PART1:COMMODITIESANDMONEY107Hencetheidentityofsaleandpurchaseimpliesthatthecommodityisuseless,if,onbeingthrownintothealchemisticalretortofcirculation,itdoesnotcomeoutagainintheshapeofmoney;if,inotherwords,itcannotbesoldbyitsowner,andthereforebeboughtbytheownerofthemoney.Thatidentityfurtherimpliesthattheexchange,ifitdoestakeplace,constitutesaperiodofrest,aninterval,longorshort,inthelifeofthecommodity.Sincethefirstmetamorphosisofacommodityisatonceasaleandapurchase,itisalsoanindependentprocessinitself.Thepurchaserhasthecommodity,thesellerhasthemoney,i.e.,acommodityreadytogointocirculationatanytime.

Noonecansellunlesssomeoneelsepurchases.Butnooneisforthwithboundtopurchase,becausehehasjustsold.Circulationburststhroughallrestrictionsastotime,place,andindividuals,imposedbydirectbarter,andthisiteffectsbysplittingup,intotheantithesisofasaleandapurchase,thedirectidentitythatinbarterdoesexistbetweenthealienationofone'sownandtheacquisitionofsomeotherman'sproduct.

Tosaythatthesetwoindependentandantitheticalactshaveanintrinsicunity,areessentiallyone,isthesameastosaythatthisintrinsiconenessexpressesitselfinanexternalantithesis.Iftheintervalintimebetweenthetwocomplementaryphasesofthecompletemetamorphosisofacommoditybecometoogreat,ifthesplitbetweenthesaleandthepurchasebecometoopronounced,theintimateconnexionbetweenthem,theironeness,assertsitselfbyproducing–acrisis.

Theantithesis,use-valueandvalue;thecontradictionsthatprivatelabourisboundtomanifestitselfasdirectsociallabour,thataparticularisedconcretekindoflabourhastopassforabstracthumanlabour;thecontradictionbetweenthepersonificationofobjectsandtherepresentationofpersonsbythings;alltheseantithesesandcontradictions,whichareimmanentincommodities,assertthemselves,anddevelop108CAPITALtheirmodesofmotion,intheantitheticalphasesofthemetamorphosisofacommodity.Thesemodesthereforeimplythepossibility,andnomorethanthepossibility,ofcrises.Theconversionofthismerepossibilityintoarealityistheresultofalongseriesofrelations,that,fromourpresentstandpointofsimplecirculation,haveasyetnoexistence.25B.TheCurrency26ofMoneyThechangeofform,C–M–C,bywhichthecirculationofthematerialproductsoflabourisbroughtabout,requiresthatagivenvalueintheshapeofacommodityshallbegintheprocess,andshall,alsointheshapeofacommodity,endit.Themovementofthecommodityisthereforeacircuit.Ontheotherhand,theformofthismovementprecludesacircuitfrombeingmadebythemoney.Theresultisnotthereturnofthemoney,butitscontinuedremovalfurtherandfurtherawayfromitsstarting-point.Solongasthesellersticksfasttohismoney,whichisthetransformedshapeofhiscommodity,thatcommodityisstillinthefirstphaseofitsmetamorphosis,andhascompletedonlyhalfitscourse.Butsosoonashecompletestheprocess,sosoonashesupplementshissalebyapurchase,themoneyagainleavesthehandsofitspossessor.Itistruethatiftheweaver,afterbuyingtheBible,sellmorelinen,moneycomesbackintohishands.Butthisreturnisnotowingtothecirculationofthefirst20yardsoflinen;thatcirculationresultedinthemoneygettingintothehandsoftheselleroftheBible.Thereturnofmoneyintothehandsoftheweaverisbroughtaboutonlybytherenewalorrepetitionoftheprocessofcirculationwithafreshcommodity,whichrenewedprocessendswiththesameresultasitspredecessordid.

HencethemovementdirectlyimpartedtomoneybythecirculationofcommoditiestakestheformofPART1:COMMODITIESANDMONEY109aconstantmotionawayfromitsstarting-point,ofacoursefromthehandsofonecommodity-ownerintothoseofanother.Thiscourseconstitutesitscurrency(coursdelamonnaie).

Thecurrencyofmoneyistheconstantandmonotonousrepetitionofthesameprocess.Thecommodityisalwaysinthehandsoftheseller;themoney,asameansofpurchase,alwaysinthehandsofthebuyer.Andmoneyservesasameansofpurchasebyrealisingthepriceofthecommodity.

Thisrealisationtransfersthecommodityfromthesellertothebuyerandremovesthemoneyfromthehandsofthebuyerintothoseoftheseller,whereitagaingoesthroughthesameprocesswithanothercommodity.Thatthisone-sidedcharacterofthemoney'smotionarisesoutofthetwo-sidedcharacterofthecommodity'smotion,isacircumstancethatisveiledover.Theverynatureofthecirculationofcommoditiesbegetstheoppositeappearance.Thefirstmetamorphosisofacommodityisvisibly,notonlythemoney'smovement,butalsothatofthecommodityitself;inthesecondmetamorphosis,onthecontrary,themovementappearstousasthemovementofthemoneyalone.Inthefirstphaseofitscirculationthecommoditychangesplacewiththemoney.Thereuponthecommodity,underitsaspectofausefulobject,fallsoutofcirculationintoconsumption.27Initssteadwehaveitsvalue-shape–themoney.Itthengoesthroughthesecondphaseofitscirculation,notunderitsownnaturalshape,butundertheshapeofmoney.

Thecontinuityofthemovementisthereforekeptupbythemoneyalone,andthesamemovementthatasregardsthecommodityconsistsoftwoprocessesofanantitheticalcharacter,is,whenconsideredasthemovementofthemoney,alwaysoneandthesameprocess,acontinuedchangeofplaceswitheverfreshcommodities.Hencetheresultbroughtaboutbythecirculationofcommodities,namely,thereplacing110CAPITALofonecommoditybyanother,takestheappearanceofhavingbeeneffectednotbymeansofthechangeofformofthecommoditiesbutratherbythemoneyactingasamediumofcirculation,byanactionthatcirculatescommodities,toallappearancemotionlessinthemselves,andtransfersthemfromhandsinwhichtheyarenon-use-values,tohandsinwhichtheyareuse-values;andthatinadirectionconstantlyopposedtothedirectionofthemoney.Thelatteriscontinuallywithdrawingcommoditiesfromcirculationandsteppingintotheirplaces,andinthuswaycontinuallymovingfurtherandfurtherfromitsstarting-point.

Hencealthoughthemovementofthemoneyismerelytheexpressionofthecirculationofcommodities,yetthecontraryappearstobetheactualfact,andthecirculationofcommoditiesseemstobetheresultofthemovementofthemoney.28Again,moneyfunctionsasameansofcirculationonlybecauseinitthevaluesofcommoditieshaveindependentreality.Henceitsmovement,asthemediumofcirculation,is,infact,merelythemovementofcommoditieswhilechangingtheirforms.

Thisfactmustthereforemakeitselfplainlyvisibleinthecurrencyofmoney.Thusthelinenforinstance,firstofallchangesitscommodity-formintoitsmoney-form.Thesecondtermofitsfirstmetamorphosis,C–M,themoneyform,thenbecomesthefirsttermofitsfinalmetamorphosis,M–C,itsre-conversionintotheBible.Buteachofthesetwochangesofformisaccomplishedbyanexchangebetweencommodityandmoney,bytheirreciprocaldisplacement.Thesamepiecesofcoincomeintotheseller'shandasthealienatedformofthecommodityandleaveitastheabsolutelyalienableformofthecommodity.Theyaredisplacedtwice.Thefirstmetamorphosisofthelinenputsthesecoinsintotheweaver'spocket,theseconddrawsthemoutofit.ThetwoinversechangesundergonebythesamecommodityarereflectedinPART1:COMMODITIESANDMONEY111thedisplacement,twicerepeated,butinoppositedirections,ofthesamepiecesofcoin.

If,onthecontrary,onlyonephaseofthemetamorphosisisgonethrough,ifthereareonlysalesoronlypurchases,thenagivenpieceofmoneychangesitsplaceonlyonce.Itssecondchangeofplacealwaysexpressesthesecondmetamorphosisofthecommodity,itsre-conversionfrommoney.Thefrequentrepetitionofthedisplacementofthesamecoinsreflectsnotonlytheseriesofmetamorphosesthatasinglecommodityhasgonethrough,butalsotheintertwiningoftheinnumerablemetamorphosesintheworldofcommoditiesingeneral.Itisamatterofcourse,thatallthisisapplicabletothesimplecirculationofcommoditiesalone,theonlyformthatwearenowconsidering.

Everycommodity,whenitfirststepsintocirculation,andundergoesitsfirstchangeofform,doessoonlytofalloutofcirculationagainandtobereplacedbyothercommodities.Money,onthecontrary,asthemediumofcirculation,keepscontinuallywithinthesphereofcirculation,andmovesaboutinit.Thequestionthereforearises,howmuchmoneythissphereconstantlyabsorbs?

Inagivencountrytheretakeplaceeverydayatthesametime,butindifferentlocalities,numerousone-sidedmetamorphosesofcommodities,or,inotherwords,numeroussalesandnumerouspurchases.Thecommoditiesareequatedbeforehandinimagination,bytheirprices,todefinitequantitiesofmoney.

Andsince,intheformofcirculationnowunderconsideration,moneyandcommoditiesalwayscomebodilyfacetoface,oneatthepositivepoleofpurchase,theotheratthenegativepoleofsale,itisclearthattheamountofthemeansofcirculationrequired,isdeterminedbeforehandbythesumofthepricesofallthesecommodities.Asamatteroffact,themoneyinrealityrepresentsthequantityorsumof112CAPITALgoldideallyexpressedbeforehandbythesumofthepricesofthecommodities.Theequalityofthesetwosumsisthereforeself-evident.Weknow,however,that,thevaluesofcommoditiesremainingconstant,theirpricesvarywiththevalueofgold(thematerialofmoney),risinginproportionasitfalls,andfallinginproportionasitrises.Nowif,inconsequenceofsuchariseorfallinthevalueofgold,thesumofthepricesofcommoditiesfallorrise,thequantityofmoneyincurrencymustfallorrisetothesameextent.Thechangeinthequantityofthecirculatingmediumis,inthiscase,itistrue,causedbythemoneyitself,yetnotinvirtueofitsfunctionasamediumofcirculation,butofitsfunctionasameasureofvalue.First,thepriceofthecommoditiesvariesinverselyasthevalueofthemoney,andthenthequantityofthemediumofcirculationvariesdirectlyasthepriceofthecommodities.Exactlythesamethingwouldhappenif,forinstance,insteadofthevalueofgoldfalling,goldwerereplacedbysilverasthemeasureofvalue,orif,insteadofthevalueofsilverrising,goldweretothrustsilveroutfrombeingthemeasureofvalue.

Intheonecase,moresilverwouldbecurrentthangoldwasbefore;intheothercase,lessgoldwouldbecurrentthansilverwasbefore.Ineachcasethevalueofthematerialofmoney,i.e.,thevalueofthecommoditythatservesasthemeasureofvalue,wouldhaveundergoneachange,andthereforeso,too,wouldthepricesofcommoditieswhichexpresstheirvaluesinmoney,andso,too,wouldthequantityofmoneycurrentwhosefunctionitistorealisethoseprices.Wehavealreadyseen,thatthesphereofcirculationhasanopeningthroughwhichgold(orthematerialofmoneygenerally)entersintoitasacommoditywithagivenvalue.Hence,whenmoneyentersonitsfunctionsasameasureofvalue,whenitexpressesprices,itsvalueisalreadydetermined.Ifnowitsvaluefall,thisfactisfirstevidencedbyachangeinthepricesofPART1:COMMODITIESANDMONEY113thosecommoditiesthataredirectlybarteredforthepreciousmetalsatthesourcesoftheirproduction.Thegreaterpartofallothercommodities,especiallyintheimperfectlydevelopedstagesofcivilsociety,willcontinueforalongtimetobeestimatedbytheformerantiquatedandillusoryvalueofthemeasureofvalue.

Nevertheless,onecommodityinfectsanotherthroughtheircommonvalue-relation,sothattheirprices,expressedingoldorinsilver,graduallysettledownintotheproportionsdeterminedbytheircomparativevalues,untilfinallythevaluesofallcommoditiesareestimatedintermsofthenewvalueofthemetalthatconstitutesmoney.Thisprocessisaccompaniedbythecontinuedincreaseinthequantityofthepreciousmetals,anincreasecausedbytheirstreamingintoreplacethearticlesdirectlybarteredforthemattheirsourcesofproduction.Inproportionthereforeascommoditiesingeneralacquiretheirtrueprices,inproportionastheirvaluesbecomeestimatedaccordingtothefallenvalueofthepreciousmetal,inthesameproportionthequantityofthatmetalnecessaryforrealisingthosenewpricesisprovidedbeforehand.

Aone-sidedobservationoftheresultsthatfolloweduponthediscoveryoffreshsuppliesofgoldandsilver,ledsomeeconomistsinthe17th,andparticularlyinthe18thcentury,tothefalseconclusion,thatthepricesofcommoditieshadgoneupinconsequenceoftheincreasedquantityofgoldandsilverservingasmeansofcirculation.Henceforthweshallconsiderthevalueofgoldtobegiven,as,infact,itismomentarily,wheneverweestimatethepriceofacommodity.

Onthissuppositionthen,thequantityofthemediumofcirculationisdeterminedbythesumofthepricesthathavetoberealised.Ifnowwefurthersupposethepriceofeachcommoditytobegiven,thesumofthepricesclearlydependsonthemassofcommoditiesincirculation.Itrequiresbutlittlerackingofbrainstocomprehendthatifonequarterofwheatcosts￡2,100114CAPITALquarterswillcost￡200,200quarters￡400,andsoon,thatconsequentlythequantityofmoneythatchangesplacewiththewheat,whensold,mustincreasewiththequantityofthatwheat.

Ifthemassofcommoditiesremainconstant,thequantityofcirculatingmoneyvarieswiththefluctuationsinthepricesofthosecommodities.Itincreasesanddiminishesbecausethesumofthepricesincreasesordiminishesinconsequenceofthechangeofprice.Toproducethiseffect,itisbynomeansrequisitethatthepricesofallcommoditiesshouldriseorfallsimultaneously.Ariseorafallinthepricesofanumberofleadingarticles,issufficientintheonecasetoincrease,intheothertodiminish,thesumofthepricesofallcommodities,and,therefore,toputmoreorlessmoneyincirculation.Whetherthechangeinthepricecorrespondtoanactualchangeofvalueinthecommodities,orwhetheritbetheresultofmerefluctuationsinmarket-prices,theeffectonthequantityofthemediumofcirculationremainsthesame.Supposethefollowingarticlestobesoldorpartiallymetamorphosedsimultaneouslyindifferentlocalities:say,onequarterofwheat,20yardsoflinen,oneBible,and4gallonsofbrandy.Ifthepriceofeacharticlebe￡2,andthesumofthepricestoberealisedbeconsequently￡8,itfollowsthat￡8inmoneymustgointocirculation.If,ontheotherhand,thesesamearticlesarelinksinthefollowingchainofmetamorphoses:1quarterofwheat–￡2–20yardsoflinen–￡2–1Bible–￡2–4gallonsofbrandy–￡2,achainthatisalreadywellknowntous,inthatcasethe￡2causethedifferentcommoditiestocirculateoneaftertheother,andafterrealisingtheirpricessuccessively,andthereforethesumofthoseprices,￡8,theycometorestatlastinthepocketofthedistiller.

The￡2thusmakefourmoves.Thisrepeatedchangeofplaceofthesamepiecesofmoneycorrespondstothedoublechangeinformofthecommodities,PART1:COMMODITIESANDMONEY115totheirmotioninoppositedirectionsthroughtwostagesofcirculation.andtotheinterlacingofthemetamorphosesofdifferentcommodities.29Theseantitheticandcomplementaryphases,ofwhichtheprocessofmetamorphosisconsists,aregonethrough,notsimultaneously,butsuccessively.Timeisthereforerequiredforthecompletionoftheseries.Hencethevelocityofthecurrencyofmoneyismeasuredbythenumberofmovesmadebyagivenpieceofmoneyinagiventime.Supposethecirculationofthe4articlestakesaday.Thesumofthepricestoberealisedinthedayis￡8,thenumberofmovesofthetwopiecesofmoneyisfour,andthequantityofmoneycirculatingis￡2.Hence,foragivenintervaloftimeduringtheprocessofcirculation,wehavethefollowingrelation:thequantityofmoneyfunctioningasthecirculatingmediumisequaltothesumofthepricesofthecommoditiesdividedbythenumberofmovesmadebycoinsofthesamedenomination.Thislawholdsgenerally.

Thetotalcirculationofcommoditiesinagivencountryduringagivenperiodismadeupontheonehandofnumerousisolatedandsimultaneouspartialmetamorphoses,saleswhichareatthesametimepurchases,inwhicheachcoinchangesitsplaceonlyonce,ormakesonlyonemove;ontheotherhand,ofnumerousdistinctseriesofmetamorphosespartlyrunningsidebyside,andpartlycoalescingwitheachother,ineachofwhichserieseachcoinmakesanumberofmoves,thenumberbeinggreaterorlessaccordingtocircumstances.Thetotalnumberofmovesmadebyallthecirculatingcoinsofonedenominationbeinggiven,wecanarriveattheaveragenumberofmovesmadebyasinglecoinofthatdenomination,orattheaveragevelocityofthecurrencyofmoney.Thequantityofmoneythrownintothecirculationatthebeginningofeachdayisofcoursedeterminedbythesumofthepricesofallthecommoditiescirculating116CAPITALsimultaneouslysidebyside.Butonceincirculation,coinsare,sotosay,maderesponsibleforoneanother.

Iftheoneincreaseitsvelocity,theothereitherretardsitsown,oraltogetherfallsoutofcirculation;forthecirculationcanabsorbonlysuchaquantityofgoldaswhenmultipliedbythemeannumberofmovesmadebyonesinglecoinorelement,isequaltothesumofthepricestoberealised.Henceifthenumberofmovesmadebytheseparatepiecesincrease,thetotalnumberofthosepiecesincirculationdiminishes.Ifthenumberofthemovesdiminish,thetotalnumberofpiecesincreases.Sincethequantityofmoneycapableofbeingabsorbedbythecirculationisgivenforagivenmeanvelocityofcurrency,allthatisnecessaryinordertoabstractagivennumberofsovereignsfromthecirculationistothrowthesamenumberofone-poundnotesintoit,atrickwellknowntoallbankers.

Justasthecurrencyofmoney,generallyconsidered,isbutareflexofthecirculationofcommodities,oroftheantitheticalmetamorphosestheyundergo,so,too,thevelocityofthatcurrencyreflectstherapiditywithwhichcommoditieschangetheirforms,thecontinuedinterlacingofoneseriesofmetamorphoseswithanother,thehurriedsocialinterchangeofmatter,therapiddisappearanceofcommoditiesfromthesphereofcirculation,andtheequallyrapidsubstitutionoffreshonesintheirplaces.Hence,inthevelocityofthecurrencywehavethefluentunityoftheantitheticalandcomplementaryphases,theunityoftheconversionoftheusefulaspectofcommoditiesintotheirvalue-aspect,andtheirre-conversionfromthelatteraspecttotheformer,ortheunityofthetwoprocessesofsaleandpurchase.Ontheotherhand,theretardationofthecurrencyreflectstheseparationofthesetwoprocessesintoisolatedantitheticalphases,reflectsthestagnationinthechangeofform,andtherefore,inthesocialinterchangeofmatter.Thecirculationitself,ofcourse,givesnocluetotheoriginofthisstagnation;itmerelyPART1:COMMODITIESANDMONEY117putsinevidencethephenomenonitself.Thegeneralpublic,who,simultaneouslywiththeretardationofthecurrency,seemoneyappearanddisappearlessfrequentlyattheperipheryofcirculation,naturallyattributethisretardationtoaquantitativedeficiencyinthecirculatingmedium.30Thetotalquantityofmoneyfunctioningduringagivenperiodasthecirculatingmedium,isdetermined,ontheonehand,bythesumofthepricesofthecirculatingcommodities,andontheotherhand,bytherapiditywithwhichtheantitheticalphasesofthemetamorphosesfollowoneanother.Onthisrapiditydependswhatproportionofthesumofthepricescan,ontheaverage,berealisedbyeachsinglecoin.Butthesumofthepricesofthecirculatingcommoditiesdependsonthequantity,aswellasontheprices,ofthecommodities.Thesethreefactors,however,stateofprices,quantityofcirculatingcommodities,andvelocityofmoney-currency,areallvariable.Hence,thesumofthepricestoberealised,andconsequentlythequantityofthecirculatingmediumdependingonthatsum,willvarywiththenumerousvariationsofthesethreefactorsincombination.Ofthesevariationsweshallconsiderthosealonethathavebeenthemostimportantinthehistoryofprices.

Whilepricesremainconstant,thequantityofthecirculatingmediummayincreaseowingtothenumberofcirculatingcommoditiesincreasing,ortothevelocityofcurrencydecreasing,ortoacombinationofthetwo.Ontheotherhandthequantityofthecirculatingmediummaydecreasewithadecreasingnumberofcommodities,orwithanincreasingrapidityoftheircirculation.

Withageneralriseinthepricesofcommodities,thequantityofthecirculatingmediumwillremainconstant,providedthenumberofcommoditiesincirculationdecreaseproportionallytotheincreaseintheirprices,orprovidedthevelocityofcurrency118CAPITALincreaseatthesamerateaspricesrise,thenumberofcommoditiesincirculationremainingconstant.Thequantityofthecirculatingmediummaydecrease,owingtothenumberofcommoditiesdecreasingmorerapidly;ortothevelocityofcurrencyincreasingmorerapidly,thanpricesrise.

Withageneralfallinthepricesofcommodities,thequantityofthecirculatingmediumwillremainconstant,providedthenumberofcommoditiesincreaseproportionallytotheirfallinprice,orprovidedthevelocityofcurrencydecreaseinthesameproportion.Thequantityofthecirculatingmediumwillincrease,providedthenumberofcommoditiesincreasequicker,ortherapidityofcirculationdecreasequicker,thanthepricesfall.

Thevariationsofthedifferentfactorsmaymutuallycompensateeachother,sothatnotwithstandingtheircontinuedinstability,thesumofthepricestoberealisedandthequantityofmoneyincirculationremainconstant;consequently,wefind,especiallyifwetakelongperiodsintoconsideration,thatthedeviationsfromtheaveragelevel,ofthequantityofmoneycurrentinanycountry,aremuchsmallerthanweshouldatfirstsightexpect,apartofcoursefromexcessiveperturbationsperiodicallyarisingfromindustrialandcommercialcrises,orlessfrequently,fromfluctuationsinthevalueofmoney.

Thelaw,thatthequantityofthecirculatingmediumisdeterminedbythesumofthepricesofthecommoditiescirculating,andtheaveragevelocityofcurrency31mayalsobestatedasfollows:giventhesumofthevaluesofcommodities,andtheaveragerapidityoftheirmetamorphoses,thequantityofpreciousmetalcurrentasmoneydependsonthevalueofthatpreciousmetal.Theerroneousopinionthatitis,onthecontrary,pricesthataredeterminedbythequantityofthecirculatingmedium,andthatthelatterdependsonthequantityofthepreciousmetalsinaPART1:COMMODITIESANDMONEY119country;32thisopinionwasbasedbythosewhofirstheldit,ontheabsurdhypothesisthatcommoditiesarewithoutaprice,andmoneywithoutavalue,whentheyfirstenterintocirculation,andthat,onceinthecirculation,analiquotpartofthemedleyofcommoditiesisexchangedforanaliquotpartoftheheapofpreciousmetals.33C.CoinandSymbolsofValueThatmoneytakestheshapeofcoin,springsfromitsfunctionasthecirculatingmedium.Theweightofgoldrepresentedinimaginationbythepricesormoney-namesofcommodities,mustconfrontthosecommodities,withinthecirculation,intheshapeofcoinsorpiecesofgoldofagivendenomination.

Coining,liketheestablishmentofastandardofprices,isthebusinessoftheState.Thedifferentnationaluniformswornathomebygoldandsilverascoins,anddoffedagaininthemarketoftheworld,indicatetheseparationbetweentheinternalornationalspheresofthecirculationofcommodities,andtheiruniversalsphere.

Theonlydifference,therefore,betweencoinandbullion,isoneofshape,andgoldcanatanytimepassfromoneformtotheother.34Butnosoonerdoescoinleavethemint,thanitimmediatelyfindsitselfonthehigh-roadtothemeltingpot.Duringtheircurrency,coinswearaway,somemore,othersless.

Nameandsubstance,nominalweightandrealweight,begintheirprocessofseparation.Coinsofthesamedenominationbecomedifferentinvalue,becausetheyaredifferentinweight.Theweightofgoldfixeduponasthestandardofprices,deviatesfromtheweightthatservesasthecirculatingmedium,andthelattertherebyceasesanylongertobearealequivalentofthecommoditieswhosepricesitrealises.Thehistoryofcoinageduringthemiddleagesanddownintothe18th120CAPITALcentury,recordstheeverrenewedconfusionarisingfromthiscause.Thenaturaltendencyofcirculationtoconvertcoinsintoameresemblanceofwhattheyprofesstobe,intoasymboloftheweightofmetaltheyareofficiallysupposedtocontain,isrecognisedbymodernlegislation,whichfixesthelossofweightsufficienttodemonetiseagoldcoin,ortomakeitnolongerlegaltender.

Thefactthatthecurrencyofcoinsitselfeffectsaseparationbetweentheirnominalandtheirrealweight,creatingadistinctionbetweenthemasmerepiecesofmetalontheonehand,andascoinswithadefinitefunctionontheother–thisfactimpliesthelatentpossibilityofreplacingmetalliccoinsbytokensofsomeothermaterial,bysymbolsservingthesamepurposesascoins.Thepracticaldifficultiesinthewayofcoiningextremelyminutequantitiesofgoldorsilver,andthecircumstancethatatfirstthelesspreciousmetalisusedasameasureofvalueinsteadofthe-moreprecious,copperinsteadofsilver,silverinsteadofgold,andthatthelesspreciouscirculatesasmoneyuntildethronedbythemoreprecious–allthesefactsexplainthepartshistoricallyplayedbysilverandcoppertokensassubstitutesforgoldcoins.Silverandcoppertokenstaketheplaceofgoldinthoseregionsofthecirculationwherecoinspassfromhandtohandmostrapidly,andaresubjecttothemaximumamountofwearandtear.Thisoccurswheresalesandpurchasesonaverysmallscalearecontinuallyhappening.Inordertopreventthesesatellitesfromestablishingthemselvespermanentlyintheplaceofgold,positiveenactmentsdeterminetheextenttowhichtheymustbecompulsorilyreceivedaspaymentinsteadofgold.Theparticulartrackspursuedbythedifferentspeciesofcoinincurrency,runnaturallyintoeachother.Thetokenskeepcompanywithgold,topayfractionalpartsofthesmallestgoldcoin;goldis,ontheonehand,constantlypouringintoretailcirculation,PART1:COMMODITIESANDMONEY121andontheotherhandisasconstantlybeingthrownoutagainbybeingchangedintotokens.35Theweightofmetalinthesilverandcoppertokensisarbitrarilyfixedbylaw.Whenincurrency,theywearawayevenmorerapidlythangoldcoins.Hencetheirfunctionsaretotallyindependentoftheirweight,andconsequentlyofallvalue.Thefunctionofgoldascoinbecomescompletelyindependentofthemetallicvalueofthatgold.Thereforethingsthatarerelativelywithoutvalue,suchaspapernotes,canserveascoinsinitsplace.Thispurelysymboliccharacteristoacertainextentmaskedinmetaltokens.Inpapermoneyitstandsoutplainly.Infact,cen'estquelepremierpasquico?te.

WealludehereonlytoinconvertiblepapermoneyissuedbytheStateandhavingcompulsorycirculation.

Ithasitsimmediateorigininthemetalliccurrency.

Moneybaseduponcreditimpliesontheotherhandconditions,which,fromourstandpointofthesimplecirculationofcommodities,areasyettotallyunknowntous.Butwemayaffirmthismuch,thatjustastruepapermoneytakesitsriseinthefunctionofmoneyasthecirculatingmedium,somoneybaseduponcredittakesrootspontaneouslyinthefunctionofmoneyasthemeansofpayment.36TheStateputsincirculationbitsofpaperonwhichtheirvariousdenominations,say￡1,￡5,&c.,areprinted.Insofarastheyactuallytaketheplaceofgoldtothesameamount,theirmovementissubjecttothelawsthatregulatethecurrencyofmoneyitself.

Alawpeculiartothecirculationofpapermoneycanspringuponlyfromtheproportioninwhichthatpapermoneyrepresentsgold.Suchalawexists;statedsimply,itisasfollows:theissueofpapermoneymustnotexceedinamountthegold(orsilverasthecasemaybe)whichwouldactuallycirculateifnotreplacedbysymbols.Nowthequantityofgoldwhichthecirculationcanabsorb,constantlyfluctuates122CAPITALaboutagivenlevel.Still,themassofthecirculatingmediuminagivencountryneversinksbelowacertainminimumeasilyascertainedbyactualexperience.Thefactthatthisminimummasscontinuallyundergoeschangesinitsconstituentparts,orthatthepiecesofgoldofwhichitconsistsarebeingconstantlyreplacedbyfreshones,causesofcoursenochangeeitherinitsamountorinthecontinuityofitscirculation.Itcanthereforebereplacedbypapersymbols.If,ontheotherhand,alltheconduitsofcirculationwereto-dayfilledwithpapermoneytothefullextentoftheircapacityforabsorbingmoney,theymightto-morrowbeoverflowinginconsequenceofafluctuationinthecirculationofcommodities.Therewouldnolongerbeanystandard.Ifthepapermoneyexceeditsproperlimit,whichistheamountingoldcoinsofthelikedenominationthatcanactuallybecurrent,itwould,apartfromthedangeroffallingintogeneraldisrepute,representonlythatquantityofgold,which,inaccordancewiththelawsofthecirculationofcommodities,isrequired,andisalonecapableofbeingrepresentedbypaper.Ifthequantityofpapermoneyissuedbedoublewhatitoughttobe,then,asamatteroffact,￡1wouldbethemoney-namenotof1/4ofanounce,butof1/8ofanounceofgold.Theeffectwouldbethesameasifanalterationhadtakenplaceinthefunctionofgoldasastandardofprices.Thosevaluesthatwerepreviouslyexpressedbythepriceof￡1wouldnowbeexpressedbythepriceof￡2.

Papermoneyisatokenrepresentinggoldormoney.

Therelationbetweenitandthevaluesofcommoditiesisthis,thatthelatterareideallyexpressedinthesamequantitiesofgoldthataresymbolicallyrepresentedbythepaper.Onlyinsofaraspapermoneyrepresentsgold,whichlikeallothercommoditieshasvalue,isitasymbolofvalue.37Finally,someonemayaskwhygoldiscapableofbeingreplacedbytokensthathavenovalue?But,PART1:COMMODITIESANDMONEY123aswehavealreadyseen,itiscapableofbeingsoreplacedonlyinsofarasitfunctionsexclusivelyascoin,orasthecirculatingmedium,andasnothingelse.Now,moneyhasotherfunctionsbesidesthisone,andtheisolatedfunctionofservingasthemerecirculatingmediumisnotnecessarilytheonlyoneattachedtogoldcoin,althoughthisisthecasewiththoseabradedcoinsthatcontinuetocirculate.Eachpieceofmoneyisamerecoin,ormeansofcirculation,onlysolongasitactuallycirculates.Butthisisjustthecasewiththatminimummassofgold,whichiscapableofbeingreplacedbypapermoney.Thatmassremainsconstantlywithinthesphereofcirculation,continuallyfunctionsasacirculatingmedium,andexistsexclusivelyforthatpurpose.ItsmovementthereforerepresentsnothingbutthecontinuedalternationoftheinversephasesofthemetamorphosisC–M–C,phasesinwhichcommoditiesconfronttheirvalue-forms,onlytodisappearagainimmediately.

Theindependentexistenceoftheexchange-valueofacommodityishereatransientapparition,bymeansofwhichthecommodityisimmediatelyreplacedbyanothercommodity.Hence,inthisprocesswhichcontinuallymakesmoneypassfromhandtohand,themeresymbolicalexistenceofmoneysuffices.Itsfunctionalexistenceabsorbs,sotosay,itsmaterialexistence.Beingatransientandobjectivereflexofthepricesofcommodities,itservesonlyasasymbolofitself,andisthereforecapableofbeingreplacedbyatoken.38Onethingis,however,requisite;thistokenmusthaveanobjectivesocialvalidityofitsown,andthisthepapersymbolacquiresbyitsforcedcurrency.

ThiscompulsoryactionoftheStatecantakeeffectonlywithinthatinnersphereofcirculationwhichiscoterminouswiththeterritoriesofthecommunity,butitisalsoonlywithinthatspherethatmoneycompletelyrespondstoitsfunctionofbeingthecirculatingmedium,orbecomescoin.

124CAPITALSection3:MoneyThecommoditythatfunctionsasameasureofvalue,and,eitherinitsownpersonorbyarepresentative,asthemediumofcirculation,ismoney.Gold(orsilver)isthereforemoney.Itfunctionsasmoney,ontheonehand,whenithastobepresentinitsowngoldenperson.Itisthenthemoney-commodity,neithermerelyideal,asinitsfunctionofameasureofvalue,norcapableofbeingrepresented,asinitsfunctionofcirculatingmedium.Ontheotherhand,italsofunctionsasmoney,whenbyvirtueofitsfunction,whetherthatfunctionbeperformedinpersonorbyrepresentative,itcongealsintothesoleformofvalue,theonlyadequateformofexistenceofexchange-value,inoppositiontouse-value,representedbyallothercommodities.

A.HoardingThecontinualmovementincircuitsofthetwoantitheticalmetamorphosesofcommodities,ortheneverceasingalternationofsaleandpurchase,isreflectedintherestlesscurrencyofmoney,orinthefunctionthatmoneyperformsofaperpetuummobileofcirculation.Butsosoonastheseriesofmetamorphosesisinterrupted,sosoonassalesarenotsupplementedbysubsequentpurchases,moneyceasestobemobilised;itistransformed,asBoisguillebertsays,from"meuble"into"immeuble,"frommovableintoimmovable,fromcoinintomoney.

Withtheveryearliestdevelopmentofthecirculationofcommodities,thereisalsodevelopedthenecessity,andthepassionatedesire,toholdfasttheproductofthefirstmetamorphosis.Thisproductisthetransformedshapeofthecommodity,oritsgold-PART1:COMMODITIESANDMONEY125chrysalis.39Commoditiesarethussoldnotforthepurposeofbuyingothers,butinordertoreplacetheircommodity-formbytheirmoney-form.Frombeingthemeremeansofeffectingthecirculationofcommodities,thischangeofformbecomestheendandaim.Thechangedformofthecommodityisthuspreventedfromfunctioningasitsunconditionallyalienableform,orasitsmerelytransientmoney-form.

Themoneybecomespetrifiedintoahoard,andthesellerbecomesahoarderofmoney.

Intheearlystagesofthecirculationofcommodities,itisthesurplususe-valuesalonethatareconvertedintomoney.Goldandsilverthusbecomeofthemselvessocialexpressionsforsuperfluityorwealth.

Thisnaiveformofhoardingbecomesperpetuatedinthosecommunitiesinwhichthetraditionalmodeofproductioniscarriedonforthesupplyofafixedandlimitedcircleofhomewants.ItisthuswiththepeopleofAsia,andparticularlyoftheEastIndies.

Vanderlint,whofanciesthatthepricesofcommoditiesinacountryaredeterminedbythequantityofgoldandsilvertobefoundinit,askshimselfwhyIndiancommoditiesaresocheap.Answer:BecausetheHindusburytheirmoney.From1602to1734,heremarks,theyburied150millionsofpoundssterlingofsilver,whichoriginallycamefromAmericatoEurope.40Inthe10yearsfrom1856to1866,EnglandexportedtoIndiaandChina￡120,000,000insilver,whichhadbeenreceivedinexchangeforAustraliangold.MostofthesilverexportedtoChinamakesitswaytoIndia.

Astheproductionofcommoditiesfurtherdevelops,everyproducerofcommoditiesiscompelledtomakesureofthenexusrerumorthesocialpledge.41Hiswantsareconstantlymakingthemselvesfelt,andnecessitatethecontinualpurchaseofotherpeople'scommodities,whiletheproductionandsaleofhisowngoodsrequiretime,anddependuponcircumstances.

126CAPITALInorderthentobeabletobuywithoutselling,hemusthavesoldpreviouslywithoutbuying.Thisoperation,conductedonageneralscale,appearstoimplyacontradiction.Butthepreciousmetalsatthesourcesoftheirproductionaredirectlyexchangedforothercommodities.Andherewehavesales(bytheownersofcommodities)withoutpurchases(bytheownersofgoldorsilver).42Andsubsequentsales,byotherproducers,unfollowedbypurchases,merelybringaboutthedistributionofthenewlyproducedpreciousmetalsamongalltheownersofcommodities.Inthisway,allalongthelineofexchange,hoardsofgoldandsilverofvariedextentareaccumulated.Withthepossibilityofholdingandstoringupexchange-valueintheshapeofaparticularcommodity,arisesalsothegreedforgold.Alongwiththeextensionofcirculation,increasesthepowerofmoney,thatabsolutelysocialformofwealtheverreadyforuse.

"Goldisawonderfulthing!Whoeverpossessesitislordofallhewants.BymeansofgoldonecanevengetsoulsintoParadise."(ColumbusinhisletterfromJamaica,1503.)Sincegolddoesnotdisclosewhathasbeentransformedintoit,everything,commodityornot,isconvertibleintogold.Everythingbecomessaleableandbuyable.Thecirculationbecomesthegreatsocialretortintowhicheverythingisthrown,tocomeoutagainasagold-crystal.Notevenarethebonesofsaints,andstilllessaremoredelicateressacrosanctae,extracommerciumhominumabletowithstandthisalchemy.43Justaseveryqualitativedifferencebetweencommoditiesisextinguishedinmoney,somoney,onitsside,liketheradicallevellerthatitis,doesawaywithalldistinctions.43aButmoneyitselfisacommodity,anexternalobject,capableofbecomingtheprivatepropertyofanyindividual.Thussocialpowerbecomestheprivatepowerofprivatepersons.TheancientsthereforedenouncedmoneyassubversiveoftheeconomicandmoralorderofPART1:COMMODITIESANDMONEY127things.43bModernsociety,which,soonafteritsbirth,pulledPlutusbythehairofhisheadfromthebowelsoftheearth,44greetsgoldasitsHolyGrail,astheglitteringincarnationoftheveryprincipleofitsownlife.

Acommodity,initscapacityofause-value,satisfiesaparticularwant,andisaparticularelementofmaterialwealth.Butthevalueofacommoditymeasuresthedegreeofitsattractionforallotherelementsofmaterialwealth,andthereforemeasuresthesocialwealthofitsowner.Toabarbarianownerofcommodities,andeventoaWest-Europeanpeasant,valueisthesameasvalue-form,andtherefore,tohimtheincreaseinhishoardofgoldandsilverisanincreaseinvalue.Itistruethatthevalueofmoneyvaries,atonetimeinconsequenceofavariationinitsownvalue,atanother,inconsequenceofachangeinthevaluesofcommodities.Butthis,ontheonehand,doesnotprevent200ouncesofgoldfromstillcontainingmorevaluethan100ounces,nor,ontheotherhand,doesithindertheactualmetallicformofthisarticlefromcontinuingtobetheuniversalequivalentformofallothercommodities,andtheimmediatesocialincarnationofallhumanlabour.Thedesireafterhoardingisinitsverynatureunsatiable.Initsqualitativeaspect,orformallyconsidered,moneyhasnoboundstoitsefficacy,i.e.,itistheuniversalrepresentativeofmaterialwealth,becauseitisdirectlyconvertibleintoanyothercommodity.But,atthesametime,everyactualsumofmoneyislimitedinamount,and,therefore,asameansofpurchasing,hasonlyalimitedefficacy.Thisantagonismbetweenthequantitativelimitsofmoneyanditsqualitativeboundlessness,continuallyactsasaspurtothehoarderinhisSisyphus-likelabourofaccumulating.Itiswithhimasitiswithaconquerorwhoseesineverynewcountryannexed,onlyanewboundary.

Inorderthatgoldmaybeheldasmoney,andmade128CAPITALtoformahoard,itmustbepreventedfromcirculating,orfromtransformingitselfintoameansofenjoyment.

Thehoarder,therefore,makesasacrificeofthelustsofthefleshtohisgoldfetish.HeactsinearnestuptotheGospelofabstention.Ontheotherhand,hecanwithdrawfromcirculationnomorethanwhathehasthrownintoitintheshapeofcommodities.Themoreheproduces,themoreheisabletosell.Hardwork,saving,andavariceare,therefore,histhreecardinalvirtues,andtosellmuchandbuylittlethesumofhispoliticaleconomy.45Bythesideofthegrossformofahoard,wefindalsoitsaestheticforminthepossessionofgoldandsilverarticles.Thisgrowswiththewealthofcivilsociety.

"Soyonsrichesouparaissonsriches"(Diderot).

Inthiswaythereiscreated,ontheonehand,aconstantlyextendingmarketforgoldandsilver,unconnectedwiththeirfunctionsasmoney,and,ontheotherhand,alatentsourceofsupply,towhichrecourseishadprincipallyintimesofcrisisandsocialdisturbance.

Hoardingservesvariouspurposesintheeconomyofthemetalliccirculation.Itsfirstfunctionarisesoutoftheconditionstowhichthecurrencyofgoldandsilvercoinsissubject.Wehaveseenhow,alongwiththecontinualfluctuationsintheextentandrapidityofthecirculationofcommoditiesandintheirprices,thequantityofmoneycurrentunceasinglyebbsandflows.

Thismassmust,therefore,becapableofexpansionandcontraction.Atonetimemoneymustbeattractedinordertoactascirculatingcoin,atanother,circulatingcoinmustberepelledinordertoactagainasmoreorlessstagnantmoney.Inorderthatthemassofmoney,actuallycurrent,mayconstantlysaturatetheabsorbingpowerofthecirculation,itisnecessarythatthequantityofgoldandsilverinacountrybegreaterthanthequantityrequiredtofunctionascoin.

ThisconditionisfulfilledbymoneytakingtheformofPART1:COMMODITIESANDMONEY129hoards.Thesereservesserveasconduitsforthesupplyorwithdrawalofmoneytoorfromthecirculation,whichinthiswayneveroverflowsitsbanks.46B.MeansofPaymentInthesimpleformofthecirculationofcommoditieshithertoconsidered,wefoundagivenvaluealwayspresentedtousinadoubleshape,asacommodityatonepole,asmoneyattheoppositepole.Theownersofcommoditiescamethereforeintocontactastherespectiverepresentativesofwhatwerealreadyequivalents.Butwiththedevelopmentofcirculation,conditionsariseunderwhichthealienationofcommoditiesbecomesseparated,byanintervaloftime,fromtherealisationoftheirprices.Itwillbesufficienttoindicatethemostsimpleoftheseconditions.Onesortofarticlerequiresalonger,anotherashortertimeforitsproduction.Again,theproductionofdifferentcommoditiesdependsondifferentseasonsoftheyear.Onesortofcommoditymaybebornonitsownmarketplace,anotherhastomakealongjourneytomarket.Commodity-ownerNo.1,maythereforebereadytosell,beforeNo.

2isreadytobuy.Whenthesametransactionsarecontinuallyrepeatedbetweenthesamepersons,theconditionsofsaleareregulatedinaccordancewiththeconditionsofproduction.Ontheotherhand,theuseofagivencommodity,ofahouse,forinstance,issold(incommonparlance,let)foradefiniteperiod.Here,itisonlyattheendofthetermthatthebuyerhasactuallyreceivedtheuse-valueofthecommodity.Hethereforebuysitbeforehepaysforit.Thevendorsellsanexistingcommodity,thepurchaserbuysasthemererepresentativeofmoney,orratheroffuturemoney.

Thevendorbecomesacreditor,thepurchaserbecomesadebtor.Sincethemetamorphosisofcommodities,orthedevelopmentoftheirvalue-form,appearshere130CAPITALunderanewaspect,moneyalsoacquiresafreshfunction;itbecomesthemeansofpayment.

Thecharacterofcreditor,orofdebtor,resultsherefromthesimplecirculation.Thechangeintheformofthatcirculationstampsbuyerandsellerwiththisnewdie.Atfirst,therefore,thesenewpartsarejustastransientandalternatingasthoseofsellerandbuyer,andareinturnsplayedbythesameactors.Buttheoppositionisnotnearlysopleasant,andisfarmorecapableofcrystallisation.47Thesamecharacterscan,however,beassumedindependentlyofthecirculationofcommodities.Theclass-strugglesoftheancientworldtooktheformchieflyofacontestbetweendebtorsandcreditors,whichinRomeendedintheruinoftheplebeiandebtors.Theyweredisplacedbyslaves.Inthemiddleagesthecontestendedwiththeruinofthefeudaldebtors,wholosttheirpoliticalpowertogetherwiththeeconomicbasisonwhichitwasestablished.Nevertheless,themoneyrelationofdebtorandcreditorthatexistedatthesetwoperiodsreflectedonlythedeeper-lyingantagonismbetweenthegeneraleconomicconditionsofexistenceoftheclassesinquestion.

Letusreturntothecirculationofcommodities.

Theappearanceofthetwoequivalents,commoditiesandmoney,atthetwopolesoftheprocessofsale,hasceasedtobesimultaneous.Themoneyfunctionsnow,firstasameasureofvalueinthedeterminationofthepriceofthecommoditysold;thepricefixedbythecontractmeasurestheobligationofthedebtor,orthesumofmoneythathehastopayatafixeddate.

Secondly,itservesasanidealmeansofpurchase.

Althoughexistingonlyinthepromiseofthebuyertopay,itcausesthecommoditytochangehands.Itisnotbeforethedayfixedforpaymentthatthemeansofpaymentactuallystepsintocirculation,leavesthehandofthebuyerforthatoftheseller.Thecirculatingmediumwastransformedintoahoard,becausethePART1:COMMODITIESANDMONEY131processstoppedshortafterthefirstphase,becausetheconvertedshapeofthecommodity,viz.,themoney,waswithdrawnfromcirculation.Themeansofpaymententersthecirculation,butonlyafterthecommodityhasleftit.Themoneyisnolongerthemeansthatbringsabouttheprocess.Itonlybringsittoaclose,bysteppinginastheabsoluteformofexistenceofexchange-value,orastheuniversalcommodity.Thesellerturnedhiscommodityintomoney,inordertherebytosatisfysomewant,thehoarderdidthesameinordertokeephiscommodityinitsmoney-shape,andthedebtorinordertobeabletopay;ifhedonotpay,hisgoodswillbesoldbythesheriff.Thevalue-formofcommodities,money,isthereforenowtheendandaimofasale,andthatowingtoasocialnecessityspringingoutoftheprocessofcirculationitself.

Thebuyerconvertsmoneybackintocommoditiesbeforehehasturnedcommoditiesintomoney:inotherwords,heachievesthesecondmetamorphosisofcommoditiesbeforethefirst.Theseller'scommoditycirculates,andrealisesitsprice,butonlyintheshapeofalegalclaimuponmoney.Itisconvertedintoause-valuebeforeithasbeenconvertedintomoney.Thecompletionofitsfirstmetamorphosisfollowsonlyatalaterperiod.48Theobligationsfallingduewithinagivenperiod,representthesumofthepricesofthecommodities,thesaleofwhichgaverisetothoseobligations.Thequantityofgoldnecessarytorealisethissum,depends,inthefirstinstance,ontherapidityofcurrencyofthemeansofpayment.Thatquantityisconditionedbytwocircumstances:firsttherelationsbetweendebtorsandcreditorsformasortofchain,insuchawaythatA,whenhereceivesmoneyfromhisdebtorB,straightwayhandsitovertoChiscreditor,andsoon;thesecondcircumstanceisthelengthoftheintervalsbetweenthedifferentdue-daysoftheobligations.

132CAPITALThecontinuouschainofpayments,orretardedfirstmetamorphoses,isessentiallydifferentfromthatinterlacingoftheseriesofmetamorphoseswhichweconsideredonaformerpage.Bythecurrencyofthecirculatingmedium,theconnexionbetweenbuyersandsellers,isnotmerelyexpressed.Thisconnexionisoriginatedby,andexistsin,thecirculationalone.

Contrariwise,themovementofthemeansofpaymentexpressesasocialrelationthatwasinexistencelongbefore.

Thefactthatanumberofsalestakeplacesimultaneously,andsidebyside,limitstheextenttowhichcoincanbereplacedbytherapidityofcurrency.Ontheotherhand,thisfactisanewleverineconomisingthemeansofpayment.Inproportionaspaymentsareconcentratedatonespot,specialinstitutionsandmethodsaredevelopedfortheirliquidation.SuchinthemiddleageswerethevirementsatLyons.ThedebtsduetoAfromB,toBfromC,toCfromA,andsoon,haveonlytobeconfrontedwitheachother,inordertoannuleachothertoacertainextentlikepositiveandnegativequantities.Therethusremainsonlyasinglebalancetopay.Thegreatertheamountofthepaymentsconcentrated,thelessisthisbalancerelativelytothatamount,andthelessisthemassofthemeansofpaymentincirculation.

Thefunctionofmoneyasthemeansofpaymentimpliesacontradictionwithoutaterminusmedius.Insofarasthepaymentsbalanceoneanother,moneyfunctionsonlyideallyasmoneyofaccount,asameasureofvalue.Insofarasactualpaymentshavetobemade,moneydoesnotserveasacirculatingmedium,asameretransientagentintheinterchangeofproducts,butastheindividualincarnationofsociallabour,astheindependentformofexistenceofexchange-value,astheuniversalcommodity.ThiscontradictioncomestoaheadinthosephasesofindustrialandcommercialcriseswhichareknownasPART1:COMMODITIESANDMONEY133monetarycrises.49Suchacrisisoccursonlywheretheever-lengtheningchainofpayments,andanartificialsystemofsettlingthem,hasbeenfullydeveloped.

Wheneverthereisageneralandextensivedisturbanceofthismechanism,nomatterwhatitscause,moneybecomessuddenlyandimmediatelytransformed,fromitsmerelyidealshapeofmoneyofaccount,intohardcash.Profanecommoditiescannolongerreplaceit.Theuse-valueofcommoditiesbecomesvalueless,andtheirvaluevanishesinthepresenceofitsownindependentform.Ontheeveofthecrisis,thebourgeois,withtheself-sufficiencythatspringsfromintoxicatingprosperity,declaresmoneytobeavainimagination.Commoditiesalonearemoney.Butnowthecryiseverywhere:moneyaloneisacommodity!

Asthehartpantsafterfreshwater,sopantshissoulaftermoney,theonlywealth.50Inacrisis,theantithesisbetweencommoditiesandtheirvalue-form,money,becomesheightenedintoanabsolutecontradiction.Hence,insuchevents,theformunderwhichmoneyappearsisofnoimportance.Themoneyfaminecontinues,whetherpaymentshavetobemadeingoldorincreditmoneysuchasbank-notes.51Ifwenowconsiderthesumtotalofthemoneycurrentduringagivenperiod,weshallfindthat,giventherapidityofcurrencyofthecirculatingmediumandofthemeansofpayment,itisequaltothesumofthepricestoberealised,plusthesumofthepaymentsfallingdue,minusthepaymentsthatbalanceeachother,minusfinallythenumberofcircuitsinwhichthesamepieceofcoinservesinturnasmeansofcirculationandofpayment.Hence,evenwhenprices,rapidityofcurrency,andtheextentoftheeconomyinpayments,aregiven,thequantityofmoneycurrentandthemassofcommoditiescirculatingduringagivenperiod,suchasaday,nolongercorrespond.

Moneythatrepresentscommoditieslongwithdrawnfromcirculation,continuestobecurrent.Commodities134CAPITALcirculate,whoseequivalentinmoneywillnotappearonthescenetillsomefutureday.Moreover,thedebtscontractedeachday,andthepaymentsfallingdueonthesameday,arequiteincommensurablequantities.52Credit-moneyspringsdirectlyoutofthefunctionofmoneyasameansofpayment.Certificatesofthedebtsowingforthepurchasedcommoditiescirculateforthepurposeoftransferringthosedebtstoothers.

Ontheotherhand,tothesameextentasthesystemofcreditisextended,soisthefunctionofmoneyasameansofpayment.Inthatcharacterittakesvariousformspeculiartoitselfunderwhichitmakesitselfathomeinthesphereofgreatcommercialtransactions.

Goldandsilvercoin,ontheotherhand,aremostlyrelegatedtothesphereofretailtrade.53Whentheproductionofcommoditieshassufficientlyextendeditself,moneybeginstoserveasthemeansofpaymentbeyondthesphereofthecirculationofcommodities.Itbecomesthecommoditythatistheuniversalsubject-matterofallcontracts.54Rents,taxes,andsuchlikepaymentsaretransformedfrompaymentsinkindintomoneypayments.Towhatextentthistransformationdependsuponthegeneralconditionsofproduction,isshown,totakeoneexample,bythefactthattheRomanEmpiretwicefailedinitsattempttolevyallcontributionsinmoney.TheunspeakablemiseryoftheFrenchagriculturalpopulationunderLouisXIV.,amiserysoeloquentlydenouncedbyBoisguillebert,MarshalVauban,andothers,wasduenotonlytotheweightofthetaxes,butalsototheconversionoftaxesinkindintomoneytaxes.55InAsia,ontheotherhand,thefactthatstatetaxesarechieflycomposedofrentspayableinkind,dependsonconditionsofproductionthatarereproducedwiththeregularityofnaturalphenomena.

Andthismodeofpaymenttendsinitsturntomaintaintheancientformofproduction.ItisoneofthesecretsoftheconservationoftheOttomanEmpire.IfthePART1:COMMODITIESANDMONEY135foreigntrade,forceduponJapanbyEuropeans,shouldleadtothesubstitutionofmoneyrentsforrentsinkind,itwillbeallupwiththeexemplaryagricultureofthatcountry.Thenarroweconomicconditionsunderwhichthatagricultureiscarriedon,willbesweptaway.

Ineverycountry,certaindaysoftheyearbecomebyhabitrecognisedsettlingdaysforvariouslargeandrecurrentpayments.Thesedatesdepend,apartfromotherrevolutionsinthewheelofreproduction,onconditionscloselyconnectedwiththeseasons.

Theyalsoregulatethedatesforpaymentsthathavenodirectconnexionwiththecirculationofcommoditiessuchastaxes,rents,andsoon.Thequantityofmoneyrequisitetomakethepayments,fallingdueonthosedatesalloverthecountry,causesperiodical,thoughmerelysuperficial,perturbationsintheeconomyofthemediumofpayment.56Fromthelawoftherapidityofcurrencyofthemeansofpayment,itfollowsthatthequantityofthemeansofpaymentrequiredforallperiodicalpayments,whatevertheirsource,isininverse57proportiontothelengthoftheirperiods.58Thedevelopmentofmoneyintoamediumofpaymentmakesitnecessarytoaccumulatemoneyagainstthedatesfixedforthepaymentofthesumsowing.Whilehoarding,asadistinctmodeofacquiringriches,vanisheswiththeprogressofcivilsociety,theformationofreservesofthemeansofpaymentgrowswiththatprogress.

C.UniversalMoneyWhenmoneyleavesthehomesphereofcirculation,itstripsoffthelocalgarbswhichitthereassumes,ofastandardofprices,ofcoin,oftokens,andofasymbolofvalue,andreturnstoitsoriginalformofbullion.Inthetradebetweenthemarketsofthe136CAPITALworld,thevalueofcommoditiesisexpressedsoastobeuniversallyrecognised.Hencetheirindependentvalue-formalso,inthesecases,confrontsthemundertheshapeofuniversalmoney.Itisonlyinthemarketsoftheworldthatmoneyacquirestothefullextentthecharacterofthecommoditywhosebodilyformisalsotheimmediatesocialincarnationofhumanlabourintheabstract.Itsrealmodeofexistenceinthissphereadequatelycorrespondstoitsidealconcept.

Withinthesphereofhomecirculation,therecanbebutonecommoditywhich,byservingasameasureofvalue,becomesmoney.Inthemarketsoftheworldadoublemeasureofvalueholdssway,goldandsilver.59Moneyoftheworldservesastheuniversalmediumofpayment,astheuniversalmeansofpurchasing,andastheuniversallyrecognisedembodimentofallwealth.Itsfunctionasameansofpaymentinthesettlingofinternationalbalancesisitschiefone.

Hencethewatchwordofthemercantilists,balanceoftrade.60Goldandsilverserveasinternationalmeansofpurchasingchieflyandnecessarilyinthoseperiodswhenthecustomaryequilibriumintheinterchangeofproductsbetweendifferentnationsissuddenlydisturbed.Andlastly,itservesastheuniversallyrecognisedembodimentofsocialwealth,wheneverthequestionisnotofbuyingorpaying,butoftransferringwealthfromonecountrytoanother,andwheneverthistransferenceintheformofcommoditiesisrenderedimpossible,eitherbyspecialconjuncturesinthemarketsorbythepurposeitselfthatisintended.61Justaseverycountryneedsareserveofmoneyforitshomecirculationso,too,itrequiresoneforexternalcirculationinthemarketsoftheworld.Thefunctionsofhoards,therefore,ariseinpartoutofthefunctionofmoney,asthemediumofthehomecirculationandhomepayments,andinpartoutofitsfunctionofmoneyoftheworld.62Forthislatterfunction,thegenuinemoney-commodity,actualgoldandsilver,isPART1:COMMODITIESANDMONEY137necessary.Onthataccount,SirJamesSteuart,inordertodistinguishthemfromtheirpurelylocalsubstitutes,callsgoldandsilver"moneyoftheworld."Thecurrentofthestreamofgoldandsilverisadoubleone.Ontheonehand,itspreadsitselffromitssourcesoverallthemarketsoftheworld,inordertobecomeabsorbed,tovariousextents,intothedifferentnationalspheresofcirculation,tofilltheconduitsofcurrency,toreplaceabradedgoldandsilvercoins,tosupplythematerialofarticlesofluxury,andtopetrifyintohoards.63Thisfirstcurrentisstartedbythecountriesthatexchangetheirlabour,realisedincommodities,forthelabourembodiedinthepreciousmetalsbygoldandsilver-producingcountries.Ontheotherhand,thereisacontinualflowingbackwardsandforwardsofgoldandsilverbetweenthedifferentnationalspheresofcirculation,acurrentwhosemotiondependsontheceaselessfluctuationsinthecourseofexchange.64Countriesinwhichthebourgeoisformofproductionisdevelopedtoacertainextent,limitthehoardsconcentratedinthestrongroomsofthebankstotheminimumrequiredfortheproperperformanceoftheirpeculiarfunctions.65Wheneverthesehoardsarestrikinglyabovetheiraveragelevel,itis,withsomeexceptions,anindicationofstagnationinthecirculationofcommodities,ofaninterruptionintheevenflowoftheirmetamorphoses.66NOTES:1Thequestion—Whydoesnotmoneydirectlyrepresentlabour-time,sothatapieceofpapermayrepresent,forinstance,xhours'labour,isatbottomthesameasthequestionwhy,giventheproductionofcommodities,mustproductstaketheformofcommodities?Thisisevident,sincetheirtakingtheformofcommoditiesimpliestheirdifferentiation138CAPITALintocommoditiesandmoney.Or,whycannotprivatelabour—labourfortheaccountofprivateindividuals—betreatedasitsopposite,immediatesociallabour?IhaveelsewhereexaminedthoroughlytheUtopianideaof"labour-money"inasocietyfoundedontheproductionofcommodities(l.c.,p.61,seq.).OnthispointIwillonlysayfurther,thatOwen's"labour-money,"forinstance,isnomore"money"thanaticketforthetheatre.Owenpre-supposesdirectlyassociatedlabour,aformofproductionthatisentirelyinconsistentwiththeproductionofcommodities.Thecertificateoflabourismerelyevidenceoftheparttakenbytheindividualinthecommonlabour,andofhisrighttoacertainportionofthecommonproducedestinedforconsumption.ButitneverentersintoOwen'sheadtopre-supposetheproductionofcommodities,andatthesametime,byjugglingwithmoney,totrytoevadethenecessaryconditionsofthatproduction.

2Savagesandhalf-civilisedracesusethetonguedifferently.

CaptainParrysaysoftheinhabitantsonthewestcoastofBaffin'sBay:"Inthiscase(hereferstobarter)theylickedit(thethingrepresentedtothem)twicetotheirtongues,afterwhichtheyseemedtoconsiderthebargainsatisfactorilyconcluded."Inthesameway,theEasternEsquimauxlickedthearticlestheyreceivedinexchange.IfthetongueisthususedintheNorthastheorganofappropriation,nowonderthat,intheSouth,thestomachservesastheorganofaccumulatedproperty,andthataKaffirestimatesthewealthofamanbythesizeofhisbelly.ThattheKaffirsknowwhattheyareaboutisshownbythefollowing:atthesametimethattheofficialBritishHealthReportof1864disclosedthedeficiencyoffat-formingfoodamongalargepartoftheworking-class,acertainDr.Harvey(not,however,thecelebrateddiscovererofthecirculationoftheblood),madeagoodthingbyadvertisingrecipesforreducingthesuperfluousfatofthebourgeoisieandaristocracy.

3SeeKarlMarx:"ZurKritik,&c.""TheorienvonderMasseinheitdesGeldes,"p.53,seq.

4"WherevergoldandsilverhavebylawbeenmadetoperformthefunctionofmoneyorofameasureofvaluesidebyPART1:COMMODITIESANDMONEY139side,ithasalwaysbeentried,butinvain,totreatthemasoneandthesamematerial.Toassumethatthereisaninvariableratiobetweenthequantitiesofgoldandsilverinwhichagivenquantityoflabour-timeisincorporated,istoassumeinfact,thatgoldandsilverareofoneandthesamematerial,andthatagivenmassofthelessvaluablemetal,silver,isaconstantfractionofagivenmassofgold.FromthereignofEdwardIII.tothetimeofGeorgeII.,thehistoryofmoneyinEnglandconsistsofonelongseriesofperturbationscausedbytheclashingofthelegallyfixedratiobetweenthevaluesofgoldandsilver,withthefluctuationsintheirrealvalues.Atonetimegoldwastoohigh,atanother,silver.Themetalthatforthetimebeingwasestimatedbelowitsvalue,waswithdrawnfromcirculation,matedandexported.Theratiobetweenthetwometalswasthenagainalteredbylaw,butthenewnominalratiosooncameintoconflictagainwiththerealone.Inourowntimes,theslightandtransientfallinthevalueofgoldcomparedwithsilver,whichwasaconsequenceoftheIndo-Chinesedemandforsilver,producedonafarmoreextendedscaleinFrancethesamephenomena,exportofsilver,anditsexpulsionfromcirculationbygold.Duringtheyears1855,1856and1857,theexcessinFranceofgold-importsovergold-exportsamountedto￡41,580,000,whiletheexcessofsilver-exportsoversilver-importswas￡14,704,000.Infact,inthosecountriesinwhichbothmetalsarelegallymeasuresofvalue,andthereforebothlegaltender,sothateveryonehastheoptionofpayingineithermetal,themetalthatrisesinvalueisatapremium,and,likeeveryothercommodity,measuresitspriceintheover-estimatedmetalwhichaloneservesinrealityasthestandardofvalue.Theresultofallexperienceandhistorywithregardtothisequationissimplythat,wheretwocommoditiesperformbylawthefunctionsofameasureofvalue,inpracticeonealonemaintainsthatposition."(KarlMarx,l.c.,pp.52,53.)5Thepeculiarcircumstance,thatwhiletheounceofgoldservesinEnglandastheunitofthestandardofmoney,thepoundsterlingdoesnotformanaliquotpartofit,hasbeenexplainedasfollows:"Ourcoinagewasoriginallyadaptedto140CAPITALtheemploymentofsilveronly,hence,anounceofsilvercanalwaysbedividedintoacertainadequatenumberofpiecesofcoin,butasgoldwasintroducedatalaterperiodintoacoinageadaptedonlytosilver,anounceofgoldcannotbecoinedintoanaliquotnumberofpieces."Maclaren,"ASketchoftheHistoryoftheCurrency."London,1858,p.16.

6WithEnglishwriterstheconfusionbetweenmeasureofvalueandstandardofprice(standardofvalue)isindescribable.

Theirfunctions,aswellastheirnames,areconstantlyinterchanged.

7Moreover,ithasnotgeneralhistoricalvalidity.

8ItisthusthatthepoundsterlinginEnglishdenoteslessthanone-thirdofitsoriginalweight;thepoundScot,beforetheunion,only1-36th;theFrenchlivre,1-74th;theSpanishmaravedi,lessthan1-1,000th;andthePortuguesereiastillsmallerfraction.

9"Lemonetelequalioggisonoideal,sonolepi?antiched'ogninazione,etuttefuronountemporeal,epercheeranorealiconessesicontava"["Thecoinswhichtodayareidealaretheoldestcoinsofeverynation,andallofthemwereoncereal,andpreciselybecausetheywererealtheywereusedforcalculation"](Galiani:Dellamoneta,l.c.,p.153.)10DavidUrquhartremarksinhis"FamiliarWords"onthemonstrosity(!)thatnow-a-daysapound(sterling),whichistheunitoftheEnglishstandardofmoney,isequaltoaboutaquarterofanounceofgold."Thisisfalsifyingameasure,notestablishingastandard."Heseesinthis"falsedenomination"oftheweightofgold,asineverythingelse,thefalsifyinghandofcivilisation.

11WhenAnacharsiswasaskedforwhatpurposestheGreeksusedmoney,hereplied,"Forreckoning."(Ashen.Deipn.1.iv.

49v.2.ed.Schweighauser,1802.)12"Owingtothefactthatmoney,whenservingasthestandardofprice,appearsunderthesamereckoningnamesasdothepricesofcommodities,andthatthereforethesumof￡317s.101/2d.maysignifyontheonehandanounceweightofgold,andontheother,thevalueofatonofiron,thisreckoningnameofmoneyhasbeencalleditsmint-price.HencetherePART1:COMMODITIESANDMONEY141spranguptheextraordinarynotion,thatthevalueofgoldisestimatedinitsownmaterial,andthat,incontradistinctiontoallothercommodities,itspriceisfixedbytheState.Itwaserroneouslythoughtthatthegivingofreckoningnamestodefiniteweightsofgold,isthesamethingasfixingthevalueofthoseweights."(KarlMarx,l.c.,p.52.)13See"TheorienvonderMasseinheitdesGeldes"in"ZurKritikderPolOekon.&c.,"p.53,seq.Thefantasticnotionsaboutraisingorloweringthemint-priceofmoneybytransferringtogreaterorsmallerweightsofgoldorsilver,thenamesalreadylegallyappropriatedtofixedweightsofthosemetals;suchnotions,atleastinthosecasesinwhichtheyaim,notatclumsyfinancialoperationsagainstcreditors,bothpublicandprivatebutateconomicquackremedies,havebeensoexhaustivelytreatedbyWm.Pettyinhis"Quantulumcunqueconcerningmoney:TotheLordMarquisofHalifax,1682,"thatevenhisimmediatefollowers,SirDudleyNorthandJohnLocke,nottomentionlaterones,couldonlydilutehim."Ifthewealthofanation"heremarks,"couldbedecupledbyaproclamation,itwerestrangethatsuchproclamationshavenotlongsincebeenmadebyourGovernors."(l.c.,p.36.)14"Oubien,ilfautconsentiràdirequ'unevaleurd'unmillionenargentvautplusqu'unevaleurégaleenmarchandises."["Orindeeditmustbeadmittedthatamillioninmoneyisworthmorethananequalvalueincommodities"](LeTrosne,l.c.,p.919),whichamountstosaying"qu'unevaleurvautplusqu'unevaleurégale."["thatonevalueisworthmorethananothervaluewhichisequaltoit."]15Jeromehadtowrestlehard,notonlyinhisyouthwiththebodilyflesh,asisshownbyhisfightinthedesertwiththehandsomewomenofhisimagination,butalsoinhisoldagewiththespiritualflesh."Ithought,"hesays,"IwasinthespiritbeforetheJudgeoftheUniverse.""Whoartthou?"askedavoice."IamaChristian.""Thouliest,"thunderedbackthegreatJudge,"thouartnoughtbutaCiceronian."16"ecsetou...purost'antameeibesqaipanta,jhsind'Hracleitos,caipurapantwn,wopercrusoucrhmatacaicrhmatwncrusos."["AsHeraclitussays,all142CAPITALthingsareexchangedforfireandfireforallthings,aswaresareexchangedforgoldandgoldforwares."](F.Lassalle:"DiePhilosophieHerakleitosdesDunkeln."Berlin,1858,Vol.

I,p.222.)Lassalleinhisnoteonthispassage,p.224,n.3.,erroneouslymakesgoldameresymbolofvalue.

17NotebytheInstituteofMarxism-LeninismintheRussianedition.—InhisletterofNovember28,1878,toN.

F.Danielson(Nikolai-on)Marxproposedthatthissentencebecorrectedtoreadasfollows:"And,asamatteroffact,thevalueofeachsingleyardisbutthematerialisedformofapartofthesociallabourexpendedonthewholenumberofyards."AnanalogouscorrectionwasmadeinacopyofthesecondGermaneditionofthefirstvolumeof"Capital"belongingtoMarx;however,notinhishandwriting.

18"Touteventeestachat."["Everysaleisapurchase."](Dr.Quesnay:"DialoguessurleCommerceetlesTravauxdesArtisans."Physiocratesed.DaireI.Partie,Paris,1846,p.170),orasQuesnayinhis"Maximesgénérales"putsit,"Vendreestacheter."["Tosellistobuy."]19"Leprixd'unemarchandisenepouvantêtrepayéqueparleprixd'uneautremarchandise"(MercierdelaRivière:"L'Ordrenatureletessentieldessociétéspolitiques."["Thepriceofonecommoditycanonlybepaidbythepriceofanothercommodity"]Physiocrates,ed.DaireII.Partie,p.554.)20"Pouravoircetargent,ilfautavoirvendu,"["Inordertohavethismoney,onemusthavemadeasale,"]l.c.,p.543.

21Asbeforeremarked,theactualproducerofgoldorsilverformsanexception.Heexchangeshisproductdirectlyforanothercommodity,withouthavingfirstsoldit.

22"Sil'argentreprésente,dansnosmains,leschosesquenouspouvonsdésirerd'acheter,ilyreprésenteaussileschosesquenousavonsvenduespourcetargent."["Ifmoneyrepresents,inourhands,thethingswecanwishtobuy,italsorepresentsthethingswehavesoldtoobtainthatmoney"](MercierdelaRivière,l.c.,p.586.)23"Ilyadonc...quatretermesettroiscontractants,dontl'unintervientdeuxfois"["Therearetherefore...fourtermsandthreecontractingparties,oneofwhomintervenestwice"]PART1:COMMODITIESANDMONEY143(LeTrosne,l.c.,p.909.)24Self-evidentasthismaybe,itisneverthelessforthemostpartunobservedbypoliticaleconomists,andespeciallybythe"Free-traderVulgaris."25SeemyobservationsonJamesMillin"ZurKritik,&c.,"pp.74-76.Withregardtothissubject,wemaynoticetwomethodscharacteristicofapologeticeconomy.Thefirstistheidentificationofthecirculationofcommoditieswiththedirectbarterofproducts,bysimpleabstractionfromtheirpointsofdifference;thesecondis,theattempttoexplainawaythecontradictionsofcapitalistproduction,byreducingtherelationsbetweenthepersonsengagedinthatmodeofproduction,tothesimplerelationsarisingoutofthecirculationofcommodities.

Theproductionandcirculationofcommoditiesarehowever,phenomenathatoccurtoagreaterorlessextentinmodesofproductionthemostdiverse.Ifweareacquaintedwithnothingbuttheabstractcategoriesofcirculation,whicharecommontoallthesemodesofproduction,wecannotpossiblyknowanythingofthespecificpointsofdifferenceofthosemodes,norpronounceanyjudgmentuponthem.InnoscienceissuchabigfussmadewithcommonplacetruismsasinPoliticalEconomy.Forinstance,J.B.Saysetshimselfupasajudgeofcrises,because,forsooth,heknowsthatacommodityisaproduct.

26Translator'snote.—Thiswordishereusedinitsoriginalsignificationofthecourseortrackpursuedbymoneyasitchangesfromhandtohand,acoursewhichessentiallydiffersfromcirculation.

27Evenwhenthecommodityissoldoverandoveragain,aphenomenonthatatpresenthasnoexistenceforus,itfalls,whendefinitelysoldforthelasttime,outofthesphereofcirculationintothatofconsumption,whereitserveseitherasmeansofsubsistenceormeansofproduction.

28"Il(l'argent)n'ad'autremouvementqueceluiquiluiestimpriméparlesproductions."["It"(money)"hasnoothermotionthanthatimpartedtoitbytheproducts"](LeTrosne,l.c.,p.885.)29"Cesontlesproductionsquile(l'argent)mettenten144CAPITALmouvementetlefontcirculer...Lacéléritédesonmouvement(c.del'argent)suppléeàsaquantité.Lorsqu'ilenestbesoinilnefaitqueglisserd'unemaindansl'autresanss'arrêteruninstant."["Itisproductswhichsetit"(money)"inmotionandmakeitcirculate...Thevelocityofits"(money's)"motionsupplementsitsquantity.Whennecessary,itdoesnothingbutslidefromhandtohand,withoutstoppingforamoment"](LeTrosne,l.c..pp.915,916.)30"Moneybeing...thecommonmeasureofbuyingandselling,everybodywhohathanythingtosell,andcannotprocurechapmenforit,ispresentlyapttothink,thatwantofmoneyinthekingdom,orcountry,isthecausewhyhisgoodsdonotgooff;andso,wantofmoneyisthecommoncry;whichisagreatmistake...Whatdothesepeoplewant,whocryoutformoney?...Thefarmercomplains...hethinksthatweremoremoneyinthecountry;heshouldhaveapriceforhisgoods.

Thenitseemsmoneyisnothiswant,butapriceforhiscornandcattel,whichhewouldsell,butcannot...Whycannothegetaprice?...(1)Eitherthereistoomuchcornandcattelinthecountry,sothatmostwhocometomarkethaveneedofselling,ashehath,andfewofbuying;or(2)Therewantstheusualventabroadbytransportation...,or(3)Theconsumptionfails,aswhenmen,byreasonofpoverty,donotspendsomuchintheirhousesasformerlytheydid;whereforeitisnottheincreaseofspecificmoney,whichwouldatalladvancethefarmer'sgoods,buttheremovalofanyofthesethreecauses,whichdotrulykeepdownthemarket...Themerchantandshopkeeperwantmoneyinthesamemanner,thatis,theywantaventforthegoodstheydealin,byreasonthatthemarketsfail"...[Anation]"neverthrivesbetter,thanwhenrichesaretostfromhandtohand."(SirDudleyNorth:"DiscoursesuponTrade,"Lond.1691,pp.11-15,passim.)Herrenschwand'sfancifulnotionsamountmerelytothis,thattheantagonism,whichhasitsorigininthenatureofcommodities,andisreproducedintheircirculation,canberemovedbyincreasingthecirculatingmedium.Butif,ontheonehand,itisapopulardelusiontoascribestagnationinproductionandcirculationtoinsufficiencyofthecirculatingmedium,itbynomeansfollows,ontheotherhand,thatanPART1:COMMODITIESANDMONEY145actualpaucityofthemediuminconsequence,e.g.,ofbunglinglegislativeinterferencewiththeregulationofcurrency,maynotgiverisetosuchstagnation.

31"Thereisacertainmeasureandproportionofmoneyrequisitetodrivethetradeofanation,moreorlessthanwhichwouldprejudicethesame.Justasthereisacertainproportionoffarthingsnecessaryinasmallretailtrade,tochangesilvermoney,andtoevensuchreckoningsascannotbeadjustedwiththesmallestsilverpieces....Now,astheproportionofthenumberoffarthingsrequisiteincommerceistobetakenfromthenumberofpeople,thefrequencyoftheirexchanges:asalso,andprincipally,fromthevalueofthesmallestsilverpiecesofmoney;soinlikemanner,theproportionofmoney[goldandsilverspecie]requisiteinourtrade,istobelikewisetakenfromthefrequencyofcommutations,andfromthebignessofthepayments."(WilliamPetty,"ATreatiseofTaxesandContributions."Lond.1667,p.17.)TheTheoryofHumewasdefendedagainsttheattacksofJ.Steuartandothers,byA.Young,inhis"PoliticalArithmetic,"Lond.1774,inwhichworkthereisaspecialchapterentitled"Pricesdependonquantityofmoney,atp.112,sqq.Ihavestatedin"ZurKritik,&c.,"p.149:"He(AdamSmith)passesoverwithoutremarkthequestionastothequantityofcoinincirculation,andtreatsmoneyquitewronglyasamerecommodity."ThisstatementappliesonlyinsofarasAdamSmith,exofficio,treatsofmoney.Nowandthen,however,asinhiscriticismoftheearliersystemsofPoliticalEconomy,hetakestherightview.

"Thequantityofcoinineverycountryisregulatedbythevalueofthecommoditieswhicharetobecirculatedbyit....Thevalueofthegoodsannuallyboughtandsoldinanycountryrequiresacertainquantityofmoneytocirculateanddistributethemtotheirproperconsumers,andcangiveemploymenttonomore.Thechannelofcirculationnecessarilydrawstoitselfasumsufficienttofillit,andneveradmitsanymore."("WealthofNations."Bk.IV.,ch.1.)Inlikemanner,exofficio,heopenshisworkwithanapotheosisonthedivisionoflabour.

Afterwards,inthelastbookwhichtreatsofthesourcesofpublicrevenue,heoccasionallyrepeatsthedenunciationsof146CAPITALthedivisionoflabourmadebyhisteacher,A.Ferguson.

32"Thepricesofthingswillcertainlyriseineverynation,asthegoldandsilverincreaseamongstthepeople,andconsequently,wherethegoldandsilverdecreaseinanynation,thepricesofallthingsmustfallproportionatelytosuchdecreaseofmoney."(JacobVanderlint:"MoneyAnswersallThings."Lond.1734,p.5.)AcarefulcomparisonofthisbookwithHume's"Essays,"provestomymindwithoutdoubtthatHumewasacquaintedwithandmadeuseofVanderlint'swork,whichiscertainlyanimportantone.Theopinionthatpricesaredeterminedbythequantityofthecirculatingmedium,wasalsoheldbyBarbonandothermuchearlierwriters."Noinconvenience,"saysVanderlint,"canarisebyanunrestrainedtrade,butverygreatadvantage;since,ifthecashofthenationbedecreasedbyit,whichprohibitionsaredesignedtoprevent,thosenationsthatgetthecashwillcertainlyfindeverythingadvanceinprice,asthecashincreasesamongstthem.And...ourmanufactures,andeverythingelse,willsoonbecomesomoderateastoturnthebalanceoftradeinourfavour,andtherebyfetchthemoneybackagain."(l.c..pp.43,44.)33Thatthepriceofeachsinglekindofcommodityformsapartofthesumofthepricesofallthecommoditiesincirculation,isaself-evidentproposition.Buthowuse-valueswhichareincommensurablewithregardtoeachother,aretobeexchanged,enmasseforthetotalsumofgoldandsilverinacountry,isquiteincomprehensible.Ifwestartfromthenotionthatallcommoditiestogetherformonesinglecommodity,ofwhicheachisbutanaliquotpart,wegetthefollowingbeautifulresult:Thetotalcommodity=xcwt.ofgold;commodityA=analiquotpartofthetotalcommodity=thesamealiquotpartofxcwt.ofgold.ThisisstatedinallseriousnessbyMontesquieu:"Sil'oncomparelamassedel'oretdel'argentquiestdanslemondeaveclasommedesmarchandisesquis'yvendilestcertainquechaquedenréeoumarchandise,enparticulier,pourraêtrecomparéeàunecertaineportiondelamasseentière.Supposonsqu'iln'yaitqu'uneseuledenréeoumarchandisedanslemonde,ouqu'iln'yaitqu'uneseulequis'achète,etqu'ellesedivisecommel'argent:CettepartiedePART1:COMMODITIESANDMONEY147cettemarchandiserépondraàunepartiedelamassedel'argent;lamoitiédutotaldel'uneàlamoitiédutotaldel'autre,&c....L'établissementduprixdeschosesdépendtoujoursfondamentalementdelaraisondutotaldeschosesautotaldessignes."["Ifonecomparestheamountofgoldandsilverintheworldwiththesumofthecommoditiesavailable,itiscertainthateachproductorcommodity,takeninisolation,couldbecomparedwithacertainportionofthetotalamountofmoney.

Letussupposethatthereisonlyoneproduct,orcommodity,intheworld,oronlyonethatcanbepurchased,andthatitcanbedividedinthesamewayasmoney:acertainpartofthiscommoditywouldthencorrespondtoapartofthetotalamountofmoney;halfthetotaloftheonewouldcorrespondtohalfthetotaloftheother&c....thedeterminationofthepricesofthingsalwaysdepends,fundamentally,ontherelationbetweenthetotalamountofthingsandthetotalamountoftheirmonetarysymbols"](Montesquieu,l.c.t.III,pp.12,13.)AstothefurtherdevelopmentofthistheorybyRicardoandhisdisciples,JamesMill,LordOverstone,andothers,see"ZurKritik,&c.,"pp.

140-146,andp.150,sqq.JohnStuartMill,withhisusualeclecticlogic,understandshowtoholdatthesametimetheviewofhisfather,JamesMill,andtheoppositeview.Onacomparisonofthetextofhiscompendium,"PrinciplesofPol.

Econ.,"withhisprefacetothefirstedition,inwhichprefaceheannounceshimselfastheAdamSmithofhisday—wedonotknowwhethertoadmiremorethesimplicityoftheman,orthatofthepublic,whotookhim,ingoodfaith,fortheAdamSmithheannouncedhimselftobe,althoughhebearsaboutasmuchresemblancetoAdamSmithassayGeneralWilliams,ofKars,totheDukeofWellington.TheoriginalresearchesofMr.J.S.Millwhichareneitherextensivenorprofound,inthedomainofPoliticalEconomy,willbefoundmusteredinrankandfileinhislittlework,"SomeUnsettledQuestionsofPoliticalEconomy,"whichappearedin1844.Lockeassertspointblanktheconnexionbetweentheabsenceofvalueingoldandsilver,andthedeterminationoftheirvaluesbyquantityalone."Mankindhavingconsentedtoputanimaginaryvalueupongoldandsilver...theintrinsicvalue,regardedinthese148CAPITALmetals,isnothingbutthequantity."("SomeConsiderations,"&c.,1691,WorksEd.1777,Vol.II.,p.15.)34Itliesofcourse,entirelybeyondmypurposetotakeintoconsiderationsuchdetailsastheseigniorageonminting.Iwill,however,citeforthebenefitoftheromanticsycophant,AdamMuller,whoadmiresthe"generousliberality"withwhichtheEnglishGovernmentcoinsgratuitously,thefollowingopinionofSirDudleyNorth:"Silverandgold,likeothercommodities,havetheirebbingsandflowings.UponthearrivalofquantitiesfromSpain...itiscarriedintotheTower,andcoined.Notlongaftertherewillcomeademandforbulliontobeexportedagain.Ifthereisnone,butallhappenstobeincoin,whatthen?

Meltitdownagain;there'snolossinit,forthecoiningcoststheownernothing.Thusthenationhasbeenabused,andmadetopayforthetwistingofstrawforassestoeat.Ifthemerchantweremadetopaythepriceofthecoinage,hewouldnothavesenthissilvertotheTowerwithoutconsideration,andcoinedmoneywouldalwayskeepavalueaboveuncoinedsilver."(North,l.c.,p.18.)NorthwashimselfoneoftheforemostmerchantsinthereignofCharlesII.

35"Ifsilverneverexceedwhatiswantedforthesmallerpaymentsitcannotbecollectedinsufficientquantitiesforthelargerpayments...theuseofgoldinthemainpaymentsnecessarilyimpliesalsoitsuseintheretailtrade:thosewhohavegoldcoinofferingthemforsmallpurchases,andreceivingwiththecommoditypurchasedabalanceofsilverinreturn;bywhichmeansthesurplusofsilverthatwouldotherwiseencumbertheretaildealer,isdrawnoffanddispersedintogeneralcirculation.Butifthereisasmuchsilveraswilltransactthesmallpaymentsindependentofgold,theretailtradermustthenreceivesilverforsmallpurchases;anditmustofnecessityaccumulateinhishands."(DavidBuchanan;"InquiryintotheTaxationandCommercialPolicyofGreatBritain."Edinburgh,1844,pp.248,249.)36ThemandarinWan-mao-in,theChineseChancelloroftheExchequer,tookitintohisheadonedaytolaybeforetheSonofHeavenaproposalthatsecretlyaimedatconvertingtheassignatsoftheempireintoconvertiblebank-notes.ThePART1:COMMODITIESANDMONEY149assignatsCommittee,initsreportofApril,1854,giveshimaseveresnubbing.Whetherhealsoreceivedthetraditionaldrubbingwithbamboosisnotstated.Theconcludingpartofthereportisasfollows:—"TheCommitteehascarefullyexaminedhisproposalandfindsthatitisentirelyinfavourofthemerchants,andthatnoadvantagewillresulttothecrown."("ArbeitenderKaiserlichRussischenGesandtschaftzuPekingüberChina."AusdemRussischenvonDr.K.AbelundF.A.Mecklenburg.ErsterBand.Berlin,1858,p.47sq.)InhisevidencebeforetheCommitteeoftheHouseofLordsontheBankActs,agovernoroftheBankofEnglandsays,withregardtotheabrasionofgoldcoinsduringcurrency:"Everyyearafreshclassofsovereignsbecomestoolight.Theclasswhichoneyearpasseswithfullweight,losesenoughbywearandteartodrawthescalesnextyearagainstit."(HouseofLords'Committee,1848,n.429.)37ThefollowingpassagefromFullartonshowsthewantofclearnessonthepartofeventhebestwritersonmoney,intheircomprehensionofitsvariousfunctions:"That,asfarasconcernsourdomesticexchanges,allthemonetaryfunctionswhichareusuallyperformedbygoldandsilvercoins,maybeperformedaseffectuallybyacirculationofinconvertiblenotespayingnovaluebutthatfactitiousandconventionalvaluetheyderivefromthelawisafactwhichadmits,Iconceive,ofnodenial.Valueofthisdescriptionmaybemadetoanswerallthepurposesofintrinsicvalue,andsupersedeeventhenecessityforastandard,providedonlythequantityofissuesbekeptunderduelimitation."(Fullerton:"RegulationofCurrencies,"London,1845,p.21.)Becausethecommoditythatservesasmoneyiscapableofbeingreplacedincirculationbymeresymbolsofvalue,thereforeitsfunctionsasameasureofvalueandastandardofpricesaredeclaredtobesuperfluous!

38Fromthefactthatgoldandsilver,sofarastheyarecoins,orexclusivelyserveasthemediumofcirculation,becomemeretokensofthemselves,NicholasBarbondeducestherightofGovernments"toraisemoney,"thatis,togivetotheweightofsilverthatiscalledashillingthenameofagreaterweight,suchasacrown;andsotopaycreditorsshillings,insteadof150CAPITALcrowns."Moneydoeswearandgrowlighterbyoftentellingover...Itisthedenominationandcurrencyofthemoneythatmenregardinbargaining,andnotthequantityofsilver...'Tisthepublicauthorityuponthemetalthatmakesitmoney."(N.

Barbon,l.c.,pp.29,30,25.)39"Unerichesseenargentn'estque...richesseenproductions,convertiesenargent."["Monetarywealthisnothingbut...wealthinproducts,transformedintomoney"](MercierdelaRivière,l.c.)"Unevaleurenproductionsn'afaitquechangerdeforme."["Avalueintheformofproducts,whichhasmerelychangeditsform."](Id.,p.486.)40"'Tisbythispractice'theykeepalltheirgoodsandmanufacturesatsuchlowrates."(Vanderlint,l.c.,pp.95,96.)41"Money...isapledge."(JohnBellers:"EssaysaboutthePoor,Manufactures,Trade,Plantations,andImmorality,"Lond.,1699,p.13.)42Apurchase,ina"categorical"sense,impliesthatgoldandsilverarealreadytheconvertedformofcommodities,ortheproductofasale.

43HenryIII.,mostChristiankingofFrance,robbedcloistersoftheirrelics,andturnedthemintomoney.ItiswellknownwhatpartthedespoilingoftheDelphicTemple,bythePhocians,playedinthehistoryofGreece.Templeswiththeancientsservedasthedwellingsofthegodsofcommodities.

Theywere"sacredbanks."WiththePhoenicians,atradingpeopleparexcellence,moneywasthetransmutedshapeofeverything.Itwas,therefore,quiteinorderthatthevirgins,who,atthefeastoftheGoddessofLove,gavethemselvesuptostrangers,shouldoffertothegoddessthepieceofmoneytheyreceived.

43a"Gold,yellow,glittering,preciousgold!

Thusmuchofthis,willmakeblackwhite;foul,fair;Wrong,right;base,noble;old,young;coward,valiant.

...Whatthis,yougods?Why,thisWilllugyourpriestsandservantsfromyoursides;Pluckstoutmen'spillowsfrombelowtheirheads;ThisyellowslaveWillknitandbreakreligions;blesstheaccurs'd;PART1:COMMODITIESANDMONEY151Makethehoarleprosyador'd;placethieves,Andgivethemtitle,kneeandapprobation,Withsenatorsonthebench;thisisit,Thatmakesthewappen'dwidowwedagain:...Comedamnedearth,Thoughcommonwhoreofmankind."(Shakespeare:TimonofAthens.)43b"Money!Nothingworseinourlives,socurrent,rampant,socorrupting.

Money—youdemolishcities,rootmenfromtheirhomes,youtrainandtwistgoodmindsandsetthemontothemostatrociousschemes.Nolimit,youmakethemadeptateverykindofoutrage,everygodlesscrimes—money!"(Sophocles,Antigone.)44"ThedesireofavaricetodrawPlutohimselfoutofthebowelsoftheearth."(TheDeipnosophists,VI,23,Athenaeus)45"Accrescerequantopiùsipuòilnumerode'venditorid'ognimerce,diminuerequantopiùsipuoilnumerodeicompratori,questisonoicardinisuiqualisiraggiranotutteleoperazionidieconomiapolitica."["Thesearethepivotsaroundwhichallthemeasuresofpoliticaleconomyturn:themaximumpossibleincreaseinthenumberofsellersofeachcommodity,andthemaximumpossibledecreaseinthenumberofbuyers"](Verri,l.c.,p.52.)46"Thereisrequiredforcarryingonthetradeofthenationadeterminatesumofspecifickmoneywhichvaries,andissometimesmore,sometimesless,asthecircumstancesweareinrequire....Thisebbingandflowingofmoneysuppliesandaccommodatesitself,withoutanyaidofPoliticians....

Thebucketsworkalternately;whenmoneyisscarce,bullioniscoined;whenbullionisscarce,moneyismelted."(SirD.

North,l.c.,Postscript,p.3.)JohnStuartMill,whoforalongtimewasanofficialoftheEastIndiaCompany,confirmsthefactthatinIndiasilverornamentsstillcontinuetoperformdirectlythefunctionsofahoard.Thesilverornamentsarebroughtoutandcoinedwhenthereisahighrateofinterest,andgobackagainwhentherateofinterestfalls.(J.S.Mill's152CAPITALEvidence"ReportsonBankActs,"1857,2084.)AccordingtoaParliamentarydocumentof1864onthegoldandsilverimportandexportofIndia,theimportofgoldandsilverin1863exceededtheexportby￡19,367,764.Duringthe8yearsimmediatelypreceding1864,theexcessofimportsoverexportsofthepreciousmetalsamountedto￡109,652,917.

Duringthiscenturyfarmorethan￡200,000,000hasbeencoinedinIndia.

47ThefollowingshowsthedebtorandcreditorrelationsexistingbetweenEnglishtradersatthebeginningofthe18thcentury."SuchaspiritofcrudityreignshereinEnglandamongthemenoftrade,thatisnottobemetwithinanyothersocietyofmen,norinanyotherkingdomoftheworld."("AnEssayonCreditandtheBankruptAct,"Lond.,1707,p.2.)48Itwillbeseenfromthefollowingquotationfrommybookwhichappearedin1859,whyItakenonoticeinthetextofanoppositeform:"Contrariwise,intheprocessinM—C,themoneycanbealienatedasarealmeansofpurchase,andinthatway,thepriceofthecommoditycanberealisedbeforetheuse-valueofthemoneyisrealisedandthecommodityactuallydelivered.Thisoccursconstantlyundertheevery-dayformofprepayments.Anditisunderthisform,thattheEnglishgovernmentpurchasesopiumfromtheryotsofIndia....

Inthesecases,however,themoneyalwaysactsasameansofpurchase....Ofcoursecapitalalsoisadvancedintheshapeofmoney....Thispointofview,however,doesnotfallwithinthehorizonofsimplecirculation."("ZurKritik,&c.,"pp.119,120.)49Themonetarycrisisreferredtointhetext,beingaphaseofeverycrisis,mustbeclearlydistinguishedfromthatparticularformofcrisis,whichalsoiscalledamonetarycrisis,butwhichmaybeproducedbyitselfasanindependentphenomenoninsuchawayastoreactonlyindirectlyonindustryandcommerce.Thepivotofthesecrisesistobefoundinmoneyedcapital,andtheirsphereofdirectactionisthereforethesphereofthatcapital,viz.,banking,thestockexchange,andfinance.

50"ThesuddenreversionfromasystemofcredittoasystemPART1:COMMODITIESANDMONEY153ofhardcashheapstheoreticalfrightontopofthepracticalpanic;andthedealersbywhoseagencycirculationisaffected,shudderbeforetheimpenetrablemysteryinwhichtheirowneconomicrelationsareinvolved"(KarlMarx,l.c.,p.126.)"Thepoorstandstill,becausetherichhavenomoneytoemploythem,thoughtheyhavethesamelandandhandstoprovidevictualsandclothes,asevertheyhad;...whichisthetruerichesofanation,andnotthemoney."JohnBellers,ProposalsforRaisingaCollegeofIndustry,London,1696,p3.

51hefollowingshowshowsuchtimesareexploitedbythe"amisducommerce.""Ononeoccasion(1839)anoldgraspingbanker(inthecity)inhisprivateroomraisedthelidofthedeskhesatover,anddisplayedtoafriendrollsofbank-notes,sayingwithintensegleetherewere￡600,000ofthem,theywereheldtomakemoneytight,andwouldallbeletoutafterthreeo'clockonthesameday."("TheTheoryofExchanges.

TheBankCharterActof1844."Lond.1864,p.81).TheObserver,asemi-officialgovernmentorgan,containedthefollowingparagraphon24thApril,1864:"Someverycuriousrumoursarecurrentofthemeanswhichhavebeenresortedtoinordertocreateascarcityofbanknotes....Questionableasitwouldseem,tosupposethatanytrickofthekindwouldbeadopted,thereporthasbeensouniversalthatitreallydeservesmention."52"Theamountofpurchasesorcontractsentereduponduringthecourseofanygivenday,willnotaffectthequantityofmoneyafloatonthatparticularday,but,inthevastmajorityofcases,willresolvethemselvesintomultifariousdraftsuponthequantityofmoneywhichmaybeafloatatsubsequentdatesmoreorlessdistant....Thebillsgrantedorcreditsopened,to-day,needhavenoresemblancewhatever,eitherinquantity,amountorduration,tothosegrantedorentereduponto-morrowornextday,nay,manyoftoday'sbills,andcredits,whendue,fallinwithamassofliabilitieswhoseoriginstraversearangeofantecedentdatesaltogetherindefinite,billsat12,6,3monthsor1oftenaggregatingtogethertoswellthecommonliabilitiesofoneparticularday...."("TheCurrencyTheoryReviewed;inaLettertotheScottishPeople."Bya154CAPITALBankerinEngland.Edinburgh,1845,pp.29,30passim.)53Asanexampleofhowlittlereadymoneyisrequiredintruecommercialoperations,IgivebelowastatementbyoneofthelargestLondonhousesofitsyearlyreceiptsandpayments.

Itstransactionsduringtheyear1856,extendingtomanymillionsofpoundssterling,areherereducedtothescaleofonemillion.

Receipts.Payments.

Bankers'and￡533,596Billspayable￡302,674Merchants'afterdateChequeson357,715Chequeson663,672Bankers,&c.LondonBankerspayableondemandCountryNotes9,627BankofEngland22,743NotesBankofEngland68,554Gold9,427NotesGold28,089Silverand1,484CopperSilverandCopper1,486?

PostOfficeOrders933?

Total￡1,000,000Total￡1,000,000"ReportfromtheSelectCommitteeontheBankActs,July,1858,"p.lxxi.

54"Thecourseoftradebeingthusturned,fromexchangingofgoodsforgoods,ordeliveringandtaking,tosellingandpaying,allthebargains...arenowstateduponthefootofaPriceinmoney."("AnEssayuponPublickCredit."3rdEd.

Lond.,1710,p.8.)55"L'argent...estdevenulebourreaudetouteschoses."Financeisthe"alambic,quiafaitévaporerunequantitéeffroyabledebiensetdedenréespourfairecefatalprécis.""L'argentdéclarelaguerreàtoutlegenrehumain."["MoneyPART1:COMMODITIESANDMONEY155...hasbecometheexecutionerofallthings."Financeisthe"alembicthatevaporatesafrightfulquantityofgoodsandcommoditiesinordertoobtainthisfatalextract.""Money[...]declareswar[...]onthewholehumanrace"](Boisguillebert:"Dissertationsurlanaturedesrichesses,del'argentetdestributs."Edit.Daire.Economistesfinanciers.Paris,1843,t.i.,pp.413,419,417.)56"OnWhitsuntide,1824,"saysMr.CraigbeforetheCommons'Committeeof1826,"therewassuchanimmensedemandfornotesuponthebanksofEdinburgh,thatby11o'clocktheyhadnotanoteleftintheircustody.Theysentroundtoallthedifferentbankstoborrow,butcouldnotgetthem,andmanyofthetransactionswereadjustedbyslipsofpaperonly;yetbythreeo'clockthewholeofthenoteswerereturnedintothebanksfromwhichtheyhadissued!Itwasameretransferfromhandtohand."Althoughtheaverageeffectivecirculationofbank-notesinScotlandislessthanthreemillionssterling,yetoncertainpaydaysintheyear,everysinglenoteinthepossessionofthebankers,amountinginthewholetoabout￡7,000,000,iscalledintoactivity.Ontheseoccasionsthenoteshaveasingleandspecificfunctiontoperform,andsosoonastheyhaveperformedit,theyflowbackintothevariousbanksfromwhichtheyissued.(SeeJohnFullarton,"RegulationofCurrencies."Lond.1845,p.86,note.)Inexplanationitshouldbestated,thatinScotland,atthedateofFullarton'swork,notesandnotchequeswereusedtowithdrawdeposits.

57NotebytheInstituteofMarxism-LeninismintheRussianedition:Apparentlyaslipofthepen.Whenwritinginversetheauthorevidentlymeantdirect.

58Tothequestion,"Iftherewereoccasiontoraise40millionsp.a.,whetherthesame6millions(gold)...wouldsufficeforsuchrevolutionsandcirculationsthereof,astraderequires,"Pettyrepliesinhisusualmasterlymanner,"Iansweryes:fortheexpensebeing40millions,iftherevolutionswereinsuchshortcircles,viz.,weekly,ashappensamongpoorartisansandlabourers,whoreceiveandpayeverySaturday,then40/52partsof1millionofmoneywouldanswerthese156CAPITALends,butifthecirclesbequarterly,accordingtoourcustomofpayingrent,andgatheringtaxes,then10millionswererequisite.Wherefore,supposingpaymentsingeneraltobeofamixedcirclebetweenoneweekand13,thenadd10millionsto40/52,thehalfofwhichwillbe5?,soasifwehave5?

millionswehaveenough."(WilliamPetty:"PoliticalAnatomyofIreland."1672,Edit.:Lond.1691,pp.13,14.)59Hencetheabsurdityofeverylawprescribingthatthebanksofacountryshallformreservesofthatpreciousmetalalonewhichcirculatesathome.The"pleasantdifficulties"thusself-createdbytheBankofEngland,arewellknown.Onthesubjectofthegreatepochsinthehistoryofthechangesintherelativevalueofgoldandsilver,seeKarlMarx,l.c.,p.136sq.

SirRobertPeel,byhisBankActof1844,soughttotideoverthedifficulty,byallowingtheBankofEnglandtoissuenotesagainstsilverbullion,onconditionthatthereserveofsilvershouldneverexceedmorethanone-fourthofthereserveofgold.ThevalueofsilverbeingforthatpurposeestimatedatitspriceintheLondonmarket.

Addedinthe4thGermanedition.—[Wefindourselvesoncemoreinaperiodofseriouschangeintherelativevaluesofgoldandsilver.About25yearsagotheratioexpressingtherelativevalueofgoldandsilverwas15-1/2:1;nowitisapproximately22:1,andsilverisstillconstantlyfallingasagainstgold.Thisisessentiallytheresultofarevolutioninthemodeofproductionofbothmetals.Formerlygoldwasobtainedalmostexclusivelybywashingitoutfromgold-bearingalluvialdeposits,productsoftheweatheringofauriferousrocks.Nowthismethodhasbecomeinadequateandhasbeenforcedintothebackgroundbytheprocessingofthequartzlodesthemselves,awayofextractionwhichformerlywasonlyofsecondaryimportance,althoughwellknowntotheancients(Diodorus,III,12-14)(Diodor'sv.Sicilien"HistorischeBibliothek,"bookIII,12-14.

Stuttgart1828,pp.258-261).Moreover,notonlywerenewhugesilverdepositsdiscoveredinNorthAmerica,intheWesternpartoftheRockyMountains,buttheseandtheMexicansilvermineswerereallyopenedupbythelayingofrailways,whichmadepossibletheshipmentofmodernmachineryandfuelandPART1:COMMODITIESANDMONEY157inconsequencetheminingofsilveronaverylargescaleatalowcost.Howeverthereisagreatdifferenceinthewaythetwometalsoccurinthequartzlodes.Thegoldismostlynative,butdisseminatedthroughoutthequartzinminutequantities.

Thewholemassoftheveinmustthereforebecrushedandthegoldeitherwashedoutorextractedbymeansofmercury.

Often1,000,000grammesofquartzbarelyyield1-3andveryseldom30-60grammesofgold.Silverisseldomfoundnative,howeveritoccursinspecialquartzthatisseparatedfromthelodewithcomparativeeaseandcontainsmostly40-90%silver;oritiscontained,insmallerquantities,incopper,leadandotheroreswhichinthemselvesareworthwhileworking.

Fromthisaloneitisapparentthatthelabourexpendedontheproductionofgoldisratherincreasingwhilethatexpendedonsilverproductionhasdecidedlydecreased,whichquitenaturallyexplainsthedropinthevalueofthelatter.Thisfallinvaluewouldexpressitselfinastillgreaterfallinpriceifthepriceofsilverwerenotpeggedevento-daybyartificialmeans.ButAmerica'srichsilverdepositshavesofarbarelybeentapped,andthustheprospectsarethatthevalueofthismetalwillkeepondroppingforratheralongtimetocome.

Astillgreatercontributingfactorhereistherelativedecreaseintherequirementofsilverforarticlesofgeneraluseandforluxuries,thatisitsreplacementbyplatedgoods,aluminium,etc.Onemaythusgaugetheutopianismofthebimetallistideathatcompulsoryinternationalquotationwillraisesilveragaintotheoldvalueratioof1:15-1/2.Itismorelikelythatsilverwillforfeititsmoneyfunctionmoreandmoreinthemarketsoftheworld.—FE.]60Theopponents,themselves,ofthemercantilesystem,asystemwhichconsideredthesettlementofsurplustradebalancesingoldandsilverastheaimofinternationaltrade,entirelymisconceivedthefunctionsofmoneyoftheworld.IhaveshownbytheexampleofRicardoinwhatwaytheirfalseconceptionofthelawsthatregulatethequantityofthecirculatingmedium,isreflectedintheirequallyfalseconceptionoftheinternationalmovementofthepreciousmetals(l.c.,pp.150sq.).Hiserroneousdogma:158CAPITAL"Anunfavourablebalanceoftradeneverarisesbutfromaredundantcurrency....Theexportationofthecoiniscausedbyitscheapness,andisnottheeffect,butthecauseofanunfavourablebalance,"alreadyoccursinBarbon:"TheBalanceofTrade,iftherebeone,isnotthecauseofsendingawaythemoneyoutofanation;butthatproceedsfromthedifferenceofthevalueofbullionineverycountry."(N.Barbon;l.c.,pp.

59,60.)MacCullochin"TheLiteratureofPoliticalEconomy,aclassifiedcatalogue,Lond.1845,"praisesBarbonforthisanticipation,butprudentlypassesoverthenaiveforms,inwhichBarbonclothestheabsurdsuppositiononwhichthe"currencyprinciple"isbased.Theabsenceofrealcriticismandevenofhonesty,inthatcatalogueculminatesinthesectionsdevotedtothehistoryofthetheoryofmoney;thereasonisthatMacCullochinthispartoftheworkisflatteringLordOverstonewhomhecalls"facileprincepsargentanorum."61Forinstance,insubsidies,moneyloansforcarryingonwarsorforenablingbankstoresumecashpayments,&c.,itisthemoney-form,andnoother,ofvaluethatmaybewanted.

62"Iwoulddesire,indeed,nomoreconvincingevidenceofthecompetencyofthemachineryofthehoardsinspecie-payingcountriestoperformeverynecessaryofficeofinternationaladjustment,withoutanysensibleaidfromthegeneralcirculation,thanthefacilitywithwhichFrance,whenbutjustrecoveringfromtheshockofadestructiveforeigninvasion,completedwithinthespaceof27monthsthepaymentofherforcedcontributionofnearly20millionstothealliedpowers,andaconsiderableproportionofthesuminspecie,withoutanyperceptiblecontractionorderangementofherdomesticcurrency,orevenanyalarmingfluctuationofherexchanges."(Fullerton,l.c.,p.141.)[Addedinthe4thGermanedition.—WehaveastillmorestrikingexampleinthefacilitywithwhichthesameFrancewasablein1871-73topayoffwithin30monthsaforcedcontributionmorethantentimesasgreat,aconsiderablepartofitlikewiseinspecie.—F.E.]63"L'argentsepartageentrelesnationsrelativementaubesoinqu'ellesenont...étanttoujoursattiréparlesproductions."["MoneyissharedamongthenationsinPART1:COMMODITIESANDMONEY159accordancewiththeirneedforit...asitisalwaysattractedbytheproducts"](LeTrosne,l.c.,p.916.)"Themineswhicharecontinuallygivinggoldandsilver,dogivesufficienttosupplysuchaneedfulbalancetoeverynation."(J.Vanderlint,l.c.,p.

40.)64"Exchangesriseandfalleveryweek,andatsomeparticulartimesintheyearrunhighagainstanation,andatothertimesrunashighonthecontrary."(N.Barbon,l.c.,p.39)65Thesevariousfunctionsareliabletocomeintodangerousconflictwithoneanotherwhenevergoldandsilverhavealsotoserveasafundfortheconversionofbank-notes.

66"WhatmoneyismorethanofabsolutenecessityforaHomeTrade,isdeadstock...andbringsnoprofittothatcountryit'skeptin,butasitistransportedintrade,aswellasimported."(JohnBellers,"Essays,"p.13.)"Whatifwehavetoomuchcoin?Wemaymeltdowntheheaviestandturnitintothesplendourofplate,vesselsorutensilsofgoldorsilver,orsenditoutasacommodity,wherethesameiswantedordesired;orletitoutatinterest,whereinterestishigh."(W.

Petty:"Quantulumcunque,"p.39.)"MoneyisbutthefatoftheBodyPolitick,whereoftoomuchdothasoftenhinderitsagility,astoolittlemakesitsick...asfatlubricatesthemotionofthemuscles,feedsinwantofvictuals,fillsuptheunevencavities,andbeautifiesthebody;sodothmoneyinthestatequickenitsaction,feedsfromabroadintimeofdearthathome,evensaccounts...andbeautifiesthewhole;althomoreespeciallytheparticularpersonsthathaveitinplenty."(W.

Petty,"PoliticalAnatomyofIreland,"p.14.)PART2:TRANSFORMATIONOFMONEYINTOCAPITALCHAPTER4:THEGENERALFORMULAFORCAPITALhecirculationofcommoditiesistheTstarting-pointofcapital.Theproductionofcommodities,theircirculation,andthatmoredevelopedformoftheircirculationcalledcommerce,theseformthehistoricalground-workfromwhichitrises.Themodernhistoryofcapitaldatesfromthecreationinthe16thcenturyofaworld-embracingcommerceandaworld-embracingmarket.

Ifweabstractfromthematerialsubstanceofthecirculationofcommodities,thatis,fromtheexchangeofthevarioususe-values,andconsideronlytheeconomicformsproducedbythisprocessofcirculation,wefinditsfinalresulttobemoney:thisfinalproductofthecirculationofcommoditiesisthefirstforminwhichcapitalappears.

Asamatterofhistory,capital,asopposedtolandedproperty,invariablytakestheformatfirstofmoney;itappearsasmoneyedwealth,asthecapitalofthemerchantandoftheusurer.1Butwehavenoneedtorefertotheoriginofcapitalinordertodiscoverthatthefirstformofappearanceofcapitalismoney.Wecanseeitdailyunderourveryeyes.Allnewcapital,tocommencewith,comesonthestage,thatis,onthemarket,whetherofcommodities,labour,ormoney,eveninourdays,intheshapeofmoneythatbyadefiniteprocesshastobetransformedintocapital.

Thefirstdistinctionwenoticebetweenmoneythatis164CAPITALmoneyonly,andmoneythatiscapital,isnothingmorethanadifferenceintheirformofcirculation.

ThesimplestformofthecirculationofcommoditiesisC-M-C,thetransformationofcommoditiesintomoney,andthechangeofthemoneybackagainintocommodities;orsellinginordertobuy.Butalongsideofthisformwefindanotherspecificallydifferentform:M-C-M,thetransformationofmoneyintocommodities,andthechangeofcommoditiesbackagainintomoney;orbuyinginordertosell.

Moneythatcirculatesinthelattermanneristherebytransformedinto,becomescapital,andisalreadypotentiallycapital.

NowletusexaminethecircuitM-C-Malittlecloser.Itconsists,liketheother,oftwoantitheticalphases.Inthefirstphase,M-C,orthepurchase,themoneyischangedintoacommodity.Inthesecondphase,C-M,orthesale,thecommodityischangedbackagainintomoney.Thecombinationofthesetwophasesconstitutesthesinglemovementwherebymoneyisexchangedforacommodity,andthesamecommodityisagainexchangedformoney;wherebyacommodityisboughtinordertobesold,or,neglectingthedistinctioninformbetweenbuyingandselling,wherebyacommodityisboughtwithmoney,andthenmoneyisboughtwithacommodity.2Theresult,inwhichthephasesoftheprocessvanish,istheexchangeofmoneyformoney,M-M.IfIpurchase2,000lbs.ofcottonfor￡100,andresellthe2,000lbs.

ofcottonfor￡110,Ihave,infact,exchanged￡100for￡110,moneyformoney.

NowitisevidentthatthecircuitM-C-Mwouldbeabsurdandwithoutmeaningiftheintentionweretoexchangebythismeanstwoequalsumsofmoney,￡100for￡100.Themiser'splanwouldbefarsimplerandsurer;hestickstohis￡100insteadofexposingittothedangersofcirculation.Andyet,whetherthemerchantwhohaspaid￡100forhiscottonsellsitforPART2:TRANSFORMATIONOFMONEYINTOCAPITAL165￡110,orletsitgofor￡100,oreven￡50,hismoneyhas,atallevents,gonethroughacharacteristicandoriginalmovement,quitedifferentinkindfromthatwhichitgoesthroughinthehandsofthepeasantwhosellscorn,andwiththemoneythussetfreebuysclothes.WehavethereforetoexaminefirstthedistinguishingcharacteristicsoftheformsofthecircuitsM-C-MandC-M-C,andindoingthistherealdifferencethatunderliesthemeredifferenceofformwillrevealitself.

Letussee,inthefirstplace,whatthetwoformshaveincommon.

Bothcircuitsareresolvableintothesametwoantitheticalphases,C-M,asale,andM-C,apurchase.

Ineachofthesephasesthesamematerialelements-acommodity,andmoney,andthesameeconomicdramatispersonae,abuyerandaseller-confrontoneanother.Eachcircuitistheunityofthesametwoantitheticalphases,andineachcasethisunityisbroughtaboutbytheinterventionofthreecontractingparties,ofwhomoneonlysells,anotheronlybuys,whilethethirdbothbuysandsells.

What,however,firstandforemostdistinguishesthecircuitC-M-CfromthecircuitM-C-M,istheinvertedorderofsuccessionofthetwophases.Thesimplecirculationofcommoditiesbeginswithasaleandendswithapurchase,whilethecirculationofmoneyascapitalbeginswithapurchaseandendswithasale.Intheonecaseboththestarting-pointandthegoalarecommodities,intheothertheyaremoney.

Inthefirstformthemovementisbroughtaboutbytheinterventionofmoney,inthesecondbythatofacommodity.

InthecirculationC-M-C,themoneyisintheendconvertedintoacommodity,thatservesasause-value;itisspentonceforall.Intheinvertedform,M-C-M,onthecontrary,thebuyerlaysoutmoneyinorderthat,asaseller,hemayrecovermoney.By166CAPITALthepurchaseofhiscommodityhethrowsmoneyintocirculation,inordertowithdrawitagainbythesaleofthesamecommodity.Heletsthemoneygo,butonlywiththeslyintentionofgettingitbackagain.Themoney,therefore,isnotspent,itismerelyadvanced.3InthecircuitC-M-C,thesamepieceofmoneychangesitsplacetwice.Thesellergetsitfromthebuyerandpaysitawaytoanotherseller.Thecompletecirculation,whichbeginswiththereceipt,concludeswiththepayment,ofmoneyforcommodities.ItistheverycontraryinthecircuitM-C-M.Hereitisnotthepieceofmoneythatchangesitsplacetwice,butthecommodity.Thebuyertakesitfromthehandsofthesellerandpassesitintothehandsofanotherbuyer.

Justasinthesimplecirculationofcommoditiesthedoublechangeofplaceofthesamepieceofmoneyeffectsitspassagefromonehandintoanother,soherethedoublechangeofplaceofthesamecommoditybringsabouttherefluxofthemoneytoitspointofdeparture.

Suchrefluxisnotdependentonthecommoditybeingsoldformorethanwaspaidforit.Thiscircumstanceinfluencesonlytheamountofthemoneythatcomesback.Therefluxitselftakesplace,sosoonasthepurchasedcommodityisresold,inotherwords,sosoonasthecircuitM-C-Miscompleted.Wehavehere,therefore,apalpabledifferencebetweenthecirculationofmoneyascapital,anditscirculationasmeremoney.

ThecircuitC-M-Ccomescompletelytoanend,sosoonasthemoneybroughtinbythesaleofonecommodityisabstractedagainbythepurchaseofanother.

If,nevertheless,therefollowsarefluxofmoneytoitsstarting-point,thiscanonlyhappenthrougharenewalorrepetitionoftheoperation.IfIsellaquarterofcornfor￡3,andwiththis￡3buyclothes,themoney,sofarasIamconcerned,isspentanddonePART2:TRANSFORMATIONOFMONEYINTOCAPITAL167with.Itbelongstotheclothesmerchant.IfInowsellasecondquarterofcorn,moneyindeedflowsbacktome,nothoweverasasequeltothefirsttransaction,butinconsequenceofitsrepetition.Themoneyagainleavesme,sosoonasIcompletethissecondtransactionbyafreshpurchase.Therefore,inthecircuitC-M-C,theexpenditureofmoneyhasnothingtodowithitsreflux.

Ontheotherhand,inM-C-M,therefluxofthemoneyisconditionedbytheverymodeofitsexpenditure.

Withoutthisreflux,theoperationfails,ortheprocessisinterruptedandincomplete,owingtotheabsenceofitscomplementaryandfinalphase,thesale.

ThecircuitC-M-Cstartswithonecommodity,andfinisheswithanother,whichfallsoutofcirculationandintoconsumption.Consumption,thesatisfactionofwants,inoneword,use-value,isitsendandaim.

ThecircuitM-C-M,onthecontrary,commenceswithmoneyandendswithmoney.Itsleadingmotive,andthegoalthatattractsit,isthereforemereexchange-value.

Inthesimplecirculationofcommodities,thetwoextremesofthecircuithavethesameeconomicform.Theyarebothcommodities,andcommoditiesofequalvalue.Buttheyarealsouse-valuesdifferingintheirqualities,as,forexample,cornandclothes.

Theexchangeofproducts,ofthedifferentmaterialsinwhichthelabourofsocietyisembodied,formsherethebasisofthemovement.ItisotherwiseinthecirculationM-C-M,whichatfirstsightappearspurposeless,becausetautological.Bothextremeshavethesameeconomicform.Theyarebothmoney,andthereforearenotqualitativelydifferentuse-values;formoneyisbuttheconvertedformofcommodities,inwhichtheirparticularuse-valuesvanish.Toexchange￡100forcotton,andthenthissamecottonagainfor￡100,ismerelyaroundaboutwayofexchangingmoneyformoney,thesameforthesame,andappearstobeanoperationjust168CAPITALaspurposelessasitisabsurd.4Onesumofmoneyisdistinguishablefromanotheronlybyitsamount.

ThecharacterandtendencyoftheprocessM-C-M,isthereforenotduetoanyqualitativedifferencebetweenitsextremes,bothbeingmoney,butsolelytotheirquantitativedifference.Moremoneyiswithdrawnfromcirculationatthefinishthanwasthrownintoitatthestart.Thecottonthatwasboughtfor￡100isperhapsresoldfor￡100+￡10or￡110.TheexactformofthisprocessisthereforeM-C-M',whereM'=M+DM=theoriginalsumadvanced,plusanincrement.

ThisincrementorexcessovertheoriginalvalueIcall"surplus-value."Thevalueoriginallyadvanced,therefore,notonlyremainsintactwhileincirculation,butaddstoitselfasurplus-valueorexpandsitself.Itisthismovementthatconvertsitintocapital.

Ofcourse,itisalsopossible,thatinC-M-C,thetwoextremesC-C,saycornandclothes,mayrepresentdifferentquantitiesofvalue.Thefarmermaysellhiscornaboveitsvalue,ormaybuytheclothesatlessthantheirvalue.Hemay,ontheotherhand,"bedone"bytheclothesmerchant.Yet,intheformofcirculationnowunderconsideration,suchdifferencesinvaluearepurelyaccidental.Thefactthatthecornandtheclothesareequivalents,doesnotdeprivetheprocessofallmeaning,asitdoesinM-C-M.Theequivalenceoftheirvaluesisratheranecessaryconditiontoitsnormalcourse.

Therepetitionorrenewaloftheactofsellinginordertobuy,iskeptwithinboundsbytheveryobjectitaimsat,namely,consumptionorthesatisfactionofdefinitewants,anaimthatliesaltogetheroutsidethesphereofcirculation.Butwhenwebuyinordertosell,we,onthecontrary,beginandendwiththesamething,money,exchange-value;andtherebythemovementbecomesinterminable.Nodoubt,MbecomesM+DM,￡100become￡110.Butwhenviewedintheirqualitativeaspectalone,￡110arePART2:TRANSFORMATIONOFMONEYINTOCAPITAL169thesameas￡100,namelymoney;andconsideredquantitatively,￡110is,like￡100,asumofdefiniteandlimitedvalue.Ifnow,the￡110bespentasmoney,theyceasetoplaytheirpart.Theyarenolongercapital.Withdrawnfromcirculation,theybecomepetrifiedintoahoard,andthoughtheyremainedinthatstatetilldoomsday,notasinglefarthingwouldaccruetothem.If,then,theexpansionofvalueisonceaimedat,thereisjustthesameinducementtoaugmentthevalueofthe￡110asthatofthe￡100;forbotharebutlimitedexpressionsforexchange-value,andthereforebothhavethesamevocationtoapproach,byquantitativeincrease,asnearaspossibletoabsolutewealth.Momentarily,indeed,thevalueoriginallyadvanced,the￡100isdistinguishablefromthesurplus-valueof￡10thatisannexedtoitduringcirculation;butthedistinctionvanishesimmediately.

Attheendoftheprocess,wedonotreceivewithonehandtheoriginal￡100,andwiththeother,thesurplus-valueof￡10.Wesimplygetavalueof￡110,whichisinexactlythesameconditionandfitnessforcommencingtheexpandingprocess,astheoriginal￡100was.Moneyendsthemovementonlytobeginitagain.5Therefore,thefinalresultofeveryseparatecircuit,inwhichapurchaseandconsequentsalearecompleted,formsofitselfthestarting-pointofanewcircuit.Thesimplecirculationofcommodities—sellinginordertobuy—isameansofcarryingoutapurposeunconnectedwithcirculation,namely,theappropriationofuse-values,thesatisfactionofwants.

Thecirculationofmoneyascapitalis,onthecontrary,anendinitself,fortheexpansionofvaluetakesplaceonlywithinthisconstantlyrenewedmovement.Thecirculationofcapitalhasthereforenolimits.6Astheconsciousrepresentativeofthismovement,thepossessorofmoneybecomesacapitalist.Hisperson,orratherhispocket,isthepointfromwhichthemoneystartsandtowhichitreturns.The170CAPITALexpansionofvalue,whichistheobjectivebasisormain-springofthecirculationM-C-M,becomeshissubjectiveaim,anditisonlyinsofarastheappropriationofevermoreandmorewealthintheabstractbecomesthesolemotiveofhisoperations,thathefunctionsasacapitalist,thatis,ascapitalpersonifiedandendowedwithconsciousnessandawill.Use-valuesmustthereforeneverbelookeduponastherealaimofthecapitalist;7neithermusttheprofitonanysingletransaction.Therestlessnever-endingprocessofprofit-makingaloneiswhatheaimsat.8Thisboundlessgreedafterriches,thispassionatechaseafterexchange-value9,iscommontothecapitalistandthemiser;butwhilethemiserismerelyacapitalistgonemad,thecapitalistisarationalmiser.

Thenever-endingaugmentationofexchange-value,whichthemiserstrivesafter,byseekingtosave10hismoneyfromcirculation,isattainedbythemoreacutecapitalist,byconstantlythrowingitafreshintocirculation.11Theindependentform,i.e.,themoney-form,whichthevalueofcommoditiesassumesinthecaseofsimplecirculation,servesonlyonepurpose,namely,theirexchange,andvanishesinthefinalresultofthemovement.Ontheotherhand,inthecirculationM-C-M,boththemoneyandthecommodityrepresentonlydifferentmodesofexistenceofvalueitself,themoneyitsgeneralmode,andthecommodityitsparticular,or,sotosay,disguisedmode.12Itisconstantlychangingfromoneformtotheotherwithouttherebybecominglost,andthusassumesanautomaticallyactivecharacter.Ifnowwetakeinturneachofthetwodifferentformswhichself-expandingvaluesuccessivelyassumesinthecourseofitslife,wethenarriveatthesetwopropositions:Capitalismoney:Capitaliscommodities.13Intruth,however,valueisheretheactivefactorinaprocess,inwhich,whileconstantlyassumingtheforminturnofPART2:TRANSFORMATIONOFMONEYINTOCAPITAL171moneyandcommodities,itatthesametimechangesinmagnitude,differentiatesitselfbythrowingoffsurplus-valuefromitself;theoriginalvalue,inotherwords,expandsspontaneously.Forthemovement,inthecourseofwhichitaddssurplus-value,isitsownmovement,itsexpansion,therefore,isautomaticexpansion.Becauseitisvalue,ithasacquiredtheoccultqualityofbeingabletoaddvaluetoitself.

Itbringsforthlivingoffspring,or,attheleast,laysgoldeneggs.

Value,therefore,beingtheactivefactorinsuchaprocess,andassumingatonetimetheformofmoney,atanotherthatofcommodities,butthroughallthesechangespreservingitselfandexpanding,itrequiressomeindependentform,bymeansofwhichitsidentitymayatanytimebeestablished.Andthisformitpossessesonlyintheshapeofmoney.Itisundertheformofmoneythatvaluebeginsandends,andbeginsagain,everyactofitsownspontaneousgeneration.Itbeganbybeing￡100,itisnow￡110,andsoon.Butthemoneyitselfisonlyoneofthetwoformsofvalue.Unlessittakestheformofsomecommodity,itdoesnotbecomecapital.Thereisherenoantagonism,asinthecaseofhoarding,betweenthemoneyandcommodities.Thecapitalistknowsthatallcommodities,howeverscurvytheymaylook,orhoweverbadlytheymaysmell,areinfaithandintruthmoney,inwardlycircumcisedJews,andwhatismore,awonderfulmeanswherebyoutofmoneytomakemoremoney.

Insimplecirculation,C-M-C,thevalueofcommoditiesattainedatthemostaformindependentoftheiruse-values,i.e.,theformofmoney;butthatsamevaluenowinthecirculationM-C-M,orthecirculationofcapital,suddenlypresentsitselfasanindependentsubstance,endowedwithamotionofitsown,passingthroughalife-processofitsown,inwhichmoneyandcommoditiesaremereformswhich172CAPITALitassumesandcastsoffinturn.Nay,more:insteadofsimplyrepresentingtherelationsofcommodities,itentersnow,sotosay,intoprivaterelationswithitself.

Itdifferentiatesitselfasoriginalvaluefromitselfassurplus-value;asthefatherdifferentiateshimselffromhimselfquatheson,yetbothareoneandofoneage:foronlybythesurplus-valueof￡10doesthe￡100originallyadvancedbecomecapital,andsosoonasthistakesplace,sosoonastheson,andbytheson,thefather,isbegotten,sosoondoestheirdifferencevanish,andtheyagainbecomeone,￡110.

Valuethereforenowbecomesvalueinprocess,moneyinprocess,and,assuch,capital.Itcomesoutofcirculation,entersintoitagain,preservesandmultipliesitselfwithinitscircuit,comesbackoutofitwithexpandedbulk,andbeginsthesameroundeverafresh.14M-M',moneywhichbegetsmoney,suchisthedescriptionofCapitalfromthemouthsofitsfirstinterpreters,theMercantilists.

Buyinginordertosell,or,moreaccurately,buyinginordertoselldearer,M-C-M',appearscertainlytobeaformpeculiartoonekindofcapitalalone,namely,merchants'capital.Butindustrialcapitaltooismoney,thatischangedintocommodities,andbythesaleofthesecommodities,isre-convertedintomoremoney.Theeventsthattakeplaceoutsidethesphereofcirculation,intheintervalbetweenthebuyingandselling,donotaffecttheformofthismovement.

Lastly,inthecaseofinterest-bearingcapital,thecirculationM-C-M'appearsabridged.Wehaveitsresultwithouttheintermediatestage,intheformM-M',"enstylelapidaire"sotosay,moneythatisworthmoremoney,valuethatisgreaterthanitself.

M-C-M'isthereforeinrealitythegeneralformulaofcapitalasitappearsprimafaciewithinthesphereofcirculation.

PART2:TRANSFORMATIONOFMONEYINTOCAPITAL173NOTES:1Thecontrastbetweenthepower,basedonthepersonalrelationsofdominionandservitude,thatisconferredbylandedproperty,andtheimpersonalpowerthatisgivenbymoney,iswellexpressedbythetwoFrenchproverbs,"Nulleterresansseigneur,"and"L'argentn'apasdema?tre,"–"Nolandwithoutitslord,"and"Moneyhasnomaster."2"Avecdel'argentonachètedesmarchandisesetavecdesmarchandisesonachètedel'argent."["Withmoneyonebuyscommodities,andwithcommoditiesonebuysmoney"](MercierdelaRivière:"L'ordrenatureletessentieldessociétéspolitiques,"p.543.)3"Whenathingisboughtinordertobesoldagain,thesumemployediscalledmoneyadvanced;whenitisboughtnottobesold,itmaybesaidtobeexpended."—(JamesSteuart:"Works,"&c.EditedbyGen.SirJamesSteuart,hisson.Lond.,1805,V.I.,p.274.)4"Onn'échangepasdel'argentcontredel'argent,"["Onedoesnotexchangemoneyformoney,"]saysMercierdelaRivièretotheMercantilists(l.c.,p.486.)Inawork,which,exprofessotreatsof"trade"and"speculation,"occursthefollowing:"Alltradeconsistsintheexchangeofthingsofdifferentkinds;andtheadvantage"(tothemerchant?)"arisesoutofthisdifference.Toexchangeapoundofbreadagainstapoundofbread...wouldbeattendedwithnoadvantage;...Hencetradeisadvantageouslycontrastedwithgambling,whichconsistsinamereexchangeofmoneyformoney."(Th.

Corbet,"AnInquiryintotheCausesandModesoftheWealthofIndividuals;orthePrinciplesofTradeandSpeculationExplained."London,1841,p.5.)AlthoughCorbetdoesnotseethatM-M,theexchangeofmoneyformoney,isthecharacteristicformofcirculation,notonlyofmerchants'capitalbutofallcapital,yetatleastheacknowledgesthatthisformiscommontogamblingandtoonespeciesoftrade,viz.,speculation:butthencomesMacCullochandmakesout,that174CAPITALtobuyinordertosell,istospeculate,andthusthedifferencebetweenSpeculationandTradevanishes."Everytransactioninwhichanindividualbuysproduceinordertosellitagain,is,infact,aspeculation."(MacCulloch:"ADictionaryPractical,&c.,ofCommerce."Lond.,1847,p.1009.)Withmuchmorenaiveté,Pinto,thePindaroftheAmsterdamStockExchange,remarks,"Lecommerceestunjeu:(takenfromLocke)etcen'estpasavecdesgueuxqu'onpeutgagner.Sil'ongagnaitlongtempsentoutavectous,ilfaudraitrendredebonaccordlesplusgrandespartiesduprofitpourrecommencerlejeu."["Tradeisagame,andnothingcanbewonfrombeggars.Ifonewoneverythingfromeverybodyallthetime,itwouldbenecessarytogivebackthegreaterpartoftheprofitvoluntarily,inordertobeginthegameagain"](Pinto:"TraitédelaCirculationetduCrédit."Amsterdam,1771.p.231,)5"Capitalisdivisible...intotheoriginalcapitalandtheprofit,theincrementtothecapital...althoughinpracticethisprofitisimmediatelyturnedintocapital,andsetinmotionwiththeoriginal."(F.Engels,"UmrissezueinerKritikderNational?konomie,in:Deutsch-Franz?sischeJahrbücher,herausgegebenvonArnoldRugeundKarlMarx."Paris,1844,p.99.)6AristotleopposesOeconomictoChrematistic.Hestartsfromtheformer.Sofarasitistheartofgainingalivelihood,itislimitedtoprocuringthosearticlesthatarenecessarytoexistence,andusefuleithertoahouseholdorthestate."Truewealth(oaleqinosploutos)consistsofsuchvaluesinuse;forthequantityofpossessionsofthiskind,capableofmakinglifepleasant,isnotunlimited.Thereis,however,asecondmodeofacquiringthings,towhichwemaybypreferenceandwithcorrectnessgivethenameofChrematistic,andinthiscasethereappeartobenolimitstorichesandpossessions.Trade(ekapelikeisliterallyretailtrade,andAristotletakesthiskindbecauseinitvaluesinusepredominate)doesnotinitsnaturebelongtoChrematistic,forheretheexchangehasreferenceonlytowhatisnecessarytothemselves(thebuyerorseller)."Therefore,ashegoesontoshow,theoriginalformoftradewasbarter,butwiththeextensionofthelatter,therearosethePART2:TRANSFORMATIONOFMONEYINTOCAPITAL175necessityformoney.Onthediscoveryofmoney,barterofnecessitydevelopedintokapelike,intotradingincommodities,andthisagain,inoppositiontoitsoriginaltendency,grewintoChrematistic,intotheartofmakingmoney.NowChrematisticisdistinguishablefromOeconomicinthisway,that"inthecaseofChrematisticcirculationisthesourceofrichespoietikecrematon...diachrematondiaboles.Anditappearstorevolveaboutmoney,formoneyisthebeginningandendofthiskindofexchange(tonomismastoiceiontesallagesestin).Thereforealsoriches,suchasChrematisticstrivesfor,areunlimited.

Justaseveryartthatisnotameanstoanend,butanendinitself,hasnolimittoitsaims,becauseitseeksconstantlytoapproachnearerandnearertothatend,whilethoseartsthatpursuemeanstoanend,arenotboundless,sincethegoalitselfimposesalimituponthem,sowithChrematistic,therearenoboundstoitsaims,theseaimsbeingabsolutewealth.

OeconomicnotChrematistichasalimit...theobjectoftheformerissomethingdifferentfrommoney,ofthelattertheaugmentationofmoney....Byconfoundingthesetwoforms,whichoverlapeachother,somepeoplehavebeenledtolookuponthepreservationandincreaseofmoneyadinfinitumastheendandaimofOeconomic."(Aristoteles,DeRep.edit.

Bekker,lib.l.c.8,9.passim.)7"Commodities(hereusedinthesenseofuse-values)arenottheterminatingobjectofthetradingcapitalist,moneyishisterminatingobject."(Th.Chalmers,OnPol.Econ.&c.,2ndEd.,Glasgow,1832,pp.165,166.)8"Ilmercantenoncontaquasipernienteillucrofatto,mamirasemprealfuturo."["Themerchantcountsthemoneyhehasmadeasalmostnothing;healwayslookstothefuture."](A.Genovesi,LezionidiEconomiaCivile(1765),Custodi'sedit.ofItalianEconomists.ParteModernat.viii,p.139.)9"Theinextinguishablepassionforgain,theaurisacrafames,willalwaysleadcapitalists."(MacCulloch:"ThePrinciplesofPolit.Econ."London,1830,p.179.)Thisview,ofcourse,doesnotpreventthesameMacCullochandothersofhiskidney,whenintheoreticaldifficulties,such,forexample,asthequestionofover-production,fromtransformingthesame176CAPITALcapitalistintoamoralcitizen,whosesoleconcernisforuse-values,andwhoevendevelopsaninsatiablehungerforboots,hats,eggs,calico,andotherextremelyfamiliarsortsofuse-values.

10SozeinisacharacteristicGreekexpressionforhoarding.

SoinEnglishtosavehasthesametwomeanings:sauverandépargner.

11"Questoinfinitochelecosenonhannoinprogresso,hannoingiro."["Thatinfinitywhichthingsdonotpossess,theypossessincirculation."](Galiani.)12"Cen'estpaslamatièrequifaitlecapital,maislavaleurdecesmatières."["Itisnotmatterwhichmakescapital,butthevalueofthatmatter."](J.B.Say:"Traitéd'Econ.Polit."3èmeéd.Paris,1817,t.II.,p.429.)13"Currency(!)employedinproducingarticles...iscapital."(Macleod:"TheTheoryandPracticeofBanking."London,1855,v.1,ch.i,p.55.)"Capitaliscommodities."(JamesMill:"ElementsofPol.Econ."Lond.,1821,p.74.)14Capital:"portionfructifiantedelarichesseaccumulée...

valeurpermanente,multipliante."(Sismondi:"NouveauxPrincipesd'Econ.Polit.,"t.i.,p.88,89.)CHAPTER5:CONTRADICTIONSINTHEGENERALFORMULAOFCAPITALheformwhichcirculationtakeswhenmoneyTbecomescapital,isopposedtoallthelawswehavehithertoinvestigatedbearingonthenatureofcommodities,valueandmoney,andevenofcirculationitself.Whatdistinguishesthisformfromthatofthesimplecirculationofcommodities,istheinvertedorderofsuccessionofthetwoantitheticalprocesses,saleandpurchase.Howcanthispurelyformaldistinctionbetweentheseprocesseschangetheircharacterasitwerebymagic?

Butthatisnotall.Thisinversionhasnoexistencefortwooutofthethreepersonswhotransactbusinesstogether.Ascapitalist,IbuycommoditiesfromAandsellthemagaintoB,butasasimpleownerofcommodities,IsellthemtoBandthenpurchasefreshonesfromA.AandBseenodifferencebetweenthetwosetsoftransactions.Theyaremerelybuyersorsellers.AndIoneachoccasionmeetthemasamereownerofeithermoneyorcommodities,asabuyeroraseller,and,whatismore,inbothsetsoftransactions,IamopposedtoAonlyasabuyerandtoBonlyasaseller,totheoneonlyasmoney,totheotheronlyascommodities,andtoneitherofthemascapitaloracapitalist,orasrepresentativeofanythingthatismorethanmoneyorcommodities,orthatcanproduceanyeffectbeyondwhatmoneyandcommoditiescan.

178CAPITALFormethepurchasefromAandthesaletoBarepartofaseries.Buttheconnexionbetweenthetwoactsexistsformealone.AdoesnottroublehimselfaboutmytransactionwithB,nordoesBaboutmybusinesswithA.AndifIofferedtoexplaintothemthemeritoriousnatureofmyactionininvertingtheorderofsuccession,theywouldprobablypointouttomethatIwasmistakenastothatorderofsuccession,andthatthewholetransaction,insteadofbeginningwithapurchaseandendingwithasale,began,onthecontrary,withasaleandwasconcludedwithapurchase.Intruth,myfirstact,thepurchase,wasfromthestandpointofA,asale,andmysecondact,thesale,wasfromthestandpointofB,apurchase.

Notcontentwiththat,AandBwoulddeclarethatthewholeserieswassuperfluousandnothingbutHokusPokus;thatforthefutureAwouldbuydirectfromB,andBselldirecttoA.Thusthewholetransactionwouldbereducedtoasingleactforminganisolated,non-complementedphaseintheordinarycirculationofcommodities,ameresalefromA'spointofview,andfromB's,amerepurchase.Theinversion,therefore,oftheorderofsuccession,doesnottakeusoutsidethesphereofthesimplecirculationofcommodities,andwemustratherlook,whetherthereisinthissimplecirculationanythingpermittinganexpansionofthevaluethatentersintocirculation,and,consequently,acreationofsurplus-value.

Letustaketheprocessofcirculationinaformunderwhichitpresentsitselfasasimpleanddirectexchangeofcommodities.Thisisalwaysthecasewhentwoownersofcommoditiesbuyfromeachother,andonthesettlingdaytheamountsmutuallyowingareequalandcanceleachother.Themoneyinthiscaseismoneyofaccountandservestoexpressthevalueofthecommoditiesbytheirprices,butisnot,itself,intheshapeofhardcash,confrontedwiththem.Sofarasregardsuse-values,itisclearthatbothpartiesPART2:TRANSFORMATIONOFMONEYINTOCAPITAL179maygainsomeadvantage.Bothpartwithgoodsthat,asuse-values,areofnoservicetothem,andreceiveothersthattheycanmakeuseof.Andtheremayalsobeafurthergain.A,whosellswineandbuyscorn,possiblyproducesmorewine,withgivenlabour-time,thanfarmerBcould,andBontheotherhand,morecornthanwine-growerAcould.A,therefore,mayget,forthesameexchange-value,morecorn,andBmorewine,thaneachwouldrespectivelygetwithoutanyexchangebyproducinghisowncornandwine.

Withreference,therefore,touse-value,thereisgoodgroundforsayingthat"exchangeisatransactionbywhichbothsidesgain."1Itisotherwisewithexchange-value."Amanwhohasplentyofwineandnocorntreatswithamanwhohasplentyofcornandnowine;anexchangetakesplacebetweenthemofcorntothevalueof50,forwineofthesamevalue.Thisactproducesnoincreaseofexchange-valueeitherfortheoneortheother;foreachofthemalreadypossessed,beforetheexchange,avalueequaltothatwhichheacquiredbymeansofthatoperation."2Theresultisnotalteredbyintroducingmoney,asamediumofcirculation,betweenthecommodities,andmakingthesaleandthepurchasetwodistinctacts.3Thevalueofacommodityisexpressedinitspricebeforeitgoesintocirculation,andisthereforeaprecedentconditionofcirculation,notitsresult.4Abstractedlyconsidered,thatis,apartfromcircumstancesnotimmediatelyflowingfromthelawsofthesimplecirculationofcommodities,thereisinanexchangenothing(ifweexceptthereplacingofoneuse-valuebyanother)butametamorphosis,amerechangeintheformofthecommodity.Thesameexchange-value,i.e.,thesamequantityofincorporatedsociallabour,remainsthroughoutinthehandsoftheownerofthecommodity,firstintheshapeofhisowncommodity,thenintheformofthemoneyforwhichheexchangedit,andlastly,inthe180CAPITALshapeofthecommodityhebuyswiththatmoney.

Thischangeofformdoesnotimplyachangeinthemagnitudeofthevalue.Butthechange,whichthevalueofthecommodityundergoesinthisprocess,islimitedtoachangeinitsmoney-form.Thisformexistsfirstasthepriceofthecommodityofferedforsale,thenasanactualsumofmoney,which,however,wasalreadyexpressedintheprice,andlastly,asthepriceofanequivalentcommodity.Thischangeofformnomoreimplies,takenalone,achangeinthequantityofvalue,thandoesthechangeofa￡5noteintosovereigns,halfsovereignsandshillings.Sofarthereforeasthecirculationofcommoditieseffectsachangeintheformaloneoftheirvalues,andisfreefromdisturbinginfluences,itmustbetheexchangeofequivalents.LittleasVulgar-Economyknowsaboutthenatureofvalue,yetwheneveritwishestoconsiderthephenomenaofcirculationintheirpurity,itassumesthatsupplyanddemandareequal,whichamountstothis,thattheireffectisnil.Iftherefore,asregardstheuse-valuesexchanged,bothbuyerandsellermaypossiblygainsomething,thisisnotthecaseasregardstheexchange-values.Herewemustrathersay,"Whereequalityexiststherecanbenogain."5Itistrue,commoditiesmaybesoldatpricesdeviatingfromtheirvalues,butthesedeviationsaretobeconsideredasinfractionsofthelawsoftheexchangeofcommodities6,whichinitsnormalstateisanexchangeofequivalents,consequently,nomethodforincreasingvalue.7Hence,weseethatbehindallattemptstorepresentthecirculationofcommoditiesasasourceofsurplus-value,therelurksaquidproquo,amixingupofuse-valueandexchange-value.Forinstance,Condillacsays:"Itisnottruethatonanexchangeofcommoditieswegivevalueforvalue.Onthecontrary,eachofthetwocontractingpartiesineverycase,givesalessforagreatervalue....IfwereallyexchangedPART2:TRANSFORMATIONOFMONEYINTOCAPITAL181equalvalues,neitherpartycouldmakeaprofit.Andyet,theybothgain,oroughttogain.Why?Thevalueofathingconsistssolelyinitsrelationtoourwants.

Whatismoretotheoneislesstotheother,andviceversa....Itisnottobeassumedthatweofferforsalearticlesrequiredforourownconsumption....Wewishtopartwithauselessthing,inordertogetonethatweneed;wewanttogivelessformore....Itwasnaturaltothinkthat,inanexchange,valuewasgivenforvalue,whenevereachofthearticlesexchangedwasofequalvaluewiththesamequantityofgold.

...Butthereisanotherpointtobeconsideredinourcalculation.Thequestionis,whetherwebothexchangesomethingsuperfluousforsomethingnecessary."8Weseeinthispassage,howCondillacnotonlyconfusesuse-valuewithexchange-value,butinareallychildishmannerassumes,thatinasociety,inwhichtheproductionofcommoditiesiswelldeveloped,eachproducerproduceshisownmeansofsubsistence,andthrowsintocirculationonlytheexcessoverhisownrequirements9Still,Condillac'sargumentisfrequentlyusedbymoderneconomists,moreespeciallywhenthepointistoshow,thattheexchangeofcommoditiesinitsdevelopedform,commerce,isproductiveofsurplus-value.Forinstance,"Commerce...addsvaluetoproducts,forthesameproductsinthehandsofconsumers,areworthmorethaninthehandsofproducers,anditmaystrictlybeconsideredanactofproduction."10Butcommoditiesarenotpaidfortwiceover,onceonaccountoftheiruse-value,andagainonaccountoftheirvalue.Andthoughtheuse-valueofacommodityismoreserviceabletothebuyerthantotheseller,itsmoney-formismoreserviceabletotheseller.Wouldheotherwisesellit?Wemightthereforejustaswellsaythatthebuyerperforms"strictlyanactofproduction,"byconvertingstockings,forexample,intomoney.

Ifcommodities,orcommoditiesandmoney,of182CAPITALequalexchange-value,andconsequentlyequivalents,areexchanged,itisplainthatnooneabstractsmorevaluefrom,thanhethrowsinto,circulation.Thereisnocreationofsurplus-value.And,initsnormalform,thecirculationofcommoditiesdemandstheexchangeofequivalents.Butinactualpractice,theprocessdoesnotretainitsnormalform.Letus,therefore,assumeanexchangeofnon-equivalents.

Inanycasethemarketforcommoditiesisonlyfrequentedbyownersofcommodities,andthepowerwhichthesepersonsexerciseovereachother,isnootherthanthepoweroftheircommodities.Thematerialvarietyofthesecommoditiesisthematerialincentivetotheactofexchange,andmakesbuyersandsellersmutuallydependent,becausenoneofthempossessestheobjectofhisownwants,andeachholdsinhishandtheobjectofanother'swants.Besidesthesematerialdifferencesoftheiruse-values,thereisonlyoneotherdifferencebetweencommodities,namely,thatbetweentheirbodilyformandtheformintowhichtheyareconvertedbysale,thedifferencebetweencommoditiesandmoney.Andconsequentlytheownersofcommoditiesaredistinguishableonlyassellers,thosewhoowncommodities,andbuyers,thosewhoownmoney.

Supposethen,thatbysomeinexplicableprivilege,thesellerisenabledtosellhiscommoditiesabovetheirvalue,whatisworth100for110,inwhichcasethepriceisnominallyraised10%.Thesellerthereforepocketsasurplus-valueof10.Butafterhehassoldhebecomesabuyer.Athirdownerofcommoditiescomestohimnowasseller,whointhiscapacityalsoenjoystheprivilegeofsellinghiscommodities10%toodear.Ourfriendgained10asaselleronlytoloseitagainasabuyer.11Thenetresultis,thatallownersofcommoditiesselltheirgoodstooneanotherat10%abovetheirvalue,whichcomespreciselytothesameasiftheysoldthemattheirtruevalue.SuchaPART2:TRANSFORMATIONOFMONEYINTOCAPITAL183generalandnominalriseofpriceshasthesameeffectasifthevalueshadbeenexpressedinweightofsilverinsteadofinweightofgold.Thenominalpricesofcommoditieswouldrise,buttherealrelationbetweentheirvalueswouldremainunchanged.

Letusmaketheoppositeassumption,thatthebuyerhastheprivilegeofpurchasingcommoditiesundertheirvalue.Inthiscaseitisnolongernecessarytobearinmindthatheinhisturnwillbecomeaseller.

Hewassobeforehebecamebuyer;hehadalreadylost10%insellingbeforehegained10%asbuyer.12Everythingisjustasitwas.

Thecreationofsurplus-value,andthereforetheconversionofmoneyintocapital,canconsequentlybeexplainedneitherontheassumptionthatcommoditiesaresoldabovetheirvalue,northattheyareboughtbelowtheirvalue.13TheproblemisinnowaysimplifiedbyintroducingirrelevantmattersafterthemannerofCol.Torrens:"Effectualdemandconsistsinthepowerandinclination(!),onthepartofconsumers,togiveforcommodities,eitherbyimmediateorcircuitousbarter,somegreaterportionof...capitalthantheirproductioncosts."14Inrelationtocirculation,producersandconsumersmeetonlyasbuyersandsellers.Toassertthatthesurplus-valueacquiredbytheproducerhasitsorigininthefactthatconsumerspayforcommoditiesmorethantheirvalue,isonlytosayinotherwords:Theownerofcommoditiespossesses,asaseller,theprivilegeofsellingtoodear.Thesellerhashimselfproducedthecommoditiesorrepresentstheirproducer,butthebuyerhastonolessextentproducedthecommoditiesrepresentedbyhismoney,orrepresentstheirproducer.Thedistinctionbetweenthemis,thatonebuysandtheothersells.Thefactthattheownerofthecommodities,underthedesignationofproducer,sellsthemovertheirvalue,andunderthedesignationofconsumer,paystoomuchforthem,doesnotcarry184CAPITALusasinglestepfurther.15Tobeconsistenttherefore,theupholdersofthedelusionthatsurplus-valuehasitsorigininanominalriseofpricesorintheprivilegewhichthesellerhasofsellingtoodear,mustassumetheexistenceofaclassthatonlybuysanddoesnotsell,i.e.,onlyconsumesanddoesnotproduce.Theexistenceofsuchaclassisinexplicablefromthestandpointwehavesofarreached,viz.,thatofsimplecirculation.Butletusanticipate.Themoneywithwhichsuchaclassisconstantlymakingpurchases,mustconstantlyflowintotheirpockets,withoutanyexchange,gratis,bymightorright,fromthepocketsofthecommodity-ownersthemselves.Tosellcommoditiesabovetheirvaluetosuchaclass,isonlytocribbackagainapartofthemoneypreviouslygiventoit.16ThetownsofAsiaMinorthuspaidayearlymoneytributetoancientRome.WiththismoneyRomepurchasedfromthemcommodities,andpurchasedthemtoodear.TheprovincialscheatedtheRomans,andthusgotbackfromtheirconquerors,inthecourseoftrade,aportionofthetribute.Yet,forallthat,theconqueredwerethereallycheated.Theirgoodswerestillpaidforwiththeirownmoney.Thatisnotthewaytogetrichortocreatesurplus-value.

Letusthereforekeepwithintheboundsofexchangewheresellersarealsobuyers,andbuyers,sellers.Ourdifficultymayperhapshavearisenfromtreatingtheactorsaspersonificationsinsteadofasindividuals.

AmaybecleverenoughtogettheadvantageofBorCwithouttheirbeingabletoretaliate.Asellswineworth￡40toB,andobtainsfromhiminexchangecorntothevalueof￡50.Ahasconvertedhis￡40into￡50,hasmademoremoneyoutofless,andhasconvertedhiscommoditiesintocapital.Letusexaminethisalittlemoreclosely.Beforetheexchangewehad￡40worthofwineinthehandsofA,and￡50worthofcorninthoseofB,atotalvalueof￡90.

PART2:TRANSFORMATIONOFMONEYINTOCAPITAL185Aftertheexchangewehavestillthesametotalvalueof￡90.Thevalueincirculationhasnotincreasedbyoneiota,itisonlydistributeddifferentlybetweenAandB.WhatisalossofvaluetoBissurplus-valuetoA;whatis"minus"tooneis"plus"totheother.Thesamechangewouldhavetakenplace,ifA,withouttheformalityofanexchange,haddirectlystolenthe￡10fromB.Thesumofthevaluesincirculationcanclearlynotbeaugmentedbyanychangeintheirdistribution,anymorethanthequantityofthepreciousmetalsinacountrybyaJewsellingaQueenAnne'sfarthingforaguinea.Thecapitalistclass,asawhole,inanycountry,cannotover-reachthemselves.17Turnandtwistthenaswemay,thefactremainsunaltered.Ifequivalentsareexchanged,nosurplus-valueresults,andifnon-equivalentsareexchanged,stillnosurplus-value.18Circulation,ortheexchangeofcommodities,begetsnovalue.19Thereasonisnowthereforeplainwhy,inanalysingthestandardformofcapital,theformunderwhichitdeterminestheeconomicorganisationofmodernsociety,weentirelyleftoutofconsiderationitsmostpopular,and,sotosay,antediluvianforms,merchants'capitalandmoney-lenders'capital.

ThecircuitM-C-M,buyinginordertoselldearer,isseenmostclearlyingenuinemerchants'capital.

Butthemovementtakesplaceentirelywithinthesphereofcirculation.Since,however,itisimpossible,bycirculationalone,toaccountfortheconversionofmoneyintocapital,fortheformationofsurplus-value,itwouldappear,thatmerchants'capitalisanimpossibility,solongasequivalentsareexchanged;20that,therefore,itcanonlyhaveitsorigininthetwo-foldadvantagegained,overboththesellingandthebuyingproducers,bythemerchantwhoparasiticallyshoveshimselfinbetweenthem.ItisinthissensethatFranklinsays,"warisrobbery,commerceisgenerallycheating."21Ifthetransformationofmerchants'186CAPITALmoneyintocapitalistobeexplainedotherwisethanbytheproducersbeingsimplycheated,alongseriesofintermediatestepswouldbenecessary,which,atpresent,whenthesimplecirculationofcommoditiesformsouronlyassumption,areentirelywanting.

Whatwehavesaidwithreferencetomerchants'capital,appliesstillmoretomoney-lenders'capital.Inmerchants'capital,thetwoextremes,themoneythatisthrownuponthemarket,andtheaugmentedmoneythatiswithdrawnfromthemarket,areatleastconnectedbyapurchaseandasale,inotherwordsbythemovementofthecirculation.Inmoney-lenders'capitaltheformM-C-Misreducedtothetwoextremeswithoutamean,M-M,moneyexchangedformoremoney,aformthatisincompatiblewiththenatureofmoney,andthereforeremainsinexplicablefromthestandpointofthecirculationofcommodities.

HenceAristotle:"sincechrematisticisadoublescience,onepartbelongingtocommerce,theothertoeconomic,thelatterbeingnecessaryandpraiseworthy,theformerbasedoncirculationandwithjusticedisapproved(foritisnotbasedonNature,butonmutualcheating),thereforetheusurerismostrightlyhated,becausemoneyitselfisthesourceofhisgain,andisnotusedforthepurposesforwhichitwasinvented.Foritoriginatedfortheexchangeofcommodities,butinterestmakesoutofmoney,moremoney.

Henceitsname(τοκο?interestandoffspring).Forthebegottenarelikethosewhobegetthem.Butinterestismoneyofmoney,sothatofallmodesofmakingaliving,thisisthemostcontrarytoNature."22Inthecourseofourinvestigation,weshallfindthatbothmerchants'capitalandinterest-bearingcapitalarederivativeforms,andatthesametimeitwillbecomeclear,whythesetwoformsappearinthecourseofPART2:TRANSFORMATIONOFMONEYINTOCAPITAL187historybeforethemodernstandardformofcapital.

Wehaveshownthatsurplus-valuecannotbecreatedbycirculation,and,therefore,thatinitsformation,somethingmusttakeplaceinthebackground,whichisnotapparentinthecirculationitself.23Butcansurplus-valuepossiblyoriginateanywhereelsethanincirculation,whichisthesumtotalofallthemutualrelationsofcommodity-owners,asfarastheyaredeterminedbytheircommodities?Apartfromcirculation,thecommodity-ownerisinrelationonlywithhisowncommodity.Sofarasregardsvalue,thatrelationislimitedtothis,thatthecommoditycontainsaquantityofhisownlabour,thatquantitybeingmeasuredbyadefinitesocialstandard.Thisquantityisexpressedbythevalueofthecommodity,andsincethevalueisreckonedinmoneyofaccount,thisquantityisalsoexpressedbytheprice,whichwewillsupposetobe￡10.Buthislabourisnotrepresentedbothbythevalueofthecommodity,andbyasurplusoverthatvalue,notbyapriceof10thatisalsoapriceof11,notbyavaluethatisgreaterthanitself.Thecommodityownercan,byhislabour,createvalue,butnotself-expandingvalue.Hecanincreasethevalueofhiscommodity,byaddingfreshlabour,andthereforemorevaluetothevalueinhand,bymaking,forinstance,leatherintoboots.Thesamematerialhasnowmorevalue,becauseitcontainsagreaterquantityoflabour.Thebootshavethereforemorevaluethantheleather,butthevalueoftheleatherremainswhatitwas;ithasnotexpandeditself,hasnot,duringthemakingoftheboots,annexedsurplus-value.Itisthereforeimpossiblethatoutsidethesphereofcirculation,aproducerofcommoditiescan,withoutcomingintocontactwithothercommodity-owners,expandvalue,andconsequentlyconvertmoneyorcommoditiesintocapital.

Itisthereforeimpossibleforcapitaltobeproducedbycirculation,anditisequallyimpossibleforitto188CAPITALoriginateapartfromcirculation.Itmusthaveitsoriginbothincirculationandyetnotincirculation.

Wehave,therefore,gotadoubleresult.

Theconversionofmoneyintocapitalhastobeexplainedonthebasisofthelawsthatregulatetheexchangeofcommodities,insuchawaythatthestarting-pointistheexchangeofequivalents.24Ourfriend,Moneybags,whoasyetisonlyanembryocapitalist,mustbuyhiscommoditiesattheirvalue,mustsellthemattheirvalue,andyetattheendoftheprocessmustwithdrawmorevaluefromcirculationthanhethrewintoitatstarting.Hisdevelopmentintoafull-growncapitalistmusttakeplace,bothwithinthesphereofcirculationandwithoutit.Thesearetheconditionsoftheproblem.HicRhodus,hicsalta!25NOTES:1"L'échangeestunetransactionadmirabledanslaquellelesdeuxcontractantsgagnent-toujours(!)"["Exchangeisatransactioninwhichthetwocontractingpartiesalwaysgain,bothofthem(!)"](DestuttdeTracy:"TraitédelaVolontéetdeseseffets."Paris,1826,p.68.)Thisworkappearedafterwardsas"Traitéd'Econ.Polit."2"MercierdelaRivière,"l.c.,p.544.

3"Quel'unedecesdeuxvaleurssoitargent,ouqu'ellessoienttoutesdeuxmarchandisesusuelles,riendeplusindifférentensoi."["Whetheroneofthosetwovaluesismoney,ortheyarebothordinarycommodities,isinitselfamatterofcompleteindifference."]("MercierdelaRivière,"l.c.,p.543.)4"Cenesontpaslescontractantsquiprononcentsurlavaleur;elleestdécidéeavantlaconvention."["Itisnotthepartiestoacontractwhodecideonthevalue;thathasbeendecidedbeforethecontract."](LeTrosne,p.906.)5"Doveèegualitànonèlucro."(Galiani,"DellaMonetainCustodi,ParteModerna,"t.iv.,p.244.)PART2:TRANSFORMATIONOFMONEYINTOCAPITAL1896"L'échangedevientdésavantageuxpourl'unedesparties,lorsquequelquechoseétrangèrevientdiminuerouexagérerleprix;alorsl'égalitéestblessée,maislalésionprocèdedecettecauseetnondel'échange."["Theexchangebecomesunfavourableforoneofthepartieswhensomeexternalcircumstancecomestolessenorincreasetheprice;thenequalityisinfringed,butthisinfringementarisesfromthatcauseandnotfromtheexchangeitself."](LeTrosne,l.c.,p.

904.)7"L'échangeestdesanatureuncontratd'égalitéquisefaitdevaleurpourvaleurégale.Iln'estdoncpasunmoyendes'enrichir,puisquel'ondonneautantquel'onre?oit."["Exchangeisbyitsnatureacontractwhichrestsonequality,i.e.,ittakesplacebetweentwoequalvalues,anditisnotameansofself-enrichment,sinceasmuchisgivenasisreceived."](LeTrosne,l.c.,p.903.)8Condillac:"LeCommerceetleGouvernement"(1776).

Edit.DaireetMolinariinthe"Mélangesd'Econ.Polit."Paris,1847,pp.267,291.

9LeTrosne,therefore,answershisfriendCondillacwithjusticeasfollows:"Dansune...sociétéforméeiln'yapasdesurabondantenaucungenre."["Inadevelopedsocietyabsolutelynothingissuperfluous."]Atthesametime,inabanteringway,heremarks:"Ifboththepersonswhoexchangereceivemoretoanequalamount,andpartwithlesstoanequalamount,theybothgetthesame."ItisbecauseCondillachasnottheremotestideaofthenatureofexchange-valuethathehasbeenchosenbyHerrProfessorWilhelmRoscherasaproperpersontoanswerforthesoundnessofhisownchildishnotions.SeeRoscher's"DieGrundlagenderNational?konomie,DritteAuflage,"1858.

10S.P.Newman:"ElementsofPolit.Econ."AndoverandNewYork,1835,p.175.

11"Bytheaugmentationofthenominalvalueoftheproduce...sellersnotenriched...sincewhattheygainassellers,theypreciselyexpendinthequalityofbuyers."("TheEssentialPrinciplesoftheWealthofNations."&c.,London,1797,p.

66.)190CAPITAL12"Sil'onestforcédedonnerpour18livresunequantitédetelleproductionquienvalait24,lorsqu'onemployeracemêmeargentàacheter,onauraégalementpour18l.cequel'onpayait24."["Ifoneiscompelledtosellaquantityofacertainproductfor18livreswhenithasavalueof24livres,whenoneemploysthesameamountofmoneyinbuying,onewillreceivefor18livresthesamequantityoftheproductas24livreswouldhaveboughtotherwise."](LeTrosne,I.c.,p.897.)13"Chaquevendeurnepeutdoncparveniràrenchérirhabituellementsesmarchandises,qu'ensesoumettantaussiàpayerhabituellementpluscherlesmarchandisesdesautresvendeurs;etparlamêmeraison,chaqueconsommateurnepeutpayerhabituellementmoinschercequ'ilachète,qu'ensesoumettantaussiàunediminutionsemblablesurleprixdeschosesqu'ilvend."["Asellercannormallyonlysucceedinraisingthepricesofhiscommoditiesifheagreestopay,byandlarge,moreforthecommoditiesoftheothersellers;andforthesamereasonaconsumercannormallyonlypaylessforhispurchasesifhesubmitstoasimilarreductioninthepricesofthethingshesells."](MercierdelaRivière,l.c.,p.555.)14Torrens."AnEssayontheProductionofWealth."London,1821,p.349.

15"Theideaofprofitsbeingpaidbytheconsumers,is,assuredly,veryabsurd.Whoaretheconsumers?"(G.Ramsay:"AnEssayontheDistributionofWealth."Edinburgh,1836,p.

183.)16"Whenamanisinwantofademand,doesMr.Malthusrecommendhimtopaysomeotherpersontotakeoffhisgoods?"isaquestionputbyanangrydiscipleofRicardotoMalthus,who,likehisdisciple,ParsonChalmers,economicallyglorifiesthisclassofsimplebuyersorconsumers.(See"AnInquiryintothosePrinciplesRespectingtheNatureofDemandandtheNecessityofConsumption,latelyadvocatedbyMr.

Malthus,"&c.Lond.,1821,p.55.)17DestuttdeTracy,although,orperhapsbecause,hewasamemberoftheInstitute,heldtheoppositeview.Hesays,industrialcapitalistsmakeprofitsbecause"theyallsellformorethanithascosttoproduce.Andtowhomdotheysell?InPART2:TRANSFORMATIONOFMONEYINTOCAPITAL191thefirstinstancetooneanother."(I.c.,p.239.)18"L'échangequisefaitdedeuxvaleurségalesn'augmenteninediminuelamassedesvaleurssubsistantesdanslasociété.

L'échangededeuxvaleursinégales...nechangeriennonplusàlasommedesvaleurssociales,bienqu'ilajouteàlafortunedel'uncequ'il?tedelafortunedel'autre."["Theexchangeoftwoequalvaluesneitherincreasesnordiminishestheamountofthevaluesavailableinsociety.Nordoestheexchangeoftwounequalvalues...changeanythinginthesumofsocialvalues,althoughitaddstothewealthofonepersonwhatitremovesfromthewealthofanother."](J.B.Say,l.c.,t.II,pp.

443,444.)Say,notintheleasttroubledastotheconsequencesofthisstatement,borrowsit,almostwordforword,fromthePhysiocrats.ThefollowingexamplewillshowhowMonsieurSayturnedtoaccountthewritingsofthePhysiocrats,inhisdayquiteforgotten,forthepurposeofexpandingthe"value"ofhisown.Hismostcelebratedsaying,"Onn'achètedesproduitsqu'avecdesproduits"["Productscanonlybeboughtwithproducts."](l.c.,t.II.p.441.)runsasfollowsintheoriginalphysiocraticwork:"Lesproductionsnesepaientqu'avecdesproductions."["Productscanonlybepaidforwithproducts."](LeTrosne,l.c.,p.899.)19"Exchangeconfersnovalueatalluponproducts."(F.

Wayland:"TheElementsofPoliticalEconomy."Boston,1843,p.169.)20Undertheruleofinvariableequivalentscommercewouldbeimpossible.(G.Opdyke:"ATreatiseonPolit.Economy."NewYork,1851,pp.66-69.)"Thedifferencebetweenrealvalueandexchange-valueisbaseduponthisfact,namely,thatthevalueofathingisdifferentfromtheso-calledequivalentgivenforitintrade,i.e.,thatthisequivalentisnoequivalent."(F.Engels,l.c.,p.96).

21BenjaminFranklin:Works,Vol.II,edit.Sparksin"PositionstobeexaminedconcerningNationalWealth,"p.

376.

22Aristotle,I.c.,c.10.

23"Profit,intheusualconditionofthemarket,isnotmadebyexchanging.Haditnotexistedbefore,neithercoulditafter192CAPITALthattransaction."(Ramsay,l.c.,p.184.)24Fromtheforegoinginvestigation,thereaderwillseethatthisstatementonlymeansthattheformationofcapitalmustbepossibleeventhoughthepriceandvalueofacommoditybethesame;foritsformationcannotbeattributedtoanydeviationoftheonefromtheother.Ifpricesactuallydifferfromvalues,wemust,firstofall,reducetheformertothelatter,inotherwords,treatthedifferenceasaccidentalinorderthatthephenomenamaybeobservedintheirpurity,andourobservationsnotinterferedwithbydisturbingcircumstancesthathavenothingtodowiththeprocessinquestion.Weknow,moreover,thatthisreductionisnomerescientificprocess.Thecontinualoscillationsinprices,theirrisingandfalling,compensateeachother,andreducethemselvestoanaverageprice,whichistheirhiddenregulator.Itformstheguidingstarofthemerchantorthemanufacturerineveryundertakingthatrequirestime.Heknowsthatwhenalongperiodoftimeistaken,commoditiesaresoldneitherovernorunder,butattheiraverageprice.Ifthereforehethoughtaboutthematteratall,hewouldformulatetheproblemoftheformationofcapitalasfollows:Howcanweaccountfortheoriginofcapitalonthesuppositionthatpricesareregulatedbytheaverageprice,i.e.,ultimatelybythevalueofthecommodities?Isay"ultimately,"becauseaveragepricesdonotdirectlycoincidewiththevaluesofcommodities,asAdamSmith,Ricardo,andothersbelieve.

25"HicRhodus,hicsaltus!"–Latin,usuallytranslated:"Rhodesishere,hereiswhereyoujump!"OriginatesfromthetraditionalLatintranslationofthepunchlinefromAesop'sfableTheBoastfulAthletewhichhasbeenthesubjectofsomemistranslations.InGreek,themaximreads:"ιδο?ηρ?δο?,ιδο?καιτοπ?δημα"ThestoryisthatanathleteboaststhatwheninRhodes,heperformedastupendousjump,andthattherewerewitnesseswhocouldbackuphisstory.Abystanderthenremarked,'Alright!Let'ssaythisisRhodes,demonstratethejumphereandnow.'Thefableshowsthatpeoplemustbeknownbytheirdeeds,notbytheirownclaimsforthemselves.InthecontextPART2:TRANSFORMATIONOFMONEYINTOCAPITAL193inwhichHegeluseditinthePhilosophyofRight,thiscouldbetakentomeanthatthephilosophyofrightmusthavetodowiththeactualityofmodernsociety,notthetheoriesandidealsthatsocietiescreateforthemselves,nor,asHegelgoesontosay,to"teachtheworldwhatitoughttobe."TheepigramisgivenbyHegelfirstinGreek,theninLatin(intheform"HicRhodus,hicsaltus"),andhethensays:"Withlittlechange,theabovesayingwouldread(inGerman):"HieristdieRose,hiertanze":"Hereistherose,dancehere"Thisistakentobeanallusiontothe'roseinthecross'oftheRosicrucians(whoclaimedtopossessesotericknowledgewithwhichtheycouldtransformsociallife),implyingthatthematerialforunderstandingandchangingsocietyisgiveninsocietyitself,notinsomeother-worldlytheory,punningfirstontheGreek(Rhodos=Rhodes,rhodon=rose),thenontheLatin(saltus=jump[noun],salta=dance[imperative]).[MIAEditors.]CHAPTER6:THEBUYINGANDSELLINGOFLABOUR-POWERhechangeofvaluethatoccursinthecaseofTmoneyintendedtobeconvertedintocapital,cannottakeplaceinthemoneyitself,sinceinitsfunctionofmeansofpurchaseandofpayment,itdoesnomorethanrealisethepriceofthecommodityitbuysorpaysfor;and,ashardcash,itisvaluepetrified,nevervarying.1Justaslittlecanitoriginateinthesecondactofcirculation,there-saleofthecommodity,whichdoesnomorethantransformthearticlefromitsbodilyformbackagainintoitsmoney-form.Thechangemust,therefore,takeplaceinthecommodityboughtbythefirstact,M-C,butnotinitsvalue,forequivalentsareexchanged,andthecommodityispaidforatitsfullvalue.Weare,therefore,forcedtotheconclusionthatthechangeoriginatesintheuse-value,assuch,ofthecommodity,i.e.,initsconsumption.Inordertobeabletoextractvaluefromtheconsumptionofacommodity,ourfriend,Moneybags,mustbesoluckyastofind,withinthesphereofcirculation,inthemarket,acommodity,whoseuse-valuepossessesthepeculiarpropertyofbeingasourceofvalue,whoseactualconsumption,therefore,isitselfanembodimentoflabour,and,consequently,acreationofvalue.Thepossessorofmoneydoesfindonthemarketsuchaspecialcommodityincapacityforlabourorlabour-power.

Bylabour-powerorcapacityforlabouristobePART2:TRANSFORMATIONOFMONEYINTOCAPITAL195understoodtheaggregateofthosementalandphysicalcapabilitiesexistinginahumanbeing,whichheexerciseswheneverheproducesause-valueofanydescription.

Butinorderthatourownerofmoneymaybeabletofindlabour-powerofferedforsaleasacommodity,variousconditionsmustfirstbefulfilled.Theexchangeofcommoditiesofitselfimpliesnootherrelationsofdependencethanthosewhichresultfromitsownnature.Onthisassumption,labour-powercanappearuponthemarketasacommodity,onlyif,andsofaras,itspossessor,theindividualwhoselabour-poweritis,offersitforsale,orsellsit,asacommodity.Inorderthathemaybeabletodothis,hemusthaveitathisdisposal,mustbetheuntrammelledownerofhiscapacityforlabour,i.e.,ofhisperson.2Heandtheownerofmoneymeetinthemarket,anddealwitheachotherasonthebasisofequalrights,withthisdifferencealone,thatoneisbuyer,theotherseller;both,therefore,equalintheeyesofthelaw.Thecontinuanceofthisrelationdemandsthattheownerofthelabour-powershouldsellitonlyforadefiniteperiod,forifheweretosellitrumpandstump,onceforall,hewouldbesellinghimself,convertinghimselffromafreemanintoaslave,fromanownerofacommodityintoacommodity.Hemustconstantlylookuponhislabour-powerashisownproperty,hisowncommodity,andthishecanonlydobyplacingitatthedisposalofthebuyertemporarily,foradefiniteperiodoftime.Bythismeansalonecanheavoidrenouncinghisrightsofownershipoverit.3Thesecondessentialconditiontotheownerofmoneyfindinglabour-powerinthemarketasacommodityisthis–thatthelabourerinsteadofbeinginthepositiontosellcommoditiesinwhichhislabourisincorporated,mustbeobligedtoofferforsaleasacommoditythatverylabour-power,whichexistsonlyinhislivingself.

196CAPITALInorderthatamanmaybeabletosellcommoditiesotherthanlabour-power,hemustofcoursehavethemeansofproduction,asrawmaterial,implements,&c.Nobootscanbemadewithoutleather.Herequiresalsothemeansofsubsistence.Nobody–noteven"amusicianofthefuture"–canliveuponfutureproducts,oruponuse-valuesinanunfinishedstate;andeversincethefirstmomentofhisappearanceontheworld'sstage,manalwayshasbeen,andmuststillbeaconsumer,bothbeforeandwhileheisproducing.

Inasocietywhereallproductsassumetheformofcommodities,thesecommoditiesmustbesoldaftertheyhavebeenproduced,itisonlyaftertheirsalethattheycanserveinsatisfyingtherequirementsoftheirproducer.Thetimenecessaryfortheirsaleissuperaddedtothatnecessaryfortheirproduction.

Fortheconversionofhismoneyintocapital,therefore,theownerofmoneymustmeetinthemarketwiththefreelabourer,freeinthedoublesense,thatasafreemanhecandisposeofhislabour-powerashisowncommodity,andthatontheotherhandhehasnoothercommodityforsale,isshortofeverythingnecessaryfortherealisationofhislabour-power.

Thequestionwhythisfreelabourerconfrontshiminthemarket,hasnointerestfortheownerofmoney,whoregardsthelabour-marketasabranchofthegeneralmarketforcommodities.Andforthepresentitinterestsusjustaslittle.Weclingtothefacttheoretically,ashedoespractically.Onething,however,isclear–Naturedoesnotproduceontheonesideownersofmoneyorcommodities,andontheothermenpossessingnothingbuttheirownlabour-power.Thisrelationhasnonaturalbasis,neitherisitssocialbasisonethatiscommontoallhistoricalperiods.Itisclearlytheresultofapasthistoricaldevelopment,theproductofmanyeconomicrevolutions,oftheextinctionofawholeseriesofolderformsofsocialproduction.

PART2:TRANSFORMATIONOFMONEYINTOCAPITAL197So,too,theeconomiccategories,alreadydiscussedbyus,bearthestampofhistory.Definitehistoricalconditionsarenecessarythataproductmaybecomeacommodity.Itmustnotbeproducedastheimmediatemeansofsubsistenceoftheproducerhimself.Hadwegonefurther,andinquiredunderwhatcircumstancesall,oreventhemajorityofproductstaketheformofcommodities,weshouldhavefoundthatthiscanonlyhappenwithproductionofaveryspecifickind,capitalistproduction.Suchaninquiry,however,wouldhavebeenforeigntotheanalysisofcommodities.

Productionandcirculationofcommoditiescantakeplace,althoughthegreatmassoftheobjectsproducedareintendedfortheimmediaterequirementsoftheirproducers,arenotturnedintocommodities,andconsequentlysocialproductionisnotyetbyalongwaydominatedinitslengthandbreadthbyexchange-value.Theappearanceofproductsascommoditiespre-supposessuchadevelopmentofthesocialdivisionoflabour,thattheseparationofuse-valuefromexchange-value,aseparationwhichfirstbeginswithbarter,mustalreadyhavebeencompleted.Butsuchadegreeofdevelopmentiscommontomanyformsofsociety,whichinotherrespectspresentthemostvaryinghistoricalfeatures.Ontheotherhand,ifweconsidermoney,itsexistenceimpliesadefinitestageintheexchangeofcommodities.Theparticularfunctionsofmoneywhichitperforms,eitherasthemereequivalentofcommodities,orasmeansofcirculation,ormeansofpayment,ashoardorasuniversalmoney,point,accordingtotheextentandrelativepreponderanceoftheonefunctionortheother,toverydifferentstagesintheprocessofsocialproduction.Yetweknowbyexperiencethatacirculationofcommoditiesrelativelyprimitive,sufficesfortheproductionofalltheseforms.Otherwisewithcapital.Thehistoricalconditionsofitsexistencearebynomeansgivenwiththemerecirculationofmoneyandcommodities.Itcan198CAPITALspringintolife,onlywhentheownerofthemeansofproductionandsubsistencemeetsinthemarketwiththefreelabourersellinghislabour-power.Andthisonehistoricalconditioncomprisesaworld'shistory.

Capital,therefore,announcesfromitsfirstappearanceanewepochintheprocessofsocialproduction.4Wemustnowexaminemorecloselythispeculiarcommodity,labour-power.Likeallothersithasavalue.5Howisthatvaluedetermined?

Thevalueoflabour-powerisdetermined,asinthecaseofeveryothercommodity,bythelabour-timenecessaryfortheproduction,andconsequentlyalsothereproduction,ofthisspecialarticle.Sofarasithasvalue,itrepresentsnomorethanadefinitequantityoftheaveragelabourofsocietyincorporatedinit.

Labour-powerexistsonlyasacapacity,orpowerofthelivingindividual.Itsproductionconsequentlypre-supposeshisexistence.Giventheindividual,theproductionoflabour-powerconsistsinhisreproductionofhimselforhismaintenance.Forhismaintenanceherequiresagivenquantityofthemeansofsubsistence.Thereforethelabour-timerequisitefortheproductionoflabour-powerreducesitselftothatnecessaryfortheproductionofthosemeansofsubsistence;inotherwords,thevalueoflabour-poweristhevalueofthemeansofsubsistencenecessaryforthemaintenanceofthelabourer.Labour-power,however,becomesarealityonlybyitsexercise;itsetsitselfinactiononlybyworking.Buttherebyadefinitequantityofhumanmuscle,nerve,brain,&c.,iswasted,andtheserequiretoberestored.Thisincreasedexpendituredemandsalargerincome.6Iftheowneroflabour-powerworksto-day,to-morrowhemustagainbeabletorepeatthesameprocessinthesameconditionsasregardshealthandstrength.

Hismeansofsubsistencemustthereforebesufficienttomaintainhiminhisnormalstateasalabouringindividual.Hisnaturalwants,suchasfood,clothing,PART2:TRANSFORMATIONOFMONEYINTOCAPITAL199fuel,andhousing,varyaccordingtotheclimaticandotherphysicalconditionsofhiscountry.Ontheotherhand,thenumberandextentofhisso-callednecessarywants,asalsothemodesofsatisfyingthem,arethemselvestheproductofhistoricaldevelopment,anddependthereforetoagreatextentonthedegreeofcivilisationofacountry,moreparticularlyontheconditionsunderwhich,andconsequentlyonthehabitsanddegreeofcomfortinwhich,theclassoffreelabourershasbeenformed.7Incontradistinctionthereforetothecaseofothercommodities,thereentersintothedeterminationofthevalueoflabour-powerahistoricalandmoralelement.Nevertheless,inagivencountry,atagivenperiod,theaveragequantityofthemeansofsubsistencenecessaryforthelabourerispracticallyknown.

Theowneroflabour-powerismortal.Ifthenhisappearanceinthemarketistobecontinuous,andthecontinuousconversionofmoneyintocapitalassumesthis,theselleroflabour-powermustperpetuatehimself,"inthewaythateverylivingindividualperpetuateshimself,byprocreation."8Thelabour-powerwithdrawnfromthemarketbywearandtearanddeath,mustbecontinuallyreplacedby,attheveryleast,anequalamountoffreshlabour-power.

Hencethesumofthemeansofsubsistencenecessaryfortheproductionoflabour-powermustincludethemeansnecessaryforthelabourer'ssubstitutes,i.e.,hischildren,inorderthatthisraceofpeculiarcommodity-ownersmayperpetuateitsappearanceinthemarket.9Inordertomodifythehumanorganism,sothatitmayacquireskillandhandinessinagivenbranchofindustry,andbecomelabour-powerofaspecialkind,aspecialeducationortrainingisrequisite,andthis,onitspart,costsanequivalentincommoditiesofagreaterorlessamount.Thisamountvariesaccordingtothemoreorlesscomplicatedcharacterofthelabour-power.Theexpensesofthiseducation(excessively200CAPITALsmallinthecaseofordinarylabour-power),enterprotantointothetotalvaluespentinitsproduction.

Thevalueoflabour-powerresolvesitselfintothevalueofadefinitequantityofthemeansofsubsistence.Itthereforevarieswiththevalueofthesemeansorwiththequantityoflabourrequisitefortheirproduction.

Someofthemeansofsubsistence,suchasfoodandfuel,areconsumeddaily,andafreshsupplymustbeprovideddaily.Otherssuchasclothesandfurniturelastforlongerperiodsandrequiretobereplacedonlyatlongerintervals.Onearticlemustbeboughtorpaidfordaily,anotherweekly,anotherquarterly,andsoon.Butinwhateverwaythesumtotaloftheseoutlaysmaybespreadovertheyear,theymustbecoveredbytheaverageincome,takingonedaywithanother.

Ifthetotalofthecommoditiesrequireddailyfortheproductionoflabour-power=A,andthoserequiredweekly=B,andthoserequiredquarterly=C,andsoon,thedailyaverageofthesecommodities=(365A+52B+4C+&c)/365.Supposethatinthismassofcommoditiesrequisitefortheaveragedaythereareembodied6hoursofsociallabour,thenthereisincorporateddailyinlabour-powerhalfaday'saveragesociallabour,inotherwords,halfaday'slabourisrequisiteforthedailyproductionoflabour-power.Thisquantityoflabourformsthevalueofaday'slabour-powerorthevalueofthelabour-powerdailyreproduced.Ifhalfaday'saveragesociallabourisincorporatedinthreeshillings,thenthreeshillingsisthepricecorrespondingtothevalueofaday'slabour-power.Ifitsownerthereforeoffersitforsaleatthreeshillingsaday,itssellingpriceisequaltoitsvalue,andaccordingtooursupposition,ourfriendMoneybags,whoisintentuponconvertinghisthreeshillingsintocapital,paysthisvalue.

Theminimumlimitofthevalueoflabour-powerisdeterminedbythevalueofthecommodities,withoutPART2:TRANSFORMATIONOFMONEYINTOCAPITAL201thedailysupplyofwhichthelabourercannotrenewhisvitalenergy,consequentlybythevalueofthosemeansofsubsistencethatarephysicallyindispensable.

Ifthepriceoflabour-powerfalltothisminimum,itfallsbelowitsvalue,sinceundersuchcircumstancesitcanbemaintainedanddevelopedonlyinacrippledstate.Butthevalueofeverycommodityisdeterminedbythelabour-timerequisitetoturnitoutsoastobeofnormalquality.

Itisaverycheapsortofsentimentalitywhichdeclaresthismethodofdeterminingthevalueoflabour-power,amethodprescribedbytheverynatureofthecase,tobeabrutalmethod,andwhichwailswithRossithat,"Tocomprehendcapacityforlabour(puissancedetravail)atthesametimethatwemakeabstractionfromthemeansofsubsistenceofthelabourersduringtheprocessofproduction,istocomprehendaphantom(êtrederaison).Whenwespeakoflabour,orcapacityforlabour,wespeakatthesametimeofthelabourerandhismeansofsubsistence,oflabourerandwages."10Whenwespeakofcapacityforlabour,wedonotspeakoflabour,anymorethanwhenwespeakofcapacityfordigestion,wespeakofdigestion.Thelatterprocessrequiressomethingmorethanagoodstomach.Whenwespeakofcapacityforlabour,wedonotabstractfromthenecessarymeansofsubsistence.Onthecontrary,theirvalueisexpressedinitsvalue.Ifhiscapacityforlabourremainsunsold,thelabourerderivesnobenefitfromit,butratherhewillfeelittobeacruelnature-imposednecessitythatthiscapacityhascostforitsproductionadefiniteamountofthemeansofsubsistenceandthatitwillcontinuetodosoforitsreproduction.HewillthenagreewithSismondi:"thatcapacityforlabour...isnothingunlessitissold."11Oneconsequenceofthepeculiarnatureoflabour-powerasacommodityis,thatitsuse-valuedoesnot,ontheconclusionofthecontractbetweenthebuyer202CAPITALandseller,immediatelypassintothehandsoftheformer.Itsvalue,likethatofeveryothercommodity,isalreadyfixedbeforeitgoesintocirculation,sinceadefinitequantityofsociallabourhasbeenspentuponit;butitsuse-valueconsistsinthesubsequentexerciseofitsforce.Thealienationoflabour-poweranditsactualappropriationbythebuyer,itsemploymentasause-value,areseparatedbyanintervaloftime.Butinthosecasesinwhichtheformalalienationbysaleoftheuse-valueofacommodity,isnotsimultaneouswithitsactualdeliverytothebuyer,themoneyofthelatterusuallyfunctionsasmeansofpayment.12Ineverycountryinwhichthecapitalistmodeofproductionreigns,itisthecustomnottopayforlabour-powerbeforeithasbeenexercisedfortheperiodfixedbythecontract,asforexample,theendofeachweek.Inallcases,therefore,theuse-valueofthelabour-powerisadvancedtothecapitalist:thelabourerallowsthebuyertoconsumeitbeforehereceivespaymentoftheprice;heeverywheregivescredittothecapitalist.

Thatthiscreditisnomerefiction,isshownnotonlybytheoccasionallossofwagesonthebankruptcyofthecapitalist,13butalsobyaseriesofmoreenduringconsequences.14Nevertheless,whethermoneyservesasameansofpurchaseorasameansofpayment,thismakesnoalterationinthenatureoftheexchangeofcommodities.Thepriceofthelabour-powerisfixedbythecontract,althoughitisnotrealisedtilllater,liketherentofahouse.Thelabour-powerissold,althoughitisonlypaidforatalaterperiod.Itwill,therefore,beuseful,foraclearcomprehensionoftherelationoftheparties,toassumeprovisionally,thatthepossessoroflabour-power,ontheoccasionofeachsale,immediatelyreceivesthepricestipulatedtobepaidforit.

Wenowknowhowthevaluepaidbythepurchasertothepossessorofthispeculiarcommodity,labour-power,isdetermined.Theuse-valuewhichtheformerPART2:TRANSFORMATIONOFMONEYINTOCAPITAL203getsinexchange,manifestsitselfonlyintheactualutilisation,intheconsumptionofthelabour-power.

Themoney-ownerbuyseverythingnecessaryforthispurpose,suchasrawmaterial,inthemarket,andpaysforitatitsfullvalue.Theconsumptionoflabour-powerisatoneandthesametimetheproductionofcommoditiesandofsurplus-value.Theconsumptionoflabour-poweriscompleted,asinthecaseofeveryothercommodity,outsidethelimitsofthemarketorofthesphereofcirculation.AccompaniedbyMr.

Moneybagsandbythepossessoroflabour-power,wethereforetakeleaveforatimeofthisnoisysphere,whereeverythingtakesplaceonthesurfaceandinviewofallmen,andfollowthembothintothehiddenabodeofproduction,onwhosethresholdtherestaresusintheface"Noadmittanceexceptonbusiness."Hereweshallsee,notonlyhowcapitalproduces,buthowcapitalisproduced.Weshallatlastforcethesecretofprofitmaking.

Thisspherethatwearedeserting,withinwhoseboundariesthesaleandpurchaseoflabour-powergoeson,isinfactaveryEdenoftheinnaterightsofman.

TherealoneruleFreedom,Equality,PropertyandBentham.Freedom,becausebothbuyerandsellerofacommodity,sayoflabour-power,areconstrainedonlybytheirownfreewill.Theycontractasfreeagents,andtheagreementtheycometo,isbuttheforminwhichtheygivelegalexpressiontotheircommonwill.Equality,becauseeachentersintorelationwiththeother,aswithasimpleownerofcommodities,andtheyexchangeequivalentforequivalent.Property,becauseeachdisposesonlyofwhatishisown.AndBentham,becauseeachlooksonlytohimself.Theonlyforcethatbringsthemtogetherandputstheminrelationwitheachother,istheselfishness,thegainandtheprivateinterestsofeach.Eachlookstohimselfonly,andnoonetroubleshimselfabouttherest,andjustbecausetheydoso,dotheyall,inaccordancewith204CAPITALthepre-establishedharmonyofthings,orundertheauspicesofanall-shrewdprovidence,worktogethertotheirmutualadvantage,forthecommonwealandintheinterestofall.

Onleavingthissphereofsimplecirculationorofexchangeofcommodities,whichfurnishesthe"Free-traderVulgaris"withhisviewsandideas,andwiththestandardbywhichhejudgesasocietybasedoncapitalandwages,wethinkwecanperceiveachangeinthephysiognomyofourdramatispersonae.He,whobeforewasthemoney-owner,nowstridesinfrontascapitalist;thepossessoroflabour-powerfollowsashislabourer.Theonewithanairofimportance,smirking,intentonbusiness;theother,timidandholdingback,likeonewhoisbringinghisownhidetomarketandhasnothingtoexpectbut–ahiding.

NOTES:1"Intheformofmoney...capitalisproductiveofnoprofit."(Ricardo:"Princ.ofPol.Econ.,"p.267.)2Inencyclopaediasofclassicalantiquitieswefindsuchnonsenseasthis—thatintheancientworldcapitalwasfullydeveloped,"exceptthatthefreelabourerandasystemofcreditwaswanting."Mommsenalso,inhis"HistoryofRome,"commits,inthisrespect,oneblunderafteranother.

3Hencelegislationinvariouscountriesfixesamaximumforlabour-contracts.Whereverfreelabouristherule,thelawsregulatethemodeofterminatingthiscontract.InsomeStates,particularlyinMexico(beforetheAmericanCivilWar,alsointheterritoriestakenfromMexico,andalso,asamatteroffact,intheDanubianprovincestilltherevolutioneffectedbyKusa),slaveryishiddenundertheformofpeonage.Bymeansofadvances,repayableinlabour,whicharehandeddownfromgenerationtogeneration,notonlytheindividuallabourer,buthisfamily,become,defacto,thepropertyofotherpersonsandtheirfamilies.Juarezabolishedpeonage.Theso-calledPART2:TRANSFORMATIONOFMONEYINTOCAPITAL205EmperorMaximilianre-establisheditbyadecree,which,intheHouseofRepresentativesatWashington,wasaptlydenouncedasadecreeforthere-introductionofslaveryintoMexico."Imaymakeovertoanothertheuse,foralimitedtime,ofmyparticularbodilyandmentalaptitudesandcapabilities;becauseinconsequenceofthisrestriction,theyareimpressedwithacharacterofalienationwithregardtomeasawhole.Butbythealienationofallmylabour-timeandthewholeofmywork,Ishouldbeconvertingthesubstanceitself,inotherwords,mygeneralactivityandreality,myperson,intothepropertyofanother."(Hegel,"PhilosophiedesRechts."Berlin,1840,p.