Rough Theory

After this chapter, readers will finally be able to make their escape from the deconstructive thicket that is the third chapter of Capital. Before we part ways with this chapter, though, Marx engages in some extremely clever moves to begin to open a wedge through which he will finally drive the category of capital in the following chapter. Here he begins to make the case that commodity circulation allows – and, in some cases, necessitates – exchanges that are not driven by the need to meet material needs, but rather by the need to make money. This may sound like an obvious point, but Marx needs to make it in a way that makes clear that this is not a possibility that arises extrinsically to commodity production, as some sort of corruption of a more fundamental process, but rather is implied by the very nature of the process itself. This chapter is also, by the way, where I most directly treat the issue of crisis – a topic I can approach only in an extremely preliminary way in the thesis, since I am focussing only on the opening chapters of Capital

So one last dance with chapter 3 – and then we get to meet the Geist!

[Note: To read the thesis chapters in order, check the full list under the Thesis Tab. I will update the list as I add chapters, and also eventually publish the PDF of the entire thesis when I submit.]

8 – Crossed Circuits

In the previous chapter, we explored how Marx takes a “single” process – the circulation of commodities – and breaks that process down into component parts that each have their own distinctive practical implications, consequences and potentials. In this chapter, we continue to follow the steps in this analysis as Marx brings his account of commodity circulation to a close – but, in the process, unfolds a whole new series of potentials that will further deepen our sense of what was implicit in the opening categories of Capital.

I. Other People’s Money

Marx opens this stage of his analysis by first pointing out that even the first metamorphosis of commodity circulation implies the need for more than the one social actor whose perspective the text has thus far adopted throughout this section: in order for our first commodity owner to be able to exchange their own ordinary commodity for money, they must first find a second commodity owner, whose commodity happens to be money, looking to exchange money for that ordinary good (203-204). The “same” transaction thus involves two different types of performance, from two different actors – both of whom offer distinct perspectives on the transaction that provide equally “real”, but also partial and limited, access to specific dimensions of the process as a whole. Each perspective involves a distinctive set of performative stances, brings to light different qualitative characteristics, and makes visible divergent practical possibilities implied by the transaction (205-206).

It is here that Marx begins to introduce the possibility of a qualitative difference between the types of social actors who bring ordinary commodities to the market, and those who bring money. The analysis so far has treated the exchange of ordinary commodities for money as though this transaction is, at base, an exchange between two commodity owners, both selling the products of their own labour. For this to be true for the money owner, that person must produce the material substance of the universal equivalent as their own personal product – a form of production that must, of course, happen at some point, Marx notes, in order for the money commodity to enter the market in the first place (204). What happens from that point, however – the whole process of exchanging ordinary commodities for money that the text has just analysed – means that many of the money owners in the market do not possess money as the direct product of their personal labour, but rather because of some prior process of exchange (204). It is impossible to tell from the money itself whether it arises from the money owner’s own labour, or from some prior sale: money strips away all the qualitative specificity that inheres in ordinary commodities, serving as a material store of homogeneous, undifferentiated, potential social labour-time. In Marx’s words:

It became real money because the commodities, through their complete alienation, suffered a divestiture or transformation of their real shapes as objects of utility, thus making it the real embodiment of their values. When they thus assume the shape of values, commodities strip off every trace of their natural and original use-value, and of the particular kind of useful labour to which they owe their creation, in order to pupate into the homogeneous social materialization of undifferentiated human labour. From the mere look of a piece of money, we cannot tell what breed of commodity has been transformed into it. In their money-form all commodities look alike. (204)

Money still serves the same social functions, however it may have been acquired. Whether the money owner comes into possession of the money commodity as the immediate product of their own personal labour, or from the sale of some other product, cannot be revealed by examining the material form or the practical use of the money commodity.

In this subtle move, Marx introduces a potential disjoint between the possession of money and the expenditure of the money owner’s own personal labour. The disjoint is explicitly qualitative in this section of the text: the money commodity might not have been the money owner’s actual product. The preceding analysis of commodity exchange implies the possibility for a quantitative disjoint, as well: because money does not need to be exchanged for commodities in proportion to the labour-time socially required to reproduce the production of those commodities, it is possible for a commodity owner to experience what Marx calls an “unnatural accretion” of the value of their commodity. In this case, that commodity owner could re-enter the market as a money owner at a quantitative scale not generated by the labour-time objectified in the products of their own personal labour – and thus as a money owner who possesses a greater power to invest “social labour” than would be implied by the labour-time they have personally set in motion.

By deriving this subtle potential for a divergence between the expenditure of personal labour-time, and the possession of money, Marx opens a wedge that he will gradually widen into a full-blown practical opposition between, on the one hand, owners of money and, on the other, “commodity owners” who lack the independent means to produce their own goods, and who are thus left with nothing to sell but their own labour-time. By opening this wedge immanently from the analysis of simple commodity exchange, Marx aims to show how this practice – which superficially seems to have existed in many different historical eras – is currently understood and experienced in ways that mark it out as something much more historically specific. Marx is seeking to demonstrate that the analysis of commodity exchange tacitly or explicitly expressed in the categories of political economy, subtly indexes its own historical relation to the production of capital.

In Marx’s argument, generalised commodity production and exchange exists as a subordinate moment of this overarching social process, and thereby acquires qualitative characteristics that similar practices do not exhibit in other social contexts. This is the significance of Marx’s argument, from the opening chapter of Capital, that the limitations of Aristotle’s society prevented him from deducing the category of value: Aristotle’s analysis of practices of commodity exchange bears a different historical index – it is grounded in a different practical experience of what superficially appear to be the “same” sorts of practices. Marx’s critique of political economy is designed to trace out the subtle historical index buried in its categories – to grasp the differentia specifica of the given relations that render those categories socially valid – in order to demonstrate how these categories betray that they are based on a practical experience of commodity exchange as shaped by its contemporary role as a subordinate moment within the overarching process of the production of capital.

Having introduced this wedge between the commodity owner’s personal wealth and the amount of labour-time they have personally objectified in a product, Marx analyses the “second metamorphosis” – the exchange of money for commodities that forms the concluding part of the process of selling in order to buy. Marx notes that the money can, in principle, be exchanged for any ordinary commodity. This qualitative boundlessness, however, is checked by money’s quantitative limits: money always exists in some finite amount, which might or might not be adequate to convert into any particular ordinary commodity (205). This observation subtly carves a path for the introduction of the category of capital, which will be introduced in the following chapter – a point to which I return below.

Marx steps back at this point to review the multiplicity implied by the “single” act of selling in order to buy. Viewed from the standpoint of the social actor carrying this process through to its completion, this process must be decomposed into two distinct metamorphoses – the sale of an original commodity for money, and the use of that money to purchase a new commodity. Yet the original commodity put up for exchange is a non-use-value to its owner, while the commodity acquired at the end of the process is a use-value (207). Even the money acquired through the original sale performs multiple social functions at different stages in this process: as the material expression of the value of the original commodity, and as the equivalent-form of the subsequent purchases (207).

Moreover, the original commodity is most likely a non-use-value because its owner has produced a great many commodities of that type, all of which are therefore surplus to the owner’s needs and can be offered up for sale. The money obtained in exchange, however, may not be spent entirely on a single commodity or commodities of a single type: it might be divided amongst many other commodities at the time of purchase (206). These two metamorphoses, moreover, need not take place at the same time – as Marx says, “no one directly needs to purchase because he has sold” (208-209).

Each of the objects imbricated in this process therefore take on different qualitative characters and social functions, depending on the moment in the process being analysed. The qualities of these objects are thereby demonstrated in certain dimensions of everyday practice not to inhere intrinsically in the objects themselves, but to depend on the dynamic interactions between objects and particular social roles those objects conjuncturally play. The capacity to grasp the contingency of these qualitative characteristics is therefore primed in some dimension of social practice – even as the capacity to confuse these qualities with intrinsic material properties is simultaneously primed in others.

The commodity owner’s identity is no more stable, during this process, than the identities of the various objects. The commodity owner first becomes a seller in the process of making the original sale, and then a buyer in the process of spending the money that arises from that sale (206). In order to assume these alternating identities, the commodity owner needs a supporting cast of characters who will assist in the performance by playing the opposite part (206). From the perspective of these other social actors, of course, it is the commodity owner who provides the supporting cast. Each moment in the original commodity owner’s process of selling in order to buy, is also a partial moment within another social actor’s enactment of that very same process, from their point of view (205-206). The social actors involved in this dynamic and interwoven series of processes thus alternately assume different roles, and play opposite an ever-shifting cast of other social actors who play mirroring parts.

The qualitative character of this social interaction makes the language of stage not a casual metaphor, but a very literal depiction of how Marx understands this process: social actors contingently take part in acting out social roles that are not personally specific to the actors who perform them and that, moreover, appear to require personifying and acting out relations between material things. In Marx’s words:

While the same commodity is successively passing through the two inverse transmutations, from a commodity into money and from money into another commodity, the owner of the commodity successively changes his role from seller to buyer. Being a seller and being a buyer are therefore not fixed roles, but constantly attach themselves to different persons in the course of the circulation of commodities.

The complete metamorphosis of a commodity, in its simplest form, implies four dénouements and three dramatis personae. First, a commodity comes face to face with money; the latter is the form taken by the value of the former, and exists over there in someone else’s pocket in all its hard, material reality. A commodity-owner is thus confronted with a money-owner. Now as soon as the commodity has been changed into money, the money becomes its vanishing equivalent-form, whose use-value or content exists here on the spot, in the bodies of other commodities. Money, the final stage of the first transformation, is at the same time the starting point for the second. The person who is a seller in the first transaction thus becomes a buyer in the second, in which a third commodity-owner comes to meet him as a seller. (206)

The experience of engaging with this aspect of commodity exchange, makes available a practical distinction between the person and the social roles that person may perform, exposing the contingency of at least some social roles – rendering these visible as “social roles”, as practices that are not intrinsically bound to the innate qualities of the persons who happen to perform these roles from time to time. This practical distinction is most direct in suggesting the contingency of social roles associated with material production – the contingency, for example, of which person steps onto the economic stage as an owner of money, or as the owner of an ordinary commodity. The practical possibility to step into each of these roles on an everyday basis destabilises the notion that any special personal trait is required to play one of these parts. By extension, this practical experience also renders intuitive the possibility that other sorts of social practices might also be roles, in the sense of being potentially capable of being externalised from the persons who currently enact them. The practical experience of alternating between transpersonalised roles in one dimension of everyday life can thus constitute an experiential reservoir of critical insights, attuned to the possibility of the contingency of economic and social institutions.

If the process of commodity exchange enacts social actors as actors, it also enacts this form of economic transaction as a stage – as an “objective” network or environment that transcends the intersubjective connections that bind social actors. The objectivity of the economic sphere is already suggested in the way Marx presents the drama of commodity exchange in the quote above: the initial actors in Marx’s presentation are not the humans – they are the material objects. The humans step forward as the representatives of those objects: in Marx’s presentation, first a commodity comes face to face with money; then a commodity-owner interacts with a money-owner. The actors operate as personifications of things they own, playing out a human drama modelled on the relationships of their objects.

These local dramas, however, are themselves embedded in something larger and more impersonal. Finally unfolding explicitly the difference between commodity circulation and the direct exchange of products, Marx highlights the way in which commodity circulation transcends intersubjective interactions – even those that involve the personification of things. Drawing on his earlier discussion of how any particular process of selling in order to buy is bound together with innumerable other such processes, often distant in both space and time, Marx writes:

The circulation of commodities differs from the direct exchange of products not only in form, but in its essence. We have only to consider the course of events. The weaver has undoubtedly exchanged his linen for a Bible, his own commodity for someone else’s. But this phenomenon is only true for him. The Bible-pusher, who prefers a warming drink to cold sheets, had no intention of changing linen for his Bible; the weaver did not know that wheat had been exchanged for his linen. B’s commodity replaces that of A, but A and B do not mutually exchange their commodities. It may in fact happen that A and B buy from each other, but a particular relationship of this kind is by no means the necessary result of the general conditions of the circulation of commodities. We see here, on the one hand, how the exchange of commodities breaks through all the individual and local limitations of the direct exchange of products, and develops the metabolic process of human labour. On the other hand, there develops a whole network of social connections of natural origin, entirely beyond the control of human agents. Only because the farmer has sold his wheat is the weaver able to sell his linen, only because the weaver has sold his linen is our rash and intemperate friend able to sell his Bible, and only because the latter already has the water of everlasting life is the distiller able to sell his eau-de-vie. And so it goes on. (207-208)

The circulation of commodities thus brings into being a world of “material” connections that is differentiated out from intersubjectively-meaningful interactions: sellers and buyers, producers and consumers, do not have to know one another or consciously coordinate their actions – this result is achieved for them, “behind their backs”, and therefore in a form that confronts them as an “environment” independent and autonomous from themselves. The process renders socially valid a form of practical relativism: moments of this process really are only true – in practice – from the perspective of particular individuals, and do not exist at all from the standpoint of other participants in the process. While there are many opportunities to experience this process as nothing more than a direct exchange of products, the process appears this way only when considered from a limited point of view, and only when this point of view is adopted one-sidedly, so as to exclude a consideration of all the other perspectives this “same” process also makes available.

The circulation of commodities is also ambivalent in its potentials: Marx does not consider it a bad thing that the process breaks through the limits of the direct exchange of products and “develops the metabolic process of human labour” by opening the possibility for a vastly more complex circulation of material goods. This potentially positive result, however, is achieved at a price: the whole process sits outside the conscious control of the social actors who enact it, subjecting them to forms of coercion whose origins they do not understand, and which they tend to experience as emanating, not from their own practices, but from an external, objective, “material” environment. This environment is plausibly described as a stage – experienced by the actors as the objective backdrop for their contingent and fleeting performances of social parts that transcend their personal selves, and that other actors will play in turn. Marx’s frequent stage metaphors are therefore not all-purpose tools of social analysis: they pick out substantive qualities specific to the object he is trying to grasp.

Marx introduces at this point the topic of crisis, positioning it as a potential implicit in the way in which commodity circulation breaks apart the antithetical moments of act of exchange, breaking through the personal, temporal and spatial barriers imposed by the direct exchange of products (209). Marx brackets further discussion of the topic until his analysis can assemble sufficient resources to explain how this potential becomes real, arguing:

These forms therefore imply the possibility of crises, though no more than the possibility. For the development of this possibility a whole series of conditions is required, which do yet even exist from the standpoint of the simple circulation of commodities. (209)

In other words: the partial perspectives Marx has analysed thus far in the text, do not yet provide access to the practical vantage point from which we can grasp how crises are realised. Here as elsewhere in the text, Marx defers explicit consideration of topics until he has shown how the insights he wields are made available in our practical experience of given relations.

What is important to note is that this passage foreshadows that crisis is not conceptualised as a breakdown of the system Marx is analysing. Instead – as Marx hinted in his earlier discussion of real contradictions – crisis is one of the forms of motion that gives real contradictions room to move. Marx argues:

Circulation bursts through all the temporal, spatial and personal barriers imposed by the direct exchange of products, and it does this by splitting up the direct identity present in this case between the exchange of one’s own product and the acquisition of someone else’s into the two antithetical segments of sale and purchase. To say that these mutually independent and antithetical processes form an internal unity is to say also that their internal unity moves forward through external antitheses. These two processes lack internal independence because they complement each other. Hence, if the assertion of their external independence [ausserliche Verselbstandigung] proceeds to a certain critical point, their unity violently makes itself felt by producing – a crisis. There is an antithesis, immanent in the commodity, between use-value and value, between private labour which must simultaneously manifest itself as directly social labour, and a particular concrete kind of labour which simultaneously counts as merely abstract universal labour, between the personification of things and the reification of persons; the antithetical phases of the metamorphosis of the commodity are the developed forms of motion of this immanent contradiction. (209)

Marx has previously argued that real contradictions are resolved – but not abolished – in specific forms of motion. Here he characterises the antithetical phases of commodity circulation as such developed forms, and suggests this development implies the possibility for crisis. The phrasing – borrowed from Hegel – suggests an idealist conception of immanent qualities working their way toward real expression. In Marx’s pragmatist appropriation, the meaning is the inverse: the developed forms of motion are elements of practical experience that constitute the commodity as an object with peculiar social properties. The immanent potentials of the commodity do not cause the forms of the motion: the practical operation of the forms of motion provides the means by which the characteristics attributed to the commodity are enacted. Crisis, as a further developed form of motion, will be one of the means by which the peculiar properties of the commodity are effected in social practice. One implication of this analysis is that Marx does not understand crisis as something that points beyond capitalism in any unambiguous way: crisis is instead one of the forms in which capitalism is realised or enacted as a contradictory form. With these reflections as the backdrop, Marx turns to the question of money as a means of circulation.

II. Circulating Money

By contrast with the detailed and theoretically dense analyses of money as a measure of value and standard of price, Marx’s discussion of money as a means of circulation seems strangely truncated. Although this section, along with the closely-related section on coins as symbols of value, continues to unfold new multiplicities within the “same” object of money, it does not immediately explore performative stances or forms of subjectivity associated with the circulation of money – instead deferring the consideration of such issues until the analysis of hoarding. This comparatively cursory treatment of this particular function of money contrasts with the detail in which Marx unpacks other functions in this chapter.

The reason for this truncation, I suggest, is that Marx’s analysis touches here on a dimension of social experience whose implications he cannot yet explore adequately with the categories he has on hand. In order to explore the circulation of money in detail – and particularly in order to unpack its practical implications and associated subject positions – Marx needs to open up the possibility for quantitative expansion, introduce the potential for quantitative expansion to become a goal, and then explore the implications of a process of expanded reproduction of the system of commodity exchange. In other words, to explore this function of money, Marx needs at his disposal the category of capital and the associated performative stance of the capitalist. Introducing these concepts at this stage of his analysis, however, would break with his strategy of demonstrating that such categories can be derived by unspooling the implications of commodity exchange – and thus demonstrating how this process tacitly indexes its own dependence on the production of capital. These sections are therefore truncated for the moment, waiting until Marx advances his derivation – whose next major step lies in the examination of hoarding.

Marx, does, however, take time to emphasise one central point when he analyses money as a means of circulation: he reiterates that the circulation of money is not a process that arises externally to the circulation of commodities, corrupting commodity production, so to speak, from without. Marx’s concern – which already informs the structure of his analysis of commodity circulation – is that commodity circulation might be assessed solely in terms of its material result, and therefore seen as nothing more than a circulation of use-values. Marx’s analysis of commodity circulation therefore insists that this end result must be grasped in relation to the form in which this result is brought about – a form that involves two antithetical phases: an exchange of an ordinary commodity money, and then the reciprocal exchange of money for a different ordinary commodity. The circulation of commodities cannot therefore be considered essentially a circulation of material things, with money providing a more arbitrary and less essential contribution to this more fundamental material process: in Marx’s analysis, money is as essential to the process as ordinary goods, and forms an intrinsic element of the process of commodity circulation as a whole. In this way, Marx advances his critique of the positions with which Capital opens – which position use-values as essential, material dimensions of wealth, and exchange-values as arbitrary, contingent social forms. The discussion of the circulation of money reiterates this critique from another direction, insisting that the circulation of money still arises as a consequence of the circulation of commodities, and cannot be considered an extrinsic, contingent or artificial imposition onto a more basic process.

As Marx breaks down this process, the circulation of commodities requires two alternating, mirror-image phases, while the circulation of money involves the endless repetition of the same phase: as it circulates, money confronts an endless array of different commodities, exchanges with each commodity in turn and, in the process, continuously moves, one-sidedly, farther and farther away from its original source. The course of its movement is intertwined with the circuits formed by the circulation of commodities, but the intrinsic interdependence of these two forms of circulation is disguised by the constant removal of ordinary commodities from circulation as they fall into consumption, while the money commodity always remains behind (210-211). In this context, money can come to appear as an object with the special social power of circulating commodities, rather than as a material expression of the values of the commodities with which money trades places. Marx describes this process:

Hence the result of the circulation of commodities, namely the replacement of one commodity by another, appears not to have been mediated by its own change of form, but rather by the function of money as means of circulation. As means of circulation, money circulates commodities, which in and for themselves lack the power of movement, and transfers them from hands in which they are non-use-values into hands in which they are use-values; and this process always takes the opposite direction to the path of the commodities themselves. Money constantly removes commodities from the sphere of circulation, by constantly stepping into their place in circulation, and in this way continually moving away from its own starting-point. Hence although the movement of money is merely the expression of the circulation of commodities, the situation appears to be the reverse of this, namely the circulation of commodities seems to be the result of the movement of money. (211-212).

Marx uses this analysis to open the wedge through which he drives the topic of hoarding by assembling three resources from his analysis of the circulation of money. First, he points out that the circulation of money – although embedded within the circulation of commodities – possesses its own distinctive qualitative character: that of a monotonous, qualitatively boundless repetition of the same action over and over and over again. This resource implies two points Marx cannot fully cash out in this chapter: the possibility for this process, because qualitatively boundless, to become an end in itself, and the possibility for a performative stance or perspective that would correspond to this distinctive practical process. Second, in discussing how much money is required for circulation, Marx describes the aggregate process that sees the money commodity alternatively coined and melted down, as demand for money as the circulating medium rises and falls (222, 231). This resource implies, in a very preliminary way, that there can be practical social reasons to accumulate stores of money beyond what are currently required for immediate use. Finally, Marx analyses the velocity of circulation and the possibility of stagnation:

In the velocity of circulation, therefore, there appears the fluid unity of the antithetical and complementary phases, i.e. the transformation of the commodities from the form of utility into the form of value and their re-translation in the reverse direction, or the two processes of sale and purchase. Inversely, when the circulation of money slows down, the two processes become separated, they assert their independence and mutual antagonism; stagnation occurs in the changes of form, and hence in the metabolic process. (217)

This passage is rich in its implications. The separation of the two metamorphoses required for commodity circulation – the transformation of ordinary commodities into money, and then the reverse transformation of money back into ordinary commodities – becomes visible as a practical phenomenon during stagnation, which reveals both the necessary dependence of the two metamorphoses, and also their tension with one another. The practical experience of such phenomena is part of what makes socially valid – what constitutes in social practice – the commodity as an object that is implicitly internally divided between use-value and exchange-value: stagnation freezes the commodity into its torn halves, making socially real the commodity as an contradictory whole.

Stagnation makes visible the degree to which the circulation of commodities is not simply a “material” process – a process of social metabolism or the exchange of goods – but rather a social process that establishes complex and precarious social requirements that must be met, as a precondition for meeting material needs. Stagnation makes evident the specifically social character of the practices that must be followed in order to achieve the production and exchange of material goods in capitalist societies.

III. The Hoarding Compulsion

At the same time, stagnation – by separating piles of money from piles of goods – results in the strange social phenomenon of involuntary hoards. It is with this image that Marx opens his analysis of hoarding:

The continuous circular movement of the two antithetical metamorphoses of commodities, or the repeated alternating flow of sale and purchase, is reflected in the unceasing turnover of money, in the function it performs of a perpetuum mobile of circulation. But as soon as the series of metamorphoses is interrupted, as soon as sales are not supplemented by subsequent purchases, money is immobilized. In other words, it is transformed, as Boisguillebert says, from ‘meuble‘ into ‘immeuble‘, from coin into money. (227)

Much of the discussion of hoarding will focus on conscious motives for engaging in this practice – on various rational and irrational reasons for social actors to develop the conscious desire to accumulate masses of money, held in reserve outside of circulation. The opening passage, however, suggests the possibility for hoards to materialise suddenly and against the desires of social actors, due to the involuntary stagnation of commodity circulation. This image of involuntary hoarding – of hoards that form as the consequence of socially objective, rather than subjective or intersubjective, causes, sets the stage for Marx’s subsequent breakdown of various performative stances and subjective motivations associated with hoarding. Marx will use this discussion to contrast traditional, subjectively-driven forms of hoarding, which tended to be subject to social sanction and thereby somewhat bounded in pre-capitalist social contexts, with hoarding as this practice is promoted by more impersonal factors (230). The existence of such factors constitute hoarding as another potentially disembedded role, capable of being personified by a range of social actors, and played out on an economic stage. By analysing different forms hoarding takes in different contexts, Marx is once again teasing out the differentia specifica of practices that superficially seem the same: hoarding – the accumulation of collections of money beyond what is required to meet immediate needs – is not always the “same” practice; it, too, is determined by the relations within which it is historically suspended. This section is designed to cast light on those relations, and thereby widen the wedge through which Marx will drive the category of capital in his next chapter.

In Marx’s account, the circulation of commodities achieves the material result of effecting the social metabolism – bringing about the movement of use-values to locations where they can be consumed. This material process is mediated by social practices with their own distinctive qualitative forms, which then shape the qualitative form of the material result, in ways that can go unrecognised if the material result is examined in the absence of the social practices that bring it about. These mediating social practices achieve their material result by means of two antithetical metamorphoses – first, the transformation of the commodity into money and, second, the transformation of money into the commodity. Where the first transformation – seen from the standpoint of the owner of an ordinary commodity – appears more directly as an exchange of different kinds of commodities – an ordinary and a money commodity, the second – seen from the standpoint of the owner of money – can appear more easily as the one-sided and unitary action of money, effecting the movement of passive commodities. A process of the circulation of money – the monotonous repetition of the same action of displacing commodities, sweeping them out of circulation and into consumption – thus arises as an immanently-available perspective within the circulation of commodities.

The antithetical character of the movements that effect the circulation of commodities, already generates the potential for those movements to be arrested – involuntarily, through stagnation, but also voluntarily, as social actors adopt the goal of achieving and then amassing the results of the first metamorphosis. The qualitative character of commodity circulation makes it possible for social actors to make the transformation of the form of the commodity – from commodity into money – into their personal end goal, rather than treating the transformation as a means for achieving the end goal of consumption. Interestingly, Marx describes this process as simultaneously a desire and a necessity:

When the circulation of commodities first develops, there also develops the necessity and the passionate desire to hold fast to the product of the first metamorphosis. This product is the transformed shape of the commodity, or its gold chrysalis. Commodities are thus sold not in order to buy commodities, but in order to replace their commodity form by their money-form. Instead of being merely a way of mediating the metabolic process [Stoffwechsel], this change of form becomes an end in itself. The form of the commodity in which it is divested of content is prevented from functioning as its absolutely alienable form, or even as its merely transient money-form. The money is petrified into a hoard, and the seller of commodities becomes a hoarder of money. (227-228).

Marx quickly clarifies why he presents this phenomenon as a necessity: in the context of generalised commodity production, the possession of money becomes a prerequisite for obtaining the use-values that satisfy most material needs, yet the production and sale of one’s own commodity may be more discontinuous that one’s own need for the various products of consumption. In this context, every social actor needs to possess a store of money to sustain their consumption through the discontinuities of their own personal commodity production and sale. In Marx’s words:

With more developed commodity production, every producer is compelled to secure for himself the nexus rerum, the ‘social pledge’. His needs are ceaselessly renewed, and necessitate the continual purchase of other people’s commodities, whereas the production and sale of his own commodity costs time and is subject to various accidents. In order then to be able to buy without selling, he must have sold previously without buying. (228)

This necessity to accumulate money hoards can then be personified to a greater or lesser degree, with the desire for personification – the desire to accumulate ever greater masses of the money commodity – encouraged by the universal convertibility of money into any other good, and by the social power money conveys into individual hands (229-230). Because money does not betray how it has been generated, its existence tends to generate corrosive effects by rendering everything – commodity or not – potentially convertible into money (229). Because money is also an object, it can be appropriated by individuals, conferring on those individuals control over money’s social power (230). Because money is qualitatively unbounded, the desire for money is not formally capped in the same way as the desire for specific material goods, which are always demanded only up to the limit of the material needs those goods satisfy (230). The market for material goods can become saturated; the demand for money, which can be converted into any material good, is in principle boundless:

The commodity, as a use-value, satisfies a particular need and forms a particular element of material wealth. But the value of a commodity measures the degree of its attractiveness for all other elements of material wealth, and therefore measures the social wealth of its owner… The hoarding drive is boundless in its nature. Qualitatively or formally considered, money is independent of all limits, that is it is the universal representative of material wealth because it is directly convertible into any other commodity. (230-231)

Qualitatively boundless, money is nevertheless quantitatively bound, and thus limited in the extent to which it can command material wealth and social power for its owner. This quantitative limitation combines with qualitative boundlessness to drive an endless attempt to overcome the quantitative limits of the current hoard:

But at the same time every actual sum of money is limited in amount, and therefore has only a limited efficacy as a means of purchase. This contradiction between the quantitative limitation and the qualitative lack of limitation keeps driving the hoarder back to his Sisyphean task: accumulation. He is in the same situation as a world conqueror, who discovers a new boundary with each country he annexes. (231)

Marx’s analysis of hoarding has therefore derived, from within the political economic analysis of commodity exchange, a drive toward something more than the circulation of material goods, governed quantitatively and qualitatively by material needs: it has uncovered the potential for a drive that is indifferent to qualitative boundaries and aimed at a purely quantitative expansion – a drive toward boundless accumulation.

IV. Means of Payment

Having derived this potential for boundless accumulation as a potential subjective motivation arising from the qualitative character of commodity circulation, Marx then introduces a new social function of money – as a means of payment. His analysis of this function begins to explore, in a very preliminary way, how a drive for accumulation becomes objectively compulsive on social actors, regardless of their subjective desires. Social actors may or may not personify to the same degree the objective social potential for boundless accumulation. Nevertheless, in interacting with aspects of their everyday social environment, social actors find themselves caught up in processes oriented to accumulation, such that accumulation becomes a means or a prerequisite for achieving other ends, such as material reproduction, even for those social actors who do not deliberately take accumulation to be their direct personal goal.

Marx begins by reminding the reader of the potential for a temporal disjoint between the two antithetical moments of the circulation of commodities:

In the direct form of commodity circulation hitherto considered, we found a given value always presented to us in a double shape, as a commodity at one pole, and money at the opposite pole. The owners of commodities therefore came into contact as the representatives of equivalents which were already available to each of them. But with the development of circulation, conditions arise under which the alienation of the commodity becomes separated by an interval of time from the realization of its price. (232)

Marx focusses here on transactions in which a buyer obtains a commodity prior to providing the commodity’s money equivalent to its seller. Ever attentive to the impact of the form in which social interactions take place, Marx argues that this new form of interaction constitutes a distinctive new function of money, and generates associated performative stances or perspectives. In this new configuration, the buyer does not step into the interaction as a money owner, but rather as a representative of money that will be exchanged at some future time, while the seller hands over a commodity, but will realise that commodity’s value only later. The result is the constitution of two new social roles – those of debtor and creditor – which are both oriented to money that has been committed to exist at some future point in time. In Marx’s words:

The seller sells an existing commodity, the buyer buys as the mere representative of money, or rather as the representative of future money. The seller becomes a creditor, the buyer becomes a debtor. Since the metamorphosis of commodities, or the development of their form of value, has undergone a change here, money receives a new function as well. It becomes a means of payment. (233)

Marx is once again careful to stress that these new roles, and the associated new function of money, do not arise externally to commodity circulation, as some sort of corruption or degradation of the process. Instead, these roles arise immanently from within commodity circulation, in response to the qualitative characteristics of this circulation – specifically, in response to the potential temporal disjoint between the antithetical metamorphoses through which this circulation is effected. At the same time, these roles carry their own consequences and implications that differ from those implied by other aspects of the process of commodity circulation. In particular, in spite of the formal and, in principle, the practical capacity for social actors to alternate between these roles, just as they alternate between the roles of buyer and seller, the roles of creditor and debtor harbour a much greater risk for social actors to become frozen within the role they currently inhabit. In Marx’s words:

The role of creditor or of debtor results here from the simple circulation of commodities. The change in its form impresses this new stamp on seller and buyer. At first, therefore, these new roles are just as transient as those of seller and buyer, and are played alternately by the same actors. Nevertheless, this opposition now looks less pleasant from the very outset, and it is capable of more rigid crystallisation. (233)

The roles of creditor and debtor thus imply the possibility for one group of social actors to become perpetually in thrall to another group – a possibility that, Marx indicates, exists in a number of different historical contexts (233). Marx has not yet reached the point in his analysis where he can explicitly thematise the differentia specifica that marks out the relation of wage labour to capital, but he begins here to hint at the possibility for such a class relation.

These roles also imply a new reason for money to become the end point of the process of commodity exchange: a hoard is now required to meet the buyer’s past commitments to pay for objects of consumption that have already been advanced. Having purchased without paying in the past, the buyer must at some point generate the ability in the future to pay without purchasing anew. The buyer must accumulate a hoard – must engage in sales without new buying – in order to meet commitments that have arisen from past consumption. In Marx’s words:

The seller turned his commodity into money to satisfy some need; the hoarder in order to preserve the monetary form of his commodity, and the indebted purchaser in order to be able to pay. If he does not pay, his goods will be sold compulsorily. The value-form of the commodity, money, has now become the self-sufficient purpose of the sale, owing to a social necessity springing from the conditions of the process of circulation itself. (234)

The buyer – as debtor – must therefore accumulate a money hoard in order to meet the promises made to secure past consumption. Since the buyer’s need to consume does not disappear at that later point when these accumulated funds must be paid, this form of accumulation tacitly encourages expansion – an increase in the buyer’s production to ensure the ability to meet past commitments without contracting present consumption.

What plays out here, at the level of individual debtors and creditors, carries its analogies at a more systematic level. The management of debts and payments is concentrated in institutions that can bring a whole network of interlacing debts face-to-face to cancel one another out (235). In this form, when actual payment must be made, money enters into these payments not as the circulating medium (because the goods associated with these obligations have already changed hands in the absence of money), but as the materialisation of social labour. In Marx’s words:

But when actual payments have to be made, money does not come onto the scene as a circulating medium, in its merely transient form of an intermediary in the social metabolism, but as the individual incarnation of social labour, the independent presence of exchange-value, the universal commodity. (235)

This phenomenon becomes visible, for Marx, in monetary crises, in which a complex network of means for settling payments comes suddenly to be disrupted, interrupting the intertwining mechanisms that customarily operate to cancel out large portions of the payments owed. At this point, money of account – which tracks the relative values of the various obligations in an apparently nominal form – yields to demands for hard cash, in whatever its socially-valid form may be (236-237). Crisis therefore figures here, not as a phenomenon that points unambiguously beyond the current social configuration, but rather as a phenomenon that demonstrates that the current social configuration has the particular qualitative form – as a matter of practical experience – that Marx has been analysing in the text. By gesturing to the way in which crisis makes certain functions and characteristics of money evident, Marx ties his analysis back to a specific set of given relations, demonstrating that, in spite of the sometimes “idealist” form of the presentation, the phenomena Marx is deriving in his analysis are being grasped as aspects of real social experience.

Marx now quickly reviews how the “same” money alternately fills radically different functions as it circulates through different kinds of social interactions, taking on different qualitative characteristics and practical implications depending on the relations in which it is suspended at a given moment in time. In Marx’s words:

The farmer, for example, sells his wheat for £2, and this money serves thus as the medium of circulation. On the day when the payment falls due, he uses it to pay for linen which the weaver has delivered. The same £2 now serves as the means of payment. The weaver now buys a Bible for cash. This serves again as the means of circulation, and so on. (237)

From here, Marx moves to the more general conclusion that, in spite of what might have been implied by the circulation of commodities, considered as a face-to-face process, the very conditions of the circulation of commodities themselves give rise to a situation where there is no necessary relation between the amount of commodities and the amount of money in circulation, or between the debts contracted and the payments due, within any given period of time (237).

Marx next briefly discusses the expansion of money as a means of payment – both into the form of credit-money, in which ownership of debt itself comes to be bought and sold, and into the form of contractual payment obligations, which all become expressed in money (238). Marx regards this expansion of money as a means of payment as part of the differentia specifica of the process he is trying to grasp: he notes here the inability of earlier historical periods to universalise obligations to remit money as tender for all transactions (238-239).

He closes this discussion by returning again to the necessity for accumulating monetary hoards:

The development of money as a means of payment makes it necessary to accumulate it in preparation for the days when the sums which are owing fall due. While hoarding, considered as an independent form of self-enrichment, vanishes with the advance of bourgeois society [die bürgerliche Gesellschaft], it grows at the same time in the form of the accumulation of a reserve fund of the means of payment. (240)

Hoarding – and thus the need to pursue money as an end in itself – becomes an objective social necessity as the result of the qualitative characteristics of commodity circulation. Marx will use this conclusion in subsequent chapters to pick out the differentia specifica of the kind of commodity circulation that attracts the attention of political economy: commodity circulation which is already indexed to, and embedded within, an overarching process that is itself oriented to its own boundless expansion. Focussing on the end result – that material goods are circulated – obscures this overarching process; focussing on the form – the way the end result is achieved – begins to bring this process into view, although still incompletely. Over the next several chapters Marx will effect the leap from commodity circulation to the overarching process in which it is embedded – beginning with the introduction of the category of capital in chapter 4.

V. World Money

To effect the transition between this chapter and the next, Marx outlines one final function of money – world money – money that transcends the boundaries in which its functions can be secured by the coercive action of the state. At this point, Marx reminds us that many of the functions analysed in this chapter have been merely local phenomena: money as a standard of price, coin, and symbol of value are all functions that rely on the universal acceptance of the power of the state, and therefore do not extend beyond domestic boundaries. These domestic contexts are now situated within a broader global scale – and the process that interests Marx is therefore itself positioned explicitly as global in scale. With this move to the global, Marx introduces yet another reference to Hegel, in the form of the peculiar idealist formulation:

It is in the world market that money first functions to its full extent as the commodity whose natural form is also the directly social form of realization of human labour in the abstract. Its mode of existence becomes adequate to its concept. (240-241)

The second sentence – ghosting Hegel’s idealist presentation – suggests that a pre-existent concept of money as a materialisation of abstract labour, somehow externalises itself on the world market, thus realising its immanent potential. The first sentence, however, has already tipped Marx’s pragmatist hand and positioned this comment as a tacit critique of Hegel’s method: the world market – a practical social entity – is what first confers on money this particular function. At this point, it becomes explicit what perspective has been voiced all along in the discussion of money and abstract labour: the practically-available perspective provided by our collective experience of interacting with money as it operates on this global scale.

While the order of presentation suggests that Marx has derived the global market from the internal contradictions of the commodity – as if the commodity were a concept realising itself in history – the conceptual thrust of the analysis is the direct inverse: as we move forward in the text, we gradually learn more and more about the practical experiences that make it possible to attribute specific characteristics to the commodity – we gradually know more and more about the network of concrete social conditions that are required, in order for it to become socially valid to describe the commodity as the elementary form of social wealth. Marx’s nod to Hegel here – like the similar nod at the end of his second chapter – reminds us that Hegel is still one of the targets of Marx’s critique, and that Marx continues to unspool a critical inversion of Hegel’s method, designed to reveal Hegel’s dialectic as an apotheosis of given relations that Marx can more adequately grasp.