Marx's Theory of Money | Michael Heinrich interview with TV Boitempo
When Marx speaks about value – the value of a commodity – he never really meant a single commodity. A single commodity has no value. A single labor product cannot even be a single commodity; it is a contradiction in itself. “Commodity” presupposes exchange and exchange presupposes that there are (at least) 2 commodities which are exchanged. Therefore, value can only be common attribute of at least 2 commodities and not an attribute of a single commodity. Marx (rather briefly) says this in the third subchapter of chapter 1 which is devoted to the so called “value form”. In much more clarity, he states this in a manuscript devoted to reworking volume 1 for the 2nd edition (a manuscript which, until now, existed only in German but in an article published this year in Brazil the main parts of this manuscript are translated into Portuguese). There we can learn that value is not an attribute of a single commodity. But this means that value is a certain kind of relation. This also counts then, for the substance of value for abstract labor. And that abstract labor is not a substance limited to something single but that it’s always a relation has a consequence Marx explained at the beginning of chapter 3 of volume 1, but it is very often misunderstood.
Chapter 3 of volume 1 deals with money: with money as a measure of value; with money as a means of circulation and with money as money (as this third part of chapter 3 is known). But Marx doesn’t just give a list of functions of money. Especially in the first subchapter of chapter 3 (money as a measure of value) he discusses the immanent relation between money and value. Very briefly, in a footnote, he says that the labor is measured by time. If you work for 5 or 10 hours what counts for value is only the average labor time, not the individual labor time. But nevertheless, the value of a commodity cannot be measured directly with hours of labor time – this is an illusion. You must measure it with money.
So, to use money as a measure of value is not a kind of arbitrary decision. It is not a kind of convention in the sense that John Locke thought (people simply agreed one day to use money). No. To measure value by money is a necessity because labor time can only be attributed to the single commodity, but the single commodity doesn’t really give us the value. We only see value in a relation where production and exchange determine this relation. And this relation can be measured only by the means which is mediating this relation – and this is money. Therefore, Marx argues that money as a measure of value is necessary and that we cannot avoid this like, for example, Proudhon (a socialist contemporary of Marx) wanted to do. He wanted to abolish money but to preserve commodity production and this he would call socialism. Marx argues this is impossible. You cannot abolish money and keep commodity production. Whenever you have commodity production, you need money as this measure of value.
So, between value and money is a much closer relationship than in all other economic theories. In Capital, this becomes clear when we see the structure of the first 4 chapters. In each chapter, money plays a very crucial role, but in a very different way (which here, I can only sketch very briefly).
In the first chapter, there is the subchapter on value-form. The last value-form Marx discusses is the money-form. In chapter 2, where, for the first time, Marx analyses the action of the commodity owners in exchange, for the first time, money plays a role. So, we have to distinguish between money-form (chapter 1) and money (chapter 2). And then in the third chapter with the nice title “Money or the Circulation of Commodities”, we see money as the mediating of commodities. This is the third aspect of money with a lot of sub-aspects treated in this chapter. And in the fourth chapter, which has the nice title, “Transformation of Money in Capital”, we see not only what is mainly discussed, the secret of the surplus value (that it’s the buying and selling of labor power as a commodity). In the first subchapter of chapter 4 we see money as the – now, it’s difficult to say it in English but in German it is – übergreifende Subjekt, meaning the overcatching subject, money in the process of valorization. Marx has, in this chapter, his general formula: Money – Commodity – More Money – Valorization – Value becomes more money. But that this process starts with money is not by accident. Money here, is the independent form of value which is the necessary form of capital. So, in chapter 4 we see money as a form of capital.
Now let’s put this together:
Chapter 1: the money-form of value.
Chapter 2: the real money as a result of the real exchange of commodity owners.
Chapter 3: money in the commodity circulation.
Chapter 4: money as the independent form of value which is the crucial point for the movement of capital.
So, you see, money plays a crucial role, on the one hand, to understand value and on the other hand, to understand capital. And these are only the first 4 chapters of Capital, but the story goes on, and especially in volume 3 we will see another interesting form of money in the system of credit and fictitious capital. But this is another story which maybe will be told in another session.