A Contribution to the Critique of Political Economy
{"WorkMasterId":6482,"WpPageId":282473,"ParentWpPageId":189644,"Slug":"marx-contribution-critique-political-economy","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/karl-marx/marx-contribution-critique-political-economy/","RelativeUrl":"theos/humanities/philosophy/philosophers/karl-marx/marx-contribution-critique-political-economy/","HasFullText":true,"RawHtmlLength":668546,"CleanHtmlLength":612436,"Kicker":"Philosophy Work","Title":"A Contribution to the Critique of Political Economy","Deck":"Marx analyzes commodity, money, value, exchange, method, and historical materialism as groundwork for Capital.","BackLink":{"Text":"Back to Karl Marx","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/karl-marx/"},"AuthorCard":{"Label":"Author","Title":"Karl Marx","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/karl-marx/","MediaHref":"","ImageSrc":"https://chrisdeasy.com/wp-content/uploads/karl-marx-01-mayall-1875-standard-portrait.jpg","ImageAlt":"Karl Marx, Mayall portrait, 1875","FilterTerra":"Western Europe","ClickText":"Karl Marx","ClickHref":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/karl-marx/","Copies":["1818 CE – 1883 CE","Trier, Rhine Province, Kingdom of Prussia","German philosopher of historical materialism, alienation, class struggle, ideology critique, political economy, capitalism, communism, religion critique, and social transformation."]},"ContextCards":[{"Label":"Period","Key":"Period:4","Title":"Modern History","DateText":"1800 CE – 1944 CE","Url":"https://chrisdeasy.com/theos/humanities/philosophy/eras-of-thought/philosophers-of-modern-history/"},{"Label":"Era","Key":"Era:11","Title":"Long 19th Century","DateText":"1870 CE – 1913 CE","Url":"https://chrisdeasy.com/theos/humanities/philosophy/eras-of-thought/philosophers-of-modern-history/philosophers-of-the-long-19th-century/"},{"Label":"Composition","Title":"1859 CE","Url":"","DateText":""}],"DateNote":"Displayed as 1859 CE for first publication.","GeoCards":[{"Label":"Region","Key":"Region:1"},{"Label":"Terra Avita","Key":"TerraAvita:1"},{"Label":"Terra Avita Region","Key":"TerraAvitaRegion:3"},{"Label":"Modern Country","Key":"Country:DEU:1"}],"OriginalTitle":"Zur Kritik der politischen Oekonomie","Language":"German / French / English","DisciplineCards":[{"Label":"Primary Discipline","Key":"Discipline:political-philosophy"},{"Label":"Secondary Discipline","Key":"Discipline:epistemology"}],"Tradition":"Historical materialism / critique of political economy","FullText":{"Title":"Full Text","Copy":"Public-domain full text from Project Gutenberg eBook #46423 .","Url":"","Label":"","Kicker":"","Cards":[]},"CoreThesis":["Marx analyzes commodity, money, value, exchange, method, and historical materialism as groundwork for Capital."],"Classification":{"AlternateTitles":"Contribution to the Critique of Political Economy","KeyConcepts":"commodity; money; value; exchange; method; historical materialism; political economy","Methodology":"Historical-materialist analysis, critique of political economy, dialectical critique, philosophical polemic, archival manuscript work, journalism, and social theory.","Structure":"The page records an approved Marx work with explicit year, source evidence, and visible coauthorship, manuscript, posthumous, or Engels-edited status where needed."},"Arguments":["Marx analyzes commodity, money, value, exchange, method, and historical materialism as groundwork for Capital."],"Influence":{"InfluencedBy":"Hegel, Feuerbach, Adam Smith, David Ricardo, Aristotle, Epicurus, French socialism, British political economy, and nineteenth-century revolutionary politics.","InfluenceOn":""},"Significance":["Included as one of the twenty-seven direct Karl Marx work pages approved for the Karl Marx full-process repair.","The work anchors Marx\u0027s continuing relevance for capitalism, labor, alienation, class, ideology, religion critique, political economy, state power, social transformation, and historical explanation."],"EvidenceNote":["Accepted through title-page image evidence, Marxists archive, Gutenberg search, catalog, and scholarship evidence; 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money; value; exchange; method; historical materialism; political economy"},{"Label":"Methodology","Value":"Historical-materialist analysis, critique of political economy, dialectical critique, philosophical polemic, archival manuscript work, journalism, and social theory."},{"Label":"Structure","Value":"The page records an approved Marx work with explicit year, source evidence, and visible coauthorship, manuscript, posthumous, or Engels-edited status where needed."}]},{"Kind":"TextSection","Title":"Arguments","Paragraphs":["Marx analyzes commodity, money, value, exchange, method, and historical materialism as groundwork for Capital."]},{"Kind":"FieldSection","Title":"Influence","Fields":[{"Label":"Influenced By","Value":"Hegel, Feuerbach, Adam Smith, David Ricardo, Aristotle, Epicurus, French socialism, British political economy, and nineteenth-century revolutionary politics."},{"Label":"Influence On","Value":"Marxism, socialism, communism, critical theory, labor movements, political economy, sociology, social philosophy, philosophy of history, and twentieth-century continental thought."}]},{"Kind":"TextSection","Title":"Significance","Paragraphs":["Included as one of the twenty-seven direct Karl Marx work pages approved for the Karl Marx full-process repair.","The work anchors Marx\u0027s continuing relevance for capitalism, labor, alienation, class, ideology, religion critique, political economy, state power, social transformation, and historical explanation."]},{"Kind":"TextSection","Title":"Evidence Note","Paragraphs":["Accepted through title-page image evidence, Marxists archive, Gutenberg search, catalog, and scholarship evidence; HasFullText remains false."]},{"Kind":"RawSection","Title":"Full Text","BodyHtml":"\u003cp class=\"dz-philo__section-copy dz-philo__full-text-source\"\u003ePublic-domain full text from \u003ca href=\"https://www.gutenberg.org/ebooks/46423\"\u003eProject Gutenberg eBook #46423\u003c/a\u003e.\u003c/p\u003e\n \u003carticle class=\"dz-philo__full-text-body\"\u003e\r\n\u003cdiv class=\"transnote\"\u003e\r\nTranscriber\u0027s note:\u003cbr /\u003e\r\n\u003cb\u003eFraktur font is displayed in bold characters.\u003c/b\u003e\r\n\u003c/div\u003e\r\n\r\n\u003ch1\u003e\r\nA CONTRIBUTION TO\u003cbr /\u003e\r\nTHE CRITIQUE OF\u003cbr /\u003e\r\nPOLITICAL ECONOMY\u003c/h1\u003e\r\n\r\n\u003cp class=\"center\"\u003eBY\r\nKARL MARX\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003eTranslated from the Second German Edition by \u003cspan class=\"smcap\"\u003eN. I. Stone\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003chr class=\"small\" /\u003e\r\n\r\n\u003cp class=\"center\"\u003eWith an Appendix Containing Marx’s Introduction to the Critique\u003cbr /\u003e\r\nRecently Published among His Posthumous Papers\u003c/p\u003e\r\n\r\n\u003chr class=\"small\" /\u003e\r\n\r\n\u003cp class=\"center\"\u003eCHICAGO\u003cbr /\u003e\r\nCHARLES H. KERR \u0026amp; COMPANY\r\n\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\nCopyright, 1904\u003cbr /\u003e\r\nBy the International Library Publishing Co.\u003cbr /\u003e\u003cbr /\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\"figcenter\" style=\"width: 100px;\"\u003e\r\n\u003cimg src=\"https://chrisdeasy.com/wp-content/uploads/gutenberg-marx-contribution-critique-political-economy-i-colophon.jpg\" width=\"100\" height=\"40\" alt=\"colophon\" /\u003e\u003c/div\u003e\r\n\u003chr /\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_3\" id=\"Page_3\"\u003ePg 3\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ch2\u003eTRANSLATOR’S PREFACE.\u003c/h2\u003e\r\n\r\n\u003cp\u003eThe present translation has been made from the second\r\nedition of the “Zur Kritik der Politischen Oekonomie,”\r\npublished by Karl Kautsky in 1897 with slight\r\nchanges from the original edition of 1859; changes that\r\nhad been indicated by Marx on the margins of his own\r\ncopy of the book.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs will be seen from the author’s preface, the work\r\nwas originally issued as the first instalment of a complete\r\ntreatise of political economy. As he went on\r\nwith his work, however, Marx modified his plans and\r\neight years after the appearance of the “Zur Kritik”\r\nhe published the first volume of his Capital, whose scope\r\nwas intended to cover the entire field of political\r\neconomy.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe plan to which Marx alludes in the preface to\r\nthe present work was thus abandoned in its formal aspects,\r\nbut not in substance. The subject matter treated\r\nhere was reproduced or rather “summarized,” as Marx\r\nhimself puts it, in Capital. But that was done in so\r\nfar as was necessary to secure continuity of treatment.\r\nOn the other hand, many important matters are treated\r\nhere more thoroughly than in Capital, especially the part\r\ndevoted to the discussion of money. This, as well as\r\nthe chapters on the history of the theories of value and\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_4\" id=\"Page_4\"\u003ePg 4\u003c/a\u003e\u003c/span\u003e\r\nof money, which do not appear in Capital, make “Zur\r\nKritik” a work practically complete in itself.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe recent silver agitation in this country shows how\r\ntimely and useful this work still is, though written nearly\r\nhalf a century ago. That a great part of the working-men\r\nemployed in the cities were not carried away by\r\nthe Democratic-Populist agitation in 1896 and 1900 is\r\nprobably due in a greater measure than is commonly\r\nrealized to the direct and indirect influence of Marx,\r\nwhose economic teachings guided the socialists in their\r\ncounter agitation. And since the conditions which once\r\ngave rise to a demand for an inflated currency have by\r\nno means disappeared beyond a possibility of return,\r\nthis book has a wide field before it, outside of the library\r\nof the college and of the student of economics, which\r\nthe author’s name and prestige with the working class\r\ninsures for it.\u003c/p\u003e\r\n\r\n\u003cp\u003eThere is another reason, if any need be given why\r\nthis book should have been translated into English.\r\nMarx’s preface to the present work contains the classic\r\nformulation of his historico-philosophic theory known as\r\nthe Materialistic Interpretation of History. This theory,\r\nwhich until recently was entertained almost exclusively\r\nby socialist writers and was hardly heard of outside\r\nof socialist circles in English speaking countries,\r\nis at last receiving not only due recognition but sympathetic\r\nappreciation at the hands of men of science.\u003ca name=\"FNanchor_1_1\" id=\"FNanchor_1_1\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_1_1\" class=\"fnanchor\"\u003e1\u003c/a\u003e\r\nIt is rather a significant coincidence that the work\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_5\" id=\"Page_5\"\u003ePg 5\u003c/a\u003e\u003c/span\u003ewhich for the first time clearly formulated the law governing\r\nsocial evolution should have seen the light of\r\nday in the same year in which Darwin gave to the world\r\nhis theory of organic evolution. And as the latter had\r\nto fight its way to recognition in the teeth of religious\r\nprejudices, so has the recognition of the former been\r\nretarded by even more powerful social and political\r\nprejudices.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe Introduction to the Critique of Political Economy\r\nwhich is added as a supplement to this book is for\r\nthe first time published in book form in any language.\r\nIt was written by Marx in 1857, but for reasons explained\r\nby him in the preface was not published and in\r\nfact was never finished by him, since according to his\r\nchanged plans it would have fitted more into the last\r\nvolume of Capital which was to contain a history of\r\npolitical economy. The introduction has been published\r\nbut lately in the form of a magazine article by Karl\r\nKautsky, editor of the Neue Zeit and literary executor\r\nof Karl Marx.\u003c/p\u003e\r\n\r\n\u003cp\u003eA few explanations are here in order with reference\r\nto the work of translation. No one is more keenly alive\r\nto the shortcomings of the English rendering of the\r\noriginal than the translator himself. While fully conscious\r\nthat the translation might be greatly improved,\r\nhe has at times deliberately sacrificed literary finish to\r\ncloseness to the original. It will be found that many\r\npassages have been rendered more clear and concise in\r\nCapital in which, according to Marx’s own statement in\r\nthe preface to that work, they were much simplified\r\nand popularized. The Hegelian phraseology is more in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_6\" id=\"Page_6\"\u003ePg 6\u003c/a\u003e\u003c/span\u003e\r\nevidence in the present work rendering translation a\r\nmore difficult task. Yet for that very reason it seemed\r\nparticularly desirable to give to English speaking readers\r\nas close a version of the original as was possible. In\r\nthe few cases where certain passages from this work\r\nwere reproduced by Marx in Capital, the translation of\r\nthe latter by Moore and Aveling was freely drawn upon\r\nwith slight modifications here and there.\u003c/p\u003e\r\n\r\n\u003cp\u003eAbout the only liberty taken with Marx’s terminology\r\nhas been in the case of the word “bürgerlich.” Marx\r\nspeaks here of “bürgerliche Produktion” and “bürgerlicher\r\nReichthum” and “bürgerliche Arbeit” where eight\r\nyears later he used in corresponding passages in Capital\r\nthe word “kapitalistische.” As the English speaking\r\nreader is more accustomed to hear of the “capitalist”\r\nsystem of production than of the “bourgeois” system of\r\nproduction, etc., the translator considered Marx’s own\r\nchange of this term within a few years from the publication\r\nof “Zur Kritik” a sufficient justification for rendering\r\nthe word “bürgerlich” into “capitalistic” wherever\r\nit seemed more likely to carry the meaning home to\r\nthe reader.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn view of the fact that the work is likely to be read\r\nin wide circles it was thought desirable to translate the\r\nnumerous quotations from Italian, Greek, Latin and\r\nFrench writers, the translation being given side by side\r\nwith the original quotation. All English citations given\r\nby Marx in German have been restored from the original\r\nsources, which necessitated the use of four libraries, the\r\nAstor and the Columbia University libraries in New\r\nYork, the Congressional Library in Washington, and\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_7\" id=\"Page_7\"\u003ePg 7\u003c/a\u003e\u003c/span\u003e\r\nthe private library of Professor Seligman to whose kindness\r\nthe translator is indebted for the permission to use\r\nrare works of the seventeenth century quoted by Marx.\r\nSeveral of Marx’s references to the pages of the books\r\nquoted by him have been found to be wrong and therefore\r\ndiffer here from those given in the original. In\r\ntwo or three cases where the original English citations\r\ncould not be found they were retranslated from German\r\nwith the quotation marks omitted.\u003c/p\u003e\r\n\r\n\u003cp\u003eThis statement would be incomplete if the translator\r\nfailed to mention the helpful participation in this work\r\nby his wife whose share in the translation is equal to\r\nhis own.\u003c/p\u003e\r\n\r\n\u003cp style=\"margin-left: 2em;\"\u003e\u003cspan class=\"smcap\"\u003eNew York\u003c/span\u003e, October, 1903.\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_8\" id=\"Page_8\"\u003ePg 8-9\u003c/a\u003e\u003c/span\u003e\u003cbr /\u003e\u003c/p\u003e\r\n\r\n\u003ch2\u003eAUTHOR’S PREFACE.\u003c/h2\u003e\r\n\r\n\u003cp\u003eI consider the system of bourgeois economy in the following\r\norder: \u003ci\u003eCapital\u003c/i\u003e, \u003ci\u003elanded property\u003c/i\u003e, \u003ci\u003ewage labor\u003c/i\u003e;\r\n\u003ci\u003estate\u003c/i\u003e, \u003ci\u003eforeign trade\u003c/i\u003e, \u003ci\u003eworld market\u003c/i\u003e. Under the first three\r\nheads I examine the conditions of the economic existence\r\nof the three great classes, which make up modern bourgeois\r\nsociety; the connection of the three remaining\r\nheads is self evident. The first part of the first book,\r\ntreating of capital, consists of the following chapters:\r\n1. Commodity; 2. Money, or simple circulation; 3.\r\nCapital in general. The first two chapters form the\r\ncontents of the present work. The entire material lies\r\nbefore me in the form of monographs, written at long\r\nintervals not for publication, but for the purpose of\r\nclearing up those questions to myself, and their systematic\r\nelaboration on the plan outlined above will depend\r\nupon circumstances.\u003c/p\u003e\r\n\r\n\u003cp\u003eI omit a general introduction which I had prepared,\r\nas on second thought any anticipation of results that\r\nare still to be proven, seemed to me objectionable, and\r\nthe reader who wishes to follow me at all, must make\r\nup his mind to pass from the special to the general.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_10\" id=\"Page_10\"\u003ePg 10\u003c/a\u003e\u003c/span\u003e\r\nOn the other hand, some remarks as to the course of\r\nmy own politico-economic studies may be in place here.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe subject of my professional studies was jurisprudence,\r\nwhich I pursued, however, in connection with and\r\nas secondary to the studies of philosophy and history.\r\nIn 1842-43, as editor of the “Rheinische Zeitung,” I\r\nfound myself embarrassed at first when I had to take\r\npart in discussions concerning so-called material interests.\r\nThe proceedings of the Rhine Diet in\r\nconnection with forest thefts and the extreme subdivision\r\nof landed property; the official controversy\r\nabout the condition of the Mosel peasants into which\r\nHerr von Schaper, at that time president of the Rhine\r\nProvince, entered with the “Rheinische Zeitung;” finally,\r\nthe debates on free trade and protection, gave me the\r\nfirst impulse to take up the study of economic questions.\r\nAt the same time a weak, quasi-philosophic echo of\r\nFrench socialism and communism made itself heard in\r\nthe “Rheinische Zeitung” in those days when the good\r\nintentions “to go ahead” greatly outweighed knowledge\r\nof facts. I declared myself against such botching, but\r\nhad to admit at once in a controversy with the\r\n“Allgemeine Augsburger Zeitung” that my previous\r\nstudies did not allow me to hazard an independent judgment\r\nas to the merits of the French schools. When,\r\ntherefore, the publishers of the “Rheinische Zeitung”\r\nconceived the illusion that by a less aggressive policy\r\nthe paper could be saved from the death sentence pronounced\r\nupon it, I was glad to grasp that opportunity\r\nto retire to my study room from public life.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe first work undertaken for the solution of the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_11\" id=\"Page_11\"\u003ePg 11\u003c/a\u003e\u003c/span\u003e\r\nquestion that troubled me, was a critical revision of\r\nHegel’s “Philosophy of Law”; the introduction to that\r\nwork appeared in the “Deutsch-Französische Jahrbücher,”\r\npublished in Paris in 1844. I was led by my\r\nstudies to the conclusion that legal relations as well as\r\nforms of state could neither be understood by themselves,\r\nnor explained by the so-called general progress of the\r\nhuman mind, but that they are rooted in the material\r\nconditions of life, which are summed up by Hegel after\r\nthe fashion of the English and French of the eighteenth\r\ncentury under the name “civic society;” the anatomy\r\nof that civic society is to be sought in political economy.\r\nThe study of the latter which I had taken up in Paris,\r\nI continued at Brussels whither I emigrated on account\r\nof an order of expulsion issued by Mr. Guizot. The\r\ngeneral conclusion at which I arrived and which, once\r\nreached, continued to serve as the leading thread in my\r\nstudies, may be briefly summed up as follows: In the\r\nsocial production which men carry on they enter into\r\ndefinite relations that are indispensable and independent\r\nof their will; these relations of production correspond\r\nto a definite stage of development of their material powers\r\nof production. The sum total of these relations of\r\nproduction constitutes the economic structure of society\u0026mdash;the\r\nreal foundation, on which rise legal and political\r\nsuperstructures and to which correspond definite forms\r\nof social consciousness. The mode of production in\r\nmaterial life determines the general character of the\r\nsocial, political and spiritual processes of life. It is not\r\nthe consciousness of men that determines their existence,\r\nbut, on the contrary, their social existence determines\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_12\" id=\"Page_12\"\u003ePg 12\u003c/a\u003e\u003c/span\u003e\r\ntheir consciousness. At a certain stage of their development,\r\nthe material forces of production in society come\r\nin conflict with the existing relations of production, or\u0026mdash;what\r\nis but a legal expression for the same thing\u0026mdash;with\r\nthe property relations within which they had been\r\nat work before. From forms of development of the\r\nforces of production these relations turn into their fetters.\r\nThen comes the period of social revolution. With\r\nthe change of the economic foundation the entire immense\r\nsuperstructure is more or less rapidly transformed.\r\nIn considering such transformations the distinction\r\nshould always be made between the material\r\ntransformation of the economic conditions of production\r\nwhich can be determined with the precision of natural\r\nscience, and the legal, political, religious, aesthetic\r\nor philosophic\u0026mdash;in short ideological forms in which men\r\nbecome conscious of this conflict and fight it out. Just\r\nas our opinion of an individual is not based on what\r\nhe thinks of himself, so can we not judge of such a\r\nperiod of transformation by its own consciousness; on\r\nthe contrary, this consciousness must rather be explained\r\nfrom the contradictions of material life, from\r\nthe existing conflict between the social forces of production\r\nand the relations of production. No social order\r\never disappears before all the productive forces, for\r\nwhich there is room in it, have been developed; and new\r\nhigher relations of production never appear before the\r\nmaterial conditions of their existence have matured\r\nin the womb of the old society. Therefore, mankind\r\nalways takes up only such problems as it can solve;\r\nsince, looking at the matter more closely, we will always\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_13\" id=\"Page_13\"\u003ePg 13\u003c/a\u003e\u003c/span\u003e\r\nfind that the problem itself arises only when the material\r\nconditions necessary for its solution already exist or\r\nare at least in the process of formation. In broad outlines\r\nwe can designate the Asiatic, the ancient, the feudal,\r\nand the modern bourgeois methods of production as so\r\nmany epochs in the progress of the economic formation of\r\nsociety. The bourgeois relations of production are the\r\nlast antagonistic form of the social process of production\u0026mdash;antagonistic\r\nnot in the sense of individual antagonism,\r\nbut of one arising from conditions surrounding the life\r\nof individuals in society; at the same time the productive\r\nforces developing in the womb of bourgeois society\r\ncreate the material conditions for the solution of that\r\nantagonism. This social formation constitutes, therefore,\r\nthe closing chapter of the prehistoric stage of\r\nhuman society.\u003c/p\u003e\r\n\r\n\u003cp\u003eFrederick Engels, with whom I was continually corresponding\r\nand exchanging ideas since the appearance\r\nof his ingenious critical essay on economic categories\r\n(in the “Deutsch-Französische Jahrbücher”), came\r\nby a different road to the same conclusions as myself\r\n(see his “Condition of the Working Classes in England”).\r\nWhen he, too, settled in Brussels in the spring\r\nof 1845, we decided to work out together the contrast\r\nbetween our view and the idealism of the German\r\nphilosophy, in fact to settle our accounts with our former\r\nphilosophic conscience. The plan was carried out in\r\nthe form of a criticism of the post-Hegelian philosophy.\r\nThe manuscript in two solid octavo volumes had long\r\nreached the publisher in Westphalia, when we received\r\ninformation that conditions had so changed as not to\r\nallow of its publication. We abandoned the manuscript\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_14\" id=\"Page_14\"\u003ePg 14\u003c/a\u003e\u003c/span\u003e\r\nto the stinging criticism of the mice the more readily\r\nsince we had accomplished our main purpose\u0026mdash;the clearing\r\nup of the question to ourselves. Of the scattered\r\nwritings on various subjects in which we presented our\r\nviews to the public at that time, I recall only the “Manifesto\r\nof the Communist Party” written by Engels and\r\nmyself, and the “Discourse on Free Trade” written by\r\nmyself. The leading points of our theory were first presented\r\nscientifically, though in a polemic form, in my\r\n“Misère de la Philosophie, etc.” directed against Proudhon\r\nand published in 1847. An essay on “Wage Labor,”\r\nwritten by me in German, and in which I put together\r\nmy lectures on the subject delivered before the German\r\nWorkmen’s Club at Brussels, was prevented from leaving\r\nthe hands of the printer by the February revolution\r\nand my expulsion from Belgium which followed it as a\r\nconsequence.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe publication of the “Neue Rheinische Zeitung”\r\nin 1848 and 1849, and the events which took place later\r\non, interrupted my economic studies which I could not\r\nresume before 1850 in London. The enormous material\r\non the history of political economy which is accumulated\r\nin the British Museum; the favorable view which London\r\noffers for the observation of bourgeois society;\r\nfinally, the new stage of development upon which the\r\nlatter seemed to have entered with the discovery of gold\r\nin California and Australia, led me to the decision to\r\nresume my studies from the very beginning and work\r\nup critically the new material. These studies partly\r\nled to what might seem side questions, over which I\r\nnevertheless had to stop for longer or shorter periods of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_15\" id=\"Page_15\"\u003ePg 15\u003c/a\u003e\u003c/span\u003e\r\ntime. Especially was the time at my disposal cut down\r\nby the imperative necessity of working for a living. My\r\nwork as contributor on the leading Anglo-American\r\nnewspaper, the “New York Tribune,” at which I have\r\nnow been engaged for eight years, has caused very great\r\ninterruption in my studies, since I engage in newspaper\r\nwork proper only occasionally. Yet articles on important\r\neconomic events in England and on the continent have\r\nformed so large a part of my contributions that I have\r\nbeen obliged to make myself familiar with practical\r\ndetails which lie outside the proper sphere of political\r\neconomy.\u003c/p\u003e\r\n\r\n\u003cp\u003eThis account of the course of my studies in political\r\neconomy is simply to prove that my views, whatever one\r\nmay think of them, and no matter how little they agree\r\nwith the interested prejudices of the ruling classes, are\r\nthe result of many years of conscientious research. At\r\nthe entrance to science, however, the same requirement\r\nmust be put as at the entrance to hell:\u003c/p\u003e\r\n\r\n\u003cdiv class=\"poetry-container\"\u003e\r\n\u003cdiv class=\"poetry\"\u003e\r\n\u003cdiv class=\"stanza\"\u003e\r\n\u003cdiv class=\"line\"\u003eQui si convien lasciare ogni sospetto\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eOgni viltà convien che qui sia morta.\u003c/div\u003e\r\n\u003c/div\u003e\u003c/div\u003e\u003c/div\u003e\r\n\r\n\u003cp class=\"right padr2\"\u003e\u003cspan class=\"smcap\"\u003eKarl Marx.\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp style=\"margin-left: 2em;\"\u003eLondon, January, 1859.\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_16\" id=\"Page_16\"\u003ePg 16\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_17\" id=\"Page_17\"\u003ePg 17\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ch2\u003eCONTENTS.\u003c/h2\u003e\r\n\r\n\u003ctable summary=\"CONTENTS\"\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdr\" colspan=\"2\"\u003ePAGE.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003eTranslator’s Preface\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_3\"\u003e3\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003eAuthor’s Preface\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_8\"\u003e9\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdc\" colspan=\"2\"\u003eBOOK I. CAPITAL IN GENERAL.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003eChapter I. Commodities\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_18\"\u003e19\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl2\"\u003eA. Notes on the History of the Theory of Value\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_56\"\u003e56\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003eChapter II. Money or Simple Circulation\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_73\"\u003e73\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e1. The Measure of Value\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_74\"\u003e74\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl2\"\u003eB. Theories of the Unit of Measure of Money\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_91\"\u003e91\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e2. The Medium of Circulation\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_107\"\u003e107\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003ea. The Metamorphosis of Commodities\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_108\"\u003e108\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003eb. The Circulation of Money\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_125\"\u003e125\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003ec. Coin and Symbols of Value\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_138\"\u003e138\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e3. Money\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_162\"\u003e162\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003ea. Hoarding\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_166\"\u003e166\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003eb. Means of Payment\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_185\"\u003e185\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl6\"\u003ec. World Money\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_201\"\u003e201\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e4. The Precious Metals\u003c/td\u003e\u003ctd class=\"tdr\"\u003e\u003ca href=\"#Page_208\"\u003e208\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl2 padr2\"\u003e\u003cp class=\"indent\"\u003eC. Theories of the Medium of Circulation and of Money\u003c/p\u003e\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_215\"\u003e215\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padr2\"\u003e\u003cp class=\"indent2\"\u003eAppendix. Introduction to the Critique of Political Economy\u003c/p\u003e\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_264\"\u003e264\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e1. Production in General\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_265\"\u003e265\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4 padr2\"\u003e\u003cp class=\"indent\"\u003e2.\u0026nbsp;The General Relation of Production to Distribution, change, and Consumption\u003c/p\u003e\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_274\"\u003e274\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e3. The Method of Political Economy\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_292\"\u003e292\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl padl4\"\u003e\u003cp class=\"indent\"\u003e4. Production, Means of Production, and Conditions of Production\u003c/p\u003e\u003c/td\u003e\u003ctd class=\"tdr vertb\"\u003e\u003ca href=\"#Page_306\"\u003e306\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003eIndex\u003c/td\u003e\u003ctd class=\"tdr\"\u003e\u003ca href=\"#Page_313\"\u003e313\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\u003c/table\u003e\r\n\u003chr /\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_18\" id=\"Page_18\"\u003ePg 18-19\u003c/a\u003e\u003c/span\u003e\u003cbr /\u003e\u003c/p\u003e\r\n\r\n\u003ch2\u003e\u003cbig\u003e\u003cspan class=\"smcap\"\u003eBOOK I. Capital in general.\u003c/span\u003e\u003c/big\u003e\u003c/h2\u003e\r\n\r\n\u003chr class=\"small\" /\u003e\r\n\r\n\u003ch2\u003eCHAPTER I.\u003cbr /\u003e\u003cbr /\u003e\r\n\r\nCOMMODITIES.\u003c/h2\u003e\r\n\r\n\u003cp\u003eAt first sight the wealth of society under the capitalist\r\nsystem presents itself as an immense accumulation of\r\ncommodities, its unit being a single commodity. But\r\nevery commodity has a twofold aspect, that of \u003ci\u003euse value\u003c/i\u003e\r\nand \u003ci\u003eexchange value\u003c/i\u003e.\u003ca name=\"FNanchor_2_2\" id=\"FNanchor_2_2\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_2_2\" class=\"fnanchor\"\u003e2\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eA commodity is first of all, in the language of English\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_20\" id=\"Page_20\"\u003ePg 20\u003c/a\u003e\u003c/span\u003eeconomists, “any thing necessary, useful or pleasant in\r\nlife,” an object of human wants, a means of existence in\r\nthe broadest sense of the word. This property of commodities\r\nto serve as use-values coincides with their\r\nnatural palpable existence. Wheat e. g. is a distinct\r\nuse-value differing from the use-values cotton, glass,\r\npaper, etc. Use-value has a value only in use and is\r\nrealized only in the process of consumption. The same\r\nuse-value may be utilized in various ways. But the extent\r\nof its possible applications is circumscribed by its\r\ndistinct properties. Furthermore, it is thus limited\r\nnot only qualitatively but also quantitatively. According\r\nto their natural properties the various use-values\r\nhave different measures, such as a bushel of wheat, a\r\nquire of paper, a yard of linen, etc.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhatever the social form of wealth may be, use-values\r\nalways have a substance of their own, independent\r\nof that form. One can not tell by the\r\ntaste of wheat whether it has been raised by a\r\nRussian serf, a French peasant, or an English\r\ncapitalist. Although the object of social wants and,\r\ntherefore, mutually connected in society, use-values do\r\nnot bear any marks of the relations of social production.\r\nSuppose, we have a commodity whose use-value is that of\r\na diamond. We can not tell by looking at the diamond\r\nthat it is a commodity. When it serves as a use-value,\r\naesthetic or mechanical, on the breast of a harlot, or in\r\nthe hand of a glasscutter, it is a diamond and not a commodity.\r\nIt is the necessary pre-requisite of a commodity\r\nto be a use-value, but it is immaterial to the use-value\r\nwhether it is a commodity or not. Use-value in this\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_21\" id=\"Page_21\"\u003ePg 21\u003c/a\u003e\u003c/span\u003e\r\nindifference to the nature of its economic destination,\r\ni.\u0026nbsp;e. use-value as such lies outside the sphere of investigation\r\nof political economy.\u003ca name=\"FNanchor_3_3\" id=\"FNanchor_3_3\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_3_3\" class=\"fnanchor\"\u003e3\u003c/a\u003e It falls within the\r\nsphere of the latter only in so far as it forms its own\r\neconomic destination. It forms the material basis\r\nwhich directly underlies a definite economic relation\r\ncalled \u003ci\u003eexchange value\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eExchange-value appears at first sight as a \u003ci\u003equantitative\r\nrelation\u003c/i\u003e, as a proportion in which use-values are\r\nexchanged for one another. In such a relation they\r\nconstitute equal exchangeable quantities. Thus, a volume\r\nof Propercius and eight ounces of snuff may represent\r\nthe same exchange value, in spite of the dissimilar\r\nuse-values of tobacco and elegy. As exchange-value,\r\none kind of use-value is worth as much as another\r\nkind, if only taken in right proportion. The exchange\r\nvalue of a palace can be expressed in a certain number\r\nof boxes of shoe-blacking. On the contrary, London\r\nmanufacturers of shoe-blacking have expressed the\r\nexchange value of their many boxes of blacking, in\r\npalaces. Thus, entirely apart from their natural forms\r\nand without regard to the specific kind of wants for\r\nwhich they serve as use-values, commodities in certain\r\nquantities equal each other, take each other’s place in\r\nexchange, pass as equivalents, and in spite of their\r\nvariegated appearance, represent the same entity.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_22\" id=\"Page_22\"\u003ePg 22\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003eUse-values are primarily means of existence. These\r\nmeans of existence, however, are themselves products\r\nof social life, the result of expended human vital power,\r\n\u003ci\u003ematerialized labor\u003c/i\u003e. As the embodiment of social\r\nlabor, all commodities are the crystallization of the\r\nsame substance. Let us now consider the nature of\r\nthis substance, i.\u0026nbsp;e., of labor, which is expressed in\r\nexchange value.\u003c/p\u003e\r\n\r\n\u003cp\u003eLet one ounce of gold, one ton of iron, one quarter\r\nof wheat and twenty yards of silk represent equal exchange\r\nvalues. As equivalents, in which the qualitative\r\ndifference between their use-values has been eliminated,\r\nthey represent equal volumes of the same kind\r\nof labor. The labor which is equally embodied in all\r\nof them must be uniform, homogeneous, simple labor.\r\nIt matters as little in the case of labor whether it be\r\nembodied in gold, iron, wheat, or silk, as it does in\r\nthe case of oxygen, whether it appears in the rust of\r\niron, in the atmosphere, in the juice of a grape, or in\r\nthe blood of a human being. But the digging of gold,\r\nthe extraction of iron from a mine, the raising of\r\nwheat and the weaving of silk are so many kinds of\r\nlabor, differing in quality. As a matter of fact, what\r\nin reality appears as a difference in use-values, is in\r\nthe process of production, a difference in the work\r\ncreating those use-values. Just as labor, which creates\r\nexchange value, is indifferent to the material of use-values,\r\nso it is to the special form of labor itself. Furthermore,\r\nthe different use-values are the products of\r\nthe work of different individuals, consequently the result\r\nof various kinds of labor differing individually\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_23\" id=\"Page_23\"\u003ePg 23\u003c/a\u003e\u003c/span\u003e\r\nfrom one another. But as exchange values, they represent\r\nthe same homogeneous labor, i.\u0026nbsp;e., labor from\r\nwhich the individuality of the workers is eliminated.\r\nLabor creating exchange value is, therefore, \u003ci\u003eabstract\r\ngeneral labor\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf one ounce of gold, one ton of iron, one quarter of\r\nwheat, and twenty yards of silk are exchange values of\r\nequal magnitude or equivalents; then one ounce of\r\ngold, half a ton of iron, three bushels of wheat and\r\nfive yards of silk are exchange values of different\r\nmagnitudes, and this quantitative difference is the only\r\ndifference of which they are capable as exchange values.\r\nAs exchange values of different magnitudes, they\r\nrepresent greater or smaller quantities of that simple,\r\nhomogeneous, abstract, general labor, which forms\r\nthe substance of exchange value. The question arises,\r\nhow are these quantities to be measured? Or, rather\r\nwhat constitutes the substance of labor, which makes\r\nit capable of quantitative measurement, since the quantitative\r\ndifferences of commodities in their capacity of\r\nexchange values are but quantitative differences of labor\r\nembodied in them. Just as motion is measured by\r\ntime, so is labor measured by \u003ci\u003elabor-time\u003c/i\u003e. Given the\r\nquality of labor, the difference in its duration is the\r\nonly property by which it can be distinguished. As labor-time,\r\nlabor has the same standard of measurement\r\nas the natural time measures, viz., hours, days, weeks,\r\netc. Labor-time is the vital substance of labor, independent\r\nof its form, composition, individuality; it is its\r\nvital substance quantitatively, having at the same time\r\nits own inherent measure. Labor-time embodied in the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_24\" id=\"Page_24\"\u003ePg 24\u003c/a\u003e\u003c/span\u003e\r\nuse-values of commodities is the substance which\r\nmakes exchange values and, therefore, commodities of\r\nthem and at the same time serves to measure definite\r\nquantities of their value. Corresponding quantities of\r\ndifferent use-values, in which the same quantity of labor-time\r\nis embodied, are equivalents; or, to put it in\r\nanother form, all use-values are equivalents when\r\ntaken in proportions containing the same quantity of\r\nexpended, materialized labor-time. As exchange values,\r\nall commodities are but definite measures of \u003ci\u003econgealed\r\nlabor-time\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo understand how exchange value is determined by\r\nlabor-time, the following main points must be kept in\r\nmind: The reduction of labor to simple labor, devoid\r\nof any quality, so to speak; the specific ways and\r\nmeans by which exchange\u0026mdash;value-creating, i.\u0026nbsp;e., commodity\r\nproducing labor becomes \u003ci\u003esocial labor\u003c/i\u003e; finally,\r\nthe difference between labor as the producer of use-values,\r\nand labor as the creator of exchange values.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn order to measure commodities by the labor-time\r\ncontained in them, the different kinds of labor must be\r\nreduced to uniform, homogeneous, simple labor, in\r\nshort, to labor which is qualitatively the same, and,\r\ntherefore, differs only in quantity.\u003c/p\u003e\r\n\r\n\u003cp\u003eThis reduction appears to be an abstraction; but it\r\nis an abstraction which takes place daily in the social\r\nprocess of production. The conversion of all commodities\r\ninto labor-time is no greater abstraction nor a less\r\nreal process than the chemical reduction of all organic\r\nbodies to air. Labor, thus measured by time, does not\r\nappear in reality as the labor of different individuals.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_25\" id=\"Page_25\"\u003ePg 25\u003c/a\u003e\u003c/span\u003e\r\nbut on the contrary, the various working individuals\r\nrather appear as mere organs of labor; or, in so far as\r\nlabor is represented by exchange values, it may be defined\r\nas human labor in general. This abstraction of\r\nhuman labor in general virtually exists in the average\r\nlabor which the average individual of a given society\r\ncan perform\u0026mdash;a certain productive expenditure of human\r\nmuscles, nerves, brain, etc. It is unskilled labor\r\nto which the average individual can be put and which\r\nhe has to perform in one way or another. The character\r\nof this average labor varies in different countries\r\nand at different stages of civilization, but appears fixed\r\nin a particular society. Unskilled labor constitutes the\r\nbulk of all labor performed in capitalist society, as\r\nmay be seen from all statistics.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is obvious that if A spends six hours in the production\r\nof iron and six hours on linen, and B also produces\r\niron during six hours and linen during another\r\nsix hours, it is but a different application of \u003ci\u003ethe same\u003c/i\u003e\r\nlabor time that would be expended, if A produced iron\r\nduring twelve hours, while B worked twelve hours on\r\nlinen. But how about skilled labor which rises above\r\nthe level of average labor by its higher intensity, by its\r\ngreater specific gravity? This kind of labor resolves\r\nitself into unskilled labor composing it; it is simple\r\nlabor of a higher intensity, so that one day of skilled\r\nlabor, e. g., may equal three days of unskilled labor.\r\nThis is not the place to consider the laws regulating\r\nthis reduction. It is clear, however, that such reduction\r\ndoes take place, for, as exchange value, the product of\r\nthe most skilled labor is, when taken in a certain pro\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_26\" id=\"Page_26\"\u003ePg 26\u003c/a\u003e\u003c/span\u003eportion,\r\nequivalent to the product of unskilled average\r\nlabor, or equal to a definite quantity of that unskilled\r\nlabor.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe determination of exchange-value by means of\r\nlabor-time implies, further, the fact that an equal\r\nquantity of labor is embodied in any given commodity,\r\ne. g., a ton of iron, no matter whether it is the work of\r\nA or B, that is to say, various individuals expend an\r\nequal amount of labor-time for the production of the\r\nsame use-value of a given quality and quantity. It is\r\nthus assumed that the labor-time contained in a commodity\r\nis the labor-time \u003ci\u003enecessary\u003c/i\u003e for its production,\r\ni.\u0026nbsp;e., it is the labor-time which is required for the production\r\nof another specimen of the same commodity\r\nunder the same general conditions of production.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe conditions of labor, which creates exchange\r\nvalue, as shown by the analysis of the latter, are \u003ci\u003esocial\r\nconditions\u003c/i\u003e of labor or conditions of \u003ci\u003esocial labor\u003c/i\u003e. Social,\r\nnot in the ordinary, but in a special sense. It is\r\na specific form of the social process. The homogeneous\r\nsimplicity of labor means first of all \u003ci\u003eequality\u003c/i\u003e of\r\nthe labors of various individuals, a reciprocal relation\r\nof equality of their labors determined by the actual reduction\r\nof all kinds of labor to uniform labor. The\r\nlabor of every individual, as far as it is expressed in\r\nexchange value possesses this social character of\r\nequality and finds expression in exchange value only\r\nin so far as it is a relation of equality with the labor\r\nof all other individuals.\u003c/p\u003e\r\n\r\n\u003cp\u003eFurthermore, the labor-time of a single individual is\r\ndirectly expressed in exchange value as \u003ci\u003euniversal\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_27\" id=\"Page_27\"\u003ePg 27\u003c/a\u003e\u003c/span\u003e\r\nlabor-time\u003c/i\u003e, and this \u003ci\u003euniversal character\u003c/i\u003e of individual\r\nlabor is the manifestation of its \u003ci\u003esocial character\u003c/i\u003e.\r\nThe labor-time represented by exchange value is the\r\nlabor-time of an individual, but of an individual undistinguished\r\nfrom other individuals in so far as they perform\r\nthe same labor; therefore, the time required by\r\none individual for the production of a certain commodity\r\nis the \u003ci\u003enecessary\u003c/i\u003e labor-time which any other individual\r\nwould have to spend on the production of the\r\nsame commodity. It is the labor-time of an individual,\r\n\u003ci\u003ehis\u003c/i\u003e labor-time, but only as labor-time common to all,\r\nregardless as to which particular individual’s labor-time\r\nit is. As universal labor-time it is represented in\r\na universal product, in a \u003ci\u003euniversal equivalent\u003c/i\u003e, in a\r\ndefinite quantity of materialized labor-time: the latter\r\nis indifferent as to the particular form of use-value in\r\nwhich it appears directly as the product of an individual,\r\nand may be turned at will into any other form\r\nof use-value to represent the product of any other individual.\r\nOnly as such a \u003ci\u003euniversal\u003c/i\u003e quantity, is it a\r\n\u003ci\u003esocial\u003c/i\u003e quantity. In order to result in exchange value,\r\nthe labor of an individual must be turned into a \u003ci\u003euniversal\r\nequivalent\u003c/i\u003e, i.\u0026nbsp;e., the labor-time of an individual\r\nmust be expressed as universal labor-time, or\r\nuniversal labor-time as that of an individual. It is the\r\nsame as though different individuals had put together\r\ntheir labor-time and contributed the different quantities\r\nof labor-time at their common disposal in the form\r\nof different use-values. The labor-time of the individual\r\nis thus, in fact, the labor time which society requires\r\nfor the production of a certain use-value, i.\u0026nbsp;e.,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_28\" id=\"Page_28\"\u003ePg 28\u003c/a\u003e\u003c/span\u003e\r\nfor the satisfaction of a certain want. But the question\r\nthat interests us here is as to the specific form in\r\nwhich labor acquires a social character. Let us suppose\r\nthat a certain quantity of labor-time of a spinner is\r\nrealized in 100 lbs. of yarn. Suppose 100 yards of linen,\r\nthe product of the weaver, represent the same\r\nquantity of labor-time. Inasmuch as these two products\r\nrepresent equal quantities of universal labor-time and,\r\nhence, are equivalents of \u003ci\u003eevery\u003c/i\u003e use-value which contains\r\nthe same amount of labor-time, they are also\r\nequivalent to each other. Only because the labor-time\r\nof the spinner and that of the weaver take the form of\r\nuniversal labor-time and their products appear as universal\r\nequivalents, is the labor of the weaver realized\r\nfor the spinner, and that of the spinner, for the weaver,\r\nthe labor of one takes the place of the labor of the\r\nother, i.\u0026nbsp;e., the social character of their labors is realized\r\nfor both. Quite different it was under the patriarchal\r\nsystem of production, when spinner and weaver\r\nlived under the same roof, when the female members\r\nof the family did the spinning, and the male members\r\ndid the weaving to supply the wants of their own family;\r\nthen yarn and linen were \u003ci\u003esocial\u003c/i\u003e products, spinning\r\nand weaving were \u003ci\u003esocial\u003c/i\u003e labor within the limits of the\r\nfamily. But their social character did not manifest itself\r\nin the fact that yarn, as a universal equivalent,\r\ncould be exchanged for linen as a universal equivalent,\r\nor that one was exchanged for another, as identical\r\nand equivalent expressions of the same universal labor-time.\r\nIt was rather the family organization with\r\nits natural division of labor that impressed its peculiar\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_29\" id=\"Page_29\"\u003ePg 29\u003c/a\u003e\u003c/span\u003e\r\nsocial stamp on the product of labor. Or, let us take\r\nthe services and payments in kind of the Middle Ages.\r\nIt was the specific kind of labor performed by each individual\r\nin its natural form, the particular and not the\r\nuniversal aspect of labor, that constituted then the social\r\ntie. Or, let us finally take labor carried on in common\r\nin its primitive natural form, as we find it at the\r\ndawn of history of all civilized races.\u003ca name=\"FNanchor_4_4\" id=\"FNanchor_4_4\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_4_4\" class=\"fnanchor\"\u003e4\u003c/a\u003e It is clear that\r\nin this case labor does not acquire its social character\r\nfrom the fact that the labor of the individual takes on\r\nthe abstract form of universal labor or that his product\r\nassumes the form of a universal equivalent. The\r\nvery nature of production under a communal system\r\nmakes it impossible for the labor of the individual to\r\nbe private labor and his product to be a private product;\r\non the contrary, it makes individual labor appear\r\nas the direct function of a member of a social organism.\r\nOn the contrary, labor, which is expressed in exchange\r\nvalue, at once appears as the labor of a separate\r\nindividual. It becomes social labor only by taking\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_30\" id=\"Page_30\"\u003ePg 30\u003c/a\u003e\u003c/span\u003eon the form of its direct opposite, the form of abstract\r\nuniversal labor.\u003c/p\u003e\r\n\r\n\u003cp\u003eLabor, which creates exchange value, is, finally, characterized\r\nby the fact that even the social relations of\r\nmen appear in the reversed form of a social relation of\r\nthings. Only in so far as two use-values are in a\r\nmutual relation of exchange values does the labor of\r\ndifferent persons possess the common property of being\r\nidentical universal labor. Hence, if it be correct to\r\nsay that exchange value is a relation between persons,\u003ca name=\"FNanchor_5_5\" id=\"FNanchor_5_5\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_5_5\" class=\"fnanchor\"\u003e5\u003c/a\u003e\r\nit must be added that it is a relation disguised under a\r\nmaterial cover. Just as a pound of iron and a pound of\r\ngold represent the \u003ci\u003esame\u003c/i\u003e weight in spite of their different\r\nphysical and chemical properties, so do two use-values,\r\nas commodities containing the same quantity\r\nof labor-time, represent the \u003ci\u003esame exchange value\u003c/i\u003e. Exchange\r\nvalue thus appears as the natural social destination\r\nof use-values, a property which they possess by\r\nvirtue of being things and in consequence of which\r\nthey are exchanged for one another in definite proportions,\r\nor form equivalents, just as chemical elements\r\ncombine in certain proportions, forming chemical\r\nequivalents. It is only through the habit of everyday\r\nlife that we come to think it perfectly plain and commonplace,\r\nthat a social relation of production should\r\ntake on the form of a thing, so that the relation of persons\r\nin their work appears in the form of a mutual relation\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_31\" id=\"Page_31\"\u003ePg 31\u003c/a\u003e\u003c/span\u003e\r\nbetween things, and between things and persons.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn commodities this mystification is as yet very simple.\r\nIt is more or less plain to everybody that a relation\r\nof commodities as exchange values is nothing but\r\na mutual relation between persons in their productive\r\nactivity. This semblance of simplicity disappears in\r\nhigher productive relations. All the illusions in regard\r\nto the monetary system are due to the fact that money\r\nis not regarded as something representing a social relation\r\nof production, but as a product of nature endowed\r\nwith certain properties. The modern economists\r\nwho sneer at the illusions of the monetary system, betray\r\nthe same illusion as soon as they have to deal with\r\nhigher economic forms, as, e. g., capital.\u003ca name=\"FNanchor_6_6\" id=\"FNanchor_6_6\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_6_6\" class=\"fnanchor\"\u003e6\u003c/a\u003e It breaks\r\nforth in their confession of naive surprise, when what\r\nthey have just thought to have defined with great difficulty\r\nas a thing suddenly appears as a social relation\r\nand then reappears to tease them again as a thing, before\r\nthey have barely managed to define it as a social\r\nrelation.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince the exchange value of commodities is, in fact,\r\nnothing but a mutual relation of the labors of individuals\u0026mdash;labors\r\nwhich are similar and universal\u0026mdash;nothing\r\nbut a material expression of a specific social form of\r\nlabor, it is a tautology to say that labor is the \u003ci\u003eonly\u003c/i\u003e\r\nsource of exchange value and consequently of wealth,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_32\" id=\"Page_32\"\u003ePg 32\u003c/a\u003e\u003c/span\u003ein so far as the latter consists of exchange values.\r\nSimilarly, it is a tautology to say that matter in its\r\nnatural state has no exchange value, because it does\r\nnot contain any labor, and that exchange value as such\r\ndoes not contain matter. But when William Petty\r\ncalls “labor the father and earth the mother of wealth,”\r\nor when Bishop Berkeley asks “whether the four elements\r\nand man’s labour therein, be not the true source\r\nof wealth,”\u003ca name=\"FNanchor_7_7\" id=\"FNanchor_7_7\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_7_7\" class=\"fnanchor\"\u003e7\u003c/a\u003e or when the American, Thomas Cooper\r\nputs it popularly: “Take away from a piece of bread\r\nthe labour bestowed by the baker on the flour, by the\r\nmiller on the grain brought to him, by the farmer in\r\nploughing, sowing, tending, gathering, threshing,\r\ncleaning and transporting the seed, and what will remain?\r\nA few grains of grass, growing wild in the\r\nwoods, and unfit for any human purpose”\u003ca name=\"FNanchor_8_8\" id=\"FNanchor_8_8\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_8_8\" class=\"fnanchor\"\u003e8\u003c/a\u003e\u0026mdash;then all\r\nthese views do not refer to abstract labor as the source\r\nof exchange value, but to concrete labor as the source\r\nof material wealth; in short, to labor in so far as it\r\nproduces use-values. In assuming that a commodity\r\nhas use-value we assume the special usefulness and\r\ndistinct fitness of the labor absorbed by it, but that is\r\nall there is to the view of labor as useful labor from\r\nthe standpoint of commodity. Considering bread as\r\na use-value, we are interested in its properties as\r\nan article of food and not at all in the different kinds\r\nof labor of the farmer, miller, baker, etc. If by some\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_33\" id=\"Page_33\"\u003ePg 33\u003c/a\u003e\u003c/span\u003einvention nineteen-twentieths of this labor could be\r\nsaved, the loaf of bread would still render the same\r\nservice as before. If it fell ready-made from the sky\r\nit would not lose a single atom of its use-value. While\r\nlabor which creates exchange value is realized in the\r\nequality of commodities as universal equivalents, labor\r\nas a productive activity with a useful purpose is realized\r\nin the endless variety of use-values created by it.\r\nWhile labor which creates exchange values is \u003ci\u003eabstract\u003c/i\u003e,\r\n\u003ci\u003euniversal\u003c/i\u003e and \u003ci\u003ehomogeneous\u003c/i\u003e, labor which produces use-values\r\nis concrete and special and is made up of an\r\nendless variety of kinds of labor according to the way\r\nin which and the material to which it is applied.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is wrong to speak of labor in so far as it is applied\r\nto the production of use-values as of \u003ci\u003ethe only\u003c/i\u003e\r\nsource of wealth, namely, the material wealth produced\r\nby it. Being an activity intended to adapt materials to\r\nthis or that purpose, it requires matter as a pre-requisite.\r\nIn different use-values the proportion between\r\nlabor and raw material varies greatly, but use-value\r\nalways has a natural substratum. Labor, as an activity,\r\ndirected to the adaptation of raw material in one form\r\nor another, is a natural condition of human existence,\r\na condition of exchange of matter between man and\r\nnature, independent of all social forms. On the contrary,\r\nlabor producing exchange value is a specifically\r\nsocial form of labor. Tailoring, e. g., in its material\r\nmanifestation as a distinct productive activity, produces\r\na coat, but not the exchange value of the coat.\r\nThe latter is produced not by the labor of the tailor as\r\nsuch, but by abstract universal labor, and that belongs\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_34\" id=\"Page_34\"\u003ePg 34\u003c/a\u003e\u003c/span\u003e\r\nto a certain organization of society which has not been\r\nbrought about by the tailor. Thus, the women under\r\nthe ancient system of house industry made coats without\r\nproducing the exchange value of the coats. Labor\r\nas a source of material wealth was known to Moses,\r\nthe legislator, as well as to Adam Smith, the customs\r\nofficial.\u003ca name=\"FNanchor_9_9\" id=\"FNanchor_9_9\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_9_9\" class=\"fnanchor\"\u003e9\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eLet us consider now some propositions which follow\r\nfrom the determination of exchange value by\r\nlabor-time.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs a use-value, every commodity owes its usefulness\r\nto itself. Wheat, e. g., serves as an article of food. A\r\nmachine saves labor to a certain extent. This function\r\nof a commodity by virtue of which it serves only as\r\nuse-value, as an article of consumption, may be called\r\nits service, the service which it renders as use-value.\r\nBut as an exchange value, a commodity is always regarded\r\nas a result; the question in this case is not as\r\nto the service which it renders, but as to the service\u003ca name=\"FNanchor_10_10\" id=\"FNanchor_10_10\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_10_10\" class=\"fnanchor\"\u003e10\u003c/a\u003e\r\nwhich it has been rendered in its production. Thus,\r\nthe exchange value of a machine is determined not by\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_35\" id=\"Page_35\"\u003ePg 35\u003c/a\u003e\u003c/span\u003ethe quantity of labor-time which it saves, but by the\r\nquantity of labor-time which has been expended on its\r\nown production and which is, therefore, required to\r\nproduce a new machine of the same kind.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf, therefore, the quantity of labor-time required for\r\nthe production of commodities remained constant,\r\ntheir exchange value would remain the same. But the\r\nease and the difficulty of production are constantly\r\nchanging. If the productivity of labor increases, the\r\nsame use-value will be produced in less time. If the\r\nproductivity of labor declines, more time will be required\r\nfor the production of the same use-value. Thus,\r\nthe labor-time contained in a commodity or its exchange-value\r\nis a variable quantity, increasing or diminishing\r\nin an inverse ratio to the rise and fall of the\r\nproductivity of labor. The productive power of labor\r\nwhich is applied in the manufacturing industry on a\r\npredetermined scale depends in the agricultural and\r\nextractive industries also on natural conditions which\r\nare beyond human control. \u003ci\u003eThe same labor\u003c/i\u003e will yield\r\na greater or less output of various metals, according to\r\ntheir more or less close occurrence in the earth’s crust.\r\n\u003ci\u003eThe same labor\u003c/i\u003e may be embodied in two bushels of\r\nwheat in a favorable season, and only in one in an unfavorable\r\nseason. In this case, scarcity or abundance,\r\nas natural conditions, seem to determine the exchange\r\nvalue of commodities, because they determine the productivity\r\nof certain kinds of labor which depend upon\r\nnatural conditions.\u003c/p\u003e\r\n\r\n\u003cp\u003eUnequal volumes of different use-value contain the\r\nsame quantity of labor-time or the same exchange value.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_36\" id=\"Page_36\"\u003ePg 36\u003c/a\u003e\u003c/span\u003e\r\nThe smaller the volume of a use-value containing a\r\ncertain quantity of labor-time as compared with other\r\nuse-values, the greater its \u003ci\u003especific exchange-value\u003c/i\u003e. If\r\nwe find that certain use-values, such as, e. g., gold, silver,\r\ncopper and iron, or wheat, rye, barley and oats, form\r\na series of specific exchange values which, though not\r\nretaining exactly the same numerical ratio, still retain\r\nthrough widely remote epochs of civilization the same\r\nrough proportion of relatively larger and smaller quantities,\r\nwe may draw the conclusion that the progressive\r\ndevelopment of the productive powers of society has\r\nequally, or approximately so, affected the labor-time\r\nnecessary for the production of the various commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe exchange value of a commodity is not revealed\r\nin its own use-value. But, as the embodiment universal\r\nsocial labor-time, the use-value of one commodity\r\nbears a certain ratio to the use-values of other commodities.\r\nThus, the exchange value of one commodity\r\nis manifested in the use-values of other commodities.\r\nAn equivalent is, in fact, the exchange value of one\r\ncommodity expressed in the use-value of another commodity.\r\nIf I say, e. g., that one yard of linen is worth\r\ntwo pounds of coffee, then the exchange value of linen\r\nis expressed in terms of the use-value of coffee, viz., in a\r\ncertain quantity of that use-value. This ratio being\r\ngiven, I can express the value of any quantity of linen\r\nin coffee. It is clear that the exchange value of one\r\ncommodity, say linen, is not confined to the ratio of\r\nany one commodity, e. g. coffee, as its equivalent. The\r\nquantity of universal labor-time which is represented\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_37\" id=\"Page_37\"\u003ePg 37\u003c/a\u003e\u003c/span\u003e\r\nin one yard of linen is at the same time embodied in\r\nan endless variety of volumes of use-values of all other\r\ncommodities. The use-value of any other commodity\r\nforms the equivalent of one yard of linen, in the proportion\r\nin which it represents the same quantity of\r\nlabor-time as that yard of linen. The exchange value\r\nof \u003ci\u003ethis single commodity\u003c/i\u003e is, therefore, fully expressed\r\nin the endless number of equations in which the use-values\r\nof all other commodities form its equivalents.\r\nNot until the exchange value of a commodity is expressed\r\nin the sum total of these equations or of the\r\ndifferent proportions in which one commodity is exchanged\r\nfor every other commodity, does it find an\r\nexhaustive expression as a \u003ci\u003euniversal equivalent\u003c/i\u003e; e. g.,\r\nthe series of equations:\u003c/p\u003e\r\n\r\n\u003ctable summary=\"equations\"\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1/2 lb. of tea,\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e2 lbs. of coffee,\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e8 lbs. of bread,\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e6 yards of calico,\u003c/td\u003e\r\n\u003c/tr\u003e\u003c/table\u003e\r\n\r\n\u003cp\u003emay be represented as follows:\u003c/p\u003e\r\n\r\n\u003cp\u003e1 yard of linen = 1/8 lb. of tea + 1/2 lb. of coffee +\r\n2 lbs. of bread + 1 1/2 yards of calico.\u003c/p\u003e\r\n\r\n\u003cp\u003eTherefore, if we had before us the sum total of the\r\nequations, in which the value of a yard of linen is exhaustively\r\nexpressed, we could represent its exchange\r\nvalue in the form of a series. As a matter of fact, the\r\nseries is an endless one, since the circle of commodities,\r\nconstantly expanding, can never be closed up. But\r\nwhile the exchange value of one commodity is thus\r\nmeasured by the use-values of all other commodities,\r\nthe exchange values of all the other commodities are,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_38\" id=\"Page_38\"\u003ePg 38\u003c/a\u003e\u003c/span\u003e\r\nin their turn, measured by the use-value of this one\r\ncommodity.\u003ca name=\"FNanchor_11_11\" id=\"FNanchor_11_11\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_11_11\" class=\"fnanchor\"\u003e11\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIf the exchange value of one yard of linen is expressed\r\nin 1/2 lb. of tea, or 2 lbs. of coffee, or 6 yards of calico,\r\nor 8 lbs. of bread, etc., it follows that coffee, tea, calico,\r\nbread, etc., are equal to each other if taken in the same\r\nproportion in which they are equal to the third article,\r\nlinen; consequently, linen serves as the common measure\r\nof their exchange values. Every commodity, as the\r\nembodiment of universal labor-time, i.\u0026nbsp;e., as a certain\r\nquantity of universal labor-time, expresses in turn its\r\nexchange value in definite quantities of the use-values\r\nof all other commodities, and the exchange values of all\r\nthe other commodities are, on the other hand, measured\r\nby the use-value of this one exclusive commodity. But\r\nas an exchange value, every commodity is at the same\r\ntime the one exclusive commodity that serves as a common\r\nmeasure of the exchange values of all other commodities;\r\nand, on the other hand, it is but one of the\r\nmany commodities in the entire series of which every\r\ncommodity expresses directly its exchange value.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe value of a commodity is not affected by the\r\nnumber of commodities of other kinds. But the length\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_39\" id=\"Page_39\"\u003ePg 39\u003c/a\u003e\u003c/span\u003eof the series of equations in which its exchange value is\r\nrealized does depend upon the greater or less variety\r\nof other commodities. The series of equations in which\r\nthe value of coffee, e. g., is represented, indicates the\r\nextent to which it is exchangeable, the limits within\r\nwhich it performs the function of an exchange value.\r\nThe exchange value of a commodity as an embodiment\r\nof universal social labor-time is expressed in its equivalence\r\nto an endless variety of use-values.\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that the exchange value of a commodity\r\nvaries with the quantity of labor-time directly contained\r\nin it. Its realized exchange value, i.\u0026nbsp;e., its exchange\r\nvalue expressed in the use-values of other commodities,\r\nmust also depend on the proportion in which\r\nthe labor-time spent on the production of all other commodities\r\nis changing. If, e. g., the labor-time required\r\nfor the production of a bushel of wheat remained constant,\r\nwhile that required for the production of all\r\nother commodities doubled, the exchange value of a\r\nbushel of wheat expressed in its equivalents would become\r\nhalf as large as before. The result would be practically\r\nthe same as if the amount of time necessary for\r\nthe production of one bushel of wheat had been reduced\r\nby one-half, and that required for all other commodities\r\nhad remained unchanged. The value of commodities\r\nis determined by the proportion in which they\r\ncan be produced in the same labor-time. In order to\r\nsee what possible changes this proportion may undergo,\r\nlet us take two commodities, A and B.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eFirst case.\u003c/i\u003e Let the labor-time required for the production\r\nof commodity B remain unchanged. In that\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_40\" id=\"Page_40\"\u003ePg 40\u003c/a\u003e\u003c/span\u003e\r\ncase the exchange value of A, expressed in terms of B,\r\nrises and falls with the rise and fall of the labor-time\r\nrequired for the production of A.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eSecond case.\u003c/i\u003e Let the labor-time required for the production\r\nof commodity A remain constant. Then the\r\nexchange value of A, expressed in terms of B, falls and\r\nrises in an inverse ratio with the rise and fall of the\r\nlabor-time required for the production of B.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eThird case.\u003c/i\u003e Let the labor-time required for the production\r\nof commodities A and B rise and fall in equal\r\nproportion. Then the expression of equivalence of A\r\nand B remains unchanged. If through some cause the\r\nproductivity of all kinds of labor were to decline uniformly,\r\nso that the production of all commodities would\r\nrequire an equally increased quantity of labor-time, then\r\nthe value of all commodities would rise, though the expression\r\nof their exchange values would remain unchanged,\r\nand the actual wealth of society would decrease,\r\nbecause it would have to expend more labor-time\r\non the production of the same stock of use-values.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eFourth case.\u003c/i\u003e Let the labor-time required for the production\r\nof A and B rise and fall, but not uniformly; that\r\nis to say, the labor-time required for the production of A\r\nmay rise, while that required for B may fall, or vice\r\nversa. All of which can be reduced to the simple case\r\nwhere the labor-time required for the production of\r\none commodity remains unchanged, while that required\r\nfor the other rises or falls.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe exchange value of any commodity is expressed\r\nin the use-value of any other commodity, be it in integral\r\nunits or in fractions thereof. As exchange value,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_41\" id=\"Page_41\"\u003ePg 41\u003c/a\u003e\u003c/span\u003e\r\nevery commodity is capable of subdivision, like the\r\nlabor-time embodied in it. The equivalence of commodities\r\nis independent of their physical divisibility as use-values,\r\njust as the sum of the exchange values of commodities\r\nis indifferent to the change of form which use-values\r\nhave to undergo when converted into a \u003ci\u003esingle\u003c/i\u003e\r\nnew commodity.\u003c/p\u003e\r\n\r\n\u003cp\u003eSo far we have considered commodities from a two-fold\r\npoint of view, as use-values and exchange values\r\nalternately. But a commodity as such is a direct combination\r\nof use-value and exchange value; and it is a\r\ncommodity only in relation to other commodities. The\r\n\u003ci\u003eactual\u003c/i\u003e relation between commodities constitutes the\r\n\u003ci\u003eprocess of their exchange\u003c/i\u003e. It is a social process participated\r\nin by individuals independent of each other\r\nbut the part they take in it is that of owners of commodities\r\nonly. Their mutual relations are those of their\r\ncommodities, and thus they really appear as conscious\r\nfactors of the process of exchange.\u003c/p\u003e\r\n\r\n\u003cp\u003eA commodity \u003ci\u003eis\u003c/i\u003e a use-value, wheat, linen, a diamond,\r\na machine, etc., but as a commodity it is, at the same\r\ntime, \u003ci\u003enot\u003c/i\u003e a use-value. If it were a use-value for its\r\nowner, i.\u0026nbsp;e., a direct means for the satisfaction of his\r\nown wants, then it would not be a commodity. To him\r\nit is rather \u003ci\u003ea non-use-value\u003c/i\u003e; it is merely the material\r\ndepository of exchange-value, or simply a \u003ci\u003emeans of exchange\u003c/i\u003e;\r\nas an active bearer of exchange value, use-value\r\nbecomes a means of exchange. To the owner it is a\r\nuse-value only in so far as it constitutes exchange value.\u003ca name=\"FNanchor_12_12\" id=\"FNanchor_12_12\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_12_12\" class=\"fnanchor\"\u003e12\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_42\" id=\"Page_42\"\u003ePg 42\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIt has yet \u003ci\u003eto become\u003c/i\u003e a use-value, viz., to others. Not\r\nbeing a use-value to its owner, it is a use-value to the\r\nowners of other commodities. If it is not, then the labor\r\nexpended on it was useless labor, and the result of that\r\nlabor is not a commodity. On the other hand, the\r\ncommodity must become a use-value \u003ci\u003eto the owner himself\u003c/i\u003e,\r\nbecause his means of existence lie outside of it in\r\nthe use-values of commodities not belonging to him.\r\nIn order to become a use-value, the commodity must\r\nmeet the particular want of which it is the means of\r\nsatisfaction. Use-values of commodities are thus\r\n\u003ci\u003erealized\u003c/i\u003e use-values through a universal change of hands\r\nby passing from the hands in which they were held as\r\nmeans of exchange into those where they become use\r\nvalues. Only through this universal transfer of commodities\r\ndoes the labor contained in them become useful\r\nlabor. In this process of their mutual interchange\r\nas use-values, commodities do not acquire any new economic\r\nforms. On the contrary, even the form which\r\nmarked them as commodities disappears. Bread, e. g.,\r\nby changing hands from the baker to the consumer does\r\nnot change its identity as bread. On the contrary, it is\r\nonly the consumer that begins to regard it as a use-value,\r\nas a certain article of food, while in the hands of\r\nthe baker it was only the bearer of an economic relation,\r\na palpable yet transcendental object. Thus, the\r\nonly change of form that commodities undergo while\r\nbecoming use-values, consists in the fact that they cease\r\nto be, as a matter of form, non-use-values to their owners,\r\nand use-values to those who do not own them. To\r\nbecome use-values commodities must be universally\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_43\" id=\"Page_43\"\u003ePg 43\u003c/a\u003e\u003c/span\u003e\r\nalienated; they must enter the sphere of exchange; but\r\nthey are subject to exchange in their capacity of exchange\r\nvalues. Hence, in order to be realized as use-values,\r\nthey must be realized as exchange values.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhile the single commodity appeared from the standpoint\r\nof use-value as something independent, as exchange\r\nvalue it was regarded first of all in its relation\r\nto all other commodities. This relation was, however,\r\nmerely theoretical, imaginary. It becomes real only in\r\nthe process of exchange. On the other hand, a commodity\r\n\u003ci\u003eis\u003c/i\u003e an exchange value in so far as a certain quantity\r\nof labor-time has been expended on it, and it consequently\r\nrepresents \u003ci\u003ematerialized labor-time\u003c/i\u003e. But of\r\nitself it is only materialized individual labor-time of a\r\nparticular kind, and not \u003ci\u003euniversal\u003c/i\u003e labor-time. Therefore,\r\nit \u003ci\u003eis not\u003c/i\u003e directly an exchange value, but must first\r\n\u003ci\u003ebecome\u003c/i\u003e such. First of all, it is an embodiment of universal\r\nlabor-time only in so far as it represents labor-time\r\napplied to a definite useful purpose, i.\u0026nbsp;e., when it\r\nrepresents a use-value. This was the material condition\r\nunder which alone labor-time contained in commodities\r\nwas regarded as universal social labor. Thus,\r\nwhile a commodity can become a use-value only after\r\nit has been realized as an exchange value, it can, on the\r\nother hand, be realized as an exchange value only if it\r\nproves to be a use-value in the process of alienation.\u003c/p\u003e\r\n\r\n\u003cp\u003eA commodity can be alienated as a use-value only to\r\none whom it serves as a use-value, i.\u0026nbsp;e., as a means of satisfying\r\na certain want. On the other hand, it is exchanged\r\nfor another commodity, or, if we put ourselves\r\non the side of the owner of the other commodity, it, too,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_44\" id=\"Page_44\"\u003ePg 44\u003c/a\u003e\u003c/span\u003e\r\ncan be alienated, i.\u0026nbsp;e., be realized, only if brought in\r\ncontact with that particular want of which it is the object.\r\nIn the universal exchange of commodities as\r\n\u003ci\u003euse-values\u003c/i\u003e the basis for their mutual relations is in their\r\nmaterial difference as distinct objects which satisfy\r\ndifferent wants by their specific properties. But as\r\nmere use-values, they are indifferent to each other, and\r\nare incommensurable. As use-values they can be exchanged\r\nonly with reference to certain wants. They\r\nare exchangeable only as equivalents, and they are equivalents\r\nonly as equal quantities of materialized labor-time,\r\nso that all regard to their natural properties as\r\nuse-values and therefore to the relation of the commodities\r\nto particular wants is eliminated. On the\r\ncontrary, a commodity is realized as an exchange value\r\nby replacing as an equivalent any definite quantity of\r\nany other commodity, regardless of whether it is a use-value\r\nfor the owner of the other commodity or not. But\r\nto the owner of the other commodity it is a commodity\r\nonly in so far as it is a use-value to him, and it becomes\r\nan exchange value to its owner only in so far as it is a\r\ncommodity to that other person. Thus, the same relation\r\nappears as a proportion between commodities as\r\nmagnitudes of the same denomination, but differing\r\nqualitatively; or, as an expression of their equivalence\r\nas embodiments of universal labor-time, and, at the\r\nsame time, as a relation of qualitatively different objects,\r\nof use-values intended for the satisfaction of particular\r\nwants, in short, a relation in which they are distinguished\r\nas actual use-values. But this equivalence\r\nand non-equivalence mutually exclude each other. Thus\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_45\" id=\"Page_45\"\u003ePg 45\u003c/a\u003e\u003c/span\u003e\r\nwe have before us not only a vicious circle of problems\r\nin which the solution of one implies that of the other,\r\nbut a combination of contradicting claims, since the\r\nfulfillment of one is directly connected with that of its\r\nopposite.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe process of exchange of commodities must result\r\nboth in the unfolding and in the solution of these contradictions,\r\nneither of which, however, can appear in\r\nthat process in this simple way. We have only observed\r\nhow commodities are mutually related to each other as\r\nuse-values, i.\u0026nbsp;e., how they appear as use-values \u003ci\u003ewithin\u003c/i\u003e\r\nthe process of exchange. The exchange-value, on the\r\ncontrary, as we have considered it so far, appeared as an\r\nabstraction formed in our own minds, or\u0026mdash;if we may\r\nso put it\u0026mdash;in the mind of the individual owner of commodities,\r\nwhich lie stored in his warehouse as use-values,\r\nand weigh upon his conscience as exchange values. In\r\nthe process of exchange, however, commodities must be\r\nnot only use-values, but also exchange values to one\r\nanother, and that should appear as their own mutual\r\nrelation. The difficulty which we first encountered was\r\nthat a commodity must be first alienated and delivered\r\nto its purchasers as a use-value, in order to appear as an\r\nexchange value, as materialized labor, while on the other\r\nhand its alienation as use-value implies its being an\r\nexchange value. But let us assume that this difficulty\r\nhas been overcome. Suppose the commodity has divested\r\nitself of its use-value, and has thereby fulfilled\r\nthe material condition of being socially useful labor,\r\ninstead of a particular labor of an individual. In that\r\ncase, the commodity must become an exchange value,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_46\" id=\"Page_46\"\u003ePg 46\u003c/a\u003e\u003c/span\u003e\r\na universal equivalent, an embodiment of universal\r\nlabor-time for all other commodities in the process of\r\nexchange, and thus, leaving behind its limited role of a\r\nparticular use-value, acquire the ability to be directly\r\nrepresented in all use-values as its equivalents. But\r\nevery commodity is \u003ci\u003ejust such\u003c/i\u003e a commodity, appearing as\r\na direct incarnation of universal labor-time by divesting\r\nitself of its particular use-value. On the other hand,\r\nhowever, commodities confront each other in the process\r\nof exchange as particular commodities, as the labor\r\nof private individuals embodied in particular use-values.\r\nUniversal labor-time is itself an abstraction, which, as\r\nsuch, does not exist for commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eLet us examine the series of equations in which the\r\nexchange value of a commodity finds its concrete expression,\r\ne. g.:\u003c/p\u003e\r\n\r\n\u003ctable summary=\"equations\"\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e2 lbs. of coffee.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1/2 lb. of tea.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e8 lbs. of bread, etc.\u003c/td\u003e\r\n\u003c/tr\u003e\u003c/table\u003e\r\n\r\n\u003cp\u003eThese equations simply signify that equal quantities\r\nof universal social labor-time are embodied in one yard\r\nof linen, two pounds of coffee, half a pound of tea, etc.\r\nBut as a matter of fact the individual labors which are\r\nrepresented in these particular use-values, become universal,\r\nand, in that form, also social labor, only when\r\nthey are actually exchanged for one another in proportion\r\nto the labor-time contained in them. Social\r\nlabor-time exists in these commodities in a latent state,\r\nso to say, and is first revealed in the process of exchange.\r\nWe do not proceed from the labor of individuals as\r\nsocial labor, but, on the contrary, from special labor\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_47\" id=\"Page_47\"\u003ePg 47\u003c/a\u003e\u003c/span\u003e\r\nof private individuals which appears as universal social\r\nlabor only by divesting itself of its original character\r\nin the process of exchange. Universal social labor is,\r\ntherefore, no ready-made assumption, but a growing result.\r\nAnd thus we are confronted with a new difficulty,\r\nthat on the one hand commodities must enter the process\r\nof exchange as embodiments of universal labor-time,\r\nwhile, on the other hand, this embodiment of the\r\nlabor-time of individuals as social labor-time is itself\r\na result of the process of exchange.\u003c/p\u003e\r\n\r\n\u003cp\u003eEvery commodity becomes an exchange value by divesting\r\nitself of its use-value, or of its original nature.\r\nThe commodity must therefore assume a double capacity\r\nin the process of exchange. But that second\r\ncapacity of exchange value can appear only in the shape\r\nof another commodity, because only commodities confront\r\neach other in the process of exchange. How is a\r\nparticular commodity to represent directly \u003ci\u003ematerialized\r\nuniversal\u003c/i\u003e labor-time, or\u0026mdash;to put it differently\u0026mdash;how is\r\nindividual labor-time, which is embodied in a particular\r\ncommodity to be made directly universal in character?\r\nThe concrete expression of the exchange value of a\r\ncommodity, i.\u0026nbsp;e., of every commodity as a universal\r\nequivalent, is represented in an endless series of equations,\r\nsuch as:\u003c/p\u003e\r\n\r\n\u003ctable summary=\"equations\"\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e2 lbs. of coffee.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1/2 lb. of tea.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e8 lbs. of bread.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e6 yards of calico.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1 yard of linen\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003eetc.\u003c/td\u003e\r\n\u003c/tr\u003e\u003c/table\u003e\r\n\r\n\u003cp\u003eThe above form is theoretical in so far as commod\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_48\" id=\"Page_48\"\u003ePg 48\u003c/a\u003e\u003c/span\u003eities\r\nare only \u003ci\u003ethought of\u003c/i\u003e as definite quantities of materialized\r\nuniversal labor-time. But the capacity of a\r\nparticular commodity to serve as a universal equivalent\r\nfrom a mere abstraction becomes a \u003ci\u003esocial\u003c/i\u003e result of the\r\nprocess of exchange by a simple inversion of the above\r\nseries of equations, viz.:\u003c/p\u003e\r\n\r\n\u003ctable summary=\"equations\"\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e2 lbs. of coffee\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1 yard of linen.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1/2 lb. of tea\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1 yard of linen.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e8 lbs. of bread\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1 yard of linen.\u003c/td\u003e\r\n\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e6 yards of calico\u003c/td\u003e\u003ctd class=\"tdc\"\u003e=\u003c/td\u003e\u003ctd class=\"tdl\"\u003e1 yard of linen.\u003c/td\u003e\r\n\u003c/tr\u003e\u003c/table\u003e\r\n\r\n\u003cp\u003eWhile coffee, tea, bread, calico, in short, all commodities\r\nexpress in linen the labor-time contained in them,\r\nthe exchange value of linen, on the other hand, unfolds\r\nitself in all other commodities as its equivalents, and\r\nthe labor-time embodied in it becomes direct universal\r\nlabor-time, which is equally expressed in different volumes\r\nof all other commodities. Linen thus becomes\r\nthe \u003ci\u003euniversal equivalent\u003c/i\u003e through the \u003ci\u003euniversal action\u003c/i\u003e of\r\nall other commodities upon it. As exchange value, every\r\ncommodity served as a measure of value of all other\r\ncommodities. Now, on the contrary, since all commodities\r\nmeasure their exchange values by means of a\r\nparticular commodity, this excluded commodity becomes\r\nthe special expression of exchange value, as a\r\nuniversal equivalent. At the same time, the endless\r\nseries of equations in which the exchange value of\r\nevery commodity was expressed, is reduced to one single\r\nequation consisting of two members. The equation\r\n2 lbs. of coffee = 1 yard of linen now fully expresses\r\nthe exchange value of coffee, for in this expression a\r\nyard of linen appears as the direct equivalent of a defi\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_49\" id=\"Page_49\"\u003ePg 49\u003c/a\u003e\u003c/span\u003enite\r\nquantity of every other commodity. Thus, within\r\nthe sphere of exchange all commodities are or appear\r\nto each other as exchange values in the form of linen.\r\nThe proposition that commodities, as exchange values,\r\nare to each other as different quantities of materialized\r\nuniversal labor-time, may now be worded to the effect\r\nthat commodities, as exchange values, represent nothing\r\nbut different quantities of \u003ci\u003ethe same\u003c/i\u003e article, linen. Universal\r\nlabor-time thus assumes the aspect of a distinct\r\nthing, as a commodity existing along with and outside\r\nof all other commodities. At the same time the equation\r\n2 lbs. of coffee = 1 yard of linen, in which one\r\ncommodity appears as the exchange value of another,\r\nis yet to be realized. Only by being alienated as use-value\u0026mdash;which\r\ndepends upon whether it proves to be in\r\nthe process of exchange the object of a certain want\u0026mdash;does\r\nthe commodity actually transform its existence as\r\ncoffee into the existence as linen and thus takes on the\r\nform of a universal equivalent and becomes, indeed, an\r\nexchange value for all other commodities. Conversely,\r\nsince all commodities are turned into linen by being\r\nalienated as use-values, linen becomes the converted\r\nform of all other commodities, and only as a result of\r\nthis transformation of all other commodities into it,\r\nit becomes the direct \u003ci\u003eembodiment of universal labor-time\u003c/i\u003e,\r\ni.\u0026nbsp;e., the product of universal exchange and of the\r\nelimination of individual labor. If commodities thus\r\nassume a twofold character in order to appear as exchange\r\nvalues to each other, the commodity which has\r\nbeen singled out as the universal equivalent becomes,\r\non the other hand, a use-value in two ways. Besides\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_50\" id=\"Page_50\"\u003ePg 50\u003c/a\u003e\u003c/span\u003e\r\nits special use-value as a particular commodity, it assumes\r\na universal use-value. This latter kind of use-value\r\nconstitutes its special feature, emanating as it\r\ndoes, from the specific part which the commodity plays\r\nas a result of the universal relation which all other\r\ncommodities bear toward it in the process of exchange.\r\nThe use-value of every commodity as an object of a\r\nparticular want, has a different value in different hands,\r\ne. g., it has a different value in the hands of the one who\r\ndisposes of it, than in those of the one who acquires it.\r\nBut the commodity singled out as the universal equivalent,\r\nis now an object of a universal want arising from\r\nthe very process of exchange, and it has the same use-value\r\nto everybody, viz., that of serving as the depository\r\nof exchange value, of being a universal means of\r\nexchange. Thus we find in one commodity the solution\r\nof the contradiction which is inherent in commodity as\r\nsuch, namely, of being at one and the same time a particular\r\nuse-value and a universal equivalent, and, therefore,\r\na use-value for everybody or universal use-value.\r\nThus, while all other commodities express their exchange\r\nvalue in the form of an ideal equation with the\r\nexcluded commodity\u0026mdash;an equation yet to be realized\u0026mdash;the\r\nuse-value of the special commodity, although real,\r\nappears in the process itself as a mere form which is\r\nyet to be realized through transformation into actual\r\nuse-values. Originally the commodity appeared simply\r\nas commodity, as universal labor-time embodied in a\r\nparticular use-value. In the process of exchange, all\r\ncommodities are related to the one excluded commodity\r\nas to a simple commodity, one which appears as the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_51\" id=\"Page_51\"\u003ePg 51\u003c/a\u003e\u003c/span\u003e\r\nembodiment of universal labor-time in a particular use-value.\r\nThus, \u003ci\u003eparticular\u003c/i\u003e commodities become related to\r\none particular commodity as a universal commodity.\u003ca name=\"FNanchor_13_13\" id=\"FNanchor_13_13\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_13_13\" class=\"fnanchor\"\u003e13\u003c/a\u003e\r\nIn that manner the mutual relations of possessors of\r\ncommodities based on the fact that they regard their\r\nlabor as universal social labor, takes on the aspect of\r\ntheir relations to commodities as exchange values; and\r\nthe mutual relation of commodities as exchange values\r\nappears in the process of exchange as the relation of all\r\nof them to one particular commodity as to a specially\r\nadopted means of expression of their exchange value;\r\nagain, from the point of view of that particular commodity\r\nthe above relation appears as its specific relation\r\nto all other commodities, and, therefore, as its own\r\ndefinite, spontaneous, social character. The particular\r\ncommodity which thus appears as the specially adopted\r\nexpression of the exchange value of all other commodities,\r\nor the exchange value of commodities as a particular\r\nexclusive commodity, is \u003ci\u003emoney\u003c/i\u003e. Money is a crystallization\r\nof the exchange value of commodities which they\r\nthemselves form in the process of exchange. Thus, while\r\ncommodities become \u003ci\u003euse-values\u003c/i\u003e to each other in the\r\nprocess of exchange by casting off all definite forms and\r\nentering into mutual relations in their direct material\r\nshape, they must assume a new form, viz., proceed to\r\nthe formation of money in order to appear as \u003ci\u003eexchange\r\nvalues\u003c/i\u003e to each other. Money is not a symbol, no more\r\nthan the commodity aspect of a use-value is a symbol.\r\nThat a social relation of production takes the form of an\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_52\" id=\"Page_52\"\u003ePg 52\u003c/a\u003e\u003c/span\u003eobject existing outside of individuals, and that the definite\r\nrelations into which individuals enter in the process\r\nof production carried on in society, assume the\r\nform of specific properties of a thing, is a perversion\r\nand by no means imaginary, but prosaically real, mystification\r\nmarking all social forms of labor which creates\r\nexchange value. In money this mystification appears\r\nonly more strikingly than in commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe necessary physical properties of the particular\r\ncommodity in which the money form of all other commodities\r\nis to be crystallized\u0026mdash;as far as they are directly\r\ndetermined by the nature of exchange value\u0026mdash;are:\r\ndivisibility to any desired extent, homogeneity of\r\nits parts, and uniformity of all the specimens of the\r\ncommodity. As an embodiment of universal labor-time\r\nit must be homogeneous in its structure and capable of\r\nrepresenting only quantitative differences. Another\r\nnecessary property is durability of its use-value, as\r\nit must last through the process of exchange.\r\nThe precious metals excel in these qualities. Money\r\nnot being a result of a scheme or agreement, but having\r\nbeen produced instinctively in the process of exchange,\r\na great variety of more or less unsuited commodities had\r\nsuccessively performed its functions. At a certain\r\nstage of development of the process of exchange,\r\nthe necessity arises for a polar distribution of the functions\r\nof exchange value and use-value among commodities,\r\nso that one commodity e. g. should act as a\r\nmedium of exchange, while another is being alienated\r\nas a use-value. This necessity brings it about that one\r\nor even several commodities possessing the most generally\r\naccepted use-value, begin, incidentally at first, to play\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_53\" id=\"Page_53\"\u003ePg 53\u003c/a\u003e\u003c/span\u003e\r\nthe part of money. Even if not direct means of satisfying\r\nexisting wants, their being the most considerable\r\nmaterial constituent part of wealth, insures to them a\r\nmore general character than to the other use-values.\u003c/p\u003e\r\n\r\n\u003cp\u003eDirect barter, the original natural form of exchange,\r\nrepresents rather the beginning of the transformation\r\nof use-values into commodities, than that of commodities\r\ninto money. Exchange value has as yet no form\r\nof its own, but is still directly bound up with use-value.\r\nThis is manifested in two ways. Production, in\r\nits entire organization, aims at the creation of use-values\r\nand not of exchange values, and it is only when\r\ntheir supply exceeds the measure of consumption that\r\nuse-values cease to be use-values, and become means of\r\nexchange, i.\u0026nbsp;e., commodities. At the same time, they become\r\ncommodities only within the limits of being direct\r\nuse-values distributed at opposite poles, so that the commodities\r\nto be exchanged by their possessors must be use-values\r\nto both,\u0026mdash;each commodity to its non-possessor.\r\nAs a matter of fact, the exchange of commodities originates\r\nnot within the primitive communities,\u003ca name=\"FNanchor_14_14\" id=\"FNanchor_14_14\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_14_14\" class=\"fnanchor\"\u003e14\u003c/a\u003e but where\r\nthey end, on their borders at the few points, where they\r\ncome in contact with other communities. That is where\r\nbarter begins, and from here it strikes back into the interior\r\nof the community, decomposing it. The various\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_54\" id=\"Page_54\"\u003ePg 54\u003c/a\u003e\u003c/span\u003euse-values which first become commodities in the barter\r\nbetween different communities, such as slaves, cattle,\r\nmetals, constitute therefore in most cases the first money\r\nwithin those communities themselves. We have seen\r\nhow the exchange value of a commodity is manifested\r\nthe more perfectly as exchange value, the longer the\r\nseries of its equivalents or the \u003ci\u003egreater\u003c/i\u003e the sphere of exchange\r\nof that commodity. With the gradual expansion\r\nof barter, the increase in the number of exchanges, and\r\nthe growing diversification of the commodities drawn\r\ninto exchange, commodities develop into exchange values,\r\nwhich leads to the formation of money and has\r\na destructive effect on direct barter. The economists\r\nare in the habit of ascribing the origin of money\r\nto the difficulties which are encountered in the way of\r\nextensive barter, but they forget that these difficulties\r\narise from the development of exchange value and from\r\nthe fact that social labor becomes universal labor. E. g.,\r\ncommodities as use-values can not be subdivided at will,\r\na property which they should possess as exchange\r\nvalues. Or, a commodity belonging to A may be a use-value\r\nto B, while the commodity belonging to B may not\r\nhave any use-value to A. Or the owners of the commodities\r\nmay need each other’s indivisible goods in unequal\r\nproportions. In other words, under the pretence\r\nof analyzing simple barter, economists bring out certain\r\naspects of the contradiction which is inherent in commodities\r\nas entities simultaneously embodying both use-value\r\nand exchange value. On the other hand, they consistently\r\ncling to the idea that barter is the natural form\r\nof exchange, which suffers only from certain technical\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_55\" id=\"Page_55\"\u003ePg 55\u003c/a\u003e\u003c/span\u003e\r\ndifficulties, for which money is a cunningly devised expedient.\r\nArguing from this perfectly superficial view,\r\nan ingenious English economist has rightly maintained\r\nthat money is merely a material instrument like a ship\r\nor a steam-engine, but not an expression of a social relation\r\nin the field of production and consequently not an\r\neconomic category; and that it is, therefore, wrong to\r\ntreat the subject in political economy, which really has\r\nnothing in common with technology.\u003ca name=\"FNanchor_15_15\" id=\"FNanchor_15_15\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_15_15\" class=\"fnanchor\"\u003e15\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe world of commodities implies the existence of a\r\nhighly developed division of labor; this division is manifested\r\ndirectly in the great variety of use-values, which\r\nconfront each other as particular commodities and which\r\nembody as many different kinds of labor. The division\r\nof labor embracing all the particular kinds of productive\r\noccupations, is the complete expression of social labor in\r\nits material aspect viewed as labor creating use-values.\r\nBut from the standpoint of commodities and within the\r\nprocess of exchange, it exists only in its results, in the\r\nvariety of the commodities themselves.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe exchange of commodities constitutes the social\r\nmetabolic process, i.\u0026nbsp;e. the process in which the exchange\r\nof the special products of private individuals is the re\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_56\" id=\"Page_56\"\u003ePg 56\u003c/a\u003e\u003c/span\u003esult\r\nof certain social relations of production into which\r\nthe individuals enter in this interchange of matter. As\r\nthey develop, the mutual relations of commodities crystalize\r\ninto various aspects of the universal equivalent\r\nand thus the process of exchange becomes at the same\r\ntime the process of the formation of money. The whole\r\nof this process which takes the form of a succession of\r\nprocesses, constitutes circulation.\u003c/p\u003e\r\n\r\n\u003ch3\u003eNOTES ON THE HISTORY OF THE THEORY OF\r\nCOMMODITIES.\u003c/h3\u003e\r\n\r\n\u003cp\u003eThe analysis of commodities according to their twofold\r\naspect of use-value and exchange value by which\r\nthe former is reduced to work or deliberate productive\r\nactivity; and the latter, to labor time or homogeneous\r\nsocial labor, is the result of a century and a half of critical\r\nstudy by the classical school of political economy\r\nwhich dates from William Petty in England and Boisguillebert\r\nin France\u003ca name=\"FNanchor_16_16\" id=\"FNanchor_16_16\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_16_16\" class=\"fnanchor\"\u003e16\u003c/a\u003e and closes with Ricardo in the\r\nformer country and Sismondi in the latter.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"smcap\"\u003ePetty\u003c/span\u003e reduces use-value to labor, without deceiving\r\nhimself as to the natural limitation of its creative\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_57\" id=\"Page_57\"\u003ePg 57\u003c/a\u003e\u003c/span\u003epower. As regards concrete labor, he sizes it up in the\r\nmagnitude of its social aspect, as \u003ci\u003ethe division of labor\u003c/i\u003e.\u003ca name=\"FNanchor_17_17\" id=\"FNanchor_17_17\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_17_17\" class=\"fnanchor\"\u003e17\u003c/a\u003e\r\nThis view of the source of material wealth does not re\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_58\" id=\"Page_58\"\u003ePg 58\u003c/a\u003e\u003c/span\u003emain\r\nmore or less fruitless as in the case of his contemporary,\r\nHobbes, but leads up to his \u003ci\u003ePolitical Arithmetic\u003c/i\u003e,\r\nthe first form in which Political Economy is differentiated\r\nas an independent science.\u003c/p\u003e\r\n\r\n\u003cp\u003eHe defines exchange value, however, just as it \u003ci\u003eappears\u003c/i\u003e\r\nin the process of exchange of commodities, viz. as\r\nmoney; and money he defines as an existing commodity,\r\ngold and silver. Laboring under the ideas of the monetary\r\nsystem, he declares the special branch of labor which\r\nis devoted to the production of gold and silver as the\r\nlabor which determines exchange value. What he really\r\nmeans is that the labor of members of society must produce\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_59\" id=\"Page_59\"\u003ePg 59\u003c/a\u003e\u003c/span\u003e\r\nnot direct use-values, but commodities or use-values\r\nwhich by means of exchange are capable of assuming\r\nthe form of gold and silver, i.\u0026nbsp;e. of money, i.\u0026nbsp;e.\r\nof exchange value, i.\u0026nbsp;e. of embodiments of universal\r\nlabor. His example, however, shows strikingly that the\r\nrecognition of labor as the source of material wealth by\r\nno means excludes the misconception of the particular\r\nsocial form in which labor constitutes the source of exchange\r\nvalue.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn his turn, \u003cspan class=\"smcap\"\u003eBoisguillebert\u003c/span\u003e, if not consciously,\r\nat any rate actually reduces the exchange value of a commodity\r\nto labor-time, since he determines “true value”\r\n(la juste valeur) by the right proportion in which the\r\nlabor-time of individuals is distributed among the several\r\nbranches of industry, and defines free competition\r\nas the social process which determines these correct proportions.\r\nAt the same time, however, and in contrast\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_60\" id=\"Page_60\"\u003ePg 60\u003c/a\u003e\u003c/span\u003ewith Petty he wages a fanatical war against money\r\nwhich, by its interference, disturbs the natural equilibrium\r\nor harmony of exchange of commodities and, like\r\na wanton Moloch, demands all natural wealth as sacrifice.\r\nIt is true that this assault on money was called\r\nforth by certain historic conditions. Since Boisguillebert\r\nattacked\u003ca name=\"FNanchor_18_18\" id=\"FNanchor_18_18\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_18_18\" class=\"fnanchor\"\u003e18\u003c/a\u003e the blind destructive lust after gold which\r\npossessed the court of Louis XIV, his tax collectors, and\r\nhis nobility; on the other hand, Petty extolled in the\r\ngreed of gold the mighty impulse which spurred on the\r\nnation in her industrial development and in her conquest\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_61\" id=\"Page_61\"\u003ePg 61\u003c/a\u003e\u003c/span\u003eof the world-market; still, there asserts itself here a\r\ndeeper antagonism of principles which constantly recurs\r\nbetween true English and true French\u003ca name=\"FNanchor_19_19\" id=\"FNanchor_19_19\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_19_19\" class=\"fnanchor\"\u003e19\u003c/a\u003e Political\r\nEconomy. Boisguillebert sees, in fact, only the material\r\nsubstance of wealth, its use-value, the enjoyment\u003ca name=\"FNanchor_20_20\" id=\"FNanchor_20_20\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_20_20\" class=\"fnanchor\"\u003e20\u003c/a\u003e of it,\r\nand considers the capitalistic form of labor, i.\u0026nbsp;e. the\r\nproduction of use-values as commodities and the exchange\r\nof those commodities, as the natural social form\r\nin which individual labor attains its end. When he is,\r\ntherefore, confronted with the specific character of capitalistic\r\nwealth as in the case of money, he sees in it the\r\nusurping interference of extraneous elements and gets\r\ninto a rage about the capitalist system of labor in one\r\nform while utopian-like he praises it in another.\u003ca name=\"FNanchor_21_21\" id=\"FNanchor_21_21\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_21_21\" class=\"fnanchor\"\u003e21\u003c/a\u003e\r\nBoisguillebert furnishes us with proof that one may\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_62\" id=\"Page_62\"\u003ePg 62\u003c/a\u003e\u003c/span\u003etreat labor-time as the measure of value of commodities,\r\nand at the same time confound labor embodied\r\nin the exchange value of commodities and measured by\r\ntime, with the direct natural activity of individuals.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe first sensible analysis of exchange value as labor-time,\r\nmade so clear as to seem almost commonplace, is\r\nto be found in the work of a man of the New World\r\nwhere the bourgeois relations of production imported\r\ntogether with their representatives sprouted rapidly in\r\na soil which made up its lack of historical traditions\r\nwith a surplus of humus. That man was \u003cspan class=\"smcap\"\u003eBenjamin\r\nFranklin\u003c/span\u003e, who formulated the fundamental law of modern\r\npolitical economy\u003ca name=\"FNanchor_22_22\" id=\"FNanchor_22_22\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_22_22\" class=\"fnanchor\"\u003e22\u003c/a\u003e in his first work which he wrote\r\nwhen a mere youth and published in 1721.\u003c/p\u003e\r\n\r\n\u003cp\u003eHe declares it necessary to look for another measure\r\nof value than precious metals. That measure is labor.\r\n“By labor may the value of silver be measured as well as\r\nother things. As, suppose one man employed to raise\r\ncorn, while another is digging and refining silver; at the\r\nyear’s end, or at any other period of time, the complete\r\nproduce of corn, and that of silver, are the natural price\r\nof each other; and if one be twenty bushels, and the\r\nother twenty ounces, then an ounce of that silver is worth\r\nthe labor of raising a bushel of that corn. Now if by\r\nthe discovery of some nearer, more easy or plentiful\r\nmines, a man may get forty ounces of silver as easily as\r\nformerly he did twenty, and the same labor is still re\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_63\" id=\"Page_63\"\u003ePg 63\u003c/a\u003e\u003c/span\u003equired\r\nto raise twenty bushels of corn, then two ounces\r\nof silver will be worth no more than the same labor of\r\nraising one bushel of corn, and that bushel of corn will\r\nbe as cheap at two ounces, as it was before at one, \u003ci\u003eceteris\r\nparibus\u003c/i\u003e. Thus the riches of a country are to be valued\r\nby the quantity of labor its inhabitants are able to purchase.”\u003ca name=\"FNanchor_23_23\" id=\"FNanchor_23_23\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_23_23\" class=\"fnanchor\"\u003e23\u003c/a\u003e\r\nThus Franklin regards labor-time from the one-sided\r\neconomic point of view, as the measure of value.\r\nThe transformation of actual products into exchange\r\nvalues is self-evident with him and the only question is as\r\nto finding a quantitative measure of value. “Trade,” says\r\nhe, “in general being nothing else but the exchange of\r\nlabour for labour, the value of all things is, as I have\r\nsaid before, most justly measured by labour.”\u003ca name=\"FNanchor_24_24\" id=\"FNanchor_24_24\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_24_24\" class=\"fnanchor\"\u003e24\u003c/a\u003e Substitute\r\nthe word “work” for “labor” in the above statement,\r\nand the confusion of labor in one form and labor in another\r\nform becomes at once apparent. Since trade consists\r\ne. g. in the exchange of the respective labors of the\r\nshoemaker, miner, spinner, painter, etc., does it follow\r\nthat the value of shoes is most justly measured by the\r\nwork of a painter? On the contrary, Franklin meant\r\nthat the value of shoes, mining products, yarn, paintings,\r\netc., is determined by abstract labor which possesses no\r\nparticular qualities and can, therefore, be measured only\r\nquantitatively.\u003ca name=\"FNanchor_25_25\" id=\"FNanchor_25_25\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_25_25\" class=\"fnanchor\"\u003e25\u003c/a\u003e But since he does not develop the idea\r\nthat labor contained in exchange value is abstract uni\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_64\" id=\"Page_64\"\u003ePg 64\u003c/a\u003e\u003c/span\u003eversal\r\nlabor which assumes the form of social labor as a\r\nresult of the universal alienation of the products of individual\r\nlabor, he necessarily fails to recognize in money\r\nthe direct embodiment of this alienated labor. For that\r\nreason he sees no inner connection between money and\r\nlabor which creates exchange value, and considers money\r\nmerely as an instrument introduced from outside into\r\nthe sphere of exchange for purposes of technical convenience.\u003ca name=\"FNanchor_26_26\" id=\"FNanchor_26_26\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_26_26\" class=\"fnanchor\"\u003e26\u003c/a\u003e\r\nFranklin’s analysis of exchange value did\r\nnot exert any direct influence on the general trend of\r\nscience, because he discussed only special questions of\r\npolitical economy whenever there was a definite practical\r\noccasion for it.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe contrast between useful work and labor which\r\ncreates exchange value agitated all Europe during the\r\neighteenth century in the form of this question: what\r\nparticular kind of labor constitutes the source of bourgeois\r\nwealth? It was thus assumed that not every kind\r\nof labor which is realized in use-values or yields certain\r\nproducts does thereby directly create wealth. With the\r\nphysiocrats, however, as well as with their opponents,\r\nthe burning question was not, what kind of labor creates\r\n\u003ci\u003evalue\u003c/i\u003e, but which is it that creates \u003ci\u003esurplus value\u003c/i\u003e. They\r\napproached the problem in its complicated form before\r\nthey had solved it in its elementary form; such is the\r\nhistorical course of all sciences leading them by a\r\nlabyrinth of intersecting paths to the real starting points.\r\nUnlike other builders, science not only erects castles in\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_65\" id=\"Page_65\"\u003ePg 65\u003c/a\u003e\u003c/span\u003ethe air, but constructs separate stories of the building,\r\nbefore it has laid the foundation. Without dwelling\r\nany longer on the physiocrats and omitting quite a number\r\nof Italian economists who in some more or less ingenious\r\nideas came close to a correct analysis of the nature\r\nof commodity,\u003ca name=\"FNanchor_27_27\" id=\"FNanchor_27_27\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_27_27\" class=\"fnanchor\"\u003e27\u003c/a\u003e we pass at once to the first Briton\r\nwho elaborated the general system of bourgeois economics,\r\n\u003cspan class=\"smcap\"\u003eSir James Steuart\u003c/span\u003e.\u003ca name=\"FNanchor_28_28\" id=\"FNanchor_28_28\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_28_28\" class=\"fnanchor\"\u003e28\u003c/a\u003e His idea of exchange value\r\nas well as all the abstract categories of political economy\r\nstill seem to be with him in the process of differentiation\r\nfrom the material elements they represent and therefore\r\nappear quite vague and unsettled. In one place he determines\r\n\u003ci\u003ereal value by labor-time\u003c/i\u003e (“what a workman can\r\nperform in a day”), but immediately creates confusion\r\nby introducing the elements of wages and raw material.\u003ca name=\"FNanchor_29_29\" id=\"FNanchor_29_29\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_29_29\" class=\"fnanchor\"\u003e29\u003c/a\u003e\r\nIn another place his struggle with the material substance\r\nof the subject he treats of is revealed even more\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_66\" id=\"Page_66\"\u003ePg 66\u003c/a\u003e\u003c/span\u003estrikingly. He calls the material of nature contained\r\nin a commodity, such as the silver in a silver plate, its\r\n“intrinsic worth,” while the labor-time contained in it he\r\ncalls “useful value.” The former, he says “is …\r\nsomething real in itself,” while “the value of the second\r\nmust be estimated according to the labour it has cost to\r\nproduce it…. The labour employed in the modification\r\n[of the substance] represents a portion of a\r\nman’s time.”\u003ca name=\"FNanchor_30_30\" id=\"FNanchor_30_30\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_30_30\" class=\"fnanchor\"\u003e30\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWhat distinguishes Steuart from his predecessors and\r\nfollowers is his keen differentiation between specifically\r\nsocial labor which is represented in exchange value, and\r\nconcrete labor which produces use-values. Labor, he says,\r\nwhich through its alienation creates a universal equivalent,\r\nI call \u003ci\u003eindustry\u003c/i\u003e. Labor as industry he distinguishes\r\nnot only from concrete labor, but from all other social\r\nforms of labor.\u003ca name=\"FNanchor_31_31\" id=\"FNanchor_31_31\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_31_31\" class=\"fnanchor\"\u003e31\u003c/a\u003e It is to him the capitalistic form of\r\nlabor in contrast to its antique and mediaeval forms.\r\nHe is especially interested in the difference between capitalistic\r\nand feudal labor, of which he had observed the\r\nlatter in its decaying forms both in Scotland and on his\r\nextensive travels over the continent. Steuart knew, of\r\ncourse, very well that products took on the form of commodities\r\nand commodities, the form of money in pre-capitalistic\r\nepochs as well; but he proves conclusively\r\nthat it is only in the capitalistic period of production\r\nthat the commodity becomes the elementary and funda\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_67\" id=\"Page_67\"\u003ePg 67\u003c/a\u003e\u003c/span\u003emental\r\nform of wealth, and alienation [of commodities],\r\nthe ruling form of acquisition and that consequently\r\nlabor creating exchange value is specifically capitalistic\r\nin its character.\u003ca name=\"FNanchor_32_32\" id=\"FNanchor_32_32\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_32_32\" class=\"fnanchor\"\u003e32\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eAfter different forms of concrete labor, such as agriculture,\r\nmanufacture, navigation, trade, etc., had each\r\nin turn been declared the true source of wealth, \u003cspan class=\"smcap\"\u003eAdam\r\nSmith\u003c/span\u003e proclaimed labor in general, and namely in its\r\ngeneral social form of \u003ci\u003edivision of labor\u003c/i\u003e, to be the only\r\nsource of material wealth or use-values. While ignoring\r\nin connection with the latter the part played by nature,\r\nhe is troubled by it when he comes to deal with purely\r\nsocial wealth i.\u0026nbsp;e. exchange value. To be sure, Adam determines\r\nthe value of a commodity by the labor-time\r\ncontained in it, but relegates the actual application of\r\nthe principle to pre-Adamic times. In other words,\r\nwhat seems to him true from the standpoint of simple\r\ncommodity, ceases to be clear as soon as the higher and\r\nmore complex forms of capital, wage-labor, rent, etc.\r\ntake its place. This he expresses by saying, that the\r\nvalue of commodities used to be measured by labor-time\r\nin the paradise lost of bourgeois society, in which men\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_68\" id=\"Page_68\"\u003ePg 68\u003c/a\u003e\u003c/span\u003edealt with each other not as capitalists, wage-workers,\r\nlandlords, tenants, usurers, etc., but merely as plain producers\r\nof commodities which they exchanged. He constantly\r\nconfuses the determination of the value of commodities\r\nby the labor-time contained in them with the\r\ndetermination of their value by the value of labor. He\r\nbecomes confused in working out the details and fails\r\nto see the objective equalization of different kinds of labor\r\nwhich the social process forcibly carries out, mistaking\r\nit for the subjective equality of the labors of individuals.\u003ca name=\"FNanchor_33_33\" id=\"FNanchor_33_33\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_33_33\" class=\"fnanchor\"\u003e33\u003c/a\u003e\r\nThe transition from concrete labor to labor creating exchange\r\nvalue, i.\u0026nbsp;e. to labor in its fundamental capitalistic\r\nform he tries to derive from the \u003ci\u003edivision of labor\u003c/i\u003e. Yet,\r\nwhile it is true that private exchange implies the division\r\nof labor, it is false to maintain that division of labor\r\nimplies private exchange. Among the Peruvians, e. g.,\r\nlabor was divided to an extraordinary extent, although\r\nthere was no private exchange, no exchange of products,\r\nas commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_69\" id=\"Page_69\"\u003ePg 69\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eContrary to Adam Smith, \u003cspan class=\"smcap\"\u003eDavid Ricardo\u003c/span\u003e elaborated\r\nwith great clearness the determination of the value of\r\na commodity by labor-time and showed that this law governs\r\nalso such relations of capitalistic production which\r\nseem to contradict it most. Ricardo confines his investigations\r\nexclusively to the \u003ci\u003equantitative determination of\r\nvalue\u003c/i\u003e and as regards the latter he is at least conscious of\r\nthe fact that the realization of the law depends upon certain\r\nhistorical conditions. He says, namely, that the determination\r\nof value by labor-time holds good for commodities\r\n“only as can be increased in quantity by the\r\nexertion of human industry, and on the production of\r\nwhich competition operates without restraint.”\u003ca name=\"FNanchor_34_34\" id=\"FNanchor_34_34\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_34_34\" class=\"fnanchor\"\u003e34\u003c/a\u003e What\r\nhe really means is that the law of value presupposes for\r\nits full development an industrial society in which production\r\nis carried on a large scale and free competition\r\nprevails, i.\u0026nbsp;e. the modern capitalist society. In all other\r\nrespects, Ricardo considers the capitalist form of labor\r\nas the eternal natural form of social labor. He makes\r\nthe primitive fisherman and the primitive hunter\r\nstraightway exchange their fish and game as owners of\r\ncommodities, in proportion to the labor-time embodied\r\nin these exchange values. On this occasion he commits\r\nthe anachronism of making the primitive fisherman and\r\nprimitive hunter consult the annuity tables in current\r\nuse on the London Exchange in the year 1817 in the calculation\r\nrelating to their instruments. The “parallelograms\r\nof Mr. Owen” seem to be the only form of society\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_70\" id=\"Page_70\"\u003ePg 70\u003c/a\u003e\u003c/span\u003eoutside of the bourgeois form with which he was acquainted.\r\nAlthough confined within this bourgeois\r\nhorizon, Ricardo analyzes the bourgeois economy\u0026mdash;which\r\nlooks quite different to deeper insight than it does on\r\nthe surface\u0026mdash;with such keen power of theoretical penetration\r\nthat Lord Brougham could say of him: “Mr.\r\nRicardo seemed as if he had dropped from another\r\nplanet.”\u003c/p\u003e\r\n\r\n\u003cp\u003eIn a direct controversy with Ricardo, \u003cspan class=\"smcap\"\u003eSismondi\u003c/span\u003e\r\nlays stress upon the specifically social character of\r\nlabor which creates exchange value,\u003ca name=\"FNanchor_35_35\" id=\"FNanchor_35_35\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_35_35\" class=\"fnanchor\"\u003e35\u003c/a\u003e and says it is\r\n“characteristic of our economic progress” to reduce\r\nthe magnitude of value to the \u003ci\u003enecessary\u003c/i\u003e labor-time,\r\nto the relation between the demand of society as\r\na whole and the quantity of labor which is sufficient\r\nto satisfy this demand.\u003ca name=\"FNanchor_36_36\" id=\"FNanchor_36_36\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_36_36\" class=\"fnanchor\"\u003e36\u003c/a\u003e Sismondi is no more\r\nlaboring under Boisguillebert’s idea, that labor which\r\ncreates exchange value is adulterated by money; but just\r\nas Boisguillebert denounced money, so does Sismondi denounce\r\nlarge industrial capital. In Ricardo political\r\neconomy reached its climax, after recklessly drawing its\r\nultimate conclusions, while Sismondi supplemented it by\r\nimpersonating its doubts.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince Ricardo gave to classical political economy its\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_71\" id=\"Page_71\"\u003ePg 71\u003c/a\u003e\u003c/span\u003efinal shape, having formulated and elaborated with the\r\ngreatest clearness the law of the determination of exchange\r\nvalue by labor-time, it is natural that all the\r\npolemics among economists should center about him.\r\nStripped of its puerile\u003ca name=\"FNanchor_37_37\" id=\"FNanchor_37_37\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_37_37\" class=\"fnanchor\"\u003e37\u003c/a\u003e form this controversy comes\r\ndown to the following points:\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eFirst\u003c/i\u003e: Labor itself has exchange value, and different\r\nkinds of labor have different exchange values. We get\r\ninto a vicious circle by making exchange value the measure\r\nof exchange value, because the measuring exchange\r\nvalue needs a measure itself. This objection may be\r\nreduced to the following problem: Given labor-time as\r\nthe intrinsic measure of exchange value, develop from\r\nthat the determination of wages. The theory of wages\r\ngives the answer to that.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eSecond\u003c/i\u003e: If the exchange value of a product is equal\r\nto the labor-time contained in it, then the exchange value\r\nof one day of labor is equal to the product of that labor.\r\nIn other words, wages must be equal to the product of\r\nlabor.\u003ca name=\"FNanchor_38_38\" id=\"FNanchor_38_38\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_38_38\" class=\"fnanchor\"\u003e38\u003c/a\u003e But the very opposite is actually the case. Ergo.\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_72\" id=\"Page_72\"\u003ePg 72\u003c/a\u003e\u003c/span\u003ethis objection comes down to the following problem:\r\nHow does production, based on the determination of\r\nexchange value by labor-time only, lead to the result\r\nthat the exchange value of labor is less than the exchange\r\nvalue of its product? This problem is solved by us in\r\nthe discussion of capital.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eThird\u003c/i\u003e: The market price of commodities either falls\r\nbelow or rises above its exchange value with the changing\r\nrelations of supply and demand. \u003ci\u003eTherefore\u003c/i\u003e, the exchange\r\nvalue of commodities is determined by the relation\r\nof supply and demand and not by the labor-time\r\ncontained in them. As a matter of fact, this queer conclusion\r\nmerely amounts to the question, how a market\r\nprice based on exchange value can deviate from that exchange\r\nvalue; or, better still, how does the law of exchange\r\nvalue assert itself only in its antithesis? This\r\nproblem is solved in the theory of competition.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eFourth\u003c/i\u003e: The last and apparently the most striking\r\nobjection, if not raised in the usual form of queer examples:\r\nIf exchange value is nothing but mere labor-time\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_73\" id=\"Page_73\"\u003ePg 73\u003c/a\u003e\u003c/span\u003e\r\ntime contained in commodities, how can commodities\r\nwhich contain no labor possess exchange-value, or in\r\nother words, whence the exchange value of mere forces\r\nof nature? This problem is solved in the theory of rent.\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\u003ch2\u003eCHAPTER II.\u003c/h2\u003e\r\n\r\n\u003ch3\u003eMONEY OR SIMPLE CIRCULATION.\u003c/h3\u003e\r\n\r\n\u003cp\u003eIn a parliamentary debate on Sir Robert Peel’s Bank\r\nAct of 1844 and 1845, Gladstone remarked that not even\r\nlove has made so many fools of men as the pondering\r\nover the nature of money. He spoke of Britons to\r\nBritons. The Dutch, on the contrary, who, from times\r\nof yore, have had, Petty’s doubts notwithstanding,\r\n“angelical wits” for money speculation have never lost\r\ntheir wits in speculations about money.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe main difficulty in the analysis of money is overcome\r\nas soon as the evolution of money from commodity\r\nis understood. This point once granted, it only remains\r\nto comprehend clearly the particular forms of money,\r\nwhich is to some extent made difficult by the fact that\r\nall bourgeois relations, being gilt or silver plated, have\r\nthe appearance of money relations, and money, therefore,\r\nseems to possess an endless variety of forms, which have\r\nnothing in common with it.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the following investigation only those forms of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_74\" id=\"Page_74\"\u003ePg 74\u003c/a\u003e\u003c/span\u003e\r\nmoney are treated of which directly grow out of the exchange\r\nof commodities; the forms which belong to a\r\nhigher stage of production, as e. g., credit money will\r\nnot be discussed here. For the sake of simplicity gold\r\nis assumed throughout as the money commodity.\u003c/p\u003e\r\n\r\n\u003ch4\u003e1. THE MEASURE OF VALUE.\u003c/h4\u003e\r\n\r\n\u003cp\u003eThe first process of circulation constitutes, so to say,\r\nthe theoretical preparatory process to actual circulation.\r\nTo begin with, commodities which are use-values by\r\nnature, acquire a form in which they \u003ci\u003eappear\u003c/i\u003e in idea to\r\neach other as exchange values, as definite quantities of\r\nincorporated \u003ci\u003euniversal\u003c/i\u003e labor-time. The first necessary\r\nstep in this process is, as we have seen, the setting apart\r\nby the commodities of a specific commodity, say \u003ci\u003egold\u003c/i\u003e, as\r\nthe direct incarnation of universal labor-time, or the universal\r\nequivalent. Let us go back for a moment to the\r\nform in which commodities turn gold into money.\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n1 ton of iron = 2 ounces of gold\u003cbr /\u003e\r\n\r\n1 quarter of wheat = 1 ounce of gold\u003cbr /\u003e\r\n\r\n1 hundred weight of Mocca coffee = 1-1/4 ounce of gold\u003cbr /\u003e\r\n\r\n1 hundred weight of potash = 1/2 ounce of gold\u003cbr /\u003e\r\n\r\n1 ton of Brazil timber = 1-1/2 ounces of gold\u003cbr /\u003e\r\n\r\nY commodities = X ounces of gold\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the above series of equations iron, wheat, coffee,\r\npotash, etc. appear to each other as embodiments, of\r\nhomogeneous labor, namely, as labor materialized in\r\nmoney, from which all the peculiarities of the different\r\nkinds of concrete labor represented in the different use-values\r\nare completely eliminated. As value they are all\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_75\" id=\"Page_75\"\u003ePg 75\u003c/a\u003e\u003c/span\u003e\r\nidentical, they are the incarnation of \u003ci\u003ethe same\u003c/i\u003e labor, or\r\n\u003ci\u003ethe same\u003c/i\u003e incarnation of labor, viz., gold. As uniform embodiments\r\nof the same labor they display only \u003ci\u003eone\u003c/i\u003e difference,\r\na quantitative one, by appearing as different quantities\r\nof value, because \u003ci\u003eunequal\u003c/i\u003e quantities of labor-time\r\nare contained in their use-values. The mutual relation\r\nof these separate commodities is that of embodiments of\r\nuniversal labor-time, since they are related to universal\r\nlabor-time as to an excluded commodity, viz., gold. The\r\nsame relation the development of which causes commodities\r\nto appear to each other as exchange values, causes\r\nthe labor time contained in gold to appear as\r\nuniversal labor-time, a given quantity of which is\r\nexpressed in different quantities of iron, wheat, coffee,\r\netc,\u0026mdash;in short, in the use-values of all commodities, or is\r\ndirectly unfolded in the endless series of commodity-equivalents.\r\nWhile all commodities express their exchange\r\nvalues in gold, gold expresses its exchange value\r\ndirectly in all commodities. While commodities assume\r\nthe form of exchange value in relation to each other,\r\nthey lend to gold the form of the universal equivalent,\r\nor of money.\u003c/p\u003e\r\n\r\n\u003cp\u003eGold becomes the \u003ci\u003emeasure of value\u003c/i\u003e, because \u003ci\u003eall\u003c/i\u003e commodities\r\nmeasure their exchange values in gold, in\r\nproportion as a certain quantity of gold and a\r\ncertain quantity of the commodity contain the same\r\namount of labor-time; and it is only by virtue of this\r\nfunction of being a measure of value, in which capacity\r\nits own value is measured directly in the entire series of\r\ncommodity equivalents, that gold becomes a universal\r\nequivalent or money. On the other hand, the exchange\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_76\" id=\"Page_76\"\u003ePg 76\u003c/a\u003e\u003c/span\u003e\r\nvalue of all commodities is expressed in gold. In this\r\nexpression, the qualitative aspect is to be distinguished\r\nfrom the quantitative: there is the exchange value of the\r\ncommodity as the embodiment of the same uniform\r\nlabor-time; while the magnitude of value is exhaustively\r\nexpressed, since in the same proportion in which commodities\r\nare equated to gold they are equated to one another.\r\nOn the one hand the \u003ci\u003euniversal\u003c/i\u003e character of the\r\nlabor-time contained in them is revealed; on the other,\r\nits quantity is expressed in its golden equivalent. The\r\nexchange value of commodities thus expressed in the\r\nform of a universal equivalent and, moreover, as a\r\nnumerical proportion of this equivalent, in terms of one\r\nspecific commodity, or represented in the form of a series\r\nof commodities equated to one specific commodity, is\r\n\u003cspan class=\"smcap\"\u003ePRICE\u003c/span\u003e. Price is the form into which the exchange value\r\nof commodities is converted when it \u003ci\u003eappears\u003c/i\u003e within the\r\nsphere of circulation.\u003c/p\u003e\r\n\r\n\u003cp\u003eBy the same process by which commodities express\r\ntheir values in gold prices, they turn gold into a measure\r\nof value i.\u0026nbsp;e. into money. If all of them were to measure\r\ntheir values in silver, wheat, or copper, and therefore\r\nexpress them in the form of silver, wheat or copper\r\nprices, then silver, wheat or copper would be measures of\r\nvalue and consequently universal equivalents. In order\r\nto appear as prices in circulation, commodities must be\r\nexchange values before they enter circulation. Gold becomes\r\nthe measure of value only because all commodities\r\nestimate their exchange value in it.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe universality of this relation which is the result of\r\nevolution and from which alone springs the function of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_77\" id=\"Page_77\"\u003ePg 77\u003c/a\u003e\u003c/span\u003e\r\ngold as the measure of value, implies however, that every\r\nsingle commodity is measured in gold, in proportion to\r\nthe labor-time contained in both; that the actual common\r\nmeasure of the commodity and of gold is labor; or\r\nthat commodity and gold are passed for each other in\r\ndirect barter as equal exchange values. How this\r\nequalization actually takes place, can not be discussed\r\nhere when treating of simple circulation. So much,\r\nhowever, is clear, that in countries producing gold and\r\nsilver, certain quantities of labor-time are directly embodied\r\nin definite quantities of gold and silver, while in\r\ncountries which do not produce gold and silver the same\r\nresult is reached in a round-about way, by direct or indirect\r\nexchange of the commodities of those countries;\r\ni.\u0026nbsp;e. a definite portion of average national labor is given\r\nfor a definite quantity of labor-time, embodied in the gold\r\nand silver of the mine-owning countries. In order to be\r\nable to serve as a measure of value, gold must be as far\r\nas possible a \u003ci\u003evariable\u003c/i\u003e value, because it can become the\r\nequivalent of other commodities only as an incarnation\r\nof labor-time, and the same labor-time is realized in\r\nunequal volumes of use-values with the change in the productive\r\npower of concrete labor. In estimating all commodities\r\nin gold it is only assumed that gold represents\r\na given quantity of labor at a given moment, as was done\r\nwhen the exchange value of any commodity was expressed\r\nin terms of the use-value of any other commodity.\r\nAs for the variations of the value of gold, the\r\nlaw of exchange value formulated above holds good in\r\nits case as well. If the exchange value of commodities\r\nremains unchanged, then a general rise in their gold\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_78\" id=\"Page_78\"\u003ePg 78\u003c/a\u003e\u003c/span\u003e\r\nprices is possible only in the case of a fall in the exchange\r\nvalue of gold. If the exchange value of gold remains\r\nunchanged, a general rise of gold prices is possible\r\nonly when the exchange value of all commodities\r\nrises. The reverse is true in case of a general fall in the\r\nprices of commodities. If the value of an ounce of gold\r\nfalls or rises in consequence of a change in the labor-time\r\nrequired for its production, then the values of all other\r\ncommodities fall or rise to an equal extent. Thus, the\r\nounce of gold represents after the change, as it did before,\r\na \u003ci\u003egiven\u003c/i\u003e quantity of labor-time with regard to all\r\ncommodities. The same exchange values are now estimated\r\nin greater or smaller quantities of gold than before,\r\nbut they are estimated in proportion to the magnitude\r\nof their values, and consequently retain the same\r\nproportion to each other. The ratio 2 ÷ 4 ÷ 8 remains\r\nthe same when expressed as 1 ÷ 2 ÷ 4 or as\r\n4 ÷ 8 ÷ 16. The change in the quantity of gold in\r\nwhich exchange values are estimated with a variation in\r\nthe value of gold, interferes as little with the function\r\nof gold as a measure of value, as the fifteen times smaller\r\nvalue of silver as compared with that of gold interferes\r\nwith the performance of that function by the latter.\r\nSince labor-time is the common measure of gold and\r\ncommodities, and since gold figures as the measure of\r\nvalue only in so far as all commodities are measured by\r\nit, the idea that money makes commodities commensurable,\r\nis therefore a mere fiction of the process of\r\ncirculation.\u003ca name=\"FNanchor_39_39\" id=\"FNanchor_39_39\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_39_39\" class=\"fnanchor\"\u003e39\u003c/a\u003e It is rather the commensurability of com\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_79\" id=\"Page_79\"\u003ePg 79\u003c/a\u003e\u003c/span\u003emodities\r\nas incorporated labor-time, that turns gold into\r\nmoney.\u003c/p\u003e\r\n\r\n\u003cp\u003eCommodities enter the process of exchange in the concrete\r\nform of use-values. They are yet to be turned\r\ninto the real universal equivalent through their alienation.\r\nThe determination of their prices merely amounts\r\nto their ideal transformation into the universal equivalent,\r\na process of equation to gold which is yet to be\r\nrealized. But since commodities are, in their prices,\r\ntransformed into gold only in imagination, or are converted\r\nonly into imaginary gold, and since their money\r\nform is not differentiated as yet from their concrete\r\nselves, it follows that gold has also been turned into\r\nmoney only in imagination; it appears so far but as a\r\nmeasure of value, and in fact definite quantities of gold\r\nserve merely as names for certain quantities of labor-time.\r\nThe form in which gold is crystallized in money\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_80\" id=\"Page_80\"\u003ePg 80\u003c/a\u003e\u003c/span\u003ealways depends upon the way in which commodities express\r\ntheir own exchange value to each other.\u003c/p\u003e\r\n\r\n\u003cp\u003eCommodities now confront one another in a double\r\ncapacity: actually as use-values, ideally as exchange\r\nvalues. The twofold aspect of labor contained in them\r\nis reflected in their mutual relations; the special concrete\r\nlabor being virtually present as their use-value,\r\nwhile universal abstract labor-time is ideally represented\r\nin their price in which commodities appear as commensurable\r\nembodiments of the same value\u0026mdash;substance\r\ndiffering merely in quantity.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe difference between exchange value and price appears\r\nto be merely nominal or, as Adam Smith says,\r\nlabor is the real price, and money the nominal price of\r\ncommodities. Instead of estimating the value of one\r\nquarter of wheat in thirty days of labor, it is estimated\r\nin one ounce of gold if one ounce of gold is the product\r\nof thirty days ‘labor. However, far from this difference\r\nbeing merely nominal, all the storms which threaten\r\ncommodities in the actual process of circulation center\r\nabout it. Thirty days of labor are contained in a quarter\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_81\" id=\"Page_81\"\u003ePg 81\u003c/a\u003e\u003c/span\u003eof wheat and it need not, therefore, be expressed in terms\r\nof labor-time. But gold is a commodity distinct from\r\nwheat, and only in circulation it can be ascertained,\r\nwhether the quarter of wheat can be actually turned\r\ninto an ounce of gold as is anticipated in its price.\r\nThat will depend on whether or not it proves to be a use-value,\r\nwhether or not the quantity of labor-time contained\r\nin it is the quantity necessarily required by\r\nsociety for the production of a quarter of wheat. The\r\ncommodity as such \u003ci\u003eis\u003c/i\u003e an exchange value, it \u003ci\u003ehas\u003c/i\u003e a price.\r\nIn this difference between exchange value and price lies\r\nthe demonstration of the fact that the particular individual\r\nlabor contained in a commodity has first to be\r\nexpressed through the process of alienation in terms of\r\nits counterpart, i.\u0026nbsp;e. as impersonal, abstract, universal\r\nand, only in that form, social labor, viz. money. Whether\r\nit can be so expressed seems to be a matter of chance.\r\nThus, although the exchange value of a commodity finds\r\nonly ideally a distinct expression in price, and the twofold\r\ncharacter of labor contained in the commodity exists\r\nas yet merely as two distinct forms of expression,\r\nand, although in consequence thereof, the embodiment of\r\nuniversal labor-time, gold, confronts actual commodities\r\nonly as an imaginary measure of value, yet the fact\r\nthat exchange value exists as price, or that gold exists as\r\na measure of value implies the necessity of the alienation\r\nof commodities for hard cash and the possibility\r\nof their non-alienation. In short, here lies latent the\r\nentire contradiction which is inherent in the fact that\r\nproducts are commodities or that the particular work of\r\na private individual can be of no account in society\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_82\" id=\"Page_82\"\u003ePg 82\u003c/a\u003e\u003c/span\u003e\r\nuntil it has taken the very opposite form of abstract universal\r\nlabor. For that reason, the utopians, who want\r\nto have commodities but not money, who want a system\r\nof production based on private exchange without the\r\nnecessary conditions underlying such a system, are consistent\r\nwhen they “destroy” money not in its tangible\r\nform but in its nebulous illusory form of a measure of\r\nvalue. Under the invisible measure of value there lurks\r\nthe hard cash.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe process by which gold has become the measure\r\nof value and exchange value has been turned into price,\r\nbeing once assumed, all commodities express in their\r\nprices but imagined quantities of gold of various magnitudes.\r\nAs such various quantities of the same thing,\r\ngold, they are equated, compared and measured with\r\neach other, and thus arises the technical necessity of\r\nreferring them to a definite quantity of gold as a unit\r\nof measure, a unit which develops into a standard\r\nmeasure by virtue of its divisibility into aliquot parts,\r\nwhich in their turn can be sub-divided into aliquot parts.\u003ca name=\"FNanchor_40_40\" id=\"FNanchor_40_40\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_40_40\" class=\"fnanchor\"\u003e40\u003c/a\u003e\r\nBut quantities of gold as such are measured by weight.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_83\" id=\"Page_83\"\u003ePg 83\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe standard of measure is thus found ready in the general\r\nmeasures of weight of metals and, therefore, where-ever\r\nmetallic circulation is in vogue, these measures serve\r\noriginally as standards of price. Since commodities no\r\nmore relate to each other as exchange values to be\r\nmeasured by labor-time, but as magnitudes of the same\r\ndenomination measured in gold, the latter is transformed\r\nfrom a \u003ci\u003emeasure of value\u003c/i\u003e into a \u003ci\u003estandard of price\u003c/i\u003e. The\r\ncomparison of prices with each other as different quantities\r\nof gold is thus crystallized in figures which correspond\r\nto an assumed quantity of gold and represent it\r\nas a standard of aliquot parts. Gold as measure of value\r\nand as standard of price has entirely different forms\r\nof manifestation and the confusing of the two has\r\nresulted in the wildest of theories. Gold is a\r\nmeasure of value as incorporated labor-time; it\r\nis the standard of price as certain weight of\r\nmetal. Gold becomes the measure of value by\r\nvirtue of its relation as exchange value to commodities\r\nas exchange values; as standard of price, a definite quantity\r\nof gold serves as a unit for other quantities of gold.\r\nGold is the measure of value, because its value is variable;\r\nit is the standard of price, because it is fixed as a constant\r\nunit of weight. In this case, as in all cases of measuring\r\nquantities of the same denomination, the establishment\r\nof a definite and unvarying unit of measure is all-important.\r\nThe necessity of settling upon a quantity\r\nof gold as a unit of measure and upon its aliquot parts\r\nas subdivisions of that unit, has given rise to the notion\r\nthat a certain quantity of gold which has naturally a\r\nvariable value had been assigned a fixed ratio of value\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_84\" id=\"Page_84\"\u003ePg 84\u003c/a\u003e\u003c/span\u003e\r\nto the exchange values of all commodities; the fact is\r\noverlooked that exchange values of commodities are\r\ntransformed into prices, i.\u0026nbsp;e. into quantities of gold, before\r\ngold develops as a standard of price. No matter\r\nhow the value of gold may vary, the ratios between the\r\nvalues of different quantities of gold remain constant.\r\nLet the fall in the value of gold amount to 1000 per cent.,\r\nstill twelve ounces of gold will have a twelve times\r\ngreater value than one ounce of gold; and in prices the\r\nonly thing considered is the ratio between different quantities\r\nof gold. Since, on the other hand, no rise or fall\r\nin the value of an ounce of gold can alter its weight, no\r\nalteration can take place in the weight of its aliquot\r\nparts. Thus gold always renders the same service as an\r\ninvariable standard of price, no matter how much its\r\nvalue may vary.\u003ca name=\"FNanchor_41_41\" id=\"FNanchor_41_41\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_41_41\" class=\"fnanchor\"\u003e41\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eAn historical process which, as we shall explain later,\r\nwas determined by the nature of metallic circulation, led\r\nto the result that the same denomination of weight was\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_85\" id=\"Page_85\"\u003ePg 85\u003c/a\u003e\u003c/span\u003eretained for a constantly changing and decreasing\r\nweight of precious metals in their function of a standard\r\nof price. Thus the English pound sterling denotes\r\nless than one-third of its original weight; the pound\r\nScot, before the Union, only 1-36; the French livre, 1-74;\r\nthe Spanish Maravedi, less than 1-1000; the Portuguese\r\nRei, a still smaller fraction. Such was the historical\r\norigin of the discrepancy between the current money\r\nnames of various weights of metals and their weight\r\ndenominations.\u003ca name=\"FNanchor_42_42\" id=\"FNanchor_42_42\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_42_42\" class=\"fnanchor\"\u003e42\u003c/a\u003e Since the determination of the unit of\r\nmeasure, of its aliquot parts, and of their names is\r\npurely conventional, and since they should possess within\r\nthe sphere of circulation the character of universality\r\nand compulsion, they had to be settled \u003ci\u003eby law\u003c/i\u003e. The\r\npurely formal operation thus devolved upon the government.\u003ca name=\"FNanchor_43_43\" id=\"FNanchor_43_43\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_43_43\" class=\"fnanchor\"\u003e43\u003c/a\u003e\r\nThe metal which was to serve as the money ma\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_86\" id=\"Page_86\"\u003ePg 86\u003c/a\u003e\u003c/span\u003eterial,\r\nwas found already adopted in the community. In\r\ndifferent countries the legal standard of price is naturally\r\ndifferent. In England e. g. the ounce as a weight\r\nof metal is divided into pennyweights, grains and carats\r\nTroy, but the ounce of gold as the unit of money is divided\r\ninto 3 7-8 sovereigns, the sovereign into 20 shillings,\r\nthe shilling into 12 pence, so that 100 pounds of 22\r\ncarat gold (1200 ounces) = 4672 sovereigns and 10\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_87\" id=\"Page_87\"\u003ePg 87\u003c/a\u003e\u003c/span\u003eshillings. In the world market, however, where national\r\nboundaries disappear, these national characteristics of\r\nthe measure of money also disappear and give place to\r\nthe general measures of weight of metals.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe price of a commodity or the quantity of gold into\r\nwhich it is ideally transformed, is, therefore, now expressed\r\nin the names of coins of the gold standard. Thus,\r\ninstead of saying: a quarter of wheat is worth an ounce\r\nof gold, it is said in England to be worth 3£ 17s. 10-1/2d.\r\nAll prices are thus expressed in the same denominations.\r\nThe peculiar form which commodities lend to their\r\nexchange values is transformed into a \u003ci\u003emoney-denomination\u003c/i\u003e\r\nby which commodities tell each other how much they\r\nare worth. Money in its turn becomes \u003ci\u003emoney of account\u003c/i\u003e.\u003ca name=\"FNanchor_44_44\" id=\"FNanchor_44_44\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_44_44\" class=\"fnanchor\"\u003e44\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWe transform commodities into money of account,\r\nin our mind, on paper, in conversation, whenever it is\r\na question of expressing any kind of wealth in terms of\r\nexchange value.\u003ca name=\"FNanchor_45_45\" id=\"FNanchor_45_45\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_45_45\" class=\"fnanchor\"\u003e45\u003c/a\u003e For that transformation we need the\r\ngold substance, but only in imagination. In order to\r\nestimate the value of a thousand bales of cotton in a\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_88\" id=\"Page_88\"\u003ePg 88\u003c/a\u003e\u003c/span\u003ecertain number of ounces of gold and then to express\r\nthis number of ounces in the denominations of the\r\nounce, £. s. d., not a single atom of gold is required.\r\nThus, not a single ounce of gold was in circulation in\r\nScotland before Robert Peel’s Bank Act of 1845, although\r\nthe gold ounce, expressed in its English standard\r\nof account, 3£ 17s. 10-1/2d., served as the legal standard\r\nof price. In a similar manner silver serves as standard\r\nof price in the trade between Siberia and China, although\r\nthat trade virtually amounts to barter. It is, therefore,\r\nimmaterial to money, as money of account, whether or\r\nnot its entire unit of measure or the fractions thereof\r\nare really coined. In England, at the time of William\r\nthe Conqueror, 1£, then a pound of pure\r\nsilver, and the shilling, 1-20 of a pound, existed\r\nonly as money of account, while the penny, 1-240\r\nof a pound of silver, was the largest silver coin in existence.\r\nOn the other hand, there are no shillings\r\nand pence in England to-day, although they are legal\r\ndenominations for certain parts of an ounce of gold.\r\nMoney as money of account may exist exclusively in\r\nidea, while the money in actual existence may be coined\r\naccording to an entirely different standard. Thus the\r\nmoney in circulation in many English colonies of North\r\nAmerica consisted until late in the eighteenth century\r\nof Spanish and Portuguese coins, although the money\r\nof account was throughout the same as in England.\u003ca name=\"FNanchor_46_46\" id=\"FNanchor_46_46\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_46_46\" class=\"fnanchor\"\u003e46\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_89\" id=\"Page_89\"\u003ePg 89\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eOwing to the fact that money, when serving as the\r\nstandard of price, appears under the same reckoning\r\nnames as do the prices of commodities, and that, therefore,\r\nthe sum of 3£ 17s. l0-1/2d. may signify, on the\r\none hand, an ounce weight of gold, and on the other,\r\nthe value of a ton of iron, this reckoning name of money\r\nhas been called its \u003ci\u003emint-price\u003c/i\u003e. Hence, there sprang up\r\nthe extraordinary notion that the value of gold is estimated\r\nin its own material, and that, in contradistinction\r\nto all other commodities, its price is \u003ci\u003efixed\u003c/i\u003e by the State.\r\nIt was erroneously thought that the giving of reckoning\r\nnames to definite weights of gold is the same thing\r\nas fixing the value of those weights.\u003ca name=\"FNanchor_47_47\" id=\"FNanchor_47_47\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_47_47\" class=\"fnanchor\"\u003e47\u003c/a\u003e In so far as gold\r\nserves as one of the elements in determining price, i.\u0026nbsp;e.,\r\nwhere it performs the function of money of account, it\r\nnot only has no \u003ci\u003efixed\u003c/i\u003e price, but has \u003ci\u003eno\u003c/i\u003e price whatever.\r\nIn order to have a price, i.\u0026nbsp;e., in order to express itself\r\nin a \u003ci\u003especific\u003c/i\u003e commodity as a \u003ci\u003euniversal\u003c/i\u003e equivalent that\r\nother commodity would have to play the same exclusive\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_90\" id=\"Page_90\"\u003ePg 90\u003c/a\u003e\u003c/span\u003erole in the process of circulation as gold. But two commodities\r\nexcluding all other commodities mutually exclude\r\neach other. Therefore, wherever gold and silver\r\nhave by law been made to perform side by side the function\r\nof money or of a measure of value it has always been\r\ntried, but in vain, to treat them as one and the same material.\r\nTo assume that there is an invariable ratio between\r\nthe quantities of gold and silver in which a given quantity\r\nof labor-time is incorporated, is to assume, in fact, that\r\ngold and silver are of one and the same material, and\r\nthat a given mass of the less valuable metal, silver, is a\r\nconstant fraction of a given mass of gold. From the\r\nreign of Edward III to the time of George II, the history\r\nof money in England consists of one long series of\r\nperturbations caused by the clashing of the legally fixed\r\nratio between the values of gold and silver, with the\r\nfluctuations in their real values. At one time gold was\r\ntoo high; at another, silver. The metal that for the time\r\nbeing was estimated below its value was withdrawn from\r\ncirculation, melted and exported. The ratio between the\r\ntwo metals was then again altered by law, but the new\r\nnominal ratio soon came into conflict again with the\r\nreal one. In our own times, the slight and transient\r\nfall in the value of gold compared with silver, which\r\nwas a consequence of the Indo-Chinese demand for\r\nsilver, produced on a far more extended scale in France\r\nthe same phenomena, export of silver, and its expulsion\r\nfrom circulation by gold. During the years 1855,\r\n1856 and 1857, the excess in France of gold imports\r\nover gold exports amounted to £41,580,000, while the\r\nexcess of silver exports over silver imports was £14,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_91\" id=\"Page_91\"\u003ePg 91\u003c/a\u003e\u003c/span\u003e704,000.\r\nIn fact, in those countries in which both\r\nmetals are legally measures of value, and therefore both\r\nlegal tender, so that every one has the option of paying\r\nin either metal, the metal that rises in value is at a\r\npremium, and, like every other commodity, measures\r\nits price in the over-estimated metal which alone serves\r\nin reality as the standard of value. The result of all\r\nexperience and history with regard to this question is\r\nsimply that, where two commodities perform by law\r\nthe functions of a measure of value, in practice one\r\nalone maintains that position.\u003ca name=\"FNanchor_48_48\" id=\"FNanchor_48_48\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_48_48\" class=\"fnanchor\"\u003e48\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003ch3\u003eB. THEORIES OF THE UNIT OF MEASURE OF\r\nMONEY.\u003c/h3\u003e\r\n\r\n\u003cp\u003eThe circumstance that commodities are converted\r\ninto gold only in ideas as prices and that gold is therefore\r\nturned into money only in idea, gave rise to the\r\ntheory of the \u003ci\u003eideal unit of measure of money\u003c/i\u003e. Since,\r\nin the determination of prices, gold and silver serve\r\nonly ideally as money of account, it was asserted\r\nthat the names pound, shilling, pence, thaler, franc,\r\netc., instead of denoting certain weights of gold\r\nand silver or labor incorporated in some way, stood\r\nrather for ideal atoms of value. Thus, if, e. g.,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_92\" id=\"Page_92\"\u003ePg 92\u003c/a\u003e\u003c/span\u003ethe value of an ounce of silver should rise it would contain\r\nmore such atoms and would therefore have to be\r\nestimated and coined in a greater number of shillings.\r\nThis doctrine, revived again during the last commercial\r\ncrisis in England and even voiced in Parliament in two\r\nseparate reports attached to the report of the select\r\nCommittee on the Bank Acts sitting in July, 1858, dates\r\nfrom the end of the seventeenth century.\u003c/p\u003e\r\n\r\n\u003cp\u003eAt the time of the accession of William III., the English\r\nmint-price of an ounce of silver was 5s. 2d., or 1-62\r\nof an ounce of silver was equal to a penny; 12 of these\r\npence were called a shilling. According to that standard,\r\na piece of silver weighing, say, 6 ounces, would be\r\ncoined into thirty-one coins, each called a shilling. But\r\nthe \u003ci\u003emarket price\u003c/i\u003e of an ounce of silver rose above its\r\n\u003ci\u003emint price\u003c/i\u003e, from 5s. 2d. to 6s. 3d., or, in order to buy\r\nan ounce of silver bullion 6s. 3d. had to be paid. How\r\ncould the market price of an ounce of silver rise above\r\nits mint price, when the mint price is merely a reckoning\r\nname for aliquot parts of an ounce of silver? The\r\nriddle was easily solved. Out of £5,600,000 of silver\r\nmoney which was in circulation at that time, four millions\r\nwere worn out, clipped and debased. A trial disclosed\r\nthat £57,000 of silver which were supposed to\r\nweigh 220,000 ounces, weighed only 141,000 ounces.\r\nThe mint went on coining according to the same standard,\r\nbut light-weighted shillings in actual circulation\r\nrepresented smaller parts of an ounce than their name\r\nimplied. Hence, a greater quantity of these light-weighted\r\nshillings had to be paid in the market for an\r\nounce of silver bullion. When a general recoinage was\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_93\" id=\"Page_93\"\u003ePg 93\u003c/a\u003e\u003c/span\u003e\r\ndecided upon in consequence of the derangement that had\r\nbeen produced, LOWNDES, the Secretary of the Treasury,\r\ndeclared that the value of an ounce of silver had\r\nrisen and therefore it must henceforth be coined into\r\n6s. 3d. instead of into 5s. 2d. as heretofore. His argument\r\npractically amounted to the assertion that the rise\r\nin the value of the ounce caused a fall in the value of its\r\naliquot parts. His false theory, however, served merely\r\nas an embellishment for a just, practical purpose. The\r\ngovernment debts were contracted in light shillings,\r\nwere they to be paid in heavy ones? Instead of saying\r\npay back four ounces of silver, when you had received\r\nnominally five ounces but virtually only four, he said\r\npay back nominally five ounces but reduce the metallic\r\ncontents to four ounces and call a shilling what you\r\nhad called four-fifths of a shilling heretofore. Thus\r\nLowndes practically adhered to the metallic weight\r\nwhile theoretically he clung to the reckoning name.\r\nHis adversaries who clung only to the name and therefore\r\ndeclared the 25 to 50 per cent. lighter shilling to\r\nbe identical with the full-weight shilling maintained\r\non the contrary that they adhered to the metallic weight.\u003c/p\u003e\r\n\r\n\u003cp\u003eJOHN LOCKE, who was an advocate of the new bourgeoisie\r\nin all forms, the manufacturers against the\r\nworking classes and paupers, the commercial class\r\nagainst the old fashioned usurers, the financial aristocracy\r\nagainst the state debtors, and who went so far\r\nas to prove in his own work that the bourgeois reason is\r\nthe normal human reason, also took up the challenge\r\nagainst Lowndes. John Locke carried the day and\r\nmoney borrowed at ten or fourteen shillings to a guinea\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_94\" id=\"Page_94\"\u003ePg 94\u003c/a\u003e\u003c/span\u003e\r\nwas repaid in guineas of twenty shillings.\u003ca name=\"FNanchor_49_49\" id=\"FNanchor_49_49\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_49_49\" class=\"fnanchor\"\u003e49\u003c/a\u003e SIR JAMES\r\nSTEUART sums up the entire transaction as follows:\r\n“ … the state gained considerably upon the score\r\nof taxes, as well as the creditors upon their capitals and\r\ninterest; and the nation, which was the principal loser,\r\nwas pleased; because their \u003ci\u003estandard\u003c/i\u003e (The standard of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_95\" id=\"Page_95\"\u003ePg 95\u003c/a\u003e\u003c/span\u003etheir own value) was not debased.”\u003ca name=\"FNanchor_50_50\" id=\"FNanchor_50_50\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_50_50\" class=\"fnanchor\"\u003e50\u003c/a\u003e Steuart thought\r\nthat the nation would prove more alert with the further\r\ndevelopment of commerce. He was mistaken. About\r\n120 years later the same \u003ci\u003equid pro quo\u003c/i\u003e was repeated.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt was just in the order of things that Bishop BERKELEY,\r\nthe representative of a mystical idealism in English\r\nphilosophy, should have given a theoretical turn to\r\nthe doctrine of the ideal unit of measure of money, something\r\nwhich the practical “Secretary to the Treasury”\r\nhad failed to do. He asks: “Whether the terms Crown,\r\nLivre, Pound Sterling, etc., are not to be considered\r\nas Exponents or Denominations of such Proportion?\r\n[namely proportions of abstract value as such.] And\r\nwhether Gold, Silver, and Paper are not Tickets or Counters\r\nfor Reckoning, Recording and Transferring thereof?\r\n(of the proportion of value). Whether \u003ci\u003ePower\u003c/i\u003e to command\r\nthe Industry of others be not real Wealth? And\r\nwhether Money be not in Truth, Tickets or Tokens for\r\nconveying and recording such Power, and whether it be\r\nof great consequence what Materials the Tickets are made\r\nof?”\u003ca name=\"FNanchor_51_51\" id=\"FNanchor_51_51\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_51_51\" class=\"fnanchor\"\u003e51\u003c/a\u003e Here we find a confusion, first of the measure of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_96\" id=\"Page_96\"\u003ePg 96\u003c/a\u003e\u003c/span\u003evalue and the standard of price, and secondly of gold\r\nand silver as measures on the one hand and mediums\r\nof circulation on the other. Because precious metals\r\ncan be replaced by tokens in the process of circulation\r\nBerkeley comes to the conclusion that these tokens represent\r\nnothing, i.\u0026nbsp;e., only the abstract idea of value.\u003c/p\u003e\r\n\r\n\u003cp\u003eSIR JAMES STEUART had so fully developed the\r\ntheory of the ideal unit of measure of money, that his\r\nsuccessors\u0026mdash;unconscious successors since they do not\r\nknow him\u0026mdash;have added to it neither a new version\r\nnor even a new example. “Money, which I call\r\nof account, is no more than an arbitrary scale of\r\nequal parts, invented for measuring the respective\r\nvalue of things vendible. Money of account, therefore,\r\nis quite a different thing from money coin,\r\nwhich is price\u003ca name=\"FNanchor_52_52\" id=\"FNanchor_52_52\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_52_52\" class=\"fnanchor\"\u003e52\u003c/a\u003e and might exist, although there was\r\nno such thing in the world as any substance which could\r\nbecome an adequate and proportional equivalent, for\r\nevery commodity…. Money of account …\r\nperforms the same office with regard to the value of\r\nthings, that degrees, minutes, seconds, etc., do with\r\nregard to angles, or as scales do to geographical maps,\r\nor to plans of any kind. In all these inventions, there\r\nis constantly some denomination taken for the unit.\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_97\" id=\"Page_97\"\u003ePg 97\u003c/a\u003e\u003c/span\u003e… The usefulness of all those inventions being\r\nsolely confined to the marking of proportion. Just so\r\nthe unit in money can have no invariable determinate\r\nproportion to any part of value, that is to say, it cannot\r\nbe fixed to any particular quantity of gold, silver, or any\r\nother commodity whatsoever. The unit once fixed, we\r\ncan, by multiplying it, ascend to the greatest value….\r\nThe value of commodities, therefore, depending\r\nupon a general combination of circumstances relative\r\nto themselves and to the fancies of men, their value\r\nought to be considered as changing only with respect to\r\none another; consequently, anything which troubles or\r\nperplexes the ascertaining those changes of proportion\r\nby the means of a general, determinate and invariable\r\nscale, must be hurtful to trade…. Money …\r\nis an ideal scale of equal parts. If it be demanded what\r\nought to be the standard value of one part? I answer\r\nby putting another question: What is the standard length\r\nof a degree, a minute, a second? It has none …\r\nbut so soon as one part becomes determined by the nature\r\nof a scale, all the rest must follow in proportion. Of\r\nthis kind of money … we have two examples.\r\nThe bank of Amsterdam presents us with the one, the\r\ncoast of Angola with the other.”\u003ca name=\"FNanchor_53_53\" id=\"FNanchor_53_53\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_53_53\" class=\"fnanchor\"\u003e53\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eSteuart speaks here simply of the part money plays\r\nin circulation as the \u003ci\u003estandard of price\u003c/i\u003e and \u003ci\u003emoney of\r\naccount\u003c/i\u003e. If different commodities are marked in the\r\nprice-list at 15s., 20s., 36s., respectively, then I care,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_98\" id=\"Page_98\"\u003ePg 98\u003c/a\u003e\u003c/span\u003ein fact, neither for the silver substance, nor for the\r\nname of the shilling when comparing the magnitudes\r\nof their values. The ratios between the numbers 15,\r\n20, 36, tell everything, and the number 1 has become\r\nthe only unit of measure. Only the abstract proportion\r\nof numbers can at all serve as a purely abstract expression\r\nof proportion. In order to be consistent, Steuart\r\nshould have dropped not only gold and silver, but their\r\nlegal baptismal names as well. Since he does not understand\r\nthe nature of the transformation of the measure\r\nof value into a standard of price, he naturally believes\r\nthat the definite quantity of gold which serves\r\nas a unit of measure relates as a measure not to other\r\nquantities of gold, but to values as such. Since commodities\r\nappear as quantities of the same denomination\r\nthrough the conversion of their exchange values\r\ninto prices, he denies that property of the measure which\r\nreduces them to one denomination; and since in this\r\ncomparison of different quantities of gold the quantity\r\nof gold which serves as a unit of measure is conventional,\r\nhe does not see the necessity of fixing it at all. Instead\r\nof calling 1-360 part of a circle degree, he might give\r\nthat name to 1-180th part; the right angle would then\r\nbe measured by 45 degrees instead of 90, and acute and\r\nobtuse angles would be measured accordingly. Nevertheless,\r\nthe measure of the angle would remain, then,\r\nas before, first a qualitatively definite mathematical figure,\r\nthe circle, and second a quantitatively definite part\r\nof the circle. As for Steuart’s economic illustrations,\r\nhe refutes his own argument with one and does not prove\r\nanything with the other. The bank money of Amster\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_99\" id=\"Page_99\"\u003ePg 99\u003c/a\u003e\u003c/span\u003edam\r\nwas, in fact, merely the reckoning name for Spanish\r\ndoubloons, which retained their full weight by lying\r\nidly in the bank vaults, while the circulating coins became\r\nthinner from hard rubbing against the outer world.\r\nAnd as for the African idealists we have to abandon\r\nthem to their fate until critical travelers will tell us\r\nmore about them.\u003ca name=\"FNanchor_54_54\" id=\"FNanchor_54_54\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_54_54\" class=\"fnanchor\"\u003e54\u003c/a\u003e The French assignat could be called\r\nan almost ideal money in Steuart’s sense: “\u003ci\u003eNational\r\nproperty. Assignation of 100 francs.\u003c/i\u003e” To be sure, the\r\nuse-value which the assignation was supposed to represent,\r\nnamely, the confiscated land, was indicated here,\r\nbut the quantitative definition of the unit of measure\r\nwas forgotten and “the franc” became a meaningless\r\nword. How much or how little land the assignation\r\nfranc represented depended on the results of the public\r\nauctions. In practice, however, the assignation franc\r\ncirculated as a token of value of silver money and its\r\ndepreciation was, therefore, measured by this silver\r\nstandard.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe period of the suspension of cash payments by\r\nthe Bank of England was hardly more fruitful of war-bulletins\r\nthan of money theories. The depreciation of\r\nbank notes and the rise of the market price of gold\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_100\" id=\"Page_100\"\u003ePg 100\u003c/a\u003e\u003c/span\u003eabove its mint price called forth again the doctrine of\r\nthe ideal unit of money on the part of some of the advocates\r\nof the Bank. Lord Castlereagh found the classical\r\nconfused expression for the confused idea by speaking\r\nof the unit of measure of money as “a sense of value\r\nin reference to currency as compared with commodities.”\r\nWhen a few years after the peace of Paris conditions\r\npermitted the resumption of cash payments, the\r\nsame question which had been stirred up by Lowndes\r\nunder William III., came up, hardly changed in form.\r\nAn enormous government debt, as well as a mass of\r\nprivate debts, accumulated in twenty years, fixed obligations,\r\netc., had been contracted on the basis of depreciated\r\nbank notes. Were they to be paid back in\r\nbank notes of which £4672, 10s. nominal, actually represented\r\n100 pounds of 22 carat gold? THOMAS ATTWOOD,\r\na banker of Birmingham, came forth as \u003ci\u003eLowndes\r\nredivivus\u003c/i\u003e. The creditors were to receive nominally as\r\nmany shillings as had been nominally borrowed, but if\r\nabout 1-78 of an ounce of gold constituted a shilling\r\naccording to the old standard of coinage, then say 1-90\r\nof an ounce should now be christened a shilling. Attwood’s\r\nadherents are known as the Birmingham school\r\nof “little shillingmen.” The controversy over the ideal\r\nmoney unit, which had started in 1819, still went on in\r\n1845 between Sir Robert Peel and Attwood, whose own\r\nwisdom, as far as the function of money as a measure\r\nis concerned, is exhaustively summed up in the following\r\npassage, in which, referring to Sir Robert Peel’s controversy\r\nwith the Birmingham Chamber of Commerce,\r\nhe says: “The substance of your queries is … in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_101\" id=\"Page_101\"\u003ePg 101\u003c/a\u003e\u003c/span\u003e\r\nwhat sense is the word pound to be used?… To\r\nwhat will the sum one pound be equivalent?… Before\r\nI venture a reply I must enquire what constitutes\r\na standard of value?… Is £3 17s. 10-1/2d.\r\nan \u003ci\u003eounce\u003c/i\u003e of gold, or is it only of the \u003ci\u003evalue\u003c/i\u003e of an ounce\r\nof gold? If £3 17s. 10-1/2d. be an ounce of gold, why\r\nnot call things by their proper names, and, dropping the\r\nterms pounds, shillings and pence, say ounces, pennyweights\r\nand grains?… If we adopt the terms\r\nounces, pennyweights and grains of gold, as our monetary\r\nsystem, we should pursue a direct system of barter…. But\r\nif gold be estimated as of the \u003ci\u003evalue\u003c/i\u003e\r\nof £3 17s. 10-1/2d. per ounce … how is this … that\r\nmuch difficulty has been experienced at\r\ndifferent periods to check gold from rising to £5 4s.\r\nper ounce, and we now notice that gold is quoted at\r\n£3 17s. 9d. per ounce?… The expression \u003ci\u003epound\u003c/i\u003e\r\nhas reference to value, but not a fixed standard value….\r\nThe term pound is the \u003ci\u003eideal unit\u003c/i\u003e….\r\nLabour is the parent of cost and gives the relative value\r\nto gold or iron. \u003ci\u003eWhatever denomination of words are\r\nused to express the daily or weekly labour of a man\u003c/i\u003e,\r\nsuch words express the cost of the commodity produced.”\u003ca name=\"FNanchor_55_55\" id=\"FNanchor_55_55\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_55_55\" class=\"fnanchor\"\u003e55\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the last words the hazy conception of the ideal\r\nmoney measure melts away and its real meaning breaks\r\nthrough. The reckoning names of gold, pound sterling,\r\nshilling, etc., should be names for definite quantities\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_102\" id=\"Page_102\"\u003ePg 102\u003c/a\u003e\u003c/span\u003eof labor-time. Since labor-time constitutes the substance\r\nand the intrinsic measure of values, these names\r\nwould then actually represent definite proportions of\r\nvalue. In other words, labor-time is maintained to be\r\nthe true unit of measure of money. With this we leave\r\nthe Birmingham school, but should add in passing that\r\nthe doctrine of the ideal measure of money acquired\r\nnew importance in the controversy over the question\r\nof the convertibility or non-convertibility of bank notes.\r\nIf paper receives its name from gold or silver, then the\r\nconvertibility of a note or its exchangeability for gold\r\nor silver remains an economic law, no matter what the\r\ncivil law may be. Thus a Prussian paper thaler, although\r\nlegally inconvertible, would immediately depreciate\r\nif it were worth less than a silver thaler in ordinary\r\ntrade, i.\u0026nbsp;e., if it were not practically convertible.\r\nThe consistent advocates of inconvertible paper money\r\nin England, therefore, sought refuge in the ideal measure\r\nof money. If the reckoning names of money, £,\r\ns., etc., are names of certain quantities of atoms of value,\r\nof which a commodity absorbs or loses now more, now\r\nless in exchange for other commodities, then an English\r\n£5 note, e. g., is just as independent of its relation to\r\ngold as of that to iron and cotton. Since its title would\r\nno more imply its theoretical equality with a certain\r\nquantity of gold or any other commodity, the demand\r\nfor its convertibility, i.\u0026nbsp;e., for its practical equality with\r\na definite quantity of a specified thing would be excluded\r\nby the very conception of the note.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe theory of labor-time as the direct measure of\r\nmoney was first systematically developed by JOHN\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_103\" id=\"Page_103\"\u003ePg 103\u003c/a\u003e\u003c/span\u003e\r\nGRAY.\u003ca name=\"FNanchor_56_56\" id=\"FNanchor_56_56\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_56_56\" class=\"fnanchor\"\u003e56\u003c/a\u003e He makes a National Central Bank ascertain\r\nthrough its branches the labor-time consumed in the production\r\nof various commodities. The producer receives an\r\nofficial certificate of value in exchange for his commodity.\r\ni.\u0026nbsp;e., he gets a receipt for as much labor-time as his commodity\r\ncontains,\u003ca name=\"FNanchor_57_57\" id=\"FNanchor_57_57\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_57_57\" class=\"fnanchor\"\u003e57\u003c/a\u003e and these bank notes of one week’s\r\nlabor, one day’s labor, one hour’s labor, etc., serve at the\r\nsame time as a check for an equivalent in all other\r\ncommodities stored in the bank warehouses.\u003ca name=\"FNanchor_58_58\" id=\"FNanchor_58_58\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_58_58\" class=\"fnanchor\"\u003e58\u003c/a\u003e This is\r\nthe fundamental principle carefully worked out in detail\r\nand based throughout on existing English institu\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_104\" id=\"Page_104\"\u003ePg 104\u003c/a\u003e\u003c/span\u003etions.\r\nUnder this system, says Gray, “to sell for money\r\nmay be rendered, at all times, precisely as easy as it now\r\nis to buy with money; … production would become\r\nthe uniform and never-failing cause of demand.”\u003ca name=\"FNanchor_59_59\" id=\"FNanchor_59_59\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_59_59\" class=\"fnanchor\"\u003e59\u003c/a\u003e\r\nThe precious metals would lose their “privilege” as\r\nagainst other commodities and “take their proper place\r\nin the market beside butter and eggs, and cloth and\r\ncalico, and then the value of the precious metals will\r\nconcern us just as little … as the value of the\r\ndiamond.”\u003ca name=\"FNanchor_60_60\" id=\"FNanchor_60_60\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_60_60\" class=\"fnanchor\"\u003e60\u003c/a\u003e “Shall we retain our fictitious standard of\r\nvalue, gold, and thus keep the productive resources of\r\nthe country in bondage? or, shall we resort to the natural\r\nstandard of value, labour, and thereby set our productive\r\nresources free?”\u003ca name=\"FNanchor_61_61\" id=\"FNanchor_61_61\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_61_61\" class=\"fnanchor\"\u003e61\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eLabor-time being the intrinsic measure of value, why\r\nshould there be another external measure side by side\r\nwith it? Why does exchange value develop into price?\r\nWhy do all commodities estimate their value in one exclusive\r\ncommodity, which is thus converted into a special\r\nembodiment of exchange value into money? That\r\nwas the problem which Gray had to solve. Instead of\r\nsolving it, he imagined that commodities could be related\r\ndirectly to each other as products of social labor.\r\nBut they can relate to each other only in their capacity\r\nof commodities. Commodities are the direct products\r\nof isolated independent private labors, which have to\r\nbe realized as universal social labor through their alienation\r\nin the process of private exchange, that is to say,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_105\" id=\"Page_105\"\u003ePg 105\u003c/a\u003e\u003c/span\u003elabor based on the production of commodities becomes\r\nsocial labor only through universal alienation of individual\r\nlabors. But by assuming that the labor-time contained\r\nin commodities is \u003ci\u003edirectly social\u003c/i\u003e labor-time, Gray\r\nassumes it to be common labor-time or labor-time of directly\r\nassociated individuals. Under such conditions a\r\nspecific commodity like gold or silver could not confront\r\nother commodities as the incarnation of universal\r\nlabor, and exchange value would not be turned into\r\nprice; but, on the other hand, use-value would not become\r\nexchange value, products would not become commodities\r\nand thus the very foundation of the capitalistic\r\nsystem of production would be removed. But that\r\nis not what Gray has in mind. \u003ci\u003eProducts are to be produced\r\nas commodities, but are not to be exchanged as\r\ncommodities.\u003c/i\u003e He entrusts a national bank with the\r\ncarrying out of this pious wish. On the one hand,\r\nsociety, through the bank, makes individuals independent\r\nof the conditions of private exchange, and on the\r\nother, it allows them to go on producing on the basis\r\nof private exchange. The logic of things, however,\r\ncompels Gray to do away with one condition of capitalistic\r\nproduction after another, although he wishes\r\nto “reform” only the money system which results from\r\nthe exchange of commodities. Thus he transforms capital\r\ninto national capital,\u003ca name=\"FNanchor_62_62\" id=\"FNanchor_62_62\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_62_62\" class=\"fnanchor\"\u003e62\u003c/a\u003e land into national property,\u003ca name=\"FNanchor_63_63\" id=\"FNanchor_63_63\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_63_63\" class=\"fnanchor\"\u003e63\u003c/a\u003e\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_106\" id=\"Page_106\"\u003ePg 106\u003c/a\u003e\u003c/span\u003eand if his bank is to be watched closely, it will be found\r\nthat it not only receives commodities with one hand and\r\nissues certificates for work delivered with the other, but\r\nthat it regulates production as well. In his last work,\r\n“Lectures on Money,” in which Gray is anxious to demonstrate\r\nthat his labor-money is a purely bourgeois reform,\r\nhe gets tangled up in even more glaring contradictions.\u003c/p\u003e\r\n\r\n\u003cp\u003eEvery commodity is directly money. That was Gray’s\r\ntheory deducted from his incomplete and, therefore,\r\nfalse analysis of commodities. The “organic” structure\r\nof “labor money,” the “national bank” and the “ware-docks”\r\nare mere fantastic visions in which the dogma\r\nis made by a legerdemain to appear to us as a universal\r\nlaw. The dogma that a commodity is money or that\r\nthe isolated labor of the individual contained in it\r\nis direct social labor, will of course not become true\r\nthrough the mere fact that a bank believes in it and\r\ncarries on operations accordingly. It is more likely that\r\nbankruptcy would play in that case the part of the practical\r\ncritic. What remains concealed in Gray’s writings\r\nand hidden from himself as well, namely, that labor-money\r\nis a well-sounding economic phrase for the pious\r\nwish to get rid of money, and with money, of exchange\r\nvalue, and with exchange value, of commodities, and\r\nwith commodities, of the capitalistic mode of production,\r\nwas clearly expressed by some English socialists\r\nof whom a few preceded and others followed Gray.\u003ca name=\"FNanchor_64_64\" id=\"FNanchor_64_64\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_64_64\" class=\"fnanchor\"\u003e64\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_107\" id=\"Page_107\"\u003ePg 107\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eBut it remained for Mr. Proudhon and his school to\r\npreach in all earnest the degradation of \u003ci\u003emoney\u003c/i\u003e and the\r\nexaltation of the \u003ci\u003ecommodity\u003c/i\u003e as the gist of socialism and\r\nthus to reduce socialism to an elementary misconception\r\nof the necessary connection between commodity\r\nand money.\u003ca name=\"FNanchor_65_65\" id=\"FNanchor_65_65\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_65_65\" class=\"fnanchor\"\u003e65\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003ch4\u003e2. THE MEDIUM OF CIRCULATION.\u003c/h4\u003e\r\n\r\n\u003cp\u003eAfter the commodity has received in the process of\r\nprice determination the form in which it becomes capable\r\nof circulation, and after gold has acquired the character\r\nof money in the same process, circulation will both\r\npresent and solve the contradictions which are inherent\r\nin the process of exchange of commodities. The actual\r\nexchange of commodities, i.\u0026nbsp;e., the social interchange of\r\nmatter consists of a change of form in which is unfolded\r\nthe double character of the commodity as use-value and\r\nexchange value, and at the same time its own change of\r\nform is crystallized in distinct forms of money. To describe\r\nthis change of form is to describe circulation. As\r\nwe have seen, given a world of commodities and with it\r\na system of division of labor, commodity is but a developed\r\nform of exchange value; in the same manner, circulation\r\nimplies a steady stream of exchange transactions\r\nwhich are being continually renewed on all sides.\r\nThe second assumption we make is that commodities\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_108\" id=\"Page_108\"\u003ePg 108\u003c/a\u003e\u003c/span\u003eenter the process of exchange with a \u003ci\u003edefinite price\u003c/i\u003e or\r\nthat they appear to each other in that process in a\r\ndouble capacity, really as use-values, ideally\u0026mdash;in price\u0026mdash;as\r\nexchange values.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe liveliest streets of London are crowded with\r\nstores whose show windows are filled with the riches\r\nof the world, Indian shawls, American revolvers, Chinese\r\nporcelain, Parisian corsets, Russian furs and tropical\r\nspices, but all of these things of joy bear fatal\r\nwhite labels marked with Arabian figures with the laconic\r\ncharacters £, s., d. Such is the picture of the\r\ncommodity appearing in circulation.\u003c/p\u003e\r\n\r\n\u003ch5\u003ea. THE METAMORPHOSIS OF COMMODITIES.\u003c/h5\u003e\r\n\r\n\u003cp\u003eOn close examination the process of circulation is\r\nseen to consist of two distinct cycles. If we denote\r\ncommodity by the letter C and money by the letter M\r\nwe can express these two forms as follows:\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\nC\u0026mdash;M\u0026mdash;C\u003cbr /\u003e\r\nM\u0026mdash;C\u0026mdash;M.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003eIn this chapter we are interested exclusively in the\r\nfirst form, i.\u0026nbsp;e., in the form which serves as the direct\r\nexpression of the circulation of commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe process C\u0026mdash;M\u0026mdash;C consists of the movement\r\nC\u0026mdash;M, the exchange of the commodity for money, or\r\n\u003ci\u003eselling\u003c/i\u003e; the opposite movement M\u0026mdash;C, exchange of\r\nmoney for a commodity, or \u003ci\u003ebuying\u003c/i\u003e; and of the unity of\r\nthe two movements C\u0026mdash;M\u0026mdash;C, exchange of the commodity\r\nfor money in order to exchange the money for\r\na commodity, or \u003ci\u003eselling\u003c/i\u003e in order to \u003ci\u003ebuy\u003c/i\u003e. But the result\r\nwhich marks the end of the process is C\u0026mdash;C, exchange\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_109\" id=\"Page_109\"\u003ePg 109\u003c/a\u003e\u003c/span\u003e\r\nof commodity for commodity, real interchange of matter.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf we look at it from the extreme end of the first\r\ncommodity, C\u0026mdash;M\u0026mdash;C represents its transformation into\r\ngold and its retransformation from gold into a commodity;\r\na movement in which the commodity exists\r\nfirst as a particular use-value, then divests itself of that\r\ncharacter, acquires the character of exchange value or\r\nuniversal equivalent, in which capacity it has nothing\r\nin common with its natural form, then throws off the\r\nlast form as well to remain finally an actual use-value\r\nfor the satisfaction of particular wants. In this last\r\nform it falls out of the sphere of circulation into that\r\nof consumption. The entire process of circulation\r\nC\u0026mdash;M\u0026mdash;C thus includes the combined series of metamorphoses,\r\nwhich every single commodity undergoes\r\nin order to become a direct use-value to its possessor.\r\nThe first metamorphosis is accomplished in the first\r\nphase of the circulation process, C\u0026mdash;M; the second in\r\nthe last phase, M\u0026mdash;C; and the entire process constitutes\r\nthe \u003ci\u003ecurriculum vitae\u003c/i\u003e of the commodity. But the\r\nprocess C\u0026mdash;M\u0026mdash;C represents the combined metamorphosis\r\nof a single commodity and constitutes at the\r\nsame time the sum of certain one-sided metamorphoses\r\nof other commodities, since every metamorphosis of\r\nthe first commodity constitutes its transformation into\r\nanother commodity and therefore the transformation of\r\nthe other commodity into it; hence it constitutes a twofold\r\ntransformation which takes place at the same\r\nstage of circulation. We must then consider separately\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_110\" id=\"Page_110\"\u003ePg 110\u003c/a\u003e\u003c/span\u003e\r\neach of the two processes of exchange into which circulation\r\nC\u0026mdash;M\u0026mdash;C breaks up.\u003c/p\u003e\r\n\r\n\u003cp\u003eC\u0026mdash;M or \u003ci\u003esale\u003c/i\u003e: commodity C enters the process of circulation\r\nnot only as a particular use-value, e. g., a ton\r\nof iron, but as a use-value of a certain price, say, £3\r\n17s. 10-1/2d., or an ounce of gold. While this price is on\r\nthe one hand the exponent of the quantity of labor-time\r\ncontained in a ton of iron, i.\u0026nbsp;e., of the magnitude of its\r\nvalue, it at the same time expresses the pious wish of\r\nthe iron to become gold, i.\u0026nbsp;e., to give to the labor-time\r\nit contains the aspect of universal social labor-time.\r\nUnless this trans-substantiation takes place, the ton of\r\niron not only ceases to be a commodity, but even a product,\r\nfor it is a commodity only because it is a non-use-value\r\nto its owner; that is to say, his labor counts as\r\nactual labor only in so far as it is labor useful to others,\r\nand the thing is useful to him only as abstract universal\r\nlabor. It is, therefore, the business of iron, or of its\r\nowner, to find that point in the world of commodities\r\nwhere iron attracts gold. But this difficulty, the \u003ci\u003esalto\r\nmortale\u003c/i\u003e of the commodity, is overcome when the sale\r\nactually takes place, as is assumed here on the analysis\r\nof simple circulation. When the ton of iron is realized\r\nas a use-value through its alienation, i.\u0026nbsp;e., by passing\r\nfrom the hands in which it is a non-use-value to hands\r\nin which it is a use-value, it at the same time realizes\r\nits price and from mere imaginary gold it becomes real\r\ngold. In place of the name one ounce of gold or £3 17s.\r\n10-1/2d., an ounce of real gold has appeared, but the ton\r\nof iron has cleared that place. Not only does the commodity\u0026mdash;which\r\nin its price had been ideally converted\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_111\" id=\"Page_111\"\u003ePg 111\u003c/a\u003e\u003c/span\u003e\r\ninto gold\u0026mdash;actually turn into gold through the sale\r\nC\u0026mdash;M, but gold, which as a measure of value had been\r\nonly ideal money and in fact figured merely as a money\r\nname of commodities\u0026mdash;is now turned into actual\r\nmoney\u003ca name=\"FNanchor_66_66\" id=\"FNanchor_66_66\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_66_66\" class=\"fnanchor\"\u003e66\u003c/a\u003e by the same process. Just as gold became\r\nthe ideal universal equivalent, because all commodities\r\nmeasured their values by it, so does it\r\nnow become the absolutely alienable commodity, real\r\nmoney, because it is the product of the universal\r\nalienation of commodities for it\u0026mdash;and the sale C\u0026mdash;M\r\nis the process by means of which that universal alienation\r\ntakes place. But gold becomes real money only\r\nthrough sale, because the exchange values of commodities\r\nwere already ideal gold in their prices.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the sale C\u0026mdash;M, as well as in the purchase M\u0026mdash;C,\r\ntwo commodities, entities of exchange value and use-value,\r\nconfront each other, but the exchange value of\r\nthe commodity exists only ideally as price; while as regards\r\ngold, although it is really a use-value, its use-\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_112\" id=\"Page_112\"\u003ePg 112\u003c/a\u003e\u003c/span\u003evalue\r\nis confined only to its being the bearer of exchange\r\nvalue and is, therefore, merely a formal use-value,\r\nhaving no relation to a real individual want. The\r\nantithesis of use-value and exchange value is thus distributed\r\nat the two extreme poles of C\u0026mdash;M, so that the\r\ncommodity confronts gold as a use-value which has yet\r\nto realize in gold its exchange value or its price, while\r\ngold confronts the commodity as an exchange value,\r\nwhose formal use-value is yet to be realized in the commodity.\r\nOnly through this duplication of the commodity\r\nas commodity and gold, and, further, through\r\nthe twofold and polar relation by virtue of which each\r\nextreme represents but ideally what its opposite is in\r\nreality and is in reality what its opposite is only ideally\u0026mdash;in\r\nshort, only through the appearance of commodities\r\nas two-sided polar opposites are the contradictions\r\nsolved that are inherent in the process of exchange.\u003c/p\u003e\r\n\r\n\u003cp\u003eSo far we have considered C\u0026mdash;M as sale, as the conversion\r\nof commodity into money. But if we look at it\r\nfrom the other end, the same process will assume the\r\nform M\u0026mdash;C, or purchase, i.\u0026nbsp;e., the conversion of money\r\ninto commodity. Sale is necessarily its opposite at the\r\nsame time; it is the former if we look at the process\r\nfrom one end, and the latter if we regard the process\r\nfrom the other end. In practice this process differs\r\nonly in that the initiative in C\u0026mdash;M originates at the\r\ncommodity end or with the seller, while in M\u0026mdash;C it\r\ncomes from the money end or the buyer. In describing\r\nthe first metamorphosis of the commodity, its conversion\r\ninto money as a result of the completion of the\r\nfirst phase of circulation C\u0026mdash;M, we assume at the same\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_113\" id=\"Page_113\"\u003ePg 113\u003c/a\u003e\u003c/span\u003e\r\ntime that another commodity has been converted into\r\nmoney and is now in its second phase of circulation,\r\nM\u0026mdash;C. Thus we get into a vicious circle of assumptions.\r\nCirculation itself constitutes such a vicious circle. If\r\nwe did not consider M in M\u0026mdash;C as the result of a metamorphosis\r\nof another commodity, we would thereby\r\ntake exchange out of the process of circulation. But\r\noutside of the latter the form C\u0026mdash;M disappears and only\r\ntwo different Cs confront each other, say iron and gold,\r\nthe exchange of which does not constitute a part of the\r\nprocess of circulation, being direct barter. Gold, at\r\nthe source of its production, is a commodity like any\r\nother commodity. Its relative value and that of iron\r\nor of any other commodity is expressed here in quantities\r\nin which they are mutually exchanged. But in the\r\nprocess of circulation this operation is implied, the\r\nvalue of gold being already given in the prices of commodities.\r\nNothing can, therefore, be more erroneous\r\nthan the idea that gold and commodity enter into the\r\nrelation of direct barter \u003ci\u003ewithin the process of circulation\u003c/i\u003e\r\nand that their relative values are ascertained\r\nthrough their exchange as simple commodities. The\r\nillusion that gold is bartered as a simple commodity\r\nfor other commodities in the process of circulation is\r\ndue to the fact that prices represent equations in which\r\ncertain quantities of commodities are made equal to\r\ncertain quantities of gold, i.\u0026nbsp;e., that the commodities are\r\nmade to relate to gold in its capacity of money, as a\r\nuniversal equivalent, and, therefore, appear to be directly\r\nexchangeable for it. In so far as the price of a\r\ncommodity is \u003ci\u003erealized\u003c/i\u003e in gold, it is exchanged for\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_114\" id=\"Page_114\"\u003ePg 114\u003c/a\u003e\u003c/span\u003e\r\ngold as a commodity, as a particular embodiment of\r\nlabor-time; but in so far as it is the \u003ci\u003eprice\u003c/i\u003e that is realized\r\nin gold, the commodity is exchanged for gold in\r\nits capacity of money and not of a commodity, i.\u0026nbsp;e., it is\r\nexchanged for gold as a universal embodiment of labor-time.\r\nBut in either case the quantity of gold for which\r\nthe commodity is exchanged in the process of circulation\r\nis not determined by exchange, but the exchange\r\nis determined by the price of the commodity, i.\u0026nbsp;e., by\r\nits exchange value estimated in gold.\u003ca name=\"FNanchor_67_67\" id=\"FNanchor_67_67\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_67_67\" class=\"fnanchor\"\u003e67\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWithin the process of circulation gold appears in\r\neverybody’s hands as the result of sale C\u0026mdash;M. But since\r\nC\u0026mdash;M, sale, is at the same time M\u0026mdash;C, purchase, it is\r\napparent that while C, the commodity from which the\r\nprocess starts, is passing through its first metamorphosis,\r\nanother commodity, which confronts it as the opposite\r\npole M, is completing its second metamorphosis and is,\r\ntherefore, passing through the second phase of circulation,\r\nwhile the first commodity is still in the first phase\r\nof its course.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs a result of the first phase of circulation, the sale,\r\nwe get money which is the starting point of the second\r\nphase. In place of the commodity in its first form appears\r\nits golden equivalent. This result may now form\r\na resting point, since the commodity in this second form\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_115\" id=\"Page_115\"\u003ePg 115\u003c/a\u003e\u003c/span\u003epossesses a lasting existence of its own. The commodity,\r\na non-use-value in the hands of its possessor, is now\r\non hand in an always useful, since always exchangeable,\r\nform, and it depends upon circumstances when and at\r\nwhat point of the surface of the commodity world it\r\nwill again enter circulation. Its formation into a gold\r\nchrysalis constitutes an independent period in its life\r\nwhich may last a greater or less length of time. While\r\nin the case of barter the exchange of one particular use-value\r\nis directly bound up with the exchange of another\r\nparticular use-value, the universal character of labor\r\nwhich creates exchange value is manifested in the separation\r\nand lack of coincidence of acts of purchase and\r\nsale.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eM\u0026mdash;C, purchase\u003c/i\u003e, is the inverted movement of C\u0026mdash;M\r\nand at the same time the second or final metamorphosis\r\nof the commodity. As gold, i.\u0026nbsp;e., in the form of the universal\r\nequivalent, the commodity can be directly represented\r\nin the use-values of all other commodities; the\r\nlatter aspire to gold as their hereafter, but at the same\r\ntime indicate in their prices the key in which it must\r\nsound in order that their bodies, their use-values, may\r\ntake the place of money, while their souls, their exchange-values,\r\nmay enter gold. The universal product\r\nof the alienation of commodities is the absolutely alienable\r\ncommodity. There is no qualitative and only a\r\nquantitative limit to the transformation of gold into\r\ncommodity, namely, the limit of its own quantity or\r\nmagnitude of its value. “Everything is to be had for\r\ncash.” While in the movement C\u0026mdash;M, the commodity,\r\nthrough its alienation as a use-value, realizes its own\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_116\" id=\"Page_116\"\u003ePg 116\u003c/a\u003e\u003c/span\u003e\r\nprice and the use-value of somebody else’s money; it\r\nrealizes in the movement M\u0026mdash;C, through its alienation\r\nas an exchange value, its own use-value and the price\r\nof the other commodity. While through the realization\r\nof its price the commodity transforms gold into actual\r\nmoney, it turns gold into its merely fleeting money-form,\r\nthrough its own retransformation. Since the\r\ncirculation of commodities implies an extensive division\r\nof labor and consequently a diversity of wants on the\r\npart of individuals, a diversity which bears an inverse\r\nratio to the specialization of their own products, the\r\npurchase M\u0026mdash;C may appear as an equation with one commodity\r\nequivalent or split up into a series of commodity-equivalents\r\nlimited by the variety of the demands of the\r\npurchaser and by the amount of money in his possession.\r\nJust as a sale is a purchase, so is a purchase a sale. M\u0026mdash;C\r\nis at the same time C\u0026mdash;M, but the initiative belongs in\r\nthis case to gold or the purchaser.\u003c/p\u003e\r\n\r\n\u003cp\u003eComing back now to C\u0026mdash;M\u0026mdash;C, or to circulation as\r\na whole, it is apparent that it contains the combined\r\nseries of metamorphoses through which a commodity\r\npasses. But at the same time as one commodity enters\r\nthe first phase of its circulation and completes its first\r\nmetamorphosis, another commodity enters the second\r\nphase of circulation, completes its second metamorphosis\r\nand falls out of circulation; the first commodity enters\r\nat the same time the second phase of circulation completes\r\nits second metamorphosis and falls out of circulation,\r\nwhile a third commodity enters circulation,\r\npasses through the first phase of its course completing\r\nthe first metamorphosis.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_117\" id=\"Page_117\"\u003ePg 117\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThus, the combined circulation C\u0026mdash;M\u0026mdash;C, as a complete\r\nmetamorphosis of a commodity always constitutes\r\nat the same time the end of the complete metamorphosis\r\nof another commodity and the beginning of a\r\ncomplete metamorphosis of a third commodity, i.\u0026nbsp;e., a\r\nseries without beginning or end. To illustrate this let\r\nus call C in either extreme C’ and C” respectively, in\r\norder to distinguish the commodities, the series reading\r\nthus: C’\u0026mdash;M\u0026mdash;C”. The first member, C’\u0026mdash;M, presupposes\r\nin fact that M is the result of another transaction\r\nC\u0026mdash;M, and is thus itself merely the last member\r\nof a series C\u0026mdash;M\u0026mdash;C’, while the second part M\u0026mdash;C” is\r\nmerely a result of C”\u0026mdash;M, or appears as the first part\r\nof C”\u0026mdash;M\u0026mdash;C’”, and so on. Furthermore, although M is\r\nthe result of only \u003ci\u003eone\u003c/i\u003e sale, it appears that the last part\r\nM\u0026mdash;C, may be represented as M\u0026mdash;C’ + M\u0026mdash;C” +\r\nM\u0026mdash;C’”, etc., i.\u0026nbsp;e., it may be split up into a number of\r\npurchases, and consequently a number of sales, or into\r\na number of first members of new complete metamorphoses\r\nof commodities. Since the complete metamorphosis\r\nof a single commodity thus appears as a link not\r\nonly of one endless chain of metamorphoses, but of\r\nmany such chains, the process of circulation in the world\r\nof commodities presents a hopeless confusion of intertwined\r\nmovements constantly ending and starting anew\r\nat a countless number of points. But every single sale\r\nor purchase stands as an independent isolated act, whose\r\nsupplemental act may be separated from it in time and\r\nplace, and therefore does not need to follow it directly\r\nas its continuation. Every separate process of circulation,\r\nC\u0026mdash;M or M\u0026mdash;C, as a transformation of one com\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_118\" id=\"Page_118\"\u003ePg 118\u003c/a\u003e\u003c/span\u003emodity\r\ninto use-value and of another into money, i.\u0026nbsp;e.,\r\nas the first and second phases of circulation respectively\r\nforms an independent halting point from either direction;\r\nbut, on the other hand, all commodities commence\r\ntheir second metamorphosis in the common form\r\nof the universal equivalent, gold, and stop at the starting\r\npoint of the second phase of circulation; for that,\r\nreason any M\u0026mdash;C dovetails in actual circulation with\r\nany C\u0026mdash;M; the second chapter in the life-course of\r\none commodity with the first chapter of that of another\r\ncommodity. A, e. g., sells £2 worth of iron. He thus\r\ncompletes the transaction C\u0026mdash;M or the first metamorphosis\r\nof commodity iron, but postpones his purchase\r\nuntil some other time. At the same time B, who sold\r\n2 quarters of wheat for £6 a fortnight since, buys with\r\nthe same £6 a coat and trousers of Moses \u0026amp; Son, thus\r\ncompleting M\u0026mdash;C or the second metamorphosis of the\r\ncommodity, wheat.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe two transactions M\u0026mdash;C and C\u0026mdash;M appear here\r\nmerely as links of one chain, because a commodity expressed\r\nin gold looks like any other commodity, and\r\none cannot tell by the looks of the gold whether it is\r\ntransformed iron or transformed wheat. C\u0026mdash;M\u0026mdash;C appears,\r\ntherefore, in the actual process of circulation as\r\na jumble of countless accidentally coinciding or successively\r\nfollowing members of different complete metamorphoses.\r\nThe actual process of circulation thus appears\r\nnot as a complete metamorphosis of a commodity,\r\nnot as its movement through opposite phases, but as a\r\nmere agglomeration of many accidentally coinciding or\r\nsuccessive purchases and sales. The process thus loses\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_119\" id=\"Page_119\"\u003ePg 119\u003c/a\u003e\u003c/span\u003e\r\nall clearness of outline which is so much more the case\r\nsince every single act of circulation, e. g., sale, is at the\r\nsame time its opposite, purchase, and vice versa. On the\r\nother hand, the process of circulation is nothing but\r\nthe movement of metamorphoses in the world of commodities\r\nand, therefore, must reflect them also in its\r\nmovement as a whole. How that reflection takes place\r\nwe shall consider in the following chapter. It may be\r\nadded here that in C\u0026mdash;M\u0026mdash;C the two extreme Cs constitute\r\ntwo forms of commodities which do not bear the\r\nsame relation to M. The first C relates to money as a\r\ncommodity of a special class to a universal commodity,\r\nwhile money relates to the second C as a universal commodity\r\nto an individual commodity. C\u0026mdash;M\u0026mdash;C can,\r\ntherefore, be reduced by abstract logic to the final form\r\nS\u0026mdash;U\u0026mdash;I in which S, standing for species, forms the\r\nfirst extreme; U, signifying universality, forms the\r\nconnecting medium, and I, individuality, constitutes\r\nthe last extreme.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe owners of commodities entered the sphere of\r\ncirculation simply as guardians of commodities. Within\r\nthat sphere they confront each other in the opposite\r\nroles of buyer and seller, one as a personified sugar-loaf,\r\nthe other as personified gold. As soon as the sugar-loaf\r\nis turned into gold, the seller becomes a buyer.\r\nThese definite social functions are no outgrowths of\r\nhuman nature, but are the products of relations of exchange\r\nbetween men who produce their goods in the\r\nform of commodities. They are so far from being purely\r\nindividual relations between buyer and seller that\r\nboth enter this relation only to the extent that their\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_120\" id=\"Page_120\"\u003ePg 120\u003c/a\u003e\u003c/span\u003e\r\nindividual labor is disregarded and is turned into money\r\nas labor of \u003ci\u003eno\u003c/i\u003e individual. Just as it is, therefore, childish\r\nto consider these economic bourgeois roles of buyer\r\nand seller as eternal social forms of human individuality,\r\nso it is on the other hand, preposterous to lament\r\nin them the extinction of individuality.\u003ca name=\"FNanchor_68_68\" id=\"FNanchor_68_68\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_68_68\" class=\"fnanchor\"\u003e68\u003c/a\u003e They are the\r\nnecessary manifestations of individuality at a certain\r\nstage of the social system of production. Moreover, in\r\nthe opposition of buyer and seller the antagonistic nature\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_121\" id=\"Page_121\"\u003ePg 121\u003c/a\u003e\u003c/span\u003eof capitalistic production is expressed as yet so superficially\r\nand as mere matter of form, that this opposition\r\nbelongs also to precapitalistic forms of society, since it\r\nmerely requires that the mutual relations of individuals\r\nshould be those of owners of commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eNow, if we consider the result of C\u0026mdash;M\u0026mdash;C, it comes\r\ndown to mere interchange of matter, C\u0026mdash;C. A commodity\r\nhas been exchanged for a commodity, a use-value\r\nfor a use-value, and the transformation of the\r\ncommodity into money, or the commodity in its form of\r\nmoney, serves merely as a means of effecting this interchange\r\nof matter. Money thus appears merely as a\r\n\u003ci\u003emedium of exchange\u003c/i\u003e of commodities; not as a medium\r\nof exchange in general, but as a means of exchange in\r\nthe sphere of circulation, i.\u0026nbsp;e., a \u003ci\u003emedium of circulation\u003c/i\u003e.\u003ca name=\"FNanchor_69_69\" id=\"FNanchor_69_69\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_69_69\" class=\"fnanchor\"\u003e69\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_122\" id=\"Page_122\"\u003ePg 122\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that the process of circulation of commodities\r\ncomes to a completion in C\u0026mdash;C, appearing as\r\nmere barter carried on by means of money; further,\r\nthat C\u0026mdash;M\u0026mdash;C represents in general not only two isolated\r\nprocesses, but their dynamic union as well; but\r\nto draw from that the conclusion that purchase and sale\r\nform an indivisible unit, is a mode of thinking the criticism\r\nof which belongs to the domain of logic, and not\r\nto that of economics. The separation of purchase and\r\nsale in the process of exchange destroys all local, primitive,\r\npatriarchal and naively genial barriers to interchange\r\nof matter in society. It is, moreover, the general\r\nform of the separation of the points of coincidence\r\nand opposition in this interchange, carrying within it\r\nthe possibility of commercial crises, because the antagonism\r\nof commodity and money is the abstract and\r\ngeneral form of all antagonisms with which the capitalistic\r\nsystem of labor is pregnant. Hence, circulation\r\nof money is possible without crises, but crises can not\r\noccur without money circulation. In other words, where\r\nlabor based on the system of private exchange has not\r\nreached the stage marked by the existence of money,\r\nit is less capable of producing those phenomena which\r\npresuppose the full development of the capitalistic\r\nmode of production. Bearing this in mind we can\r\nappreciate the depth of the criticism which proposes to\r\ndo away with the “shortcomings” of capitalistic production\r\nby abolishing the “privilege” enjoyed by the\r\nprecious metals and introducing a so-called “rational\r\nmonetary system.” As a sample of economic defence\r\nof an opposite character may serve the following piece\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_123\" id=\"Page_123\"\u003ePg 123\u003c/a\u003e\u003c/span\u003e\r\nof reasoning which has been proclaimed exceedingly\r\nkeen. JAMES MILL, the father of the well-known\r\nEnglish economist, John Stuart Mill, says: “Whatever\r\n… be the amount of the annual produce, it never\r\ncan exceed the amount of the annual demand….\r\nOf two men who perform an exchange, the one does\r\nnot come with only a supply, the other with only a demand;\r\neach of them comes with both a demand and a\r\nsupply…. The supply which he brings is the\r\ninstrument of his demand; and his demand and supply\r\nare of course exactly equal to one another. It is therefore,\r\nimpossible that there should ever be in any country\r\na commodity or commodities in quantity greater\r\nthan the demand, without there being, to an equal\r\namount, some other commodity or commodities in quantity\r\nless than the demand.”\u003ca name=\"FNanchor_70_70\" id=\"FNanchor_70_70\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_70_70\" class=\"fnanchor\"\u003e70\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_124\" id=\"Page_124\"\u003ePg 124\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eMill restores the balance by turning the process of\r\ncirculation into direct barter and then smuggling into\r\ndirect barter the character of buyer and seller borrowed\r\nby him from the process of circulation. To put it in\r\nhis own confused language, during certain periods when\r\nall commodities are unsaleable there are really more\r\nbuyers than sellers of one commodity, \u003ci\u003emoney\u003c/i\u003e, and more\r\nsellers than buyers of \u003ci\u003eall other money\u003c/i\u003e, commodities;\r\nsuch was, e. g., the case at certain moments during the\r\ncommercial crisis of 1857-58 in London and Hamburg.\r\nThe metaphysical balance of purchases and sales amounts\r\nto this, that every purchase is a sale and every sale is a\r\npurchase, which is a poor consolation to the guardian of\r\nthe commodity who can not bring about its sale and\r\ntherefore can not buy.\u003ca name=\"FNanchor_71_71\" id=\"FNanchor_71_71\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_71_71\" class=\"fnanchor\"\u003e71\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe separation of sale and purchase makes possible\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_125\" id=\"Page_125\"\u003ePg 125\u003c/a\u003e\u003c/span\u003ea large number of fictitious transactions side by side\r\nwith genuine trade before the final exchange between\r\nthe producer and the consumer of commodities takes\r\nplace. It enables a host of parasites to penetrate the\r\nprocess of production and exploit the separation. But\r\nthis, again, means that with money as the universal\r\nform of labor under the capitalist system, there is \u003ci\u003ethe\r\npossibility\u003c/i\u003e of the development of its contradictions.\u003c/p\u003e\r\n\r\n\u003ch5\u003eb. THE CIRCULATION OF MONEY.\u003c/h5\u003e\r\n\r\n\u003cp\u003eActual circulation appears at first sight as a mass\r\nof purchases and sales accidentally taking place side by\r\nside. In buying as in selling, commodities and money\r\nalways stand in the same mutual relation: the seller, on\r\nthe side of the commodity; the buyer, on that of money.\r\nMoney as a medium of circulation always appears therefore\r\nas \u003ci\u003ea means of purchase\u003c/i\u003e; and in that way the\r\ndifference in its destinations in the opposite phases of\r\nthe metamorphosis of the commodity becomes indistinguishable.\u003c/p\u003e\r\n\r\n\u003cp\u003eMoney passes into the hands of the seller in the\r\nsame transaction in which the commodity passes into\r\nthe hands of the buyer. Commodities and money\r\nthus flow in opposite directions and this change\r\nof place in which the commodity passes over to one\r\nside and money to the other side, occurs simultaneously\r\nat an indefinitely large number of points on the\r\nentire surface of bourgeois society. But the first\r\nstep which the commodity makes in the sphere of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_126\" id=\"Page_126\"\u003ePg 126\u003c/a\u003e\u003c/span\u003e\r\ncirculation is also its last step.\u003ca name=\"FNanchor_72_72\" id=\"FNanchor_72_72\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_72_72\" class=\"fnanchor\"\u003e72\u003c/a\u003e Whether it leaves its\r\nplace on account of its attraction for gold (C\u0026mdash;M), or\r\non account of its attraction by gold (M\u0026mdash;C), with one\r\nmove, with one change of place it falls out of the sphere\r\nof circulation into that of consumption. Circulation is\r\na continuous flow of commodities, but different commodities\r\nall the time, since each commodity makes but\r\none move. Every commodity enters upon the second\r\nphase of its circulation not as the same commodity, but\r\nas another commodity, gold. Hence the movement of a\r\nmetamorphosed commodity is the movement of gold.\r\nThe same piece of gold or the identical gold coin which\r\nchanged places with one commodity in the act C\u0026mdash;M,\r\nreappears from the opposite end as the starting point\r\nfor M\u0026mdash;C and thus changes places for the second time\r\nwith another commodity. Just as it passed from the\r\nhands of buyer B into those of seller A, it now leaves\r\nA’s hands who has become a buyer and passes into C’s\r\nhands. The path described by a commodity in its transformation\r\ninto money and its retransformation from\r\nmoney, i.\u0026nbsp;e., the movement of a complete metamorphosis\r\nof a commodity assumes the aspect of an apparent\r\nmovement of the same coin that changes places twice\r\nwith two different commodities. No matter in how\r\nscattered and haphazard fashion purchases and sales may\r\ntake place near each other, there is always in actual\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_127\" id=\"Page_127\"\u003ePg 127\u003c/a\u003e\u003c/span\u003ecirculation a seller for each buyer and the money which\r\nmoves into the place of the commodity sold, before it\r\ncame into the hands of the buyer, must have already\r\nchanged places with another commodity. Sooner or\r\nlater it again leaves the hands of the seller, who turns\r\nbuyer, to pass into the hands of a new seller and this\r\nfrequently repeated change of place forms the interlacing\r\nof the metamorphoses of commodities. The same\r\ncoins are moving, some more, others less frequently, from\r\none place in the sphere of circulation to another, always\r\nin the direction opposite to that of the commodities\r\nmoved, thus describing a longer or shorter circulation-curve.\r\nThe different movements of the same coin can follow\r\neach other in point of time only, and on the contrary,\r\nthe many scattered purchases and sales which appear\r\nas so many separate changes of place between commodities\r\nand money, occur simultaneously separated only in\r\npoint of space.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe circulation of commodities C\u0026mdash;M\u0026mdash;C in its elementary\r\nform is completely described in the transition\r\nof money from the hands of the buyer into those of the\r\nseller and from the hands of the latter, as soon as he\r\nhas turned buyer, into those of a new seller. This completes\r\nthe metamorphosis of the commodity and with it\r\nthe movement of money in so far as that movement is\r\nthe expression of the metamorphosis. But since new\r\nuse-values are continually produced in the shape of new\r\ncommodities and must thus be constantly thrown anew\r\ninto circulation, the process C\u0026mdash;M\u0026mdash;C is repeatedly renewed\r\nby the same commodity owners. The money which\r\nthey have spent as buyers gets back into their hands\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_128\" id=\"Page_128\"\u003ePg 128\u003c/a\u003e\u003c/span\u003e\r\nas soon as they appear again as vendors of commodities.\r\nThe constant renewal of the circulation of commodities\r\nfinds its reflection in the continual circulation over the\r\nentire surface of bourgeois society of a quantity of money\r\nwhich, passing from hand to hand, describes at the same\r\ntime a number of different small cycles starting from\r\nnumberless points and returning each to its own starting\r\npoint, to repeat the same movement over again.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe change of form on the part of commodities appears\r\nas a mere change of place on the part of money\r\nand the continuity of the circulation movement is all\r\non the side of money, since the commodity always makes\r\nbut one step in the direction opposite to money, while\r\nthe latter makes in each case the second step for the\r\ncommodity; the entire movement seems, therefore, to\r\nproceed from money, although in the case of a sale the\r\ncommodity draws money out of its place, i.\u0026nbsp;e., it circulates\r\nmoney as much as it is circulated by the latter in\r\nthe case of a purchase. Furthermore, owing to the fact\r\nthat money always confronts commodities in its capacity\r\nof a means of purchase, and in that capacity moves\r\ncommodities only by realizing their price, the entire\r\nmovement of circulation appears as a change of place\r\nbetween money and commodities, the former realizing\r\nthe prices of the latter either by separate acts of\r\ncirculation taking place simultaneously and side by\r\nside, or by successive transactions when the same coin\r\nrealizes the prices of different commodities one after\r\nanother. If we consider, e. g., the series C\u0026mdash;M\u0026mdash;C’\u0026mdash;M\u0026mdash;C”\u0026mdash;M\u0026mdash;C’”,\r\netc., without regard to the qualitative\r\naspects which become indistinguishable in the process\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_129\" id=\"Page_129\"\u003ePg 129\u003c/a\u003e\u003c/span\u003e\r\nof circulation, we witness the same monotonous operation.\r\nAfter realizing the price of C, M successively realizes\r\nthose of C’, C”, etc., and commodities C’, C”,\r\nC’”, etc., constantly take the place which money has left.\r\nMoney thus appears to keep commodities in circulation\r\nby realizing their prices. In discharging this function\r\nof realization of prices, money is itself constantly circulating,\r\nnow changing its place, now describing a curve\r\nof circulation, now completing a small circuit where the\r\nstarting and returning points coincide. As a medium of\r\ncirculation, money is subject to a circulation of its own.\r\nThe change of form of the circulating commodities appears,\r\ntherefore, as a movement of money which furthers\r\nthe exchange of commodities, motionless in themselves.\r\nThe movement of the circulation process of commodities\r\nthus takes on the form of the movement of gold as a\r\nmedium of circulation, i.\u0026nbsp;e. of the \u003ci\u003ecirculation of money\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince owners of commodities give the products of their\r\nindividual labor the appearance of products of social\r\nlabor by turning one object, viz. gold, into the direct\r\nexpression of universal labor-time and therefore into\r\nmoney, their own movement by which all of them effect\r\nthe interchange of the material products of their labor\r\nnow appears to them as the direct movement of that\r\none object, as the circulation of gold. The social movement\r\nitself appears to the owners of commodities partly\r\nas an outward necessity and partly as a mere formal intermediary\r\nprocess which enables every individual who\r\nputs any use-value into circulation to get other use-values\r\nout of it of an equal value. The use-value of\r\ncommodities comes into play with their disappearance\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_130\" id=\"Page_130\"\u003ePg 130\u003c/a\u003e\u003c/span\u003e\r\nfrom the sphere or circulation, while the use-value of\r\nmoney as a medium of circulation is in its very circulation.\r\nThe movement of a commodity in the sphere of\r\ncirculation is of a transitory kind, while ceaseless motion\r\nin that sphere constitutes the function of money.\r\nThrough this special function which it performs within\r\nthe sphere of circulation money acquires a new capacity,\r\nwhich we have to consider now more closely.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the first place, we see that the circulation of money\r\nforms an endlessly split up movement, since it reflects\r\nthe splitting up of the process of circulation into an infinitely\r\nlarge number of purchases and sales and the independent\r\nseparation of the mutually supplementary\r\nphases of metamorphoses of commodities. In the small\r\ncycles described by money, where the starting and returning\r\npoints coincide, we do find a return movement,\r\ni.\u0026nbsp;e., an actual circular movement, but the fact that there\r\nare as many starting points as there are commodities and\r\nthat the number of these cycles is infinitely large puts\r\nthem beyond all control, measurement, or computation.\r\nThe time between the start and the return of a commodity\r\nis just as indefinite. Moreover, it is immaterial\r\nwhether or not such a circuit has been actually described\r\nin a given case. No economic fact is more generally\r\nknown than that one can spend money with one hand\r\nwithout getting it back with the other. Money proceeds\r\nfrom an endless number of points and returns to as many\r\ndifferent points, but the coincidence of the starting and\r\nreturning points is a matter of chance, because in the\r\nmovement C\u0026mdash;M\u0026mdash;C the turning of the buyer again into\r\na seller is not a necessary condition. Still less does the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_131\" id=\"Page_131\"\u003ePg 131\u003c/a\u003e\u003c/span\u003e\r\ncirculation of money resemble a movement radiating\r\nfrom a common centre to all points of the periphery and\r\nback from the peripheral points to the centre. The so-called\r\ncycle described by money, as it is pictured,\r\namounts simply to this, that at all points we observe its\r\nappearance and disappearance, its never ceasing transition\r\nfrom place to place. In a higher, more involved\r\nform of money circulation, e. g. bank-note circulation,\r\nwe shall find that the conditions of emission of money\r\ninclude those for its return. But in the simple money\r\ncirculation it is a matter of chance for the same buyer\r\nto become again a seller. Where we really see constant\r\ncycle motions taking place, they are only reflections of\r\ndeeper forces in the sphere of production, e. g., the manufacturer\r\ndraws money from his banker on Friday, pays\r\nit out to his working-men on Saturday, the men immediately\r\npay out the greater part of it to the storekeepers,\r\netc., and the latter turn it in on Monday back\r\nto the banker.\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that money realizes simultaneously a\r\ncertain number of prices in the variegated purchases and\r\nsales which take place side by side at the same time. On\r\nthe other hand, in so far as its movement represents the\r\nmovement of the combined metamorphoses of commodities\r\nand the interlacing of these metamorphoses, the\r\nsame coin realizes the prices of different commodities\r\nand thus makes a larger or smaller number of\r\nmoves. If we take the circulation of a country for a\r\ngiven length of time, say a day, the quantity of gold\r\nrequired for the realization of prices and, consequently,\r\nfor the circulation of commodities, will be determined\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_132\" id=\"Page_132\"\u003ePg 132\u003c/a\u003e\u003c/span\u003e\r\nby two conditions: first, the sum total of the prices; second,\r\nthe average number of moves made by one coin.\r\nThis number of moves or the rapidity of circulation of\r\nmoney is in its turn determined by or expresses the\r\naverage rapidity with which commodities go through the\r\ndifferent phases of their metamorphoses, the rapidity\r\nwith which these metamorphoses succeed one another,\r\nand with which those commodities that have gone\r\nthrough their metamorphoses are replaced by new commodities\r\nin the process of circulation. We have seen\r\nthat in the process of the determination of prices the\r\nexchange value of all commodities is ideally converted\r\ninto a certain quantity of gold of the same value and\r\nthat the same amount of value is present in a double\r\nform in either of the isolated acts of circulation M\u0026mdash;C\r\nand C\u0026mdash;M, first embodied in the commodity, and second,\r\nin gold; yet gold enjoys the capacity of a medium of circulation\r\nnot by virtue of its isolated relation to separate\r\ncommodities in a state of rest, but owing to its active\r\npresence in the dynamic world of commodities, viz., its\r\nfunction of expressing the change of form of commodities\r\nby its change of place and expressing the rapidity of\r\ntheir change of form by the rapidity of its change of\r\nplace. The extent to which it is present in the sphere\r\nof circulation, i.\u0026nbsp;e., the actual quantity of gold in circulation,\r\nis thus determined by the extent to which it is\r\ndischarging its function throughout the entire process.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe circulation of money implies the circulation of\r\ncommodities; money circulates commodities which have\r\nprices, i.\u0026nbsp;e., which are beforehand ideally equated to certain\r\nquantities of gold. In the determination of the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_133\" id=\"Page_133\"\u003ePg 133\u003c/a\u003e\u003c/span\u003e\r\nprices of commodities, the value of the quantity of gold\r\nwhich serves as a unit of measure, or the value of gold,\r\nis assumed to be given. Under that assumption the\r\nquantity of gold necessary for circulation is determined\r\nfirst of all by the sum total of the prices of commodities\r\nthat are to be realized. But this sum is itself determined:\r\n1. By the level of prices, the relatively high or low exchange\r\nvalue of commodities estimated in gold; and\r\n2. By the mass of commodities circulating at fixed\r\nprices, i.\u0026nbsp;e. by the number of purchases and sales at\r\ngiven prices.\u003ca name=\"FNanchor_73_73\" id=\"FNanchor_73_73\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_73_73\" class=\"fnanchor\"\u003e73\u003c/a\u003e If one quarter of wheat is worth 60\r\nshillings, then twice as much gold is required to circulate\r\nit or to realize its price as would be the case if it\r\nwere worth only 30 shillings. To circulate 500 quarters\r\nof wheat at 60 shillings, twice as much gold is necessary\r\nas for the circulation of 250 quarters at the same\r\nprice. Finally, to circulate 10 quarters at 100 shillings\r\nonly half as much money is necessary as when circu\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_134\" id=\"Page_134\"\u003ePg 134\u003c/a\u003e\u003c/span\u003elating\r\n40 quarters at 50 shillings. It follows that the\r\nquantity of gold required for circulation may fall in\r\nspite of a rise in price, if the mass of commodities in circulation\r\ndeclines in a greater ratio than the rise of the\r\ncombined sum of prices; and, inversely, the quantity of\r\nthe circulating medium may rise in spite of a decline\r\nof the mass of commodities in circulation, if the sum\r\ntotal of prices rises in a greater ratio. Thorough and\r\nminute English investigations have demonstrated e. g.\r\nthat in the early stages of a dearth of grain in England\r\nthe quantity of money in circulation increases, because\r\nthe total price of the diminished supply of grain is\r\ngreater than the former total price of a larger supply of\r\ngrain, while the circulation of the other commodities\r\ncontinues undisturbed for some time at their old prices.\r\nAt a later stage of the dearth of grain, there is a decline\r\nin the quantity of circulating money, either because less\r\ngoods are sold at old prices besides grain, or the same\r\nquantity of those goods is sold at lower prices.\u003c/p\u003e\r\n\r\n\u003cp\u003eBut, as we have seen, the quantity of money in circulation\r\nis determined not only by the sum total of prices\r\nof commodities that are to be realized, but also by the\r\nrapidity with which money circulates or with which it\r\ncompletes this work of realization. If the same\r\nsovereign makes ten purchases a day, each of a commodity\r\nhaving a price of one sovereign, and thus changes\r\nhands ten times, it does as much work as would be accomplished\r\nby ten sovereigns each performing but a\r\nsingle act of circulation a day.\u003ca name=\"FNanchor_74_74\" id=\"FNanchor_74_74\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_74_74\" class=\"fnanchor\"\u003e74\u003c/a\u003e Consequently, rapidity\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_135\" id=\"Page_135\"\u003ePg 135\u003c/a\u003e\u003c/span\u003eof gold circulation can make up for its quantity,\r\nor the presence of gold in the sphere of circulation is determined\r\nnot only by its presence as an equivalent of a\r\ncommodity side by side with it, but also by its participation\r\nin the movement of metamorphoses of commodities.\r\nThe rapidity of the circulation of money, however,\r\ncan serve as a substitute for its quantity only to a\r\nlimited extent, since at any given moment an endless\r\nnumber of isolated purchases and sales takes places in\r\ndifferent localities.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf the total price of the commodities in circulation\r\nrises, but in a smaller ratio than the increase in the\r\nrapidity of circulation of money, the volume of the circulating\r\nmedium will diminish. If on the contrary the\r\nrapidity of circulation decreases in a greater ratio than\r\nthe total price of the commodities in circulation, the volume\r\nof currency will increase. An increasing volume of\r\ncurrency combined with a general fall of prices or a diminishing\r\nvolume of currency in connection with a general\r\nrise of prices is one of the best known phenomena in\r\nthe history of prices. But the consideration of the causes\r\nwhich bring about a simultaneous rise in the level of\r\nprices and a still greater rise in the rate of velocity of\r\ncirculation of money, or the opposite phenomenon, falls\r\noutside of the sphere of simple circulation. By way of\r\nillustration, it may be mentioned that in periods of prevailing\r\ncredit, the rapidity of circulation of money grows\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_136\" id=\"Page_136\"\u003ePg 136\u003c/a\u003e\u003c/span\u003efaster than the prices of commodities, while in times of\r\ndeclining credit the prices of commodities fall slower\r\nthan the rapidity of circulation. The shallow and artificial\r\ncharacter of the simple circulation of money is\r\nmanifested in the fact that all the elements which have\r\na determining influence on the volume of currency, such\r\nas the volume of commodities in circulation, prices, the\r\nrise or fall of prices, the number of simultaneous purchases\r\nand sales, the rapidity of the circulation of\r\nmoney,\u0026mdash;depend on the metamorphic process which\r\ntakes place in the world of commodities, and that\r\nagain depends on the general character of the methods of\r\nproduction, the size of population, the relation between\r\ncity and country, the development of the means of\r\ntransportation, the greater or less division of labor,\r\ncredit, etc.; in short, on circumstances all of which lie\r\n\u003ci\u003eoutside\u003c/i\u003e of the sphere of simple circulation of money and\r\nare only reflected in it.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe rapidity of circulation being given, the volume\r\nof currency is simply determined by the prices of commodities.\r\nHence, prices are not high or low, because\r\nthere is more or less money in circulation, but on the\r\ncontrary, there is more or less money in circulation, because\r\nprices are high or low. This is one of the most\r\nimportant laws, whose demonstration in detail by means\r\nof the history of prices constitutes perhaps the only\r\nmerit of the post-Ricardian English Political Economy.\r\nIf experience shows, that the level of metallic circulation\r\nor the mass of gold and silver in circulation in a\r\ngiven country is subject to temporary ebbs and tides\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_137\" id=\"Page_137\"\u003ePg 137\u003c/a\u003e\u003c/span\u003e\r\nand very violent ones at times,\u003ca name=\"FNanchor_75_75\" id=\"FNanchor_75_75\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_75_75\" class=\"fnanchor\"\u003e75\u003c/a\u003e but on the whole remains\r\nstationary for long periods, the deviations forming\r\nbut small oscillations about the average level, this\r\nis explained by the antagonistic nature of the circumstances\r\nwhich determine the quantity of money in circulation.\r\nTheir simultaneous modifications neutralize\r\ntheir effects and leave everything where it was before.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe law, that with a given rapidity of circulation of\r\nmoney and a given total sum of prices of commodities\r\nthe quantity of the circulating medium is determined,\r\nmay also be expressed as follows. If the exchange values\r\nof commodities and the average rapidity of their metamorphoses\r\nare given, the quantity of gold in circulation\r\ndepends on its own value. If, therefore, the value of\r\ngold, i.\u0026nbsp;e. the labor-time necessary for its production,\r\nshould rise or fall, the prices of commodities will rise\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_138\" id=\"Page_138\"\u003ePg 138\u003c/a\u003e\u003c/span\u003eor fall in inverse ratio, and corresponding to that rise or\r\nfall of prices, the rapidity of circulation remaining the\r\nsame, a larger or smaller quantity of gold would be required\r\nto keep the same volume of commodities in circulation.\r\nThe same change would occur, if the old\r\nstandard of value were superseded by a more or less\r\nvaluable metal. Thus, Holland required from fourteen\r\nto fifteen times as much silver as it had previously required\r\ngold, in order to circulate the same volume of commodities,\r\nwhen out of tender regard for the government\r\ncreditors and out of fear of the effects of the discoveries\r\nin California and Australia it substituted silver for gold\r\nmoney.\u003c/p\u003e\r\n\r\n\u003cp\u003eFrom the fact that the quantity of gold in circulation\r\ndepends on the variable sum total of prices of commodities\r\nand the varying rapidity of circulation, it follows\r\nthat the volume of the circulating medium must be\r\ncapable of contraction and expansion; in short, that\r\naccording to the requirements of circulation, gold must\r\nnow enter, now leave the sphere of circulation in its\r\ncapacity of a medium of circulation. How the circulation\r\nprocess itself realizes these conditions, we shall see\r\nlater on.\u003c/p\u003e\r\n\r\n\u003ch5\u003ec. COIN AND SYMBOLS OF VALUE.\u003c/h5\u003e\r\n\r\n\u003cp\u003eIn its capacity of a medium of circulation, gold acquires\r\na shape of its own, it becomes \u003ci\u003ecoin\u003c/i\u003e. In order to\r\nprevent any technical difficulties in the way of its circulation,\r\nit is coined according to the standard of the\r\nmoney of account. Gold pieces whose imprints and\r\nlegends show that they contain certain weights of gold\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_139\" id=\"Page_139\"\u003ePg 139\u003c/a\u003e\u003c/span\u003e\r\ncorresponding to the reckoning names of money, £,\r\ns., etc., are coins. The establishment of a mint-price, as\r\nwell as the technical work of coining, are the business\r\nof the state. Both as money of account and as coin,\r\nmoney acquires a \u003ci\u003elocal and political character\u003c/i\u003e; it speaks\r\ndifferent languages and wears different national uniforms.\r\nThe sphere in which money circulates as coin,\r\nis distinguished as an \u003ci\u003einternal\u003c/i\u003e sphere of circulation\r\nwhich is separated from the \u003ci\u003euniversal\u003c/i\u003e sphere of circulation\r\nin the commodity world by national boundaries.\u003c/p\u003e\r\n\r\n\u003cp\u003eYet, the only difference between gold bullion and gold\r\ncoin is that between coin denomination and weight denomination.\r\nWhat seems to be a difference in name in\r\nthe latter case appears as a difference in shape in the\r\nformer. Gold coin can be thrown into the melting-pot\r\nand thus be converted again into gold \u003ci\u003esans phrase\u003c/i\u003e, just\r\nas, on the contrary, gold bars only have to be sent to\r\nthe mint to receive the shape of coins. The conversion\r\nand reconversion from one form into another appears to\r\nbe a purely technical matter.\u003c/p\u003e\r\n\r\n\u003cp\u003eFor 100 pounds or 1200 ounces troy of 22 carat gold\r\none can get £4,672-1/2 or gold sovereigns at the English\r\nmint; if these sovereigns be put on one side of the weighing\r\nscale and one hundred pounds of gold bullion on the\r\nother, the two will balance each other, which proves that\r\nthe sovereign is nothing but a piece of gold of certain\r\nweight bearing this name in English coinage and having\r\na shape and stamp of its own. The 4,672-1/2\r\nsovereigns are put into circulation at different points,\r\nand once in its grasp they make a certain number of\r\nmoves per day, some sovereigns more, others less. If the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_140\" id=\"Page_140\"\u003ePg 140\u003c/a\u003e\u003c/span\u003e\r\naverage number of moves per day of each ounce be ten,\r\nthe 1200 ounces of gold would realize 12,000 ounces or\r\n46,725 sovereigns as the total price of commodities.\r\nYou may turn and toss an ounce of gold in any way you\r\nlike, and it will never weigh ten ounces. But here in the\r\nprocess of circulation one ounce practically does weigh\r\nten ounces. The work performed by a coin in the sphere\r\nof circulation is equivalent to the quantity of gold it\r\ncontains multiplied by the number of its moves. Besides\r\nthe actual importance which a coin possesses by\r\nvirtue of its being an individual piece of gold of a definite\r\nweight, it acquires an ideal significance due to its\r\nfunction. But whether the sovereign circulates once or\r\nten times, in each particular purchase or sale it acts\r\nonly as one sovereign. It is like a general who by timely\r\nappearance at ten different points on the battle field\r\ndoes the work of ten generals, but still remains the same\r\nidentical general at each point. The idealization of the\r\nmeans of circulation which is due to the supplanting of\r\nquantity by rapidity in money circulation, affects only\r\nthe function of the coin within the sphere of circulation,\r\nbut not the nature of the individual coin.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe circulation of money is a movement through\r\nthe outside world, and the sovereign, though it \u003ci\u003enon\r\nolet\u003c/i\u003e, keeps rather mixed company. In the course\r\nof its friction against all kinds of hands, pouches,\r\npockets, purses, money-belts, bags, chests and strong-boxes,\r\nthe coin rubs off, loses one gold atom here\r\nand another one there and thus, as it wears off\r\nin its wanderings over the world, it loses more\r\nand more of its intrinsic substance. By being used\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_141\" id=\"Page_141\"\u003ePg 141\u003c/a\u003e\u003c/span\u003e\r\nit gets used up. Let us take up a sovereign at\r\nthe moment when its natural, inborn character has\r\nbeen slightly affected. A baker, says Dodd,\u003ca name=\"FNanchor_76_76\" id=\"FNanchor_76_76\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_76_76\" class=\"fnanchor\"\u003e76\u003c/a\u003e who receives\r\nfrom the bank to-day a brand new sovereign and pays it\r\nto-morrow to the miller, does not pay the same veritable\r\nsovereign; the latter has become lighter than it was at\r\nthe time he received it. It is clear, says an anonymous\r\nwriter,\u003ca name=\"FNanchor_77_77\" id=\"FNanchor_77_77\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_77_77\" class=\"fnanchor\"\u003e77\u003c/a\u003e that in the very nature of things, coins must depreciate\r\none by one as a result of ordinary and unavoidable\r\nfriction. It is a physical impossibility to entirely\r\nexclude light coins from circulation at any time, even\r\nfor one day. Jacob estimates that of the 380 million\r\npounds sterling which were in existence in Europe in\r\n1809, nineteen million pounds sterling entirely disappeared\r\nby 1829, i.\u0026nbsp;e., within a period of twenty years.\u003ca name=\"FNanchor_78_78\" id=\"FNanchor_78_78\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_78_78\" class=\"fnanchor\"\u003e78\u003c/a\u003e\r\nThus, while a commodity at its first step into the\r\nsphere of circulation, falls out of it, a coin, after\r\na couple of steps within that sphere represents more\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_142\" id=\"Page_142\"\u003ePg 142\u003c/a\u003e\u003c/span\u003emetal than it actually contains. The longer a\r\ncoin remains in circulation, the rapidity of circulation\r\nremaining the same, or the greater its rapidity\r\nof circulation within the same period of time, the\r\ngreater the discrepancy between its form as coin and its\r\nactual gold or silver substance. What remains is \u003ci\u003emagni\r\nnominis umbra\u003c/i\u003e. The body of the coin becomes but a\r\nshadow. If at first it became heavier through the\r\nprocess of circulation, it now becomes lighter on account\r\nof it, but continues to represent the original quantity\r\nof gold in each single purchase or sale. The sovereign,\r\nas a fictitious sovereign, as fictitious gold, continues to\r\nperform the function of a legitimate coin. While other\r\nbeings lose their idealism in contact with the outer world,\r\nthe coin is idealized by practice, being gradually transformed\r\ninto a mere phantom of its golden or silver body.\r\nThis second idealization of metal money springing from\r\nthe very process of circulation, or from the discrepancy\r\nbetween its nominal weight and its real weight is exploited\r\nin all kinds of coin counterfeiting practiced\r\npartly by governments, partly by private adventurers.\r\nThe entire history of coinage from the beginning of the\r\nmiddle ages until late in the eighteenth century is nothing\r\nbut a history of these two-fold and antagonistic adulterations,\r\nand Custodi’s voluminous collection of writings\r\nof Italian economists turns mostly about this point.\u003c/p\u003e\r\n\r\n\u003cp\u003eBut the fictitious importance of gold due to its function,\r\ncomes in conflict with its real substance. One gold\r\ncoin has lost more, another, less of its metal substance\r\nin the course of circulation, and one of them is, as a\r\nmatter of fact, worth more now than the other. But\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_143\" id=\"Page_143\"\u003ePg 143\u003c/a\u003e\u003c/span\u003e\r\nsince in the discharge of their function of coins they\r\nare taken at the same value, the sovereign weighing a\r\nquarter of an ounce passing for no more than the sovereign\r\nwhich only stands for a quarter of an ounce, the\r\nfull-weight sovereigns are subjected in the hands of unscrupulous\r\nowners to surgical operations which produce\r\nartificially what the circulation process has caused in a\r\nnatural way to their more light-weighted brothers. They\r\nare clipped and reduced and the superfluous gold fat\r\nlands in the melting pot. If 4,672-1/2 gold sovereigns\r\nwhen put on one side of the weighing scale weigh on an\r\naverage only 800 ounces instead of 1200, they will buy\r\nwhen brought to the gold market only 800 ounces of\r\ngold; that is, the market price of gold would rise above\r\nits mint price. Every coin, even if of full weight would\r\npass in its mint form for less than in bullion form. The\r\nfull weight sovereigns would be reconverted into bullion,\r\na form in which a greater quantity of gold is always\r\nworth more than a smaller quantity. As soon as this\r\ndecline of metallic weight would affect a sufficiently\r\nlarge number of sovereigns to bring about a permanent\r\nrise of the market price of gold above its mint price, the\r\nreckoning names of the coins, though remaining the\r\nsame, would begin to denote a smaller quantity of gold.\r\nThat is to say, the standard of money would change\r\nand gold would be coined in the future according to this\r\nnew standard. By virtue of its idealization as a\r\nmedium of circulation, gold would react upon and\r\nchange the legally determined ratios under which it acted\r\nas the standard of price. The same revolution would be\r\nrepeated after a certain length of time and thus gold\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_144\" id=\"Page_144\"\u003ePg 144\u003c/a\u003e\u003c/span\u003e\r\nwould be subject to constant change both as a standard\r\nof price and as a medium of circulation, a change under\r\none of these forms leading to a change under the other\r\nand vice versa. This explains the phenomenon mentioned\r\nabove, namely that in the history of all modern\r\nnations the same money-name stands for a constantly\r\ndiminishing quantity of metal. The contradiction between\r\ngold as coin and gold as standard of price becomes\r\nalso one between gold as coin and gold as the\r\nuniversal equivalent; in the latter capacity it circulates\r\nnot only within the limits of national boundaries, but\r\nin the world market. As a measure of value gold was\r\nalways of full weight, because it served only as ideal gold.\r\nIn its capacity of equivalent in the isolated transaction\r\nC\u0026mdash;M it passes at once from a state of motion to a state\r\nof rest; but in its capacity of coin its natural substance\r\ncomes in constant conflict with its function. The transformation\r\nof the gold sovereign into fictitious gold can\r\nnot be wholly avoided, but legislation seeks to prevent\r\nits unlimited circulation as coin by prescribing its withdrawal\r\nfrom circulation as soon as its shortage of metallic\r\nsubstance reaches a certain degree. According to the\r\nEnglish law, e. g., a sovereign which lacks more than\r\n0.747 grains of its weight ceases to be legal tender. The\r\nBank of England which weighed forty-eight million gold\r\nsovereigns in the short period between 1844 and 1848,\r\npossesses in Mr. Cotton’s gold weighing scale a machine\r\nwhich not only detects a difference of 1-100 part of a\r\ngrain between two sovereigns, but like a sensible being,\r\nimmediately throws out the light-weight coin on a board\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_145\" id=\"Page_145\"\u003ePg 145\u003c/a\u003e\u003c/span\u003e\r\nwhere it lands under another machine which cuts it up\r\nwith oriental cruelty.\u003c/p\u003e\r\n\r\n\u003cp\u003eThat being the case, gold coins could not circulate\r\nat all were not their circulation confined to definite\r\nspheres in which they do not wear off so rapidly. In so\r\nfar as a gold coin weighing only one-fifth of an ounce\r\npasses in circulation for a quarter of an ounce of gold,\r\nit is practically merely a sign or a symbol for one-twentieth\r\nof an ounce of gold, and in that way all gold\r\ncoins are transformed by the very process of circulation\r\ninto more or less of a mere sign or symbol of their\r\nsubstance. But no thing can be its own symbol. Painted\r\ngrapes are no symbol of real grapes, they are imaginary\r\ngrapes. Still less can a light-weight sovereign be a symbol\r\nof a full-weighted one, just as a lean horse can not\r\nserve as a symbol of a fat one. Since gold thus becomes\r\na symbol of its own self, but at the same time can\r\nnot serve in that capacity, it receives a symbolical, silver\r\nor copper substitute in those spheres of circulation in\r\nwhich it is most subject to wear and tear, namely where\r\npurchases and sales are constantly taking place on the\r\nsmallest scale. In these spheres, even if not the same\r\nidentical coins, still a certain part of the entire supply\r\nof gold money would constantly circulate as coin. To\r\nthat extent gold is substituted by silver or copper tokens.\r\nThus, while only a specific commodity can perform\r\nin a given country the function of a measure of value and\r\ntherefore of money, different commodities can serve as\r\ncoin side by side with gold. These subsidiary mediums\r\nof circulation, such as silver or copper coins, represent\r\ndefinite fractions of a gold coin within the sphere of cir\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_146\" id=\"Page_146\"\u003ePg 146\u003c/a\u003e\u003c/span\u003eculation.\r\nTheir own silver or copper weight is, therefore,\r\nnot determined by the proportions of the respective\r\nvalues of silver and copper to that of gold, but is arbitrarily\r\nfixed by law. They may be issued only in such\r\nquantities in which the diminutive fractions of gold coin\r\nwhich they represent would constantly circulate either\r\nfor purposes of change for gold coins of higher denominations,\r\nor for realizing equally small prices of commodities.\r\nIn retail trade silver and copper tokens belong to\r\ndistinct spheres of circulation. In the nature of things,\r\nthe rapidity of their circulation is in inverse ratio to\r\nthe price which they realize in each separate purchase or\r\nsale, or to the size of the fraction of gold coin which\r\nthey represent. If we consider how immense the volume\r\nof the daily retail trade in a country like England is,\r\nwe will understand from the comparatively insignificant\r\nproportions of its combined volume how rapid and steady\r\nthe circulation of the subsidiary coin must be. From a\r\nparliamentary report of recent date we see, e. g., that in\r\n1857 the English mint coined £4,859,000 worth of gold,\r\n£733,000 of silver nominal value which contained metal\r\nactually worth £363,000. The total amount of gold\r\ncoined in the ten years ending December 31, 1857, was\r\n£55,239,000, and of silver only £2,434,000. The supply\r\nof copper coin in 1857 amounted only to £6,720\r\nnominal value containing £3,492 worth of copper; of\r\nthis £3,136 was in pennies, £2,464 in half-pennies, and\r\n£1,120 in farthings. The total value of copper coined\r\nin the ten years was £141,477 nominal, the metallic\r\nvalue being £73,503. Just as gold coin is prevented\r\nfrom permanently retaining its function of coin by the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_147\" id=\"Page_147\"\u003ePg 147\u003c/a\u003e\u003c/span\u003e\r\nlegal provision of the loss of weight which demonetizes\r\nit, so are the silver and copper tokens prevented from\r\npassing from their spheres of circulation into that of\r\ngold coin and acquiring the character of money by the\r\nprovision of the maximum amount for which they are\r\nlegal tender. In England e. g. copper is legal tender\r\nonly to the amount of six pence and silver up to forty\r\nshillings. If silver and copper tokens were to be issued\r\nin greater quantities than the requirements of their\r\nspheres of circulation call for, prices of commodities\r\nwould not rise as a result, but the accumulation of these\r\ntokens in the hands of retail dealers would reach such an\r\nextent that they would be finally compelled to sell them\r\nas metal. Thus in 1798 English copper coins, issued by\r\nprivate individuals, accumulated in the hands of small\r\ntraders to the amount of £20,350 which they tried in\r\nvain to put again in circulation, being finally compelled\r\nto throw them as metal on the copper market.\u003ca name=\"FNanchor_79_79\" id=\"FNanchor_79_79\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_79_79\" class=\"fnanchor\"\u003e79\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe silver and copper tokens which represent gold\r\ncoin in certain spheres of circulation in the interior of\r\nthe country, contain a definite quantity of silver and\r\ncopper prescribed by law, but after they get into circulation,\r\nthey wear off like gold coins and become even more\r\nrapidly mere phantoms, according to the rapidity and\r\nsteadiness of their circulation. To draw again a line\r\nof demonetization beyond which silver and copper tokens\r\nwould lose their character of coins, they would have to be\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_148\" id=\"Page_148\"\u003ePg 148\u003c/a\u003e\u003c/span\u003ereplaced in turn within certain spheres of their own\r\ncirculation by some other symbolic money, say iron\r\nand lead, and such representation of one kind of symbolic\r\nmoney by another kind would form an endless\r\nprocess. In all countries with a well developed circulation\r\nthe very requirements of money circulation\r\nmake it necessary that the character of silver and\r\ncopper tokens as money be made independent of any\r\nloss of weight in those coins. Thus, as it was in the\r\nnature of things, it appears that they serve as symbols\r\nof gold coin not because they are symbols made\r\nof silver or copper, not because they have certain\r\nvalue, but only in so far as they have no value.\u003c/p\u003e\r\n\r\n\u003cp\u003eRelatively worthless things, such as \u003ci\u003epaper\u003c/i\u003e, can consequently\r\nperform the function of symbols of gold\r\nmoney. That subsidiary currency consists of metal\r\ntokens, such as silver, copper, etc., is mainly due to\r\nthe fact that in most countries the less valuable metals\r\nsuch as silver in England, copper in ancient Rome,\r\nSweden, Scotland, etc., had circulated as money before\r\nthey were degraded by the process of circulation\r\nto the rank of small change and replaced by a more\r\nprecious metal. Besides, it is natural that the money\r\nsymbol which grows directly out of metallic circulation,\r\nshould itself be a metal. Just as that portion\r\nof gold which would always have to circulate as small\r\nchange, is replaced by metal tokens; so can the other\r\nportion of gold which is constantly absorbed as coin\r\nby circulation in the interior of the country and,\r\ntherefore, must continually circulate, be replaced with\r\nworthless tokens. The level below which the mass of\r\ncirculating coin never sinks is determined in each\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_149\" id=\"Page_149\"\u003ePg 149\u003c/a\u003e\u003c/span\u003e\r\ncountry by experience. Thus, the originally imperceptible\r\ndifference between the nominal weight and\r\nthe metallic weight of a metal coin can grow apace\r\nuntil it reaches the point of absolute separation. The\r\nmint name of money parts company with its substance\r\nand exists outside of it in worthless slips of paper.\r\nJust as the exchange value of commodities is crystallized\r\nby their process of exchange into gold money,\r\nso is gold money sublimated in its currency into its\r\nown symbol first in the form of worn coin, then in\r\nthe form of subsidiary metal currency, and finally in\r\nthe form of a worthless token, paper, mere \u003ci\u003esign of\r\nvalue\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eGold coin has produced its substitutes, first metallic\r\nand then paper, only because in spite of its loss of\r\nmetallic weight it continued to perform the function of\r\ncoin. It did not circulate because of its wear and\r\ntear; on the contrary, it wore out to a symbol because\r\nit continued to circulate. Only in so far as gold\r\nmoney becomes simply a token of its own value in the\r\nprocess of circulation, can mere tokens of value take\r\nits place.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn so far as the movement C\u0026mdash;M\u0026mdash;C represents a\r\ndynamic unity of two processes C\u0026mdash;M and M\u0026mdash;C\r\nwhich pass directly one into the other, or in so far as\r\na commodity passes through the complete process of\r\nits metamorphosis, it express its exchange value in\r\nprice and in money only to discard that form at once\r\nand to become again a commodity or, rather, a use-value.\r\nThat is to say, it develops \u003ci\u003eonly an apparent\r\nassertion of the independence\u003c/i\u003e of its exchange value.\r\nOn the other hand, we have seen that gold, in so far\r\nas it performs the function of coin or in so far as it\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_150\" id=\"Page_150\"\u003ePg 150\u003c/a\u003e\u003c/span\u003e\r\ncontinually circulates, actually forms only a connecting\r\nlink between the metamorphoses of commodities\r\nand constitutes \u003ci\u003ebut their transitory money form\u003c/i\u003e;\r\nfurthermore, that it realizes the price of one set of\r\ncommodities only in order to realize that of another,\r\nbut in no case does it constitute a stable form of exchange\r\nvalue or appear itself as a commodity in a\r\nstate of rest. The reality which the exchange value\r\nof commodities acquires in the process and which is\r\nrepresented by gold in its circulation, is the reality of\r\nan electric spark. Although real gold, it plays the\r\npart of fictitious gold, and can, therefore, be replaced\r\nin this function by a token of itself.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe token of value, say paper, which plays the part\r\nof coin, is the token of a quantity of gold expressed\r\nin its currency name, i.\u0026nbsp;e., it is a gold token. Just\r\nas a certain quantity of gold does not in itself express\r\na value ratio, so is that true of the token which takes\r\nits place. In so far as a certain quantity of gold, as\r\nembodied labor-time, has a value of a certain magnitude,\r\nthe gold token represents value. But the magnitude\r\nof the value which it represents depends all\r\nthe time on the value of the quantity of gold for\r\nwhich it stands. As regards commodities the token\r\nof value expresses \u003ci\u003ethe reality of their price\u003c/i\u003e, it is \u003ci\u003esignum\r\npretii\u003c/i\u003e and sign of their value only because their\r\nvalue is expressed in their price. In the process C\u0026mdash;M\u0026mdash;C,\r\nin so far as it represents the dynamic unity\r\nor direct alternation of the two metamorphoses\u0026mdash;and\r\nthat is the aspect it assumes in the sphere of circulation\r\nin which the token of value discharges its function\u0026mdash;the\r\nexchange value of commodities acquires in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_151\" id=\"Page_151\"\u003ePg 151\u003c/a\u003e\u003c/span\u003e\r\nprice only an ideal expression and in money only an\r\nimaginary symbolic existence. Exchange value thus\r\nacquires \u003ci\u003eonly\u003c/i\u003e an imaginary though material expression,\r\nbut it has no real existence except in the commodities\r\nthemselves, in so far as a certain quantity\r\nof labor-time is embodied in them. It \u003ci\u003eappears\u003c/i\u003e, therefore,\r\nthat the token of value represents \u003ci\u003edirectly\u003c/i\u003e the\r\nvalue of commodities, by figuring not as a token of\r\ngold but as a token of the value which exists in the\r\ncommodity alone and is only expressed in price. But\r\nit is a false appearance. The token of value is directly\r\nonly \u003ci\u003ea token of price\u003c/i\u003e, i.\u0026nbsp;e., a \u003ci\u003etoken of gold\u003c/i\u003e, and\r\nonly indirectly a token of value of a commodity.\r\nUnlike Peter Shlemihl, gold has not sold its shadow,\r\nbut buys with its shadow. The token of value operates\r\nonly in so far as it represents the price of one\r\ncommodity as against that of another within the\r\nsphere of circulation, or in so far as it \u003ci\u003erepresents gold\u003c/i\u003e\r\nto every owner of commodities. A certain comparatively\r\nworthless object such as a piece of leather, a\r\nslip of paper, etc., becomes by force of custom a\r\ntoken of money material, but maintains its existence\r\nin that capacity only so long as its character as a symbol\r\nof money is guaranteed by the general acquiescence\r\nof the owners of commodities, i.\u0026nbsp;e., so long as\r\nit enjoys a legally established conventional existence\r\nand compulsory circulation. Paper money issued by\r\nthe state and circulating as legal tender is the perfected\r\nform of the token of value, and the only form\r\nof paper money, which has its immediate origin in\r\nmetallic circulation or even in the simple circulation\r\nof commodities. \u003ci\u003eCredit money\u003c/i\u003e belongs to a higher\r\nsphere of the social process of production and is gov\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_152\" id=\"Page_152\"\u003ePg 152\u003c/a\u003e\u003c/span\u003eerned\r\nby entirely different laws. Symbolic paper\r\nmoney does not in fact, differ in the least from subsidiary\r\nmetal coin, except that it reaches wider\r\nspheres of circulation. We have seen that the mere\r\ntechnical development of the standard of price or of\r\nthe mint price and later the shaping of gold bullion\r\ninto coin have called forth the interference of the\r\nstate; this circumstance brought about a visible separation\r\nof national circulation from the world circulation\r\nof commodities: this separation is completed by\r\nthe evolution of coin into a token of value. As a\r\nmere medium of circulation money can assume an independent\r\nexistence only within the sphere of national\r\ncirculation.\u003ca name=\"FNanchor_80_80\" id=\"FNanchor_80_80\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_80_80\" class=\"fnanchor\"\u003e80\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eOur presentation has shown that the coin form of\r\ngold as a token of value differentiated from the gold\r\nsubstance itself, has its direct origin in the process of\r\ncirculation and not in any agreement or state interference.\r\nRussia offers a striking example of the\r\nnatural origin of the token of value. At the time\r\nwhen hides and furs played there the part of money,\r\nthe conflict between the perishable and bulky nature\r\nof the material and its function as a medium of circulation\r\nresulted in the custom of replacing it by small\r\npieces of stamped leather which thus became a kind\r\nof draft payable in hides and furs. Later on they\r\nbecame under the name of copecs mere tokens for\r\nfractions of the silver rouble and remained in use in\r\nsome parts until 1700, when Peter the Great ordered\r\ntheir withdrawal in exchange for small copper coins\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_153\" id=\"Page_153\"\u003ePg 153\u003c/a\u003e\u003c/span\u003eissued by the state. Ancient writers who could\r\nobserve the phenomena of exclusively metallic circulation,\r\nalready took the view of coin as a symbol or\r\ntoken of value. That is true both of \u003ci\u003ePlato\u003c/i\u003e\u003ca name=\"FNanchor_81_81\" id=\"FNanchor_81_81\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_81_81\" class=\"fnanchor\"\u003e81\u003c/a\u003e and \u003ci\u003eAristotle\u003c/i\u003e.\u003ca name=\"FNanchor_82_82\" id=\"FNanchor_82_82\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_82_82\" class=\"fnanchor\"\u003e82\u003c/a\u003e\r\nIn countries where credit is not developed,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_154\" id=\"Page_154\"\u003ePg 154\u003c/a\u003e\u003c/span\u003eas e. g. in China, legal tender paper money is found\r\nat an early date\u003ca name=\"FNanchor_83_83\" id=\"FNanchor_83_83\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_83_83\" class=\"fnanchor\"\u003e83\u003c/a\u003e. Early advocates of paper money\r\nexpressly point out the fact that metallic coin is\r\ntransformed into a token of value in the very process\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_155\" id=\"Page_155\"\u003ePg 155\u003c/a\u003e\u003c/span\u003eof circulation. So Benjamin Franklin\u003ca name=\"FNanchor_84_84\" id=\"FNanchor_84_84\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_84_84\" class=\"fnanchor\"\u003e84\u003c/a\u003e and Bishop\r\nBerkeley.\u003ca name=\"FNanchor_85_85\" id=\"FNanchor_85_85\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_85_85\" class=\"fnanchor\"\u003e85\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eHow many reams of paper cut up into bills can circulate\r\nas money? Put in that way, the question would\r\nbe absurd. The worthless tokens are signs of value\r\nonly in so far as they represent gold within the sphere\r\nof circulation and they represent it only to the extent\r\nto which it would itself be absorbed as coin by\r\nthe process of circulation; this quantity is determined\r\nby its own value, the exchange values of the commodities\r\nand the rapidity of their metamorphoses\r\nbeing given. Bills of a denomination of £5 could\r\ncirculate in a quantity five times less than those of £1\r\ndenomination, and if all payments were made in shilling\r\nbills, then twenty times as many shilling bills\r\nwould have to be in circulation as are one pound bills.\r\nIf the gold currency were represented by bills of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_156\" id=\"Page_156\"\u003ePg 156\u003c/a\u003e\u003c/span\u003edifferent denominations, e. g. five pound, one pound\r\nand ten shilling bills, then the quantity of these different\r\ntokens of value would be determined not only\r\nby the quantity of gold necessary for circulation as\r\na whole, but also by that required in the sphere of\r\ncirculation of each kind of bills. If fourteen million\r\npounds sterling (this is the provision of the English\r\nBank Law, not for the entire currency but only for\r\ncredit money) were the level below which the circulation\r\nof a country never sank, then fourteen million\r\npaper bills, each a token of value of one pound, could\r\ncirculate. If the value of gold fell or rose because\r\nthe labor-time necessary for its production had fallen\r\nor risen, then, the exchange value of the same volume\r\nof commodities remaining the same, the number of\r\none pound bills in circulation would rise or fall in\r\ninverse ratio to the change in the value of gold. If\r\ngold were replaced by silver as a measure of value,\r\nthe ratio of the respective values of silver and gold\r\nbeing 1:15, and if each bill were to represent now the\r\nsame quantity of silver as it represented gold before,\r\nthen there would be 210 million one pound bills in circulation\r\ninstead of the previous fourteen million.\r\nThe number of paper bills is thus determined by the\r\nquantity of gold money which they represent in circulation,\r\nand since they are tokens of value only in\r\nso far as they represent it, their value is simply determined\r\nby their \u003ci\u003equantity\u003c/i\u003e. Thus, while the quantity of\r\ngold in circulation is determined by the prices of commodities,\r\nthe value of the paper bills in circulation,\r\non the contrary, depends exclusively on their own\r\nquantity.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe interference of the state which issues paper\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_157\" id=\"Page_157\"\u003ePg 157\u003c/a\u003e\u003c/span\u003e\r\nmoney as legal tender\u0026mdash;and we are treating of paper\r\nmoney of that kind only\u0026mdash;seems to do away with the\r\neconomic law. The state which in its mint price gave\r\na certain name to a piece of gold of certain weight,\r\nand in the act of coinage only impressed its stamp\r\non gold, seems now to turn paper into gold by the\r\nmagic of its stamp. Since paper bills are legal tender,\r\nno one can prevent the state from forcing as large a\r\nquantity of them as it desires into circulation and\r\nfrom impressing upon it any coin denomination, such\r\nas £1, £5, £20. The bills which have once gotten into\r\ncirculation can not be removed, since on the one hand\r\ntheir course is hemmed in by the frontier posts of\r\nthe country and on the other they lose all value, use-value,\r\nas well as exchange-value, outside of circulation.\r\nTake away from them their function and they\r\nbecome worthless rags of paper. Yet this power of\r\nthe state is a mere fiction. It may throw into circulation\r\nany desired quantity of paper bills of whatever\r\ndenomination, but with this mechanical act its control\r\nceases. Once in the grip of circulation and the token\r\nof value or paper money becomes subject to its intrinsic\r\nlaws.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf fourteen million pounds sterling were the quantity\r\nof gold required for the circulation of commodities\r\nand if the state were to put into circulation two\r\nhundred and ten million bills each of the denomination\r\nof £1, then these two hundred and ten millions\r\nwould become the representatives of gold to the\r\namount of fourteen million pounds sterling. It would\r\nbe the same as if the state were to make the one\r\npound bills represent a fifteen times less valuable\r\nmetal or a fifteen times smaller weight\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_158\" id=\"Page_158\"\u003ePg 158\u003c/a\u003e\u003c/span\u003e\r\nof gold. Nothing would be changed but the nomenclature\r\nof the standard of price, which by its very nature\r\nis conventional, no matter whether such change takes\r\nplace as a direct result of a change of the mint standard\r\nor indirectly owing to an increase of paper bills to\r\nan extent required by a new lower standard. Since the\r\nname £ would stand now for a fifteen times smaller\r\nquantity of gold, the prices of all commodities would\r\nincrease fifteen times and two hundred and ten million\r\none pound bills would now be actually as necessary as\r\nfourteen million had been before. To the same extent\r\nto which the combined quantity of tokens of value would\r\nincrease now, the quantity of gold which each of them\r\nrepresents would decrease. The rise of prices would\r\nconstitute but a reaction on the part of the process of\r\ncirculation which forcibly equates the tokens of value to\r\nthe quantity of gold which they are supposed to replace.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the history of the debasement of money in England\r\nand France by their governments, we find repeatedly that\r\nprices had not risen in the same proportion in which the\r\nsilver coinage had been debased. That was simply due\r\nto the fact that the proportion in which the currency\r\nwas increased did not correspond to the proportion in\r\nwhich it had been debased; that is to say, because an\r\ninadequate quantity of coins of the poorer metallic composition\r\nwas issued, if the exchange values of commodities\r\nwere to be estimated in the future in the new coin as\r\na measure of value and be realized in coins corresponding\r\nto this smaller unit of measure. This solves the difficulty\r\nleft unsettled in the controversy between Locke\r\nand Lowndes. The ratio which a token of value, whether\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_159\" id=\"Page_159\"\u003ePg 159\u003c/a\u003e\u003c/span\u003e\r\nmade of paper or of debased gold or silver, bears to certain\r\nweights of gold or silver estimated according to the\r\nmint price, depends not on its own composition but on\r\nthe quantity in which it is found in circulation. The\r\ndifficulty in understanding this is due to the fact that\r\nmoney in its two functions of a measure of value and a\r\nmedium of circulation is subject to two not only opposite\r\nbut apparently contradictory laws corresponding\r\nto the difference in the two functions. In the discharge\r\nof its function of a measure of value where money\r\nserves merely as money of account and gold only as ideal\r\ngold, everything depends on the natural substance of\r\nmoney. Estimated in silver or expressed in silver prices\r\nexchange values are naturally estimated quite differently\r\nthan when measured in gold or as gold prices. On the\r\ncontrary, in its function of a medium of circulation,\r\nwhere gold is not only imagined but is actually present\r\nside by side with other commodities, its substance is\r\nimmaterial and everything depends on its quantity. For\r\nthe unit of measure the determining factor is whether\r\nit consists of a pound of gold, silver or copper; while in\r\nthe case of coin, no matter what its own composition is,\r\nit will become the embodiment of each of these units of\r\nmeasure in accordance with its quantity. But it goes\r\nagainst common sense that in the case of mere imaginary\r\nmoney everything should depend on its material substance,\r\nwhile in that of the palpably present coin all\r\nshould be determined by an ideal ratio of numbers.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe rise or fall of prices of commodities following a\r\nrise or fall of the quantity of paper notes\u0026mdash;the latter\r\nonly where paper currency constitutes the exclusive\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_160\" id=\"Page_160\"\u003ePg 160\u003c/a\u003e\u003c/span\u003e\r\nmedium of circulation\u0026mdash;is thus nothing but an assertion\r\nthrough the process of circulation of a law mechanically\r\nviolated from without; namely, that the\r\nquantity of gold in circulation is determined by the\r\nprices of commodities, and the quantity of tokens of\r\nvalue in circulation is determined by the quantity of\r\ngold coin which it represents. For that reason any\r\ndesired number of paper notes will be absorbed and\r\nequally digested by the process of circulation, because\r\nthe token of value, no matter with what gold title it\r\nmay enter circulation, will be compressed within the\r\nlatter to a token of that quantity of gold which could\r\nactually circulate in its place.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the case of the circulation of tokens of value all\r\nlaws pertaining to the circulation of real money appear\r\nto be reversed and standing on their heads.\r\nWhile gold circulates because it has value, paper has\r\nvalue because it circulates. While with a given exchange\r\nvalue of commodities, the quantity of gold\r\nin circulation depends on its own value, the value of\r\npaper depends on its own quantity in circulation.\r\nWhile the quantity of gold in circulation rises or falls\r\nwith the rise or fall of prices of commodities, the\r\nprices of commodities seem to rise or fall with the\r\nchange in the quantity of paper in circulation. While\r\nthe circulation of commodities can absorb only a\r\ndefinite quantity of gold coin and as a result of that\r\nthe alternating contraction and expansion of the currency\r\nappears as a necessary law, paper money seems\r\nto enter circulation in any desired amount. While\r\nthe state is guilty of debasing gold and silver coin and\r\nof disturbing their function of a medium of circula\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_161\" id=\"Page_161\"\u003ePg 161\u003c/a\u003e\u003c/span\u003etion,\r\nif it turns out a coin, only 1-100 of a grain below\r\nits nominal weight; it performs a perfectly\r\nproper operation by issuing absolutely worthless\r\npaper notes which contain nothing of the metal except\r\nits mint denomination. While gold coin apparently\r\nrepresents the value of commodities only in\r\nso far as that value is itself estimated in gold or is\r\nexpressed in price, the token of value seems to represent\r\ndirectly the value of commodities. It is, therefore,\r\nclear why students who examined one-sidedly\r\nthe phenomena of circulation of money by confining\r\ntheir observations to the circulation of legal tender\r\npaper money, should have failed to grasp the intrinsic\r\nlaws governing the circulation of money. As\r\na matter of fact, these laws appear not only reversed\r\nbut extinct in the circulation of tokens of value, since\r\npaper currency, if issued in the right quantity, goes\r\nthrough certain movements which are not in its\r\nnature as a token of value, while its proper movement\r\ninstead of growing directly out of the metamorphosis\r\nof commodities, springs from the violation\r\nof its proper proportion to gold.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_162\" id=\"Page_162\"\u003ePg 162\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ch4\u003e3. MONEY.\u003c/h4\u003e\r\n\r\n\u003cp\u003eMoney as distinguished from coin, the result of the\r\ncirculation process C\u0026mdash;M\u0026mdash;C, forms the starting point\r\nof the circulation process M\u0026mdash;C\u0026mdash;M, i.\u0026nbsp;e. the exchange\r\nof money for commodity in order to exchange commodity\r\nfor money. In the form C\u0026mdash;M\u0026mdash;C, commodity\r\nforms the starting and final points of the movement; in\r\nthe form M\u0026mdash;C\u0026mdash;M, money plays that part. In the\r\nformer case money is the medium of exchange of commodities,\r\nin the latter the commodity helps money to\r\nbecome money. Money which appears merely as a\r\nmeans of circulation in the first form becomes an end\r\nin the second form; while commodity which appeared\r\nfirst as the end, now becomes but a means. Since money\r\nis itself the result of circulation C\u0026mdash;M\u0026mdash;C, the result\r\nof circulation appears at the same time as its starting\r\npoint in the form M\u0026mdash;C\u0026mdash;M. While in the case of\r\nC\u0026mdash;M\u0026mdash;C the interchange of matter constituted the real\r\nimport of the process, the form of the commodity resulting\r\nfrom this first process constitutes the import\r\nof the second process M\u0026mdash;C\u0026mdash;M.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the form C\u0026mdash;M\u0026mdash;C the two extreme members are\r\ncommodities of the same value, but qualitatively different\r\nuse-values. Their mutual exchange C\u0026mdash;C constitutes\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_163\" id=\"Page_163\"\u003ePg 163\u003c/a\u003e\u003c/span\u003e\r\nactual interchange of matter. In the form M\u0026mdash;C\u0026mdash;M\r\nthe two extremes are gold and at the same time gold of\r\nequal value. To exchange gold for a commodity in\r\norder to exchange the commodity for gold, or if we consider\r\nthe final result M\u0026mdash;M, to exchange gold for gold,\r\nseems absurd. But if we translate the formula M\u0026mdash;C\u0026mdash;M\r\ninto the expression: \u003ci\u003eto buy\u003c/i\u003e in order \u003ci\u003eto sell\u003c/i\u003e, which\r\nmeans nothing but to exchange gold for gold through\r\nan intervening movement, we recognize at once the prevailing\r\nform of capitalist production. In actual practice,\r\nhowever, people do not buy in order to sell, but they\r\nbuy cheap in order to sell dear. Money is exchanged for\r\na commodity in order to exchange the same commodity\r\nfor a larger amount of money, so that the extremes M,\r\nM are, if not qualitatively, then quantitatively different.\r\nSuch a quantitative difference presupposes the \u003ci\u003eexchange\r\nof non-equivalents\u003c/i\u003e, yet commodity and money as such are\r\nonly opposite forms of the same commodity, i.\u0026nbsp;e. they\r\nare different forms of the same magnitude of value. The\r\ncircuit M\u0026mdash;C\u0026mdash;M thus conceals under the forms of\r\nmoney and commodity more highly developed relations\r\nof production, and is but a reflection within the sphere\r\nof simple circulation of a movement of a more advanced\r\ncharacter. Money, as distinguished from the medium of\r\ncirculation, must therefore be developed from the direct\r\nform of circulation of commodities, C\u0026mdash;M\u0026mdash;C.\u003c/p\u003e\r\n\r\n\u003cp\u003eGold, i.\u0026nbsp;e., the specific commodity which serves as a\r\nmeasure of value and a medium of circulation, becomes\r\nmoney without any further assistance on the part of society.\r\nIn England, where silver is neither the measure\r\nof value nor the prevailing medium of circulation, it\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_164\" id=\"Page_164\"\u003ePg 164\u003c/a\u003e\u003c/span\u003e\r\ndoes not become money, just as gold in Holland, as soon\r\nas it had been dethroned as a measure of value, ceased\r\nto be money. A commodity thus becomes money only in\r\nits combined capacity of a measure of value and medium\r\nof circulation; or, the unity of the measure of value and\r\nmedium of circulation is money. As such a unity, however,\r\ngold has a separate existence independent of its\r\nexistence in the two functions. As a measure of value\r\nit is only ideal money and ideal gold; as a mere medium\r\nof circulation it is symbolic money and symbolic gold;\r\nbut in its plain metallic bodily form gold is money or\r\nmoney is real gold.\u003c/p\u003e\r\n\r\n\u003cp\u003eLet us now consider for a moment the commodity\r\ngold when it is in a state of rest, and plays the part of\r\nmoney in its relation to other commodities. All commodities\r\nrepresent in their prices a certain quantity of\r\ngold, that is to say, they are merely imaginary gold or\r\nimaginary money, representatives of gold, just as, on\r\nthe other hand, money in the form of a token of value\r\nappeared as a mere representative of prices of commodities.\u003ca name=\"FNanchor_86_86\" id=\"FNanchor_86_86\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_86_86\" class=\"fnanchor\"\u003e86\u003c/a\u003e\r\nSince all commodities are thus but imaginary\r\nmoney, money is the only real commodity. Contrary to\r\ncommodities, which only represent the independently existing\r\nexchange value, i.\u0026nbsp;e., universal social labor, or abstract\r\nwealth, gold is the \u003ci\u003ematerial form of abstract\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_165\" id=\"Page_165\"\u003ePg 165\u003c/a\u003e\u003c/span\u003ewealth\u003c/i\u003e. Through its use-value, every commodity, by its\r\nrelation to some particular want, expresses only one\r\naspect of material wealth, but one side of wealth. Money,\r\nhowever, satisfies every want since it can be directly\r\nconverted into the object of any want. Its own use-value\r\nis realized in the endless series of use-values which\r\nform its equivalents. In its virgin metallic state it\r\nholds locked up all the material wealth which lies unfolded\r\nin the world of commodities. Thus, while commodities\r\nrepresent in their prices the universal equivalent\r\nor abstract wealth, viz., gold, the latter represents\r\nin its use-value the use-values of all commodities. Gold\r\nis, therefore, \u003ci\u003ethe bodily representative of material\r\nwealth\u003c/i\u003e. It is the “precis de toutes les choses” (Boisguillebert),\r\nthe compendium of the wealth of society.\r\nAt one and the same time, it is the direct incarnation\r\nof universal labor in its form, and the aggregate of all\r\nconcrete labor in its substance. It is universal wealth\r\nindividualized.\u003ca name=\"FNanchor_87_87\" id=\"FNanchor_87_87\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_87_87\" class=\"fnanchor\"\u003e87\u003c/a\u003e As a medium of circulation it underwent\r\nall kinds of injury, was clipped, and even reduced\r\nto the condition of a mere symbolic paper rag. As\r\nmoney it is restored to its golden glory.\u003ca name=\"FNanchor_88_88\" id=\"FNanchor_88_88\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_88_88\" class=\"fnanchor\"\u003e88\u003c/a\u003e From a serve\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_166\" id=\"Page_166\"\u003ePg 166\u003c/a\u003e\u003c/span\u003eit becomes a lord. From a mere understrapper it rises\r\nto the position of Lord of commodities.\u003ca name=\"FNanchor_89_89\" id=\"FNanchor_89_89\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_89_89\" class=\"fnanchor\"\u003e89\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003ch5\u003ea. HOARDING.\u003c/h5\u003e\r\n\r\n\u003cp\u003eGold separates itself as money from the process of\r\ncirculation whenever a commodity interrupts the process\r\nof its metamorphosis and remains in its form of a\r\ngold chrysalis. This occurs every time a sale is not immediately\r\nfollowed by purchase. The independent isolation\r\nof gold as money is, thus, a material expression\r\nof the disintegration of the process of circulation, or of\r\nthe metamorphosis of commodities, into two separate\r\nacts independent of each other. The coin itself becomes\r\nmoney as soon as its course is interrupted. In\r\nthe hands of the seller who takes it in exchange for\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_167\" id=\"Page_167\"\u003ePg 167\u003c/a\u003e\u003c/span\u003ehis commodity, it is money and not coin; as soon as\r\nit passes out of his hands it is again coin. Everybody\r\nis a seller of the one commodity which he produces, but\r\na buyer of all other commodities which he needs for his\r\nexistence in society. While his selling is determined by\r\nthe labor-time required for the production of his commodity,\r\nhis buying is determined by the continual renewal\r\nof the wants of life. In order to be able to buy\r\nwithout having sold anything, he must sell without buying.\r\nIn fact, the circulation process C\u0026mdash;M\u0026mdash;C is a\r\ndynamic unity of sale and purchase only in so far as it\r\nconstitutes at the same time the constant process of its\r\nseparation. In order that money should flow continuously\r\nas coin, coin must constantly coagulate as money.\r\nThe continuous flow of coin depends on its constant\r\naccumulations in the form of reserve-funds of coin\r\nwhich spring up throughout the sphere of circulation\r\nand form sources of supply; the formation, distribution,\r\ndisappearance, and reformation of these reserve funds\r\nis constantly changing, their existence constantly disappears,\r\ntheir disappearance constantly exists. Adam\r\nSmith expressed this never-ceasing transformation of\r\ncoin into money and of money into coin by saying that\r\nevery owner of commodities must always keep in supply\r\nbesides the particular commodity which he sells, a certain\r\nquantity of the universal commodity with which he\r\nbuys. We saw, that in the process C\u0026mdash;M\u0026mdash;C the second\r\nmember M\u0026mdash;C splits up into a series of purchases which\r\ndo not take place at once, but at intervals of time, so\r\nthat one part of M circulates as money while the other\r\nrests as money. Money is in that case only \u003ci\u003esuspended\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_168\" id=\"Page_168\"\u003ePg 168\u003c/a\u003e\u003c/span\u003e\r\ncoin\u003c/i\u003e and the separate parts of the circulating mass of\r\ncoins appear now in one form, now in another, constantly\r\nchanging. This first transformation of the medium\r\nof circulation into money represents, therefore, but a\r\ntechnical aspect of money circulation.\u003ca name=\"FNanchor_90_90\" id=\"FNanchor_90_90\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_90_90\" class=\"fnanchor\"\u003e90\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe primitive form of wealth is that of a surplus or\r\nsuperabundance, i.\u0026nbsp;e., that part of the products which\r\nare not immediately required as use-values, or the possession\r\nof such products whose use-value falls outside\r\nthe sphere of mere necessaries. When considering the\r\ntransition of commodity into money we saw that this\r\nsurplus or superabundance of products constitutes the\r\nproper sphere of exchange at a low stage of development\r\nof production. Superfluous products become exchangeable\r\nproducts or commodities. The adequate form of\r\nthis surplus is gold and silver, the first form in which\r\nwealth as abstract social wealth is preserved. Commodities\r\ncan not only be stored up in the form of gold and\r\nsilver, i.\u0026nbsp;e., in the substance of money, but gold and\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_169\" id=\"Page_169\"\u003ePg 169\u003c/a\u003e\u003c/span\u003esilver are wealth in preserved form. While every use-value\r\nperforms its service as such by being consumed,\r\ni.\u0026nbsp;e., destroyed, the use-value of gold as money consists\r\nin its being the bearer of exchange value, in embodying\r\nuniversal labor-time as a shapeless raw material.\r\nAs shapeless metal, exchange value possesses an indestructible\r\nform. Gold or silver thus brought to rest as\r\nmoney, forms a \u003ci\u003ehoard\u003c/i\u003e. Among nations with an exclusively\r\nmetallic circulation, such as the ancients were,\r\nhoarding is practiced universally from the individual\r\nto the state which guards its state hoard. In more\r\nancient times, in Asia and Egypt, these hoards under\r\nthe protection of kings and priests appear rather as a\r\nmark of their power. In Greece and Rome it was part\r\nof public policy to accumulate state hoards as the safest\r\nand most available form of surplus. The quick transfer\r\nof such hoards by conquerors from one country to another\r\nand the sudden outpour of a part of these hoards\r\ninto the general circulation constitute a peculiar feature\r\nof ancient economy.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs the incarnation of labor-time gold is a pledge for\r\nits own value, and since it is the embodiment of \u003ci\u003euniversal\u003c/i\u003e\r\nlabor-time, the process of circulation pledges gold\r\nits constant rôle of exchange value. Owing to the mere\r\nfact that the owner of commodities can retain his commodity\r\nin the form of exchange value or retain the exchange-value\r\nas a commodity, the exchange of commodities\r\nfor the purpose of retaining them in the transformed\r\nshape of gold becomes circulation’s own motive.\r\nThe metamorphosis C\u0026mdash;M takes place for the sake of\r\nthe metamorphosis, i.\u0026nbsp;e., in order to transform it from\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_170\" id=\"Page_170\"\u003ePg 170\u003c/a\u003e\u003c/span\u003e\r\nparticular natural wealth into universal social wealth.\r\nInstead of change of matter, change of form becomes its\r\nown purpose. From a mere form of the movement exchange\r\nvalue becomes its substance. Commodity is preserved\r\nas wealth, as commodity, only in so far as it\r\nkeeps within the sphere of circulation, and it keeps in\r\nthat fluent state only in so far as it solidifies in the form\r\nof silver and gold. It remains in the stream of circulation\r\nas its crystal. At the same time gold and silver\r\nthemselves become money only in so far as they do not\r\nplay the part of mediums of circulation. \u003ci\u003eAs non-mediums\r\nof circulation they become money.\u003c/i\u003e The withdrawal\r\nof a commodity from circulation in the form of\r\ngold is therefore the only means of keeping it constantly\r\nwithin the sphere of circulation.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe owner of commodities can receive money from circulation\r\nonly in return for a commodity which he gives\r\nto it. Constant selling, continual throwing of commodities\r\ninto circulation is, therefore, the first condition\r\nof hoarding from the standpoint of the circulation of\r\ncommodities. On the other hand, money as a medium\r\nof circulation constantly disappears in the very process\r\nof circulation by being realized all the time in use-values\r\nand becoming dissolved in fleeting pleasures. It must,\r\ntherefore, be taken out of the all-consuming stream of\r\ncirculation or the commodity must be kept up in its\r\nfirst metamorphosis, so that money is prevented from\r\nperforming its function of a means of purchase. The\r\ncommodity owner who has now become a hoarder, must\r\nsell as much as possible and buy as little as possible, as\r\nold Cato had taught: “patrem familias vendacem, non\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_171\" id=\"Page_171\"\u003ePg 171\u003c/a\u003e\u003c/span\u003e\r\nemacem esse.” While industry constitutes the positive\r\ncondition of hoarding, saving forms the negative one.\r\nThe less the equivalent of a commodity is withdrawn\r\nfrom circulation in the form of particular commodities\r\nor use-values, the more it is withdrawn in the shape of\r\nmoney or exchange value.\u003ca name=\"FNanchor_91_91\" id=\"FNanchor_91_91\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_91_91\" class=\"fnanchor\"\u003e91\u003c/a\u003e The acquisition of wealth\r\nin its universal form thus requires abstinence from\r\nwealth in its material reality. Thus the stimulating\r\nimpulse for hoarding is \u003ci\u003egreed\u003c/i\u003e, the objects of which are\r\nnot commodities as use-values, but exchange value as\r\ncommodity. In order to get possession of the surplus\r\nin its universal form, the particular wants must be\r\ntreated as so much luxury and excess. Thus the Cortes\r\npresented a report to Philipp II., in 1593, in which,\r\namong other things, was said: “The Cortes of Valladolid\r\nin the year 1586 petitioned Your Majesty not to\r\nallow the further importation into the Kingdom of candles,\r\nglassware, jewelry, knives and similar articles;\r\nthese things useless to human life come from abroad\r\nto be exchanged for gold, as though the Spaniards were\r\nIndians.” The hoarder despises the worldly, temporary\r\nand transitory enjoyments in his hunt after the\r\neternal treasure, which neither moth nor rust can eat,\r\nwhich is perfectly celestial and earthly at the same time.\r\n“The general remote cause of our want of money is the\r\ngreat excess of this Kingdom in consuming the Commodities\r\nof Forreine Countries, which prove to us discom\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_172\" id=\"Page_172\"\u003ePg 172\u003c/a\u003e\u003c/span\u003emodities,\r\nin hindering us of so much treasure, which\r\notherwise would bee brought in, in lieu of those toyes….\r\nWee … consume amongst us, that great\r\nabundance of the Wines of Spaine, of France, of the\r\nRhene, of the Levant … the Raisins of Spaine,\r\nthe Corints of the Levant, the Lawnes and Cambricks of\r\nHannaults … the Silkes of Italie, the Sugers and\r\nTobaco of the West Indies, the Spices of the East Indies:\r\nAll which are of no necessetie unto us and yet are\r\nbought with ready mony.”\u003ca name=\"FNanchor_92_92\" id=\"FNanchor_92_92\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_92_92\" class=\"fnanchor\"\u003e92\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the form of gold and silver, wealth is indestructible,\r\nboth because exchange value is preserved in the\r\nshape of indestructible metal, and, especially, because\r\ngold and silver are prevented from becoming, as mediums\r\nof circulation, mere vanishing money forms of\r\nthe commodity. The destructible substance is thus sacrificed\r\nfor the indestructible form. “If money be taken\r\n(by means of taxation) from him, who spendeth the\r\nsame … upon eating and drinking, or any other\r\nperishing Commodity; and the same transferred to one\r\nthat bestoweth it on Cloaths; I say that even in this\r\ncase the Commonwealth hath some little advantage; because\r\nCloaths do not altogether perish so soon as Meats\r\nand Drinks. But if the same be spent in Furniture of\r\nHouses, the advantage is yet a little more; if in Building\r\nof Houses, yet more; if in improving of Lands, working\r\nof Mines, Fishing, etc., yet more; but most of all, in\r\nbringing Gold and Silver into the Country; because those\r\nthings are not only not perishable, but are esteemed for\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_173\" id=\"Page_173\"\u003ePg 173\u003c/a\u003e\u003c/span\u003eWealth at all times and everywhere; whereas other Commodities\r\nwhich are perishable, or whose value depends\r\nupon the Fashion; or which are contingently scarce and\r\nplentiful, are Wealth, but pro hic et nunc.”\u003ca name=\"FNanchor_93_93\" id=\"FNanchor_93_93\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_93_93\" class=\"fnanchor\"\u003e93\u003c/a\u003e The withdrawal\r\nof money from the stream of circulation and the\r\nsaving of it from the social interchange of matter reaches\r\nits extreme form in the \u003ci\u003eburying\u003c/i\u003e of money, so that social\r\nwealth is brought as an underground indestructible\r\ntreasure into a perfectly secret private relation with the\r\nowner of commodities. Dr. Bernier, who stayed for\r\nsome time at the court of Aurenzeb at Delhi, tells us\r\nhow the merchants, especially the Mohammedan heathens,\r\nwho control nearly all the trade and all money,\r\nsecretly bury their money deep in the ground, “being\r\nimbued with the faith that the gold and silver which\r\nthey put away during their lives will serve them after\r\ndeath in the next world.”\u003ca name=\"FNanchor_94_94\" id=\"FNanchor_94_94\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_94_94\" class=\"fnanchor\"\u003e94\u003c/a\u003e However, in so far as the asceticism\r\nof the hoarder is combined with active industry,\r\nhe is rather a Protestant by religion and still\r\nmore a Puritan. “It can not be denied that buying and\r\nselling are necessary, that one can not get along without\r\nthem, and that one can buy like a Christian especially\r\nthings that serve in need and in honor; for the patriarchs\r\nhad also bought and sold cattle, wool, grain, butter,\r\nmilk and other goods. They are gifts of God which\r\nHe gives out of the earth and divides among men. But\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_174\" id=\"Page_174\"\u003ePg 174\u003c/a\u003e\u003c/span\u003eforeign trade which brings over from Calcutta, India\r\nand other such places commodities consisting of costly\r\nsilks, and gold ware, and spices which only serve for\r\nluxury and are of no use, draining the land and the\r\npeople of their money, should not be tolerated if we but\r\nhad a government of princes. Yet I do not wish to\r\nwrite of that now, for I believe it will have to stop of\r\nitself, when we have no money any longer; and so will\r\nluxury and gluttony; for no writing or teaching will\r\nhelp until want and poverty will force us.”\u003ca name=\"FNanchor_95_95\" id=\"FNanchor_95_95\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_95_95\" class=\"fnanchor\"\u003e95\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIn times of disturbance in the process of the social\r\ninterchange of matter, the burying of money takes place\r\neven in bourgeois societies which are at a high stage of\r\ndevelopment. The social bond in its compact form is\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_175\" id=\"Page_175\"\u003ePg 175\u003c/a\u003e\u003c/span\u003ebeing saved from the social movement (with the owner\r\nof commodities this bond is the commodity and the adequate\r\nform of the commodity is money). The social\r\n\u003ci\u003enervus rerum\u003c/i\u003e is buried next to the body whose nerve it\r\nis.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe hoard would now become mere useless metal,\r\nits money soul would depart from it and it would remain\r\nas the burnt ashes of circulation, as its caput\r\nmortuum, if it did not constantly tend to get back into\r\ncirculation. Money, or crystallized exchange value, is,\r\naccording to its nature, the form of abstract wealth;\r\nbut, on the other hand, any given sum of money is a\r\nquantitatively limited magnitude of value. The quantitative\r\nlimitation of exchange value is in contradiction\r\nwith its qualitative universality and the hoarder con\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_176\" id=\"Page_176\"\u003ePg 176\u003c/a\u003e\u003c/span\u003eceives\r\nin it a barrier which turns, in fact, into a qualitative\r\nbarrier as well and makes of the hoard merely a\r\nlimited representative of material wealth. Money, in\r\nits capacity of a universal equivalent, appears, as we have\r\nseen, as a member of an equation, the other member of\r\nwhich consists of an endless series of commodities. It\r\ndepends on the magnitude of the exchange value to\r\nwhat extent money will be realized in such an endless\r\nseries, i.\u0026nbsp;e., to what degree it corresponds to the conception\r\nof it as an exchange value. The automatic\r\nmovement of exchange value as exchange value can only\r\ntend to its passing beyond its quantitative limits. But\r\nby exceeding the quantitative limits of the hoard a new\r\nlimit is created which must be removed in its turn.\r\nThere is no definite limit which appears as a barrier to\r\nfurther hoarding, every limit plays that part. Hoard\r\naccumulation has, therefore, no inherent limits, no inherent\r\nmeasure; it is an endless process which finds in\r\neach successive result an impulse for a new beginning.\r\nWhile the hoard is increased only by being preserved,\r\nit is preserved only by being increased.\u003c/p\u003e\r\n\r\n\u003cp\u003eMoney is not only \u003ci\u003ean\u003c/i\u003e object of the passion for riches;\r\nit is \u003ci\u003ethe\u003c/i\u003e object of that passion. The latter is essentially\r\n\u003ci\u003eauri sacra fames\u003c/i\u003e. The passion for riches, contrary to\r\nthat for special kinds of natural wealth or use-values,\r\nsuch as clothing, ornaments, herds, etc., is possible only\r\nwhen universal wealth has been individualized as such\r\nin a particular object and can, therefore, be retained in\r\nthe form of a single commodity. Money appears then\r\nno less as an object than as a source of the passion for\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_177\" id=\"Page_177\"\u003ePg 177\u003c/a\u003e\u003c/span\u003e\r\nriches.\u003ca name=\"FNanchor_96_96\" id=\"FNanchor_96_96\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_96_96\" class=\"fnanchor\"\u003e96\u003c/a\u003e The underlying fact of the matter is that exchange\r\nvalue as such and with it its increase become\r\nthe final aim. Greed holds the hoard fast by not allowing\r\nthe money to become a medium of circulation, but\r\nthe thirst for gold saves the money soul of the hoard by\r\nkeeping up the lasting affinity of gold for circulation.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo sum up, the activity by which hoards are built up\r\nresolves itself into withdrawal of money from circulation\r\nby continually repeated sales, and simple hoarding\r\nor \u003ci\u003eaccumulation\u003c/i\u003e. In fact, it is only in the sphere of\r\nsimple circulation and, especially, in the form of hoarding,\r\nthat accumulation of wealth as such takes place,\r\nwhile, as we shall see later, in the case of other so-called\r\nforms of accumulation it is only a misnomer to call them\r\nby that name in mere recollection of the simple accumulation\r\nof money. All other commodities are hoarded\r\neither as use-values, in which case the manner of storing\r\nthem up is determined by the peculiarities of their use-value:\r\nthe storing of grain, e. g., requires special equipment;\r\nthe accumulation of sheep makes one a shepherd;\r\nthe accumulation of slaves and land creates relations\r\nof master and servant, etc.; the accumulation of particular\r\nkinds of wealth requires special processes different\r\nfrom the simple act of hoarding, and develops special\r\nindividual traits. Or, wealth in the form of com\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_178\" id=\"Page_178\"\u003ePg 178\u003c/a\u003e\u003c/span\u003emodities\r\nis hoarded as exchange-value and in that case\r\nhoarding appears as a commercial or a specific economic\r\noperation. The one who carries on such operations becomes\r\na dealer in corn, in cattle, etc. Gold and silver\r\nare money not through some activity of the individual\r\nwho accumulates it, but as crystals of the process of\r\ncirculation which goes on without any aid on his part.\r\nHe has nothing to do but to put them aside, adding\r\nnew weights of metal to his hoard, a perfectly senseless\r\noperation which, if applied to all other commodities,\r\nwould deprive them of all value.\u003ca name=\"FNanchor_97_97\" id=\"FNanchor_97_97\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_97_97\" class=\"fnanchor\"\u003e97\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eOur hoarder appears as a martyr of exchange value,\r\na holy ascetic crowning the metal pillar. He cares for\r\nwealth only in its social form and therefore he buries\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_179\" id=\"Page_179\"\u003ePg 179\u003c/a\u003e\u003c/span\u003eit away from society. He wants to have the commodity\r\nin the form in which it is always capable of entering\r\ncirculation and therefore he withdraws it from circulation.\r\nHe dreams of exchange value and therefore does\r\nnot exchange. The fluid form of wealth and its petrification,\r\nthe elixir of life and the stone of wisdom madly\r\nhaunt each other in alchemic fashion. In his imaginary\r\nunlimited passion for enjoyment he denies himself\r\nall enjoyment. Because he wishes to satisfy all social\r\nwants, he barely satisfies his elementary natural wants.\r\nWhile holding fast to his wealth in its metallic bodily\r\nform, the latter escapes him as a phantom. As a matter of\r\nfact, however, the hoarding of money for the sake of\r\nmoney is the barbaric form of production for production’s\r\nsake, i.\u0026nbsp;e., the development of the productive\r\nforces of social labor beyond the limits of ordinary wants.\r\nThe less the production of commodities is developed,\r\nthe more important is the first crystallization of exchange\r\nvalue into money, or hoarding, which plays,\r\ntherefore, an important part among the ancient nations,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_180\" id=\"Page_180\"\u003ePg 180\u003c/a\u003e\u003c/span\u003ein Asia until the present day, and among modern agricultural\r\nnations where exchange value has not as yet\r\ntaken hold of all the relations of production. Before\r\ntaking up the consideration of the specific economic\r\nfunction of hoarding within the sphere of metallic circulation,\r\nlet us mention another form of hoarding.\u003c/p\u003e\r\n\r\n\u003cp\u003eQuite apart from their aesthetic properties, silver and\r\ngold commodities are convertible into money, since the\r\nmaterial of which they are made is a money material;\r\nand, inversely, gold money and gold bullion can be converted\r\ninto commodities. Because gold and silver constitute\r\nthe material of abstract wealth, the greatest display\r\nof wealth consists of the utilization of these metals\r\nas concrete use-values, and if the owner of commodities\r\nhides his treasure at certain stages of production, he is\r\nvery anxious to appear before other owners of commodities\r\nas \u003ci\u003erico hombre\u003c/i\u003e whenever he can do so with safety.\r\nHe gilds himself and his house.\u003ca name=\"FNanchor_98_98\" id=\"FNanchor_98_98\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_98_98\" class=\"fnanchor\"\u003e98\u003c/a\u003e In Asia, especially in\r\nIndia, where, unlike under the capitalist system, the\r\nhoarding of wealth appears not as a subordinate function\r\nof the system of production, but as an end in itself,\r\ngold and silver commodities are practically but aesthetic\r\nforms of hoards. In mediaeval England gold and silver\r\ncommodities were considered before the law as mere\r\nforms of treasure, since their value was but slightly in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_181\" id=\"Page_181\"\u003ePg 181\u003c/a\u003e\u003c/span\u003ecreased\r\nby the crude labor spent upon them. They were\r\ndestined to re-enter circulation and their fineness was\r\ntherefore prescribed in the same manner as that of\r\ncoin. The increasing use of gold and silver as objects\r\nof luxury with the growth of wealth is such a simple\r\nmatter that it was perfectly clear to the ancients,\u003ca name=\"FNanchor_99_99\" id=\"FNanchor_99_99\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_99_99\" class=\"fnanchor\"\u003e99\u003c/a\u003e while\r\nmodern economists have advanced the erroneous proposition\r\nthat the use of silver and gold articles increases\r\nnot in proportion to the growth of wealth, but in proportion\r\nto the fall in value of the precious metals. Their\r\notherwise accurate references to the use of Californian\r\nand Australian gold are inconclusive, since the increased\r\nconsumption of gold as a raw material does not find\r\njustification, according to their theory, in any corresponding\r\ndecline in its value. From 1810 to 1830, in\r\nconsequence of the struggle of the American colonies\r\nagainst Spain and the interruption of mining caused by\r\nrevolutions, the annual average production of precious\r\nmetals declined by more than one-half. The decline\r\nof coin in circulation in Europe amounted to nearly one-sixth,\r\ncomparing the years 1829 and 1809. Although\r\nthe quantity produced had thus declined and the cost\r\nof production, if it had changed at all, had increased,\r\nyet the consumption of precious metals as objects of\r\nluxury increased to an extraordinary extent in England\r\nduring the very war and on the continent after the\r\nPeace of Paris. The consumption increased with the\r\ngeneral growth of wealth.\u003ca name=\"FNanchor_100_100\" id=\"FNanchor_100_100\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_100_100\" class=\"fnanchor\"\u003e100\u003c/a\u003e It may be stated as a general\r\nlaw that the conversion of gold and silver money\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_182\" id=\"Page_182\"\u003ePg 182\u003c/a\u003e\u003c/span\u003einto articles of luxury prevails in times of peace, while\r\ntheir reconversion into bullion or even coin takes place\r\nin stormy periods.\u003ca name=\"FNanchor_101_101\" id=\"FNanchor_101_101\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_101_101\" class=\"fnanchor\"\u003e101\u003c/a\u003e How considerable the proportion\r\nis of the gold and silver treasure in the form of articles\r\nof luxury to the quantity of precious metals serving as\r\nmoney may be seen from the fact that in 1829 the proportion\r\nin England, according to Jacob, was two to one,\r\nand in entire Europe and America the precious metals\r\nin the form of articles of luxury exceeded those in the\r\nform of money by one-fourth.\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that the circulation of money is but\r\nthe manifestation of the metamorphoses of commodities,\r\nor of the form under which the social interchange of\r\nmatter takes place. With the change in the total price\r\nof commodities in circulation or in the volume of their\r\nsimultaneous metamorphoses, the rapidity of their change\r\nof form in each case being given, the total quantity of\r\ngold in circulation must always expand or contract.\r\nThat is possible only under the condition that the total\r\nquantity of money in the country continually bear a varying\r\nratio to the quantity of money in circulation. This\r\ncondition is met by the process of hoarding. With a\r\nfall in prices or rise in the rapidity of circulation, the\r\nhoard-reservoirs absorb that part of money which is\r\nthrown out of circulation; with a rise in price or a de\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_183\" id=\"Page_183\"\u003ePg 183\u003c/a\u003e\u003c/span\u003ecline\r\nin the rapidity of circulation, the hoards open up\r\nand return a part of their contents to the stream of\r\ncirculation. The solidification of circulating money\r\ninto hoards and the outpouring of hoards into circulation\r\nis a constantly oscillating movement in which the\r\nprevalence of the one or the other tendency is determined\r\nexclusively by fluctuations in the circulation of\r\ncommodities. Hoards thus serve as conduits for the\r\nsupply and withdrawal of money to or from circulation,\r\nso that every time only that quantity of money circulates\r\nas coin which is required by the immediate needs\r\nof circulation. If the volume of the entire circulation\r\nsuddenly expands and the fluent unity of sale and\r\npurchase assumes such dimensions that the total sum of\r\nprices to be realized increases more rapidly than the\r\nrapidity of the circulation of money, the hoards decrease\r\nperceptibly; but when the combined movement slackens\r\nto an unusual extent, or the movement of buying and\r\nselling steadies itself, the medium of circulation solidifies\r\ninto money in large measure, and the treasure reservoirs\r\nfill up far above their average level. In countries\r\nwith an exclusively metallic circulation or where production\r\nis at a low stage of development, the hoards are\r\nendlessly split up and scattered all over the land, while\r\nin countries where the capitalist system is developed\r\nthey are concentrated in bank reservoirs. Hoards are\r\nnot to be confounded with coin reservoirs, which\r\nform a constituent part of the total supply of\r\nmoney in circulation, while the interaction between\r\nhoards and currency implies the decline or rise of its\r\ntotal supply. Gold and silver commodities form, as we\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_184\" id=\"Page_184\"\u003ePg 184\u003c/a\u003e\u003c/span\u003e\r\nhave seen, both conduits for the withdrawal of precious\r\nmetals, as well as sources of their supply. In ordinary\r\ntimes only their former function is of importance to\r\nthe economy of metallic circulation.\u003ca name=\"FNanchor_102_102\" id=\"FNanchor_102_102\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_102_102\" class=\"fnanchor\"\u003e102\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_185\" id=\"Page_185\"\u003ePg 185\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003ch5\u003eb. MEANS OF PAYMENT.\u003c/h5\u003e\r\n\r\n\u003cp\u003eThe two forms which have so far distinguished money\r\nfrom the circulating medium are those of \u003ci\u003esuspended coin\u003c/i\u003e\r\nand of the \u003ci\u003ehoard\u003c/i\u003e. The temporary transformation of coin\r\ninto money in the case of the former means that\r\nthe second phase of C\u0026mdash;M\u0026mdash;C, namely purchase\r\nM\u0026mdash;C, must break up within a certain sphere of\r\ncirculation into a series of successive purchases. As\r\nto hoarding, it is simply based on the isolation of the\r\nact C\u0026mdash;M when it does not immediately pass into M\u0026mdash;C,\r\nor is but an independent development of the first metamorphosis\r\nof a commodity; it represents money as the\r\nresult of the alienation of all commodities in contra-distinction\r\nto the medium of circulation as the embodiment\r\nof commodities in their always alienable form.\r\nCoin reserves and hoards are money only as non-circulating\r\nmediums and are non-circulating mediums only because\r\nthey do not circulate. In the capacity in which\r\nwe consider money now, it circulates or enters circulation,\r\nbut does not perform the function of a circulating\r\nmedium. As a medium of circulation money is always\r\na means of purchase, now it does not act in that capacity.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs soon as money develops through the process of\r\nhoarding into the embodiment of abstract social wealth\r\nand the tangible representative of material wealth, it\r\nassumes in that capacity special functions within the\r\nprocess of circulation. If money circulates merely as a\r\nmedium of circulation and therefore as a means of\r\npurchase, it is understood that commodity and money\r\nconfront each other at the same time, i.\u0026nbsp;e., that the same\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_186\" id=\"Page_186\"\u003ePg 186\u003c/a\u003e\u003c/span\u003e\r\nvalue is present in a double form: at one pole, as a\r\ncommodity in the hands of the seller; at the other\r\npole as money in the hands of the buyer. This simultaneous\r\nexistence of the two equivalents at opposite\r\npoles and their simultaneous change of places or mutual\r\nalienation presupposes in its turn that seller and\r\nbuyer enter into relations as owners of equivalents\r\nthat are on hand. But in the course of time, the\r\nprocess of the metamorphosis of commodities which\r\nproduces the different forms of money, transforms\r\nalso the owners of commodities or changes the character\r\nin which they appear before each other in the\r\ncommunity. In the process of metamorphosis of the\r\ncommodity the guardian of the latter changes his skin\r\nas often as the commodity changes place or as the\r\nmoney assumes new forms. Thus, the owners of\r\ncommodities originally confronted each other only as\r\ncommodity owners, but later on they became one a\r\nbuyer, the other a seller; then each became alternately\r\nbuyer and seller, then hoarders, and finally rich men.\r\nIn that manner, the owners of commodities do not\r\ncome out of the process of circulation the same men\r\nthat they entered. In fact the different forms which\r\nmoney assumes in the process of circulation are but\r\ncrystallized changes of form of the commodities\r\nthemselves, which in their turn are but concrete expressions\r\nof the changing social relations in which\r\ncommodity owners carry on the interchange of matter\r\nwith one another. New trade relations spring up in\r\nthe process of circulation, and, as representatives of\r\nthese changed relations, commodity owners assume\r\nnew economic roles. Just as gold becomes idealized\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_187\" id=\"Page_187\"\u003ePg 187\u003c/a\u003e\u003c/span\u003e\r\nwithin the process of circulation and plain paper, in\r\nits capacity of a representative of gold, performs the\r\nfunction of money, so does the same process of circulation\r\nlend the weight of actual seller and buyer\r\nto the buyer and seller who enter it merely as representatives\r\nof future money and future commodities.\u003c/p\u003e\r\n\r\n\u003cp\u003eAll the forms in which gold develops into money,\r\nare but the unfolding of potentialities which the\r\nmetamorphosis of commodities bears within itself.\r\nThese forms did not become distinctly differentiated\r\nin the process of simple money circulation where\r\nmoney appears as coin and the movement C\u0026mdash;M\u0026mdash;C\r\nforms a dynamic unity; at most, they appeared as\r\nmere potentialities as, e. g., in the case of the break\r\nin the metamorphosis of a commodity. We have\r\nseen that in the process C\u0026mdash;M the relations between\r\nthe commodity and money were those of an actual\r\nuse-value and ideal exchange-value to an actual exchange\r\nvalue and only ideal use-value. By alienating\r\nhis commodity as a use-value the seller realized its\r\nown exchange value and the use-value of money. On\r\nthe contrary, the buyer, by alienating his money as\r\nexchange value, realized its own use-value and the\r\nprice of the commodity. Commodity and money\r\nchanged places accordingly. When it comes to a realization\r\nin actual life of this bi-polar contrast, a new\r\nbreak occurs. The seller actually alienates his commodity,\r\nbut realizes its price only in idea: he has sold\r\nhis commodity at its price, which is to be realized,\r\nhowever, only subsequently, at a time agreed upon.\r\nThe purchaser buys as the representative of future\r\nmoney, while the vender sells as the owner of present\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_188\" id=\"Page_188\"\u003ePg 188\u003c/a\u003e\u003c/span\u003e\r\ngoods. On the part of the vender, the commodity\r\nas use-value is actually alienated, without the price\r\nbeing actually realized; on the part of the purchaser,\r\nmoney is actually realized in the use-value of the\r\ncommodity, without being actually alienated as exchange\r\nvalue. Instead of a token of value representing\r\nmoney symbolically as was the case before,\r\nthe purchaser himself performs that part now. And\r\njust as in the former case the symbolic nature of the\r\ntoken of value called forth the guarantee of the state\r\nwhich has made it legal tender, so does the personal\r\nsymbolism of the buyer bring about legally enforcible\r\nprivate contracts among commodity owners.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe contrary may happen in the process M\u0026mdash;C,\r\nwhere the money can be alienated as a real means of\r\npurchase, and in that way the price of the commodity\r\ncan be realized before the use-value of the money is\r\nrealized and the commodity actually delivered. This\r\noccurs constantly under the everyday form of pre-payments.\r\nAnd it is under this form that the English\r\ngovernment purchases opium from the ryots of India,\r\nor, foreign merchants residing in Russia mostly buy\r\nagricultural products. In these cases, however, the\r\nmoney always acts in its well known role of a means\r\nof purchase and therefore, does not assume any new\r\nforms.\u003ca name=\"FNanchor_103_103\" id=\"FNanchor_103_103\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_103_103\" class=\"fnanchor\"\u003e103\u003c/a\u003e We need not dwell, therefore, on this case\r\nany longer; but with reference to the changed form\r\nwhich the two processes M\u0026mdash;C and C\u0026mdash;M assume\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_189\" id=\"Page_189\"\u003ePg 189\u003c/a\u003e\u003c/span\u003enow, we may note that the difference between purchase\r\nand sale which appeared but imaginary in the\r\ndirect process of circulation, now becomes a real difference,\r\nsince in the former case only the money is\r\npresent and in the latter only the commodity, and in\r\neither case only that extreme is present from which\r\nthe initiative comes. Besides, the two forms have\r\nthis in common: that in either, one of the equivalents\r\nis present only in the common will of the buyer and\r\nseller,\u0026mdash;a will that is binding on both and assumes\r\ndefinite legal forms.\u003c/p\u003e\r\n\r\n\u003cp\u003eSeller and buyer become creditor and debtor.\r\nWhile the commodity owner looked comical as the\r\nguardian of a treasure, he now becomes awe-inspiring,\r\nsince he no longer identifies himself but his neighbor\r\nwith a certain sum of money and makes him and\r\nnot himself a martyr of exchange value. From a believer\r\nhe becomes a creditor, for religion he substitutes\r\nlaw.\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n“I stay here on my bond!”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003eThus, in the modified form C\u0026mdash;M in which the\r\ncommodity is present and money is only represented,\r\nmoney plays first of all the part of a measure of\r\nvalue. The exchange value of the commodity is estimated\r\nin money as its measure; but as exchange\r\nvalue, established by contract, price exists not only\r\nin the mind of the seller, but also as a measure of\r\nobligation on the part of the buyer. Besides serving\r\nas a measure of value, money plays here the part of\r\na means of purchase, although in that capacity it only\r\ncasts ahead the shadow of its future existence. It\r\nattracts the commodity from its position in the hand\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_190\" id=\"Page_190\"\u003ePg 190\u003c/a\u003e\u003c/span\u003e\r\nof the seller into that of the buyer. As soon as the\r\nterm of the contract expires, money enters circulation,\r\nsince it changes its position by passing from the\r\nhands of the former buyer into those of the former\r\nseller. But it does not enter circulation as a circulating\r\nmedium or as a means of purchase. It performed\r\nthose functions before it was present and\r\nit appears after it has ceased to perform them. It\r\nnow enters circulation as the only adequate equivalent\r\nof the commodity, as the absolute form of existence\r\nof exchange value, as the last word of the process of\r\nexchange, in short as money, and money in its distinct\r\nrole of a \u003ci\u003euniversal means of payment\u003c/i\u003e. In this capacity\r\nof a means of payment money appears as the\r\nabsolute commodity, but within the sphere of circulation\r\nand not without it as was the case with hoards.\r\nThe difference between the means of purchase and the\r\nmeans of payment makes itself unpleasantly felt in\r\nperiods of commercial crises.\u003ca name=\"FNanchor_104_104\" id=\"FNanchor_104_104\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_104_104\" class=\"fnanchor\"\u003e104\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eOriginally, the conversion of the product into\r\nmoney in the sphere of circulation appears only as\r\nan individual necessity for the commodity owner in\r\nso far as his own product has no use-value to him,\r\nbut has to acquire it first by being alienated. But in\r\norder to pay at the expiration of the contract, he\r\nmust have sold commodities before that. Thus, entirely\r\napart from his individual wants, the movement\r\nof the circulation process makes selling a social necessity\r\nwith every owner of commodities. As a former\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_191\" id=\"Page_191\"\u003ePg 191\u003c/a\u003e\u003c/span\u003ebuyer of a commodity he is compelled to become a\r\nseller of another commodity in order to get money\r\nnot as a means of purchase but as a means of payment,\r\nas the absolute form of exchange value. The\r\nconversion of commodity into money as a final act,\r\nor the first metamorphosis of a commodity as an end\r\nin itself which in the case of hoarding seemed to be\r\na matter of caprice on the part of the commodity\r\nowner, becomes now an economic function. The motive\r\nand essence of sale for the sake of payment becomes\r\nfrom a mere form of the process of circulation\r\nits self emanating substance.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn this form of sale the commodity completes its\r\nchange of position; it circulates while it postpones its\r\nfirst metamorphosis, viz. its transformation into\r\nmoney. On the contrary, on the part of the buyer\r\nthe second metamorphosis is completed, i.\u0026nbsp;e. money\r\nis reconverted into a commodity before the first metamorphosis\r\nhas taken place, i.\u0026nbsp;e., before the commodity\r\nhas been turned into money. The first metamorphosis\r\nthus takes place after the second in point\r\nof time; and thereby, money i.\u0026nbsp;e. the form of the commodity\r\nin its first metamorphosis, acquires a new\r\ndestination. Money or the spontaneous development of\r\nexchange value, is no longer a mere intermediary form\r\nof the circulation of commodities, but its final result.\u003c/p\u003e\r\n\r\n\u003cp\u003eThat such \u003ci\u003etime sales\u003c/i\u003e in which the two poles of the\r\nsale are separated in point of time, have their natural\r\norigin in the simple circulation of commodities, requires\r\nno elaborate proof. In the first place, the development\r\nof circulation leads to a continual repeti\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_192\" id=\"Page_192\"\u003ePg 192\u003c/a\u003e\u003c/span\u003etion\r\nof the mutual transactions between the same\r\ncommodity owners who confront each other as seller\r\nand buyer. The repetition is not accidental; on the\r\ncontrary, goods are ordered, let us say, for a certain\r\ndate in the future when they are to be delivered and\r\npaid for. In that case the sale is ideal, i.\u0026nbsp;e. it is\r\nlegally accomplished without the actual presence of\r\nthe goods and money. Both forms of money, those\r\nof a medium of circulation and of a means of payment\r\nstill coincide here, since in the first place, commodity\r\nand money change places simultaneously, and\r\nsecondly, the money does not buy the commodity, but\r\nrealizes the price of the commodity purchased before.\r\nIn the second place, the nature of a great many\r\nuse-values makes the simultaneous alienation and delivery\r\nof the goods impossible, and delivery has to\r\nbe postponed for a certain time; e. g., when the use\r\nof a house is sold for one month, the use-value of\r\nthe house is delivered only at the expiration of the\r\nmonth, although it changes hands at the beginning of\r\nthe month. Since the actual transfer of the use-value\r\nand its virtual alienation are separated here in\r\npoint of time, the realization of its price occurs also\r\nafter its change of place. Finally, the difference in\r\nthe seasons and in the length of time required for the\r\nproduction of various commodities brings about a\r\nsituation where one tries to sell his goods, while the\r\nother is not ready to buy; and with the repeated purchases\r\nand sales between the same commodity owners\r\nthe two ends of sale fall apart according to the conditions\r\nof production of the respective commodities.\r\nThus arises a relation of creditor and debtor between\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_193\" id=\"Page_193\"\u003ePg 193\u003c/a\u003e\u003c/span\u003e\r\nthe owners of commodities which, though constituting\r\nthe natural foundation of the credit system, may be\r\nfully developed before the latter comes into existence.\r\nIt is clear that with the extension of the credit system,\r\nand, consequently, with the development of the\r\ncapitalist system of production in general, the function\r\nof money as a means of payment will extend at\r\nthe expense of its function as a means of purchase\r\nand, still more, as an element of hoarding. In England,\r\ne. g., money as coin has been almost completely\r\nbanished into the sphere of retail and petty trade between\r\nproducers and consumers, while it dominates\r\nthe sphere of large commercial transactions as a\r\nmeans of payment.\u003ca name=\"FNanchor_105_105\" id=\"FNanchor_105_105\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_105_105\" class=\"fnanchor\"\u003e105\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eAs the universal means of payment money becomes\r\nthe \u003ci\u003euniversal commodity\u003c/i\u003e of all contracts, at first only in\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_194\" id=\"Page_194\"\u003ePg 194\u003c/a\u003e\u003c/span\u003ethe sphere of circulation of commodities.\u003ca name=\"FNanchor_106_106\" id=\"FNanchor_106_106\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_106_106\" class=\"fnanchor\"\u003e106\u003c/a\u003e But with the\r\ndevelopment of this function of money, all other forms\r\nof payment are gradually converted into money payments.\r\nThe extent to which money is developed as the\r\nexclusive means of payment indicates the degree to\r\nwhich exchange value has taken hold of production in\r\nits depth and breadth.\u003ca name=\"FNanchor_107_107\" id=\"FNanchor_107_107\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_107_107\" class=\"fnanchor\"\u003e107\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe volume of money in circulation, as a means of\r\npayment, is determined in the first place, by the amount\r\nof payments, i.\u0026nbsp;e. by the sum total of the prices of the\r\ncommodities alienated, but not about to be alienated, as\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_195\" id=\"Page_195\"\u003ePg 195\u003c/a\u003e\u003c/span\u003ein the case of the simple circulation of money. The\r\nquantity thus determined is subject, however, to two\r\nmodifications. The first modification is due to the\r\nrapidity with which the same piece of money repeats\r\nthe same function, i.\u0026nbsp;e. with which the several payments\r\nsucceed one another. A pays B, whereupon B\r\npays C, and so forth. The rapidity with which the\r\nsame coin repeats its function as a means of payment,\r\ndepends first, upon the continuity of the relation of\r\ncreditor and debtor among the owners of commodities,\r\nthe same commodity owner being the creditor\r\nof one person and the debtor of another, etc., and\r\nsecondly, upon the interval which separates the times\r\nof various payments. This chain of payments or of\r\nsupplementary first metamorphoses of commodities is\r\nqualitatively different from the chain of metamorphoses\r\nwhich is formed by the circulation of money\r\nas a circulating medium. The latter not only makes\r\nits appearance gradually, but is even formed in that\r\nmanner. A commodity is first converted into money,\r\nthen again into a commodity, thereby enabling\r\nanother commodity to become money, etc.; or, seller\r\nbecomes buyer, whereby another commodity owner\r\nturns seller. This successive connection is accidentally\r\nformed in the very process of the exchange of\r\ncommodities. But when the money which A has paid\r\nto B is passed on from B to C, from C to D, etc.,\r\nand that, too, at intervals rapidly succeeding one\r\nanother, then this external connection reveals but an\r\nalready existing social connection. The same money\r\npasses through different hands not because it appears\r\nas a means of payment; it passes as a means of pay\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_196\" id=\"Page_196\"\u003ePg 196\u003c/a\u003e\u003c/span\u003ement\r\nbecause the different hands have already\r\nclasped each other. The rapidity with which money\r\ncirculates as a means of payment thus shows that individuals\r\nhave been drawn into the process of circulation\r\nmuch deeper than would be indicated by the\r\nsame rapidity of the circulation of money as coin or\r\nas a means of purchase.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe sum total of prices made up by all the purchases\r\nand sales taking place at the same time, and,\r\ntherefore, side by side, constitutes the limit for the\r\nsubstitution of the volume of coin by the rapidity of\r\nits circulation. If the payments that are to be made\r\nsimultaneously are concentrated at one place\u0026mdash;which\r\nnaturally arises at first at points where the circulation\r\nof commodities is largest\u0026mdash;the payments balance each\r\nother as negative and positive quantities: A is under\r\nobligations to pay B, while he has to be paid by C.\r\netc. The quantity of money required as a means of\r\npayment will, therefore, be determined not by the\r\ntotal amount of payments which have to be made simultaneously,\r\nbut by the greater or less concentration\r\nof the same and by the magnitude of the balance remaining\r\nafter their mutual neutralization as negative\r\nand positive quantities. Special arrangements are\r\nmade for settlements of this kind even where the\r\ncredit system is not developed at all, as was the case\r\ne. g. in ancient Rome. The consideration of these\r\narrangements, however, as well as that of the general\r\ntime limits of payment, which are everywhere established\r\namong certain elements in the community, does\r\nnot belong here. We may add that the specific influence\r\nwhich these time settlements exert on the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_197\" id=\"Page_197\"\u003ePg 197\u003c/a\u003e\u003c/span\u003e\r\nperiodic fluctuations in the quantity of money in circulation,\r\nhas been scientifically investigated but lately.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn so far as the payments mutually balance as positive\r\nand negative quantities, no money actually appears\r\non the scene. It figures here only in its capacity\r\nof a measure of value: first, in the prices of\r\ncommodities, and second, in the magnitude of mutual\r\nobligations. Aside from its ideal form, exchange\r\nvalue does not exist here independently, not even in\r\nthe form of a token of value; that is to say, money\r\nplays here only the part of ideal money of account.\r\nThe function of money as a means of payment thus\r\nimplies a contradiction. On the one hand, in so far\r\nas payments balance, it serves only ideally as a measure\r\nof value. On the other hand, in so far as a payment\r\nhas actually to be made, money enters circulation\r\nnot as a transient circulating medium, but as the\r\nfinal resting form of the universal equivalent, as the\r\nabsolute commodity, in a word, as money. Therefore,\r\nwhenever such a thing as a chain of payments\r\nand an artificial system of settling them, is developed,\r\nmoney suddenly changes its visionary nebulous shape\r\nas a measure of value, turning into hard cash or\r\nmeans of payment, as soon as some shock causes a\r\nviolent interruption of the flow of payments and disturbs\r\nthe mechanism of their settlement. Thus, under\r\nconditions of fully developed capitalist production,\r\nwhere the commodity owner has long become a capitalist,\r\nknows his Adam Smith, and condescendingly\r\nlaughs at the superstition that gold and silver alone\r\nconstitute money or that money differs at all from\r\nother commodities as the absolute commodity, money\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_198\" id=\"Page_198\"\u003ePg 198\u003c/a\u003e\u003c/span\u003e\r\nsuddenly reappears not as a medium of circulation,\r\nbut as the only adequate form of exchange value, as\r\nthe only form of wealth, exactly as it is looked upon\r\nby the hoarder. In its capacity of such an exclusive\r\nform of wealth, it reveals itself, unlike under the\r\nmonetary system, not in mere imaginary, but in actual\r\ndepreciation and worthlessness of all material wealth.\r\nThat is what constitutes the particular phase of crises\r\nof the world market which is known as a money crisis.\r\nThe \u003ci\u003esummum bonum\u003c/i\u003e for which everybody is crying\r\nat such times as for the only form of wealth, is cash,\r\nhard cash; and by the side of it all other commodities\r\njust because they are use-values, appear useless like\r\nso many trifles and toys, or, as our Dr. Martin Luther\r\nsays, as mere objects of ornament and gluttony. This\r\nsudden reversion from a system of credit to a system\r\nof hard cash heaps theoretical fright on top of the\r\npractical panic; and the dealers by whose agency circulation\r\nis affected shudder before the impenetrable\r\nmystery in which their own economical relations are\r\ninvolved.\u003ca name=\"FNanchor_108_108\" id=\"FNanchor_108_108\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_108_108\" class=\"fnanchor\"\u003e108\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003ePayments, in their turn, require the formation of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_199\" id=\"Page_199\"\u003ePg 199\u003c/a\u003e\u003c/span\u003ereserve funds, the accumulation of money as a means\r\nof payment. The building up of reserve funds appears\r\nno longer as a practice carried on outside of\r\nthe sphere of circulation, as in the case of hoarding;\r\nnor as a mere technical accumulation of coin, as in\r\nthe case of coin reserves; on the contrary, money\r\nmust now be gradually accumulated to be available\r\non certain future dates when payments become due.\r\nWhile hoarding, in its abstract form as a means of\r\nenrichment, declines with the development of the\r\ncapitalist system of production, that species of hoarding\r\nwhich is directly called for by the process of production,\r\nincreases; or, to put it differently, a part of\r\nthe treasure which is generally formed in the sphere\r\nof circulation of commodities, is absorbed as a reserve\r\nfund of means of payment. The more developed\r\nthe capitalist system of production, the more\r\nthese reserve funds are limited to the necessary minimum.\r\nLocke, in his work “On the Lowering of Interest”\u003ca name=\"FNanchor_109_109\" id=\"FNanchor_109_109\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_109_109\" class=\"fnanchor\"\u003e109\u003c/a\u003e\r\nfurnishes interesting data with reference to\r\nthe size of these reserve funds in his time. They\r\nshow what a considerable part of the total money in\r\ncirculation the reservoirs for means of payment absorbed\r\nin England just at the time when banking began\r\nto develop.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe law as to quantity of money in circulation, as\r\nit has been formulated in the analysis of the simple\r\ncirculation of money, receives an essential modification\r\nwhen the circulation of the means of payment is\r\ntaken into account. The rapidity of the circulation of\r\nmoney whether as circulating medium or as means of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_200\" id=\"Page_200\"\u003ePg 200\u003c/a\u003e\u003c/span\u003epayment\u0026mdash;being given, the total amount of money in\r\ncirculation at a given time will be determined by the\r\nsum total of the prices of commodities to be realized,\r\n\u003ci\u003eplus\u003c/i\u003e the total amount of payments falling due at the\r\nsame time, \u003ci\u003eminus\u003c/i\u003e the amount of payments balancing\r\neach other. The general law that the volume of\r\nmoney in circulation depends on the prices of commodities\r\nis not affected by this in the least, since the\r\nextent of the payments is itself determined by the\r\nprices stipulated in contracts. What is, however,\r\nstrikingly demonstrated, is that even if the rapidity of\r\ncirculation and the economy of payments be assumed\r\nto remain the same, the sum total of the prices of\r\nthe commodities circulating in a given period of time,\r\nsay one day, and the volume of money in circulation\r\non the same day are by no means equal, because there\r\nis a large number of commodities in circulation whose\r\nprices have yet to be realized in money at a future\r\ndate, and there is a quantity of money in circulation\r\nwhich constitutes the payment for commodities which\r\nhave long gone out of circulation. The latter amount\r\nwill depend on the sum of payments falling due on\r\nthe same day although contracted for at entirely different\r\nperiods.\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that a change in the values of gold\r\nand silver does not affect their function as measures\r\nof value or money of account. But this change is of\r\ndecisive importance for money as a hoard, since with\r\nthe rise or fall of value of gold and silver, the total\r\nvalue of a gold or silver hoard will also rise or fall.\r\nOf still greater importance is the effect of this change\r\non money as a means of payment. The payment takes\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_201\" id=\"Page_201\"\u003ePg 201\u003c/a\u003e\u003c/span\u003e\r\nplace after the sale of the commodity, or the money\r\nserves in two different capacities at two different periods;\r\nfirst, as a measure of value, then as a means\r\nof payment corresponding to the measurement. If,\r\nduring this interval, the value of the precious metals\r\nor the labor-time necessary for their production undergoes\r\na change, the same quantity of gold or silver\r\nwill be worth more or less when it appears as a means\r\nof payment than what it was when it served as a\r\nmeasure of value, i.\u0026nbsp;e., when the contract was concluded.\r\nThe function of a particular commodity,\r\nlike gold or silver, to serve as money or independent\r\nexchange value comes here in conflict with the nature\r\nof the particular commodity whose magnitude of\r\nvalue depends on changes in the cost of its production.\r\nThe great social revolution which caused the\r\nfall in value of the precious metals in Europe, is as\r\nwell known as the revolution of an opposite character\r\nwhich had been brought about at an early period in\r\nthe history of the ancient Roman republic by the rise\r\nin value of copper in terms of which the debts of the\r\nplebeians had been contracted. Without attempting\r\nhere to follow any further the fluctuations of value\r\nof the precious metals and their effect on the system\r\nof bourgeois political economy, it is at once apparent\r\nthat a fall in the value of the precious metals favors\r\nthe debtors at the expense of the creditors, while a\r\nrise in their value favors the creditors at the expense\r\nof the debtors.\u003c/p\u003e\r\n\r\n\u003ch5\u003ec. WORLD MONEY.\u003c/h5\u003e\r\n\r\n\u003cp\u003eGold becomes money as distinguished from coin only\r\nafter it is withdrawn from circulation in the shape of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_202\" id=\"Page_202\"\u003ePg 202\u003c/a\u003e\u003c/span\u003e\r\na hoard; it then enters circulation as a non-medium of\r\ncirculation, and finally breaks through the barriers of\r\nhome circulation to assume the part of a universal equivalent\r\nin the world of commodities. It becomes \u003ci\u003eworld\r\nmoney\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhile the general measures of weight of the precious\r\nmetals served as their original measures of value, the reverse\r\nprocess takes place now in the world market, and\r\nthe reckoning names of money are turned back into corresponding\r\nweight names. In the same way, while\r\nshapeless crude metal (aes rude) was the original\r\nform of the medium of circulation and the coin form\r\nconstituted but the official stamp certifying that a given\r\npiece of metal was of a certain weight, now the precious\r\nmetal in its capacity of a world coin throws off its stamp\r\nand shape and reassumes the indistinguishable bullion\r\nform; and even if national coins, such as Russian imperials,\r\nMexican dollars, and English sovereigns, do circulate\r\nabroad, their name is of no importance, and only\r\ntheir contents count. Finally, as international money,\r\nthe precious metals come again to perform their original\r\nfunction of mediums of exchange, which, like the exchange\r\nof commodities, arose first not within the\r\nvarious primitive communities, but at their points of\r\ncontact with one another. As world money, money thus\r\nreassumes its primitive form. On leaving the sphere\r\nof home circulation, it strips off the particular forms\r\nwhich it has acquired in the course of the development of\r\nthe process of exchange within that particular national\r\nsphere, those local garbs of standard of price, of coin,\r\nof auxiliary coin, and of token of value.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_203\" id=\"Page_203\"\u003ePg 203\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that in the home circulation of a country,\r\nonly one commodity serves as a measure of value.\r\nSince, however, that function is performed by gold in\r\nsome countries and by silver in others, there is a double\r\nstandard of value in the world market and money assumes\r\ntwo forms in all its other functions. The translation\r\nof the values of commodities from gold prices into\r\nsilver prices and vice versa depends in each case upon\r\nthe relative value of the two metals, which is constantly\r\nchanging and, therefore, appears to be constantly in the\r\nprocess of determination. Commodity owners in every\r\nnational sphere of circulation have to use gold and silver\r\nalternately for foreign circulation and thus to exchange\r\nthe metal which is accepted as money at home for the\r\nmetal which they happen to need as money abroad.\r\nEvery nation is, therefore, utilizing both metals, gold\r\nand silver, as world money.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the international circulation of commodities, gold\r\nand silver appear not as mediums of circulation, but as\r\nuniversal mediums of exchange. The universal medium\r\nof exchange performs its function only under its two\r\ndeveloped forms of a means of purchase and of a means\r\nof payment, whose mutual relation in the world market\r\nis the very reverse of what it is at home. In the sphere\r\nof home circulation, money in the form of coin, played\r\nexclusively the part of a means of purchase, either as the\r\nintermediary in the dynamic unity C\u0026mdash;M\u0026mdash;C or as the\r\nrepresentative of the transient form of exchange value in\r\nthe unceasing change of positions by commodities. In\r\nthe world market it is just the contrary. Gold and silver\r\nappear here as a means of purchase when the ex\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_204\" id=\"Page_204\"\u003ePg 204\u003c/a\u003e\u003c/span\u003echange\r\nof matter is but one-sided, and purchase and\r\nsale do not coincide. The frontier trade at Kiachta\r\ne. g. is both actually and according to treaty, one of\r\nbarter, in which silver plays only the part of a measure\r\nof value. The war of 1857-58 compelled the Chinese to\r\nsell without buying. Silver suddenly appeared now as\r\na means of purchase. Out of regard to the letter of\r\nthe treaty, the Russians made up the French five frank\r\ncoins into crude silver commodities, which were made to\r\nserve as a means of exchange. Silver has always served\r\nas a means of purchase between Europe and America\r\non one side and Asia on the other, where it settles down\r\nin the form of hoards. Furthermore, the precious\r\nmetals serve as international means of purchase whenever\r\nthe ordinary balance of exchange of matter between\r\ntwo nations is suddenly upset, as e. g. when a failure\r\nof crops forces one of them to buy on an extraordinary\r\nscale. Finally, the precious metals are international\r\nmeans of purchase in the hands of gold and silver producing\r\ncountries, in which case they directly constitute\r\na product and commodity and not merely a converted\r\nform of a commodity. The more the exchange of commodities\r\nbetween different national spheres of circulation\r\nis developed, the more important becomes the function\r\nof world money to serve as a \u003ci\u003emeans of payment\u003c/i\u003e\r\nfor the settlement of international balances.\u003c/p\u003e\r\n\r\n\u003cp\u003eLike home circulation, international circulation requires\r\na constantly changing quantity of gold and silver.\r\nA part of the accumulated hoards serves therefore, in\r\neach country as a reserve fund of world money, which\r\nnow declines, now rises, according to the fluctuations of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_205\" id=\"Page_205\"\u003ePg 205\u003c/a\u003e\u003c/span\u003e\r\nthe exchange of commodities.\u003ca name=\"FNanchor_110_110\" id=\"FNanchor_110_110\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_110_110\" class=\"fnanchor\"\u003e110\u003c/a\u003e Besides the special movements\r\nwhich take place between national spheres of\r\ncirculation, world-money possesses a universal movement,\r\nwhose starting points are at the sources of production\r\nfrom which gold and silver streams spread out in\r\ndifferent directions all over the world market. Here\r\ngold and silver enter the world circulation as commodities\r\nand are exchanged for commodity equivalents in\r\nproportion to the labor-time contained in them, before\r\nthey penetrate national spheres of circulation. In the\r\nlatter, they appear now with a given magnitude of value.\r\nEvery fall or rise in the cost of their production equally\r\naffects, therefore, their relative value throughout the\r\nworld market; on the other hand, that value is entirely\r\nindependent of the extent to which the different\r\nnational spheres of circulation absorb gold or silver. The\r\npart of the metal stream which is caught up by every\r\nseparate sphere in the world of commodities, partly\r\nenters directly the home circulation of money to make\r\nup for worn out coin; partly is dammed up in the different\r\nreservoirs containing hoards of coin, means of payment\r\nand world-money; partly is turned into articles of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_206\" id=\"Page_206\"\u003ePg 206\u003c/a\u003e\u003c/span\u003eluxury, while the rest simply forms a treasure. At an\r\nadvanced stage of development of the capitalist system\r\nof production the formation of hoards is reduced to the\r\nminimum required by the various processes of circulation\r\nfor the free play of their mechanism. The hoard\r\nas such becomes idle wealth, unless it appears as a temporary\r\nform of a surplus resulting from a favorable balance\r\nof payments or as the result of an interrupted exchange\r\nof matter, i.\u0026nbsp;e. as the solidification of a commodity\r\nin its first metamorphosis.\u003c/p\u003e\r\n\r\n\u003cp\u003eGold and silver, in their capacity of money, being\r\nby conception universal commodities, assume in their\r\ncapacity of world money the form adapted to a\r\nuniversal commodity. To the extent to which all\r\ncommodities are exchanged for them, they become\r\nthe transformed impersonation of all commodities\r\nand, therefore, universally alienable commodities.\r\nTheir function of serving as the embodiment of\r\nuniversal labor-time is realized more and more as the\r\ninterchange of matter produced by concrete labor embraces\r\nincreasing parts of the world. They become universal\r\nequivalents to the extent to which the series of particular\r\nequivalents which constitute their spheres of exchange,\r\nincreases. Since in the sphere of world circulation\r\ncommodities unfold their own exchange value on a\r\nuniversal scale, they assume the form of world money\r\nwhen transformed into gold and silver. As commodity\r\nowning nations are thus turning gold into money by their\r\ndiversified industry and universal trade, industry and\r\ntrade appear to them only as a means of getting money\r\nout of the world market in the shape of gold and silver.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_207\" id=\"Page_207\"\u003ePg 207\u003c/a\u003e\u003c/span\u003e\r\nGold and silver, as world money, are, therefore, as much\r\nproducts of the universal circulation of commodities as\r\nthey are means of widening its sphere. Like chemistry\r\nwhich grew up behind the backs of the alchemists who\r\ntried to find a way of making gold, so do the sources\r\nof world industry and world trade spring up behind the\r\nbacks of the owners of commodities, while they are hunting\r\nfor the commodity in its magic form. Gold and silver\r\nhelp to create the world market by anticipating its\r\nexistence in their conception of money. That this magic\r\neffect of the precious metals is by no means confined to\r\nthe period of infancy of capitalist society but is a necessary\r\noutgrowth of the perverse conception which the\r\nrepresentatives of the commodity world have of their\r\nown work in society, is shown by the extraordinary influence\r\nexerted in the middle of the nineteenth century\r\nby the discovery of new gold fields.\u003c/p\u003e\r\n\r\n\u003cp\u003eJust as money develops into world-money, so the commodity\r\nowner develops into a cosmopolitan. The cosmopolitan\r\nrelation of men is originally only a relation\r\nof commodity owners. The commodity as such rises\r\nabove all religious, political, national, and language barriers.\r\nPrice is its universal language and money, its\r\ncommon form. But with the development of world-money\r\nas distinguished from national coin, there develops\r\nthe cosmopolitanism of the commodity owner as\r\nthe faith of practical reason opposed to traditional, religious,\r\nnational and other prejudices which hinder the\r\ninterchange of matter among mankind. As the identical\r\ngold that lands in England in the form of American\r\neagles, turns there into sovereigns and three days later\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_208\" id=\"Page_208\"\u003ePg 208\u003c/a\u003e\u003c/span\u003e\r\ncirculates in Paris in the form of Napoleons, only to\r\nemerge in Venice in a few weeks as so many ducats,\r\nretaining all the while the same value, it becomes clear\r\nto the commodity owner that nationality “is but the\r\nguinea’s stamp.” The lofty idea which he conceives of\r\nthe entire world is that of a market, the \u003ci\u003eworld market\u003c/i\u003e.\u003ca name=\"FNanchor_111_111\" id=\"FNanchor_111_111\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_111_111\" class=\"fnanchor\"\u003e111\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003ch4\u003e4. THE PRECIOUS METALS.\u003c/h4\u003e\r\n\r\n\u003cp\u003eThe process of capitalist production first of all takes\r\nhold of the metallic circulation as of a ready, transmitted\r\norgan which, though undergoing a gradual transformation,\r\nalways retains its fundamental structure.\r\nThe question as to why gold and silver and not other\r\ncommodities serve as money material falls outside the\r\nlimits of the capitalist system. We shall, therefore,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_209\" id=\"Page_209\"\u003ePg 209\u003c/a\u003e\u003c/span\u003econfine ourselves to summing up the most essential\r\npoints.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince universal labor-time admits of quantitative differences\r\nonly, the object which is to serve as its specific\r\nincarnation must be capable of representing purely quantitative\r\ndifferences, i.\u0026nbsp;e., it must be homogeneous and uniform\r\nin quality throughout. That is the first condition\r\na commodity must satisfy to perform the function of\r\na measure of value. If commodities were estimated\r\nin oxen, hides, grain, etc., they would really have\r\nto be estimated in an ideal average ox, or average hide,\r\nsince there are qualitative differences between an ox and\r\nan ox, grain and grain, hide and hide. On the contrary,\r\ngold and silver, as elementary substances, are always\r\nthe same, and equal quantities of them represent, therefore,\r\nvalues of equal magnitude.\u003ca name=\"FNanchor_112_112\" id=\"FNanchor_112_112\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_112_112\" class=\"fnanchor\"\u003e112\u003c/a\u003e The other condition\r\nwhich a commodity that is to serve as a universal equivalent\r\nmust satisfy and which follows directly from its\r\nfunction of representing purely quantitative differences,\r\nis that it must be capable of being divided and re-united\r\nat will, so that money of account may be represented\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_210\" id=\"Page_210\"\u003ePg 210\u003c/a\u003e\u003c/span\u003ematerially as well. Gold and silver possess these properties\r\nto a superior degree.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs mediums of circulation, gold and silver have this\r\nadvantage over other commodities, that their high specific\r\ngravity which condenses much weight in little space,\r\ncorresponds to their economic specific gravity which condenses\r\nrelatively much labor-time, i.\u0026nbsp;e. a great quantity\r\nof exchange value in a small volume. This insures\r\nfacility of transport, of transition from hand to hand\r\nand from one country to another, the ability to appear\r\nas rapidly as to disappear, in short, that material mobility\r\nwhich constitutes the \u003ci\u003esine qua non\u003c/i\u003e of the commodity\r\nthat is to serve as the \u003ci\u003eperpetuum mobile\u003c/i\u003e of the\r\nprocess of circulation.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe high specific value of the precious metals, their\r\ndurability, comparative indestructibility, insusceptibility\r\nof oxidation through the action of the air, in the case\r\nof gold insolubility in acids except in aqua regia,\u0026mdash;all\r\nthese natural properties make the precious metals\r\nthe natural material for hoarding. Peter Martyr who\r\nseems to have been a great lover of chocolate, remarks,\r\ntherefore, of the cacao-bags which formed a species\r\nof Mexican gold: “O felicem monetam, quae suavem\r\nutilemque praebet humano generi potum, et a tartarea\r\npeste avaritiae suos immunes servat possessores, quod\r\nsuffodi aut diu servari nequeat.”\u003ca name=\"FNanchor_113_113\" id=\"FNanchor_113_113\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_113_113\" class=\"fnanchor\"\u003e113\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_211\" id=\"Page_211\"\u003ePg 211\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003eThe great importance of metals in general in the\r\ndirect process of production is due to the part they\r\nplay as instruments of production. Apart from their\r\nscarcity, the great softness of gold and silver as compared\r\nwith iron and even copper (in the hardened state\r\nin which it was used by the ancients), makes them unfit\r\nfor that application and deprives them, therefore, to a\r\ngreat extent, of that property on which the use-value\r\nof metals is generally based. Useless as they are in\r\nthe direct process of production, they are easily dispensed\r\nwith as means of existence, as articles of consumption.\r\nFor that reason any desired quantity of\r\nthem may be absorbed by the social process of circulation\r\nwithout disturbing the processes of direct production\r\nand consumption. Their individual use-value does not\r\ncome in conflict with their economic function. Furthermore,\r\ngold and silver are not only negatively superfluous,\r\ni.\u0026nbsp;e. dispensable articles, but their aesthetic\r\nproperties make them the natural material of luxury,\r\nornamentation, splendor, festive occasions, in short,\r\nthe positive form of abundance and wealth. They\r\nappear, in a way, as spontaneous light brought out from\r\nthe underground world, since silver reflects all rays of\r\nlight in their original combination, and gold only the\r\ncolor of highest intensity, viz. red light. The sensation\r\nof color is, generally speaking, the most popular form\r\nof aesthetic sense. The etymological connection between\r\nthe names of the precious metals, and the relations of\r\ncolors, in the different Indo-Germanic languages has\r\nbeen established by Jacob Grimm (see his History of\r\nthe German Language).\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_212\" id=\"Page_212\"\u003ePg 212\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eFinally, the susceptibility of gold and silver of being\r\nturned from coin into bullion, from bullion into articles\r\nof luxury and vice versa, i.\u0026nbsp;e. the advantage they possess\r\nas against other commodities in not being tied down to a\r\ndefinite, exclusive form in which they can be used, makes\r\nthem the natural material of money, which must constantly\r\nchange from one form to another.\u003c/p\u003e\r\n\r\n\u003cp\u003eNature no more produces money than it does bankers\r\nor discount rates. But since the capitalist system of\r\nproduction requires the crystallization of wealth as a\r\nfetich in the form of a single article, gold and silver\r\nappear as its appropriate incarnation. Gold and silver\r\nare not money by nature, but money is by nature gold\r\nand silver. In the first place, the silver or gold money\r\ncrystal is not only the product of the process of circulation,\r\nbut in fact its only final product. In the second\r\nplace, gold and silver are ready and direct products of\r\nnature, not distinguished by any difference of form.\r\nThe universal product of the social process or the social\r\nprocess itself as a product is a peculiar natural product,\r\na metal hidden in the bowels of the earth and extracted\r\ntherefrom.\u003ca name=\"FNanchor_114_114\" id=\"FNanchor_114_114\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_114_114\" class=\"fnanchor\"\u003e114\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eWe have seen that gold and silver are unable to fulfill\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_213\" id=\"Page_213\"\u003ePg 213\u003c/a\u003e\u003c/span\u003ethe requirements which they are expected to meet in\r\ntheir capacity of money, viz. to remain values of unvarying\r\nmagnitude. Still, as Aristotle had already observed,\r\nthey possess a more constant value than the average\r\nof other commodities. Apart from the universal\r\neffect of an appreciation or depreciation of the precious\r\nmetals, the fluctuations in the ratio between the values\r\nof gold and silver has a special importance, since both\r\nserve side by side in the world market as money material.\r\nThe purely economic causes of this change of\r\nvalue must be traced to the change in the labor-time\r\nrequired for the production of these metals; conquests\r\nand other political upheavals which exercised a great\r\ninfluence on the value of metals in the ancient world,\r\nhave nowadays only a local and transitory effect. The\r\nlabor-time required for the production of the metals\r\nwill depend on the degree of their natural scarcity, as\r\nwell as on the greater or less difficulty with which they\r\ncan be obtained in a purely metallic state. As a matter\r\nof fact, gold is the first metal discovered by man. This\r\nis due to the fact that nature itself furnishes it partly\r\nin pure crystalline form, individualized, free from\r\nchemical combination with other substances, or, as the\r\nalchemists used to say, in a virgin state; and so far as\r\nit does not appear in that state, nature does the technical\r\nwork in the great gold washeries of rivers. Only\r\nthe crudest kind of labor is thus required of man\r\nin the extraction of gold, either from rivers or from\r\nalluvial deposits; while the extraction of silver presupposes\r\nthe development of mining and a comparatively\r\nhigh degree of technical skill generally. For that\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_214\" id=\"Page_214\"\u003ePg 214\u003c/a\u003e\u003c/span\u003e\r\nreason the value of silver is originally greater than that\r\nof gold in spite of the lesser absolute scarcity of the\r\nformer. Strabo’s assertion that a certain Arabian tribe\r\ngave ten pounds of gold for one pound of iron and two\r\npounds of gold for one pound of silver, seems by no means\r\nincredible. But as the productive powers of labor in\r\nsociety are developed and the product of unskilled\r\nlabor rises in value as compared with the product of\r\nskilled labor; as the earth’s crust is more thoroughly\r\nbroken up and the original superficial sources of gold\r\nsupply give out, the value of silver begins to fall in\r\nproportion to that of gold. At a given stage of development\r\nof engineering and of the means of communication,\r\nthe discovery of new gold or silver fields become the\r\ndecisive factor. In ancient Asia the ratio of gold to\r\nsilver was 6 to 1 or 8 to 1; the latter ratio prevailed in\r\nChina and Japan as late as the beginning of the nineteenth\r\ncentury; 10 to 1, the ratio in Xenophon’s time,\r\nmay be considered as the average ratio of the middle\r\nperiod of antiquity. The exploitation of the Spanish\r\nsilver mines by Carthage and later by Rome had about\r\nthe same effect in antiquity, as the discovery of the\r\nAmerican mines in modern Europe. For the period of\r\nthe Roman empire 15 or 16 to 1 may be assumed as a\r\nrough average, although we frequently find cases of still\r\ngreater depreciation of silver in Rome. The same movement\r\nbeginning with the relative depreciation of gold\r\nand concluding with the fall in the value of silver, is\r\nrepeated in the following epoch which has lasted from\r\nthe Middle Ages to the present time. As in Xenophon’s\r\ntimes the average ratio in the Middle Ages was 10 to 1,\r\nchanging to 16 or 15 to 1 in consequence of the discovery\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_215\" id=\"Page_215\"\u003ePg 215\u003c/a\u003e\u003c/span\u003e\r\nof the American mines. The discovery of the Australian,\r\nCalifornian and Columbian gold sources makes\r\na new fall in the value of gold probable.\u003ca name=\"FNanchor_115_115\" id=\"FNanchor_115_115\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_115_115\" class=\"fnanchor\"\u003e115\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003ch3\u003eC. THEORIES OF THE MEDIUM OF CIRCULATION\r\nAND OF MONEY.\u003c/h3\u003e\r\n\r\n\u003cp\u003eAs the universal thirst for gold prompted nations and\r\nprinces in the sixteenth and seventeenth centuries, the\r\nperiod of infancy of modern bourgeois society, to cru\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_216\" id=\"Page_216\"\u003ePg 216\u003c/a\u003e\u003c/span\u003esades\r\nbeyond the sea in search of the golden grail,\u003ca name=\"FNanchor_116_116\" id=\"FNanchor_116_116\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_116_116\" class=\"fnanchor\"\u003e116\u003c/a\u003e the\r\nfirst interpreters of the modern world, the founders of\r\nthe monetary system, of which the mercantile system is\r\nbut a variation, proclaimed gold and silver, i.\u0026nbsp;e. money,\r\nas the only thing that constitutes wealth. They were\r\nquite right when, from the point of view of the simple\r\ncirculation of commodities, they declared that the mission\r\nof bourgeois society was to make money, i.\u0026nbsp;e. to\r\nbuild up everlasting treasures which neither moth nor\r\nrust could eat. It is no argument with the monetary\r\nsystem to say that a ton of iron whose price is £3 constitutes\r\na value of the same magnitude as £3 worth of\r\ngold. The point here is not the magnitude of the exchange\r\nvalue, but as to what constitutes its adequate\r\nform. If the monetary and mercantile systems single\r\nout international trade and the particular branches of\r\nnational industry directly connected with that trade\r\nas the only true sources of wealth or money, it must be\r\nborne in mind, that in that period the greater part of\r\nnational production was still carried on under forms\r\nof feudalism and was the source from which producers\r\ndrew directly their means of subsistence. Products, as\r\na rule, were not turned into commodities nor, therefore,\r\ninto money; they did not enter into the general social\r\ninterchange of matter; did not, therefore, appear as\r\nembodiments of universal abstract labor; and did not,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_217\" id=\"Page_217\"\u003ePg 217\u003c/a\u003e\u003c/span\u003ein fact, constitute bourgeois wealth. Money as the end\r\nand object of circulation is exchange value or abstract\r\nwealth, but it is no material element of wealth and does\r\nnot form the directing goal and impelling motive of\r\nproduction. True to the conditions as they prevailed\r\nin that primitive stage of bourgeois production, those\r\nunrecognized prophets held fast to the pure, tangible,\r\nand resplendent form of exchange value, to its form of\r\na universal commodity as against all special commodities.\r\nThe proper bourgeois economic sphere of that\r\nperiod was the sphere of the circulation of commodities.\r\nHence, they judged the entire complex process of bourgeois\r\nproduction from the point of view of that elementary\r\nsphere and confounded money with capital.\r\nThe unceasing war of modern economists against the\r\nmonetary and mercantile system is mostly due to the\r\nfact that this system blabs out in brutally naive fashion,\r\nthe secret of bourgeois production, viz. its subjection\r\nto the domination of exchange value. Ricardo, though\r\nwrong in the application he makes of it, remarks somewhere\r\nthat even in times of famine, grain is imported\r\nnot because the nation is starving, but because the grain\r\ndealer is making money. In its criticism of the monetary\r\nand mercantile system, political economy, by attacking\r\nthat system as a mere illusion and as a false\r\ntheory, fails to recognize in it the barbaric form of its\r\nown fundamental principles. Furthermore, this system\r\nhas not only an historic justification, but within certain\r\nspheres of modern economy retains until now the full\r\nrights of citizenship. At all stages of the bourgeois\r\nsystem of production in which wealth assumes the ele\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_218\" id=\"Page_218\"\u003ePg 218\u003c/a\u003e\u003c/span\u003ementary\r\nform of a commodity, exchange value assumes\r\nthe elementary form of money and in all phases of the\r\nprocess of production wealth reassumes for a moment\r\nthe universal elementary commodity form. Even at\r\nthe most advanced stage of bourgeois economy, the\r\nspecific functions of gold and silver to serve as money,\r\nin contradistinction to their function of mediums of\r\ncirculation\u0026mdash;a function which distinguishes them from\r\nall other commodities\u0026mdash;is not done away with, but only\r\nlimited, hence the monetary and mercantile system retains\r\nits right of citizenship. The Catholic fact that\r\ngold and silver are contrasted with other profane commodities\r\nas the direct incarnation of social labor, that\r\nis as the expression of abstract wealth, naturally offends\r\nthe Protestant point d’honneur of bourgeois economy,\r\nand out of fear of the prejudices of the monetary system\r\nit had lost for a long time its grasp of the phenomena\r\nof money circulation, as will be shown presently.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt was quite natural that, contrary to the monetary\r\nand mercantile system which knew money only in its\r\nform of a crystallized product of circulation, classical\r\npolitical economy should have conceived money first of\r\nall in its fluent form of exchange value arising and disappearing\r\nwithin the process of the metamorphosis of\r\ncommodities. And since the circulation of commodities\r\nis regarded exclusively in the form of C\u0026mdash;M\u0026mdash;C and the\r\nlatter in its turn, exclusively in its aspect of a dynamic\r\nunity of sale and purchase, money comes to be regarded\r\nin its capacity of a medium of circulation as opposed to\r\nits capacity of money. And when that medium of circulation\r\nis isolated in its function of coin, it turns, as\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_219\" id=\"Page_219\"\u003ePg 219\u003c/a\u003e\u003c/span\u003e\r\nwe have seen, into a token of value. But since classical\r\npolitical economy had to deal with metallic circulation\r\nas the prevailing form of circulation, it defined metallic\r\nmoney as coin, and metallic coin as a mere token of\r\nvalue. In accordance with the law governing the circulation\r\nof tokens of value, the proposition was advanced\r\nthat the prices of commodities depend on the quantity\r\nof money in circulation instead of the opposite principle\r\nthat the quantity of money in circulation depends on\r\nthe prices of commodities. We find this view more or\r\nless clearly expressed by the Italian economists of the\r\nseventeenth century; LOCKE now asserts, now denies\r\nthat principle; it is clearly elaborated in the “Spectator”\r\n(of October 19, 1711) by MONTESQUIEU AND\r\nHUME. Since Hume was by far the most important\r\nrepresentative of this theory in the eighteenth century,\r\nwe shall commence our review with him.\u003c/p\u003e\r\n\r\n\u003cp\u003eUnder certain assumptions, an increase or decrease\r\nin the quantity either of the metallic money in circulation,\r\nor of the tokens of value in circulation seems to\r\naffect \u003ci\u003euniformly\u003c/i\u003e the prices of commodities. With each\r\nfall or rise of the \u003ci\u003evalue\u003c/i\u003e of gold or silver in which the\r\nexchange values of commodities are estimated as prices,\r\nthere is a rise or fall of prices, because of the change in\r\ntheir measure of value; as a result of the rise or fall of\r\nprices, a greater or smaller quantity of gold and silver\r\nis circulating as coin. But the apparent phenomenon\r\nis the fall in prices\u0026mdash;the exchange value of commodities\r\nremaining the same\u0026mdash;accompanied by an increased or\r\ndiminished quantity of the medium of circulation. On\r\nthe other hand, if the quantity of tokens of value rises\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_220\" id=\"Page_220\"\u003ePg 220\u003c/a\u003e\u003c/span\u003e\r\nabove or falls below its required level, it is forcibly\r\nreduced to the latter by a fall or rise of prices. In\r\neither case the same effect seems to be brought about\r\nby the same cause, and Hume holds fast to this semblance.\u003c/p\u003e\r\n\r\n\u003cp\u003eEvery scientific inquiry into the relation between the\r\nvolume of the circulating medium and the movement\r\nof prices must assume the value of the money material as\r\ngiven. Hume, on the contrary, considers exclusively\r\nperiods of revolution in the value of the precious metals,\r\ni.\u0026nbsp;e. revolutions in the measure of value. The rise of\r\nprices which occurred simultaneously with the increase\r\nof metallic money after the discovery of the American\r\nmines forms the historical background of his theory,\r\nwhile his polemic against the monetary and mercantile\r\nsystem furnishes its practical motive. The importation\r\nof precious metals can naturally increase while their cost\r\nof production remains the same. On the other hand, a\r\ndecrease in their value, i.\u0026nbsp;e. in the labor-time required\r\nfor their production will reveal itself first of all in\r\ntheir increased imports. Hence, said the later followers\r\nof Hume, a decrease in the value of the precious metals,\r\nreveals itself in an increased volume of the circulating\r\nmedium, and the increased volume of the latter is shown\r\nin the rise of prices. As a matter of fact, however, the\r\nrise in price affects only exported commodities, which are\r\nexchanged for gold and silver as commodities and not\r\nas mediums of circulation. Thus, the prices of these\r\ncommodities, which are now estimated in gold and silver\r\nof lower value, rise as compared with the prices of\r\nall other commodities whose exchange value continues\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_221\" id=\"Page_221\"\u003ePg 221\u003c/a\u003e\u003c/span\u003e\r\nto be estimated in gold or silver according to the standard\r\nof their old cost of production. This two-fold appraisement\r\nof the exchange values of commodities in\r\nthe same country can naturally be only temporary, and\r\nthe gold and silver prices must become equalized in the\r\nproportions determined by the exchange values themselves,\r\nso that finally the exchange values of all commodities\r\ncome to be estimated according to the new value\r\nof the money material. The development of this process,\r\nas well as the ways and means in which the\r\nexchange value of commodities asserts itself within the\r\nlimits of the fluctuations of market prices, do not fall\r\nwithin the scope of this work. But that this equalization\r\ntakes place but gradually in the early periods of\r\ndevelopment of bourgeois production and extends over\r\nlong periods of time, never keeping pace with the increase\r\nof cash in circulation, has been strikingly demonstrated\r\nby new critical investigations of the movement\r\nof prices of commodities in the sixteenth century.\u003ca name=\"FNanchor_117_117\" id=\"FNanchor_117_117\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_117_117\" class=\"fnanchor\"\u003e117\u003c/a\u003e The\r\nfavorite references of Hume’s followers to the rise of\r\nprices in ancient Rome in consequence of the conquests\r\nof Macedonia, Egypt and Asia Minor, are quite irrelevant.\r\nThe characteristic method of antiquity of suddenly\r\ntransferring hoarded treasures from one country\r\nto another, which was accomplished by violence and thus\r\nbrought about a temporary reduction of the cost of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_222\" id=\"Page_222\"\u003ePg 222\u003c/a\u003e\u003c/span\u003eproduction of precious metals in a certain country by\r\nthe simple process of plunder, affects just as little the\r\nintrinsic laws of money circulation, as the gratuitous\r\ndistribution of Egyptian and Sicilian grain in Rome\r\naffected the universal law governing the price of grain.\r\nHume, as well as all other writers of the eighteenth\r\ncentury, was not in possession of the material necessary\r\nfor the detailed observation of the circulation of money.\r\nThis material, which first becomes available with the full\r\ndevelopment of banking, includes in the first place a\r\ncritical history of prices of commodities, and in the second,\r\nofficial and current statistics relating to the expansion\r\nand contraction of the circulating medium, the imports\r\nand exports of the precious metals, etc. Hume’s\r\ntheory of circulation may be summed up in the following\r\npropositions: 1. The prices of commodities in\r\na country are determined by the quantity of money\r\nexisting there (real or symbolic money); 2. The money\r\ncurrent in a country represents all the commodities to\r\nbe found there. In proportion “as there is more or less\r\nof this representation,” i.\u0026nbsp;e. of money, “there goes a\r\ngreater or less quantity of the thing represented to the\r\nsame quantity of it”; 3. If commodities increase in\r\nquantity, their price falls or the value of money rises.\r\nIf money increases in quantity, then, on the contrary,\r\nthe price of commodities rises and the value of money\r\ndeclines.\u003ca name=\"FNanchor_118_118\" id=\"FNanchor_118_118\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_118_118\" class=\"fnanchor\"\u003e118\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e“The dearness of everything,” says Hume, “from\r\nplenty of money, is a disadvantage, which attends an\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_223\" id=\"Page_223\"\u003ePg 223\u003c/a\u003e\u003c/span\u003eestablished commerce, and sets bounds to it in every\r\ncountry, by enabling the poorer states to undersell the\r\nricher in all foreign markets.”\u003ca name=\"FNanchor_119_119\" id=\"FNanchor_119_119\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_119_119\" class=\"fnanchor\"\u003e119\u003c/a\u003e “Where coin is in greater\r\nplenty; as a greater quantity of it is required to represent\r\nthe same quantity of goods; it can have no effect,\r\neither good or bad, taking a nation within itself; any\r\nmore than it would make an alteration on a merchant’s\r\nbooks, if, instead of the Arabian method of notation,\r\nwhich requires few characters, he should make use of\r\nthe Roman, which requires a great many. Nay, the\r\ngreater quantity of money, like the Roman characters,\r\nis rather inconvenient, and requires greater trouble\r\nboth to keep and transport it.”\u003ca name=\"FNanchor_120_120\" id=\"FNanchor_120_120\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_120_120\" class=\"fnanchor\"\u003e120\u003c/a\u003e In order to prove anything,\r\nHume should have shown that under a \u003ci\u003egiven\u003c/i\u003e\r\nsystem of notation the quantity of characters used does\r\nnot depend on the magnitude of the numbers, but that\r\non the contrary, the magnitude of the numbers depends\r\non the quantity of the characters used. It is perfectly\r\ntrue that there is no advantage in estimating or “counting”\r\nvalues of commodities in depreciated gold and\r\nsilver, and that is the reason why nations have always\r\nfound it more convenient with the growth of the value\r\nof the commodities in circulation to count in silver in\r\npreference to copper, and in gold rather than in silver.\r\nIn proportion as the nations became richer, they converted\r\nthe less valuable metals into subsidiary coin and\r\nthe more valuable ones into money. Furthermore, Hume\r\nforgets that in order to count values in gold and silver,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_224\" id=\"Page_224\"\u003ePg 224\u003c/a\u003e\u003c/span\u003eit is not necessary that either gold or silver should be\r\n“on hand.” Money of account and the medium of circulation\r\nare identical with him and both are “coin.”\r\nHume concludes that a rise or fall of prices depends\r\non the quantity of money in circulation, because a\r\nchange in the value of the measure of value, i.\u0026nbsp;e. of\r\nthe precious metals which serve as money of account,\r\ncauses a rise or fall of prices and, consequently, also a\r\nchange in the amount of money in circulation, the rapidity\r\nof the latter remaining the same. That not only\r\nthe quantity of gold and silver increased in the sixteenth\r\nand seventeenth centuries, but that the cost of their production\r\nhad declined at the same time, Hume could know\r\nfrom the closing up of the European mines. In the sixteenth\r\nand seventeenth centuries the prices of commodities\r\nincreased in Europe with the influx of the mass of\r\nAmerican gold and silver; hence the prices of commodities\r\nin every land are determined by the mass\r\nof gold and silver to be found there. This was Hume’s\r\nfirst “necessary consequence.”\u003ca name=\"FNanchor_121_121\" id=\"FNanchor_121_121\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_121_121\" class=\"fnanchor\"\u003e121\u003c/a\u003e In the sixteenth and\r\nseventeenth centuries prices had not risen uniformly with\r\nthe increase of the quantity of precious metals; more\r\nthan half a century passed before \u003ci\u003eany\u003c/i\u003e change in prices\r\nbecame perceptible, and even then it took a long time\r\nbefore the exchange values of commodities came to be\r\ngenerally estimated according to the depreciated value\r\nof gold and silver, i.\u0026nbsp;e. before the revolution affected\r\nthe general price level. Hence, concludes Hume, who,\r\nquite contrary to the principles of his philosophy, gen\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_225\" id=\"Page_225\"\u003ePg 225\u003c/a\u003e\u003c/span\u003eeralizes\r\nindiscriminately from imperfectly observed\r\nfacts, prices of commodities or the value of money depend\r\nnot on the total amount of money to be found\r\nin the country, but rather on the quantity of gold and\r\nsilver which is actually in circulation; but in the long\r\nrun all the gold and silver in the country must be\r\nabsorbed by circulation in the form of coin.\u003ca name=\"FNanchor_122_122\" id=\"FNanchor_122_122\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_122_122\" class=\"fnanchor\"\u003e122\u003c/a\u003e It is\r\nclear that if gold and silver have a value of their own,\r\nthen, apart from all other laws of circulation, only a\r\ndefinite quantity of gold and silver can circulate as the\r\nequivalent of commodities of a given value. If, therefore,\r\nevery quantity of gold and silver which happens\r\nto be in a country must enter the sphere of exchange of\r\ncommodities as a medium of circulation without regard\r\nto the total value of the commodities, then gold and\r\nsilver have no intrinsic value and are in fact no real\r\ncommodities. That is Hume’s third “necessary consequence.”\r\nHe makes commodities enter the process of\r\ncirculation without price and gold and silver without\r\nvalue. That is the reason why he never speaks of the\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_226\" id=\"Page_226\"\u003ePg 226\u003c/a\u003e\u003c/span\u003evalue of commodities and of gold, but only of their\r\nrelative quantities. Locke had already said that gold\r\nand silver had merely an imaginary or conventional\r\nvalue; the first brutal expression of opposition to the\r\nassertion of the monetary “system” that gold and silver\r\nalone have true value. That gold and silver owe their\r\ncharacter of money to the function they perform in\r\nthe social process of exchange is interpreted to the effect\r\nthat they owe their own value and therefore the magnitude\r\nof their value to a social function.\u003ca name=\"FNanchor_123_123\" id=\"FNanchor_123_123\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_123_123\" class=\"fnanchor\"\u003e123\u003c/a\u003e Gold and\r\nsilver are thus worthless things, which, however, acquire\r\na fictitious value within the sphere of circulation \u003ci\u003eas\r\nrepresentatives of commodities\u003c/i\u003e. They are converted by\r\nthe process of circulation not into money, but into value.\r\nThis value of theirs is determined by the proportion\r\nbetween their own volume and that of the commodities,\r\nsince the two must balance each other. Thus, Hume\r\nmakes gold and silver enter the world of commodities\r\nas non-commodities; but as soon as they appear in the\r\nform of coin, he turns them, on the contrary, into mere\r\ncommodities, which must be exchanged for other commodities\r\nby simple barter. In that manner, if the world\r\nof commodities consisted of but one commodity, say one\r\nmillion quarters of grain, the idea would work itself\r\nout very simply; viz., one quarter of grain would be\r\nexchanged for two ounces of gold if there were altogether\r\ntwo million ounces of gold, and for twenty\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_227\" id=\"Page_227\"\u003ePg 227\u003c/a\u003e\u003c/span\u003eounces of gold, if there were a total of twenty million\r\nounces, the price of the commodity and the value of\r\nmoney rising or falling in inverse ratio to the quantity\r\nof gold in existence.\u003ca name=\"FNanchor_124_124\" id=\"FNanchor_124_124\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_124_124\" class=\"fnanchor\"\u003e124\u003c/a\u003e But the world of commodities\r\nconsists of an endless variety of use-values, whose relative\r\nvalues are by no means determined by their relative\r\nquantities. How, then, does Hume conceive this exchange\r\nof the volume of commodities for the volume of\r\ngold? He contents himself with the meaningless, hollow\r\nidea that every commodity is exchanged as an aliquot\r\npart of the entire volume of commodities for a corresponding\r\naliquot part of the volume of gold. The\r\nprocess of the movement of commodities due to the\r\nantagonism between exchange value and use-value which\r\ncommodities bear within themselves, and which manifests\r\nitself in the circulation of money, becoming crystallized\r\nin different forms of the latter, is thus done\r\naway with, giving place to the imaginary mechanical\r\nequalization process between the quantity of precious\r\nmetals to be found in a country and the volume of commodities\r\nexisting there at the same time.\u003c/p\u003e\r\n\r\n\u003cp\u003eSIR JAMES STEUART opens his inquiry into the\r\nnature of coin and money with an elaborate criticism of\r\nHume and Montesquieu.\u003ca name=\"FNanchor_125_125\" id=\"FNanchor_125_125\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_125_125\" class=\"fnanchor\"\u003e125\u003c/a\u003e He is really the first to ask\r\nthis question: is the quantity of current money deter\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_228\" id=\"Page_228\"\u003ePg 228\u003c/a\u003e\u003c/span\u003emined\r\nby the prices of commodities, or are the prices of\r\ncommodities determined by the quantity of current\r\nmoney? Although his analysis is obscured by his\r\nfantastic conception of the measure of value, his\r\nvacillating view of exchange value and by reminiscences\r\nof the mercantile system, he discovers\r\nthe essential forms of money and the general laws of the\r\ncirculation of money, because he makes no attempt at a\r\nmechanical separation of commodities from money, but\r\nproceeds to develop its different functions from the\r\ndifferent aspects of the exchange of commodities. Money\r\nis used, he says, for two principal purposes: for the payment\r\nof debts and for the purchase of what one needs;\r\nthe two together form “ready money demands.” The\r\nstate of trade and industry, the mode of living, the\r\ncustomary expenditures of the people, taken all together\r\nregulate and determine the volume of “ready\r\nmoney demands,” i.\u0026nbsp;e. the number of “alienations.” In\r\norder to effect this multitude of payments, a certain proportion\r\nof money is required. This proportion may increase\r\nor decrease according to circumstances, even while\r\nthe number of alienations remains the same. At any\r\nrate, the circulation of a country can absorb only a\r\ndefinite quantity of money.\u003ca name=\"FNanchor_126_126\" id=\"FNanchor_126_126\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_126_126\" class=\"fnanchor\"\u003e126\u003c/a\u003e “It is the complicated\r\noperations of demand and competition which determines\r\nthe standard price of everything”; the latter “does not\r\nin the least depend on the quantity of gold and silver\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_229\" id=\"Page_229\"\u003ePg 229\u003c/a\u003e\u003c/span\u003ein the country.”\u003ca name=\"FNanchor_127_127\" id=\"FNanchor_127_127\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_127_127\" class=\"fnanchor\"\u003e127\u003c/a\u003e What then will become of the gold\r\nand silver that is not required as coin? They are hoarded\r\nor used in the manufacture of articles of luxury. If\r\nthe quantity of gold and silver fall below the level\r\nrequired for circulation, symbolic money or other substitutes\r\ntake its place. If a favorable rate of exchange\r\nbrings about a surplus of money in the country and\r\ncuts off at the same time the demand for its shipment\r\nabroad, it will accumulate in strong-boxes, where the\r\n“riches will remain without producing more effect than\r\nif they had remained in the mine.”\u003c/p\u003e\r\n\r\n\u003cp\u003eThe second law discovered by Steuart is that of the\r\nreflux of credit circulation to its starting point. Finally,\r\nhe works out the effects which the disparity of the rates\r\nof interest in different countries produces upon the international\r\nexport and import of precious metals. The\r\nlast two points we mention here only for the sake of\r\ncompleteness, since they have but a remote bearing on\r\nthe subject of our discussion.\u003ca name=\"FNanchor_128_128\" id=\"FNanchor_128_128\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_128_128\" class=\"fnanchor\"\u003e128\u003c/a\u003e Symbolic money or credit\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_230\" id=\"Page_230\"\u003ePg 230\u003c/a\u003e\u003c/span\u003emoney\u0026mdash;Steuart does not as yet distinguish between\r\nthe two forms of money\u0026mdash;may take the place of precious\r\nmetals as a means of purchase or means of payment in\r\nthe sphere of home circulation, but never in the world\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_231\" id=\"Page_231\"\u003ePg 231\u003c/a\u003e\u003c/span\u003emarket. Paper notes are therefore “money of the society,”\r\nwhile gold and silver are “money of the world.”\u003ca name=\"FNanchor_129_129\" id=\"FNanchor_129_129\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_129_129\" class=\"fnanchor\"\u003e129\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is characteristic of nations with an “historical” development,\r\nin the sense in which the term is used by\r\nthe historical school of law, to keep forgetting their\r\nown history. Although the controversy as to the relation\r\nof prices of commodities to the volume of the\r\ncirculating medium has been continually agitating Parliament\r\nfor the last half a century, and has precipitated\r\nin England thousands of pamphlets, large and small,\r\nSteuart has remained even more of a “dead dog” than\r\nSpinoza seemed to be to Moses Mendelson in Lessing’s\r\ntime. Even the latest writer on the history of “currency,”\r\nMaclaren, makes Adam Smith the original author\r\nof Steuart’s theory, and Ricardo of Hume’s theory.\u003ca name=\"FNanchor_130_130\" id=\"FNanchor_130_130\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_130_130\" class=\"fnanchor\"\u003e130\u003c/a\u003e\u003c/p\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_232\" id=\"Page_232\"\u003ePg 232\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003eWhile Ricardo elaborated Hume’s theory, Adam Smith\r\nregistered the results of Steuart’s investigations as\r\ndead facts. Adam Smith applied the Scotch saying\r\nthat “mony mickles mak a muckle” even to his\r\nspiritual wealth, and therefore concealed with petty\r\ncare the sources to which he owed the little out of which\r\nhe tried to make so much. More than once he prefers\r\nto break off the point of the discussion, whenever he feels\r\nthat an attempt on his part clearly to formulate the\r\nquestion would compel him to settle his accounts with\r\nhis predecessors. So in the case of the money theory.\r\nHe tacitly adopts Steuart’s theory when he says that\r\nthe gold and silver existing in a country is partly\r\nutilized as coin; partly accumulated in the form of\r\nreserve funds for merchants in countries without banks,\r\nor of bank reserves in countries with a credit currency;\r\npartly serves as a hoard for the settling of international\r\npayments; partly is turned into articles of luxury. He\r\npasses over without remark the question as to the quantity\r\nof coin in circulation, treating money quite wrongly\r\nas a mere commodity.\u003ca name=\"FNanchor_131_131\" id=\"FNanchor_131_131\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_131_131\" class=\"fnanchor\"\u003e131\u003c/a\u003e His vulgarizer, the dull J. B.\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_233\" id=\"Page_233\"\u003ePg 233\u003c/a\u003e\u003c/span\u003eSay, whom the French have proclaimed \u003ci\u003eprince de la\r\nscience\u003c/i\u003e\u0026mdash;like Johann Christoph Gottsched, who proclaimed\r\nhis Schönaich a Homer and himself a Pietro\r\nAretino to the \u003ci\u003eterror principum and lux mundi\u003c/i\u003e\u0026mdash;has\r\nwith great pomp raised this not altogether innocent\r\noversight of Adam Smith to a dogma.\u003ca name=\"FNanchor_132_132\" id=\"FNanchor_132_132\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_132_132\" class=\"fnanchor\"\u003e132\u003c/a\u003e It must be said,\r\nhowever, that his hostile attitude to the illusions of the\r\nmercantile system prevented Adam Smith from taking\r\nan objective view of the phenomena of metallic circulation,\r\nwhile his views on credit money are original and\r\ndeep. As in the eighteenth century petrification theories\r\nthere is always felt the presence of an undercurrent\r\nwhich springs from either a critical or apologetic attitude\r\ntoward the biblical tradition of the flood, so there\r\nis concealed behind all the money theories of the eighteenth\r\ncentury a secret struggle with the monetary\r\nsystem, the ghost which had stood guard over the cradle\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_234\" id=\"Page_234\"\u003ePg 234\u003c/a\u003e\u003c/span\u003eof bourgeois economy and continued to throw its shadow\r\nover legislation.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the nineteenth century, inquiries into the nature\r\nof money were not prompted directly by phenomena of\r\nmetallic circulation, but rather by those of banknote\r\ncirculation. The former was touched upon only in order\r\nto discover the laws governing the latter. The suspension\r\nof specie payments by the Bank of England in\r\n1797, the rise of prices of many commodities which\r\nfollowed it, the fall of the mint price of gold below\r\nits market price, the depreciation of bank-notes, especially\r\nsince 1809, furnished the direct practical occasion\r\nfor a party struggle in parliament and a theoretical\r\ntournament outside of it, both conducted with like passion.\r\nThe historical background for the controversy\r\nwas furnished by the history of paper money during\r\nthe eighteenth century: the fiasco of Law’s bank; the\r\ndepreciation of the provincial bank-notes of the English\r\nColonies in North America from the beginning to the\r\nmiddle of the eighteenth century which went hand in\r\nhand with the increase in the number of tokens of value;\r\nfurther, the Continental bills issued as legal tender by\r\nthe American government during the War of Independence;\r\nand finally, the experiment with the French \u003ci\u003eassignats\u003c/i\u003e\r\ncarried out on a still larger scale. Most of the\r\nEnglish writers of that period confound the circulation\r\nof bank-notes, which is governed by quite different laws,\r\nwith the circulation of tokens of value or government\r\nlegal tender paper money; and while they claim to\r\nexplain the phenomena of this legal tender circulation\r\nby the laws of metallic circulation, they proceed, as a\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_235\" id=\"Page_235\"\u003ePg 235\u003c/a\u003e\u003c/span\u003e\r\nmatter of fact, just the opposite way, viz., deducting\r\nlaws for the latter from phenomena observed\r\nin connection with the former. We omit all the\r\nnumerous writers of the period of 1800-1809 and\r\nturn directly to RICARDO, both because he embodies\r\nthe views of his predecessors, which he formulates with\r\ngreater precision, and because the shape he gave to the\r\ntheory of money governs English bank legislation until\r\nthis moment. Ricardo, like his predecessors, confounds\r\nthe circulation of bank-notes, or credit money, with the\r\ncirculation of mere tokens of value. The fact which\r\nimpresses him most is the depreciation of paper currency\r\naccompanied by the rise of prices of commodities.\r\nWhat the American mines had been to Hume, the paper-bill\r\npresses in Threadneedle street were to Ricardo, and\r\nhe himself expressly identifies the two factors at some\r\nplace in his works. His first writings, which dealt exclusively\r\nwith the money question belong to the time\r\nof the most violent controversy between the Bank of\r\nEngland, which had on its side the ministers and the\r\nwar party, and its opponents about whom were centered\r\nthe parliamentary opposition, the Whigs and the Peace\r\nparty. They appeared as immediate forerunners of the\r\nfamous Report of the Bullion Committee of 1810, in\r\nwhich Ricardo’s views were adopted.\u003ca name=\"FNanchor_133_133\" id=\"FNanchor_133_133\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_133_133\" class=\"fnanchor\"\u003e133\u003c/a\u003e The singular\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_236\" id=\"Page_236\"\u003ePg 236\u003c/a\u003e\u003c/span\u003ecircumstance, that Ricardo and his adherents, who held\r\nmoney to be merely a token of value, are called bullionists,\r\nis due not only to the name of that committee, but\r\nalso to the nature of their theory. In his work on\r\npolitical economy, Ricardo repeated and developed further\r\nthe same views, but nowhere has he investigated\r\nthe nature of money as such, as he had done in the case\r\nof exchange value, profit, rent, etc.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo begin with, Ricardo determines the value of gold\r\nand silver, like that of all other commodities, by the\r\nquantity of labor-time embodied in them.\u003ca name=\"FNanchor_134_134\" id=\"FNanchor_134_134\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_134_134\" class=\"fnanchor\"\u003e134\u003c/a\u003e By means of\r\nthem, as commodities of a given value, the values of all\r\nother commodities are measured.\u003ca name=\"FNanchor_135_135\" id=\"FNanchor_135_135\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_135_135\" class=\"fnanchor\"\u003e135\u003c/a\u003e The volume of the\r\ncirculating medium in a country is determined by the\r\nvalue of the unit of measure of money on the one hand,\r\nand by the sum total of the exchange values of commodities,\r\non the other. This quantity is modified by economy\r\nin the method of payment.\u003ca name=\"FNanchor_136_136\" id=\"FNanchor_136_136\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_136_136\" class=\"fnanchor\"\u003e136\u003c/a\u003e Since the quantity of money,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_237\" id=\"Page_237\"\u003ePg 237\u003c/a\u003e\u003c/span\u003eof a given value, which can be absorbed by circulation, is\r\nthus determined and since the value of money within\r\nthe sphere of circulation manifests itself only in its\r\nquantity, it follows that mere tokens of value, if issued\r\nin proportions determined by the value of money, may\r\nreplace it in circulation, and in fact, “a currency is in\r\nits most perfect state when it consists wholly of paper\r\nmoney, but of paper money of an equal value with the\r\ngold which it professes to represent.”\u003ca name=\"FNanchor_137_137\" id=\"FNanchor_137_137\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_137_137\" class=\"fnanchor\"\u003e137\u003c/a\u003e So far Ricardo\r\ndetermines the volume of the circulating medium by the\r\nprices of commodities, assuming the value of money\r\nto be given; money as a token of value means with him\r\na token of a definite quantity of gold and not a mere\r\nworthless representative of commodities as was the case\r\nwith Hume.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhen Ricardo suddenly gets off the straight path of\r\nhis presentation and takes the very opposite view, he\r\ndoes so to turn his attention to the international circulation\r\nof precious metals and thus brings confusion into\r\nthe problem by introducing considerations that are foreign\r\nto the subject. Let us follow his own course of\r\nreasoning, and, in order to remove everything that is\r\nartificial and incidental, let us assume that the gold and\r\nsilver mines are located in the interior of the countries\r\nin which the precious metals circulate as money. The\r\nonly inference which follows from Ricardo’s reasoning\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_238\" id=\"Page_238\"\u003ePg 238\u003c/a\u003e\u003c/span\u003eas so far developed, is that, the value of gold being\r\ngiven, the quantity of money in circulation will be determined\r\nby the prices of commodities. Thus, at a\r\ngiven moment, the quantity of gold in circulation in a\r\ncountry is simply determined by the exchange value of\r\nthe commodities in circulation. Let us suppose now\r\nthat the sum total of these exchange values has declined\r\neither because there are less commodities produced at the\r\nold exchange values, or because, in consequence of an\r\nincreased productivity of labor, the same quantity of\r\ncommodities has a smaller value. Or, we may assume\r\non the contrary that the sum total of exchange values\r\nhas increased, either because the quantity of commodities\r\nhas increased while the cost of their production has\r\nremained the same, or because the value of the same\r\nor of a smaller quantity of commodities has risen in\r\nconsequence of a diminished productivity of labor. What\r\nbecomes in either case of the \u003ci\u003egiven\u003c/i\u003e quantity of metal\r\nin circulation? If gold is money merely because\r\nit is current as a medium of circulation; if it is\r\ncompelled to remain in circulation like government legal\r\ntender paper money (and that is what Ricardo has in\r\nmind), then the quantity of money in circulation will\r\nrise above the normal level, as determined by the exchange\r\nvalue of the metal, in the former case, and fall\r\nbelow that level in the latter. Although possessing a\r\nvalue of its own, gold will become in the former case a\r\ntoken of a metal of lower exchange value than its\r\nown, and in the latter, a token of a metal of\r\nhigher value. In the former case it will remain as a\r\ntoken of value less than its own, in the latter greater than\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_239\" id=\"Page_239\"\u003ePg 239\u003c/a\u003e\u003c/span\u003e\r\nits own (again an abstract deduction from legal tender\r\npaper money). In the former case it is the same\r\nas though commodities were estimated in a metal of\r\nlower value than gold, in the latter, as though they\r\nwere estimated in a metal of higher value. In the former\r\ncase, prices of commodities would rise therefore, in the\r\nlatter they would fall. In either case the movement of\r\nprices, their rise or fall, would appear as the effect of a\r\nrelative expansion or contraction of the volume of gold\r\nin circulation above or below the level corresponding to\r\nits own value, i.\u0026nbsp;e. above or below the normal quantity\r\nwhich is determined by the proportion between its own\r\nvalue and that of the commodities in circulation.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe same process would take place if the sum total\r\nof the prices of the commodities in circulation remained\r\nunchanged, while the volume of gold in circulation\r\ncame to be below or above the right level: the former\r\nin case the gold coin worn out in the course of circulation\r\nwere not replaced by the production of a corresponding\r\nquantity of gold in the mines; the latter, if the\r\noutput of the mines exceeded the requirements of circulation.\r\nIn either case it is assumed that the cost\r\nof production of gold or its value remain the same.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo sum up: the money in circulation is at its normal\r\nlevel, when its volume is determined by its own bullion\r\nvalue, the exchange value of commodities being given.\r\nIt rises above that level, bringing about a fall in the\r\nvalue of gold below its own bullion value and a rise of\r\nprices of commodities, whenever the sum total of the\r\nexchange values of commodities declines, or the output\r\nof gold from the mines increases. It sinks below its\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_240\" id=\"Page_240\"\u003ePg 240\u003c/a\u003e\u003c/span\u003e\r\nright level, leading to a rise of gold above its own\r\nbullion value and to a fall of prices of commodities,\r\nwhenever the sum total of the exchange values of the\r\ncommodities or the gold output of the mines is not sufficient\r\nto replace the quantity of outworn gold. In either\r\ncase the gold in circulation becomes a token of value\r\ngreater or smaller than that it really possesses. It may\r\nbecome an appreciated or depreciated token of itself. As\r\nsoon as all commodities would come to be estimated in\r\ngold of this new value and the general price level would\r\naccordingly rise or fall, the quantity of current gold\r\nwould again answer the requirements of circulation (a\r\nconsequence which Ricardo emphasizes with great pleasure),\r\nbut would be at variance with the cost of production\r\nof the precious metals and, therefore, with their\r\nrelation as commodities to all other commodities. According\r\nto the general Ricardian theory of exchange\r\nvalue, the rise of gold above its exchange value, i.\u0026nbsp;e., above\r\nthe value as determined by the labor-time contained in it,\r\nwould cause an increase in the production of gold until\r\nthe increased output of it would reduce its value to the\r\nproper magnitude. And in the same manner, a fall of gold\r\nbelow its value would cause a decline in its production\r\nuntil its value rose again to its proper magnitude. By\r\nthese opposite movements the discrepancy between the\r\nbullion value of gold and its value as a medium of circulation\r\nwould disappear, the normal level of the volume\r\nof gold in circulation would be restored, and the\r\nprice level would again correspond to the measure of\r\nvalue. These fluctuations in the value of gold in circulation\r\nwould to the same extent affect gold in the form of\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_241\" id=\"Page_241\"\u003ePg 241\u003c/a\u003e\u003c/span\u003e\r\nbullion, because by assumption, all gold that is not utilized\r\nas an article of luxury, is supposed to be in circulation.\r\nSince gold itself may become, both as coin and bullion,\r\na token of value of greater or smaller magnitude\r\nthan its bullion value, it is self understood that convertible\r\nbank-notes in circulation have to share the same fate.\r\nAlthough bank-notes are convertible, i.\u0026nbsp;e. their real value\r\nand nominal value agree, “the aggregate currency consisting\r\nof metal and of convertible notes” may appreciate\r\nor depreciate according as to whether it rises or\r\nfalls, for reasons already stated, above or below the level\r\ndetermined by the exchange value of the commodities in\r\ncirculation and the bullion value of gold. Inconvertible\r\npaper money, has, from this point of view, only that\r\nadvantage as against convertible paper money, that it\r\nmay depreciate in a two-fold manner. It may fall below\r\nthe value of the metal which it is supposed to represent,\r\nbecause it has been issued in too great quantity,\r\nor it may depreciate because the metal it represents has\r\nitself fallen in value. This depreciation, not of paper\r\nas compared with gold, but of gold and paper together,\r\nor of the aggregate currency of a country, is one of the\r\nprincipal discoveries of Ricardo, which Lord Overstone\r\nand Co. pressed into their service and made a fundamental\r\nprinciple of Sir Robert Peele’s Bank legislation\r\nof 1844 and 1845.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhat should have been proven was that the price of\r\ncommodities or the value of gold depends on the\r\nquantity of gold in circulation. The proof consists in\r\nthe assumption of what is to be proven, viz. that any\r\nquantity of the precious metal employed as money\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_242\" id=\"Page_242\"\u003ePg 242\u003c/a\u003e\u003c/span\u003e\r\nmust become a medium of circulation or coin, and thereby\r\na token of value for the commodities in circulation,\r\nno matter in what proportion to its own intrinsic value\r\nand no matter what the total value of those commodities\r\nmay be. To put it differently, the proof consists in\r\noverlooking all the other functions which money performs\r\nbesides its function of a medium of circulation.\r\nWhen hard pressed, as in his controversy with Bosanquet,\r\nRicardo, completely under the influence of the\r\nphenomenon of depreciated tokens of value caused by\r\ntheir quality, takes recourse to dogmatic assurances.\u003ca name=\"FNanchor_138_138\" id=\"FNanchor_138_138\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_138_138\" class=\"fnanchor\"\u003e138\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIf Ricardo had built up this theory by abstract reasoning,\r\nas we have done it here, without introducing concrete\r\nfacts and incidental matters which only distract\r\nhis attention from the main question, its hollowness\r\nwould be striking. But he takes up the entire subject\r\nin its \u003ci\u003einternational\u003c/i\u003e aspect. It will be easy to prove,\r\nhowever, that the apparent magnitude of scale does not\r\nmake his fundamental ideas less diminutive.\u003c/p\u003e\r\n\r\n\u003cp\u003eHis first proposition was as follows: the volume of\r\nmetallic currency is normal when it is determined by\r\nthe total value of the commodities in circulation estimated\r\nin its bullion value. Expressed so as to apply\r\nto international conditions, it reads thus: in a normal\r\nstate of circulation every country possesses a quantity\r\nof money “according to the state of its commerce and\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_243\" id=\"Page_243\"\u003ePg 243\u003c/a\u003e\u003c/span\u003ewealth.” Money circulates at a value corresponding\r\nto its real value or to its cost of production, i.\u0026nbsp;e. it has\r\nthe same value \u003ci\u003ein all countries\u003c/i\u003e.\u003ca name=\"FNanchor_139_139\" id=\"FNanchor_139_139\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_139_139\" class=\"fnanchor\"\u003e139\u003c/a\u003e That being the case,\r\n“there could be no temptation offered to either for their\r\nimportation or exportation.”\u003ca name=\"FNanchor_140_140\" id=\"FNanchor_140_140\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_140_140\" class=\"fnanchor\"\u003e140\u003c/a\u003e There would thus be\r\nestablished a balance of currencies between the different\r\ncountries. The normal level of a national currency is\r\nnow expressed in terms of an international balance of\r\ncurrencies, which practically amounts to the statement\r\nthat nationality does not change anything in a universal\r\neconomic law. We have reached again the same fatal\r\npoint as before. How is the normal level disturbed?\r\nOr, speaking in terms of the new terminology, how is\r\nthe international balance of currencies disturbed? Or,\r\nhow does money cease to have the same value in all\r\ncountries? Or, finally, how does it cease to pass at its\r\nown value in every country? We have seen that the\r\nnormal level was disturbed by an increase or decrease\r\nof the volume of money in circulation while the total\r\nvalue of commodities remained the same; or, because\r\nthe quantity of money in circulation remained the same\r\nwhile the exchange values of commodities rose or fell.\r\nIn the same manner, the international level, determined\r\nby the value of the metal itself, is disturbed by an increase\r\nin the quantity of gold in a country brought\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_244\" id=\"Page_244\"\u003ePg 244\u003c/a\u003e\u003c/span\u003eabout by the discovery of new gold mines,\u003ca name=\"FNanchor_141_141\" id=\"FNanchor_141_141\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_141_141\" class=\"fnanchor\"\u003e141\u003c/a\u003e or by an increase\r\nor decrease of the total exchange-value of the\r\ncirculating commodities in any particular country. Just\r\nas in the former case the output of the precious metals\r\ndecreased or increased according as to whether it was\r\nnecessary to contract or expand the currency and thereby\r\nto lower or raise prices, so are the same effects produced\r\nnow by export and import from one country to another.\r\nIn the country in which prices would rise or the value\r\nof gold would fall below the bullion value in consequence\r\nof a redundant currency, gold would be depreciated,\r\nand the prices of commodities would rise as\r\ncompared with other countries. Gold would, therefore,\r\nbe exported, while commodities would be imported, and\r\nvice versa. Just as in the former case the output of\r\ngold, so now the import or export of gold and, with it,\r\nthe rise or fall of prices of commodities would continue\r\nuntil, as we would have said before, the right value\r\nrelation would be restored between the metal and commodities,\r\nor as we shall say now, the international\r\nbalance of currencies would be restored. Just as in the\r\nformer case the production of gold increased or decreased\r\nbecause gold stood above or below its value,\r\nso now the international migration of gold would take\r\nplace for the same reason. Just as in the former case,\r\nevery change in the production of the circulating metal\r\naffected its quantity and, thereby, prices, so would the\r\nsame effect be produced now by international import\r\nand export. As soon as the relative values of gold and\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_245\" id=\"Page_245\"\u003ePg 245\u003c/a\u003e\u003c/span\u003ecommodities or the normal quantity of currency would\r\nbe restored, no further production would take place in\r\nthe former case, and no further export or import in the\r\nlatter, except in so far as would be necessary to replace\r\noutworn coin and to meet the demand of manufacturers\r\nof articles of luxury. It follows “that the temptation to\r\nexport money in exchange for goods, or what is termed\r\nan unfavorable balance of trade, never arises but from a\r\nredundant currency.”\u003ca name=\"FNanchor_142_142\" id=\"FNanchor_142_142\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_142_142\" class=\"fnanchor\"\u003e142\u003c/a\u003e “The exportation of the coin\r\nis caused by its cheapness, and is not the effect, but the\r\ncause of an unfavourable balance.”\u003ca name=\"FNanchor_143_143\" id=\"FNanchor_143_143\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_143_143\" class=\"fnanchor\"\u003e143\u003c/a\u003e Since the increase\r\nor decrease in the production of gold in the former case\r\nand the importation or exportation of gold in the latter,\r\ntake place only whenever its volume rises above or sinks\r\nbelow its normal level, i.\u0026nbsp;e. whenever gold appreciates\r\nor depreciates in comparison with its bullion value, or\r\nwhenever prices of commodities are too high or too low;\r\nit follows that every such movement works as a corrective,\u003ca name=\"FNanchor_144_144\" id=\"FNanchor_144_144\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_144_144\" class=\"fnanchor\"\u003e144\u003c/a\u003e\r\nsince, through the resultant expansion or contraction\r\nof the currency, prices are restored to their true\r\nlevel: in the former case this level represents the balance\r\nbetween the respective values of gold and of commodities;\r\nin the latter, the international balance of currencies.\r\nTo put it in other words: money circulates in different\r\ncountries only in so far as it circulates as coin in every\r\ncountry. Money is but coin and all the gold existing in\r\na country must therefore enter circulation, i.\u0026nbsp;e. it can\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_246\" id=\"Page_246\"\u003ePg 246\u003c/a\u003e\u003c/span\u003erise above or fall below its value as a token of value.\r\nThus we safely land again, by the round-about way of\r\nthis international complication, at the simple dogma\r\nwhich constituted our starting point.\u003c/p\u003e\r\n\r\n\u003cp\u003eWith what violence to actual facts Ricardo has to explain\r\nthem in the sense of his abstract theory, a few\r\nillustrations will suffice to show. He maintains, e. g.\r\nthat in years of poor crops, which happened frequently\r\nin England during 1800-1820, gold is exported not\r\nbecause corn is needed and gold as money is at all times\r\nan effectual means of purchase in the world market, but\r\nbecause gold is in such cases depreciated in its value as\r\ncompared with other commodities and, therefore, the\r\ncurrency of the country in which there has been a failure\r\nof crops is depreciated with respect to other national\r\ncurrencies. “In consequence of a bad harvest, a country\r\nhaving been deprived of a part of its commodities …\r\nthe currency which was before at its just level …\r\nbecome(s) redundant,” and prices of all commodities\r\nrise in consequence.\u003ca name=\"FNanchor_145_145\" id=\"FNanchor_145_145\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_145_145\" class=\"fnanchor\"\u003e145\u003c/a\u003e Contrary to this paradoxical in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_247\" id=\"Page_247\"\u003ePg 247\u003c/a\u003e\u003c/span\u003eterpretation\r\nit has been proven statistically that from\r\n1793 to the present time, whenever England had a bad\r\nharvest the available supply of currency not only did\r\nnot become superabundant, but became inadequate and\r\nthat, therefore, more money circulated and had to circulate\r\non such occasions.\u003ca name=\"FNanchor_146_146\" id=\"FNanchor_146_146\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_146_146\" class=\"fnanchor\"\u003e146\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the same manner, Ricardo maintained, with reference\r\nto Napoleon’s Continental System and the English\r\nBlockade Decree, that the English exported gold instead\r\nof commodities to the Continent, because their money\r\nwas depreciated with respect to the money on the Continent,\r\nthat their commodities were, therefore, more\r\nhigh priced, which made it a more profitable commercial\r\nspeculation to export gold than goods. According to\r\nhim England was a market in which commodities were\r\ndear and money was cheap, while on the Continent\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_248\" id=\"Page_248\"\u003ePg 248\u003c/a\u003e\u003c/span\u003ecommodities were cheap and money was dear. The trouble,\r\naccording to an English writer, was “the ruinously\r\nlow prices of our manufactures and of our colonial\r\nproductions under the operation … of the ‘Continental\r\nSystem ‘during the last six years of the war….\r\nThe prices of sugar and coffee, for instance, on\r\nthe Continent, computed in gold, were four or five times\r\nhigher than their prices in England, computed in bank-notes.\r\nI am speaking … of the times in which\r\nthe French chemists discovered sugar in beet-root, and\r\na substitute for coffee in chicory; and when the English\r\ngrazier tried experiments upon fattening oxen with\r\ntreacle and molasses\u0026mdash;of the times when we took possession\r\nof the island of Heligoland, in order to form\r\nthere a depot of goods to facilitate, if possible, the\r\nsmuggling of them into the north of Europe; and when\r\nthe lighter descriptions of British manufactures found\r\ntheir way into Germany through Turkey…. Almost\r\nall the merchandise of the world accumulated in\r\nour warehouses, where they became impounded, except\r\nwhen some small quantity was released by a French\r\nLicense, for which the merchants at Hamburgh and\r\nAmsterdam had, perhaps, given Napoleon such a sum\r\nas forty or fifty thousand pounds. They must have been\r\nstrange merchants … to have paid so large a sum\r\nfor liberty to carry a cargo of goods from a dear market\r\nto a cheap one. What was the ostensible alternative the\r\nmerchant had?… Either to buy coffee at 6d.\r\na pound in bank-notes, and send it to a place where it\r\nwould instantly sell at 3s. or 4s. a pound in gold, or to\r\nbuy gold with bank-notes at £5 an ounce, and send it\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_249\" id=\"Page_249\"\u003ePg 249\u003c/a\u003e\u003c/span\u003e\r\nto a place where it would be received at £3 17s. 10-1/2d.\r\nan ounce…. It is too absurd, of course, to say\r\n… that the gold was remitted instead of the coffee,\r\nas a preferable mercantile operation….\r\nThere was not a country in the world in which so\r\nlarge a quantity of desirable goods could be obtained, in\r\nreturn for an ounce of gold, as in England….\r\nBonaparte … was constantly examining the\r\nEnglish Price Current…. So long as he saw that\r\ngold was dear and coffee was cheap in England, he was\r\nsatisfied that his ‘Continental System ‘worked well.”\u003ca name=\"FNanchor_147_147\" id=\"FNanchor_147_147\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_147_147\" class=\"fnanchor\"\u003e147\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eAt the very time when Ricardo first formulated his\r\ntheory of money, and the Bullion Committee embodied\r\nit in its parliamentary report, namely in 1810, a ruinous\r\nfall of prices of all English commodities as compared\r\nwith those of 1808 and 1809 took place, while\r\ngold rose in value accordingly. Only agricultural products\r\nformed an exception, because their importation\r\nfrom abroad met with obstacles and their domestic\r\nsupply was decimated by unfavorable crop conditions.\u003ca name=\"FNanchor_148_148\" id=\"FNanchor_148_148\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_148_148\" class=\"fnanchor\"\u003e148\u003c/a\u003e\r\nRicardo so utterly failed to comprehend the rôle of\r\nprecious metals as an international means of payment,\r\nthat in his testimony before the Committee of the House\r\nof Lords in 1819 he could say “that drains for exportation\r\nwould cease altogether so soon as cash payments\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_250\" id=\"Page_250\"\u003ePg 250\u003c/a\u003e\u003c/span\u003eshould be resumed, and the currency be restored to its\r\nmetallic level.” He died just in time, on the very eve\r\nof the crisis of 1825, which belied his prophesies.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe time when Ricardo wrote was generally little\r\nadapted for the observation of the function of precious\r\nmetals as world money. Before the introduction of the\r\nContinental System, the balance of trade had almost\r\nalways been in favor of England, and while that system\r\nlasted, the commercial intercourse with the European\r\ncontinent was too insignificant to affect the English\r\nrate of exchange. The money transmissions were mostly\r\nof a political nature and Ricardo seems to have utterly\r\nfailed to grasp the part which subsidy payments played\r\nat that time in English gold exports.\u003ca name=\"FNanchor_149_149\" id=\"FNanchor_149_149\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_149_149\" class=\"fnanchor\"\u003e149\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eAmong the contemporaries of Ricardo who formed\r\nthe school which adopted his economic principles,\r\nJAMES MILL was the most important one. He attempted\r\nto work out Ricardo’s theory of money on the\r\nbasis of simple metallic circulation, without the irrelevant\r\ninternational complications which served Ricardo\r\nto hide the inadequacy of his theory, and without any\r\ncontroversial regard for the operations of the Bank of\r\nEngland. His main arguments are as follows:\u003c/p\u003e\r\n\r\n\u003cp\u003e“By value of money, is here to be understood the\r\nproportion in which it exchanges for other commodities,\r\nor the quantity of it which exchanges for a certain\r\nquantity of other things…. It is the total quantity\r\nof the money in any country, which determines\r\nwhat portion of that quantity shall exchange for a cer\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_251\" id=\"Page_251\"\u003ePg 251\u003c/a\u003e\u003c/span\u003etain\r\nportion of the goods or commodities of that country.\r\nIf we suppose that all the goods of the country are on\r\none side, all the money on the other, and that they are\r\nexchanged at once against one another, it is evident\r\n… that the value of money would depend wholly\r\nupon the quantity of it. It will appear that the case\r\nis precisely the same in the actual state of the facts.\r\nThe whole of the goods of a country are not exchanged\r\nat once against the whole of the money; the goods are\r\nexchanged in portions, often in very small portions,\r\nand at different times, during the course of the whole\r\nyear. The same piece of money which is paid in one\r\nexchange to-day, may be paid in another exchange tomorrow.\r\nSome of the pieces will be employed in a\r\ngreat many exchanges, some in very few, and some,\r\nwhich happen to be hoarded, in none at all. There\r\nwill, amid all these varieties, be a certain average number\r\nof exchanges, the same which, if all the pieces had\r\nperformed an equal number, would have been performed\r\nby each; that average we may suppose to be any number\r\nwe please; say, for example, ten. If each of the pieces\r\nof the money in the country perform ten purchases,\r\nthat is exactly the same thing as if all the pieces were\r\nmultiplied by ten, and performed only one purchase\r\neach. The value of all the goods in the country is equal\r\nto ten times the value of all the money…. If\r\nthe quantity of money instead of performing ten exchanges\r\nin the year, were ten times as great, and performed\r\nonly one exchange in the year, it is evident that\r\nwhatever addition were made to the whole quantity,\r\nwould produce a proportional diminution of value, in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_252\" id=\"Page_252\"\u003ePg 252\u003c/a\u003e\u003c/span\u003e\r\neach of the minor quantities taken separately. As the\r\nquantity of goods, against which the money is all exchanged\r\nat once, is supposed to be the same, the value\r\nof all the money is no more, after the quantity is augmented,\r\nthan before it was augmented. If it is supposed\r\nto be augmented one-tenth, the value of every part, that\r\nof an ounce for example, must be diminished one-tenth….\r\nIn whatever degree, therefore, the quantity of\r\nmoney is increased or diminished, other things remaining\r\nthe same, in that same proportion, the value of\r\nthe whole, and of every part, is reciprocally diminished\r\nor increased. This, it is evident, is a proposition universally\r\ntrue. Whenever the value of money has either\r\nrisen or fallen (the quantity of goods against which it\r\nis exchanged and the rapidity of circulation remaining\r\nthe same), the change must be owing to a corresponding\r\ndiminution or increase of the quantity; and can be owing\r\nto nothing else. If the quantity of goods diminish, while\r\nthe quantity of money remains the same, it is the same\r\nthing as if the quantity of money had been increased;”\r\nand vice versa…. “Similar changes are produced\r\nby any alteration in the rapidity of circulation….\r\nAn increase in the number of these purchases has the\r\nsame effect as an increase in the quantity of money;\r\na diminution the reverse…. If there is any portion\r\nof the annual produce which is not exchanged at all,\r\nas what is consumed by the producer; or which is not\r\nexchanged for money; that is not taken into the account,\r\nbecause what is not exchanged for money is in the\r\nsame state with respect to the money, as if it did not\r\nexist…. Whenever the coining of money …\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_253\" id=\"Page_253\"\u003ePg 253\u003c/a\u003e\u003c/span\u003e\r\nis free, its quantity is regulated by the value of the\r\nmetal…. Gold and silver are in reality commodities….\r\nIt is cost of production …\r\nwhich determines the value of these, as of other ordinary\r\nproductions.”\u003ca name=\"FNanchor_150_150\" id=\"FNanchor_150_150\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_150_150\" class=\"fnanchor\"\u003e150\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eThe whole wisdom of Mill resolves itself into a series\r\nof arbitrary and absurd assumptions. He wishes to\r\nprove that the price of commodities or the value of\r\nmoney is determined by “the total quantity of the money\r\nin any country.” \u003ci\u003eAssuming\u003c/i\u003e that the quantity and the\r\nexchange value of the commodities in circulation remain\r\nunchanged and that the same be true of the rapidity of\r\ncirculation and of the value of precious metals as determined\r\nby the cost of production, and \u003ci\u003eassuming\u003c/i\u003e at the\r\nsame time that the quantity of the metallic currency\r\nincreases or decreases in proportion to the quantity of\r\nmoney \u003ci\u003eexisting\u003c/i\u003e in a country, it becomes really “evident”\r\nthat what was to have been proven has been assumed.\r\nMill falls, moreover, into the same error as Hume by\r\nassuming that use-values and not commodities with a\r\ngiven exchange value are in circulation, and that\r\nvitiates his statement, even if we grant all of his “assumptions.”\r\nThe rapidity of circulation may remain the\r\nsame; this may also be true of the value of the precious\r\nmetals and of the \u003ci\u003equantity\u003c/i\u003e of commodities in circulation;\r\nand yet a change in the exchange value of the latter\r\nmay require now a larger and now a smaller quantity\r\nof money for their circulation. Mill sees that a part of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_254\" id=\"Page_254\"\u003ePg 254\u003c/a\u003e\u003c/span\u003ethe money in a country is in circulation, while another is\r\nidle. With the aid of a most absurd average calculation\r\nhe \u003ci\u003eassumes\u003c/i\u003e that, although it really appears to be different,\r\nyet all the gold in a country does circulate. Assuming\r\nthat ten million silver thalers circulate in\r\na country twice a year, there could be twenty\r\nmillion such coins in circulation, if each circulated but\r\nonce. And if the entire quantity of silver to be found\r\nin a country in any form amounts to one hundred million\r\nthalers, it may be supposed that the entire one\r\nhundred million can enter circulation, if each piece of\r\nmoney should circulate once in five years. One could\r\nas well assume that all the money of the world circulate\r\nin Hempstead, but that each piece of money instead of\r\nbeing employed three times a year, is employed once in\r\n3,000,000 years. The one assumption is as relevant as\r\nthe other for the purpose of determining the relation\r\nbetween the sum total of prices of commodities and the\r\nvolume of currency. Mill feels that it is a matter of\r\ndecisive importance to him to bring the commodities\r\nin direct contact not with the money in circulation, but\r\nwith the entire supply of money existing in a country.\r\nHe admits that “the whole of the goods of a country are\r\nnot exchanged at once against the whole of the money,”\r\nbut that the goods are exchanged in different portions\r\nand at different times of the year for different portions\r\nof money. To do away with this difficulty he \u003ci\u003eassumes\u003c/i\u003e\r\nthat it does not exist. Moreover, this entire idea\r\nof direct contact of commodities and money and direct\r\nexchange is a mere abstraction from the movement of\r\nsimple purchase and sale or the function of money as a\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_255\" id=\"Page_255\"\u003ePg 255\u003c/a\u003e\u003c/span\u003e\r\nmeans of purchase. Already in the movement of money\r\nas a means of payment, commodity and money cease to\r\nappear simultaneously.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe commercial crises of the nineteenth century,\r\nnamely, the great crises of 1825 and 1836, did not result\r\nin any new developments in the Ricardian theory of\r\nmoney, but they did furnish new applications for it.\r\nThey were no longer isolated economic phenomena, such\r\nas the depreciation of the precious metals in the sixteenth\r\nand seventeenth centuries which interested\r\nHume, or the depreciation of paper money in\r\nthe eighteenth and early nineteenth centuries which\r\nconfronted Ricardo; they were the great storms\r\nof the world market in which the conflict of all\r\nthe elements of the capitalist process of production\r\ndischarge themselves, and whose origin and\r\nremedy were sought in the most superficial and abstract\r\nsphere of this process, the sphere of money circulation.\r\nThe theoretical assumption from which the school of\r\neconomic weather prophets proceeds, comes down in\r\nthe end to the illusion that Ricardo discovered the laws\r\ngoverning the circulation of purely metallic currency.\r\nThe only thing that remained for them to do was to subject\r\nto the same laws the circulation of credit and bank-note\r\ncurrency.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe most general and most palpable phenomenon in\r\ncommercial crises is the sudden, general decline of prices\r\nfollowing a prolonged general rise. The general decline\r\nof prices of commodities may be expressed as a rise in\r\nthe relative value of money with respect to all commodities,\r\nand the general rise of prices as a decline of the\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_256\" id=\"Page_256\"\u003ePg 256\u003c/a\u003e\u003c/span\u003e\r\nrelative value of money. In either expression the phenomenon\r\nis described but not explained. Whether I\r\nput the question thus: explain the general periodic rise\r\nof prices followed by a general decline of the same, or\r\nformulate the same problem by saying: explain the\r\nperiodic decline and rise of the relative value of money\r\nwith respect to commodities; the different wording leaves\r\nthe problem as little changed as would its translation\r\nfrom German into English. Ricardo’s theory of money\r\nwas exceedingly convenient, because it lends a tautology\r\nthe semblance of a statement of causal connection.\r\nWhence comes the periodic general fall of prices? From\r\nthe periodic rise of the relative value of money.\r\nWhence the general periodic rise of prices? From the\r\nperiodic decline of the relative value of money. It\r\nmight have been stated with equal truth that the periodic\r\nrise and fall of prices is due to their periodic rise\r\nand fall. The problem itself is stated under the assumption\r\nthat the intrinsic value of money, i.\u0026nbsp;e., its\r\nvalue as determined by the cost of production of precious\r\nmetals remains \u003ci\u003eunchanged\u003c/i\u003e. If it is more than a tautology\r\nthen it is based on a misconception of the most\r\nelementary principles. If the exchange value of A\r\nmeasured in terms of B, declines, we know that this\r\nmay be caused by a decline of the value of A as much\r\nas by a rise of the value of B; the same being true of\r\nthe case of a rise of the exchange value of A measured\r\nin terms of B. The tautology once admitted as a statement\r\nof cause, the rest follows easily. A rise of prices\r\nof commodities is caused by a decline of the value of\r\nmoney and a decline of the value of money is caused,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_257\" id=\"Page_257\"\u003ePg 257\u003c/a\u003e\u003c/span\u003e\r\nas we know from Ricardo, by a redundant currency,\r\ni.\u0026nbsp;e., by a rise of the volume of currency over the level\r\ndetermined by its own intrinsic value and the intrinsic\r\nvalue of the commodities. In the same manner, the general\r\ndecline of prices of commodities is explained by the\r\nrise of the value of money above its intrinsic value in\r\nconsequence of an inadequate currency. Thus, prices\r\nrise and fall periodically, because there is periodically\r\ntoo much or too little money in circulation. Should\r\na rise of prices happen to coincide with a contracted currency,\r\nand a fall of prices with an expanded one, it may\r\nbe asserted in spite of those facts that in consequence\r\nof a contraction or expansion of the volume of commodities\r\nin the market, which can not be proven statistically,\r\nthe quantity of money in circulation has, although not\r\nabsolutely, yet relatively increased or declined. We have\r\nseen that according to Ricardo these universal fluctuations\r\nmust take place even with a purely metallic currency,\r\nbut that they balance each other through their\r\nalternations; thus, e. g., an inadequate currency causes\r\na fall of prices, the fall of prices leads to the export of\r\ncommodities abroad, this export causes again an import\r\nof gold from abroad, which, in its turn, brings about a\r\nrise of prices; the opposite movement taking place in\r\ncase of a redundant currency, when commodities are imported\r\nand money is exported. But, since in spite of\r\nthese universal fluctuations of prices which are in perfect\r\naccord with Ricardo’s theory of metallic currency,\r\ntheir acute and violent form, their crisis-form, belongs\r\nto the period of advanced credit, it is perfectly clear\r\nthat the issue of bank-notes is not exactly regulated by\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_258\" id=\"Page_258\"\u003ePg 258\u003c/a\u003e\u003c/span\u003e\r\nthe laws of metallic currency. Metallic currency has\r\nits remedy in the import and export of precious metals\r\nwhich immediately enter circulation and thus, by their\r\ninflux or efflux, cause the prices of commodities to fall\r\nor rise. The same effect on prices must now be exerted\r\nby banks by the artificial imitation of the laws of metallic\r\ncurrency. If gold is coming in from abroad it\r\nproves that the currency is inadequate, that the value\r\nof money is too high and the prices of commodities too\r\nlow, and, consequently, that bank notes must be put in\r\ncirculation in proportion to the newly imported gold.\r\nOn the contrary, notes have to be withdrawn from circulation\r\nin proportion to the export of gold from the\r\ncountry. That is to say, the issue of bank notes must\r\nbe regulated by the import and export of the precious\r\nmetals or by the rate of exchange. Ricardo’s false assumption\r\nthat gold is only coin, and that therefore all\r\nimported gold swells the currency, causing prices to rise,\r\nwhile all exported gold reduces the currency leading to\r\na fall of prices, this theoretical assumption is turned\r\ninto a practical experiment of putting in every case an\r\namount of currency in circulation equal to the amount\r\nof gold in existence. Lord Overstone (the banker Jones\r\nLoyd), Colonel Torrens, Norman, Clay, Arbuthnot and\r\na host of other writers, known in England as the adherents\r\nof the “currency principle,” not only preached\r\nthis doctrine, but with the aid of Sir Robert Peel succeeded\r\nin 1844 and 1845 in making it the basis of the\r\npresent English and Scotch bank legislation. Its ignominous\r\nfailure, theoretical as well as practical, following\r\nupon experiments on the largest national scale,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_259\" id=\"Page_259\"\u003ePg 259\u003c/a\u003e\u003c/span\u003e\r\ncan be treated only after we take up the theory of credit.\u003ca name=\"FNanchor_151_151\" id=\"FNanchor_151_151\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_151_151\" class=\"fnanchor\"\u003e151\u003c/a\u003e\r\nSo much can be seen, however, that the theory of Ricardo\r\nwhich isolates money in its fluent form of currency, ends\r\nby ascribing to the ebbs and tides in the supply of\r\nprecious metals an influence on bourgeois economy such\r\nas the believers in the superstitions of the monetary system\r\nhad never dreamt of. Thus did Ricardo, who proclaimed\r\npaper currency as the most perfect form of\r\nmoney, become the prophet of the bullionists.\u003c/p\u003e\r\n\r\n\u003cp\u003eAfter Hume’s theory or the abstract opposition to the\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_260\" id=\"Page_260\"\u003ePg 260\u003c/a\u003e\u003c/span\u003emonetary system was thus developed to its ultimate conclusions,\r\nSteuart’s concrete conception of money was finally\r\nrestored to its rights by THOMAS TOOKE.\u003ca name=\"FNanchor_152_152\" id=\"FNanchor_152_152\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_152_152\" class=\"fnanchor\"\u003e152\u003c/a\u003e\r\nTooke arrives at his principles not from any theory, but\r\nby a conscientious analysis of the history of prices of\r\ncommodities from 1793 to 1856. In the first edition of\r\nhis History of Prices which appeared in 1823, Tooke is\r\nstill under the complete influence of the Ricardian theory,\r\nand vainly tries to reconcile it with actual facts.\r\nHis pamphlet “On the Currency,” which appeared after\r\nthe crisis of 1825 might even be considered as the first\r\nconsistent presentation of the views which were later\r\ngiven the force of law by Overstone. Continued studies\r\nin the history of prices forced him, however, to the conclusion\r\nthat the direct connection between prices and the\r\nvolume of currency, as it is pictured by the theory, is a\r\nmere illusion; that the expansion and contraction of\r\ncurrency which takes place while the value of the precious\r\nmetals remains unchanged, is always the effect\r\nbut never the cause of price fluctuations; that the circulation\r\nof money is in any event but a secondary movement;\r\nand that money assumes quite different forms in\r\nthe actual process of production in addition to that of\r\na circulating medium. His detailed investigations belong\r\nto a sphere outside of that of simple metallic circulation\r\nand can be discussed here as little as the investigations\r\nof WILSON and FULLARTON which belong\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_261\" id=\"Page_261\"\u003ePg 261\u003c/a\u003e\u003c/span\u003eto the same class.\u003ca name=\"FNanchor_153_153\" id=\"FNanchor_153_153\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_153_153\" class=\"fnanchor\"\u003e153\u003c/a\u003e None of these writers takes a one-sided\r\nview of money, but treat it in its various aspects; the\r\ntreatment, however, is mechanical, without an attempt\r\nto establish an organic connection either between these\r\nvarious aspects themselves, or between them and the\r\ncombined system of economic categories. They fall,\r\ntherefore, into the error of confusing \u003ci\u003emoney\u003c/i\u003e as distinguished\r\nfrom \u003ci\u003emedium of circulation\u003c/i\u003e with \u003ci\u003ecapital\u003c/i\u003e or\r\neven with commodity, although they are forced elsewhere\r\nto differentiate it from both.\u003ca name=\"FNanchor_154_154\" id=\"FNanchor_154_154\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_154_154\" class=\"fnanchor\"\u003e154\u003c/a\u003e When gold, e. g.,\r\nis shipped abroad, it practically means that capital is\r\nsent abroad, but the same thing takes place when iron,\r\ncotton, grain, or any other commodity is exported. Both\r\nare capital and are distinguished not as capital, but as\r\nmoney and commodity. The function of gold as the\r\ninternational medium of exchange springs, therefore,\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_262\" id=\"Page_262\"\u003ePg 262\u003c/a\u003e\u003c/span\u003enot from its being capital, but from its specific character\r\nof money. Similarly, when gold, or bank notes in\r\nits place, circulate in the home trade as means of payment,\r\nthey constitute capital at the same time. But\r\nthey could not be replaced by capital in the form of commodities,\r\nas has been demonstrated very palpably by\r\ncrises, for instance. That is to say, it is the fact that\r\ngold is distinguished from commodities in its capacity\r\nof money and not in that of capital, that makes it the\r\nmeans of payment. Even when capital is exported directly\r\nas capital, as, e. g., when it is done for the purpose\r\nof lending abroad a certain amount on interest, it\r\ndepends on circumstances, whether it will be exported\r\nin the form of commodities or in that of gold, and if in\r\nthe latter form, it is due to the specific destination of\r\nthe precious metals as distinguished from commodities\r\nto serve as money. In general, these writers do not consider\r\nmoney in its abstract form, as it is developed within\r\nthe sphere of simple circulation of commodities, and\r\nas it spontaneously grows out of the relation of the circulating\r\ncommodities. As a result, they constantly\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_263\" id=\"Page_263\"\u003ePg 263\u003c/a\u003e\u003c/span\u003evacillate between the abstract forms of money which distinguish\r\nit from commodity and those forms of it beneath\r\nwhich are concealed concrete relations, such as\r\ncapital, revenue, etc.\u003ca name=\"FNanchor_155_155\" id=\"FNanchor_155_155\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_155_155\" class=\"fnanchor\"\u003e155\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_264\" id=\"Page_264\"\u003e[Pg 264]\u003c/a\u003e\u003cbr /\u003e\u003ca name=\"Page_265\" id=\"Page_265\"\u003ePg 265\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ch2\u003e\u003csmall\u003eIntroduction\u003c/small\u003e\u003cbr /\u003e\r\n\r\n\u003csmall\u003e\u003csmall\u003eto the\u003c/small\u003e\u003c/small\u003e\u003cbr /\u003e\r\n\r\nCritique of Political Economy.\u003ca name=\"FNanchor_156_156\" id=\"FNanchor_156_156\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_156_156\" class=\"fnanchor\"\u003e156\u003c/a\u003e\u003c/h2\u003e\r\n\r\n\u003chr class=\"small\" /\u003e\r\n\u003ch4\u003e1. \u003csmall\u003ePRODUCTION IN GENERAL.\u003c/small\u003e\u003c/h4\u003e\r\n\r\n\u003cp\u003eThe subject of our discussion is first of all \u003ci\u003ematerial\u003c/i\u003e\r\nproduction by individuals as determined by society, naturally\r\nconstitutes the starting point. The individual\r\nand isolated hunter or fisher who forms the starting\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_266\" id=\"Page_266\"\u003ePg 266\u003c/a\u003e\u003c/span\u003epoint with Smith and Ricardo, belongs to the insipid\r\nillusions of the eighteenth century. They are Robinsonades\r\nwhich do not by any means represent, as students\r\nof the history of civilization imagine, a reaction\r\nagainst over-refinement and a return to a misunderstood\r\nnatural life. They are no more based on such a naturalism\r\nthan is Rosseau’s “contrat social,” which makes naturally\r\nindependent individuals come in contact and have\r\nmutual intercourse by contract. They are the fiction\r\nand only the aesthetic fiction of the small and great\r\nRobinsonades. They are, moreover, the anticipation of\r\n“bourgeois society,” which had been in course of de\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_267\" id=\"Page_267\"\u003ePg 267\u003c/a\u003e\u003c/span\u003evelopment\r\nsince the sixteenth century and made gigantic\r\nstrides towards maturity in the eighteenth. In\r\nthis society of free competition the individual appears\r\nfree from the bonds of nature, etc., which in former\r\nepochs of history made him a part of a definite, limited\r\nhuman conglomeration. To the prophets of the eighteenth\r\ncentury, on whose shoulders Smith and Ricardo\r\nare still standing, this eighteenth century individual,\r\nconstituting the joint product of the dissolution of the\r\nfeudal form of society and of the new forces of production\r\nwhich had developed since the sixteenth century,\r\nappears as an ideal whose existence belongs to the past;\r\nnot as a result of history, but as its starting point.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince that individual appeared to be in conformity\r\nwith nature and [corresponded] to their conception of\r\nhuman nature, [he was regarded] not as a product of\r\nhistory, but of nature. This illusion has been characteristic\r\nof every new epoch in the past. Steuart, who, as\r\nan aristocrat, stood more firmly on historical ground,\r\ncontrary to the spirit of the eighteenth century, escaped\r\nthis simplicity of view. The further back we go into\r\nhistory, the more the individual and, therefore, the\r\nproducing individual seems to depend on and constitute\r\na part of a larger whole: at first it is, quite naturally,\r\nthe family and the clan, which is but an enlarged family;\r\nlater on, it is the community growing up in its different\r\nforms out of the clash and the amalgamation of clans.\r\nIt is but in the eighteenth century, in “bourgeois\r\nsociety,” that the different forms of social union confront\r\nthe individual as a mere means to his private ends,\r\nas an outward necessity. But the period in which this\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_268\" id=\"Page_268\"\u003ePg 268\u003c/a\u003e\u003c/span\u003e\r\nview of the isolated individual becomes prevalent, is the\r\nvery one in which the interrelations of society (general\r\nfrom this point of view) have reached the highest state\r\nof development. Man is in the most literal sense of the\r\nword a \u003ci\u003ezoon politikon\u003c/i\u003e, not only a social animal, but an\r\nanimal which can develop into an individual only in\r\nsociety. Production by isolated individuals outside of\r\nsociety\u0026mdash;something which might happen as an exception\r\nto a civilized man who by accident got into the\r\nwilderness and already dynamically possessed within\r\nhimself the forces of society\u0026mdash;is as great an absurdity\r\nas the idea of the development of language without individuals\r\nliving together and talking to one another. We\r\nneed not dwell on this any longer. It would not be necessary\r\nto touch upon this point at all, were not the vagary\r\nwhich had its justification and sense with the people of\r\nthe eighteenth century transplanted in all earnest into\r\nthe field of political economy by Bastiat, Carey, Proudhon\r\nand others. Proudhon and others naturally find it\r\nvery pleasant, when they do not know the historical\r\norigin of a certain economic phenomenon, to give it a\r\nquasi historico-philosopohical explanation by going into\r\nmythology. Adam or Prometheus hit upon the scheme\r\ncut and dried, whereupon it was adopted, etc. Nothing\r\nis more tediously dry than the dreaming \u003ci\u003elocus communis\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhenever we speak, therefore, of production, we always\r\nhave in mind production at a certain stage of social\r\ndevelopment, or production by social individuals. Hence,\r\nit might seem that in order to speak of production at\r\nall, we must either trace the historical process of de\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_269\" id=\"Page_269\"\u003ePg 269\u003c/a\u003e\u003c/span\u003evelopment\r\nthrough its various phases, or declare at the\r\noutset that we are dealing with a certain historical period,\r\nas, e. g., with modern capitalistic production which,\r\nas a matter of fact, constitutes the subject proper of\r\nthis work. But all stages of production have certain\r\nlandmarks in common, common purposes. \u003ci\u003eProduction\r\nin general\u003c/i\u003e is an abstraction, but it is a rational abstraction,\r\nin so far as it singles out and fixes the common\r\nfeatures, thereby saving us repetition. Yet these general\r\nor common features discovered by comparison constitute\r\nsomething very complex, whose constituent elements\r\nhave different destinations. Some of these elements\r\nbelong to all epochs, others are common to a\r\nfew. Some of them are common to the most modern as\r\nwell as to the most ancient epochs. No production is\r\nconceivable without them; but while even the most completely\r\ndeveloped languages have laws and conditions in\r\ncommon with the least developed ones, what is characteristic\r\nof their development are the points of departure\r\nfrom the general and common. The conditions which\r\ngenerally govern production must be differentiated in\r\norder that the essential points of difference be not lost\r\nsight of in view of the general uniformity which is due\r\nto the fact that the subject, mankind, and the object,\r\nnature, remain the same. The failure to remember this\r\none fact is the source of all the wisdom of modern\r\neconomists who are trying to prove the eternal nature\r\nand harmony of existing social conditions. Thus they\r\nsay, e. g., that no production is possible without some\r\ninstrument of production, let that instrument be only\r\nthe hand; that none is possible without past accumu\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_270\" id=\"Page_270\"\u003ePg 270\u003c/a\u003e\u003c/span\u003elated\r\nlabor, even if that labor consist of mere skill\r\nwhich has been accumulated and concentrated in the\r\nhand of the savage by repeated exercise. Capital is,\r\namong other things, also an instrument of production,\r\nalso past impersonal labor. Hence capital is a universal,\r\neternal natural phenomenon; which is true if we disregard\r\nthe specific properties which turn an “instrument\r\nof production” and “stored up labor” into capital. The\r\nentire history of production appears to a man like Carey,\r\ne. g., as a malicious perversion on the part of governments.\u003c/p\u003e\r\n\r\n\u003cp\u003eIf there is no production in general, there is\r\nalso no general production. Production is always\r\nsome special branch of production or an aggregate,\r\nas, e. g., agriculture, stock raising, manufactures, etc.\r\nBut political economy is not technology. The connection\r\nbetween the general destinations of production at a\r\ngiven stage of social development and the particular\r\nforms of production, is to be developed elsewhere (later\r\non).\u003c/p\u003e\r\n\r\n\u003cp\u003eFinally, production is not only of a special kind. It\r\nis always a certain body politic, a social personality that\r\nis engaged on a larger or smaller aggregate of branches\r\nof production. The connection between the real process\r\nand its scientific presentation also falls outside of\r\nthe scope of this treatise. [We must thus distinguish\r\nbetween] production in general, special branches of\r\nproduction and production as a whole.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is the fashion with economists to open their works\r\nwith a general introduction, which is entitled “produc\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_271\" id=\"Page_271\"\u003ePg 271\u003c/a\u003e\u003c/span\u003etion”\r\n(see, e. g., John Stuart Mill) and deals with the\r\ngeneral “requisites of production.”\u003c/p\u003e\r\n\r\n\u003cp\u003eThis general introductory part treats or is supposed\r\nto treat:\u003c/p\u003e\r\n\r\n\u003cp\u003e1. Of the conditions without which production is impossible,\r\ni.\u0026nbsp;e., of the most essential conditions of production.\r\nAs a matter of fact, however, it dwindles down,\r\nas we shall see, to a few very simple definitions, which\r\nflatten out into shallow tautologies;\u003c/p\u003e\r\n\r\n\u003cp\u003e2. Of conditions which further production more or\r\nless, as, e. g., Adam Smith’s [discussion of] a progressive\r\nand stagnant state of society.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn order to give scientific value to what serves with\r\nhim as a mere summary, it would be necessary to study\r\nthe \u003ci\u003edegree of productivity\u003c/i\u003e by periods in the development\r\nof individual nations; such a study falls outside of the\r\nscope of the present subject, and in so far as it does belong\r\nhere is to be brought out in connection with the\r\ndiscussion of competition, accumulation, etc. The commonly\r\naccepted view of the matter gives a general answer\r\nto the effect that an industrial nation is at the\r\nheight of its production at the moment when it reaches\r\nits historical climax in all respects. Or, that certain\r\nraces, climates, natural conditions, such as distance from\r\nthe sea, fertility of the soil, etc., are more favorable to\r\nproduction than others. That again comes down to the\r\ntautology that the facility of creating wealth depends on\r\nthe extent to which its elements are present both subjectively\r\nand objectively. As a matter of fact a nation is\r\nat its industrial height so long as its main object is not\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_272\" id=\"Page_272\"\u003ePg 272\u003c/a\u003e\u003c/span\u003e\r\ngain, but the process of gaining. In that respect the\r\nYankees stand above the English.\u003c/p\u003e\r\n\r\n\u003cp\u003eBut all that is not what the economists are really after\r\nin the general introductory part. Their object is rather\r\nto represent production in contradistinction to distribution\u0026mdash;see\r\nMill, e. g.\u0026mdash;as subject to eternal laws independent\r\nof history, and then to substitute bourgeois\r\nrelations, in an underhand way, as immutable natural\r\nlaws of society \u003ci\u003ein abstracto\u003c/i\u003e. This is the more or less\r\nconscious aim of the entire proceeding. On the contrary,\r\nwhen it comes to distribution, mankind is supposed\r\nto have indulged in all sorts of arbitrary action.\r\nQuite apart from the fact that they violently break the\r\nties which bind production and distribution together, so\r\nmuch must be clear from the outset: that, no matter how\r\ngreatly the systems of distribution may vary at different\r\nstages of society, it should be possible here, as in the case\r\nof production, to discover the common features and to\r\nconfound and eliminate all historical differences in\r\nformulating \u003ci\u003egeneral human\u003c/i\u003e laws. E. g., the slave, the\r\nserf, the wage-worker\u0026mdash;all receive a quantity of food,\r\nwhich enables them to exist as slave, serf, and wage-worker.\r\nThe conqueror, the official, the landlord, the\r\nmonk, or the levite, who respectively live on tribute,\r\ntaxes, rent, alms, and the tithe,\u0026mdash;all receive [a part]\r\nof the social product which is determined by laws different\r\nfrom those which determine the part received by the\r\nslave, etc. The two main points which all economists\r\nplace under this head, are: first, property; second, the\r\nprotection of the latter by the administration of justice,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_273\" id=\"Page_273\"\u003ePg 273\u003c/a\u003e\u003c/span\u003e\r\npolice, etc. The objections to these two points can be\r\nstated very briefly.\u003c/p\u003e\r\n\r\n\u003cp\u003e1. All production is appropriation of nature by the\r\nindividual within and through a definite form of society.\r\nIn that sense it is a tautology to say that property (appropriation)\r\nis a condition of production. But it becomes\r\nridiculous, when from that one jumps at once to\r\na definite form of property, e. g. private property (which\r\nimplies, besides, as a prerequisite the existence of an opposite\r\nform, viz. absence of property). History points\r\nrather to common property (e. g. among the Hindoos,\r\nSlavs, ancient Celts, etc.) as the primitive form, which\r\nstill plays an important part at a much later period as\r\ncommunal property. The question as to whether\r\nwealth grows more rapidly under this or that form of\r\nproperty, is not even raised here as yet. But that there\r\ncan be no such a thing as production, nor, consequently,\r\nsociety, where property does not exist in any form, is a\r\ntautology. Appropriation which does not appropriate is\r\na \u003ci\u003econtradictio in subjecto\u003c/i\u003e.\u003c/p\u003e\r\n\r\n\u003cp\u003e2. Protection of property, etc. Reduced to their real\r\nmeaning, these commonplaces express more than what\r\ntheir preachers know, namely, that every form of production\r\ncreates its own legal relations, forms of government,\r\netc. The crudity and the shortcomings of the\r\nconception lie in the tendency to see but an accidental reflective\r\nconnection in what constitutes an organic union.\r\nThe bourgeois economists have a vague notion that it is\r\nbetter to carry on production under the modern police,\r\nthan it was, e. g. under club-law. They forget that\r\nclub law is also law, and that the right of the stronger\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_274\" id=\"Page_274\"\u003ePg 274\u003c/a\u003e\u003c/span\u003e\r\ncontinues to exist in other forms even under their “government\r\nof law.”\u003c/p\u003e\r\n\r\n\u003cp\u003eWhen the social conditions corresponding to a certain\r\nstage of production are in a state of formation or disappearance,\r\ndisturbances of production naturally arise,\r\nalthough differing in extent and effect.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo sum up: all the stages of production have certain\r\ndestinations in common, which we generalize in\r\nthought; but the so-called general conditions of all production\r\nare nothing but abstract conceptions which do\r\nnot go to make up any real stage in the history of production.\u003c/p\u003e\r\n\r\n\u003ch4\u003e2. THE GENERAL RELATION OF PRODUCTION TO DISTRIBUTION,\r\nEXCHANGE, AND CONSUMPTION.\u003c/h4\u003e\r\n\r\n\u003cp\u003eBefore going into a further analysis of production, it\r\nis necessary to look at the various divisions which economists\r\nput side by side with it. The most shallow conception\r\nis as follows: By production, the members of\r\nsociety appropriate (produce and shape) the products\r\nof nature to human wants; distribution determines the\r\nproportion in which the individual participates in this\r\nproduction; exchange brings him the particular products\r\ninto which he wishes to turn the quantity secured by\r\nhim through distribution; finally, through consumption\r\nthe products become objects of use and enjoyment, of individual\r\nappropriation. Production yields goods adopted\r\nto our needs; distribution distributes them according\r\nto social laws; exchange distributes further what has\r\nalready been distributed, according to individual wants;\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_275\" id=\"Page_275\"\u003ePg 275\u003c/a\u003e\u003c/span\u003e\r\nfinally, in consumption the product drops out of the\r\nsocial movement, becoming the direct object of the individual\r\nwant which it serves and satisfies in use.\r\nProduction thus appears as the starting point; consumption\r\nas the final end; and distribution and exchange as\r\nthe middle; the latter has a double aspect, distribution\r\nbeing defined as a process carried on by society, while\r\nexchange, as one proceeding from the individual. In\r\nproduction the person is embodied in things, in [consumption\u003ca name=\"FNanchor_157_157\" id=\"FNanchor_157_157\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_157_157\" class=\"fnanchor\"\u003e157\u003c/a\u003e]\r\nthings are embodied in persons; in distribution,\r\nsociety assumes the part of go-between of production\r\nand consumption in the form of generally prevailing\r\nrules; in exchange this is accomplished by the accidental\r\nmake-up of the individual.\u003c/p\u003e\r\n\r\n\u003cp\u003eDistribution determines what proportion (quantity)\r\nof the products the individual is to receive; exchange determines\r\nthe products in which the individual desires to\r\nreceive his share allotted to him by distribution.\u003c/p\u003e\r\n\r\n\u003cp\u003eProduction, distribution, exchange, and consumption\r\nthus form a perfect connection, production standing for\r\nthe general, distribution and exchange for the special,\r\nand consumption for the individual, in which all are\r\njoined together. To be sure this is a connection, but it\r\ndoes not go very deep. Production is determined [according\r\nto the economists] by universal natural laws,\r\nwhile distribution depends on social chance: distribution\r\ncan, therefore, have a more or less stimulating effect on\r\nproduction: exchange lies between the two as a formal\r\n(?) social movement, and the final act of consumption\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_276\" id=\"Page_276\"\u003ePg 276\u003c/a\u003e\u003c/span\u003ewhich is considered not only as a final purpose, but also\r\nas a final aim, falls, properly, outside of the scope of\r\neconomics, except in so far as it reacts on the starting\r\npoint and causes the entire process to begin all over\r\nagain.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe opponents of the economists\u0026mdash;whether economists\r\nthemselves or not\u0026mdash;who reproach them with tearing\r\napart, like barbarians, what is an organic whole,\r\neither stand on common ground with them or are \u003ci\u003ebelow\u003c/i\u003e\r\nthem. Nothing is more common than the charge that\r\nthe economists have been considering production as an\r\nend in itself, too much to the exclusion of everything else.\r\nThe same has been said with regard to distribution.\r\nThis accusation is itself based on the economic conception\r\nthat distribution exists side by side with production\r\nas a self-contained, independent sphere. Or [they are\r\naccused] that the various factors are not treated by them\r\nin their connection as a whole. As though it were the\r\ntext books that impress this separation upon life and not\r\nlife upon the text books; and the subject at issue were\r\na dialectic balancing of conceptions and not an analysis\r\nof real conditions.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003ea. Production is at the same time also consumption.\u003c/i\u003e\r\nTwofold consumption, subjective and objective. The individual\r\nwho develops his faculties in production, is also\r\nexpending them, consuming them in the act of production,\r\njust as procreation is in its way a consumption of\r\nvital powers. In the second place, production is consumption\r\nof means of production which are used and\r\nused up and partly (as e. g. in burning) reduced to\r\ntheir natural elements. The same is true of the con\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_277\" id=\"Page_277\"\u003ePg 277\u003c/a\u003e\u003c/span\u003esumption\r\nof raw materials which do not remain in their\r\nnatural form and state, being greatly absorbed in the\r\nprocess. The act of production is, therefore, in all its\r\naspects an act of consumption as well. But this is admitted\r\nby economists. Production as directly identical\r\nwith consumption, consumption as directly coincident\r\nwith production, they call productive consumption. This\r\nidentity of production and consumption finds its expression\r\nin Spinoza’s proposition, \u003ci\u003eDeterminatio est negatio\u003c/i\u003e.\r\nBut this definition of productive consumption is resorted\r\nto just for the purpose of distinguishing between\r\nconsumption as identical with production and consumption\r\nproper, which is defined as its destructive counterpart.\r\nLet us then consider consumption proper.\u003c/p\u003e\r\n\r\n\u003cp\u003eConsumption is directly also production, just as in nature\r\nthe consumption of the elements and of chemical\r\nmatter constitutes production of plants. It is clear,\r\nthat in nutrition, e. g., which is but one form of consumption,\r\nman produces his own body; but it is equally\r\ntrue of every kind of consumption, which goes to produce\r\nthe human being in one way or another. [It is]\r\nconsumptive production. But, say the economists, this\r\nproduction which is identical with consumption, is a\r\nsecond production resulting from the destruction of the\r\nproduct of the first. In the first, the producer transforms\r\nhimself into things; in the second, things are\r\ntransformed into human beings. Consequently, this\r\nconsumptive production\u0026mdash;although constituting a direct\r\nunity of production and consumption\u0026mdash;differs essentially\r\nfrom production proper. The direct unity in which production\r\ncoincides with consumption and consumption\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_278\" id=\"Page_278\"\u003ePg 278\u003c/a\u003e\u003c/span\u003e\r\nwith production, does not interfere with their direct\r\nduality.\u003c/p\u003e\r\n\r\n\u003cp\u003eProduction is thus at the same time consumption, and\r\nconsumption is at the same time production. Each is\r\ndirectly its own counterpart. But at the same time an\r\nintermediary movement goes on between the two. Production\r\nfurthers consumption by creating material for the\r\nlatter which otherwise would lack its object. But consumption\r\nin its turn furthers production, by providing\r\nfor the products the individual for whom they are\r\nproducts. The product receives its last finishing touches\r\nin consumption. A railroad on which no one rides,\r\nwhich is, consequently not used up, not consumed, is but\r\na potential railroad, and not a real one. Without production,\r\nno consumption; but, on the other hand, without\r\nconsumption, no production; since production would\r\nthen be without a purpose. Consumption produces\r\nproduction in two ways.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the first place, in that the product first becomes a\r\nreal product in consumption; e. g., a garment becomes\r\na real garment only through the act of being worn; a\r\ndwelling which is not inhabited, is really no dwelling;\r\nconsequently, a product as distinguished from a mere\r\nnatural object, proves to be such, first \u003ci\u003ebecomes\u003c/i\u003e a product\r\nin consumption. Consumption gives the product the\r\nfinishing touch by annihilating it, since a product is the\r\n[result] of production not only as the material embodiment\r\nof activity, but also as a mere object for the active\r\nsubject.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the second place, consumption produces production\r\nby creating the necessity for new production, i.\u0026nbsp;e.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_279\" id=\"Page_279\"\u003ePg 279\u003c/a\u003e\u003c/span\u003e\r\nby providing the ideal, inward, impelling cause which\r\nconstitutes the prerequisite of production. Consumption\r\nfurnishes the impulse for production as well as its\r\nobject, which plays in production the part of its guiding\r\naim. It is clear that while production furnishes the\r\nmaterial object of consumption, consumption provides\r\nthe ideal object of production, as its image, its want, its\r\nimpulse and its purpose. It furnishes the object of\r\nproduction in its subjective form. No wants, no production.\r\nBut consumption reproduces the want.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn its turn, production:\u003c/p\u003e\r\n\r\n\u003cp\u003eFirst, furnishes consumption\u003ca name=\"FNanchor_158_158\" id=\"FNanchor_158_158\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_158_158\" class=\"fnanchor\"\u003e158\u003c/a\u003e with its material, its\r\nobject. Consumption without an object is no consumption,\r\nhence production works in this direction by producing\r\nconsumption.\u003c/p\u003e\r\n\r\n\u003cp\u003eSecond. But it is not only the object that production\r\nprovides for consumption. It gives consumption its\r\ndefinite outline, its character, its finish. Just as consumption\r\ngives the product its finishing touch as a\r\nproduct, production puts the finishing touch on consumption.\r\nFor the object is not simply an object in general,\r\nbut a definite object, which is consumed in a certain\r\ndefinite manner prescribed in its turn by production.\r\nHunger is hunger; but the hunger that is satisfied with\r\ncooked meat eaten with fork and knife is a different kind\r\nof hunger from the one that devours raw meat with the\r\naid of hands, nails, and teeth. Not only the object of\r\nconsumption, but also the manner of consumption is\r\nproduced by production; that is to say, consumption is\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_280\" id=\"Page_280\"\u003ePg 280\u003c/a\u003e\u003c/span\u003ecreated by production not only objectively, but also subjectively.\r\nProduction thus creates the consumers.\u003c/p\u003e\r\n\r\n\u003cp\u003eThird. Production not only supplies the want with\r\nmaterial, but supplies the material with a want. When\r\nconsumption emerges from its first stage of natural\r\ncrudeness and directness\u0026mdash;and its continuation in that\r\nstate would in itself be the result of a production still\r\nremaining in a state of natural crudeness\u0026mdash;it is itself\r\nfurthered by its object as a moving spring. The want\r\nof it which consumption experiences is created by its\r\nappreciation of the product. The object of art, as well\r\nas any other product, creates an artistic and beauty-enjoying\r\npublic. Production thus produces not only an\r\nobject for the individual, but also an individual for the\r\nobject.\u003c/p\u003e\r\n\r\n\u003cp\u003eProduction thus produces consumption: first, by furnishing\r\nthe latter with material; second, by determining\r\nthe manner of consumption; third, by creating in\r\nconsumers a want for its products as objects of consumption.\r\nIt thus produces the object, the manner, and\r\nthe moving spring of consumption. In the same manner,\r\nconsumption [creates] the \u003ci\u003edisposition\u003c/i\u003e of the producer\r\nby setting (?) him up as an aim and by stimulating\r\nwants. The identity of consumption and production\r\nthus appears to be a three fold one.\u003c/p\u003e\r\n\r\n\u003cp\u003eFirst, direct identity: production is consumption; consumption\r\nis production. Consumptive production.\r\nProductive consumption. Economists call both productive\r\nconsumption, but make one distinction by calling the\r\nformer reproduction, and the latter productive consumption.\r\nAll inquiries into the former deal with productive\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_281\" id=\"Page_281\"\u003ePg 281\u003c/a\u003e\u003c/span\u003e\r\nand unproductive labor; those into the latter treat of\r\nproductive and unproductive consumption.\u003c/p\u003e\r\n\r\n\u003cp\u003eSecond. Each appears as the means of the other and as\r\nbeing brought about by the other, which is expressed\r\nas their mutual interdependence; a relation, by virtue of\r\nwhich they appear as mutually connected and indispensable,\r\nyet remaining outside of each other.\u003c/p\u003e\r\n\r\n\u003cp\u003eProduction creates the material as the outward object\r\nof consumption; consumption creates the want as\r\nthe inward object, the purpose of production. Without\r\nproduction, no consumption; without consumption,\r\nno production; this maxim figures (?) in political economy\r\nin many forms.\u003c/p\u003e\r\n\r\n\u003cp\u003eThird. Production is not only directly consumption\r\nand consumption directly production; nor is production\r\nmerely a means of consumption and consumption the\r\npurpose of production. In other words, not only does\r\neach furnish the other with its object; production, the\r\nmaterial object of consumption; consumption, the ideal\r\nobject of production. On the contrary, either one is\r\nnot only directly the other, not (?) only a means of furthering\r\nthe other, but while it is taking place, creates the\r\nother as such for itself (?). Consumption completes\r\nthe act of production by giving the finishing touch to\r\nthe product as such, by destroying the latter, by breaking\r\nup its independent material form; by bringing to\r\na state of readiness, through the necessity of repetition,\r\nthe disposition to produce developed in the first act of\r\nproduction; that is to say, it is not only the concluding\r\nact through which the product becomes a product, but\r\nalso [the one] through which the producer becomes a\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_282\" id=\"Page_282\"\u003ePg 282\u003c/a\u003e\u003c/span\u003e\r\nproducer. On the other hand, production produces consumption,\r\nby determining the manner of consumption,\r\nand further, by creating the incentive for consumption,\r\nthe very ability to consume, in the form of want. This\r\nlatter identity mentioned under point 3, is much discussed\r\nin political economy in connection with the treatment\r\nof the relations of demand and supply, of objects\r\nand wants, of natural wants and those created by society.\u003c/p\u003e\r\n\r\n\u003cp\u003eHence, it is the simplest matter with a Hegelian to\r\ntreat production and consumption as identical. And\r\nthis has been done not only by socialist writers of fiction\r\nbut even by economists, e. g. Say; the latter maintained\r\nthat if we consider a nation as a whole, or mankind \u003ci\u003ein\r\nabstracto\u003c/i\u003e\u0026mdash;her production is at the same time her consumption.\r\nStorch pointed out Say’s error by calling\r\nattention to the fact that a nation does not entirely consume\r\nher product, but also creates means of production,\r\nfixed capital, etc. To consider society as a single\r\nindividual is moreover a false mode of speculative reasoning.\r\nWith an individual, production and consumption\r\nappear as different aspects of one act. The important\r\npoint to be emphasized here is that if production and\r\nconsumption be considered as activities of one individual\r\nor of separate individuals, they appear at any rate as aspects\r\nof one process in which production forms the actual\r\nstarting point and is, therefore, the predominating factor.\r\nConsumption, as a natural necessity, as a want, constitutes\r\nan internal factor of productive activity, but\r\nthe latter is the starting point of realization and, therefore,\r\nits predominating factor, the act into which the\r\nentire process resolves itself in the end. The individual\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_283\" id=\"Page_283\"\u003ePg 283\u003c/a\u003e\u003c/span\u003e\r\nproduces a certain article and turns again into himself\r\nby consuming it; but he returns as a productive and a\r\nself-reproducing individual. Consumption thus appears\r\nas a factor of production.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn society, however, the relation of the producer to his\r\nproduct, as soon as it is completed, is an outward one, and\r\nthe return of the product to the individual depends on\r\nhis relations to other individuals. He does not take immediate\r\npossession of it. Nor does the direct appropriation\r\nof the product constitute his purpose, when he produces\r\nin society. Between the producer and the product\r\ndistribution steps in, which determines by social laws\r\nhis share in the world of products; that is to say, distribution\r\nsteps in between production and consumption.\u003c/p\u003e\r\n\r\n\u003cp\u003eDoes distribution form an independent sphere standing\r\nside by side with and outside of production?\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003eb. Production and Distribution.\u003c/i\u003e In perusing the\r\ncommon treatises on economics one can not help being\r\nstruck with the fact that everything is treated there\r\ntwice; e. g., under distribution, there figure rent, wages,\r\ninterest, and profit; while under production we find land,\r\nlabor, and capital as agents of production. As regards\r\ncapital, it is at once clear that it is counted twice: first,\r\nas an agent of production; second, as a source of income;\r\nas determining factors and definite forms of distribution,\r\ninterest and profit figure as such also in production, since\r\nthey are forms, in which capital increases and grows, and\r\nare consequently factors of its own production. Interest\r\nand profit, as forms of distribution, imply the existence\r\nof capital as an agent of production. They are forms of\r\ndistribution which have for their prerequisite capital as\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_284\" id=\"Page_284\"\u003ePg 284\u003c/a\u003e\u003c/span\u003e\r\nan agent of production. They are also forms of reproduction\r\nof capital.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the same manner, wages is wage-labor when considered\r\nunder another head; the definite character which\r\nlabor has in one case as an agent of production, appears\r\nin the other as a form of distribution. If labor were not\r\nfixed as wage-labor, its manner of participation in distribution\u003ca name=\"FNanchor_159_159\" id=\"FNanchor_159_159\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_159_159\" class=\"fnanchor\"\u003e159\u003c/a\u003e\r\nwould not appear as wages, as is the case e. g.\r\nunder slavery. Finally, rent\u0026mdash;to take at once the most developed\r\nform of distribution\u0026mdash;by means of which landed\r\nproperty receives its share of the products, implies the\r\nexistence of large landed property (properly speaking,\r\nagriculture on a large scale) as an agent of production,\r\nand not simply land, no more than wages represents\r\nsimply labor. The relations and methods of distribution\r\nappear, therefore, merely as the reverse sides of\r\nthe agents of production. An individual who participates\r\nin production as a wage laborer, receives his share\r\nof the products, i.\u0026nbsp;e. of the results of production, in the\r\nform of wages. The subdivisions and organization of\r\ndistribution are determined by the subdivisions and organization\r\nof production. Distribution is itself a\r\nproduct of production, not only in so far as the material\r\ngoods are concerned, since only the results of production\r\ncan be distributed; but also as regards its form, since the\r\ndefinite manner of participation in production determines\r\nthe particular form of distribution, the form under\r\nwhich participation in distribution takes place. It is\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_285\" id=\"Page_285\"\u003ePg 285\u003c/a\u003e\u003c/span\u003equite an illusion to place land under production, rent under\r\ndistribution, etc.\u003c/p\u003e\r\n\r\n\u003cp\u003eEconomists, like Ricardo, who are accused above all of\r\nhaving paid exclusive attention to production, define distribution,\r\ntherefore, as the exclusive subject of political\r\neconomy, because they instinctively\u003ca name=\"FNanchor_160_160\" id=\"FNanchor_160_160\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_160_160\" class=\"fnanchor\"\u003e160\u003c/a\u003e regard the forms of\r\ndistribution as the clearest forms in which the agents\r\nof production find expression in a given society.\u003c/p\u003e\r\n\r\n\u003cp\u003eTo the single individual distribution naturally appears\r\nas a law established by society determining his\r\nposition in the sphere of production, within which he\r\nproduces, and thus antedating production. At the outset\r\nthe individual has no capital, no landed property.\r\nFrom his birth he is assigned to wage-labor by the\r\nsocial process of distribution. But this very condition\r\nof being assigned to wage-labor is the result of the existence\r\nof capital and landed property as independent\r\nagents of production.\u003c/p\u003e\r\n\r\n\u003cp\u003eFrom the point of view of society as a whole, distribution\r\nseems to antedate and to determine production\r\nin another way as well, as a pre-economic fact, so to say.\r\nA conquering people divides the land among the conquerors\r\nestablishing thereby a certain division and form\r\nof landed property and determining the character of\r\nproduction; or, it turns the conquered people into slaves\r\nand thus makes slave labor the basis of production. Or,\r\na nation, by revolution, breaks up large estates into small\r\nparcels of land and by this new distribution imparts to\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_286\" id=\"Page_286\"\u003ePg 286\u003c/a\u003e\u003c/span\u003eproduction a new character. Or, legislation perpetuates\r\nland ownership in large families or distributes labor as\r\nan hereditary privilege and thus fixes it in castes.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn all of these cases, and they are all historic, it is\r\nnot distribution that seems to be organized and determined\r\nby production, but on the contrary, production by\r\ndistribution.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the most shallow conception of distribution, the\r\nlatter appears as a distribution of products and to that\r\nextent as further removed from and quasi-independent\r\nof production. But before distribution means distribution\r\nof products, it is first, a distribution of the means\r\nof production, and second, what is practically another\r\nwording of the same fact, it is a distribution of the members\r\nof society among the various kinds of production\r\n(the subjection of individuals to certain conditions of\r\nproduction). The distribution of products is manifestly\r\na result of this distribution, which is bound up with the\r\nprocess of production and determines the very organization\r\nof the latter. To treat of production apart from the\r\ndistribution which is comprised in it, is plainly an idle\r\nabstraction. Conversely, we know the character of the\r\ndistribution of products the moment we are given the\r\nnature of that other distribution which forms originally\r\na factor of production. Ricardo, who was concerned\r\nwith the analysis of production as it is organized in modern\r\nsociety and who was the economist of production \u003ci\u003epar\r\nexcellence\u003c/i\u003e, for that very reason declares \u003ci\u003enot\u003c/i\u003e production\r\nbut distribution as the subject proper of modern economics.\r\nWe have here another evidence of the insipidity\r\nof the economists who treat production as an eternal\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_287\" id=\"Page_287\"\u003ePg 287\u003c/a\u003e\u003c/span\u003e\r\ntruth, and banish history to the domain of distribution.\u003c/p\u003e\r\n\r\n\u003cp\u003eWhat relation to production this distribution, which\r\nhas a determining influence on production itself, assumes,\r\nis plainly a question which falls within the\r\nprovince of production. Should it be maintained that\r\nat least to the extent that production depends on a certain\r\ndistribution of the instruments of production, distribution\r\nin that sense precedes production and constitutes\r\nits prerequisite; it may be replied that production\r\nhas in fact its prerequisite conditions, which form\r\nfactors of it. These may appear at first to have a natural\r\norigin. By the very process of production they are\r\nchanged from natural to historical, and if they appear\r\nduring one period as a natural prerequisite of production,\r\nthey formed at other periods its historical result.\r\nWithin the sphere of production itself they are undergoing\r\na constant change. E. g., the application of machinery\r\nproduces a change in the distribution of the instruments\r\nof production as well as in that of products,\r\nand modern land ownership on a large scale is as much\r\nthe result of modern trade and modern industry, as that\r\nof the application of the latter to agriculture.\u003c/p\u003e\r\n\r\n\u003cp\u003eAll of these questions resolve themselves in the last\r\ninstance to this: How do general historical conditions\r\naffect production and what part does it play at all in\r\nthe course of history? It is evident that this question\r\ncan be taken up only in connection with the discussion\r\nand analysis of production.\u003c/p\u003e\r\n\r\n\u003cp\u003eYet in the trivial form in which these questions are\r\nraised above, they can be answered just as briefly. In\r\nthe case of all conquests three ways lie open. The con\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_288\" id=\"Page_288\"\u003ePg 288\u003c/a\u003e\u003c/span\u003equering\r\npeople may impose its own methods of production\r\nupon the conquered (e. g. the English in Ireland in\r\nthe nineteenth century, partly also in India); or, it may\r\nallow everything to remain as it was contenting itself\r\nwith tribute (e. g. the Turks and the Romans); or, the\r\ntwo systems by mutually modifying each other may result\r\nin something new, a synthesis (which partly resulted\r\nfrom the Germanic conquests). In all of these conquests\r\nthe method of production, be it of the conquerors,\r\nthe conquered, or the one resulting from a combination\r\nof both, determines the nature of the new distribution\r\nwhich comes into play. Although the latter appears\r\nnow as the prerequisite condition of the new period of\r\nproduction, it is in itself but a product of production,\r\nnot of production belonging to history in general, but of\r\nproduction relating to a definite historical period. The\r\nMongols with their devastations in Russia e. g. acted in\r\naccordance with their system of production, for which\r\nsufficient pastures on large uninhabited stretches of\r\ncountry are the main prerequisite. The Germanic barbarians,\r\nwith whom agriculture carried on with the aid\r\nof serfs was the traditional system of production and who\r\nwere accustomed to lonely life in the country, could introduce\r\nthe same conditions in the Roman provinces so\r\nmuch easier since the concentration of landed property\r\nwhich had taken place there, died away completely with\r\nthe older systems of agriculture. There is a prevalent\r\ntradition that in certain periods robbery constituted the\r\nonly source of living. But in order to be able to plunder,\r\nthere must be something to plunder, i.\u0026nbsp;e. there must be\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_289\" id=\"Page_289\"\u003ePg 289\u003c/a\u003e\u003c/span\u003e\r\nproduction.\u003ca name=\"FNanchor_161_161\" id=\"FNanchor_161_161\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_161_161\" class=\"fnanchor\"\u003e161\u003c/a\u003e And even the method of plunder is determined\r\nby the method of production. A stockjobbing nation\u003ca name=\"FNanchor_162_162\" id=\"FNanchor_162_162\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_162_162\" class=\"fnanchor\"\u003e162\u003c/a\u003e\r\ne. g. can not be robbed in the same manner as a\r\nnation of shepherds.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the case of the slave the instrument of production\r\nis robbed directly. But then the production of the country\r\nin whose interest he is robbed, must be so organized\r\nas to admit of slave labor, or (as in South America, etc.)\r\na system of production must be introduced adapted to\r\nslavery.\u003c/p\u003e\r\n\r\n\u003cp\u003eLaws may perpetuate an instrument of production, e.\r\ng. land, in certain families. These laws assume an\r\neconomic importance if large landed property is in harmony\r\nwith the system of production prevailing in society,\r\nas is the case e. g. in England. In France agriculture\r\nhad been carried on on a small scale in spite of the large\r\nestates, and the latter were, therefore, broken up by the\r\nRevolution. But how about the legislative attempt to\r\nperpetuate the minute subdivision of the land? In spite\r\nof these laws land ownership is concentrating again. The\r\neffect of legislation on the maintenance of a system of\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_290\" id=\"Page_290\"\u003ePg 290\u003c/a\u003e\u003c/span\u003edistribution and its resultant influence on production\r\nare to be determined elsewhere.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003ci\u003ec. Exchange and Circulation.\u003c/i\u003e Circulation is but a\r\ncertain aspect of exchange, or it may be defined as exchange\r\nconsidered as a whole. Since \u003ci\u003eexchange\u003c/i\u003e is an intermediary\r\nfactor between production and its dependent,\r\ndistribution, on the one hand, and consumption, on the\r\nother; and since the latter appears but as a constituent\r\nof production, exchange is manifestly also a constituent\r\npart of production.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the first place, it is clear that the exchange of\r\nactivities and abilities which takes place in the\r\nsphere of production falls directly within the\r\nlatter and constitutes one of its essential elements.\r\nIn the second place, the same is true of the\r\nexchange of products, in so far as it is a means\r\nof completing a certain product, designed for immediate\r\nconsumption. To that extent exchange constitutes\r\nan act included in production. Thirdly, the so-called\r\nexchange between dealers and dealers\u003ca name=\"FNanchor_163_163\" id=\"FNanchor_163_163\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_163_163\" class=\"fnanchor\"\u003e163\u003c/a\u003e is by virtue\r\nof its organization determined by production, and is itself\r\na species of productive activity. Exchange appears\r\nto be independent of and indifferent to production only\r\nin the last stage when products are exchanged directly\r\nfor consumption. But in the first place, there is no ex\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_291\" id=\"Page_291\"\u003ePg 291\u003c/a\u003e\u003c/span\u003echange\r\nwithout a division of labor, whether natural or\r\nas a result of historical development; secondly, private\r\nexchange implies the existence of private production;\r\nthirdly, the intensity of exchange, as well as its extent\r\nand character are determined by the degree of development\r\nand organization of production, as e. g. exchange\r\nbetween city and country, exchange in the country, in the\r\ncity, etc. Exchange thus appears in all its aspects to be\r\ndirectly included in or determined by production.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe result we arrive at is not that production, distribution,\r\nexchange, and consumption are identical, but\r\nthat they are all members of one entity, different sides\r\nof one unit. Production predominates not only over\r\nproduction itself in the opposite sense of that term, but\r\nover the other elements as well. With it the process\r\nconstantly starts over again. That exchange and consumption\r\ncan not be the predominating elements is self\r\nevident. The same is true of distribution in the narrow\r\nsense of distribution of products; as for distribution in\r\nthe sense of distribution of the agents of production, it\r\nis itself but a factor of production. A definite [form\r\nof] production thus determines the [forms of] consumption,\r\ndistribution, exchange, and \u003ci\u003ealso the mutual relations\r\nbetween these various elements\u003c/i\u003e. Of course, production\r\n\u003ci\u003ein its one-sided form\u003c/i\u003e is in its turn influenced by\r\nother elements; e. g. with the expansion of the market,\r\ni.\u0026nbsp;e. of the sphere of exchange, production grows in\r\nvolume and is subdivided to a greater extent.\u003c/p\u003e\r\n\r\n\u003cp\u003eWith a change in distribution, production undergoes a\r\nchange; as e. g. in the case of concentration of capital,\r\nof a change in the distribution of population in city and\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_292\" id=\"Page_292\"\u003ePg 292\u003c/a\u003e\u003c/span\u003e\r\ncountry, etc. Finally, the demands of consumption also\r\ninfluence production. A mutual interaction takes place\r\nbetween the various elements. Such is the case with\r\nevery organic body.\u003c/p\u003e\r\n\r\n\u003ch4\u003e3. THE METHOD OF POLITICAL ECONOMY.\u003c/h4\u003e\r\n\r\n\u003cp\u003eWhen we consider a given country from a politico-economic\r\nstandpoint, we begin with its population, then\r\nanalyze the latter according to its subdivision into classes,\r\nlocation in city, country, or by the sea, occupation in different\r\nbranches of production; then we study its exports\r\nand imports, annual production and consumption, prices\r\nof commodities, etc. It seems to be the correct procedure\r\nto commence with the real and concrete aspect of\r\nconditions as they are; in the case of political economy,\r\nto commence with population which is the basis and\r\nthe author of the entire productive activity of society.\r\nYet, on closer consideration it proves to be wrong. Population\r\nis an abstraction, if we leave out e. g. the classes\r\nof which it consists. These classes, again, are but an\r\nempty word, unless we know what are the elements on\r\nwhich they are based, such as wage-labor, capital, etc.\r\nThose imply, in their turn, exchange, division of labor,\r\nprices, etc. Capital, e. g. does not mean anything without\r\nwage-labor, value, money, price, etc. If we start out,\r\ntherefore, with population, we do so with a chaotic conception\r\nof the whole, and by closer analysis we will gradually\r\narrive at simpler ideas; thus we shall proceed\r\nfrom the imaginary concrete to loss and less complex abstractions,\r\nuntil we get at the simplest conception. This\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_293\" id=\"Page_293\"\u003ePg 293\u003c/a\u003e\u003c/span\u003e\r\nonce attained, we might start on our return journey until\r\nwe would finally come back to population, but this time\r\nnot as a chaotic notion of an integral whole, but as a rich\r\naggregate of many conceptions and relations. The\r\nformer method is the one which political economy had\r\nadopted in the past at its inception. The economists of\r\nthe seventeenth century, e. g., always started out with\r\nthe living aggregate: population, nation, state, several\r\nstates, etc., but in the end they invariably arrived, by\r\nmeans of analysis, at certain leading, abstract general\r\nprinciples, such as division of labor, money, value, etc.\r\nAs soon as these separate elements had been more or less\r\nestablished by abstract reasoning, there arose the systems\r\nof political economy which start from simple conceptions,\r\nsuch as labor, division of labor, demand, exchange\r\nvalue, and conclude with state, international exchange\r\nand world market. The latter is manifestly the\r\nscientifically correct method. The concrete is concrete,\r\nbecause it is a combination of many objects with different\r\ndestinations, i.\u0026nbsp;e. a unity of diverse elements. In our\r\nthought, it therefore appears as a process of synthesis, as\r\na result, and not as a starting point, although it is the\r\nreal starting point and, therefore, also the starting point\r\nof observation and conception. By the former method\r\nthe complete conception passes into an abstract definition;\r\nby the latter, the abstract definitions lead to the\r\nreproduction of the concrete subject in the course of\r\nreasoning. Hegel fell into the error, therefore, of considering\r\nthe real as the result of self-coordinating, self-absorbed,\r\nand spontaneously operating thought, while\r\nthe method of advancing from the abstract to the con\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_294\" id=\"Page_294\"\u003ePg 294\u003c/a\u003e\u003c/span\u003ecrete\r\nis but a way of thinking by which the concrete is\r\ngrasped and is reproduced in our mind as a concrete. It\r\nis by no means, however, the process which itself generates\r\nthe concrete. The simplest economic category,\r\nsay, exchange value, implies the existence of population,\r\npopulation that is engaged in production under certain\r\nconditions; it also implies the existence of certain types\r\nof family, clan, or state, etc. It can have no other existence\r\nexcept as an abstract one-sided relation of an\r\nalready given concrete and living aggregate.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs a category, however, exchange value leads an antediluvian\r\nexistence. And since our philosophic consciousness\r\nis so arranged that only the image of the man\r\nthat it conceives appears to it as the real man and the\r\nworld as it conceives it, as the real world; it mistakes\r\nthe movement of categories for the real act of production\r\n(which unfortunately (?) receives only its impetus\r\nfrom outside) whose result is the world; that is true\u0026mdash;here\r\nwe have, however, again a tautology\u0026mdash;in so far as\r\nthe concrete aggregate is a thought aggregate, in so far as\r\nthe concrete subject of our thought is in fact a product\r\nof thought, of comprehension; not, however, in the sense\r\nof a product of a self-emanating conception which works\r\noutside of and stands above observation and imagination,\r\nbut of a mental consummation of observation and imagination.\r\nThe whole, as it appears in our heads as a\r\nthought-aggregate, is the product of a thinking mind\r\nwhich grasps the world in the only way open to it, a way\r\nwhich differs from the one employed by the artistic, religious,\r\nor practical mind. The concrete subject continues\r\nto lead an independent existence after it has been\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_295\" id=\"Page_295\"\u003ePg 295\u003c/a\u003e\u003c/span\u003e\r\ngrasped, as it did before, outside of the head, so long as\r\nthe head contemplates it only speculatively, theoretically.\r\nSo that in the employment of the theoretical method\r\n[in political economy], the subject, society, must constantly\r\nbe kept in mind as the premise from which we\r\nstart.\u003c/p\u003e\r\n\r\n\u003cp\u003eBut have these simple categories no independent historical\r\nor natural existence antedating the more concrete\r\nones? \u003ci\u003eÇa depend.\u003c/i\u003e For instance, in his Philosophy of\r\nLaw Hegel rightly starts out with possession, as the\r\nsimplest legal relation of individuals. But there is\r\nno such thing as possession before the family or the relations\r\nof lord and serf, which are a great deal more concrete\r\nrelations, have come into existence. On the other\r\nhand, one would be right in saying that there are\r\nfamilies and clans which only \u003ci\u003epossess\u003c/i\u003e, but do not \u003ci\u003eown\u003c/i\u003e\r\nthings. The simpler category thus appears as a relation\r\nof simple family and clan communities with respect\r\nto property. In earlier society the category appears as\r\na simple relation of a developed organism, but the concrete\r\nsubstratum from which springs the relation of possession,\r\nis always implied. One can imagine an isolated\r\nsavage in possession of things. But in that case possession\r\nis no legal relation. It is not true that the family\r\ncame as the result of the historical evolution of possession.\r\nOn the contrary, the latter always implies the\r\nexistence of this “more concrete category of law.” Yet\r\nso much may be said, that the simple categories are the\r\nexpression of relations in which the less developed concrete\r\nentity may have been realized without entering\r\ninto the manifold relations and bearings which are\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_296\" id=\"Page_296\"\u003ePg 296\u003c/a\u003e\u003c/span\u003e\r\nmentally expressed in the concrete category; but when\r\nthe concrete entity attains fuller development it will\r\nretain the same category as a subordinate relation.\u003c/p\u003e\r\n\r\n\u003cp\u003eMoney may exist and actually had existed in history\r\nbefore capital, or banks, or wage-labor came into existence.\r\nWith that in mind, it may be said that the more\r\nsimple category can serve as an expression of the predominant\r\nrelations of an undeveloped whole or of the\r\nsubordinate relations of a more developed whole, [relations]\r\nwhich had historically existed before the whole\r\ndeveloped in the direction expressed in the more concrete\r\ncategory. In so far, the laws of abstract reasoning which\r\nascends from the most simple to the complex, correspond\r\nto the actual process of history.\u003c/p\u003e\r\n\r\n\u003cp\u003eOn the other hand, it may be said that there are highly\r\ndeveloped but historically unripe forms of society in\r\nwhich the highest economic forms are to be found, such\r\nas co-operation, advanced division of labor, etc., and yet\r\nthere is no money in existence, e. g. Peru.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn Slavic communities also, money, as well as exchange\r\nto which it owes its existence, does not appear\r\nat all or very little within the separate communities, but\r\nit appears on their boundaries in their inter-communal\r\ntraffic; in general, it is erroneous to consider exchange\r\nas a constituent element originating within the community.\r\nIt appears at first more in the mutual relations\r\nbetween different communities, than in those between\r\nthe members of the same community. Furthermore, although\r\nmoney begins to play its part everywhere at an\r\nearly stage, it plays in antiquity the part of a predominant\r\nelement only in one-sidedly developed nations,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_297\" id=\"Page_297\"\u003ePg 297\u003c/a\u003e\u003c/span\u003e\r\nviz. trading nations, and even in most cultured antiquity,\r\nin Greece and Rome, it attains its full development,\r\nwhich constitutes the prerequisite of modern bourgeois\r\nsociety, only in the period of their decay. Thus,\r\nthis quite simple category attained its culmination in the\r\npast only at the most advanced stages of society. Even\r\nthen it did not pervade (?) all economic relations; in\r\nRome e. g. at the time of its highest development taxes\r\nand payments in kind remained the basis. As a matter\r\nof fact, the money system was fully developed there only\r\nso far as the army was concerned; it never came to dominate\r\nthe entire system of labor.\u003c/p\u003e\r\n\r\n\u003cp\u003eThus, although the simple category may have existed\r\nhistorically before the more concrete one, it can attain its\r\ncomplete internal and external development only in complex\r\n(?) forms of society, while the more concrete category\r\nhas reached its full development in a less advanced\r\nform of society.\u003c/p\u003e\r\n\r\n\u003cp\u003eLabor is quite a simple category. The idea of labor in\r\nthat sense, as labor in general, is also very old. Yet,\r\n“labor” thus simply defined by political economy is as\r\nmuch a modern category, as the conditions which have\r\ngiven rise to this simple abstraction. The monetary system,\r\ne. g. defines wealth quite objectively, as a thing (?)\u003ca name=\"FNanchor_164_164\" id=\"FNanchor_164_164\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_164_164\" class=\"fnanchor\"\u003e164\u003c/a\u003e\r\nin money. Compared with this point of view, it was\r\na great step forward, when the industrial or commercial\r\nsystem came to see the source of wealth not in the object\r\nbut in the activity of persons, viz. in commercial and in\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_298\" id=\"Page_298\"\u003ePg 298\u003c/a\u003e\u003c/span\u003edustrial\r\nlabor. But even the latter was thus considered\r\nonly in the limited sense of a money producing activity.\r\nThe physiocratic system [marks still further progress]\r\nin that it considers a certain form of labor, viz. agriculture,\r\nas the source of wealth, and wealth itself not in\r\nthe disguise of money, but as a product in general, as\r\nthe general result of labor. But corresponding to the\r\nlimitations of the activity, this product is still only a\r\nnatural product. Agriculture is productive, land is the\r\nsource of production \u003ci\u003epar excellence\u003c/i\u003e. It was a tremendous\r\nadvance on the part of Adam Smith to throw aside all\r\nlimitations which mark wealth-producing activity and\r\n[to define it] as labor in general, neither industrial, nor\r\ncommercial, nor agricultural, or one as much as the other.\r\nAlong with the universal character of wealth-creating\r\nactivity we have now the universal character of the\r\nobject defined as wealth, viz. product in general, or labor\r\nin general, but as past incorporated labor. How difficult\r\nand great was the transition, is evident from the\r\nway Adam Smith himself falls back from time to time\r\ninto the physiocratic system. Now, it might seem as\r\nthough this amounted simply to finding an abstract expression\r\nfor the simplest relation into which men have\r\nbeen mutually entering as producers from times of yore,\r\nno matter under what form of society. In one sense\r\nthis is true. In another it is not.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe indifference as to the particular kind of labor implies\r\nthe existence of a highly developed aggregate of different\r\nspecies of concrete labor, none of which is any\r\nlonger the predominant one. So do the most general abstractions\r\ncommonly arise only where there is the highest\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_299\" id=\"Page_299\"\u003ePg 299\u003c/a\u003e\u003c/span\u003e\r\nconcrete development, where one feature appears to be\r\njointly possessed by many, and to be common to all.\r\nThen it can not be thought of any longer in one particular\r\nform. On the other hand, this abstraction of\r\nlabor is but the result of a concrete aggregate of different\r\nkinds of labor. The indifference to the particular\r\nkind of labor corresponds to a form of society in which\r\nindividuals pass with ease from one kind of work to another,\r\nwhich makes it immaterial to them what particular\r\nkind of work may fall to their share. Labor has become\r\nhere, not only categorically but really, a means\r\nof creating wealth in general and is no longer grown together\r\nwith the individual into one particular destination.\r\nThis state of affairs has found its highest development\r\nin the most modern of bourgeois societies, the\r\nUnited States. It is only here that the abstraction of\r\nthe category “labor,” “labor in general,” labor \u003ci\u003esans\r\nphrase\u003c/i\u003e, the starting point of modern political economy,\r\nbecomes realized in practice. Thus, the simplest abstraction\r\nwhich modern political economy sets up as its starting\r\npoint, and which expresses a relation dating back to\r\nantiquity and prevalent under all forms of society, appears\r\nin this abstraction truly realized only as a category\r\nof the most modern society. It might be said that what\r\nappears in the United States as an historical product,\u0026mdash;viz.\r\nthe indifference as to the particular kind of labor\u0026mdash;appears\r\namong the Russians e. g. as a natural disposition.\r\nBut it makes all the difference in the world\r\nwhether barbarians have a natural predisposition which\r\nmakes them applicable alike to everything, or whether\r\ncivilized people apply themselves to everything. And,\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_300\" id=\"Page_300\"\u003ePg 300\u003c/a\u003e\u003c/span\u003e\r\nbesides, this indifference of the Russians as to the kind\r\nof work they do, corresponds to their traditional practice\r\nof remaining in the rut of a quite definite occupation\r\nuntil they are thrown out of it by external influences.\u003c/p\u003e\r\n\r\n\u003cp\u003eThis example of labor strikingly shows how even the\r\nmost abstract categories, in spite of their applicability to\r\nall epochs\u0026mdash;just because of their abstract character\u0026mdash;are\r\nby the very definiteness of the abstraction a product of\r\nhistorical conditions as well, and are fully applicable\r\nonly to and under those conditions.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe bourgeois society is the most highly developed and\r\nmost highly differentiated historical organization of production.\r\nThe categories which serve as the expression\r\nof its conditions and the comprehension of its own organization\r\nenable it at the same time to gain an insight\r\ninto the organization and the conditions of production\r\nwhich had prevailed under all the past forms of society,\r\non the ruins and constituent elements of which it has\r\narisen, and of which it still drags along some unsurmounted\r\nremnants, while what had formerly been mere\r\nintimation has now developed to complete significance.\r\nThe anatomy of the human being is the key to the\r\nanatomy of the ape. But the intimations of a higher\r\nanimal in lower ones can be understood only if the\r\nanimal of the higher order is already known. The\r\nbourgeois economy furnishes a key to ancient economy,\r\netc. This is, however, by no means true of the method of\r\nthose economists who blot out all historical differences\r\nand see the bourgeois form in all forms of society. One\r\ncan understand the nature of tribute, tithes, etc., after\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_301\" id=\"Page_301\"\u003ePg 301\u003c/a\u003e\u003c/span\u003e\r\none has learned the nature of rent. But they must not\r\nbe considered identical.\u003c/p\u003e\r\n\r\n\u003cp\u003eSince, furthermore, bourgeois society is but a form\r\nresulting from the development of antagonistic elements,\r\nsome relations belonging to earlier forms of society are\r\nfrequently to be found in it but in a crippled state or\r\nas a travesty of their former self, as e. g. communal\r\nproperty. While it may be said, therefore, that the\r\ncategories of bourgeois economy contain what is true of\r\nall other forms of society, the statement is to be taken\r\n\u003ci\u003ecum grano salis\u003c/i\u003e. They may contain these in a developed,\r\nor crippled, or caricatured form, but always essentially\r\ndifferent. The so-called historical development\r\namounts in the last analysis to this, that the last\r\nform considers its predecessors as stages leading up to\r\nitself and perceives them always one-sidedly, since it is\r\nvery seldom and only under certain conditions that it is\r\ncapable of self-criticism; of course, we do not speak here\r\nof such historical periods which appear to their own contemporaries\r\nas periods of decay. The Christian religion\r\nbecame capable to assist us to an objective view of past\r\nmythologies as soon as it was ready for self-criticism to a\r\ncertain extent, \u003ci\u003edynamei\u003c/i\u003e so-to-say. In the same way bourgeois\r\npolitical economy first came to understand the\r\nfeudal, the ancient, and the oriental societies as soon as\r\nthe self-criticism of the bourgeois society had commenced.\r\nSo far as bourgeois political economy has not gone into\r\nthe mythology of purely (?) identifying the bourgeois\r\nsystem with the past, its criticism of the feudal system\r\nagainst which it still had to wage war resembled Christ\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_302\" id=\"Page_302\"\u003ePg 302\u003c/a\u003e\u003c/span\u003eian\r\ncriticism of the heathen religions or Protestant criticism\r\nof Catholicism.\u003c/p\u003e\r\n\r\n\u003cp\u003eIn the study of economic categories, as in the case\r\nof every historical and social science, it must be borne in\r\nmind that as in reality so in our mind the subject, in this\r\ncase modern bourgeois society, is given and that the\r\ncategories are therefore but forms of expression, manifestations\r\nof existence, and frequently but one-sided aspects\r\nof this subject, this definite society; and that,\r\ntherefore, the origin of [political economy] \u003ci\u003eas a science\u003c/i\u003e\r\ndoes not by any means date from the time to which it\r\nis referred \u003ci\u003eas such\u003c/i\u003e. This is to be firmly held in mind\r\nbecause it has an immediate and important bearing on\r\nthe matter of the subdivisions of the science.\u003c/p\u003e\r\n\r\n\u003cp\u003eFor instance, nothing seems more natural than to\r\nstart with rent, with landed property, since it is bound\r\nup with land, the source of all production and all existence,\r\nand with the first form of production in all\r\nmore or less settled communities, viz. agriculture. But\r\nnothing would be more erroneous. Under all forms of\r\nsociety there is a certain industry which predominates\r\nover all the rest and whose condition therefore determines\r\nthe rank and influence of all the rest.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is the universal light with which all the other colors\r\nare tinged and are modified through its peculiarity. It\r\nis a special ether which determines the specific gravity\r\nof everything that appears in it.\u003c/p\u003e\r\n\r\n\u003cp\u003eLet us take for example pastoral nations (mere hunting\r\nand fishing tribes are not as yet at the point from\r\nwhich real development commences). They engage in a\r\ncertain form of agriculture, sporadically. The nature\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_303\" id=\"Page_303\"\u003ePg 303\u003c/a\u003e\u003c/span\u003e\r\nof land-ownership is determined thereby. It is held in\r\ncommon and retains this form more or less according to\r\nthe extent to which these nations hold on to traditions;\r\nsuch e. g. is land-ownership among the Slavs. Among\r\nnations whose agriculture is carried on by a settled population\u0026mdash;the\r\nsettled state constituting a great advance\u0026mdash;where\r\nagriculture is the predominant industry, such as\r\nin ancient and feudal societies, even the manufacturing\r\nindustry and its organization, as well as the forms of\r\nproperty which pertain to it, have more or less the characteristic\r\nfeatures of the prevailing system of land ownership;\r\n[society] is then either entirely dependent upon\r\nagriculture, as in the case of ancient Rome, or, as in\r\nthe middle ages, it imitates in its city relations the forms\r\nof organization prevailing in the country. Even capital,\r\nwith the exception of pure money capital, has, in the\r\nform of the traditional working tool, the characteristics\r\nof land ownership in the Middle Ages.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe reverse is true of bourgeois society. Agriculture\r\ncomes to be more and more merely a branch of industry\r\nand is completely dominated by capital. The same is\r\ntrue of rent. In all the forms of society in which land\r\nownership is the prevalent form, the influence of the\r\nnatural element is the predominant one. In those where\r\ncapital predominates the prevailing element is the one\r\nhistorically created by society. Rent can not be understood\r\nwithout capital, nor can capital, without rent. Capital\r\nis the all dominating economic power of bourgeois\r\nsociety. It must form the starting point as well as the\r\nend and be developed before land-ownership is. After\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_304\" id=\"Page_304\"\u003ePg 304\u003c/a\u003e\u003c/span\u003e\r\neach has been considered separately, their mutual relation\r\nmust be analyzed.\u003c/p\u003e\r\n\r\n\u003cp\u003eIt would thus be impractical and wrong to arrange\r\nthe economic categories in the order in which they were\r\nthe determining factors in the course of history. Their\r\norder of sequence is rather determined by the relation\r\nwhich they bear to one another in modern bourgeois society,\r\nand which is the exact opposite of what seems to be\r\ntheir natural order or the order of their historical development.\r\nWhat we are interested in is not the place\r\nwhich economic relations occupy in the historical succession\r\nof different forms of society. Still less are we\r\ninterested in the order of their succession “in idea”\r\n(\u003ci\u003eProudhon\u003c/i\u003e), which is but a hazy (?) conception of the\r\ncourse of history. We are interested in their organic\r\nconnection within modern bourgeois society.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe sharp line of demarkation (abstract precision)\r\nwhich so clearly distinguished the trading nations of antiquity,\r\nsuch as the Phenicians and the Carthagenians,\r\nwas due to that very predominance of agriculture. Capital\r\nas trading or money capital appears in that abstraction,\r\nwhere capital does not constitute as yet the predominating\r\nelement of society. The Lombardians and\r\nthe Jews occupied the same position among the agricultural\r\nnations of the middle ages.\u003c/p\u003e\r\n\r\n\u003cp\u003eAs a further illustration of the fact that the same\r\ncategory plays different parts at different stages of society,\r\nwe may mention the following: one of the latest\r\nforms of bourgeois society, viz. stock companies, appear\r\nalso at its beginning in the form of the great chartered\r\nmonopolistic trading companies.\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_305\" id=\"Page_305\"\u003ePg 305\u003c/a\u003e\u003c/span\u003e\r\nThe conception of national wealth which is imperceptibly\r\nformed in the minds of the economists of the\r\nseventeenth century, and which partly continues to be\r\nentertained by those of the eighteenth century, is that\r\nwealth is produced solely for the state, but that the\r\npower of the latter is proportional to that wealth. It was\r\nas yet an unconsciously hypocritical way in which wealth\r\nannounced itself and its own production as the aim of\r\nmodern states considering the latter merely as a means\r\nto the production of wealth.\u003c/p\u003e\r\n\r\n\u003cp\u003eThe order of treatment must manifestly be as follows:\r\nfirst, the general abstract definitions which are more or\r\nless applicable to all forms of society, but in the sense\r\nindicated above. Second, the categories which go to make\r\nup the inner organization of bourgeois society and constitute\r\nthe foundations of the principal classes; capital,\r\nwage-labor, landed property; their mutual relations; city\r\nand country; the three great social classes, the exchange\r\nbetween them; circulation, credit (private). Third,\r\nthe organization of bourgeois society in the form of\r\na state, considered in relation to itself; the “unproductive”\r\nclasses; taxes; public debts; public credit; population;\r\ncolonies; emigration. Fourth, the international\r\norganization of production; international division of\r\nlabor; international exchange; import and export; rate\r\nof exchange. Fifth, the world market and crises.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_306\" id=\"Page_306\"\u003ePg 306\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ch4 style=\"margin-left: 3em; text-indent: -3em; text-align: justify;\"\u003e\r\n4. PRODUCTION, MEANS OF PRODUCTION, AND CONDITIONS\r\nOF PRODUCTION, THE RELATIONS OF PRODUCTION\r\nAND DISTRIBUTION.\u003ca name=\"FNanchor_165_165\" id=\"FNanchor_165_165\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_165_165\" class=\"fnanchor\"\u003e165\u003c/a\u003e THE CONNECTION BETWEEN\r\nFORM OF STATE AND PROPERTY ON THE ONE HAND\r\nAND RELATIONS OF PRODUCTION AND DISTRIBUTION(1)\r\nON THE OTHER. LEGAL RELATIONS. FAMILY\r\nRELATIONS.\u003c/h4\u003e\r\n\r\n\u003cp\u003eNotes on the points to be mentioned here and not to be\r\nomitted:\u003ca name=\"FNanchor_166_166\" id=\"FNanchor_166_166\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_166_166\" class=\"fnanchor\"\u003e166\u003c/a\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e1. \u003ci\u003eWar\u003c/i\u003e attains complete development before peace;\r\nhow certain economic phenomena, such as wage-labor,\r\nmachinery, etc., are developed at an earlier date through\r\nwar and in armies than within bourgeois society. The\r\nconnection between productive force and the means of\r\ncommunication is made especially plain in the case of\r\nthe army.\u003c/p\u003e\r\n\r\n\u003cp\u003e2. The relation between the idealistic and realistic\r\nmethods of writing history; namely, the so-called history\r\nof civilization which is all a history of religion and states.\u003c/p\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_307\" id=\"Page_307\"\u003ePg 307\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003eIn this connection something may be said of the different\r\nmethods hitherto employed in writing history. The\r\nso-called objective [method]. The subjective. (The\r\nmoral and others). The philosophic.\u003c/p\u003e\r\n\r\n\u003cp\u003e3. \u003ci\u003eSecondary and tertiary.\u003c/i\u003e Conditions of production\r\nwhich have been taken over or transplanted; in general,\r\nthose that are not original. Here [is to be treated] the\r\neffect of international relations.\u003c/p\u003e\r\n\r\n\u003cp\u003e4. Objections to the materialistic character of this\r\nview. Its relation to naturalistic materialism.\u003c/p\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_308\" id=\"Page_308\"\u003ePg 308\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003cp\u003e5. The dialectics of the conceptions productive\r\nforce (means of production) and relation of production,\r\ndialectics whose limits are to be determined\r\nand which does not do away with the concrete difference.\u003c/p\u003e\r\n\r\n\u003cp\u003e6. The unequal relation between the development\r\nof material production and art, for instance. In\r\ngeneral, the conception of progress is not to be\r\ntaken in the sense of the usual abstraction. In the\r\ncase of art, etc., it is not so important and difficult\r\nto understand this disproportion as in that of practical\r\nsocial relations, e. g. the relation between education\r\nin the United States and Europe. The really\r\ndifficult point, however, that is to be discussed here\r\nis that of the unequal (?) development of relations\r\nof production as legal relations. As, e. g., the connection\r\nbetween Roman civil law (this is less true\r\nof criminal and public law) and modern production.\u003c/p\u003e\r\n\r\n\u003cp\u003e7. This conception of development appears to\r\nimply necessity. On the other hand, justification of\r\naccident. Varia. (Freedom and other points). (The\r\neffect of means of communication). World history\r\ndoes not always appear in history as the result of\r\nworld history.\u003c/p\u003e\r\n\r\n\u003cp\u003e8. The starting point [is to be found] in certain\r\nfacts of nature embodied subjectively and objectively\r\nin clans, races, etc.\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e4. Produktion, Produktionsmittel und Produktionsverhältnisse.\r\nProduktionsverhältnis und Verkehrsverhältnisse.\r\nStaats- und Eigenthumsformen im Verhältnis zu den\r\nProduktions- und Verkehrsverhältnissen. Rechtsverhältnisse.\r\nFamilienverhältnisse.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003eNotabene in bezug auf Punkte, die hier zu erwähnen und\r\nnicht vergessen werden dürfen:\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e1. Der \u003cspan class=\"gesperrt\"\u003eKrieg\u003c/span\u003e ist früher ausgebildet, wie der Frieden:\r\n[Auszuführen wäre] die Art, wie durch den Krieg und in\r\nden Armeen etc. gewisse ökonomische Verhältnisse wie Lohnarbeit,\r\nMaschinerie etc. früher entwickelt [werden] als im\r\nInneren der bürgerlichen Gesellschaft. Auch das Verhältnis\r\nvon Produktivkraft und Verkehrsverhältnissen wird besonders\r\nanschaulich in der Armee.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e2. Verhältnis der bisherigen idealen Geschichtsschreibung\r\nzur realen. Namentlich die sogenannte Kulturgeschichte, die\r\nalle Religions-und Staatengeschichte.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003eBei der Gelegenheit kann auch etwas gesagt werden über\r\ndie verschiedenen Arten der bisherigen Geschichtsschreibung.\r\nSogenannte objektive. Subjektive. (Moralische und andere.)\r\nPhilosophische.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e3. \u003cspan class=\"gesperrt\"\u003eSekundäres und Tertiäres.\u003c/span\u003e Ueberhaupt\r\n\u003cspan class=\"gesperrt\"\u003eabgeleitete, übertragene\u003c/span\u003e, nicht ursprüngliche\r\nProduktionsverhältnisse. Hier [ist das] Einspielen der\r\ninternationalen Verhältnisse [zu behandeln].\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e4. Vorwürfe über Materialismus dieser Auffassung.\r\nVerhältnis zum naturalistischen Materialismus.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e5. Dialektik der Begriffe Produktivkraft (Produktionsmittel)\u003c/b\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_309\" id=\"Page_309\"\u003ePg 309\u003c/a\u003e\u003c/span\u003e\r\n\u003cb\u003eund Produktionsverhältnis, eine Dialektik, deren\r\nGrenzen zu bestimmen sind und den realen Unterschied nicht\r\naufhebt.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e6. Das unegale Verhältnis der Entwicklung der materiellen\r\nProduktion zum Beispiel zur künstlerischen. Ueberhaupt\r\nist der Begriff des Fortschritts nicht in der gewöhnlichen\r\nAbstraktion zu fassen. Bei der Kunst etc. ist diese Disproportion\r\nnoch nicht so wichtig und schwierig zu fassen als\r\ninnerhalb praktisch-sozialer Verhältnisse selbst, zum Beispiel\r\ndas Bildungsverhältnis der Vereinigten Staaten zu Europa.\r\nDer eigentlich schwierige Punkt, der hier zu erörtern, ist\r\naber der, wie die Produktionsverhältnisse als Rechtsverhältnisse\r\nin ungleiche (?) Entwicklung treten. Also zum Beispiel\r\ndas Verhältnis des römischen Privatrechts (im Kriminalrecht\r\nund öffentlichen ist das wenige der Fall) zur\r\nmodernen Produktion.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e7. Diese Auffassung erscheint als nothwendige Entwicklung.\r\nAber Berechtigung des Zufalls. Varia.\u003ca name=\"FNanchor_167_167\" id=\"FNanchor_167_167\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_167_167\" class=\"fnanchor\"\u003e167\u003c/a\u003e (Die Freiheit\r\nund anderes noch.) (Einwirkung der Kommunikationsmittel.)\r\nWeltgeschichte eigentlich\u003ca name=\"FNanchor_168_168\" id=\"FNanchor_168_168\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_168_168\" class=\"fnanchor\"\u003e168\u003c/a\u003e nicht immer in der\r\nGeschichte als weltgeschicht[liches] Resultat.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003e\u003cb\u003e8. Der Ausgangspunkt [ist] natürlich von der Naturbestimmtheit\r\n[zu nehmen]; subjektiv und objektiv, Stämme,\r\nRassen etc.\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp\u003eIt is well known that certain periods of highest\r\ndevelopment of art stand in no direct connection\r\nwith the general development of society, nor with\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_310\" id=\"Page_310\"\u003ePg 310\u003c/a\u003e\u003c/span\u003e\r\nthe material basis and the skeleton structure of its\r\norganization. Witness the example of the Greeks\r\nas compared with the modern nations or even\r\nShakespeare. As regards certain forms of art, as\r\ne. g. the epos, it is admitted that they can never\r\nbe produced in the world-epoch making form as soon\r\nas art as such comes into existence; in other words,\r\nthat in the domain of art certain important forms of\r\nit are possible only at a low stage of its development.\r\nIf that be true of the mutual relations of\r\ndifferent forms of art within the domain of art\r\nitself, it is far less surprising that the same is true\r\nof the relation of art as a whole to the general development\r\nof society. The difficulty lies only in the\r\ngeneral formulation of these contradictions. No\r\nsooner are they specified than they are explained.\r\nLet us take for instance the relation of Greek art\r\nand of that of Shakespeare’s time to our own. It is\r\na well known fact that Greek mythology was not\r\nonly the arsenal of Greek art, but also the very\r\nground from which it had sprung. Is the view of\r\nnature and of social relations which shaped Greek\r\nimagination and Greek [art] possible in the age of\r\nautomatic machinery, and railways, and locomotives,\r\nand electric telegraphs? Where does Vulcan come\r\nin as against Roberts \u0026amp; Co.; Jupiter, as against the\r\nlightning rod; and Hermes, as against the Credit\r\nMobilier? All mythology masters and dominates\r\nand shapes the forces of nature in and through the\r\nimagination; hence it disappears as soon as man\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_311\" id=\"Page_311\"\u003ePg 311\u003c/a\u003e\u003c/span\u003e\r\ngains mastery over the forces of nature. What becomes\r\nof the Goddess Fame side by side with Printing\r\nHouse Square?\u003ca name=\"FNanchor_169_169\" id=\"FNanchor_169_169\"\u003e\u003c/a\u003e\u003ca href=\"#Footnote_169_169\" class=\"fnanchor\"\u003e169\u003c/a\u003e Greek art presupposes the existence\r\nof Greek mythology, i.\u0026nbsp;e. that nature and even\r\nthe form of society are wrought up in popular fancy\r\nin an unconsciously artistic fashion. That is its\r\nmaterial. Not, however, any mythology taken at\r\nrandom, nor any accidental unconsciously artistic\r\nelaboration of nature (including under the latter all\r\nobjects, hence [also] society). Egyptian mythology\r\ncould never be the soil or womb which would give\r\nbirth to Greek art. But in any event [there had to\r\nbe] \u003ci\u003ea\u003c/i\u003e mythology. In no event [could Greek art\r\noriginate] in a society which excludes any mythological\r\nexplanation of nature, any mythological attitude\r\ntowards it and which requires from the artist\r\nan imagination free from mythology.\u003c/p\u003e\r\n\r\n\u003cp\u003eLooking at it from another side: is Achilles possible\r\nside by side with powder and lead? Or is the\r\nIliad at all compatible with the printing press and\r\nsteam press? Does not singing and reciting and the\r\nmuses necessarily go out of existence with the appearance\r\nof the printer’s bar, and do not, therefore,\r\ndisappear the prerequisites of epic poetry?\u003c/p\u003e\r\n\r\n\u003cp\u003eBut the difficulty is not in grasping the idea that\r\nGreek art and epos are bound up with certain forms\r\nof social development. It rather lies in understanding\r\nwhy they still constitute with us a source of\r\naesthetic enjoyment and in certain respects pre\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_312\" id=\"Page_312\"\u003ePg 312\u003c/a\u003e\u003c/span\u003evail\r\nas the standard and model beyond attainment.\u003c/p\u003e\r\n\r\n\u003cp\u003eA man can not become a child again unless he\r\nbecomes childish. But does he not enjoy the artless\r\nways of the child and must he not strive to reproduce\r\nits truth on a higher plane? Is not the character\r\nof every epoch revived perfectly true to nature\r\nin child nature? Why should the social childhood\r\nof mankind, where it had obtained its most beautiful\r\ndevelopment, not exert an eternal charm as an\r\nage that will never return? There are ill-bred children\r\nand precocious children. Many of the ancient\r\nnations belong to the latter class. The Greeks were\r\nnormal children. The charm their art has for us\r\ndoes not conflict with the primitive character of the\r\nsocial order from which it had sprung. It is rather\r\nthe product of the latter, and is rather due to the fact\r\nthat the unripe social conditions under which the\r\nart arose and under which alone it could appear\r\ncan never return.\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e(End of Manuscript.)\u003c/p\u003e\r\n\r\n\u003chr /\u003e\r\n\r\n\u003ch2\u003eFOOTNOTES\u003c/h2\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\u003cp\u003e\u003ca name=\"Footnote_1_1\" id=\"Footnote_1_1\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_1_1\"\u003e\u003cspan class=\"label\"\u003e[1]\u003c/span\u003e\u003c/a\u003e Cf. Seligman, “The Economic Interpretation of History.”\r\nMacMillan. 1902.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_2_2\" id=\"Footnote_2_2\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_2_2\"\u003e\u003cspan class=\"label\"\u003e[2]\u003c/span\u003e\u003c/a\u003e Aristotle, d. Rep. L. l, c. 9 (edit. I Bekkeri Oxonii, 1837)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“ἐκαστου γὰρ κτήματος διττὴ ἡ χρῆσις ἐστιν … ἡ μὲν οἰκεία, ἡ δ ‘οὐκ\r\nοἰκεια τού ‘πράγματος, οῖον ὑποδηματος ἥ τε ὑπόδησις καὶ ἡ μεταβλητική.\r\nἈμφότεραι γὰρ hὑποδηματος χρήσεις· καὶ γὰρ hἡ ἀλλαττομενος τῷ δεομένω\r\nhὑποδηματος ἀντὶ νομίσματος ἡ τροφῆς χρῆται τῷ ὑποδηματι ἧ hὑπόδημα,\r\nἀλλ ‘οὐ τὴν οἰκείαν χρῆσιν· οὐ γὰρ ἀλλαγης ἕνεκεν γέγονεν. Τὸν αὐτον δὲ\r\nτρόπον ἕχει καὶ περὶ τῶν ἅλλων κτημάτων.”\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n(“Of everything which we possess there are two uses:\u0026mdash;one\r\nis the proper, and the other the improper or secondary use of\r\nit. For example, a shoe is used for wear, and is used for exchange;\r\nboth are uses of the shoe. He who gives a shoe in\r\nexchange for money or food to him who wants one, does indeed\r\nuse the shoe as a shoe, but this is not its proper or primary\r\npurpose, for a shoe is not made to be an object of barter. The\r\nsame may be said of all possessions.” The Politics of Aristotle,\r\ntranslated into English by B. Jowett, Oxford, 1885,\r\nv. I., p. 15.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_3_3\" id=\"Footnote_3_3\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_3_3\"\u003e\u003cspan class=\"label\"\u003e[3]\u003c/span\u003e\u003c/a\u003e That is the reason why German compilers are so fond of\r\ndwelling on use-value, calling it a “good.” See e. g. L. Stein,\r\n“System der Staatswissenschaften,” v. I., chapter on “goods”\r\n(Gütter). For intelligent information on “goods” one must\r\nturn to treatises on commodities.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_4_4\" id=\"Footnote_4_4\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_4_4\"\u003e\u003cspan class=\"label\"\u003e[4]\u003c/span\u003e\u003c/a\u003e A ridiculous presumption has gained currency of late to\r\nthe effect that common property in its primitive form is specifically\r\na Slavonian, or even exclusively Russian form. It\r\nis the primitive form which we can prove to have existed\r\namong Romans, Teutons, and Celts; and of which numerous\r\nexamples are still to be found in India, though in a partly\r\nruined state. A closer study of the Asiatic, especially of Indian\r\nforms of communal ownership would show how from the\r\ndifferent forms of primitive communism different forms of its\r\ndissolution have been developed. Thus e. g. the various original\r\ntypes of Roman and Teutonic private property can be\r\ntraced back to various forms of Indian communism.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_5_5\" id=\"Footnote_5_5\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_5_5\"\u003e\u003cspan class=\"label\"\u003e[5]\u003c/span\u003e\u003c/a\u003e “La Ricchezza è una ragione tra due persone.” (“Value is\r\na relation between two persons”) Galiani, “Della Moneta,”\r\np. 220 in vol. II. of Custodi’s collection of “Scrittori classici\r\nItaliani di Economia Politica. Parte Moderna,” Milano, 1803.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_6_6\" id=\"Footnote_6_6\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_6_6\"\u003e\u003cspan class=\"label\"\u003e[6]\u003c/span\u003e\u003c/a\u003e “In its natural state, matter … is always destitute\r\nof value.” McCulloch, “A Discourse on the Rise, Progress,\r\nPeculiar Objects, and Importance of Political Economy,” 2nd\r\nedition, Edinburgh, 1825, pg. 48. It is evident how even a\r\nMcCulloch stands above the fetishism of German “thinkers”,\r\nwho declare “matter” and half a dozen other foreign things\r\nto be elements of value. Cf. e. g. L. Stein, l. c. v. I., p. 110.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_7_7\" id=\"Footnote_7_7\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_7_7\"\u003e\u003cspan class=\"label\"\u003e[7]\u003c/span\u003e\u003c/a\u003e Berkeley, \u003ci\u003eThe Querist\u003c/i\u003e, London, 1750.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_8_8\" id=\"Footnote_8_8\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_8_8\"\u003e\u003cspan class=\"label\"\u003e[8]\u003c/span\u003e\u003c/a\u003e Thomas Cooper, Lectures on the Elements of Political\r\nEconomy, London, 1831, p. 99.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_9_9\" id=\"Footnote_9_9\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_9_9\"\u003e\u003cspan class=\"label\"\u003e[9]\u003c/span\u003e\u003c/a\u003e F. List could never grasp the difference between labor as a\r\nsource of use-value and labor as the creator of certain social\r\nform of wealth or exchange value, because comprehension was\r\naltogether foreign to his practical mind; he therefore saw in\r\nthe modern English economists mere plagiarists of Moses, the\r\nEgyptian.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_10_10\" id=\"Footnote_10_10\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_10_10\"\u003e\u003cspan class=\"label\"\u003e[10]\u003c/span\u003e\u003c/a\u003e It can be readily understood what kind of “service” is rendered\r\nby the category “service” to economists of the type of\r\nJ. B. Say and F. Bastiat, whose pondering sagacity, as Malthus\r\nhas justly remarked, always abstracts from the specially\r\ndefinite forms of economic relations.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_11_11\" id=\"Footnote_11_11\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_11_11\"\u003e\u003cspan class=\"label\"\u003e[11]\u003c/span\u003e\u003c/a\u003e “Egli è proprio ancora delle misure d’aver si fatta relazione\r\ncolle cose misurate, che in certo modo la misurata divien\r\nmisura della misurante.” Montanari, Della Moneta, p. 48 in\r\nv. III of Custodi’s “Scrittori classici Italiani di Economia\r\nPolitica. Parte Antica.” (“It is the property of measure to be\r\nin such a relation to the things measured, that in a certain way\r\nthe thing measured becomes the measure of the measuring\r\nthing.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_12_12\" id=\"Footnote_12_12\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_12_12\"\u003e\u003cspan class=\"label\"\u003e[12]\u003c/span\u003e\u003c/a\u003e It is in that sense that Aristotle (see the passage quoted at\r\nthe beginning of this chapter) conceives exchange value.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_13_13\" id=\"Footnote_13_13\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_13_13\"\u003e\u003cspan class=\"label\"\u003e[13]\u003c/span\u003e\u003c/a\u003e This expression is used by Genovesi.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_14_14\" id=\"Footnote_14_14\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_14_14\"\u003e\u003cspan class=\"label\"\u003e[14]\u003c/span\u003e\u003c/a\u003e Aristotle makes the same remark with reference to the\r\nprivate family as the primitive community. But the primitive\r\nform of family is the tribal family, from the historical\r\ndissolution of which the private family develops. ἐν μὲν οὔν τῃ πρώτο κοινωνίᾳ (τοῦτο δ ‘ἐστὶν οἰκίἀ)\r\nφανερὸν ὅτι οὐδέν ἐστιν ἔργον αὐτῆς (namely της ἀλλαγῆς) “And in the first community, which is the family,\r\nthis art is obviously of no use.” Jowett’s transl. l. c.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_15_15\" id=\"Footnote_15_15\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_15_15\"\u003e\u003cspan class=\"label\"\u003e[15]\u003c/span\u003e\u003c/a\u003e “Money is, in fact, only the instrument for carrying on\r\nbuying and selling (but, if you please, what do you understand\r\nby buying and selling?) and the consideration of it no more\r\nforms a part of the science of political economy, than the consideration\r\nof ships, or steam engines, or of any other instrument\r\nemployed to facilitate the production and distribution of\r\nwealth.” Th. Hodgskin, Popular Political Economy, etc. London,\r\n1827, p. 178, 179.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_16_16\" id=\"Footnote_16_16\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_16_16\"\u003e\u003cspan class=\"label\"\u003e[16]\u003c/span\u003e\u003c/a\u003e A comparative study of the writings and characters of\r\nPetty and Boisguillebert, outside of the light which it would\r\nthrow upon the difference of French and English society at\r\nthe end of the seventeenth and the beginning of the eighteenth\r\ncenturies, would disclose the origin of the national contrast\r\nbetween English and French Political Economy. The same\r\ncontrast reasserts itself in Ricardo and Sismondi.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_17_17\" id=\"Footnote_17_17\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_17_17\"\u003e\u003cspan class=\"label\"\u003e[17]\u003c/span\u003e\u003c/a\u003e Petty had illustrated the productive power inherent in the\r\ndivision of labor on a much grander scale than that was done\r\nlater by Adam Smith. See his “Essay concerning the multiplication\r\nof mankind, etc.,” 3rd edition, 1686, p. 35-36. He\r\nnot only brings out the advantages of the division of labor on\r\nthe example of the manufacture of a watch, as Adam Smith\r\ndid later on that of a needle, but considers also a city and an\r\nentire country from the point of view of a large manufacturing\r\nestablishment. The Spectator, of November 26, 1711, refers\r\nto this “illustration of the admirable Sir William Petty.”\r\nMcCulloch is, therefore, mistaken when he supposes that the\r\nSpectator confounded Petty with a writer forty years his\r\njunior. See McCulloch, “The Literature of Political Economy,\r\na classified catalogue,” London, 1845, p. 105. Petty is\r\nconscious of being the founder of a new science. His method,\r\nhe says, “is not yet very usual, for instead of using only comparative\r\nand superlative Words, and intellectual Arguments,”\r\nhe has undertaken to speak “in Terms of Number, Weight or\r\nMeasure; to use only Arguments of Sense, and to consider only\r\nsuch Causes, as have visible Foundations in Nature; leaving\r\nthose that depend upon the mutable Minds, Opinions, Appetites,\r\nand Passions of particular Men, to the Consideration of\r\nothers.” (Political Arithmetick, etc., London, 1699. Preface.)\r\n(A new edition of “The Economic Writings of Sir William\r\nPetty,” edited by Chas. Henry Hull, has been published by the\r\nUniversity Press at Cambridge, 1899. The above passage will\r\nbe found in vol. I., p. 244. The further references are given\r\nto this new, more accessible edition. Translator.) His wonderful\r\nkeenness shows itself e. g. in the proposal to transport “all\r\nthe moveables and people of Ireland, and of the Highlands of\r\nScotland … into the rest of Great Britain.” Thereby\r\nmuch labor-time would be saved, the productivity of labor increased,\r\nand “the King and his Subjects would thereby become\r\nmore Rich and Strong.” (Political Arithmetick, ch. 4, p. 285.)\r\nOr in the chapter of his Political Arithmetic in which he\r\nproves that England’s mission is the conquest of the world’s\r\nmarket at a time when Holland still played the leading part\r\nas a trading nation and France seemed to be on the way of\r\nbecoming the ruling trading Power: “That the King of England’s\r\nSubjects, have Stock competent and convenient, to drive\r\nthe Trade of the whole Commercial World” (l. c., ch. 10, p.\r\n311). “That the Impediments of England’s greatness are but\r\ncontingent and removable” (l. c., ch. 5, p. 298). A singular\r\nhumor pervades all his writings. Thus, he shows that it was\r\nby material means that Holland\u0026mdash;at that time the model country\r\nwith English economists, just as England is with continental\r\neconomists to-day\u0026mdash;conquered the world market “without\r\nsuch Angelical Wits and Judgments, as some attribute to\r\nthe Hollanders” (l. c., p. 258). He advocates “Liberty of\r\nConscience” as a condition of trade, because “Dissenters …\r\nare … patient Men, and such as believe that Labour and\r\nIndustry is their Duty towards God,” and “They believe that\r\n… for those who have less Wealth, to think they have\r\nthe more Wit and Understanding, especially of the things of\r\nGod which they think chiefly belong to the Poor.” “From\r\nwhence it follows that Trade is not fixt to any species of Religion\r\nas such; but rather … to the Heterodox part of\r\nthe whole” (l. c., p. 262-264). He advocates an “allowance\r\nby Publick Tax” for those “who live by begging, cheating,\r\nstealing, gaming, borrowing without intention of restoring,”\r\nbecause “it were more for the publick profit” to tax the\r\ncountry for such persons “than to suffer them to spend extravagantly,\r\nat the only charge of careless, credulous, and\r\ngood natured People” (p. 269-270). But he is opposed to\r\ntaxes which transfer the wealth from industrious people “to\r\nsuch as do nothing at all, but eat and drink, sing, play, and\r\ndance; nay such as study the Metaphysicks” (ibid.). Petty’s\r\nwritings are rarities of the bookseller’s trade and are to be\r\nfound only in scattered poor old editions, which is the more\r\nsurprising since William Petty was not only the father of\r\nEnglish Political Economy, but also the ancestor of Henry\r\nPetty, alias Marquis of Lansdowne, the nestor of the English\r\nWhigs. However, the Lansdowne family could hardly\r\nbring out a complete edition of Petty’s works without prefacing\r\nit with his biography, and what can be said of most\r\norigins of the great Whig families holds good also in this\r\ncase, viz., “the less said of them the better.” The keen-witted\r\nbut cynical army surgeon who was as ready to plunder in Ireland\r\nunder the shield of Cromwell as to crawl before Charles II.\r\nto get the title of baron which he needed for his plunderings,\r\nis a model hardly fit for public exhibition. Besides that, Petty\r\nseeks to prove in most of his writings which he published in his\r\nlifetime, that England’s prosperity reached its climax under\r\nCharles II., a heterodox view for the hereditary exploiters of\r\nthe “glorious revolution.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_18_18\" id=\"Footnote_18_18\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_18_18\"\u003e\u003cspan class=\"label\"\u003e[18]\u003c/span\u003e\u003c/a\u003e In contrast with the “black art of finance” of his time,\r\nBoisguillebert says: “La science financière n’est que la connaissance\r\napprofondie des intérêts de l’agriculture et du commerce.”\r\nLe Détail de la France, 1697. Eugène Daire’s edition\r\nof Economistes financiers du XVIII. siècle, Paris, 1843, vol. I.,\r\np. 241.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_19_19\" id=\"Footnote_19_19\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_19_19\"\u003e\u003cspan class=\"label\"\u003e[19]\u003c/span\u003e\u003c/a\u003e But not \u003ci\u003eRomance\u003c/i\u003e Political Economy, since the Italians reproduce\r\nthe contrast between the English and French economists\r\nin the two respective schools of Naples and Milan, while\r\nthe Spaniards of the earlier period are either pure Mercantilists;\r\nmodified mercantilists like Ustariz; or, like Jovellanos\r\n(see his Obras, Barcelona, 1839-40), hold to the “golden mean”\r\nwith Adam Smith.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_20_20\" id=\"Footnote_20_20\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_20_20\"\u003e\u003cspan class=\"label\"\u003e[20]\u003c/span\u003e\u003c/a\u003e “La véritable richesse … jouissance entière, non\r\nseulement des besoins de la vie, mais même de tous les superflus\r\net de tout, ce qui peut fair plaisir à la sensualité,” Boisguillebert,\r\n“Dissertation sur la nature de la richesse,” etc.,\r\nl. c., p. 403. But while Petty was a frivolous, rapacious and\r\nunprincipled adventurer, Boisguillebert, though an intendant\r\nunder Louis XIV, championed the interests of the oppressed\r\nclasses with a daring that was equal to his keenness of mind.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_21_21\" id=\"Footnote_21_21\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_21_21\"\u003e\u003cspan class=\"label\"\u003e[21]\u003c/span\u003e\u003c/a\u003e The French Socialism of the Proudhon type suffers from\r\nthe same national hereditary disease.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_22_22\" id=\"Footnote_22_22\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_22_22\"\u003e\u003cspan class=\"label\"\u003e[22]\u003c/span\u003e\u003c/a\u003e “Benjamin Franklin, The Works of, etc.,” ed. by I. Sparks,\r\nvol. II., Boston, 1836. “A Modest Inquiry into the Nature and\r\nNecessity of a Paper Currency.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_23_23\" id=\"Footnote_23_23\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_23_23\"\u003e\u003cspan class=\"label\"\u003e[23]\u003c/span\u003e\u003c/a\u003e L. c., p. 265.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_24_24\" id=\"Footnote_24_24\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_24_24\"\u003e\u003cspan class=\"label\"\u003e[24]\u003c/span\u003e\u003c/a\u003e L. c., p. 267.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_25_25\" id=\"Footnote_25_25\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_25_25\"\u003e\u003cspan class=\"label\"\u003e[25]\u003c/span\u003e\u003c/a\u003e L. c., “Remarks and Facts relative to the American Paper\r\nMoney,” 1764.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_26_26\" id=\"Footnote_26_26\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_26_26\"\u003e\u003cspan class=\"label\"\u003e[26]\u003c/span\u003e\u003c/a\u003e See “Papers on American Politics; Remarks and Facts\r\nrelative to the American Paper Money,” 1764, l. c.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_27_27\" id=\"Footnote_27_27\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_27_27\"\u003e\u003cspan class=\"label\"\u003e[27]\u003c/span\u003e\u003c/a\u003e See e. g. Galiani, “Della Moneta,” in vol. 3 of Scrittori\r\nClassici italiani di Economia politica (Published by Custodi).\r\nParte Moderna, Milano, 1803. “La fatica, he says, è l’unica\r\nche dà valore alla cosa” (“only effort can give value to any\r\nthing”). The designation of labor as “fatica,” strain, effort,\r\nis characteristic of the southerner.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_28_28\" id=\"Footnote_28_28\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_28_28\"\u003e\u003cspan class=\"label\"\u003e[28]\u003c/span\u003e\u003c/a\u003e Steuart’s work, “An Inquiry into the Principles of Political\r\nEconomy, being an Essay on the Science of Domestic Policy in\r\nFree Nations,” appeared first in London in two quarto volumes\r\nin the year 1767, ten years before Adam Smith’s “Wealth\r\nof Nations.” I quote from the Dublin edition of 1770. (The\r\nreferences to pages are the same for the standard London edition\r\nof 1767, except where otherwise stated. Translator.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_29_29\" id=\"Footnote_29_29\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_29_29\"\u003e\u003cspan class=\"label\"\u003e[29]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., vol. I., p. 181-183.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_30_30\" id=\"Footnote_30_30\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_30_30\"\u003e\u003cspan class=\"label\"\u003e[30]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., vol. I., p. 361-362.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_31_31\" id=\"Footnote_31_31\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_31_31\"\u003e\u003cspan class=\"label\"\u003e[31]\u003c/span\u003e\u003c/a\u003e See chapter I., book II., vol. I. “of the reciprocal connections\r\nbetween Trade and Industry” (Translator).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_32_32\" id=\"Footnote_32_32\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_32_32\"\u003e\u003cspan class=\"label\"\u003e[32]\u003c/span\u003e\u003c/a\u003e He declares, therefore, the patriarchal form of agriculture\r\nwhich is devoted to the direct production of use-values for the\r\nowner of the land, to be an “abuse,” not in Sparta, or Rome,\r\nor even in Athens, but in the industrial countries of the eighteenth\r\ncentury. This “abusive agriculture” is not “trade,” but\r\na “direct means of subsisting.” Just as capitalistic agriculture\r\nclears the country of superfluous mouths, so does the capitalistic\r\nmode of manufacture clear the factory of superfluous\r\nhands.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_33_33\" id=\"Footnote_33_33\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_33_33\"\u003e\u003cspan class=\"label\"\u003e[33]\u003c/span\u003e\u003c/a\u003e Thus e. g., Adam Smith says: “Equal quantities of labour,\r\nat all times and places, may be said to be of equal value to the\r\nlabourer. In his ordinary state of health, strength and spirits,\r\nin the ordinary degree of his skill and dexterity, he must always\r\nlay down the same portion of his ease, his liberty, and his\r\nhappiness. The price which he pays must always be the same,\r\nwhatever may be the quantity of goods which he receives in\r\nreturn for it. Of these, indeed, it may sometimes purchase a\r\ngreater and sometimes a smaller quantity; but it is their value\r\nwhich varies, not that of the labour which purchases them….\r\nLabour alone, therefore, never varying in its own\r\nvalue … is their [commodities’] real price, etc. Adam\r\nSmith (Book I., ch. V., p. 34, Oxford, 1869. Translator.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_34_34\" id=\"Footnote_34_34\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_34_34\"\u003e\u003cspan class=\"label\"\u003e[34]\u003c/span\u003e\u003c/a\u003e David Ricardo, “On the Principles of Political Economy and\r\nTaxation,” 3rd edition, London, 1821, p. 3.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_35_35\" id=\"Footnote_35_35\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_35_35\"\u003e\u003cspan class=\"label\"\u003e[35]\u003c/span\u003e\u003c/a\u003e Sismondi, “Etudes sur l’Economie Politique,” t. II., Bruxelles,\r\n1837. “C’est l’opposition entre la valeur usuelle …\r\net la valeur échangeable à laquelle le commerce a reduit toute\r\nchose,” p. 161. [Paris edition, p. 229, Transl.]\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_36_36\" id=\"Footnote_36_36\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_36_36\"\u003e\u003cspan class=\"label\"\u003e[36]\u003c/span\u003e\u003c/a\u003e Sismondi l. c., p. 163-166 seq. [Paris edition, 230 etf.\r\nTransl.]\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_37_37\" id=\"Footnote_37_37\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_37_37\"\u003e\u003cspan class=\"label\"\u003e[37]\u003c/span\u003e\u003c/a\u003e Perhaps the silliest to be found are the annotations of J. B.\r\nSay to the French translation of Ricardo, made by Constancio,\r\nand the most pedantically arrogant are the remarks of Mr.\r\nMacLeod in his newly published “Theory of Exchange,” London,\r\n1858.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_38_38\" id=\"Footnote_38_38\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_38_38\"\u003e\u003cspan class=\"label\"\u003e[38]\u003c/span\u003e\u003c/a\u003e This objection raised against Ricardo by bourgeois economists\r\nwas taken up later by the socialists. Having assumed\r\nthe correctness of the formula, they charged the practice with\r\ncontradiction to the theory and appealed to bourgeois society\r\nto realize in practice the conclusions which were supposed to\r\nfollow from its theoretical principles. That was at least the\r\nway in which the English socialists turned Ricardo’s formula\r\nof exchange value against political economy. It remained for\r\nMr. Proudhon not only to proclaim the fundamental principle\r\nof old society as the principle of the new, but also to declare\r\nhimself the discoverer of the formula in which Ricardo summed\r\nup the combined results of classical English political economy.\r\nIt has been proven that the utopian interpretation of the Ricardian\r\nformula was about forgotten in England when Mr.\r\nProudhon “discovered” it on the other side of the Canal. (Cf.\r\nmy work: “Misère de la Philosophie,” etc., Paris, 1847, paragraph\r\non la valeur constituée.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_39_39\" id=\"Footnote_39_39\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_39_39\"\u003e\u003cspan class=\"label\"\u003e[39]\u003c/span\u003e\u003c/a\u003e True, Aristotle sees that the exchange value of commodities\r\nunderlies their prices: “ὅτι ὴ ἀλλαγη ἥν πρὶν τὸ νόμισμα ἔιναι, ὁῆλον·\r\nδιαφέρει γὰρ οὐδὲν ἡ εί κλίναι πέντε ἀντι οἰκίας, ἣ ὅσου αὶ πέντε\r\nκλῖναι.” (“It is clear that exchange existed before coin. For it does not make\r\nany difference whether you give five beds for a house, or as\r\nmuch money as five beds are worth”). On the other hand,\r\nsince commodities acquire only in price the form of exchange\r\nvalue with respect to one another, he makes them commensurable\r\nthrough money. “Διὸ δεῖ πάντα\r\nτετιμῆσθαι· οὕτω γὰρ ἀεὶ ἔσται ἀλλαγὴ, εἰ δὲ τοῦτο, κοινωνία. Τὸ δὴ\r\nνόμισμα ὥσπερ μέτρον σύμμετρα ποιῆσαν ἰσάζει, οὔτε γὰρ ἃν μὴ οὔσης\r\nἀλλαγῆς κοινωνία ἡν, ὄυτ ‘ἀλλαγὴ ἰσότητος μὴ οὔτ’ ἰσότης, μὴ οὔσης\r\nσυμμετρίας.” (“Therefore all has to be appraised.\r\nIn that way exchange may always take place, and, with\r\nit, society can exist. Coin, like measure, makes everything\r\ncommensurable and equal, for without exchange there\r\nwould be no society, without equality there would be no\r\nexchange, and without commensurability, no equality.”)\r\nHe does not conceal from himself that these different\r\nobjects measured by money are entirely incommensurable\r\nquantities. What he is after is the common unit of commodities\r\nas exchange values, which as an ancient Greek he was unable\r\nto find. He gets out of the difficulty by making commensurable\r\nthrough money what is in itself incommensurable, so far as it\r\nis necessary for practical purposes. “Τῇ μὲν οὔν ἀληθείᾳ ἀδύνατον τὰ τοσοῦτον διαφέροντα\r\nσύμμετρα γενέσθαι, πρὸς δὲ τὴν χρείαν ἐνδέχεται ἰκανῶς.”\r\n(“In truth it is impossible to make things that are so different,\r\ncommensurable, but for practical purposes it is permissible.”)\r\nAristotle, Ethica Nicomachea. l. 5, c. 8, edit. Bekkeri. Oxonii,\r\n1837.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_40_40\" id=\"Footnote_40_40\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_40_40\"\u003e\u003cspan class=\"label\"\u003e[40]\u003c/span\u003e\u003c/a\u003e The peculiar circumstance that, while the ounce of gold\r\nserves in England as the unit of the standard of money, it is\r\nnot divided into aliquot parts has been explained as follows:\r\n“Our coinage was originally adapted to the employment of\r\nsilver only\u0026mdash;hence an ounce of silver can always be divided\r\ninto a certain adequate number of pieces of coin; but as gold\r\nwas introduced at a later period into a coinage adapted only\r\nto silver, an ounce of gold cannot be coined into an adequate\r\nnumber of pieces.” Maclaren: “A Sketch of the History of the\r\nCurrency,” p. 16, London, 1858.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_41_41\" id=\"Footnote_41_41\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_41_41\"\u003e\u003cspan class=\"label\"\u003e[41]\u003c/span\u003e\u003c/a\u003e “Money may continually vary in value and yet be as good a\r\nmeasure of value as if it remained perfectly stationary. Suppose,\r\nfor instance, it is reduced in value…. Before the reduction,\r\na guinea would purchase three bushels of wheat or 6 days’\r\nlabour; subsequently it would purchase only 2 bushels of wheat,\r\nor 4 days ‘labour. In both cases, the relations of wheat and\r\nlabour to money being given, their mutual relations can be\r\ninferred; in other words, we can ascertain that a bushel of\r\nwheat is worth 2 days ‘labour. This, which is all that measuring\r\nvalue implies, is as readily done after the reduction as\r\nbefore. The excellence of a thing as a measure of value is\r\naltogether independent of its own variableness in value” (p. 11,\r\nBailey, “Money and its Vicissitudes.” London, 1837).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_42_42\" id=\"Footnote_42_42\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_42_42\"\u003e\u003cspan class=\"label\"\u003e[42]\u003c/span\u003e\u003c/a\u003e “Le monete lequali oggi sono ideali sono le piu antiche\r\nd’ogni nazione, e tutte furono un tempo reali (the latter assertion\r\nis too sweeping), e perchè erano reali con esse si contava.”\r\nGaliani, “Della Moneta,” l. c., p. 153 (“Coins which\r\nare ideal to-day [i.\u0026nbsp;e., whose names no longer correspond to\r\ntheir value] are among the more ancient with every nation;\r\nat one time they were all real, and for that reason served for\r\nthe purpose of counting.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_43_43\" id=\"Footnote_43_43\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_43_43\"\u003e\u003cspan class=\"label\"\u003e[43]\u003c/span\u003e\u003c/a\u003e The romantic A. Müller says: “According to our idea every\r\nindependent sovereign has the right to name the metal money,\r\nand to give it a nominal social value, rank, standing and title\r\n(p. 276, v. II., A. H. Müller, “Die Elemente der Staatskunst,”\r\nBerlin, 1809). As far as title is concerned the Hon. Hofrath\r\nis right; but he forgets the \u003ci\u003esubstance\u003c/i\u003e. How confused his\r\n“ideas” were, may be seen, e. g., from the following passage:\r\n“Everybody understands how much depends upon the right\r\ndetermination of the mint-price, especially in a country like\r\nEngland, where the government with \u003ci\u003emagnificent liberality\u003c/i\u003e\r\ncoins money gratuitously (Herr Müller seems to think that\r\nthe members of the English government defray the mint expenses\r\nout of their own pockets), where it does not charge any\r\nmintage, etc., and thus if the mint-price of gold were set considerably\r\nabove its market price, if instead of paying as now\r\n£3 17s. 10-1/2d. per 1 oz. of gold, it would set the price of an\r\nounce of gold at £3 19s., all money would flow into the mint\r\nand exchanging for the silver contained there bring it into the\r\nmarket to be exchanged there for the cheaper gold; the latter\r\nwould in the same manner be brought again to the mint and\r\nthe entire coinage system would be upset” (l. c., p. 280-281).\r\nTo preserve order in English coinage, Müller falls back on\r\n“disorder.” While shilling and pence are mere names of certain\r\nparts of an ounce of gold represented by signs of silver\r\nand copper, he imagines that an ounce of gold is estimated in\r\ngold, silver and copper and thus confers upon the Englishmen\r\nthe blessing of a triple standard of value. Silver as a measure\r\nof money, next to gold, was formally abolished only in 1816\r\nby 56 George III., c. 68. As a matter of fact, it was legally\r\nabolished as early as 1734 by 14 George II., c. 42, and still\r\nearlier by actual practice. There were two circumstances that\r\nmade A. Müller capable of a so-called higher conception of\r\npolitical economy: first, his wide ignorance of economic facts;\r\nsecond, his dilettanti-like visionary attitude toward philosophy.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_44_44\" id=\"Footnote_44_44\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_44_44\"\u003e\u003cspan class=\"label\"\u003e[44]\u003c/span\u003e\u003c/a\u003e “Ἀνάχαρσις, πυνθανομένου τινὸς, πρὸς τί οί Ἕλληνες χρῶνται τῷ\r\nἀργυρίῳ ἕιπε πρὸς τὸ ἀριθμεῖν.” (Athen. Deipn. l. IV. 49. v. 2, ed. Schweighäuser,\r\n1802.) (When Anacharsis was asked for what purpose\r\nthe Greeks used money, he replied, “For reckoning.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_45_45\" id=\"Footnote_45_45\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_45_45\"\u003e\u003cspan class=\"label\"\u003e[45]\u003c/span\u003e\u003c/a\u003e G. Garnier, one of the early French translators of Adam\r\nSmith, conceived the queer notion of fixing a proportion between\r\nthe use of money of account and that of actual money. His\r\nproportion is 10 to 1. (G. Garnier, “Histoire de la Monnaie\r\ndepuis les temps de la plus haute antiquité,” etc., t. 1, p. 78.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_46_46\" id=\"Footnote_46_46\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_46_46\"\u003e\u003cspan class=\"label\"\u003e[46]\u003c/span\u003e\u003c/a\u003e The act of Maryland in 1723 by which tobacco was made\r\nthe legal standard, but its value reduced to terms of English\r\ngold money, namely one penny equal to one pound of tobacco,\r\nreminds of the “leges barbarorum,” in which, inversely, certain\r\nsums of money were expressed in terms of oxen, cows, etc. In\r\nthat case neither gold nor silver, but the ox and the cow were\r\nthe actual material of the money of account.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_47_47\" id=\"Footnote_47_47\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_47_47\"\u003e\u003cspan class=\"label\"\u003e[47]\u003c/span\u003e\u003c/a\u003e Thus, we read, e. g., in the “Familiar Words” of Mr. David\r\nUrquhart: “The value of gold is to be measured by itself;\r\nhow can any substance be the measure of its own worth in\r\nother things? The worth of gold is to be established by its\r\nown weight, under a false denomination of that weight\u0026mdash;and\r\nan ounce is to be worth so many pounds and fractions of\r\npounds. This is falsifying a measure, not establishing a\r\nstandard.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_48_48\" id=\"Footnote_48_48\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_48_48\"\u003e\u003cspan class=\"label\"\u003e[48]\u003c/span\u003e\u003c/a\u003e “Money is the measure of Commerce, and of the rate of\r\neverything, and therefore ought to be kept (as all other measures)\r\nas steady and invariable as may be. But this cannot be,\r\nif your money be made of two Metals, whose proportion\r\n… constantly varies in respect of one another.” John\r\nLocke: Some Considerations on the Lowering of Interest, etc.,\r\n1691 (p. 166, p. 65 in his Works 7 ed., London, 1768, vol. III.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_49_49\" id=\"Footnote_49_49\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_49_49\"\u003e\u003cspan class=\"label\"\u003e[49]\u003c/span\u003e\u003c/a\u003e Locke says among other things: “ … call that a\r\nCrown now, which before … was but a part of a Crown….\r\nAn equal quantity of Silver is always the same Value\r\nwith an equal quantity of Silver…. For if the abating\r\n1-20 of the quantity of Silver of any Coin does not lessen its\r\nValue, the abating 19-20 of the quantity of the Silver of any\r\nCoin will not abate its Value. And so a single Penny, being\r\ncalled a Crown, will buy as much Spice, or Silk, or any other\r\nCommodity, as a Crown-Piece, which contains 20 times as\r\nmuch Silver…. Now [all that may be done] is giving a\r\nless quantity of Silver the Stamp and Denomination of a greater….\r\nBut ‘tis Silver and not Names that pay Debts\r\nand purchase Commodities” (l. c., p. 135-145 passim). If to\r\nraise the value of money means nothing but to give any desired\r\nname to an aliquot part of a silver coin, e. g., to call an\r\neighth part of an ounce of silver a penny, then money may\r\nreally be rated as high as you please. At the same time, Locke\r\nanswered Lowndes that the rise of the market price above the\r\nmint price was due not to the rise of the value of silver, but\r\nto the lighter silver coins. Seventy-seven clipped shillings do\r\nnot weigh a particle more than 62 full-weighted ones. Finally\r\nhe pointed out with perfect right that, aside from the loss of\r\nweight in the circulating coin, the market price of silver bullion\r\nin England could rise to some extent above its mint price,\r\nsince the export of silver bullion was allowed while that of\r\nsilver coin was prohibited (l. c., p. 54-116 passim). Locke was\r\nexceedingly careful not to touch upon the burning question\r\nof public debts, and no less carefully avoided the discussion of\r\nthe delicate economic question, viz., the depreciation of the\r\ncurrency out of proportion to its real loss of silver, as was\r\nshown by the rate of exchange and the ratio of silver bullion\r\nto silver coin. We shall return to this question in its general\r\nform in the chapter on the Medium of Circulation. Nicholas\r\nBarbon in “A Discourse Concerning Coining the New Money\r\nLighter, in Answer to Mr. Locke’s Considerations, etc.,” London,\r\n1696, tried in vain to entice Locke to difficult ground.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_50_50\" id=\"Footnote_50_50\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_50_50\"\u003e\u003cspan class=\"label\"\u003e[50]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., v. II., p. 154.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_51_51\" id=\"Footnote_51_51\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_51_51\"\u003e\u003cspan class=\"label\"\u003e[51]\u003c/span\u003e\u003c/a\u003e The Querist, l. c., (p. 5-6-7.) The “Queries on Money” are\r\ngenerally clever. Among other things Berkeley is perfectly\r\nright in saying that by their progress the North American\r\ncolonies “make it plain as daylight, that gold and silver are not\r\nso necessary for the wealth of a nation, as the vulgar of all\r\nranks imagine.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_52_52\" id=\"Footnote_52_52\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_52_52\"\u003e\u003cspan class=\"label\"\u003e[52]\u003c/span\u003e\u003c/a\u003e Price means here real equivalent in the sense commonly\r\nemployed by English economic writers in the seventeenth century.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_53_53\" id=\"Footnote_53_53\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_53_53\"\u003e\u003cspan class=\"label\"\u003e[53]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., v. II., p. 154, 299 [1st London edition, of\r\n1767, v. I., p. 526-531. Transl.].\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_54_54\" id=\"Footnote_54_54\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_54_54\"\u003e\u003cspan class=\"label\"\u003e[54]\u003c/span\u003e\u003c/a\u003e On the occasion of the last commercial crisis the ideal\r\nAfrican money received loud praise from certain English\r\nquarters, after its seat was this time moved from the coast\r\nto the heart of Barbary. The freedom of the Berbers from\r\ncommercial and industrial crises was ascribed to the ideal unit\r\nof measure of their bars. Would it not have been simpler to\r\nsay that trade and industry are the \u003ci\u003econditio sine qua non\u003c/i\u003e of\r\ncommercial and industrial crises?\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_55_55\" id=\"Footnote_55_55\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_55_55\"\u003e\u003cspan class=\"label\"\u003e[55]\u003c/span\u003e\u003c/a\u003e The Currency Question, The Gemini Letters, London, 1844,\r\np. 260-272, passim.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_56_56\" id=\"Footnote_56_56\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_56_56\"\u003e\u003cspan class=\"label\"\u003e[56]\u003c/span\u003e\u003c/a\u003e John Gray: “The Social System. A Treatise on the Principle\r\nof Exchange, Edinburgh, 1831.” Compare with “Lectures on\r\nthe Nature and Use of Money, Edinburgh, 1848,” by the same\r\nauthor. After the February revolution Gray sent a memorial\r\nto the provisional French government, in which he instructs\r\nthe latter that France is not in need of an “organization of\r\nlabour,” but of an “organization of exchange” of which the\r\nplan is fully worked out in his money system. Honest John\r\ndid not suspect that sixteen years after the appearance of\r\nhis “Social System” a patent for the same discovery would be\r\ntaken out by the ingenious Proudhon.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_57_57\" id=\"Footnote_57_57\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_57_57\"\u003e\u003cspan class=\"label\"\u003e[57]\u003c/span\u003e\u003c/a\u003e Gray, “The Social System,” etc., p. 63: “Money should be\r\nmerely a receipt, an evidence that the holder of it has either\r\ncontributed certain value to the national stock of wealth or\r\nthat he has acquired a right to the same value from some one\r\nwho has contributed to it.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_58_58\" id=\"Footnote_58_58\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_58_58\"\u003e\u003cspan class=\"label\"\u003e[58]\u003c/span\u003e\u003c/a\u003e An estimated value being previously put upon produce,\r\nlet it be lodged in a bank, and drawn out again, whenever it\r\nis required, merely stipulating, by common consent, that he\r\nwho lodges any kind of property in the proposed National\r\nBank, may take out of it an equal value of whatever it may\r\ncontain, instead of being obliged to draw out the self-same\r\nthing that he put in.” L. c., p. 68.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_59_59\" id=\"Footnote_59_59\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_59_59\"\u003e\u003cspan class=\"label\"\u003e[59]\u003c/span\u003e\u003c/a\u003e L. c., p. 16.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_60_60\" id=\"Footnote_60_60\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_60_60\"\u003e\u003cspan class=\"label\"\u003e[60]\u003c/span\u003e\u003c/a\u003e Gray: “Lectures on Money, etc.,” p. 182.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_61_61\" id=\"Footnote_61_61\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_61_61\"\u003e\u003cspan class=\"label\"\u003e[61]\u003c/span\u003e\u003c/a\u003e L. c., p. 169.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_62_62\" id=\"Footnote_62_62\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_62_62\"\u003e\u003cspan class=\"label\"\u003e[62]\u003c/span\u003e\u003c/a\u003e “The business of every country ought to be conducted on a\r\nnational capital.” John Gray, “The Social System,” etc.,\r\np. 171.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_63_63\" id=\"Footnote_63_63\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_63_63\"\u003e\u003cspan class=\"label\"\u003e[63]\u003c/span\u003e\u003c/a\u003e “The land to be transformed into national property.” L. c.,\r\np. 298.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_64_64\" id=\"Footnote_64_64\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_64_64\"\u003e\u003cspan class=\"label\"\u003e[64]\u003c/span\u003e\u003c/a\u003e See e. g. W. Thompson: “An Inquiry into the Distribution\r\nof Wealth, etc.,” London, 1827. Bray, “Labour’s Wrongs and\r\nLabour’s Remedy,” Leeds, 1839.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_65_65\" id=\"Footnote_65_65\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_65_65\"\u003e\u003cspan class=\"label\"\u003e[65]\u003c/span\u003e\u003c/a\u003e Alfred Darimont’s “De la Reforme des banques,” Paris,\r\n1856, may be considered as a compendium of this melodramatic\r\ntheory of money.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_66_66\" id=\"Footnote_66_66\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_66_66\"\u003e\u003cspan class=\"label\"\u003e[66]\u003c/span\u003e\u003c/a\u003e “Di due sorte è la moneta, ideale e reale; e a dui diversi\r\nusi è adoperata, a valutare le cose e a comperarle. Per valutare\r\nè buona la moneta ideale, cosi come la reale e forse anche più.\r\nL’altro uso della moneta è di comperare quelle cose istesse,\r\nch’ella apprezza … i prezzi e i contratti si valutano in\r\nmoneta ideale e si eseguiscono in moneta reale.” Galiani,\r\nl. c., p. 112 sq. (“Money is of two kinds, ideal and real; and\r\nis adapted to two different uses: to determine the value of\r\nthings and to buy them. For the purpose of valuation ideal\r\nmoney is as good as real and perhaps even better. The other\r\nuse of money is to buy the same things which it appraises\r\n… prices and contracts are determined in ideal money\r\nand are executed in real money.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_67_67\" id=\"Footnote_67_67\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_67_67\"\u003e\u003cspan class=\"label\"\u003e[67]\u003c/span\u003e\u003c/a\u003e This, of course, does not prevent the market price of commodities\r\nto be above or below their value. However, this consideration\r\nis foreign to simple circulation and belongs to quite\r\nanother sphere to be considered later, when we shall investigate\r\nthe relation between value and market price.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_68_68\" id=\"Footnote_68_68\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_68_68\"\u003e\u003cspan class=\"label\"\u003e[68]\u003c/span\u003e\u003c/a\u003e How deeply some beautiful souls are wounded by the merely\r\nsuperficial aspect of the antagonism which asserts itself in buying\r\nand selling, may be seen from the following abstract from\r\nM. Isaac Pereire’s: “Leçons sur l’industrie et les finances,”\r\nParis, 1832. The fact that the same Isaac in his capacity of\r\ninventor and dictator of the “Credit mobilier” has acquired the\r\nreputation of the wolf of the Paris Bourse shows what lurks\r\nbehind the sentimental criticism of economics. Says Mr. Pereire\r\nat the time an apostle of St. Simons: “C’est parceque tous les\r\nindividus sont isolés, séparés les uns des autres, soit dans leur\r\ntravaux, soit pour la consommation, qu’il y a echange entre\r\neux des produits de leur industrie respective. De la necessité\r\nde l’échange est derivée la necessité de determiner la valeur\r\nrelative des objets. Les idées de la valeur et de l’échange\r\nsont donc intimement liées, et toutes deux dans leur forme\r\nactuelle exprime l’individualisme et l’antagonisme…. Il\r\nn’y a lieu a fixer la valeur des produits que parcequ’il y a\r\nvente at achat, en d’autres termes, antagonisme entre les divers\r\nmembres de la societé. Il n’y a lieu à s’occuper du prix, de\r\nvaleur que là oú il y avait vente et echat, c’est à dire, oú chaque\r\nindividu était obligé de lutter, pour se procurer les object\r\nnécessaires a l’entretien de son existence” (l. c., p. 2, 3 passim).\r\n(“Since individuals are isolated and separated from\r\none another both in their labors and in consumption, exchange\r\ntakes place between them in the products of their respective\r\nindustries. From the necessity of exchange arises the necessity\r\nof determining the relative value of things. The ideas of\r\nvalue and exchange are thus intimately connected and both\r\nexpress in their actual form individualism and antagonism….\r\nThe determination of values of products takes place\r\nonly because there are sales and purchases, or, to put it differently,\r\nbecause there is an antagonism between different members\r\nof society. One has to occupy himself with price and\r\nvalue only where there is sale and purchase, that is to say,\r\nwhere every individual is obliged to struggle to procure for\r\nhimself the objects necessary for the maintenance of his existence.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_69_69\" id=\"Footnote_69_69\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_69_69\"\u003e\u003cspan class=\"label\"\u003e[69]\u003c/span\u003e\u003c/a\u003e “L’argent n’est que le moyen et l’acheminement, au lieu que\r\nles denrées utiles à la vie sont la fin et le but.” (“Money is\r\nbut the ways and means, while the things useful in life are\r\nthe end and object.”) Boisguillebert: “Le Détail de la France,”\r\n1697, in Eugene Daires ‘“Economistes financiers du XVIIIieme siècle,\r\nvol. I., Paris, 1843, p. 210.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_70_70\" id=\"Footnote_70_70\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_70_70\"\u003e\u003cspan class=\"label\"\u003e[70]\u003c/span\u003e\u003c/a\u003e In November, 1807, William Spence published a pamphlet\r\nin England under the title: “Britain Independent of Commerce.”\r\nThe principle set forth in this pamphlet was further\r\nelaborated by William Cobbet in his “Political Register” under\r\nthe virulent title, “Perish Commerce.” To this James Mill replied\r\nin 1808 in his “Defence of Commerce” which contains the\r\npassage quoted above from his “Elements of Political Economy”\r\n(p. 190-193, Transl.). In his controversy with Sismondi\r\nand Malthus on commercial crises, J. B. Say appropriated this\r\nclever device, and as it would be difficult to point out with\r\nwhat new idea this comical “prince de la science” had enriched\r\npolitical economy, his continental admirers have trumpeted him\r\nas the man who had unearthed the treasure of the metaphysical\r\nbalance of purchases and sales; as a matter of fact, his merits\r\nconsisted rather of the impartiality with which he equally misunderstood\r\nhis contemporaries, Malthus, Sismondi and Ricardo.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_71_71\" id=\"Footnote_71_71\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_71_71\"\u003e\u003cspan class=\"label\"\u003e[71]\u003c/span\u003e\u003c/a\u003e The manner in which economists explain the different aspects\r\nof the commodity may be seen from the following examples:\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“With money in possession, we have but one exchange to\r\nmake in order to secure the object of desire, while with other\r\nsurplus products we have two, the first of which (procuring the\r\nmoney) is infinitely more difficult than the second.” (G. Opdyke,\r\n“A Treatise on Political Economy,” New York, 1851, p. 277-278.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“The superior saleableness of money is the exact effect or\r\nnatural consequence of the less saleableness of commodities.”\r\n(Th. Corbet, “An Inquiry into the Causes and Modes of the\r\nWealth of Individuals.” etc., London, 1841, p. 117.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“Money has the quality of being always exchangeable for\r\nwhat it measures.” (Bosanquet, “Metallic, Paper and Credit\r\nCurrency,” etc., London, 1842, p. 100.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“Money can always buy other commodities, whereas other\r\ncommodities can not always buy money.” (Th. Tooke, “An Inquiry\r\ninto the Currency Principle,” 2d ed., London, 1844, p. 10.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_72_72\" id=\"Footnote_72_72\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_72_72\"\u003e\u003cspan class=\"label\"\u003e[72]\u003c/span\u003e\u003c/a\u003e The same commodity can be bought and resold many times.\r\nIt circulates, then, not merely as a commodity, but in a capacity\r\nwhich does not exist from the point of view of simple circulation,\r\nof the simple contrast of commodity and money.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_73_73\" id=\"Footnote_73_73\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_73_73\"\u003e\u003cspan class=\"label\"\u003e[73]\u003c/span\u003e\u003c/a\u003e The quantity of money is immaterial “pourvu qu’il y en ait\r\nassez pour maintenir les prix contractés par les denrées” (as\r\nlong as it is sufficient to maintain the existing prices of commodities).\r\nBoisguillebert, l. c. p. 210.\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“If the circulation of commodities of four hundred millions\r\nrequired a currency of forty millions, and … this proportion\r\nof one-tenth was the due level, estimating both currency\r\nand commodities in gold; then, if the value of commodities\r\nto be circulated increased to four hundred and fifty millions,\r\nfrom natural causes … I should say the currency, in\r\norder to continue at its level, must be increased to forty-five\r\nmillions.” (William Blake, “Observations on the Effects Produced\r\nby the Expenditure of Government, etc.,” London, 1823,\r\np. 80.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_74_74\" id=\"Footnote_74_74\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_74_74\"\u003e\u003cspan class=\"label\"\u003e[74]\u003c/span\u003e\u003c/a\u003e “E la velocità del giro del danaro, non la quantità dei metalli\r\nche fa apparir molto a poco il danaro.” (Galiani, l. c. p. 99.)\r\n(“It is the rapidity of the circulation of money and not the\r\nquantity of metals that causes a greater or smaller amount of\r\nmoney to appear.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_75_75\" id=\"Footnote_75_75\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_75_75\"\u003e\u003cspan class=\"label\"\u003e[75]\u003c/span\u003e\u003c/a\u003e An example of an extraordinary decline of metallic circulation\r\nfrom its average level was furnished by England in 1858,\r\nas may be seen from the following extract from the London\r\nEconomist: “From the nature of the case (namely, the isolated\r\nnature of simple circulation) very exact data cannot be\r\nprocured as to the amount of cash that is fluctuating in the\r\nmarket, and in the hands of the not banking classes. But,\r\nperhaps, the activity or the inactivity of the mints of the great\r\ncommercial nations is one of the most likely indications in\r\nthe variations of that amount. Much will be manufactured\r\nwhen it is wanted; and little when little is wanted….\r\nAt the English mint the coinage was in 1855 £9,245,000; 1856,\r\n£6,476,000; 1857, £5,293,855. During 1858 the mint had\r\nscarcely anything to do.” (Economist, July 10, 1858.) But\r\nat the same time about eighteen million pounds sterling were\r\nlying in the bank vaults.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_76_76\" id=\"Footnote_76_76\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_76_76\"\u003e\u003cspan class=\"label\"\u003e[76]\u003c/span\u003e\u003c/a\u003e Dodd, “Curiosities of Industry,” etc., London, 1854.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_77_77\" id=\"Footnote_77_77\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_77_77\"\u003e\u003cspan class=\"label\"\u003e[77]\u003c/span\u003e\u003c/a\u003e “The Currency Question Reviewed, etc., by a Banker.”\r\n(Edinburgh, 1845, p. 69.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“Si un écu un peu usé etait reputé valoir quelque chose de\r\nmoins qu’un écu tout neuf, la circulation se trouverait continuellement\r\narrêtée, et il n’y aurait pas un seul payement qui\r\nne fut matière à contestation.” (G. Garnier, l. c. t. I., p. 24.)\r\n(“If an ecu slightly used would pass for a little less than an\r\nentirely new ecu, circulation would be continually interfered\r\nwith, and not a payment would take place that would not give\r\nrise to controversy.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_78_78\" id=\"Footnote_78_78\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_78_78\"\u003e\u003cspan class=\"label\"\u003e[78]\u003c/span\u003e\u003c/a\u003e W. Jacob, “An Inquiry Into the Production and Consumption\r\nof the Precious Metals.” (London, 1831, vol. II., ch.\r\nXXVI.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_79_79\" id=\"Footnote_79_79\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_79_79\"\u003e\u003cspan class=\"label\"\u003e[79]\u003c/span\u003e\u003c/a\u003e David Buchanan, “Observations on the Subjects Treated of\r\nin Dr. Smith’s Inquiry on the Wealth of Nations,” etc. (Edinburgh,\r\n1841, p. 3.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_80_80\" id=\"Footnote_80_80\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_80_80\"\u003e\u003cspan class=\"label\"\u003e[80]\u003c/span\u003e\u003c/a\u003e Henry Storch, “Cours d’Economic Politique.” etc., avec des\r\nnotes par J. B Say. Paris, 1823, tom. IV., p. 179. Storch published\r\nhis work in French at St. Petersburg. J. B. Say immediately\r\nissued a Parisian reprint, supplemented with alleged\r\n“notes,” which as a matter of fact contain nothing but commonplaces.\r\nStorch (see his “Considerations sur la Nature du\r\nRevenue National,” Paris, 1824) took by no means kindly to\r\nthis annexation of his work by the “prince de la science.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_81_81\" id=\"Footnote_81_81\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_81_81\"\u003e\u003cspan class=\"label\"\u003e[81]\u003c/span\u003e\u003c/a\u003e Plato de Rep. L. II “νόμισμα ξύμβολον τῆς ἀλλαγῆς.” (“Money\r\nsymbol of exchange.”) Opera omnia, etc., ed. G. Stallbumius,\r\nLondon, 1850, p. 304. Plato develops money only in two capacities\u0026mdash;as\r\na measure of value and a token of value, but demands,\r\nin addition to the token of value serving for home circulation,\r\nanother one for trade between Greece and foreign\r\ncountries. (See also Book V of his Laws.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_82_82\" id=\"Footnote_82_82\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_82_82\"\u003e\u003cspan class=\"label\"\u003e[82]\u003c/span\u003e\u003c/a\u003e Aristotle, Ethic. Nicom, l. 5., ch. 8, l. c.:\r\nοἶον δ ‘ὑπάλλαγμα τῆς χρείας τὸ νόμισμα γέγονου κατὰ συνθήκην καὶ διὰ τοὔτο τοὔνομα ἔχει\r\nνόμισμα. ὅτι οὐ φὐσει ἀλλὰ νόμῳ, καὶ ἐφ ‘ἡμῖν μεταβαλεῖν καὶ ποιῆσαι\r\nἄχρηστον.” (“In the satisfaction of wants money became\r\nthe medium of exchange by agreement. And for that reason\r\nit bears the name νόμισμα, because it owes its existence, not to\r\nnature, but to law (νόμω), and it is in our power to\r\nchange it and make it void.”) Aristotle had a far more\r\ncomprehensive and deep view of money than Plato. In\r\nthe following passage he beautifully shows how barter between\r\ndifferent communities creates the necessity of assigning\r\nthe character of money to a specific commodity, i.\u0026nbsp;e.,\r\none which has itself an intrinsic value. “Ξενικωτέρας\r\nγὰρ γενομένης τῆς βοηθείας τῷ εἰσάγεσθαι hὦν ἐνδεεῖς καὶ ἔκπεμπειν ὥν\r\nἐπλέοναζον, ἐξ ἀνάγκης ἡ τοῦ νομίσματος ἐπορίσθη χρῆσις· διὸ πρὸς τὰς\r\nἀλλαγας τοιοῦτόν τι συνέθεντο πρὸς σφᾶς αὐτοὺς διδόναι καὶ λαμβάνειν,\r\nδ ‘τῶν χρησίμων αὐτὸ ὂν εἶχε τὴν χρείαν εὐμεταχείριστον … οἶον\r\nσίδηρος καὶ ἄργυρος κἂν εἴ τι τοιοῦτον ἕτερον”. (Arist. De Republica, l. i. p.\r\n9, [secs. 7, 8] l. c.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n(“When the inhabitants of one country became more dependent\r\non those of another, and they imported what they\r\nneeded and exported the surplus, money necessarily came into\r\nuse … and hence men agreed to employ in their dealings\r\nwith each other something which was intrinsically useful\r\nand easily applicable to the purposes of life, for example, iron,\r\nsilver and the like.” Trans, by B. Jowett, “The Politics of Aristotle,\r\nOxford, 1885, p. 16). This passage is quoted by Michel\r\nChevalier, who either has not read Aristotle or did not understand\r\nhim, to prove that in Aristotle’s opinion currency must\r\nconsist of a substance having intrinsic value. On the contrary,\r\nAristotle says expressly that money as a mere medium of circulation\r\nseems to owe its existence to agreement or law, as is\r\nshown by its name νόμισμα, and that in reality it owes its\r\nutility as coin to its function and not to any intrinsic use-value\r\nof its own. λῆρος εἶναι δοκεῖ τὸ νόμισμα καὶ νόμος παντάπασι, φύσει δ’\r\nοὐδὲν ὅτι μεταθεμένων τε τῶν χρωμένων οὐδενὸς ἄξιον οὐδὲ χρήσιμον πρὸς\r\nοὐδὲν τῶν ἀναγκαίων ἑοτί. (“Others maintain that\r\ncoined money is a mere sham, a thing not natural, but conventional\r\nonly, which would have no value or use for any of the\r\npurposes of daily life if another commodity were substituted\r\nby the users.” (l. c. sec. 11.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_83_83\" id=\"Footnote_83_83\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_83_83\"\u003e\u003cspan class=\"label\"\u003e[83]\u003c/span\u003e\u003c/a\u003e Mandeville, Sir John, “Voyages and Travels,” London,\r\n1705, p. 105: “This Emperor (of Cattay or China) may dispende\r\nols muche as he wile withouten estymacion. For he\r\ndespendethe not, nor makethe no money, but of lether empredeth,\r\nor of papyre. And when that money bathe ronne so\r\nlonge that it begynethe to waste, than men beren it to the\r\nEmperoure Tresorye, and then they taken newe Money for\r\nthe old. And that money gothe thorghe out all the contree,\r\nand thorge out all his Provynces…. They make no\r\nmoney neither of Gold nor of Sylver,” and “therefore,” thinks\r\nMandeville, “he may despende ynew and outrageously.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_84_84\" id=\"Footnote_84_84\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_84_84\"\u003e\u003cspan class=\"label\"\u003e[84]\u003c/span\u003e\u003c/a\u003e Benjamin Franklin, “Remarks and Facts Relative to the\r\nAmerican Paper Money,” 1764, p. 348, l. c. “At this very\r\ntime, even the silver money in England is obliged to the legal\r\ntender for part of its value; that part which is the difference\r\nbetween its real weight and its denomination. Great part\r\nof the shillings and sixpences now current are by wearing become\r\n5, 10, 20, and some of the sixpences even 50 per cent., too\r\nlight. For this difference between the \u003ci\u003ereal\u003c/i\u003e and the \u003ci\u003enominal\u003c/i\u003e you\r\nhave no intrinsic value. You have not so much as paper, you\r\nhave nothing. It is the legal tender, with the knowledge that\r\nit can easily be repassed for the same value, that makes three-pennyworth\r\nof silver pass for a sixpence.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_85_85\" id=\"Footnote_85_85\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_85_85\"\u003e\u003cspan class=\"label\"\u003e[85]\u003c/span\u003e\u003c/a\u003e Berkeley, l. c., p. 5-6. “Whether the denominations being\r\nretained, although the bullion were gone … might not\r\nnevertheless … a circulation of commerce (be) maintained?”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_86_86\" id=\"Footnote_86_86\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_86_86\"\u003e\u003cspan class=\"label\"\u003e[86]\u003c/span\u003e\u003c/a\u003e “Non solo i metalli ricchi son segni delle cose …; ma\r\nvicendevolmente le cose … sono segni dell’oro e dell’argento.”\r\n(A. Genovesi, “Lezioni di Economia Civile,” 1765. p.\r\n281 in Custodi, Parte Mod. 1. VIII.) (“Not only are precious\r\nmetals tokens of things, but vice versa, things are tokens of\r\ngold and silver.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_87_87\" id=\"Footnote_87_87\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_87_87\"\u003e\u003cspan class=\"label\"\u003e[87]\u003c/span\u003e\u003c/a\u003e Petty. “Gold and silver are universal wealth.” (Political\r\nArithmetic, l. c., p. 242.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_88_88\" id=\"Footnote_88_88\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_88_88\"\u003e\u003cspan class=\"label\"\u003e[88]\u003c/span\u003e\u003c/a\u003e E. Misselden. “Free Trade, or the Means to Make Trade\r\nFlourish,” etc., London, 1622. “The natural matter of Commerce\r\nis Merchandise, which Merchants from the end of Trade\r\nhave stiled Commodities. The Artificiall matter of Commerce\r\nis Money, which hath obtained the title of sinewes of warre\r\nand of State…. Money, though it be in nature and time\r\nafter Merchandise, yet forasmuch as it is now in use become\r\nthe chiefe.” (p. 7.) He compares his own treatment of merchandise\r\nand money with the manner of “Old Jacob, who,\r\nblessing his Grandchildren, crost his hands, and laide his right\r\nhand on the yonger, and his left hand on the elder.” (l. c.)\r\nBoisguillebert, “Dissert. sur la Nature Des Richesses,” etc.\r\n“Voilà donc l’esclave du commerce devenu son maître….\r\nLa misère des peuples ne vient que de ce qu’on a fait un maître,\r\nou plutôt un tyran de ce qui était un esclave.” (p. 395, 399.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_89_89\" id=\"Footnote_89_89\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_89_89\"\u003e\u003cspan class=\"label\"\u003e[89]\u003c/span\u003e\u003c/a\u003e Boisguillebert, l. c. “On a fait une idole de ces métaux\r\n(l’or et l’argent) et laissant là, l’objet et l’intention pour\r\nlesquels ils avaient été appelés dans le commerce, savoir, pour\r\ny servir de gages dans l’échange et la tradition réciproque, on\r\nles a presque quittés de ce service pour en former des divinités,\r\naux quelles on a sacrifié et sacrifie toujours plus de biens et de\r\nbesoins précieux et même d’hommes, que jamais l’aveugle antiquité\r\nn’en immola à ces fausses divinités,” etc. (l. c., p. 395.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_90_90\" id=\"Footnote_90_90\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_90_90\"\u003e\u003cspan class=\"label\"\u003e[90]\u003c/span\u003e\u003c/a\u003e In the first halt of the perpetuum mobile, \u003ci\u003ei.\u0026nbsp;e.\u003c/i\u003e, in the\r\nsuspension of the function of money as a medium of circulation,\r\nBoisguillebert at once suspects its independent existence from\r\ncommodities. Money, he says, must be “in constant motion,\r\nit can be money only by being mobile, but as soon as it becomes\r\nmotionless all is lost.” (“Dans un mouvement continuel,\r\nce qui ne peut être que tant qu’il est meuble, mais\r\nsitôt qu’il devient immeuble tout est perdu.” (“Le Détail de\r\nla France,” p. 231.) What he overlooks is that this halt\r\nconstitutes the condition of its movement. What he really\r\nwants is that the value form of commodities should appear\r\nmerely in the transitory form of their change of matter, but\r\nshould never become an end in itself.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_91_91\" id=\"Footnote_91_91\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_91_91\"\u003e\u003cspan class=\"label\"\u003e[91]\u003c/span\u003e\u003c/a\u003e “ … The more the stock … is … encreased\r\nin wares, the more it decreaseth in treasure.” (E.\r\nMisselden, l. c., p. 23.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_92_92\" id=\"Footnote_92_92\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_92_92\"\u003e\u003cspan class=\"label\"\u003e[92]\u003c/span\u003e\u003c/a\u003e l. c., p. 11-13 passim.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_93_93\" id=\"Footnote_93_93\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_93_93\"\u003e\u003cspan class=\"label\"\u003e[93]\u003c/span\u003e\u003c/a\u003e Petty, “Political Arith.,” l. c., p. 196 (1899 edition, v. I, p.\r\n269. Transl.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_94_94\" id=\"Footnote_94_94\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_94_94\"\u003e\u003cspan class=\"label\"\u003e[94]\u003c/span\u003e\u003c/a\u003e Francois Bernier, “Voyage contenant la description des\r\nétats du Grand Mogul.” (Paris edition, 1830, t. l., conf., p.\r\n312-314.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_95_95\" id=\"Footnote_95_95\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_95_95\"\u003e\u003cspan class=\"label\"\u003e[95]\u003c/span\u003e\u003c/a\u003e Dr. Martin Luther, “Bücher vom Kaufhandel und Wucher,”\r\n1524. In the same passage Luther says: “Gott hat uns\r\nDeutsche dahin geschleidert, dass wir unser gold und silber\r\nmüssen in fremde Länder stossen, alle Welt reich machen und\r\nselbst Bettler Bleiben. England sollte wohl weniger Goldes\r\nhaben, wenn Deutschland ihm sein Tuch liesse, und der König\r\nvon Portugal sollte auch weniger haben, wenn wir ihm die\r\nWürze liessen. Rechne Du, wie viel eine Messe zu Frankfurt\r\naus Deutschen Landen gefürt wird, ohne Not und Ursache:\r\nso wirst Du Dich wundern, wie es zugehe, dass noch ein heller\r\nin Deutschen Landen sei. Frankfurt ist das Silber- und Goldloch,\r\ndadurch aus Deutschem Lande fleisst, was nur guillet\r\nund wächst, gemünzt oder geschlagen wird bei uns; wäre das\r\nLoch zuegestopft, so dürft man itzt der Klage nicht hören, die\r\nallethalben eitel Schuld und kein Geld, alle Land und Städte\r\nausgewuchert sind. Aber lass gehen, es will doch also gehen;\r\nwir Deutsche müssen Deutsche bleiben! wir lassen nicht ab, wir\r\nmüssen denn.”\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\nIn the work quoted above Misselden wishes to retain the gold\r\nand silver at least within the confines of Christendom: “The\r\nother forreine remote causes of the want of money, are the\r\nTrades maintained out of Christendome to Turky, Persia and\r\nthe East Indies, which trades are maintained for the most part\r\nwith ready money, yet in a different manner from the trades\r\nof Christendome within itselfe. For although the trades within\r\nChristendome are driven with ready monies, yet those monies\r\nare still contained and continued within the bounds of Christendome.\r\nThere is indeede a fluxus and refluxus, a flood and ebbe\r\nof the monies of Christendome traded within it selfe; for sometimes\r\nthere is more in one part of Christendome, sometimes\r\nthere is lesse in another, as one Country wanteth and another\r\naboundeth: It cometh and goeth, and whirleth about\r\nthe Circle of Christendome, but is still contained within the\r\ncompasse thereof. But the money that is traded out of Christendome\r\ninto the parts aforesaid is continually issued out and\r\nnever returneth againe.” (p. 19-20.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_96_96\" id=\"Footnote_96_96\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_96_96\"\u003e\u003cspan class=\"label\"\u003e[96]\u003c/span\u003e\u003c/a\u003e “A nummo prima origo avaritiae … haec paulatim\r\nexarsit rabie quadam, non jam avaritia, sed fames auris.”\r\n(Plin., Hist. Nat., l. XXXIII., c. XIV.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n(“From money first springs avarice … the latter\r\ngradually grows into a kind of madness, which is no more\r\navarice, but a thirst for gold.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_97_97\" id=\"Footnote_97_97\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_97_97\"\u003e\u003cspan class=\"label\"\u003e[97]\u003c/span\u003e\u003c/a\u003e Horace thus understands nothing of the philosophy of\r\nhoarding when he says (Satir. l. II., Satir. III): “Siquis\r\nemat citharas, emptas comportat in unum, Nec studio citharae\r\nnec musae deditus ulli; Si scalpra et formas non sutor; nautica\r\nvela Aversus mercaturis; delirus et amens, Undique dicatur\r\nmerito. Qui discrepat istis, Qui nummos aurunque recondit\r\nnescius uti Compositis metuensque velut contingere sacrum?”\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\"poetry-container\"\u003e\r\n\u003cdiv class=\"poetry\"\u003e\r\n\u003cdiv class=\"stanza\"\u003e\r\n\u003cdiv class=\"line i04\"\u003e“If one buys fiddles, hoards them up when bought,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eThough music’s study ne’er engaged his thought,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eOne lasts and awls, unversed in cobbler’s craft,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eOne sails for ships, not knowing fore from aft,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eYou’d call them mad: but tell me, if you please,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eHow that man’s case is different from these,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eWho as he gets it, stows away his gain,\u003c/div\u003e\r\n\u003cdiv class=\"line\"\u003eAnd thinks to touch a farthing were profane?”\u003c/div\u003e\r\n\u003c/div\u003e\u003c/div\u003e\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\n(Transl. by John Covington, London, 1874, p. 60.)\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\nMr. Senior understands the question much better: “L’argent\r\nparaît etre la seule chose dont le désir est universel, et il en\r\nest ainsi parceque l’argent est \u003ci\u003eune richesse abstraite\u003c/i\u003e et parceque\r\nles hommes, en la possédant peuvent satisfaire à tous leur besoins\r\nde quelque nature qu’ils soient.” (“Principes Fondamentaux\r\nde l’Economie Politique, tirés de leçons edites et inedites de\r\nN. W. Senior, par Comte Jean Arrivabene,” Paris, 1836, p. 221.\r\n(The corresponding passage in the English edition of his Political\r\nEconomy, London, 1863, is to be found on p. 27. Translator.)\r\nSo does Storch: “Since money represents all other\r\nforms of wealth, it is only necessary to accumulate it to provide\r\nfor oneself all kinds of wealth existing in the world.” (l.\r\nc., v. 2, p. 134.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_98_98\" id=\"Footnote_98_98\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_98_98\"\u003e\u003cspan class=\"label\"\u003e[98]\u003c/span\u003e\u003c/a\u003e To what extent the inner man of the commodity owner remains\r\nunchanged, even when he has become civilized and has\r\ndeveloped into a capitalist, is shown by the example of a London\r\nrepresentative of a cosmopolitan banking house who adopted\r\nas a fitting coat of arms for his family a £100,000 bank note,\r\nwhich he had hung up in a glass frame. The point here is in\r\nthe mocking contempt of the note for circulation.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_99_99\" id=\"Footnote_99_99\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_99_99\"\u003e\u003cspan class=\"label\"\u003e[99]\u003c/span\u003e\u003c/a\u003e See the passage from Xenophon, quoted below.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_100_100\" id=\"Footnote_100_100\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_100_100\"\u003e\u003cspan class=\"label\"\u003e[100]\u003c/span\u003e\u003c/a\u003e Jacob, l. c., v. 2, ch. 25 and 26.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_101_101\" id=\"Footnote_101_101\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_101_101\"\u003e\u003cspan class=\"label\"\u003e[101]\u003c/span\u003e\u003c/a\u003e “In times of great agitation and insecurity, especially during\r\ninternal commotions or invasions, gold and silver articles\r\nare rapidly converted into money; whilst during periods of\r\ntranquility and prosperity, money is converted into plate and\r\njewelry.” (l. c., v. 2, p. 357.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_102_102\" id=\"Footnote_102_102\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_102_102\"\u003e\u003cspan class=\"label\"\u003e[102]\u003c/span\u003e\u003c/a\u003e In the following passage Xenophon develops money in its\r\nspecific forms of money and hoard: “ἐν μόνω τούτῳ ὦν ἐγω οἴδα ἔργων οὐδὲ φθονεῖ\r\nοὐδεις τοῖς ἐπισκευαζομένοις … ἀργυρῖτις δὲ ὅσω ἄν πλείων φαίνηται,\r\nκαὶ ἀργύριον πλεῖον γίγνηται, τοσούτῳ πλείονες ἐπί τὸ ἔργον τοῦτο\r\nἔρχονται … καὶ γὰρ δὴ ἔπιπλα μὲν ἐπειδὰν ἰκανά τις κτήσηται τῇ οἰκίᾳ,\r\nοὐ μάλα ἔἱτι προσωνοῦνται· ἀργύριον δὲ οὐδείς πω οὔτω πολὺ ἐκτήσατο\r\nὥστε μὴ ἔτι προσθεῖσθαι, ἀλλ ‘ἤν τισι γένηται παμπληθὲς, τὸ περιττεῦον\r\nκατορύττοντες οὐδὲν ἥττον ἥδονται ἥ χρώμενοι αὐτᾠ· καὶ μὲν ὅταν γε εὗ\r\nπράττωσιν αἰ πόλεις ἰσχυρῶς, οἰ ἄνθρωποι ἀργυρίου δέονται. Οἰ μὲν γὰρ\r\nἄνδρες ἀμφι ὅπλα τε καλὰ καὶ ἵππους ἀγαρθοὺς καὶ οἰκίας καὶ κατασκευὰς\r\nμεγαλοπρεπεῖς βοὐλονται δαπανᾶν, αἰδὲ γυναῖκες εἰς ἐσθῆτα πολυτελῆ καὶ\r\nχρυσοῦν κόσμον τρέπονται· ὅταν δε αὔ νοσήσωσι πόλεις ἠ ἀφορίαις καρπῶν ῆ\r\nπολέμω ἔτι καὶ πολὺ μἄλλον τῆς γῆς ἀρυοῦ γιγνομενης καὶ εἰς ἐπιτήδεια\r\nκαὶ εἰς ἐπικουροὺς νομίσματος δέονται.” (Xen. de Vectigalibus, c. IV.)\r\n(“Of all operations with which I am acquainted, this is the\r\nonly one in which no sort of jealousy is felt at a further development\r\nof the industry … the larger the quantity of ore\r\ndiscovered and the greater the amount of silver extracted, the\r\ngreater the number of persons ready to engage in the operation….\r\nNo one when he has got sufficient furniture for\r\nhis house dreams of making further purchases on this head,\r\nbut of silver no one ever yet possessed so much that he was\r\nforced to cry “Enough.” On the contrary, if ever anybody\r\ndoes become possessed of an immoderate amount he finds as\r\nmuch pleasure in digging a hole in the ground and hoarding it\r\nas an actual employment of it…. When a state is prosperous\r\nthere is nothing which people so much desire as silver.\r\nThe men want money to expend on beautiful armor and fine\r\nhorses, and houses and sumptuous paraphernalia of all sorts.\r\nThe women betake themselves to expensive apparel and ornaments\r\nof gold. Or when states are sick, either through barrenness\r\nof corn and other fruits, or through war, the demand for\r\ncurrent coin is even more imperative (whilst the ground lies\r\nunproductive), to pay for necessaries or military aid.” (Transl.\r\nby H. G. Dakyns, London, 1892, v. 2, Revenues, p. 335-336.)\r\nAristotle develops in Book I., ch. 9 of his Politics the two\r\nopposite movements of circulation. C-M-C and M-C-M, calling\r\nthem “economics” and “chrematistics” respectively. The two\r\nforms are represented by the Greek tragedian Euripides as\r\nSikn (right) and Keodos (profit).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_103_103\" id=\"Footnote_103_103\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_103_103\"\u003e\u003cspan class=\"label\"\u003e[103]\u003c/span\u003e\u003c/a\u003e Of course, capital also is advanced in the shape of money,\r\nand the money thus advanced may be advanced capital, but\r\nthis point of view does not fall within the horizon of simple\r\ncirculation.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_104_104\" id=\"Footnote_104_104\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_104_104\"\u003e\u003cspan class=\"label\"\u003e[104]\u003c/span\u003e\u003c/a\u003e “The difference between the means of purchase and the\r\nmeans of payment” is emphasized by Luther.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_105_105\" id=\"Footnote_105_105\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_105_105\"\u003e\u003cspan class=\"label\"\u003e[105]\u003c/span\u003e\u003c/a\u003e Mr. MacLeod, in spite of his doctrinaire conceit about definitions,\r\nfails so utterly to grasp the most elementary economic\r\nrelations that he tries to deduce the very origin of money\r\nfrom its crowning form, viz., that of a means of payment. He\r\nsays among other things that since people do not always need\r\neach other’s services at the same time, and not to the same\r\nextent, “there would remain over a certain difference or\r\namount of service due from the first to the second\u0026mdash;debt.”\r\nThe owner of this debt needs the services of a third person,\r\nwho does not directly need those of the second, and “transfers\r\nto the third the debt due to him from the first. Evidence of\r\ndebts changes so hands\u0026mdash;currency…. When a person\r\nreceived an obligation expressed by metallic currency, he is\r\nable to command the services not only of the original debtor,\r\nbut of the whole of the industrious community.” (MacLeod,\r\n“Theory and Practice of Banking,” etc., London, 1855, v. I.,\r\nch. I.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_106_106\" id=\"Footnote_106_106\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_106_106\"\u003e\u003cspan class=\"label\"\u003e[106]\u003c/span\u003e\u003c/a\u003e Bailey, l. c., p. 3. “Money is the general commodity of\r\ncontracts, or that in which the majority of bargains about\r\nproperty, to be completed at a future time, are made.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_107_107\" id=\"Footnote_107_107\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_107_107\"\u003e\u003cspan class=\"label\"\u003e[107]\u003c/span\u003e\u003c/a\u003e Says Senior (in his Lectures, published by Comte Arrivabene,\r\nl. c., p. 117): “Since the value of everything changes\r\nwithin a certain period of time, people select as a means of payment\r\nan article whose value changes least and which retains\r\nlongest a given average ability to buy things. Thus, money becomes\r\nthe expression or representative of values.” On the contrary:\r\njust because gold, silver, etc., have become money, i.\u0026nbsp;e.,\r\nthe embodiment of independently existing exchange value, they\r\nbecome the universal means of payment. When the consideration\r\nas to the stability of the value of money mentioned by Mr.\r\nSenior comes into play, i.\u0026nbsp;e., in periods when money asserts itself\r\nas the universal means of payment through the force of\r\ncircumstances, then is just the time when fluctuations in the\r\nvalue of money are discovered. Such was the time of Elizabeth\r\nin England, when Lord Burleigh and Sir Thomas Smith, in\r\nview of the manifest depreciation of the precious metals, put\r\nthrough an act of parliament which obliged the universities of\r\nOxford and Cambridge to stipulate the payment of one-third of\r\ntheir ground rents in wheat and malt.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_108_108\" id=\"Footnote_108_108\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_108_108\"\u003e\u003cspan class=\"label\"\u003e[108]\u003c/span\u003e\u003c/a\u003e Boisguillebert, who would stem the development of bourgeois\r\nrelations of production and violently attacks the bourgeois\r\npersonally, has a soft heart for those forms of money in\r\nwhich it appears only ideally or transiently. Thus he speaks\r\nfirst of the medium of circulation and next of the means of\r\npayment. What he does not see is the direct transition of\r\nmoney from its ideal to the material form, since the hard\r\ncash is latently present in the ideal measure of value. That\r\nmoney is but another form of commodities, he says, is shown\r\nby wholesale trade, in which exchange takes place without\r\nthe intervention of money, after “les marchandises sont appreciés.”\r\n(“Le Detail de la France,” l. c. p. 210.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_109_109\" id=\"Footnote_109_109\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_109_109\"\u003e\u003cspan class=\"label\"\u003e[109]\u003c/span\u003e\u003c/a\u003e Locke, l. c., p. 17, 18.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_110_110\" id=\"Footnote_110_110\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_110_110\"\u003e\u003cspan class=\"label\"\u003e[110]\u003c/span\u003e\u003c/a\u003e “Il danaro ammassato supplisce a quella somma, che per\r\nessere attualmente in circolazione, per l’eventuale promiscuità\r\nde ‘commerci si allontana \u003ci\u003ee sorte della sfera della circolazione\r\nmedesima\u003c/i\u003e.” (“The accumulated money supplements that\r\namount which, in order to be actually in circulation and to\r\nmeet all possible perturbations of trade, retires from that\r\nsphere of circulation.” (G. R. Carli, note to Berri’s “Meditazioni\r\nsulla Economia Politica,” p. 196, t. XV. of Custodi’s\r\nl. c.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_111_111\" id=\"Footnote_111_111\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_111_111\"\u003e\u003cspan class=\"label\"\u003e[111]\u003c/span\u003e\u003c/a\u003e Montanari, “Della Moneta,” 1683, l. c., p. 40. “È cosi\r\nfattamente diffusa per tutto il globo terrestre la communicazione\r\nde ‘populi insieme, che puo quasi dirsi esser il mondo\r\ntutto divinuto una sola citta in cui si fa perpetua fiera d’ogni\r\nmercanzia, e dove ogni uomo di tutto cio che la terra, gli\r\nanimali e l’umana industria altrove producono, puo mediante\r\nil danaro stando in sua casa provedersi e godere. Maravigliosa\r\ninvenzione.” (“The communication of nations among\r\nthemselves is so widely extended all over the globe that it\r\nmay be almost said that the entire world has become one city\r\nin which a perpetual fair of merchandise is held and where\r\nevery man may by means of money acquire and enjoy, while\r\nstaying at home, all that the earth, the animals and human\r\nindustry produce elsewhere. Marvelous invention.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_112_112\" id=\"Footnote_112_112\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_112_112\"\u003e\u003cspan class=\"label\"\u003e[112]\u003c/span\u003e\u003c/a\u003e I metalli han questo di proprio e singulare che in essi soli\r\ntutte le ragioni si riducono ad una che è la loro quantità, non\r\navendo ricevuto delle natura diversa qualità nè nell’interna\r\nloro constituzione nè nell’externa forma e fattura.” (Galiani,\r\nl. c., p. 130.) (“Metals have this singular property, that\r\neverything in them is reduced to one consideration, viz., that\r\nof quantity, since they are not endowed by nature with any\r\ndifferences in quality either in their internal structure or in\r\ntheir external form and shape.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_113_113\" id=\"Footnote_113_113\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_113_113\"\u003e\u003cspan class=\"label\"\u003e[113]\u003c/span\u003e\u003c/a\u003e De Orbe Novo. “O, happy coin, which furnishes mankind\r\nwith a pleasant and useful beverage and keeps its possessors\r\nimmune from the hell-born pest of avarice, since it can not be\r\neither buried or preserved long.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_114_114\" id=\"Footnote_114_114\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_114_114\"\u003e\u003cspan class=\"label\"\u003e[114]\u003c/span\u003e\u003c/a\u003e In 760 a multitude of poor people emigrated to the south\r\nof Prague to wash the gold sand found there, and three men\r\nwere able to extract three marks of gold a day. As a result\r\nof that the run on the “diggings” and the number of hands\r\ntaken away from agriculture became so great that the country\r\nwas visited by a famine the following year. See M. G. Körner,\r\n“Abhandlung von dem Alterthum des Böhmischen Bergwerks,”\r\nSchneeberg, 1758.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_115_115\" id=\"Footnote_115_115\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_115_115\"\u003e\u003cspan class=\"label\"\u003e[115]\u003c/span\u003e\u003c/a\u003e So far the Australian and other discoveries have not affected\r\nthe ratio of the values of gold and silver. The assertions\r\nto the contrary of Michel Chevalier are worth as much as the\r\nSocialism of this ex-St. Simonist. The quotations of silver on\r\nthe London market prove, however, that the average gold\r\nprice of silver during 1850-1858 is not quite 3 per cent. higher\r\nthan the price during 1830-1850. But this rise in price is\r\naccounted for simply by the Asiatic demand for silver. In the\r\ncourse of the years 1852-1858 the price of silver was changing\r\nin certain years and months only with a change in this\r\ndemand, and in no case with the importation of gold from the\r\nnewly discovered sources. The following is a summary of the\r\ngold prices of silver on the London market.\r\n\u003c/p\u003e\r\n\u003cp class=\"center\"\u003e\r\nPRICE OF SILVER PER OUNCE.\r\n\u003c/p\u003e\r\n\r\n\u003ctable summary=\"PRICE OF SILVER PER OUNCE.\"\u003e\u003ctr\u003e\r\n\r\n\u003ctd class=\"tdc\"\u003e\u003ci\u003eYear\u0026mdash;\u003c/i\u003e\u003c/td\u003e\u003ctd class=\"tdc padl2\"\u003e\u003ci\u003eMarch.\u003c/i\u003e\u003c/td\u003e\u003ctd class=\"tdc padl2\"\u003e\u003ci\u003eJuly.\u003c/i\u003e\u003c/td\u003e\u003ctd class=\"tdc padl2\"\u003e\u003ci\u003eNovember.\u003c/i\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\r\n\u003ctd class=\"tdl\"\u003e1852\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e60-1/8\u0026nbsp;pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e60-1/4\u0026nbsp;pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-7/8\u0026nbsp;pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1853\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-3/8 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-1/2 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-7/8 pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1854\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-7/8 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-3/4 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-1/2 pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1855\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e60-7/8 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-1/2 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e60-7/8 pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1856\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e60\u003cspan class=\"h\"\u003e-7/8 \u003c/span\u003epence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-1/4 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e62-1/8 pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1857\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-3/4 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-5/8 pence\u003c/td\u003e\u003ctd class=\"tdl padl2\"\u003e61-1/2 pence\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\r\n\u003ctd class=\"tdl\"\u003e1858\u003c/td\u003e\u003ctd class=\"tdl padl2\" colspan=\"3\"\u003e61-5/8 pence\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\u003c/table\u003e\r\n\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_116_116\" id=\"Footnote_116_116\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_116_116\"\u003e\u003cspan class=\"label\"\u003e[116]\u003c/span\u003e\u003c/a\u003e “Gold is a wonderful thing! Whoever possesses it, is master\r\nof all that he desires. By means of gold even admission to\r\nHeaven may be gained for souls.” (Columbus in a letter from\r\nJamaica in 1503).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_117_117\" id=\"Footnote_117_117\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_117_117\"\u003e\u003cspan class=\"label\"\u003e[117]\u003c/span\u003e\u003c/a\u003e The slowness of the process was admitted by Hume, although\r\nit but little agrees with his principle. See David Hume\r\n“Essays and Treatises on several subjects.” London, 1777, v.\r\nI, p. 300.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_118_118\" id=\"Footnote_118_118\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_118_118\"\u003e\u003cspan class=\"label\"\u003e[118]\u003c/span\u003e\u003c/a\u003e Conf. Steuart, l. c. v. I, p. 394-400.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_119_119\" id=\"Footnote_119_119\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_119_119\"\u003e\u003cspan class=\"label\"\u003e[119]\u003c/span\u003e\u003c/a\u003e David Hume, l. c. p. 300.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_120_120\" id=\"Footnote_120_120\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_120_120\"\u003e\u003cspan class=\"label\"\u003e[120]\u003c/span\u003e\u003c/a\u003e David Hume, l. c. p. 303.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_121_121\" id=\"Footnote_121_121\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_121_121\"\u003e\u003cspan class=\"label\"\u003e[121]\u003c/span\u003e\u003c/a\u003e David Hume, l. c. p. 303.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_122_122\" id=\"Footnote_122_122\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_122_122\"\u003e\u003cspan class=\"label\"\u003e[122]\u003c/span\u003e\u003c/a\u003e David Hume, l. c. p. 307, 308, 303: “It is evident, that the\r\nprices do not so much depend on the absolute quantity of commodities,\r\nand that of money, which are in a nation, as on that\r\nof the commodities, which can or may come to market, and of\r\nthe money which circulates. If the coin be locked up in chests,\r\nit is the same thing with regard to prices, as if it were annihilated;\r\nif the commodities be hoarded in magazines and\r\ngranaries, a like effect follows. As the money and commodities\r\nin these cases, never meet, they cannot affect each other. The\r\nwhole (of prices) at last reaches \u003ci\u003ea just proportion with the\r\nnew quantity of specie which is in the kingdom\u003c/i\u003e.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_123_123\" id=\"Footnote_123_123\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_123_123\"\u003e\u003cspan class=\"label\"\u003e[123]\u003c/span\u003e\u003c/a\u003e See \u003ci\u003eLaw\u003c/i\u003e and \u003ci\u003eFranklin\u003c/i\u003e about surplus value which gold and\r\nsilver are supposed to acquire from their function of money.\r\nAlso \u003ci\u003eForbonnais\u003c/i\u003e.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_124_124\" id=\"Footnote_124_124\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_124_124\"\u003e\u003cspan class=\"label\"\u003e[124]\u003c/span\u003e\u003c/a\u003e This fiction is literally advanced by Montesquieu. [The passage\r\nfrom Montesquieu is quoted by Marx in his Capital, v. I.\r\nPart 1, Ch. III, section 2, b, foot-note. Note by K. Kautsky to\r\n2nd German edition].\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_125_125\" id=\"Footnote_125_125\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_125_125\"\u003e\u003cspan class=\"label\"\u003e[125]\u003c/span\u003e\u003c/a\u003e Steuart, l. c. v. I., p. 394 seq.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_126_126\" id=\"Footnote_126_126\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_126_126\"\u003e\u003cspan class=\"label\"\u003e[126]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., v. 2. p. 377-379 passim (not found in the\r\n1767 London edition. Translator).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_127_127\" id=\"Footnote_127_127\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_127_127\"\u003e\u003cspan class=\"label\"\u003e[127]\u003c/span\u003e\u003c/a\u003e Steuart, l. c., p. 379-380 passim (London, 1767 edition, v.\r\nl. p. 400. Transl.).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_128_128\" id=\"Footnote_128_128\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_128_128\"\u003e\u003cspan class=\"label\"\u003e[128]\u003c/span\u003e\u003c/a\u003e “The additional coin will be locked up, or converted into\r\nplate…. As for the paper money, so soon as it has served\r\nthe first purpose of supplying the demand of him who borrowed\r\nit, it will return upon the debtor in it and become realized….\r\nLet the specie of a country, therefore, be augmented or\r\ndiminished in ever so great a proportion, commodities will still\r\nrise and fall according to the principles of demand and competition,\r\nand these will constantly depend upon the inclinations\r\nof those who have property or any kind of equivalent whatsoever\r\nto give, but never upon the quantity of coin they are possessed\r\nof…. Let it (namely, the quantity of specie in a\r\ncountry) be ever so low, while there is real property of any\r\ndenomination in the country, a competition to consume in those\r\nwho possess it, prices will be high, by the means of barter,\r\nsymbolical money, mutual prestations and a thousand other inventions….\r\nIf this country has a communication with\r\nother nations, there must be a proportion between the prices\r\nof many kinds of merchandize there and elsewhere, and a sudden\r\naugmentation or diminution of the specie, supposing it\r\ncould of itself operate the effects of raising or sinking prices,\r\nwould be restrained in its operation by foreign competition.”\r\nl. c. v. 1, p. 400-402. “The circulation of every country must\r\nbe in proportion to the industry of the inhabitants producing\r\nthe commodities which come to market…. If the coin of a\r\ncountry, therefore, falls below the proportion of the price of industry\r\noffered to sale, inventions, like symbolical money, will be\r\nfallen upon, to provide for an equivalent for it. But if the\r\nspecie be found above the proportion of industry, it will have\r\nno effect in raising prices, nor will it enter into circulation: it\r\nwill be hoarded up in treasures…. Whatsoever be the\r\nquantity of money in a nation, in correspondence with the rest\r\nof the world, there never can remain in circulation, but the\r\nquantity nearly proportional to the consumption of the rich\r\nand to the labour and industry of the poor inhabitants,” and\r\nthis proportion is not determined “by the quantity of money\r\nactually in the country” (l. c. p. 403-408 passim.) “All nations\r\nwill endeavor to throw their ready money, not necessary\r\nfor their own circulation, into that country where the interest\r\nof money is high with respect to their own.” (l. c. v. 2. p. 5).\r\n“The richest nation in Europe may be the poorest in circulating\r\nspecie.” l. c., v. 2, p. 6. For the polemics against Steuart see\r\nArthur Young. [In his foot-note in Capital, v. 1, Part 1, ch.\r\nIII., section 2, b. p. 62, Humboldt ed., Marx says: The theory\r\nof Hume was defended against the attacks of J. Steuart and\r\nothers, by A. Young, in his “Political Arithmetic,” London,\r\n1774, in which work there is a special chapter entitled “Prices\r\ndepend on quantity of money.” Note by K. Kautsky to 2nd\r\nGerman edition].\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_129_129\" id=\"Footnote_129_129\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_129_129\"\u003e\u003cspan class=\"label\"\u003e[129]\u003c/span\u003e\u003c/a\u003e Steuart, l. e., v. 2, p. 370. Louis Blanc translates the expression\r\n“money of the society” which stands for home or national\r\nmoney, as socialist money, which is perfectly meaningless\r\nand makes a Socialist of John Law. (See the first volume\r\nof his History of the French Revolution).\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_130_130\" id=\"Footnote_130_130\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_130_130\"\u003e\u003cspan class=\"label\"\u003e[130]\u003c/span\u003e\u003c/a\u003e Maclaren, l. c. p. 43 seq. Patriotism led Gustav Julius, a\r\nGerman writer who met with very early death, to hold up old\r\nBüsch as an authority as against the Ricardian school. Honest\r\nBüsch rendered Steuart’s elegant English into Hamburg Platt\r\nand by trying to improve upon the original spoiled it as often\r\nas he could.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_131_131\" id=\"Footnote_131_131\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_131_131\"\u003e\u003cspan class=\"label\"\u003e[131]\u003c/span\u003e\u003c/a\u003e Note to the 2nd edition: This is not an exact statement.\r\nAdam Smith expresses the law correctly on many occasions.\r\n[See Capital, Humboldt edition, p. 62, ft-note 1, where writing\r\nseven years later, Marx makes the following qualification:\r\n“This statement applies only in so far as Adam Smith, \u003ci\u003eex officio\u003c/i\u003e,\r\ntreats of money. Now and then, however, as in his criticism of\r\nthe earlier systems of political economy, he takes the right\r\nview. ‘The quantity of coin in every country is regulated by\r\nthe value of the commodities which are to be circulated by it….\r\nThe value of the goods annually bought and sold in any\r\ncountry requires a certain quantity of money to circulate and\r\ndistribute them to their proper consumers, and can give employment\r\nto no more. The channel of circulation necessarily\r\ndraws to itself a sum sufficient to fill it, and never admits\r\nany more.’ Wealth of Nations, Book iv., ch. I.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_132_132\" id=\"Footnote_132_132\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_132_132\"\u003e\u003cspan class=\"label\"\u003e[132]\u003c/span\u003e\u003c/a\u003e The distinction between currency and money is therefore\r\nnot found in “Wealth of Nations.” Deceived by the apparent\r\nimpartiality of Adam Smith, who knew his Hume and Steuart\r\nvery well, honest Maclaren remarks: “The theory of the dependence\r\nof prices on the extent of the currency had not as yet,\r\nattracted attention; and Doctor Smith, like Mr. Locke (Locke\r\nundergoes a change in his view), considers metallic money\r\nnothing but a commodity.” Maclaren, l. c. p. 44.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_133_133\" id=\"Footnote_133_133\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_133_133\"\u003e\u003cspan class=\"label\"\u003e[133]\u003c/span\u003e\u003c/a\u003e David Ricardo, “The High Price of Bullion, a Proof of the\r\nDepreciation of Bank-notes.” 4th edition, London, 1811. (The\r\nfirst edition appeared in 1809). Further, “Reply to Mr. Bosanquet’s\r\nPractical Observations on the Report of the Bullion Committee.”\r\nLondon, 1811.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_134_134\" id=\"Footnote_134_134\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_134_134\"\u003e\u003cspan class=\"label\"\u003e[134]\u003c/span\u003e\u003c/a\u003e David Ricardo: “On the Principles of Political Economy,\r\netc.” p. 77. “Their value [of metals] [like that of all other\r\ncommodities], depends on the total quantity of labour necessary\r\nto obtain the metal, and to bring it to market.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_135_135\" id=\"Footnote_135_135\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_135_135\"\u003e\u003cspan class=\"label\"\u003e[135]\u003c/span\u003e\u003c/a\u003e l. c. p. 77, 180, 181.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_136_136\" id=\"Footnote_136_136\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_136_136\"\u003e\u003cspan class=\"label\"\u003e[136]\u003c/span\u003e\u003c/a\u003e Ricardo, l. c. p. 421. “The quantity of money that can be\r\nemployed in a country must depend on its value: if gold alone\r\nwere employed for the circulation of commodities, a quantity\r\nwould be required, one fifteenth only of what would be necessary,\r\nif silver were made use of for the same purpose.” See\r\nalso Ricardo’s: “Proposals for an Economical and Secure Currency,”\r\nLondon, 1816, p. 89, where he says: “The amount of\r\nnotes in circulation depends on the amount required for the\r\ncirculation of the country; which is regulated … by\r\nthe value of the standard [of money], the amount of payments,\r\nand the economy practised in effecting them.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_137_137\" id=\"Footnote_137_137\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_137_137\"\u003e\u003cspan class=\"label\"\u003e[137]\u003c/span\u003e\u003c/a\u003e Ricardo, “Principles of Political Economy”, p. 432.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_138_138\" id=\"Footnote_138_138\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_138_138\"\u003e\u003cspan class=\"label\"\u003e[138]\u003c/span\u003e\u003c/a\u003e David Ricardo, “Reply to Mr. Bosanquet’s Practical Observations,\r\netc.” p. 49. “That commodities would rise or fall in\r\nprice, in proportion to the increase or diminution of money, \u003ci\u003eI\r\nassume as a fact which is incontrovertible\u003c/i\u003e.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_139_139\" id=\"Footnote_139_139\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_139_139\"\u003e\u003cspan class=\"label\"\u003e[139]\u003c/span\u003e\u003c/a\u003e David Ricardo, “The High Price of Bullion,” etc. “Money\r\nwould have the same value in all countries.” p. 4. In his\r\nPolitical Economy Ricardo modified this statement, but not in\r\na way to affect what has been said here.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_140_140\" id=\"Footnote_140_140\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_140_140\"\u003e\u003cspan class=\"label\"\u003e[140]\u003c/span\u003e\u003c/a\u003e l. c. p. 3-4.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_141_141\" id=\"Footnote_141_141\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_141_141\"\u003e\u003cspan class=\"label\"\u003e[141]\u003c/span\u003e\u003c/a\u003e l. c., p. 4.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_142_142\" id=\"Footnote_142_142\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_142_142\"\u003e\u003cspan class=\"label\"\u003e[142]\u003c/span\u003e\u003c/a\u003e Ricardo, l. c., p. 11-12.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_143_143\" id=\"Footnote_143_143\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_143_143\"\u003e\u003cspan class=\"label\"\u003e[143]\u003c/span\u003e\u003c/a\u003e Ricardo, l. c., p. 14.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_144_144\" id=\"Footnote_144_144\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_144_144\"\u003e\u003cspan class=\"label\"\u003e[144]\u003c/span\u003e\u003c/a\u003e l. c., p. 17.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_145_145\" id=\"Footnote_145_145\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_145_145\"\u003e\u003cspan class=\"label\"\u003e[145]\u003c/span\u003e\u003c/a\u003e Ricardo, l. c., p. 74-75. “England, in consequence of a bad\r\nharvest, would come under the case of a country having been\r\ndeprived of a part of its commodities, and, therefore, requiring\r\na diminished amount of circulating medium. The currency\r\nwhich was before equal to her payments would now become\r\nsuper-abundant and relatively cheap, in proportion … of\r\nher diminished production; the exportation of this sum, therefore,\r\nwould restore the value of her currency to the value of the\r\ncurrencies of other countries.” His confusion of money and\r\ncommodity, and of money and coin borders on the ludicrous in\r\nthe following passage: “If we can suppose that after an unfavorable\r\nharvest, when England has occasion for an unusual\r\nimportation of corn, another nation is possessed of a super-abundance\r\nof that article, but has no wants for any commodity\r\nwhatever, it would unquestionably follow that such nation\r\nwould not export its corn in exchange for commodities: \u003ci\u003ebut\r\nneither would it export corn for money\u003c/i\u003e, as that is a commodity\r\nwhich no nation ever wants absolutely, but relatively.” l. c.,\r\np. 75. Pushkin in his hero poem makes the father of his hero\r\nincapable of comprehending that commodities are money. But\r\nthat money is a commodity, the Russians have understood from\r\ntimes of yore as is proven not only by the English corn imports\r\nin 1838-1842, but by the entire history of their commerce.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_146_146\" id=\"Footnote_146_146\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_146_146\"\u003e\u003cspan class=\"label\"\u003e[146]\u003c/span\u003e\u003c/a\u003e Conf. Thomas Tooke, “History of Prices,” and James Wilson,\r\n“Capital, Currency and Banking.” (The latter work is a\r\nreprint of a series of articles which appeared in the London\r\nEconomist in 1844, 1845 and 1847.)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_147_147\" id=\"Footnote_147_147\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_147_147\"\u003e\u003cspan class=\"label\"\u003e[147]\u003c/span\u003e\u003c/a\u003e James Deacon Hume: “Letters on the Corn Laws.” London,\r\n1834, p. 29-31. [Letter by H. B. T. on the Corn Laws and\r\non the Rights of the Working Classes. Transl.]\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_148_148\" id=\"Footnote_148_148\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_148_148\"\u003e\u003cspan class=\"label\"\u003e[148]\u003c/span\u003e\u003c/a\u003e Thomas Tooke, “History of Prices,” etc. London, 1848,\r\np. 110.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_149_149\" id=\"Footnote_149_149\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_149_149\"\u003e\u003cspan class=\"label\"\u003e[149]\u003c/span\u003e\u003c/a\u003e Conf. W. Blake’s above quoted “Observations etc.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_150_150\" id=\"Footnote_150_150\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_150_150\"\u003e\u003cspan class=\"label\"\u003e[150]\u003c/span\u003e\u003c/a\u003e James Mill: “Elements of Political Economy.” [London,\r\n1821, p. 95-101 passim. Transl.]\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_151_151\" id=\"Footnote_151_151\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_151_151\"\u003e\u003cspan class=\"label\"\u003e[151]\u003c/span\u003e\u003c/a\u003e A few months before the outbreak of the commercial crisis\r\nof 1857, a committee of the House of Commons was in session\r\nto inquire into the effect of the bank-laws of 1844 and 1845.\r\nLord Overstone, the theoretical father of these laws, delivered\r\nhimself of this boast in his testimony before the committee:\r\n“By strict and prompt adherence to the principles of the act of\r\n1844, everything has passed off with regularity and ease; the\r\nmonetary system is safe and unshaken, the prosperity of the\r\ncountry is undisputed, the public confidence in the wisdom of\r\nthe act of 1844 is daily gaining strength; and if the committee\r\nwish for further practical illustration of the soundness of the\r\nprinciples on which it rests, or of the beneficial results which it\r\nhas assured, the true and sufficient answer to the committee is,\r\nlook around you; look at the present state of trade of the country,\r\nlook at the contentment of the people; look at the wealth\r\nand prosperity which pervades every class of the community;\r\nand then, having done so, the committee may be fairly called\r\nupon to decide whether they will interfere with the continuance\r\nof an act under which these results have been developed.”\r\nThus did Overstone blow his own horn on the fourteenth of\r\nJuly, 1857; on the twelfth of November of the same year the\r\nMinistry had to suspend on its own responsibility the wonderful\r\nlaw of 1844.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_152_152\" id=\"Footnote_152_152\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_152_152\"\u003e\u003cspan class=\"label\"\u003e[152]\u003c/span\u003e\u003c/a\u003e Tooke was entirely ignorant of Steuart’s work, as may be\r\nseen from his “History of Prices for 1839-1847,” London, 1848.\r\nwhere he reviews the history of the theories of money.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_153_153\" id=\"Footnote_153_153\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_153_153\"\u003e\u003cspan class=\"label\"\u003e[153]\u003c/span\u003e\u003c/a\u003e Tooke’s most important work besides the “History of Prices”\r\nwhich his co-worker Newmarch published in six volumes, is\r\n“An Inquiry into the Currency Principle, the Connection of the\r\nCurrency with Prices” etc., 2nd edition, London, 1844. Wilson’s\r\nbook we have already quoted. Finally there is to be mentioned\r\nJohn Fullarton’s “On the Regulation of Currencies,” 2d\r\nedition, London, 1845.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_154_154\" id=\"Footnote_154_154\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_154_154\"\u003e\u003cspan class=\"label\"\u003e[154]\u003c/span\u003e\u003c/a\u003e “We ought to … distinguish … between gold\r\n… as merchandise, \u003ci\u003ei.\u0026nbsp;e.\u003c/i\u003e as capital, and gold … as currency”\r\n(Tooke, “An Inquiry into the Currency Principle, etc.”\r\np. 10). “Gold and silver may be counted upon to realize on\r\ntheir arrival nearly the exact sum required to be provided …\r\ngold and silver possess an infinite advantage over all other description\r\nof merchandize … from the circumstance of\r\nbeing universally in use as money…. It is not in tea, coffee,\r\nsugar or indigo that debts, whether foreign or domestic, are\r\nusually contracted to be paid, but in coin; and the remittance,\r\ntherefore, either in the identical coin designated, or in bullion\r\nwhich can be promptly turned into that coin through the mint\r\nor market of the country to which it is sent, must always afford\r\nto the remitter, the most certain, immediate, and accurate\r\nmeans of affecting this object, without risk of disappointment\r\nfrom the failure of demand or fluctuation of price.” (Fullerton,\r\nl. c. p. 132-133.) “Any other article (except gold or silver)\r\nmight in quantity or kind be beyond the usual demand of\r\nthe country to which it is sent.” (Tooke: “An Inquiry, etc.”)\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_155_155\" id=\"Footnote_155_155\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_155_155\"\u003e\u003cspan class=\"label\"\u003e[155]\u003c/span\u003e\u003c/a\u003e The transformation of money into capital we shall consider\r\nin the third chapter which treats of capital and forms the end\r\nof the first book.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_156_156\" id=\"Footnote_156_156\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_156_156\"\u003e\u003cspan class=\"label\"\u003e[156]\u003c/span\u003e\u003c/a\u003e This introduction was first published in the Neue Zeit (see\r\nTranslator’s Preface, p. 5) of March 7, 14 and 21, 1903, by\r\nKarl Kautsky, with the following explanation:\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“This article has been found among the posthumous papers\r\nof Karl Marx. It is a fragmentary sketch of a treatise that\r\nwas to have served as an introduction to his main work, which\r\nhe had been writing for many years and whose outline was\r\nclearly formed in his mind. The manuscript is dated August\r\n23, 1857…. As the idea is very often indicated only in\r\nfragmentary sentences, I have taken the liberty of introducing\r\nhere and there changes in style, insertions of words, etc….\r\nA mere reprint of the original would have made it unintelligible….\r\nNot all the words in the manuscript are\r\nlegible….\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“Wherever there could be no doubt as to the necessity of\r\ncorrections, I did so without indicating them in the text; in\r\nother cases I put all insertions in brackets. Wherever I am\r\nnot certain as to whether I have deciphered a word correctly, I\r\nhave put an interrogation point after it; other changes are\r\nspecially noted. In all other respects this is an exact reprint\r\nof the original, whose fragmentary and incomplete passages\r\nserve to remind us only too painfully of the many treasures of\r\nthought which went down to the grave with Marx, treasures\r\nwhich would have sufficed for generations if Marx had not so\r\nanxiously avoided giving to the world any of his ideas until he\r\nhad tested them repeatedly from every conceivable point of\r\nview and had given them a wording that would be incontrovertible.\r\nIn spite of its fragmentary character it opens before\r\nus a wealth of new points of view.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_157_157\" id=\"Footnote_157_157\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_157_157\"\u003e\u003cspan class=\"label\"\u003e[157]\u003c/span\u003e\u003c/a\u003e The original reads “person.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_158_158\" id=\"Footnote_158_158\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_158_158\"\u003e\u003cspan class=\"label\"\u003e[158]\u003c/span\u003e\u003c/a\u003e The manuscript reads “production.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_159_159\" id=\"Footnote_159_159\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_159_159\"\u003e\u003cspan class=\"label\"\u003e[159]\u003c/span\u003e\u003c/a\u003e The manuscript reads “production.”\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_160_160\" id=\"Footnote_160_160\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_160_160\"\u003e\u003cspan class=\"label\"\u003e[160]\u003c/span\u003e\u003c/a\u003e The German text reads “instruktiv,” which I take to be a\r\nmisprint of “instinktiv.” Translator.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_161_161\" id=\"Footnote_161_161\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_161_161\"\u003e\u003cspan class=\"label\"\u003e[161]\u003c/span\u003e\u003c/a\u003e Compare this with foot-note 1, on p. 34 of Capital, Humboldt\r\nedition, New York:\r\n\u003c/p\u003e\r\n\u003cp\u003e\r\n“Truly comical is M. Bastiat, who imagines that the ancient\r\nGreeks and Romans lived by plunder alone. But when people\r\nplunder for centuries, there must always be something at hand\r\nfor them to seize; the objects of plunder must be continually\r\nreproduced.” K. Kautsky.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_162_162\" id=\"Footnote_162_162\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_162_162\"\u003e\u003cspan class=\"label\"\u003e[162]\u003c/span\u003e\u003c/a\u003e The English expression is used by Marx in his German\r\noriginal. Transl.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_163_163\" id=\"Footnote_163_163\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_163_163\"\u003e\u003cspan class=\"label\"\u003e[163]\u003c/span\u003e\u003c/a\u003e Marx evidently has in mind here a passage in Adam Smith’s\r\nWealth of Nations (vol. 2, ch. 2) in which he speaks of the circulation\r\nof a country as consisting of two distinct parts: circulation\r\nbetween dealers and dealers, and that between dealers\r\nand consumers. The word dealer signifies here not only a merchant\r\nor shopkeeper, but also a producer. K. Kautsky.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_164_164\" id=\"Footnote_164_164\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_164_164\"\u003e\u003cspan class=\"label\"\u003e[164]\u003c/span\u003e\u003c/a\u003e Here two words in the manuscript can not be deciphered.\r\nThey look like “ausser sich” (“outside of itself”). K. Kautsky.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_165_165\" id=\"Footnote_165_165\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_165_165\"\u003e\u003cspan class=\"label\"\u003e[165]\u003c/span\u003e\u003c/a\u003e Distribution (Verkehr) is used here in the sense of physical\r\ndistribution of goods and not in sense of economic distribution\r\nof the shares of the products between the different\r\nfactors of production. Translator.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_166_166\" id=\"Footnote_166_166\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_166_166\"\u003e\u003cspan class=\"label\"\u003e[166]\u003c/span\u003e\u003c/a\u003e As the “notes” written down by Marx in the following eight\r\nparagraphs are extremely fragmentary, making translation in\r\nsome cases impossible without a certain degree of interpretation,\r\nand as the original is not accessible in book-form, they are\r\nreproduced here in German for the benefit of the student who\r\nmay feel interested in the original wording as it had been jotted\r\ndown by Marx.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_167_167\" id=\"Footnote_167_167\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_167_167\"\u003e\u003cspan class=\"label\"\u003e[167]\u003c/span\u003e\u003c/a\u003e Im Original ist zu lesen\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;Va\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_168_168\" id=\"Footnote_168_168\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_168_168\"\u003e\u003cspan class=\"label\"\u003e[168]\u003c/span\u003e\u003c/a\u003e Im Original ist zu lesen\u0026nbsp;\u0026nbsp;\u0026nbsp;\u0026nbsp;egtl.\u003c/p\u003e\u003c/div\u003e\r\n\r\n\u003cdiv class=\"footnote\"\u003e\r\n\r\n\u003cp\u003e\u003ca name=\"Footnote_169_169\" id=\"Footnote_169_169\"\u003e\u003c/a\u003e\u003ca href=\"#FNanchor_169_169\"\u003e\u003cspan class=\"label\"\u003e[169]\u003c/span\u003e\u003c/a\u003e The site of the “Times” building in London. K. K.\u003c/p\u003e\u003c/div\u003e\r\n\u003chr /\u003e\r\n\u003cp\u003e\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_313\" id=\"Page_313\"\u003ePg 313\u003c/a\u003e\u003c/span\u003e\u003c/p\u003e\r\n\u003ch2\u003eAUTHORS QUOTED IN ZUR KRITIK\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nArbuthnot, \u003ca href=\"#Page_258\"\u003e258\u003c/a\u003e.\u003cbr /\u003e\r\nAristotle, \u003ca href=\"#Page_18\"\u003e19\u003c/a\u003e, \u003ca href=\"#Page_41\"\u003e41\u003c/a\u003e, \u003ca href=\"#Page_53\"\u003e53\u003c/a\u003e, \u003ca href=\"#Page_78\"\u003e78\u003c/a\u003e-79, \u003ca href=\"#Page_153\"\u003e153\u003c/a\u003e, \u003ca href=\"#Page_154\"\u003e154\u003c/a\u003e, \u003ca href=\"#Page_184\"\u003e184\u003c/a\u003e.\u003cbr /\u003e\r\nAthenaeus, \u003ca href=\"#Page_87\"\u003e87\u003c/a\u003e.\u003cbr /\u003e\r\nAttwood, \u003ca href=\"#Page_100\"\u003e100\u003c/a\u003e.\u003cbr /\u003e\r\nBailey, \u003ca href=\"#Page_84\"\u003e84\u003c/a\u003e.\u003cbr /\u003e\r\nBarbon, \u003ca href=\"#Page_95\"\u003e95\u003c/a\u003e.\u003cbr /\u003e\r\nBastiat, \u003ca href=\"#Page_34\"\u003e34\u003c/a\u003e.\u003cbr /\u003e\r\nBerkeley, Bischop, \u003ca href=\"#Page_32\"\u003e32\u003c/a\u003e, \u003ca href=\"#Page_95\"\u003e95\u003c/a\u003e-96, \u003ca href=\"#Page_155\"\u003e155\u003c/a\u003e.\u003cbr /\u003e\r\nBernier, \u003ca href=\"#Page_173\"\u003e173\u003c/a\u003e.\u003cbr /\u003e\r\nBlake, \u003ca href=\"#Page_133\"\u003e133\u003c/a\u003e, \u003ca href=\"#Page_250\"\u003e250\u003c/a\u003e.\u003cbr /\u003e\r\nBlanc, Louis, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\nBoisguillebert, \u003ca href=\"#Page_56\"\u003e56\u003c/a\u003e, \u003ca href=\"#Page_59\"\u003e59\u003c/a\u003e, \u003ca href=\"#Page_121\"\u003e121\u003c/a\u003e, \u003ca href=\"#Page_133\"\u003e133\u003c/a\u003e, \u003ca href=\"#Page_166\"\u003e166\u003c/a\u003e, \u003ca href=\"#Page_168\"\u003e168\u003c/a\u003e, \u003ca href=\"#Page_198\"\u003e198\u003c/a\u003e.\u003cbr /\u003e\r\nBosanquet, \u003ca href=\"#Page_124\"\u003e124\u003c/a\u003e, \u003ca href=\"#Page_235\"\u003e235\u003c/a\u003e, \u003ca href=\"#Page_242\"\u003e242\u003c/a\u003e.\u003cbr /\u003e\r\nBray, \u003ca href=\"#Page_106\"\u003e106\u003c/a\u003e.\u003cbr /\u003e\r\nBrougham, \u003ca href=\"#Page_70\"\u003e70\u003c/a\u003e.\u003cbr /\u003e\r\nBuchanan, \u003ca href=\"#Page_147\"\u003e147\u003c/a\u003e.\u003cbr /\u003e\r\nBüsch, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\nCarli, \u003ca href=\"#Page_205\"\u003e205\u003c/a\u003e.\u003cbr /\u003e\r\nCastlereagh, Lord, \u003ca href=\"#Page_100\"\u003e100\u003c/a\u003e.\u003cbr /\u003e\r\nCato, \u003ca href=\"#Page_170\"\u003e170\u003c/a\u003e.\u003cbr /\u003e\r\nChevalier, \u003ca href=\"#Page_154\"\u003e154\u003c/a\u003e, \u003ca href=\"#Page_215\"\u003e215\u003c/a\u003e.\u003cbr /\u003e\r\nClay, \u003ca href=\"#Page_258\"\u003e258\u003c/a\u003e.\u003cbr /\u003e\r\nCobbet, \u003ca href=\"#Page_123\"\u003e123\u003c/a\u003e.\u003cbr /\u003e\r\nCooper, \u003ca href=\"#Page_32\"\u003e32\u003c/a\u003e.\u003cbr /\u003e\r\nCorbet, \u003ca href=\"#Page_124\"\u003e124\u003c/a\u003e.\u003cbr /\u003e\r\nDarimont, \u003ca href=\"#Page_107\"\u003e107\u003c/a\u003e.\u003cbr /\u003e\r\nDodd, \u003ca href=\"#Page_141\"\u003e141\u003c/a\u003e.\u003cbr /\u003e\r\nForbonnais, \u003ca href=\"#Page_226\"\u003e226\u003c/a\u003e.\u003cbr /\u003e\r\nFranklin, \u003ca href=\"#Page_62\"\u003e62\u003c/a\u003e-3, \u003ca href=\"#Page_155\"\u003e155\u003c/a\u003e, \u003ca href=\"#Page_226\"\u003e226\u003c/a\u003e.\u003cbr /\u003e\r\nFullarton, \u003ca href=\"#Page_260\"\u003e260\u003c/a\u003e.\u003cbr /\u003e\r\nGaliani, \u003ca href=\"#Page_30\"\u003e30\u003c/a\u003e, \u003ca href=\"#Page_65\"\u003e65\u003c/a\u003e, \u003ca href=\"#Page_85\"\u003e85\u003c/a\u003e, \u003ca href=\"#Page_111\"\u003e111\u003c/a\u003e, \u003ca href=\"#Page_134\"\u003e134\u003c/a\u003e.\u003cbr /\u003e\r\nGarnier, \u003ca href=\"#Page_87\"\u003e87\u003c/a\u003e, \u003ca href=\"#Page_141\"\u003e141\u003c/a\u003e.\u003cbr /\u003e\r\nGenovesi, \u003ca href=\"#Page_51\"\u003e51\u003c/a\u003e, \u003ca href=\"#Page_164\"\u003e164\u003c/a\u003e.\u003cbr /\u003e\r\nGladstone, \u003ca href=\"#Page_73\"\u003e73\u003c/a\u003e.\u003cbr /\u003e\r\nGray, \u003ca href=\"#Page_103\"\u003e103\u003c/a\u003e sq.\u003cbr /\u003e\r\nGrim, \u003ca href=\"#Page_211\"\u003e211\u003c/a\u003e.\u003cbr /\u003e\r\nHodgskin, \u003ca href=\"#Page_55\"\u003e55\u003c/a\u003e.\u003cbr /\u003e\r\nHorace, \u003ca href=\"#Page_178\"\u003e178\u003c/a\u003e.\u003cbr /\u003e\r\nHume, D., \u003ca href=\"#Page_219\"\u003e219\u003c/a\u003e, \u003ca href=\"#Page_221\"\u003e221\u003c/a\u003e sq, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\nHume, J. D., \u003ca href=\"#Page_249\"\u003e249\u003c/a\u003e.\u003cbr /\u003e\r\nJakob, \u003ca href=\"#Page_141\"\u003e141\u003c/a\u003e, \u003ca href=\"#Page_181\"\u003e181\u003c/a\u003e.\u003cbr /\u003e\r\nJovellanos, \u003ca href=\"#Page_61\"\u003e61\u003c/a\u003e.\u003cbr /\u003e\r\nJulius, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\nKorner, \u003ca href=\"#Page_212\"\u003e212\u003c/a\u003e.\u003cbr /\u003e\r\nLaw, \u003ca href=\"#Page_226\"\u003e226\u003c/a\u003e, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\nList, \u003ca href=\"#Page_34\"\u003e34\u003c/a\u003e.\u003cbr /\u003e\r\nLocke, \u003ca href=\"#Page_91\"\u003e91\u003c/a\u003e, \u003ca href=\"#Page_93\"\u003e93\u003c/a\u003e sq., \u003ca href=\"#Page_199\"\u003e199\u003c/a\u003e, \u003ca href=\"#Page_219\"\u003e219\u003c/a\u003e, \u003ca href=\"#Page_226\"\u003e226\u003c/a\u003e, \u003ca href=\"#Page_233\"\u003e233\u003c/a\u003e.\u003cbr /\u003e\r\nLowndes, \u003ca href=\"#Page_94\"\u003e94\u003c/a\u003e.\u003cbr /\u003e\r\nLuther, \u003ca href=\"#Page_174\"\u003e174\u003c/a\u003e-5, \u003ca href=\"#Page_190\"\u003e190\u003c/a\u003e.\u003cbr /\u003e\r\nMcCulloch, \u003ca href=\"#Page_31\"\u003e31\u003c/a\u003e, \u003ca href=\"#Page_57\"\u003e57\u003c/a\u003e.\u003cbr /\u003e\r\nMaclaren, \u003ca href=\"#Page_82\"\u003e82\u003c/a\u003e, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e, \u003ca href=\"#Page_233\"\u003e233\u003c/a\u003e.\u003cbr /\u003e\r\nMacleod, \u003ca href=\"#Page_71\"\u003e71\u003c/a\u003e, \u003ca href=\"#Page_193\"\u003e193\u003c/a\u003e.\u003cbr /\u003e\r\n\u003cspan class=\"pagenum\"\u003e\u003ca name=\"Page_314\" id=\"Page_314\"\u003ePg 314\u003c/a\u003e\u003c/span\u003e\r\nMalthus, \u003ca href=\"#Page_34\"\u003e34\u003c/a\u003e.\u003cbr /\u003e\r\nMandeville, Sir J., \u003ca href=\"#Page_154\"\u003e154\u003c/a\u003e.\u003cbr /\u003e\r\nMill, James, \u003ca href=\"#Page_123\"\u003e123\u003c/a\u003e-4, \u003ca href=\"#Page_250\"\u003e250\u003c/a\u003e sqq.\u003cbr /\u003e\r\nMisselden, \u003ca href=\"#Page_165\"\u003e165\u003c/a\u003e, \u003ca href=\"#Page_171\"\u003e171\u003c/a\u003e, \u003ca href=\"#Page_174\"\u003e174\u003c/a\u003e-5.\u003cbr /\u003e\r\nMontanari, \u003ca href=\"#Page_38\"\u003e38\u003c/a\u003e.\u003cbr /\u003e\r\nMontesquieu, \u003ca href=\"#Page_219\"\u003e219\u003c/a\u003e, \u003ca href=\"#Page_227\"\u003e227\u003c/a\u003e.\u003cbr /\u003e\r\nMüller, \u003ca href=\"#Page_85\"\u003e85\u003c/a\u003e.\u003cbr /\u003e\r\nNorman, \u003ca href=\"#Page_258\"\u003e258\u003c/a\u003e.\u003cbr /\u003e\r\nOpdyke, \u003ca href=\"#Page_124\"\u003e124\u003c/a\u003e.\u003cbr /\u003e\r\nOverstone, Lord, \u003ca href=\"#Page_241\"\u003e241\u003c/a\u003e, \u003ca href=\"#Page_258\"\u003e258\u003c/a\u003e.\u003cbr /\u003e\r\nPeel, Sir R., \u003ca href=\"#Page_73\"\u003e73\u003c/a\u003e, \u003ca href=\"#Page_100\"\u003e100\u003c/a\u003e, \u003ca href=\"#Page_241\"\u003e241\u003c/a\u003e, \u003ca href=\"#Page_258\"\u003e258\u003c/a\u003e.\u003cbr /\u003e\r\nPereire, \u003ca href=\"#Page_120\"\u003e120\u003c/a\u003e.\u003cbr /\u003e\r\nPeter Martyr, \u003ca href=\"#Page_210\"\u003e210\u003c/a\u003e.\u003cbr /\u003e\r\nPetty, Sir W., \u003ca href=\"#Page_32\"\u003e32\u003c/a\u003e, \u003ca href=\"#Page_56\"\u003e56\u003c/a\u003e sq., \u003ca href=\"#Page_165\"\u003e165\u003c/a\u003e, \u003ca href=\"#Page_172\"\u003e172\u003c/a\u003e-3.\u003cbr /\u003e\r\nPlato, \u003ca href=\"#Page_153\"\u003e153\u003c/a\u003e.\u003cbr /\u003e\r\nPliny, \u003ca href=\"#Page_177\"\u003e177\u003c/a\u003e.\u003cbr /\u003e\r\nProudhon, \u003ca href=\"#Page_61\"\u003e61\u003c/a\u003e, \u003ca href=\"#Page_72\"\u003e72\u003c/a\u003e, \u003ca href=\"#Page_103\"\u003e103\u003c/a\u003e, \u003ca href=\"#Page_107\"\u003e107\u003c/a\u003e.\u003cbr /\u003e\r\nRicardo, \u003ca href=\"#Page_56\"\u003e56\u003c/a\u003e, \u003ca href=\"#Page_69\"\u003e69\u003c/a\u003e sq., \u003ca href=\"#Page_71\"\u003e71\u003c/a\u003e, \u003ca href=\"#Page_217\"\u003e217\u003c/a\u003e, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e, \u003ca href=\"#Page_235\"\u003e235\u003c/a\u003e, \u003ca href=\"#Page_250\"\u003e250\u003c/a\u003e, \u003ca href=\"#Page_259\"\u003e259\u003c/a\u003e.\u003cbr /\u003e\r\nSay, \u003ca href=\"#Page_34\"\u003e34\u003c/a\u003e, \u003ca href=\"#Page_71\"\u003e71\u003c/a\u003e, \u003ca href=\"#Page_123\"\u003e123\u003c/a\u003e, \u003ca href=\"#Page_153\"\u003e153\u003c/a\u003e, \u003ca href=\"#Page_233\"\u003e233\u003c/a\u003e.\u003cbr /\u003e\r\nSenior, \u003ca href=\"#Page_178\"\u003e178\u003c/a\u003e, \u003ca href=\"#Page_194\"\u003e194\u003c/a\u003e.\u003cbr /\u003e\r\nSismondi, \u003ca href=\"#Page_56\"\u003e56\u003c/a\u003e, \u003ca href=\"#Page_77\"\u003e77\u003c/a\u003e.\u003cbr /\u003e\r\nSmith, \u003ca href=\"#Page_34\"\u003e34\u003c/a\u003e, \u003ca href=\"#Page_57\"\u003e57\u003c/a\u003e, \u003ca href=\"#Page_61\"\u003e61\u003c/a\u003e, \u003ca href=\"#Page_67\"\u003e67\u003c/a\u003e-68, \u003ca href=\"#Page_80\"\u003e80\u003c/a\u003e, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e sq.\u003cbr /\u003e\r\nSpence, \u003ca href=\"#Page_123\"\u003e123\u003c/a\u003e.\u003cbr /\u003e\r\nStein, \u003ca href=\"#Page_21\"\u003e21\u003c/a\u003e, \u003ca href=\"#Page_31\"\u003e31\u003c/a\u003e-2.\u003cbr /\u003e\r\nSteuart, Sir James, \u003ca href=\"#Page_65\"\u003e65\u003c/a\u003e sq., \u003ca href=\"#Page_94\"\u003e94\u003c/a\u003e sq., \u003ca href=\"#Page_222\"\u003e222\u003c/a\u003e, \u003ca href=\"#Page_227\"\u003e227\u003c/a\u003e sq., \u003ca href=\"#Page_260\"\u003e260\u003c/a\u003e.\u003cbr /\u003e\r\nStorch, 152-3, \u003ca href=\"#Page_179\"\u003e179\u003c/a\u003e.\u003cbr /\u003e\r\nThompson, \u003ca href=\"#Page_106\"\u003e106\u003c/a\u003e.\u003cbr /\u003e\r\nTooke, \u003ca href=\"#Page_124\"\u003e124\u003c/a\u003e, \u003ca href=\"#Page_247\"\u003e247\u003c/a\u003e, \u003ca href=\"#Page_249\"\u003e249\u003c/a\u003e, \u003ca href=\"#Page_260\"\u003e260\u003c/a\u003e sq.\u003cbr /\u003e\r\nTorrens, \u003ca href=\"#Page_58\"\u003e58\u003c/a\u003e.\u003cbr /\u003e\r\nUrquhart, \u003ca href=\"#Page_89\"\u003e89\u003c/a\u003e.\u003cbr /\u003e\r\nUstariz, \u003ca href=\"#Page_61\"\u003e61\u003c/a\u003e.\u003cbr /\u003e\r\nWilson, \u003ca href=\"#Page_260\"\u003e260\u003c/a\u003e.\u003cbr /\u003e\r\nXenophon, \u003ca href=\"#Page_181\"\u003e181\u003c/a\u003e, \u003ca href=\"#Page_184\"\u003e184\u003c/a\u003e.\u003cbr /\u003e\r\nYoung, \u003ca href=\"#Page_231\"\u003e231\u003c/a\u003e.\u003cbr /\u003e\r\n\u003c/p\u003e\r\n\u003c/article\u003e"}],"SectionSequence":["Back Link","Work Title","Deck","Author","Period","Era","Composition","Date Note","Region","Terra Avita","Terra Avita Region","Modern Country","Original Title","Language","Primary Discipline","Secondary Discipline","Tradition","Full Versions","Core Thesis","Classification","Arguments","Influence","Significance","Evidence Note","Full Text"],"Counts":{"ContextCards":3,"GeoCards":4,"DisciplineCards":2,"Links":11,"Sections":25,"Styles":3,"Scripts":1}}