--Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. . . . Thus there has been history, but there is no longer any? ] (Karl Marx. Mise`re de la Philosophie. Re? ponse a la Philosophie de la Mise`re par M. Proudhon, 1847, p. 113. ) Truly comical is M. Bastiat, who imagines that the ancient Greeks and Romans lived by plunder alone. But when people plunder for centuries, there must always be something at hand for them to seize; the objects of plunder must be continually reproduced. It would thus appear that even Greeks and Romans had some process of production, consequently, an economy, which just as much constituted the material basis of their world, as bourgeois economy constitutes that of our modern world. Or perhaps Bastiat means, that a mode of production based on slavery is based on a system of plunder. In that case he treads on dangerous ground. If a giant thinker like Aristotle erred in his appreciation of slave labour, why should a dwarf economist like Bastiat be right in his appreciation of wage labour? I seize this opportunity of shortly answering an objection taken by a German paper in America, to my work, --Zur Kritik der Pol. Oekonomie, 1859. ? In the estimation of that paper, my view that each special mode of production and the social relations corresponding to it, in short, that the economic structure of society, is the real basis on which the juridical and political superstructure is raised and to which definite social forms of thought correspond; that the mode of production determines the character of the social, political, and intellectual life generally, all this is very true for our own times, in which material interests preponderate, but not for the middle ages, in which Catholicism, nor for Athens and Rome, where politics, reigned supreme. In the first place it strikes
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one as an odd thing for any one to suppose that these well-worn phrases about the middle ages and the ancient world are unknown to anyone else. This much, however, is clear, that the middle ages could not live on Catholicism, nor the ancient world on politics. On the contrary, it is the mode in which they gained a livelihood that explains why here politics, and there Catholicism, played the chief part. For the rest, it requires but a slight acquaintance with the history of the Roman republic, for example, to be aware that its secret history is the history of its landed property. On the other hand, Don Quixote long ago paid the penalty for wrongly imagining that knight errantry was compatible with all economic forms of society.
35 --Observations on certain verbal disputes in Pol. Econ. , particularly relating to value and to demand and supply? Lond. , 1821, p. 16.
36 S. Bailey, l. c. , p. 165.
37 The author of --Observations? and S. Bailey accuse Ricardo of converting exchange value from something relative into something absolute. The opposite is the fact. He has explained the apparent relation between objects, such as diamonds and pearls, in which relation they appear as exchange values, and disclosed the true relation hidden behind the appearances, namely, their relation to each other as mere expressions of human labour. If the followers of Ricardo answer Bailey somewhat rudely, and by no means convincingly, the reason is to be sought in this, that they were unable to find in Ricardo's own works any key to the hidden relations existing between value and its form, exchange value.
? ? Chapter 2: Exchange
It is plain that commodities cannot go to market and make exchanges of their own account. We must, therefore, have recourse to their guardians, who are also their owners. Commodities are things, and therefore without power of resistance against man. If they are wanting in docility he can use force; in other words, he can take possession of them. 1 In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another, as persons whose will resides in those object, and must behave in such a way that each does not appropriate the commodity of the other, and part with his own, except by means of an act done by mutual consent. They must therefore, mutually recognise in each other the rights of private proprietors. This juridical relation, which thus expresses itself in a contract, whether such contract be part of a developed legal system or not, is a relation between two wills, and is but the reflex of the real economic relation between the two. It is this economic relation that determines the subject-matter comprised in each such juridical act. 2
The persons exist for one another merely as representatives of, and, therefore. as owners of, commodities. In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them.
What chiefly distinguishes a commodity from its owner is the fact, that it looks upon every other commodity as but the form of appearance of its own value. A born leveller and a cynic, it is always ready to exchange not only soul, but body, with any and every other commodity, be the same more repulsive than Maritornes herself. The owner makes up for this lack in the commodity of a sense of the concrete, by his own five and more senses. His commodity possesses for himself no immediate use-value. Otherwise, he would not bring it to the market. It has use-value for others; but for himself its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange. 3 Therefore, he makes up his mind to part with it for commodities whose value in use is of service to him. All commodities are non-use-values for their owners, and use-values for their non-owners. Consequently, they must all change hands. But this change of hands is what constitutes their exchange, and the latter puts them in relation with each other as values, and realises them as values. Hence commodities must be realised as values before they can be realised as use-values.
On the other hand, they must show that they are use-values before they can be realised as values. For the labour spent upon them counts effectively, only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange.
Every owner of a commodity wishes to part with it in exchange only for those commodities whose use-value satisfies some want of his. Looked at in this way, exchange is for him simply a private transaction. On the other hand, he desires to realise the value of his commodity, to convert it into any other suitable commodity of equal value, irrespective of whether his own commodity has or has not any use-value for the owner of the other. From this point of view, exchange is for him a social transaction of a general character. But one and the same set of transactions cannot be simultaneously for all owners of commodities both exclusively private and exclusively social and general.
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Let us look at the matter a little closer. To the owner of a commodity, every other commodity is, in regard to his own, a particular equivalent, and consequently his own commodity is the universal equivalent for all the others. But since this applies to every owner, there is, in fact, no commodity acting as universal equivalent, and the relative value of commodities possesses no general form under which they can be equated as values and have the magnitude of their values compared. So far, therefore, they do not confront each other as commodities, but only as products or use-values. In their difficulties our commodity owners think like Faust: --Im Anfang war die Tat. ? [--In the beginning was the deed. ? - Goethe, Faust. ] They therefore acted and transacted before they thought. Instinctively they conform to the laws imposed by the nature of commodities. They cannot bring their commodities into relation as values, and therefore as commodities, except by comparing them with some one other commodity as the universal equivalent. That we saw from the analysis of a commodity. But a particular commodity cannot become the universal equivalent except by a social act. The social action therefore of all other commodities, sets apart the particular commodity in which they all represent their values. Thereby the bodily form of this commodity becomes the form of the socially recognised universal equivalent. To be the universal equivalent, becomes, by this social process, the specific function of the commodity thus excluded by the rest. Thus it becomes - money. --Illi unum consilium habent et virtutem et potestatem suam bestiae tradunt. Et ne quis possit emere aut vendere, nisi qui habet characterem aut nomen bestiae aut numerum nominis ejus. ? [--These have one mind, and shall give their power and strength unto the beast. ? Revelations, 17:13; --And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. ? Revelations, 13:17. ] (Apocalypse. )
Money is a crystal formed of necessity in the course of the exchanges, whereby different products of labour are practically equated to one another and thus by practice converted into commodities. The historical progress and extension of exchanges develops the contrast, latent in commodities, between use-value and value. The necessity for giving an external expression to this contrast for the purposes of commercial intercourse, urges on the establishment of an independent form of value, and finds no rest until it is once for all satisfied by the differentiation of commodities into commodities and money. At the same rate, then, as the conversion of products into commodities is being accomplished, so also is the conversion of one special commodity into money. 4
The direct barter of products attains the elementary form of the relative expression of value in one respect, but not in another. That form is x Commodity A = y Commodity B. The form of direct barter is x use-value A = y use-value B. 5 The articles A and B in this case are not as yet commodities, but become so only by the act of barter. The first step made by an object of utility towards acquiring exchange-value is when it forms a non-use-value for its owner, and that happens when it forms a superfluous portion of some article required for his immediate wants. Objects in themselves are external to man, and consequently alienable by him. In order that this alienation may be reciprocal, it is only necessary for men, by a tacit understanding, to treat each other as private owners of those alienable objects, and by implication as independent individuals. But such a state of reciprocal independence has no existence in a primitive society based on property in common, whether such a society takes the form of a patriarchal family, an ancient Indian community, or a Peruvian Inca State. The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities, or with members of the latter. So soon, however, as products once become commodities in the external relations of a community, they also, by reaction, become so in its internal intercourse. The proportions in which they are exchangeable are at first quite a matter of chance. What makes them exchangeable is the mutual desire of their owners to alienate them. Meantime the need for
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foreign objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social act. In the course of time, therefore, some portion at least of the products of labour must be produced with a special view to exchange. From that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption, and its utility for the purposes of exchange. Its use-value becomes distinguished from its exchange- value. On the other hand, the quantitative proportion in which the articles are exchangeable, becomes dependent on their production itself. Custom stamps them as values with definite magnitudes.
In the direct barter of products, each commodity is directly a means of exchange to its owner, and to all other persons an equivalent, but that only in so far as it has use-value for them. At this stage, therefore, the articles exchanged do not acquire a value-form independent of their own use- value, or of the individual needs of the exchangers. The necessity for a value-form grows with the increasing number and variety of the commodities exchanged. The problem and the means of solution arise simultaneously. Commodity-owners never equate their own commodities to those of others, and exchange them on a large scale, without different kinds of commodities belonging to different owners being exchangeable for, and equated as values to, one and the same special article. Such last-mentioned article, by becoming the equivalent of various other commodities, acquires at once, though within narrow limits, the character of a general social equivalent. This character comes and goes with the momentary social acts that called it into life. In turns and transiently it attaches itself first to this and then to that commodity. But with the development of exchange it fixes itself firmly and exclusively to particular sorts of commodities, and becomes crystallised by assuming the money-form. The particular kind of commodity to which it sticks is at first a matter of accident. Nevertheless there are two circumstances whose influence is decisive. The money-form attaches itself either to the most important articles of exchange from outside, and these in fact are primitive and natural forms in which the exchange-value of home products finds expression; or else it attaches itself to the object of utility that forms, like cattle, the chief portion of indigenous alienable wealth. Nomad races are the first to develop the money-form, because all their worldly goods consist of moveable objects and are therefore directly alienable; and because their mode of life, by continually bringing them into contact with foreign communities, solicits the exchange of products. Man has often made man himself, under the form of slaves, serve as the primitive material of money, but has never used land for that purpose. Such an idea could only spring up in a bourgeois society already well developed. It dates from the last third of the 17th century, and the first attempt to put it in practice on a national scale was made a century afterwards, during the French bourgeois revolution.
In proportion as exchange bursts its local bonds, and the value of commodities more and more expands into an embodiment of human labour in the abstract, in the same proportion the character of money attaches itself to commodities that are by Nature fitted to perform the social function of a universal equivalent. Those commodities are the precious metals.
The truth of the proposition that, --although gold and silver are not by Nature money, money is by Nature gold and silver,? 6 is shown by the fitness of the physical properties of these metals for the functions of money. 7 Up to this point, however, we are acquainted only with one function of money, namely, to serve as the form of manifestation of the value of commodities, or as the material in which the magnitudes of their values are socially expressed. An adequate form of manifestation of value, a fit embodiment of abstract, undifferentiated, and therefore equal human labour, that material alone can be whose every sample exhibits the same uniform qualities. On the other hand, since the difference between the magnitudes of value is purely quantitative, the money commodity must be susceptible of merely quantitative differences, must therefore be
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divisible at will, and equally capable of being reunited. Gold and silver possess these properties by Nature.
The use-value of the money-commodity becomes two-fold. In addition to its special use-value as a commodity (gold, for instance, serving to stop teeth, to form the raw material of articles of luxury, &c. ), it acquires a formal use-value, originating in its specific social function.
Since all commodities are merely particular equivalents of money, the latter being their universal equivalent, they, with regard to the latter as the universal commodity, play the parts of particular commodities. 8
We have seen that the money-form is but the reflex, thrown upon one single commodity, of the value relations between all the rest. That money is a commodity9 is therefore a new discovery only for those who, when they analyse it, start from its fully developed shape. The act of exchange gives to the commodity converted into money, not its value, but its specific value-form. By confounding these two distinct things some writers have been led to hold that the value of gold and silver is imaginary. 10 The fact that money can, in certain functions, be replaced by mere symbols of itself, gave rise to that other mistaken notion, that it is itself a mere symbol. Nevertheless under this error lurked a presentiment that the money-form of an object is not an inseparable part of that object, but is simply the form under which certain social relations manifest themselves. In this sense every commodity is a symbol, since, in so far as it is value, it is only the material envelope of the human labour spent upon it. 11 But if it be declared that the social characters assumed by objects, or the material forms assumed by the social qualities of labour under the re? gime of a definite mode of production, are mere symbols, it is in the same breath also declared that these characteristics are arbitrary fictions sanctioned by the so-called universal consent of mankind. This suited the mode of explanation in favour during the 18th century. Unable to account for the origin of the puzzling forms assumed by social relations between man and man, people sought to denude them of their strange appearance by ascribing to them a conventional origin.
It has already been remarked above that the equivalent form of a commodity does not imply the determination of the magnitude of its value. Therefore, although we may be aware that gold is money, and consequently directly exchangeable for all other commodities, yet that fact by no means tells how much 10 lbs. , for instance, of gold is worth. Money, like every other commodity, cannot express the magnitude of its value except relatively in other commodities. This value is determined by the labour-time required for its production, and is expressed by the quantity of any other commodity that costs the same amount of labour-time. 12 Such quantitative determination of its relative value takes place at the source of its production by means of barter. When it steps into circulation as money, its value is already given. In the last decades of the 17th century it had already been shown that money is a commodity, but this step marks only the infancy of the analysis. The difficulty lies, not in comprehending that money is a commodity, but in discovering how, why, and by what means a commodity becomes money.
computing what cost him just as much labour and time which in effect is no more than exchanging one man's labour in one thing for a time certain, for another man's labour in another thing for the same time. ? (l. c. , p. 39. ) [The English language has the advantage of possessing different words for the two aspects of labour here considered. The labour which creates use value, and counts qualitatively, is Work, as distinguished from Labour, that which creates Value and counts quantitatively, is Labour as distinguished from Work - Engels]
17 The few economists, amongst whom is S. Bailey, who have occupied themselves with the analysis of the form of value, have been unable to arrive at any result, first, because they confuse the form of value with value itself; and second, because, under the coarse influence of the practical bourgeois, they exclusively give their attention to the quantitative aspect of the question. --The command of quantity . . . constitutes value. ? (--Money and its Vicissitudes. ? London, 1837, p. 11. By S. Bailey. )
18 The celebrated Franklin, one of the first economists, after Wm. Petty, who saw through the nature of value, says: --Trade in general being nothing else but the exchange of labour for labour, the value of all things is . . . most justly measured by labour. ? (--The works of B. Franklin, &c. ,? edited by Sparks. Boston, 1836, Vol. II. , p. 267. ) Franklin is unconscious that by estimating the value of everything in labour, he makes abstraction from any difference in the sorts of labour exchanged, and thus reduces them all to equal human labour. But although ignorant of this, yet he says it. He speaks first of --the one labour,? then of --the other labour,? and finally of --labour,? without further qualification, as the substance of the value of everything.
19 In a sort of way, it is with man as with commodities. Since he comes into the world neither with a looking glass in his hand, nor as a Fichtian philosopher, to whom --I am I? is sufficient, man first sees and recognises himself in other men. Peter only establishes his own identity as a man by first comparing himself with Paul as being of like kind. And thereby Paul, just as he stands in his Pauline personality, becomes to Peter the type of the genus homo.
20 Value is here, as occasionally in the preceding pages, used in sense of value determined as to quantity, or of magnitude of value.
21 This incongruity between the magnitude of value and its relative expression has, with customary ingenuity, been exploited by vulgar economists. For example - --Once admit that A falls, because B, with which it is exchanged, rises, while no less labour is bestowed in the meantime on A, and your general principle of value falls to the ground. . . If he [Ricardo] allowed that when A rises in value relatively to B, B falls in value relatively to A, he cut away the ground on which he rested his grand proposition, that the value of a commodity is ever determined by the labour embodied in it, for if a change in the cost of A alters not only its own value in relation to B, for which it is exchanged, but also the value of B relatively to that of A, though no change has taken place in the quantity of labour to produce B, then not only the doctrine falls to the ground which asserts that the quantity of labour bestowed on an article regulates its value, but also that which affirms the cost of an article to regulate its value' (J. Broadhurst: --Political Economy,? London, 1842, pp. 11 and 14. ) Mr. Broadhurst might just as well say: consider the fractions 10/20, 10/50, 10/100, &c. , the number 10 remains unchanged, and yet its proportional magnitude, its magnitude relatively to the numbers 20, 50, 100 &c. , continually diminishes. Therefore the great principle that the magnitude of a whole number, such as 10, is --regulated? by the number of times unity is contained in it, falls to the ground. [The author explains in section 4 of this chapter, pp. 80-81, note 2 (note 33 of this document), what he understands by --Vulgar Economy. ? - Engels]
22 Such expressions of relations in general, called by Hegel reflex categories, form a very curious class. For instance, one man is king only because other men stand in the relation of subjects to him. They, on the contrary, imagine that they are subjects because he is king.
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23 F. L. A. Ferrier, sous-inspecteur des douanes, --Du gouvernement conside? re? dans ses rapports avec le commerce,? Paris, 1805; and Charles Ganilh, --Des Syste`mes d'Economie Politique, - 2nd ed. , Paris, 1821.
24 In Homer, for instance, the value of an article is expressed in a series of different things II. VII. 472- 475.
25 For this reason, we can speak of the coat value of the linen when its value is expressed in coats, or of its corn value when expressed in corn, and so on. Every such expression tells us, that what appears in the use values, cost, corn, &c. , is the value of the linen. --The value of any commodity denoting its relation in exchange, we may speak of it as . . . corn value, cloth value, according to the commodity with which it is compared; and hence there are a thousand different kinds of value, as many kinds of value as there are commodities in existence, and all are equally real and equally nominal. ? (--A Critical Dissertation on the Nature, Measures and Causes of Value: chiefly in reference to the writings of Mr. Ricardo and his followers. ? By the author of --Essays on the Formation, &c. , of Opinions. ? London, 1825, p. 39. ) S. Bailey, the author of this anonymous work, a work which in its day created much stir in England, fancied that, by thus pointing out the various relative expressions of one and the same value, he had proved the impossibility of any determination of the concept of value. However narrow his own views may have been, yet, that he laid his finger on some serious defects in the Ricardian Theory, is proved by the animosity with which he was attacked by Ricardo's followers. See the Westminster Review for example.
26 It is by no means self-evident that this character of direct and universal exchangeability is, so to speak, a polar one, and as intimately connected with its opposite pole, the absence of direct exchangeability, as the positive pole of the magnet is with its negative counterpart. It may therefore be imagined that all commodities can simultaneously have this character impressed upon them, just as it can be imagined that all Catholics can be popes together. It is, of course, highly desirable in the eyes of the petit bourgeois, for whom the production of commodities is the nec plus ultra of human freedom and individual independence, that the inconveniences resulting from this character of commodities not being directly exchangeable, should be removed. Proudhon's socialism is a working out of this Philistine Utopia, a form of socialism which, as I have elsewhere shown, does not possess even the merit of originality. Long before his time, the task was attempted with much better success by Gray, Bray, and others. But, for all that, wisdom of this kind flourishes even now in certain circles under the name of --science. ? Never has any school played more tricks with the word science, than that of Proudhon, for --wo Begriffe fehlen, Da stellt zur rechten Zeit ein Wort sich ein. ? [--Where thoughts are absent, Words are brought in as convenient replacements,? Goethe's, Faust, See Proudhon's Philosophy of Poverty]
26a In the German edition, there is the following footnote here: --One may recall that China and the tables began to dance when the rest of the world appeared to be standing still - pour encourager les autres [to encourage the others]. ? The defeat of the 1848-49 revolutions was followed by a period of dismal political reaction in Europe. At that time, spiritualism, especially table-turning, became the rage among the European aristocracy. In 1850-64, China was swept by an anti-feudal liberation movement in the form of a large-scale peasant war, the Taiping Revolt. - Note by editors of MECW.
27 Among the ancient Germans the unit for measuring land was what could be harvested in a day, and was called Tagwerk, Tagwanne (jurnale, or terra jurnalis, or diornalis), Mannsmaad, &c. (See G. L. von Maurer, --Einleitung zur Geschichte der Mark, &c. Verfassung,? Munchen, 1854, p. 129 sq. )
28 When, therefore, Galiani says: Value is a relation between persons - --La Ricchezza e una ragione tra due persone,? - he ought to have added: a relation between persons expressed as a relation between things. (Galiani: Della Moneta, p. 221, V. III. of Custodi's collection of --Scrittori Classici Italiani di Economia Politica. ? Parte Moderna, Milano 1803. )
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29 What are we to think of a law that asserts itself only by periodical revolutions? It is just nothing but a law of Nature, founded on the want of knowledge of those whose action is the subject of it. ? (Friedrich Engels: --Umrisse zu einer Kritik der Nationalo? konomie,? in the --Deutsch-Franzo? sische Jahrbu? cher,? edited by Arnold Ruge and Karl Marx. Paris. 1844. )
30 Even Ricardo has his stories a` la Robinson. --He makes the primitive hunter and the primitive fisher straightway, as owners of commodities, exchange fish and game in the proportion in which labour time is incorporated in these exchange values. On this occasion he commits the anachronism of making these men apply to the calculation, so far as their implements have to be taken into account, the annuity tables in current use on the London Exchange in the year 1817. The parallelograms of Mr. Owen appear to be the only form of society, besides the bourgeois form, with which he was acquainted. ? (Karl Marx: --Zur Kritik, &c. . ? pp. 38, 39)
31 A ridiculous presumption has latterly got abroad that common property in its primitive form is specifically a Slavonian, or even exclusively Russian form. It is the primitive form that we can prove to have existed amongst Romans, Teutons, and Celts, and even to this day we find numerous examples, ruins though they be, in India. A more exhaustive study of Asiatic, and especially of Indian forms of common property, would show how from the different forms of primitive common property, different forms of its dissolution have been developed. Thus, for instance, the various original types of Roman and Teutonic private property are deducible from different forms of Indian common property. ? (Karl Marx, --Zur Kritik, &c. ,? p. 10. )
32 The insufficiency of Ricardo's analysis of the magnitude of value, and his analysis is by far the best, will appear from the 3rd and 4th books of this work. As regards value in general, it is the weak point of the classical school of Political Economy that it nowhere expressly and with full consciousness, distinguishes between labour, as it appears in the value of a product, and the same labour, as it appears in the use value of that product. Of course the distinction is practically made, since this school treats labour, at one time under its quantitative aspect, at another under its qualitative aspect. But it has not the least idea, that when the difference between various kinds of labour is treated as purely quantitative, their qualitative unity or equality, and therefore their reduction to abstract human labour, is implied. For instance, Ricardo declares that he agrees with Destutt de Tracy in this proposition: --As it is certain that our physical and moral faculties are alone our original riches, the employment of those faculties, labour of some kind, is our only original treasure, and it is always from this employment that all those things are created which we call riches. . . It is certain, too, that all those things only represent the labour which has created them, and if they have a value, or even two distinct values, they can only derive them from that (the value) of the labour from which they emanate. ? (Ricardo, --The Principles of Pol. Econ. ,? 3 Ed. Lond. 1821, p. 334. ) We would here only point out, that Ricardo puts his own more profound interpretation upon the words of Destutt. What the latter really says is, that on the one hand all things which constitute wealth represent the labour that creates them, but that on the other hand, they acquire their --two different values? (use value and exchange value) from --the value of labour. ? He thus falls into the commonplace error of the vulgar economists, who assume the value of one commodity (in this case labour) in order to determine the values of the rest. But Ricardo reads him as if he had said, that labour (not the value of labour) is embodied both in use value and exchange value. Nevertheless, Ricardo himself pays so little attention to the twofold character of the labour which has a twofold embodiment, that he devotes the whole of his chapter on --Value and Riches, Their Distinctive Properties,? to a laborious examination of the trivialities of a J. B. Say. And at the finish he is quite astonished to find that Destutt on the one hand agrees with him as to labour being the source of value, and on the other hand with J. B. Say as to the notion of value.
33 It is one of the chief failings of classical economy that it has never succeeded, by means of its analysis of commodities, and, in particular, of their value, in discovering that form under which value becomes exchange value. Even Adam Smith and Ricardo, the best representatives of the school, treat
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the form of value as a thing of no importance, as having no connection with the inherent nature of commodities. The reason for this is not solely because their attention is entirely absorbed in the analysis of the magnitude of value. It lies deeper. The value form of the product of labour is not only the most abstract, but is also the most universal form, taken by the product in bourgeois production and stamps that production as a particular species of social production, and thereby gives it its special historical character. If then we treat this mode of production as one eternally fixed by Nature for every state of society, we necessarily overlook that which is the differentia specifica of the value form, and consequently of the commodity form, and of its further developments, money form, capital form, &c. We consequently find that economists, who are thoroughly agreed as to labour time being the measure of the magnitude of value, have the most strange and contradictory ideas of money, the perfected form of the general equivalent.
This is seen in a striking manner when they treat of banking, where the commonplace definitions of money will no longer hold water. This led to the rise of a restored mercantile system (Ganilh, &c. ), which sees in value nothing but a social form, or rather the unsubstantial ghost of that form. Once for all I may here state, that by classical Political Economy, I understand that economy which, since the time of W. Petty, has investigated the real relations of production in bourgeois society in contradistinction to vulgar economy, which deals with appearances only, ruminates without ceasing on the materials long since provided by scientific economy, and there seeks plausible explanations of the most obtrusive phenomena, for bourgeois daily use, but for the rest, confines itself to systematising in a pedantic way, and proclaiming for everlasting truths, the trite ideas held by the self-complacent bourgeoisie with regard to their own world, to them the best of all possible worlds.
34 --Les e? conomistes ont une singulie`re manie`re de proce? der. Il n'y a pour eux que deux sortes d'institutions, celles de l'art et celles de la nature. Les institutions de la fe? odalite? sont des institutions artificielles celles de la bourgeoisie sont des institutions naturelles. Ils ressemblent en ceci aux the? ologiens, qui eux aussi e? tablissent deux sortes de religions. Toute religion qui n'est pas la leur, est une invention des hommes tandis que leur propre religion est une e? manation de Dieu -Ainsi il y a eu de l'histoire, mais il n'y en a plus. ? [--Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. The institutions of feudalism are artificial institutions, those of the bourgeoisie are natural institutions. In this they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. . . . Thus there has been history, but there is no longer any? ] (Karl Marx. Mise`re de la Philosophie. Re? ponse a la Philosophie de la Mise`re par M. Proudhon, 1847, p. 113. ) Truly comical is M. Bastiat, who imagines that the ancient Greeks and Romans lived by plunder alone. But when people plunder for centuries, there must always be something at hand for them to seize; the objects of plunder must be continually reproduced. It would thus appear that even Greeks and Romans had some process of production, consequently, an economy, which just as much constituted the material basis of their world, as bourgeois economy constitutes that of our modern world. Or perhaps Bastiat means, that a mode of production based on slavery is based on a system of plunder. In that case he treads on dangerous ground. If a giant thinker like Aristotle erred in his appreciation of slave labour, why should a dwarf economist like Bastiat be right in his appreciation of wage labour? I seize this opportunity of shortly answering an objection taken by a German paper in America, to my work, --Zur Kritik der Pol. Oekonomie, 1859. ? In the estimation of that paper, my view that each special mode of production and the social relations corresponding to it, in short, that the economic structure of society, is the real basis on which the juridical and political superstructure is raised and to which definite social forms of thought correspond; that the mode of production determines the character of the social, political, and intellectual life generally, all this is very true for our own times, in which material interests preponderate, but not for the middle ages, in which Catholicism, nor for Athens and Rome, where politics, reigned supreme. In the first place it strikes
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one as an odd thing for any one to suppose that these well-worn phrases about the middle ages and the ancient world are unknown to anyone else. This much, however, is clear, that the middle ages could not live on Catholicism, nor the ancient world on politics. On the contrary, it is the mode in which they gained a livelihood that explains why here politics, and there Catholicism, played the chief part. For the rest, it requires but a slight acquaintance with the history of the Roman republic, for example, to be aware that its secret history is the history of its landed property. On the other hand, Don Quixote long ago paid the penalty for wrongly imagining that knight errantry was compatible with all economic forms of society.
35 --Observations on certain verbal disputes in Pol. Econ. , particularly relating to value and to demand and supply? Lond. , 1821, p. 16.
36 S. Bailey, l. c. , p. 165.
37 The author of --Observations? and S. Bailey accuse Ricardo of converting exchange value from something relative into something absolute. The opposite is the fact. He has explained the apparent relation between objects, such as diamonds and pearls, in which relation they appear as exchange values, and disclosed the true relation hidden behind the appearances, namely, their relation to each other as mere expressions of human labour. If the followers of Ricardo answer Bailey somewhat rudely, and by no means convincingly, the reason is to be sought in this, that they were unable to find in Ricardo's own works any key to the hidden relations existing between value and its form, exchange value.
? ? Chapter 2: Exchange
It is plain that commodities cannot go to market and make exchanges of their own account. We must, therefore, have recourse to their guardians, who are also their owners. Commodities are things, and therefore without power of resistance against man. If they are wanting in docility he can use force; in other words, he can take possession of them. 1 In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another, as persons whose will resides in those object, and must behave in such a way that each does not appropriate the commodity of the other, and part with his own, except by means of an act done by mutual consent. They must therefore, mutually recognise in each other the rights of private proprietors. This juridical relation, which thus expresses itself in a contract, whether such contract be part of a developed legal system or not, is a relation between two wills, and is but the reflex of the real economic relation between the two. It is this economic relation that determines the subject-matter comprised in each such juridical act. 2
The persons exist for one another merely as representatives of, and, therefore. as owners of, commodities. In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them.
What chiefly distinguishes a commodity from its owner is the fact, that it looks upon every other commodity as but the form of appearance of its own value. A born leveller and a cynic, it is always ready to exchange not only soul, but body, with any and every other commodity, be the same more repulsive than Maritornes herself. The owner makes up for this lack in the commodity of a sense of the concrete, by his own five and more senses. His commodity possesses for himself no immediate use-value. Otherwise, he would not bring it to the market. It has use-value for others; but for himself its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange. 3 Therefore, he makes up his mind to part with it for commodities whose value in use is of service to him. All commodities are non-use-values for their owners, and use-values for their non-owners. Consequently, they must all change hands. But this change of hands is what constitutes their exchange, and the latter puts them in relation with each other as values, and realises them as values. Hence commodities must be realised as values before they can be realised as use-values.
On the other hand, they must show that they are use-values before they can be realised as values. For the labour spent upon them counts effectively, only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange.
Every owner of a commodity wishes to part with it in exchange only for those commodities whose use-value satisfies some want of his. Looked at in this way, exchange is for him simply a private transaction. On the other hand, he desires to realise the value of his commodity, to convert it into any other suitable commodity of equal value, irrespective of whether his own commodity has or has not any use-value for the owner of the other. From this point of view, exchange is for him a social transaction of a general character. But one and the same set of transactions cannot be simultaneously for all owners of commodities both exclusively private and exclusively social and general.
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Let us look at the matter a little closer. To the owner of a commodity, every other commodity is, in regard to his own, a particular equivalent, and consequently his own commodity is the universal equivalent for all the others. But since this applies to every owner, there is, in fact, no commodity acting as universal equivalent, and the relative value of commodities possesses no general form under which they can be equated as values and have the magnitude of their values compared. So far, therefore, they do not confront each other as commodities, but only as products or use-values. In their difficulties our commodity owners think like Faust: --Im Anfang war die Tat. ? [--In the beginning was the deed. ? - Goethe, Faust. ] They therefore acted and transacted before they thought. Instinctively they conform to the laws imposed by the nature of commodities. They cannot bring their commodities into relation as values, and therefore as commodities, except by comparing them with some one other commodity as the universal equivalent. That we saw from the analysis of a commodity. But a particular commodity cannot become the universal equivalent except by a social act. The social action therefore of all other commodities, sets apart the particular commodity in which they all represent their values. Thereby the bodily form of this commodity becomes the form of the socially recognised universal equivalent. To be the universal equivalent, becomes, by this social process, the specific function of the commodity thus excluded by the rest. Thus it becomes - money. --Illi unum consilium habent et virtutem et potestatem suam bestiae tradunt. Et ne quis possit emere aut vendere, nisi qui habet characterem aut nomen bestiae aut numerum nominis ejus. ? [--These have one mind, and shall give their power and strength unto the beast. ? Revelations, 17:13; --And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. ? Revelations, 13:17. ] (Apocalypse. )
Money is a crystal formed of necessity in the course of the exchanges, whereby different products of labour are practically equated to one another and thus by practice converted into commodities. The historical progress and extension of exchanges develops the contrast, latent in commodities, between use-value and value. The necessity for giving an external expression to this contrast for the purposes of commercial intercourse, urges on the establishment of an independent form of value, and finds no rest until it is once for all satisfied by the differentiation of commodities into commodities and money. At the same rate, then, as the conversion of products into commodities is being accomplished, so also is the conversion of one special commodity into money. 4
The direct barter of products attains the elementary form of the relative expression of value in one respect, but not in another. That form is x Commodity A = y Commodity B. The form of direct barter is x use-value A = y use-value B. 5 The articles A and B in this case are not as yet commodities, but become so only by the act of barter. The first step made by an object of utility towards acquiring exchange-value is when it forms a non-use-value for its owner, and that happens when it forms a superfluous portion of some article required for his immediate wants. Objects in themselves are external to man, and consequently alienable by him. In order that this alienation may be reciprocal, it is only necessary for men, by a tacit understanding, to treat each other as private owners of those alienable objects, and by implication as independent individuals. But such a state of reciprocal independence has no existence in a primitive society based on property in common, whether such a society takes the form of a patriarchal family, an ancient Indian community, or a Peruvian Inca State. The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities, or with members of the latter. So soon, however, as products once become commodities in the external relations of a community, they also, by reaction, become so in its internal intercourse. The proportions in which they are exchangeable are at first quite a matter of chance. What makes them exchangeable is the mutual desire of their owners to alienate them. Meantime the need for
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foreign objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social act. In the course of time, therefore, some portion at least of the products of labour must be produced with a special view to exchange. From that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption, and its utility for the purposes of exchange. Its use-value becomes distinguished from its exchange- value. On the other hand, the quantitative proportion in which the articles are exchangeable, becomes dependent on their production itself. Custom stamps them as values with definite magnitudes.
In the direct barter of products, each commodity is directly a means of exchange to its owner, and to all other persons an equivalent, but that only in so far as it has use-value for them. At this stage, therefore, the articles exchanged do not acquire a value-form independent of their own use- value, or of the individual needs of the exchangers. The necessity for a value-form grows with the increasing number and variety of the commodities exchanged. The problem and the means of solution arise simultaneously. Commodity-owners never equate their own commodities to those of others, and exchange them on a large scale, without different kinds of commodities belonging to different owners being exchangeable for, and equated as values to, one and the same special article. Such last-mentioned article, by becoming the equivalent of various other commodities, acquires at once, though within narrow limits, the character of a general social equivalent. This character comes and goes with the momentary social acts that called it into life. In turns and transiently it attaches itself first to this and then to that commodity. But with the development of exchange it fixes itself firmly and exclusively to particular sorts of commodities, and becomes crystallised by assuming the money-form. The particular kind of commodity to which it sticks is at first a matter of accident. Nevertheless there are two circumstances whose influence is decisive. The money-form attaches itself either to the most important articles of exchange from outside, and these in fact are primitive and natural forms in which the exchange-value of home products finds expression; or else it attaches itself to the object of utility that forms, like cattle, the chief portion of indigenous alienable wealth. Nomad races are the first to develop the money-form, because all their worldly goods consist of moveable objects and are therefore directly alienable; and because their mode of life, by continually bringing them into contact with foreign communities, solicits the exchange of products. Man has often made man himself, under the form of slaves, serve as the primitive material of money, but has never used land for that purpose. Such an idea could only spring up in a bourgeois society already well developed. It dates from the last third of the 17th century, and the first attempt to put it in practice on a national scale was made a century afterwards, during the French bourgeois revolution.
In proportion as exchange bursts its local bonds, and the value of commodities more and more expands into an embodiment of human labour in the abstract, in the same proportion the character of money attaches itself to commodities that are by Nature fitted to perform the social function of a universal equivalent. Those commodities are the precious metals.
The truth of the proposition that, --although gold and silver are not by Nature money, money is by Nature gold and silver,? 6 is shown by the fitness of the physical properties of these metals for the functions of money. 7 Up to this point, however, we are acquainted only with one function of money, namely, to serve as the form of manifestation of the value of commodities, or as the material in which the magnitudes of their values are socially expressed. An adequate form of manifestation of value, a fit embodiment of abstract, undifferentiated, and therefore equal human labour, that material alone can be whose every sample exhibits the same uniform qualities. On the other hand, since the difference between the magnitudes of value is purely quantitative, the money commodity must be susceptible of merely quantitative differences, must therefore be
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divisible at will, and equally capable of being reunited. Gold and silver possess these properties by Nature.
The use-value of the money-commodity becomes two-fold. In addition to its special use-value as a commodity (gold, for instance, serving to stop teeth, to form the raw material of articles of luxury, &c. ), it acquires a formal use-value, originating in its specific social function.
Since all commodities are merely particular equivalents of money, the latter being their universal equivalent, they, with regard to the latter as the universal commodity, play the parts of particular commodities. 8
We have seen that the money-form is but the reflex, thrown upon one single commodity, of the value relations between all the rest. That money is a commodity9 is therefore a new discovery only for those who, when they analyse it, start from its fully developed shape. The act of exchange gives to the commodity converted into money, not its value, but its specific value-form. By confounding these two distinct things some writers have been led to hold that the value of gold and silver is imaginary. 10 The fact that money can, in certain functions, be replaced by mere symbols of itself, gave rise to that other mistaken notion, that it is itself a mere symbol. Nevertheless under this error lurked a presentiment that the money-form of an object is not an inseparable part of that object, but is simply the form under which certain social relations manifest themselves. In this sense every commodity is a symbol, since, in so far as it is value, it is only the material envelope of the human labour spent upon it. 11 But if it be declared that the social characters assumed by objects, or the material forms assumed by the social qualities of labour under the re? gime of a definite mode of production, are mere symbols, it is in the same breath also declared that these characteristics are arbitrary fictions sanctioned by the so-called universal consent of mankind. This suited the mode of explanation in favour during the 18th century. Unable to account for the origin of the puzzling forms assumed by social relations between man and man, people sought to denude them of their strange appearance by ascribing to them a conventional origin.
It has already been remarked above that the equivalent form of a commodity does not imply the determination of the magnitude of its value. Therefore, although we may be aware that gold is money, and consequently directly exchangeable for all other commodities, yet that fact by no means tells how much 10 lbs. , for instance, of gold is worth. Money, like every other commodity, cannot express the magnitude of its value except relatively in other commodities. This value is determined by the labour-time required for its production, and is expressed by the quantity of any other commodity that costs the same amount of labour-time. 12 Such quantitative determination of its relative value takes place at the source of its production by means of barter. When it steps into circulation as money, its value is already given. In the last decades of the 17th century it had already been shown that money is a commodity, but this step marks only the infancy of the analysis. The difficulty lies, not in comprehending that money is a commodity, but in discovering how, why, and by what means a commodity becomes money.
