Data in JSON/A_CONTRIBUTION_TO_THE_CRITIQUE_OF_POLITI.json

{
    "title": "this is a reproduction of a library book that was digitized",
    "sections": [
        "this is a reproduction of a library book that was digitized by google as part of an ongoing effort to preserve the information in books and make it universally accessible. https://books.google.com",
        "a contribution to the critique of political economy by karl marx translated from the second german edition byn.i.stone with anappendix containing marx's introduction tothecritique recently published among his posthumous papers . chicago charles h.kerr &company",
        "undergraduate library hp 501 m394 1907 copyright ,1904 by the international library publishing co. john f.higgins ,printer andbinder 376-389 west monroe street ,chicago",
        "undergraduate library ! translator's preface . the present translation has been made from the sec- ond edition ofthe \"zur kritik der politischen oekon- omie ,\"published bykarl kautsky in1897 with slight changes from the original edition of1859 ;changes that had been indicated bymarx onthe margins ofhis own copy ofthe book . as will beseen from the author's preface ,the work was originally issued asthe first instalment ofacom- plete treatise of political economy .as he went on with his work ,however ,marx modified his plans and eight years after the appearance ofthe \"zur kritik \" hepublished the first volume ofhis capital ,whose scope was intended to cover the entire field of political economy . the plan towhich marx alludes inthe preface to the present work was thus abandoned initsformal as- pects ,but not insubstance .the subject matter treated here was reproduced orrather \"summarized ,\"asmarx himself puts it,incapital .but that was done inso far aswas necessary tosecure continuity oftreatment . on the other hand ,many important matters are treated here more thoroughly than incapital ,especially the part devoted tothe discussion ofmoney .this ,aswell as the chapters onthe history ofthe theories ofvalue and this one xtd5-7f8-9qafiih",
        "ofmoney ,which donot appear incapital ,make \"zur kritik \"awork practically complete initself . the recent silver agitation inthis country shows how timely and useful this work still is,though written nearly half acentury ago.that agreat part ofthe working- men employed inthe cities were not carried away by the democratic -populist agitation in1896 and 1900 is probably due inagreater measure than iscommonly realized tothe direct and indirect influence ofmarx , whose economic teachings guided the socialists intheir counter agitation .and since the conditions which ,once gave rise toademand for aninflated currency have by no means disappeared beyond apossibility ofreturn , this book has awide field before it,outside ofthe library ofthe college and ofthe student ofeconomics ,which the author's name and prestige with the working class insures for it. there isanother reason ,ifany need begiven why this book should have been translated into english . marx's preface tothe present work contains the classic formulation ofhis historico -philosophic theory known as the materialistic interpretation ofhistory .this the- ory,which until recently was entertained almost exclu- sively bysocialist writers and was hardly heard ofout- side ofsocialist circles inenglish speaking countries , isatlast receiving not only due recognition but sym- pathetic appreciation atthe hands ofmen ofscience.1 itisrather asignificant coincidence that the work cf. seligman ,\"the economic interpretation ofhistory .\" macmillan ,1902 .",
        "which for the first time clearly formulated the law gov erning social evolution should have seen the light of day inthe same year inwhich darwin gave tothe world his theory oforganic evolution .and asthe latter had tofight itsway torecognition inthe teeth ofreligious prejudices ,sohas the recognition ofthe former been retarded by even more powerful social and political prejudices . the introduction tothe critique ofpolitical econ- omy which isadded asasupplement tothis book isfor the first time published inbook form inany language . itwas written by marx in1857 ,but for reasons ex- plained byhim inthe preface was not published and in fact was never finished byhim ,since according tohis changed plans itwould have fitted more into the last volume ofcapital which was tocontain ahistory of political economy .the introduction has been published but lately inthe form ofamagazine article by karl kautsky ,editor ofthe neue zeit and literary executor ofkarl marx . afew explanations are here inorder with reference tothe work oftranslation .no one ismore keenly alive tothe shortcomings ofthe english rendering ofthe original than the translator himself .while fully con- scious that the translation might begreatly improved , hehas attimes deliberately sacrificed literary finish to closeness tothe original .itwill befound that many passages have been rendered more clear and concise in capital inwhich ,according tomarx's own statement in the preface tothat work ,they were much simplified and popularized .the hegelian phraseology ismore in",
        "- evidence inthe present work rendering translation a more difficult task .yet for that very reason itseemed particularly desirable togive toenglish speaking read- ers asclose aversion ofthe original aswas possible .in the few cases where certain passages from this work were reproduced bymarx incapital ,the translation of the latter bymoore and aveling was freely drawn upon with slight modifications here and there . about the only liberty taken with marx's terminology has been inthe case ofthe word \"brgerlich .\" marx speaks here of\"brgerliche produktion \"and \"brger- licher reichthum \"and \"brgerliche arbeit \"where eight years later heused incorresponding passages incapital the word \"kapitalistische .\" as the english speaking reader ismore accustomed tohear ofthe \"capitalist \" system ofproduction than ofthe \"bourgeois \"system of production ,etc.,the translator considered marx's own change ofthis term within afew years from the publi- cation of\"zur kritik \"asufficient justification for ren- dering the word \"brgerlich \"into \"capitalistic \"wher- ever itseemed more likely tocarry the meaning home to the reader . inview ofthe fact that the work islikely toberead inwide circles itwas thought desirable totranslate the numerous quotations from italian ,greek ,latin and french writers ,the translation being given side byside with the original quotation .all english citations given bymarx ingerman have been restored from the original sources ,which necessitated the use offour libraries ,the astor and the columbia university libraries in new york ,the congressional library inwashington ,and",
        "- the private library ofprofessor seligman towhose kind- ness the translator isindebted for the permission touse rare works ofthe seventeenth century quoted bymarx . several ofmarx's references tothe pages ofthe books quoted byhim have been found tobewrong and there- fore differ here from those given inthe original .in two orthree cases where the original english citations could not befound they were retranslated from german with the quotation marks omitted . this statement would beincomplete ifthe translator failed tomention the helpful participation inthis work byhis wife whose share inthe translation isequal to his own . new york ,october ,1903 .",
        "i",
        "-! author's preface . iconsider the system ofbourgeois economy inthe fol- lowing order :capital ,landed property ,wage labor ; state ,foreign trade ,world market .under the first three heads iexamine the conditions ofthe economic existence ofthe three great classes ,which make upmodern bour- geois society ;the connection ofthe three remaining heads isself evident .the first part ofthe first book , treating ofcapital ,consists ofthe following chapters : 1.commodity ;2.money ,or simple circulation ;3. capital ingeneral .the first two chapters form the contents ofthe present work .the entire material lies before me inthe form ofmonographs ,written atlong intervals not for publication ,but for the purpose of clearing up those questions tomyself ,and their sys- tematic elaboration onthe plan outlined above will de- pend upon circumstances . iomit ageneral introduction which ihad prepared , ason second thought any anticipation ofresults that are still tobeproven ,seemed tome objectionable ,and the reader who wishes tofollow me atall,must make up his mind topass from the special tothe general .",
        "10 on the other hand ,some remarks astothe course of my own politico -economic studies may beinplace here . the subject ofmy professional studies was jurispru- dence ,which ipursued ,however ,inconnection with and assecondary tothe studies ofphilosophy and history . in 1842-43 ,aseditor ofthe \"rheinische zeitung ,\"i found myself embarrassed atfirst when ihad totake part indiscussions concerning so-called material in- terests . the proceedings of the rhine diet in connection with forest thefts and the extreme sub- division oflanded property ;the official controversy about the condition ofthe mosel peasants into which herr von schaper ,atthat time president ofthe rhine province ,entered with the \"rheinische zeitung ;\"finally , the debates on free trade and protection ,gave me the first impulse totake upthe study ofeconomic questions . at the same time aweak ,quasi -philosophic echo of french socialism and communism made itself heard in the \"rheinische zeitung \"inthose days when the good intentions \"togoahead \"greatly outweighed knowledge offacts .ideclared myself against such botching ,but had to admit at once in acontroversy with the \"allgemeine augsburger zeitung \"that my previous studies did not allow me tohazard anindependent judg- ment astothe merits ofthe french schools . therefore ,the publishers ofthe \"rheinische zeitung \" conceived the illusion that by aless aggressive policy the paper could besaved from the death sentence pro- nounced upon it,iwas glad tograsp that opportunity toretire tomy study room from public life.when , the first work undertaken for the solution ofthe",
        "- 11 question that troubled me,was acritical revision of hegel's \"philosophy oflaw \";the introduction tothat work appeared in the \"deutsch -franzsische jahr- bcher ,\"published inparis in1844. iwas led bymy studies tothe conclusion that legal relations aswell as forms ofstate could neither beunderstood bythemselves , nor explained bythe so-called general progress ofthe human mind ,but that they are rooted inthe material conditions oflife,which are summed upbyhegel after the fashion ofthe english and french ofthe eighteenth century under the name \"civic society ;\"the anatomy ofthat civic society istobesought inpolitical economy . the study ofthe latter which ihad taken upinparis , icontinued atbrussels whither iemigrated onaccount ofan order ofexpulsion issued by mr. guizot .the general conclusion atwhich iarrived and which ,once reached ,continued toserve asthe leading thread inmy studies ,may bebriefly summed up asfollows :inthe social production which men carry onthey enter into definite relations that are indispensable and independent oftheir will ;these relations ofproduction correspond toadefinite stage ofdevelopment oftheir material pow- ers ofproduction .the sum total ofthese relations of production constitutes the economic structure ofsociety -the real foundation ,onwhich rise legal and political superstructures and towhich correspond definite forms ofsocial consciousness .the mode ofproduction in material life determines the general character ofthe social ,political and spiritual processes oflife.itisnot the consciousness ofmen that determines their existence , but,onthe contrary ,their social existence determines",
        "12 -their consciousness .atacertain stage oftheir develop- ment ,the material forces ofproduction insociety come inconflict with the existing relations ofproduction ,or- what isbut alegal expression for the same thing with the property relations within which they had been atwork before .from forms ofdevelopment ofthe forces ofproduction these relations turn into their fet- ters .then comes the period ofsocial revolution .with the change ofthe economic foundation the entire im- mense superstructure ismore or less rapidly trans- formed .inconsidering such transformations the dis- tinction should always be made between the material transformation ofthe economic conditions ofproduc- tion which can bedetermined with the precision ofnat- ural science ,and the legal ,political ,religious ,aesthetic orphilosophic -inshort ideological forms inwhich men become conscious ofthis conflict and fight itout.just asour opinion ofanindividual isnot based on what hethinks ofhimself ,socan we not judge ofsuch a period oftransformation byitsown consciousness ;on the contrary ,this consciousness must rather be ex- plained from the contradictions ofmaterial life,from the existing conflict between the social forces ofproduc- tion and the relations ofproduction .no social order ever disappears before all the productive forces ,for which there isroom init,have been developed ;and new higher relations ofproduction never appear before the material conditions oftheir existence have matured inthe womb ofthe old society .therefore ,mankind always takes up only such problems asitcan solve ; since ,looking atthe matter more closely ,wewill always",
        "what asshole - 13 - find that the problem itself arises only when the material conditions necessary for its solution already exist or are atleast inthe process offormation .inbroad out- lines wecan designate the asiatic ,the ancient ,the feudal , t and the modern bourgeois methods ofproduction asso many epochs inthe progress ofthe economic formation of society .the bourgeois relations ofproduction are the last antagonistic form ofthe social process ofproduction -antagonistic not inthe sense ofindividual antagonism , but ofone arising from conditions surrounding the life ofindividuals insociety ;atthe same time the produc- tive forces developing inthe womb ofbourgeois society create the material conditions for the solution ofthat antagonism .this social formation constitutes ,there- fore ,the closing chapter ofthe prehistoric stage of human society . frederick engels ,with whom iwas continually cor- responding and exchanging ideas since the appearance ofhis ingenious critical essay on economic categories (in the \"deutsch -franzsische jahrbcher \"),came by adifferent road tothe same conclusions asmy- self (see his \"condition ofthe working classes ineng- land \").when he,too,settled inbrussels inthe spring of1845 ,we decided ,towork out together the contrast between our view and the idealism ofthe german philosophy ,infact tosettle our accounts with our former philosophic conscience .the plan was carried out in the form ofacriticism ofthe post -hegelian philosophy . the manuscript intwo solid octavo volumes had long reached the publisher inwestphalia ,when we received information that conditions had sochanged asnot to allow ofitspublication .we abandoned the manuscript",
        "-- - 14 tothe stinging criticism ofthe mice the more readily since wehad accomplished our main purpose -the clear- ing up ofthe question toourselves .ofthe scattered writings onvarious subjects inwhich we presented our views tothe public atthat time ,irecall only the \"mani- festo ofthe communist party \"written byengels and myself ,and the \"discourse onfree trade \"written by myself .the leading points ofour theory were first pre- sented scientifically ,though inapolemic form ,inmy \"misre delaphilosophie ,etc.\"directed against proud- hon and published in1847. an essay on\"wage labor ,\" written byme ingerman ,and inwhich iput together my lectures onthe subject delivered before the german workmen's club atbrussels ,was prevented from leav- ing the hands ofthe printer bythe february revolution and my expulsion from belgium which followed itasa consequence . the publication ofthe \"neue rheinische zeitung \" in1848 and 1849 ,and the events which took place later on,interrupted my economic studies which icould not resume before 1850 inlondon .the enormous material onthe history ofpolitical economy which isaccumulated inthe british museum ;the favorable view which lon- don offers for the observation of bourgeois society ; finally ,the new stage ofdevelopment upon which the latter seemed tohave entered with the discovery ofgold incalifornia and australia ,led me tothe decision to resume my studies from the very beginning and work up critically the new material .these studies partly led towhat might seem side questions ,over which i nevertheless had tostop for longer orshorter periods of11",
        "15 time .especially was the time atmy disposal cut down bythe imperative necessity ofworking for aliving .my work ascontributor on the leading anglo -american newspaper ,the \"new york tribune ,\"atwhich ihave now been engaged for eight years ,has caused very great interruption inmy studies ,since iengage innewspaper work proper only occasionally .yet articles onimportant economic events inengland and onthe continent have formed solarge apart ofmy contributions that ihave been obliged tomake myself familiar with practical details which lieoutside the proper sphere ofpolitical economy . this account ofthe course ofmy studies inpolitical economy issimply toprove that my views ,whatever one may think ofthem ,and nomatter how little they agree with the interested prejudices ofthe ruling classes ,are the result ofmany years ofconscientious research .at the entrance toscience ,however ,the same requirement must beput asatthe entrance tohell : qui siconvien lasciare ogni sospetto ogni vilt convien che qui sia morta . karl marx . london ,january ,1859 .",
        "contents . translator's preface author's preface book i.capital ingeneral . chapter i.commoditiespage . 3 a.notes onthe history ofthetheory ofvalue ..... chapter ii.money orsimple circulation ... 1.the measure ofvalue ...... theories oftheunit ofmeasure ofmoney ..... 2.the medium ofcirculation ..... a.the metamorphosis ofcommodities ..... b.the circulation ofmoney ....19 56 73 74 91 107 108 125 c.coin and symbols ofvalue ... 138 3.money a.hoarding b.means ofpayment ....162 166 185 c.world money .... 201 4.the precious metals ..... 208 c.theories ofthe medium ofcirculation and of money215 appendix .introduction tothe critique ofpolitical economy 264 1.production ingeneral ..... 265 2.the general relation ofproduction todis- tribution ,exchange ,and consumption ..... 274 3.the method ofpolitical economy ..... 4.production ,means ofproduction ,and con-292 ditions ofproduction .... 306 index 313",
        "cs",
        "capital in general . book i. chapter i. commodities . atfirst sight the wealth ofsociety under the capitalist system presents itself asanimmense accumulation of commodities ,its unit being asingle commodity .but every commodity has atwofold aspect ,that ofuse value and exchange value. 1acommodity isfirst ofall,inthe language ofenglish aristotle ,d.rep.l.1,c.9(edit.ibekkeri oxonii ,1837 ):      ... ,   ,   . -   ;        ,  -   .     .\" (\"ofeverything which wepossess there are two uses :-one isthe proper ,and the other the improper orsecondary use of it.for example ,ashoe isused forwear ,and isused forex- change ;both are uses ofthe shoe .hewho gives ashoe in exchange formoney orfood tohim who wants one,does indeed use the shoe asashoe ,but this isnot itsproper orprimary purpose ,forashoe isnot made tobeanobject ofbarter .the same may besaid ofallpossessions .\"the politics ofaris- totle ,translated into english by b.jowett ,oxford ,1885 , v.i.,p.15.)",
        "- - 20 economists ,\"any thing necessary ,useful orpleasant in life,\"anobject ofhuman wants ,ameans ofexistence in the broadest sense ofthe word .this property ofcom- modities toserve as use-values coincides with their natural palpable existence .wheat e.g.isadistinct use-value differing from the use-values cotton ,glass , paper ,etc. use -value has avalue only inuse and is realized only inthe process ofconsumption .the same use-value may beutilized invarious ways .but the ex- tent ofitspossible applications iscircumscribed byits distinct properties .furthermore ,itisthus limited not only qualitatively but also quantitatively .accord- ing totheir natural properties the various use-values have different measures ,such asabushel ofwheat ,a quire ofpaper ,ayard oflinen ,etc. whatever the social form of wealth may be,use- values always have asubstance of their own ,in- dependent ofthat form . one can not tell by the taste ofwheat whether it has been raised by a russian serf ,afrench peasant ,or an english capitalist .although the object ofsocial wants and , therefore ,mutually connected insociety ,use-values do not bear any marks ofthe relations ofsocial production . suppose ,wehave acommodity whose use-value isthat of adiamond .we can not tell bylooking atthe diamond that itisacommodity .when itserves asause-value , aesthetic ormechanical ,onthe breast ofaharlot ,orin the hand ofaglasscutter ,itisadiamond and not acom- modity .itisthe necessary pre-requisite ofacommodity tobeause-value ,but itisimmaterial tothe use-value whether itisacommodity ornot.use -value inthis",
        "- - 21 indifference tothe nature ofits economic destination , i.e.use-value assuch lies outside the sphere ofin- vestigation ofpolitical economy .'itfalls within the sphere ofthe latter only insofar asitforms itsown economic destination .itforms the material basis which directly underlies adefinite economic relation called exchange value . exchange -value appears atfirst sight asaquantita- tive relation ,asaproportion inwhich use-values are exchanged for one another .insuch arelation they constitute equal exchangeable quantities .thus ,avol- ume ofpropercius and eight ounces ofsnuff may rep- resent the same exchange value ,inspite ofthe dissim- ilar use-values oftobacco and elegy .as exchange -val- ue,one kind ofuse-value isworth asmuch asanother kind ,ifonly taken inright proportion .the exchange value ofapalace can beexpressed inacertain number ofboxes ofshoe -blacking .on the contrary ,london manufacturers of shoe -blacking have expressed the exchange value oftheir many boxes ofblacking ,in palaces .thus ,entirely apart from their natural forms and without regard tothe specific kind ofwants for which they serve asuse-values ,commodities incertain quantities equal each other ,take each other's place in exchange ,pass asequivalents ,and inspite oftheir variegated appearance ,represent the same entity . \"that isthe reason why german compilers are sofond of dwelling onuse-value ,calling ita\"good .\"see e.g.l.stein , \"system der staatswissenschaften ,\"v.i.,chapter on\"goods \" (gtter ).for intelligent information on\"goods \"one must turn totreatises oncommodities .",
        "22 use -values are primarily means ofexistence .these means ofexistence ,however ,are themselves products . ofsocial life ,the result ofexpended human vital pow- er,materialized labor .as the embodiment ofsocial labor ,all commodities are the crystallization ofthe same substance .let usnow consider the nature of this substance ,i.e.,of labor ,which isexpressed in exchange value . let one ounce ofgold ,one ton ofiron ,one quarter ofwheat and twenty yards ofsilk represent equal ex- change values .as equivalents ,inwhich the qualita- tive difference between their use-values has been elim- inated ,they represent equal volumes ofthe same kind oflabor .the labor which isequally embodied inall ofthem must beuniform ,homogeneous ,simple labor . itmatters aslittle inthe case oflabor whether itbe embodied ingold ,iron ,wheat ,orsilk ,asitdoes in the case ofoxygen ,whether itappears inthe rust of iron ,inthe atmosphere ,inthe juice ofagrape ,orin the blood ofahuman being .but the digging ofgold , the extraction ofiron from amine ,the raising of wheat and the weaving ofsilk are somany kinds of labor ,differing inquality .as amatter offact ,what inreality appears asadifference inuse-values ,isin the process ofproduction ,adifference inthe work creating those use-values .just aslabor ,which creates exchange value ,isindifferent tothe material ofuse- values ,soitistothe special form oflabor itself .fur- thermore ,the different use-values are the products of the work ofdifferent individuals ,consequently the re- sult ofvarious kinds of labor differing individually",
        "23 from one another .but asexchange values ,they rep- resent the same homogeneous labor ,i.e.,labor from which the individuality ofthe workers iseliminated . labor creating exchange value is,therefore ,abstract general labor . ifone ounce ofgold ,one ton ofiron ,one quarter of wheat ,and twenty yards ofsilk are exchange values of equal magnitude or equivalents ;then one ounce of gold ,half aton ofiron ,three bushels ofwheat and five yards of silk are exchange values of different magnitudes ,and this quantitative difference isthe only difference ofwhich they are capable asexchange val- ues.as exchange values ofdifferent magnitudes ,they represent greater orsmaller quantities ofthat simple , homogeneous ,abstract ,general labor ,which forms the substance ofexchange value .the question arises , how are these quantities tobemeasured ?or,rather what constitutes the substance oflabor ,which makes itcapable ofquantitative measurement ,since the quan- titative differences ofcommodities intheir capacity of exchange values are but quantitative differences ofla- bor embodied inthem .just asmotion ismeasured by time ,soislabor measured by labor -time .given the quality oflabor ,the difference inits duration isthe only property bywhich itcan bedistinguished .as la- bor-time ,labor has the same standard ofmeasurement asthe natural time measures ,viz.,hours ,days ,weeks , etc. labor -time isthe vital substance oflabor ,inde- pendent ofitsform ,composition ,individuality ;itisits vital substance quantitatively ,having atthe same time itsown inherent measure .labor -time embodied inthe1",
        "24 - use-values of commodities isthe substance which makes exchange values and ,therefore ,commodities of them and atthe same time serves tomeasure definite quantities oftheir value .corresponding quantities of different use-values ,inwhich the same quantity ofla- bor-time isembodied ,are equivalents ;or,toput itin another form ,all use-values are equivalents when taken inproportions containing the same quantity of expended ,materialized labor -time .as exchange val- ues,allcommodities are but definite measures ofcon- gealed labor -time . to understand how exchange value isdetermined by labor -time ,the following main points must bekept in mind :the reduction oflabor tosimple labor ,devoid of any quality ,sotospeak ;the specific ways and means bywhich exchange -value -creating ,i.e.,com- modity producing labor becomes social labor ;finally , the difference between labor asthe producer ofuse- values ,and labor asthe creator ofexchange values . inorder tomeasure commodities bythe labor -time contained inthem ,the different kinds oflabor must be reduced to uniform ,homogeneous ,simple labor ,in short ,tolabor which isqualitatively the same ,and . therefore ,differs only inquantity . this reduction appears tobeanabstraction ;but it isanabstraction which takes place daily inthe social process ofproduction .the conversion ofallcommod- ities into labor -time isnogreater abstraction nor aless real process than the chemical reduction ofallorganic bodies toair.labor ,thus measured bytime ,does not appear inreality asthe labor ofdifferent individuals ,",
        "- 25 but onthe contrary ,the various working individuals rather appear asmere organs oflabor ;or,insofar as labor isrepresented byexchange values ,itmay bede- fined ashuman labor ingeneral .this abstraction of human labor ingeneral virtually exists inthe average labor which the average individual ofagiven society can perform acertain productive expenditure ofhu- man muscles ,nerves ,brain ,etc. itisunskilled labor towhich the average individual can beput and which hehas toperform inone way oranother .the char- acter ofthis average labor varies indifferent countries and atdifferent stages ofcivilization ,but appears fixed inaparticular society .unskilled labor constitutes the bulk ofall labor performed incapitalist society ,as may beseen from allstatistics . itisobvious that ifaspends six hours inthe pro- duction ofiron and six hours onlinen ,and balso pro- duces iron during six hours and linen during another six hours ,itisbut adifferent application ofthe same labor time that would beexpended ,ifaproduced iron during twelve hours ,while bworked twelve hours on linen .but how about skilled labor which rises above the level ofaverage labor byitshigher intensity ,byits \" greater specific gravity ?this kind oflabor resolves itself into unskilled labor composing it;itissimple labor ofahigher intensity ,sothat one day ofskilled iabor ,e.g.,may equal three days ofunskilled labor . this isnot the place toconsider the laws regulating this reduction .itisclear ,however ,that such reduction does take place ,for,asexchange value ,the product of the most skilled labor is,when taken inacertain pro-",
        "26 portion ,equivalent tothe product ofunskilled average labor ,orequal toadefinite quantity ofthat unskilled labor . the determination ofexchange -value by means of labor -time implies ,further ,the fact that an equal quantity oflabor isembodied inany given commodity , e.g.,aton ofiron ,nomatter whether itisthe work of aorb,that istosay,various individuals expend an equal amount oflabor -time for the production ofthe same use-value ofagiven quality and quantity .itis thus assumed that the labor -time contained inacom- modity isthe labor -time necessary for itsproduction , i.e.,itisthe labor -time which isrequired for the pro- duction ofanother specimen ofthe same commodity under the same general conditions ofproduction . so-the conditions of labor ,which creates exchange value ,asshown bythe analysis ofthe latter ,are social conditions oflabor orconditions ofsocial labor . cial ,not inthe ordinary ,but inaspecial sense .itis aspecific form ofthe social process .the homogene- ous simplicity oflabor means first ofall equality of the labors ofvarious individuals ,areciprocal relation ofequality oftheir labors determined bythe actual re- duction ofallkinds oflabor touniform labor .the labor ofevery individual ,asfar asitisexpressed in exchange value possesses this social character of equality and finds expression inexchange value only insofar asitisarelation ofequality with the labor ofall other individuals . furthermore ,the labor -time ofasingle individual is directly expressed in exchange value as universal",
        "- 27 labor -time ,and this universal character of individ- ual labor isthe manifestation ofits social character . the labor -time represented by exchange value isthe labor -time ofanindividual ,but ofanindividual undis- tinguished from other individuals insofar asthey per- form the same labor ;therefore ,the time required by one individual for the production ofacertain commod- ity isthe necessary labor -time which any other indi- vidual would have tospend onthe production ofthe same commodity .itisthe labor -time ofanindividual , his labor -time ,but only aslabor -time common toall, regardless astowhich particular individual's labor- time itis.as universal labor -time itisrepresented in auniversal product ,inauniversal equivalent ,ina definite quantity ofmaterialized labor -time ;the latter isindifferent astothe particular form ofuse-value in which itappears directly asthe product ofan indi- vidual ,and may beturned atwill into any other form ofuse-value torepresent the product ofany other in- dividual .only assuch auniversal quantity ,isita social quantity .inorder toresult inexchange value , the labor ofanindividual must beturned into auni- versal equivalent ,i.e.,the labor -time of an indi- vidual must be expressed asuniversal labor -time ,or universal labor -time asthat ofanindividual .itisthe same asthough different individuals had put together their labor -time and contributed the different quanti- ties oflabor -time attheir common disposal inthe form of different use-values .the labor -time ofthe indi- vidual isthus ,infact ,the labor time which society re- quires for the production ofacertain use-value ,i.e., her",
        "28 for the satisfaction ofacertain want .but the ques- tion that interests ushere isastothe specific form in which labor acquires asocial character .let ussuppose that acertain quantity oflabor -time ofaspinner is realized in100 lbs.ofyarn .suppose 100 yards oflin- en,the product ofthe weaver ,represent the same quantity oflabor -time .inasmuch asthese two products represent equal quantities ofuniversal labor -time and , hence ,are equivalents ofevery use-value which con- tains the same amount oflabor -time ,they are also equivalent toeach other .only because the labor -time ofthe spinner and that ofthe weaver take the form of universal labor -time and their products appear asuni- versal equivalents ,isthe labor ofthe weaver realized for the spinner ,and that ofthe spinner ,for the weav- er,the labor ofone takes the place ofthe labor ofthe other ,i.e.,the social character oftheir labors isreal- ized for both .quite different itwas under the patri- archal system ofproduction ,when spinner and weaver lived under the same roof ,when the female members ofthe family did the spinning ,and the male members did the weaving tosupply the wants oftheir own fam- ily;then yarn and linen were social products ,spinning and weaving were social labor within the limits ofthe family .but their social character did not manifest it- self inthe fact that yarn ,asauniversal equivalent , could beexchanged for linen asauniversal equivalent , orthat one was exchanged for another ,asidentical- and equivalent expressions ofthe same universal la- bor-time .itwas rather the family organization with itsnatural division oflabor that impressed itspeculiar",
        "29 social stamp onthe product oflabor .or,letustake the services and payments inkind ofthe middle ages . itwas the specific kind oflabor performed byeach in- dividual initsnatural form ,the particular and not the universal aspect oflabor ,that constituted then the so- cial tie.or,letusfinally take labor carried onincom- mon initsprimitive natural form ,aswe find itatthe dawn ofhistory ofallcivilized races .'itisclear that inthis case labor does not acquire itssocial character from the fact that the labor ofthe individual takes on the abstract form ofuniversal labor orthat his prod- uct assumes the form ofauniversal equivalent .the very nature ofproduction under acommunal system makes itimpossible for the labor ofthe individual to beprivate labor and his product tobeaprivate prod- uct ;onthe contrary ,itmakes individual labor appear asthe direct function ofamember ofasocial organ- ism .on the contrary ,labor ,which isexpressed inex- change value ,atonce appears asthe labor ofasepar- ate individual .itbecomes social labor only bytaking 'aridiculous presumption has gained currency oflate to the effect that common property initsprimitive form isspe- cifically aslavonian ,oreven exclusively russian form .it isthe primitive form which we can prove tohave existed among romans ,teutons ,and celts ;and ofwhich numerous examples are still tobefound inindia ,though inapartly ruined state .acloser study ofthe asiatic ,especially ofin- dian forms ofcommunal ownership would show how from the different forms ofprimitive communism different forms ofits dissolution have been developed .thus e.g.the various origi- nal types ofroman and teutonic private property can be traced back tovarious forms ofindian communism .",
        "30 onthe form ofitsdirect opposite ,the form ofabstract universal labor . labor ,which creates exchange value ,is,finally ,char- acterized bythe fact that even the social relations of men appear inthe reversed form ofasocial relation of things .only inso far astwo use-values are ina mutual relation ofexchange values does the labor of different persons possess the common property ofbe- ing identical universal labor .hence ,ifitbecorrect to say that exchange value isarelation between persons ,' itmust beadded that itisarelation disguised under a material cover .just asapound ofiron and apound of gold represent the same weight inspite oftheir differ- ent physical and chemical properties ,sodo two use- values ,ascommodities containing the same quantity oflabor -time ,represent the same exchange value .ex- change value thus appears asthe natural social destina- tion ofuse-values ,aproperty which they possess by virtue ofbeing things and inconsequence ofwhich they are exchanged for one another indefinite propor- tions ,orform equivalents ,just aschemical elements combine in certain proportions ,forming chemical equivalents .itisonly through the habit ofeveryday life that we come tothink itperfectly plain and com- monplace ,that asocial relation ofproduction should take onthe form ofathing ,sothat the relation ofper- sons intheir work appears inthe form ofamutual re- \"laricchezza una ragione tra due persone .\"(\"value is arelation between two persons \")galiani ,\"della moneta ,\" p.220 invol.ii.ofcustodi's collection of\"scrittori classici italiani dieconomia politica .parte moderna ,\"milano ,1803 .",
        "31 lation between things ,and between things and persons . incommodities this mystification isasyet very sim- ple.itismore orless plain toeverybody that arela- tion ofcommodities asexchange values isnothing but amutual relation between persons intheir productive activity .this semblance of simplicity disappears in higher productive relations .all the illusions inregard tothe monetary system are due tothe fact that money isnot regarded assomething representing asocial re- lation ofproduction ,but asaproduct ofnature en- dowed with certain properties .the modern economists who sneer atthe illusions ofthe monetary system ,be- tray the same illusion assoon asthey have todeal with higher economic forms ,as,e.g.,capital .itbreaks forth intheir confession ofnaive surprise ,when what they have just thought tohave defined with great diffi- culty asathing suddenly appears asasocial relation and then reappears totease them again asathing ,be- fore they have barely managed todefine itasasocial relation . since the exchange value ofcommodities is,infact , nothing but amutual relation ofthe labors ofindivid- uals -labors which are similar and universal -nothing but amaterial expression ofaspecific social form of labor ,itisatautology tosay that labor isthe only source ofexchange value and consequently ofwealth , \"initsnatural state ,matter isalways destitute ofvalue .\"mcculloch ,\"adiscourse onthe rise ,progress , peculiar objects ,and importance ofpolitical economy ,\"2nd edition ,edinburgh ,1825 ,p.48. itisevident how high even a m'culloch stands above the fetichism ofgerman \"thinkers ,\"",
        "32 inso far asthe latter consists of exchange values . similarly ,itisatautology tosay that matter inits natural state has no exchange value ,because itdoes not contain any labor ,and that exchange value assuch does not contain matter .but when william petty calls \"labor the father and earth the mother ofwealth ,\" orwhen bishop berkeley asks \"whether the four ele- ments and man's labour therein ,benot the true source ofwealth ,\"orwhen the american ,thomas cooper puts itpopularly :\"take away from apiece ofbread the labour bestowed bythe baker onthe flour ,bythe miller onthe grain brought tohim ,bythe farmer in ploughing ,sowing ,tending ,gathering ,threshing , cleaning and transporting the seed ,and what will re- main ?afew grains of grass ,growing wild inthe woods ,and unfit for any human purpose \"-then all these views donot refer toabstract labor asthe source ofexchange value ,but toconcrete labor asthe source ofmaterial wealth ;inshort ,tolabor insofar asit produces use-values .inassuming that acommodity has use-value we assume the special usefulness and distinct fitness ofthe labor absorbed byit,but that is allthere istothe view oflabor asuseful labor from the standpoint ofcommodity .considering bread as ause-value ,we are interested in its properties as anarticle offood and not atallinthe different kinds oflabor ofthe farmer ,miller ,baker ,etc. ifbysome who declare \"matter \"and half adozen other foreign things tobeelements ofvalue .cf.e.g.l.stein ,1.c.v.i.,p.110. 'berkeley ,the querist ,london ,1750 . \"thomas cooper ,lectures on the elements ofpolitical economy ,london ,1831 ,p.99.",
        "33 invention nineteen -twentieths ofthis labor could be. saved ,the loaf ofbread would still render the same service asbefore .ifitfell ready -made from the sky itwould not lose asingle atom ofitsuse-value .while labor which creates exchange value isrealized inthe equality ofcommodities asuniversal equivalents ,labor asaproductive activity with auseful purpose isreal- ized inthe endless variety ofuse-values created byit. while labor which creates exchange values isabstract , universal and homogeneous ,labor which produces use- values isconcrete and special and ismade up ofan endless variety ofkinds oflabor according tothe way inwhich and the material towhich itisapplied . itiswrong tospeak oflabor insofar asitisap- plied tothe production ofuse-values asofthe only source ofwealth ,namely ,the material wealth produced byit.being anactivity intended toadapt materials to this orthat purpose ,itrequires matter asapre-requi- site .in different use-values the proportion between labor and raw material varies greatly ,but use-value always has anatural substratum ,labor ,asanactivity , directed tothe adaptation ofraw material inone form oranother ,isanatural condition ofhuman existence , acondition ofexchange ofmatter between man and nature ,independent ofall social forms .on the con- trary ,labor producing exchange value isaspecifically social form oflabor .tailoring ,e.g.,initsmaterial manifestation asadistinct productive activity ,pro- duces acoat ,but not the exchange value ofthe coat . the latter isproduced not bythe labor ofthe tailor as such ,but byabstract universal labor ,and that belongs",
        "34 toacertain organization ofsociety which has not been brought about bythe tailor .thus ,the women under the ancient system ofhouse industry made coats with- out producing the exchange value ofthe coats .labor asasource ofmaterial wealth was known tomoses , the legislator ,aswell astoadam smith ,the customs official .' let usconsider now some propositions which fol- low from the determination of exchange value by labor -time . as ause-value ,every commodity owes itsusefulness toitself .wheat ,e.g.,serves asanarticle offood .a machine saves labor toacertain extent .this function ofacommodity byvirtue ofwhich itserves only as use-value ,asanarticle ofconsumption ,may becalled its service ,the service which itrenders asuse-value . but asanexchange value ,acommodity isalways re- garded asaresult ;the question inthis case isnot as tothe service which itrenders ,but astothe service which ithas been rendered initsproduction .thus , the exchange value ofamachine isdetermined not by f.list could never grasp the difference between labor asa source ofuse-value and labor asthe creator ofcertain social form ofwealth orexchange value ,because comprehension was altogether foreign tohispractical mind ;he,therefore ,saw in the modern english economists mere plagiarists ofmoses ,the egyptian . \"itcan bereadily understood what kind of\"service \"isren- dered bythe category \"service \"toeconomists ofthe type of j.b.say and f.bastiat ,whose pondering sagacity ,asmal- thus has justly remarked ,always abstracts from the spe- cifically definite forms ofeconomic relations .",
        "35 the quantity oflabor -time which itsaves ,but bythe quantity oflabor -time which has been expended onits own production and which is,therefore ,required to produce anew machine ofthe same kind . .if,therefore ,the quantity oflabor -time required for the production of commodities remained constant , their exchange value would remain the same .but the ease and the difficulty of production are constantly changing .ifthe productivity oflabor increases ,the same use-value will beproduced inless time .ifthe productivity oflabor declines ,more time will bere- quired for the production ofthe same use-value .thus , the labor -time contained inacommodity orits ex- change -value isavariable quantity ,increasing ordi- minishing inaninverse ratio tothe rise and fall ofthe productivity oflabor .the productive power oflabor which isapplied inthe manufacturing industry on a predetermined scale depends inthe agricultural and extractive industries also onnatural conditions which are beyond human control .the same labor will yield agreater orless output ofvarious metals ,according to their more orless close occurrence inthe earth's crust . the same labor may beembodied intwo bushels of wheat inafavorable season ,and only inone inanun- favorable season .inthis case ,scarcity orabundance , asnatural conditions ,seem todetermine the exchange value ofcommodities ,because they determine the pro- ductivity ofcertain kinds oflabor which depend upon natural conditions . unequal volumes ofdifferent use-value contain the same quantity oflabor -time orthe same exchange value",
        "- 36 - the smaller the volume ofause-value containing a certain quantity oflabor -time ascompared with other use-values ,the greater its specific exchange -value .if wefind that certain use-values ,such as,e.g.,gold ,silver , copper and iron ,orwheat ,rye,barley and oats ,form aseries ofspecific exchange values which ,though not retaining exactly the same numerical ratio ,still retain through widely remote epochs ofcivilization the same rough proportion ofrelatively larger and smaller quan- tities ,wemay draw the conclusion that the progressive development ofthe productive powers ofsociety has equally ,or approximately so,affected the labor -time necessary for the production ofthe various commod- ities . the exchange value ofacommodity isnot revealed initsown use-value .but ,asthe embodiment ofuni- versal social labor -time ,the use-value ofone commod- ity bears acertain ratio tothe use-values ofother com- modities .thus ,the exchange value ofone commodity ismanifested inthe use-values ofother commodities . an equivalent is,infact ,the exchange value ofone commodity expressed inthe use-value ofanother com- modity .ifisay,e.g.,that one yard oflinen isworth two pounds ofcoffee ,then the exchange value oflinen isexpressed interms ofthe use-value ofcoffee ,viz.,ina certain quantity ofthat use-value .this ratio being given ,ican express the value ofany quantity oflinen . incoffee .itisclear that the exchange value ofone commodity ,say linen ,isnot confined tothe ratio of any one commodity ,e.g.coffee ,asitsequivalent .the quantity ofuniversal labor -time which isrepresented",
        "- - 37 inone yard oflinen isatthe same time embodied in anendless variety ofvolumes ofuse-values ofallother commodities .the use-value ofany other commodity forms the equivalent ofone yard oflinen ,inthe pro- portion inwhich itrepresents the same quantity of labor -time asthat yard oflinen .the exchange value ofthis single commodity is,therefore ,fully expressed inthe endless number ofequations inwhich the use- values ofall other commodities form its equivalents . not until the exchange value ofacommodity isex- pressed inthe sum total ofthese equations orofthe different proportions inwhich one commodity isex- changed for every other commodity ,does itfind an exhaustive expression asauniversal equivalent ;e.g., the series ofequations : 1yard oflinen- c 1yard oflinen 1yard oflinen = 1yard oflinen = may berepresented asfollows :lb. oftea, 2lbs.ofcoffee , 8lbs.ofbread , 6yards ofcalico , 1yard oflinen = lb.oftea +lb.ofcoffee + 2lbs.ofbread +1 yards ofcalico . therefore ,ifwe had before usthe sum total ofthe equations ,inwhich the value ofayard oflinen isex- haustively expressed ,we could represent its exchange value inthe form ofaseries .as amatter offact ,the series isanendless one,since the circle ofcommodities , constantly expanding ,can never be closed up. but while the exchange value ofone commodity isthus measured by the use-values ofall other commodities , the exchange values ofall the other commodities are,",
        "38 intheir turn ,measured by the use-value ofthis one commodity. ifthe exchange value ofone yard oflinen isexpressed inlb.oftea,or2lbs.ofcoffee ,or6yards ofcalico , or8lbs.ofbread ,etc.,itfollows that coffee ,tea,calico , bread ,etc.,are equal toeach other iftaken inthe same proportion inwhich they are equal tothe third article , linen ;consequently ,linen serves asthe common measure oftheir exchange values .every commodity ,asthe embodiment ofuniversal labor -time ,i.e.,asacertain quantity ofuniversal labor -time ,expresses inturn its exchange value indefinite quantities ofthe use-values ofallother commodities ,and the exchange values ofall the other commodities are,onthe other hand ,measured bythe use-value ofthis one exclusive commodity .but asanexchange value ,every commodity isatthe same time the one exclusive commodity that serves asacom- mon measure ofthe exchange values ofall other com- modities ;and ,onthe other hand ,itisbut one ofthe many commodities inthe entire series ofwhich every commodity expresses directly its exchange value . the value ofacommodity isnot affected by the number ofcommodities ofother kinds .but the length 1\"egli proprio ancora delle misure d'aver sifatta relazione colle cose misurate ,che incerto modo lamisurata divien misura della misurante .\"montanari ,della moneta ,p.48in v.iii.ofcustodi's \"scrittori classici italiani dieconomia politica .parte antica .\"(\"itistheproperty ofmeasure tobe insuch arelation tothethings measured ,that inacertain way the thing measured becomes the measure ofthe measuring thing .\")",
        "39 - ofthe series ofequations inwhich itsexchange value is realized does depend upon the greater orless variety ofother commodities .the series ofequations inwhich the value ofcoffee ,e.g.,isrepresented ,indicates the extent towhich itisexchangeable ,the limits within which itperforms the function ofan exchange value the exchange value ofacommodity asanembodiment ofuniversal social labor -time isexpressed initsequiv alence toanendless variety ofuse-values . we have seen that the exchange value ofacommodity varies with the quantity oflabor -time directly con- tained init.its realized exchange value ,i.e.,itsex- change value expressed inthe use-values ofother com- modities ,must also depend onthe proportion inwhich the labor -time spent onthe production ofallother com- modities ischanging .if,e.g.,the labor -time required for the production ofabushel ofwheat remained con- stant ,while that required for the production ofall other commodities doubled ,the exchange value ofa bushel ofwheat expressed inits equivalents would be- come half aslarge asbefore .the result would beprac- tically the same asifthe amount oftime necessary for the production ofone bushel ofwheat had been re- duced byone-half ,and that required for allother com- modities had remained unchanged .the value ofcom- modities isdetermined bythe proportion inwhich they can beproduced inthe same labor -time .in order to see what possible changes this proportion may undergo , let ustake two commodities ,aand b. first case .let the labor -time required for the pro- duction ofcommodity bremain unchanged .inthat",
        "- - 40 case the exchange value ofa,expressed interms ofb, rises and falls with the rise and fall ofthe labor -time required for the production ofa. second case .let the labor -time required for the pro- duction ofcommodity aremain constant .then the exchange value ofa,expressed interms ofb,falls and rises inaninverse ratio with the rise and fall ofthe labor -time required for the production ofb. third case .let the labor -time required for the pro- duction ofcommodities aand brise and fall inequal proportion .then the expression ofequivalence ofa and bremains unchanged .ifthrough some cause the productivity ofall kinds oflabor were todecline uni- formly ,sothat the production ofallcommodities would require anequally increased quantity oflabor -time ,then the value ofallcommodities would rise ,though the ex- pression oftheir exchange values would remain un- changed ,and the actual wealth ofsociety would de- crease ,because itwould have toexpend more labor- time onthe production ofthe same stock ofuse-values . fourth case .let the labor -time required for the pro- duction ofaand brise and fall,but not uniformly ;that istosay,the labor -time required for the production ofa may rise,while that required for bmay fall ,orvice versa .all ofwhich can bereduced tothe simple case where the labor -time required for the production of one commodity remains unchanged ,while that required for the other rises orfalls . the exchange value ofany commodity isexpressed inthe use-value ofany other commodity ,beitinin- tegral units orinfractions thereof .asexchange value ,",
        "- - 41 every commodity iscapable of subdivision ,like the labor -time embodied init.the equivalence ofcommod- ities isindependent oftheir physical divisibility asuse- values ,just asthe sum ofthe exchange values ofcom- modities isindifferent tothe change ofform which use- values have toundergo when converted into asingle new commodity . so far we have considered commodities from atwo- fold point ofview ,asuse-values and exchange values alternately .but acommodity assuch isadirect com- bination ofuse-value and exchange value ;and itisa commodity only inrelation toother commodities .the actual relation between commodities constitutes the process oftheir exchange .itisasocial process par- ticipated inby individuals independent ofeach other but the part they take initisthat ofowners ofcom modities only .their mutual relations are those oftheir commodities ,and thus they really appear asconscious factors ofthe process ofexchange . acommodity isause-value ,wheat ,linen ,adiamond , amachine ,etc.,but asacommodity itis,atthe same time ,not ause-value .ifitwere ause-value for its owner ,i.e.,adirect means for the satisfaction ofhis own wants ,then itwould not beacommodity .tohim itisrather anon -use-value ;itismerely the material depository ofexchange -value ,orsimply ameans ofex- change ;asanactive bearer ofexchange value ,use-value becomes ameans ofexchange .to the owner itisa use-value only insofar asitconstitutes exchange value .' itisinthat sense that aristotle (seethe passage quoted at the beginning ofthis chapter )conceives exchange value .",
        "42 - ithas yet tobecome ause-value ,viz.,toothers .not being ause-value toitsowner ,itisause-value tothe owners ofother commodities .ifitisnot,then the labor expended onitwas useless labor ,and the result ofthat labor isnot acommodity .on the other hand ,the commodity must become ause-value tothe owner him- self,because his means ofexistence lieoutside ofitin the use-values ofcommodities not belonging tohim . in order tobecome ause-value ,the commodity must meet the particular want ofwhich itisthe means of satisfaction . use -values of commodities are thus realized use-values through auniversal change ofhands bypassing from the hands inwhich they were held as means ofexchange into those where they become use values .only through this universal transfer ofcom- modities does the labor contained inthem become use- ful labor .inthis process oftheir mutual interchange asuse-values ,commodities donot acquire any new eco- nomic forms .on the contrary ,even the form which marked them ascommodities disappears .bread ,e.g., bychanging hands from the baker tothe consumer does not change itsidentity asbread .on the contrary ,itis only the consumer that begins toregard itasause- value ,asacertain article offood ,while inthe hands of the baker itwas only the bearer ofaneconomic rela- tion ,apalpable yet transcendental object .thus ,the only change ofform that commodities undergo while becoming use-values ,consists inthe fact that they cease tobe,asamatter ofform ,non -use-values totheir own- ers,and use-values tothose who donot own them .to become use-values commodities must be universally",
        "- - 43 alienated ;they must enter the sphere ofexchange ;but they are subject toexchange intheir capacity ofex- change values .hence ,inorder toberealized asuse- values ,they must berealized asexchange values . while the single commodity appeared from the stand- point ofuse-value assomething independent ,asex- change value itwas regarded first ofallinits relation toall other commodities .this relation was ,however , merely theoretical ,imaginary .itbecomes real only in the process ofexchange .on the other hand ,acom- modity isanexchange value insofar asacertain quan- tity oflabor -time has been expended onit,and itcon- sequently represents materialized labor -time .but of itself itisonly materialized individual labor -time ofa particular kind ,and not universal labor -time .there- fore ,itisnot directly anexchange value ,but must first become such .first ofall,itisanembodiment ofuni- versal labor -time only insofar asitrepresents labor- time applied toadefinite useful purpose ,i.e.,when it represents ause-value .this was the material condi- tion under which alone labor -time contained incom- modities was regarded asuniversal social labor .thus , while acommodity can become ause-value only after ithas been realized asanexchange value ,itcan,onthe other hand ,berealized asanexchange value only ifit proves tobeause-value inthe process ofalienation . acommodity can bealienated asause-value only to one whom itserves asause-value ,i.e.,asameans ofsat- isfying acertain want .on the other hand ,itisex- changed for another commodity ,or,ifweput ourselves onthe side ofthe owner ofthe other commodity ,it,too,",
        "- - 44 can bealienated ,i.e.,berealized ,only ifbrought in contact with that particular want ofwhich itisthe ob- ject .in the universal exchange of commodities as use-values the basis for their mutual relations isintheir material difference as distinct objects which satisfy different wants by their specific properties .but as mere use-values ,they are indifferent toeach other ,and are incommensurable .as use-values they can beex- changed only with reference tocertain wants .they are exchangeable only asequivalents ,and they are equiv- alents only asequal quantities ofmaterialized labor- time ,sothat all regard totheir natural properties as use-values and therefore tothe relation ofthe com- modities toparticular wants iseliminated .on the contrary ,acommodity isrealized asanexchange value byreplacing asanequivalent any definite quantity of any other commodity ,regardless ofwhether itisause- value for the owner ofthe other commodity ornot.but tothe owner ofthe other commodity itisacommodity only insofar asitisause-value tohim ,and itbecomes anexchange value toitsowner only insofar asitisa commodity tothat other person .thus ,the same rela- tion appears asaproportion between \"commodities as magnitudes ofthe same denomination ,but differing qualitatively ;or,asanexpression oftheir equivalence asembodiments ofuniversal labor -time ,and ,atthe same time ,asarelation ofqualitatively different ob- jects ,ofuse-values intended for the satisfaction ofpar- ticular wants ,inshort ,arelation inwhich they are dis- tinguished asactual use-values .but this equivalence and non -equivalence mutually exclude each other .thus",
        "45 wehave before usnot only avicious circle ofproblems inwhich the solution ofone implies that ofthe other , but acombination ofcontradicting claims ,since the fulfillment ofone isdirectly connected with that ofits opposite . the process ofexchange ofcommodities must result both inthe unfolding and inthe solution ofthese con- tradictions ,neither ofwhich ,however ,can appear in that process inthis simple way .we have only observed how commodities are mutually related toeach other as use-values ,i.e.,how they appear asuse-values within the process ofexchange .the exchange -value ,onthe contrary ,aswehave considered itsofar,appeared asan abstraction formed inour own minds ,or-ifwe may soput it inthe mind ofthe individual owner ofcom- modities ,which liestored inhis warehouse asuse-values , and weigh upon his conscience asexchange values .in the process ofexchange ,however ,commodities must be not only use-values ,but also exchange values toone another ,and that should appear astheir own mutual relation .the difficulty which wefirst encountered was that acommodity must befirst alienated and delivered toitspurchasers asause-value ,inorder toappear asan exchange value ,asmaterialized labor ,while onthe other hand its alienation asuse-value implies its being an exchange value .but let usassume that this difficulty has been overcome .suppose the commodity has di- vested itself ofitsuse-value ,and has thereby fulfilled the material condition ofbeing socially useful labor , instead ofaparticular labor ofanindividual .inthat case ,the commodity must become an exchange value , i== yard orminen6yards ofcalico . 1yard oflinen = etc. the above form istheoretical insofar ascommod-",
        "46 auniversal equivalent ,an embodiment of universal labor -time for all other commodities inthe process of exchange ,and thus ,leaving behind itslimited role ofa particular use-value ,acquire the ability tohodin .11 48 ities are only thought ofasdefinite quantities ofmate- rialized universal labor -time .but the capacity ofa particular commodity toserve asauniversal equivalent from amere abstraction becomes asocial result ofthe process ofexchange byasimple inversion ofthe above series ofequations ,viz.: 2lbs.ofcoffee = 1yard oflinen . lb. oftea 8lbs.ofbread 6yards ofcalico1yard oflinen . =1yard oflinen . 1yard oflinen . while coffee ,tea,bread ,calico ,inshort ,allcommod- ities express inlinen the labor -time contained inthem , the exchange value oflinen ,onthe other hand ,unfolds itself inall other commodities asits equivalents ,and the labor -time embodied initbecomes direct universal labor -time ,which isequally expressed indifferent vol- umes ofall other commodities .linen thus becomes the universal equivalent through the universal action of allother commodities upon it.asexchange value ,every commodity served asameasure ofvalue ofall other commodities .now ,on the contrary ,since all com- modities measure their exchange values bymeans ofa particular commodity ,this excluded commodity be- comes the special expression ofexchange value ,asa universal equivalent .at the same time ,the endless series of equations in which the exchange value of every commodity was expressed ,isreduced toone single equation consisting of two members .the equation 2lbs.ofcoffee 1yard oflinen now fully expresses the exchange value ofcoffee ,for inthis expression a yard oflinen appears asthe direct equivalent ofadefi-=",
        "45 - wehave before usnot only avicious circle ofproblems inwhich the solution ofone implies that ofthe other , but acombination ofcontradicting claims ,since the fulfillment ofone isdirectly connected with that ofits opposite . the process ofexchange ofcommodities must result both inthe unfolding and inthe solution ofthese con- tradictions ,neither ofwhich ,however ,can appear in that process inthis simple way .we have only observed how commodities are mutually related toeach other as use-values ,i.e.,how they appear asuse-values within the process ofexchange .the exchange -value ,onthe contrary ,aswehave considered itsofar,appeared asan abstraction formed inour own minds ,or-ifwe may soput it inthe mind ofthe individual owner ofcom- modities ,which liestored inhis warehouse asuse-values , and weigh upon his conscience asexchange values .in the process ofexchange ,however ,commodities must be not only use-values ,but also exchange values toone another ,and that should appear astheir own mutual relation .the difficulty which wefirst encountered was that acommodity must befirst alienated and delivered toitspurchasers asause-value ,inorder toappear asan exchange value ,asmaterialized labor ,while onthe other hand its alienation asuse-value implies its being an exchange value .but let usassume that this difficulty has been overcome .suppose the commodity has di- vested itself ofits use-value ,and has thereby fulfilled the material condition ofbeing socially useful labor , instead ofaparticular labor ofanindividual .inthat case ,the commodity must become an exchange value ,",
        "- 46 auniversal equivalent ,an embodiment of universal labor -time for all other commodities inthe process of exchange ,and thus ,leaving behind itslimited role ofa particular use-value ,acquire the ability tobedirectly represented inall use-values asits equivalents .but every commodity isjust such acommodity ,appearing as adirect incarnation ofuniversal labor -time bydivesting itself ofits particular use-value .on the other hand , however ,commodities confront each other inthe pro- cess ofexchange asparticular commodities ,asthe labor ofprivate individuals embodied inparticular use-values . universal labor -time isitself anabstraction ,which ,as such ,does not exist for commodities . let usexamine the series ofequations inwhich the exchange value ofacommodity finds its concrete ex- pression ,e.g.: =1yard oflinen 1yard oflinen =2lbs.ofcoffee . lb. oftea. 8lbs.ofbread ,etc. 1yard oflinen = these equations simply signify that equal quantities ofuniversal social labor -time are embodied inone yard oflinen ,two pounds ofcoffee ,half apound oftea,etc. but asamatter offact the individual labors which are represented inthese particular use-values ,become uni- versal ,and ,inthat form ,also social labor ,only when they are actually exchanged for one another inpro- portion tothe labor -time contained inthem .social labor -time exists inthese commodities inalatent state , sotosay,and isfirst revealed inthe process ofexchange . we do not proceed from the labor ofindividuals as social labor ,but,on the contrary ,from special labor",
        "- - 47 ofprivate individuals which appears asuniversal social labor only by divesting itself ofits original character inthe process ofexchange .universal social labor is, therefore ,noready -made assumption ,but agrowing re- sult .and thus weare confronted with anew difficulty , that onthe one hand commodities must enter the pro- cess ofexchange asembodiments ofuniversal labor- time ,while ,onthe other hand ,this embodiment ofthe labor -time ofindividuals associal labor -time isitself aresult ofthe process ofexchange . every commodity becomes anexchange value bydi- vesting itself ofitsuse-value ,orofitsoriginal nature . the commodity must therefore assume adouble ca- pacity inthe process ofexchange .but that second capacity ofexchange value can appear only inthe shape ofanother commodity ,because only commodities con- front each other inthe process ofexchange .how isa particular commodity torepresent directly materialized universal labor -time ,or-toput itdifferently -how is individual labor -time ,which isembodied inaparticular commodity tobemade directly universal incharacter ? the concrete expression ofthe exchange value of a commodity ,i.e.,ofevery commodity asauniversal equivalent ,isrepresented inanendless series ofequa- tions ,such as: 1yard oflinen = 2lbs.ofcoffee . 1yard oflinen = lb. oftea. 1yard oflinen- 8lbs.ofbread . 1yard oflinen = 1yard oflinen =6yards ofcalico . etc. the above form istheoretical insofar ascommod-",
        "48 ities are only thought ofasdefinite quantities ofmate- rialized universal labor -time .but the capacity ofa particular commodity toserve asauniversal equivalent from amere abstraction becomes asocial result ofthe process ofexchange byasimple inversion ofthe above series ofequations ,viz.: 2lbs.ofcoffee 1yard oflinen . lb. oftea 8lbs.ofbread= 1yard oflinen . = 1yard oflinen . 6yards ofcalico 1yard oflinen .= while coffee ,tea,bread ,calico ,inshort ,allcommod- ities express inlinen the labor -time contained inthem , the exchange value oflinen ,onthe other hand ,unfolds itself inall other commodities asits equivalents ,and the labor -time embodied initbecomes direct universal labor -time ,which isequally expressed indifferent vol- umes ofall other commodities .linen thus becomes the universal equivalent through the universal action of allother commodities upon it.asexchange value ,every commodity served asameasure ofvalue ofall other commodities .now ,on the contrary ,since all com- modities measure their exchange values bymeans ofa particular commodity ,this excluded commodity be- comes the special expression ofexchange value ,asa universal equivalent .at the same time ,the endless series of equations inwhich the exchange value of every commodity was expressed ,isreduced toone single equation consisting oftwo members .the equation 2lbs.ofcoffee =1yard oflinen now fully expresses the exchange value ofcoffee ,for inthis expression a yard oflinen appears asthe direct equivalent ofadefi-",
        "- 49 =nite quantity ofevery other commodity .thus ,within the sphere ofexchange all commodities are orappear toeach other asexchange values inthe form oflinen . the proposition that commodities ,asexchange values , are toeach other asdifferent quantities ofmaterialized universal labor -time ,may now beworded tothe effect that commodities ,asexchange values ,represent nothing but different quantities ofthe same article ,linen .uni- versal labor -time thus assumes the aspect ofadistinct thing ,asacommodity existing along with and outside ofall other commodities .atthe same time the equa- tion 2lbs.ofcoffee 1yard oflinen ,inwhich one. commodity appears asthe exchange value ofanother , isyet toberealized .only by being alienated asuse value -which depends upon whether itproves tobein the process ofexchange the object ofacertain want does the commodity actually transform itsexistence as coffee into the existence aslinen and thus takes onthe form ofauniversal equivalent and becomes ,indeed ,an exchange value for all other commodities .conversely , since all commodities are turned into linen bybeing alienated asuse-values ,linen becomes the converted form ofall other commodities ,and only asaresult of this transformation ofall other commodities into it, itbecomes the direct embodiment ofuniversal labor- time ,i.c.,the product ofuniversal exchange and ofthe elimination ofindividual labor .ifcommodities thus assume atwofold character inorder toappear asex- change values toeach other ,the commodity which has been singled out asthe universal equivalent becomes , onthe other hand ,ause-value intwo ways .besides",
        "- 50 its special use-value asaparticular commodity ,itas- sumes auniversal use-value .this latter kind ofuse- value constitutes its special feature ,emanating asit does ,from the specific part which the commodity plays asaresult ofthe universal relation which all other commodities bear toward itinthe process ofexchange . the use-value ofevery commodity asan object ofa particular want ,has adifferent value indifferent hands , e.g.,ithas adifferent value inthe hands ofthe one who disposes ofit,than inthose ofthe one who acquires it. but the commodity singled out asthe universal equiv alent ,isnow anobject ofauniversal want arising from the very process ofexchange ,and ithas the same use- value toeverybody ,viz.,that ofserving asthe depos- itory ofexchange value ,ofbeing auniversal means of exchange .thus wefind inone commodity the solution ofthe contradiction which isinherent incommodity as such ,namely ,ofbeing atone and the same time apar- ticular use-value and auniversal equivalent ,and ,there- fore ,ause-value for everybody oruniversal use-value . thus ,while all other commodities express their ex- change value inthe form ofanideal equation with the excluded commodity -anequation yet toberealized- the use-value ofthe special commodity ,although real , appears inthe process itself asamere form which is yet tobe realized through transformation into actual use-values .originally the commodity appeared simply ascommodity ,asuniversal labor -time embodied ina particular use-value .inthe process ofexchange ,all commodities are related tothe one excluded commod , ity astoasimple commodity ,one which appears asthe",
        "- 51 embodiment ofuniversal labor -time inaparticular use- value .thus ,particular commodities become related to one particular commodity asauniversal commodity .' inthat manner the mutual relations ofpossessors of commodities based onthe fact that they regard their labor asuniversal social labor ,takes onthe aspect of their relations tocommodities asexchange values ;and the mutual relation ofcommodities asexchange values appears inthe process ofexchange asthe relation ofall ofthem toone particular commodity astoaspecially adopted means ofexpression oftheir exchange value ; again ,from the point ofview ofthat particular com- modity the above relation appears asitsspecific relation toall other commodities ,and ,therefore ,asits own definite ,spontaneous ,social character .the particular commodity which thus appears asthe specially adopted expression ofthe exchange value ofallother commod- ities ,orthe exchange value ofcommodities asaparticu- lar exclusive commodity ,ismoney .money isacrystal- lization ofthe exchange value ofcommodities which they themselves form inthe process ofexchange .thus ,while commodities become use-values to each other inthe process ofexchange bycasting offalldefinite forms and entering into mutual relations intheir direct material shape ,they must assume anew form ,viz.,proceed to the formation ofmoney inorder toappear asexchange values toeach other .money isnot asymbol ,nomore than the commodity aspect ofause-value isasymbol . that asocial relation ofproduction takes the form ofan object existing outside ofindividuals ,and that the defi- this expression isused bygenovesi .",
        "- 52 nite relations into which individuals enter inthe pro- cess ofproduction carried on in society ,assume the form ofspecific properties ofathing ,isaperversion and bynomeans imaginary ,but prosaically real ,mys- tification marking allsocial forms oflabor which creates exchange value .in money this mystification appears only more strikingly than incommodities . the necessary physical properties ofthe particular commodity inwhich the money form ofallother com- modities istobe crystallized -asfar asthey are di- rectly determined by the nature ofexchange value- are divisibility toany desired extent ,homogeneity of its parts ,and uniformity ofall the specimens ofthe commodity .asanembodiment ofuniversal labor -time itmust behomogeneous initsstructure and capable of representing only quantitative differences . another necessary property isdurability ofits use-value ,as it must last through the process of exchange . the precious metals excel inthese qualities .money not being aresult ofascheme oragreement ,but having been produced instinctively inthe process ofexchange , agreat variety ofmore orless unsuited commodities had successively performed its functions . at acertain stage of development of the process of exchange , the necessity arises for apolar distribution ofthe func- tions ofexchange value and use-value among commo- dities ,sothat one commodity e.g.should act asa medium ofexchange ,while another isbeing alienated asause-value .this necessity brings itabout that one oreven several commodities possessing the most generally accepted use-value ,begin ,incidentally atfirst ,toplay",
        "- 53 the part ofmoney .even ifnot direct means ofsatis- fying existing wants ,their being the most considerable material constituent part ofwealth ,insures tothem a more general character than tothe other use-values . direct barter ,the original natural form ofexchange , represents rather the beginning ofthe transformation ofuse-values into commodities ,than that ofcommo- dities into money .exchange value has asyet noform ofits own ,but isstill directly bound up with use- value .this ismanifested intwo ways .production ,in its entire organization ,aims atthe creation ofuse- values and not ofexchange values ,and itisonly when their supply exceeds the measure ofconsumption that use-values cease tobeuse-values ,and become means of exchange ,i.e.,commodities .atthe same time ,they be- come commodities only within the limits ofbeing direct use-values distributed atopposite poles ,sothat the com- modities tobeexchanged bytheir possessors must beuse- values toboth ,-each commodity toits non -possessor . asamatter offact ,the exchange ofcommodities origin ates not within the primitive communities ,'but where they end ,ontheir borders atthe few points ,where they come incontact with other communities .that iswhere barter begins ,and from here itstrikes back into the in- terior ofthe community ,decomposing it.the various 'aristotle makes the same remark with reference tothe private family asthe primitive community .but the prim- itive form offamily isthe tribal family ,from the historical dissolution ofwhich the private family develops .\"vpvovvth   (  )     (name lyvkays )\"and inthe first community ,which isthefamily . this artisobviously ofnouse.\"jowett's transl .1.c.)",
        "- 54 use-values which first become commodities inthe barter between different communities ,such asslaves ,cattle , metals ,constitute therefore inmost cases the first money within those communities themselves .we have seen how the exchange value ofacommodity ismanifested . the more perfectly asexchange value ,the longer the series ofitsequivalents orthe greater the sphere ofex- change ofthat commodity .with the gradual expansion ofbarter ,the increase inthe number ofexchanges ,and the growing diversification ofthe commodities drawn into exchange ,commodities develop into exchange val- ues,which leads tothe formation ofmoney and has adestructive effect on direct barter .the econ- omists are inthe habit ofascribing the origin ofmoney tothe difficulties which are encountered inthe way of extensive barter ,but they forget that these difficulties arise from the development ofexchange value and from the fact that social labor becomes universal labor .e.g., commodities asuse-values can not besubdivided atwill , aproperty which they should possess as exchange values .or,acommodity belonging toamay beause- value tob,while the commodity belonging tobmay not have any use-value toa. or the owners ofthe com- modities may need each other's indivisible goods inun- equal proportions .inother words ,under the pretence ofanalyzing simple barter ,economists bring out certain aspects ofthe contradiction which isinherent incom- modities asentities simultaneously embodying both use- value and exchange value .on the other hand ,they con- sistently cling tothe idea that barter isthe natural form ofexchange ,which suffers only from certain technical",
        "55 - difficulties ,for which money isacunningly devised ex- pedient .arguing from this perfectly superficial view , aningenious english economist has rightly maintained that money ismerely amaterial instrument like aship orasteam -engine ,but not anexpression ofasocial rela- tion inthe field ofproduction and consequently not an economic category ;and that itis,therefore ,wrong to treat the subject inpolitical economy ,which really has nothing incommon with technology .' the world ofcommodities implies the existence ofa highly developed division oflabor ;this division ismani- fested directly inthe great variety ofuse-values ,which confront each other asparticular commodities and which embody asmany different kinds oflabor .the division oflabor embracing allthe particular kinds ofproductive occupations ,isthe complete expression ofsocial labor in itsmaterial aspect viewed aslabor creating use-values . but from the standpoint ofcommodities and within the process ofexchange ,itexists only initsresults ,inthe variety ofthe commodities themselves . the exchange ofcommodities constitutes the social metabolic process ,i.e.the process inwhich the exchange ofthe special products ofprivate individuals isthe re- \"money is,infact,only the instrument for carrying on buying and selling (but,ifyou please ,what doyou understand bybuying and selling ?)and the consideration ofitnomore forms apart ofthe science ofpolitical economy ,than the con- sideration ofships ,orsteam engines ,orofany other instru- ment employed tofacilitate the production and distribution of wealth .\"th.hodgskin ,popular political economy ,etc. lon- don,1827 ,p.178,179.",
        "- 56 sult ofcertain social relations ofproduction into which the individuals enter inthis interchange ofmatter . they develop ,the mutual relations ofcommodities crys- talize into various aspects ofthe universal equivalent and thus the process ofexchange becomes atthe same time the process ofthe formation ofmoney .the whole ofthis process which takes the form ofasuccession of processes ,constitutes circulation . notes on the history of the theory of commodities . the analysis ofcommodities according totheir two- fold aspect ofuse-value and exchange value by which the former isreduced towork ordeliberate productive activity ;and the latter ,tolabor time orhomogeneous social labor ,isthe result ofacentury and ahalf ofcriti- cal study bythe classical school ofpolitical economy which dates from william petty inengland and bois- guillebert in france and closes with ricardo inthe former country and sismondi inthe latter .1 petty reduces use-value tolabor ,without deceiving himself astothe natural limitation ofits creative 'acomparative study ofthe writings and characters of petty and boisguillebert ,outside ofthe light which itwould throw upon the difference offrench and english society at the end ofthe seventeenth and the beginning oftheeighteenth centuries ,would disclose the origin ofthe national contrast between english and french political economy .the same contrast reasserts itself inricardo and sismondi .",
        "57  power .asregards concrete labor ,hesizes itupinthe magnitude ofitssocial aspect ,asthe division oflabor. this view ofthe source ofmaterial wealth does not re- 'petty had illustrated the productive power inherent inthe division oflabor onamuch grander scale than that was done later byadam smith .see his \"essay concerning the multi- plication ofmankind ,etc.,\"3rd edition ,1686 ,p.35-36 .he not only brings out the advantages ofthe division oflabor on the example ofthe manufacture ofawatch ,asadam smith did later onthat ofaneedle ,but considers also acity and an entire country from the point ofview ofalarge manufacturing establishment .the spectator ,ofnovember 26,1711 ,refers tothis \"illustration ofthe admirable sir william petty .\" mcculloch is,therefore ,mistaken when hesupposes that the spectator confounded petty with awriter forty years his junior .see mcculloch ,\"the literature ofpolitical econ- omy ,aclassified catalogue ,\"london ,1845 ,p.105. petty is conscious ofbeing the founder ofanew science .his method , hesays ,\"isnotyet very usual ,forinstead ofusing only com- parative and superlative words ,and intellectual arguments ,\" hehas undertaken tospeak \"interms ofnumber ,weight or measure ;touseonly arguments ofsense ,and toconsider only such causes ,ashave visible foundations innature ;leaving those that depend upon the mutable minds ,opinions ,appe- tites ,and passions ofparticular men ,tothe consideration of others .\"(political arithmetick ,etc.,london ,1699. preface .) (anew edition of\"the economic writings ofsir william petty ,\"edited bychas .henry hull ,has been published bythe university press atcambridge ,1899. the above passage will befound invol.i.,p.244. the further references are given tothis new,more accessible edition .translator .)his wonder . fulkeenness shows itself e.g.intheproposal totransport \"all the moveables and people ofireland ,and ofthe highlands of scotland ...into the rest ofgreat britain .\"thereby much labor -time would besaved ,the productivity oflabor in-",
        "58 main more orless fruitless asinthe case ofhis con- temporary ,hobbes ,but leads uptohis political arith- metic ,the first form inwhich political economy isdif- ferentiated asanindependent science . he defines exchange value ,however ,just asitappears inthe process of exchange of commodities ,viz.as money ;and money hedefines asanexisting commodity , gold and silver .laboring under the ideas ofthe mone- tary system ,hedeclares the special branch oflabor which isdevoted tothe production ofgold and silver asthe labor which determines exchange value .what hereally means isthat the labor ofmembers ofsociety must pro- creased ,and \"the king and hissubjects would thereby become more rich and strong .\"(political arithmetick ,ch.4,p.285. ) orinthe chapter ofhis political arithmetic inwhich he proves that england's mission isthe conquest ofthe world's market atatime when holland still played the leading part asatrading nation and france seemed tobeonthe way of becoming the ruling trading power :\"that the king ofeng- land's subjects ,have stock competent and convenient ,todrive the trade ofthe whole commercial world \"(1.c.,ch.10,p. 311).\"that the impediments ofengland's greatness are but contingent and removable \"(1.c.,ch.5,p.298).asingular humor pervades allhiswritings .thus ,heshows that itwas bymaterial means that holland -atthat time themodel coun- try with english economists ,just asengland iswith conti- nental economists to-day-conquered the world market \"with- out such angelical wits and judgments ,assome attribute to the hollanders \"(1.c.,p.258).he advocates \"liberty of conscience \"asacondition oftrade ,because \"dissenters .. are ... patient men ,and such asbelieve that labour and industry istheir duty towards god,\"and \"they believe that ..for those who have less wealth ,tothink they have",
        "59 - duce not direct use-values ,but commodities oruse-values which by means ofexchange are capable ofassuming the form of gold and silver ,i.e.of money ,i.e. ofexchange value ,i.e.ofembodiments ofuniversal labor .his example ,however ,shows strikingly that the recognition oflabor asthe source ofmaterial wealth by nomeans excludes the misconception ofthe particular social form inwhich labor constitutes the source ofex. change value . in his turn ,boisguillebert ,ifnot consciously , atany rate actually reduces the exchange value ofacom- modity tolabor -time ,since hedetermines \"true value \" (lajuste valeur )bythe right proportion inwhich the labor -time ofindividuals isdistributed among the sev- eral branches ofindustry ,and defines free competition asthe social process which determines these correct pro- portions .atthe same time ,however ,and incontrast the more wit and understanding ,especially ofthe things of god which they think chiefly belong tothe poor .\"\"from whence itfollows that trade isnot fixt toany species ofr- ligion assuch ;but rather tothe heterodox part of the whole \"(1.c.,p.262-264 ).he advocates an\"allowance bypublick tax\"for those \"who live bybegging ,cheating , stealing ,gaming ,borrowing without intention ofrestoring ,\" because \"itwere more for the publick profit \"totax the country for such persons \"than tosuffer them tospend ex- travagantly ,atthe only charge ofcareless ,credulous ,and good natured people \"(p.269-270 ).but heisopposed to taxes which transfer the wealth from industrious people \"to such asdonothing atall,but eat and drink ,sing,play ,and dance ;nay such asstudy the metaphysicks \"(ibid.).petty's writings are rarities ofthe bookseller's trade and are tobe found only inscattered poor old editions ,which isthe more",
        "60 with petty he wages afanatical war against money which ,by itsinterference ,disturbs the natural equili- brium orharmony ofexchange ofcommodities and ,like awanton moloch ,demands allnatural wealth assacri- fice.itistrue that this assault onmoney was called forth by certain historic conditions .since boisguille- bert attacked 'the blind destructive lust after gold which possessed the court oflouis xiv ,his tax collectors ,and his nobility ;onthe other hand ,petty extolled inthe greed ofgold the mighty impulse which spurred onthe nation inher industrial development and inher conquest surprising since william petty was not only the father of english political economy ,but also the ancestor ofhenry petty ,alias marquis oflansdowne ,the nestor ofthe eng- lish whigs .however ,the lansdowne family could hardly bring out acomplete edition ofpetty's works without pre- facing itwith his biography ,and what can besaid ofmost origines ofthe great whig families holds good also inthis case ,viz.,\"the less said ofthem the better .\"the keen -witted but cynical army surgeon who was asready toplunder inire- land under theshield ofcromwell astocrawl before charles ii. togetthe title ofbaron which heneeded forhis plunderings , isamodel hardly fitforpublic exhibition .besides that ,petty seeks toprove inmost ofhiswritings which hepublished inhis lifetime ,that england's prosperity reached itsclimax under charles ii.,aheterodox view for the hereditary exploiters of the \"glorious revolution .\" incontrast with the \"black art offinance \"ofhis time , boisguillebert says :\"lascience financire n'est que lacon- naissance approfondie des intrts del'agriculture etducom- merce .\"ledtail delafrance ,1697. eugne daire's edition ofeconomistes financiers duxviii .sicle ,paris ,1843 ,vol.i., p.241.",
        "61 - ofthe world -market ;still ,there asserts itself here a deeper antagonism ofprinciples which constantly re- curs between true english and true french 'political economy .boisguillebert sees ,infact ,only the material substance ofwealth ,itsuse-value ,the enjoyment ofit, and considers the capitalistic form oflabor ,i.e.the production ofuse-values ascommodities and the ex- change ofthose commodities ,asthe natural social form inwhich individual labor attains itsend .when heis, therefore ,confronted with the specific character ofcapi- talistic wealth asinthe case ofmoney ,hesees initthe usurping interference ofextraneous elements and gets into arage about the capitalist system oflabor inone form while utopian -like he praises itin another. boisguillebert furnishes us with proof that one may but not romance political economy ,since the italians re- produce the contrast between the english and french econo- mists inthe two respective schools ofnaples and milan ,while the spaniards ofthe earlier period are either pure mercan- tilists ;modified mercantilists like ustariz ;or,like jovellanos (seehisobras ,barcelona ,1839-40 ),hold tothe \"golden mean \" with adam smith . \"la vritable richesse jouissance entire ,non seulement des besoins delavie,mais mme detous lessuper- flus etdetout ,cequi peut fair plaisir lasensualit ,\"bois- guillebert ,\"dissertation sur lanature delarichesse ,\"etc., 1.c.,p.403. but while petty was afrivolous ,rapacious and unprincipled adventurer ,boisguillebert ,though anintendant under louis xiv ,championed the interests ofthe oppressed classes with adaring that was equal tohiskeenness ofmind . the french socialism ofthe proudhon type suffers from the same national hereditary disease .",
        "- 62 treat labor -time asthe measure ofvalue of commo- ditics ,and atthe same time confound labor embodied inthe exchange value ofcommodities and measured by time ,with the direct natural activity ofindividuals . the first sensible analysis ofexchange value aslabor- time ,made soclear astoseem almost commonplace ,is tobefound inthe work ofaman ofthe new world where the bourgeois relations ofproduction imported together with their representatives sprouted rapidly in asoil which made up its lack ofhistorical traditions with asurplus ofhumus .that man was benjamin franklin ,who formulated the fundamental law ofmod- ern political economy inhis first work which hewrote when amere youth and published in1721 . he declares itnecessary tolook for another measure ofvalue than precious metals .that measure islabor . \"bylabor may the value ofsilver bemeasured aswell as other things .as,suppose one man employed toraise corn ,while another isdigging and refining silver ;atthe year's end ,oratany other period oftime ,the complete produce ofcorn ,and that ofsilver ,are the natural price ofeach other ;and ifone betwenty bushels ,and the other twenty ounces ,then anounce ofthat silver isworth the labor ofraising abushel ofthat corn .now ifby the discovery ofsome nearer ,more easy orplentiful mines ,aman may get forty ounces ofsilver aseasily as formerly hedid twenty ,and the same labor isstill re- 1\"benjamin franklin ,the works of,etc.,\"ed.byi.sparks , vol.ii.,boston ,1836. \"amodest inquiry into the nature and necessity ofapaper currency .\"",
        "63 - quired toraise twenty bushels ofcorn ,then two ounces ofsilver will beworth nomore than the same labor of raising one bushel ofcorn ,and that bushel ofcorn will beascheap attwo ounces ,asitwas before atone,ceteris paribus .thus the riches ofacountry are tobevalued bythe quantity oflabor itsinhabitants are able topur- chase .\"thus franklin regards labor -time from the one- sided economic point ofview ,asthe measure ofvalue . the transformation ofactual products into exchange values isself-evident with him and the only question isas tofinding aquantitative measure ofvalue .\"trade ,\"says he,\"ingeneral being nothing else but the exchange of labour for labour ,the value ofallthings is,asihave said before ,most justly measured bylabour .\" substi- tute the word \"work \"for \"labor \"inthe above statement , and the confusion oflabor inone form and labor inan- other form becomes atonce apparent .since trade con- sists e.g.inthe exchange ofthe respective labors ofthe shoemaker ,miner ,spinner ,painter ,etc.,does itfollow that the value ofshoes ismost justly measured bythe work ofapainter ?on the contrary ,franklin meant that the value ofshoes ,mining products ,yarn ,paintings , etc.,isdetermined byabstract labor which possesses no particular qualities and can,therefore ,bemeasured only quantitatively .but since hedoes not develop the idea that labor contained inexchange value isabstract uni- 1l.c.,p.265. 'l.c.,p.267. 'l.c.,\"remarks and facts relative tothe american paper money ,\"1764 .",
        "-  64 versal labor which assumes the form ofsocial labor asa result ofthe universal alienation ofthe products ofin- dividual labor ,henecessarily fails torecognize inmoney the direct embodiment ofthis alienated labor .for that reason hesees noinner connection between money and labor which creates exchange value ,and considers money merely asan instrument introduced from outside into the sphere ofexchange for purposes oftechnical con- venience. franklin's analysis ofexchange value did not exert any direct influence onthe general trend of science ,because hediscussed only special questions of political economy whenever there was adefinite practical occasion for it. the contrast between useful work and labor which creates exchange value agitated all europe during the eighteenth century inthe form ofthis question :what particular kind oflabor constitutes the source ofbour- geois wealth ?itwas thus assumed that not every kind oflabor which isrealized inuse-values oryields certain products does thereby directly create wealth .with the physiocrats ,however ,aswell aswith their opponents , the burning question was not,what kind oflabor creates value ,but which isitthat creates surplus value .they approached the problem initscomplicated form before they had solved itinitselementary form ;such isthe historical course of all sciences leading them by a labyrinth ofintersecting paths tothe real starting points . unlike other builders ,science not only erects castles in 1see \"papers onamerican politics ;remarks and facts relative tothe american paper money ,\"1764 ,1.c.",
        "65 - the air,but constructs separate stories ofthe building , before ithas laid the foundation .without dwelling any longer onthe physiocrats and omitting quite anum- ber ofitalian economists who insome more orless in- genious ideas came close toacorrect analysis ofthe na- ture ofcommodity ,'wepass atonce tothe first briton who elaborated the general system ofbourgeois econ- omics ,sir james steuart .his idea ofexchange value aswell asallthe abstract categories ofpolitical economy still seem tobewith him inthe process ofdifferentiation from the material elements they represent and therefore appear quite vague and unsettled .inone place hede- termines real value bylabor -time (\"what aworkman can perform inaday \"),but immediately creates confusion byintroducing the elements ofwages and raw material. in another place his struggle with the material sub- stance ofthe subject hetreats ofisrevealed even more see e.g.galiani ,\"della moneta ,\"invol.3ofscrittori classici italiani dieconomia politica (published bycustodi ). parte moderna ,milano ,1803. \"lafatica ,hesays ,l'unica che dvalore alla cosa \"(\"only effort can give value toany thing \").the designation oflabor as\"fatica ,\"strain ,effort , ischaracteristic ofthe southerner . 'steuart's work ,\"aninquiry into the principles ofpolitical economy ,being anessay onthe science ofdomestic policy in free nations ,\"appeared first inlondon intwo quarto vol- umes intheyear 1767 ,tenyears before adam smith's \"wealth ofnations .\"iquote from the dublin edition of1770. (the references topages arethe same forthe standard london edi- tion of1767 ,except where otherwise stated .translator .) steuart ,1.c.,vol.i.,p.181-183 .",
        "- 66 strikingly .he calls the material ofnature contained inacommodity ,such asthe silver inasilver plate ,its \"intrinsic worth ,\"while the labor -time contained inithe calls \"useful value .\" the former ,hesays \"is . something real initself ,\"while \"the value ofthe second must beestimated according tothe labour ithas cost to produce it... the labour employed inthe modi- fication [ofthe substance ]represents aportion ofa man's time .\"1 what distinguishes steuart from his predecessors and followers ishis keen differentiation between specifically social labor which isrepresented inexchange value ,and concrete labor which produces use-values .labor ,hesays , which through itsalienation creates auniversal equival- ent,icall industry .labor asindustry hedistinguishes not only from concrete labor ,but from all other social forms oflabor . itistohim the capitalistic form of labor incontrast toits antique and mediaeval forms . he isespecially interested inthe difference between cap- italistic and feudal labor ,ofwhich hehad observed the latter initsdecaying forms both inscotland and onhis extensive travels over the continent .steuart knew ,of course ,very well that products took onthe form ofcom- modities and commodities ,the form ofmoney inpre- capitalistic epochs aswell ;but heproves conclusively that itisonly inthe capitalistic period ofproduction that the commodity becomes the elementary and funda- steuart ,1.c.,vol.i.,p.361-362 . 'see chapter i.,book ii.,vol.i.\"ofthe reciprocal conne tions between trade and industry \"(translator ).",
        "67 mental form ofwealth ,and alienation [ofcommodities ], the ruling form ofacquisition and that consequently labor creating exchange value isspecifically capitalistic inits character .' after different forms ofconcrete labor ,such asagri- culture ,manufacture ,navigation ,trade ,etc.,had each inturn been declared the true source ofwealth ,adam smith proclaimed labor ingeneral ,and namely inits general social form ofdivision oflabor ,tobethe only source ofmaterial wealth oruse-values .while ignoring inconnection with the latter the part played bynature , heistroubled byitwhen hecomes todeal with purely social wealth i.e.exchange value .tobesure ,adam de- termines the value ofacommodity bythe labor -time contained init,but relegates the actual application of the principle topre-adamic times .in other words , what seems tohim true from the standpoint ofsimple commodity ,ceases tobeclear assoon asthe higher and more complex forms ofcapital ,wage -labor ,rent ,etc. take its place .this he expresses by saying ,that the value ofcommodities used tobemeasured bylabor -time inthe paradise lost ofbourgeois society ,inwhich men 'hedeclares ,therefore ,the patriarchal form ofagriculture which isdevoted tothe direct production ofuse-values forthe owner ofthe land ,tobean\"abuse ,\"not insparta ,orrome . oreven inathens ,but inthe industrial countries ofthe eigh teenth century .this \"abusive agriculture \"isnot \"trade ,\"but a\"direct means ofsubsisting .\"just ascapitalistic agriculture clears the country ofsuperfluous mouths ,sodoes the capital- istic mode ofmanufacture clear the factory ofsuperfluous hands .",
        "68 dealt with each other not ascapitalists ,wage -workers , landlords ,tenants ,usurers ,etc.,but merely asplain pro- ducers ofcommodities which they exchanged .he con- stantly confuses the determination ofthe value ofcom- modities bythe labor -time contained inthem with the determination oftheir value bythe value oflabor .he becomes confused inworking out the details and fails toseethe objective equalization ofdifferent kinds oflabor which the social process forcibly carries out,mistaking itfor the subjective equality ofthe labors ofindividuals . the transition from concrete labor tolabor creating ex- change value ,i.e.tolabor initsfundamental capitalistic form hetries toderive from the division oflabor .yet , while itistrue that private exchange implies the divis- ion oflabor ,itisfalse tomaintain that division oflabor implies private exchange .among the peruvians ,e.g., labor was divided toanextraordinary extent ,although there was noprivate exchange ,noexchange ofproducts , ascommodities . thus e.g.,adam smith says :\"equal quantities oflabour , atalltimes and places ,may besaid tobeofequal value tothe labourer .inhisordinary state ofhealth ,strength and spirits , inthe ordinary degree ofhis skill and dexterity ,hemust al- ways laydown the same portion ofhisease ,hisliberty ,and his happiness .the price which hepays must always bethe same , whatever may bethe quantity ofgoods which hereceives in return for it.ofthese ,indeed ,itmay sometimes purchase a greater and sometimes asmaller quantity ;but itistheir value which varies ,not that ofthe labour which purchases them . ...labour alone ,therefore ,never varying inits own value istheir [commodities ']real price ,etc. adam smith (book i.,ch.v.,p.34,oxford ,1869. translator .)",
        "69 contrary toadam smith ,david ricardo elaborated with great clearness the determination ofthe value of acommodity bylabor -time and showed that this law gov- erns also such relations ofcapitalistic production which seem tocontradict itmost .ricardo confines his inves- tigations exclusively tothe quantitative determination of value and asregards the latter heisatleast conscious of the fact that the realization ofthe law depends upon cer- tain historical conditions .he says ,namely ,that the de- termination ofvalue bylabor -time holds good for com- modities \"only ascan beincreased inquantity bythe exertion ofhuman industry ,and onthe production of which competition operates without restraint .\" what hereally means isthat the law ofvalue presupposes for itsfull development anindustrial society inwhich pro- duction iscarried onalarge scale and free competition prevails ,i.e.the modern capitalist society .inallother respects ,ricardo considers the capitalist form oflabor asthe eternal natural form ofsocial labor .he makes the primitive fisherman and the primitive hunter straightway exchange their fish and game asowners of commodities ,inproportion tothe labor -time embodied inthese exchange values .on this occasion hecommits the anachronism ofmaking the primitive fisherman and primitive hunter consult the annuity tables incurrent use onthe london exchange inthe year 1817 inthe cal- culation relating totheir instruments .the \"parallelo- grams ofmr. owen \"seem tobethe only form ofsociety 'david ricardo ,\"ontheprinciples ofpolitical economy and taxation ,\"3rd edition ,london ,1821 ,p.3.",
        "- --- 70 outside ofthe bourgeois form with which he was ac- quainted .although confined within this bourgeois horizon ,ricardo analyzes the bourgeois economy -which looks quite different todeeper insight than itdoes on the surface -with such keen power oftheoretical pene- tration that lord brougham could say ofhim :\"mr. ricardo seemed asifhe had dropped from another planet .\" in adirect controversy with ricardo ,sismondi lays stress upon the specifically social character of labor which creates exchange value ,'and says itis \"characteristic of our economic progress \"toreduce the magnitude ofvalue tothe necessary labor- time , to the relation between the demand of society as awhole and the quantity of labor which issuf- ficient tosatisfy this demand .\" sismondi isnomore laboring under boisguillebert's idea ,that labor which creates exchange value isadulterated bymoney ;but just asboisguillebert denounced money ,sodoes sismondi de- nounce large industrial capital .in ricardo political economy reached itsclimax ,after recklessly drawing its ultimate conclusions ,while sismondi supplemented itby impersonating itsdoubts . 1since ricardo gave toclassical political economy its sismondi ,\"etudes sur l'economic politique ,\"t.ii.,brux- elles ,1837. \"c'est l'opposition entre lavaleur usuelle  etlavaleur changeable laquelle lecommerce areduit toute chose ,\"p.161. [paris edition ,p.229,transl .] 'sismondi 1.c.,p.163-166 seq.[paris edition ,230 etf. transl .]",
        "71 final shape ,having formulated and elaborated with the greatest clearness the law ofthe determination ofex- change value by labor -time ,itisnatural that all the polemics among economists should center about him . stripped ofits puerile 'form this controversy comes down tothe following points : first :labor itself has exchange value ,and different kinds oflabor have different exchange values .we get into avicious circle bymaking exchange value the meas- ure ofexchange value ,because the measuring exchange value needs ameasure itself .this objection may be reduced tothe following problem :given labor -time as the intrinsic measure ofexchange value ,develop from that the determination ofwages .the theory ofwages gives the answer tothat . second :ifthe exchange value ofaproduct isequal tothe labor -time contained init,then the exchange value ofone day oflabor isequal tothe product ofthat labor . inother words ,wages must beequal tothe product of labor .but the very opposite isactually the case .ergo . 'perhaps the silliest tobefound arethe annotations ofj.b. say tothe french translation ofricardo ,made byconstancio , and the most pedantically arrogant are the remarks ofmr. macleod inhis newly published \"theory ofexchange ,\"lon- don,1858 . this objection raised against ricardo bybourgeois econ- omists was taken uplater bythe socialists .having assumed the correctness ofthe formula ,they charged the practice with contradiction tothe theory and appealed tobourgeois society torealize inpractice the conclusions which were supposed to follow from itstheoretical principles .that was atleast the",
        "- 72 this objection comes down tothe following problem : how does production ,based on the determination of exchange value by labor -time only ,lead tothe result that the exchange value oflabor isless than the exchange value ofitsproduct ?this problem issolved byusin the discussion ofcapital . third :the market price ofcommodities either falls below orrises above itsexchange value with the changing relations ofsupply and demand .therefore ,the ex- change value ofcommodities isdetermined bythe rela- tion ofsupply and demand and not bythe labor -time contained inthem .asamatter offact ,this queer con- clusion merely amounts tothe question ,how amarket price based onexchange value can deviate from that ex- change value ;or,better still ,how does the law ofex- change value assert itself only initsantithesis ?this problem issolved inthe theory ofcompetition . fourth :the last and apparently the most striking objection ,ifnot raised inthe usual form ofqueer ex- amples :ifexchange value isnothing but mere labor- way inwhich the english socialists turned ricardo's formula ofexchange value against political economy .itremained for mr. proudhon not only toproclaim the fundamental principle ofold society asthe principle ofthe new,but also todeclare himself thediscoverer oftheformula inwhich ricardo summed upthe combined results ofclassical english political economy . ithas been proven that the utopian interpretation ofthe ri- cardian formula was about forg ten inengland when mr. proudhon \"discovered \"itonthe other side ofthe canal .(cf. my work :\"misre delaphilosophie ,\"etc.,paris ,1847 ,para- graph onlavaleur constitue .)",
        "- - 73 time contained incommodities ,how can commodities which contain no labor possess exchange -value ,orin other words ,whence the exchange value ofmere forces ofnature ?this problem issolved inthe theory ofrent . chapter ii. money or simple circulation . inaparliamentary debate onsir robert peel's bank act of1844 and 1845 ,gladstone remarked that not even love has made somany fools ofmen asthe pondering over the nature ofmoney .he spoke of britons to britons .the dutch ,onthe contrary ,who ,from times of yore ,have had ,petty's doubts notwithstanding , \"angelical wits \"for money speculation have never lost their wits inspeculations about money . the main difficulty inthe analysis ofmoney isover- come assoon asthe evolution ofmoney from commodity isunderstood .this point once granted ,itonly remains tocomprehend clearly the particular forms ofmoney , which istosome extent made difficult bythe fact that allbourgeois relations ,being gilt orsilver plated ,have the appearance ofmoney relations ,and money ,therefore , seems topossess anendless variety offorms ,which have nothing incommon with it. inthe following investigation only those forms of",
        "74 - money are treated ofwhich directly grow out ofthe ex- change ofcommodities ;the forms which belong toa higher stage ofproduction ,ase.g.,credit money will not bediscussed here .for the sake ofsimplicity gold isassumed throughout asthe money commodity . 1.the measure ofvalue . the first process ofcirculation constitutes ,sotosay, the theoritical preparatory process toactual circulation . to begin with ,commodities which are use-values by nature ,acquire aform inwhich they appear inidea to each other asexchange values ,asdefinite quantities of incorporated universal labor -time .the first necessary step inthis process is,aswehave seen ,the setting apart bythe commodities ofaspecific commodity ,say gold ,as the direct incarnation ofuniversal labor -time ,orthe uni- versal equivalent .let usgoback for amoment tothe form inwhich commodities turn gold into money . 2ounces ofgold 1ton ofiron - 1quarter ofwheat 1ounce ofgold= 1hundred weight ofmocca coffee 1-4 ounce ofgold 1hundred weight ofpotash =ounce ofgold 1ton ofbrazil timber =1 ounces ofgold ycommodities =xounces ofgold inthe above series ofequations iron ,wheat ,coffee , potash ,etc. appear toeach other asembodiments of homogeneous labor ,namely ,aslabor materialized in money ,from which allthe peculiarities ofthe different kinds ofconcrete labor represented inthe different use- values are completely eliminated .asvalue they are all g",
        "- - 75 identical ,they are the incarnation ofthe same labor ,or the same incarnation oflabor ,viz.,gold .asuniform em- bodiments ofthe same labor they display only one differ- ence ,aquantitative one,byappearing asdifferent quan- tities ofvalue ,because unequal quantities oflabor -time are contained intheir use-values .the mutual relation ofthese separate commodities isthat ofembodiments of universal labor -time ,since they are related touniversal labor -time astoanexcluded commodity ,viz.,gold .the same relation the development ofwhich causes commodi- ties toappear toeach other asexchange values ,causes the labor time contained in gold to appear universal labor -time ,agiven quantity of which is expressed indifferent quantities ofiron ,wheat ,coffee , etc,-in short ,inthe use-values ofallcommodities ,oris directly unfolded inthe endless series ofcommodity- equivalents .while all commodities express their ex- change values ingold ,gold expresses itsexchange value directly inallcommodities .while commodities assume the form ofexchange value inrelation toeach other , they lend togold the form ofthe universal equivalent , orofmoney . gold becomes the measure ofvalue ,because all com- modities measure their exchange values in gold ,in proportion as acertain quantity of gold and a certain quantity ofthe commodity contain the same amount oflabor -time ;and itisonly byvirtue ofthis function ofbeing ameasure ofvalue ,inwhich capacity itsown value ismeasured directly inthe entire series of commodity equivalents ,that gold becomes auniversal equivalent ormoney .on the other hand ,the exchange",
        "- - 76 value ofall commodities isexpressed ingold .inthis expression ,the qualitative aspect istobedistinguished from the quantitative :there isthe exchange value ofthe commodity asthe embodiment ofthe same uniform labor -time ;while the magnitude ofvalue isexhaustively expressed ,since inthe same proportion inwhich com- modities are equated togold they are equated toone an- other .on the one hand the universal character ofthe labor -time contained inthem isrevealed ;onthe other , itsquantity isexpressed initsgolden equivalent .the exchange value ofcommodities thus expressed inthe form of auniversal equivalent and ,moreover ,asa numerical proportion ofthis equivalent ,interms ofone specific commodity ,orrepresented inthe form ofaseries ofcommodities equated toone specific commodity ,is price .price isthe form into which the exchange value ofcommodities isconverted when itappears within the sphere ofcirculation . by the same process by which commodities express their values ingold prices ,they turn gold into ameasure ofvalue i.e.into money .ifallofthem were tomeasure their values insilver ,wheat ,orcopper ,and therefore express them in the form ofsilver ,wheat orcopper prices ,then silver ,wheat orcopper would bemeasures of value and consequently universal equivalents .inorder toappear asprices incirculation ,commodities must be exchange values before they enter circulation .gold be- comes the measure ofvalue only because allcommodities estimate their exchange value init. the universality ofthis relation which isthe result of evolution and from which alone springs the function of",
        "77 gold asthe measure ofvalue ,implies however ,that every single commodity ismeasured ingold ,inproportion to the labor -time contained inboth ;that the actual com- mon measure ofthe commodity and ofgold islabor ;or that commodity and gold are passed for each other in direct barter as equal exchange values .how this equalization actually takes place ,can not bediscussed . here when treating ofsimple circulation .so much , however ,isclear ,that incountries producing gold and silver ,certain quantities oflabor -time are directly em- bodied indefinite quantities ofgold and silver ,while in countries which donot produce gold and silver the same result isreached inaround -about way ,bydirect orin- direct exchange ofthe commodities ofthose countries ; i.e.adefinite portion ofaverage national labor isgiven foradefinite quantity oflabor -time ,embodied inthe gold and silver ofthe mine -owning countries .inorder tobe able toserve asameasure ofvalue ,gold must beasfar aspossible avariable value ,because itcan become the equivalent ofother commodities only asanincarnation oflabor -time ,and the same labor -time isrealized in unequal volumes ofuse-values with the change inthe pro- ductive power ofconcrete labor .inestimating allcom- modities ingold itisonly assumed that gold represents agiven quantity oflabor atagiven moment ,aswas done when the exchange value ofany commodity was ex- pressed interms ofthe use-value ofany other com- modity .asfor the variations ofthe value ofgold ,the law ofexchange value formulated above holds good in itscase aswell .ifthe exchange value ofcommodities remains unchanged ,then ageneral rise intheir gold",
        "78 - prices ispossible only inthe case ofafall inthe ex- change value ofgold .ifthe exchange value ofgold re- mains unchanged ,ageneral rise ofgold prices ispos- sible only when the exchange value ofall commodities rises .the reverse istrue incase ofageneral fall inthe prices ofcommodities .ifthe value ofanounce ofgold falls orrises inconsequence ofachange inthe labor -time required for itsproduction ,then the values ofallother commodities fall orrise toanequal extent .thus ,the ounce ofgold represents after the change ,asitdid be- fore ,agiven quantity oflabor -time with regard toall commodities .the same exchange values are now esti- mated ingreater orsmaller quantities ofgold than be- fore ,but they are estimated inproportion tothe mag- nitude oftheir values ,and consequently retain the same proportion toeach other .the ratio 2 4 8re- mains the same when expressed as12 4oras 48 16. the change inthe quantity ofgold in which exchange values are estimated with avariation in the value ofgold ,interferes aslittle with the function ofgold asameasure ofvalue ,asthe fifteen times smaller value ofsilver ascompared with that ofgold interferes with the performance ofthat function bythe latter . since labor -time isthe common measure ofgold and commodities ,and since gold figures asthe measure of value only insofar asallcommodities are measured by it,the idea that money makes commodities commen- surable ,istherefore amere fiction ofthe process of circulation .itisrather the commensurability ofcom- 'true ,aristotle sees that the exchange value ofcommodities underlies their prices :66   ,",
        "- 79 modities asincorporated labor -time ,that turns gold into money . commodities enter the process ofexchange inthe con- crete form ofuse-values .they are yet tobeturned into the real universal equivalent through their aliena- tion .the determination oftheir prices merely amounts totheir ideal transformation into the universal equiv- alent ,aprocess ofequation togold which isyet tobe realized .but since commodities are,intheir prices , transformed into gold only inimagination ,orare con- verted only into imaginary gold ,and since their money form isnot differentiated asyet from their concrete selves ,itfollows that gold has also been turned into money only inimagination ;itappears sofar but asa measure ofvalue ,and infact definite quantities ofgold serve merely asnames for certain quantities oflabor- time .the form inwhich gold iscrystallized inmoney itis      ,   .\" clear that exchange existed before coin.for itdoes notmake any difference whether you give five beds for ahouse ,oras much money asfive beds are worth \").onthe other hand , since commodities acquire only inprice the form ofexchange value with respect toone another ,hemakes them commensur able through money .66     , , .      ,    ,   , ,  .\"(\"therefore all has tobeappraised . inthat way exchange may always take place ,and,with it,society can exist . coin ,like measure ,makes every- thing commensurable and equal ,for without exchange there would beno society ,without equality there would beno exchange ,and without commensurability ,no equality .\") he does not conceal from himself that these different objects measured by money are entirely incommensurable",
        "80 always depends upon the way inwhich commodities ex- press their own exchange value toeach other . commodities now confront one another inadouble capacity :actually asuse-values ,ideally asexchange values .the twofold aspect oflabor contained inthem isreflected intheir mutual relations ;the special con- crete labor being virtually present astheir use-value , while universal abstract labor -time isideally represented intheir price inwhich commodities appear ascom- mensurable embodiments ofthe same value -substance differing merely inquantity . the difference between exchange value and price ap- pears tobe merely nominal or,asadam smith says , labor isthe real price ,and money the nominal price of commodities .instead ofestimating the value ofone quarter ofwheat inthirty days oflabor ,itisestimated inone ounce ofgold ifone ounce ofgold isthe product ofthirty days 'labor .however ,far from this difference being merely nominal ,allthe storms which threaten commodities inthe actual process ofcirculation center about it.thirty days oflabor are contained inaquarter quantities .what heisafter isthecommon unit ofcommodities asexchange values ,which asanancient greek hewas unable tofind.hegets out ofthedifficulty bymaking commensurable through money what isinitself incommensurable ,sofar asit isnecessary forpractical purposes .\"       ,    .\" (\"intruth itisimpossible tomake things that aresodifferent , commensurable ,but forpractical purposes itispermissible .\") aristotle ,ethica nicomachea ,1.5,c.8,edit.bekkeri ,oxonii , 1837 .",
        "- 1-3 81 ofwheat and itneed not,therefore ,beexpressed interms oflabor -time .but gold isacommodity distinct from wheat ,and only incirculation itcan be ascertained , whether the quarter ofwheat can be actually turned into an ounce ofgold asisanticipated inits price . that will depend onwhether ornot itproves tobeause- value ,whether ornot the quantity oflabor -time con- tained in itisthe quantity necessarily required by society for the production ofaquarter ofwheat .the commodity assuch isanexchange value ,ithas aprice . inthis difference between exchange value and price lies the demonstration ofthe fact that the particular in- dividual labor contained inacommodity has first tobe expressed through the process ofalienation interms of its counterpart ,i.e.asimpersonal ,abstract ,universal and ,only inthat form ,social labor ,viz.money .whether itcan besoexpressed seems tobeamatter ofchance . thus ,although the exchange value ofacommodity finds only ideally adistinct expression inprice ,and the two- fold character oflabor contained inthe commodity ex- ists asyet merely astwo distinct forms ofexpression , and ,although inconsequence thereof ,the embodiment of universal labor -time ,gold ,confronts actual commodi- ties only asanimaginary measure ofvalue ,yet the fact that exchange value exists asprice ,orthat gold exists as ameasure ofvalue implies the necessity ofthe aliena- tion ofcommodities for hard cash and the possibility oftheir non -alienation .inshort ,here lies latent the entire contradiction which isinherent inthe fact that products are commodities orthat the particular work of aprivate individual can be ofno account insociety",
        "82 until ithas taken the very opposite form ofabstract uni- versal labor .for that reason ,the utopians ,who want tohave commodities but not money ,who want asystem ofproduction based on private exchange without the necessary conditions underlying such asystem ,are con- sistent when they \"destroy \"money not inits tangible form but initsnebulous illusory form ofameasure of value .under the invisible measure ofvalue there lurks the hard cash . the process by which gold has become the measure ofvalue and exchange value has been turned into price , being once assumed ,all commodities express intheir prices but imagined quantities ofgold ofvarious mag- nitudes .assuch various quantities ofthe same thing , gold ,they are equated ,compared and measured with each other ,and thus arises the technical necessity of referring them toadefinite quantity ofgold asaunit of measure ,aunit which develops into astandard measure byvirtue ofits divisibility into aliquot parts , which intheir turn can besub-divided into aliquot parts .' but quantities ofgold assuch are measured byweight . the peculiar circumstance that ,while the ounce ofgold serves inengland asthe unit ofthe standard ofmoney ,itis not divided into aliquot parts has been explained asfollows : \"our coinage was originally adapted tothe employment of silver only -hence anounce ofsilver can always bedivided into acertain adequate number ofpieces ofcoin ;but asgold was introduced atalater period into acoinage adapted only tosilver ,anounce ofgold cannot becoined into anadequate number ofpieces .\"maclaren :\"asketch ofthehistory ofthe currency ,\"p.16,london ,1858 .",
        "83 - the standard ofmeasure isthus found ready inthe gen- eral measures ofweight ofmetals and ,therefore ,where- ever metallic circulation isinvogue ,these measures serve originally asstandards ofprice .since commodities no more relate toeach other asexchange values tobe measured bylabor -time ,but asmagnitudes ofthe same denomination measured ingold ,the latter istransformed from ameasure ofvalue into astandard ofprice .the comparison ofprices with each other asdifferent quanti- ties ofgold isthus crystallized infigures which corre- spond toanassumed quantity ofgold and represent it asastandard ofaliquot parts .gold asmeasure ofvalue and asstandard ofprice has entirely different forms of manifestation and the confusing ofthe two has resulted in the wildest of theories . gold is a measure of value as incorporated labor -time ;it isthe standard of price as acertain weight of metal . gold becomes the measure of value by virtue ofitsrelation asexchange value tocommodities asexchange values ;asstandard ofprice ,adefinite quan- tity ofgold serves asaunit for other quantities ofgold . gold isthe measure ofvalue ,because itsvalue isvariable ; itisthe standard ofprice ,because itisfixed asaconstant unit ofweight .inthis case ,asinallcases ofmeasur- ing quantities ofthe same denomination ,the establish- ment ofadefinite and unvarying unit ofmeasure isall- important .the necessity ofsettling upon aquantity ofgold asaunit ofmeasure and upon itsaliquot parts assubdivisions ofthat unit ,has given rise tothe notion that acertain quantity ofgold which has naturally a variable value had been assigned afixed ratio ofvalue",
        "- - 84 tothe exchange values ofall commodities ;the fact is overlooked that exchange values of commodities are transformed into prices ,i.e.into quantities ofgold ,be- fore gold develops asastandard ofprice .no matter how the value ofgold may vary ,the ratios between the values ofdifferent quantities ofgold remain constant . let the fall inthe value ofgold amount to1000 per cent ., still twelve ounces ofgold will have atwelve times greater value than one ounce ofgold ;and inprices the only thing considered isthe ratio between different quan- tities ofgold .since ,onthe other hand ,norise orfall inthe value ofanounce ofgold can alter itsweight ,no alteration can take place inthe weight ofits aliquot parts .thus gold always renders the same service asan invariable standard ofprice ,no matter how much its value may vary .' an historical process which ,asweshall explain later , was determined bythe nature ofmetallic circulation ,led tothe result that the same denomination ofweight was 1\"money may continually vary invalue and yetbeasgood a measure ofvalue asifitremained perfectly stationary .suppose , forinstance ,itisreduced invalue ....before thereduction , aguinea would purchase three bushels ofwheat or6days ' labour ;subsequently itwould purchase only 2bushels ofwheat , or4days 'labour .inboth cases ,the relations ofwheat and labour tomoney being given ,their mutual relations can be inferred ;inother words ,wecan ascertain that abushel of wheat isworth 2days 'labour .this ,which isallthat meas- uring value implies ,isasreadily done after the reduction as before .the excellence ofathing asameasure ofvalue is altogether independent ofitsown variableness invalue \"(p.11, bailey ,\"money and itsvicissitudes ,\"london ,1837 ).",
        "- 85 retained for aconstantly changing and decreasing weight ofprecious metals intheir function ofastand- ard ofprice .thus the english pound sterling denotes less than one-third ofits original weight ;the pound scot ,before the union ,only 1-36 ;the french livre ,1-74 ; the spanish maravedi ,less than 1-1000 ;the portuguese rei,astill smaller fraction .such was the historical origin ofthe discrepancy between the current money names ofvarious weights ofmetals and their weight denominations .'since the determination ofthe unit of measure ,ofits aliquot parts ,and oftheir names is purely conventional ,and since they should possess within the sphere ofcirculation the character ofuniversality and compulsion ,they had tobe settled bylaw .the purely formal operation thus devolved upon the govern- ment .the metal which was toserve asthe money ma- 1\"lemonete lequali oggi sono ideali sono lepiu antiche d'ogni nazione ,etutte furono untempo reali (the latter as- sertion istoo sweeping ),eperch erano reali con esse sicon- tava .\"galiani ,\"della moneta ,\"1.c.,p.153 (\"coins which are ideal to-day [i.e.,whose names nolonger correspond to their value ]are among the more ancient with every nation ; atone time they were allreal,and forthat reason served for the purpose ofcounting .\") 2the romantic a.mller says :\"according toour idea every independent sovereign has the right toname the metal money , and togive itanominal social value ,rank ,standing and title (p.276,v.ii.,a.h.mller ,\"die elemente der staatskunst ,\" berlin ,1809 ).asfar astitle isconcerned the hon .hofrath isright ;but heforgets the substance .how confused his \"ideas \"were ,may beseen ,e.g.,from the following passage : \"everybody understands how much depends upon the right",
        "- 86 terial ,was found already adopted inthe community .in different countries the legal standard ofprice isnatur- ally different .inengland e.g.the ounce asaweight ofmetal isdivided into pennyweights ,grains and carats troy ,but the ounce ofgold asthe unit ofmoney isdi- vided into 37-8 sovereigns ,the sovereign into 20shill- ings ,the shilling into 12pence ,sothat 100 pounds of22 carat gold (1200 ounces )= 4672 sovereigns and 10 determination ofthe mint -price ,especially inacountry like england ,where the government with magnificent liberality coins money gratuitously (herr mller seems tothink that the members ofthe english government defray the mint ex- penses out oftheir own pockets ),where itdoes not charge any mintage ,etc.,and thus ifthe mint -price ofgold were setcon- siderably above itsmarket price ,ifinstead ofpaying asnow 317s.10d .per 1oz.ofgold ,itwould setthe price ofan ounce ofgold at319s.,allmoney would flow into the mint and exchanging forthe silver contained there bring itinto the market tobeexchanged there forthe cheaper gold ;the latter would inthe same manner bebrought again tothe mint and the entire coinage system would beupset \"(1.c.,p.280-281 ). topreserve order inenglish coinage ,mller falls back on \"disorder .\"while shilling and pence are mere names ofcer- tain parts ofanounce ofgold represented bysigns ofsilver and copper ,heimagines that anounce ofgold isestimated in gold ,silver and copper and thus confers upon the englishmen theblessing ofatriple standard ofvalue .silver asameasure ofmoney ,next togold ,was formally abolished only in1816 by56george iii.,c.68. asamatter offact,itwas legally abolished asearly as1734 by14george ii.,c.42,and still earlier byactual practice .there were two circumstances that made a.mller capable ofaso-called higher conception of political economy :first ,hiswide ignorance ofeconomic facts ; second ,hisdilettanti -like visionary attitude toward philosophy .",
        "87 - shillings .inthe world market ,however ,where national boundaries disappear ,these national characteristics of the measure ofmoney also disappear and give place to the general measures ofweight ofmetals . the price ofacommodity orthe quantity ofgold into which itisideally transformed ,is,therefore ,now ex- pressed inthe names ofcoins ofthe gold standard .thus , instead ofsaying :aquarter ofwheat isworth anounce ofgold ,itissaid inengland tobeworth 317s.10d . all prices are thus expressed inthe same denominations . the peculiar form which commodities lend totheir exchange values istransformed into amoney -denomina- tion bywhich commodities tell each other how much they are worth .money inits turn becomes money ofac- count. we transform commodities into money ofaccount , inour mind ,onpaper ,inconversation ,whenever itis aquestion ofexpressing any kind ofwealth interms of exchange value .'for that transformation we need the gold substance ,but only inimagination .in order to estimate the value ofathousand bales ofcotton ina 1\" , ,    rinempsrpleiv .\"(athen .deipn .1.iv.49.v.2,ed.schweig- huser ,1802. )(when anacharsis was asked forwhat purpose the greeks used money ,hereplied ,\"for reckoning .\") 'g.garnier ,one ofthe early french translators ofadam smith ,conceived thequeer notion offixing aproportion between the use ofmoney ofaccount and that ofactual money .his proportion is10to1.(g.garnier ,\"histoire delamonnaie depuis lestemps delaplus haute antiquit .\"etc.,t.1,p.78.)",
        "88 certain number ofounces ofgold and then toexpress this number of ounces inthe denominations ofthe ounce ,.s.d.,not asingle atom ofgold isrequired . thus ,not asingle ounce ofgold was incirculation in scotland before robert peel's bank act of 1845 ,al- though the gold ounce ,expressed initsenglish standard ofaccount ,317s.10d .,served asthe legal standard ofprice .inasimilar manner silver serves asstandard ofprice inthe trade between siberia and china ,although that trade virtually amounts tobarter .itis,therefore , immaterial tomoney ,asmoney ofaccount ,whether or not its entire unit ofmeasure orthe fractions thereof are really coined . in england ,atthe time ofwil- liam the conqueror ,1,then apound of pure silver ,and the shilling ,1-20 of apound ,existed only as money of account ,while the penny ,1-240 ofapound ofsilver ,was the largest silver coin inex- istence .on the other hand ,there are no shillings and pence inengland to-day ,although they are legal denominations for certain parts ofan ounce ofgold . money asmoney ofaccount may exist exclusively in idea ,while the money inactual existence may becoined according toanentirely different standard .thus the money incirculation inmany english colonies ofnorth america consisted until late inthe eighteenth century ofspanish and portuguese coins ,although the money ofaccount was throughout the same asinengland. the act ofmaryland in1723 bywhich tobacco was made the legal standard ,but itsvalue reduced toterms ofenglish gold money ,namely one penny equal toone pound oftobacco ,",
        "89 owing tothe fact that money ,when serving asthe standard ofprice ,appears under the same reckoning names asdothe prices ofcommodities ,and that ,there- fore ,the sum of317s.10d .may signify ,onthe one hand ,an ounce weight ofgold ,and onthe other , the value ofaton ofiron ,this reckoning name ofmoney has been called itsmint -price .hence ,there sprang up the extraordinary notion that the value ofgold isesti- mated initsown material ,and that ,incontradistinction toall other commodities ,itsprice isfixed bythe state . itwas erroneously thought that the giving ofreckon- ning names todefinite weights ofgold isthe same thing asfixing the value ofthose weights .'insofar asgold serves asone ofthe elements indetermining price ,i.e., where itperforms the function ofmoney ofaccount ,it not only has nofixed price ,but has noprice whatever . inorder tohave aprice ,i.e.,inorder toexpress itself inaspecific commodity asauniversal equivalent that other commodity would have toplay the same exclusive reminds ofthe \"leges barbarorum ,\"inwhich ,inversely ,certain sums ofmoney were expressed interms ofoxen ,cows ,etc. in that case neither gold nor silver ,but the oxand the cow were the actual material ofthe money ofaccount . thus ,weread ,e.g.,inthe \"familiar words \"ofmr. david urquhart :\"the value ofgold istobemeasured byitself ; how can any substance bethe measure ofitsown worth in other things ?the worth ofgold istobeestablished byits own weight ,under afalse denomination ofthat weight -and anounce istobeworth somany pounds and fractions of pounds .this isfalsifying ameasure ,not establishing a standard .\"",
        "90 role inthe process ofcirculation asgold .but two com- modities excluding all other commodities mutually ex- clude each other .therefore ,wherever gold and silver have bylaw been made toperform side byside the func- tion ofmoney orofameasure ofvalue ithas always been tried ,but invain ,totreat them asone and the same ma- terial .toassume that there isaninvariable ratio between the quantities ofgold and silver inwhich agiven quantity oflabor -time isincorporated ,istoassume ,infact ,that gold and silver are ofone and the same material ,and that agiven mass ofthe less valuable metal ,silver ,isa constant fraction ofagiven mass ofgold .from the reign ofedward iii tothe time ofgeorge ii,the his- tory ofmoney inengland consists ofone long series of perturbations caused bythe clashing ofthe legally fixed ratio between the values ofgold and silver ,with the fluctuations intheir real values .at one time gold was too high ;atanother ,silver .the metal that forthe time being was estimated below itsvalue was withdrawn from circulation ,melted and exported .the ratio between the two metals was then again altered bylaw ,but the new nominal ratio soon came into conflict again with the real one.in our own times ,the slight and transient fall inthe value ofgold compared with silver ,which was aconsequence ofthe indo -chinese demand for silver ,produced onafar more extended scale infrance the same phenomena ,export ofsilver ,and its expul- sion from circulation bygold .during the years 1855 , 1856 and 1857 ,the excess infrance ofgold imports over gold exports amounted to 41,580,000 ,while the excess ofsilver exports over silver imports was 14,-",
        "g  91 704,000 .in fact ,inthose countries in which both metals are legally measures ofvalue ,and therefore both legal tender ,sothat every one has the option ofpaying ineither metal ,the metal that rises invalue isata premium ,and ,like every other commodity ,measures itsprice inthe over -estimated metal which alone serves inreality asthe standard ofvalue .the result ofall experience and history with regard tothis question is simply that ,where two commodities perform bylaw the functions ofameasure ofvalue ,inpractice one alone maintains that position. b. theories of the unit of measure of money . the circumstance that commodities are converted into gold only inideas asprices and that gold isthere- fore turned into money only inidea ,gave rise tothe theory ofthe ideal unit ofmeasure ofmoney .since , inthe determination ofprices ,gold and silver serve only ideally as money of account ,itwas asserted that the names pound ,shilling ,pence ,thaler ,franc , etc.,instead of denoting certain weights of gold and silver orlabor incorporated insome way ,stood . rather for ideal atoms of value .thus ,if,e.g., 1\"money isthe measure ofcommerce ,and ofthe rate of everything ,and therefore ought tobekept (asallother meas- ures )assteady and invariable asmay be.but this cannot be, ifyour money bemade oftwo metals ,whose proportion constantly varies inrespect ofone another .\"john locke :some considerations onthe lowering ofinterest ,etc., 1691 (p.166,p.65inhisworks 7ed.,london ,1768 ,vol.iii.",
        "- 92 the value ofanounce ofsilver should rise itwould con- tain more such atoms and would therefore have tobe estimated and coined inagreater number ofshillings . this doctrine ,revived again during the last commercial crisis inengland and even voiced inparliament intwo separate reports attached tothe report ofthe select committee onthe bank acts sitting injuly ,1858 ,dates from the end ofthe seventeenth century . atthe time ofthe accession ofwilliam iii.,the eng- lish mint -price ofanounce ofsilver was 5s.2d.,or1-62 ofanounce ofsilver was equal toapenny ;12ofthese pence were called ashilling .according tothat stand- ard,apiece ofsilver weighing ,say,6ounces ,would be coined into thirty -one coins ,each called ashilling .but the market price ofan ounce ofsilver rose above its mint price ,from 5s.2d.to6s.3d.,or,inorder tobuy anounce ofsilver bullion 6s.3d.had tobepaid .how could the market price ofanounce ofsilver rise above itsmint price ,when the mint price ismerely areckon- ing name for aliquot parts ofanounce ofsilver ?the riddle was easily solved .out of 5,600,000 ofsilver money which was incirculation atthat time ,four mil- lions were worn out,clipped and debased .atrial dis- closed that 57,000 ofsilver which were supposed to weigh 220,000 ounces ,weighed only 141,000 ounces . the mint went oncoining according tothe same stand- ard,but light -weighted shillings inactual circulation represented smaller parts ofanounce than their name implied .hence ,agreater quantity ofthese light- weighted shillings had tobepaid inthe market for an ounce ofsilver bullion .when ageneral recoinage was",
        "93 decided upon inconsequence ofthe derangement that had been produced ,lowndes ,the secretary ofthe treas- ury,declared that the value ofanounce ofsilver had risen and therefore itmust henceforth becoined into 6s.3d.instead ofinto 5s.2d.asheretofore .his argu- ment practically amounted tothe assertion that the rise inthe value ofthe ounce caused afall inthe value ofits aliquot parts .his false theory ,however ,served merely asanembellishment for ajust ,practical purpose .the government debts were contracted inlight shillings , were they tobepaid inheavy ones ?instead ofsaying pay back four ounces ofsilver ,when you had received nominally five ounces but virtually only four ,hesaid pay back nominally five ounces but reduce the metallic contents tofour ounces and call ashilling what you had called four -fifths ofashilling heretofore .thus lowndes practically adhered tothe metallic weight while theoretically he clung tothe reckoning name . his adversaries who clung only tothe name and there- fore declared the 25to50per cent .lighter shilling to be identical with the full -weight shilling maintained onthe contrary that they adhered tothe metallic weight . john locke ,who was anadvocate ofthe new bour- geoisie in all forms ,the manufacturers against the working classes and paupers ,the commercial class against the old fashioned usurers ,the financial aris- tocracy against the state debtors ,and who went sofar. astoprove inhis own work that the bourgeois reason is the normal human reason ,also took up the challenge against lowndes .john locke carried the day and money borrowed atten orfourteen shillings toaguinea",
        "94 - was repaid inguineas oftwenty shillings. sir james steuart sums upthe entire transaction asfollows : the state gained considerably upon the score oftaxes ,aswell asthe creditors upon their capitals and interest ;and the nation ,which was the principal loser , was pleased ;because their standard (the standard of 66locke says among other things : ... call that a crown now ,which before ...was but apart ofacrown ... anequal quantity ofsilver isalways the same value with anequal quantity ofsilver ....for ifthe abating 1-20 ofthe quantity ofsilver ofany coin does not lessen its value ,the abating 19-20 ofthe quantity ofthe silver ofany coin will not abate itsvalue .and soasingle penny ,being called acrown ,will buy asmuch spice ,orsilk,orany other commodity ,asacrown -piece ,which contains 20times as much silver ....now [allthat may bedone ]isgiving a less quantity ofsilver thestamp and denomination ofagreat- er.... but 'tissilver and not names that pay debts and purchase commodities \"(1.c.,p.135-145 passim ).ifto 1aise the value ofmoney means nothing but togive any de- sired name toanaliquot part ofasilver coin ,e.g.,tocall an eighth part ofanounce ofsilver apenny ,then money may really berated ashigh asyou please .atthe same time ,locke answered lowndes that the rise ofthe market price above the mint price was due not tothe rise ofthe value ofsilver ,but tothe lighter silver coins .seventy -seven clipped shillings do not weigh aparticle more than 62full-weighted ones .finally hepointed out with perfect right that ,aside from the loss of weight inthe circulating coin ,the market price ofsilver bul- lion inengland could rise tosome extent above itsmint price , since the export ofsilver bullion was allowed while that of silver coin was prohibited (1.c.,p.54-116 passim ).locke was exceedingly careful not totouch upon the burning question ofpublic debts ,and noless carefully avoided the discussion of",
        "95 - their own value )was not debased .\" steuart thought that the nation would prove more alert with the further development ofcommerce .he was mistaken .about 120 years later the same quid pro quo was repeated . itwas just inthe order ofthings that bishop berke- ley ,the representative ofamystical idealism ineng- lish philosophy ,should have given atheoretical turn to the doctrine ofthe ideal unit ofmeasure ofmoney ,some- thing which the practical \"secretary tothe treasury \" had failed todo.he asks :\"whether the terms crown , livre ,pound sterling ,etc.,are not tobe considered asexponents or denominations ofsuch proportion ? [namely proportions ofabstract value assuch .]and whether gold ,silver ,and paper are not tickets orcount- ers for reckoning ,recording and transferring thereof ? (ofthe proportion ofvalue ).whether power tocom- mand the industry ofothers benot real wealth ?and whether money benot intruth ,tickets ortokens for conveying and recording such power ,and whether itbe ofgreat consequence what materials the tickets are made of?\"here wefind aconfusion ,first ofthe measure of the delicate economic question ,viz.,the depreciation ofthe currency out ofproportion toitsreal loss ofsilver ,aswas shown bythe rate ofexchange and the ratio ofsilver bullion tosilver coin .we shall return tothis question initsgeneral form inthe chapter onthe medium ofcirculation .nicholas barbon in\"adiscourse concerning coining the new money lighter ,inanswer tomr. locke's considerations ,etc.,\"lon- don,1696 ,tried invain toentice locke todifficult ground . steuart ,1.c.,v.ii.,p.154. 3the querist ,1.c.,(p.5-6-7 .)the \"queries onmoney \"are generally clever .among other things berkeley isperfectly",
        "-- 96 value and the standard ofprice ,and secondly ofgold and silver asmeasures onthe one hand and mediums ofcirculation on the other .because precious metals can bereplaced bytokens inthe process ofcirculation berkeley comes tothe conclusion that these tokens rep- resent nothing ,i.e.,only the abstract idea ofvalue . sir james steuart had sofully developed the theory ofthe ideal unit ofmeasure ofmoney ,that his successors -unconscious successors since they do not know him -have added to itneither anew version nor even anew example . \"money ,which icall of account ,isno more than an arbitrary scale of equal parts ,invented for measuring the respective value ofthings vendible . money of account ,there- fore ,isquite adifferent thing from money coin , which isprice and might exist ,although there was nosuch thing inthe world asany substance which could become an adequate and proportional equivalent ,for every commodity . money ofaccount performs the same office with regard tothe value of things ,that degrees ,minutes ,seconds ,etc.,do with regard toangles ,orasscales dotogeographical maps , ortoplans ofany kind .inallthese inventions ,there isconstantly some denomination taken for the unit . right insaying that bytheir progress the north american colonies \"make itplain asdaylight ,that gold and silver arenot sonecessary for the wealth ofanation ,asthe vulgar ofall ranks imagine .\" 1price means here real equivalent inthe sense commonly employed byenglish economic writers inthe seventeenth cen tury .",
        "- - 97 the usefulness ofall those inventions being solely confined tothe marking ofproportion .just so the unit inmoney can have noinvariable determinate proportion toany part ofvalue ,that istosay,itcannot befixed toany particular quantity ofgold ,silver ,orany other commodity whatsoever .the unit once fixed ,we can,by multiplying it,ascend tothe greatest value . the value ofcommodities ,therefore ,depending upon ageneral combination ofcircumstances relative tothemselves and tothe fancies ofmen ,their value ought tobeconsidered aschanging only with respect to one another ;consequently ,anything which troubles or perplexes the ascertaining those changes ofproportion bythe means ofageneral ,determinate and invariable scale ,must behurtful totrade ...money isanideal scale ofequal parts .ifitbedemanded what ought tobethe standard value ofone part ?ianswer byputting another question :what isthe standard length ofadegree ,aminute ,asecond ?ithas none but sosoon asone part becomes determined bythe nature ofascale ,allthe rest must follow inproportion .of this kind ofmoney ..we have two examples . the bank ofamsterdam presents uswith the one,the coast ofangola with the other .\"\" steuart speaks here simply ofthe part money plays incirculation asthe standard ofprice and money of account .ifdifferent commodities are marked inthe price -list at15s.,20s.,36s.,respectively ,then icare , steuart ,i.c.,v.ii.,p.154,299 [1st london edition ,of 1767 ,v.i.,p.526-531 .transl .].",
        "98 -- infact ,neither for the silver substance ,nor for the name ofthe shilling when comparing the magnitudes oftheir value the ratios between the numbers 15, 20,36,tell everything ,and the number 1has become the only unit ofmeasure .only the abstract proportion ofnumbers can atallserve asapurely abstract expres- sion ofproportion .inorder tobeconsistent ,steuart should have dropped not only gold and silver ,but their legal baptismal names aswell .since hedoes not un- derstand the nature ofthe transformation ofthe meas- ure ofvalue into astandard ofprice ,henaturally be- lieves that the definite quantity ofgold which serves asaunit ofmeasure relates asameasure not toother quantities ofgold ,but tovalues assuch .since com- modities appear asquantities ofthe same denomina- tion through the conversion oftheir exchange values into prices ,hedenies that property ofthe measure which reduces them toone denomination ;and since inthis comparison ofdifferent quantities ofgold the quantity ofgold which serves asaunit ofmeasure isconventional , hedoes not see the necessity offixing itatall.instead ofcalling 1-360 part ofacircle degree ,hemight give that name to1-180th part ;the right angle would then bemeasured by45degrees instead of90,and acute and obtuse angles would bemeasured accordingly .never- theless ,the measure ofthe angle would remain ,then , asbefore ,first aqualitatively definite mathematical fig- ure,the circle ,and second aquantitatively definite part ofthe circle .as for steuart's economic illustrations , herefutes his own argument with one and does not prove anything with the other .the bank money ofamster-",
        "-- - 99 dam was,infact ,merely the reckoning name for span- ish doubloons ,which retained their full weight bylying idly inthe bank vaults ,while the circulating coins be- came thinner from hard rubbing against the outer world . and asfor the african idealists we have toabandon them totheir fate until critical travelers will tell us more about them .'the french assignat could becalled an almost ideal money insteuart's sense :\"national property .assignation of100 francs .\" tobesure ,the use-value which the assignation was supposed torepre- sent ,namely ,the confiscated land ,was indicated here , but the quantitative definition ofthe unit ofmeasure was forgotten and \"the franc \"became ameaningless word .how much orhow little land the assignation franc represented depended onthe results ofthe public auctions .in practice ,however ,the assignation franc circulated asatoken ofvalue ofsilver money and its depreciation was ,therefore ,measured by this silver standard . the period ofthe suspension ofcash payments by the bank ofengland was hardly more fruitful ofwar- bulletins than ofmoney theories .the depreciation of bank notes and the rise ofthe market price ofgold 'onthe occasion ofthe last commercial crisis the ideal african money received loud praise from certain english quarters ,after itsseat was this time moved from the coast tothe heart ofbarbary .the freedom ofthe berbers from commercial and industrial crises was ascribed tothe ideal unit ofmeasure oftheir bars .would itnot have been simpler to say that trade and industry are the conditio sine qua non of commercial and industrial crises ?",
        "100  above its mint price called forth again the doctrine of the ideal unit ofmoney onthe part ofsome ofthe ad- vocates ofthe bank .lord castlereagh found the clas- sical confused expression for the confused idea byspeak- ing ofthe unit ofmeasure ofmoney as\"asense ofvalue inreference tocurrency ascompared with commodi- ties.\"when afew years after the peace ofparis con- ditions permitted the resumption ofcash payments ,the same question which had been stirred up by lowndes under william iii.,came up,hardly changed inform . an enormous government debt ,aswell asamass of private debts ,accumulated intwenty years ,fixed obli- gations ,etc.,had been contracted on the basis ofde- preciated bank notes .were they tobe paid back in bank notes ofwhich 4672 ,10s.nominal ,actually rep- resented 100 pounds of22carat gold ?thomas att- wood ,abanker ofbirmingham ,came forth aslowndes redivivus .the creditors were toreceive nominally as many shillings ashad been nominally borrowed ,but if about 1-78 ofanounce ofgold constituted ashilling according tothe old standard ofcoinage ,then say 1-90 ofanounce should now bechristened ashilling .att- wood's adherents are known asthe birmingham school of\"little shillingmen .\"the controversy over the ideal money unit ,which had started in1819 ,still went onin 1845 between sir robert peel and attwood ,whose own wisdom ,asfar asthe function ofmoney asameasure isconcerned ,isexhaustively summed upinthe following passage ,inwhich ,referring tosir robert peel's con- troversy with the birmingham chamber ofcommerce , hesays :\"the substance ofyour queries is ...in",
        "- 101 what sense isthe word pound tobeused ? what will the sum one pound be equivalent ?to before iventure areply imust enquire what consti- tutes astandard ofvalue ?...is317s.10d . anounce ofgold ,orisitonly ofthe value ofanounce ofgold ?if 317s.10d .beanounce ofgold ,why not call things bytheir proper names ,and ,dropping the terms pounds ,shillings and pence ,say ounces ,penny- weights and grains ?...ifwe adopt the terms ounces ,pennyweights and grains ofgold ,asour mone- tary system ,we should pursue adirect system ofbar- ter. but ifgold beestimated asofthe value of 317s.10d .per ounce ..how isthis that much difficulty has been experienced at different periods tocheck gold from rising to 54s. per ounce ,and we now notice that gold isquoted at 317s.9d.per ounce ?...the expression pound has reference tovalue ,but not afixed standard value . the term pound isthe ideal unit . labour isthe parent ofcost and gives the relative value togold oriron .whatever denomination ofwords are used toexpress the daily orweekly labour ofaman , such words express the cost ofthe commodity pro- duced .\"\" in the last words the hazy conception ofthe ideal money measure melts away and itsreal meaning breaks through .the reckoning names ofgold ,pound sterling , shilling ,etc.,should be names for definite quantities the currency question ,the gemini letters ,london ,1844 , p.260-272 ,passim .",
        "102 -- oflabor -time .since labor -time constitutes the sub- stance and the intrinsic measure ofvalues ,these names would then actually represent definite proportions of value .inother words ,labor -time ismaintained tobe the true unit ofmeasure ofmoney .with this we leave the birmingham school ,but should add inpassing that the doctrine ofthe ideal measure ofmoney acquired new importance inthe controversy over the question ofthe convertibility ornon -convertibility ofbank notes . ifpaper receives itsname from gold orsilver ,then the convertibility ofanote orits exchangeability for gold orsilver remains aneconomic law,nomatter what the civil law may be.thus aprussian paper thaler ,al- though legally inconvertible ,would immediately depre- ciate ifitwere worth less than asilver thaler inordi- nary trade ,i.e.,ifitwere not practically convertible . the consistent advocates ofinconvertible paper money inengland ,therefore ,sought refuge inthe ideal meas- ure ofmoney .ifthe reckoning names ofmoney ,, s.,etc.,are names ofcertain quantities ofatoms ofvalue , ofwhich acommodity absorbs orloses now more ,now less inexchange for other commodities ,then anenglish 5note ,e.g.,isjust asindependent ofitsrelation to gold asofthat toiron and cotton .since itstitle would no more imply its theoretical equality with acertain quantity ofgold orany other commodity ,the demand for itsconvertibility ,i.e.,for itspractical equality with adefinite quantity ofaspecified thing would beexcluded bythe very conception ofthe note . the theory oflabor -time asthe direct measure of money was first systematically developed by john",
        "103 2gray .he makes anational central bank ascertain through itsbranches the labor -time consumed inthe pro- duction ofvarious commodities .the producer receives an official certificate ofvalue inexchange forhiscommodity . i.e.,hegets areceipt for asmuch labor -time ashis com- modity contains ,and these bank notes ofone week's labor ,one day's labor ,one hour's labor ,etc.,serve atthe same time asacheck for an equivalent inall other commodities stored inthe bank warehouses . this is the fundamental principle carefully worked out inde- tail and based throughout onexisting english institu- 'john gray :\"the social system .atreatise ontheprinciple ofexchange ,edinburgh ,1831. \"compare with \"lectures on the nature and use ofmoney ,edinburgh ,1848 ,\"bythe same author .after the february revolution gray sent amemorial tothe provisional french government ,inwhich heinstructs the latter that france isnot inneed ofan\"organization of labour ,\"but ofan\"organization ofexchange \"ofwhich the plan isfully worked out inhis money system .honest john did not suspect that sixteen years after the appearance of his\"social system \"apatent forthe same discovery would be taken out bythe ingenious proudhon . 'gray ,\"the social system ,\"etc.,p.63:\"money should be merely areceipt ,anevidence that the holder ofithas either contributed certain value tothe national stock ofwealth or that hehas acquired aright tothe same value from some one who has contributed toit.\" 'an estimated value being previously put upon produce , letitbelodged inabank ,and drawn out again ,whenever it isrequired ,merely stipulating ,bycommon consent ,that he who lodges any kind ofproperty inthe proposed national bank ,may take out ofitanequal value ofwhatever itmay contain ,instead ofbeing obliged todraw out the self-same thing that heput in.\"l.c.,p.68.",
        "104 - tions .under this system ,says gray ,\"tosell for money may berendered ,atalltimes ,precisely aseasy asitnow istobuy with money ;...production would be- come the uniform and never -failing cause ofdemand .\"\" the precious metals would lose their \"privilege \"as against other commodities and \"take their proper place inthe market beside butter and eggs ,and cloth and calico ,and then the value ofthe precious metals will concern usjust aslittle ...asthe value ofthe diamond .\" \"shall we retain our fictitious standard of value ,gold ,and thus keep the productive resources of the country inbondage ?or,shall we resort tothe nat- ural standard ofvalue ,labour ,and thereby setour pro- ductive resources free ?\" labor -time being the intrinsic measure ofvalue ,why should there beanother external measure side by side with it?why does exchange value develop into price ? why doallcommodities estimate their value inone ex- clusive commodity ,which isthus converted into aspe- cial embodiment ofexchange value into money ?that was the problem which gray had tosolve .instead of solving it,heimagined that commodities could bere- lated directly toeach other asproducts ofsocial labor . but they can relate toeach other only intheir capacity ofcommodities .commodities are the direct products ofisolated independent private labors ,which have to berealized asuniversal social labor through their alien- ation inthe process ofprivate exchange ,that istosay, l.c.,p.16. 'gray :\"lectures onmoney ,etc.,\"p.182. l.c.,p.169.",
        "105 labor based onthe production ofcommodities becomes social labor only through universal alienation ofindi- vidual labors .but byassuming that the labor -time con- tained incommodities isdirectly social labor -time ,gray assumes ittobecommon labor -time orlabor -time ofdi- rectly associated individuals .under such conditions a specific commodity like gold orsilver could not con- front other commodities asthe incarnation ofuniversal labor ,and exchange value would not be turned into nrice ;but,onthe other hand ,use-value would not be- come exchange value ,products would not become com- modities and thus the very foundation ofthe capital- istic system ofproduction would beremoved .but that isnot what gray has inmind .products are tobepro- duced ascommodities ,but are not tobeexchanged as commodities .he entrusts anational bank with the carrying out ofthis pious wish .on the one hand , society ,through the bank ,makes individuals indepen- dent ofthe conditions ofprivate exchange ,and onthe other ,itallows them togoon producing onthe basis ofprivate exchange .the logic ofthings ,however , compels gray todoaway with one condition ofcapi- talistic production after another ,although he wishes to\"reform \"only the money system which results from the exchange ofcommodities .thus hetransforms cap- ital into national capital ,land into national property ,' 1\"the business ofevery country ought tobeconducted ona national capital .\" john gray ,\"the social system ,\"etc., p.171. \"the land tobetransformed into national property .\"l.c., p.298.",
        "106 - and ifhis bank istobewatched closely ,itwill befound that itnot only receives commodities with one hand and issues certificates for work delivered with the other ,but that itregulates production aswell .inhis last work , \"lectures onmoney ,\"inwhich gray isanxious todem- onstrate that his labor -money isapurely bourgeois re- form ,hegets tangled upineven more glaring contra- dictions . every commodity isdirectly money .that was gray's theory deducted from his incomplete and ,therefore , false analysis ofcommodities .the \"organic \"structure of\"labor money ,\"the \"national bank \"and the \"ware- docks \"are mere fantastic visions inwhich the dogma ismade byalegerdemain toappear tousasauniversal law.the dogma that acommodity ismoney orthat the isolated labor ofthe individual contained init isdirect social labor ,will ofcourse not become true through the mere fact that abank believes initand carries onoperations accordingly .itismore likely that bankruptcy would play inthat case the part ofthe prac- tical critic .what remains concealed ingray's writings and hidden from himself aswell ,namely ,that labor- money isawell -sounding economic phrase for the pious wish toget rid ofmoney ,and with money ,ofexchange value ,and with exchange value ,ofcommodities ,and with commodities ,ofthe capitalistic mode ofproduc- tion ,was clearly expressed by some english socialists ofwhom afew preceded and others followed gray .' see e.g.w.thompson :\"aninquiry into the distribution ofwealth ,etc.,\"london ,1827. bray ,\"labour's wrongs and labour's remedy ,\"leeds ,1839 .",
        "107 but itremained for mr. proudhon and his school to preach inallearnest the degradation ofmoney and the exaltation ofthe commodity asthe gist ofsocialism and thus toreduce socialism toan elementary misconcep- tion ofthe necessary connection between commodity and money. 2. the medium of circulation . after the commodity has received inthe process of price determination the form inwhich itbecomes capa- ble ofcirculation ,and after gold has acquired the charac- ter ofmoney inthe same process ,circulation will both present and solve the contradictions which are inherent inthe process ofexchange ofcommodities .the actual exchange ofcommodities ,i.e.,the social interchange of matter consists ofachange ofform inwhich isunfolded the double character ofthe commodity asuse-value and exchange value ,and atthe same time itsown change of form iscrystallized indistinct forms ofmoney .to de- scribe this change ofform istodescribe circulation .as wehave seen ,given aworld ofcommodities and with it asystem ofdivision oflabor ,commodity isbut adevel- oped form ofexchange value ;inthe same manner ,cir- culation implies asteady stream ofexchange transac- tions which are being continually renewed onall sides . the second assumption we make isthat commodities alfred darimont's \"de lareforme des banques ,\"paris , 1856 ,may beconsidered asacompendium ofthis melodramatic theory ofmoney .",
        "108 enter the process ofexchange with adefinite price or that they appear toeach other inthat process ina double capacity ,really asuse-values ,ideally -inprice asexchange values . the liveliest streets of london are crowded with stores whose show windows are filled with the riches ofthe world ,indian shawls ,american revolvers ,chi- nese porcelain ,parisian corsets ,russian furs and trop- ical spices ,but all ofthese things ofjoy bear fatal white labels marked with arabian figures with the la- conic characters ,s.,d.such isthe picture ofthe commodity appearing incirculation . a.the metamorphosis of commodities . on close examination the process ofcirculation is seen toconsist oftwo distinct cycles .ifwe denote commodity bythe letter cand money bythe letter m wecan express these two forms asfollows : c-m-c m-c-m. inthis chapter we are interested exclusively inthe first form ,i.e.,inthe form which serves asthe direct expression ofthe circulation ofcommodities . the process c-m-cconsists of the movement c-m,the exchange ofthe commodity for money ,or selling ;the opposite movement m-c,exchange of money for acommodity ,orbuying ;and ofthe unity of the two movements c-m-c,exchange of the com- modity for money inorder toexchange the money for acommodity ,orselling inorder tobuy .but the result which marks the end ofthe process isc-c,exchange",
        "109 - ofcommodity for commodity ,real interchange ofmat- ter. ifwe look atitfrom the extreme end ofthe first commodity ,c-m-crepresents itstransformation into gold and its retransformation from gold into acom- modity ;amovement inwhich the commodity exists first asaparticular use-value ,then divests itself ofthat character ,acquires the character ofexchange value or universal equivalent ,inwhich capacity ithas nothing incommon with itsnatural form ,then throws offthe last form aswell toremain finally anactual use-value for the satisfaction ofparticular wants .inthis last form itfalls out ofthe sphere ofcirculation into that ofconsumption .the entire process of circulation c-m-cthus includes the combined series ofmeta- morphoses ,which every single commodity undergoes inorder tobecome adirect use-value toits possessor . the first metamorphosis isaccomplished inthe first phase ofthe circulation process ,c-m;the second in the last phase ,m-c;and the entire process consti- tutes the curriculum vitae ofthe commodity .but the process c-m-crepresents the combined metamor- phosis ofasingle commodity and constitutes atthe same time the sum ofcertain one-sided metamorphoses of other commodities ,since every metamorphosis of the first commodity constitutes itstransformation into another commodity and therefore the transformation of the other commodity into it;hence itconstitutes atwo- fold transformation which takes place atthe same stage ofcirculation .we must then consider separately",
        "- - 110 each ofthe two processes ofexchange into which cir culation c-m-cbreaks up. c-morsale :commodity centers the process ofcir- culation not only asaparticular use-value ,e.g.,aton ofiron ,but asause-value ofacertain price ,say,3 17s.10d .,oranounce ofgold .while this price ison the one hand the exponent ofthe quantity oflabor -time contained inaton ofiron ,i.e.,ofthe magnitude ofits value ,itatthe same time expresses the pious wish of the iron tobecome gold ,i.e.,togive tothe labor -time itcontains the aspect of universal social labor -time . unless this trans -substantiation takes place ,the ton of iron not only ceases tobeacommodity ,but even aprod- uct,for itisacommodity only because itisanon -use- value toitsowner ;that istosay,his labor counts as actual labor only insofar asitislabor useful toothers , and the thing isuseful tohim only asabstract universal labor .itis,therefore ,the business ofiron ,orofits owner ,tofind that point inthe world ofcommodities where iron attracts gold .but this difficulty ,the salto mortale ofthe commodity ,isovercome when the sale actually takes place ,asisassumed here onthe analysis ofsimple circulation .when the ton ofiron isrealized asause-value through its alienation ,i.e.,bypassing from the hands inwhich itisanon -use-value tohands inwhich itisause-value ,itatthe same time realizes itsprice and from mere imaginary gold itbecomes real gold .inplace ofthe name one ounce ofgold or317s. 10d .,anounce ofreal gold has appeared ,but the ton ofiron has cleared that place .not only does the com- modity -which inits price had been ideally converted",
        "- 111 into gold -actually turn into gold through the sale cm,but gold ,which asameasure ofvalue had been only ideal money and infact figured merely asamoney name of commodities -is now turned into actual money by the same process . just as gold be- came the ideal universal equivalent ,because all com- modities measured their values by it,so does it now become the absolutely alienable commodity ,real money ,because itisthe product ofthe universal alienation ofcommodities for it-and the sale c-m isthe process bymeans ofwhich that universal aliena- tion takes place .but gold becomes real money only through sale ,because the exchange values ofcommod- ities were already ideal gold intheir prices . inthe sale c-m,aswell asinthe purchase mc, two commodities ,entities ofexchange value and use- value ,confront each other ,but the exchange value of the commodity exists only ideally asprice ;while asre- gards gold ,although itisreally ause-value ,its use- 1\"didue sorte lamoneta ,ideale ereale ;eadui diversi usiadoperata ,avalutare lecose eacomperarle .per valutare buona lamoneta ideale ,cosi come lareale eforse anche piu. l'altro uso della moneta dicomperare quelle cose istesse , ch'ella apprezzaiprezzi eicontratti sivalutano in moneta ideale esieseguiscono inmoneta reale .\"galiani , 1.c.,p.112 sq.(\"money isoftwo kinds ,ideal and real ;and isadapted totwo different uses :todetermine the value of things and tobuy them .for the purpose ofvaluation ideal money isasgood asreal and perhaps even better .the other use ofmoney istobuy the same things which itappraises ..prices and contracts are determined inideal money and are executed inreal money .\")",
        "- 112 value isconfined only toits being the bearer ofex- change value and is,therefore ,merely aformal use- value ,having norelation toareal individual want .the antithesis ofuse-value and exchange value isthus dis- tributed atthe two extreme poles ofc-m,sothat the commodity confronts gold asause-value which has yet torealize ingold itsexchange value oritsprice ,while gold confronts the commodity asan exchange value , whose formal use-value isyet toberealized inthe com- modity .only through this duplication ofthe com- modity ascommodity and gold ,and ,further ,through the twofold and polar relation byvirtue ofwhich each extreme represents but ideally what its opposite isin reality and isinreality what itsopposite isonly ideal- ly-inshort ,only through the appearance ofcommod- ities astwo-sided polar opposites are the contradictions solved that are inherent inthe process ofexchange . sofar wehave considered c-massale ,asthe con- version ofcommodity into money .but ifwelook atit from the other end,the same process will assume the form m-c,orpurchase ,i.e.,the conversion ofmoney into commodity .sale isnecessarily itsopposite atthe same time ;itisthe former ifwe look atthe process from one end ,and the latter ifwe regard the process from the other end .in practice this process differs only inthat the initiative inc-moriginates atthe commodity end orwith the seller ,while inm-cit comes from the money end orthe buyer .indescribing the first metamorphosis ofthe commodity ,its conver- sion into money asaresult ofthe completion ofthe first phase ofcirculation c-m,weassume atthe same",
        "- - 113 time that another commodity has been converted into money and isnow inits second phase ofcirculation , m-c.thus weget into avicious circle ofassumptions . circulation itself constitutes such avicious circle .if wedid not consider minm-casthe result ofameta- morphosis of another commodity ,we would thereby take exchange out ofthe process ofcirculation .but outside ofthe latter the form c-mdisappears and only two different csconfront each other ,say iron and gold , the exchange ofwhich does not constitute apart ofthe process ofcirculation ,being direct barter .gold ,at the source ofits production ,isacommodity like any other commodity .its relative value and that ofiron orofany other commodity isexpressed here inquantities in which they are mutually exchanged .but inthe process of circulation this operation isimplied ,the value ofgold being already given inthe prices ofcom- modities .nothing can,therefore ,be more erroneous than the idea that gold and commodity enter into the relation ofdirect barter within the process ofcircula- tion and that their relative values are ascertained through their exchange assimple commodities .the illusion that gold isbartered asasimple commodity for other commodities inthe process ofcirculation is due tothe fact that prices represent equations inwhich certain quantities ofcommodities are made equal to certain quantities ofgold ,i.e.,that the commodities are made torelate togold inits capacity ofmoney ,asa universal equivalent ,and ,therefore ,appear tobe di- rectly exchangeable for it.insofar asthe price ofa commodity isrealized in gold ,itisexchanged for",
        "- - 114 gold asacommodity ,asaparticular embodiment of labor -time ;but insofar asitisthe price that isre- alized ingold ,the commodity isexchanged for gold in itscapacity ofmoney and not ofacommodity ,i.e.,itis exchanged for gold asauniversal embodiment oflabor- time .but ineither case the quantity ofgold for which the commodity isexchanged inthe process ofcircula- tion isnot determined byexchange ,but the exchange isdetermined bythe price ofthe commodity ,i.e.,by itsexchange value estimated ingold .' within the process of circulation gold appears in everybody's hands asthe result ofsale c-m.but since c-m,sale ,isatthe same time m-c,purchase ,itis apparent that while c,the commodity from which the process starts ,ispasing through itsfirst metamorphosis , another commodity ,which confronts itasthe opposite pole m,iscompleting itssecond metamorphosis and is, therefore ,passing through the second phase ofcircula- tion ,while the first commodity isstill inthe first phase ofitscourse . as aresult ofthe first phase ofcirculation ,the sale , weget money which isthe starting point ofthe second phase .inplace ofthe commodity initsfirst form ap- pears itsgolden equivalent .this result may now form aresting point ,since the commodity inthis second form this ,ofcourse ,does not prevent the market price ofcom- modities tobeabove orbelow their value .however ,this con- sideration isforeign tosimple circulation and belongs toquite another sphere tobeconsidered later ,when weshall investi- gate the relation between value and market price .",
        "115 possesses alasting existence ofitsown .the commod- ity,anon -use-value inthe hands ofitspossessor ,isnow onhand inanalways useful ,since always exchangeable , form ,and itdepends upon circumstances when and at what point ofthe surface ofthe commodity world it will again enter circulation .its formation into agold chrysalis constitutes an independent period inits life which may last agreater orless length oftime .while inthe case ofbarter the exchange ofone particular use- value isdirectly bound upwith the exchange ofanother particular use-value ,the universal character oflabor which creates exchange value ismanifested inthe sep- aration and lack ofcoincidence ofacts ofpurchase and sale . m-c,purchase ,isthe inverted movement ofc-m and atthe same time the second orfinal metamorphosis ofthe commodity .asgold ,i.e.,inthe form ofthe uni- versal equivalent ,the commodity can bedirectly repre- sented inthe use-values ofall other commodities ;the latter aspire togold astheir hereafter ,but atthe same time indicate intheir prices the key inwhich itmust sound inorder that their bodies ,their use-values ,may take the place ofmoney ,while their souls ,their ex- change -values ,may enter gold .the universal product ofthe alienation ofcommodities isthe absolutely alien- able commodity .there isno qualitative and only a quantitative limit tothe transformation ofgold into commodity ,namely ,the limit ofits own quantity or magnitude ofits value .\"everything istobehad for cash .\"while inthe movement c-m,the commodity , through its alienation asause-value ,realizes its own",
        "116 - price and the use-value ofsomebody else's money ;it realizes inthe movement m-c,through its alienation asan exchange value ,itsown use-value and the price ofthe other commodity .while through the realization ofitsprice the commodity transforms gold into actual money ,itturns gold into its merely fleeting money- form ,through its own retransformation .since the circulation ofcommodities implies anextensive division oflabor and consequently adiversity ofwants onthe part ofindividuals ,adiversity which bears aninverse ratio tothe specialization oftheir own products ,the purchase m-cmay appear asanequation with one com- modity equivalent orsplit upinto aseries ofcommodity- equivalents limited bythe variety ofthe demands ofthe purchaser and bythe amount ofmoney inhis possession . just asasale isapurchase ,soisapurchase asale .m-c isatthe same time c-m,but the initiative belongs in this case togold orthe purchaser . coming back now toc-m-c,ortocirculation as awhole ,itisapparent that itcontains the combined series ofmetamorphoses through which acommodity passes .but atthe same time asone commodity enters the first phase ofitscirculation and completes itsfirst metamorphosis ,another commodity enters the second phase ofcirculation ,completes itssecond metamorphosis and falls out ofcirculation ;the first commodity enters atthe same time the second phase ofcirculation com- pletes itssecond metamorphosis and falls out ofcircu- lation ,while athird commodity enters circulation , passes through the first phase ofitscourse completing the first metamorphosis .",
        "117 thus ,the combined circulation c-m-c,asacom plete metamorphosis ofacommodity always constitutes atthe same time the end ofthe complete metamor- phosis ofanother commodity and the beginning ofa complete metamorphosis ofathird commodity ,i.e.,a series without beginning orend .to illustrate this let uscall cineither extreme c'and c\"respectively ,in order todistinguish the commodities ,the series reading thus :c-m-c\".the first member ,c'-m,presup- poses infact that misthe result ofanother transac- tion c-m,and isthus itself merely the last member ofaseries c-m-c',while the second part m-c\"is merely aresult ofc\"-m ,orappears asthe first part ofc\"-m -c\",and soon.furthermore ,although mis the result ofonly one sale ,itappears that the last part m-c,may be represented as m-c'+ m-c\"+ m-c\"\",etc.,i.e.,itmay besplit upinto anumber of purchases ,and consequently anumber ofsales ,orinto anumber offirst members ofnew complete metamor- phoses ofcommodities .since the complete metamor- phosis ofasingle commodity thus appears asalink not only ofone endless chain ofmetamorphoses ,but of many such chains ,the process ofcirculation inthe world ofcommodities presents ahopeless confusion ofinter- twined movements constantly ending and starting anew atacountless number ofpoints .but every single sale orpurchase stands asanindependent isolated act,whose supplemental act may beseparated from itintime and place ,and therefore does not need tofollow itdirectly asitscontinuation .every separate process ofcircula- tion ,c-morm-c,asatransformation ofone com-",
        "118 modity into use-value and ofanother into money ,i.e., asthe first and second phases ofcirculation respective- lyforms anindependent halting point from either di- rection ;but,onthe other hand ,all commodities com- mence their second metamorphosis inthe common form ofthe universal equivalent ,gold ,and stop atthe start- ing point ofthe second phase ofcirculation ;for that reason any m-cdovetails inactual circulation with any c-m;the second chapter inthe life-course of one commodity with the first chapter ofthat ofanother commodity .a,e.g.,sells 2worth ofiron .he thus completes the transaction c-morthe first metamor- phosis ofcommodity iron ,but postpones his purchase until some other time .atthe same time b,who sold 2quarters ofwheat for 6afortnight since ,buys with the same 6acoat and trousers ofmoses &son ,thus completing m-corthe second metamorphosis ofthe commodity ,wheat . the two transactions m-cand c-mappear here merely aslinks ofone chain ,because acommodity ex- pressed ingold looks like any other commodity ,and one cannot tell bythe looks ofthe gold whether itis transformed iron ortransformed wheat .c-m-cap- pears ,therefore ,inthe actual process ofcirculation as ajumble ofcountless accidentally coinciding orsuc- cessively following members ofdifferent complete meta- morphoses .the actual process ofcirculation thus ap- pears not asacomplete metamorphosis ofacommodity , not asitsmovement through opposite phases ,but asa mere agglomeration ofmany accidentally coinciding or successive purchases and sales .the process thus loses",
        "119 - allclearness ofoutline which issomuch more the case since every single act ofcirculation ,e.g.,sale ,isatthe same time itsopposite ,purchase ,and vice versa .onthe other hand ,the process ofcirculation isnothing but the movement ofmetamorphoses inthe world ofcom- modities and ,therefore ,must reflect them also inits movement asawhole .how that reflection takes place we shall consider inthe following chapter .itmay be added here that inc-m-cthe two extreme cscon- stitute two forms ofcommodities which donot bear the same relation tom. the first crelates tomoney asa commodity ofaspecial class toauniversal commodity , while money relates tothe second casauniversal com- modity toan individual commodity .c-m-ccan, therefore ,bereduced byabstract logic tothe final form s-u-iinwhich s,standing for species ,forms the first extreme ;u,signifying universality ,forms the connecting medium ,and i,individuality ,constitutes the last extreme . the owners ofcommodities entered the sphere of circulation simply asguardians ofcommodities .within that sphere they confront each other inthe opposite roles ofbuyer and seller ,one asapersonified sugar -loaf , the other aspersonified gold .as soon asthe sugar- loaf isturned into gold ,the seller becomes abuyer . these definite social functions are no outgrowths of human nature ,but are the products ofrelations ofex- change between men who produce their goods inthe form ofcommodities .they are sofar from being pure- lyindividual relations between buyer and seller that both enter this relation only tothe extent that their",
        "120 individual labor isdisregarded and isturned into money aslabor ofnoindividual .just asitis,therefore ,child- ish toconsider these economic bourgeois roles ofbuyer and seller aseternal social forms ofhuman individu- ality ,soitisonthe other hand ,preposterous tolament inthem the extinction ofindividuality .'they are the necessary manifestations ofindividuality atacertain stage ofthe social system ofproduction .moreover ,in the opposition ofbuyer and seller the antagonistic nature 'how deeply some beautiful souls arewounded bythemerely superficial aspect oftheantagonism which asserts itself inbuy- ing and selling ,may beseen from the following abstract from m.isaac pereire's :\"leons sur l'industrie etles finances ,\" paris ,1832. the fact that the same isaac inhis capacity of inventor and dictator ofthe \"credit mobilier \"has acquired the reputation ofthe wolf ofthe paris bourse shows what lurks behind thesentimental criticism ofeconomics .says mr. pereire . atthetime anapostle ofst.simons :\"c'est parceque tous les individus sont isols ,spars lesuns des autres ,soit dans leur travaux ,soit pour laconsommation ,qu'il yaechange entre eux des produits deleur industrie respective .delanecessit del'change est derive lanecessit dedeterminer lavaleur relative des objets .les ides delavaleur etdel'change sont donc intimement lies ,ettoutes deux dans leur forme actuelle exprime l'individualisme etl'antagonisme ...il n'y alieu afixer lavaleur des produits que parcequ'il ya vente atachat ,end'autres termes ,antagonisme entre lesdivers membres delasociet .iln'y alieu s'occuper duprix ,de valeur que loilyavait vente etechat ,c'est dire,ochaque individu tait oblig delutter ,pour seprocurer les object ncessaires al'entretien deson existence \"(1.c.,p.2,3pas- sim).(\"since individuals are isolated and separated from one another both intheir labors and inconsumption ,exchange takes place between them inthe products oftheir respective",
        "121 ofcapitalistic production isexpressed asyet sosuper- ficially and asmere matter ofform ,that this opposition belongs also toprecapitalistic forms ofsociety ,since it merely requires that the mutual relations ofindividuals should bethose ofowners ofcommodities . now ,ifweconsider the result ofc-m-c,itcomes down tomere interchange ofmatter ,c-c.acom- modity has been exchanged for acommodity ,ause- value for ause-value ,and the transformation ofthe commodity into money ,orthe commodity initsform of money ,serves merely asameans ofeffecting this inter- change ofmatter .money thus appears merely asa medium ofexchange ofcommodities ;not asamedium ofexchange ingeneral ,but asameans ofexchange in the sphere ofcirculation ,i.e.,amedium ofcirculation. industries .from thenecessity ofexchange arises the necessity ofdetermining the relative value ofthings .the ideas of value and exchange are thus intimately connected and both express intheir actual form individualism and antagonism . ..the determination ofvalues ofproducts takes place only because there aresales and purchases ,or,toput itdiffer- ently ,because there isanantagonism between different mem- bers ofsociety .one has tooccupy himself with price and value only where there issale and purchase ,that istosay, where every individual isobliged tostruggle toprocure for himself the objects necessary for the maintenance ofhis ex- istence .\") \"l'argent n'est que lemoyen etl'acheminement ,aulieu que lesdenres utiles laviesont lafinetlebut.\"(\"money is but the ways and means ,while the things useful inlife are theend and object .\")boisguillebert :\"ledtail delafrance ,\" 1697 ,ineugene daires '\"economistes financiers du xviii ieme siecle ,vol.i.,paris ,1843 ,p.210.",
        "122 we have seen that the process ofcirculation ofcom- modities comes toacompletion inc-c,appearing as mere barter carried on by means ofmoney ;further , that c-m-crepresents ingeneral not only two iso- lated processes ,but their dynamic union aswell ;but todraw from that the conclusion that purchase and sale form anindivisible unit ,isamode ofthinking the crit- icism ofwhich belongs tothe domain oflogic ,and not tothat ofeconomics .the separation ofpurchase and sale inthe process ofexchange destroys all local ,prim- itive ,patriarchal and naively genial barriers tointer- change ofmatter insociety .itis,moreover ,the gen- eral form ofthe separation ofthe points ofcoincidence and opposition inthis interchange ,carrying within it the possibility ofcommercial crises ,because the antag- onism ofcommodity and money isthe abstract and general form ofall antagonisms with which the capi- talistic system oflabor ispregnant .hence ,circulation ofmoney ispossible without crises ,but crises can not occur without money circulation .inother words ,where labor based onthe system ofprivate exchange has not reached the stage marked by the existence ofmoney , itisless capable ofproducing those phenomena which presuppose the full development ofthe capitalistic mode ofproduction .bearing this in mind we can appreciate the depth ofthe criticism which proposes to do away with the \"shortcomings \"ofcapitalistic pro- duction by abolishing the \"privilege \"enjoyed by the precious metals and introducing aso-called \"rational monetary system .\" as asample ofeconomic defence ofanopposite character may serve the following piece",
        "- -- 123 ofreasoning which has been proclaimed exceedingly keen .james mill ,the father ofthe well -known english economist ,john stuart mill ,says :\"whatever ..bethe amount ofthe annual produce ,itnever can exceed the amount ofthe annual demand of two men who perform an exchange ,the one does. not come with only asupply ,the other with only ade- mand ;each ofthem comes with both ademand and a supply ....the supply which he brings isthe instrument ofhis demand ;and his demand and supply are ofcourse exactly equal toone another .itisthere- fore ,impossible that there should ever beinany coun- try acommodity orcommodities inquantity greater than the demand ,without there being ,to an equal amount ,some other commodity orcommodities inquan- tity less than the demand .\" innovember ,1807 ,william spence published apamphlet inengland under the title :\"britain independent ofcom- merce .\"the principle setforth inthis pamphlet was further elaborated bywilliam cobbet inhis\"political register \"under the virulent title ,\"perish commerce .\"tothis james mill re- plied in1808 inhis\"defence ofcommerce \"which contains the passage quoted above from his \"elements ofpolitical econ- omy \"(p.190-193 ,transl .).inhiscontroversy with sismondi and malthus oncommercial crises ,j.b.say appropriated this clever device ,and asitwould bedifficult topoint out with what new idea this comical \"prince delascience \"had enriched political economy ,hiscontinental admirers have trumpeted him astheman who had unearthed thetreasure ofthe metaphysical balance ofpurchases and sales ;asamatter offact,hismerits consisted rather oftheimpartiality with which heequally mis- understood hiscontemporaries ,malthus ,sismondi and ricardo .",
        "124 mill restores the balance by turning the process of circulation into direct barter and then smuggling into direct barter the character ofbuyer and seller borrowed byhim from the process ofcirculation .to put itin his own confused language ,during certain periods when all commodities are unsaleable there are really more buyers than sellers ofone commodity ,money ,and more sellers than buyers ofall other money ,commodities ; such was ,e.g.,the case atcertain moments during the commercial crisis of1857-58 inlondon and hamburg . the metaphysical balance ofpurchases and sales amounts tothis ,that every purchase isasale and every sale isa purchase ,which isapoor consolation tothe guardian of the commodity who can not bring about its sale and therefore can not buy. the separation ofsale and purchase makes possible the manner inwhich economists explain thedifferent aspects ofthe commodity may beseen from the following examples : \"with money inpossession ,wehave but one exchange to make inorder tosecure the object ofdesire ,while with other surplus products wehave two,the first ofwhich (procuring the money )isinfinitely more difficult than thesecond .\"(g.opdyke , \"atreatise onpolitical economy ,\"new york ,1851 ,p.277-278 .) \"the superior saleableness ofmoney isthe exact effect or natural consequence ofthe less saleableness ofcommodities .\" (th.corbet ,\"an inquiry into the causes and modes ofthe wealth ofindividuals ,\"etc.,london ,1841 ,p.117.) \"money has the quality ofbeing always exchangeable for what itmeasures .\"(bosanquet ,\"metallic ,paper and credit currency ,\"etc.,london ,1842. p.100. ) \"money can always buy other commodities ,whereas other commodities can not always buy money .\"(th.tooke ,\"anin- quiry into thecurrency principle ,\"2ded.,london ,1844 ,p.10.)",
        "125 alarge number offictitious transactions side by side with genuine trade before the final exchange between the producer and the consumer ofcommodities takes place .itenables ahost ofparasites topenetrate the process ofproduction and exploit the separation .but this ,again ,means that with money asthe universal form oflabor under the capitalist system ,there isthe possibility ofthe development ofitscontradictions . b.the circulation of money . actual circulation appears atfirst sight asamass ofpurchases and sales accidentally taking place side by side .inbuying asinselling ,commodities and money always stand inthe same mutual relation :the seller ,on the side ofthe commodity ;the buyer ,onthat ofmoney . money asamedium ofcirculation always appears there- fore asameans ofpurchase ;and inthat way the difference inits destinations inthe opposite phases of the metamorphosis ofthe commodity becomes indis- tinguishable . money passes into the hands ofthe seller inthe same transaction inwhich the commodity passes into the hands of the buyer .commodities and money thus flow in opposite directions and this change ofplace inwhich the commodity passes over toone side ,and money tothe other side ,occurs simultaneously at an indefinitely large number of points on the entire surface of bourgeois society . but the first step which the commodity makes inthe sphere of",
        "- --- 126 circulation isalso its last step .whether itleaves its place onaccount ofitsattraction for gold (c-m),or onaccount ofitsattraction bygold (m-c),with one move ,with one change ofplace itfalls out ofthe sphere ofcirculation into that ofconsumption .circulation is acontinuous flow ofcommodities ,but different com- modities allthe time ,since each commodity makes but one move .every commodity enters upon the second phase ofitscirculation not asthe same commodity ,but asanother commodity ,gold .hence the movement ofa metamorphosed commodity isthe movement ofgold . the same piece ofgold orthe identical gold coin which changed places with one commodity inthe act c-m, reappears from the opposite end asthe starting point for m-cand thus changes places for the second time with another commodity .just asitpassed from the hands ofbuyer binto those ofseller a,itnow leaves a's hands who has become abuyer and passes into c's hands .the path described byacommodity initstrans- formation into money and its retransformation from money ,i.e.,the movement of acomplete metamor- phosis ofacommodity assumes the aspect ofanapparent movement ofthe same coin that changes places twice with two different commodities .no matter inhow scattered and haphazard fashion purchases and sales may take place near each other ,there isalways inactual the same commodity can bebought and resold many times . itcirculates ,then ,notmerely asacommodity ,but inacapacity which does not exist from the point ofview ofsimple circula- tion ,ofthe simple contrast ofcommodity and money .",
        "127 circulation aseller for each buyer and the money which moves into the place ofthe commodity sold ,before it came into the hands ofthe buyer ,must have already changed places with another commodity .sooner or later itagain leaves the hands ofthe seller ,who turns buyer ,topass into the hands ofanew seller and this frequently repeated change ofplace forms the interlac- ing ofthe metamorphoses ofcommodities .the same coins are moving ,some more ,others less frequently ,from one place inthe sphere ofcirculation toanother ,always inthe direction opposite tothat ofthe commodities moved ,thus describing alonger orshorter circulation- curve .the different movements ofthe same coin can fol- low each other inpoint oftime only ,and onthe contrary , the many scattered purchases and sales which appear assomany separate changes ofplace between commod- ities and money ,occur simultaneously separated only in point ofspace . the circulation ofcommodities c-m-cinitsele- mentary form iscompletely described inthe transition . ofmoney from the hands ofthe buyer into those ofthe seller and from the hands ofthe latter ,assoon ashe has turned buyer ,into those ofanew seller .this com- pletes the metamorphosis ofthe commodity and with it the movement ofmoney insofar asthat movement is the expression ofthe metamorphosis .but since new use-values are continually produced inthe shape ofnew commodities and must thus beconstantly thrown anew into circulation ,the process c-m-cisrepeatedly re- newed bythe same commodity owners .the money which they have spent asbuyers gets back into their hands",
        "128 assoon asthey appear again asvendors ofcommodities . the constant renewal ofthe circulation ofcommodities finds itsreflection inthe continual circulation over the entire surface ofbourgeois society ofaquantity ofmoney which ,passing from hand tohand ,describes atthe same time anumber ofdifferent small cycles starting from numberless points and returning each toitsown start- ing point ,torepeat the same movement over again . the change ofform onthe part ofcommodities ap- pears asamere change ofplace onthe part ofmoney and the continuity ofthe circulation movement isall onthe side ofmoney ,since the commodity always makes but one step inthe direction opposite tomoney ,while the latter makes ineach case the second step for the commodity ;the entire movement seems ,therefore ,to proceed from money ,although inthe case ofasale the commodity draws money out ofitsplace ,i.e.,itcircu- lates money asmuch asitiscirculated bythe latter in the case ofapurchase .furthermore ,owing tothe fact that money always confronts commodities inits capac- ity ofameans ofpurchase ,and inthat capacity moves commodities only by realizing their price ,the entire movement ofcirculation appears asachange ofplace between money and commodities ,the former realiz- ing the prices ofthe latter either byseparate acts of circulation taking place simultaneously and side by side ,orbysuccessive transactions when the same coin. realizes the prices ofdifferent commodities one after another .ifwe consider ,c.g.,the series c-m-c- m-c-m-c\",etc.,without regard tothe qualitative aspects which become indistinguishable inthe process",
        "129 ofcirculation ,we witness the same monotonous opera- tion .after realizing the price ofc,msuccessively re- alizes those of c',c\",etc.,and commodities c',c\", c\",etc.,constantly take the place which money has left. money thus appears tokeep commodities incirculation byrealizing their prices .indischarging this function ofrealization ofprices ,money isitself constantly cir- culating ,now changing itsplace ,now describing acurve ofcirculation ,now completing asmall circuit where the starting and returning points coincide .asamedium of circulation ,money issubject toacirculation ofitsown . the change ofform ofthe circulating commodities ap- pears ,therefore ,asamovement ofmoney which furthers the exchange ofcommodities ,motionless inthemselves . the movement ofthe circulation process ofcommodities thus takes onthe form ofthe movement ofgold asa medium ofcirculation ,i.e.ofthe circulation ofmoney . since owners ofcommodities give the products oftheir individual labor the appearance ofproducts ofsocial labor byturning one object ,viz.gold ,into the direct expression ofuniversal labor -time and therefore into money ,their own movement bywhich allofthem effect the interchange ofthe material products oftheir labor now appears tothem asthe direct movement ofthat one object ,asthe circulation ofgold .the social move- ment itself appears tothe owners ofcommodities partly asanoutward necessity and partly asamere formal in- termediary process which enables every individual who puts any use-value into circulation toget other use- values out ofitofanequal value .the use-value of commodities comes into play with their disappearance!||",
        "130 from the sphere orcirculation ,while the use-value of money asamedium ofcirculation isinitsvery circula- tion .the movement ofacommodity inthe sphere of circulation isofatransitory kind ,while ceaseless mo- tion inthat sphere constitutes the function ofmoney . through this special function which itperforms within the sphere ofcirculation money acquires anew capacity , which wehave toconsider now more closely . inthe first place ,wesee that the circulation ofmoney forms anendlessly split up movement ,since itreflects the splitting upofthe process ofcirculation into anin- finitely large number ofpurchases and sales and the in- dependent separation ofthe mutually supplementary phases ofmetamorphoses ofcommodities .inthe small cycles described by money ,where the starting and re- turning points coincide ,wedofind areturn movement , i.e.,anactual circular movement ,but the fact that there are asmany starting points asthere are commodities and that the number ofthese cycles isinfinitely large puts them beyond all control ,measurement ,orcomputation . the time between the start and the return ofacom- modity isjust asindefinite .moreover ,itisimmaterial whether ornot such acircuit has been actually described inagiven case .no economic fact ismore generally known than that one can spend money with one hand without getting itback with the other .money proceeds from anendless number ofpoints and returns toasmany different points ,but the coincidence ofthe starting and returning points isamatter ofchance ,because inthe movement c-m-cthe turning ofthe buyer again into >seller isnot anecessary condition .still less does the",
        "131 circulation ofmoney resemble amovement radiating from acommon centre toallpoints ofthe periphery and back from the peripheral points tothe centre .the so- called cycle described by money ,asitispictured , amounts simply tothis ,that atallpoints weobserve its appearance and disappearance ,itsnever ceasing transi- tion from place toplace .inahigher ,more involved form ofmoney circulation ,e.g.bank -note circulation , we shall find that the conditions ofemission ofmoney include those for itsreturn .but inthe simple money circulation itisamatter ofchance for the same buyer tobecome again aseller .where wereally see constant cycle motions taking place ,they are only reflections of deeper forces inthe sphere ofproduction ,e.g.,the man- ufacturer draws money from his banker onfriday ,pays itout tohis workingmen on saturday ,the men im- mediately pay out the greater part ofittothe store- keepers ,etc.,and the latter turn itinonmonday back tothe banker . we have seen that money realizes simultaneously a certain number ofprices inthe variegated purchases and sales which take place side byside atthe same time .on the other hand ,insofar asitsmovement represents the movement ofthe combined metamorphoses ofcommodi- ties and the interlacing ofthese metamorphoses ,the same coin realizes the prices of different com- modities and thus makes alarger orsmaller number of moves .ifwe take the circulation ofacountry for a given length oftime ,say aday ,the quantity ofgold required for the realization ofprices and ,consequently , for the circulation ofcommodities ,will bedeterminedli",
        "132 - bytwo conditions :first ,the sum total ofthe prices ;sec- ond ,the average number ofmoves made byone coin . this number ofmoves orthe rapidity ofcirculation of money isinits turn determined by orexpresses the average rapidity with which commodities gothrough the different phases oftheir metamorphoses ,the rapidity with which these metamorphoses succeed one another , and with which those commodities that have gone through their metamorphoses are replaced bynew com- modities inthe process ofcirculation .we have seen that inthe process ofthe determination ofprices the exchange value ofall commodities isideally converted into acertain quantity ofgold ofthe same value and that the same amount ofvalue ispresent inadouble form ineither ofthe isolated acts ofcirculation m-c and c-m,first embodied inthe commodity ,and second , ingold ;yet gold enjoys the capacity ofamedium ofcir- culation not byvirtue ofitsisolated relation toseparate commodities inastate ofrest ,but owing toitsactive presence inthe dynamic world ofcommodities ,viz.,its function ofexpressing the change ofform ofcommodi- ties byitschange ofplace and expressing the rapidity of their change ofform bythe rapidity ofits change of place .the extent towhich itispresent inthe sphere ofcirculation ,i.e.,the actual quantity ofgold incir- culation ,isthus determined bythe extent towhich itis discharging itsfunction throughout the entire process . the circulation ofmoney implies the circulation of commodities ;money circulates commodities which have prices ,i.e.,which are beforehand ideally equated tocer- tain quantities ofgold .inthe determination ofthe",
        "133 irices ofcommodities ,the value ofthe quantity ofgold which serves asaunit ofmeasure ,orthe value ofgold , isassumed tobe given .under that assumption the quantity ofgold necessary for circulation isdetermined . first ofallbythe sum total ofthe prices ofcommodities that are toberealized .but this sum isitself determined : 1.bythe level ofprices ,the relatively high orlow ex- change value ofcommodities estimated ingold ;and 2.by the mass of commodities circulating at fixed prices ,i.e.bythe number ofpurchases and sales at given prices .ifone quarter ofwheat isworth 60 shillings ,then twice asmuch gold isrequired tocircu- late itortorealize itsprice aswould bethe case ifit were worth only 30shillings .to circulate 500 quar- ters ofwheat at60shillings ,twice asmuch gold isneces- sary asfor the circulation of250 quarters atthe same price .finally ,tocirculate 10quarters at100 shillings only half asmuch money isnecessary aswhen circu- the quantity ofmoney isimmaterial \"pourvu qu'il yenait assez pour maintenir lesprix contracts par lesdenres \"(as long asitissufficient tomaintain the existing prices ofcom- modities ).boisguillebert ,1.c.p.210. \"ifthe circulation ofcommodities offour hundred millions required acurrency offorty millions ,and ...this pro- portion ofone-tenth was the due level ,estimating both cur- rency and commodities ingold ;then ,ifthe value ofcommodi- ties tobecirculated increased tofour hundred and fifty millions , from natural causes ...ishould say the currency ,in order tocontinue atitslevel ,must beincreased toforty -five millions .\"(william blake ,\"observations onthe effects pro- duced bythe expenditure ofgovernment ,etc.,\"london ,1823 , p.80.)iii",
        "- 134 lating 40quarters at50shillings .itfollows that the quantity ofgold required for circulation may fall in spite ofarise inprice ,ifthe mass ofcommodities incir- culation declines inagreater ratio than the rise ofthe combined sum ofprices ;and ,inversely ,the quantity of the circulating medium may rise inspite ofadecline ofthe mass ofcommodities incirculation ,ifthe sum total ofprices rises inagreater ratio .thorough and minute english investigations have demonstrated e.g. that inthe early stages ofadearth ofgrain inengland the quantity ofmoney incirculation increases ,because the total price ofthe diminished supply ofgrain is greater than the former total price ofalarger supply of grain ,while the circulation ofthe other commodities continues undisturbed for some time attheir old prices . atalater stage ofthe dearth ofgrain ,there isadecline inthe quantity ofcirculating money ,either because less goods are sold atold prices besides grain ,orthe same quantity ofthose goods issold atlower prices . but ,aswe have seen ,the quantity ofmoney incir- culation isdetermined not only bythe sum total ofprices ofcommodities that are toberealized ,but also bythe rapidity with which money circulates orwith which it completes this work of realization .if the same sovereign makes ten purchases aday,each ofacom- modity having aprice ofone sovereign ,and thus changes hands ten times ,itdoes asmuch work aswould beac- complished by ten sovereigns each performing but a single act ofcirculation aday .'consequently ,rapidity 1\"elavelocit delgiro deldanaro ,non laquantit deimetalli che faapparir molto apoco ildanaro .\"(galiani ,1.c.p.99.)",
        "- - 135 of gold circulation can make up for its quantity , orthe presence ofgold inthe sphere ofcirculation isde- termined not only byitspresence asanequivalent ofa commodity side byside with it,but also byitspartici- pation inthe movement ofmetamorphoses ofcommodi- ties .the rapidity ofthe circulation ofmoney ,how- ever ,can serve asasubstitute for itsquantity only toa limited extent ,since atany given moment an endless number ofisolated purchases and sales takes places in different localities . ifthe total price ofthe commodities incirculation rises ,but inasmaller ratio than the increase inthe rapidity ofcirculation ofmoney ,the volume ofthe circu- lating medium will diminish .ifonthe contrary the rapidity ofcirculation decreases inagreater ratio than the total price ofthe commodities incirculation ,the vol- ume ofcurrency will increase .an increasing volume of currency combined with ageneral fall ofprices oradi- minishing volume ofcurrency inconnection with agen- eral rise ofprices isone ofthe best known phenomena in the history ofprices .but the consideration ofthe causes which bring about asimultaneous rise inthe level of prices and astill greater rise inthe rate ofvelocity of circulation ofmoney ,orthe opposite phenomenon ,falls outside ofthe sphere ofsimple circulation .by way of illustration ,itmay bementioned that inperiods ofpre- vailing credit ,the rapidity ofcirculation ofmoney grows (\"itisthe rapidity ofthe circulation ofmoney and not the quantity ofmetals that causes agreater orsmaller amount of money toappear .\")",
        "136 [faster than the prices ofcommodities ,while intimes of declining credit the prices ofcommodities fall slower than the rapidity ofcirculation .the shallow and arti- ficial character ofthe simple circulation ofmoney is manifested inthe fact that allthe elements which have adetermining influence onthe volume ofcurrency ,such asthe volume ofcommodities incirculation ,prices ,the rise orfall ofprices ,the number ofsimultaneous pur- chases and sales ,the rapidity ofthe circulation of money ,depend on the metamorphic process which takes place in the world of commodities ,and that again depends onthe general character ofthe methods of production ,the size ofpopulation ,the relation between city and country ,the development ofthe means of transportation ,the greater or less division of labor , credit ,etc.;inshort ,oncircumstances allofwhich lie outside ofthe sphere ofsimple circulation ofmoney and are only reflected init. the rapidity ofcirculation being given ,the volume ofcurrency issimply determined bythe prices ofcom- modities .hence ,prices are not high orlow,because there ismore orless money incirculation ,but onthe contrary ,there ismore orless money incirculation ,be- cause prices are high orlow .this isone ofthe most important laws ,whose demonstration indetail bymeans ofthe history ofprices constitutes perhaps the only merit ofthe post -ricardian english political economy . ifexperience shows ,that the level ofmetallic circula- tion orthe mass ofgold and silver incirculation ina given country issubject totemporary ebbs and tides",
        "- 137 and very violent ones attimes ,'but onthe whole re mains stationary for long periods ,the deviations form- ing but small oscillations about the average level ,this isexplained bythe antagonistic nature ofthe circum- stances which determine the quantity ofmoney incircu- lation .their simultaneous modifications neutralize their effects and leave everything where itwas before . the law,that with agiven rapidity ofcirculation of money and agiven total sum ofprices ofcommodities the quantity ofthe circulating medium isdetermined , may also beexpressed asfollows .ifthe exchange values ofcommodities and the average rapidity oftheir meta- morphoses are given ,the quantity ofgold incirculation depends on its own value .if,therefore ,the value of gold ,i.e.the labor -time necessary for its production , should rise orfall,the prices ofcommodities will rise anexample ofanextraordinary decline ofmetallic circula- tion from itsaverage level was furnished byengland in1858 , asmay beseen from the following extract from the london economist :\"from the nature ofthe case (namely ,the iso- lated nature ofsimple circulation )very exact data cannot be procured astothe amount ofcash that isfluctuating inthe market ,and inthe hands ofthe not banking classes .but, perhaps ,theactivity ortheinactivity ofthe mints ofthegreat commercial nations isone ofthe most likely indications in the variations ofthat amount .much will bemanufactured when itiswanted ;and little when little iswanted .. atthe english mint thecoinage was in1855 9,245,000 ;1856 , 6,476,000 ;1857 ,5,293,855 .during 1858 the mint had scarcely anything todo.\"(economist ,july 10,1858. )but atthe same time about eighteen million pounds sterling were lying inthe bank vaults .",
        "138 orfall ininverse ratio ,and corresponding tothat rise or fall ofprices ,the rapidity ofcirculation remaining the same ,alarger orsmaller quantity ofgold would bere- quired tokeep the same volume ofcommodities incir- culation .the same change would occur ,ifthe old standard ofvalue were superseded by amore orless valuable metal .thus ,holland required from fourteen tofifteen times asmuch silver asithad previously re- quired gold ,inorder tocirculate the same volume ofcom- modities ,when out oftender regard for the government creditors and out offear ofthe effects ofthe discoveries incalifornia and australia itsubstituted silver for gold money . from the fact that the quantity ofgold incirculation depends onthe variable sum total ofprices ofcommodi- ties and the varying rapidity ofcirculation ,itfollows that the volume ofthe circulating medium must be capable ofcontraction and expansion ;inshort ,that according tothe requirements ofcirculation ,gold must now enter ,now leave the sphere ofcirculation inits capacity ofamedium ofcirculation .how the circula- tion process itself realizes these conditions ,we shall see later on. c.coin and symbols ofvalue . inits capacity ofamedium ofcirculation ,gold ac- quires ashape ofitsown ,itbecomes coin .inorder to prevent any technical difficulties inthe way ofitscircu- lation ,itiscoined according tothe standard ofthe money ofaccount . gold pieces whose imprints and legends show that they contain certain weights ofgold",
        "- 139 corresponding tothe reckoning names ofmoney ,, s.,etc.,are coins .the establishment ofamint -price ,as well asthe technical work ofcoining ,are the business ofthe state .both asmoney ofaccount and ascoin , money acquires alocal and political character ;itspeaks different languages and wears different national uni- forms .the sphere inwhich money circulates ascoin , isdistinguished asan internal sphere ofcirculation which isseparated from the universal sphere ofcircula- tion inthe commodity world bynational boundaries . yet ,the only difference between gold bullion and gold coin isthat between coin denomination and weight de- nomination .what seems tobeadifference inname in the latter case appears asadifference inshape inthe former .gold coin can bethrown into the melting -pot and thus beconverted again into gold sans phrase ,just as,onthe contrary ,gold bars only have tobesent to the mint toreceive the shape ofcoins .the conversion and reconversion from one form into another appears to beapurely technical matter . for 100 pounds or1200 ounces troy of22carat gold one can get 4,672 orgold sovereigns atthe english mint ;ifthese sovereigns beput onone side ofthe weigh- ing scale and one hundred pounds ofgold bullion onthe other ,the two will balance each other ,which proves that the sovereign isnothing but apiece ofgold ofcertain weight bearing this name inenglish coinage and hav- ing ashape and stamp of its own .the 4,6722 sovereigns are put into circulation atdifferent points , and once initsgrasp they make acertain number of moves per day,some sovereigns more ,others less.ifthe",
        "- - 140 average number ofmoves per day ofeach ounce beten, the 1200 ounces ofgold would realize 12,000 ounces or 46,725 sovereigns asthe total price of commodities . you may turn and toss anounce ofgold inany way you like ,and itwill never weigh ten ounces .but here inthe process ofcirculation one ounce practically does weigh ten ounces .the work performed byacoin inthe sphere ofcirculation isequivalent tothe quantity ofgold it contains multiplied bythe number ofits moves .be- sides the actual importance which acoin possesses by virtue ofitsbeing anindividual piece ofgold ofadef- inite weight ,itacquires anideal significance due toits function .but whether the sovereign circulates once or ten times ,ineach particular purchase orsale itacts only asone sovereign .itislike ageneral who bytimely appearance atten different points onthe battle field does the work often generals ,but still remains the same identical general ateach point .the idealization ofthe means ofcirculation which isdue tothe supplanting of quantity by rapidity inmoney circulation ,affects only the function ofthe coin within the sphere ofcirculation , but not the nature ofthe individual coin . the circulation ofmoney isamovement through the outside world ,and the sovereign ,though itnon olet ,keeps rather mixed company . in the course ofits friction against all kinds of hands ,pouches , pockets ,purses ,money -belts ,bags ,chests and strong- boxes ,the coin rubs off,loses one gold atom here and another one there and thus ,as itwears off in its wanderings over the world ,it loses more and more ofits intrinsic substance . by being used",
        "- - 141 itgets used up. let us take up asovereign at the moment when its natural ,inborn character has been slightly affected .abaker ,says dodd ,'who receives from the bank to-day abrand new sovereign and pays it to-morrow tothe miller ,does not pay the same veritable sovereign ;the latter has become lighter than itwas at the time hereceived it.itisclear ,says ananonymous writer ,2that inthe very nature ofthings ,coins must de- preciate one byone asaresult ofordinary and unavoid- able friction .itisaphysical impossibility toentirely exclude light coins from circulation atany time ,even for one day.jacob estimates that ofthe 380 million . pounds sterling which were inexistence ineurope in 1809 ,nineteen million pounds sterling entirely disap- peared by1829 ,i.e.,within aperiod oftwenty years. thus ,while acommodity at its first step into the sphere of circulation ,falls out ofit,acoin ,after acouple ofsteps within that sphere represents more 'dodd ,\"curiosities ofindustry ,\"etc.,london ,1854 . \"the currency question reviewed ,etc.,by abanker .\" (edinburgh ,1845 ,p.69.) \"siuncu unpeu us etait reput valoir quelque chose de moins qu'un cu tout neuf ,lacirculation setrouverait contin- uellement arrte ,etiln'y aurait pas unseul payement qu nefutmatire contestation .\"(g.garnier ,1.c.t.i.,p.21.) (\"ifanecu slightly used would pass foralittle less than an entirely new ecu,circulation would becontinually interferes . with ,and not apayment would take place that would notgive rise tocontroversy .\") 3w.jacob ,\"aninquiry into the production and consump- tion ofthe precious metals .\" (london ,1831 ,vol.ii.,ch. xxvi .)",
        "142 metal than it actually contains . the longer a coin remains in circulation ,the rapidity of circu- lation remaining the same ,orthe greater its rapid- ity ofcirculation within the same period oftime ,the greater the discrepancy between itsform ascoin and its actual gold orsilver substance .what remains ismagni nominis umbra .the body ofthe coin becomes but a shadow .if at first itbecame heavier through the process ofcirculation ,itnow becomes lighter onaccount ofit,but continues torepresent the original quantity ofgold ineach single purchase orsale .the sovereign , asafictitious sovereign ,asfictitious gold ,continues to perform the function ofalegitimate coin .while other beings lose their idealism incontact with the outer world , the coin isidealized bypractice ,being gradually trans- formed into amere phantom ofitsgolden orsilver body . this second idealization ofmetal money springing from the very process ofcirculation ,orfrom the discrepancy between its nominal weight and its real weight isex- ploited inall kinds of coin counterfeiting practiced partly by governments ,partly by private adventurers . the entire history ofcoinage from the beginning ofthe middle ages until late inthe eighteenth century isnoth- ing but ahistory ofthese two -fold and antagonistic adul- terations ,and custodi's voluminous collection ofwrit- ings ofitalian economists turns mostly about this point . but the fictitious importance ofgold due toitsfunc- tion ,comes inconflict with itsreal substance .one gold coin has lost more ,another ,less ofitsmetal substance inthe course ofcirculation ,and one ofthem is,asa matter offact ,worth more now than the other .but",
        "143 - since inthe discharge oftheir function ofcoins they are taken atthe same value ,the sovereign weighing a quarter ofanounce passing for nomore than the sov- ereign which only stands for aquarter ofanounce ,the full -weight sovereigns are subjected inthe hands ofun- scrupulous owners tosurgical operations which produce artificially what the circulation process has caused ina natural way totheir more light -weighted brothers .they are clipped and reduced and the superfluous gold fat lands inthe melting pot.if4,672 %gold sovereigns when put onone side ofthe weighing scale weigh onan average only 800 ounces instead of1200 ,they will buy when brought tothe gold market only 800 ounces of gold ;that is,the market price ofgold would rise above itsmint price .every coin ,even ifoffull weight would pass initsmint form for less than inbullion form .the full weight sovereigns would bereconverted into bullion , aform inwhich agreater quantity ofgold isalways worth more than asmaller quantity .as soon asthis decline ofmetallic weight would affect asufficiently large number ofsovereigns tobring about apermanent rise ofthe market price ofgold above itsmint price ,the reckoning names ofthe coins ,though remaining the same ,would begin todenote asmaller quantity ofgold . that istosay,the standard ofmoney would change and gold would becoined inthe future according tothis new standard .by virtue of its idealization as a medium of circulation ,gold would react upon and change the legally determined ratios under which itacted asthe standard ofprice .the same revolution would be repeated after acertain length oftime and thus gold",
        "144 would besubject toconstant change both asastandard ofprice and asamedium ofcirculation ,achange under one ofthese forms leading toachange under the other and vice versa .this explains the phenomenon men- tioned above ,namely that inthe history ofallmodern nations the same money -name stands for aconstantly diminishing quantity ofmetal .the contradiction be- tween gold ascoin and gold asstandard ofprice be- comes also one between gold ascoin and gold asthe universal equivalent ;inthe latter capacity itcirculates not only within the limits ofnational boundaries ,but inthe world market .as ameasure ofvalue gold was always offull weight ,because itserved only asideal gold . initscapacity ofequivalent inthe isolated transaction c-mitpasses atonce from astate ofmotion toastate ofrest ;but initscapacity ofcoin itsnatural substance comes inconstant conflict with itsfunction .the trans- formation ofthe gold sovereign into fictitious gold can not bewholly avoided ,but legislation seeks toprevent itsunlimited circulation ascoin byprescribing itswith- drawal from circulation assoon asitsshortage ofmetallic substance reaches acertain degree .according tothe english law,e.g.,asovereign which lacks more than 0.747 grains ofitsweight ceases tobelegal tender .the bank ofengland which weighed forty -eight million gold sovereigns inthe short period between 1844 and 1848 , possesses inmr. cotton's gold weighing scale amachine which not only detects adifference of1-100 part ofa grain between two sovereigns ,but like asensible being , immediately throws out the light -weight coin onaboard",
        "- 145 where itlands under another machine which cuts itup with oriental cruelty . that being the case ,gold coins could not circulate atall were not their circulation confined todefinite spheres inwhich they donot wear offsorapidly .inso far asagold coin weighing only one-fifth ofanounce passes incirculation for aquarter ofanounce ofgold , itispractically merely asign orasymbol for one- twentieth ofanounce ofgold ,and inthat way allgold coins are transformed bythe very process ofcircula- tion into more orless ofamere sign orsymbol oftheir substance .but nothing can beitsown symbol .painted grapes are nosymbol ofreal grapes ,they are imaginary grapes .still less can alight -weight sovereign beasym- bol ofafull -weighted one,just asalean horse can not serve asasymbol ofafat one.since gold thus be- comes asymbol ofitsown self,but atthe same time can not serve inthat capacity ,itreceives asymbolical ,silver orcopper substitute inthose spheres ofcirculation in which itismost subject towear and tear ,namely where purchases and sales are constantly taking place onthe smallest scale .inthese spheres ,even ifnot the same identical coins ,still acertain part ofthe entire supply ofgold money would constantly circulate ascoin .to that extent gold issubstituted bysilver orcopper tokens . thus ,while only aspecific commodity can perform inagiven country the function ofameasure ofvalue and therefore ofmoney ,different commodities can serve as coin side byside with gold .these subsidiary mediums ofcirculation ,such assilver orcopper coins ,represent definite fractions ofagold coin within the sphere ofcir-",
        "146 culation .their own silver orcopper weight is,there- fore ,not determined bythe proportions ofthe respective values ofsilver and copper tothat ofgold ,but isar- bitrarily fixed bylaw .they may beissued only insuch quantities inwhich the diminutive fractions ofgold coin which they represent would constantly circulate either forpurposes ofchange forgold coins ofhigher denomina- tions ,orfor realizing equally small prices ofcommodi- ties.inretail trade silver and copper tokens belong to distinct spheres ofcirculation .inthe nature ofthings , the rapidity oftheir circulation isininverse ratio to the price which they realize ineach separate purchase or sale ,ortothe size ofthe fraction ofgold coin which they represent .ifweconsider how immense the volume ofthe daily retail trade inacountry like england is, wewill understand from the comparatively insignificant proportions ofitscombined volume how rapid and steady the circulation ofthe subsidiary coin must be.from a parliamentary report ofrecent date wesee,e.g.,that in 1857 the english mint coined 4,859,000 worth ofgold , 733,000 ofsilver nominal value which contained metal actually worth 363,000 .the total amount ofgold coined inthe ten years ending december 31,1857 ,was 55,239,000 ,and ofsilver only 2,434,000 .the sup- ply ofcopper coin in1857 amounted only to 6,720 nominal value containing 3,492 worth ofcopper ;of this 3,136 was inpennies ,2,464 inhalf -pennies ,and 1,120 infarthings .the total value ofcopper coined inthe ten years was 141,477 nominal ,the metallic value being 73,503 .just asgold coin isprevented from permanently retaining itsfunction ofcoin bythe",
        "147 - legal provision ofthe loss ofweight which demonetizes it,soare the silver and copper tokens prevented from passing from their spheres ofcirculation into that of gold coin and acquiring the character ofmoney bythe provision ofthe maximum amount for which they are legal tender .in england e.g.copper islegal tender only tothe amount ofsix pence and silver uptoforty shillings .ifsilver and copper tokens were tobeissued . ingreater quantities than the requirements oftheir spheres ofcirculation call for,prices ofcommodities would not rise asaresult ,but the accumulation ofthese tokens inthe hands ofretail dealers would reach such an extent that they would befinally compelled tosell them asmetal .thus in1798 english copper coins ,issued by private individuals ,accumulated inthe hands ofsmall traders tothe amount of 20,350 which they tried in vain toput again incirculation ,being finally compelled tothrow them asmetal onthe copper market .' the silver and copper tokens which represent gold coin incertain spheres ofcirculation inthe interior of the country ,contain adefinite quantity ofsilver and copper prescribed bylaw,but after they get into circula- tion ,they wear offlike gold coins and become even more rapidly mere phantoms ,according tothe rapidity and steadiness oftheir circulation .to draw again aline ofdemonetization beyond which silver and copper tokens would lose their character ofcoins ,they would have tobe 'david buchanan ,\"observations onthe subjects treated of indr.smith's inquiry onthe wealth ofnations ,\"etc. (edin- burgh ,1841 ,p.3.)",
        "148 replaced inturn within certain spheres oftheir own circulation by some other symbolic money ,say iron and lead ,and such representation ofone kind ofsym- bolic money by another kind would form an endless process .in all countries with awell developed cir- culation the very requirements ofmoney circulation make itnecessary that the character of silver and copper tokens asmoney bemade independent ofany loss ofweight inthose coins .thus ,asitwas inthe nature ofthings ,itappears that they serve assym- bols ofgold coin not because they are symbols made ofsilver or copper ,not because they have certain value ,but only insofar asthey have novalue . relatively worthless things ,such aspaper ,can con- sequently perform the function of symbols ofgold money .that subsidiary currency consists of metal tokens ,such assilver ,copper ,etc.,ismainly due to the fact that inmost countries the less valuable metals such assilver inengland ,copper inancient rome , sweden ,scotland ,etc.,had circulated asmoney be- fore they were degraded bythe process ofcirculation tothe rank ofsmall change and replaced by amore precious metal .besides ,itisnatural that the money symbol which grows directly out ofmetallic ,circula- tion ,should itself be ametal .just asthat portion ofgold which would always have tocirculate assmall change ,isreplaced bymetal tokens ;socan the other portion ofgold which isconstantly absorbed ascoin by circulation inthe interior ofthe country and , therefore ,must continually circulate ,bereplaced with worthless tokens .the level below which the mass of circulating coin never sinks isdetermined in each",
        "149 country by experience .thus ,the originally imper- ceptible difference between the nominal weight and the metallic weight ofametal coin can grow apace until itreaches the point ofabsolute separation .the mint name ofmoney parts company with itssubstance and exists outside ofitinworthless slips ofpaper . just asthe exchange value ofcommodities iscrystal- lized bytheir process ofexchange into gold money , soisgold money sublimated inits currency into its own symbol first inthe form ofworn coin ,then in the form ofsubsidiary metal currency ,and finally in the form ofaworthless token ,paper ,mere sign of value . gold coin has produced itssubstitutes ,first metallic and then paper ,only because inspite ofits loss of metallic weight itcontinued toperform the function of coin .itdid not circulate because ofits wear and tear ;onthe contrary ,itwore out toasymbol because itcontinued to circulate .only inso far as gold money becomes simply atoken ofitsown value inthe process ofcirculation ,can mere tokens ofvalue take itsplace . insofar asthe movement c-m-crepresents a dynamic unity of two processes c-m and m-c which pass directly one into the other ,orinsofar as acommodity passes through the complete process of its metamorphosis ,itexpress its exchange value in price and inmoney only todiscard that form atonce and tobecome again acommodity or,rather ,ause- value .that istosay,itdevelops only an apparent assertion ofthe independence ofits exchange value . on the other hand ,we have seen that gold ,insofar asitperforms the function ofcoin orinsofar asit",
        "150 - continually circulates ,actually forms only aconnect- ing link between the metamorphoses ofcommodities and constitutes but their transitory money form ; furthermore ,that itrealizes the price ofone set of commodities only inorder torealize that ofanother , but innocase does itconstitute astable form ofex- change value or appear itself asacommodity ina state ofrest .the reality which the exchange value ofcommodities acquires inthe process and which is represented bygold initscirculation ,isthe reality of an electric spark .although real gold ,itplays the part offictitious gold ,and can ,therefore ,bereplaced inthis function byatoken ofitself . the token ofvalue ,say paper ,which plays the part ofcoin ,isthe token ofaquantity ofgold expressed inits currency name ,i.e.,itisagold token .just asacertain quantity ofgold does not initself express avalue ratio ,soisthat true ofthe token which takes itsplace .insofar asacertain quantity ofgold ,as embodied labor -time ,has avalue ofacertain magni- tude ,the gold token represents value .but the mag- nitude ofthe value which itrepresents depends all the time on the value ofthe quantity of gold for which itstands .as regards commodities the token ofvalue expresses the reality oftheir price ,itissig- num pretii and sign oftheir value only because their value isexpressed intheir price .inthe process c m-c,insofar asitrepresents the dynamic unity ordirect alternation ofthe two metamorphoses and that isthe aspect itassumes inthe sphere ofcircula- tion inwhich the token ofvalue discharges its func- tion -the exchange value ofcommodities acquires in",
        "- 151 price only an ideal expression and inmoney only an imaginary symbolic existence .exchange value thus acquires only an imaginary though material expres- sion ,but ithas no real existence except inthe com- modities themselves ,insofar asacertain quantity oflabor -time isembodied inthem .itappears ,there- fore ,that the token ofvalue represents directly the value ofcommodities ,by figuring not asatoken of gold but asatoken ofthe value which exists inthe commodity alone and isonly expressed inprice .but itisafalse appearance .the token ofvalue isdi- rectly only atoken ofprice ,i.e.,atoken ofgold ,and only indirectly atoken of value of acommodity . unlike peter shlemihl ,gold has not sold itsshadow , but buys with its shadow .the token ofvalue oper- ates only insofar asitrepresents the price ofone commodity as against that of another within the sphere ofcirculation ,orinsofar asitrepresents gold toevery owner ofcommodities .acertain compara- tively worthless object such asapiece ofleather ,a slip of paper ,etc.,becomes by force of custom a token ofmoney material ,but maintains its existence inthat capacity only solong asitscharacter asasym- bol ofmoney isguaranteed by the general acquies- cence ofthe owners ofcommodities ,i.e.,solong as itenjoys alegally established conventional existence and compulsory circulation .paper money issued by the state and circulating aslegal tender isthe per- fected form ofthe token ofvalue ,and the only form ofpaper money ,which has its immediate origin in metallic circulation oreven inthe simple circulation ofcommodities .credit money belongs toahigher sphere ofthe social process ofproduction and isgov-",
        "152 - erned by entirely different laws .symbolic paper money does not infact ,differ inthe least from sub- sidiary metal coin ,except that it reaches wider spheres ofcirculation .we have seen that the mere technical development ofthe standard ofprice orof the mint price and later the shaping ofgold bullion into coin have called forth the interference ofthe state ;this circumstance brought about avisible sep- aration ofnational circulation from the world circula- tion ofcommodities ;this separation iscompleted by the evolution of coin into atoken of value .as a mere medium ofcirculation money can assume anin- dependent existence only within the sphere of na- tional circulation . our presentation has shown that the coin form of gold asatoken ofvalue differentiated from the gold substance itself ,has itsdirect origin inthe process of circulation and not inany agreement orstate inter- ference .russia offers astriking example of the natural origin ofthe token ofvalue .at the time when hides and furs played there the part ofmoney , the conflict between the perishable and bulky nature ofthe material and its function asamedium ofcir- culation resulted inthe custom ofreplacing itbysmall pieces ofstamped leather which thus became akind of draft payable inhides and furs .later on they became under the name of copecs mere tokens for fractions ofthe silver rouble and remained inuse in some parts until 1700 ,when peter the great ordered their withdrawal inexchange for small copper coins 'henry storch ,\"cours d'economic politique ,\"etc.,avec des notes par j.bsay.paris ,1823 ,tom .iv.,p.179. storch pub-",
        "153 issued by the state . observe the phenomena ofexclusively metallic circu- lation ,already took the view ofcoin asasymbol or token ofvalue .that istrue both ofplato 'and aris- totle . in countries where credit isnot developed , lished hiswork infrench atst.petersburg .j.b.say imme- diately issued aparisian reprint ,supplemented with alleged \"notes ,\"which asamatter offact contain nothing but com- monplaces .storch (seehis \"considerations sur lanature du revenue national ,\"paris ,1824 )took bynomeans kindly to this annexation ofhiswork bythe \"prince delascience .\"ancient writers who could plato derep.l.ii\"   .\"(\"money symbol ofexchange .\")opera omnia ,etc.,ed.g.stallbumius , london ,1850 ,p.304. plato develops money only intwo ca- pacities asameasure ofvalue and atoken ofvalue ,but de- mands ,inaddition tothe token ofvalue serving forhome cir- culation ,another one for trade between greece and foreign countries .(see also book vofhislaws .) \"aristotle ,ethic .nicom ,1.5.,ch.8,1.c.:olov d'izlayua          .   ,  - oar xenotov \"(\"inthe satisfaction ofwants money became the medium ofexchange byagreement .and forthat reason itbears thename vuoua ,because itowes itsexistence ,not to nature ,but tolaw (vou ),and tiisinour power to change itand make itvoid .\")aristotle had afar more comprehensive and deep view ofmoney than plato .in the following passage hebeautifully shows how barter be- tween different communities creates the necessity ofas- signing the character ofmoney toaspecific commodity .i.e.. onewhich hasitself anintrinsic value .\"        ,               ,-      ...       \". (arist .de republica ,1.i,c. 9,[secs,7,8]1.c.)",
        "154 - ase.g.inchina ,legal tender paper money isfound atan early date .'.early advocates ofpaper money expressely point out the fact that metallic coin is transformed into atoken ofvalue inthe very process use(\"when the inhabitants ofone country became more de- pendent onthose ofanother ,and they imported what they needed and exported the surplus ,money necessarily came into and hence men agreed toemploy intheir deal- ings with each other something which was intrinsically useful and easily applicable tothe purposes oflife,forexample ,iron , silver and the like.\"trans .byb.jowett ,\"the politics ofar- istotle ,oxford ,1885 ,p.16).this passage isquoted bymichel chevalier ,who either has not read aristotle ordidnot under- stand him,toprove that inaristotle's opinion currency must consist ofasubstance having intrinsic vaiue .onthe contrary , aristotle says expressly that money asamere medium ofcir- culation seems toowe itsexistence toagreement orlaw,asis shown byitsname vtopa ,and that inreality itowes its utility ascoin toitsfunction and not toany intrinsic use- value ofitsown .      ,                (\"others maintain that coined money isamere sham ,athing not natural ,but conven- tional only ,which would have novalue oruse forany ofthe purposes ofdaily life ifanother commodity were substituted bythe users .\"(1.c.sec.11.) 'mandeville ,sir john ,\"voyages and travels ,\"london , 1705 ,p.105:\"this emperor (ofcattay orchina )may dis- pende olsmuche ashewile withouten estymacion .for he despendethe not,nor makethe nomoney ,but oflether em- predeth ,orofpapyre .and when that money hathe ronne so longe that itbegynethe towaste ,than men beren ittothe emperoure tresorye ,and then they taken newe money for the old.and that money gothe thorghe out allthe contree , and thorge out all his provynces . .. they make no money nouther ofgold nor ofsylver ,\"and \"therefore ,\"thinks mandeville ,\"hemay despende ynew and outrageously .\"",
        "155 - of circulation .so benjamin franklin 'and bishop berkeley. how many reams ofpaper cut upinto bills can cir- culate asmoney ?put inthat way ,the question would beabsurd .the worthless tokens are signs ofvalue only insofar asthey represent gold within the sphere of circulation and they represent itonly tothe ex- tent towhich itwould itself beabsorbed ascoin by the process ofcirculation ;this quantity isdetermined by its own value ,the exchange values ofthe com- modities and the rapidity of their metamorphoses being given .bills ofadenomination of 5could circulate inaquantity five times less than those of1 denomination ,and ifallpayments were made inshill- ing bills ,then twenty times as many shilling bills would have tobeincirculation asare one pound bills . ifthe gold currency were represented by bills of 'benjamin franklin ,\"remarks and facts relative tothe american paper money ,\"1764 ,p.348,1.c.\"atthis very time ,even the silver money inengland isobliged tothe legal tender for part ofitsvalue ;that part which isthe difference between its real weight and itsdenomination .great part ofthe shillings and sixpences now current are bywearing be- come 5,10,20,and some ofthe sixpences even 50percent .,too light .for this difference between the real and the nominal you have nointrinsic value .you have not somuch aspaper ,you have nothing .itisthe legal tender ,with the knowledge that itcan easily berepassed forthe same value ,that makes three- pennyworth ofsilver pass for asixpence .\" berkeley ,1.c..p.5-6.\"whether the denominations being retained ,although the bullion were gone ..might not acirculation ofcommerce (be)main- nevertheless tained ?\"",
        "- 156 different denominations ,e.g.five pound ,one pound and ten shilling bills ,then the quantity ofthese dif- ferent tokens ofvalue would bedetermined not only by the quantity ofgold necessary for circulation as awhole ,but also by that required inthe sphere of circulation ofeach kind ofbills .iffourteen million pounds sterling (this isthe provision ofthe english bank law ,not for the entire currency but only for credit money )were the level below which the circu- lation ofacountry never sank ,then fourteen million paper bills ,each atoken ofvalue ofone pound ,could circulate .ifthe value ofgold fell or rose because the labor -time necessary for itsproduction had fallen orrisen ,then ,the exchange value ofthe same volume of commodities remaining the same ,the number of one pound bills incirculation would rise or fall in inverse ratio tothe change inthe value ofgold .if gold were replaced by silver asameasure ofvalue , the ratio ofthe respective values ofsilver and gold being 1:15 ,and ifeach bill were torepresent now the same quantity ofsilver asitrepresented gold before , then there would be210 million one pound bills incir- culation instead of the previous fourteen million . the number ofpaper bills isthus determined bythe quantity ofgold money which they represent incir- culation ,and since they are tokens ofvalue only in sofar asthey represent it,their value issimply deter- mined bytheir quantity .thus ,while the quantity of gold incirculation isdetermined bythe prices ofcom- modities ,the value ofthe paper bills incirculation , on the contrary ,depends exclusively on their own quantity . the interference ofthe state which issues paper",
        "- 157 - money aslegal tender -and we are treating ofpaper money ofthat kind only -seems todoaway with the economic law .the state which initsmint price gave acertain name toapiece ofgold ofcertain weight , and inthe act ofcoinage only impressed its stamp on gold ,seems now toturn paper into gold by the magic ofitsstamp .since paper bills are legal tender , noone can prevent the state from forcing aslarge a quantity ofthem asitdesires into circulation and from impressing upon itany coin denomination ,such as1,5,20.the bills which have once gotten into circulation can not beremoved ,since onthe one hand their course ishemmed inby the frontier posts of the country and onthe other they lose allvalue ,use- value aswell asexchange -value ,outside ofcircula- tion .take away from them their function and they become worthless rags ofpaper .yet this power of the state isamere fiction .itmay throw into circu- lation any desired quantity ofpaper bills ofwhatever denomination ,but with this mechanical act itscontrol ceases .once inthe grip ofcirculation and the token ofvalue orpaper money becomes subject toits in- trinsic laws . iffourteen million pounds sterling were the quan- tity ofgold required for the circulation ofcommod- ities and ifthe state were toput into circulation two hundred and ten million bills each ofthe denomina- tion of 1,then these two hundred and ten millions would become the representatives of gold to the amount offourteen million pounds sterling .itwould be the same asifthe state were to make the one pound bills represent afifteen times less valuable metal or a fifteen times smaller weight",
        "- 158 ofgold .nothing would bechanged but the nomencla- ture ofthe standard ofprice ,which byitsvery nature isconventional ,no matter whether such change takes place asadirect result ofachange ofthe mint stand- ard orindirectly owing toanincrease ofpaper bills to anextent required byanew lower standard .since the name would stand now for afifteen times smaller quantity ofgold ,the prices ofall commodities would increase fifteen times and two hundred and ten million one pound bills would now beactually asnecessary a fourteen million had been before .to the same extent towhich the combined quantity oftokens ofvalue would increase now ,the quantity ofgold which each ofthem represents would decrease .the rise ofprices would constitute but areaction onthe part ofthe process of circulation which forcibly equates the tokens ofvalue to the quantity ofgold which they are supposed toreplace . inthe history ofthe debasement ofmoney inengland and france bytheir governments ,wefind repeatedly that prices had not risen inthe same proportion inwhich the silver coinage had been debased .that was simply due tothe fact that the proportion inwhich the currency was increased did not correspond tothe proportion in which ithad been debased ;that istosay,because an inadequate quantity ofcoins ofthe poorer metallic com- position was issued ,ifthe exchange values ofcommodi- ties were tobeestimated inthe future inthe new coin as ameasure ofvalue and berealized incoins correspond- ing tothis smaller unit ofmeasure .this solves the dif- ficulty left unsettled inthe controversy between locke and lowndes .the ratio which atoken ofvalue ,whether",
        "--- - 159 made ofpaper orofdebased gold orsilver ,bears tocer- tain weights ofgold orsilver estimated according tothe mint price ,depends not onitsown composition but on the quantity inwhich itisfound incirculation .the difficulty inunderstanding this isdue tothe fact that money initstwo functions ofameasure ofvalue and a medium ofcirculation issubject totwo not only op- posite but apparently contradictory laws corresponding tothe difference inthe two functions .inthe discharge ofits function ofameasure of value where money serves merely asmoney ofaccount and gold only asideal gold ,everything depends on the natural substance of money .estimated insilver orexpressed insilver prices exchange values are naturally estimated quite differently than when measured ingold orasgold prices .on the contrary ,inits function ofamedium ofcirculation , where gold isnot only imagined but isactually present side by side with other commodities ,its substance is immaterial and everything depends onitsquantity .for the unit ofmeasure the determining factor iswhether itconsists ofapound ofgold ,silver orcopper ;while in the case ofcoin ,nomatter what itsown composition is, itwill become the embodiment ofeach ofthese units of measure inaccordance with its quantity .but itgoes against common sense that inthe case ofmere imaginary money everything should depend on its material sub- stance ,while inthat ofthe palpably present coin all should bedetermined byanideal ratio ofnumbers . the rise orfall ofprices ofcommodities following a rise orfall ofthe quantity ofpaper notes -the latter only where paper currency constitutes the exclusive",
        "160 medium ofcirculation -isthus nothing but anasser- tion through the process ofcirculation ofalaw me- chanically violated from without ;namely ,that the quantity ofgold incirculation isdetermined by the prices ofcommodities ,and the quantity oftokens of value incirculation isdetermined bythe quantity of gold coin which itrepresents .for that reason any desired number ofpaper notes will be absorbed and equally digested bythe process ofcirculation ,because the token ofvalue ,nomatter with what gold title it may enter circulation ,will be compressed within the latter toatoken ofthat quantity ofgold which could actually circulate initsplace . inthe case ofthe circulation oftokens ofvalue all laws pertaining tothe circulation ofreal money ap- pear to be reversed and standing on their heads . while gold circulates because ithas value ,paper has value because itcirculates .while with agiven ex- change value of commodities ,the quantity ofgold incirculation depends on itsown value ,the value of paper depends on its own quantity in circulation . while the quantity ofgold incirculation rises orfalls with the rise or fall ofprices of commodities ,the prices ofcommodities seem torise orfall with the change inthe quantity ofpaper incirculation .while the circulation of commodities can absorb only a definite quantity ofgold coin and asaresult ofthat the alternating contraction and expansion ofthe cur- rency appears asanecessary law ,paper money seems toenter circulation inany desired amount .while the state isguilty ofdebasing gold and silver coin and ofdisturbing their function ofamedium ofcircula-",
        "- - 161 tion ,ifitturns out acoin ,only 1-100 ofagrain be- low its nominal weight ;itperforms aperfectly proper operation by issuing absolutely worthless paper notes which contain nothing ofthe metal ex- cept its mint denomination .while gold coin ap- parently represents the value ofcommodities only in sofar asthat value isitself estimated ingold oris expressed inprice ,the token ofvalue seems torepre- sent directly the value ofcommodities .itis,there- fore ,clear why students who examined one -sidedly the phenomena ofcirculation ofmoney by confining their observations tothe circulation of legal tender paper money ,should have failed to grasp the in- trinsic laws governing the circulation ofmoney .as amatter offact ,these laws appear not only reversed but extinct inthe circulation oftokens ofvalue ,since paper currency ,ifissued inthe right quantity ,goes through certain movements which are not in its nature asatoken of value ,while its proper move- ment instead of growing directly out ofthe meta- morphosis ofcommodities ,springs from the violation ofitsproper proportion togold .",
        "- - 162 3. money . money asdistinguished from coin ,the result ofthe circulation process c-m-c,forms the starting point ofthe circulation process m-c-m,i.e.the exchange ofmoney for commodity in order toexchange com- modity for money .inthe form c-m-c,commodity forms the starting and final points ofthe movement ;in the form m-c-m,money plays that part .inthe former case money isthe medium ofexchange ofcom- modities ,inthe latter the commodity helps money to become money .money which appears merely as a means ofcirculation inthe first form becomes anend inthe second form ;while commodity which appeared first asthe end ,now becomes but ameans .since money isitself the result ofcirculation c-m-c,the result ofcirculation appears atthe same time asitsstarting point inthe form m-c-m.while inthe case of c-m-cthe interchange ofmatter constituted the real import ofthe process ,the form ofthe commodity re- sulting from this first process constitutes the import ofthe second process m-c-m. inthe form c-m-cthe two extreme members are commodities ofthe same value ,but qualitatively different use-values .their mutual exchange c-cconstitutes",
        "163 actual interchange ofmatter .inthe form m-c-m the two extremes are gold and atthe same time gold of equal value .to exchange gold for acommodity in order toexchange the commodity for gold ,orifwecon- sider the final result m-m,toexchange gold for gold , seems absurd .but ifwetranslate the formula m-c- minto the expression :tobuy inorder tosell,which means nothing but toexchange gold for gold through anintervening movement ,werecognize atonce the pre- vailing form ofcapitalist production .inactual prac- tice ,however ,people donot buy inorder tosell,but they buy cheap inorder tosell dear .money isexchanged for acommodity inorder toexchange the same commodity for alarger amount ofmoney ,sothat the extremes m, mare,ifnot qualitatively ,then quantitatively different . such aquantitative difference presupposes the exchange ofnon -equivalents ,yet commodity and money assuch are only opposite forms ofthe same commodity ,i.e.they are different forms ofthe same magnitude ofvalue .the circuit m-c-mthus conceals under the forms of money and commodity more highly developed relations ofproduction ,and isbut areflection within the sphere ofsimple circulation ofamovement ofamore advanced character .money ,asdistinguished from the medium of circulation ,must therefore bedeveloped from the direct form ofcirculation ofcommodities ,c-m-c. gold ,i.e.,the specific commodity which serves asa measure ofvalue and amedium ofcirculation ,becomes money without any further assistance onthe part ofso- ciety .inengland ,where silver isneither the measure ofvalue nor the prevailing medium ofcirculation ,it 1",
        "164 - does not become money ,just asgold inholland ,assoon asithad been dethroned asameasure ofvalue ,ceased tobemoney .acommodity thus becomes money only in itscombined capacity ofameasure ofvalue and medium ofcirculation ;or,the unity ofthe measure ofvalue and medium ofcirculation ismoney .assuch aunity ,how- ever ,gold has aseparate existence independent ofits existence inthe two functions .as ameasure ofvalue itisonly ideal money and ideal gold ;asamere medium ofcirculation itissymbolic money and symbolic gold ; but initsplain metallic bodily form gold ismoney.or money isreal gold . let usnow consider for amoment the commodity gold when itisinastate ofrest ,and plays the part of money inits relation toother commodities .all com- modities represent intheir prices acertain quantity of gold ,that istosay,they are merely imaginary gold or imaginary money ,representatives ofgold ,just as,on the other hand ,money inthe form ofatoken ofvalue appeared asamere representative ofprices ofcommod ities . since all commodities are thus but imaginary money ,money isthe only real commodity ..contrary to commodities ,which only represent the independently ex isting exchange value ,i.e.,universal social labor ,orah- stract wealth ,gold isthe material form ofabstract ..;ma 1\"non solo imetalli ricchi son segni delle cose vicendevolmente lecose .. sono segni dell'oro edell'ar gento .\"(a.genovesi ,\"lezioni dieconomia civile ,\"1765. p. 281 incustodi ,parte mod .1.viii .)(\"not only are precious metals tokens ofthings ,but vice versa ,things are tokens of gold and silver .\")",
        "165 wealth .through itsuse-value ,every commodity ,byits relation tosome particular want ,expresses only one aspect ofmaterial wealth ,but one side ofwealth .money , however ,satisfies every want since itcan be directly converted into the object ofany want .its own use- value isrealized inthe endless series ofuse-values which form its equivalents .in its virgin metallic state it holds locked up allthe material wealth which lies un- folded inthe world ofcommodities .thus ,while com- modities represent intheir prices the universal equiva- lent orabstract wealth ,viz.,gold ,the latter represents initsuse-value the use-values ofall commodities .gold is,therefore ,the bodily representative of material wealth .itisthe \"precis detoutes les choses \"(bois- guillebert ),the compendium ofthe wealth ofsociety . atone and the same time ,itisthe direct incarnation ofuniversal labor inits form ,and the aggregate ofall. concrete labor initssubstance .itisuniversal wealth individualized .'as amedium ofcirculation itunder- went allkinds ofinjury ,was clipped ,and even reduced tothe condition ofamere symbolic paper rag. money itisrestored toitsgolden glory .as from aserve 'petty .\"gold and silver are universal wealth .\"(political arithmetic ,1.c.,p.242. ) e.misselden .\"free trade ,orthe means tomake trade flourish ,\"etc.,london ,1622. \"the natural matter ofcom merce ismerchandise ,which merchants from the end oftrade have stiled commodities .the artificiall matter ofcommerce ismoney ,which hath obtained the title ofsinewes ofwarre and ofstate . money ,though itbeinnature and time after merchandise ,yet forasmuch asitisnow inuse become",
        "- - 166 itbecomes alord .from amere understrapper itrises tothe position oflord ofcommodities. a.hoarding . gold separates itself asmoney from the process of circulation whenever acommodity interrupts the pro- cess ofitsmetamorphosis and remains initsform ofa gold chrysalis .this occurs every time asale isnot im- mediately followed by purchase .the independent is- olation ofgold asmoney is,thus ,amaterial expression ofthe disintegration ofthe process ofcirculation ,orof the metamorphosis ofcommodities ,into two separate acts independent ofeach other .the coin itself be- comes money assoon asits course isinterrupted .in the hands ofthe seller who takes itinexchange for the chiefe .\"(p.7.)hecompares hisown treatment ofmer- chandise and money with the manner of\"old jacob ,who, blessing hisgrandchildren ,crost hishands ,and laide hisright hand onthe yonger ,and hisleft hand onthe elder .\"`(1.c.) boisguillebert ,\"dissert .sur lanature des richesses ,\"etc. \"viol donc l'esclave ducommerce devenu son matre lamisre despeuples nevient quedecequ'on afait unmatre , ouplutt untyran decequi tait unesclave .\"(p.395,399. ) 'boisguillebert ,1.c.\"on afait une idole deces mtaux (l'or etl'argent )etlaissant l,l'objet etl'intention pour lesquels ilsavaient t appls dans lecommerce ,savoir ,pour yservir degages dans l'echange etlatradition reciproque ,on lesapresque quitts deceservice pour enformer desdivinits , aux quelles onasacrifi etsacrifie toujours plus debiens etde besoins prcieux etmme d'hommes ,que jamais l'aveugle an- tiquit n'en immola cesfausses divinits ,\"etc. (i.c.,p.395. )",
        "167 his commodity ,itismoney and not coin ;assoon as itpasses out ofhis hands itisagain coin .everybody isaseller ofthe one commodity which heproduces ,but abuyer ofallother commodities which heneeds for his existence insociety .while his selling isdetermined by the labor -time required for the production ofhis com- modity ,his buying isdetermined bythe continual re- newal ofthe wants oflife.inorder tobeable tobuy without having sold anything ,hemust sell without buy- ing.in fact ,the circulation process c-m-cisa dynamic unity ofsale and purchase only insofar asit constitutes atthe same time the constant process ofits separation .inorder that money should flow continu- ously ascoin ,coin must constantly coagulate asmoney . the continuous flow ofcoin depends on its constant accumulations inthe form of reserve -funds of coin which spring up throughout the sphere ofcirculation and form sources ofsupply ;the formation ,distribution , disappearance ,and reformation ofthese reserve funds isconstantly changing ,their existence constantly dis- appears ,their disappearance constantly exists .adam smith expressed this never -ceasing transformation of coin into money and ofmoney into coin bysaying that every owner ofcommodities must always keep insupply besides the particular commodity which hesells ,acer- tain quantity ofthe universal commodity with which he buys .we saw ,that inthe process c-m-cthe second member m-csplits upinto aseries ofpurchases which donot take place atonce ,but atintervals oftime ,so that one part ofmcirculates asmoney while the other rests asmoney .money isinthat case only suspended",
        "- - 168 coin and the separate parts ofthe circulating mass of coins appear now inone form ,now inanother ,constant- lychanging .this first transformation ofthe medium ofcirculation into money represents ,therefore ,but a technical aspect ofmoney circulation .' the primitive form ofwealth isthat ofasurplus or superabundance ,i.e.,that part ofthe products which are not immediately required asuse-values ,orthe pos- session ofsuch products whose use-value falls outside the sphere ofmere necessaries .when considering the transition ofcommodity into money we saw that this surplus orsuperabundance ofproducts constitutes the proper sphere ofexchange atalow stage ofdevelopment ofproduction .superfluous products become exchange- able products orcommodities .the adequate form of this surplus isgold and silver ,the first form inwhich wealth asabstract social wealth ispreserved .commod- ities can not only bestored upinthe form ofgold and silver ,i.e.,inthe substance ofmoney ,but gold and inthe first halt ofthe perpetuum mobile ,i.e.,inthe suspension ofthefunction ofmoney asamedium ofcirculation , boisguillebert atonce suspects itsindependent existence from commodities .money ,hesays ,must be\"inconstant motion , itcan bemoney only bybeing mobile ,but assoon asitbe- comes motionless allislost.\" (\"dans unmouvement con- tinuel ,cequi nepeut tre que tant qu'il est meuble ,mais sitot qu'il devient immeuble tout estperdu .\"(\"ledetail de lafrance ,\"p.231. )what he overlooks isthat this halt constitutes the condition ofitsmovement .what hereally wants isthat the value form ofcommodities should appear merely inthe transitory form oftheir change ofmatter ,but should never become anend initself .",
        "169 silver are wealth inpreserved form .while every use- value performs itsservice assuch bybeing consumed , i.e.,destroyed ,the use-value ofgold asmoney con- sists inits being the bearer ofexchange value ,inem- bodying universal labor -time asashapeless raw material . as shapeless metal ,exchange value posseses an inde- structible form .gold orsilver thus brought torest as money ,forms ahoard .among nations with anexclu- sively metallic circulation ,such asthe ancients were , hoarding ispracticed universally from the individual tothe state which guards its state hoard .in more ancient times ,inasia and egypt ,these hoards under the protection ofkings and priests appear rather asa mark oftheir power .ingreece and rome itwas part ofpublic policy toaccumulate state hoards asthe safest and most available form ofsurplus .the quick transfer ofsuch hoards byconquerors from one country toan- other and the sudden outpour ofapart ofthese hoards into the general circulation constitute apeculiar feature ofancient economy . asthe incarnation oflabor -time gold isapledge for itsown value ,and since itisthe embodiment ofuniver- sal labor -time ,the process ofcirculation pledges gold itsconstant rle ofexchange value .owing tothe mere fact that the owner ofcommodities can retain his com- modity inthe form ofexchange value orretain the ex- change -value asacommodity ,the exchange ofcommod- ities for the purpose ofretaining them inthe trans- formed shape ofgold becomes circulation's own motive . the metamorphosis c-mtakes place for the sake of the metamorphosis ,i.e.,inorder totransform itfrom",
        "170 particular natural wealth into universal social wealth . instead ofchange ofmatter ,change ofform becomes its own purpose .from amere form ofthe movement ex- change value becomes itssubstance .commodity ispre- served aswealth ,ascommodity ,only insofar asit keeps within the sphere ofcirculation ,and itkeeps in that fluent state only insofar asitsolidifies inthe form ofsilver and gold .itremains inthe stream ofcircu- lation asitscrystal .atthe same time gold and silver themselves become money only insofar asthey donot play the part of mediums of circulation .as non- mediums ofcirculation they become money .the with- drawal ofacommodity from circulation inthe form of gold istherefore the only means ofkeeping itcon- stantly within the sphere ofcirculation . the owner ofcommodities can receive money from cir- culation only inreturn for acommodity which hegives toit.constant selling ,continual throwing ofcom- modities into circulation is,therefore ,the first condition ofhoarding from the standpoint ofthe circulation of commodities .on the other hand ,money asamedium ofcirculation constantly disappears inthe very process ofcirculation bybeing realized allthe time inuse-values and becoming dissolved infleeting pleasures .itmust , therefore ,betaken out ofthe all-consuming stream of circulation orthe commodity must bekept up inits first metamorphosis ,sothat money isprevented from performing its function ofameans ofpurchase .the commodity owner who has now become ahoarder ,must sell asmuch aspossible and buy aslittle aspossible ,as old cato had taught :\"patrem familias vendacem ,non",
        "171 - emacem esse .\"while industry constitutes the positive condition ofhoarding ,saving forms the negative one. the less the equivalent ofacommodity iswithdrawn from circulation inthe form ofparticular commodities oruse-values ,the more itiswithdrawn inthe shape of money orexchange value .'the acquisition ofwealth in its universal form thus requires abstinence from wealth inits material reality .thus the stimulating impulse for hoarding isgreed ,the objects ofwhich are not commodities asuse-values ,but exchange value as commodity .in order toget possession ofthe surplus inits universal form ,the particular wants must be treated assomuch luxury and excess .thus the cortes presented areport tophilipp ii.,in1593 ,inwhich , among other things ,was said :\"the cortes ofvalla- dolid inthe year 1586 petitioned your majesty not to allow the further importation into the kingdom ofcan- dles ,glassware ,jewelry ,knives and similar articles ; these things useless tohuman life come from abroad tobeexchanged for gold ,asthough the spaniards were indians .\" the hoarder despises the worldly ,tempo- rary and transitory enjoyments inhis hunt after the eternal treasure ,which neither moth nor rust can eat, which isperfectly celestial and earthly atthe same time . \"the general remote cause ofour want ofmoney isthe great excess ofthis kingdom inconsuming the com- modities offorreine countries ,which prove tousdiscom- 166 the more the stock .. is .. icreased inwares ,the more itdecreaseth intreasure .\" misselden ,1.c.,p.23.)er. (e.",
        "172 modities ,inhindering usofsomuch treasure ,which otherwise would bee brought in,inlieu ofthose toyes wee .. consume amongst us,that great abundance ofthe wines ofspaine ,offrance ,ofthe rhene ,ofthe levant ...the raisins ofspaine , the corints ofthe levant ,the lawnes and cambricks of hannaults ...the silkes ofitalie ,the sugers and tobaco ofthe west indies ,the spices ofthe east indies : all which are ofno necessetie unto us and yet are bought with ready mony .\" inthe form ofgold and silver ,wealth isindestructi- ble,both because exchange value ispreserved inthe shape ofindestructible metal ,and ,especially ,because gold and silver are prevented from becoming ,asme- diums ofcirculation ,mere vanishing money forms of the commodity .the destructible substance isthus sac- rificed for the indestructible form .\"ifmoney betaken (by means oftaxation )from him ,who spendeth the same .. upon eating and drinking ,orany other perishing commodity ;and the same transferred toone that bestoweth iton cloaths ;isay that even inthis case the commonwealth hath some little advantage ;be- cause cloaths donot altogether perish sosoon asmeats and drinks .but ifthe same bespent infurniture of houses ,the advantage isyet alittle more ;ifinbuilding ofhouses ,yet more ;ifinimproving oflands ,working ofmines ,fishing ,etc.,yet more ;but most ofall,in bringing gold and silver into the country ;because those things are not only not perishable ,but are esteemed for 11.c.,p.11-13 passim .",
        "- - 173 wealth atalltimes and everywhere ;whereas other com- modities which are perishable ,orwhose value depends upon the fashion ;orwhich are contingently scarce and plentiful ,are wealth ,but pro hic etnunc .\" the with- drawal ofmoney from the stream ofcirculation and the saving ofitfrom the social interchange ofmatter reaches itsextreme form inthe burying ofmoney ,sothat social wealth isbrought as an underground indestructible treasure into aperfectly secret private relation with the owner ofcommodities .dr. bernier ,who stayed for some time atthe court ofaurenzeb atdelhi ,tells us how the merchants ,especially the mohammedan heath- ens,who control nearly all the trade and all money , secretly bury their money deep inthe ground ,\"being imbued with the faith that the gold and silver which they put away during their lives will serve them after death inthe next world .\"however ,insofar asthe as- ceticism ofthe hoarder iscombined with active in- dustry ,heisrather aprotestant by religion and still more apuritan .\"itcan not bedenied that buying and selling are necessary ,that one can not get along without them ,and that one can buy like achristian especially things that serve inneed and inhonor ;for the patri- archs had also bought and sold cattle ,wool ,grain ,but- ter,milk and other goods .they are gifts ofgod which he gives out ofthe earth and divides among men .but 'petty ,\"political arith .,\"1.c.,p.196 (1899 edition ,v.i,p. 269. transl .) 'francois bernier ,\"voyage contenant ladescription des tats dugrand mogul .\"(paris edition ,1830 ,t.1.,conf .,p. 312-314 .",
        "- 174  foreign trade which brings over from calcutta ,india and other such places commodities consisting ofcostly silks ,and gold ware ,and spices which only serve for luxury and are ofno use,draining the land and the people oftheir money ,should not betolerated ifwebut had agovernment ofprinces .yet ido not wish to write ofthat now ,for ibelieve itwill have tostop of itself ,when wehave nomoney any longer ;and sowill luxury and gluttony ;for no writing orteaching will help until want and poverty will force us.\" intimes ofdisturbance inthe process ofthe social interchange ofmatter ,the burying ofmoney takes plac even inbourgeois societies which are atahigh stage of development .the social bond initscompact form is 'dr. martin luther ,\"bcher vom kaufhandel und wucher ,\" 1524. inthe same passage luther says :\"gott hat uns deutsche dahin geschleidert ,dass wir unser gold und silber mssen infremde lnder stossen ,alle welt reich machen und selbst bettler bleiben .england sollte wohl weniger goldes haben ,wenn deutschland ihm sein tuch liesse ,und der knig von portugal sollte auch weniger haben ,wenn wir ihm die wrze liessen .rechne du,wie viel eine messe zufrank- furt aus deutschen landen gefrt wird ,ohne not und ursache : sowirst dudich wundern ,wie eszugehe ,dass noch einheller indeutschen landen sei.frankfurt istdas silber -und gold- loch ,dadurch aus deutschem lande fleisst ,was nur guillet und wchst ,gemnzt oder geschlagen wird beiuns;wre das loch zuegestopft ,sodrft man itzt der klage nicht hren ,die allethalben eitel schuld und kein geld ,alle land und stdte ausgewuchert sind .aber lass gehen ,eswill doch also gehen ; wir deutsche mssen deutsche bleiben !wir lassen nicht ab,wir mssen denn .\" inthework quoted above misselden wishes toretain theguid",
        "175 - being saved from the social movement (with the owner ofcommodities this bond isthe commodity and the ade- quate form ofthe commodity ismoney ).the social nervus rerum isburied next tothe body whose nerve it is. the hoard would now become mere useless metal , itsmoney soul would depart from itand itwould re- main asthe burnt ashes ofcirculation ,asits caput mortuum ,ifitdid not constantly tend toget back into circulation .money ,orcrystallized exchange value ,is, according toits nature ,the form ofabstract wealth ; but,onthe other hand ,any given sum ofmoney isa quantitatively limited magnitude ofvalue .the quan- titative limitation ofexchange value isincontradiction with its qualitative universality and the hoarder con- and silver atleast within the confines ofchristendom :\"the other forreine remote causes ofthe want ofmoney ,are the trades maintained out ofchristendome toturky ,persia and the east indies ,which trades aremaintained forthemost part with ready money ,yet inadifferent manner from the trades ofchristendome within itselfe .for although thetrades within christendome are driven with ready monies ,yet those monies arestill contained and continued within the bounds ofchristen- dome .there isindeede afluxus and refluxus ,aflood and ebbe ofthe monies ofchristendome traded within itselfe ;forsome- times there ismore inone part ofchristendome ,sometimes there islesse inanother ,asone country wanteth and an- other aboundeth :itcometh and goeth ,and whirleth about the circle ofchristendome ,but isstill contained within the compasse thereof .but the money that istraded out ofchris- tendome into the parts aforesaid iscontinually issued out and never returneth againe .\"(p.19-20 .)",
        "176 ceives initabarrier which turns ,infact ,into aquali- tative barrier aswell and makes ofthe hoard merely a limited representative ofmaterial wealth .money ,in itscapacity ofauniversal equivalent ,appears ,aswehave scen ,asamember ofanequation ,the other member of which consists ofanendless series ofcommodities .it depends on the magnitude ofthe exchange value to what extent money will berealized insuch anendless series ,i.e.,towhat degree itcorresponds tothe con- ception ofitasan exchange value .the automatic movement ofexchange value asexchange value can only tend toitspassing beyond itsquantitative limits .but byexceeding the quantitative limits ofthe hoard anew limit iscreated which must be removed inits turn . there isnodefinite limit which appears asabarrier to further hoarding ,every limit plays that part .hoard accumulation has,therefore ,noinherent limits ,noin- herent measure ;itisanendless process which finds in each successive result animpulse for anew beginning . while the hoard isincreased only bybeing preserved , itispreserved only bybeing increased . money isnot only anobject ofthe passion for riches ; itisthe object ofthat passion .the latter isessentially auri sacra fames .the passion for riches ,contrary to that for special kinds ofnatural wealth oruse-values , such asclothing ,ornaments ,herds ,etc.,ispossible only when universal wealth has been individualized assuch inaparticular object and can,therefore ,beretained in the form ofasingle commodity .money appears then noless asanobject than asasource ofthe passion for",
        "177 = !!riches .the underlying fact ofthe matter isthat ex- change value assuch and with itits increase become the final aim .greed holds the hoard fast bynot allow- ing the money tobecome amedium ofcirculation ,but the thirst for gold saves the money soul ofthe hoard by keeping upthe lasting affinity ofgold for circulation . tosum up,the activity bywhich hoards are built up resolves itself into withdrawal ofmoney from circula- tion bycontinually repeated sales ,and simple hoarding oraccumulation .in fact ,itisonly inthe sphere of simple circulation and ,especially ,inthe form ofhoard- ing,that accumulation ofwealth assuch takes place , while ,asweshall see later ,inthe case ofother so-called forms ofaccumulation itisonly amisnomer tocall them bythat name inmere recollection ofthe simple accu- mulation ofmoney .all other commodities are hoarded either asuse-values ,inwhich case the manner ofstoring them upisdetermined bythe peculiarities oftheir use- value :the storing ofgrain ,e.g.,requires special equip- ment ;the accumulation ofsheep makes one ashepherd ; the accumulation ofslaves and land creates relations ofmaster and servant ,etc.;the accumulation ofpar- ticular kinds ofwealth requires special processes differ- ent from the simple act ofhoarding ,and develops spe- cial individual traits .or,wealth inthe form ofcom- haec paulatim \"anummo prima origo avaritiae exarsit rabie quadam ,non jam avaritia ,sed fames auris .\" (plin .,hist .nat.,1.xxxiii .,c.xiv .) (\"from money first springs avarice .. the latter gradually grows into akind ofmadness ,which isnomore avarice ,but athirst forgold .\")",
        "- 178 modities ishoarded asexchange -value and inthat case hoarding appears asacommercial oraspecific economic operation .the one who carries onsuch operations be- comes adealer incorn ,incattle ,etc. gold and silver are money not through some activity ofthe individual who accumulates it,but ascrystals ofthe process of circulation which goes onwithout any aid onhis part . he has nothing todo but toput them aside ,adding new weights ofmetal tohis hoard ,aperfectly sense- less operation which ,ifapplied toallother commodities , would deprive them ofall value .' our hoarder appears asamartyr ofexchange value , aholy ascetic crowning the metal pillar .he cares for wealth only inits social form and therefore heburies 'horace thus understands nothing ofthe philosophy of hoarding when hesays (satir .1.ii.,satir .iii):\"siquis emat citharas ,emptas comportat inunum ,nec studio citharae necmusae deditus ulli;siscalpra etformas non sutor ;nautica vela aversus mercaturis ;delirus etamens ,undique dicatur merito .qui discrepat istis ,qui nummos aurunque recondit nescius uticompositis metuensque velut contingere sacrum ?\" \"ifone buys fiddles ,hoards them upwhen bought , though music's study ne'er engaged histhought , one lasts and awls ,unversed incobbler's craft , one sails forships ,notknowing fore from aft, you'd call them mad :but tell me,ifyou please , how that man's case isdifferent from these , who ashegets it,stows away hisgain , and thinks totouch afarthing were profane !\" (transl .byjohn covington ,london ,1874 ,p.60.) mr. senior understands the question much better :\"l'argent parat etre laseule chose dont ledsir estuniversel ,etilen",
        "- 179 itaway from society .he wants tohave the commodity inthe form inwhich itisalways capable ofentering circulation and therefore hewithdraws itfrom circula- tion .he dreams ofexchange value and therefore does not exchange .the fluid form ofwealth and itspetri- fication ,the elixir oflife and the stone ofwisdom madly haunt each other inalchemic fashion .in his imagi- nary unlimited passion for enjoyment hedenies himself all enjoyment .because he wishes tosatisfy all social wants ,hebarely satisfies his elementary natural wants . while holding fast tohis wealth initsmetallic bodily form ,the latter escapes him asaphantom .asamatter of fact ,however ,the hoarding ofmoney for the sake of money isthe barbaric form ofproduction for produc- tion's sake ,i.e.,the development ofthe productive forces ofsocial labor beyond the limits ofordinary wants . the less the production ofcommodities isdeveloped , the more important isthe first crystallization ofex- change value into money ,or hoarding ,which plays , therefore ,animportant part among the ancient nations , estainsi parceque l'argent estune richesse abstraite etparcque leshommes ,enlapossdant peuvent satisfaire tous leur be- soins dequelque nature qu'ils soient .\"(\"principes fondamen- taux del'economie politique ,tirs deleons edites etinedites de n.w.senior ,par comte jean arrivabene ,\"paris ,1836 ,p.221. (the corresponding passage intheenglish edition ofhispoliti- caleconomy ,london ,1863 ,istobefound onp.27. trans- lator .)sodoes storch :\"since money represents allother forms ofwealth ,itisonly necessary toaccumulate ittopro- vide foroneself allkinds ofwealth existing inthe world .\"(1. c.,v.2,p.134.)\"",
        "180 inasia until the present day,and among modern agri- cultural nations where exchange value has not asyet taken hold ofallthe relations ofproduction .before taking up the consideration ofthe specific economic function ofhoarding within the sphere ofmetallic cir- culation ,letusmention another form ofhoarding . quite apart from their aesthetic properties ,silver and gold commodities are convertible into money ,since the material ofwhich they are made isamoney material ; and ,inversely ,gold money and gold bullion can becon- verted into commodities .because gold and silver con- stitute the material ofabstract wealth ,the greatest dis- play ofwealth consists ofthe utilization ofthese metals asconcrete use-values ,and ifthe owner ofcommodities hides his treasure atcertain stages ofproduction ,heis very anxious toappear before other owners ofcommod- ities asrico hombre whenever hecan dosowith safety . he gilds himself and his house. inasia ,especially in india ,where ,unlike under the capitalist system ,the hoarding ofwealth appears not asasubordinate func- tion ofthe system ofproduction ,but asanend initself , gold and silver commodities are practically but aesthetic forms ofhoards .inmediaeval england gold and silver commodities were considered before the law asmere forms oftreasure ,since their value was but slightly in- towhat extent the inner man ofthe commodity owner re- mains unchanged ,even when hehas become civilized and has developed into acapitalist ,isshown bythe example ofalon- don representative ofacosmopolitan banking house who adopted asafitting coat ofarms forhisfamily a100,000 bank note , which hehad hung upinaglass frame .the point here isin the mocking contempt ofthe note forcirculation .",
        "- - 181 creased bythe crude labor spent upon them .they were destined tore-enter circulation and their fineness was therefore prescribed inthe same manner asthat of coin .the increasing use ofgold and silver asobjects ofluxury with the growth ofwealth issuch asimple matter that itwas perfectly clear tothe ancients ,'while modern economists have advanced the erroneous prp- osition that the use ofsilver and gold articles increases not inproportion tothe growth ofwealth ,but inpro- portion tothe fall invalue ofthe precious metals .their otherwise accurate references tothe use ofcalifornian and australian gold are inconclusive ,since the increased consumption ofgold asaraw material does not find justification ,according totheir theory ,inany corre- sponding decline initsvalue .from 1810 to1830 ,in consequence ofthe struggle ofthe american colonies against spain and the interruption ofmining caused by revolutions ,the annual average production ofprecious metals declined by more than one-half .the decline ofcoin incirculation ineurope amounted tonearly one- sixth ,comparing the years 1829 and 1809. although the quantity produced had thus declined and the cost ofproduction ,ifithad changed atall,had increased , yet the consumption ofprecious metals asobjects of luxury increased toanextraordinary extent inengland during the very war and on the continent after the peace ofparis .the consumption increased with the general growth ofwealth . itmay bestated asagen- eral law that the conversion ofgold and silver money see the passage from xenophon ,quoted below . 'jacob ,l.c.,v.2,ch.25and 26.",
        "- 182 into articles ofluxury prevails intimes ofpeace ,while their reconversion into bullion oreven coin takes place instormy periods . how considerable the proportion isofthe gold and silver treasure inthe form ofarticles ofluxury tothe quantity ofprecious metals serving as money may beseen from the fact that in1829 the pro- portion inengland ,according tojacob ,was two toone, and inentire europe and america the precious metals inthe form ofarticles ofluxury exceeded those inthe form ofmoney byone-fourth . we have seen that the circulation ofmoney isbut the manifestation ofthe metamorphoses ofcommodities , orofthe form under which the social interchange of matter takes place .with the change inthe total price ofcommodities incirculation orinthe volume oftheir simultaneous metamorphoses ,the rapidity oftheir change ofform ineach case being given ,the total quantity of gold incirculation must always expand orcontract . that ispossible only under the condition that the total quantity ofmoney inthe country continually bear avary- ing ratio tothe quantity ofmoney incirculation .this condition ismet bythe process ofhoarding .with a fall inprices orrise inthe rapidity ofcirculation ,the hoard -reservoirs absorb that part ofmoney which is thrown out ofcirculation ;with arise inprice orade- \"intimes ofgreat agitation and insecurity ,especially dur ing internal commotions orinvasions ,gold and silver articles are rapidly converted into money ;whilst during periods of tranquility and prosperity ,money isconverted into plate an:l jewelry .\"(l.c.,v.2,p.357. )",
        "183 - cline inthe rapidity ofcirculation ,the hoards open up and return apart oftheir contents tothe stream of circulation . the solidification ofcirculating money into hoards and the outpouring ofhoards into circula- tion isaconstantly oscillating movement inwhich the prevalence ofthe one orthe other tendency isdeter- mined exclusively byfluctuations inthe circulation of commodities .hoards thus serve asconduits for the supply and withdrawal ofmoney toorfrom circulation , sothat every time only that quantity ofmoney circu- lates ascoin which isrequired bythe immediate needs ofcirculation .ifthe volume ofthe entire circula- tion suddenly expands and the fluent unity ofsale and purchase assumes such dimensions that the total sum of prices tobe realized increases more rapidly than the rapidity ofthe circulation ofmoney ,the hoards decrease perceptibly ;but when the combined movement slackens toanunusual extent ,orthe movement ofbuying and selling steadies itself ,the medium ofcirculation solidi- fies into money inlarge measure ,and the treasure reser- voirs fill up far above their average level .incountries with an exclusively metallic circulation orwhere pro- duction isatalow stage ofdevelopment ,the hoards are endlessly split upand scattered allover the land ,while incountries where the capitalist system isdeveloped they are concentrated inbank reservoirs .hoards are not to be confounded with coin reservoirs ,which form aconstituent part of the total supply of money in circulation ,while the interaction between hoards and currency implies the decline orrise ofits total supply .gold and silver commodities form ,aswe",
        "- - 184 have seen ,both conduits for the withdrawal ofprecious metals ,aswell assources oftheir supply .inordinary times only their former function isofimportance to the economy ofmetallic circulation .' inthe following passage xenophon develops money inits specific forms ofmoney and hoard :\"       ...   ,   ,     ....     , -            ,          , -   .            ,                    .\"(xen.devectigalibus ,c.iv.) (\"ofalloperations with which iam acquainted ,this isthe only one inwhich nosort ofjealousy isfelt atafurther devel- opment ofthe industry .. the larger thequantity ofore discovered and the greater the amount ofsilver extracted ,the greater the number ofpersons ready toengage inthe opera- tion .noone when hehas got sufficient furniture for his house dreams ofmaking further purchases onthis head , but ofsilver noone ever yet possessed somuch that hewas forced tocry \"enough .\"on the contrary ,ifever anybody does become possessed ofanimmoderate amount hefinds as much pleasure indigging ahole inthe ground and hoarding it asanactual employment ofit .. when astate ispros- perous there isnothing which people somuch desire assilver . the men want money toexpend onbeautiful armor and fine horses ,and houses and sumptuous paraphernalia ofallsorts . the women betake themselves toexpensive apparel and orna- ments ofgold .orwhen states aresick,either through barren- ness ofcorn and other fruits ,orthrough war,the demand for current coin iseven more imperative (whilst the ground lies unproductive ),topay fornecessaries ormilitary aid.\"(transl . byh.g.dakyns ,london ,1892 ,v.2,revenues ,p.335-336 .) aristotle develops inbook i.,ch.9ofhis politics the two opposite movements ofcirculation ,c-m-cand m-c-m,calling them \"economics \"and \"chrematistics \"respectively .the two forms are represented bythe greek tragedian euripides as sikn (right )and keodos (profit ).:",
        "- 185 b.means ofpayment . the two forms which have sofar distinguished money from the circulating medium are those ofsuspended coin and ofthe hoard .the temporary transformation ofcoin into money in the case ofthe former means that the second phase of c-m-c,namely purchase m-c,must break up within acertain sphere of circulation into aseries ofsuccessive purchases .as tohoarding ,itissimply based onthe isolation ofthe act c-mwhen itdoes not immediately pass into m-c, orisbut anindependent development ofthe first meta- morphosis ofacommodity ;itrepresents money asthe result ofthe alienation ofall commodities incontra- distinction tothe medium ofcirculation asthe embodi- ment ofcommodities intheir always alienable form . coin reserves and hoards are money only asnon -circulat- ing mediums and are non -circulating mediums only be- cause they donot circulate .inthe capacity inwhich we consider money now ,itcirculates orenters circula- tion ,but does not perform the function ofacirculating medium .asamedium ofcirculation money isalways ameans ofpurchase ,now itdoes not actinthat capacity .- as soon asmoney develops through the process of hoarding into the embodiment ofabstract social wealth and the tangible representative ofmaterial wealth ,it assumes inthat capacity special functions within the process ofcirculation .ifmoney circulates merely asa medium ofcirculation and therefore as ameans of purchase ,itisunderstood that commodity and money confront each other atthe same time ,i.e.,that the same",
        "186 value ispresent inadouble form :atone pole ,asa commodity inthe hands ofthe seller ;atthe other pole asmoney inthe hands ofthe buyer .this sim- ultaneous existence ofthe two equivalents atopposite poles and their simultaneous change ofplaces ormu- tual alienation presupposes initsturn that seller and buyer enter into relations asowners of equivalents that are on hand .but inthe course oftime ,the process ofthe metamorphosis ofcommodities which produces the different forms of money ,transforms also the owners ofcommodities orchanges the char- acter inwhich they appear before each other inthe community .inthe process ofmetamorphosis ofthe commodity the guardian ofthe latter changes his skin. asoften asthe commodity changes place orasthe money assumes new forms .thus ,the owners of commodities originally confronted each other only as commodity owners ,but later on they became one a buyer ,the other aseller ;then each became alternately buyer and seller ,then hoarders ,and finally rich men . in that manner ,the owners of commodities do not come out ofthe process ofcirculation the same men that they entered .infact the different forms which money assumes inthe process ofcirculation are but crystallized changes of form of the commodities themselves ,which intheir turn are but concrete ex- pressions ofthe changing social relations inwhich commodity owners carry onthe interchange ofmatter with one another .new trade relations spring upin the process ofcirculation ,and ,asrepresentatives of these changed relations ,commodity owners assume new economic roles .just asgold becomes idealized",
        "187 within the process ofcirculation and plain paper ,in itscapacity ofarepresentative ofgold ,performs the function ofmoney ,sodoes the same process ofcir- culation lend the weight of actual seller and buyer tothe buyer and seller who enter itmerely asrepre- sentatives of future money and future commodities . all the forms inwhich gold develops into money , are but the unfolding of potentialities which the metamorphosis of commodities bears within itself . these forms did not become distinctly differentiated inthe process of simple money circulation where money appears ascoin and the movement c-m-c forms adynamic unity ;atmost ,they appeared as mere potentialities as,e.g.,inthe case ofthe break inthe metamorphosis of acommodity .we have seen that inthe process c-mthe relations between the commodity and money were those ofan actual use-value and ideal exchange -value toan actual ex- change value and only ideal use-value .by alienating his commodity asause-value the seller realized its own exchange value and the use-value ofmoney .on the contrary ,the buyer ,by alienating his money as exchange value ,realized its own use-value and the price of the commodity .commodity and money changed places accordingly .when itcomes toareal- ization inactual life ofthis bi-polar contrast ,anew break occurs .the seller actually alienates his com- modity ,but realizes itsprice only inidea :hehas sold his commodity atits price ,which istobe realized , however ,only subsequently ,atatime agreed upon . the purchaser buys asthe representative of future money ,while the vender sells asthe owner ofpresent",
        "188 - goods .on the part ofthe vender ,the commodity asuse-value isactually alienated ,without the price being actually realized ;onthe part ofthe purchaser , money isactually realized inthe use-value ofthe commodity ,without being actually alienated asex- change value .instead of atoken of value repre- senting money symbolically aswas the case before , the purchaser himself performs that part now .and just asinthe former case the symbolic nature ofthe token ofvalue called forth the guarantee ofthe state which has made itlegal tender ,sodoes the personal symbolism ofthe buyer bring about legally enforcible private contracts among commodity owners . the contrary may happen inthe process m-c, where the money can bealienated asareal means of purchase ,and inthat way the price ofthe commodity can berealized before the use-value ofthe money is realized and the commodity actually delivered .this occurs constantly under the everyday form ofpre- payments .and itisunder this form that the english government purchases opium from the ryots ofindia , or,foreign merchants residing inrussia mostly buy agricultural products .in these cases ,however ,the money always acts initswell known role ofameans ofpurchase and therefore ,does not assume any new forms .'we need not dwell ,therefore ,on this case any longer ;but with reference tothe changed form which the two processes m-cand c-m assume 'ofcourse ,capital also isadvanced inthe shape ofmoney , and the money thus advanced may beadvanced capital ,but this point ofview does not fall within the horizon ofsimple circulation .",
        "189 now ,we may note that the difference between pur- chase and sale which appeared but imaginary inthe direct process ofcirculation ,now becomes areal dif- ference ,since inthe former case only the money is present and inthe latter only the commodity ,and in either case only that extreme ispresent from which the initiative comes .besides ,the two forms have this incommon :that ineither ,one ofthe equivalents ispresent only inthe common will ofthe buyer and seller ,awill that isbinding on both and assumes definite legal forms . seller and buyer become creditor and debtor . while the commodity owner looked comical asthe guardian ofatreasure ,he now becomes awe -inspir- ing,since henolonger identifies himself but his neigh- bor with acertain sum ofmoney and makes him and not himself amartyr ofexchange value .from abe- liever he becomes acreditor ,for religion he substi- tutes law . \"istay here onmy bond !\" thus ,inthe modified form c-min which the commodity ispresent and money isonly represented , money plays first of all the part of ameasure of value .the exchange value ofthe commodity isesti- mated inmoney as its measure ;but as exchange value ,established by contract ,price exists not only inthe mind ofthe seller ,but also asameasure of obligation onthe part ofthe buyer .besides serving asameasure ofvalue ,money plays here the part of ameans ofpurchase ,although inthat capacity itonly casts ahead the shadow ofits future existence .it attracts the commodity from its position inthe hand",
        "190 ofthe seller into that ofthe buyer .as soon asthe term ofthe contract expires ,money enters circula- tion ,since itchanges itsposition bypassing from the hands ofthe former buyer into those ofthe former seller .but itdoes not enter circulation asacircu- lating medium orasameans ofpurchase .itper- formed those functions before itwas present and itappears after ithas ceased toperform them .it now enters circulation asthe only adequate equivalent ofthe commodity ,asthe absolute form ofexistence ofexchange value ,asthe last word ofthe process of exchange ,inshort asmoney ,and money initsdistinct role of auniversal means ofpayment .inthis ca- pacity ofameans ofpayment money appears asthe absolute commodity ,but within the sphere ofcircu- lation and not without itaswas the case with hoards . the difference between the means ofpurchase and the means ofpayment makes itself unpleasantly felt in periods ofcommercial crises .' originally ,the conversion of the product into money inthe sphere of circulation appears only as an individual necessity for the commodity owner in sofar ashis own product has no use-value tohim , but has toacquire itfirst bybeing alienated .but in order to pay atthe expiration ofthe contract ,he must have sold commodities before that .thus ,en- tirely apart from his individual wants ,the movement ofthe circulation process makes selling asocial neces- sity with every owner ofcommodities .as aformer \"the difference between the means ofpurchase and the means ofpayment isemphasized byluther .",
        "191 buyer ofacommodity he iscompelled tobecome a seller of another commodity inorder toget money not asameans ofpurchase but asameans ofpay- ment ,asthe absolute form ofexchange value .the conversion ofcommodity into money asafinal act, orthe first metamorphosis ofacommodity asanend initself which inthe case ofhoarding seemed tobe amatter ofcaprice on the part ofthe commodity owner ,becomes now aneconomic function .the mo- tive and essence ofsale for the sake ofpayment be- comes from amere form ofthe process ofcirculation its self emanating substance . inthis form of sale the commodity completes its change ofposition ;itcirculates while itpostpones its first metamorphosis ,viz.its transformation into money .on the contrary ,onthe part ofthe buyer the second metamorphosis iscompleted ,i.e.money isreconverted into acommodity before the first meta- morphosis has taken place ,i.e.,before the com- modity has been turned into money .the first meta- morphosis thus takes place after the second inpoint oftime ;and thereby ,money i.e.the form ofthe com- modity in its first metamorphosis ,acquires anew destination .money orthe spontaneous development of exchange value ,isnolonger amere intermediary form ofthe circulation ofcommodities ,but itsfinal result . that such time sales inwhich the two poles ofthe sale are separated inpoint oftime ,have their natural origin inthe simple circulation ofcommodities ,re- quires no elaborate proof .inthe first place ,the de- velopment ofcirculation leads toacontinual repeti-",
        "192 tion ofthe mutual transactions between the same commodity owners who confront each other asseller and buyer .the repetition isnot accidental ;onthe contrary ,goods are ordered ,let ussay,for acertain date inthe future when they are tobedelivered and paid for.in that case the sale isideal ,i.e.itis legally accomplished without the actual presence of the goods and money .both forms ofmoney ,those ofamedium ofcirculation and ofameans ofpay- ment still coincide here ,since inthe first place ,com- modity and money change places simultaneously ,and secondly ,the money does not buy the commodity ,but realizes the price ofthe commodity purchased be- fore .inthe second place ,the nature ofagreat many use-values makes the simultaneous alienation and de- livery ofthe goods impossible ,and delivery has to bepostponed for acertain time ;e.g.,when the use of ahouse issold for one month ,the use-value of the house isdelivered only atthe expiration ofthe month ,although itchanges hands atthe beginning of the month .since the actual transfer of the use- value and itsvirtual alienation are separated here in point oftime ,the realization ofitsprice occurs also atfer its change ofplace .finally ,the difference in the seasons and inthe length oftime required for the production of various commodities brings about a situation where one tries tosell his goods ,while the other isnot ready tobuy ;and with the repeated pur- chases and sales between the same commodity owners the two ends ofsale fall apart according tothe con- ditions ofproduction ofthe respective commodities . thus arises arelation ofcreditor and debtor between",
        "193 the owners ofcommodities which ,though constituting the natural foundation ofthe credit system ,may be fully developed before the latter comes into existence . itisclear that with the extension ofthe credit system , and ,consequently ,with the development of the capitalist system ofproduction ingeneral ,the func- tion ofmoney asameans ofpayment will extend at the expense ofits function asameans ofpurchase and ,still more ,asan element ofhoarding .ineng- land ,e.g.,money ascoin has been almost completely banished into the sphere ofretail and petty trade be- tween producers and consumers ,while itdominates the sphere of large commercial transactions as a means ofpayment .\" as the universal means ofpayment money becomes the universal commodity ofallcontracts ,atfirst only in 'mr. macleod ,inspite ofhisdoctrinaire conceit about defi- nitions ,fails soutterly tograsp the most elementary econom- icrelations that hetries todeduce the very origin ofmoney from itscrowning form ,viz.,that ofameans ofpayment .he says among other things that since people donot always need each other's services atthe same time ,and not tothe same extent ,\"there would remain over acertain difference or amount ofservice due from the first tothe second -debt .\" the owner ofthis debt needs the services ofathird person , who does not directly need those ofthe second ,and \"transfers tothe third the debt dut tohim from the first .evidence of debts changes sohands -currency . when aperson received anobligation expressed bymetallic currency ,heis able tocommand the services not only ofthe original debtor , but ofthe whole ofthe industrious community .\"(macleod , \"theory and practice ofbanking ,\"etc.,london ,1855 ,v.i., ch.i.).",
        "194 the sphere ofcirculation ofcommodities . but with the development ofthis function ofmoney ,allother forms ofpayment are gradually converted into money pay- ments .the extent towhich money isdeveloped asthe exclusive means of payment indicates the degree to, which exchange value has taken hold ofproduction in itsdepth and breadth.2 the volume ofmoney incirculation ,asameans of payment ,isdetermined inthe first place ,bythe amount ofpayments ,i.e.bythe sum total ofthe prices ofthe commodities alienated ,but not about tobealienated ,as 'bailey ,1.c.,p.3. \"money isthe general commodity of contracts ,orthat inwhich the majority ofhargains about property ,tobecompleted atafuture time ,are made .\" says senior (inhis lectures ,published bycomte arriva- bene ,1.c.,p.117):\"since the value ofeverything changes within acertain period oftime ,people select asameans ofpay ment anarticle whose value changes least and which retains longest agiven average ability tobuy things .thus ,money be comes theexpression orrepresentative ofvalues .\"onthe con- trary :just because gold ,silver ,etc.,have become money ,i.e., the embodiment ofindependently existing exchange value ,they become the universal means ofpayment .when the considera- tion astothe stability ofthevalue ofmoney mentioned bymr. senior comes into play ,i.e.,inperiods when money asserts it- self asthe universal means ofpayment through the force of circumstances ,then isjust the time when fluctuations inthe value ofmoney arediscovered .such was thetime ofelizabeth inengland ,when lord burleigh and sir thomas smith ,in view ofthe manifest depreciation ofthe precious metals ,put through anactofparliament which obliged the universities of oxford and cambridge tostipulate thepayment ofone-third of their ground rents inwheat and malt ,",
        "195 inthe case ofthe simple circulation ofmoney .the quantity thus determined issubject ,however ,totwo modifications .the first modification isdue tothe rapidity with which the same piece ofmoney repeats the same function ,i.e.with which the several pay- ments succeed one another .apays b,whereupon b pays c,and soforth .the rapidity with which the same coin repeats itsfunction asameans ofpayment , depends first ,upon the continuity ofthe relation of creditor and debtor among the owners ofcommodi- ties ,the same commodity owner being the creditor ofone person and the debtor of another ,etc.,and secondly ,upon the interval which separates the times ofvarious payments .this chain ofpayments orof supplementary first metamorphoses ofcommodities is qualitatively different from the chain of metamor- phoses which isformed bythe circulation ofmoney asacirculating medium .the latter not only makes itsappearance gradually ,but iseven formed inthat manner .acommodity isfirst converted into money , then again into acommodity ,thereby enabling another commodity tobecome money ,etc.;or,seller becomes buyer ,whereby another commodity owner turns seller .this successive connection isaccident- ally formed inthe very process ofthe exchange of commodities .but when the money which ahas paid tobispassed on from btoc,from ctod,etc., and that ,too,atintervals rapidly succeeding one another ,then this external connection reveals but an already existing social connection .the same money passes through different hands not because itappears asameans ofpayment ;itpasses asameans ofpay-",
        "- 196 ment because the different hands have already clasped each other .the rapidity with which money circulates asameans ofpayment thus shows that in- dividuals have been drawn into the process ofcircu- lation much deeper than would be indicated by the same rapidity ofthe circulation ofmoney ascoin or asameans ofpurchase . the sum total ofprices made up by allthe pur- chases and sales taking place atthe same time ,and , therefore ,side by side ,constitutes the limit for the substitution ofthe volume ofcoin bythe rapidity of its circulation .ifthe payments that are tobemade simultaneously are concentrated atone place -which naturally arises atfirst atpoints where the circulation ofcommodities islargest -the payments balance each other asnegative and positive quantities :aisunder obligations topay b,while he has tobe paid by c, etc. the quantity ofmoney required asameans of payment will ,therefore ,be determined not by the total amount ofpayments which have tobemade sim- ultaneously ,but bythe greater orless concentration ofthe same and bythe magnitude ofthe balance re- maining after their mutual neutralization asnegative and positive quantities . special arrangements are made for settlements ofthis kind even where the credit system isnot developed atall,aswas the case e.g.inancient rome .the consideration ofthese arrangements ,however ,aswell asthat ofthe general time limits ofpayment ,which are everywhere estab- lished among certain elements inthe community ,does not belong here .we may add that the specific in- fluence which these time settlements exert on the",
        "197 1periodic fluctuations inthe quantity ofmoney incir- culation ,has been scientifically investigated but lately . insofar asthe payments mutually balance asposi- tive and negative quantities ,no money actually ap- pears on the scene .itfigures here only inits ca- pacity ofameasure ofvalue :first ,inthe prices of commodities ,and second ,inthe magnitude ofmutual obligations .aside from its ideal form ,exchange value does not exist here independently ,not even in the form ofatoken ofvalue ;that istosay,money plays here only the part ofideal money ofaccount . the function ofmoney asameans ofpayment thus implies acontradiction .on the one hand ,insofar aspayments balance ,itserves only ideally asameas- ure ofvalue .on the other hand ,insofar asapay- ment has actually tobemade ,money enters circula- tion not asatransient circulating medium ,but asthe final resting form ofthe universal equivalent ,asthe absolute commodity ,inaword ,asmoney .there- fore ,whenever such athing asachain ofpayments and anartificial system ofsettling them ,isdeveloped , money suddenly changes itsvisionary nebulous shape asameasure of value ,turning into hard cash or means ofpayment ,assoon assome shock causes a violent interruption ofthe flow ofpayments and dis- turbs the mechanism oftheir settlement .thus ,under conditions of fully developed capitalist production , where the commodity owner has long become acapit- alist ,knows his adam smith ,and condescendingly laughs atthe superstition that gold and silver alone constitute money orthat money differs atall from other commodities asthe absolute commodity ,money!",
        "198 suddenly reappears not asamedium ofcirculation , but asthe only adequate form ofexchange value ,as the only form ofwealth ,exactly asitislooked upon bythe hoarder .initscapacity ofsuch an exclusive form of wealth ,itreveals itself ,unlike under the monetary system ,not inmere imaginary ,but inactual depreciation and worthlessness ofallmaterial wealth . that iswhat constitutes the particular phase ofcrises ofthe world market which isknown asamoney crisis . the summum bonum for which everybody iscrying atsuch times asfor the only form ofwealth ,iscash , hard cash ;and bythe side ofitallother commodities just because they are use-values ,appear useless like somany trifles and toys ,or,asour dr. martin luther says ,asmere objects ofornament and gluttony .this sudden reversion from asystem ofcredit toasystem ofhard cash heaps theoretical fright ontop ofthe practical panic ;and the dealers bywhose agency cir- culation isaffected shudder before the impenetrable mystery inwhich their own economical relations are involved .' payments ,intheir turn ,require the formation of 'boisguillebert ,who would stem the development ofbour- geois relations ofproduction and violently attacks the bour- geois personally ,has asoft heart forthose forms ofmoney in which itappears only ideally ortransiently .thus hespeaks first ofthe medium ofcirculation and next ofthe means of payment .what hedoes not see isthe direct transition of money from itsideal tothe material form ,since the hard cash islatently present inthe ideal measure ofvalue .that money isbut another form ofcommodities ,hesays ,isshown bywholesale trade ,inwhich exchange takes place without the intervention ofmoney ,after \"lesmarchandises sont ap- precis .\"(\"ledetail delafrance ,\"1,c.p.210.)",
        "- 199 reserve funds ,the accumulation ofmoney asameans ofpayment .the building up ofreserve funds ap- pears no longer asapractice carried on outside of the sphere ofcirculation ,asinthe case ofhoarding ; nor asamere technical accumulation ofcoin ,asin the case of coin reserves ;on the contrary ,money must now be gradually accumulated tobe available on certain future dates when payments become due . while hoarding ,inits abstract form asameans of enrichment ,declines with the development of the capitalist system ofproduction ,that species ofhoard- ing which isdirectly called for bythe process ofpro- duction ,increases ;or,toput itdifferently ,apart of the treasure which isgenerally formed inthe sphere of circulation of commodities ,isabsorbed as are- serve fund of means of payment .the more de- veloped the capitalist system ofproduction ,the more these reserve funds are limited tothe necessary mini- mum .locke ,inhis work \"on the lowering ofin- terest \"furnishes interesting data with reference to the size ofthese reserve funds inhis time .they show what aconsiderable part ofthe total money in circulation the reservoirs for means ofpayment ab- sorbed inengland just atthe time when banking be- gan todevelop . the law astoquantity ofmoney incirculation ,as ithas been formulated inthe analysis ofthe simple circulation ofmoney ,receives an essential modifica- tion when the circulation ofthe means ofpayment is taken into account .the rapidity ofthe circulation of money whether ascirculating medium orasmeans of 'locke ,1.c.,p.17,18.",
        "200 - payment -being given ,the total amount ofmoney in circulation atagiven time will bedetermined bythe sum total ofthe prices ofcommodities toberealized , plus the total amount ofpayments falling due atthe same time ,minus the amount ofpayments balancing each other .the general law that the volume of money incirculation depends on the prices ofcom- modities isnot affected bythis inthe least ,since the extent ofthe payments isitself determined by the prices stipulated in contracts .what is,however , strikingly demonstrated ,isthat even ifthe rapidity of circulation and the economy ofpayments beassumed toremain the same ,the sum total ofthe prices of the commodities circulating inagiven period oftime , say one day ,and the volume ofmoney incirculation onthe same day are bynomeans equal ,because there isalarge number ofcommodities incirculation whose prices have yet tobe realized inmoney atafuture date ,and there isaquantity ofmoney incirculation which constitutes the payment for commodities which have long gone out ofcirculation .the latter amount will depend on the sum ofpayments falling due on the same day although contracted for atentirely dif- ferent periods . we have seen that achange inthe values ofgold and silver does not affect their function asmeasures ofvalue ormoney ofaccount .but this change isof decisive importance for money asahoard ,since with the rise orfall ofvalue ofgold and silver ,the total value ofagold orsilver hoard will also rise orfall. of still greater importance isthe effect ofthis change onmoney asameans ofpayment .the payment takes",
        "201 place after the sale ofthe commodity ,orthe money serves intwo different capacities attwo different pe- riods ;first ,asameasure ofvalue ,then asameans ofpayment corresponding tothe measurement .if, during this interval ,the value ofthe precious metals orthe labor -time necessary for their production un- dergoes achange ,the same quantity ofgold orsilver will beworth more orless when itappears asameans ofpayment than what itwas when itserved asa measure ofvalue ,i.e.,when the contract was con- cluded .the function of aparticular commodity , like gold orsilver ,toserve asmoney orindependent exchange value comes here inconflict with the nature of the particular commodity whose magnitude of value depends on changes inthe cost ofits produc- tion .the great social revolution which caused the fall invalue ofthe precious metals ineurope ,isas well known asthe revolution ofanopposite character which had been brought about atan early period in the history ofthe ancient roman republic bythe rise invalue ofcopper interms ofwhich the debts ofthe plebeians had been contracted .without attempting here tofollow any further the fluctuations ofvalue ofthe precious metals and their effect onthe system ofbourgeois political economy ,itisatonce apparent that afall inthe value ofthe precious metals favors the debtors atthe expense ofthe creditors ,while a rise intheir value favors the creditors atthe expense ofthe debtors . c. world money . gold becomes money asdistinguished from coin only after itiswithdrawn from circulation inthe shape of",
        "202 - ahoard ;itthen enters circulation asanon -medium of circulation ,and finally breaks through the barriers of home circulation toassume the part ofauniversal equiv- alent inthe world ofcommodities .itbecomes world money . while the general measures ofweight ofthe precious metals served astheir original measures ofvalue ,the re- verse process takes place now inthe world market ,and the reckoning names ofmoney are turned back into cor- responding weight names .in the same way ,while shapeless crude metal (aes rude )was the original form ofthe medium ofcirculation and the coin form constituted but the official stamp certifying that agiven piece ofmetal was ofacertain weight ,now the precious metal initscapacity ofaworld coin throws offitsstamp and shape and reassumes the indistinguishable bullion form ;and even ifnational coins ,such asrussian im- perials ,mexican dollars ,and english sovereigns ,docir- culate abroad ,their name isofnoimportance ,and only their contents count .finally ,asinternational money , the precious metals come again toperform their original function ofmediums ofexchange ,which ,like the ex- change of commodities ,arose first not within the various primitive communities ,but attheir points of contact with one another .asworld money ,money thus reassumes its primitive form .on leaving the sphere ofhome circulation ,itstrips off the particular forms which ithas acquired inthe course ofthe development of the process ofexchange within that particular national sphere ,those local garbs ofstandard ofprice ,ofcoin , ofauxiliary coin ,and oftoken ofvalue .",
        "203 we have seen that inthe home circulation ofacoun- try,only one commodity serves asameasure ofvalue . since ,however ,that function isperformed bygold in some countries and bysilver inothers ,there isadouble standard ofvalue inthe world market and money as- sumes two forms inallitsother functions .the transla- tion ofthe values ofcommodities from gold prices into silver prices and vice versa depends ineach case upon the relative value ofthe two metals ,which isconstantly changing and ,therefore ,appears tobeconstantly inthe process ofdetermination .commodity owners inevery national sphere ofcirculation have touse gold and silver alternately for foreign circulation and thus toexchange the metal which isaccepted asmoney athome for the metal which they happen to need asmoney abroad . every nation is,therefore ,utilizing both metals ,gold and silver ,asworld money . inthe international circulation ofcommodities ,gold and silver appear not asmediums ofcirculation ,but as universal mediums ofexchange .the universal medium ofexchange performs its function only under its two developed forms ofameans ofpurchase and ofameans ofpayment ,whose mutual relation inthe world market isthe very reverse ofwhat itisathome .inthe sphere ofhome circulation ,money inthe form ofcoin ,played exclusively the part ofameans ofpurchase ,either asthe intermediary inthe dynamic unity c-m-corasthe representative ofthe transient form ofexchange value in the unceasing change ofpositions bycommodities .in the world market itisjust the contrary .gold and sil- ver appear here asameans ofpurchase when the ex-",
        "204 - change ofmatter isbut one-sided ,and purchase and sale do not coincide .the frontier trade atkiachta e.g.isboth actually and according totreaty ,one of barter ,inwhich silver plays only the part ofameasure ofvalue .the war of1857-58 compelled the chinese to sell without buying .silver suddenly appeared now as ameans ofpurchase .out ofregard tothe letter of the treaty ,the russians made upthe french five frank coins into crude silver commodities ,which were made to serve asameans ofexchange .silver has always served asameans ofpurchase between europe and america onone side and asia onthe other ,where itsettles down in the form of hoards .furthermore ,the precious metals serve asinternational means ofpurchase when- ever the ordinary balance ofexchange ofmatter between two nations issuddenly upset ,ase.g.when afailure ofcrops forces one ofthem tobuy onanextraordinary scale .finally ,the precious metals are international means ofpurchase inthe hands ofgold and silver pro- ducing countries ,inwhich case they directly constitute aproduct and commodity and not merely aconverted form ofacommodity .the more the exchange ofcom- modities between different national spheres ofcircula- tion isdeveloped ,the more important becomes the func- tion ofworld money toserve asameans ofpayment for the settlement ofinternational balances . like home circulation ,international circulation re- quires aconstantly changing quantity ofgold and silver . apart ofthe accumulated hoards serves therefore ,in each country asareserve fund ofworld money ,which now declines ,now rises ,according tothe fluctuations of",
        "205 the exchange ofcommodities. besides the special move- ments which take place between national spheres of circulation ,world -money possesses auniversal move- ment ,whose starting points are atthe sources ofproduc- tion from which gold and silver streams spread out in different directions all over the world market .here gold and silver enter the world circulation ascommodi- ties and are exchanged for commodity equivalents in proportion tothe labor -time contained inthem ,before they penetrate national spheres ofcirculation .inthe latter ,they appear now with agiven magnitude ofvalue . every fall orrise inthe cost oftheir production equally affects ,therefore ,their relative value throughout the world market ;on the other hand ,that value isen- tirely independent ofthe extent towhich the different national spheres ofcirculation absorb gold orsilver .the part ofthe metal stream which iscaught upbyevery separate sphere inthe world ofcommodities ,partly enters directly the home circulation ofmoney tomake upfor worn out coin ;partly isdammed upinthe differ- ent reservoirs containing hoards ofcoin ,means ofpay- ment and world -money ;partly isturned into articles of \"ildanaro ammassato supplisce aquella somma ,che per essere attualmente incircolazione ,per l'eventuale promiscuit de'commerci siallontana esorte della sfera della circolazione medesima .\" (\"the accumulated money supplements that amount which ,inorder tobeactually incirculation and to meet all possible perturbations oftrade ,retires from that sphere ofcirculation .\"(g.r.carli ,note toberri's \"medi- tazioni sulla economia politica ,\"p.196,t.xv.ofcustodi's 1.c.)",
        "206 luxury ,while the rest simply forms atreasure .at an advanced stage ofdevelopment ofthe capitalist system ofproduction the formation ofhoards isreduced tothe minimum required bythe various processes ofcircula- tion for the free play oftheir mechanism .the hoard assuch becomes idle wealth ,unless itappears asatem- porary form ofasurplus resulting from afavorable bal- ance ofpayments orasthe result ofaninterrupted ex- change ofmatter ,i.e.asthe solidification ofacom- modity initsfirst metamorphosis . gold and silver ,intheir capacity ofmoney ,being byconception universal commodities ,assume intheir capacity of world money the form adapted to a universal commodity . to the extent to which all commodities are exchanged for them ,they become the transformed impersonation of all commodities and ,therefore ,universally alienable commodities . their function of serving as the embodiment of universal labor -time isrealized more and more asthe interchange ofmatter produced by concrete labor em- braces increasing parts ofthe world .they become uni- versal equivalents tothe extent towhich the series ofpar- ticular equivalents which constitute their spheres ofex- change ,increases .since inthe sphere ofworld circula- tion commodities unfold their own exchange value ona universal scale ,they assume the form ofworld money when transformed into gold and silver .as commodity owning nations are thus turning gold into money bytheir diversified industry and universal trade ,industry and trade appear tothem only asameans ofgetting money out ofthe world market inthe shape ofgold and silver .",
        "207 - gold and silver ,asworld money ,are,therefore ,asmuch products ofthe universal circulation ofcommodities as they are means ofwidening itssphere .like chemistry which grew upbehind the backs ofthe alchemists who tried tofind away ofmaking gold ,sodothe sources ofworld industry and world trade spring upbehind the backs ofthe owners ofcommodities ,while they are hunt- ing forthe commodity initsmagic form .gold and sil- ver help tocreate the world market byanticipating its existence intheir conception ofmoney .that this magic effect ofthe precious metals isbynomeans confined to the period ofinfancy ofcapitalist society but isaneces- sary outgrowth ofthe perverse conception which the representatives ofthe commodity world have oftheir own work insociety ,isshown bythe extraordinary in- fluence exerted inthe middle ofthe nineteenth century bythe discovery ofnew gold fields . just asmoney develops into world -money ,sothe com- modity owner develops into acosmopolitan .the cos- mopolitan relation ofmen isoriginally only arelation ofcommodity owners .the commodity assuch rises above allreligious ,political ,national ,and language bar- riers .price isits universal language and money ,its common form .but with the development ofworld- money asdistinguished from national coin ,there de- velops the cosmopolitanism ofthe commodity owner as the faith ofpractical reason opposed totraditional ,re- ligious ,national and other prejudices which hinder the interchange ofmatter among mankind .asthe iden- tical gold that lands inengland inthe form ofamerican eagles ,turns there into sovereigns and three days later",
        "208 - circulates inparis inthe form ofnapoleons ,only to emerge invenice inafew weeks assomany ducats , retaining allthe while the same value ,itbecomes clear tothe commodity owner that nationality \"isbut the guinea's stamp .\" the lofty idea which heconceives of the entire world isthat ofamarket ,the world market .' 4. the precious metals . the process ofcapitalist production first ofalltakes hold ofthe metallic circulation asofaready ,trans- mitted organ which ,though undergoing agradual trans- formation ,always retains its fundamental structure . the question astowhy gold and silver and not other commodities serve asmoney material falls outside the limits ofthe capitalist system .we shall ,therefore , 'montanari ,\"della moneta ,\"1683 ,1.c.,p.40. \"ecosi fattamente diffusa per tutto ilglobo terrestre lacommunica- zione de'populi insieme ,che puo quasi dirsi esser ilmondo tutto divinuto una sola citta incuisifaperpetua fiera d'ogni mercanzia ,edove ogni uomo ditutto cio che laterra ,gli animali el'umana industria altrove producono ,puo mediante ildanaro stando insua casa provedersi egodere .maravigli- osa invenzione .\" (\"the communication of nations among themselves issowidely extended allover the globe that it may bealmost said that the entire world has become one city inwhich aperpetual fair ofmerchandise isheld and where every man may bymeans ofmoney acquire and enjoy ,while staying athome ,allthat the earth ,the animals and humen industry produce elsewhere .marvelous invention !\")",
        "209 confine ourselves tosumming up the most essential points . since universal labor -time admits ofquantitative dif- ferences only ,the object which istoserve asitsspecific incarnation must becapable ofrepresenting purely quan- titative differences ,i.e.,itmust behomogeneous and uni- form inquality throughout .that isthe first condition acommodity must satisfy toperform the function of ameasure ofvalue .if commodities were estimated in oxen ,hides ,grain ,etc.,they would really have tobeestimated inanideal average ox,oraverage hide , since there are qualitative differences betwen anoxand anox,grain and grain ,hide and hide .onthe contrary , gold and silver ,aselementary substances ,are always the same ,and equal quantities ofthem represent ,there- fore ,values ofequal magnitude .'the other condition which acommodity that istoserve asauniversal equiva- lent must satisfy and which follows directly from its function ofrepresenting purely quantitative differences , isthat itmust becapable ofbeing divided and re-united atwill ,sothat money ofaccount may berepresented 'imetalli han questo diproprio esingulare che inessi soli tutte leragioni siriducono aduna che laloro quantit ,non avendo ricevuto delle natura diversa qualit nnell'interna loro constituzione nenell'externa forma efattura .\"(galiani , 1.c.,p.130.) (\"metals have this singular property ,that everything inthem isreduced toone consideration ,viz.,that ofquantity ,since they are not endowed bynature with any differences inquality either intheir internal structure orin their external form and shape .\")",
        "210 - materially aswell .gold and silver possess these prop- erties toasuperior degree . asmediums ofcirculation ,gold and silver have this advantage over other commodities ,that their high speci- ficgravity which condenses much weight inlittle space , corresponds totheir economic specific gravity which con- denses relatively much labor -time ,i.e.agreat quantity ofexchange value in asmall volume .this insures facility oftransport ,oftransition from hand tohand and from one country toanother ,the ability toappear asrapidly astodisappear ,inshort ,that material mobil- ity which constitutes the sine qua non ofthe com- modity that istoserve asthe perpetuum mobile ofthe process ofcirculation . the high specific value ofthe precious metals ,their durability ,comparative indestructibility ,insusceptibility ofoxidation through the action ofthe air,inthe case ofgold insolubility in acids except inaqua regia ,- all these natural properties make the precious metals the natural material for hoarding .peter martyr who seems tohave been agreat lover ofchocolate ,remarks , therefore ,ofthe cacao -bags which formed aspecies ofmexican gold :\"ofelicem monetam ,quae suavem utilemque praebet humano generi potum ,etatartarea peste avaritiae suos immunes servat possessores ,quod suffodi aut diu servari nequeat .\" deorbe novo .\"o,happy coin ,which furnishes mankind with apleasant and useful beverage and keeps itspossessors immune from the hell-born pest ofavarice ,since itcan not be either buried orpreserved long .\"",
        "211 - the great importance ofmetals ingeneral inthe direct process ofproduction isdue tothe part they play asinstruments ofproduction .apart from their scarcity ,the great softness ofgold and silver ascom- pared with iron and even copper (inthe hardened state inwhich itwas used bythe ancients ),makes them unfit for that application and deprives them ,therefore ,toa great extent ,ofthat property on which the use-value ofmetals isgenerally based .useless asthey are in the direct process ofproduction ,they are easily dis- pensed with asmeans ofexistence ,asarticles ofcon- sumption .for that reason any desired quantity of them may beabsorbed bythe social process ofcirculation without disturbing the processes ofdirect production and consumption .their individual use-value does not come inconflict with their economic function .further- more ,gold and silver are not only negatively super- fluous ,i.e.dispensable articles ,but their aesthetic properties make them the natural material ofluxury , ornamentation ,splendor ,festive occasions ,in short , the positive form ofabundance and wealth . they appear ,inaway ,asspontaneous light brought out from the underground world ,since silver reflects all rays of light intheir original combination ,and gold only the color ofhighest intensity ,viz.red light .the sensation ofcolor is,generally speaking ,the most popular form ofaesthetic sense .the etymological connection between the names ofthe precious metals ,and the relations of colors ,inthe different indo -germanic languages has been established by jacob grimm (see his history of the german language ).",
        "212 - finally ,the susceptibility ofgold and silver ofbeing turned from coin into bullion ,from bullion into articles ofluxury and vice versa ,i.e.the advantage they possess asagainst other commodities innot being tied down toa definite ,exclusive form inwhich they can beused ,makes them the natural material ofmoney ,which must con- stantly change from one form toanother . nature nomore produces money than itdoes bankers ordiscount rates .but since the capitalist system of production requires the crystallization ofwealth asa fetich inthe form ofasingle article ,gold and silver appear asitsappropriate incarnation .gold and silver are not money bynature ,but money isbynature gold and silver .inthe first place ,the silver orgold money crystal isnot only the product ofthe process ofcircula- tion ,but infact itsonly final product .inthe second place ,gold and silver are ready and direct products of nature ,not distinguished by any difference ofform . the universal product ofthe social process orthe social process itself asaproduct isapeculiar natural product , ametal hidden inthe bowels ofthe earth and extracted therefrom . we have seen that gold and silver are unable tofulfill in 760 amultitude ofpoor people emigrated tothe south ofprague towash the gold sand found there ,and three men were able toextract three marks ofgold aday.asaresult ofthat the run onthe \"diggings \"and the number ofhands taken away from agriculture became sogreat that the country was visited byafamine the following year .see m.g.krner , \"abhandlung von dem alterthum des bhmischen bergwerks ,\" schneeberg ,1758 .",
        "- 213 the requirements which they are expected tomeet in their capacity ofmoney ,viz.toremain values ofunvary- ing magnitude .still ,asaristotle had already observed , they possess amore constant value than the average of other commodities .apart from the universal effect ofanappreciation ordepreciation ofthe precious metals ,the fluctuations inthe ratio between the values ofgold and silver has aspecial importance ,since both serve side byside inthe world market asmoney mate- rial .the purely economic causes ofthis change of value must betraced tothe change inthe labor -time required for the production ofthese metals ;conquests and other political upheavals which exercised agreat influence onthe value ofmetals inthe ancient world , have nowadays only alocal and transitory effect .the labor -time required for the production ofthe metals will depend onthe degree oftheir natural scarcity ,as well asonthe greater orless difficulty with which they can beobtained inapurely metallic state .asamatter offact ,gold isthe first metal discovered byman .this isdue tothe fact that nature itself furnishes itpartly in pure crystalline form ,individualized ,free from chemical combination with other substances ,or,asthe alchemists used tosay,inavirgin state ;and sofar as itdoes not appear inthat state ,nature does the technical work inthe great gold washeries of rivers .only the crudest kind oflabor isthus required of man inthe extraction ofgold ,either from rivers orfrom alluvial deposits ;while the extraction ofsilver pre- supposes the development ofmining and acomparatively high degree of technical skill generally . for that",
        "214 - reason the value ofsilver isoriginally greater than that ofgold inspite ofthe lesser absolute scarcity ofthe former .strabo's assertion that acertain arabian tribe gave ten pounds ofgold for one pound ofiron and two pounds ofgold forone pound ofsilver ,seems bynomeans incredible .but asthe productive powers oflabor in society are developed and the product of unskilled labor rises invalue ascompared with the product of skilled labor ;asthe earth's crust ismore thoroughly broken up and the original superficial sources ofgold supply give out,the value ofsilver begins tofall in proportion tothat ofgold .atagiven stage ofdevelop- ment ofengineering and ofthe means ofcommunica- tion ,the discovery ofnew gold orsilver fields become the decisive factor .in ancient asia the ratio ofgold to silver was 6to1or8to1;the latter ratio prevailed in china and japan aslate asthe beginning ofthe nine- teenth century ;10to1,the ratio inxenophon's time , may beconsidered asthe average ratio ofthe middle period ofantiquity .the exploitation ofthe spanish silver mines bycarthage and later byrome had about the same effect inantiquity ,asthe discovery ofthe american mines inmodern europe .for the period of the roman empire 15or16to1may beassumed asa rough average ,although wefrequently find cases ofstill greater depreciation ofsilver inrome .the same move- ment beginning with the relative depreciation ofgold and concluding with the fall inthe value ofsilver ,is repeated inthe following epoch which has lasted from the middle ages tothe present time .asinxenophon's times the average ratio inthe middle ages was 10to1, changing to16or15to1inconsequence ofthe discovery",
        "215 - ofthe american mines .the discovery ofthe aus- tralian ,californian and columbian gold sources makes anew fall inthe value ofgold probable .' c.1. theories of the medium of circula- tion and of money . asthe universal thirst for gold prompted nations and princes inthe sixteenth and seventeenth centuries ,the period ofinfancy ofmodern bourgeois society ,tocru- 1sofar the australian and other discoveries have not af fected theratio ofthevalues ofgold and silver .the assertions tothe contrary ofmichel chevalier are worth asmuch asthe socialism ofthis ex-st.simonist .the quotations ofsilver on the london market prove ,however ,that the average gold price ofsilver during 1850-1858 isnot quite 3per cent .higher than the price during 1830-1850 .but this rise inprice is accounted forsimply bythe asiatic demand forsilver .inthe course ofthe years 1852-1858 the price ofsilver was chang- ing incertain years and months only with achange inthis demand ,and innocase with the importation ofgold from the newly discovered sources .the following isasummary ofthe gold prices ofsilver onthe london market . price of silver per ounce . year- march . july . november . 1852 ....... 60%pence 60 pence 61%pence 1853 1854 1855 1856 1857 185861%pence 61 pence 61%pence 614 pence 60%pence 61 pence 60 pence 61 pence 614 pence 61%pence 61%pence61%pence 61%pence 60%pence 62%pence 61%pence",
        "216 sades beyond the sea insearch ofthe golden grail ,'the first interpreters ofthe modern world ,the founders of the monetary system ,ofwhich the mercantile system is but avariation ,proclaimed gold and silver ,i.e.money , asthe only thing that constitutes wealth .they were quite right when ,from the point ofview ofthe simple circulation ofcommodities ,they declared that the mis- sion ofbourgeois society was tomake money ,i.e.to build up everlasting treasures which neither moth nor rust could eat.itisno argument with the monetary system tosay that aton ofiron whose price is3con- stitutes avalue ofthe same magnitude as3worth of gold .the point here isnot the magnitude ofthe ex- change value ,but astowhat constitutes itsadequate form .ifthe monetary and mercantile systems single out international trade and the particular branches of national industry directly connected with that trade asthe only true sources ofwealth ormoney ,itmust be borne inmind ,that inthat period the greater part of national production was still carried on under forms offeudalism and was the source from which producers drew directly their means ofsubsistence .products ,as arule ,were not turned into commodities nor,therefore , into money ;they did not enter into the general social interchange ofmatter ;did not,therefore ,appear as embodiments ofuniversal abstract labor ;and did not, \"gold isawonderful thing !whoever possesses it,ismas- terofallthat hedesires .bymeans ofgold even admission to heaven may begained forsouls .\"(columbus inaletter from jamaica in1503 ).",
        "217 infact ,constitute bourgeois wealth .money asthe end and object ofcirculation isexchange value orabstract wealth ,but itisnomaterial element ofwealth and does not form the directing goal and impelling motive of production .true tothe conditions asthey prevailed inthat primitive stage ofbourgeois production ,those unrecognized prophets held fast tothe pure ,tangible , and resplendent form ofexchange value ,toitsform of auniversal commodity asagainst all special commod- ities .the proper bourgeois economic sphere ofthat period was the sphere ofthe circulation ofcommodities . hence ,they judged the entire complex process ofbour- geois production from the point ofview ofthat ele- mentary sphere and confounded money with capital . the unceasing war ofmodern economists against the monetary and mercantile system ismostly due tothe fact that this system blabs out inbrutally naive fashion , the secret ofbourgeois production ,viz.its subjection tothe domination ofexchange value .ricardo ,though wrong inthe application hemakes ofit,remarks some- where that even intimes offamine ,grain isimported not because the nation isstarving ,but because the grain dealer ismaking money .initscriticism ofthe mone- tary and mercantile system ,political economy ,by at- tacking that system asamere illusion and asafalse theory ,fails torecognize initthe barbaric form ofits own fundamental principles .furthermore ,this system has not only anhistoric justification ,but within certain spheres ofmodern economy retains until now the full rights ofcitizenship .at all stages ofthe bourgeois system ofproduction inwhich wealth assumes the ele-",
        "218 mentary form ofacommodity ,exchange value assumes the elementary form ofmoney and inallphases ofthe process ofproduction wealth reassumes for amoment the universal elementary commodity form .even at the most advanced stage of bourgeois economy ,the specific functions ofgold and silver toserve asmoney , in contradistinction totheir function ofmediums of circulation -afunction which distinguishes them from allother commodities -isnot done away with ,but only limited ,hence the monetary and mercantile system re- tains its right ofcitizenship .the catholic fact that gold and silver are contrasted with other profane com- modities asthe direct incarnation ofsocial labor ,that isasthe expression ofabstract wealth ,naturally offends the protestant point d'honneur ofbourgeois economy , and out offear ofthe prejudices ofthe monetary system ithad lost for along time itsgrasp ofthe phenomena ofmoney circulation ,aswill beshown presently . itwas quite natural that ,contrary tothe monetary and mercantile system which knew money only inits form ofacrystallized product ofcirculation ,classical political economy should have conceived money first of allinitsfluent form ofexchange value arising and dis- appearing within the process ofthe metamorphosis of commodities .and since the circulation ofcommodities isregarded exclusively inthe form ofc-m-cand the latter initsturn ,exclusively initsaspect ofadynamic unity ofsale and purchase ,money comes toberegarded initscapacity ofamedium ofcirculation asopposed to itscapacity ofmoney .and when that medium ofcir- culation isisolated inits function ofcoin .itturns ,as",
        "219 wehave seen ,into atoken ofvalue .but since classical political economy had todeal with metallic circulation asthe prevailing form ofcirculation ,itdefined metallic money ascoin ,and metallic coin asamere token of value .inacordance with the law governing the circula- tion oftokens ofvalue ,the proposition was advanced that the prices ofcommodities depend onthe quantity ofmoney incirculation instead ofthe opposite principle that the quantity ofmoney incirculation depends on the prices ofcommodities .we find this view more or less clearly expressed bythe italian economists ofthe seventeenth century ;locke now asserts ,now denies that principle ;itisclearly elaborated inthe \"spectator \" (of october 19,1711 )by montesquieu and hume .since hume was by far the most important representative ofthis theory inthe eighteenth century , weshall commence our review with him . under certain assumptions ,an increase ordecrease inthe quantity either ofthe metallic money incircula- tion ,orofthe tokens ofvalue incirculation seems to affect uniformly the prices ofcommodities .with each fall orrise ofthe value ofgold orsilver inwhich the exchange values ofcommodities are estimated asprices , there isarise orfall ofprices ,because ofthe change in their measure ofvalue ;asaresult ofthe rise orfall of prices ,agreater orsmaller quantity ofgold and silver iscirculating ascoin .but the apparent phenomenon isthe fall inprices -the exchange value ofcommodities remaining the same -accompanied by an increased or diminished quantity ofthe medium ofcirculation .on the other hand ,ifthe quantity oftokens ofvalue rises",
        "220 above orfalls below its required level ,itisforcibly reduced tothe latter by afall orrise ofprices .in either case the same effect seems tobebrought about bythe same cause ,and hume holds fast tothis sem- blance . every scientific inquiry into the relation between the volume ofthe circulating medium and the movement ofprices must assume the value ofthe money material as given .hume ,on the contrary ,considers exclusively periods ofrevolution inthe value ofthe precious metals , i.e.revolutions inthe measure ofvalue .the rise of prices which occurred simultaneously with the increase ofmetallic money after the discovery ofthe american mines forms the historical background ofhis theory , while his polemic against the monetary and mercantile system furnishes itspractical motive .the importation ofprecious metals can naturally increase while their cost ofproduction remains the same .on the other hand ,a decrease intheir value ,i.e.inthe labor -time required for their production will reveal itself first ofall in their increased imports .hence ,said the later followers ofhume ,adecrease inthe value ofthe precious metals , reveals itself inanincreased volume ofthe circulating medium ,and the increased volume ofthe latter isshown inthe rise ofprices .asamatter offact ,however ,the rise inprice affects only exported commodities ,which are exchanged for gold and silver ascommodities and not asmediums ofcirculation .thus ,the prices ofthese commodities ,which are now estimated ingold and sil- ver oflower value ,rise ascompared with the prices of all other commodities whose exchange value continues",
        "- - 221 tobeestimated ingold orsilver according tothe stand- ard oftheir old cost ofproduction .this two -fold ap- praisement ofthe exchange values ofcommodities in the same country can naturally beonly temporary ,and the gold and silver prices must become equalized inthe proportions determined bythe exchange values them- selves ,sothat finally the exchange values ofall com- modities come tobeestimated according tothe new value ofthe money material .the development ofthis pro- cess ,aswell asthe ways and means in which the exchange value ofcommodities asserts itself within the limits ofthe fluctuations ofmarket prices ,donot fall within the scope ofthis work .but that this equaliza- tion takes place but gradually inthe early periods of development ofbourgeois production and extends over long periods oftime ,never keeping pace with the in- crease ofcash incirculation ,has been strikingly demon- strated by new critical investigations ofthe movement ofprices ofcommodities inthe sixteenth century .'the favorite references ofhume's followers tothe rise of prices inancient rome inconsequence ofthe conquests ofmacedonia ,egypt and asia minor ,are quite irrele- vant .the characteristic method ofantiquity ofsud- denly transferring hoarded treasures from one country toanother ,which was accomplished byviolence and thus brought about atemporary reduction ofthe cost of 'the slowness ofthe process was admitted byhume ,al- though itbut little agrees with hisprinciple .seedavid hume \"essays and treatises onseveral subjects .\"london ,1777 ,v. 1,p.300.",
        "222 production ofprecious metals inacertain country by the simple process ofplunder ,affects just aslittle the intrinsic laws ofmoney circulation ,asthe gratuitous distribution ofegyptian and sicilian grain inrome affected the universal law governing the price ofgrain . hume ,aswell asall other writers ofthe eighteenth century ,was not inpossession ofthe material necessary for the detailed observation ofthe circulation ofmoney . this material ,which first becomes available with the full development ofbanking ,includes inthe first place a critical history ofprices ofcommodities ,and inthe sec- ond ,official and current statistics relating tothe expan- sion and contraction ofthe circulating medium ,the im- ports and exports ofthe precious metals ,etc. hume's theory ofcirculation may besummed up inthe follow- ing propositions : 1.the prices of commodities in acountry are determined by the quantity ofmoney existing there (real orsymbolic money );2.the money current inacountry represents allthe commodities to befound there .inproportion \"asthere ismore orless2217 - 224 - itisnot necessary that either gold orsilver should be \"onhand .\" money ofaccount and the medium ofcir- culation are identical with him and both are \"coin .\" hume concludes that arise orfall ofprices depends on the quantity of money in circulation ,because a change inthe value ofthe measure ofvalue ,i.e.of the precious metals which serve asmoney ofaccount , causes arise orfall ofprices and ,consequently ,also a change inthe amount ofmoney incirculation ,the rap- idity ofthe latter remaining the same .that not only the quantity ofgold and silver increased inthe sixteenth and seventeenth centuries ,but that the cost oftheir pro- duction had declined atthe same time ,hume could know from the closing upofthe european mines .inthe six- teenth and seventeenth centuries the prices ofcommodi- ties increased ineurope with the influx ofthe mass of american gold and silver ;hence the prices ofcom- modities in every land are determined by the mass ofgold and silver tobefound there .this was hume's first \"necessary consequence .\" in the sixteenth and seventeenth centuries prices had not risen uniformly with the increase ofthe quantity ofprecious metals ;more than half acentury passed before any change inprices became perceptible ,and even then ittook along time before the exchange values ofcommoditics came tobe generally estimated according tothe depreciated value ofgold and silver ,i.e.before the revolution affected the general price level .hence ,concludes hume ,who , quite contrary tothe principles ofhis philosophy ,gen. 'david hume ,1.c.p.303.",
        "wwwded 223 -- established commerce ,and sets bounds toitinevery country ,byenabling the poorer states toundersell the richer inallforeign markets .\" \"where coin isingreat- erplenty ;asagreater quantity ofitisrequired torepre- sent the same quantity ofgoods ;itcan have noeffect , either good orbad ,taking anation within itself ;any more than itwould make analteration onamerchant's books ,if,instead ofthe arabian method ofnotation , which requires few characters ,heshould make use of the roman ,which requires agreat many .nay ,the greater quantity ofmoney ,like the roman characters , israther inconvenient ,and requires greater trouble both tokeep and transport it.\" inorder toprove any- thing ,hume should have shown that under agiven system ofnotation the quantity ofcharacters used does not depend onthe magnitude ofthe numbers ,but that onthe contrary ,the magnitude ofthe numbers depends onthe quantity ofthe characters used .itisperfectly true that there isnoadvantage inestimating or\"count- ing\"values of commodities indepreciated gold and silver ,and that isthe reason why nations have always found itmore convenient with the growth ofthe value ofthe commodities incirculation tocount insilver in preference tocopper ,and ingold rather than insilver . inproportion asthe nations became richer ,they con- verted the less valuable metals into subsidiary coin and the more valuable ones into money .furthermore ,hume forgets that inorder tocount values ingold and silver , david hume ,1.c.p.300. 'david hume ,1.c.p.303,",
        "- 224 itisnot necessary that either gold orsilver should be \"onhand .\" money ofaccount and the medium ofcir- culation are identical with him and both are \"coin .\" hume concludes that arise orfall ofprices depends on the quantity of money in circulation ,because a change inthe value ofthe measure ofvalue ,i.e.of the precious metals which serve asmoney ofaccount , causes arise orfall ofprices and ,consequently ,also a change inthe amount ofmoney incirculation ,the rap- idity ofthe latter remaining the same .that not only the quantity ofgold and silver increased inthe sixteenth and seventeenth centuries ,but that the cost oftheir pro- duction had declined atthe same time ,hume could know from the closing upofthe european mines .inthe six- teenth and seventeenth centuries the prices ofcommodi- ties increased ineurope with the influx ofthe mass of american gold and silver ;hence the prices ofcom- modities inevery land are determined by the mass ofgold and silver tobefound there .this was hume's first \"necessary consequence .\" in the sixteenth and seventeenth centuries prices had not risen uniformly with the increase ofthe quantity ofprecious metals ;more than half acentury passed before any change inprices became perceptible ,and even then ittook along time before the exchange values ofcommodities came tobe generally estimated according tothe depreciated value ofgold and silver ,i.e.before the revolution affected the general price level .hence ,concludes hume ,who , quite contrary tothe principles ofhis philosophy ,gen . 'david hume ,1.c.p.303.991",
        "- - 225 eralizes indiscriminately from imperfectly observed facts ,prices ofcommodities orthe value ofmoney de- pend not onthe total amount ofmoney tobefound inthe country ,but rather onthe quantity ofgold and silver which isactually incirculation ;but inthe long run all the gold and silver inthe country must be absorbed by circulation inthe form ofcoin .'itis clear that ifgold and silver have avalue oftheir own , then ,apart from all other laws ofcirculation ,only a definite quantity ofgold and silver can circulate asthe equivalent ofcommodities ofagiven value .if,there- fore ,every quantity ofgold and silver which happens tobeinacountry must enter the sphere ofexchange of commodities asamedium ofcirculation without regard tothe total value ofthe commodities ,then gold and silver have no intrinsic value and are infact no real commodities .that ishume's third \"necessary conse- quence .\" he makes commodities enter the process of circulation without price and gold and silver without value .that isthe reason why henever speaks ofthe 'david hume ,1.c.p.307,308,303:\"itisevident ,that the prices donot somuch depend onthe absolute quantity ofcom. modities ,and that ofmoney ,which are inanation ,asonthat ofthe commodities ,which can ormay come tomarket ,and of the money which circulates .ifthecoin belocked upinchests , itisthe same thing with regard toprices ,asifitwere anni . hilated ;ifthe commodities behoarded inmagazines and granaries ,alike effect follows .asthe money and commodities inthese cases ,never meet ,they cannot affect each other .the whole (ofprices )atlast reaches ajust proportion with the new quantity ofspecie which isinthekingdom .\"",
        "226 value ofcommodities and ofgold ,but only oftheir relative quantities .locke had already said that gold and silver had merely an imaginary or conventional value ;the first brutal expression ofopposition tothe assertion ofthe monetary \"system \"that gold and silver alone have true value .that gold and silver owe their character ofmoney tothe function they perform in the social process ofexchange isinterpreted tothe effect that they owe their own value and therefore the magni- tude oftheir value toasocial function .'gold and silver are thus worthless things ,which ,however ,acquire afictitious value within the sphere ofcirculation as representatives ofcommodities .they are converted by the process ofcirculation not into money ,but into value . this value oftheirs isdetermined bythe proportion between their own volume and that ofthe commodities , since the two must balance each ether .thus ,hume makes gold and silver enter the world ofcommodities asnon -commodities ;but assoon asthey appear inthe form ofcoin ,heturns them ,onthe contrary ,into mere commodities ,which must beexchanged for other com- modities bysimple barter .inthat manner ,ifthe world ofcommodities consisted ofbut one commodity ,say one million quarters ofgrain ,the idea would work itself out very simply ;viz.,one quarter ofgrain would be exchanged for two ounces ofgold ifthere were alto- gether two million ounces of gold ,and for twenty 'see law and franklin about surplus value which gold and silver are supposed toacquire from their function ofmoney . also forbonnais .",
        "227 - ounces ofgold ,ifthere were atotal oftwenty million ounces ,the price ofthe commodity and the value of money rising orfalling ininverse ratio tothe quantity ofgold inexistence .'but the world ofcommodities consists ofanendless variety ofuse-values ,whose rela- tive values are bynomeans determined bytheir relative quantities .how ,then ,does hume conceive this ex- change ofthe volume ofcommodities for the volume of gold ?he contents himself with the meaningless ,hollow idea that every commodity isexchanged asanaliquot part ofthe entire volume ofcommodities for acorre- sponding aliquot part ofthe volume ofgold .the process ofthe movement ofcommodities due tothe antagonism between exchange value and use-value which commodities bear within themselves ,and which mani- fests itself inthe circulation ofmoney ,becoming cry- stallized indifferent forms ofthe latter ,isthus done away with ,giving place tothe imaginary mechanical equalization process between the quantity ofprecious metals tobefound inacountry and the volume ofcom- modities existing there atthe same time . sir james steuart opens his inquiry into the nature ofcoin and money with anelaborate criticism of hume and montesquieu . he isreally the first toask this question :isthe quantity ofcurrent money deter- this fiction isliterally advanced bymontesquieu .[the pas sage from montesquieu isquoted bymarx inhiscapital ,v.1. part 1,ch.iii,section 2,b,foot-note .note byk.kautsky to 2nd german edition ]. steuart ,1.c.v.i.,p.394 seq.",
        "228 mined bythe prices ofcommodities ,orare the prices of commodities determined by the quantity of current money ? although his analysis isobscured by his fantastic conception of the measure of value ,his vacillating view of exchange value and by remi- niscences of the mercantile system ,he discovers the essential forms ofmoney and the general laws ofthe eirculation ofmoney ,because hemakes noattempt ata mechanical separation ofcommodities from money ,but proceeds todevelop its different functions from the different aspects ofthe exchange ofcommodities .money isused ,hesays ,for two principal purposes :for the pay- ment ofdebts and for the purchase ofwhat one needs ; the two together form \"ready money demands .\"the state oftrade and industry ,the mode ofliving ,the customary expenditures ofthe people ,taken all to- gether regulate and determine the volume of\"ready money demands ,\"i.e.the number of\"alienations .\"in order toeffect this multitude ofpayments ,acertain pro- portion ofmoney isrequired .this proportion may in- erease ordecrease according tocircumstances ,even while the number ofalienations remains the same .at any rate ,the circulation ofacountry can absorb only a definite quantity ofmoney .'\"it isthe complicated operations ofdemand and competition which determines the standard price ofeverything \";the latter \"does not inthe least depend onthe quantity ofgold and silver 'steuart ,1.c.,v.2,p.377-379 passim (not found inthe 1767 london edition .translator ).",
        "229 inthe country .\"what then will become ofthe gold and silver that isnot required ascoin ?they are hoard- edorused inthe manufacture ofarticles ofluxury .if the quantity ofgold and silver fall below the level required for circulation ,symbolic money orother sub- stitutes take itsplace .ifafavorable rate ofexchange brings about asurplus ofmoney inthe country and cuts off atthe same time the demand for itsshipment abroad ,itwill accumulate instrong -boxes ,where the \"riches will remain without producing more effect than ifthey had remained inthe mine .\" the second law discovered bysteuart isthat ofthe reflux ofcredit circulation toitsstarting point .finally , heworks out the effects which the disparity ofthe rates ofinterest indifferent countries produces upon the in- ternational export and import ofprecious metals .the last two points we mention here only for the sake of completeness ,since they have but aremote bearing on the subject ofour discussion .symbolic money orcredit 'steuart ,1.c.,p.379-380 passim (london ,1767 edition ,v. 1.p.400. transl .). \"the additional coin will belocked up,orconverted into plate ....asforthepaper money ,sosoon asithas served thefirst purpose ofsupplying thedemand ofhim who borrowed it,itwill return upon the debtor initand become realized . .let the specie ofacountry ,therefore ,beaugmented or diminished inever sogreat aproportion ,commodities will still rise and fall according tothe principles ofdemand and com- petition ,and these will constantly depend upon the inclinations ofthose who have property orany kind ofequivalent whatso-i",
        "- 230 money -steuart does not asyet distinguish between the two forms ofmoney -may take the place ofprecious metals asameans ofpurchase ormeans ofpayment in the sphere ofhome circulation ,but never inthe world ever togive ,but never upon the quantity ofcoin they are pos- sessed of... let it(namely ,the quantity ofspecie ina country )beever solow,while there isreal property ofany denomination inthecountry ,acompetition toconsume inthose who possess it,prices will behigh ,bythe means ofbarter , symbolical money ,mutual prestations and athousand other in- ventions ....ifthis country has acommunication with other nations ,there must beaproportion between the prices ofmany kinds ofmerchandize there and elsewhere ,and asud- den augmentation ordiminution ofthe specic ,supposing it could ofitself operate the effects ofraising orsinking prices , would berestrained initsoperation byforeign competition .\" 1.c.v.1,p.400-402 .\"the circulation ofevery country must beinproportion tothe industry ofthe inhabitants producing the commodities which come tomarket ...ifthe coin ofa country ,therefore ,falls below theproportion ofthe price ofin- dustry offered tosale,inventions ,like symbolical money ,will be fallen upon ,toprovide for anequivalent for it.but ifthe specie befound above the proportion ofindustry ,itwin have noeffect inraising prices ,nor will itenter into circulation :it will behoarded upintreasures ....whatsoever bethe quantity ofmoney inanation ,incorrespondence with the rest ofthe world ,there never can remain incirculation ,but the quantity nearly proportional tothe consumption ofthe rich and tothe labour and industry ofthe poor inhabitants ,\"and this proportion isnot determined \"bythe quantity ofmoney actually inthe country \"(1.c.p.403-408 passim .)\"all na tions will endeavor tothrow their ready money ,not necessary fortheir own circulation ,into that country where the interest ofmoney ishigh with respect totheir own .\"(1.c.v.2.p.5).",
        "231 market .paper notes are therefore \"money ofthe so- ciety ,\"while gold and silver are \"money ofthe world .\"' itischaracteristic ofnations with an\"historical \"de- velopment ,inthe sense inwhich the term isused by the historical school oflaw,tokeep forgetting their own history .although the controversy astothe rela- tion ofprices ofcommodities to the volume ofthe circulating medium has been continually agitating par- liament for the last half acentury ,and has precipitated inengland thousands ofpamphlets ,large and small , steuart has remained even more ofa\"dead dog \"than spinoza seemed tobetomoses mendelson inlessing's time .even the latest writer onthe history of\"cur- rency ,\"maclaren ,makes adam smith the original au- thor ofsteuart's theory ,and ricardo ofhume's theory .\" \"the richest nation ineurope may bethepoorest incirculating specie .\"1.c.,v.2,p.6.for the polemics against steuart see arthur young .[inhisfoot-note incapital ,v.1,part 1,ch. iii.,section 2,b.p.62,humboldt ed.,marx says :the theory ofhume was defended against the attacks ofj.steuart and others ,bya.young ,inhis \"political arithmetic ,\"london , 1774 ,inwhich work there isaspecial chapter entitled \"prices depend onquantity ofmoney .\"note byk.kautsky to2nd german edition ]. 'steuart ,1.c.,v.2,p.370. louis blanc translates the ex- pression \"money ofthe society \"which stands forhome orna- tional money ,associalist money ,which isperfectly meaning- less and makes asocialist ofjohn law .(seethe first volume ofhishistory ofthefrench revolution ). maclaren ,1.c.p.43seq.patriotism ledgustav julius ,a german writer who met with very early death ,tohold upold bsh asanauthority asagainst the ricardian school .honest",
        "232 while ricardo elaborated hume's theory ,adam smith registered the results of steuart's investigations as dead facts .adam smith applied the scotch say- ing that \"mony mickles mak amuckle \"even tohis spiritual wealth ,and therefore concealed with petty care the sources towhich heowed the little out ofwhich hetried tomake somuch .more than once heprefers tobreak offthe point ofthe discussion ,whenever hefeels that an attempt on his part clearly toformulate the question would compel him tosettle his accounts with his predecessors .sointhe case ofthe money theory . he tacitly adopts steuart's theory when he says that the gold and silver existing in acountry ispartly utilized ascoin ;partly accumulated inthe form of reserve funds for merchants incountries without banks , orofbank reserves incountries with acredit currency ; partly serves asahoard for the settling ofinternational payments ;partly isturned into articles ofluxury .he passes over without remark the question astothe quan- tity ofcoin incirculation ,treating money quite wrongly asamere commodity .'his vulgarizer ,the dull j.b. bsch rendered steuart's elegant english into hamburg platt and bytrying toimprove upon the original spoiled itasoften ashecould . note tothe 2nd edition :this isnot anexact statement . adam smith expresses the law correctly onmany occasions . [see capital ,humboldt edition ,p.62,ft-note 1,where writing seven years later ,marx makes the following qualification : \"this statement applies only insofarasadam smith ,exofficio , treats ofmoney .now and then ,however ,asinhiscriticism of the earlier systems ofpolitical economy ,hetakes the right",
        "233 1 2say ,whom the french have proclaimed prince dela science -like johann christoph gottsched ,who pro- claimed his schnaich ahomer and himself apietro aretino tothe terror principum and lux mundi -has with great pomp raised this not altogether innocent oversight ofadam smith toadogma .itmust besaid , however ,that his hostile attitude tothe illusions ofthe mercantile system prevented adam smith from taking anobjective view ofthe phenomena ofmetallic circula- tion ,while his views oncredit money are original and deep .asinthe eighteenth century petrification theories there isalways felt the presence ofan undercurrent which springs from either acritical orapologetic atti- tude toward the biblical tradition ofthe flood ,sothere isconcealed behind allthe money theories ofthe eigh- teenth century asecret struggle with the monetary system ,the ghost which had stood guard over the cradle view .\"the quantity ofcoin inevery country isregulated by the value ofthe commodities which are tobecirculated byit. the value ofthegoods annually bought and sold inany country requires acertain quantity ofmoney tocirculate and distribute them totheir proper consumers ,and can give em- ployment tonomore .the channel ofcirculation necessarily draws toitself asum sufficient tofillit,and never admits any more .'wealth ofnations ,book iv.,ch.i.\"] \"the distinction between currency and money istherefore not found in\"wealth ofnations .\"deceived bythe apparent impartiality ofadam smith ,who knew hishume and steuart very well ,honest maclaren remarks :\"the theory ofthe de- pendence ofprices ontheextent ofthecurrency had not asyet, attracted attention ;and doctor smith ,like mr. locke (locke undergoes achange inhis view ),considers metallic money nothing but acommodity .\"maclaren ,l.c.p.44.",
        "234 ofbourgeois economy and continued tothrow itsshadow over legislation . inthe nineteenth century ,inquiries into the nature ofmoney were not prompted directly byphenomena of metallic circulation ,but rather bythose ofbanknote circulation .the former was touched upon only inorder todiscover the laws governing the latter .the suspen- sion ofspecie payments by the bank ofengland in 1797 ,the rise ofprices ofmany commodities which followed it,the fall ofthe mint price ofgold below its market price ,the depreciation ofbank -notes ,espe- cially since 1809 ,furnished the direct practical occasion for aparty struggle inparliament and atheoretical tournament outside ofit,both conducted with like pas- sion .the historical background for the controversy was furnished by the history ofpaper money during the eighteenth century :the fiasco oflaw's bank ;the depreciation ofthe provincial bank -notes ofthe english colonies innorth america from the beginning tothe middle ofthe eighteenth century which went hand in hand with the increase inthe number oftokens ofvalue ; further ,the continental bills issued aslegal tender by the american government during the war ofindepend- ence ;and finally ,the experiment with the french assig- nats carried out on astill larger scale .most ofthe english writers ofthat period confound the circulation ofbank -notes ,which isgoverned byquite different laws , with the circulation oftokens ofvalue orgovernment legal tender paper money ;and while they claim to explain the phenomena ofthis legal tender circulation bythe laws ofmetallic circulation ,they proceed ,asa",
        "- 235 matter of fact ,just the opposite way ,viz.,deduct- ing laws for the latter from phenomena observed in connection with the former .we omit all the numerous writers ofthe period of 1800-1809 and turn directly toricardo ,both because heembodies the views ofhis predecessors ,which heformulates with greater precision ,and because the shape hegave tothe theory ofmoney governs english bank legislation until this moment .ricardo ,like his predecessors ,confounds the circulation ofbank -notes ,orcredit money ,with the circulation ofmere tokens ofvalue .the fact which impresses him most isthe depreciation ofpaper cur- rency accompanied bythe rise ofprices ofcommodities . what the american mines had been tohume ,the paper- bill presses inthreadneedle street were toricardo ,and hehimself expressly identifies the two factors atsome place inhis works .his first writings ,which dealt ex- clusively with the money question belong tothe time ofthe most violent controversy between the bank of england ,which had onits side the ministers and the war party ,and itsopponents about whom were centered the parliamentary opposition ,the whigs and the peace party .they appeared asimmediate forerunners ofthe famous report ofthe bullion committee of1810 ,in which ricardo's views were adopted .' the singular david ricardo ,\"the high price ofbullion ,aproof ofthe depreciation ofbank -notes .\"4th edition ,london ,1811. (the first edition appeared in1809 ).further ,\"reply tomr. bosan- quet's practical observations onthereport ofthebullion com- mittee .\"london ,1811 .",
        "236 circumstance ,that ricardo and his adherents ,who held money tobemerely atoken ofvalue ,are called bullion- ists,isdue not only tothe name ofthat committee ,but also tothe nature oftheir theory .in his work on political economy ,ricardo repeated and developed fur- ther the same views ,but nowhere has he investigated the nature ofmoney assuch ,ashehad done inthe case ofexchange value ,profit ,rent ,etc. to begin with ,ricardo determines the value ofgold and silver ,like that ofall other commodities ,bythe quantity oflabor -time embodied inthem. by means of them ,ascommodities ofagiven value ,the values ofall other commodities are measured.2 the volume ofthe circulating medium inacountry isdetermined bythe value ofthe unit ofmeasure ofmoney onthe one hand , and bythe sum total ofthe exchange values ofcommodi- ties,onthe other .this quantity ismodified byeconomy inthe method ofpayment .\"since the quantity ofmoney , 'david ricardo :\"onthe principles ofpolitical economy , etc.\"p.77. \"their value [ofmetals ][like that ofallother commodities ],depends onthetotal quantity oflabour necessary toobtain the metal ,and tobring ittomarket .\" 1.c.p.77,180,181. 'ricardo ,1.c.p.421. \"the quantity ofmoney that can be employed inacountry must depend onitsvalue :ifgold alone were employed forthe circulation ofcommodities ,aquantity would berequired ,one fifteenth only ofwhat would beneces- sary ,ifsilver were made use offorthe same purpose .\"see also ricardo's :\"proposals foraneconomical and secure cur- rency ,\"london ,1816 ,p.89,where hesays :\"the amount of notes incirculation depends onthe amount required forthe",
        "237 ofagiven value ,which can beabsorbed bycirculation ,is thus determined and since the value ofmoney within the sphere ofcirculation manifests itself only inits quantity ,itfollows that mere tokens ofvalue ,ifissued inproportions determined bythe value ofmoney ,may replace itincirculation ,and infact ,\"acurrency isin itsmost perfect state when itconsists wholly ofpaper money ,but ofpaper money ofanequal value with the gold which itprofesses torepresent .\" sofar ricardo determines the volume ofthe circulating medium bythe prices ofcommodities ,assuming the value ofmoney tobegiven ;money asatoken ofvalue means with him atoken ofadefinite quantity ofgold and not amere worthless representative ofcon.modities aswas the case with hume . when ricardo suddenly gets offthe straight path of his presentation and takes the very opposite view ,he does sototurn his attention tothe international circula- tion ofprecious metals and thus brings confusion into the problem byintroducing considerations that are for- eign tothe subject .let usfollow his own course of reasoning ,and ,inorder toremove everything that is artificial and incidental ,letusassume that the gold and silver mines are located inthe interior ofthe countries inwhich the precious metals circulate asmoney .the only inference which follows from ricardo's reasoning circulation ofthe country ;which isregulated ..by thevalue ofthestandard [ofmoney ],theamount ofpayments , and theeconomy practised ineffecting them .\" 'ricardo ,\"principles ofpolitical economy \",p.432.",
        "238 assofar developed ,isthat ,the value ofgold being given ,the quantity ofmoney incirculation will bede- termined by the prices ofcommodities .thus ,ata given moment ,the quantity ofgold incirculation ina country issimply determined bythe exchange value of the commodities incirculation .let ussuppose now that the sum total ofthese exchange values has declined either because there are less commodities produced atthe old exchange values ,orbecause ,inconsequence ofan increased productivity oflabor ,the same quantity of commodities has asmaller value .or,we may assume onthe contrary that the sum total ofexchange values has increased ,either because the quantity ofcommod- ities has increased while the cost oftheir production has remained the same ,orbecause the value ofthe same orofasmaller quantity ofcommodities has risen in consequence ofadiminished productivity oflabor .what becomes ineither case ofthe given quantity ofmetal in circulation ?if gold is money merely because itiscurrent as amedium of circulation ;ifitis compelled toremain incirculation like government legal tender paper money (and that iswhat ricardo has in mind ),then the quantity ofmoney incirculation will rise above the normal level ,asdetermined by the ex- change value ofthe metal ,inthe former case ,and fall below that level inthe latter .although possessing a value ofitsown ,gold will become inthe former case a token ofametal oflower exchange value than its own ,and in the latter ,atoken of ametal of higher value .inthe former case itwill remain asa token ofvalue less than itsown ,inthe latter greater than",
        "- 239 its own (again an abstract deduction from legal ten- der paper money ).inthe former case itisthe same asthough commodities were estimated inametal of lower value than gold ,inthe latter ,asthough they were estimated inametal ofhigher value .inthe former case ,prices ofcommodities would rise therefore ,inthe latter they would fall.ineither case the movement of prices ,their rise orfall,would appear asthe effect ofa relative expansion orcontraction ofthe volume ofgold incirculation above orbelow the level corresponding to itsown value ,i.e.above orbelow the normal quantity which isdetermined bythe proportion between itsown value and that ofthe commodities incirculation . the same process would take place ifthe sum total ofthe prices ofthe commodities incirculation remained unchanged ,while the volume of gold in circulation came tobebelow orabove the right level :the former incase the gold coin worn out inthe course ofcircula- tion were not replaced by the production ofacorre- sponding quantity ofgold inthe mines ;the latter ,ifthe output ofthe mines exceeded the requirements ofcir- culation .in either case itisassumed that the cost ofproduction ofgold oritsvalue remain the same . tosum up:the money incirculation isatitsnormal level ,when itsvolume isdetermined byitsown bullion value ,the exchange value ofcommodities being given . itrises above that level ,bringing about afall inthe value ofgold below itsown bullion value and arise of prices ofcommodities ,whenever the sum total ofthe exchange values ofcommodities declines ,orthe output ofgold from the mines increases .itsinks below its",
        "240 right level ,leading toarise of gold above its own bullion value and toafall ofprices ofcommodities , whenever the sum total ofthe exchange values ofthe commodities orthe gold output ofthe mines isnot suffi- cient toreplace the quantity ofoutworn gold .ineither case the gold incirculation becomes atoken ofvalue greater orsmaller than that itreally possesses .itmay become anappreciated ordepreciated token ofitself .as soon asallcommodities would come tobeestimated in gold ofthis new value and the general price level would accordingly rise orfall,the quantity ofcurrent gold would again answer the requirements ofcirculation (a consequence which ricardo emphasizes with great pleas- ure),but would beatvariance with the cost ofproduc- tion ofthe precious metals and ,therefore ,with their relation ascommodities toallother commodities .ac- cording tothe general ricardian theory ofexchange value ,the rise ofgold above itsexchange value ,i.e.,above the value asdetermined bythe labor -time contained init, would cause anincrease inthe production ofgold until the increased output ofitwould reduce itsvalue tothe proper magnitude .and inthe same manner ,afall ofgold below itsvalue would cause adecline initsproduction until itsvalue rose again toitsproper magnitude .by these opposite movements the discrepancy between the bullion value ofgold and itsvalue asamedium ofcir- culation would disappear ,the normal level ofthe vol- ume ofgold incirculation would berestored ,and the price level would again correspond tothe measure of value .these fluctuations inthe value ofgold incircula- tion would tothe same extent affect gold inthe form of",
        "- 241 bullion ,because byassumption ,allgold that isnot util- ized asanarticle ofluxury ,issupposed tobeincircula- tion .since gold itself may become ,both ascoin and bul- lion ,atoken ofvalue ofgreater orsmaller magnitude than itsbullion value ,itisself understood that convert- ible bank -notes incirculation have toshare the same fate . although bank -notes are convertible ,i.e.their real value and nominal value agree ,\"the aggregate currency con sisting ofmetal and ofconvertible notes \"may appre ciate ordepreciate according astowhether itrises of falls ,for reasons already stated ,above orbelow the level determined bythe exchange value ofthe commodities in circulation and the bullion value ofgold .inconvertib'e paper money ,has,from this point ofview ,only that advantage asagainst convertible paper money ,that it may depreciate inatwo-fold manner .itmay fall be- low the value ofthe metal which itissupposed torepre- sent ,because ithas been issued intoo great quantity , oritmay depreciate because the metal itrepresents has itself fallen invalue .this depreciation ,not ofpaper ascompared with gold ,but ofgold and paper together , orofthe aggregate currency ofacountry ,isone ofthe principal discoveries ofricardo ,which lord overstone and co. pressed into their service and made afunda- mental principle ofsir robert peele's bank legislation of1844 and 1845 . what should have been proven was that the price of commodities or the value of gold depends on the quantity ofgold incirculation .the proof consists in the assumption ofwhat istobeproven ,viz.that any quantity ofthe precious metal employed as money",
        "--- 242 must become amedium ofcirculation orcoin ,and there- byatoken ofvalue for the commodities incirculation , nomatter inwhat proportion toitsown intrinsic value and nomatter what the total value ofthose commodities may be.to put itdifferently ,the proof consists in overlooking all the other functions which money per- forms besides its function ofamedium ofcirculation . when hard pressed ,asinhis controversy with bosan- quet ,ricardo ,completely under the influence ofthe phenomenon ofdepreciated tokens ofvalue caused by their quality ,takes recourse todogmatic assurances .' ifricardo had built upthis theory byabstract reason- ing,aswe have done ithere ,without introducing con- crete facts and incidental matters which only distract his attention from the main question ,its hollowness would bestriking .but hetakes upthe entire subject inits international aspect .itwill be easy toprove , however ,that the apparent magnitude ofscale does not make his fundamental ideas less diminutive . his first proposition was asfollows :the volume of metallic currency isnormal when itisdetermined by the total value ofthe commodities incirculation esti- mated initsbullion value .expressed soastoapply tointernational conditions ,itreads thus :inanormal state ofcirculation every country possesses aquantity ofmoney \"according tothe state ofitscommerce and 'david ricardo ,\"reply tomr. bosanquet's practical obser- vations ,etc.\"p.49. \"that commodities would rise orfall in price ,inproportion tothe increase ordiminution ofmoney ,i assume asafact which isincontrovertible .\"",
        "243 - wealth .\" money circulates atavalue corresponding toitsreal value ortoitscost ofproduction ,i.e.ithas the same value inall countries. that being the case , \"there could benotemptation offered toeither for their importation or exportation .\" there would thus be established abalance ofcurrencies between the different countries .the normal level ofanational currency is now expressed interms ofan international balance of currencies ,which practically amounts tothe statement that nationality does not change anything inauniversal economic law.we have reached again the same fatal point asbefore .how isthe normal level disturbed ? or,speaking interms ofthe new terminology ,how is the international balance ofcurrencies disturbed ?or, how does money cease tohave the same value inall countries ?or,finally ,how does itcease topass atits own value inevery country ?we have seen that the normal level was disturbed by anincrease ordecrease ofthe volume ofmoney incirculation while the total value ofcommodities remained the same ;or,because the quantity ofmoney incirculation remained the same while the exchange values ofcommodities rose orfell. inthe same manner ,the international level ,determined bythe value ofthe metal itself ,isdisturbed byanin- crease inthe quantity ofgold inacountry brought 'david ricardo ,\"the high price ofbullion ,\"etc. \"money would have the same value inall countries .\"p.4.inhis political economy ricardo modified this statement ,but not in away toaffect what has been said here . '1.c.p.3-4..",
        "- - 244 about bythe discovery ofnew gold mines ,'orbyanin- crease ordecrease ofthe total exchange -value ofthe circulating commodities inany particular country .just asinthe former case the output ofthe precious metals decreased orincreased according astowhether itwas necessary tocontract orexpand the currency and thereby tolower orraise prices ,soare the same effects produced now byexport and import from one country toanother . inthe country inwhich prices would rise orthe value ofgold would fall below the bullion value inconse- quence ofaredundant currency ,gold would be de- preciated ,and the prices ofcommodities would rise as compared with other countries .gold would ,therefore , beexported ,while commodities would beimported ,and vice versa .just asinthe former case the output of gold ,sonow the import orexport ofgold and ,with it, the rise orfall ofprices ofcommodities would continue until ,aswe would have said before ,the right value relation would berestored between the metal and com- modities ,or as we shall say now ,the international balance ofcurrencies would berestored .just asinthe former case the production ofgold increased orde- creased because gold stood above orbelow its value , sonow the international migration ofgold would take place for the same reason .just asinthe former case , every change inthe production ofthe circulating metal affected itsquantity and ,thereby ,prices ,sowould the same effect be produced now by international import and export .assoon asthe relative values ofgold and 11.c.,p.4.",
        "- - 245 commodities orthe normal quantity ofcurrency would berestored ,nofurther production would take place in the former case ,and nofurther export orimport inthe latter ,except insofar aswould benecessary toreplace outworn coin and tomeet the demand ofmanufacturers ofarticles ofluxury .itfollows \"that the temptation to export money inexchange for goods ,orwhat istermed anunfavorable balance oftrade ,never arises but from a redundant currency .\" \"the exportation ofthe coin. iscaused byitscheapness ,and isnot the effect ,but the cause ofanunfavourable balance .\"2since the increase ordecrease inthe production ofgold inthe former case and the importation orexportation ofgold inthe latter , take place only whenever itsvolume rises above orsinks . below its normal level ,i.e.whenever gold appreciates ordepreciates incomparison with itsbullion value ,or whenever prices ofcommodities are too high ortoo low ; itfollows that every such movement works asacorrec- tive ,since ,through the resultant expansion orcontrac- tion ofthe currency ,prices are restored totheir true level inthe former case this level represents the balance between the respective values ofgold and ofcommodi- ties ;inthe latter ,the international balance ofcurrencies . toput itinother words :money circulates indifferent countries only insofar asitcirculates ascoin inevery country .money isbut coin and allthe gold existing in acountry must therefore enter circulation ,i.e.itcan 'ricardo ,1.c.,p.11-12 . ricardo ,1.c.,p.14. 1.c.,p.17.",
        "246 rise above orfall below its value asatoken ofvalue . thus wesafely land again ,bythe round -about way of this international complication ,atthe simple dogma which constituted our starting point . with what violence toactual facts ricardo has toex- plain them inthe sense ofhis abstract theory ,afew illustrations will suffice toshow .he maintains ,e.g. that inyears ofpoor crops ,which happened frequently in england during 1800-1820 ,gold isexported not because corn isneeded and gold asmoney isatalltimes aneffectual means ofpurchase inthe world market ,but because gold isinsuch cases depreciated initsvalue as compared with other commodities and ,therefore ,the currency ofthe country inwhich there has been afailure ofcrops isdepreciated with respect toother national currencies .\"inconsequence ofabad harvest ,acountry having been deprived ofapart ofitscommodities the currency which was before atitsjust level . become (s)redundant ,\"and prices ofall commodities rise inconsequence .'contrary tothis paradoxical in- ricardo ,1.c.,p.74-75 .\"england ,inconsequence ofabad harvest ,would come under the case ofacountry having been deprived ofapart ofitscommodities ,and,therefore ,requiring adiminished amount ofcirculating medium .the currency which was before equal toher payments would now become super -abundant and relatively cheap ,inproportion ...of her diminished production ;the exportation ofthis sum ,there- fore,would restore thevalue ofhercurrency tothevalue ofthe currencies ofother countries .\"his confusion ofmoney and commodity ,and ofmoney and coin borders onthe ludicrous in the following passage :\"ifwecan suppose that after anun-",
        "-- - 247 1terpretation ithas been proven statistically that from 1793 tothe present time ,whenever england had abad harvest the available supply ofcurrency not only did not become superabundant ,but became inadequate and that ,therefore ,more money circulated and had tocir- culate onsuch occasions. inthe same manner ,ricardo maintained ,with refer- ence tonapoleon's continental system and the english blockade decree ,that the english exported gold instead ofcommodities tothe continent ,because their money was depreciated with respect tothe money onthe con- tinent ,that their commodities were ,therefore ,more high priced ,which made itamore profitable commercial speculation toexport gold than goods .according to him england was amarket inwhich commodities were dear and money was cheap ,while on the continent favorable harvest ,when england has occasion foranunusual importation ofcorn ,another nation ispossessed ofasuper- abundance ofthat article ,but has nowants forany commodity whatever ,itwould unquestionably follow that such nation would not export itscorn inexchange for commodities :but neither would itexport corn formoney ,asthat isacommodity which nonation ever wants absolutely ,but relatively .\"1.c., p.75. pushkin inhishero poem makes the father ofhishero incapable ofcomprehending that commodities are money .but that money isacommodity ,therussians have understood from times ofyore asisproven not only bytheenglish corn imports in1838-1842 ,but bythe entire history oftheir commerce . 'conf .thomas tooke ,\"history ofprices ,\"and james wil- son,\"capital ,currency and banking .\"(the latter work isa reprint ofaseries ofarticles which appeared inthe london economist in1844 ,1845 and 1847. )",
        "248 commodities were cheap and money was dear .the trou- ble,according toanenglish writer ,was \"the ruinously low prices ofour manufactures and ofour colonial productions under the operation ofthe 'con- tinental system 'during the last six years ofthe war . the prices ofsugar and coffee ,for instance ,on the continent ,computed ingold ,were four orfive times higher than their prices inengland ,computed inbank- notes .iam speaking ...ofthe times inwhich the french chemists discovered sugar inbeet -root ,and asubstitute for coffee inchicory ;and when the eng- lish grazier tried experiments upon fattening oxen with treacle and molasses -ofthe times when we took pos- session ofthe island ofheligoland ,inorder toform there adepot ofgoods to facilitate ,ifpossible ,the smuggling ofthem into the north ofeurope ;and when the lighter descriptions ofbritish manufactures found their way into germany through turkey ....al- most allthe merchandise ofthe world accumulated in our warehouses ,where they became impounded ,except when some small quantity was released by afrench license ,for which the merchants athamburgh and amsterdam had ,perhaps ,given napoleon such asum asforty orfifty thousand pounds .they must have been strange merchants .. tohave paid solarge asum for liberty tocarry acargo ofgoods from adear market toacheap one.what was the ostensible alternative the merchant had ?...either tobuy coffee at6d. apound inbank -notes ,and send ittoaplace where it would instantly sell at3s.or4s.apound ingold ,orto buy gold with bank -notes at5anounce ,and send it",
        "--- - 249 toaplace where itwould bereceived at317s.10d . anounce ....itistoo absurd ,ofcourse ,tosay that the gold was remitted instead ofthe cof- fee,as apreferable mercantile operation . there was not acountry inthe world in which so large aquantity ofdesirable goods could beobtained ,in return for an ounce ofgold ,asinengland ... bonaparte was constantly examining the english price current . solong ashesaw that gold was dear and coffee was cheap inengland ,hewas satisfied that his 'continental system 'worked well .\" at the very time when ricardo first formulated his theory ofmoney ,and the bullion committee embodied itinitsparliamentary report ,namely in1810 ,aruin- ous fall ofprices ofall english commodities ascom- pared with those of1808 and 1809 took place ,while gold rose invalue accordingly .only agricultural prod- ucts formed an exception ,because their importa- tion from abroad met with obstacles and their domestic supply was decimated byunfavorable crop conditions .\" ricardo soutterly failed tocomprehend the rle of precious metals asaninternational means ofpayment , that inhis testimony before the committee ofthe house oflords in1819 hecould say \"that drains for exporta- tion would cease altogether sosoon ascash payments lon. james deacon hume :\"letters onthe corn laws .\" don,1834 ,p.29-31 .[letter byh.b.t.onthecorn laws and onthe rights ofthe working classes .transl .] 'thomas tooke ,\"history ofprices ,\"etc. london ,1848 , p.110.",
        "250 should beresumed ,and the currency berestored toits metallic level .\"he died just intime ,onthe very eve ofthe crisis of1825 ,which belied his prophesies . the time when ricardo wrote was generally little adapted for the observation ofthe function ofprecious metals asworld money .before the introduction ofthe continental system ,the balance oftrade had almost always been infavor ofengland ,and while that system lasted ,the commercial intercourse with the european continent was too insignificant toaffect the english rate ofexchange .the money transmissions were mostly ofapolitical nature and ricardo seems tohave utterly failed tograsp the part which subsidy payments played atthat time inenglish gold exports. among the contemporaries of ricardo who formed the school which adopted his economic principles , james mill was the most important one.he at- tempted towork out ricardo's theory ofmoney onthe basis ofsimple metallic circulation ,without the irrele- vant international complications which served ricardo tohide the inadequacy ofhis theory ,and without any controversial regard for the operations ofthe bank of england .his main arguments are asfollows : \"by value ofmoney ,ishere tobe understood the proportion inwhich itexchanges for other commodities , orthe quantity ofitwhich exchanges for acertain quantity ofother things . ..itisthe total quan- tity ofthe money inany country ,which determines what portion ofthat quantity shall exchange for acer- 'conf .w.blake's above quoted \"observations etc.\"",
        "251 tain portion ofthe goods orcommodities ofthat country . ifwe suppose that allthe goods ofthe country are on one side ,allthe money onthe other ,and that they are exchanged atonce against one another ,itisevident .that the value ofmoney would depend wholly upon the quantity ofit.itwill appear that the case isprecisely the same inthe actual state ofthe facts . the whole ofthe goods ofacountry are not exchanged atonce against the whole ofthe money ;the goods are exchanged inportions ,often in very small portions , and atdifferent times ,during the course ofthe whole year .the same piece ofmoney which ispaid inone exchange to-day,may bepaid inanother exchange to- morrow .some ofthe pieces will be employed ina great many exchanges ,some in very few,and some , which happen tobe hoarded ,innone atall.there will ,amid allthese varieties ,beacertain average num- ber ofexchanges ,the same which ,ifallthe pieces had performed anequal number ,would have been performed byeach ;that average wemay suppose tobeany number weplease ;say,for example ,ten.ifeach ofthe pieces ofthe money inthe country perform ten purchases , that isexactly the same thing asifallthe pieces were multiplied by ten,and performed only one purchase each .the value ofallthe goods inthe country isequal toten times the value ofall the money ....if the quantity ofmoney instead ofperforming ten ex- changes inthe year ,were ten times asgreat ,and per- formed only one exchange inthe year ,itisevident that whatever addition were made tothe whole quantity , would produce aproportional diminution ofvalue ,in",
        "252 each ofthe minor quantities taken separately .asthe quantity ofgoods ,against which the money isall ex- changed atonce ,issupposed tobethe same ,the value ofallthe money isnomore ,after the quantity isaug- mented ,than before itwas augmented .ifitissupposed tobeaugmented one-tenth ,the value ofevery part ,that ofanounce for example ,must bediminished one-tenth . inwhatever degree ,therefore ,the quantity of money isincreased ordiminished ,other things remain- ing the same ,inthat same proportion ,the value of the whole ,and ofevery part ,isreciprocally diminished orincreased .this ,itisevident ,isaproposition uni- versally true .whenever the value ofmoney has either risen orfallen (the quantity ofgoods against which it isexchanged and the rapidity ofcirculation remaining the same ),the change must beowing toacorresponding diminution orincrease ofthe quantity ;and can beowing tonothing else .ifthe quantity ofgoods diminish ,while the quantity ofmoney remains the same ,itisthe same thing asifthe quantity ofmoney had been increased ;\" and vice versa . ..\"similar changes are produced byany alteration inthe rapidity ofcirculation . an increase inthe number ofthese purchases has the same effect asan increase inthe quantity ofmoney ; adiminution the reverse . ifthere isany por- tion ofthe annual produce which isnot exchanged atall, aswhat isconsumed bythe producer ;orwhich itnot exchanged for money ;that isnot taken into the account , because what isnot exchanged for money isinthe same state with respect tothe money ,asifitdid not exist . whenever the coining ofmoney",
        "- - 255 means ofpurchase .already inthe movement ofmoney asameans ofpayment ,commodity and money cease to appear simultaneously . the commercial crises ofthe nineteenth century , namely ,the great crises of1825 and 1836 ,did not re- sult inany new developments inthe ricardian theory of money ,but they did furnish new applications for it. they were nolonger isolated economic phenomena ,such asthe depreciation ofthe precious metals inthe six- teenth and seventeenth centuries which interested hume ,or the depreciation of paper money in the eighteenth and early nineteenth centuries which confronted ricardo ;they were they were the great storms ofthe world market in which the conflict of all the elements of the capitalist process of pro- duction discharge themselves ,and whose origin and remedy were sought inthe most superficial and abstract sphere ofthis process ,the sphere ofmoney circulation . the theoretical assumption from which the school of economic weather prophets proceeds ,comes down in the end tothe illusion that ricardo discovered the laws governing the circulation ofpurely metallic currency . the only thing that remained for them todowas tosub- ject tothe same laws the circulation ofcredit and bank- note currency . the most general and most palpable phenomenon in commercial crises isthe sudden ,general decline ofprices . following aprolonged general rise .the general decline ofprices ofcommodities may beexpressed asarise in the relative value ofmoney with respect toallcommodi- ties,and the general rise ofprices asadecline ofthe",
        "254 - the money inacountry isincirculation ,while another is idle .with the aid ofamost absurd average calculation leassumes that ,although itreally appears tobediffer- cnt,yet allthe gold inacountry does circulate .as- :uming that ten million silver thalers circulate in acountry twice ayear ,there could be twenty million such coins incirculation ,ifeach circulated but once .and ifthe entire quantity ofsilver tobefound . inacountry inany form amounts toone hundred mil- lion thalers ,itmay be supposed that the entire one hundred million can enter circulation ,ifeach piece of money should circulate once infive years .one could aswell assume that allthe money ofthe world circulate inhempstead ,but that each piece ofmoney instead of being employed three times ayear ,isemployed once in 3,000,000 years .the one assumption isasrelevant as the other for the purpose ofdetermining the relation between the sum total ofprices ofcommodities and the volume ofcurrency .mill feels that itisamatter of decisive importance tohim tobring the commodities indirect contact not with the money incirculation ,but with the entire supply ofmoney existing inacountry . he admits that \"the whole ofthe goods ofacountry are not exchanged atonce against the whole ofthe money ,\" but that the goods are exchanged indifferent portions and atdifferent times ofthe year for different portions ofmoney .to doaway with this difficulty heassumes that itdoes not exist .moreover ,this entire idea ofdirect contact ofcommodities and money and direct exchange isamere abstraction from the movement of simple purchase and sale orthe function ofmoney asa",
        "- 255 means ofpurchase .already inthe movement ofmoney asameans ofpayment ,commodity and money cease to appear simultaneously . the commercial crises ofthe nineteenth century , namely ,the great crises of1825 and 1836 ,did not re- sult inany new developments inthe ricardian theory of money ,but they did furnish new applications for it. they were nolonger isolated economic phenomena ,such asthe depreciation ofthe precious metals inthe six- teenth and seventeenth centuries which interested hume ,or the depreciation of paper money in the eighteenth and early nineteenth centuries which confronted ricardo ;they were the great storms ofthe world market in which the conflict of all the elements of the capitalist process of pro- duction discharge themselves ,and whose origin and remedy were sought inthe most superficial and abstract sphere ofthis process ,the sphere ofmoney circulation . the theoretical assumption from which the school of economic weather prophets proceeds ,comes down in the end tothe illusion that ricardo discovered the laws governing the circulation ofpurely metallic currency . the only thing that remained for them todowas tosub- ject tothe same laws the circulation ofcredit and bank- note currency . the most general and most palpable phenomenon in commercial crises isthe sudden ,general decline ofprices following aprolonged general rise .the general decline ofprices ofcommodities may beexpressed asarise in the relative value ofmoney with respect toallcommodi- ties,and the general rise ofprices asadecline ofthe",
        "- 256 relative value ofmoney .ineither expression the phe- nomenon isdescribed but not explained .whether i put the question thus :explain the general periodic rise ofprices followed byageneral decline ofthe same ,or formulate the same problem by saying :explain the periodic decline and rise ofthe relative value ofmoney with respect tocommodities ;the different wording leaves the problem aslittle changed aswould its translation from german into english .ricardo's theory ofmoney was exceedingly convenient ,because itlends atautology the semblance ofastatement of causal connection . whence comes the periodic general fall ofprices ?from the periodic rise of the relative value of money . whence the general periodic rise ofprices ?from the periodic decline ofthe relative value ofmoney .it might have been stated with equal truth that the peri- odic rise and fall ofprices isdue totheir periodic rise and fall.the problem itself isstated under the as- sumption that the intrinsic value ofmoney ,i.e.,its value asdetermined bythe cost ofproduction ofprecious metals remains unchanged .ifitismore than atau- tology then itisbased onamisconception ofthe most elementary principles .if the exchange value of a measured interms ofb,declines ,we know that this may becaused byadecline ofthe value ofaasmuch asbyarise ofthe value ofb;the same being true of the case ofarise ofthe exchange value ofameasured interms ofb. the tautology once admitted asastate- ment ofcause ,the rest follows easily .arise ofprices . ofcommodities iscaused by adecline ofthe value of money and adecline ofthe value ofmoney iscaused ,",
        "- 257 aswe know from ricardo ,by aredundant currency , i.e.,byarise ofthe volume ofcurrency over the level determined byitsown intrinsic value and the intrinsic value ofthe commodities .inthe same manner ,the gen- eral decline ofprices ofcommodities isexplained bythe rise ofthe value ofmoney above itsintrinsic value in consequence ofan inadequate currency .thus ,prices rise and fall periodically ,because there isperiodically too much ortoo little money incirculation .should arise ofprices happen tocoincide with acontracted cur- rency ,and afall ofprices with anexpanded one,itmay beasserted inspite ofthose facts that inconsequence ofacontraction orexpansion ofthe volume ofcommod- ities inthe market ,which can not beproven statistically , the quantity ofmoney incirculation has,although not absolutely ,yet relatively increased ordeclined .we have seen that according toricardo these universal fluctua- tions must take place even with apurely metallic cur- rency ,but that they balance each other through their alternations ;thus ,e.g.,aninadequate currency causes afall ofprices ,the fall ofprices leads tothe export of commodities abroad ,this export causes again animport ofgold from abroad ,which ,initsturn ,brings about a rise ofprices ;the opposite movement taking place in case ofaredundant currency ,when commodities are im- ported and money isexported .but ,since inspite of these universal fluctuations ofprices which are inper- fect accord with ricardo's theory ofmetallic currency , their acute and violent form ,their crisis -form ,belongs tothe period ofadvanced credit ,itisperfectly clear that the issue ofbank -notes isnot exactly regulated by",
        "- 258 - the laws ofmetallic currency .metallic currency has itsremedy inthe import and export ofprecious metals which immediately enter circulation and thus ,bytheir influx orefflux ,cause the prices ofcommodities tofall orrise .the same effect onprices must now beexerted bybanks bythe artificial imitation ofthe laws ofme- tallic currency .ifgold iscoming infrom abroad it proves that the currency isinadequate ,that the value ofmoney istoo high and the prices ofcommodities too low,and ,consequently ,that bank notes must beput in circulation inproportion tothe newly imported gold . on the contrary ,notes have tobewithdrawn from cir- culation inproportion tothe export ofgold from the country .that istosay,the issue ofbank notes must beregulated bythe import and export ofthe precious metals orbythe rate ofexchange .ricardo's false as- sumption that gold isonly coin ,and that therefore all imported gold swells the currency ,causing prices torise, while allexported gold reduces the currency leading to afall ofprices ,this theoretical assumption isturned into apractical experiment ofputting inevery case an amount ofcurrency incirculation equal tothe amount ofgold inexistence .lord overstone (liebanker jones loyd ),colonel torrens ,norman ,clay ,arbuthnot and ahost ofother writers ,known inengland asthe ad- hereris ofthe \"currency principle ,\"not only preached this doctrine ,but with the aid ofsir robert peel suc- ceeded in1844 and 1845 inmaking itthe basis ofthe present english and scotch bank legislation .its ig- nominous failure ,theoretical aswell aspractical ,fol- lowing upon experiments onthe largest national scale ,",
        "259 can betreated only after wetake upthe theory ofcredit .' somuch can beseen ,however ,that the theory ofricardo which isolates money initsfluent form ofcurrency ,ends by ascribing tothe ebbs and tides inthe supply of precious metals aninfluence onbourgeois economy such asthe believers inthe superstitions ofthe monetary sys- tem had never dreamt of.thus did ricardo ,who pro- claimed paper currency asthe most perfect form of money ,become the prophet ofthe bullionists . after hume's theory orthe abstract opposition tothe afew months before the outbreak ofthe commercial crisis of1857 ,acommittee ofthe house ofcommons was insession toinquire into the effect ofthe bank -laws of1844 and 1845 . lord overstone ,the theoretical father ofthese laws ,delivered himself ofthis boast inhis testimony before the committee : \"bystrict and prompt adherence tothe principles oftheactof 1844 ,everything has passed offwith regularity and ease ;the monetary system issafe and unshaken ,the prosperity ofthe country isundisputed ,the public confidence inthe wisdom of theactof1844 isdaily gaining strength ;and ifthe committee wish forfurther practical illustration ofthe soundness ofthe principles onwhich itrests ,orofthebeneficial results which it has assured ,the true and sufficient answer tothecommittee is, look around you;look atthepresent state oftrade ofthecoun- try,look atthe contentment ofthe people ;look atthe wealth and prosperity which pervades every class ofthe community ; and then ,having done so,the committee may befairly called upon todecide whether they will interfere with thecontinuance ofanact under which these results have been developed .\" thus did overstone blow his own horn onthe fourteenth of july ,1857 ;onthe twelfth ofnovember ofthe same year the ministry had tosuspend onitsown responsibility the wonder- fullaw of1844 .",
        "260 monetary system was thus developed toitsultimate con- clusions ,steuart's concrete conception ofmoney was fi- nally restored to its rights by thomas tooke. tooke arrives athis principles not from any theory ,but by aconscientious analysis ofthe history ofprices of commodities from 1793 to1856. inthe first edition of his history ofprices which appeared in1823 ,tooke is still under the complete influence ofthe ricardian the- ory,and vainly tries toreconcile itwith actual facts . his pamphlet \"on the currency ,\"which appeared after the crisis of1825 might even beconsidered asthe first consistent presentation ofthe views which were later given the force oflaw byoverstone .continued studies inthe history ofprices forced him ,however ,tothe con- clusion that the direct connection between prices and the volume ofcurrency ,asitispictured bythe theory ,isa mere illusion ;that the expansion and contraction of currency which takes place while the value ofthe pre- cious metals remains unchanged ,isalways the effect but never the cause ofprice fluctuations ;that the circu- lation ofmoney isinany event but asecondary move- ment ;and that money assumes quite different forms in the actual process ofproduction inaddition tothat of acirculating medium .his detailed investigations be- long toasphere outside ofthat ofsimple metallic cir- culation and can bediscussed here aslittle asthe inves- tigations ofwilson and fullarton which belong tooke was entirely ignorant ofsteuart's work ,asmay be seen from his\"history ofprices for 1839-1847 ,\"london ,1848 , where hereviews the history ofthe theories ofmoney .",
        "261 - tothe same class. none ofthese writers takes aone-sided view ofmoney ,but treat itinitsvarious aspects ;the treatment ,however ,ismechanical ,without anattempt toestablish anorganic connection either between these various aspects themselves ,orbetween them and the combined system ofeconomic categories . they fall, therefore ,into the error ofconfusing money asdistin- guished from medium ofcirculation with capital or even with commodity ,although they are forced else- where todifferentiate itfrom both .'when gold ,e.g., isshipped abroad ,itpractically means that capital is sent abroad ,but the same thing takes place when iron , cotton ,grain ,orany other commodity isexported .both are capital and are distinguished not ascapital ,but as money and commodity .the function ofgold asthe international medium ofexchange springs ,therefore , 'tooke's most important work besides the\"history ofprices \" which his co-worker newmarch published insix volumes ,is \"aninquiry into the currency principle ,the connection ofthe currency with prices \"etc.,2nd edition ,london ,1844. wil- son's book wehave already quoted .finally there istobemen- tioned john fullarton's \"onthe regulation ofcurrencies ,\"2d edition ,london ,1845 . 1between gold \"we ought to ...distinguish ... asmerchandise ,i.e.ascapital ,and gold ...ascur- rency \"(tooke ,\"aninquiry into the currency principle ,etc.\" p.10).\"gold and silver may becounted upon torealize on their arrival nearly theexact sum required tobeprovided ... gold and silver possess aninfinite advantage over allother de- scription ofmerchandize ...from the circumstance of being universally inuseasmoney ...itisnotintea,coffee , ugar orindigo that debts ,whether foreign ordomestic ,areii",
        "262 not from itsbeing capital ,but from its specific char- acter ofmoney .similarly ,when gold ,orbank notes in itsplace ,circulate inthe home trade asmeans ofpay- ment ,they constitute capital atthe same time .but they could not bereplaced bycapital inthe form ofcom- modities ,ashas been demonstrated very palpably by crises ,for instance .that istosay,itisthe fact that gold isdistinguished from commodities initscapacity ofmoney and not inthat ofcapital ,that makes itthe means ofpayment .even when capital isexported di- rectly ascapital ,as,e.g.,when itisdone for the pur- pose oflending abroad acertain amount oninterest ,it depends on circumstances ,whether itwill beexported inthe form ofcommodities orinthat ofgold ,and ifin the latter form ,itisdue tothe specific destination of the precious metals asdistinguished from commodities toserve asmoney .ingeneral ,these writers donot con- sider money initsabstract form ,asitisdeveloped with- inthe sphere ofsimple circulation ofcommodities ,and asitspontaneously grows out ofthe relation ofthe cir- culating commodities .as aresult ,they constantly usually contracted tobepaid ,but incoin ;and the remittance , therefore ,either inthe identical coin designated ,orinbullion which can bepromptly turned into that coin through the mint ormarket ofthecountry towhich itissent ,must always afford tothe remitter ,the most certain ,immediate ,and accurate means ofaffecting this object ,without risk ofdisappointment from the failure ofdemand orfluctuation ofprice .\"(fuller- ton,1.c.p.132-133 .)\"any other article (except gold orsil- ver)might inquantity orkind bebeyond the usual demand of the country towhich itissent .\"(tooke :\"aninquiry ,etc.\")",
        "263 - vacillate between the abstract forms ofmoney which dis- tinguish itfrom commodity and those forms ofitbe- neath which are concealed concrete relations ,such as capital ,revenue ,etc.' the transformation ofmoney into capital weshall consider inthethird chapter which treats ofcapital and forms the end ofthefirst book .",
        "introduction tothe critique of political economy . 1.production ingeneral . the subject ofour discussion isfirst ofall material production byindividuals asdetermined bysociety ,nat- urally constitutes the starting point .the individual and isolated hunter orfisher who forms the starting 'this introduction was first published inthe neue zeit (see translator's preface ,p.5)ofmarch 7,14and 21,1903 ,by karl kantsky ,with the following explanation : \"this article has been found among the posthumous papers ofkarl marx .itisafragmentary sketch ofatreatise that was tohave served asanintroduction tohismain work ,which hehad been writing for many years and whose outline was clearly formed inhis mind .the manuscript isdated august",
        "- - 266 point with smith and ricardo ,belongs tothe insipid illusions ofthe eighteenth century .they are robin- sonades which do not byany means represent ,asstu- dents ofthe history ofcivilization imagine ,areaction against over -refinement and areturn toamisunderstood natural life.they are nomore based onsuch anatural- ism than isrosseau's \"contrat social ,\"which makes nat- urally independent individuals come incontact and have mutual intercourse by contract .they are the fiction and only the aesthetic fiction ofthe small and great robinsonades .they are,moreover ,the anticipation of \"bourgeois society ,\"which had been incourse ofde- 23,1857. ...asthe idea isvery often indicated only in fragmentary sentences ,ihave taken the liberty ofintroducing here and there changes instyle ,insertions ofwords ,etc.. ..amere reprint ofthe original would have made itun- intelligible ... not all the words inthe manuscript are legible . \"wherever there could benodoubt astothe necessity of corrections ,idid sowithout indicating them inthe text ;in other cases iput allinsertions inbrackets .wherever iair not certain astowhether ihave deciphered aword correctly ,i have put aninterrogation point after it;other changes are specially noted .inallother respects this isanexact reprint ofthe original ,whose fragmentary and incomplete passages serve toremind usonly too painfully ofthe many treasures of thought which went down tothe grave with marx ,treasures which would have sufficed forgenerations ifmarx had not so anxiously avoided giving tothe world any ofhisideas until he had tested them repeatedly from every conceivable point of view and had given them awording that would beincontro- vertible .inspite ofitsfragmentary character itopens before usawealth ofnew points ofview .\"",
        "267 velopment since the sixteenth century and made gi- gantic strides towards maturity inthe eighteenth .in this society offree competition the individual appears free from the bonds ofnature ,etc.,which informer epochs ofhistory made him apart ofadefinite ,limited human conglomeration .to the prophets ofthe eigh- teenth century ,onwhose shoulders smith and ricardo are still standing ,this eighteenth century individual , constituting the joint product ofthe dissolution ofthe feudal form ofsociety and ofthe new forces ofproduc- tion which had developed since the sixteenth century , appears asanideal whose existence belongs tothe past ; not asaresult ofhistory ,but asitsstarting point . since that individual appeared tobeinconformity with nature and [corresponded ]totheir conception of human nature ,[hewas regarded ]not asaproduct of history ,but ofnature .this illusion has been charac- teristic ofevery new epoch inthe past .steuart ,who ,as an aristocrat ,stood more firmly on historical ground , contrary tothe spirit ofthe eighteenth century ,escaped this simplicity ofview .the further back we gointo history ,the more the individual and ,therefore ,the producing individual seems todepend onand constitute apart ofalarger whole :atfirst itis,quite naturally , the family and the clan ,which isbut anenlarged family ; later on,itisthe community growing upinitsdifferent forms out ofthe clash and the amalgamation ofclans . itisbut in the eighteenth century ,in \"bourgeois society ,\"that the different forms ofsocial union con- front the individual asamere means tohis private ends , asanoutward necessity .but the period inwhich this",
        "- 268 1view ofthe isolated individual becomes prevalent ,isthe very one inwhich the interrelations ofsociety (general from this point ofview )have reached the highest state ofdevelopment .man isinthe most literal sense ofthe word azoon politikon ,not only asocial animal ,but an animal which can develop into an individual only in society .production by isolated individuals outside of society -something which might happen asan excep- tion toacivilized man who by accident got into the wilderness and already dynamically possessed within himself the forces ofsociety -isasgreat an absurdity asthe idea ofthe development oflanguage without in- dividuals living together and talking toone another .wc need not dwell onthis any longer .itwould not beneces- sary totouch upon this point atall,were not the vagary which had itsjustification and sense with the people of the eighteenth century transplanted inall earnest into the field ofpolitical economy bybastiat ,carey ,proud- hon and others .proudhon and others naturally find it very pleasant ,when they do not know the historical origin ofacertain economic phenomenon ,togive ita quasi historico -philosopohical explanation bygoing into mythology .adam orprometheus hit upon the scheme cut and dried ,whereupon itwas adopted ,etc. nothing ismore tediously dry than the dreaming locus com- munis . whenever we speak ,therefore ,ofproduction ,we al- ways have inmind production atacertain stage ofsocial development ,orproduction bysocial individuals .hence , itmight seem that inorder tospeak ofproduction at all,we must either trace the historical process ofde-",
        "269 velopment through itsvarious phases ,ordeclare atthe outset that we are dealing with acertain historical pe- riod ,as,e.g.,with modern capitalistic production which , asamatter offact ,constitutes the subject proper of this work .but all stages ofproduction have certain landmarks incommon ,common purposes .production ingeneral isanabstraction ,but itisarational abstrac- tion ,insofar asitsingles out and fixes the common features ,thereby saving usrepetition .yet these gen- eral orcommon features discovered bycomparison con- stitute something very complex ,whose constituent ele- ments have different destinations .some ofthese ele- ments belong toall epochs ,others are common toa few .some ofthem are common tothe most modern as well astothe most ancient epochs .no production is conceivable without them ;but while even the most com- pletely developed languages have laws and conditions in common with the least developed ones ,what ischarac- teristic oftheir development are the points ofdeparture from the general and common .the conditions which generally govern production must be differentiated in order that the essential points ofdifference benot lost sight ofinview ofthe general uniformity which isdue. tothe fact that the subject ,mankind ,and the object , nature ,remain the same .the failure toremember this one fact isthe source ofall the wisdom of modern economists who are trying toprove the eternal nature . and harmony ofexisting social conditions .thus they say,e.g.,that noproduction ispossible without some instrument ofproduction ,letthat instrument beonly the hand ;that none ispossible without past accumu-!",
        "- 270 lated labor ,even ifthat labor consist ofmere skill which has been accumulated and concentrated inthe hand ofthe savage by repeated exercise .capital is, among other things ,also aninstrument ofproduction , also past impersonal labor .hence capital isauniversal , eternal natural phenomenon ;which istrue ifwedisre- gard the specific properties which turn an\"instrument ofproduction \"and \"stored uplabor \"into capital .the entire history ofproduction appears toaman like carey , e.g.,asamalicious perversion onthe part ofgovern- ments . if there is no production in general ,there is also no general production . production is always some special branch of production oran aggregate , as,e.g.,agriculture ,stock raising ,manufactures ,etc. but political economy isnot technology .the connec- tion between the general destinations ofproduction ata given stage ofsocial development and the particular forms ofproduction ,istobedeveloped elsewhere (later on). finally ,production isnot only ofaspecial kind .it isalways acertain body politic ,asocial personality that isengaged onalarger orsmaller aggregate ofbranches ofproduction .the connection between the real pro- cess and its scientific presentation also falls outside of the scope ofthis treatise .[we must thus distinguish between ]production ingeneral ,special branches of production and production asawhole . itisthe fashion with economists toopen their works with ageneral introduction ,which isentitled \"produc-",
        "- 271 tion \"(see,e.g.,john stuart mill )and deals with the general \"requisites ofproduction .\" this general introductory part treats orissupposed totreat : 1.ofthe conditions without which production isim- possible ,i.e.,ofthe most essential conditions ofpro- duction .asamatter offact ,however ,itdwindles down , aswe shall see,toafew very simple definitions ,which flatten out into shallow tautologies ; 2.of conditions which further production more or less,as,e.g.,adam smith's [discussion of]aprogres- sive and stagnant state ofsociety . inorder togive scientific value towhat serves with him asamere summary ,itwould benecessary tostudy the degree ofproductivity byperiods inthe development ofindividual nations ;such astudy falls outside ofthe scope ofthe present subject ,and insofar asitdoes be- long here istobebrought out inconnection with the discussion ofcompetition ,accumulation ,etc. the com- monly accepted view ofthe matter gives ageneral an- swer tothe effect that an industrial nation isatthe height ofitsproduction atthe moment when itreaches its historical climax inall respects .or,that certain races ,climates ,natural conditions ,such asdistance from the sea,fertility ofthe soil,etc.,are more favorable to production than others .that again comes down tothe tautology that the facility ofcreating wealth depends on the extent towhich its elements are present both sub jectively and objectively .asamatter offact anation is atitsindustrial height solong asitsmain object isnot",
        "- 272 gain ,but the process ofgaining .inthat respect the yankees stand above the english . but allthat isnot what the economists are really after inthe general introductory part .their object israther to represent production in contradistinction to dis- tribution -see mill ,e.g.-assubject toeternal laws in- dependent ofhistory ,and then tosubstitute bourgeois relations ,inan underhand way ,asimmutable natural laws ofsociety inabstracto .this isthe more orless conscious aim ofthe entire proceeding .on the con- trary ,when itcomes todistribution ,mankind issup- posed tohave indulged inall sorts ofarbitrary action quite apart from the fact that they violently break the ties which bind production and distribution together ,so much must beclear from the outset :that ,nomatter how greatly the systems ofdistribution may vary atdifferent stages ofsociety ,itshould bepossible here ,asinthe case ofproduction ,todiscover the common features and to confound and eliminate all historical differences in formulating general human laws .e.g.,the slave ,the serf ,the wage -worker -all receive aquantity offood , which enables them toexist asslave ,serf ,and wage- worker .the conqueror ,the official ,the landlord ,the monk ,orthe levite ,who respectively live on tribute , taxes ,rent ,alms ,and the tithe ,-all receive [apart ] ofthe social product which isdetermined bylaws differ- ent from those which determine the part received bythe slave ,etc. the two main points which all economists place under this head ,are:first ,property ;second ,the protection ofthe latter bythe administration ofjustice ,",
        "- 273 police ,etc. the objections tothese two points can be stated very briefly . 1.all production isappropriation ofnature bythe individual within and through adefinite form ofsociety . inthat sense itisatautology tosay that property (ap- propriation )isacondition ofproduction .but itbe- comes ridiculous ,when from that one jumps atonce to adefinite form ofproperty ,e.g.private property (which implies ,besides ,asaprerequisite the existence ofanop- posite form ,viz.absence ofproperty ).history points rather tocommon property (e.g.among the hindoos , slavs ,ancient celts ,etc. )asthe primitive form ,which still plays animportant part atamuch later period as communal property .the question as to whether wealth grows more rapidly under this orthat form of property ,isnot even raised here asyet.but that there can benosuch athing asproduction ,nor,consequently , society ,where property does not exist inany form ,isa tautology .appropriation which does not appropriate is acontradictio insubjecto . 3.protection ofproperty ,etc. reduced totheir real meaning ,these commonplaces express more than what their preachers know ,namely ,that every form ofpro duction creates itsown legal relations ,forms ofgovern ment ,etc. the crudity and the shortcomings ofthe conception lieinthe tendency toseebut anaccidental re- flective connection inwhat constitutes anorganic union . the bourgeois economists have avague notion that itis better tocarry onproduction under the modern police , than itwas ,e.g.under club -law.they forget that club law isalso law,and that the right ofthe stronger",
        "274 continues toexist inother forms even under their \"gov- ernment oflaw.\" when the social conditions corresponding toacertain stage ofproduction are inastate offormation ordisap- pearance ,disturbances of production naturally arise , although differing inextent and effect . to sum up:all the stages ofproduction have cer- tain destinations incommon ,which we generalize in thought ;but the so-called general conditions ofallpro- duction are nothing but abstract conceptions which do not gotomake upany real stage inthe history ofproduc- tion . 2.the general relation ofproduction todistribu- tion ,exchange ,and consumption . before going into afurther analysis ofproduction ,it isnecessary tolook atthe various divisions which econ- omists put side byside with it.the most shallow con- ception isasfollows :by production ,the members of society appropriate (produce and shape )the products ofnature tohuman wants ;distribution determines the proportion inwhich the individual participates inthis production ;exchange brings him the particular products into which he wishes toturn the quantity secured by him through distribution ;finally ,through consumption the products become objects ofuse and enjoyment ,ofin- dividual appropriation .production yields goods adopt- edtoour needs ;distribution distributes them accord- ing tosocial laws ;exchange distributes further what has already been distributed ,according toindividual wants ;",
        "- 275 finally ,inconsumption the product drops out ofthe, social movement ,becoming the direct object ofthe in- dividual want which itserves and satisfies in use. production thus appears asthe starting point ;consump- tion asthe final end ;and distribution and exchange as the middle ;the latter has adouble aspect ,distribution being defined asaprocess carried onbysociety ,while exchange ,asone proceeding from the individual .in production the person isembodied inthings ,in[con- sumption ']things are embodied inpersons ;indistribu- tion ,society assumes the part ofgo-between ofproduc- tion and consumption inthe form ofgenerally prevailing rules ;inexchange this isaccomplished bythe accidental make -upofthe individual . distribution determines what proportion (quantity ) ofthe products the individual istoreceive ;exchange de- termines the products inwhich the individual desires to receive his share allotted tohim bydistribution . production ,distribution ,exchange ,and consumption thus form aperfect connection ,production standing for the general ,distribution and exchange for the special , and consumption for the individual ,inwhich all are joined together .tobesure this isaconnection ,but it does not govery deep .production isdetermined [ac- cording tothe economists ]by universal natural laws , while distribution depends onsocial chance :distribution can,therefore ,have amore orless stimulating effect on production :exchange lies between the two asaformal (?)social movement ,and the final act ofconsumption 1the original reads \"person .\"",
        "--- - 276 which isconsidered not only asafinal purpose ,but also asafinal aim ,falls ,properly ,outside ofthe scope of economics ,except insofar asitreacts onthe starting point and causes the entire process tobegin all over again . the opponents ofthe economists -whether econo- mists themselves ornot-who reproach them with tear- ing apart ,like barbarians ,what isan organic whole , either stand oncommon ground with them orare below them .nothing ismore common than the charge that the economists have been considering production asan end initself ,too much tothe exclusion ofeverything else . the same has been said with regard todistribution . this accusation isitself based onthe economic concep- tion that distribution exists side byside with production asaself -contained ,independent sphere .or [they are accused ]that the various factors are not treated bythem intheir connection asawhole .asthough itwere the text books that impress this separation upon life and not life upon the text books ;and the subject atissue were adialectic balancing ofconceptions and not ananalysis ofreal conditions . a.production isatthe same time also consumption . twofold consumption ,subjective and objective .the in- dividual who develops his faculties inproduction ,isalso expending them ,consuming them inthe act ofproduc- tion ,just asprocreation isinitsway aconsumption of vital powers .inthe second place ,production iscon- sumption ofmeans ofproduction which are used and used up and partly (ase.g.inburning )reduced to their natural elements .the same istrue ofthe con:",
        "- 277 sumption ofraw materials which donot remain intheir natural form and state ,being greatly absorbed inthe process .the act ofproduction is,therefore ,inall its aspects anact ofconsumption aswell .but this isad- mitted byeconomists .production asdirectly identical with consumption ,consumption asdirectly coincident with production ,they call productive consumption .this identity ofproduction and consumption finds its ex- pression inspinoza's proposition ,determinatio estnega- tio.but this definition ofproductive consumption isre- sorted tojust for the purpose ofdistinguishing between consumption asidentical with production and consump- tion proper ,which isdefined asitsdestructive counter- part .let usthen consider consumption proper . consumption isdirectly also production ,just asinna- ture the consumption ofthe elements and ofchemical matter constitutes production ofplants .itisclear , that innutrition ,e.g.,which isbut one form ofcon- sumption ,man produces his own body ;but itisequally true ofevery kind ofconsumption ,which goes topro- duce the human being inone way oranother .[itis] consumptive production .but ,say the economists ,this production which isidentical with consumption ,isa second production resulting from the destruction ofthe product ofthe first .inthe first ,the producer trans- forms himself into things ;inthe second ,things are transformed into human beings .consequently ,this consumptive production -although constituting adirect unity ofproduction and consumption -differs essentially from production proper .the direct unity inwhich pro- duction coincides with consumption and consumption!",
        "- - 278 with production ,does not interfere with their direct duality . production isthus atthe same time consumption ,and consumption isatthe same time production .each is directly itsown counterpart .but atthe same time an intermediary movement goes onbetween the two .produc- tion furthers consumption bycreating material for the latter which otherwise would lack itsobject .but con- sumption initsturn furthers production ,byproviding for the products the individual for whom they are products .the product receives itslast finishing touches in consumption .arailroad on which no one rides , which is,consequently not used up,not consumed ,isbut apotential railroad ,and not areal one.without pro- duction ,noconsumption ;but,onthe other hand ,with- out consumption ,noproduction ;since production would then be without apurpose .consumption produces production intwo ways . inthe first place ,inthat the product first becomes a real product inconsumption ;e.g.,agarment becomes areal garment only through the act ofbeing worn ;a dwelling which isnot inhabited ,isreally nodwelling ; consequently ,aproduct asdistinguished from amere natural object ,proves tobesuch ,first becomes aproduct inconsumption .consumption gives the product the finishing touch byannihilating it,since aproduct isthe [result ]ofproduction not only asthe material embodi- ment ofactivity ,but also asamere object for the active subject . in the second place ,consumption produces produc- tion bycreating the necessity for new production ,i.e.",
        "279 - byproviding the ideal ,inward ,impelling cause which constitutes the prerequisite ofproduction .consump- tion furnishes the impulse for production aswell asits object ,which plays inproduction the part ofitsguiding aim .itisclear that while production furnishes the material object ofconsumption ,consumption provides the ideal object ofproduction ,asitsimage ,itswant ,its impulse and its purpose .itfurnishes the object of production initssubjective form .no wants ,noproduc- tion .but consumption reproduces the want . initsturn ,production first ,furnishes consumption 'with its material ,its object .consumption without anobject isnoconsump- tion ,hence production works inthis direction bypro- ducing consumption . second .but itisnot only the object that production provides for consumption .itgives consumption its definite outline ,itscharacter ,its finish .just ascon- sumption gives the product its finishing touch asa product ,production puts the finishing touch onconsump- tion .for the object isnot simply anobject ingeneral , but adefinite object ,which isconsumed inacertain definite manner prescribed inits turn by production . hunger ishunger ;but the hunger that issatisfied with cooked meat eaten with fork and knife isadifferent kind ofhunger from the one that devours raw meat with the aid ofhands ,nails ,and teeth .not only the object of consumption ,but also the manner ofconsumption is produced byproduction ;that istosay,consumption is 'the manuscript reads \"production .\"",
        "280 created byproduction not only objectively ,but also sub- jectively .production thus creates the consumers . third .production not only supplies the want with material ,but supplies the material with awant .when consumption emerges from its first stage ofnatural crudeness and directness -and its continuation inthat state would initself bethe result ofaproduction still remaining inastate ofnatural crudeness -itisitself furthered byitsobject asamoving spring .the want ofitwhich consumption experiences iscreated by its appreciation ofthe product .the object ofart,aswell asany other product ,creates an artistic and beauty- enjoying public .(production thus produces not only an object for the individual ,but also anindividual for the object . production thus produces consumption :first ,byfur- nishing the latter with material ;second ,bydetermin- ing the manner ofconsumption ;third ,by creating in consumers awant for its products asobjects ofcon- sumption .itthus produces the object ,the manner ,and the moving spring ofconsumption .inthe same man- ner,consumption [creates ]the disposition ofthe pro- ducer bysetting (?)him upasanaim and bystimulat- ing wants .the identity ofconsumption and production thus appears tobeathree fold one. first ,direct identity :production isconsumption ;con- sumption is production .consumptive production . productive consumption .economists call both productive consumption ,but make one distinction by calling the former reproduction ,and the latter productive consump- tion .all inquiries into the former deal with productive",
        "281 and unproductive labor ;those into the latter treat of productive and unproductive consumption . second .each appears asthe means ofthe other and as being brought about bythe other ,which isexpressed astheir mutual interdependence ;arelation ,byvirtue of which they appear asmutually connected and indis- pensable ,yet remaining outside ofeach other . production creates the material asthe outward ob- ject ofconsumption ;consumption creates the want as the inward object ,the purpose ofproduction .with- out production ,noconsumption ;without consumption , noproduction ;this maxim figures (?)inpolitical econ- omy inmany forms . third .production isnot only directly consumption and consumption directly production ;nor isproduction merely ameans ofconsumption and consumption the purpose ofproduction .inother words ,not only does each furnish the other with itsobject ;production ,the material object ofconsumption ;consumption ,the ideal object ofproduction .on the contrary ,either one is not only directly the other ,not (?)only ameans offur- thering the other ,but while itistaking place ,creates the other assuch for itself (?).consumption completes the act ofproduction bygiving the finishing touch to the product assuch ,bydestroying the latter ,bybreak- ing up itsindependent material form ;bybringing to astate ofreadiness ,through the necessity ofrepetition , the disposition toproduce developed inthe first act of production ;that istosay,itisnot only the concluding act through which the product becomes aproduct ,but also [the one ]through which the producer becomes a",
        "- - 282 producer .onthe other hand ,production produces an sumption ,bydetermining the manner ofconsumption , and further ,bycreating the incentive for consumption , the very ability toconsume ,inthe form ofwant .this latter identity mentioned under point 3,ismuch dis- cussed inpolitical economy inconnection with the treat- ment ofthe relations ofdemand and supply ,ofobjects and wants ,ofnatural wants and those created bysociety . hence ,itisthe simplest matter with ahegelian to treat production and consumption asidentical .and this has been done not only bysocialist writers offiction but even byeconomists ,e.g.say ;the latter maintained that ifwe consider anation asawhole ,ormankind in abstracto -her production isatthe same time her con- sumption .storch pointed out say's error by calling attention tothe fact that anation does not entirely con- sume her product ,but also creates means ofproduc- tion ,fixed capital ,etc. to consider society asasingle individual ismoreover afalse mode ofspeculative reason- ing.with anindividual ,production and consumption appear asdifferent aspects ofone act.the important point tobeemphasized here isthat ifproduction and consumption beconsidered asactivities ofone individual orofseparate individuals ,they appear atany rate asas- pects ofone process inwhich production forms the actual starting point and is,therefore ,the predominating factor . consumption ,asanatural necessity ,asawant ,con- stitutes an internal factor ofproductive activity ,but the latter isthe starting point ofrealization and ,there- fore ,its predominating factor ,the act into which the entire process resolves itself inthe end .the individua",
        "283 produces acertain article and turns again into himself byconsuming it;but hereturns asaproductive and a self-reproducing individual .consumption thus appears asafactor ofproduction . insociety ,however ,the relation ofthe producer tohis product ,assoon asitiscompleted ,isanoutward one,and the return ofthe product tothe individual depends on his relations toother individuals .he does not take im- mediate possession ofit.nor does the direct appropria- tion ofthe product constitute his purpose ,when hepro- duces insociety .between the producer and the product distribution steps in,which determines bysocial laws his share inthe world ofproducts ;that istosay,dis- tribution steps inbetween production and consumption . does distribution form anindependent sphere stand- ing side byside with and outside ofproduction ? b.production and distribution . in perusing the common treatises oneconomics one can not help being struck with the fact that everything istreated there twice ;e.g.,under distribution ,there figure rent ,wages , interest ,and profit ;while under production wefind land , labor ,and capital asagents ofproduction .as regards capital ,itisatonce clear that itiscounted twice :first , asanagent ofproduction ;second ,asasource ofincome ; asdetermining factors and definite forms ofdistribution , interest and profit figure assuch also inproduction ,since they are forms ,inwhich capital increases and grows ,and are consequently factors ofitsown production .interest and profit ,asforms ofdistribution ,imply the existence ofcapital asanagent ofproduction .they are forms of distribution which have for their prerequisite capital as",
        "----- - 284 anagent ofproduction .they are also forms ofrepra duction ofcapital . inthe same manner ,wages iswage -labor when cons sidered under another head ;the definite character which labor has inone case asanagent ofproduction ,appears inthe other asaform ofdistribution .iflabor were not fixed aswage -labor ,itsmanner ofparticipation indis- tribution 'would not appear aswages ,asisthe case e.g. under slavery .finally ,rent -totake atonce the most de- veloped form ofdistribution -bymeans ofwhich landed property receives itsshare ofthe products ,implies the existence oflarge landed property (properly speaking , agriculture onalarge scale )asanagent ofproduction , and not simply land ,no more than wages represents simply labor .the relations and methods ofdistribu- tion appear ,therefore ,merely asthe reverse sides of the agents ofproduction .]an individual who partici- pates inproduction asawage laborer ,receives his share ofthe products ,i.e.ofthe results ofproduction ,inthe form ofwages .the subdivisions and organization of distribution are determined bythe subdivisions and or ganization of production .distribution is itself a product ofproduction ,not only insofar asthe material goods are concerned ,since only the results ofproduction can bedistributed ;but also asregards itsform ,since the definite manner ofparticipation inproduction deter mines the particular form ofdistribution ,the form under which participation indistribution takes place .itis the manuscript reads \"production .\"",
        "-- 285 quite anillusion toplace land under production ,rent uu- der distribution ,etc. economists ,like ricardo ,who are accused above allof having paid exclusive attention toproduction ,define dis- tribution ,therefore ,asthe exclusive subject ofpolitical economy ,because they instinctively 'regard the forms of distribution asthe clearest forms inwhich the agents ofproduction find expression inagiven society . to the single individual distribution naturally ap- pears asalaw established by society determining his position inthe sphere ofproduction ,within which he produces ,and thus antedating production .atthe out- set the individual has no capital ,nolanded property . from his birth he isassigned towage -labor by the . social process ofdistribution .but this very condition ofbeing assigned towage -labor isthe result ofthe ex- istence ofcapital and landed property asindependent agents ofproduction . from the point ofview ofsociety asawhole ,distri- bution seems toantedate and todetermine production inanother way aswell ,asapre-economic fact ,sotosay. aconquering people divides the land among the con- querors establishing thereby acertain division and form oflanded property and determining the character of production ;or,itturns the conquered people into slaves and thus makes slave labor the basis ofproduction .or, anation ,byrevolution ,breaks uplarge estates into small parcels ofland and bythis new distribution imparts to 'the german text reads \"instruktiv ,\"which itake tobea misprint of\"instinktiv .\"translator .",
        "286 - [production anew character .or,legislation prepetuates land ownership inlarge families ordistributes labor as anhereditary privilege and thus fixes itincastes . in all ofthese cases ,and they are all historic ,itis not distribution that seems tobeorganized and deter- mined byproduction ,but onthe contrary ,production by distribution . inthe most shallow conception ofdistribution ,the latter appears asadistribution ofproducts and tothat extent asfurther removed from and quasi -independent ofproduction .but before distribution means distribu- tion ofproducts ,itisfirst ,adistribution ofthe means ofproduction ,and second ,what ispractically another wording ofthe same fact ,itisadistribution ofthe mem- bers ofsociety among the various kinds ofproduction (the subjection ofindividuals tocertain conditions of production ).the distribution ofproducts ismanifestly aresult ofthis distribution ,which isbound upwith the process ofproduction and determines the very organiza- tion ofthe latter .totreat ofproduction apart from the distribution which iscomprised init,isplainly anidle abstraction .conversely ,we know the character ofthe distribution ofproducts the moment we are given the nature ofthat other distribution which forms originally afactor ofproduction .ricardo ,who was concerned with the analysis ofproduction asitisorganized inmod- ern society and who was the economist ofproduction par excellence ,for that very reason declares not production but distribution asthe subject proper ofmodern econo- mics .we have here another evidence ofthe insipidity ofthe economists who treat production asan eternal",
        "287- truth ,and banish history tothe domain ofdistribution . what relation toproduction this distribution ,which has adetermining influence on production itself ,as- sumes ,isplainly aquestion which falls within the province ofproduction .should itbemaintained that atleast tothe extent that production depends onacer- tain distribution ofthe instruments ofproduction ,dis- tribution inthat sense precedes production and con- stitutes itsprerequisite ;itmay bereplied that produc- tion has infact itsprerequisite conditions ,which form factors ofit.these may appear atfirst tohave anat- ural origin .bythe very process ofproduction they are changed from natural tohistorical ,and ifthey appear during one period asanatural prerequisite ofproduc- tion ,they formed atother periods itshistorical result . within the sphere ofproduction itself they are under- going aconstant change .e.g.,the application ofma- chinery produces achange inthe distribution ofthe in- struments ofproduction aswell asinthat ofproducts , and modern land ownership onalarge scale isasmuch the result ofmodern trade and modern industry ,asthat ofthe application ofthe latter toagriculture . all ofthese questions resolve themselves inthe last instance tothis :how dogeneral historical conditions affect production and what part does itplay atall in the course ofhistory ?itisevident that this question can betaken uponly inconnection with the discussion and analysis ofproduction . yet inthe trivial form inwhich these questions are raised above ,they can beanswered just asbriefly .in the case ofallconquests three ways lieopen .the con-",
        "288 quering people may impose itsown methods ofproduc- tion upon the conquered (e.g.the english inireland in the nineteenth century ,partly also inindia );or,itmay allow everything toremain asitwas contenting itself with tribute (e.g.the turks and the romans );or,the two systems bymutually modifying each other may re- sult insomething new ,asynthesis (which partly resulted from the germanic conquests ).in all ofthese con- quests the method ofproduction ,beitofthe conquerors , the conquered ,orthe one resulting from acombination ofboth ,determines the nature ofthe new distribution which comes into play .although the latter appears now asthe prerequisite condition ofthe new period of production ,itisinitself but aproduct ofproduction , not ofproduction belonging tohistory ingeneral ,but of production relating toadefinite historical period .the mongols with their devastations inrussia e.g.acted in accordance with their system ofproduction ,for which sufficient pastures on large uninhabited stretches of country are the main prerequisite .the germanic bar- barians ,with whom agriculture carried onwith the aid ofserfs was the traditional system ofproduction and who were accustomed tolonely life inthe country ,could in- troduce the same conditions inthe roman provinces so much easier since the concentration oflanded property which had taken place there ,did away completely with the older systems ofagriculture .there isaprevalent tradition that incertain periods robbery constituted the only source ofliving .but inorder tobeable toplunder , there must besomething toplunder ,i.e.there must be",
        "- - 289 production .'and even the method ofplunder isdeter- mined bythe method ofproduction .astockjobbing na- tion e.g.can not berobbed inthe same manner asa nation ofshepherds . inthe case ofthe slave the instrument ofproduction isrobbed directly .but then the production ofthe coun- try inwhose interest heisrobbed ,must besoorganized astoadmit ofslave labor ,or(asinsouth america ,etc. ): asystem ofproduction must beintroduced adapted to slavery . laws may perpetuate aninstrument ofproduction ,e. g.land ,incertain families .these laws assume an economic importance iflarge landed property isinhar- mony with the system ofproduction prevailing insociety , asisthe case e.g.inengland .infrance agriculture had been carried ononasmall scale inspite ofthe large estates ,and the latter were ,therefore ,broken upbythe revolution .but how about the legislative attempt to perpetuate the minute subdivision ofthe land ?inspite ofthese laws land ownership isconcentrating again .the effect oflegislation onthe maintenance ofasystem of 1compare this with foot-note 1,onp.34ofcapital ,hum- boldt edition ,new york : \"truly comical ism.bastiat ,who imagines that the ancient greeks and romans lived byplunder alone .but when people . plunder forcenturies ,there must always besomething athand forthem toseize ;the objects ofplunder must becontinually reproduced .\"k.kautsky . 'the english expression isused bymarx inhis german original .transl .",
        "- -- 290 distribution and its resultant influence on production are tobedetermined elsewhere . c.exchange and circulation .circulation isbut a certain aspect ofexchange ,oritmay bedefined asex- change considered asawhole .since exchange isanin- termediary factor between production and itsdependent , distribution ,onthe one hand ,and consumption ,onthe other ;and since the latter appears but asaconstituent ofproduction ,exchange ismanifestly also aconstituent part ofproduction . in the first place ,itisclear that the exchange of activities and abilities which takes place in the sphere of production falls directly within the latter and constitutes one of its essential elements . in the second place ,the same is true of the exchange of products ,in so far as itisameans of completing acertain product ,designed for im- mediate consumption .to that extent exchange consti- tutes anact included inproduction .thirdly ,the so- called exchange between dealers and dealers 'isbyvirtue ofitsorganization determined byproduction ,and isit- self aspecies ofproductive activity .exchange appears tobeindependent ofand indifferent toproduction only inthe last stage when products are exchanged directly for consumption .but inthe first place ,there isnoex- 'marx evidently has inmind here apassage inadam smith's wealth ofnations (vol.2,ch.2)inwhich hespeaks ofthecir culation ofacountry asconsisting oftwo distinct parts :cir- culation between dealers and dealers ,and that between dealers and consumers .the word dealer signifies here not only amer- chant orshopkeeper ,but also aproducer .k.kautsky .",
        "- - 291>change without adivision oflabor ,whether natural or asaresult ofhistorical development ;secondly ,private exchange implies the existence ofprivate production ; thirdly ,the intensity ofexchange ,aswell asitsextent and character are determined bythe degree ofdevelop- ment and organization ofproduction ,ase.g.exchange between city and country ,exchange inthe country ,inthe city ,etc. exchange thus appears inallitsaspects tobe directly included inordetermined byproduction . 1the result wearrive atisnot that production ,distri- bution ,exchange ,and consumption are identical ,but that they are allmembers ofone entity ,different sides ofone unit .production predominates not only over production itself inthe opposite sense ofthat term ,but over the other elements aswell .with itthe process constantly starts over again .that exchange and con- sumption can not bethe predominating elements isself evident .the same istrue ofdistribution inthe narrow sense ofdistribution ofproducts ;asfor distribution in the sense ofdistribution ofthe agents ofproduction ,it isitself but afactor ofproduction .adefinite [form of]production thus determines the [forms of]consump- tion ,distribution ,exchange ,and also the mutual rela- tions between these various elements .ofcourse ,produc- tion inits one-sided form isinitsturn influenced by other elements ;e.g.with the expansion ofthe market , i.e.ofthe sphere ofexchange ,production grows in volume and issubdivided toagreater extent . with achange indistribution ,production undergoes a change ;ase.g.inthe case ofconcentration ofcapital , ofachange inthe distribution ofpopulation incity and",
        "292 country ,etc. finally ,the demands ofconsumption also influence production .amutual interaction takes place between the various elements .such isthe case with every organic body . 3.the method ofpolitical economy . when we consider agiven country from apolitico- economic standpoint ,webegin with itspopulation ,then analyze the latter according toitssubdivision into classes , location incity ,country ,orbythe sea,occupation indif- ferent branches ofproduction ;then westudy itsexports and imports ,annual production and consumption ,prices ofcommodities ,etc. itseems tobethe correct pro- cedure tocommence with the real and concrete aspect of conditions asthey are;inthe case ofpolitical econ- omy ,tocommence with population which isthe basis and the author ofthe entire productive activity ofsociety . yet ,oncloser consideration itproves tobewrong .pop- ulation isanabstraction ,ifweleave out e.g.the classes ofwhich itconsists .these classes ,again ,are but an empty word ,unless we know what are the elements on which they are based ,such aswage -labor ,capital ,etc. these imply ,intheir turn ,exchange ,division oflabor , prices ,etc. capital ,e.g.does not mean anything without wage -labor ,value ,money ,price ,etc. ifwe start out, therefore ,with population ,wedosowith achaotic con- ception ofthe whole ,and bycloser analysis wewill grad- ually arrive atsimpler ideas ;thus we shall proceed from the imaginary concrete toless and less complex ab- stractions ,until weget atthe simplest conception .this",
        "293 once attained ,wemight start onour return journey until wewould finally come back topopulation ,but this time not asachaotic notion ofanintegral whole ,but asarich aggregate of many conceptions and relations .the former method isthe one which political economy had adopted inthe past atitsinception .the economists of the seventeenth century ,e.g.,always started out with the living aggregate :population ,nation ,state ,several states ,etc.,but inthe end they invariably arrived ,by means ofanalysis ,atcertain leading ,abstract general principles ,such asdivision oflabor ,money ,value ,etc. assoon asthese separate elements had been more orless established by abstract reasoning ,there arose the sys- tems ofpolitical economy which start from simple con- ceptions ,such aslabor ,division oflabor ,demand ,ex- change value ,and conclude with state ,international ex- change and world market .the latter ismanifestly the scientifically correct method .the concrete isconcrete , because itisacombination ofmany objects with different destinations ,i.e.aunity ofdiverse elements .inour thought ,ittherefore appears asaprocess ofsynthesis ,as aresult ,and not asastarting point ,although itisthe real starting point and ,therefore ,also the starting point ofobservation and conception .by the former method the complete conception passes into anabstract defini- tion ;bythe latter ,the abstract definitions lead tothe reproduction ofthe concrete subject inthe course of reasoning .hegel fell into the error ,therefore ,ofcon- sidering the real asthe result ofself-coordinating ,self- absorbed ,and spontaneously operating thought ,while the method ofadvancing from the abstract tothe con-",
        "- - 294 crete isbut away ofthinking bywhich the concrete is grasped and isreproduced inour mind asaconcrete .it isbynomeans ,however ,the process which itself gen- erates the concrete .the simplest economic category , say,exchange value ,implies the existence ofpopulation , population that isengaged inproduction under certain conditions ;italso implies the existence ofcertain types offamily ,clan ,orstate ,etc. itcan have noother ex- istence except asan abstract one-sided relation ofan already given concrete and living aggregate . as acategory ,however ,exchange value leads anan- tediluvian existence .and since our philosophic con- sciousness issoarranged that only the image ofthe man that itconceives appears toitasthe real man and the world asitconceives it,asthe real world ;itmistakes the movement ofcategories for the real act ofproduc- tion (which unfortunately (?)receives only itsimpetus from outside )whose result isthe world ;that istrue- here we have ,however ,again atautology -insofar as the concrete aggregate isathought aggregate ,insofar as the concrete subject ofour thought isinfact aproduct ofthought ,ofcomprehension ;not,however ,inthe sense ofaproduct ofaself-emanating conception which works outside ofand stands above observation and imagination , but ofamental consummation ofobservation and imagi- nation .the whole ,asitappears inour heads asa thought -aggregate ,isthe product ofathinking mind which grasps the world inthe only way open toit,away which differs from the one employed bythe artistic ,re- ligious ,orpractical mind .the concrete subject con- tinues tolead anindependent existence after ithas been",
        "- 295 - grasped ,asitdid before ,outside ofthe head ,solong as the head contemplates itonly speculatively ,theoretically . sothat inthe employment ofthe theoretical method [inpolitical economy ],the subject ,society ,must con- stantly bekept inmind asthe premise from which we start . but have these simple categories noindependent his- torical ornatural existence antedating the more concrete ones ?a depend .for instance ,inhis philosophy of law hegel rightly starts out with possession ,asthe simplest legal relation of individuals .but there is nosuch thing aspossession before the family orthe rela- tions oflord and serf ,which are agreat deal more con- crete relations ,have come into existence .on the other hand ,one would be right insaying that there are families and clans which only possess ,but donot own things .the simpler category thus appears asarela- tion ofsimple family and clan communities with respect toproperty .inearlier society the category appears as asimple relation ofadeveloped organism ,but the con- crete substratum from which springs the relation ofpos- session ,isalways implied .one can imagine anisolated savage inpossession ofthings .but inthat case pos- session isnolegal relation .itisnot true that the family came asthe result ofthe historical evolution ofpos- session .on the contrary ,the latter always implies the existence ofthis \"more concrete category oflaw.\" yet somuch may besaid ,that the simple categories are the expression ofrelations inwhich the less developed con- crete entity may have been realized without entering into the manifold relations and bearings which are",
        "- 296 mentally expressed inthe concrete category ;but when the concrete entity attains fuller development itwill retain the same category asasubordinate relation . money may exist and actually had existed inhistory before capital ,orbanks ,orwage -labor came into exist- ence .with that inmind ,itmay besaid that the more simple category can serve asanexpression ofthe pre- dominant relations ofanundeveloped whole orofthe subordinate relations ofamore developed whole ,[rela- tions ]which had historically existed before the whole developed inthe direction expressed inthe more concrete category .insofar,the laws ofabstract reasoning which ascends from the most simple tothe complex ,corre- spond tothe actual process ofhistory . onthe other hand ,itmay besaid that there are highly developed but historically unripe forms ofsociety in which the highest economic forms are tobefound ,such , asco-operation ,advanced division oflabor ,etc.,and yet there isnomoney inexistence ,e.g.peru . in slavic communities also ,money ,aswell asex- change towhich itowes its existence ,does not appear atallorvery little within the separate communities ,but itappears ontheir boundaries intheir inter -communal traffic ;ingeneral ,itiserroneous toconsider exchange asaconstituent element originating within the com- munity .itappears atfirst more inthe mutual relations between different communities ,than inthose between the members ofthe same community .furthermore ,al- though money begins toplay itspart everywhere atan early stage ,itplays inantiquity the part ofapre- dominant element only inone-sidedly developed nations ,",
        "- 297 viz.trading nations ,and even inmost cultured an- tiquity ,ingreece and rome ,itattains itsfull develop- ment ,which constitutes the prerequisite ofmodern bour- geois society ,only inthe period oftheir decay .thus , this quite simple category attained itsculmination inthe past only atthe most advanced stages ofsociety .even then itdid not pervade (?)all economic relations ;in rome e.g.atthe time ofitshighest development taxes and payments inkind remained the basis .asamatter- offact ,the money system was fully developed there only sofar asthe army was concerned ;itnever came todom- inate the entire system oflabor . thus ,although the simple category may have existed historically before the more concrete one,itcan attain its complete internal and external development only incom- plex (?)forms ofsociety ,while the more concrete cate- gory has reached itsfull development inaless advanced form ofsociety . labor isquite asimple category .the idea oflabor in that sense ,aslabor ingeneral ,isalso very old.yet , \"labor \"thus simply defined by political economy isas much amodern category ,asthe conditions which have given rise tothis simple abstraction .the monetary sys- tem ,e.g.defines wealth quite objectively ,asathing (?) inmoney .compared with this point ofview ,itwas agreat step forward ,when the industrial orcommercial system came toseethe source ofwealth not inthe object but inthe activity ofpersons ,viz.incommercial and in- here two words inthe manuscript can not bedeciphered . they look like \"ausser sich\"(\"outside ofitself \").k.kautsky .",
        "- - 298 dustrial labor .but even the latter was thus considered only inthe limited sense ofamoney producing activity . the physiocratic system [marks still further progress ] inthat itconsiders acertain form oflabor ,viz.agricul- ture ,asthe source ofwealth ,and wealth itself not in the disguise ofmoney ,but asaproduct ingeneral ,as the general result oflabor .but corresponding tothe limitations ofthe activity ,this product isstill only a natural product .agriculture isproductive ,land isthe source ofproduction par excellence .itwas atremendous advance onthe part ofadam smith tothrow aside all limitations which mark wealth -producing activity and [todefine it]aslabor ingeneral ,neither industrial ,nor commercial ,nor agricultural ,orone asmuch asthe other . along with the universal character ofwealth -creating activity we have now the universal character ofthe object defined aswealth ,viz.product ingeneral ,orlabor ingeneral ,but aspast incorporated labor .how diffi- cult and great was the transition ,isevident from the way adam smith himself falls back from time totime into the physiocratic system .now ,itmight seem as though this amounted simply tofinding anabstract ex- pression for the simplest relation into which men have been mutually entering asproducers from times ofyore , no matter under what form ofsociety .in one sense this istrue .inanother itisnot. the indifference astothe particular kind oflabor im- plies the existence ofahighly developed aggregate ofdif- ferent species ofconcrete labor ,none ofwhich isany longer the predominant one.sodothe most general ab- stractions commonly arise only where there isthe highest",
        "299 - concrete development ,where one feature appears tobe jointly possessed by many ,and tobecommon toall. then itcan not bethought ofany longer inone par- ticular form .on the other hand ,this abstraction of labor isbut the result ofaconcrete aggregate ofdiffer- ent kinds oflabor .the indifference tothe particular kind oflabor corresponds toaform ofsociety inwhich individuals pass with ease from one kind ofwork toan- other ,which makes itimmaterial tothem what particu- lar kind ofwork may fall totheir share .labor has be- come here ,not only categorically but really ,ameans ofcreating wealth ingeneral and isnolonger grown to- gether with the individual into one particular destina- tion .this state ofaffairs has found itshighest develop- ment inthe most modern ofbourgeois societies ,the united states .itisonly here that the abstraction of the category \"labor ,\"\"labor in general ,\"labor sans phrase ,the starting point ofmodern political economy , becomes realized inpractice .thus ,the simplest abstrac- tion which modern political economy sets upasitsstart- ing point ,and which expresses arelation dating back to antiquity and prevalent under all forms ofsociety ,ap- pears inthis abstraction truly realized only asacategory ofthe most modern society .itmight besaid that what appears inthe united states asanhistorical product , viz.the indifference astothe particular kind oflabor- appears among the russians e.g.asanatural disposi- tion .but itmakes all the difference inthe world whether barbarians have anatural predisposition which makes them applicable alike toeverything ,orwhether civilized people apply themselves toeverything .and ,",
        "- 300 besides ,this indifference ofthe russians astothe kind ofwork they do,corresponds totheir traditional practice ofremaining inthe rut ofaquite definite occupation until they are thrown out ofitbyexternal influences . this example oflabor strikingly shows how even the most abstract categories ,inspite oftheir applicability to allepochs -just because oftheir abstract character -are bythe very definiteness ofthe abstraction aproduct of historical conditions aswell ,and are fully applicable only toand under those conditions . the bourgeois society isthe most highly developed and most highly differentiated historical organization ofpro- duction .the categories which serve asthe expression ofitsconditions and the comprehension ofitsown or- ganization enable itatthe same time togain aninsight into the organization and the conditions ofproduction which had prevailed under allthe past forms ofsociety , onthe ruins and constituent elements ofwhich ithas arisen ,and ofwhich itstill drags along some unsur- mounted remnants ,while what had formerly been mere intimation has now developed tocomplete significance . the anatomy ofthe human being isthe key tothe anatomy ofthe ape.but the intimations ofahigher animal inlower ones can be understood only ifthe animal ofthe higher order isalready known .the bourgeois economy furnishes akey toancient economy , etc. this is,however ,bynomeans true ofthe method of those economists who blot out all historical differences and seethe bourgeois form inallforms ofsociety .one can understand the nature oftribute ,tithes ,etc.,after",
        "- - 301 one has learned the nature ofrent .but they must not beconsidered identical . since ,furthermore ,bourgeois society isbut aform ' resulting from the development ofantagonistic elements , some relations belonging toearlier forms ofsociety are frequently tobefound initbut inacrippled state or asatravesty oftheir former self ,ase.g.communal property .while itmay be said ,therefore ,that the categories ofbourgeois economy contain what istrue of allother forms ofsociety ,the statement istobetaken cum grano salis . they may contain these inade- veloped ,orcrippled ,orcaricatured form ,but always es- sentially different .the so-called historical develop- ment amounts inthe last analysis tothis ,that the last form considers itspredecessors asstages leading upto itself and perceives them always one-sidedly ,since itis very seldom and only under certain conditions that itis capable ofself-criticism ;ofcourse ,wedonot speak here ofsuch historical periods which appear totheir own con- temporaries asperiods ofdecay .the christian religion became capable toassist ustoanobjective view ofpast mythologies assoon asitwas ready forself-criticism toa certain extent ,dynamei so-to-say.inthe same way bour- geois political economy first came tounderstand the feudal ,the ancient ,and the oriental societies assoon as the self-criticism ofthe bourgeois society had commenced . sofar asbourgeois political economy has not gone into the mythology ofpurely (?)identifying the bourgeois system with the past ,itscriticism ofthe feudal system against which itstill had towage war resembled christ-",
        "-- 302 ian criticism ofthe heathen religions orprotestant criti- cism ofcatholicism . inthe study ofeconomic categories ,asinthe case ofevery historical and social science ,itmust beborne in mind that asinreality soinour mind the subject ,inthis case modern bourgeois society ,isgiven and that the categories are therefore but forms ofexpression ,mani- festations ofexistence ,and frequently but one-sided as- pects ofthis subject ,this definite society ;and that , therefore ,the origin of[political economy ]asascience does not byany means date from the time towhich it isreferred assuch .this istobefirmly held inmind because ithas animmediate and important bearing on the matter ofthe subdivisions ofthe science . for instance ,nothing seems more natural than to start with rent ,with landed property ,since itisbound up with land ,the source ofall production and all ex- istence ,and with the first form ofproduction inall more orless settled communities ,viz.agriculture .but nothing would bemore erroneous .under allforms of society there isacertain industry which predominates over all the rest and whose condition therefore deter- mines the rank and influence ofallthe rest . itisthe universal light with which allthe other colors are tinged and are modified through itspeculiarity .it isaspecial ether which determines the specific gravity ofeverything that appears init. let ustake for example pastoral nations (mere hunt- ing and fishing tribes are not asyet atthe point from which real development commences ).they engage ina certain form ofagriculture ,sporadically .the nature",
        "303 ofland -ownership isdetermined thereby .itisheld in common and retains this form more orless according to the extent towhich these nations hold ontotraditions ; such e.g.island -ownership among the slavs .among nations whose agriculture iscarried onbyasettled popu- lation -the settled state constituting agreat advance- where agriculture isthe predominant industry ,such as inancient and feudal societies ,even the manufacturing industry and itsorganization ,aswell asthe forms of property which pertain toit,have more orless the charac- teristic features ofthe prevailing system ofland owner- ship ;[society ]isthen either entirely dependent upon agriculture ,asinthe case ofancient rome ,or,asin the middle ages ,itimitates initscity relations the forms oforganization prevailing inthe country .even capital , with the exception ofpure money capital ,has,inthe form ofthe traditional working tool ,the characteristics ofland ownership inthe middle ages . the reverse istrue ofbourgeois society .agriculture comes tobemore and more merely abranch ofindustry and iscompletely dominated bycapital .the same is true ofrent .inallthe forms ofsociety inwhich land ownership isthe prevalent form ,the influence ofthe natural element isthe predominant one .inthose where capital predominates the prevailing element isthe one historically created bysociety .rent can not beunder- stood without capital ,nor can capital ,without rent .cap- ital isthe all dominating economic power ofbourgeois society .itmust form the starting point aswell asthe end and bedeveloped before land -ownership is after",
        "304 - each has been considered separately ,their mutual rela- tion must beanalyzed . itwould thus beimpractical and wrong toarrange the economic categories inthe order inwhich they were the determining factors inthe course ofhistory .their order ofsequence israther determined bythe relation which they bear toone another inmodern bourgeois so- ciety ,and which isthe exact opposite ofwhat seems tobe their natural order orthe order oftheir historical de- velopment .what we are interested inisnot the place which economic relations occupy inthe historical suc- cession ofdifferent forms ofsociety .still less are we interested inthe order oftheir succession \"inidea \" (proudhon ),which isbut ahazy (?)conception ofthe course ofhistory .we are interested intheir organic connection within modern bourgeois society . the sharp line ofdemarkation (abstract precision ) which soclearly distinguished the trading nations ofan- tiquity ,such asthe phenicians and the carthagenians , was due tothat very predominance ofagriculture .cap- ital astrading ormoney capital appears inthat abstrac- tion ,where capital does not constitute asyet the pre- dominating element ofsociety .the lombardians and the jews occupied the same position among the agricul- tural nations ofthe middle ages . as afurther illustration ofthe fact that the same category plays different parts atdifferent stages ofso- ciety ,we may mention the following :one ofthe latest forms ofbourgeois society ,viz.stock companies ,appear also atitsbeginning inthe form ofthe great chartered monopolistic trading companies .",
        "305 - the conception ofnational wealth which isimper- ceptibly formed inthe minds ofthe economists ofthe seventeenth century ,and which partly continues tobe entertained bythose ofthe eighteenth century ,isthat wealth isproduced solely for the state ,but that the power ofthe latter isproportional tothat wealth .itwas asyet anunconsciously hypocritical way inwhich wealth announced itself and itsown production asthe aim of modern states considering the latter merely asameans tothe production ofwealth . the order oftreatment must manifestly beasfollows : first ,the general abstract definitions which are more or less applicable toall forms ofsociety ,but inthe sense indicated above .second ,the categories which gotomake upthe inner organization ofbourgeois society and con- stitute the foundations ofthe principal classes ;capital , wage -labor ,landed property ;their mutual relations ;city and country ;the three great social classes ,the exchange between them ;circulation ,credit (private ).third , the organization ofbourgeois society inthe form of astate ,considered inrelation toitself ;the \"unproduc- tive \"classes ;taxes ;public debts ;public credit ;popula- tion ;colonies ;emigration .fourth ,the international organization of production ;international division of labor ;international exchange ;import and export ;rate ofexchange .fifth ,the world market and crises .",
        "- 306 4.production ,means ofproduction ,and conditions ofproduction .the relations ofproduction and distribution .'the connection between form ofstate and property onthe one hand and relations of production and distribu- tion onthe other .legal relations .fam- ily relations . notes onthe points tobementioned here and not tobe omitted :\" 1.war attains complete development before peace ; how certain economic phenomena ,such aswage labor , machinery ,etc.,are developed atanearlier date through war and inarmies than within bourgeois society .the connection between productive force and the means of communication ismade especially plain inthe case of the army . 2.the relation between the idealistic and realistic methods ofwriting history ;namely ,the so-called history ofcivilization which isallahistory ofreligion and states . distribution (verkehr )isused here inthe sense ofphysi- cal distribution ofgoods and not insense ofeconomic dis- tribution ofthe shares ofthe products between the different factors ofproduction .translator . 'asthe \"notes \"written down bymarx inthefollowing eight paragraphs are extremely fragmentary ,making translation in some cases impossible without acertain degree ofinterpreta . tion,and astheoriginal isnotaccessible inbook -form ,they are reproduced here ingerman forthe benefit ofthe student who may feel interested intheoriginal wording asithad been jotted down bymarx ,",
        "307 inthis connection sometning may besaid ofthe differ- ent methods hitherto employed inwriting history .the so-called objective [method ].the subjective .(the moral and others ).the philosophic . 4. broduktion ,produktionsmittel und produktionsverhlt- niffe . broduktionsverhltnis und verkehrsverhltniffe . staats- und eigenthumsformen im berhltnis zu den produktions- und verkehrsverhltnissen .rechtsverhltniffe . familienverhltnisse . notabene inbezug auf punkte ,diehier zuerwhnen und nicht vergessen werden drfen : 1.der krieg istfrher ausgebildet ,wie der frieden : [auszufhren wre ]die art,wie durch den krieg und in den armeen 2.gewisse konomische verhltnisse wie lohn- arbeit ,maschinerie 2.frher entwickelt [werden ]als im inneren der brgerlichen gesellschaft .auch das verhltnis von produktivkraft und verkehrsverhltnissen wird besonders anschaulich inder armee . 2.verhltnis der bisherigen idealen geschichtsschreibung zur realen .namentlich diesogenannte kulturgeschichte ,die alle religions- und staatengechichte . bei der gelegenheit kann auch etwas gesagt werden ber die verschiedenen arten der bisherigen geschichtsschreibung . sogenannte objektive .subjektive .(moralische und andere .) philosophische . 3.sefundres und tertire 3. ueberhaupt abgeleitete ,bertragene ,nicht ursprngliche produktionsverhltnisse .hier [ist das]einspielen der internationalen verhltnisse [zubehandeln ]. 4. vorwrfe ber materialismus dieser auffassung . verhltnis zum naturalitichen materialismus . 5.dialektik der begriffe produktivkraft (produktions-",
        "308 mittel )und produktionsverhltnis ,eine dialektif ,deren grenzen zubestimmen sind und dierealen unterschied nicht aufhebt . 6.das unegale verhltnis der entwicklung der mate riellen produktion zum beispiel zur fnstlerischen .ueber- haupt istder begriff des fortschritts nicht inder gewhn lichen abstraktion zufassen .bei derkunst .istdiese dis- proportion noch nicht sowichtig und schwierig zufassen als innerhalb praktisch -sozialer verhltnisse selbst ,zum beispiel das bildungsverhltnis dervereinigten staaten zueuropa der eigentlich schwierige punkt ,der hier zuerrtern ist aber der,wie dieproduktionsverhltnisse als rechtsverhlt nisse inungleiche (?)entwidlung treten .also zum bei- spiel das verhltnis des rmischen privatrechts (imkrimi nalrecht und ffentlichen istdas weniger der fall )zur modernen produktion . 7diese auffassung erscheint als nothwendige entwick lung .aber berechtigung des zufalls .varia .'(die frei- heit und anderes noch .)(ginwirkung der kommunikations- mittel .) weltgeschichte eigentlich nicht immer in der geschichte als weltgeschicht [liches ]resultat . 8.der ausgangspunkt [ist]natrlich von der natur- bestimmtheit [zunehmen ];subjektiv und objektiv ,stmme , rassen 2c. 3.secondary and tertiary .conditions ofproduction which have been taken over ortransplanted ;ingeneral , those that are not original .here [istobetreated ]the effect ofinternational relations . 4.objections tothe materialistic character ofthis view .its relation tonaturalistic materialism . 1imoriginal istzulesen va *imoriginal iftsulejen egil.",
        "- - 309 5.the dialectics ofthe conceptions productive force (means ofproduction )and relation ofproduc- tion ,dialectics whose limits are tobe determined and which does not do away with the concrete dif- ference . 6.the unequal relation between the development of material production and art,for instance .in general ,the conception ofprogress isnot to be taken inthe sense ofthe usual abstraction .inthe case ofart,etc. ,itisnot soimportant and difficult tounderstand this disproportion asinthat ofpracti- cal social relations ,e.g.the relation between edu- cation inthe united states and europe .the really difficult point ,however ,that istobediscussed here isthat ofthe unequal (?)development ofrelations ofproduction aslegal relations .as,e.g.,the con- nection between roman civil law (this isless true ofcriminal and public law )and modern production . 7.this conception of development appears to imply necessity .on the other hand ,justification of accident .varia .(freedom and other points ).(the effect ofmeans ofcommunication ).world history does not always appear inhistory asthe result of world history . 8.the starting point [istobe found ]incertain facts ofnature embodied subjectively and objective- lyinclans ,races ,etc. itiswell known that certain periods ofhighest development ofart stand in no direct connection with the general development ofsociety ,nor with",
        "- - 310 the material basis and the skeleton structure ofits organization .witness the example ofthe greeks as compared with the modern nations or even shakespeare .as regards certain forms ofart,as e.g.the epos ,itisadmitted that they can never beproduced inthe world -epoch making form assoon asart assuch comes into existence ;inother words , that inthe domain ofart certain important forms of itare possible only atalow stage ofits develop- ifthat be true ofthe mutual relations of different forms of art within the domain of art itself ,itisfar less surprising that the same istrue ofthe relation ofart asawhole tothe general de- velopment ofsociety .the difficulty lies only inthe general formulation ofthese contradictions .no sooner are they specified than they are explained . let us take for instance the relation ofgreek art and ofthat ofshakespeare's time toour own .itis awell known fact that greek mythology was not only the arsenal of greek art,but also the very ground from which ithad sprung .isthe view of nature and ofsocial relations which shaped greek imagination and greek [art]possible inthe age of automatic machinery ,and railways ,and locomotives , and electric telegraphs ?where does vulcan come inasagainst roberts &co.;jupiter ,asagainst the lightning rod ;and hermes ,as against the credit mobilier ?all mythology masters and dominates and shapes the forces ofnature inand through the imagination ;hence itdisappears assoon as man",
        "- - 311 gains mastery over the forces ofnature .what be- comes ofthe goddess fame side by side with print- ing house square ?'greek art presupposes the exis- tence ofgreek mythology ,i.e.that nature and even the form ofsociety are wrought upinpopular fancy inan unconsciously artistic fashion .that isits material .not ,however ,any mythology taken at random ,nor any accidental unconsciously artistic elaboration ofnature (including under the latter all objects ,hence [also ]society ).egyptian mythology could never bethe soil orwomb which would give birth togreek art.but inany event [there had to be]amythology .in no event [could greek art originate ]inasociety which excludes any mytho- logical explanation ofnature ,any mythological at- titude towards itand which requires from the artist animagination free from mythology . looking atitfrom another side :isachilles pos- sible side by side with powder and lead ?or isthe iliad atall compatible with the printing press and steam press ?does not singing and reciting and the muses necessarily go out ofexistence with the ap- pearance ofthe printer's bar ,and do not ,therefore , disappear the prerequisites ofepic poetry ? but the difficulty isnot ingrasping the idea that greek art and epos are bound upwith certain forms ofsocial development .itrather lies inunderstand- ing why they still constitute with us asource of aesthetic enjoyment and in certain respects pre- 1the site ofthe \"times \"building inlondon .k.k.",
        "312 deutschvail asthe standard and model beyond attainment./ aman can not become achild again unless he becomes childish .but does henot enjoy the artless ways ofthe child and must he not strive torepro- duce itstruth onahigher plane ?isnot the charac- ter ofevery epoch revived perfectly true tonature inchild nature ?why should the social childhood ofmankind ,where ithad obtained its most beauti- ful development ,not exert an eternal charm asan age that will never return ?there are ill-bred chil- dren and precocious children .many ofthe ancient nations belong tothe latter class .the greeks were normal children .the charm their art has for us does not conflict with the primitive character ofthe social order from which ithad sprung .itisrather the product ofthe latter ,and israther due tothe fact that the unripe social conditions under which the art arose and under which alone itcould appear can never return . (end ofmanuscript .)",
        "313 authors quoted in zur kritik arbuthnot ,258. aristotle ,19,41,53,78-79 ,dodd ,141. 153,154,184. athenaeus ,87. attwood ,100. bailey ,84. barbon ,95. bastiat ,34.darimont ,107. forbonnais ,226. franklin ,62-3 ,155,226. fullarton ,260. galiani ,30,65,85,111,134. garnier ,87,141. genovesi ,51,164. berkeley ,bischop ,32,95-96 ,gladstone ,73. 155. bernier ,173.gray ,103sq . grim ,211. blake ,133. 250. blanc ,louis ,231. boisguillebert ,56,59, 133,166,168,198. bosanquet ,124,235,242. bray ,106.hodgskin ,55. horace ,178. 121,hume ,d.,219,221sq ,231. hume ,j.d.,249. jakob ,141,181. jovellanos ,61. julius ,231. brougham ,70. buchanan ,147. bsch ,231. carli ,205. castlereagh ,lord ,100. cato ,170. chevalier ,154,215. clay ,258. cobbet ,123. cooper ,32. corbet ,124.korner ,212. law ,226,231. list,34. locke ,91,93sq .,199,219,226, 233. lowndes ,94. luther ,174-5 ,190. mac culloch ,31,57. maclaren ,82,231,233. macleod ,71,193.",
        "314 - malthus ,34. mandeville ,sirj.,154. mill ,james ,123-4 ,250 sqq. misselden ,165,171,174-5 . montanari ,38. montesquieu ,219,227. mller ,85. norman ,258. opdyke ,124. overstone ,lord ,241,258. peel ,sirr.,73,100,241,258. pereire ,120. peter martyr ,210.say,34,71,123,153,233. senior ,178,194. sismondi ,56,77. smith ,34,57,61,67-68 ,80, 231sq . spence ,123. stein ,21,31-2 . steuart ,sirjames ,65sq .,94sq . 222,227sq .,260. storch ,152-3 ,179. thompson ,106. tooke ,124,247,249,260sq . torrens ,58. petty ,sirw.,32,56sq .,165. urquhart ,89. 172-3 . plato ,153. pliny ,177. proudhon ,61.72,103,107. ricardo ,56,69sq .,71,217, 231,235,250,259.ustariz ,61. wilson ,260. xenophon ,181,184. young ,231.",
        "165 jul 23 1977",
        "- 253 isfree ,its quantity isregulated bythe value ofthe metal . gold and silver are in reality com-  modities ..itis cost of production . which determines the value ofthese ,asofother ordi- nary productions .\"* the whole wisdom ofmill resolves itself into aseries ofarbitrary and absurd assumptions .he wishes to prove that the price ofcommodities orthe value of money isdetermined by\"the total quantity ofthe money inany country .\"assuming that the quantity and the exchange value ofthe commodities incirculation remain unchanged and that the same betrue ofthe rapidity of circulation and ofthe value ofprecious metals asdeter- mined bythe cost ofproduction ,and assuming atthe same time that the quantity ofthe metallic currency increases ordecreases inproportion tothe quantity of money existing inacountry ,itbecomes really \"evident \" that what was tohave been proven has been assumed . mill falls ,moreover ,into the same error ashume by assuming that use-values and not commodities with a given exchange value are in circulation ,and that vitiates his statement ,even ifwe grant all ofhis \"as- sumptions .\"the rapidity ofcirculation may remain the same ;this may also betrue ofthe value ofthe precious metals and ofthe quantity ofcommodities incirculation ; and yet achange inthe exchange value ofthe latter may require now alarger and now asmaller quantity ofmoney for their circulation .mill sees that apart of *james mill :\"elements ofpolitical economy .\"[london , 1821 ,p.95-101 passim .transl .]",
        "- 254 the money inacountry isincirculation ,while another is idle .with the aid ofamost absurd average calculation leassumes that ,although itreally appears tobediffer- int,yet all the gold inacountry does circulate .as- uming that ten million silver thalers circulate in acountry twice ayear ,there could be twenty million such coins incirculation ,ifeach circulated but once .and ifthe entire quantity ofsilver tobefound inacountry inany form amounts toone hundred mil- lion thalers ,itmay be supposed that the entire one hundred million can enter circulation ,ifeach piece of money should circulate once infive years .one could aswell assume that allthe money ofthe world circulate inhempstead ,but that each piece ofmoney instead of being employed three times ayear ,isemployed once in 3,000,000 years .the one assumption isasrelevant as the other for the purpose ofdetermining the relation between the sum total ofprices ofcommodities and the volume ofcurrency .mill feels that itisamatter of decisive importance tohim tobring the commodities indirect contact not with the money incirculation ,but with the entire supply ofmoney existing inacountry . he admits that \"the whole ofthe goods ofacountry are not exchanged atonce against the whole ofthe money ,\" but that the goods are exchanged indifferent portions and atdifferent times ofthe year for different portions ofmoney .to doaway with this difficulty heassumes that itdoes not exist .moreover ,this entire idea ofdirect contact ofcommodities and money and direct exchange isamere abstraction from the movement of simple purchase and sale orthe function ofmoney asa"
    ]
}