Chapter 2 of Capital Volume 1 This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org Capital, a critical analysis of capitalist production. Volume 1 by Karl Marx, translated from the 3rd German edition by Samuel Moore and Edward Avling edited by Frederick Engels. Part 1, Commodities of Money. Chapter 2, Exchange. It is plain that commodities cannot go to market and make exchanges of their own account. We must therefore have recourse to their guardians, who are also their owners. Commodities are things and therefore without power of resistance against man. If they are wanting in docility, he can use force. In other words, he can take possession of them. Footnote 1 In the 12th century, so renowned for its piety, they included amongst commodities some very delicate things. Thus a French poet of the period enumerates amongst the goods to be found in the market of Landis. Not only clothing, shoes, leather, agricultural implements etc. But also farm, moth, foal, delir, corps. End of footnote. In order that these objects may enter into relation with each other's commodities, their guardians must place themselves in relation to one another, as person whose will resides in those objects, and must behave in such a way that each does not appropriate the commodity of the other, and part with his own, except by means of an act done by mutual consent. They must therefore mutually recognise in each other the rights of private proprietors. This juridical relation, which thus expresses itself in a contract, whether such contract be part of a developed legal system or not, is a relation between two wills, and is but the reflex of the real economic relation between the two. It is this economic relation that determines the subject matter comprised in each juridical act. Footnote 2 Proudhon begins by taking his ideal of justice, of justius etenel, from the juridical relations that correspond to the production of commodities. Thereby, it may be noted, he proves to the consolation of all good citizens that the production of commodities is a form of production as everlasting as justice. Then he turns round and seeks to reform the actual production of commodities and the actual legal system corresponding there to in accordance with this ideal. What opinion should we have of a chemist who, instead of studying the actual laws of the molecular changes in the composition and decomposition of matter, and on that foundation solving definite problems, claimed to regulate the composition and decomposition of matter by means of the eternal ideas of naturality and affinity. Do we really know any more about usury, when we say contradicts justius etenel, achite etenel, mutualite etenel, and other verites etenel, than the fathers of the church did, when they said it was incompatible with gras etenel. Foie etenel, and la volonté etenel de Dieu, end of footnote. The persons exist for one another merely as representatives of and therefore as owners of commodities. In the course of our investigation, we shall find in general that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them. What chiefly distinguishes a commodity from its owner is the fact that it looks upon every other commodity as but the form of appearance of its own value. A born leveler and a cynic, it is always ready to exchange not only soul but body with any and every other commodity be the same more repulsive than maritornas herself. The owner makes up for this lack in the commodity of a sense of the concrete by his own five and more senses. His commodity possesses for himself no immediate use value, otherwise he would not bring it to the market. It has use value for others, but for himself its only direct use value is that of being a depository of exchange value and consequently a means of exchange. Footnote 3 Quotes For twofold is the use of every object. The one is peculiar to the object as such, the other is not, as a sandal which may be worn and is also exchangeable. Both are uses of the sandal for even he who exchanges the sandal for money or food he is in want of makes use of the sandal as a sandal but not in its natural way for it has not been made for the sake of being exchanged. Close quotes Aristotle, Der Republika, Book 1, Chapter 9 End of Footnote Therefore, he makes up his mind to part with it for commodities whose value in use is of service to him. All commodities are non-use values for their owners and use values for their non-owners, consequently they must all change hands. But this change of hands is what constitutes their exchange and the latter puts them in relation with each other as values and realises them as values. Hence commodities must be realised as values before they can be realised as use values. On the other hand, they must show that they are use values before they can be realised as values. For the labour spent upon them counts effectively only in so far as it is spent in a form that is useful for others. Whether that labour is useful for others and its product consequently capable of satisfying the wants of others can be proved only by the act of exchange. Every owner of a commodity wishes to part with it in exchange only for those commodities whose use value satisfies some want of his. Look at it in this way. Exchange is for him simply a private transaction. On the other hand, he desires to realise the value of his commodity to convert it into any other suitable commodity of equal value irrespective of whether his own commodity has or has not any use value for the owner of the other. From this point of view exchanges for him a social transaction of a general character. But one and the same set of transactions cannot be simultaneously for all owners of commodities both exclusively private and exclusively social and general. Let us look at the matter a little closer. To the owner of a commodity every other commodity is in regard to his own a particular equivalent and consequently his own commodity is the universal equivalent for all of the others. But since this applies to every owner there is in fact no commodity acting as universal equivalent and the relative value of commodities possesses no general form under which they can be equated as values and have the magnitude of their values compared. So far therefore they do not confront each other as commodities but only as products or use values. In their difficulties our commodity owners think like Faust quotes in the beginning was the deed from Gerser's Faust they therefore acted and transacted before they thought instinctively they conform to the laws imposed by the nature of commodities they cannot bring their commodities into relation as values and therefore as commodities except by comparing them with some one other commodity as the universal equivalent that we saw from the analysis of a commodity but a particular commodity cannot become the universal equivalent except by a social act the social action therefore of all other commodities sets apart the particular commodity in which they all represent their values thereby the bodily form of this commodity becomes the form of the socially recognized universal equivalent to be the universal equivalent becomes by this social process a specific function of the commodity thus excluded by the rest thus it becomes money quotes these have one mind and shall give their power and strength unto the beast revelations 1713 quotes and that no man might buy or sell save he that had the mark or the name of the beast or the number of his name revelations 1317 from the apocalypse money is a crystal formed of necessity in the course of the exchanges whereby different products of labor are practically equated to one another and thus by practice converted into commodities the historical progress and extension of exchanges develops the contrast latent in commodities between use value and value the necessity for giving an external expression to this contrast for the purposes of commercial intercourse urges on the establishment of an independent form of value and finds no rest until it is once for all satisfied by the differentiation of commodities into commodities and money at the same rate then as the conversion of products into commodities is being accomplished so also is the conversion of one special commodity into money footnote 4 from this we may form an estimate of the shrewdness of the petit bourgeois socialism which while perpetuating the production of commodities aims at abolishing the antagonism between money and commodities and consequently since money exists only by virtue of this antagonism at abolishing money itself we might just as well try to retain Catholicism without the Pope for more on this point see my work a contribution to the critique of political economy page 61 and following end of footnote the direct barter of products attains the elementary form of the relative expression of value in one respect but not in another that form is x commodity a equals y commodity b the form of direct barter is x of use value a is equivalent of y of use value b footnote 5 so long as instead of two distinct use values being exchanged a chaotic mass of articles are offered as the equivalent of a single article which is often the case with savages even the direct barter of products is in its first infancy end of footnote the articles a and b in this case are not as yet commodities but become so only by the act of barter the first step made by an object of utility towards acquiring exchange value is when it forms a non-use value for its owner and that happens when it forms a superfluous portion of some article required for his immediate wants objects in themselves are external to man and consequently alienable by him in order that this alienation may be reciprocal it is only necessary for men by a tacit understanding to treat each other as private owners of those alienable objects and by implication as independent individuals but such a state of reciprocal independence has no existence in a primitive society based on property in common whether such society takes the form of a patriarchal family an ancient Indian community or a Peruvian Inca state the exchange of commodities therefore first begins on the boundaries of such communities at their points of contact with other similar communities or with members of the latter so soon however as products once become commodities in the external relations of a community they also by reaction become so in its internal intercourse the proportions in which they are exchangeable are at first quite a matter of chance what makes them exchangeable is the mutual desire of their owners to alienate them meantime the need for foreign objects of utility gradually establishes itself the constant repetition of exchange makes it a normal social act in the course of time therefore some portion at least of the products of labour must be produced with a special view to exchange from that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption and its utility for the purposes of exchange its use value becomes distinguished from its exchange value on the other hand the quantitative proportion in which the articles are exchangeable becomes dependent on their production itself custom stamps that as values with definite magnitudes in the direct part of products each commodity is directly a means of exchange to its owner and to all other persons and equivalent but that only in so far as it has use value for them at this stage therefore the articles exchanged do not acquire a value form independent of their own use value or of the individual needs of the exchangers the necessity for a value form grows with the increasing number and variety of the commodities exchanged the problem and the means of solution arise simultaneously commodity owners never equate their own commodities to those of others and exchange them on a large scale without different kinds of commodities belonging to different owners being exchangeable for and equated as values 2, 1 and the same special article such last mentioned article by becoming the equivalent of various other commodities acquires at once though within narrow limits the character of a general social equivalent this character comes and goes with the momentary social acts that called it into life in turns and transiently it attaches itself first to this and then to that commodity but with the development of exchange it fixes itself firmly and exclusively to particular sorts of commodities and becomes crystallized by assuming the money form the particular kind of commodity to which it sticks is at first a matter of accident nevertheless there are two circumstances whose influence is decisive the money form attaches itself neither to the most important articles of exchange from outside and these in fact are primitive and natural forms in which the exchange value of home products finds expression or else it attaches itself to the object of utility that forms like a cator the chief portion of indigenous, alienable wealth nomad races are the first to develop the money form because all their worldly goods consist of movable objects and are therefore directly alienable and because their mode of life by continually bringing them into contact with foreign communities solicits the exchange of products man has often made man himself under the form of slaves serve as the primitive material of money but has never used land for that purpose such an idea could only spring up in a bourgeois society already well developed it dates from the last third of the 17th century and the first attempt to put it in practice on a national scale was made a century afterwards during the French bourgeois revolution in proportion as exchange bursts its local bonds and the value of commodities more and more expands into an embodiment of human labour in the abstract in the same proportion the character of money attaches itself to commodities that are by nature fitted to perform the social function of a universal equivalent those commodities are the precious metals the truth of the proposition that quotes although gold and silver are not by nature money money is by nature gold and silver close quotes is shown by the fitness of the physical properties of these metals for the functions of money footnote 6 Karl Marx, Locke Kittato page 135 quotes the metals are by their nature money close quotes Gagliani de la moneta in Castaudis collection Parthe moderna book 3 end of footnote and footnote 7 for further details on this subject see in my work cited above the chapter on quotes the precious metals close quotes end of footnote up to this point however we are acquainted only with one function of money namely to serve as the form of manifestation of the value of commodities or as the material in which the magnitudes of their values are socially expressed an adequate form of manifestation of value a fit embodiment of abstract differentiated and therefore equal human labour that material alone can be whose every sample exhibits the same uniform qualities on the other hand since the difference between the magnitudes of value is purely quantitative the money commodity must be susceptible to merely quantitative differences must therefore be divisible at will and equally capable of being reunited gold and silver possess these properties by nature the use value of the money commodity becomes twofold in addition to its special use value as a commodity gold for instance serving to stop teeth or to form the raw material of articles of luxury etc it acquires a formal use value originating in its specific social function since all commodities are merely particular equivalents of money the latter being their universal equivalent they with regard to the latter as the universal commodity play the parts of particular commodities footnote 8 quotes il danaro e la merce universale close quotes very loco gitato page 16 end of footnote we have seen that the money form is but the reflex thrown upon one single commodity of the value relations between all the rest footnote 9 three quotations quote silver and gold themselves which we may call by the general name of bullion are commodities rising and falling in value bullion then may be reckoned to be of higher value where the smaller weight will purchase the greater quantity of the product or manufacturer of the country close quotes from a discourse of the general notions of money trade and exchanges as they stand in relation to each other by a merchant London 1695 page 7 quotes silver and gold coined or uncoined though they are used for a measure of all other things are no less a commodity than wine, oil, tobacco, cloth or stuffs close quotes from a discourse concerning trade and that in particular of the East Indies London 1689 page 2 quotes the stock and riches of the kingdom cannot properly be confined to money nor ought gold and silver to be excluded from being merchandise close quotes from the East India trade a most profitable trade London 1677 page 4 end of footnote that money is a commodity is therefore a new discovery only for those who when they analyze it start from its fully developed shape the act of exchange gives to the commodity converted into money not its value but its specific value form by confounding these two distinct things some writers have been led to hold that the value of gold and silver is imaginary footnote 10 some quotations gold and silver have value as metals before they are money Gagliani, Locke or Kintato Locke says the universal consent of mankind gave to silver on account of its qualities which made it suitable for money and imaginary value though on the other hand how could different nations give an imaginary value to any single thing or how could this imaginary value have maintained itself close quotes but the following shows how little he himself understood about the matter quotes silver was exchanged in proportion to the value in use it possessed consequently in proportion to its real value by its adoption as money it received an additional value in the valeur additionnelle close quotes Jean Law Consideration sur le numérique et le commerce in E. Der's edition of Economiste Financier de de suite et en siècle page 470 and a footnote the fact that money can in certain functions be replaced by mere symbols of itself gave rise to that other mistake of notion that it is itself a mere symbol nevertheless under this era there is a work to presentiment that the money form of an object is not an inseparable part of that object but is simply the form under which certain social relations manifest themselves in this sense every commodity is a symbol since in so far as it is value it is only the material envelope of the human labour spent upon it footnote 11 some quotations money is there the commodity's symbol and as a symbol it is attracted by the commodity's close quotes V. De Forbonnet Elements du Commerce Nouvelle Edition Leiden 1766 book 2 pages 143 and 155 quotes money is a symbol of a thing and represents it close quotes Montesquieu Esprit de Loire Hover London 1767 book 2 page 2 Quotes Money is not a mere symbol for it is itself wealth it does not represent the values it is their equivalents close quotes La Tronne de Nocco Chitato page 910 Quotes Mission of value contemplates the valuable article as a mere symbol the article counts not for what it is but for what it is worth close quotes Hegel Nocco Chitato page 100 Lawyers started long before economists the idea that money is a mere symbol and that the value of the precious metals is purely imaginary yes they did in the psychophantic service of the crown heads supporting the right of the latter to debase the coinage during the whole of the Middle Ages by the traditions of the Roman Empire and the conceptions of money to be found in the pandex An apt scholar of theirs, Philip Valois in a decree of 1346 said quotes let no one call into question that the trade, the composition, the supply and the power of issuing ordinances on the currency belongs exclusively to us and to our royal majesty to fix such a rate and at such price as it shall please us and seem good to us close quotes it was a maximum of the Roman law that the value of money was fixed by decree of the emperor it was expressly forbidden to treat money as a commodity quotes however it shall not be lawful to anyone for to buy money for as it was created for public use it is not permissible for it to be a commodity close quotes some good work on this question has been done by G. F. Panini Sagio sopra il giusto pregio della corse 1751 Castodi parte moderna Book two in the second part of his work Panini directs his polemics especially against the lawyers end of footnote but if it be declared that the social characters assumed by objects or the material forms assumed by the social qualities of labour under the regime of a definite mode of production are mere symbols it is in the same breath also declared that these characteristics are arbitrary fictions sanctioned by the so-called universal consent of mankind this suited the mode of explanation in favour during the 18th century unable to account for the origin of the puzzling forms assumed by the social relations between man and man people sought to denude them of their strange appearance by ascribing to them a conventional origin it has already been remarked above that the equivalent form of a commodity does not imply the determination of the magnitude of its value therefore although we may be aware that gold is money and consequently directly exchangeable for all other commodities yet that fact by no means tells us how much 10 pounds for instance of gold is worth money like every other commodity cannot express the magnitude of its value except relatively in other commodities this value is determined by the labour time required for its production and is expressed by the quantity of any other commodity that costs the same amount of labour time footnote 12 quotes if a man can bring to London an ounce of silver out of the earth in Peru in the same time that he can produce a bushel of corn then the one is the natural price of the other now if by reason of new or more easier minds a man can procure two ounces of silver as easily as he formerly did one the corn will be as cheap at ten shillings the bushel as it was before at five shillings Qaeteris Paribus close quotes William Petty a treatise of taxes and contributions London 1667 page 32 end of footnote such quantitative determination of its relative value takes place at the source of its production by means of barter when it steps into circulation as money its value is already given in the last decades of the 17th century it has already been shown that money is a commodity but this step marks only the infancy of the analysis the difficulty lies not in comprehending that money is a commodity but in discovering how, why and by what means a commodity becomes money footnote 13 the learned Professor Rosha after first informing us that quotes the false definitions of money may be divided into two main groups those which make it more and those which make it less than a commodity close quotes gives us a long and very mixed catalogue of works on the nature of money from which it appears that he has not the remotest idea of the real history of the theory and then he moralizes thus quotes for the rest it is not to be denied that most of the later economists do not bear sufficiently in mind the peculiarities that distinguish money from all other commodities close quotes it is then after all either more or less than a commodity continue the quote so far the semi mercantilist reaction of Ghanil is not altogether without foundation close quotes from Wilhelm Rosha de Grundlagen der National Economy third edition 1858 pages 207 to 210 more less not sufficiently so far not altogether what clearness and precision of ideas and language and such eclectic professorial twaddle is modestly baptised by Mr. Rosha quotes the anatomical physiological method close quotes of political economy one discovery however he must have credit for namely that money is quotes a pleasant commodity end of footnote we have already seen from the most elementary expression of value X commodity A is Y commodity B that the object in which the magnitude of the value of another object is represented appears to have the equivalent form independently of this relation as a social property given to it by nature we followed up this false appearance to its final establishment which is complete so soon as the universal equivalent form becomes identified with the bodily form of a particular commodity and thus crystallised into the money form what appears to happen is not that gold becomes money in consequence of all other commodities expressing their values in it but on the contrary that all other commodities universally express their values in gold because it is money the intermediate steps of the process vanish in the result and leave no trace behind commodities find their own value already completely represented without any initiative on their part in another commodity existing in company with them these objects gold and silver just as they come out of the bowels of the earth are forthwith the direct incarnation of all human labour hence the magic of money in the form of society now under consideration the behaviour of men in the social process of production is purely atomic hence their relations to each other in production assume a material character independent of their control and conscious individual action these facts manifest themselves at first by products as a general rule taking the form of commodities we have seen how the progressive development of a society of commodity producers stamps one privileged commodity with the character of money hence the riddle presented by money is but the riddle presented by commodities only it now strikes us in its most glaring form End of Part 1, Chapter 2 Chapter 3, Section 1 of Capital, Volume 1 this is a LibriVox recording all LibriVox recordings are in the public domain for more information or to volunteer, please visit LibriVox.org this recording by Jake Baker, 2007 Capital, a critical analysis of capitalist production, Volume 1 by Karl Marx translated from the 3rd German edition by Samuel Moore and Edward Aveling and edited by Frederick Engels Part 1, Commodities and Money, Chapter 3 Money or the Circulation of Commodities, Section 1 the Measure of Values throughout this work I assume for the sake of simplicity, gold, as the money commodity the first chief function of money is to supply commodities with the material for the expression of their values or to represent their values of magnitudes of the same denomination qualitatively equal and quantitatively comparable it thus serves as a universal measure of value and only by virtue of this function does gold, the equivalent commodity par excellence, become money it is not money that renders commodities commensurable just the contrary, it is because all commodities as values are realized human labor and therefore commensurable that their values can be measured by one and the same special commodity and the later be converted into the common measure of their values, i.e. into money money as a measure of value is the phenomenal form that must of necessity be assumed by that measure of value which is imminent in commodities labor time footnote the question, why does not money directly represent labor time so that a piece of paper may represent for instance X hours labor is at bottom the same as the question why, given the production of commodities must products take the form of commodities this is evident since they are taking the form of commodities implies their differentiation into commodities and money or why cannot private labor, labor for the account of private individuals be treated as its opposite immediate social labor i have elsewhere examined thoroughly the utopian idea of labor money and a society founded on the production of commodities loco setato page 61 sequencia on this point i will only say further that Owen's labor money for instance is no more money than a ticket for the theater Owen presupposes directly associated labor a form of production that is entirely inconsistent with a production of commodities the certificate of labor is merely evidence of the part taken by the individual in the common labor and of his right to a certain portion of the common produce destined for consumption but it never enters into Owen's head to presuppose the production of commodities and at the same time by juggling with money to try to evade the necessary conditions of that production and footnote the expression of the value of a commodity in gold x commodity a equals y money commodity is its money form or price a single equation such as one ton of iron equals two ounces of gold now suffices to express the value of the iron in a socially valid manner there is no longer any need for this equation to figure as a link in the chain of equations that express the values of all other commodities because the equivalent commodity gold now has the character of money the general form of relative value has resumed its original shape of simple or isolated relative value on the other hand the experimented expression of relative value the endless series of equations has now become the form peculiar to the relative value of the money commodity the series itself too is now given and has social recognition in the prices of actual commodities we have only to read the quotations of a price list backwards to find the magnitude of the value of money expressed in all sorts of commodities but money itself has no price in order to put it on an equal footing with all other commodities in this respect we should be obliged to equate it to itself as its own equivalent the price or money form of commodities is, like their form of value generally a form quite distinct from their palpable bodily form it is therefore a purely ideal or mental form although invisible the value of iron linen and corn has actual existence in these very articles it is ideally made perceptible by their equality with gold a relation that, so to say, exists only in their own heads their owner must therefore lend them his tongue or hang a ticket on them before their prices can be communicated to the outside world footnote savages and half civilized races use the tongue differently Captain Perry says of the inhabitants of the west coast of Baffins Bay quote in this case, he refers to Barter, they licked it, the thing represented to them twice to their tongues after which they seem to consider the bargain satisfactorily concluded end quote in the same way the eastern Eskimo licked the articles they received in exchange if the tongue is thus used in the north as the organ of appropriation no wonder that in the south the stomach serves as the organ of accumulated property and that a kafir estimates the wealth of a man by the size of his belly that the kafirs know what they are about is shown by the following at the same time that the official British health report of 1864 disclosed the deficiency of fat-forming food among a large part of the working class a certain Dr. Harvey, not however the celebrated discoverer of the circulation of the blood made a good thing by advertising recipes for reducing the superfluous fat of the bourgeoisie and aristocracy end footnote since the expression of the value of commodities in gold is a merely ideal act we may use for this purpose imaginary or ideal money every trader knows that he is far from having turned his goods into money when he has expressed their value in a price or in imaginary money and that it does not require the least bit of real gold to estimate in that metal millions of pounds worth of goods one therefore money serves as a measure of value it is employed only as imaginary or ideal money this circumstance has given rise to the wildest theories footnote see Karl Marx, Zur Kritik, etc. Theorien von der Masenheit deskelter page 53, Sequentia and footnote but although the money that performs the functions of a measure of value is only ideal money price depends entirely upon the actual substance that is money the value or in other words the quantity of human labor contained in a ton of iron is expressed in imagination by such a quantity of the money commodity as contains the same amount of labor as the iron according therefore as the measure of value is gold, silver or copper the value of the ton of iron will be expressed by very different prices or will be represented by very different quantities of those metals respectively if therefore two different commodities such as gold and silver are simultaneously measures of value all commodities have two prices one a gold price the other a silver price these exist quietly side by side so long as the ratio of the value of silver to that of gold remains unchanged say at 15 to 1 every exchange in their ratio disturbs the ratio which exists between the gold prices and the silver prices of commodities and thus proves by facts that a double standard of value is inconsistent with the functions of a standard footnote quote wherever gold and silver have by law been made to perform the function of money or of a measure of value side by side it is always been tried but in vain to treat them as one in the same material to assume that there is an invariable ratio between the quantities of gold and silver in which a given quantity of labor time is incorporated is to assume in fact that gold and silver are of one in the same material and that a given mass of the less valuable metal silver is a constant fraction of a given mass of gold from the reign of Edward III to the time of George II the history of money in England consists of one long series of perturbations caused by the clashing of the legally fixed ratio between the values of gold and silver with the fluctuations in their real values at one time gold was too high at another silver the metal that for the time being was estimated below its value was withdrawn from circulation, mated, and exported the ratio between the two metals was then again altered by law but the new nominal ratio soon came into conflict again with the real one in our own times the slight and transient fall in the value of gold compared with silver was the consequence of the Indochinese demand for silver produced on a far more extended scale in France the same phenomena export of silver and its expulsion from circulation by gold during the years 1855, 1856, and 1857 the excess in France of gold imports over gold exports amounted to 41,580,000 pounds while the excess of silver exports over silver imports was 14,704,000 pounds in fact in those countries in which both metals are legally measures of value and therefore both legal tender so that everyone has the option of paying in either metal the metal that rise in value is at a premium and like every other commodity measures its price in the overestimated metal which alone serve in reality as the standard of value the result of all experience in history with regard to this equation is simply that where two commodities perform by law the functions of a measure of value in practice one alone maintains that position Karl Marx, Locostatato pages 52 and 53 commodities with definite prices present themselves under the form lowercase a commodity capital A equals X gold lowercase B commodity capital B equals Z gold lowercase C commodity capital C equals Y gold etc where lowercase ABC represent definite quantities of the commodities capital ABC and XYZ definite quantities of gold the values of these commodities are therefore changed in imagination into so many different quantities of gold hence in spite of the confusing variety of the commodities themselves their values become magnitudes of the same denomination gold magnitudes they are now capable of being compared with each other and measured and the want becomes technically felt of comparing them with some fixed quantity of gold as a unit measure this unit by subsequent division into aliquot parts becomes itself the standard or scale before they become money gold silver and copper already possess such standard measures in their standards of weight so that for example a pound weight while serving as the unit is on the one hand divisible into ounces and on the other may be combined to make up hundred weights footnote the peculiar circumstance that while the ounce of gold serves in England as the unit of the standard of money the pound sterling does not form an aliquot part of it has been explained as follows quote our coinage was originally adapted to the employment of silver only hence an ounce of silver can always be divided into a certain adequate number of pieces of coin but as gold was introduced at a later period into a coinage adapted only to silver an ounce of gold cannot be coined into an aliquot number of pieces end quote McLaren a sketch of the history of the currency London 1858 page 16 and footnote it is owing to this that in all metallic currencies the names given to the standards of money or price were originally taken from the pre-existing names of the standards of weight as measure of value and as standard of price money has two entirely distinct functions to perform it is the measure of value in as much as it is the socially recognized incarnation of human labor it is the standard of price in as much as it is a fixed weight of metal as the measure of value it serves to convert the values of all the manifold commodities into prices into imaginary quantities of gold as the standard of price it measures those quantities of gold the measure of values measures commodities considered values the standard of price measures on the contrary quantities of gold by a unit quantity of gold not the value of one quantity of gold by the weight of another in order to make gold a standard of price a certain weight must be fixed upon as the unit in this case as in all cases of measuring quantities of the same denomination the establishment of an unvarying unit of measure is all important hence the less the unit is subject to variation so much the better does the standard of value fill its office but only in so far as it is itself a product of labor and therefore potentially variable in value can gold serve as a measure of value footnote with English writers the confusion between measure of value and standard of price standard of value is indescribable their functions as well as their names are constantly interchanged and footnote it is in the first place quite clear that a change in the value of gold does not in any way affect its function as a standard of price no matter how this value varies the proportions between the values of different quantities of the metal remain constant however great the fall in its value 12 ounces of gold still have 12 times the value of one ounce and in prices the only thing considered is the relation between different quantities of gold since on the other hand no rise or fall in the value of an ounce of gold can alter its weight no alteration can take place in the weight of its parts thus gold always renders the same service as an invariable standard of price however much its value may vary in the second place a change in the value of gold does not interfere with its functions as a measure of value the change affects all commodities simultaneously and therefore characteristics powder this leaves their relatives values intersay unaltered although those values are now expressed in higher or lower gold prices just as when we estimate the value of any commodity by a definite quantity of the use value of some other commodity so in estimating the value of the former and gold we assume nothing more than that the production of a given quantity of gold costs at the given period a given amount of labor as regards the fluctuations of prices generally they are subject to the laws of elementary relative value investigated in a former chapter a general rise in the prices of commodities can result only either from a rise in their values the value of money remaining constant or from a fall in the value of money the values of commodities remaining constant on the other hand a general fall in prices can result only either from a fall in the values of commodities the value of money remaining constant or from a rise in the value of money the values of commodities remaining constant it therefore by no means follows that a rise in the value of money necessarily implies a proportional fall in the prices of commodities or that a fall in the value of money implies a proportional rise in prices. Such change of price holds good only in the case of commodities whose value remains constant. With those, for example, whose value rises simultaneously with, and proportionally to, that of money, there is no alteration in price, and if their value rises either slower or faster than that of money, the fall or rise in their prices, will be determined by the difference between the change in their value and that of money, and so on. Let us now go back to the consideration of the price form. By degrees, there arises a discrepancy between the current money names of the various weights of the precious metal figuring as money and the actual weights which those names originally represented. This discrepancy is the result of historical causes among which the Chief R. 1. The importation of foreign money into an imperfectly developed community. This happened in Rome in its early days where gold and silver coins circulated at first as foreign commodities. The names that these foreign coins never coincide with those of the indigenous weights. 2. As wealth increases, the less precious metal is thrust out by the more precious from its place as a measure of value, copper by silver, silver by gold. However, much this order of sequence may be in contradiction with poetical chronology. Moreover, it has not general historical validity. 3. The word pound, for instance, was the money name given to an actual pound weight of silver. When gold replaced silver as a measure of value, the same name was applied according to the ratio between the values of silver and gold to perhaps one fifteenth of a pound of gold. The word pound as a money name thus becomes differentiated from the same word as a weight name. Footnote. It is thus that the pound sterling in English denotes less than one-third of its original weight, the pound scott, before the union, only one-thirty-sixth, the French livre, one-seveteen-fourth. The Spanish merivédi, less than one-thousandth, and the Portuguese ray, a still smaller fraction. Footnote. The debasing of money carried on for centuries by kings and princes to such an extent that, of the original weight of the coins, nothing in fact remained but the names. Footnote. The coins which today are ideal are the oldest coins of every nation, and all of them were once real, and precisely because they were real they were used for calculation. Galliani, de la moneta, Loki's citate, page one-fifty-three, and footnote. These historical causes convert the separation of the money name from the weight name into an established habit with the community, since the standard of money is, on the one hand, purely conventional, and must on the other hand find a general acceptance, it is in the end regulated by law. A given weight of one of the precious metals, an ounce of gold, for instance, becomes officially divided into aliquot parts with legally bestowed names such as pound, dollar, etc. These aliquot parts, which then-fourth serve as units of money, are then subdivided into other aliquot parts with legal names such as shilling, penny, etc. Footnote. David Urquhart remarks in his familiar words on the monstrosity that nowadays a pound sterling, which is the unit of the English standard of money, is equal to about a quarter of an ounce of gold. This is falsifying a measure not establishing a standard. He sees in this false denomination of the weight of gold as in everything else the falsifying hand of civilization, and footnote. But, both before and after these divisions are made, a definite weight of metal is the standard of metallic money. The sole alteration consists in the subdivision and denomination. The prices or quantities of golds, into which the values of commodities are ideally changed, are therefore now expressed in the names of the coins, or in the legally valid names of the subdivisions of the gold standard. Hence, instead of saying a quarter of wheat is worth an ounce of gold, we say it is worth three pounds, seventeen shillings, ten and a half pence. In this way commodities express by their prices how much they are worth, and money serves as money of account, whenever it is a question of fixing the value of an article in its money form. Footnote. When Anacarsis was asked for what purposes the Greeks used money, he replied, for reckoning, and footnote. The name of a thing is something distinct from the qualities of that thing. I know nothing of a man, by knowing that his name is Jacob. In the same way with regard to money, every trace of a value relation disappears in the names pound, dollar, frank, duket, etc. The confusion caused by attributing a hidden meaning to these capitalistic signs is all the greater, because these money names express both the values of commodities and, at the same time, adequate parts of the weight of the metal that is the standard of money. Footnote. Quote, owing to the fact that money, when serving as the standard of price, appears under the same reckoning names as do the prices of commodities, and that therefore the sum of three pounds, seventeen shillings, ten and a half pence may signify on the one hand an ounce weight of gold, and on the other the value of a ton of iron, this reckoning name of money has been called its mint price. Hence, they're sprang up the extraordinary notion that the value of gold is estimated in its own material and that, in contra-distinction to all other commodities, its price is fixed by the state. It was erroneously thought that the giving of reckoning names to definite weights of golds is the same thing as fixing the value of those weights. End quotes. Karl Marx, Local Saitati, page 52. End footnote. On the other hand, it is absolutely necessary that value, in order that it may be distinguished from the varied bodily forms of commodities, should assume this material and un-meaning, but at the same time, purely social form. Footnote. See Theorien von der Masenheit des Geldes in Zur der Kritik der Pol-Ekon etc. page 53. Sequencia. The fantastic notions about raising or lowering the mint price of money by transferring to greater or smaller weights of gold or silver, the names already legally appropriated to fixed weights of those metals. Such notions, at least in those cases in which they aim, not at clumsy financial operations against creditors, both public and private, but at economic quack remedies, have been so exhaustively treated by William Petty in his Pointilum Cunqua concerning money, the Lord Marquis of Halifax, 1682, that even his immediate followers, Sir Dudley North and John Locke, not to mention later ones, could only dilute him. Quote, if the wealth of a nation, he remarks, could be decoupled by a proclamation, it were strange that such proclamations have not long since been made by our governors. End quote. Locosi Tato page 36. End of footnote. Price is the money name of the labor realized in a commodity, hence the expression of the equivalence of a commodity with the sum of money constituting its price is a tautology. Just as, in general, the expression of the relative value of a commodity is a statement of the equivalence of two commodities. Footnote. Quote, oh bien, il faut consentir à dire qu'une valeur dans le milieu en argent vaut plus qu'une valeur égale en moindre dix. End quote. Quote, or indeed, it must be admitted that a million in money is worth more than an equal value in commodities. End quote. La Trazna, Locosi Tato page 919, which amounts to saying, quote, qu'une valeur vaut plus qu'une valeur égale. End quote. Quote, that one value is worth more than another value which is equal to it. End quote. End footnote. But although price being the exponent of the magnitude of a commodity's value is the exponent of its exchange ratio with money, it does not follow that the exponent of this exchange ratio is necessarily the exponent of the magnitude of the commodity's value. Suppose two equal quantities of socially necessary labor to be respectively represented by one quarter of wheat and two pound sterling, nearly half an ounce of gold. Two pound sterling is the expression in money of the magnitude of the value of the quarter of wheat, or is its price. If now circumstances allow of this price being raised to three pound sterling or compel it to be reduced to one pound sterling, then although one pound sterling and three pound sterling may be too small or too great properly to express the magnitude of the wheat's value, nevertheless they are its prices for they are, in the first place, the form under which the value appears, i.e. money, and in the second place, the exponents of its exchange ratio with money. If the conditions of production, in other words, if the productive power of labor remain constant, the same amount of social labor time must, both before and after the change in price, be expended in the reproduction of a quarter of wheat. This circumstance depends neither on the will of the wheat producer nor on that of the owners of other commodities. Magnitude of value expresses a relation of social production. It expresses the connection that necessarily exists between a certain article and the portion of the total labor time of society required to produce it. As soon as magnitude of value is converted into price, the above necessary relation takes the shape of a more or less accidental exchange ratio between a single commodity and another, the money commodity. But this exchange ratio may express either the real magnitude of that commodity's value or the quantity of gold deviating from that value for which, according to circumstances, it may be parted with. The possibility therefore of quantitative incongruity between price and magnitude of value or the deviation of the former from the latter is inherent in the price form itself. This is no defect, but on the contrary admirably adapts the price form to a mode of production whose inherent laws impose themselves only as the mean of apparently lawless irregularities that compensate one another. The price form, however, is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price, i.e. between the former and its expression and money, but it may also conceal a qualitative inconsistency, so much so that although money is nothing but the value form of commodities, price ceases altogether to express value. Objects that in themselves are no commodities, such as conscience, honor, etc., are capable of being offered for sale by their holders and of thus acquiring, through their price, the form of commodities. Hence, an object may have a price without having value. The price in that case is imaginary, like certain quantities in mathematics. On the other hand, the imaginary price form may sometimes conceal either a direct or indirect real value relation, for instance, the price of uncultivated land, which is without value, because no human labor has been incorporated in it. Price, like relative value in general, expresses the value of a commodity, e.g. a ton of iron, by stating that a given quantity of the equivalent, e.g. an ounce of gold, is directly exchangeable for iron, but it by no means states the converse that iron is directly exchangeable for gold. In order, therefore, that a commodity may in practice act effectively as an exchange value, it must quit its bodily shape, must transform itself from mere imaginary into real gold, although to the commodity such transubstantiation may be more difficult than to the Hegelian concept, the transition from necessity to freedom, or to a lobster the casting of his shell, or to St. Jeremy the putting off of the old atom. Jeremy had to wrestle hard, not only in his youth with the bodily flesh, as is shown by his fight in the desert with the handsome woman of his imagination, but also in his old age with the spiritual flesh. I thought, he says, I was in the spirit before the judge of the universe. Who art thou? asked a voice. I am a Christian. Thou liest, thundered back the great judge. Thou art not but a Ciceroanian. End footnote. Though a commodity may, side by side with its actual form, iron for instance, take in our imagination the form of gold, yet it cannot at one and the same time actually be both iron and gold. To fix its price, it suffices to equate it to gold in imagination. But to enable it to render to its owner the service of a universal equivalent, it must be actually replaced by gold. If the owner of the iron were to go to the owner of some other commodity offered for exchange, and were to refer him to the price of the iron as proof that it was already money, he would get the same answer as St. Peter gave in heaven to Dante, when the latter recited the creed. A price therefore implies both that a commodity is exchangeable for money, and also that it must be so exchanged. On the other hand, gold serves as an ideal measure of value, only because it has already, in the process of exchange, established itself as the money commodity. Under the ideal measure of values there lurks the hard cash. Capital A critical analysis of capitalist production, Volume 1 by Karl Marx. Translated from the third German edition by Samuel Moore and Edward Eveling, and edited by Frederick Engels. Part 1. Commodities and Money. Chapter 3. Money or the Circulation of Commodities. Section 2. The Medium of Circulation. A. The Metamorphosis of Commodities. We saw in a former chapter that the exchange of commodities implies contradictory and mutually exclusive conditions. The differentiation of commodities into commodities and money does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side. This is generally the way in which real contradictions are reconciled. For instance, it is a contradiction to depict one body as constantly falling towards another and as, at the same time, constantly flying away from it. The ellipse is a form of motion which, while allowing this contradiction to go on, at the same time, reconciles it. Insofar as exchange is a process by which commodities are transferred from hands in which they are non-use values to hands in which they become use values, it is a social circulation of matter. The product of one form of useful labor replaces that of another. When once a commodity has found a resting place, where it can serve as a use value, it falls out of the sphere of exchange into that of consumption, but the former sphere alone interests us at the present. We have, therefore, now to consider exchange from a formal point of view, to investigate the change of form or metamorphosis of commodities which effectuates the social circulation of matter. The comprehension of this change of form is, as a rule, very imperfect. The cause of this imperfection is, apart from indistinct notions of value itself, that every change of form in a commodity results from the exchange of two commodities, an ordinary one and the money commodity. If we keep in view the material fact alone that a commodity has been exchanged for gold, we overlook the very thing that we ought to observe, namely what has happened to the form of the commodity. We overlook the facts that gold, when a mere commodity, is not money, and that when other commodities express their prices in gold, this gold is but the money form of those commodities themselves. Commodities, first of all, enter into the process of exchange just as they are. The process then differentiates them into commodities and money, and thus produces an external opposition corresponding to the internal opposition inherent in them, as being at once use values and values. Commodities as use values now stand opposed to money as exchange value. On the other hand, both opposing sides are commodities, unities of use value and value, but this unity of differences manifests itself at two opposite poles, and at each pole in an opposite way. Being poles, they are as necessarily opposite as they are connected. On the one side of the equation we have an ordinary commodity, which is in reality a use value. Its value is expressed only ideally in its price, by which it is equated to its opponent, the gold, as to the real embodiment of its value. On the other hand, the gold, in its metallic reality, ranks as the embodiment of value as money. Gold as gold is exchange value itself. As to its use value, that has only an ideal existence, represented by the series of expressions of relative value in which it stands face-to-face with all other commodities. The sum of whose uses makes up the sum of the various uses of gold. These antagonistic forms of commodities are the real forms in which the process of their exchange moves and takes place. Let us now accompany the owner of some commodity, say our old friend the weaver of linen, to the scene of the action, the market. His twenty yards of linen has a definite price, two pound sterling. He exchanges it for the two pound sterling, and then, like a man of the good old stamp that he is, he parts with the two pound sterling for a family Bible of the same price. The linen, which in his eyes is a mere commodity, a depository of value, he alienates in exchange for gold, which is the linen's value form, and this form he again parts with for another commodity, the Bible, which is destined to enter his house as an object of utility, and of edification to its inmates. The exchange becomes an accomplished fact by two metamorphoses of opposite yet supplementary character, the conversion of the commodity into money, and the reconversion of the money into a commodity. Footnote. Quote. As Heraclitus says, all things are exchanged for fire, and fire for all things, as wares are exchanged for gold, and gold for wares. End Quote. F. LaSalle de Philosophie Heraclitus de Stunckern, Berlin, 1858, volume 1, page 222. LaSalle, in his note on this passage, page 224, note 3, erroneously makes gold a mere symbol of value. And footnote. The two phases of this metamorphosis are both of them distinct transactions of the weaver, selling, or the exchange of the commodity for money, buying, or the exchange of the money for a commodity, and the unity of the two acts selling in order to buy. The result of the whole transaction, as regards the weaver, is this, that instead of being in possession of the linen, he now has the Bible. Instead of his original commodity, he now possesses another of the same value, but of different utility. In like manner he procures his other means of subsistence and means of production. From his point of view, the whole process effectuates nothing more than the exchange of the product of his labor for the product of someone else's, nothing more than an exchange of products. The exchange of commodities is therefore accompanied by the following changes in their form, commodity to money to commodity, C to M to C. The result of the whole process is, so far as concerns the objects themselves, C to C, the exchange of one commodity for another, the circulation of materialized social labor. When this result is attained, the process is at an end. C to M, First Metamorphosis or Sale The leap taken by the value from the body of the commodity into the body of the gold is, as I have elsewhere called it, the salto mortale of the commodity. If it falls short then, although the commodity itself is not harmed, its owner decidedly is. The social division of labor causes his labor to be as one-sided as his wants are many-sided. This is precisely the reason why the product of his labor serves him solely as exchange value, but it cannot acquire the properties of a socially recognized universal equivalent except by being converted into money. That money, however, isn't someone else's pocket. In order to entice the money out of that pocket, our friend's commodity must, above all things, be a use-value to the owner of the money. For this, it is necessary that the labor expended upon it be of the kind that is socially useful, of a kind that constitutes a branch of the social division of labor. But division of labor is a system of production which has grown up spontaneously and continues to grow behind the backs of the producers. The commodity to be exchanged may possibly be the product of some new kind of labor that pretends to satisfy new liars and requirements, or even to give rise itself to new requirements. A particular operation, though yesterday perhaps forming one out of the many operations conducted by one producer in creating a given commodity, may today separate itself from this connection, may establish itself as an independent branch of labor and send its incomplete product to market as an independent commodity. The circumstances may or may not be right for such a separation. Today the product satisfies a social want. Tomorrow the article may, either altogether or partially, be superseded by some other appropriate product. Moreover, although our weaver's labor may be a recognized branch of the social division of labor, yet the fact is by no means sufficient to guarantee the utility of his twenty yards of linen. If the community's want of linen, and such a want has a limit like every other want, should already be saturated by the products of rival weavers, our friend's product is superfluous, redundant, and consequently useless. Although people do not look a gift horse in the mouth, our friend does not frequent the market for the purpose of making presents. But suppose his product turned out a real use value, and thereby attracts money. The question arises, how much will it attract? No doubt the answer is already anticipated in the price of the article, in the exponent of the magnitude of its value. We leave out of consideration here any accidental miscalculation of value by our friend, a mistake that is soon rectified in the market. We suppose him to have spent on his product only that amount of labor time that is on average socially necessary. The price, then, is merely the money name of the quantity of social labor realized in his commodity. But without the leave, and behind the back of our weaver, the old-fashioned mode of weaving undergoes a change. The labor time that yesterday was without doubt socially necessary to the production of a yard of linen ceases to be so today, a fact which the owner of the money is only too eager to prove from the prices quoted by our friend's competitors. Unluckily for him weavers are not few and far between. Lastly, suppose that every piece of linen in the market contains no more labor time than is socially necessary. In spite of this, all these pieces taken as a whole may have had superfluous labor time spent upon them. If the market cannot stomach the whole quantity at the normal price of two shillings a yard, this proves that too great a portion of the total labor of the community has been expended in the form of weaving. The effect is the same as if each individual weaver had expended more labor time upon his particular product than is socially necessary. Here we may say, with the German proverb, cut together, hung together. All the linen in the market counts as but one article of commerce, of which each piece is only an aliquot part, and as a matter of fact the value also of each single yard is but the materialized form of the same definite and socially fixed quantity of homogeneous human labor. Footnote, note by the Institute of Marxism-Leninism in the Russian edition. In his letter of November 28, 1878, to N. F. Danielsson, Marx proposed that this sentence be corrected to read as follows, and as a matter of fact the value of each single yard is but the materialized form of a part of the social labor expended on the whole number of yards. An analogous correction was made in a copy of the second German edition of the first volume of capital belonging to Marx, however not in his handwriting. And footnote. We see then commodities are in love with money, but the course of true love never did run smooth. The quantitative division of labor is brought about in exactly the same spontaneous and accidental manner as its qualitative division. The owners of commodities therefore find out that the same division of labor that turns them into independent private producers also frees the social process of production and the relations of the individual producers to each other within that process from all dependence on the will of those producers, and that the seeming mutual independence of the individuals is supplemented by a system of general and mutual dependence through or by means of the products. The division of labor converts the product of labor into a commodity and thereby makes necessary its further conversion into money. At the same time it also makes the accomplishment of this transubstantiation quite accidental. Here however we are only concerned with the phenomenon in its integrity and we therefore assume its progress to be normal. Moreover if the conversion takes place at all that is if the commodity be not absolutely unsaleable its metamorphosis does take place although the price realized may be abnormally above or below the value. The seller has his commodity replaced by gold the buyer has his gold replaced by a commodity. The fact which here stares us in the face is that a commodity in gold 20 yards of linen and two pound sterling have changed tans and places in other words they have been exchanged but for what is the commodity exchanged for the shape assumed by its own value the universal equivalent and for what is the gold exchanged for a particular form of its own use value. Why does gold take the form of money face to face with the linen? Because the linen's price of two pound sterling its denomination and money has already equated the linen to gold in its character of money. A commodity strips off its original commodity form on being alienated i.e. on the instance its use value actually attracts the gold that before existed only ideally in its price. The realization of a commodity's price or of its ideal value form is therefore at the same time the realization of the ideal use value of money. The conversion of a commodity into money is the simultaneous conversion of money into a commodity the apparently single process is in reality a double one for the pole of the commodity owner it is a sale from the opposite pole of the money owner it is a purchase in other words a sale is a purchase c2m is also m2c footnote quote toute vente et écharre every sale is a purchase end quote dr quesney dialogue sur le commerce et la travaux des artisans physiocrats addition ter premier parti paris 1846 page 170 or as quesney in his maxime generalis puts it vendre et acheter to sell is to buy and footnote up to this point we have considered men in only one economic capacity that of owners of commodities a capacity in which they appropriate the produce of the labor of others by alienating that of their own labor hence for one commodity owner to meet with another who has money it is necessary either that the product of the labor of the latter person the buyer should be in itself money should be gold the material of which money consists or that his product should already have changed its skin and have stripped off its original form of a useful object in order that it may play the part of money gold must of course enter the market at some point or other this point is to be found at the source of production of the metal at which place gold is bartered as the immediate product of labor for some other product of equal value from that moment it always represents the realized price of some commodity footnote d'une ultra-merchandise Mercier de la revière l'ordre naturel et essentiel des sociétés politiques the price of one commodity can only be paid by the price of another commodity visual cut addition d'un deuxième parti page 554 and footnote apart from its exchange for other commodities at the source of its production gold and whosoever hands it may be is the transformed shape of some commodity alienated by its owner it is the product of a sale or of the first metamorphosis c2m footnote pour avoir cet argent il faut avoir venu in order to have this money one must have made a sale local citato page 543 gold as we saw became ideal money or a measure of values in consequence of all commodities measuring their values by it and thus contrasting it ideally with their natural shape as useful objects and making it the shape of their value it became real money by the general alienation of commodities by actually changing places with their natural forms as useful objects and thus becoming in reality the embodiment of their values when they assume this money shape commodities trip off every trace of their natural use value and of the particular kind of labor to which they owe their creation in order to transform themselves into the uniform socially recognized incarnation of homogenous human labor we cannot tell from the mere look of a piece of money for what particular commodity it has been exchanged under their money form all commodities look alike hence money may be dirt although dirt is not money we will assume that the two gold pieces in consideration of which our weaver has parted with his linen are the metamorphosed shape of a quarter of wheat the sale of the linen c2m is at the same time its purchase m2c but the sale is the first act of a process that ends with a transaction of an opposite nature namely the purchase of a bible the purchase of the linen on the other hand ends a movement that began with a transaction of the opposite nature namely with the sale of the wheat c2m linen to money which is the first phase of c2m prime to c linen to money to bible is also m2c money to linen the last phase of another movement c2m to c wheat to money to linen the first metamorphosis of one commodity its transformation from a commodity into money is therefore also invariably the second metamorphosis of some other commodity the re-transformation of the latter from money into a commodity footnote as before remarked the actual producer of gold or silver forms an exception he exchanges his product directly for another commodity without having first sold it and footnote m2c or purchase the second and concluding metamorphosis of a commodity because money is the metamorphosed shape of all other commodities the result of their general alienation for this reason it is alienable itself without restriction or condition it reads all prices backwards and thus so to say depicts itself in the bodies of all other commodities which offered to it the material for the realization of its own use value at the same time the prices will englances cast at money by commodities define the limits of its convertibility by pointing to its quantity since every commodity on becoming money disappears as a commodity it is impossible to tell from the money itself how it got into the hands of its possessor or what article has been changed into it no no let from whatever source it may come representing on the one hand a sold commodity it represents on the other a commodity to be bought footnote it if money represents in our hands the things we can wish to buy it also represents the things we have sold to obtain that money and quote Mercier de la revière local citato page 586 m to c a purchase is at the same time c to m a sale the concluding metamorphosis of one commodity is the first metamorphosis of another with regard to our weaver the life of his commodity ends with the bible into which he has reconverted to his two pound sterling but suppose the seller of the bible turns the two pound sterling set free by the weaver into brandy m to c the concluding phase of c to m to c linen to money to bible is also c to m the first phase of c to m to c bible to money to brandy the producer of a particular commodity has that one article alone to offer this he sells very often in large quantities but his many and various wants compel him to split up the price realized the sum of money set free into numerous purchases hence a sale leads to many purchases of various articles the concluding metamorphosis of a commodity thus constitutes an aggregation of first metamorphosis of various other commodities if we now consider the completed metamorphosis of a commodity as a whole it appears in the first place that it is made up of two opposite and complementary movements c to m and m to c these two antithetical transmutations of a commodity are brought about by two antithetical social acts on part of the owner and these acts in their turn stamp the character of the economic parts played by him as the person who makes a sale he is a seller as the person who makes a purchase he is a buyer but just as upon every such transmutation of a commodity its two forms commodity form and money form exist simultaneously but at opposite poles so every seller has a buyer opposed to him and every buyer a seller while one particular commodity is going through its two transmutations in succession from a commodity into money and from money into another commodity the owner of the commodity changes in succession his part from that of seller to that of buyer these characters of seller and buyer are therefore not permanent but attach themselves in turns to the various persons engaged in the circulation of commodities the complete metamorphosis of a commodity in its simplest form implies four extremes and three dramatic person I first a commodity comes face to face with money the latter is the form taken by the value of the former and exists in all its hard reality in the pocket of the buyer a commodity owner is thus brought into contact with a possessor of money so soon now as the commodity has been changed into money the money becomes its transient equivalent form the use value of which equivalent form is to be found in the bodies of other commodities money the final term of the first transmutation is at the same time the starting point for the second the person who is a seller in the first transaction thus becomes a buyer in the second in which a third commodity owner appears on the scene as a seller footnote quote il y a donc quattre term et toi contractant dont l'interviens deux fois there are therefore four terms and three contracting parties one of whom intervenes twice and quote le trustner local citato page 909 and footnote the two phases each inverse to the other that make up the metamorphosis of commodity constitute together a circular movement a circuit commodity form stripping off of this form and return to the commodity form no doubt the commodity appears here under two different aspects at the starting point it is not a use value to its owner at the finishing point it is so too the money appears in the first phase as a solid crystal of value a crystal into which the commodity eagerly solidifies and in the second dissolves into the mere transient equivalent form destined to be replaced by a use value the two metamorphoses constituting the circuit are at the same time two inverse partial metamorphoses of two other commodities one on the same commodity the linen opens the series of its own metamorphoses and completes the metamorphosis of another the wheat in the first phase or sale the linen plays these two parts in its own person but then changed into gold it completes its own second and final metamorphosis and helps at the same time to accomplish the first metamorphosis of a third commodity hence the circuit made by one commodity in the course of its metamorphoses is inextricably mixed with the circuits of other commodities the total of all the different circuits constitutes the circulation of commodities the circulation of commodities differs from the direct exchange of products barter not only in form but in substance only consider the course of events the weaver has as a matter of fact exchanged his linen for a bible his own commodity for that of someone else but this is true only so far as he himself is concerned the seller of the bible who prefers something to warm his inside no more thought of exchanging his bible for linen than our weaver knew that wheat had been exchanged for his linen B's commodity replaces that of A but A and B do not mutually exchange those commodities it may of course happen that A and B make simultaneous purchases the one from the other but such exceptional transactions are by no means the necessary result of the general conditions of the circulation of commodities we see here on the one hand how the exchange of commodities breaks through all local and personal bounds inseparable from direct barter and develops the circulation of the products of social labor and on the other hand how it develops a whole network of social relations spontaneous in their growth and entirely beyond the control of the actors it is only because the farmer has sold his wheat that the weaver isn't able to sell his linen only because the weaver has sold his linen that our hot spur is unable to sell his bible and only because the latter has sold the water of everlasting life that the distiller isn't able to sell his ode de vie and so on the process of circulation therefore does not like direct barter products become extinguished upon the use values changing places in hands the money does not finish on dropping out of the circuit of the metamorphosis of a given commodity it is constantly being precipitated into new places in the arena of circulation vacated by other commodities in the complete metamorphosis of the linen for example linen to money to bible the linen first falls out of circulation and money steps into its place then the bible falls out of circulation and again money takes its place when one commodity replaces another the money commodity always sticks to the hands of some third person footnote self-evident as this may be it is nevertheless for the most part unobserved by political economists and especially by the quote free trader vulgaris and quote and footnote circulation sweats money from every poor nothing can be more childish than the dogma that because every sale is a purchase and every purchase a sale therefore the circulation of commodities necessarily implies an equilibrium of sales and purchases if this means that the number of actual sales is equal to the number of purchases it is mere tautology but its real report is to prove that every seller brings his buyer to market with him nothing of the kind the sale and the purchase constitute one identical act in exchange between a commodity owner and an owner of money between two persons as opposed to each other as the two poles of a magnet they form a two distinct acts of polar and opposite characters when performed by one single person hence the identity of sale and purchase implies that the commodity is useless if on being thrown into the alchemistical retort of circulation it does not come out again in the shape of money if in other words it cannot be sold by its owner and therefore be bought by the owner of the money that identity further implies that the exchange if it do take place constitutes a period of rest an interval long or short in the life of the commodity since the first metamorphosis of a commodity is at once a sale and a purchase it is also an independent process in itself the purchaser has the commodity the seller has the money i.e a commodity ready to go into circulation at any time no one can sell unless someone else purchases but no one is forthwith bound to purchase because he has just sold circulation bursts through all restrictions as to time place and individuals imposed by direct barter and this it affects by splitting up into the antithesis of sale and a purchase the direct identity that in barter does exist between the alienation of one's own and the acquisition of some other man's product to say that these two independent and antithetical acts have an intrinsic unity are essentially one is the same to say that this intrinsic oneness expresses itself in an external antithesis if the interval in time between the two complementary phases of the complete metamorphosis of a commodity become too great if the split between the sale and the purchase become too pronounced the intimate connection between them their oneness asserts itself by producing a crisis the antithesis use value and value the contradictions that private labor is bound to manifest itself as direct social labor that a particularized concrete kind of labor has to pass for abstract human labor the contradiction between the personification of objects and the representation of persons by things all these antithesis and contradictions which are imminent in commodities assert themselves and develop their modes of motion in the antithetical phases of the metamorphosis of a commodity these modes therefore imply the possibility and no more than the possibility of crises the conversion of this mere possibility into a reality is the result of a long series of relations that from our present standpoint of simple circulation have as yet no existence footnote see my observations on james mille in sur critique etc pages 74 to 76 with regard to the subject we may notice two methods characteristic of apologetic economy the first is the identification of the circulation of commodities with the direct barter of products by simple abstraction from their points of difference the second is the attempts to explain away the contradictions of capitalist production by reducing the relations between the persons engaged in that mode of production to the simple relations arising out of the circulation of commodities the production and circulation of commodities are however phenomenon that occur to a greater or less extent in modes of production the most diverse if we are acquainted with nothing but the abstract categories of circulation which are common to all these modes of production we cannot possibly know anything of the specific points of difference of these modes nor pronounce any judgment upon them in no science is such a big fuss made with common place trozums as in political economy for instance jb say sets himself up as a judge of crises because for sooth he knows that a commodity is a product and a footnote end of chapter three section two a of capital volume one