----------------------------------------
--------    ,transcriber's ,note3       
,bold text is enclosed within plus      
signs4      ,gesperrt text is enclosed  
within equal signs4      ,fraktur font  
is enclosed between two upright         
lines4                                  
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--------            ,a ,,contribution   
,,to    ,,the ,,critique ,,of           
,,political ,,economy      ,,by         
,,karl ,,marx      ,translated from the 
,second ,german ,edition by ,n4 ,i4     
,stone      ,with an ,appendix          
,containing ,marx's ,introduction to the
 ,critique    ,recently ,published among
 ,his ,posthumous ,papers      ,,chicago
    ,,charles ,h4 ,,kerr  ,,company     
,copyright1 #aijd    ,by the            
,international ,library ,publishing ,co4
          ,,translator',s ,,preface4    
,the present translation has been made  
from the second edition of the  8,zur   
,kritik der ,politischen ,oekonomie10   
published by ,karl ,kautsky in  #ahig   

with slight changes from the original   
edition of #ahei2 changes  that had been
 indicated by ,marx on the margins of   
his own copy of the  book4    ,as will  
be seen from the author's preface1 the  
work was originally  issued as the first
 instalment of a complete treatise of   
political  economy4 ,as he went on with 
his work1 however1 ,marx modified his   
plans  and eight years after the        
appearance of the 8,zur ,kritik0 he     
published  the first volume of his      
,capital1 whose scope was intended to   
cover the  entire field of political    
economy4    ,the plan to which ,marx    
alludes in the preface to the present   
work  was thus abandoned in its formal  
aspects1 but not in substance4 ,the     
subject matter treated here was         
reproduced or rather 8summarized10 as   
,marx himself puts it1 in ,capital4 ,but
 that was done in so far as was         
necessary to secure continuity of       
treatment4 ,on the other hand1 many     
important matters are treated here more 

thoroughly than in ,capital1  especially
 the part devoted to the discussion of  
money4 ,this1 as well  as the chapters  
on the history of the theories of value 
and of money1  which do not appear in   
,capital1 make 8,zur ,kritik0 a work    
practically  complete in itself4    ,the
 recent silver agitation in this country
 shows how timely and useful  this work 
still is1 though written nearly half a  
century ago4 ,that a  great part of the 
working-men employed in the cities were 
not carried  away by the                
,democratic-,populist agitation in #ahif
 and #aijj is probably  due in a greater
 measure than is commonly realized to   
the direct  and indirect influence of   
,marx1 whose economic teachings guided  
the  socialists in their counter        
agitation4 ,and since the conditions    
which  once gave rise to a demand for an
 inflated currency have by no means     
disappeared beyond a possibility of     
return1 this book has a wide field      
before it1 outside of the library of the

 college and of the student of          
economics1 which the author's name and  
prestige with the working class  insures
 for it4    ,there is another reason1 if
 any need be given why this book should 
have been translated into ,english4     
,marx's preface to the present work     
contains the classic formulation of his 
historico-philosophic theory  known as  
the ,materialistic ,interpretation of   
,history4 ,this theory1  which until    
recently was entertained almost         
exclusively by socialist  writers and   
was hardly heard of outside of socialist
 circles in ,english  speaking          
countries1 is at last receiving not only
 due recognition but  sympathetic       
appreciation at the hands of men of     
science4#a ,it is  rather a significant 
coincidence that the work which for the 
first  time clearly formulated the law  
governing social evolution should have  
seen the light of day in the same year  
in which ,darwin gave to the  world his 
theory of organic evolution4 ,and as the

 latter had to fight  its way to        
recognition in the teeth of religious   
prejudices1 so has the  recognition of  
the former been retarded by even more   
powerful social  and political          
prejudices4    ,the ,introduction to the
 ,critique of ,political ,economy which 
is added  as a supplement to this book  
is for the first time published in book 
form in any language4 ,it was written by
 ,marx in #aheg1 but for reasons        
explained by him in the preface was not 
published and in fact was never         
finished by him1 since according to his 
changed plans it would have  fitted more
 into the last volume of ,capital which 
was to contain a  history of political  
economy4 ,the introduction has been     
published but  lately in the form of a  
magazine article by ,karl ,kautsky1     
editor of the  ,neue ,zeit and literary 
executor of ,karl ,marx4    ,a few      
explanations are here in order with     
reference to the work of  translation4  
,no one is more keenly alive to the     

shortcomings of the  ,english rendering 
of the original than the translator     
himself4 ,while  fully conscious that   
the translation might be greatly        
improved1 he  has at times deliberately 
sacrificed literary finish to closeness 
to  the original4 ,it will be found that
 many passages have been rendered  more 
clear and concise in ,capital in which1 
according to ,marx's own  statement in  
the preface to that work1 they were much
 simplified and  popularized4 ,the      
,hegelian phraseology is more in        
evidence in the  present work rendering 
translation a more difficult task4 ,yet 
for  that very reason it seemed         
particularly desirable to give to       
,english  speaking readers as close a   
version of the original as was possible4
 ,in  the few cases where certain       
passages from this work were reproduced 
by  ,marx in ,capital1 the translation  
of the latter by ,moore and ,aveling was
  freely drawn upon with slight         
modifications here and there4    ,about 

the only liberty taken with ,marx's     
terminology has been in  the case of the
 word 8brgerlich40 ,marx speaks here of 
8brgerliche  ,produktion0 and           
8brgerlicher ,reichthum0 and 8brgerliche
 ,arbeit0 where  eight years later he   
used in corresponding passages in       
,capital the word  8kapitalistische40   
,as the ,english speaking reader is more
 accustomed to  hear of the 8capitalist0
 system of production than of the       
8bourgeois0  system of production1 etc41
 the translator considered ,marx's own  
change  of this term within a few years 
from the publication of 8,zur ,kritik0  
a sufficient justification for rendering
 the word 8brgerlich0 into              
8capitalistic0 wherever it seemed more  
likely to carry the meaning home  to the
 reader4    ,in view of the fact that   
the work is likely to be read in wide   
circles  it was thought desirable to    
translate the numerous quotations from  
,italian1 ,greek1 ,latin and ,french    
writers1 the translation being given    

side by side with the original          
quotation4 ,all ,english citations given
  by ,marx in ,german have been restored
 from the original sources1 which       
necessitated the use of four libraries1 
the ,astor and the ,columbia            
,university libraries in ,new ,york1 the
 ,congressional ,library in             
,washington1 and the private library of 
,professor ,seligman to whose  kindness 
the translator is indebted for the      
permission to use rare  works of the    
seventeenth century quoted by ,marx4    
,several of ,marx's  references to the  
pages of the books quoted by him have   
been found to  be wrong and therefore   
differ here from those given in the     
original4  ,in two or three cases where 
the original ,english citations could   
not  be found they were retranslated    
from ,german with the quotation marks   
omitted4    ,this statement would be    
incomplete if the translator failed to  
mention  the helpful participation in   
this work by his wife whose share in the

  translation is equal to his own4      
,new ,york1 ,october1 #aijc4            
,,author',s ,,preface4      ,i consider 
the system of bourgeois economy in the  
following order3  ,capital1 landed      
property1 wage labor2 state1 foreign    
trade1  world market4 ,under the first  
three heads ,i examine the conditions   
of the economic existence of the three  
great classes1 which make up  modern    
bourgeois society2 the connection of the
 three remaining heads  is self evident4
 ,the first part of the first book1     
treating of capital1  consists of the   
following chapters3 #a4 ,commodity2 #b4 
,money1 or simple  circulation2 #c4     
,capital in general4 ,the first two     
chapters form the  contents of the      
present work4 ,the entire material lies 
before me in the  form of monographs1   
written at long intervals not for       
publication1 but  for the purpose of    
clearing up those questions to myself1  
and their  systematic elaboration on the
 plan outlined above will depend upon   

circumstances4    ,i omit a general     
introduction which ,i had prepared1 as  
on second  thought any anticipation of  
results that are still to be proven1    
seemed  to me objectionable1 and the    
reader who wishes to follow me at all1  
must make up his mind to pass from the  
special to the general4 ,on the  other  
hand1 some remarks as to the course of  
my own politico-economic  studies may be
 in place here4    ,the subject of my   
professional studies was jurisprudence1 
which ,i  pursued1 however1 in          
connection with and as secondary to the 
studies  of philosophy and history4 ,in 
#ahdb-dc1 as editor of the 8,rheinische 
,zeitung10 ,i found myself embarrassed  
at first when ,i had to take part  in   
discussions concerning so-called        
material interests4 ,the proceedings  of
 the ,rhine ,diet in connection with    
forest thefts and the extreme           
subdivision of landed property2 the     
official controversy about the          
condition of the ,mosel peasants into   

which ,herr von ,schaper1 at that  time 
president of the ,rhine ,province1      
entered with the 8,rheinische           
,zeitung20 finally1 the debates on free 
trade and protection1 gave  me the first
 impulse to take up the study of        
economic questions4 ,at  the same time a
 weak1 quasi-philosophic echo of ,french
 socialism and  communism made itself   
heard in the 8,rheinische ,zeitung0 in  
those days  when the good intentions 8to
 go ahead0 greatly outweighed knowledge 
of  facts4 ,i declared myself against   
such botching1 but had to admit at  once
 in a controversy with the 8,allgemeine 
,augsburger ,zeitung0 that my  previous 
studies did not allow me to hazard an   
independent judgment as  to the merits  
of the ,french schools4 ,when1          
therefore1 the publishers  of the       
8,rheinische ,zeitung0 conceived the    
illusion that by a less  aggressive     
policy the paper could be saved from the
 death sentence  pronounced upon it1 ,i 
was glad to grasp that opportunity to   

retire to  my study room from public    
life4    ,the first work undertaken for 
the solution of the question that       
troubled me1 was a critical revision of 
,hegel's 8,philosophy of ,law02  the    
introduction to that work appeared in   
the 8,deutsch-,franzsische  ,jahrbcher10
 published in ,paris in #ahdd4 ,i was   
led by my studies to  the conclusion    
that legal relations as well as forms of
 state could  neither be understood by  
themselves1 nor explained by the        
so-called  general progress of the human
 mind1 but that they are rooted in the  
material conditions of life1 which are  
summed up by ,hegel after the  fashion  
of the ,english and ,french of the      
eighteenth century under  the name      
8civic society20 the anatomy of that    
civic society is to  be sought in       
political economy4 ,the study of the    
latter which ,i had  taken up in ,paris1
 ,i continued at ,brussels whither ,i   
emigrated on  account of an order of    
expulsion issued by ,mr4 ,guizot4 ,the  

general  conclusion at which ,i arrived 
and which1 once reached1 continued to   
serve as the leading thread in my       
studies1 may be briefly summed up as    
follows3 ,in the social production which
 men carry on they enter into  definite 
relations that are indispensable and    
independent of their  will2 these       
relations of production correspond to a 
definite stage  of development of their 
material powers of production4 ,the sum 
total  of these relations of production 
constitutes the economic structure  of  
societythe real foundation1 on which    
rise legal and political                
superstructures and to which correspond 
definite forms of social  consciousness4
 ,the mode of production in material    
life determines the  general character  
of the social1 political and spiritual  
processes  of life4 ,it is not the      
consciousness of men that determines    
their  existence1 but1 on the contrary1 
their social existence determines  their
 consciousness4 ,at a certain stage of  

their development1 the  material forces 
of production in society come in        
conflict with the  existing relations of
 production1 orwhat is but a legal      
expression  for the same thingwith the  
property relations within which they    
had been at work before4 ,from forms of 
development of the forces  of production
 these relations turn into their        
fetters4 ,then comes  the period of     
social revolution4 ,with the change of  
the economic  foundation the entire     
immense superstructure is more or less  
rapidly  transformed4 ,in considering   
such transformations the distinction    
should  always be made between the      
material transformation of the economic 
conditions of production which can be   
determined with the precision  of       
natural science1 and the legal1         
political1 religious1 aesthetic or      
philosophicin short ideological forms in
 which men become conscious of  this    
conflict and fight it out4 ,just as our 
opinion of an individual  is not based  

on what he thinks of himself1 so can we 
not judge of such  a period of          
transformation by its own consciousness2
 on the contrary1  this consciousness   
must rather be explained from the       
contradictions of  material life1 from  
the existing conflict between the social
 forces  of production and the relations
 of production4 ,no social order ever   
disappears before all the productive    
forces1 for which there is room  in it1 
have been developed2 and new higher     
relations of production  never appear   
before the material conditions of their 
existence have  matured in the womb of  
the old society4 ,therefore1 mankind    
always  takes up only such problems as  
it can solve2 since1 looking at the     
matter more closely1 we will always find
 that the problem itself  arises only   
when the material conditions necessary  
for its solution  already exist or are  
at least in the process of formation4   
,in broad  outlines we can designate the
 ,asiatic1 the ancient1 the feudal1 and 

the modern bourgeois methods of         
production as so many epochs in the     
progress of the economic formation of   
society4 ,the bourgeois relations  of   
production are the last antagonistic    
form of the social process of           
productionantagonistic not in the sense 
of individual antagonism1 but  of one   
arising from conditions surrounding the 
life of individuals in  society2 at the 
same time the productive forces         
developing in the womb  of bourgeois    
society create the material conditions  
for the solution  of that antagonism4   
,this social formation constitutes1     
therefore1 the  closing chapter of the  
prehistoric stage of human society4     
,frederick ,engels1 with whom ,i was    
continually corresponding and           
exchanging ideas since the appearance of
 his ingenious critical essay  on       
economic categories 7in the             
8,deutsch-,franzsische ,jahrbcher071    
came by a different road to the same    
conclusions as myself 7see his          

8,condition of the ,working ,classes in 
,england074 ,when he1 too1 settled  in  
,brussels in the spring of #ahde1 we    
decided to work out together the        
contrast between our view and the       
idealism of the ,german philosophy1 in  
fact to settle our accounts with our    
former philosophic conscience4 ,the     
plan was carried out in the form of a   
criticism of the post-,hegelian         
philosophy4 ,the manuscript in two solid
 octavo volumes had long  reached the   
publisher in ,westphalia1 when we       
received information  that conditions   
had so changed as not to allow of its   
publication4 ,we  abandoned the         
manuscript to the stinging criticism of 
the mice the  more readily since we had 
accomplished our main purposethe        
clearing  up of the question to         
ourselves4 ,of the scattered writings on
 various  subjects in which we presented
 our views to the public at that time1  
,i  recall only the 8,manifesto of the  
,communist ,party0 written by ,engels   

and myself1 and the 8,discourse on ,free
 ,trade0 written by myself4 ,the        
leading points of our theory were first 
presented scientifically1  though in a  
polemic form1 in my 8,misre de la       
,philosophie1 etc40  directed against   
,proudhon and published in #ahdg4 ,an   
essay on 8,wage  ,labor10 written by me 
in ,german1 and in which ,i put together
 my  lectures on the subject delivered  
before the ,german ,workmen's ,club at  
,brussels1 was prevented from leaving   
the hands of the printer by the         
,february revolution and my expulsion   
from ,belgium which followed it as  a   
consequence4    ,the publication of the 
8,neue ,rheinische ,zeitung0 in #ahdh   
and #ahdi1 and  the events which took   
place later on1 interrupted my economic 
studies  which ,i could not resume      
before #ahej in ,london4 ,the enormous  
material  on the history of political   
economy which is accumulated in the     
,british  ,museum2 the favorable view   
which ,london offers for the observation

 of  bourgeois society2 finally1 the new
 stage of development upon which the    
latter seemed to have entered with the  
discovery of gold in ,california  and   
,australia1 led me to the decision to   
resume my studies from the  very        
beginning and work up critically the new
 material4 ,these studies  partly led to
 what might seem side questions1 over   
which ,i nevertheless  had to stop for  
longer or shorter periods of time4      
,especially was the  time at my disposal
 cut down by the imperative necessity of
 working  for a living4 ,my work as     
contributor on the leading              
,anglo-,american  newspaper1 the 8,new  
,york ,tribune10 at which ,i have now   
been engaged for  eight years1 has      
caused very great interruption in my    
studies1 since  ,i engage in newspaper  
work proper only occasionally4 ,yet     
articles on  important economic events  
in ,england and on the continent have   
formed  so large a part of my           
contributions that ,i have been obliged 

to make  myself familiar with practical 
details which lie outside the proper    
sphere of political economy4    ,this   
account of the course of my studies in  
political economy is simply  to prove   
that my views1 whatever one may think of
 them1 and no matter  how little they   
agree with the interested prejudices of 
the ruling  classes1 are the result of  
many years of conscientious research4   
,at the  entrance to science1 however1  
the same requirement must be put as at  
the entrance to hell3      ,qui si      
convien lasciare ogni sospetto    ,ogni 
vilt convien che qui sia morta4         
,karl ,marx4      ,london1 ,january1    
#ahei4          ,,contents4             
,,page4      ,translator's ,preface     
#c      ,author's ,preface              
#i        ,,book ,i4 ,,capital ,,in     
,,general4      ,chapter ,i4            
,commodities                            
#ai        ,a4 ,notes on the ,history of
 the ,theory of ,value                  
#ef      ,chapter ,,ii4 ,money or       

,simple ,circulation                    
#gc          #a4 ,the ,measure of ,value
                                        
#gd        ,b4 ,theories of the ,unit of
 ,measure of ,money                     
#ia          #b4 ,the ,medium of        
,circulation                            
#ajg            a4 ,the ,metamorphosis  
of ,commodities                         
#ajh            b4 ,the ,circulation of 
,money                                  
#abe            c4 ,coin and ,symbols of
 ,value                                 
#ach          #c4 ,money                
#afb            a4 ,hoarding            
#aff            b4 ,means of ,payment   
#ahe            c4 ,world ,money        
#bja          #d4 ,the ,precious ,metals
                                        
#bjh        ,c4 ,theories of the ,medium
 of ,circulation and of           ,money
                                        
#bae      ,appendix4 ,introduction to   
the ,critique of ,political             
,economy                                

#bfd          #a4 ,production in        
,general                                
#bfe          #b4 ,the ,general         
,relation of ,production to             
,distribution1             ,exchange1   
and ,consumption                        
#bgd          #c4 ,the ,method of       
,political ,economy                     
#bib          #d4 ,production1 ,means of
 ,production1 and ,conditions           
of ,production                          
#cjf      ,index                        
#cac          ,,capital ,,in ,,general4 
,,book ,i4          ,,chapter ,i4       
,,commodities4      ,at first sight the 
wealth of society under the capitalist  
system  presents itself as an immense   
accumulation of commodities1 its unit   
being a single commodity4 ,but every    
commodity has a twofold aspect1  that of
 use value and exchange value4#b    ,a  
commodity is first of all1 in the       
language of ,english economists1  8any  
thing necessary1 useful or pleasant in  
life10 an object of human  wants1 a     

means of existence in the broadest sense
 of the word4 ,this  property of        
commodities to serve as use-values      
coincides with their  natural palpable  
existence4 ,wheat e4 g4 is a distinct   
use-value  differing from the use-values
 cotton1 glass1 paper1 etc4 ,use-value  
has  a value only in use and is realized
 only in the process of consumption4    
,the same use-value may be utilized in  
various ways4 ,but the extent of  its   
possible applications is circumscribed  
by its distinct properties4             
,furthermore1 it is thus limited not    
only qualitatively but also             
quantitatively4 ,according to their     
natural properties the various          
use-values have different measures1 such
 as a bushel of wheat1 a quire  of      
paper1 a yard of linen1 etc4            
,whatever the social form of wealth may 
be1 use-values always have a  substance 
of their own1 independent of that form4 
,one can not tell by  the taste of wheat
 whether it has been raised by a        

,russian serf1 a  ,french peasant1 or an
 ,english capitalist4 ,although the     
object of social  wants and1 therefore1 
mutually connected in society1          
use-values do  not bear any marks of the
 relations of social production4        
,suppose1 we  have a commodity whose    
use-value is that of a diamond4 ,we can 
not tell  by looking at the diamond that
 it is a commodity4 ,when it serves as a
  use-value1 aesthetic or mechanical1 on
 the breast of a harlot1 or in  the hand
 of a glasscutter1 it is a diamond and  
not a commodity4 ,it is  the necessary  
prerequisite of a commodity to be a     
use-value1 but it is  immaterial to the 
use-value whether it is a commodity or  
not4 ,use-value  in this indifference to
 the nature of its economic destination1
 i4 e4  use-value as such lies outside  
the sphere of investigation of political
  economy4#c ,it falls within the sphere
 of the latter only in so far  as it    
forms its own economic destination4 ,it 
forms the material basis  which directly

 underlies a definite economic relation 
called exchange  value4                 
,exchange-value appears at first sight  
as a quantitative relation1  as a       
proportion in which use-values are      
exchanged for one another4 ,in  such a  
relation they constitute equal          
exchangeable quantities4 ,thus1  a      
volume of ,propercius and eight ounces  
of snuff may represent the  same        
exchange value1 in spite of the         
dissimilar use-values of tobacco  and   
elegy4 ,as exchange-value1 one kind of  
use-value is worth as much  as another  
kind1 if only taken in right proportion4
 ,the exchange  value of a palace can be
 expressed in a certain number of boxes 
of  shoe-blacking4 ,on the contrary1    
,london manufacturers of shoe-blacking  
have expressed the exchange value of    
their many boxes of blacking1  in       
palaces4 ,thus1 entirely apart from     
their natural forms and  without regard 
to the specific kind of wants for which 
they serve as  use-values1 commodities  

in certain quantities equal each other1 
take  each other's place in exchange1   
pass as equivalents1 and in spite of    
their variegated appearance1 represent  
the same entity4    ,use-values are     
primarily means of existence4 ,these    
means of existence1  however1 are       
themselves products of social life1 the 
result of expended  human vital power1  
materialized labor4 ,as the embodiment  
of social  labor1 all commodities are   
the crystallization of the same         
substance4  ,let us now consider the    
nature of this substance1 i4 e41 of     
labor1  which is expressed in exchange  
value4    ,let one ounce of gold1 one   
ton of iron1 one quarter of wheat and   
twenty yards of silk represent equal    
exchange values4 ,as equivalents1  in   
which the qualitative difference between
 their use-values has been  eliminated1 
they represent equal volumes of the same
 kind of labor4  ,the labor which is    
equally embodied in all of them must be 
uniform1  homogeneous1 simple labor4 ,it

 matters as little in the case of labor 
whether it be embodied in gold1 iron1   
wheat1 or silk1 as it does in  the case 
of oxygen1 whether it appears in the    
rust of iron1 in the  atmosphere1 in the
 juice of a grape1 or in the blood of a 
human being4  ,but the digging of gold1 
the extraction of iron from a mine1 the 
raising of wheat and the weaving of silk
 are so many kinds of labor1  differing 
in quality4 ,as a matter of fact1 what  
in reality appears as a  difference in  
use-values1 is in the process of        
production1 a difference  in the work   
creating those use-values4 ,just as     
labor1 which creates  exchange value1 is
 indifferent to the material of         
use-values1 so it  is to the special    
form of labor itself4 ,furthermore1 the 
different  use-values are the products  
of the work of different individuals1   
consequently the result of various kinds
 of labor differing  individually from  
one another4 ,but as exchange values1   
they represent  the same homogeneous    

labor1 i4 e41 labor from which the      
individuality  of the workers is        
eliminated4 ,labor creating exchange    
value is1  therefore1 abstract general  
labor4    ,if one ounce of gold1 one ton
 of iron1 one quarter of wheat1 and     
twenty  yards of silk are exchange      
values of equal magnitude or            
equivalents2  then one ounce of gold1   
half a ton of iron1 three bushels of    
wheat  and five yards of silk are       
exchange values of different magnitudes1
  and this quantitative difference is   
the only difference of which  they are  
capable as exchange values4 ,as exchange
 values of different  magnitudes1 they  
represent greater or smaller quantities 
of that  simple1 homogeneous1 abstract1 
general labor1 which forms the substance
  of exchange value4 ,the question      
arises1 how are these quantities to be  
measured8 ,or1 rather what constitutes  
the substance of labor1 which  makes it 
capable of quantitative measurement1    
since the quantitative  differences of  

commodities in their capacity of        
exchange values are  but quantitative   
differences of labor embodied in them4  
,just as motion  is measured by time1 so
 is labor measured by labor-time4 ,given
  the quality of labor1 the difference  
in its duration is the only  property by
 which it can be distinguished4 ,as     
labor-time1 labor has  the same standard
 of measurement as the natural time     
measures1 viz41  hours1 days1 weeks1    
etc4 ,labor-time is the vital substance 
of labor1  independent of its form1     
composition1 individuality2 it is its   
vital  substance quantitatively1 having 
at the same time its own inherent       
measure4 ,labor-time embodied in the    
use-values of commodities is the        
substance which makes exchange values   
and1 therefore1 commodities of  them and
 at the same time serves to measure     
definite quantities of  their value4    
,corresponding quantities of different  
use-values1 in which  the same quantity 
of labor-time is embodied1 are          

equivalents2 or1 to  put it in another  
form1 all use-values are equivalents    
when taken in  proportions containing   
the same quantity of expended1          
materialized  labor-time4 ,as exchange  
values1 all commodities are but definite
  measures of congealed labor-time4     
,to understand how exchange value is    
determined by labor-time1 the  following
 main points must be kept in mind3 ,the 
reduction of labor to  simple labor1    
devoid of any quality1 so to speak2 the 
specific ways  and means by which       
exchangevalue-creating1 i4 e41 commodity
 producing  labor becomes social labor2 
finally1 the difference between labor as
  the producer of use-values1 and labor 
as the creator of exchange values4      
,in order to measure commodities by the 
labor-time contained in them1  the      
different kinds of labor must be reduced
 to uniform1 homogeneous1  simple labor1
 in short1 to labor which is            
qualitatively the same1 and1  therefore1
 differs only in quantity4    ,this     

reduction appears to be an abstraction2 
but it is an abstraction  which takes   
place daily in the social process of    
production4 ,the  conversion of all     
commodities into labor-time is no       
greater abstraction  nor a less real    
process than the chemical reduction of  
all organic  bodies to air4 ,labor1 thus
 measured by time1 does not appear in   
reality  as the labor of different      
individuals4 but on the contrary1 the   
various working individuals rather      
appear as mere organs of labor2 or1  in 
so far as labor is represented by       
exchange values1 it may be defined  as  
human labor in general4 ,this           
abstraction of human labor in general   
virtually exists in the average labor   
which the average individual  of a given
 society can performa certain productive
 expenditure of  human muscles1 nerves1 
brain1 etc4 ,it is unskilled labor to   
which the  average individual can be put
 and which he has to perform in one way 
or another4 ,the character of this      

average labor varies in different       
countries and at different stages of    
civilization1 but appears fixed in  a   
particular society4 ,unskilled labor    
constitutes the bulk of all labor       
performed in capitalist society1 as may 
be seen from all statistics4    ,it is  
obvious that if ,a spends six hours in  
the production of iron  and six hours on
 linen1 and ,b also produces iron during
 six hours and  linen during another six
 hours1 it is but a different           
application  of the same labor time that
 would be expended1 if ,a produced iron 
during twelve hours1 while ,b worked    
twelve hours on linen4 ,but how  about  
skilled labor which rises above the     
level of average labor by its  higher   
intensity1 by its greater specific      
gravity8 ,this kind of labor  resolves  
itself into unskilled labor composing   
it2 it is simple labor  of a higher     
intensity1 so that one day of skilled   
labor1 e4 g41 may  equal three days of  
unskilled labor4 ,this is not the place 

to consider  the laws regulating this   
reduction4 ,it is clear1 however1 that  
such  reduction does take place1 for1 as
 exchange value1 the product of the     
most skilled labor is1 when taken in a  
certain proportion1 equivalent  to the  
product of unskilled average labor1 or  
equal to a definite  quantity of that   
unskilled labor4    ,the determination  
of exchange-value by means of labor-time
 implies1  further1 the fact that an    
equal quantity of labor is embodied in  
any  given commodity1 e4 g41 a ton of   
iron1 no matter whether it is the work  
of ,a or ,b1 that is to say1 various    
individuals expend an equal amount  of  
labor-time for the production of the    
same use-value of a given  quality and  
quantity4 ,it is thus assumed that the  
labor-time contained  in a commodity is 
the labor-time necessary for its        
production1 i4 e41  it is the labor-time
 which is required for the production of
 another  specimen of the same commodity
 under the same general conditions of   

production4    ,the conditions of labor1
 which creates exchange value1 as shown 
by the  analysis of the latter1 are     
social conditions of labor or conditions
  of social labor4 ,social1 not in the  
ordinary1 but in a special  sense4 ,it  
is a specific form of the social        
process4 ,the homogeneous  simplicity of
 labor means first of all equality of   
the labors of  various individuals1 a   
reciprocal relation of equality of their
 labors  determined by the actual       
reduction of all kinds of labor to      
uniform  labor4 ,the labor of every     
individual1 as far as it is expressed in
  exchange value possesses this social  
character of equality and finds         
expression in exchange value only in so 
far as it is a relation of  equality    
with the labor of all other individuals4
    ,furthermore1 the labor-time of a   
single individual is directly  expressed
 in exchange value as universal         
labor-time1 and this  universal         
character of individual labor is the    

manifestation of its  social character4 
,the labor-time represented by exchange 
value is the  labor-time of an          
individual1 but of an individual        
undistinguished from  other individuals 
in so far as they perform the same      
labor2 therefore1  the time required by 
one individual for the production of a  
certain  commodity is the necessary     
labor-time which any other individual   
would have to spend on the production of
 the same commodity4 ,it is the         
labor-time of an individual1 his        
labor-time1 but only as labor-time      
common to all1 regardless as to which   
particular individual's  labor-time it  
is4 ,as universal labor-time it is      
represented in a  universal product1 in 
a universal equivalent1 in a definite   
quantity  of materialized labor-time3   
the latter is indifferent as to the     
particular form of use-value in which it
 appears directly as the  product of an 
individual1 and may be turned at will   
into any other  form of use-value to    

represent the product of any other      
individual4  ,only as such a universal  
quantity1 is it a social quantity4 ,in  
order to result in exchange value1 the  
labor of an individual must  be turned  
into a universal equivalent1 i4 e41 the 
labor-time of an  individual must be    
expressed as universal labor-time1 or   
universal  labor-time as that of an     
individual4 ,it is the same as though   
different  individuals had put together 
their labor-time and contributed the    
different quantities of labor-time at   
their common disposal in the form  of   
different use-values4 ,the labor-time of
 the individual is thus1  in fact1 the  
labor time which society requires for   
the production of  a certain use-value1 
i4 e41 for the satisfaction of a certain
 want4  ,but the question that interests
 us here is as to the specific form in  
which labor acquires a social character4
 ,let us suppose that a certain         
quantity of labor-time of a spinner is  
realized in #ajj lbs4 of yarn4  ,suppose

 #ajj yards of linen1 the product of the
 weaver1 represent the  same quantity of
 labor-time4 ,inasmuch as these two     
products represent  equal quantities of 
universal labor-time and1 hence1 are    
equivalents of  every use-value which   
contains the same amount of labor-time1 
they  are also equivalent to each other4
 ,only because the labor-time of the    
spinner and that of the weaver take the 
form of universal labor-time  and their 
products appear as universal            
equivalents1 is the labor of  the weaver
 realized for the spinner1 and that of  
the spinner1 for the  weaver1 the labor 
of one takes the place of the labor of  
the other1 i4  e41 the social character 
of their labors is realized for both4   
,quite  different it was under the      
patriarchal system of production1 when  
spinner and weaver lived under the same 
roof1 when the female members  of the   
family did the spinning1 and the male   
members did the weaving to  supply the  
wants of their own family2 then yarn and

 linen were social  products1 spinning  
and weaving were social labor within the
 limits of  the family4 ,but their      
social character did not manifest itself
 in the  fact that yarn1 as a universal 
equivalent1 could be exchanged for linen
  as a universal equivalent1 or that one
 was exchanged for another1 as          
identical and equivalent expressions of 
the same universal labor-time4  ,it was 
rather the family organization with its 
natural division of  labor that         
impressed its peculiar social stamp on  
the product of  labor4 ,or1 let us take 
the services and payments in kind of the
 ,middle  ,ages4 ,it was the specific   
kind of labor performed by each         
individual in  its natural form1 the    
particular and not the universal aspect 
of labor1  that constituted then the    
social tie4 ,or1 let us finally take    
labor  carried on in common in its      
primitive natural form1 as we find it at
  the dawn of history of all civilized  
races4#d ,it is clear that in this  case

 labor does not acquire its social      
character from the fact that the  labor 
of the individual takes on the abstract 
form of universal labor  or that his    
product assumes the form of a universal 
equivalent4 ,the  very nature of        
production under a communal system makes
 it impossible  for the labor of the    
individual to be private labor and his  
product  to be a private product2 on the
 contrary1 it makes individual labor    
appear as the direct function of a      
member of a social organism4 ,on the    
contrary1 labor1 which is expressed in  
exchange value1 at once appears  as the 
labor of a separate individual4 ,it     
becomes social labor only  by taking on 
the form of its direct opposite1 the    
form of abstract  universal labor4      
,labor1 which creates exchange value1   
is1 finally1 characterized by the  fact 
that even the social relations of men   
appear in the reversed form  of a social
 relation of things4 ,only in so far as 
two use-values are  in a mutual relation

 of exchange values does the labor of   
different  persons possess the common   
property of being identical universal   
labor4  ,hence1 if it be correct to say 
that exchange value is a relation       
between persons1#e it must be added that
 it is a relation disguised  under a    
material cover4 ,just as a pound of iron
 and a pound of gold  represent the same
 weight in spite of their different     
physical and  chemical properties1 so do
 two use-values1 as commodities         
containing  the same quantity of        
labor-time1 represent the same exchange 
value4  ,exchange value thus appears as 
the natural social destination of       
use-values1 a property which they       
possess by virtue of being things and   
in consequence of which they are        
exchanged for one another in definite   
proportions1 or form equivalents1 just  
as chemical elements combine in  certain
 proportions1 forming chemical          
equivalents4 ,it is only through  the   
habit of everyday life that we come to  

think it perfectly plain and            
commonplace1 that a social relation of  
production should take on the  form of a
 thing1 so that the relation of persons 
in their work appears  in the form of a 
mutual relation between things1 and     
between things  and persons4    ,in     
commodities this mystification is as yet
 very simple4 ,it is more  or less plain
 to everybody that a relation of        
commodities as exchange  values is      
nothing but a mutual relation between   
persons in their  productive activity4  
,this semblance of simplicity disappears
 in higher  productive relations4 ,all  
the illusions in regard to the monetary 
system are due to the fact that money is
 not regarded as something  representing
 a social relation of production1 but as
 a product of  nature endowed with      
certain properties4 ,the modern         
economists who sneer  at the illusions  
of the monetary system1 betray the same 
illusion  as soon as they have to deal  
with higher economic forms1 as1 e4 g41  

capital4#f ,it breaks forth in their    
confession of naive surprise1 when  what
 they have just thought to have defined 
with great difficulty as a  thing       
suddenly appears as a social relation   
and then reappears to tease  them again 
as a thing1 before they have barely     
managed to define it as  a social       
relation4    ,since the exchange value  
of commodities is1 in fact1 nothing but 
a  mutual relation of the labors of     
individualslabors which are similar  and
 universalnothing but a material        
expression of a specific social  form of
 labor1 it is a tautology to say that   
labor is the only  source of exchange   
value and consequently of wealth1 in so 
far as the  latter consists of exchange 
values4 ,similarly1 it is a tautology to
  say that matter in its natural state  
has no exchange value1 because  it does 
not contain any labor1 and that exchange
 value as such does  not contain matter4
 ,but when ,william ,petty calls 8labor 
the father and  earth the mother of     

wealth10 or when ,bishop ,berkeley asks 
8whether  the four elements and man's   
labour therein1 be not the true source  
of  wealth10#g or when the ,american1   
,thomas ,cooper puts it popularly3      
8,take away from a piece of bread the   
labour bestowed by the baker on  the    
flour1 by the miller on the grain       
brought to him1 by the farmer  in       
ploughing1 sowing1 tending1 gathering1  
threshing1 cleaning and  transporting   
the seed1 and what will remain8 ,a few  
grains of grass1  growing wild in the   
woods1 and unfit for any human          
purpose0#hthen all  these views do not  
refer to abstract labor as the source of
 exchange  value1 but to concrete labor 
as the source of material wealth2 in    
short1 to labor in so far as it produces
 use-values4 ,in assuming  that a       
commodity has use-value we assume the   
special usefulness  and distinct fitness
 of the labor absorbed by it1 but that  
is all  there is to the view of labor as
 useful labor from the standpoint of    

commodity4 ,considering bread as a      
use-value1 we are interested in its     
properties as an article of food and not
 at all in the different kinds  of labor
 of the farmer1 miller1 baker1 etc4 ,if 
by some invention  nineteen-twentieths  
of this labor could be saved1 the loaf  
of bread  would still render the same   
service as before4 ,if it fell          
ready-made  from the sky it would not   
lose a single atom of its use-value4    
,while  labor which creates exchange    
value is realized in the equality of    
commodities as universal equivalents1   
labor as a productive activity  with a  
useful purpose is realized in the       
endless variety of use-values  created  
by it4 ,while labor which creates       
exchange values is abstract1  universal 
and homogeneous1 labor which produces   
use-values is  concrete and special and 
is made up of an endless variety of     
kinds of  labor according to the way in 
which and the material to which it is   
applied4    ,it is wrong to speak of    

labor in so far as it is applied to the 
production of use-values as of the only 
source of wealth1 namely1  the material 
wealth produced by it4 ,being an        
activity intended to  adapt materials to
 this or that purpose1 it requires      
matter as a  prerequisite4 ,in different
 use-values the proportion between labor
  and raw material varies greatly1 but  
use-value always has a natural          
substratum4 ,labor1 as an activity1     
directed to the adaptation of raw       
material in one form or another1 is a   
natural condition of human  existence1 a
 condition of exchange of matter between
 man and nature1  independent of all    
social forms4 ,on the contrary1 labor   
producing  exchange value is a          
specifically social form of labor4      
,tailoring1 e4  g41 in its material     
manifestation as a distinct productive  
activity1  produces a coat1 but not the 
exchange value of the coat4 ,the latter 
is produced not by the labor of the     
tailor as such1 but by abstract         

universal labor1 and that belongs to a  
certain organization of society  which  
has not been brought about by the       
tailor4 ,thus1 the women under  the     
ancient system of house industry made   
coats without producing the  exchange   
value of the coats4 ,labor as a source  
of material wealth was  known to ,moses1
 the legislator1 as well as to ,adam    
,smith1 the customs  official4#i    ,let
 us consider now some propositions which
 follow from the  determination of      
exchange value by labor-time4    ,as a  
use-value1 every commodity owes its     
usefulness to itself4 ,wheat1  e4 g41   
serves as an article of food4 ,a machine
 saves labor to a certain  extent4 ,this
 function of a commodity by virtue of   
which it serves only  as use-value1 as  
an article of consumption1 may be called
 its service1  the service which it     
renders as use-value4 ,but as an        
exchange value1  a commodity is always  
regarded as a result2 the question in   
this case  is not as to the service     

which it renders1 but as to the         
service#aj  which it has been rendered  
in its production4 ,thus1 the exchange  
value  of a machine is determined not by
 the quantity of labor-time which it    
saves1 but by the quantity of labor-time
 which has been expended on  its own    
production and which is1 therefore1     
required to produce a new  machine of   
the same kind4    ,if1 therefore1 the   
quantity of labor-time required for the 
production  of commodities remained     
constant1 their exchange value would    
remain  the same4 ,but the ease and the 
difficulty of production are constantly 
changing4 ,if the productivity of labor 
increases1 the same use-value  will be  
produced in less time4 ,if the          
productivity of labor declines1  more   
time will be required for the production
 of the same use-value4  ,thus1 the     
labor-time contained in a commodity or  
its exchange-value is  a variable       
quantity1 increasing or diminishing in  
an inverse ratio to  the rise and fall  

of the productivity of labor4 ,the      
productive power of  labor which is     
applied in the manufacturing industry on
 a predetermined  scale depends in the  
agricultural and extractive industries  
also on  natural conditions which are   
beyond human control4 ,the same labor   
will yield a greater or less output of  
various metals1 according to  their more
 or less close occurrence in the earth's
 crust4 ,the same  labor may be embodied
 in two bushels of wheat in a favorable 
season1  and only in one in an          
unfavorable season4 ,in this case1      
scarcity or  abundance1 as natural      
conditions1 seem to determine the       
exchange value  of commodities1 because 
they determine the productivity of      
certain  kinds of labor which depend    
upon natural conditions4    ,unequal    
volumes of different use-value contain  
the same quantity of  labor-time or the 
same exchange value4 ,the smaller the   
volume of a  use-value containing a     
certain quantity of labor-time as       

compared with  other use-values1 the    
greater its specific exchange-value4 ,if
 we find  that certain use-values1 such 
as1 e4 g41 gold1 silver1 copper and     
iron1  or wheat1 rye1 barley and oats1  
form a series of specific exchange      
values which1 though not retaining      
exactly the same numerical ratio1  still
 retain through widely remote epochs of 
civilization the same  rough proportion 
of relatively larger and smaller        
quantities1 we may  draw the conclusion 
that the progressive development of the 
productive  powers of society has       
equally1 or approximately so1 affected  
the  labor-time necessary for the       
production of the various commodities4  
,the exchange value of a commodity is   
not revealed in its own use-value4      
,but1 as the embodiment universal social
 labor-time1 the use-value  of one      
commodity bears a certain ratio to the  
use-values of other  commodities4 ,thus1
 the exchange value of one commodity is 
manifested  in the use-values of other  

commodities4 ,an equivalent is1 in fact1
 the  exchange value of one commodity   
expressed in the use-value of another   
commodity4 ,if ,i say1 e4 g41 that one  
yard of linen is worth two pounds  of   
coffee1 then the exchange value of linen
 is expressed in terms of  the use-value
 of coffee1 viz41 in a certain quantity 
of that use-value4  ,this ratio being   
given1 ,i can express the value of any  
quantity of  linen in coffee4 ,it is    
clear that the exchange value of one    
commodity1  say linen1 is not confined  
to the ratio of any one commodity1 e4 g4
  coffee1 as its equivalent4 ,the       
quantity of universal labor-time which  
is represented in one yard of linen is  
at the same time embodied in  an endless
 variety of volumes of use-values of all
 other commodities4  ,the use-value of  
any other commodity forms the equivalent
 of one yard  of linen1 in the          
proportion in which it represents the   
same quantity of  labor-time as that    
yard of linen4 ,the exchange value of   

this single  commodity is1 therefore1   
fully expressed in the endless number of
  equations in which the use-values of  
all other commodities form its          
equivalents4 ,not until the exchange    
value of a commodity is expressed  in   
the sum total of these equations or of  
the different proportions in  which one 
commodity is exchanged for every other  
commodity1 does it  find an exhaustive  
expression as a universal equivalent2 e4
 g41 the  series of equations3      #a  
yard of linen  #a_/b lb4 of tea1    #a  
yard of linen  #b lbs4 of coffee1    #a 
yard of linen  #h lbs4 of bread1    #a  
yard of linen  #f yards of calico1      
may be represented as follows3    #a    
yard of linen  #a_/h lb4 of tea  #a_/b  
lb4 of coffee  #b lbs4 of bread         
#a-a_/b yards of calico4    ,therefore1 
if we had before us the sum total of the
 equations1 in  which the value of a    
yard of linen is exhaustively expressed1
 we could  represent its exchange value 
in the form of a series4 ,as a matter of

  fact1 the series is an endless one1   
since the circle of commodities1        
constantly expanding1 can never be      
closed up4 ,but while the exchange      
value of one commodity is thus measured 
by the use-values of all other          
commodities1 the exchange values of all 
the other commodities are1 in  their    
turn1 measured by the use-value of this 
one commodity4#aa    ,if the exchange   
value of one yard of linen is expressed 
in #a_/b lb4 of  tea1 or #b lbs4 of     
coffee1 or #f yards of calico1 or #h    
lbs4 of bread1  etc41 it follows that   
coffee1 tea1 calico1 bread1 etc41 are   
equal to  each other if taken in the    
same proportion in which they are equal 
to  the third article1 linen2           
consequently1 linen serves as the common
  measure of their exchange values4     
,every commodity1 as the embodiment  of 
universal labor-time1 i4 e41 as a       
certain quantity of universal           
labor-time1 expresses in turn its       
exchange value in definite quantities   

of the use-values of all other          
commodities1 and the exchange values  of
 all the other commodities are1 on the  
other hand1 measured by the  use-value  
of this one exclusive commodity4 ,but as
 an exchange value1  every commodity is 
at the same time the one exclusive      
commodity  that serves as a common      
measure of the exchange values of all   
other  commodities2 and1 on the other   
hand1 it is but one of the many         
commodities in the entire series of     
which every commodity expresses         
directly its exchange value4    ,the    
value of a commodity is not affected by 
the number of commodities  of other     
kinds4 ,but the length of the series of 
equations in which  its exchange value  
is realized does depend upon the greater
 or less  variety of other commodities4 
,the series of equations in which the   
value of coffee1 e4 g41 is represented1 
indicates the extent to which  it is    
exchangeable1 the limits within which it
 performs the function of  an exchange  

value4 ,the exchange value of a         
commodity as an embodiment  of universal
 social labor-time is expressed in its  
equivalence to an  endless variety of   
use-values4    ,we have seen that the   
exchange value of a commodity varies    
with the  quantity of labor-time        
directly contained in it4 ,its realized 
exchange  value1 i4 e41 its exchange    
value expressed in the use-values of    
other  commodities1 must also depend on 
the proportion in which the labor-time  
spent on the production of all other    
commodities is changing4 ,if1 e4  g41   
the labor-time required for the         
production of a bushel of wheat         
remained constant1 while that required  
for the production of all other         
commodities doubled1 the exchange value 
of a bushel of wheat expressed  in its  
equivalents would become half as large  
as before4 ,the result  would be        
practically the same as if the amount of
 time necessary for  the production of  
one bushel of wheat had been reduced by 

one-half1  and that required for all    
other commodities had remained          
unchanged4  ,the value of commodities is
 determined by the proportion in which  
they  can be produced in the same       
labor-time4 ,in order to see what       
possible  changes this proportion may   
undergo1 let us take two commodities1 ,a
 and  ,b4    ,first case4 ,let the      
labor-time required for the production  
of  commodity ,b remain unchanged4 ,in  
that case the exchange value of ,a1     
expressed in terms of ,b1 rises and     
falls with the rise and fall of the     
labor-time required for the production  
of ,a4    ,second case4 ,let the        
labor-time required for the production  
of  commodity ,a remain constant4 ,then 
the exchange value of ,a1 expressed in  
terms of ,b1 falls and rises in an      
inverse ratio with the rise and fall  of
 the labor-time required for the        
production of ,b4    ,third case4 ,let  
the labor-time required for the         
production of  commodities ,a and ,b    

rise and fall in equal proportion4 ,then
 the  expression of equivalence of ,a   
and ,b remains unchanged4 ,if through   
some  cause the productivity of all     
kinds of labor were to decline          
uniformly1  so that the production of   
all commodities would require an equally
  increased quantity of labor-time1 then
 the value of all commodities  would    
rise1 though the expression of their    
exchange values would remain  unchanged1
 and the actual wealth of society would 
decrease1 because  it would have to     
expend more labor-time on the production
 of the same  stock of use-values4      
,fourth case4 ,let the labor-time       
required for the production of ,a and   
,b rise and fall1 but not uniformly2    
that is to say1 the labor-time  required
 for the production of ,a may rise1     
while that required for ,b  may fall1 or
 vice versa4 ,all of which can be       
reduced to the simple  case where the   
labor-time required for the production  
of one commodity  remains unchanged1    

while that required for the other rises 
or falls4    ,the exchange value of any 
commodity is expressed in the use-value 
of  any other commodity1 be it in       
integral units or in fractions thereof4 
,as exchange value1 every commodity is  
capable of subdivision1 like  the       
labor-time embodied in it4 ,the         
equivalence of commodities is           
independent of their physical           
divisibility as use-values1 just as the 
sum of the exchange values of           
commodities is indifferent to the change
  of form which use-values have to      
undergo when converted into a single    
new commodity4    ,so far we have       
considered commodities from a twofold   
point of view1  as use-values and       
exchange values alternately4 ,but a     
commodity as such  is a direct          
combination of use-value and exchange   
value2 and it is a  commodity only in   
relation to other commodities4 ,the     
actual relation  between commodities    
constitutes the process of their        

exchange4 ,it is  a social process      
participated in by individuals          
independent of each  other but the part 
they take in it is that of owners of    
commodities  only4 ,their mutual        
relations are those of their            
commodities1 and thus  they really      
appear as conscious factors of the      
process of exchange4    ,a commodity is 
a use-value1 wheat1 linen1 a diamond1 a 
machine1  etc41 but as a commodity it   
is1 at the same time1 not a use-value4  
,if it were a use-value for its owner1  
i4 e41 a direct means for the           
satisfaction of his own wants1 then it  
would not be a commodity4 ,to him  it is
 rather a non-use-value2 it is merely   
the material depository of              
exchange-value1 or simply a means of    
exchange2 as an active bearer of        
exchange value1 use-value becomes a     
means of exchange4 ,to the owner it  is 
a use-value only in so far as it        
constitutes exchange value4#ab    ,it   
has yet to become a use-value1 viz41 to 

others4 ,not being a  use-value to its  
owner1 it is a use-value to the owners  
of other  commodities4 ,if it is not1   
then the labor expended on it was       
useless  labor1 and the result of that  
labor is not a commodity4 ,on the other 
hand1 the commodity must become a       
use-value to the owner himself1  because
 his means of existence lie outside of  
it in the use-values of  commodities not
 belonging to him4 ,in order to become a
 use-value1 the  commodity must meet the
 particular want of which it is the     
means of  satisfaction4 ,use-values of  
commodities are thus realized use-values
  through a universal change of hands by
 passing from the hands in which  they  
were held as means of exchange into     
those where they become use  values4    
,only through this universal transfer of
 commodities does the  labor contained  
in them become useful labor4 ,in this   
process of their  mutual interchange as 
use-values1 commodities do not acquire  
any new  economic forms4 ,on the        

contrary1 even the form which marked    
them as  commodities disappears4 ,bread1
 e4 g41 by changing hands from the baker
  to the consumer does not change its   
identity as bread4 ,on the contrary1  it
 is only the consumer that begins to    
regard it as a use-value1 as a  certain 
article of food1 while in the hands of  
the baker it was only  the bearer of an 
economic relation1 a palpable yet       
transcendental  object4 ,thus1 the only 
change of form that commodities undergo 
while  becoming use-values1 consists in 
the fact that they cease to be1 as  a   
matter of form1 non-use-values to their 
owners1 and use-values to  those who do 
not own them4 ,to become use-values     
commodities must be  universally        
alienated2 they must enter the sphere of
 exchange2 but  they are subject to     
exchange in their capacity of exchange  
values4  ,hence1 in order to be realized
 as use-values1 they must be realized as
  exchange values4    ,while the single 
commodity appeared from the standpoint  

of use-value as  something independent1 
as exchange value it was regarded first 
of all  in its relation to all other    
commodities4 ,this relation was1        
however1  merely theoretical1 imaginary4
 ,it becomes real only in the process of
  exchange4 ,on the other hand1 a       
commodity is an exchange value in so    
far as a certain quantity of labor-time 
has been expended on it1 and  it        
consequently represents materialized    
labor-time4 ,but of itself it  is only  
materialized individual labor-time of a 
particular kind1 and  not universal     
labor-time4 ,therefore1 it is not       
directly an exchange  value1 but must   
first become such4 ,first of all1 it is 
an embodiment  of universal labor-time  
only in so far as it represents         
labor-time  applied to a definite useful
 purpose1 i4 e41 when it represents a   
use-value4 ,this was the material       
condition under which alone labor-time  
contained in commodities was regarded as
 universal social labor4  ,thus1 while a

 commodity can become a use-value only  
after it has been  realized as an       
exchange value1 it can1 on the other    
hand1 be realized  as an exchange value 
only if it proves to be a use-value in  
the process  of alienation4    ,a       
commodity can be alienated as a         
use-value only to one whom it  serves as
 a use-value1 i4 e41 as a means of      
satisfying a certain  want4 ,on the     
other hand1 it is exchanged for another 
commodity1 or1  if we put ourselves on  
the side of the owner of the other      
commodity1  it1 too1 can be alienated1  
i4 e41 be realized1 only if brought in  
contact with that particular want of    
which it is the object4 ,in the         
universal exchange of commodities as    
use-values the basis for  their mutual  
relations is in their material          
difference as distinct  objects which   
satisfy different wants by their        
specific properties4  ,but as mere      
use-values1 they are indifferent to each
 other1 and  are incommensurable4 ,as   

use-values they can be exchanged only   
with  reference to certain wants4 ,they 
are exchangeable only as equivalents1   
and they are equivalents only as equal  
quantities of materialized  labor-time1 
so that all regard to their natural     
properties as  use-values and therefore 
to the relation of the commodities to   
particular wants is eliminated4 ,on the 
contrary1 a commodity is  realized as an
 exchange value by replacing as an      
equivalent any  definite quantity of any
 other commodity1 regardless of whether 
it  is a use-value for the owner of the 
other commodity or not4 ,but to  the    
owner of the other commodity it is a    
commodity only in so far  as it is a    
use-value to him1 and it becomes an     
exchange value to  its owner only in so 
far as it is a commodity to that other  
person4  ,thus1 the same relation       
appears as a proportion between         
commodities  as magnitudes of the same  
denomination1 but differing             
qualitatively2  or1 as an expression of 

their equivalence as embodiments of     
universal  labor-time1 and1 at the same 
time1 as a relation of qualitatively    
different objects1 of use-values        
intended for the satisfaction of        
particular wants1 in short1 a relation  
in which they are distinguished  as     
actual use-values4 ,but this equivalence
 and non-equivalence mutually  exclude  
each other4 ,thus we have before us not 
only a vicious circle  of problems in   
which the solution of one implies that  
of the other1 but  a combination of     
contradicting claims1 since the         
fulfillment of one is  directly         
connected with that of its opposite4    
,the process of exchange of commodities 
must result both in the  unfolding and  
in the solution of these contradictions1
 neither of  which1 however1 can appear 
in that process in this simple way4 ,we 
have only observed how commodities are  
mutually related to each other  as      
use-values1 i4 e41 how they appear as   
use-values within the  process of       

exchange4 ,the exchange-value1 on the   
contrary1 as we have  considered it so  
far1 appeared as an abstraction formed  
in our own  minds1 orif we may so put   
itin the mind of the individual owner   
of commodities1 which lie stored in his 
warehouse as use-values1  and weigh upon
 his conscience as exchange values4 ,in 
the process of  exchange1 however1      
commodities must be not only use-values1
 but also  exchange values to one       
another1 and that should appear as their
 own  mutual relation4 ,the difficulty  
which we first encountered was that a   
commodity must be first alienated and   
delivered to its purchasers as  a       
use-value1 in order to appear as an     
exchange value1 as materialized  labor1 
while on the other hand its alienation  
as use-value implies  its being an      
exchange value4 ,but let us assume that 
this difficulty  has been overcome4     
,suppose the commodity has divested     
itself of its  use-value1 and has       
thereby fulfilled the material condition

 of being  socially useful labor1       
instead of a particular labor of an     
individual4  ,in that case1 the         
commodity must become an exchange value1
 a universal  equivalent1 an embodiment 
of universal labor-time for all other   
commodities in the process of exchange1 
and thus1 leaving behind its  limited   
role of a particular use-value1 acquire 
the ability to be  directly represented 
in all use-values as its equivalents4   
,but every  commodity is just such a    
commodity1 appearing as a direct        
incarnation  of universal labor-time by 
divesting itself of its particular      
use-value4 ,on the other hand1 however1 
commodities confront each other  in the 
process of exchange as particular       
commodities1 as the labor  of private   
individuals embodied in particular      
use-values4 ,universal  labor-time is   
itself an abstraction1 which1 as such1  
does not exist for  commodities4    ,let
 us examine the series of equations in  
which the exchange value of a  commodity

 finds its concrete expression1 e4 g43  
#a yard of linen  #b lbs4 of coffee4    
#a yard of linen  #a_/b lb4 of tea4     
#a yard of linen  #h lbs4 of bread1 etc4
    ,these equations simply signify that
 equal quantities of universal  social  
labor-time are embodied in one yard of  
linen1 two pounds  of coffee1 half a    
pound of tea1 etc4 ,but as a matter of  
fact the  individual labors which are   
represented in these particular         
use-values1  become universal1 and1 in  
that form1 also social labor1 only when 
they  are actually exchanged for one    
another in proportion to the labor-time 
contained in them4 ,social labor-time   
exists in these commodities in  a latent
 state1 so to say1 and is first revealed
 in the process of  exchange4 ,we do not
 proceed from the labor of individuals  
as social  labor1 but1 on the contrary1 
from special labor of private           
individuals  which appears as universal 
social labor only by divesting itself of
  its original character in the process 

of exchange4 ,universal social  labor   
is1 therefore1 no ready-made assumption1
 but a growing result4  ,and thus we are
 confronted with a new difficulty1 that 
on the one  hand commodities must enter 
the process of exchange as embodiments  
of  universal labor-time1 while1 on the 
other hand1 this embodiment of the      
labor-time of individuals as social     
labor-time is itself a result of  the   
process of exchange4    ,every commodity
 becomes an exchange value by divesting 
itself of its  use-value1 or of its     
original nature4 ,the commodity must    
therefore  assume a double capacity in  
the process of exchange4 ,but that      
second  capacity of exchange value can  
appear only in the shape of another     
commodity1 because only commodities     
confront each other in the process  of  
exchange4 ,how is a particular commodity
 to represent directly  materialized    
universal labor-time1 orto put it       
differentlyhow is  individual           
labor-time1 which is embodied in a      

particular commodity to  be made        
directly universal in character8 ,the   
concrete expression of the  exchange    
value of a commodity1 i4 e41 of every   
commodity as a universal  equivalent1 is
 represented in an endless series of    
equations1 such as3      #a yard of     
linen  #b lbs4 of coffee4    #a yard of 
linen  #a_/b lb4 of tea4    #a yard of  
linen  #h lbs4 of bread4    #a yard of  
linen  #f yards of calico4    #a yard of
 linen  etc4    ,the above form is      
theoretical in so far as commodities are
 only  thought of as definite quantities
 of materialized universal  labor-time4 
,but the capacity of a particular       
commodity to serve as a  universal      
equivalent from a mere abstraction      
becomes a social result  of the process 
of exchange by a simple inversion of the
 above series of  equations1 viz43      
#b lbs4 of coffee   #a yard of linen4   
#a_/b lb4 of tea     #a yard of linen4  
#h lbs4 of bread    #a yard of linen4   
#f yards of calico  #a yard of linen4   

,while coffee1 tea1 bread1 calico1 in   
short1 all commodities express  in linen
 the labor-time contained in them1 the  
exchange value of  linen1 on the other  
hand1 unfolds itself in all other       
commodities as  its equivalents1 and the
 labor-time embodied in it becomes      
direct  universal labor-time1 which is  
equally expressed in different volumes  
of all other commodities4 ,linen thus   
becomes the universal equivalent        
through the universal action of all     
other commodities upon it4  ,as exchange
 value1 every commodity served as a     
measure of value of  all other          
commodities4 ,now1 on the contrary1     
since all commodities  measure their    
exchange values by means of a particular
 commodity1  this excluded commodity    
becomes the special expression of       
exchange  value1 as a universal         
equivalent4 ,at the same time1 the      
endless  series of equations in which   
the exchange value of every commodity   
was expressed1 is reduced to one single 

equation consisting of two  members4    
,the equation #b lbs4 of coffee  #a yard
 of linen now fully  expresses the      
exchange value of coffee1 for in this   
expression a yard  of linen appears as  
the direct equivalent of a definite     
quantity  of every other commodity4     
,thus1 within the sphere of exchange all
  commodities are or appear to each     
other as exchange values in the  form of
 linen4 ,the proposition that           
commodities1 as exchange values1  are to
 each other as different quantities of  
materialized universal  labor-time1 may 
now be worded to the effect that        
commodities1 as  exchange values1       
represent nothing but different         
quantities of the  same article1 linen4 
,universal labor-time thus assumes the  
aspect of  a distinct thing1 as a       
commodity existing along with and       
outside of  all other commodities4 ,at  
the same time the equation #b lbs4 of   
coffee   #a yard of linen1 in which one 
commodity appears as the exchange  value

 of another1 is yet to be realized4     
,only by being alienated as             
use-valuewhich depends upon whether it  
proves to be in the process  of exchange
 the object of a certain wantdoes the   
commodity actually  transform its       
existence as coffee into the existence  
as linen and  thus takes on the form of 
a universal equivalent and becomes1     
indeed1  an exchange value for all other
 commodities4 ,conversely1 since all    
commodities are turned into linen by    
being alienated as use-values1  linen   
becomes the converted form of all other 
commodities1 and only as  a result of   
this transformation of all other        
commodities into it1 it  becomes the    
direct embodiment of universal          
labor-time1 i4 e41 the  product of      
universal exchange and of the           
elimination of individual  labor4 ,if   
commodities thus assume a twofold       
character in order to  appear as        
exchange values to each other1 the      
commodity which has been  singled out as

 the universal equivalent becomes1 on   
the other hand1 a  use-value in two     
ways4 ,besides its special use-value as 
a particular  commodity1 it assumes a   
universal use-value4 ,this latter kind  
of  use-value constitutes its special   
feature1 emanating as it does1  from the
 specific part which the commodity plays
 as a result of the  universal relation 
which all other commodities bear toward 
it in the  process of exchange4 ,the    
use-value of every commodity as an      
object of  a particular want1 has a     
different value in different hands1 e4  
g41 it  has a different value in the    
hands of the one who disposes of it1    
than  in those of the one who acquires  
it4 ,but the commodity singled out as   
the universal equivalent1 is now an     
object of a universal want arising  from
 the very process of exchange1 and it   
has the same use-value to  everybody1   
viz41 that of serving as the depository 
of exchange value1  of being a universal
 means of exchange4 ,thus we find in one

 commodity  the solution of the         
contradiction which is inherent in      
commodity as  such1 namely1 of being at 
one and the same time a particular      
use-value  and a universal equivalent1  
and1 therefore1 a use-value for         
everybody  or universal use-value4      
,thus1 while all other commodities      
express their  exchange value in the    
form of an ideal equation with the      
excluded  commodityan equation yet to be
 realizedthe use-value of the special   
commodity1 although real1 appears in the
 process itself as a mere  form which is
 yet to be realized through             
transformation into actual  use-values4 
,originally the commodity appeared      
simply as commodity1 as  universal      
labor-time embodied in a particular     
use-value4 ,in the process  of exchange1
 all commodities are related to the one 
excluded commodity  as to a simple      
commodity1 one which appears as the     
embodiment of  universal labor-time in a
 particular use-value4 ,thus1 particular

  commodities become related to one     
particular commodity as a universal     
commodity4#ac ,in that manner the mutual
 relations of possessors of  commodities
 based on the fact that they regard     
their labor as universal  social labor1 
takes on the aspect of their relations  
to commodities as  exchange values2 and 
the mutual relation of commodities as   
exchange  values appears in the process 
of exchange as the relation of all of   
them to one particular commodity as to a
 specially adopted means of  expression 
of their exchange value2 again1 from the
 point of view of  that particular      
commodity the above relation appears as 
its specific  relation to all other     
commodities1 and1 therefore1 as its own 
definite1  spontaneous1 social          
character4 ,the particular commodity    
which thus  appears as the specially    
adopted expression of the exchange value
  of all other commodities1 or the      
exchange value of commodities as a      
particular exclusive commodity1 is      

money4 ,money is a crystallization  of  
the exchange value of commodities which 
they themselves form in  the process of 
exchange4 ,thus1 while commodities      
become use-values  to each other in the 
process of exchange by casting off all  
definite  forms and entering into mutual
 relations in their direct material     
shape1 they must assume a new form1     
viz41 proceed to the formation of  money
 in order to appear as exchange values  
to each other4 ,money  is not a symbol1 
no more than the commodity aspect of a  
use-value  is a symbol4 ,that a social  
relation of production takes the form of
  an object existing outside of         
individuals1 and that the definite      
relations into which individuals enter  
in the process of production  carried on
 in society1 assume the form of specific
 properties of a  thing1 is a perversion
 and by no means imaginary1 but         
prosaically real1  mystification marking
 all social forms of labor which creates
 exchange  value4 ,in money this        

mystification appears only more         
strikingly than in  commodities4    ,the
 necessary physical properties of the   
particular commodity in which  the money
 form of all other commodities is to be 
crystallizedas far  as they are directly
 determined by the nature of exchange   
valueare3  divisibility to any desired  
extent1 homogeneity of its parts1 and   
uniformity of all the specimens of the  
commodity4 ,as an embodiment  of        
universal labor-time it must be         
homogeneous in its structure  and       
capable of representing only            
quantitative differences4 ,another      
necessary property is durability of its 
use-value1 as it must last  through the 
process of exchange4 ,the precious      
metals excel in these  qualities4 ,money
 not being a result of a scheme or      
agreement1 but  having been produced    
instinctively in the process of         
exchange1 a great  variety of more or   
less unsuited commodities had           
successively performed  its functions4  

,at a certain stage of development of   
the process  of exchange1 the necessity 
arises for a polar distribution of the  
functions of exchange value and         
use-value among commodities1 so that    
one commodity e4 g4 should act as a     
medium of exchange1 while another  is   
being alienated as a use-value4 ,this   
necessity brings it about that  one or  
even several commodities possessing the 
most generally accepted  use-value1     
begin1 incidentally at first1 to play   
the part of money4  ,even if not direct 
means of satisfying existing wants1     
their being the  most considerable      
material constituent part of wealth1    
insures to them  a more general         
character than to the other use-values4 
,direct barter1 the original natural    
form of exchange1 represents rather  the
 beginning of the transformation of     
use-values into commodities1  than that 
of commodities into money4 ,exchange    
value has as yet no  form of its own1   
but is still directly bound up with     

use-value4 ,this  is manifested in two  
ways4 ,production1 in its entire        
organization1  aims at the creation of  
use-values and not of exchange values1  
and  it is only when their supply       
exceeds the measure of consumption that 
use-values cease to be use-values1 and  
become means of exchange1  i4 e41       
commodities4 ,at the same time1 they    
become commodities only  within the     
limits of being direct use-values       
distributed at opposite  poles1 so that 
the commodities to be exchanged by their
 possessors  must be use-values to      
both1each commodity to its              
non-possessor4 ,as a  matter of fact1   
the exchange of commodities originates  
not within the  primitive               
communities1#ad but where they end1 on  
their borders at the  few points1 where 
they come in contact with other         
communities4 ,that is  where barter     
begins1 and from here it strikes back   
into the interior  of the community1    
decomposing it4 ,the various use-values 

which first  become commodities in the  
barter between different communities1   
such  as slaves1 cattle1 metals1        
constitute therefore in most cases the  
first money within those communities    
themselves4 ,we have seen how  the      
exchange value of a commodity is        
manifested the more perfectly  as       
exchange value1 the longer the series of
 its equivalents or the  greater the    
sphere of exchange of that commodity4   
,with the gradual  expansion of barter1 
the increase in the number of exchanges1
 and  the growing diversification of the
 commodities drawn into exchange1       
commodities develop into exchange       
values1 which leads to the formation  of
 money and has a destructive effect on  
direct barter4 ,the economists  are in  
the habit of ascribing the origin of    
money to the difficulties  which are    
encountered in the way of extensive     
barter1 but they forget  that these     
difficulties arise from the development 
of exchange value  and from the fact    

that social labor becomes universal     
labor4 ,e4 g41  commodities as          
use-values can not be subdivided at     
will1 a property  which they should     
possess as exchange values4 ,or1 a      
commodity belonging  to ,a may be a     
use-value to ,b1 while the commodity    
belonging to ,b may  not have any       
use-value to ,a4 ,or the owners of the  
commodities may  need each other's      
indivisible goods in unequal            
proportions4 ,in other  words1 under the
 pretence of analyzing simple barter1   
economists  bring out certain aspects of
 the contradiction which is inherent in 
commodities as entities simultaneously  
embodying both use-value and  exchange  
value4 ,on the other hand1 they         
consistently cling to the  idea that    
barter is the natural form of exchange1 
which suffers only  from certain        
technical difficulties1 for which money 
is a cunningly  devised expedient4      
,arguing from this perfectly superficial
 view1 an  ingenious ,english economist 

has rightly maintained that money is    
merely a material instrument like a ship
 or a steam-engine1 but not  an         
expression of a social relation in the  
field of production and  consequently   
not an economic category2 and that it   
is1 therefore1 wrong  to treat the      
subject in political economy1 which     
really has nothing in  common with      
technology4#ae    ,the world of         
commodities implies the existence of a  
highly developed  division of labor2    
this division is manifested directly in 
the great  variety of use-values1 which 
confront each other as particular       
commodities and which embody as many    
different kinds of labor4 ,the  division
 of labor embracing all the particular  
kinds of productive  occupations1 is the
 complete expression of social labor in 
its material  aspect viewed as labor    
creating use-values4 ,but from the      
standpoint of  commodities and within   
the process of exchange1 it exists only 
in its  results1 in the variety of the  

commodities themselves4    ,the exchange
 of commodities constitutes the social  
metabolic process1  i4 e4 the process in
 which the exchange of the special      
products of  private individuals is the 
result of certain social relations of   
production into which the individuals   
enter in this interchange of  matter4   
,as they develop1 the mutual relations  
of commodities crystalize  into various 
aspects of the universal equivalent and 
thus the process  of exchange becomes at
 the same time the process of the       
formation of  money4 ,the whole of this 
process which takes the form of a       
succession  of processes1 constitutes   
circulation4      ,,notes ,,on ,,the    
,,history ,,of ,,the ,,theory ,,of      
,,commodities4    ,the analysis of      
commodities according to their twofold  
aspect of  use-value and exchange value 
by which the former is reduced to work  
or deliberate productive activity2 and  
the latter1 to labor time or            
homogeneous social labor1 is the result 

of a century and a half of  critical    
study by the classical school of        
political economy which dates  from     
,william ,petty in ,england and         
,boisguillebert in ,france#af and       
closes with ,ricardo in the former      
country and ,sismondi in the latter4    
,petty reduces use-value to labor1      
without deceiving himself as to the     
natural limitation of its creative      
power4 ,as regards concrete labor1  he  
sizes it up in the magnitude of its     
social aspect1 as the division  of      
labor4#ag ,this view of the source of   
material wealth does not  remain more or
 less fruitless as in the case of his   
contemporary1  ,hobbes1 but leads up to 
his ,political ,arithmetic1 the first   
form in  which ,political ,economy is   
differentiated as an independent        
science4    ,he defines exchange value1 
however1 just as it appears in the      
process  of exchange of commodities1    
viz4 as money2 and money he defines as  
an existing commodity1 gold and silver4 

,laboring under the ideas of  the       
monetary system1 he declares the special
 branch of labor which  is devoted to   
the production of gold and silver as the
 labor which  determines exchange value4
 ,what he really means is that the labor
 of  members of society must produce not
 direct use-values1 but commodities  or 
use-values which by means of exchange   
are capable of assuming the  form of    
gold and silver1 i4 e4 of money1 i4 e4  
of exchange value1 i4  e4 of embodiments
 of universal labor4 ,his example1      
however1 shows  strikingly that the     
recognition of labor as the source of   
material  wealth by no means excludes   
the misconception of the particular     
social  form in which labor constitutes 
the source of exchange value4    ,in his
 turn1 ,boisguillebert1 if not          
consciously1 at any rate actually       
reduces the exchange value of a         
commodity to labor-time1 since he       
determines 8true value0 7la juste       
valeur7 by the right proportion in      

which the labor-time of individuals is  
distributed among the several  branches 
of industry1 and defines free           
competition as the social  process which
 determines these correct proportions4  
,at the same time1  however1 and in     
contrast with ,petty he wages a         
fanatical war against  money which1 by  
its interference1 disturbs the natural  
equilibrium or  harmony of exchange of  
commodities and1 like a wanton ,moloch1 
demands  all natural wealth as          
sacrifice4 ,it is true that this assault
 on money  was called forth by certain  
historic conditions4 ,since             
,boisguillebert  attacked#ah the blind  
destructive lust after gold which       
possessed  the court of ,louis ,,xiv1   
his tax collectors1 and his nobility2 on
 the  other hand1 ,petty extolled in the
 greed of gold the mighty impulse  which
 spurred on the nation in her industrial
 development and in her  conquest of the
 world-market2 still1 there asserts     
itself here a  deeper antagonism of     

principles which constantly recurs      
between true  ,english and true         
,french#ai ,political ,economy4         
,boisguillebert sees1  in fact1 only the
 material substance of wealth1 its      
use-value1 the  enjoyment#bj of it1 and 
considers the capitalistic form of      
labor1 i4  e4 the production of         
use-values as commodities and the       
exchange of  those commodities1 as the  
natural social form in which individual 
labor  attains its end4 ,when he is1    
therefore1 confronted with the specific 
character of capitalistic wealth as in  
the case of money1 he sees in it  the   
usurping interference of extraneous     
elements and gets into a rage  about the
 capitalist system of labor in one form 
while utopian-like  he praises it in    
another4#ba ,boisguillebert furnishes us
 with proof  that one may treat         
labor-time as the measure of value of   
commodities1  and at the same time      
confound labor embodied in the exchange 
value of  commodities and measured by   

time1 with the direct natural activity  
of  individuals4    ,the first sensible 
analysis of exchange value as           
labor-time1 made so  clear as to seem   
almost commonplace1 is to be found in   
the work of  a man of the ,new ,world   
where the bourgeois relations of        
production  imported together with their
 representatives sprouted rapidly in a  
soil which made up its lack of          
historical traditions with a surplus of 
humus4 ,that man was ,benjamin          
,franklin1 who formulated the           
fundamental  law of modern political    
economy#bb in his first work which he   
wrote  when a mere youth and published  
in #agba4    ,he declares it necessary  
to look for another measure of value    
than  precious metals4 ,that measure is 
labor4 8,by labor may the value of      
silver be measured as well as other     
things4 ,as1 suppose one man  employed  
to raise corn1 while another is digging 
and refining silver2  at the year's end1
 or at any other period of time1 the    

complete produce  of corn1 and that of  
silver1 are the natural price of each   
other2 and  if one be twenty bushels1   
and the other twenty ounces1 then an    
ounce  of that silver is worth the labor
 of raising a bushel of that corn4  ,now
 if by the discovery of some nearer1    
more easy or plentiful mines1  a man may
 get forty ounces of silver as easily as
 formerly he did  twenty1 and the same  
labor is still required to raise twenty 
bushels  of corn1 then two ounces of    
silver will be worth no more than the   
same  labor of raising one bushel of    
corn1 and that bushel of corn will be   
as cheap at two ounces1 as it was before
 at one1 ceteris paribus4  ,thus the    
riches of a country are to be valued by 
the quantity of labor  its inhabitants  
are able to purchase40#bc ,thus         
,franklin regards  labor-time from the  
one-sided economic point of view1 as the
 measure  of value4 ,the transformation 
of actual products into exchange values 
is self-evident with him and the only   

question is as to finding a             
quantitative measure of value4 8,trade10
 says he1 8in general being  nothing    
else but the exchange of labour for     
labour1 the value of all  things is1 as 
,i have said before1 most justly        
measured by labour40#bd  ,substitute the
 word 8work0 for 8labor0 in the above   
statement1 and  the confusion of labor  
in one form and labor in another form   
becomes  at once apparent4 ,since trade 
consists e4 g4 in the exchange of the   
respective labors of the shoemaker1     
miner1 spinner1 painter1 etc41 does  it 
follow that the value of shoes is most  
justly measured by the work  of a       
painter8 ,on the contrary1 ,franklin    
meant that the value of shoes1  mining  
products1 yarn1 paintings1 etc41 is     
determined by abstract labor  which     
possesses no particular qualities and   
can1 therefore1 be measured  only       
quantitatively4#be ,but since he does   
not develop the idea  that labor        
contained in exchange value is abstract 

universal labor  which assumes the form 
of social labor as a result of the      
universal  alienation of the products of
 individual labor1 he necessarily fails 
to  recognize in money the direct       
embodiment of this alienated labor4 ,for
  that reason he sees no inner          
connection between money and labor which
  creates exchange value1 and considers 
money merely as an instrument           
introduced from outside into the sphere 
of exchange for purposes of  technical  
convenience4#bf ,franklin's analysis of 
exchange value did  not exert any direct
 influence on the general trend of      
science1 because  he discussed only     
special questions of political economy  
whenever there  was a definite practical
 occasion for it4    ,the contrast      
between useful work and labor which     
creates exchange  value agitated all    
,europe during the eighteenth century in
 the form of  this question3 what       
particular kind of labor constitutes the
 source  of bourgeois wealth8 ,it was   

thus assumed that not every kind of     
labor  which is realized in use-values  
or yields certain products does  thereby
 directly create wealth4 ,with the      
physiocrats1 however1 as well  as with  
their opponents1 the burning question   
was not1 what kind of  labor creates    
value1 but which is it that creates     
surplus value4  ,they approached the    
problem in its complicated form before  
they had  solved it in its elementary   
form2 such is the historical course of  
all sciences leading them by a labyrinth
 of intersecting paths to the  real     
starting points4 ,unlike other builders1
 science not only erects  castles in the
 air1 but constructs separate stories of
 the building1  before it has laid the  
foundation4 ,without dwelling any longer
 on the  physiocrats and omitting quite 
a number of ,italian economists who in  
some more or less ingenious ideas came  
close to a correct analysis  of the     
nature of commodity1#bg we pass at once 
to the first ,briton  who elaborated the

 general system of bourgeois economics1 
,sir ,james  ,steuart4#bh ,his idea of  
exchange value as well as all the       
abstract  categories of political       
economy still seem to be with him in the
  process of differentiation from the   
material elements they represent  and   
therefore appear quite vague and        
unsettled4 ,in one place he  determines 
real value by labor-time 78what a       
workman can perform in  a day071 but    
immediately creates confusion by        
introducing the elements  of wages and  
raw material4#bi ,in another place his  
struggle with the  material substance of
 the subject he treats of is revealed   
even more  strikingly4 ,he calls the    
material of nature contained in a       
commodity1  such as the silver in a     
silver plate1 its 8intrinsic worth10    
while the  labor-time contained in it he
 calls 8useful value40 ,the former1 he  
says  8is 444 something real in itself10
 while 8the value of the second must  be
 estimated according to the labour it   

has cost to produce it4444 ,the  labour 
employed in the modification of the     
substance represents a  portion of a    
man's time40#cj    ,what distinguishes  
,steuart from his predecessors and      
followers is  his keen differentiation  
between specifically social labor which 
is  represented in exchange value1 and  
concrete labor which produces           
use-values4 ,labor1 he says1 which      
through its alienation creates  a       
universal equivalent1 ,i call industry4 
,labor as industry he  distinguishes not
 only from concrete labor1 but from all 
other social  forms of labor4#ca ,it is 
to him the capitalistic form of labor   
in contrast to its antique and mediaeval
 forms4 ,he is especially  interested in
 the difference between capitalistic and
 feudal labor1 of  which he had observed
 the latter in its decaying forms both  
in ,scotland  and on his extensive      
travels over the continent4 ,steuart    
knew1 of  course1 very well that        
products took on the form of commodities

 and  commodities1 the form of money in 
precapitalistic epochs as well2 but  he 
proves conclusively that it is only in  
the capitalistic period of  production  
that the commodity becomes the          
elementary and fundamental  form of     
wealth1 and alienation of commodities1  
the ruling form of  acquisition and that
 consequently labor creating exchange   
value is  specifically capitalistic in  
its character4#cb    ,after different   
forms of concrete labor1 such as        
agriculture1  manufacture1 navigation1  
trade1 etc41 had each in turn been      
declared  the true source of wealth1    
,adam ,smith proclaimed labor in        
general1  and namely in its general     
social form of division of labor1 to be 
the only source of material wealth or   
use-values4 ,while ignoring in          
connection with the latter the part     
played by nature1 he is troubled  by it 
when he comes to deal with purely social
 wealth i4 e4 exchange  value4 ,to be   
sure1 ,adam determines the value of a   

commodity by the  labor-time contained  
in it1 but relegates the actual         
application of  the principle to        
pre-,adamic times4 ,in other words1 what
 seems to him  true from the standpoint 
of simple commodity1 ceases to be clear 
as  soon as the higher and more complex 
forms of capital1 wage-labor1  rent1    
etc4 take its place4 ,this he expresses 
by saying1 that the value  of           
commodities used to be measured by      
labor-time in the paradise  lost of     
bourgeois society1 in which men dealt   
with each other not  as capitalists1    
wage-workers1 landlords1 tenants1       
usurers1 etc41 but  merely as plain     
producers of commodities which they     
exchanged4 ,he  constantly confuses the 
determination of the value of           
commodities by  the labor-time contained
 in them with the determination of their
 value  by the value of labor4 ,he      
becomes confused in working out the     
details  and fails to see the objective 
equalization of different kinds of labor

  which the social process forcibly     
carries out1 mistaking it for the       
subjective equality of the labors of    
individuals4#cc ,the transition  from   
concrete labor to labor creating        
exchange value1 i4 e4 to labor in  its  
fundamental capitalistic form he tries  
to derive from the division  of labor4  
,yet1 while it is true that private     
exchange implies the  division of labor1
 it is false to maintain that division  
of labor  implies private exchange4     
,among the ,peruvians1 e4 g41 labor was 
divided  to an extraordinary extent1    
although there was no private exchange1 
no  exchange of products1 as            
commodities4    ,contrary to ,adam      
,smith1 ,david ,ricardo elaborated with 
great clearness  the determination of   
the value of a commodity by labor-time  
and showed  that this law governs also  
such relations of capitalistic          
production  which seem to contradict it 
most4 ,ricardo confines his             
investigations  exclusively to the      

quantitative determination of value and 
as regards  the latter he is at least   
conscious of the fact that the          
realization  of the law depends upon    
certain historical conditions4 ,he says1
  namely1 that the determination of     
value by labor-time holds good for      
commodities 8only as can be increased in
 quantity by the exertion of  human     
industry1 and on the production of which
 competition operates  without          
restraint40#cd ,what he really means is 
that the law of value  presupposes for  
its full development an industrial      
society in which  production is carried 
on a large scale and free competition   
prevails1  i4 e4 the modern capitalist  
society4 ,in all other respects1        
,ricardo  considers the capitalist form 
of labor as the eternal natural form of 
social labor4 ,he makes the primitive   
fisherman and the primitive hunter      
straightway exchange their fish and game
 as owners of commodities1 in           
proportion to the labor-time embodied in

 these exchange values4 ,on this        
occasion he commits the anachronism of  
making the primitive fisherman  and     
primitive hunter consult the annuity    
tables in current use on the  ,london   
,exchange in the year #ahag in the      
calculation relating to their           
instruments4 ,the 8parallelograms of    
,mr4 ,owen0 seem to be the only form  of
 society outside of the bourgeois form  
with which he was acquainted4  ,although
 confined within this bourgeois horizon1
 ,ricardo analyzes the  bourgeois       
economywhich looks quite different to   
deeper insight than  it does on the     
surfacewith such keen power of          
theoretical penetration  that ,lord     
,brougham could say of him3 8,mr4       
,ricardo seemed as if he had  dropped   
from another planet40    ,in a direct   
controversy with ,ricardo1 ,sismondi    
lays stress upon  the specifically      
social character of labor which creates 
exchange  value1#ce and says it is      
8characteristic of our economic         

progress0 to  reduce the magnitude of   
value to the necessary labor-time1 to   
the  relation between the demand of     
society as a whole and the quantity of  
labor which is sufficient to satisfy    
this demand4#cf ,sismondi is no  more   
laboring under ,boisguillebert's idea1  
that labor which creates  exchange value
 is adulterated by money2 but just as   
,boisguillebert  denounced money1 so    
does ,sismondi denounce large industrial
 capital4  ,in ,ricardo political       
economy reached its climax1 after       
recklessly  drawing its ultimate        
conclusions1 while ,sismondi            
supplemented it by  impersonating its   
doubts4    ,since ,ricardo gave to      
classical political economy its final   
shape1  having formulated and elaborated
 with the greatest clearness the law of 
the determination of exchange value by  
labor-time1 it is natural that  all the 
polemics among economists should center 
about him4 ,stripped  of its puerile#cg 
form this controversy comes down to the 

following  points3    ,first3 ,labor    
itself has exchange value1 and different
 kinds of labor  have different exchange
 values4 ,we get into a vicious circle  
by making  exchange value the measure of
 exchange value1 because the measuring  
exchange value needs a measure itself4  
,this objection may be reduced  to the  
following problem3 ,given labor-time as 
the intrinsic measure  of exchange      
value1 develop from that the            
determination of wages4 ,the  theory of 
wages gives the answer to that4         
,second3 ,if the exchange value of a    
product is equal to the labor-time      
contained in it1 then the exchange value
 of one day of labor is equal  to the   
product of that labor4 ,in other words1 
wages must be equal to  the product of  
labor4#ch ,but the very opposite is     
actually the case4  ,ergo4 this         
objection comes down to the following   
problem3 ,how does  production1 based on
 the determination of exchange value by 
labor-time  only1 lead to the result    

that the exchange value of labor is less
 than  the exchange value of its        
product8 ,this problem is solved by us  
in the  discussion of capital4          
,third3 ,the market price of commodities
 either falls below or rises  above its 
exchange value with the changing        
relations of supply and  demand4        
,therefore1 the exchange value of       
commodities is determined by  the       
relation of supply and demand and not by
 the labor-time contained  in them4 ,as 
a matter of fact1 this queer conclusion 
merely amounts to  the question1 how a  
market price based on exchange value can
 deviate  from that exchange value2 or1 
better still1 how does the law of       
exchange value assert itself only in its
 antithesis8 ,this problem is  solved in
 the theory of competition4    ,fourth3 
,the last and apparently the most       
striking objection1 if  not raised in   
the usual form of queer examples3 ,if   
exchange value  is nothing but mere     
labor-time contained in commodities1 how

 can  commodities which contain no labor
 possess exchange-value1 or in other    
words1 whence the exchange value of mere
 forces of nature8 ,this problem  is    
solved in the theory of rent4           
,,chapter ,,ii4    ,,money ,,or ,,simple
 ,,circulation4      ,in a parliamentary
 debate on ,sir ,robert ,peel's ,bank   
,act of #ahdd and  #ahde1 ,gladstone    
remarked that not even love has made so 
many fools of  men as the pondering over
 the nature of money4 ,he spoke of      
,britons to  ,britons4 ,the ,dutch1 on  
the contrary1 who1 from times of yore1  
have had1  ,petty's doubts              
notwithstanding1 8angelical wits0 for   
money speculation  have never lost their
 wits in speculations about money4      
,the main difficulty in the analysis of 
money is overcome as soon as  the       
evolution of money from commodity is    
understood4 ,this point once  granted1  
it only remains to comprehend clearly   
the particular forms  of money1 which is
 to some extent made difficult by the   

fact that all  bourgeois relations1     
being gilt or silver plated1 have the   
appearance  of money relations1 and     
money1 therefore1 seems to possess an   
endless  variety of forms1 which have   
nothing in common with it4    ,in the   
following investigation only those forms
 of money are treated  of which directly
 grow out of the exchange of            
commodities2 the forms  which belong to 
a higher stage of production1 as e4 g41 
credit money  will not be discussed     
here4 ,for the sake of simplicity gold  
is assumed  throughout as the money     
commodity4      #a4 ,,the ,,measure ,,of
 ,,value4    ,the first process of      
circulation constitutes1 so to say1 the 
theoretical preparatory process to      
actual circulation4 ,to begin  with1    
commodities which are use-values by     
nature1 acquire a form in  which they   
appear in idea to each other as exchange
 values1 as  definite quantities of     
incorporated universal labor-time4 ,the 
first  necessary step in this process   

is1 as we have seen1 the setting apart  
by the commodities of a specific        
commodity1 say gold1 as the direct      
incarnation of universal labor-time1 or 
the universal equivalent4 ,let  us go   
back for a moment to the form in which  
commodities turn gold into  money4      
#a ton of iron  #b ounces of gold       
#a quarter of wheat  #a ounce of gold   
#a hundred weight of ,mocca coffee      
#a-a_/d ounce of gold      #a hundred   
weight of potash  #a_/b ounce of gold   
#a ton of ,brazil timber  #a-a_/b ounces
 of gold      ,y commodities  ,x ounces 
of gold    ,in the above series of      
equations iron1 wheat1 coffee1 potash1  
etc4  appear to each other as           
embodiments1 of homogeneous labor1      
namely1  as labor materialized in money1
 from which all the peculiarities of    
the different kinds of concrete labor   
represented in the different  use-values
 are completely eliminated4 ,as value   
they are all identical1  they are the   
incarnation of the same labor1 or the   

same incarnation  of labor1 viz41 gold4 
,as uniform embodiments of the same     
labor they  display only one difference1
 a quantitative one1 by appearing  as   
different quantities of value1 because  
unequal quantities of  labor-time are   
contained in their use-values4 ,the     
mutual relation  of these separate      
commodities is that of embodiments of   
universal  labor-time1 since they are   
related to universal labor-time as to an
  excluded commodity1 viz41 gold4 ,the  
same relation the development of  which 
causes commodities to appear to each    
other as exchange values1  causes the   
labor time contained in gold to appear  
as universal  labor-time1 a given       
quantity of which is expressed in       
different  quantities of iron1 wheat1   
coffee1 etc1in short1 in the use-values 
of all commodities1 or is directly      
unfolded in the endless series of       
commodity-equivalents4 ,while all       
commodities express their exchange      
values in gold1 gold expresses its      

exchange value directly in all          
commodities4 ,while commodities assume  
the form of exchange value in  relation 
to each other1 they lend to gold the    
form of the universal  equivalent1 or of
 money4    ,gold becomes the measure of 
value1 because all commodities measure  
their exchange values in gold1 in       
proportion as a certain quantity of     
gold and a certain quantity of the      
commodity contain the same amount  of   
labor-time2 and it is only by virtue of 
this function of being a  measure of    
value1 in which capacity its own value  
is measured directly  in the entire     
series of commodity equivalents1 that   
gold becomes  a universal equivalent or 
money4 ,on the other hand1 the exchange 
value of all commodities is expressed in
 gold4 ,in this expression1  the        
qualitative aspect is to be             
distinguished from the quantitative3    
there is the exchange value of the      
commodity as the embodiment of the  same
 uniform labor-time2 while the magnitude

 of value is exhaustively  expressed1   
since in the same proportion in which   
commodities are  equated to gold they   
are equated to one another4 ,on the one 
hand the  universal character of the    
labor-time contained in them is         
revealed2  on the other1 its quantity is
 expressed in its golden equivalent4    
,the  exchange value of commodities thus
 expressed in the form of a universal   
equivalent and1 moreover1 as a numerical
 proportion of this equivalent1  in     
terms of one specific commodity1 or     
represented in the form of a  series of 
commodities equated to one specific     
commodity1 is ,,price4  ,price is the   
form into which the exchange value of   
commodities is  converted when it       
appears within the sphere of            
circulation4    ,by the same process by 
which commodities express their values  
in gold  prices1 they turn gold into a  
measure of value i4 e4 into money4 ,if  
all of them were to measure their values
 in silver1 wheat1 or copper1  and      

therefore express them in the form of   
silver1 wheat or copper  prices1 then   
silver1 wheat or copper would be        
measures of value and  consequently     
universal equivalents4 ,in order to     
appear as prices in  circulation1       
commodities must be exchange values     
before they enter  circulation4 ,gold   
becomes the measure of value only       
because all  commodities estimate their 
exchange value in it4    ,the           
universality of this relation which is  
the result of evolution  and from which 
alone springs the function of gold as   
the measure of  value1 implies however1 
that every single commodity is measured 
in  gold1 in proportion to the          
labor-time contained in both2 that the  
actual common measure of the commodity  
and of gold is labor2 or that  commodity
 and gold are passed for each other in  
direct barter as  equal exchange values4
 ,how this equalization actually takes  
place1  can not be discussed here when  
treating of simple circulation4 ,so     

much1 however1 is clear1 that in        
countries producing gold and silver1    
certain quantities of labor-time are    
directly embodied in definite           
quantities of gold and silver1 while in 
countries which do not produce  gold and
 silver the same result is reached in a 
round-about way1 by  direct or indirect 
exchange of the commodities of those    
countries2  i4 e4 a definite portion of 
average national labor is given for a   
definite quantity of labor-time1        
embodied in the gold and silver of the  
mine-owning countries4 ,in order to be  
able to serve as a measure of  value1   
gold must be as far as possible a       
variable value1 because it  can become  
the equivalent of other commodities only
 as an incarnation  of labor-time1 and  
the same labor-time is realized in      
unequal volumes  of use-values with the 
change in the productive power of       
concrete  labor4 ,in estimating all     
commodities in gold it is only assumed  
that  gold represents a given quantity  

of labor at a given moment1 as was  done
 when the exchange value of any         
commodity was expressed in terms  of the
 use-value of any other commodity4 ,as  
for the variations of the  value of     
gold1 the law of exchange value         
formulated above holds good  in its case
 as well4 ,if the exchange value of     
commodities remains  unchanged1 then a  
general rise in their gold prices is    
possible only  in the case of a fall in 
the exchange value of gold4 ,if the     
exchange  value of gold remains         
unchanged1 a general rise of gold prices
 is  possible only when the exchange    
value of all commodities rises4 ,the    
reverse is true in case of a general    
fall in the prices of commodities4  ,if 
the value of an ounce of gold falls or  
rises in consequence of a  change in the
 labor-time required for its production1
 then the values  of all other          
commodities fall or rise to an equal    
extent4 ,thus1 the  ounce of gold       
represents after the change1 as it did  

before1 a given  quantity of labor-time 
with regard to all commodities4 ,the    
same  exchange values are now estimated 
in greater or smaller quantities  of    
gold than before1 but they are estimated
 in proportion to the  magnitude of     
their values1 and consequently retain   
the same proportion  to each other4 ,the
 ratio #b  #d  #h remains the same when 
expressed  as #a  #b  #d or as #d  #h   
#af4 ,the change in the quantity of gold
 in  which exchange values are estimated
 with a variation in the value of  gold1
 interferes as little with the function 
of gold as a measure  of value1 as the  
fifteen times smaller value of silver as
 compared  with that of gold interferes 
with the performance of that function   
by the latter4 ,since labor-time is the 
common measure of gold and  commodities1
 and since gold figures as the measure  
of value only in so  far as all         
commodities are measured by it1 the idea
 that money makes  commodities          
commensurable1 is therefore a mere      

fiction of the process  of              
circulation4#ci ,it is rather the       
commensurability of commodities  as     
incorporated labor-time1 that turns gold
 into money4    ,commodities enter the  
process of exchange in the concrete form
  of use-values4 ,they are yet to be    
turned into the real universal          
equivalent through their alienation4    
,the determination of their prices      
merely amounts to their ideal           
transformation into the universal       
equivalent1 a process of equation to    
gold which is yet to be realized4  ,but 
since commodities are1 in their prices1 
transformed into gold only  in          
imagination1 or are converted only into 
imaginary gold1 and since  their money  
form is not differentiated as yet from  
their concrete  selves1 it follows that 
gold has also been turned into money    
only  in imagination2 it appears so far 
but as a measure of value1 and in  fact 
definite quantities of gold serve merely
 as names for certain  quantities of    

labor-time4 ,the form in which gold is  
crystallized in  money always depends   
upon the way in which commodities       
express their  own exchange value to    
each other4    ,commodities now confront
 one another in a double capacity3      
actually as  use-values1 ideally as     
exchange values4 ,the twofold aspect of 
labor  contained in them is reflected in
 their mutual relations2 the special    
concrete labor being virtually present  
as their use-value1 while  universal    
abstract labor-time is ideally          
represented in their price  in which    
commodities appear as commensurable     
embodiments of the same  valuesubstance 
differing merely in quantity4    ,the   
difference between exchange value and   
price appears to be merely  nominal or1 
as ,adam ,smith says1 labor is the real 
price1 and money  the nominal price of  
commodities4 ,instead of estimating the 
value of  one quarter of wheat in thirty
 days of labor1 it is estimated in one  
ounce of gold if one ounce of gold is   

the product of thirty days'  labor4     
,however1 far from this difference being
 merely nominal1 all the  storms which  
threaten commodities in the actual      
process of circulation  center about it4
 ,thirty days of labor are contained in 
a quarter of  wheat and it need not1    
therefore1 be expressed in terms of     
labor-time4  ,but gold is a commodity   
distinct from wheat1 and only in        
circulation  it can be ascertained1     
whether the quarter of wheat can be     
actually  turned into an ounce of gold  
as is anticipated in its price4 ,that   
will  depend on whether or not it proves
 to be a use-value1 whether or not  the 
quantity of labor-time contained in it  
is the quantity necessarily  required by
 society for the production of a quarter
 of wheat4 ,the  commodity as such is an
 exchange value1 it has a price4 ,in    
this  difference between exchange value 
and price lies the demonstration of  the
 fact that the particular individual    
labor contained in a commodity  has     

first to be expressed through the       
process of alienation in terms  of its  
counterpart1 i4 e4 as impersonal1       
abstract1 universal and1 only  in that  
form1 social labor1 viz4 money4 ,whether
 it can be so expressed  seems to be a  
matter of chance4 ,thus1 although the   
exchange value  of a commodity finds    
only ideally a distinct expression in   
price1  and the twofold character of    
labor contained in the commodity exists 
as yet merely as two distinct forms of  
expression1 and1 although in            
consequence thereof1 the embodiment of  
universal labor-time1 gold1  confronts  
actual commodities only as an imaginary 
measure of value1 yet  the fact that    
exchange value exists as price1 or that 
gold exists as a  measure of value      
implies the necessity of the alienation 
of commodities  for hard cash and the   
possibility of their non-alienation4 ,in
 short1  here lies latent the entire    
contradiction which is inherent in the  
fact that products are commodities or   

that the particular work of a  private  
individual can be of no account in      
society until it has taken  the very    
opposite form of abstract universal     
labor4 ,for that reason1  the utopians1 
who want to have commodities but not    
money1 who want a  system of production 
based on private exchange without the   
necessary  conditions underlying such a 
system1 are consistent when they        
8destroy0  money not in its tangible    
form but in its nebulous illusory form  
of a  measure of value4 ,under the      
invisible measure of value there lurks  
the  hard cash4    ,the process by which
 gold has become the measure of value   
and exchange  value has been turned into
 price1 being once assumed1 all         
commodities  express in their prices but
 imagined quantities of gold of various 
magnitudes4 ,as such various quantities 
of the same thing1 gold1 they  are      
equated1 compared and measured with each
 other1 and thus arises the  technical  
necessity of referring them to a        

definite quantity of gold  as a unit of 
measure1 a unit which develops into a   
standard measure by  virtue of its      
divisibility into aliquot parts1 which  
in their turn can  be subdivided into   
aliquot parts4#dj ,but quantities of    
gold as such  are measured by weight4   
,the standard of measure is thus found  
ready in the general measures  of weight
 of metals and1 therefore1 where-ever   
metallic circulation  is in vogue1 these
 measures serve originally as standards 
of price4  ,since commodities no more   
relate to each other as exchange values 
to  be measured by labor-time1 but as   
magnitudes of the same denomination     
measured in gold1 the latter is         
transformed from a measure of value     
into a standard of price4 ,the          
comparison of prices with each other  as
 different quantities of gold is thus   
crystallized in figures which           
correspond to an assumed quantity of    
gold and represent it as a  standard of 
aliquot parts4 ,gold as measure of value

 and as standard of  price has entirely 
different forms of manifestation and the
 confusing  of the two has resulted in  
the wildest of theories4 ,gold is a     
measure  of value as incorporated       
labor-time2 it is the standard of price 
as  certain weight of metal4 ,gold      
becomes the measure of value by virtue  
of its relation as exchange value to    
commodities as exchange values2  as     
standard of price1 a definite quantity  
of gold serves as a unit  for other     
quantities of gold4 ,gold is the measure
 of value1 because  its value is        
variable2 it is the standard of price1  
because it is  fixed as a constant unit 
of weight4 ,in this case1 as in all     
cases of  measuring quantities of the   
same denomination1 the establishment of 
a  definite and unvarying unit of       
measure is all-important4 ,the necessity
  of settling upon a quantity of gold as
 a unit of measure and upon its  aliquot
 parts as subdivisions of that unit1 has
 given rise to the  notion that a       

certain quantity of gold which has      
naturally a variable  value had been    
assigned a fixed ratio of value to the  
exchange values  of all commodities2 the
 fact is overlooked that exchange values
 of  commodities are transformed into   
prices1 i4 e4 into quantities of gold1  
before gold develops as a standard of   
price4 ,no matter how the value of  gold
 may vary1 the ratios between the values
 of different quantities of  gold remain
 constant4 ,let the fall in the value of
 gold amount to #ajjj  per cent41 still 
twelve ounces of gold will have a twelve
 times greater  value than one ounce of 
gold2 and in prices the only thing      
considered  is the ratio between        
different quantities of gold4 ,since1 on
 the other  hand1 no rise or fall in the
 value of an ounce of gold can alter its
  weight1 no alteration can take place  
in the weight of its aliquot  parts4    
,thus gold always renders the same      
service as an invariable  standard of   
price1 no matter how much its value may 

vary4#da    ,an historical process      
which1 as we shall explain later1 was   
determined  by the nature of metallic   
circulation1 led to the result that the 
same denomination of weight was retained
 for a constantly changing  and         
decreasing weight of precious metals in 
their function of a  standard of price4 
,thus the ,english pound sterling       
denotes less than  one-third of its     
original weight2 the pound ,scot1 before
 the ,union1  only #a-cf2 the ,french   
livre1 #a-gd2 the ,spanish ,maravedi1   
less than  #a-ajjj2 the ,portuguese     
,rei1 a still smaller fraction4 ,such   
was the  historical origin of the       
discrepancy between the current money   
names  of various weights of metals and 
their weight denominations4#db  ,since  
the determination of the unit of        
measure1 of its aliquot parts1  and of  
their names is purely conventional1 and 
since they should  possess within the   
sphere of circulation the character of  
universality  and compulsion1 they had  

to be settled by law4 ,the purely formal
  operation thus devolved upon the      
government4#dc ,the metal which  was to 
serve as the money material1 was found  
already adopted in  the community4 ,in  
different countries the legal standard  
of price  is naturally different4 ,in   
,england e4 g4 the ounce as a weight of 
metal is divided into pennyweights1     
grains and carats ,troy1 but the  ounce 
of gold as the unit of money is divided 
into #c #g-h sovereigns1  the sovereign 
into #bj shillings1 the shilling into   
#ab pence1 so that  #ajj pounds of #bb  
carat gold 7#abjj ounces7  #dfgb        
sovereigns and #aj  shillings4 ,in the  
world market1 however1 where national   
boundaries  disappear1 these national   
characteristics of the measure of money 
also  disappear and give place to the   
general measures of weight of metals4   
,the price of a commodity or the        
quantity of gold into which it is       
ideally transformed1 is1 therefore1 now 
expressed in the names of  coins of the 

gold standard4 ,thus1 instead of saying3
 a quarter of  wheat is worth an ounce  
of gold1 it is said in ,england to be   
worth #c  #ags4 #aj-a_/b;d4 ,all prices 
are thus expressed in the same          
denominations4  ,the peculiar form which
 commodities lend to their exchange     
values is  transformed into a           
money-denomination by which commodities 
tell each  other how much they are      
worth4 ,money in its turn becomes money 
of  account4#dd    ,we transform        
commodities into money of account1 in   
our mind1 on paper1  in conversation1   
whenever it is a question of expressing 
any kind of  wealth in terms of exchange
 value4#de ,for that transformation we  
need  the gold substance1 but only in   
imagination4 ,in order to estimate the  
value of a thousand bales of cotton in a
 certain number of ounces of  gold and  
then to express this number of ounces in
 the denominations of  the ounce1 4 s4  
d41 not a single atom of gold is        
required4 ,thus1 not  a single ounce of 

gold was in circulation in ,scotland    
before ,robert  ,peel's ,bank ,act of   
#ahde1 although the gold ounce1         
expressed in its  ,english standard of  
account1 #c #ags4 #aj-a_/b;d41 served as
 the legal  standard of price4 ,in a    
similar manner silver serves as standard
 of  price in the trade between ,siberia
 and ,china1 although that trade        
virtually amounts to barter4 ,it is1    
therefore1 immaterial to money1  as     
money of account1 whether or not its    
entire unit of measure or the  fractions
 thereof are really coined4 ,in         
,england1 at the time of ,william  the  
,conqueror1 #a1 then a pound of pure    
silver1 and the shilling1 #a-bj  of a   
pound1 existed only as money of account1
 while the penny1 #a-bdj  of a pound of 
silver1 was the largest silver coin in  
existence4 ,on  the other hand1 there   
are no shillings and pence in ,england  
to-day1  although they are legal        
denominations for certain parts of an   
ounce of  gold4 ,money as money of      

account may exist exclusively in idea1  
while  the money in actual existence may
 be coined according to an entirely     
different standard4 ,thus the money in  
circulation in many ,english  colonies  
of ,north ,america consisted until late 
in the eighteenth  century of ,spanish  
and ,portuguese coins1 although the     
money of account  was throughout the    
same as in ,england4#df    ,owing to the
 fact that money1 when serving as the   
standard of price1  appears under the   
same reckoning names as do the prices of
 commodities1  and that1 therefore1 the 
sum of #c #ags4 #aj-a_/b;d4 may signify1
 on  the one hand1 an ounce weight of   
gold1 and on the other1 the value  of a 
ton of iron1 this reckoning name of     
money has been called its  mint-price4  
,hence1 there sprang up the             
extraordinary notion that  the value of 
gold is estimated in its own material1  
and that1 in  contradistinction to all  
other commodities1 its price is fixed by
  the ,state4 ,it was erroneously       

thought that the giving of reckoning    
names to definite weights of gold is the
 same thing as fixing the  value of     
those weights4#dg ,in so far as gold    
serves as one of the  elements in       
determining price1 i4 e41 where it      
performs the function  of money of      
account1 it not only has no fixed price1
 but has no  price whatever4 ,in order  
to have a price1 i4 e41 in order to     
express  itself in a specific commodity 
as a universal equivalent that  other   
commodity would have to play the same   
exclusive role in the  process of       
circulation as gold4 ,but two           
commodities excluding all other         
commodities mutually exclude each other4
 ,therefore1 wherever gold and  silver  
have by law been made to perform side by
 side the function of  money or of a    
measure of value it has always been     
tried1 but in vain1  to treat them as   
one and the same material4 ,to assume   
that there is an  invariable ratio      
between the quantities of gold and      

silver in which a  given quantity of    
labor-time is incorporated1 is to       
assume1 in fact1  that gold and silver  
are of one and the same material1 and   
that a given  mass of the less valuable 
metal1 silver1 is a constant fraction of
 a  given mass of gold4 ,from the reign 
of ,edward ,,iii to the time of ,george 
,,ii1 the history of money in ,england  
consists of one long series of          
perturbations caused by the clashing of 
the legally fixed ratio between  the    
values of gold and silver1 with the     
fluctuations in their real  values4 ,at 
one time gold was too high2 at another1 
silver4 ,the metal  that for the time   
being was estimated below its value was 
withdrawn  from circulation1 melted and 
exported4 ,the ratio between the two    
metals  was then again altered by law1  
but the new nominal ratio soon came into
  conflict again with the real one4 ,in 
our own times1 the slight and  transient
 fall in the value of gold compared with
 silver1 which was a  consequence of the

 ,indo-,chinese demand for silver1      
produced on a far  more extended scale  
in ,france the same phenomena1 export of
 silver1  and its expulsion from        
circulation by gold4 ,during the years  
#ahee1  #ahef and #aheg1 the excess in  
,france of gold imports over gold       
exports  amounted to #da1ehj1jjj1 while 
the excess of silver exports over silver
  imports was #ad1gjd1jjj4 ,in fact1 in 
those countries in which both  metals   
are legally measures of value1 and      
therefore both legal tender1  so that   
every one has the option of paying in   
either metal1 the metal  that rises in  
value is at a premium1 and1 like every  
other commodity1  measures its price in 
the over-estimated metal which alone    
serves  in reality as the standard of   
value4 ,the result of all experience    
and history with regard to this question
 is simply that1 where two  commodities 
perform by law the functions of a       
measure of value1 in  practice one alone
 maintains that position4#dh      ,b4   

,,theories ,,of ,,the ,,unit ,,of       
,,measure ,,of ,,money4    ,the         
circumstance that commodities are       
converted into gold only in ideas  as   
prices and that gold is therefore turned
 into money only in idea1  gave rise to 
the theory of the ideal unit of measure 
of money4 ,since1  in the determination 
of prices1 gold and silver serve only   
ideally  as money of account1 it was    
asserted that the names pound1 shilling1
  pence1 thaler1 franc1 etc41 instead of
 denoting certain weights of  gold and  
silver or labor incorporated in some    
way1 stood rather for  ideal atoms of   
value4 ,thus1 if1 e4 g41 the value of an
 ounce of silver  should rise it would  
contain more such atoms and would       
therefore have  to be estimated and     
coined in a greater number of shillings4
 ,this  doctrine1 revived again during  
the last commercial crisis in ,england  
and even voiced in ,parliament in two   
separate reports attached to the  report
 of the select ,committee on the ,bank  

,acts sitting in ,july1 #aheh1  dates   
from the end of the seventeenth century4
    ,at the time of the accession of    
,william ,,iii41 the ,english mint-price
  of an ounce of silver was #es4 #b;d41 
or #a-fb of an ounce of silver was      
equal to a penny2 #ab of these pence    
were called a shilling4 ,according  to  
that standard1 a piece of silver        
weighing1 say1 #f ounces1 would be      
coined into thirty-one coins1 each      
called a shilling4 ,but the market      
price of an ounce of silver rose above  
its mint price1 from #es4 #b;d4  to #fs4
 #c;d41 or1 in order to buy an ounce of 
silver bullion #fs4 #c;d4 had  to be    
paid4 ,how could the market price of an 
ounce of silver rise above  its mint    
price1 when the mint price is merely a  
reckoning name for  aliquot parts of an 
ounce of silver8 ,the riddle was easily 
solved4 ,out  of #e1fjj1jjj of silver   
money which was in circulation at that  
time1  four millions were worn out1     
clipped and debased4 ,a trial disclosed 

that #eg1jjj of silver which were       
supposed to weigh #bbj1jjj ounces1      
weighed only #ada1jjj ounces4 ,the mint 
went on coining according to  the same  
standard1 but light-weighted shillings  
in actual circulation  represented      
smaller parts of an ounce than their    
name implied4 ,hence1  a greater        
quantity of these light-weighted        
shillings had to be paid in  the market 
for an ounce of silver bullion4 ,when a 
general recoinage  was decided upon in  
consequence of the derangement that had 
been  produced1 ,,lowndes1 the          
,secretary of the ,treasury1 declared   
that the  value of an ounce of silver   
had risen and therefore it must         
henceforth  be coined into #fs4 #c;d4   
instead of into #es4 #b;d4 as           
heretofore4 ,his  argument practically  
amounted to the assertion that the rise 
in the  value of the ounce caused a fall
 in the value of its aliquot parts4     
,his false theory1 however1 served      
merely as an embellishment for a  just1 

practical purpose4 ,the government debts
 were contracted in light  shillings1   
were they to be paid in heavy ones8     
,instead of saying pay  back four ounces
 of silver1 when you had received       
nominally five ounces  but virtually    
only four1 he said pay back nominally   
five ounces but  reduce the metallic    
contents to four ounces and call a      
shilling what  you had called           
four-fifths of a shilling heretofore4   
,thus ,lowndes  practically adhered to  
the metallic weight while theoretically 
he clung  to the reckoning name4 ,his   
adversaries who clung only to the name  
and therefore declared the #be to #ej   
per cent4 lighter shilling to be        
identical with the full-weight shilling 
maintained on the contrary that  they   
adhered to the metallic weight4         
,,john ,,locke1 who was an advocate of  
the new bourgeoisie in all forms1  the  
manufacturers against the working       
classes and paupers1 the  commercial    
class against the old fashioned usurers1

 the financial  aristocracy against the 
state debtors1 and who went so far as to
 prove  in his own work that the        
bourgeois reason is the normal human    
reason1  also took up the challenge     
against ,lowndes4 ,john ,locke carried  
the day  and money borrowed at ten or   
fourteen shillings to a guinea was      
repaid  in guineas of twenty            
shillings4#di ,,sir ,,james ,,steuart   
sums up the  entire transaction as      
follows3 8 444 the state gained         
considerably upon  the score of taxes1  
as well as the creditors upon their     
capitals and  interest2 and the nation1 
which was the principal loser1 was      
pleased2  because their standard 7,the  
standard of their own value7 was not    
debased40#ej ,steuart thought that the  
nation would prove more alert  with the 
further development of commerce4 ,he was
 mistaken4 ,about #abj  years later the 
same quid pro quo was repeated4    ,it  
was just in the order of things that    
,bishop ,,berkeley1 the  representative 

of a mystical idealism in ,english      
philosophy1 should  have given a        
theoretical turn to the doctrine of the 
ideal unit  of measure of money1        
something which the practical           
8,secretary to  the ,treasury0 had      
failed to do4 ,he asks3 8,whether the   
terms ,crown1  ,livre1 ,pound ,sterling1
 etc41 are not to be considered as      
,exponents  or ,denominations of such   
,proportion8 namely proportions of      
abstract  value as such4 ,and whether   
,gold1 ,silver1 and ,paper are not      
,tickets  or ,counters for ,reckoning1  
,recording and ,transferring thereof8   
7of  the proportion of value74 ,whether 
,power to command the ,industry of      
others be not real ,wealth8 ,and whether
 ,money be not in ,truth1 ,tickets  or  
,tokens for conveying and recording such
 ,power1 and whether it be of  great    
consequence what ,materials the ,tickets
 are made of80#ea ,here  we find a      
confusion1 first of the measure of value
 and the standard  of price1 and        

secondly of gold and silver as measures 
on the one hand  and mediums of         
circulation on the other4 ,because      
precious metals can  be replaced by     
tokens in the process of circulation    
,berkeley comes to  the conclusion that 
these tokens represent nothing1 i4 e41  
only the  abstract idea of value4       
,,sir ,,james ,,steuart had so fully    
developed the theory of the ideal  unit 
of measure of money1 that his           
successorsunconscious successors  since 
they do not know himhave added to it    
neither a new version  nor even a new   
example4 8,money1 which ,i call of      
account1 is no more  than an arbitrary  
scale of equal parts1 invented for      
measuring the  respective value of      
things vendible4 ,money of account1     
therefore1 is  quite a different thing  
from money coin1 which is price#eb and  
might  exist1 although there was no such
 thing in the world as any substance    
which could become an adequate and      
proportional equivalent1 for every      

commodity4444 ,money of account 444     
performs the same office with  regard to
 the value of things1 that degrees1     
minutes1 seconds1 etc41  do with regard 
to angles1 or as scales do to           
geographical maps1 or to  plans of any  
kind4 ,in all these inventions1 there is
 constantly some  denomination taken for
 the unit4 444 ,the usefulness of all   
those  inventions being solely confined 
to the marking of proportion4 ,just so  
the unit in money can have no invariable
 determinate proportion to any  part of 
value1 that is to say1 it cannot be     
fixed to any particular  quantity of    
gold1 silver1 or any other commodity    
whatsoever4 ,the  unit once fixed1 we   
can1 by multiplying it1 ascend to the   
greatest  value4444 ,the value of       
commodities1 therefore1 depending upon a
  general combination of circumstances  
relative to themselves and to the       
fancies of men1 their value ought to be 
considered as changing only  with       
respect to one another2 consequently1   

anything which troubles or  perplexes   
the ascertaining those changes of       
proportion by the means  of a general1  
determinate and invariable scale1 must  
be hurtful to  trade4444 ,money 444 is  
an ideal scale of equal parts4 ,if it be
 demanded  what ought to be the standard
 value of one part8 ,i answer by putting
  another question3 ,what is the        
standard length of a degree1 a minute1 a
  second8 ,it has none 444 but so soon  
as one part becomes determined by  the  
nature of a scale1 all the rest must    
follow in proportion4 ,of this  kind of 
money 444 we have two examples4 ,the    
bank of ,amsterdam presents  us with the
 one1 the coast of ,angola with the     
other40#ec    ,steuart speaks here      
simply of the part money plays in       
circulation  as the standard of price   
and money of account4 ,if different     
commodities are marked in the price-list
 at #aes41 #bjs41 #cfs41  respectively1 
then ,i care1 in fact1 neither for the  
silver substance1  nor for the name of  

the shilling when comparing the         
magnitudes of their  values4 ,the ratios
 between the numbers #ae1 #bj1 #cf1 tell
 everything1 and  the number #a has     
become the only unit of measure4 ,only  
the abstract  proportion of numbers can 
at all serve as a purely abstract       
expression  of proportion4 ,in order to 
be consistent1 ,steuart should have     
dropped  not only gold and silver1 but  
their legal baptismal names as well4    
,since he does not understand the nature
 of the transformation of the  measure  
of value into a standard of price1 he   
naturally believes that  the definite   
quantity of gold which serves as a unit 
of measure relates  as a measure not to 
other quantities of gold1 but to values 
as such4  ,since commodities appear as  
quantities of the same denomination     
through  the conversion of their        
exchange values into prices1 he denies  
that  property of the measure which     
reduces them to one denomination2 and   
since in this comparison of different   

quantities of gold the quantity  of gold
 which serves as a unit of measure is   
conventional1 he does not  see the      
necessity of fixing it at all4 ,instead 
of calling #a-cfj part  of a circle     
degree1 he might give that name to      
#a-ahjth part2 the right  angle would   
then be measured by #de degrees instead 
of #ij1 and acute and  obtuse angles    
would be measured accordingly4          
,nevertheless1 the measure  of the angle
 would remain1 then1 as before1 first a 
qualitatively  definite mathematical    
figure1 the circle1 and second a        
quantitatively  definite part of the    
circle4 ,as for ,steuart's economic     
illustrations1  he refutes his own      
argument with one and does not prove    
anything with  the other4 ,the bank     
money of ,amsterdam was1 in fact1 merely
 the  reckoning name for ,spanish       
doubloons1 which retained their full    
weight  by lying idly in the bank       
vaults1 while the circulating coins     
became  thinner from hard rubbing       

against the outer world4 ,and as for the
  ,african idealists we have to abandon 
them to their fate until critical       
travelers will tell us more about       
them4#ed ,the ,french assignat  could be
 called an almost ideal money in        
,steuart's sense3 8,national  property4 
,assignation of #ajj francs40 ,to be    
sure1 the use-value which  the          
assignation was supposed to represent1  
namely1 the confiscated  land1 was      
indicated here1 but the quantitative    
definition of the unit  of measure was  
forgotten and 8the franc0 became a      
meaningless word4  ,how much or how     
little land the assignation franc       
represented depended  on the results of 
the public auctions4 ,in practice1      
however1 the  assignation franc         
circulated as a token of value of silver
 money and  its depreciation was1       
therefore1 measured by this silver      
standard4    ,the period of the         
suspension of cash payments by the ,bank
 of ,england  was hardly more fruitful  

of war-bulletins than of money theories4
 ,the  depreciation of bank notes and   
the rise of the market price of gold    
above its mint price called forth again 
the doctrine of the ideal  unit of money
 on the part of some of the advocates of
 the ,bank4 ,lord  ,castlereagh found   
the classical confused expression for   
the confused  idea by speaking of the   
unit of measure of money as 8a sense of 
value  in reference to currency as      
compared with commodities40 ,when a few 
years after the peace of ,paris         
conditions permitted the resumption of  
cash payments1 the same question which  
had been stirred up by ,lowndes  under  
,william ,,iii41 came up1 hardly changed
 in form4 ,an enormous  government debt1
 as well as a mass of private debts1    
accumulated in  twenty years1 fixed     
obligations1 etc41 had been contracted  
on the  basis of depreciated bank notes4
 ,were they to be paid back in bank     
notes of which #dfgb1 #ajs4 nominal1    
actually represented #ajj pounds  of #bb

 carat gold8 ,,thomas ,,attwood1 a      
banker of ,birmingham1 came forth  as   
,lowndes redivivus4 ,the creditors were 
to receive nominally as  many shillings 
as had been nominally borrowed1 but if  
about #a-gh of  an ounce of gold        
constituted a shilling according to the 
old standard  of coinage1 then say #a-ij
 of an ounce should now be christened a 
shilling4 ,attwood's adherents are known
 as the ,birmingham school of  8little  
shillingmen40 ,the controversy over the 
ideal money unit1 which  had started in 
#ahai1 still went on in #ahde between   
,sir ,robert ,peel and  ,attwood1 whose 
own wisdom1 as far as the function of   
money as a measure  is concerned1 is    
exhaustively summed up in the following 
passage1 in  which1 referring to ,sir   
,robert ,peel's controversy with the    
,birmingham  ,chamber of ,commerce1 he  
says3 8,the substance of your queries is
 444  in what sense is the word pound to
 be used8444 ,to what will the sum  one 
pound be equivalent8444 ,before ,i      

venture a reply ,i must enquire  what   
constitutes a standard of value8444 ,is 
#c #ags4 #aj-a_/b;d4 an ounce  of gold1 
or is it only of the value of an ounce  
of gold8 ,if #c #ags4  #aj-a_/b;d4 be an
 ounce of gold1 why not call things by  
their proper  names1 and1 dropping the  
terms pounds1 shillings and pence1 say  
ounces1  pennyweights and grains8444 ,if
 we adopt the terms ounces1 pennyweights
  and grains of gold1 as our monetary   
system1 we should pursue a direct       
system of barter4444 ,but if gold be    
estimated as of the value of  #c #ags4  
#aj-a_/b;d4 per ounce 444 how is this   
444 that much difficulty  has been      
experienced at different periods to     
check gold from rising  to #e #ds4 per  
ounce1 and we now notice that gold is   
quoted at #c #ags4  #i;d4 per ounce8444 
,the expression pound has reference to  
value1 but  not a fixed standard        
value4444 ,the term pound is the ideal  
unit4444  ,labour is the parent of cost 
and gives the relative value to gold or 

iron4 ,whatever denomination of words   
are used to express the daily or  weekly
 labour of a man1 such words express the
 cost of the commodity  produced40#ee   
,in the last words the hazy conception  
of the ideal money measure melts  away  
and its real meaning breaks through4    
,the reckoning names of gold1  pound    
sterling1 shilling1 etc41 should be     
names for definite quantities  of       
labor-time4 ,since labor-time           
constitutes the substance and the       
intrinsic measure of values1 these names
 would then actually represent  definite
 proportions of value4 ,in other words1 
labor-time is maintained  to be the true
 unit of measure of money4 ,with this we
 leave the  ,birmingham school1 but     
should add in passing that the doctrine 
of the  ideal measure of money acquired 
new importance in the controversy over  
the question of the convertibility or   
non-convertibility of bank notes4  ,if  
paper receives its name from gold or    
silver1 then the convertibility  of a   

note or its exchangeability for gold or 
silver remains an economic  law1 no     
matter what the civil law may be4 ,thus 
a ,prussian paper thaler1  although     
legally inconvertible1 would immediately
 depreciate if it were  worth less than 
a silver thaler in ordinary trade1 i4   
e41 if it were  not practically         
convertible4 ,the consistent advocates  
of inconvertible  paper money in        
,england1 therefore1 sought refuge in   
the ideal measure  of money4 ,if the    
reckoning names of money1 1 s41 etc41   
are names of  certain quantities of     
atoms of value1 of which a commodity    
absorbs or  loses now more1 now less in 
exchange for other commodities1 then an 
,english #e note1 e4 g41 is just as     
independent of its relation to gold  as 
of that to iron and cotton4 ,since its  
title would no more imply  its          
theoretical equality with a certain     
quantity of gold or any other           
commodity1 the demand for its           
convertibility1 i4 e41 for its practical

  equality with a definite quantity of a
 specified thing would be  excluded by  
the very conception of the note4    ,the
 theory of labor-time as the direct     
measure of money was first              
systematically developed by ,,john      
,,gray4#ef ,he makes a ,national        
,central  ,bank ascertain through its   
branches the labor-time consumed in the 
production of various commodities4 ,the 
producer receives an official           
certificate of value in exchange for his
 commodity4 i4 e41 he gets a  receipt   
for as much labor-time as his commodity 
contains1#eg and these  bank notes of   
one week's labor1 one day's labor1 one  
hour's labor1  etc41 serve at the same  
time as a check for an equivalent in all
 other  commodities stored in the bank  
warehouses4#eh ,this is the fundamental 
principle carefully worked out in detail
 and based throughout on  existing      
,english institutions4 ,under this      
system1 says ,gray1 8to  sell for money 
may be rendered1 at all times1 precisely

 as easy as it  now is to buy with      
money2 444 production would become the  
uniform and  never-failing cause of     
demand40#ei ,the precious metals would  
lose  their 8privilege0 as against other
 commodities and 8take their proper     
place in the market beside butter and   
eggs1 and cloth and calico1 and  then   
the value of the precious metals will   
concern us just as little  444 as the   
value of the diamond40#fj 8,shall we    
retain our fictitious  standard of      
value1 gold1 and thus keep the          
productive resources of the  country in 
bondage8 or1 shall we resort to the     
natural standard of  value1 labour1 and 
thereby set our productive resources    
free80#fa    ,labor-time being the      
intrinsic measure of value1 why should  
there be  another external measure side 
by side with it8 ,why does exchange     
value  develop into price8 ,why do all  
commodities estimate their value in one 
exclusive commodity1 which is thus      
converted into a special embodiment  of 

exchange value into money8 ,that was the
 problem which ,gray had  to solve4     
,instead of solving it1 he imagined that
 commodities could  be related directly 
to each other as products of social     
labor4 ,but  they can relate to each    
other only in their capacity of         
commodities4  ,commodities are the      
direct products of isolated independent 
private  labors1 which have to be       
realized as universal social labor      
through  their alienation in the process
 of private exchange1 that is to say1   
labor based on the production of        
commodities becomes social labor only   
through universal alienation of         
individual labors4 ,but by assuming     
that the labor-time contained in        
commodities is directly social          
labor-time1 ,gray assumes it to be      
common labor-time or labor-time of      
directly associated individuals4 ,under 
such conditions a specific  commodity   
like gold or silver could not confront  
other commodities as  the incarnation of

 universal labor1 and exchange value    
would not be  turned into price2 but1 on
 the other hand1 use-value would not    
become  exchange value1 products would  
not become commodities and thus the     
very foundation of the capitalistic     
system of production would be  removed4 
,but that is not what ,gray has in mind4
 ,products are to be  produced as       
commodities1 but are not to be exchanged
 as commodities4  ,he entrusts a        
national bank with the carrying out of  
this pious  wish4 ,on the one hand1     
society1 through the bank1 makes        
individuals  independent of the         
conditions of private exchange1 and on  
the other1  it allows them to go on     
producing on the basis of private       
exchange4  ,the logic of things1        
however1 compels ,gray to do away with  
one  condition of capitalistic          
production after another1 although he   
wishes  to 8reform0 only the money      
system which results from the exchange  
of  commodities4 ,thus he transforms    

capital into national capital1#fb  land 
into national property1#fc and if his   
bank is to be watched  closely1 it will 
be found that it not only receives      
commodities with  one hand and issues   
certificates for work delivered with the
 other1 but  that it regulates          
production as well4 ,in his last work1  
8,lectures on  ,money10 in which ,gray  
is anxious to demonstrate that his      
labor-money  is a purely bourgeois      
reform1 he gets tangled up in even more 
glaring  contradictions4    ,every      
commodity is directly money4 ,that was  
,gray's theory deducted  from his       
incomplete and1 therefore1 false        
analysis of commodities4  ,the 8organic0
 structure of 8labor money10 the        
8national bank0 and the  8ware-docks0   
are mere fantastic visions in which the 
dogma is made  by a legerdemain to      
appear to us as a universal law4 ,the   
dogma that  a commodity is money or that
 the isolated labor of the individual   
contained in it is direct social labor1 

will of course not become  true through 
the mere fact that a bank believes in it
 and carries on  operations accordingly4
 ,it is more likely that bankruptcy     
would play  in that case the part of the
 practical critic4 ,what remains        
concealed  in ,gray's writings and      
hidden from himself as well1 namely1    
that  labor-money is a well-sounding    
economic phrase for the pious wish to   
get rid of money1 and with money1 of    
exchange value1 and with exchange       
value1 of commodities1 and with         
commodities1 of the capitalistic mode   
of production1 was clearly expressed by 
some ,english socialists of whom  a few 
preceded and others followed ,gray4#fd  
,but it remained for ,mr4 ,proudhon and 
his school to preach in  all earnest the
 degradation of money and the exaltation
 of the  commodity as the gist of       
socialism and thus to reduce socialism  
to an  elementary misconception of the  
necessary connection between commodity  
and money4#fe      #b4 ,,the ,,medium   

,,of ,,circulation4    ,after the       
commodity has received in the process of
 price determination  the form in which 
it becomes capable of circulation1 and  
after gold has  acquired the character  
of money in the same process1           
circulation will  both present and solve
 the contradictions which are inherent  
in the  process of exchange of          
commodities4 ,the actual exchange of    
commodities1  i4 e41 the social         
interchange of matter consists of a     
change of form in  which is unfolded the
 double character of the commodity as   
use-value  and exchange value1 and at   
the same time its own change of form is 
crystallized in distinct forms of money4
 ,to describe this change of  form is to
 describe circulation4 ,as we have seen1
 given a world of  commodities and with 
it a system of division of labor1       
commodity is but  a developed form of   
exchange value2 in the same manner1     
circulation  implies a steady stream of 
exchange transactions which are being   

continually renewed on all sides4 ,the  
second assumption we make is that       
commodities enter the process of        
exchange with a definite price or  that 
they appear to each other in that       
process in a double capacity1  really as
 use-values1 ideallyin priceas exchange 
values4    ,the liveliest streets of    
,london are crowded with stores whose   
show  windows are filled with the riches
 of the world1 ,indian shawls1          
,american revolvers1 ,chinese porcelain1
 ,parisian corsets1 ,russian furs  and  
tropical spices1 but all of these things
 of joy bear fatal white  labels marked 
with ,arabian figures with the laconic  
characters 1 s41  d4 ,such is the       
picture of the commodity appearing in   
circulation4      a4 ,,the              
,,metamorphosis ,,of ,,commodities4     
,on close examination the process of    
circulation is seen to consist of  two  
distinct cycles4 ,if we denote commodity
 by the letter ,c and money  by the     
letter ,m we can express these two forms

 as follows3      ,c,m,c    ,m,c,m4     
,in this chapter we are interested      
exclusively in the first form1 i4 e41   
in the form which serves as the direct  
expression of the circulation of        
commodities4    ,the process ,c,m,c     
consists of the movement ,c,m1 the      
exchange of the  commodity for money1 or
 selling2 the opposite movement ,m,c1   
exchange  of money for a commodity1 or  
buying2 and of the unity of the two     
movements ,c,m,c1 exchange of the       
commodity for money in order to         
exchange the money for a commodity1 or  
selling in order to buy4  ,but the      
result which marks the end of the       
process is ,c,c1 exchange of  commodity 
for commodity1 real interchange of      
matter4    ,if we look at it from the   
extreme end of the first commodity1     
,c,m,c  represents its transformation   
into gold and its retransformation from 
gold into a commodity2 a movement in    
which the commodity exists first  as a  
particular use-value1 then divests      

itself of that character1  acquires the 
character of exchange value or universal
 equivalent1  in which capacity it has  
nothing in common with its natural form1
  then throws off the last form as well 
to remain finally an actual  use-value  
for the satisfaction of particular      
wants4 ,in this last form  it falls out 
of the sphere of circulation into that  
of consumption4  ,the entire process of 
circulation ,c,m,c thus includes the    
combined  series of metamorphoses1 which
 every single commodity undergoes  in   
order to become a direct use-value to   
its possessor4 ,the first  metamorphosis
 is accomplished in the first phase of  
the circulation  process1 ,c,m2 the     
second in the last phase1 ,m,c2 and the 
entire  process constitutes the         
curriculum vitae of the commodity4 ,but 
the process ,c,m,c represents the       
combined metamorphosis of a single      
commodity and constitutes at the same   
time the sum of certain one-sided       
metamorphoses of other commodities1     

since every metamorphosis of the  first 
commodity constitutes its transformation
 into another commodity  and therefore  
the transformation of the other         
commodity into it2 hence  it constitutes
 a twofold transformation which takes   
place at the same  stage of circulation4
 ,we must then consider separately each 
of the two  processes of exchange into  
which circulation ,c,m,c breaks up4     
,c,m or sale3 commodity ,c enters the   
process of circulation not only  as a   
particular use-value1 e4 g41 a ton of   
iron1 but as a use-value  of a certain  
price1 say1 #c #ags4 #aj-a_/b;d41 or an 
ounce of gold4  ,while this price is on 
the one hand the exponent of the        
quantity of  labor-time contained in a  
ton of iron1 i4 e41 of the magnitude of 
its  value1 it at the same time         
expresses the pious wish of the iron to 
become gold1 i4 e41 to give to the      
labor-time it contains the aspect  of   
universal social labor-time4 ,unless    
this trans-substantiation takes  place1 

the ton of iron not only ceases to be a 
commodity1 but even a  product1 for it  
is a commodity only because it is a     
non-use-value to  its owner2 that is to 
say1 his labor counts as actual labor   
only in so  far as it is labor useful to
 others1 and the thing is useful to him 
only as abstract universal labor4 ,it   
is1 therefore1 the business of  iron1 or
 of its owner1 to find that point in the
 world of commodities  where iron       
attracts gold4 ,but this difficulty1 the
 salto mortale  of the commodity1 is    
overcome when the sale actually takes   
place1 as  is assumed here on the       
analysis of simple circulation4 ,when   
the ton  of iron is realized as a       
use-value through its alienation1 i4 e41
 by  passing from the hands in which it 
is a non-use-value to hands in which  it
 is a use-value1 it at the same time    
realizes its price and from mere        
imaginary gold it becomes real gold4 ,in
 place of the name one ounce of  gold or
 #c #ags4 #aj-a_/b;d41 an ounce of real 

gold has appeared1 but the  ton of iron 
has cleared that place4 ,not only does  
the commoditywhich  in its price had    
been ideally converted into goldactually
 turn into  gold through the sale ,c,m1 
but gold1 which as a measure of value   
had  been only ideal money and in fact  
figured merely as a money name of       
commoditiesis now turned into actual    
money#ff by the same process4  ,just as 
gold became the ideal universal         
equivalent1 because all  commodities    
measured their values by it1 so does it 
now become the  absolutely alienable    
commodity1 real money1 because it is the
 product  of the universal alienation of
 commodities for itand the sale ,c,m is 
the process by means of which that      
universal alienation takes place4  ,but 
gold becomes real money only through    
sale1 because the exchange  values of   
commodities were already ideal gold in  
their prices4    ,in the sale ,c,m1 as  
well as in the purchase ,m,c1 two       
commodities1  entities of exchange value

 and use-value1 confront each other1 but
 the  exchange value of the commodity   
exists only ideally as price2 while  as 
regards gold1 although it is really a   
use-value1 its use-value  is confined   
only to its being the bearer of exchange
 value and is1  therefore1 merely a     
formal use-value1 having no relation to 
a real  individual want4 ,the antithesis
 of use-value and exchange value is thus
  distributed at the two extreme poles  
of ,c,m1 so that the commodity          
confronts gold as a use-value which has 
yet to realize in gold its  exchange    
value or its price1 while gold confronts
 the commodity as an  exchange value1   
whose formal use-value is yet to be     
realized in the  commodity4 ,only       
through this duplication of the         
commodity as commodity  and gold1 and1  
further1 through the twofold and polar  
relation by  virtue of which each       
extreme represents but ideally what its 
opposite  is in reality and is in       
reality what its opposite is only       

ideallyin  short1 only through the      
appearance of commodities as two-sided  
polar  opposites are the contradictions 
solved that are inherent in the  process
 of exchange4    ,so far we have        
considered ,c,m as sale1 as the         
conversion of commodity  into money4    
,but if we look at it from the other    
end1 the same process  will assume the  
form ,m,c1 or purchase1 i4 e41 the      
conversion of  money into commodity4    
,sale is necessarily its opposite at the
 same  time2 it is the former if we look
 at the process from one end1 and  the  
latter if we regard the process from the
 other end4 ,in practice  this process  
differs only in that the initiative in  
,c,m originates  at the commodity end or
 with the seller1 while in ,m,c it comes
 from  the money end or the buyer4 ,in  
describing the first metamorphosis  of  
the commodity1 its conversion into money
 as a result of the  completion of the  
first phase of circulation ,c,m1 we     
assume at the  same time that another   

commodity has been converted into money 
and  is now in its second phase of      
circulation1 ,m,c4 ,thus we get into a  
vicious circle of assumptions4          
,circulation itself constitutes such a  
vicious circle4 ,if we did not consider 
,m in ,m,c as the result of a           
metamorphosis of another commodity1 we  
would thereby take exchange out  of the 
process of circulation4 ,but outside of 
the latter the form ,c,m  disappears and
 only two different ,cs confront each   
other1 say iron  and gold1 the exchange 
of which does not constitute a part of  
the  process of circulation1 being      
direct barter4 ,gold1 at the source of  
its production1 is a commodity like any 
other commodity4 ,its relative  value   
and that of iron or of any other        
commodity is expressed here in          
quantities in which they are mutually   
exchanged4 ,but in the process  of      
circulation this operation is implied1  
the value of gold being  already given  
in the prices of commodities4 ,nothing  

can1 therefore1  be more erroneous than 
the idea that gold and commodity enter  
into  the relation of direct barter     
within the process of circulation and   
that their relative values are          
ascertained through their exchange as   
simple commodities4 ,the illusion that  
gold is bartered as a simple  commodity 
for other commodities in the process of 
circulation is due to  the fact that    
prices represent equations in which     
certain quantities  of commodities are  
made equal to certain quantities of     
gold1 i4 e41  that the commodities are  
made to relate to gold in its capacity  
of money1 as a universal equivalent1    
and1 therefore1 appear to be  directly  
exchangeable for it4 ,in so far as the  
price of a commodity  is realized in    
gold1 it is exchanged for gold as a     
commodity1 as a  particular embodiment  
of labor-time2 but in so far as it is   
the price  that is realized in gold1 the
 commodity is exchanged for gold in its 
capacity of money and not of a          

commodity1 i4 e41 it is exchanged for   
gold as a universal embodiment of       
labor-time4 ,but in either case the     
quantity of gold for which the commodity
 is exchanged in the process  of        
circulation is not determined by        
exchange1 but the exchange is           
determined by the price of the          
commodity1 i4 e41 by its exchange value 
estimated in gold4#fg    ,within the    
process of circulation gold appears in  
everybody's hands as  the result of sale
 ,c,m4 ,but since ,c,m1 sale1 is at the 
same time ,m,c1  purchase1 it is        
apparent that while ,c1 the commodity   
from which the  process starts1 is      
passing through its first metamorphosis1
 another  commodity1 which confronts it 
as the opposite pole ,m1 is completing  
its second metamorphosis and is1        
therefore1 passing through the second   
phase of circulation1 while the first   
commodity is still in the first  phase  
of its course4    ,as a result of the   
first phase of circulation1 the sale1 we

 get  money which is the starting point 
of the second phase4 ,in place of  the  
commodity in its first form appears its 
golden equivalent4 ,this  result may now
 form a resting point1 since the        
commodity in this  second form possesses
 a lasting existence of its own4 ,the   
commodity1  a non-use-value in the hands
 of its possessor1 is now on hand in an 
always useful1 since always             
exchangeable1 form1 and it depends upon 
circumstances when and at what point of 
the surface of the commodity  world it  
will again enter circulation4 ,its      
formation into a gold  chrysalis        
constitutes an independent period in its
 life which may last  a greater or less 
length of time4 ,while in the case of   
barter the  exchange of one particular  
use-value is directly bound up with the 
exchange of another particular          
use-value1 the universal character of   
labor which creates exchange value is   
manifested in the separation and  lack  
of coincidence of acts of purchase and  

sale4    ,m,c1 purchase1 is the inverted
 movement of ,c,m and at the same time  
the second or final metamorphosis of the
 commodity4 ,as gold1 i4 e41 in  the    
form of the universal equivalent1 the   
commodity can be directly  represented  
in the use-values of all other          
commodities2 the latter  aspire to gold 
as their hereafter1 but at the same time
 indicate in  their prices the key in   
which it must sound in order that their 
bodies1  their use-values1 may take the 
place of money1 while their souls1      
their exchange-values1 may enter gold4  
,the universal product of the           
alienation of commodities is the        
absolutely alienable commodity4 ,there  
is no qualitative and only a            
quantitative limit to the transformation
  of gold into commodity1 namely1 the   
limit of its own quantity or  magnitude 
of its value4 8,everything is to be had 
for cash40 ,while in  the movement ,c,m1
 the commodity1 through its alienation  
as a use-value1  realizes its own price 

and the use-value of somebody else's    
money2 it  realizes in the movement     
,m,c1 through its alienation as an      
exchange  value1 its own use-value and  
the price of the other commodity4 ,while
  through the realization of its price  
the commodity transforms gold  into     
actual money1 it turns gold into its    
merely fleeting money-form1  through its
 own retransformation4 ,since the       
circulation of commodities  implies an  
extensive division of labor and         
consequently a diversity of  wants on   
the part of individuals1 a diversity    
which bears an inverse  ratio to the    
specialization of their own products1   
the purchase ,m,c may  appear as an     
equation with one commodity equivalent  
or split up into a  series of           
commodity-equivalents limited by the    
variety of the demands  of the purchaser
 and by the amount of money in his      
possession4 ,just as  a sale is a       
purchase1 so is a purchase a sale4 ,m,c 
is at the same time  ,c,m1 but the      

initiative belongs in this case to gold 
or the purchaser4    ,coming back now to
 ,c,m,c1 or to circulation as a whole1  
it is apparent  that it contains the    
combined series of metamorphoses through
 which  a commodity passes4 ,but at the 
same time as one commodity enters the   
first phase of its circulation and      
completes its first metamorphosis1      
another commodity enters the second     
phase of circulation1 completes its     
second metamorphosis and falls out of   
circulation2 the first commodity  enters
 at the same time the second phase of   
circulation completes  its second       
metamorphosis and falls out of          
circulation1 while a third  commodity   
enters circulation1 passes through the  
first phase of its  course completing   
the first metamorphosis4    ,thus1 the  
combined circulation ,c,m,c1 as a       
complete metamorphosis of a  commodity  
always constitutes at the same time the 
end of the complete  metamorphosis of   
another commodity and the beginning of a

 complete  metamorphosis of a third     
commodity1 i4 e41 a series without      
beginning  or end4 ,to illustrate this  
let us call ,c in either extreme ,c' and
 ,c0  respectively1 in order to         
distinguish the commodities1 the series 
reading thus3 ,c',m,c04 ,the first      
member1 ,c',m1 presupposes in fact  that
 ,m is the result of another transaction
 ,c,m1 and is thus itself  merely the   
last member of a series ,c,m,c'1 while  
the second part ,m,c0  is merely a      
result of ,c0,m1 or appears as the first
 part of ,c0,m,c'01  and so on4         
,furthermore1 although ,m is the result 
of only one sale1  it appears that the  
last part ,m,c1 may be represented as   
,m,c'  ,m,c0   ,m,c'01 etc41 i4 e41 it  
may be split up into a number of        
purchases1  and consequently a number of
 sales1 or into a number of first       
members  of new complete metamorphoses  
of commodities4 ,since the complete     
metamorphosis of a single commodity thus
 appears as a link not only  of one     

endless chain of metamorphoses1 but of  
many such chains1 the  process of       
circulation in the world of commodities 
presents a hopeless  confusion of       
intertwined movements constantly ending 
and starting anew  at a countless number
 of points4 ,but every single sale or   
purchase  stands as an independent      
isolated act1 whose supplemental act may
 be  separated from it in time and      
place1 and therefore does not need to   
follow it directly as its continuation4 
,every separate process of  circulation1
 ,c,m or ,m,c1 as a transformation of   
one commodity into  use-value and of    
another into money1 i4 e41 as the first 
and second  phases of circulation       
respectively forms an independent       
halting  point from either direction2   
but1 on the other hand1 all commodities 
commence their second metamorphosis in  
the common form of the universal        
equivalent1 gold1 and stop at the       
starting point of the second phase of   
circulation2 for that1 reason any ,m,c  

dovetails in actual circulation  with   
any ,c,m2 the second chapter in the     
life-course of one commodity  with the  
first chapter of that of another        
commodity4 ,a1 e4 g41 sells  #b worth of
 iron4 ,he thus completes the           
transaction ,c,m or the first           
metamorphosis of commodity iron1 but    
postpones his purchase until some  other
 time4 ,at the same time ,b1 who sold #b
 quarters of wheat for #f a  fortnight  
since1 buys with the same #f a coat and 
trousers of ,moses   ,son1 thus         
completing ,m,c or the second           
metamorphosis of the commodity1  wheat4 
,the two transactions ,m,c and ,c,m     
appear here merely as links of one      
chain1 because a commodity expressed in 
gold looks like any other  commodity1   
and one cannot tell by the looks of the 
gold whether it is  transformed iron or 
transformed wheat4 ,c,m,c appears1      
therefore1 in the  actual process of    
circulation as a jumble of countless    
accidentally  coinciding or successively

 following members of different complete
  metamorphoses4 ,the actual process of 
circulation thus appears not as  a      
complete metamorphosis of a commodity1  
not as its movement through  opposite   
phases1 but as a mere agglomeration of  
many accidentally  coinciding or        
successive purchases and sales4 ,the    
process thus loses  all clearness of    
outline which is so much more the case  
since every  single act of circulation1 
e4 g41 sale1 is at the same time its    
opposite1 purchase1 and vice versa4 ,on 
the other hand1 the process  of         
circulation is nothing but the movement 
of metamorphoses in the  world of       
commodities and1 therefore1 must reflect
 them also in its  movement as a whole4 
,how that reflection takes place we     
shall consider  in the following        
chapter4 ,it may be added here that in  
,c,m,c the two  extreme ,cs constitute  
two forms of commodities which do not   
bear the  same relation to ,m4 ,the     
first ,c relates to money as a commodity

 of a  special class to a universal     
commodity1 while money relates to the   
second ,c as a universal commodity to an
 individual commodity4 ,c,m,c  can1     
therefore1 be reduced by abstract logic 
to the final form ,s,u,i in  which ,s1  
standing for species1 forms the first   
extreme2 ,u1 signifying  universality1  
forms the connecting medium1 and ,i1    
individuality1  constitutes the last    
extreme4    ,the owners of commodities  
entered the sphere of circulation simply
  as guardians of commodities4 ,within  
that sphere they confront each  other in
 the opposite roles of buyer and seller1
 one as a personified  sugar-loaf1 the  
other as personified gold4 ,as soon as  
the sugar-loaf  is turned into gold1 the
 seller becomes a buyer4 ,these definite
 social  functions are no outgrowths of 
human nature1 but are the products  of  
relations of exchange between men who   
produce their goods in the  form of     
commodities4 ,they are so far from being
 purely individual  relations between   

buyer and seller that both enter this   
relation  only to the extent that their 
individual labor is disregarded and  is 
turned into money as labor of no        
individual4 ,just as it is1  therefore1 
childish to consider these economic     
bourgeois roles of  buyer and seller as 
eternal social forms of human           
individuality1 so it  is on the other   
hand1 preposterous to lament in them the
 extinction  of individuality4#fh ,they 
are the necessary manifestations of     
individuality at a certain stage of the 
social system of production4  ,moreover1
 in the opposition of buyer and seller  
the antagonistic nature  of capitalistic
 production is expressed as yet so      
superficially  and as mere matter of    
form1 that this opposition belongs also 
to  precapitalistic forms of society1   
since it merely requires that  the      
mutual relations of individuals should  
be those of owners of  commodities4     
,now1 if we consider the result of      
,c,m,c1 it comes down to mere           

interchange of matter1 ,c,c4 ,a         
commodity has been exchanged for a      
commodity1 a use-value for a use-value1 
and the transformation of the  commodity
 into money1 or the commodity in its    
form of money1 serves  merely as a means
 of effecting this interchange of       
matter4 ,money thus  appears merely as a
 medium of exchange of commodities2 not 
as a  medium of exchange in general1 but
 as a means of exchange in the sphere   
of circulation1 i4 e41 a medium of      
circulation4#fi    ,we have seen that   
the process of circulation of           
commodities comes to  a completion in   
,c,c1 appearing as mere barter carried  
on by means of  money2 further1 that    
,c,m,c represents in general not only   
two isolated  processes1 but their      
dynamic union as well2 but to draw from 
that the  conclusion that purchase and  
sale form an indivisible unit1 is a mode
  of thinking the criticism of which    
belongs to the domain of logic1  and not
 to that of economics4 ,the separation  

of purchase and sale in  the process of 
exchange destroys all local1 primitive1 
patriarchal  and naively genial barriers
 to interchange of matter in society4   
,it  is1 moreover1 the general form of  
the separation of the points of         
coincidence and opposition in this      
interchange1 carrying within it the     
possibility of commercial crises1       
because the antagonism of commodity  and
 money is the abstract and general form 
of all antagonisms with  which the      
capitalistic system of labor is         
pregnant4 ,hence1 circulation  of money 
is possible without crises1 but crises  
can not occur without  money            
circulation4 ,in other words1 where     
labor based on the system of  private   
exchange has not reached the stage      
marked by the existence  of money1 it is
 less capable of producing those        
phenomena which  presuppose the full    
development of the capitalistic mode of 
production4  ,bearing this in mind we   
can appreciate the depth of the         

criticism  which proposes to do away    
with the 8shortcomings0 of capitalistic 
production by abolishing the 8privilege0
 enjoyed by the precious metals  and    
introducing a so-called 8rational       
monetary system40 ,as a sample  of      
economic defence of an opposite         
character may serve the following  piece
 of reasoning which has been proclaimed 
exceedingly keen4 ,,james  ,,mill1 the  
father of the well-known ,english       
economist1 ,john ,stuart ,mill1  says3  
8,whatever 444 be the amount of the     
annual produce1 it never can  exceed the
 amount of the annual demand4444 ,of two
 men who perform an  exchange1 the one  
does not come with only a supply1 the   
other with only  a demand2 each of them 
comes with both a demand and a          
supply4444 ,the  supply which he brings 
is the instrument of his demand2 and his
 demand  and supply are of course       
exactly equal to one another4 ,it is    
therefore1  impossible that there should
 ever be in any country a commodity or  

commodities in quantity greater than the
 demand1 without there being1  to an    
equal amount1 some other commodity or   
commodities in quantity  less than the  
demand40#gj    ,mill restores the       
balance by turning the process of       
circulation into  direct barter and then
 smuggling into direct barter the       
character of  buyer and seller borrowed 
by him from the process of circulation4 
,to  put it in his own confused         
language1 during certain periods when   
all  commodities are unsaleable there   
are really more buyers than sellers  of 
one commodity1 money1 and more sellers  
than buyers of all other  money1        
commodities2 such was1 e4 g41 the case  
at certain moments  during the          
commercial crisis of #aheg-eh in ,london
 and ,hamburg4 ,the  metaphysical       
balance of purchases and sales amounts  
to this1 that  every purchase is a sale 
and every sale is a purchase1 which is a
 poor  consolation to the guardian of   
the commodity who can not bring about   

its sale and therefore can not buy4#ga  
,the separation of sale and purchase    
makes possible a large number of        
fictitious transactions side by side    
with genuine trade before the  final    
exchange between the producer and the   
consumer of commodities  takes place4   
,it enables a host of parasites to      
penetrate the process of  production and
 exploit the separation4 ,but this1     
again1 means that with  money as the    
universal form of labor under the       
capitalist system1 there  is the        
possibility of the development of its   
contradictions4      b4 ,,the           
,,circulation ,,of ,,money4    ,actual  
circulation appears at first sight as a 
mass of purchases and  sales            
accidentally taking place side by side4 
,in buying as in selling1  commodities  
and money always stand in the same      
mutual relation3 the  seller1 on the    
side of the commodity2 the buyer1 on    
that of money4  ,money as a medium of   
circulation always appears therefore as 

a means  of purchase2 and in that way   
the difference in its destinations in   
the opposite phases of the metamorphosis
 of the commodity becomes               
indistinguishable4    ,money passes into
 the hands of the seller in the same    
transaction in  which the commodity     
passes into the hands of the buyer4     
,commodities  and money thus flow in    
opposite directions and this change of  
place  in which the commodity passes    
over to one side and money to the other 
side1 occurs simultaneously at an       
indefinitely large number of points  on 
the entire surface of bourgeois society4
 ,but the first step which  the         
commodity makes in the sphere of        
circulation is also its last  step4#gb  
,whether it leaves its place on account 
of its attraction  for gold 7,c,m71 or  
on account of its attraction by gold    
7,m,c71 with  one move1 with one change 
of place it falls out of the sphere of  
circulation into that of consumption4   
,circulation is a continuous flow  of   

commodities1 but different commodities  
all the time1 since each  commodity     
makes but one move4 ,every commodity    
enters upon the second  phase of its    
circulation not as the same commodity1  
but as another  commodity1 gold4 ,hence 
the movement of a metamorphosed         
commodity is the  movement of gold4 ,the
 same piece of gold or the identical    
gold coin  which changed places with one
 commodity in the act ,c,m1 reappears   
from  the opposite end as the starting  
point for ,m,c and thus changes places  
for the second time with another        
commodity4 ,just as it passed from the  
hands of buyer ,b into those of seller  
,a1 it now leaves ,a's hands who  has   
become a buyer and passes into ,c's     
hands4 ,the path described by a         
commodity in its transformation into    
money and its retransformation  from    
money1 i4 e41 the movement of a complete
 metamorphosis of a  commodity assumes  
the aspect of an apparent movement of   
the same coin  that changes places twice

 with two different commodities4 ,no    
matter in  how scattered and haphazard  
fashion purchases and sales may take    
place  near each other1 there is always 
in actual circulation a seller for  each
 buyer and the money which moves into   
the place of the commodity  sold1 before
 it came into the hands of the buyer1   
must have already  changed places with  
another commodity4 ,sooner or later it  
again leaves  the hands of the seller1  
who turns buyer1 to pass into the hands 
of  a new seller and this frequently    
repeated change of place forms the      
interlacing of the metamorphoses of     
commodities4 ,the same coins are        
moving1 some more1 others less          
frequently1 from one place in the       
sphere of circulation to another1 always
 in the direction opposite to  that of  
the commodities moved1 thus describing a
 longer or shorter  circulation-curve4  
,the different movements of the same    
coin can follow  each other in point of 
time only1 and on the contrary1 the many

  scattered purchases and sales which   
appear as so many separate changes  of  
place between commodities and money1    
occur simultaneously separated  only in 
point of space4    ,the circulation of  
commodities ,c,m,c in its elementary    
form is  completely described in the    
transition of money from the hands of   
the  buyer into those of the seller and 
from the hands of the latter1 as  soon  
as he has turned buyer1 into those of a 
new seller4 ,this completes  the        
metamorphosis of the commodity and with 
it the movement of money  in so far as  
that movement is the expression of the  
metamorphosis4  ,but since new          
use-values are continually produced in  
the shape of new  commodities and must  
thus be constantly thrown anew into     
circulation1  the process ,c,m,c is     
repeatedly renewed by the same commodity
 owners4  ,the money which they have    
spent as buyers gets back into their    
hands  as soon as they appear again as  
vendors of commodities4 ,the constant   

renewal of the circulation of           
commodities finds its reflection in the 
continual circulation over the entire   
surface of bourgeois society of  a      
quantity of money which1 passing from   
hand to hand1 describes at the  same    
time a number of different small cycles 
starting from numberless  points and    
returning each to its own starting      
point1 to repeat the same  movement over
 again4    ,the change of form on the   
part of commodities appears as a mere   
change  of place on the part of money   
and the continuity of the circulation   
movement is all on the side of money1   
since the commodity always makes  but   
one step in the direction opposite to   
money1 while the latter makes  in each  
case the second step for the commodity2 
the entire movement  seems1 therefore1  
to proceed from money1 although in the  
case of a sale  the commodity draws     
money out of its place1 i4 e41 it       
circulates money  as much as it is      
circulated by the latter in the case of 

a purchase4  ,furthermore1 owing to the 
fact that money always confronts        
commodities  in its capacity of a means 
of purchase1 and in that capacity moves 
commodities only by realizing their     
price1 the entire movement of           
circulation appears as a change of place
 between money and commodities1  the    
former realizing the prices of the      
latter either by separate acts  of      
circulation taking place simultaneously 
and side by side1 or by  successive     
transactions when the same coin realizes
 the prices of  different commodities   
one after another4 ,if we consider1 e4  
g41 the  series ,c,m,c',m,c0,m,c'01     
etc41 without regard to the qualitative 
aspects which become indistinguishable  
in the process of circulation1  we      
witness the same monotonous operation4  
,after realizing the price  of ,c1 ,m   
successively realizes those of ,c'1 ,c01
 etc41 and commodities  ,c'1 ,c01 ,c'01 
etc41 constantly take the place which   
money has left4  ,money thus appears to 

keep commodities in circulation by      
realizing  their prices4 ,in discharging
 this function of realization of prices1
  money is itself constantly            
circulating1 now changing its place1 now
  describing a curve of circulation1 now
 completing a small circuit where  the  
starting and returning points coincide4 
,as a medium of circulation1  money is  
subject to a circulation of its own4    
,the change of form of  the circulating 
commodities appears1 therefore1 as a    
movement of money  which furthers the   
exchange of commodities1 motionless in  
themselves4  ,the movement of the       
circulation process of commodities thus 
takes on  the form of the movement of   
gold as a medium of circulation1 i4 e4  
of  the circulation of money4    ,since 
owners of commodities give the products 
of their individual labor  the          
appearance of products of social labor  
by turning one object1  viz4 gold1 into 
the direct expression of universal      
labor-time and  therefore into money1   

their own movement by which all of them 
effect  the interchange of the material 
products of their labor now appears to  
them as the direct movement of that one 
object1 as the circulation of  gold4    
,the social movement itself appears to  
the owners of commodities  partly as an 
outward necessity and partly as a mere  
formal intermediary  process which      
enables every individual who puts any   
use-value into  circulation to get other
 use-values out of it of an equal value4
 ,the  use-value of commodities comes   
into play with their disappearance from 
the sphere or circulation1 while the    
use-value of money as a medium of       
circulation is in its very circulation4 
,the movement of a commodity  in the    
sphere of circulation is of a transitory
 kind1 while ceaseless  motion in that  
sphere constitutes the function of      
money4 ,through this  special function  
which it performs within the sphere of  
circulation  money acquires a new       
capacity1 which we have to consider now 

more  closely4    ,in the first place1  
we see that the circulation of money    
forms an  endlessly split up movement1  
since it reflects the splitting up of   
the  process of circulation into an     
infinitely large number of purchases    
and sales and the independent separation
 of the mutually supplementary  phases  
of metamorphoses of commodities4 ,in the
 small cycles described  by money1 where
 the starting and returning points      
coincide1 we do find  a return movement1
 i4 e41 an actual circular movement1 but
 the fact  that there are as many       
starting points as there are commodities
 and  that the number of these cycles is
 infinitely large puts them beyond  all 
control1 measurement1 or computation4   
,the time between the start  and the    
return of a commodity is just as        
indefinite4 ,moreover1 it is  immaterial
 whether or not such a circuit has been 
actually described in  a given case4 ,no
 economic fact is more generally known  
than that one  can spend money with one 

hand without getting it back with the   
other4  ,money proceeds from an endless 
number of points and returns to as many 
different points1 but the coincidence of
 the starting and returning  points is a
 matter of chance1 because in the       
movement ,c,m,c the turning  of the     
buyer again into a seller is not a      
necessary condition4 ,still  less does  
the circulation of money resemble a     
movement radiating  from a common centre
 to all points of the periphery and back
 from  the peripheral points to the     
centre4 ,the so-called cycle described  
by money1 as it is pictured1 amounts    
simply to this1 that at all  points we  
observe its appearance and              
disappearance1 its never ceasing        
transition from place to place4 ,in a   
higher1 more involved form of  money    
circulation1 e4 g4 bank-note            
circulation1 we shall find that  the    
conditions of emission of money include 
those for its return4 ,but  in the      
simple money circulation it is a matter 

of chance for the same  buyer to become 
again a seller4 ,where we really see    
constant cycle  motions taking place1   
they are only reflections of deeper     
forces in  the sphere of production1 e4 
g41 the manufacturer draws money from   
his  banker on ,friday1 pays it out to  
his working-men on ,saturday1 the men   
immediately pay out the greater part of 
it to the storekeepers1 etc41  and the  
latter turn it in on ,monday back to the
 banker4    ,we have seen that money    
realizes simultaneously a certain number
 of  prices in the variegated purchases 
and sales which take place side by  side
 at the same time4 ,on the other hand1  
in so far as its movement  represents   
the movement of the combined            
metamorphoses of commodities  and the   
interlacing of these metamorphoses1 the 
same coin realizes  the prices of       
different commodities and thus makes a  
larger or  smaller number of moves4 ,if 
we take the circulation of a country for
  a given length of time1 say a day1 the

 quantity of gold required for  the     
realization of prices and1 consequently1
 for the circulation of  commodities1   
will be determined by two conditions3   
first1 the sum  total of the prices2    
second1 the average number of moves made
 by one  coin4 ,this number of moves or 
the rapidity of circulation of money is 
in its turn determined by or expresses  
the average rapidity with which         
commodities go through the different    
phases of their metamorphoses1 the      
rapidity with which these metamorphoses 
succeed one another1 and with  which    
those commodities that have gone through
 their metamorphoses are  replaced by   
new commodities in the process of       
circulation4 ,we have seen  that in the 
process of the determination of prices  
the exchange value  of all commodities  
is ideally converted into a certain     
quantity of gold  of the same value and 
that the same amount of value is present
 in a  double form in either of the     
isolated acts of circulation ,m,c and   

,c,m1  first embodied in the commodity1 
and second1 in gold2 yet gold enjoys    
the capacity of a medium of circulation 
not by virtue of its isolated  relation 
to separate commodities in a state of   
rest1 but owing to its  active presence 
in the dynamic world of commodities1    
viz41 its function  of expressing the   
change of form of commodities by its    
change of place  and expressing the     
rapidity of their change of form by the 
rapidity of  its change of place4 ,the  
extent to which it is present in the    
sphere  of circulation1 i4 e41 the      
actual quantity of gold in circulation1 
is  thus determined by the extent to    
which it is discharging its function    
throughout the entire process4    ,the  
circulation of money implies the        
circulation of commodities2 money       
circulates commodities which have       
prices1 i4 e41 which are beforehand     
ideally equated to certain quantities of
 gold4 ,in the determination  of the    
prices of commodities1 the value of the 

quantity of gold  which serves as a unit
 of measure1 or the value of gold1 is   
assumed  to be given4 ,under that       
assumption the quantity of gold         
necessary  for circulation is determined
 first of all by the sum total of the   
prices of commodities that are to be    
realized4 ,but this sum is itself       
determined3 #a4 ,by the level of prices1
 the relatively high or low  exchange   
value of commodities estimated in gold2 
and #b4 ,by the mass  of commodities    
circulating at fixed prices1 i4 e4 by   
the number of  purchases and sales at   
given prices4#gc ,if one quarter of     
wheat is  worth #fj shillings1 then     
twice as much gold is required to       
circulate it  or to realize its price as
 would be the case if it were worth only
 #cj  shillings4 ,to circulate #ejj     
quarters of wheat at #fj shillings1     
twice  as much gold is necessary as for 
the circulation of #bej quarters at  the
 same price4 ,finally1 to circulate #aj 
quarters at #ajj shillings  only half as

 much money is necessary as when        
circulating #dj quarters  at #ej        
shillings4 ,it follows that the quantity
 of gold required for  circulation may  
fall in spite of a rise in price1 if the
 mass of  commodities in circulation    
declines in a greater ratio than the    
rise of the combined sum of prices2 and1
 inversely1 the quantity of  the        
circulating medium may rise in spite of 
a decline of the mass  of commodities in
 circulation1 if the sum total of prices
 rises in  a greater ratio4 ,thorough   
and minute ,english investigations have 
demonstrated e4 g4 that in the early    
stages of a dearth of grain in  ,england
 the quantity of money in circulation   
increases1 because the  total price of  
the diminished supply of grain is       
greater than the  former total price of 
a larger supply of grain1 while the     
circulation  of the other commodities   
continues undisturbed for some time at  
their  old prices4 ,at a later stage of 
the dearth of grain1 there is a decline 

in the quantity of circulating money1   
either because less goods are  sold at  
old prices besides grain1 or the same   
quantity of those goods  is sold at     
lower prices4    ,but1 as we have seen1 
the quantity of money in circulation is 
determined not only by the sum total of 
prices of commodities that are  to be   
realized1 but also by the rapidity with 
which money circulates  or with which it
 completes this work of realization4 ,if
 the same  sovereign makes ten purchases
 a day1 each of a commodity having a    
price of one sovereign1 and thus changes
 hands ten times1 it does as  much work 
as would be accomplished by ten         
sovereigns each performing  but a single
 act of circulation a day4#gd           
,consequently1 rapidity of  gold        
circulation can make up for its         
quantity1 or the presence of gold  in   
the sphere of circulation is determined 
not only by its presence  as an         
equivalent of a commodity side by side  
with it1 but also by  its participation 

in the movement of metamorphoses of     
commodities4  ,the rapidity of the      
circulation of money1 however1 can serve
 as a  substitute for its quantity only 
to a limited extent1 since at any  given
 moment an endless number of isolated   
purchases and sales takes  places in    
different localities4    ,if the total  
price of the commodities in circulation 
rises1 but in  a smaller ratio than the 
increase in the rapidity of circulation 
of  money1 the volume of the circulating
 medium will diminish4 ,if on the       
contrary the rapidity of circulation    
decreases in a greater ratio  than the  
total price of the commodities in       
circulation1 the volume  of currency    
will increase4 ,an increasing volume of 
currency combined  with a general fall  
of prices or a diminishing volume of    
currency in  connection with a general  
rise of prices is one of the best known 
phenomena in the history of prices4 ,but
 the consideration of the  causes which 
bring about a simultaneous rise in the  

level of prices  and a still greater    
rise in the rate of velocity of         
circulation of  money1 or the opposite  
phenomenon1 falls outside of the sphere 
of  simple circulation4 ,by way of      
illustration1 it may be mentioned that  
in periods of prevailing credit1 the    
rapidity of circulation of  money grows 
faster than the prices of commodities1  
while in times  of declining credit the 
prices of commodities fall slower than  
the  rapidity of circulation4 ,the      
shallow and artificial character of the 
simple circulation of money is          
manifested in the fact that all the     
elements which have a determining       
influence on the volume of currency1    
such as the volume of commodities in    
circulation1 prices1 the rise or  fall  
of prices1 the number of simultaneous   
purchases and sales1 the  rapidity of   
the circulation of money1depend on the  
metamorphic process  which takes place  
in the world of commodities1 and that   
again depends  on the general character 

of the methods of production1 the size  
of  population1 the relation between    
city and country1 the development of    
the means of transportation1 the greater
 or less division of labor1  credit1    
etc42 in short1 on circumstances all of 
which lie outside of  the sphere of     
simple circulation of money and are only
 reflected in it4    ,the rapidity of   
circulation being given1 the volume of  
currency is  simply determined by the   
prices of commodities4 ,hence1 prices   
are not  high or low1 because there is  
more or less money in circulation1 but  
on the contrary1 there is more or less  
money in circulation1 because  prices   
are high or low4 ,this is one of the    
most important laws1 whose              
demonstration in detail by means of the 
history of prices constitutes  perhaps  
the only merit of the post-,ricardian   
,english ,political ,economy4  ,if      
experience shows1 that the level of     
metallic circulation or the mass  of    
gold and silver in circulation in a     

given country is subject to  temporary  
ebbs and tides and very violent ones at 
times1#ge but on  the whole remains     
stationary for long periods1 the        
deviations forming  but small           
oscillations about the average level1   
this is explained  by the antagonistic  
nature of the circumstances which       
determine the  quantity of money in     
circulation4 ,their simultaneous        
modifications  neutralize their effects 
and leave everything where it was       
before4    ,the law1 that with a given  
rapidity of circulation of money and a  
given  total sum of prices of           
commodities the quantity of the         
circulating  medium is determined1 may  
also be expressed as follows4 ,if the   
exchange  values of commodities and the 
average rapidity of their metamorphoses 
are given1 the quantity of gold in      
circulation depends on its own  value4  
,if1 therefore1 the value of gold1 i4 e4
 the labor-time necessary  for its      
production1 should rise or fall1 the    

prices of commodities will  rise or fall
 in inverse ratio1 and corresponding to 
that rise or fall  of prices1 the       
rapidity of circulation remaining the   
same1 a larger or  smaller quantity of  
gold would be required to keep the same 
volume of  commodities in circulation4  
,the same change would occur1 if the old
  standard of value were superseded by a
 more or less valuable metal4  ,thus1   
,holland required from fourteen to      
fifteen times as much silver as  it had 
previously required gold1 in order to   
circulate the same volume  of           
commodities1 when out of tender regard  
for the government creditors  and out of
 fear of the effects of the discoveries 
in ,california and  ,australia it       
substituted silver for gold money4      
,from the fact that the quantity of gold
 in circulation depends on the  variable
 sum total of prices of commodities and 
the varying rapidity  of circulation1 it
 follows that the volume of the         
circulating medium  must be capable of  

contraction and expansion2 in short1    
that according  to the requirements of  
circulation1 gold must now enter1 now   
leave the  sphere of circulation in its 
capacity of a medium of circulation4    
,how  the circulation process itself    
realizes these conditions1 we shall see 
later on4      ,c4 ,,coin ,,and         
,,symbols ,,of ,,value4    ,in its      
capacity of a medium of circulation1    
gold acquires a shape  of its own1 it   
becomes coin4 ,in order to prevent any  
technical  difficulties in the way of   
its circulation1 it is coined according 
to  the standard of the money of        
account4 ,gold pieces whose imprints and
  legends show that they contain certain
 weights of gold corresponding  to the  
reckoning names of money1 1 s41 etc41   
are coins4 ,the  establishment of a     
mint-price1 as well as the technical    
work of  coining1 are the business of   
the state4 ,both as money of account and
  as coin1 money acquires a local and   
political character2 it speaks          

different languages and wears different 
national uniforms4 ,the sphere  in which
 money circulates as coin1 is           
distinguished as an internal  sphere of 
circulation which is separated from the 
universal sphere of  circulation in the 
commodity world by national boundaries4 
,yet1 the only difference between gold  
bullion and gold coin is that  between  
coin denomination and weight            
denomination4 ,what seems to be a       
difference in name in the latter case   
appears as a difference in shape  in the
 former4 ,gold coin can be thrown into  
the melting-pot and thus be  converted  
again into gold sans phrase1 just as1 on
 the contrary1 gold  bars only have to  
be sent to the mint to receive the shape
 of coins4  ,the conversion and         
reconversion from one form into another 
appears to  be a purely technical       
matter4    ,for #ajj pounds or #abjj    
ounces troy of #bb carat gold one can   
get  #d1fgb-a_/b or gold sovereigns at  
the ,english mint2 if these sovereigns  

be put on one side of the weighing scale
 and one hundred pounds of  gold bullion
 on the other1 the two will balance each
 other1 which  proves that the sovereign
 is nothing but a piece of gold of      
certain  weight bearing this name in    
,english coinage and having a shape and 
stamp of its own4 ,the #d1fgb-a_/b      
sovereigns are put into circulation  at 
different points1 and once in its grasp 
they make a certain number  of moves per
 day1 some sovereigns more1 others less4
 ,if the average  number of moves per   
day of each ounce be ten1 the #abjj     
ounces of gold  would realize #ab1jjj   
ounces or #df1gbe sovereigns as the     
total price  of commodities4 ,you may   
turn and toss an ounce of gold in any   
way you  like1 and it will never weigh  
ten ounces4 ,but here in the process of 
circulation one ounce practically does  
weigh ten ounces4 ,the work  performed  
by a coin in the sphere of circulation  
is equivalent to the  quantity of gold  
it contains multiplied by the number of 

its moves4  ,besides the actual         
importance which a coin possesses by    
virtue of its  being an individual piece
 of gold of a definite weight1 it       
acquires  an ideal significance due to  
its function4 ,but whether the sovereign
  circulates once or ten times1 in each 
particular purchase or sale  it acts    
only as one sovereign4 ,it is like a    
general who by timely  appearance at ten
 different points on the battle field   
does the work  of ten generals1 but     
still remains the same identical general
 at each  point4 ,the idealization of   
the means of circulation which is due to
 the  supplanting of quantity by        
rapidity in money circulation1 affects  
only  the function of the coin within   
the sphere of circulation1 but not the  
nature of the individual coin4    ,the  
circulation of money is a movement      
through the outside world1 and  the     
sovereign1 though it non olet1 keeps    
rather mixed company4 ,in the  course of
 its friction against all kinds of      

hands1 pouches1 pockets1  purses1       
money-belts1 bags1 chests and           
strong-boxes1 the coin rubs off1  loses 
one gold atom here and another one there
 and thus1 as it wears  off in its      
wanderings over the world1 it loses more
 and more of its  intrinsic substance4  
,by being used it gets used up4 ,let us 
take up a  sovereign at the moment when 
its natural1 inborn character has been  
slightly affected4 ,a baker1 says       
,dodd1#gf who receives from the bank    
to-day a brand new sovereign and pays it
 tomorrow to the miller1  does not pay  
the same veritable sovereign2 the latter
 has become  lighter than it was at the 
time he received it4 ,it is clear1 says 
an  anonymous writer1#gg that in the    
very nature of things1 coins must       
depreciate one by one as a result of    
ordinary and unavoidable friction4  ,it 
is a physical impossibility to entirely 
exclude light coins from  circulation at
 any time1 even for one day4 ,jacob     
estimates that of  the #chj million     

pounds sterling which were in existence 
in ,europe in  #ahji1 nineteen million  
pounds sterling entirely disappeared by 
#ahbi1  i4 e41 within a period of twenty
 years4#gh ,thus1 while a commodity  at 
its first step into the sphere of       
circulation1 falls out of it1 a  coin1  
after a couple of steps within that     
sphere represents more metal  than it   
actually contains4 ,the longer a coin   
remains in circulation1  the rapidity of
 circulation remaining the same1 or the 
greater its  rapidity of circulation    
within the same period of time1 the     
greater  the discrepancy between its    
form as coin and its actual gold or     
silver  substance4 ,what remains is     
magni nominis umbra4 ,the body of the   
coin  becomes but a shadow4 ,if at first
 it became heavier through the process  
of circulation1 it now becomes lighter  
on account of it1 but continues  to     
represent the original quantity of gold 
in each single purchase or  sale4 ,the  
sovereign1 as a fictitious sovereign1 as

 fictitious gold1  continues to perform 
the function of a legitimate coin4      
,while other  beings lose their idealism
 in contact with the outer world1 the   
coin is  idealized by practice1 being   
gradually transformed into a mere       
phantom  of its golden or silver body4  
,this second idealization of metal money
  springing from the very process of    
circulation1 or from the discrepancy    
between its nominal weight and its real 
weight is exploited in all  kinds of    
coin counterfeiting practiced partly by 
governments1 partly by  private         
adventurers4 ,the entire history of     
coinage from the beginning  of the      
middle ages until late in the eighteenth
 century is nothing  but a history of   
these twofold and antagonistic          
adulterations1 and  ,custodi's          
voluminous collection of writings of    
,italian economists turns  mostly about 
this point4    ,but the fictitious      
importance of gold due to its function1 
comes  in conflict with its real        

substance4 ,one gold coin has lost more1
  another1 less of its metal substance  
in the course of circulation1  and one  
of them is1 as a matter of fact1 worth  
more now than the  other4 ,but since in 
the discharge of their function of coins
 they  are taken at the same value1 the 
sovereign weighing a quarter of an      
ounce passing for no more than the      
sovereign which only stands for a       
quarter of an ounce1 the full-weight    
sovereigns are subjected in the  hands  
of unscrupulous owners to surgical      
operations which produce  artificially  
what the circulation process has caused 
in a natural way  to their more         
light-weighted brothers4 ,they are      
clipped and reduced  and the superfluous
 gold fat lands in the melting pot4 ,if 
#d1fgb-a_/b  gold sovereigns when put on
 one side of the weighing scale weigh on
 an  average only #hjj ounces instead of
 #abjj1 they will buy when brought  to  
the gold market only #hjj ounces of     
gold2 that is1 the market price  of gold

 would rise above its mint price4 ,every
 coin1 even if of full  weight would    
pass in its mint form for less than in  
bullion form4 ,the  full weight         
sovereigns would be reconverted into    
bullion1 a form in  which a greater     
quantity of gold is always worth more   
than a smaller  quantity4 ,as soon as   
this decline of metallic weight would   
affect a  sufficiently large number of  
sovereigns to bring about a permanent   
rise of the market price of gold above  
its mint price1 the reckoning  names of 
the coins1 though remaining the same1   
would begin to denote a  smaller        
quantity of gold4 ,that is to say1 the  
standard of money would  change and gold
 would be coined in the future according
 to this new  standard4 ,by virtue of   
its idealization as a medium of         
circulation1  gold would react upon and 
change the legally determined ratios    
under  which it acted as the standard of
 price4 ,the same revolution would  be  
repeated after a certain length of time 

and thus gold would be  subject to      
constant change both as a standard of   
price and as a  medium of circulation1 a
 change under one of these forms leading
 to a  change under the other and vice  
versa4 ,this explains the phenomenon    
mentioned above1 namely that in the     
history of all modern nations  the same 
money-name stands for a constantly      
diminishing quantity of  metal4 ,the    
contradiction between gold as coin and  
gold as standard of  price becomes also 
one between gold as coin and gold as the
 universal  equivalent2 in the latter   
capacity it circulates not only within  
the  limits of national boundaries1 but 
in the world market4 ,as a measure of   
value gold was always of full weight1   
because it served only as ideal  gold4  
,in its capacity of equivalent in the   
isolated transaction ,c,m it  passes at 
once from a state of motion to a state  
of rest2 but in its  capacity of coin   
its natural substance comes in constant 
conflict with  its function4 ,the       

transformation of the gold sovereign    
into fictitious  gold can not be wholly 
avoided1 but legislation seeks to       
prevent its  unlimited circulation as   
coin by prescribing its withdrawal from 
circulation as soon as its shortage of  
metallic substance reaches a  certain   
degree4 ,according to the ,english law1 
e4 g41 a sovereign which  lacks more    
than #j4gdg grains of its weight ceases 
to be legal tender4  ,the ,bank of      
,england which weighed forty-eight      
million gold sovereigns  in the short   
period between #ahdd and #ahdh1         
possesses in ,mr4 ,cotton's  gold       
weighing scale a machine which not only 
detects a difference of  #a-ajj part of 
a grain between two sovereigns1 but like
 a sensible  being1 immediately throws  
out the light-weight coin on a board    
where  it lands under another machine   
which cuts it up with oriental cruelty4 
,that being the case1 gold coins could  
not circulate at all were not  their    
circulation confined to definite spheres

 in which they do not  wear off so      
rapidly4 ,in so far as a gold coin      
weighing only one-fifth  of an ounce    
passes in circulation for a quarter of  
an ounce of gold1  it is practically    
merely a sign or a symbol for           
one-twentieth of an  ounce of gold1 and 
in that way all gold coins are          
transformed by the  very process of     
circulation into more or less of a mere 
sign or symbol  of their substance4 ,but
 no thing can be its own symbol4        
,painted grapes  are no symbol of real  
grapes1 they are imaginary grapes4      
,still less can  a light-weight         
sovereign be a symbol of a full-weighted
 one1 just as  a lean horse can not     
serve as a symbol of a fat one4 ,since  
gold thus  becomes a symbol of its own  
self1 but at the same time can not serve
 in  that capacity1 it receives a       
symbolical1 silver or copper substitute 
in  those spheres of circulation in     
which it is most subject to wear and    
tear1 namely where purchases and sales  

are constantly taking place on  the     
smallest scale4 ,in these spheres1 even 
if not the same identical  coins1 still 
a certain part of the entire supply of  
gold money would  constantly circulate  
as coin4 ,to that extent gold is        
substituted by  silver or copper tokens4
 ,thus1 while only a specific commodity 
can  perform in a given country the     
function of a measure of value and      
therefore of money1 different           
commodities can serve as coin side by   
side with gold4 ,these subsidiary       
mediums of circulation1 such as silver  
or copper coins1 represent definite     
fractions of a gold coin within  the    
sphere of circulation4 ,their own silver
 or copper weight is1  therefore1 not   
determined by the proportions of the    
respective values  of silver and copper 
to that of gold1 but is arbitrarily     
fixed by law4  ,they may be issued only 
in such quantities in which the         
diminutive  fractions of gold coin which
 they represent would constantly        

circulate  either for purposes of change
 for gold coins of higher denominations1
  or for realizing equally small prices 
of commodities4 ,in retail trade  silver
 and copper tokens belong to distinct   
spheres of circulation4 ,in  the nature 
of things1 the rapidity of their        
circulation is in inverse  ratio to the 
price which they realize in each        
separate purchase or  sale1 or to the   
size of the fraction of gold coin which 
they represent4  ,if we consider how    
immense the volume of the daily retail  
trade in a  country like ,england is1 we
 will understand from the comparatively 
insignificant proportions of its        
combined volume how rapid and steady    
the circulation of the subsidiary coin  
must be4 ,from a parliamentary  report  
of recent date we see1 e4 g41 that in   
#aheg the ,english mint  coined         
#d1hei1jjj worth of gold1 #gcc1jjj of   
silver nominal value which  contained   
metal actually worth #cfc1jjj4 ,the     
total amount of gold  coined in the ten 

years ending ,december #ca1 #aheg1 was  
#ee1bci1jjj1 and  of silver only        
#b1dcd1jjj4 ,the supply of copper coin  
in #aheg amounted  only to #f1gbj       
nominal value containing #c1dib worth of
 copper2 of this  #c1acf was in pennies1
 #b1dfd in half-pennies1 and #a1abj in  
farthings4  ,the total value of copper  
coined in the ten years was #ada1dgg    
nominal1  the metallic value being      
#gc1ejc4 ,just as gold coin is prevented
 from  permanently retaining its        
function of coin by the legal provision 
of  the loss of weight which demonetizes
 it1 so are the silver and copper       
tokens prevented from passing from their
 spheres of circulation into  that of   
gold coin and acquiring the character of
 money by the provision  of the maximum 
amount for which they are legal tender4 
,in ,england e4  g4 copper is legal     
tender only to the amount of six pence  
and silver  up to forty shillings4 ,if  
silver and copper tokens were to be     
issued  in greater quantities than the  

requirements of their spheres of        
circulation call for1 prices of         
commodities would not rise as a result1 
but the accumulation of these tokens in 
the hands of retail dealers  would reach
 such an extent that they would be      
finally compelled to sell  them as      
metal4 ,thus in #agih ,english copper   
coins1 issued by private  individuals1  
accumulated in the hands of small       
traders to the amount  of #bj1cej which 
they tried in vain to put again in      
circulation1 being  finally compelled to
 throw them as metal on the copper      
market4#gi    ,the silver and copper    
tokens which represent gold coin in     
certain  spheres of circulation in the  
interior of the country1 contain a      
definite quantity of silver and copper  
prescribed by law1 but after  they get  
into circulation1 they wear off like    
gold coins and become  even more rapidly
 mere phantoms1 according to the        
rapidity and  steadiness of their       
circulation4 ,to draw again a line of   

demonetization  beyond which silver and 
copper tokens would lose their character
 of  coins1 they would have to be       
replaced in turn within certain spheres 
of their own circulation by some other  
symbolic money1 say iron and  lead1 and 
such representation of one kind of      
symbolic money by another  kind would   
form an endless process4 ,in all        
countries with a well  developed        
circulation the very requirements of    
money circulation make  it necessary    
that the character of silver and copper 
tokens as money be  made independent of 
any loss of weight in those coins4      
,thus1 as it was  in the nature of      
things1 it appears that they serve as   
symbols of gold  coin not because they  
are symbols made of silver or copper1   
not because  they have certain value1   
but only in so far as they have no      
value4    ,relatively worthless things1 
such as paper1 can consequently perform 
the function of symbols of gold money4  
,that subsidiary currency  consists of  

metal tokens1 such as silver1 copper1   
etc41 is mainly due  to the fact that in
 most countries the less valuable metals
 such as  silver in ,england1 copper in 
ancient ,rome1 ,sweden1 ,scotland1 etc41
  had circulated as money before they   
were degraded by the process of         
circulation to the rank of small change 
and replaced by a more precious  metal4 
,besides1 it is natural that the money  
symbol which grows  directly out of     
metallic circulation1 should itself be a
 metal4 ,just  as that portion of gold  
which would always have to circulate as 
small  change1 is replaced by metal     
tokens2 so can the other portion of gold
  which is constantly absorbed as coin  
by circulation in the interior of  the  
country and1 therefore1 must continually
 circulate1 be replaced  with worthless 
tokens4 ,the level below which the mass 
of circulating  coin never sinks is     
determined in each country by           
experience4 ,thus1  the originally      
imperceptible difference between the    

nominal weight and  the metallic weight 
of a metal coin can grow apace until it 
reaches the  point of absolute          
separation4 ,the mint name of money     
parts company with  its substance and   
exists outside of it in worthless slips 
of paper4  ,just as the exchange value  
of commodities is crystallized by their 
process of exchange into gold money1 so 
is gold money sublimated in  its        
currency into its own symbol first in   
the form of worn coin1 then  in the form
 of subsidiary metal currency1 and      
finally in the form of a  worthless     
token1 paper1 mere sign of value4       
,gold coin has produced its substitutes1
 first metallic and then paper1  only   
because in spite of its loss of metallic
 weight it continued to  perform the    
function of coin4 ,it did not circulate 
because of its wear  and tear2 on the   
contrary1 it wore out to a symbol       
because it continued  to circulate4     
,only in so far as gold money becomes   
simply a token of  its own value in the 

process of circulation1 can mere tokens 
of value  take its place4    ,in so far 
as the movement ,c,m,c represents a     
dynamic unity of two  processes ,c,m and
 ,m,c which pass directly one into the  
other1 or in  so far as a commodity     
passes through the complete process of  
its  metamorphosis1 it express its      
exchange value in price and in money    
only to discard that form at once and to
 become again a commodity or1  rather1 a
 use-value4 ,that is to say1 it develops
 only an apparent  assertion of the     
independence of its exchange value4 ,on 
the other  hand1 we have seen that gold1
 in so far as it performs the function  
of coin or in so far as it continually  
circulates1 actually forms  only a      
connecting link between the             
metamorphoses of commodities and        
constitutes but their transitory money  
form2 furthermore1 that it  realizes the
 price of one set of commodities only in
 order to realize  that of another1 but 
in no case does it constitute a stable  

form of  exchange value or appear itself
 as a commodity in a state of rest4 ,the
  reality which the exchange value of   
commodities acquires in the process  and
 which is represented by gold in its    
circulation1 is the reality of  an      
electric spark4 ,although real gold1 it 
plays the part of fictitious  gold1 and 
can1 therefore1 be replaced in this     
function by a token of  itself4    ,the 
token of value1 say paper1 which plays  
the part of coin1 is the  token of a    
quantity of gold expressed in its       
currency name1 i4 e41 it  is a gold     
token4 ,just as a certain quantity of   
gold does not in itself  express a value
 ratio1 so is that true of the token    
which takes its  place4 ,in so far as a 
certain quantity of gold1 as embodied   
labor-time1  has a value of a certain   
magnitude1 the gold token represents    
value4  ,but the magnitude of the value 
which it represents depends all the     
time on the value of the quantity of    
gold for which it stands4 ,as  regards  

commodities the token of value expresses
 the reality of their  price1 it is     
signum pretii and sign of their value   
only because  their value is expressed  
in their price4 ,in the process ,c,m,c1 
in so  far as it represents the dynamic 
unity or direct alternation of the  two 
metamorphosesand that is the aspect it  
assumes in the sphere of  circulation in
 which the token of value discharges its
 functionthe  exchange value of         
commodities acquires in price only an   
ideal  expression and in money only an  
imaginary symbolic existence4 ,exchange 
value thus acquires only an imaginary   
though material expression1  but it has 
no real existence except in the         
commodities themselves1 in  so far as a 
certain quantity of labor-time is       
embodied in them4 ,it  appears1         
therefore1 that the token of value      
represents directly  the value of       
commodities1 by figuring not as a token 
of gold but as  a token of the value    
which exists in the commodity alone and 

is only  expressed in price4 ,but it is 
a false appearance4 ,the token of value 
is  directly only a token of price1 i4  
e41 a token of gold1 and only           
indirectly a token of value of a        
commodity4 ,unlike ,peter ,shlemihl1    
gold  has not sold its shadow1 but buys 
with its shadow4 ,the token of value    
operates only in so far as it represents
 the price of one commodity  as against 
that of another within the sphere of    
circulation1 or in so  far as it        
represents gold to every owner of       
commodities4 ,a certain  comparatively  
worthless object such as a piece of     
leather1 a slip of  paper1 etc41 becomes
 by force of custom a token of money    
material1 but  maintains its existence  
in that capacity only so long as its    
character  as a symbol of money is      
guaranteed by the general acquiescence  
of  the owners of commodities1 i4 e41 so
 long as it enjoys a legally            
established conventional existence and  
compulsory circulation4 ,paper  money   

issued by the state and circulating as  
legal tender is the  perfected form of  
the token of value1 and the only form of
 paper money1  which has its immediate  
origin in metallic circulation or even  
in the  simple circulation of           
commodities4 ,credit money belongs to a 
higher  sphere of the social process of 
production and is governed by entirely  
different laws4 ,symbolic paper money   
does not in fact1 differ in the  least  
from subsidiary metal coin1 except that 
it reaches wider spheres  of            
circulation4 ,we have seen that the mere
 technical development of the  standard 
of price or of the mint price and later 
the shaping of gold  bullion into coin  
have called forth the interference of   
the state2 this  circumstance brought   
about a visible separation of national  
circulation  from the world circulation 
of commodities3 this separation is      
completed  by the evolution of coin into
 a token of value4 ,as a mere medium of 
circulation money can assume an         

independent existence only within the   
sphere of national circulation4#hj      
,our presentation has shown that the    
coin form of gold as a token of  value  
differentiated from the gold substance  
itself1 has its direct  origin in the   
process of circulation and not in any   
agreement or state  interference4       
,russia offers a striking example of the
 natural origin of  the token of value4 
,at the time when hides and furs played 
there the  part of money1 the conflict  
between the perishable and bulky nature 
of  the material and its function as a  
medium of circulation resulted in  the  
custom of replacing it by small pieces  
of stamped leather which  thus became a 
kind of draft payable in hides and furs4
 ,later on they  became under the name  
of copecs mere tokens for fractions of  
the silver  rouble and remained in use  
in some parts until #agjj1 when ,peter  
the  ,great ordered their withdrawal in 
exchange for small copper coins  issued 
by the state4 ,ancient writers who could

 observe the phenomena  of exclusively  
metallic circulation1 already took the  
view of coin  as a symbol or token of   
value4 ,that is true both of ,plato#ha  
and  ,aristotle4#hb ,in countries where 
credit is not developed1 as e4 g4  in   
,china1 legal tender paper money is     
found at an early date#hc4 ,early       
advocates of paper money expressly point
 out the fact that metallic  coin is    
transformed into a token of value in the
 very process of  circulation4 ,so      
,benjamin ,franklin#hd and ,bishop      
,berkeley4#he    ,how many reams of     
paper cut up into bills can circulate as
 money8 ,put  in that way1 the question 
would be absurd4 ,the worthless tokens  
are  signs of value only in so far as   
they represent gold within the sphere   
of circulation and they represent it    
only to the extent to which it  would   
itself be absorbed as coin by the       
process of circulation2 this  quantity  
is determined by its own value1 the     
exchange values of the  commodities and 

the rapidity of their metamorphoses     
being given4 ,bills  of a denomination  
of #e could circulate in a quantity five
 times  less than those of #a           
denomination1 and if all payments were  
made in  shilling bills1 then twenty    
times as many shilling bills would have 
to  be in circulation as are one pound  
bills4 ,if the gold currency were       
represented by bills of different       
denominations1 e4 g4 five pound1  one   
pound and ten shilling bills1 then the  
quantity of these different  tokens of  
value would be determined not only by   
the quantity of gold  necessary for     
circulation as a whole1 but also by that
 required in the  sphere of circulation 
of each kind of bills4 ,if fourteen     
million pounds  sterling 7this is the   
provision of the ,english ,bank ,law1   
not for the  entire currency but only   
for credit money7 were the level below  
which  the circulation of a country     
never sank1 then fourteen million paper 
bills1 each a token of value of one     

pound1 could circulate4 ,if the  value  
of gold fell or rose because the        
labor-time necessary for its  production
 had fallen or risen1 then1 the exchange
 value of the same  volume of           
commodities remaining the same1 the     
number of one pound bills  in           
circulation would rise or fall in       
inverse ratio to the change in the      
value of gold4 ,if gold were replaced by
 silver as a measure of value1  the     
ratio of the respective values of silver
 and gold being #a3ae1 and  if each bill
 were to represent now the same quantity
 of silver as it  represented gold      
before1 then there would be #baj million
 one pound  bills in circulation instead
 of the previous fourteen million4 ,the 
number of paper bills is thus determined
 by the quantity of gold money  which   
they represent in circulation1 and since
 they are tokens of value  only in so   
far as they represent it1 their value is
 simply determined  by their quantity4  
,thus1 while the quantity of gold in    

circulation  is determined by the prices
 of commodities1 the value of the paper 
bills in circulation1 on the contrary1  
depends exclusively on their own        
quantity4    ,the interference of the   
state which issues paper money as legal 
tenderand we are treating of paper money
 of that kind onlyseems to  do away with
 the economic law4 ,the state which in  
its mint price gave  a certain name to a
 piece of gold of certain weight1 and in
 the act of  coinage only impressed its 
stamp on gold1 seems now to turn paper  
into  gold by the magic of its stamp4   
,since paper bills are legal tender1  no
 one can prevent the state from forcing 
as large a quantity of them  as it      
desires into circulation and from       
impressing upon it any coin             
denomination1 such as #a1 #e1 #bj4 ,the 
bills which have once gotten  into      
circulation can not be removed1 since on
 the one hand their course  is hemmed in
 by the frontier posts of the country   
and on the other  they lose all value1  

use-value1 as well as exchange-value1   
outside  of circulation4 ,take away from
 them their function and they become    
worthless rags of paper4 ,yet this power
 of the state is a mere fiction4  ,it   
may throw into circulation any desired  
quantity of paper bills of  whatever    
denomination1 but with this mechanical  
act its control ceases4  ,once in the   
grip of circulation and the token of    
value or paper money  becomes subject to
 its intrinsic laws4    ,if fourteen    
million pounds sterling were the        
quantity of gold  required for the      
circulation of commodities and if the   
state were to  put into circulation two 
hundred and ten million bills each of   
the  denomination of #a1 then these two 
hundred and ten millions would  become  
the representatives of gold to the      
amount of fourteen million  pounds      
sterling4 ,it would be the same as if   
the state were to make  the one pound   
bills represent a fifteen times less    
valuable metal or  a fifteen times      

smaller weight of gold4 ,nothing would  
be changed but  the nomenclature of the 
standard of price1 which by its very    
nature is  conventional1 no matter      
whether such change takes place as a    
direct  result of a change of the mint  
standard or indirectly owing to an      
increase of paper bills to an extent    
required by a new lower standard4       
,since the name  would stand now for a  
fifteen times smaller quantity  of gold1
 the prices of all commodities would    
increase fifteen times and  two hundred 
and ten million one pound bills would   
now be actually as  necessary as        
fourteen million had been before4 ,to   
the same extent to  which the combined  
quantity of tokens of value would       
increase now1 the  quantity of gold     
which each of them represents would     
decrease4 ,the rise  of prices would    
constitute but a reaction on the part of
 the process of  circulation which      
forcibly equates the tokens of value to 
the quantity  of gold which they are    

supposed to replace4    ,in the history 
of the debasement of money in ,england  
and ,france by  their governments1 we   
find repeatedly that prices had not     
risen in the  same proportion in which  
the silver coinage had been debased4    
,that was  simply due to the fact that  
the proportion in which the currency was
  increased did not correspond to the   
proportion in which it had been         
debased2 that is to say1 because an     
inadequate quantity of coins of  the    
poorer metallic composition was issued1 
if the exchange values  of commodities  
were to be estimated in the future in   
the new coin as  a measure of value and 
be realized in coins corresponding to   
this  smaller unit of measure4 ,this    
solves the difficulty left unsettled in 
the controversy between ,locke and      
,lowndes4 ,the ratio which a token  of  
value1 whether made of paper or of      
debased gold or silver1 bears  to       
certain weights of gold or silver       
estimated according to the mint  price1 

depends not on its own composition but  
on the quantity in which  it is found in
 circulation4 ,the difficulty in        
understanding this is  due to the fact  
that money in its two functions of a    
measure of value  and a medium of       
circulation is subject to two not only  
opposite but  apparently contradictory  
laws corresponding to the difference in 
the  two functions4 ,in the discharge of
 its function of a measure of value     
where money serves merely as money of   
account and gold only as ideal  gold1   
everything depends on the natural       
substance of money4 ,estimated  in      
silver or expressed in silver prices    
exchange values are naturally  estimated
 quite differently than when measured in
 gold or as gold  prices4 ,on the       
contrary1 in its function of a medium of
 circulation1  where gold is not only   
imagined but is actually present side by
 side  with other commodities1 its      
substance is immaterial and everything  
depends on its quantity4 ,for the unit  

of measure the determining factor  is   
whether it consists of a pound of gold1 
silver or copper2 while in  the case of 
coin1 no matter what its own composition
 is1 it will become  the embodiment of  
each of these units of measure in       
accordance with its  quantity4 ,but it  
goes against common sense that in the   
case of mere  imaginary money everything
 should depend on its material          
substance1  while in that of the        
palpably present coin all should be     
determined by  an ideal ratio of        
numbers4    ,the rise or fall of prices 
of commodities following a rise or fall 
of the quantity of paper notesthe latter
 only where paper currency  constitutes 
the exclusive medium of circulationis   
thus nothing but  an assertion through  
the process of circulation of a law     
mechanically  violated from without2    
namely1 that the quantity of gold in    
circulation  is determined by the prices
 of commodities1 and the quantity of    
tokens  of value in circulation is      

determined by the quantity of gold coin 
which it represents4 ,for that reason   
any desired number of paper notes  will 
be absorbed and equally digested by the 
process of circulation1  because the    
token of value1 no matter with what gold
 title it may enter  circulation1 will  
be compressed within the latter to a    
token of that  quantity of gold which   
could actually circulate in its place4  
,in the case of the circulation of      
tokens of value all laws pertaining  to 
the circulation of real money appear to 
be reversed and standing  on their      
heads4 ,while gold circulates because it
 has value1 paper has  value because it 
circulates4 ,while with a given exchange
 value of  commodities1 the quantity of 
gold in circulation depends on its own  
value1 the value of paper depends on its
 own quantity in circulation4  ,while   
the quantity of gold in circulation     
rises or falls with the  rise or fall of
 prices of commodities1 the prices of   
commodities  seem to rise or fall with  

the change in the quantity of paper in  
circulation4 ,while the circulation of  
commodities can absorb only a  definite 
quantity of gold coin and as a result of
 that the alternating  contraction and  
expansion of the currency appears as a  
necessary law1  paper money seems to    
enter circulation in any desired amount4
 ,while  the state is guilty of debasing
 gold and silver coin and of disturbing 
their function of a medium of           
circulation1 if it turns out a coin1    
only #a-ajj of a grain below its nominal
 weight2 it performs a perfectly  proper
 operation by issuing absolutely        
worthless paper notes which  contain    
nothing of the metal except its mint    
denomination4 ,while gold  coin         
apparently represents the value of      
commodities only in so far as  that     
value is itself estimated in gold or is 
expressed in price1 the  token of value 
seems to represent directly the value of
 commodities4  ,it is1 therefore1 clear 
why students who examined one-sidedly   

the  phenomena of circulation of money  
by confining their observations to  the 
circulation of legal tender paper money1
 should have failed to  grasp the       
intrinsic laws governing the circulation
 of money4 ,as a  matter of fact1 these 
laws appear not only reversed but       
extinct in the  circulation of tokens of
 value1 since paper currency1 if issued 
in  the right quantity1 goes through    
certain movements which are not in  its 
nature as a token of value1 while its   
proper movement instead of  growing     
directly out of the metamorphosis of    
commodities1 springs from  the violation
 of its proper proportion to gold4      
#c4 ,,money4    ,money as distinguished 
from coin1 the result of the circulation
 process  ,c,m,c1 forms the starting    
point of the circulation process ,m,c,m1
 i4  e4 the exchange of money for       
commodity in order to exchange commodity
  for money4 ,in the form ,c,m,c1       
commodity forms the starting and final  
points of the movement2 in the form     

,m,c,m1 money plays that part4 ,in  the 
former case money is the medium of      
exchange of commodities1 in  the latter 
the commodity helps money to become     
money4 ,money which  appears merely as a
 means of circulation in the first form 
becomes  an end in the second form2     
while commodity which appeared first as 
the end1 now becomes but a means4 ,since
 money is itself the result of          
circulation ,c,m,c1 the result of       
circulation appears at the same time  as
 its starting point in the form ,m,c,m4 
,while in the case of ,c,m,c the        
interchange of matter constituted the   
real import of the process1 the  form of
 the commodity resulting from this first
 process constitutes the  import of the 
second process ,m,c,m4    ,in the form  
,c,m,c the two extreme members are      
commodities of the same  value1 but     
qualitatively different use-values4     
,their mutual exchange  ,c,c constitutes
 actual interchange of matter4 ,in the  
form ,m,c,m the  two extremes are gold  

and at the same time gold of equal      
value4 ,to  exchange gold for a         
commodity in order to exchange the      
commodity for  gold1 or if we consider  
the final result ,m,m1 to exchange gold 
for  gold1 seems absurd4 ,but if we     
translate the formula ,m,c,m into the   
expression3 to buy in order to sell1    
which means nothing but to  exchange    
gold for gold through an intervening    
movement1 we recognize  at once the     
prevailing form of capitalist           
production4 ,in actual  practice1       
however1 people do not buy in order to  
sell1 but they buy  cheap in order to   
sell dear4 ,money is exchanged for a    
commodity in  order to exchange the same
 commodity for a larger amount of money1
 so  that the extremes ,m1 ,m are1 if   
not qualitatively1 then quantitatively  
different4 ,such a quantitative         
difference presupposes the exchange of  
non-equivalents1 yet commodity and money
 as such are only opposite  forms of the
 same commodity1 i4 e4 they are         

different forms of the same  magnitude  
of value4 ,the circuit ,m,c,m thus      
conceals under the forms  of money and  
commodity more highly developed         
relations of production1  and is but a  
reflection within the sphere of simple  
circulation of a  movement of a more    
advanced character4 ,money1 as          
distinguished from the  medium of       
circulation1 must therefore be developed
 from the direct form  of circulation of
 commodities1 ,c,m,c4    ,gold1 i4 e41  
the specific commodity which serves as a
 measure of  value and a medium of      
circulation1 becomes money without any  
further  assistance on the part of      
society4 ,in ,england1 where silver is  
neither  the measure of value nor the   
prevailing medium of circulation1 it    
does not become money1 just as gold in  
,holland1 as soon as it had been        
dethroned as a measure of value1 ceased 
to be money4 ,a commodity thus  becomes 
money only in its combined capacity of a
 measure of value  and medium of        

circulation2 or1 the unity of the       
measure of value and  medium of         
circulation is money4 ,as such a unity1 
however1 gold has a  separate existence 
independent of its existence in the two 
functions4  ,as a measure of value it is
 only ideal money and ideal gold2 as a  
mere  medium of circulation it is       
symbolic money and symbolic gold2 but in
  its plain metallic bodily form gold is
 money or money is real gold4    ,let us
 now consider for a moment the commodity
 gold when it is in a  state of rest1   
and plays the part of money in its      
relation to other  commodities4 ,all    
commodities represent in their prices a 
certain  quantity of gold1 that is to   
say1 they are merely imaginary gold or  
imaginary money1 representatives of     
gold1 just as1 on the other hand1  money
 in the form of a token of value        
appeared as a mere representative  of   
prices of commodities4#hf ,since all    
commodities are thus but  imaginary     
money1 money is the only real commodity4

 ,contrary to  commodities1 which only  
represent the independently existing    
exchange  value1 i4 e41 universal social
 labor1 or abstract wealth1 gold is the 
material form of abstract wealth4       
,through its use-value1 every           
commodity1 by its relation to some      
particular want1 expresses only one     
aspect of material wealth1 but one side 
of wealth4 ,money1 however1  satisfies  
every want since it can be directly     
converted into the object  of any want4 
,its own use-value is realized in the   
endless series of  use-values which form
 its equivalents4 ,in its virgin        
metallic state  it holds locked up all  
the material wealth which lies unfolded 
in the  world of commodities4 ,thus1    
while commodities represent in their    
prices  the universal equivalent or     
abstract wealth1 viz41 gold1 the latter 
represents in its use-value the         
use-values of all commodities4 ,gold    
is1 therefore1 the bodily representative
 of material wealth4 ,it is  the 8precis

 de toutes les choses0                  
7,boisguillebert71 the compendium  of   
the wealth of society4 ,at one and the  
same time1 it is the direct  incarnation
 of universal labor in its form1 and the
 aggregate  of all concrete labor in its
 substance4 ,it is universal wealth     
individualized4#hg ,as a medium of      
circulation it underwent all kinds  of  
injury1 was clipped1 and even reduced to
 the condition of a mere  symbolic paper
 rag4 ,as money it is restored to its   
golden glory4#hh  ,from a serve it      
becomes a lord4 ,from a mere            
understrapper it rises to  the position 
of ,lord of commodities4#hi      a4     
,,hoarding4    ,gold separates itself as
 money from the process of circulation  
whenever  a commodity interrupts the    
process of its metamorphosis and remains
  in its form of a gold chrysalis4 ,this
 occurs every time a sale is not        
immediately followed by purchase4 ,the  
independent isolation of gold  as money 
is1 thus1 a material expression of the  

disintegration of the  process of       
circulation1 or of the metamorphosis of 
commodities1 into  two separate acts    
independent of each other4 ,the coin    
itself becomes  money as soon as its    
course is interrupted4 ,in the hands of 
the seller  who takes it in exchange for
 his commodity1 it is money and not     
coin2  as soon as it passes out of his  
hands it is again coin4 ,everybody is  a
 seller of the one commodity which he   
produces1 but a buyer of all  other     
commodities which he needs for his      
existence in society4 ,while  his       
selling is determined by the labor-time 
required for the production  of his     
commodity1 his buying is determined by  
the continual renewal  of the wants of  
life4 ,in order to be able to buy       
without having sold  anything1 he must  
sell without buying4 ,in fact1 the      
circulation process  ,c,m,c is a dynamic
 unity of sale and purchase only in so  
far as it  constitutes at the same time 
the constant process of its separation4 

,in order that money should flow        
continuously as coin1 coin must         
constantly coagulate as money4 ,the     
continuous flow of coin depends on  its 
constant accumulations in the form of   
reserve-funds of coin which  spring up  
throughout the sphere of circulation and
 form sources of  supply2 the formation1
 distribution1 disappearance1 and       
reformation of  these reserve funds is  
constantly changing1 their existence    
constantly  disappears1 their           
disappearance constantly exists4 ,adam  
,smith expressed  this never-ceasing    
transformation of coin into money and of
 money  into coin by saying that every  
owner of commodities must always keep   
in supply besides the particular        
commodity which he sells1 a certain     
quantity of the universal commodity with
 which he buys4 ,we saw1 that  in the   
process ,c,m,c the second member ,m,c   
splits up into a series of  purchases   
which do not take place at once1 but at 
intervals of time1  so that one part of 

,m circulates as money while the other  
rests as  money4 ,money is in that case 
only suspended coin and the separate    
parts of the circulating mass of coins  
appear now in one form1 now in  another1
 constantly changing4 ,this first       
transformation of the medium  of        
circulation into money represents1      
therefore1 but a technical aspect  of   
money circulation4#ij    ,the primitive 
form of wealth is that of a surplus or  
superabundance1  i4 e41 that part of the
 products which are not immediately     
required as  use-values1 or the         
possession of such products whose       
use-value falls  outside the sphere of  
mere necessaries4 ,when considering the 
transition  of commodity into money we  
saw that this surplus or superabundance 
of  products constitutes the proper     
sphere of exchange at a low stage of    
development of production4 ,superfluous 
products become exchangeable  products  
or commodities4 ,the adequate form of   
this surplus is gold and  silver1 the   

first form in which wealth as abstract  
social wealth is  preserved4            
,commodities can not only be stored up  
in the form of gold  and silver1 i4 e41 
in the substance of money1 but gold and 
silver are  wealth in preserved form4   
,while every use-value performs its     
service  as such by being consumed1 i4  
e41 destroyed1 the use-value of gold as 
money consists in its being the bearer  
of exchange value1 in embodying         
universal labor-time as a shapeless raw 
material4 ,as shapeless metal1  exchange
 value possesses an indestructible form4
 ,gold or silver thus  brought to rest  
as money1 forms a hoard4 ,among nations 
with an  exclusively metallic           
circulation1 such as the ancients were1 
hoarding  is practiced universally from 
the individual to the state which guards
  its state hoard4 ,in more ancient     
times1 in ,asia and ,egypt1 these       
hoards under the protection of kings and
 priests appear rather as a  mark of    
their power4 ,in ,greece and ,rome it   

was part of public policy  to accumulate
 state hoards as the safest and most    
available form of  surplus4 ,the quick  
transfer of such hoards by conquerors   
from one  country to another and the    
sudden outpour of a part of these hoards
  into the general circulation          
constitute a peculiar feature of ancient
  economy4    ,as the incarnation of    
labor-time gold is a pledge for its own 
value1  and since it is the embodiment  
of universal labor-time1 the process  of
 circulation pledges gold its constant  
rle of exchange value4  ,owing to the   
mere fact that the owner of commodities 
can retain his  commodity in the form of
 exchange value or retain the           
exchange-value as  a commodity1 the     
exchange of commodities for the purpose 
of retaining  them in the transformed   
shape of gold becomes circulation's own 
motive4  ,the metamorphosis ,c,m takes  
place for the sake of the metamorphosis1
  i4 e41 in order to transform it from  
particular natural wealth into          

universal social wealth4 ,instead of    
change of matter1 change of form        
becomes its own purpose4 ,from a mere   
form of the movement exchange  value    
becomes its substance4 ,commodity is    
preserved as wealth1 as  commodity1 only
 in so far as it keeps within the sphere
 of circulation1  and it keeps in that  
fluent state only in so far as it       
solidifies in  the form of silver and   
gold4 ,it remains in the stream of      
circulation as  its crystal4 ,at the    
same time gold and silver themselves    
become money  only in so far as they do 
not play the part of mediums of         
circulation4  ,as non-mediums of        
circulation they become money4 ,the     
withdrawal of a  commodity from         
circulation in the form of gold is      
therefore the only  means of keeping it 
constantly within the sphere of         
circulation4    ,the owner of           
commodities can receive money from      
circulation only  in return for a       
commodity which he gives to it4         

,constant selling1  continual throwing  
of commodities into circulation is1     
therefore1 the  first condition of      
hoarding from the standpoint of the     
circulation  of commodities4 ,on the    
other hand1 money as a medium of        
circulation  constantly disappears in   
the very process of circulation by being
  realized all the time in use-values   
and becoming dissolved in fleeting      
pleasures4 ,it must1 therefore1 be taken
 out of the all-consuming  stream of    
circulation or the commodity must be    
kept up in its first  metamorphosis1 so 
that money is prevented from performing 
its function  of a means of purchase4   
,the commodity owner who has now become 
a  hoarder1 must sell as much as        
possible and buy as little as possible1 
as old ,cato had taught3 8patrem        
familias vendacem1 non emacem esse40    
,while industry constitutes the positive
 condition of hoarding1 saving  forms   
the negative one4 ,the less the         
equivalent of a commodity is  withdrawn 

from circulation in the form of         
particular commodities  or use-values1  
the more it is withdrawn in the shape of
 money or  exchange value4#ia ,the      
acquisition of wealth in its universal  
form  thus requires abstinence from     
wealth in its material reality4 ,thus   
the stimulating impulse for hoarding is 
greed1 the objects of which  are not    
commodities as use-values1 but exchange 
value as commodity4  ,in order to get   
possession of the surplus in its        
universal form1 the  particular wants   
must be treated as so much luxury and   
excess4 ,thus  the ,cortes presented a  
report to ,philipp ,,ii41 in #aeic1 in  
which1 among  other things1 was said3   
8,the ,cortes of ,valladolid in the year
 #aehf  petitioned ,your ,majesty not to
 allow the further importation into the 
,kingdom of candles1 glassware1 jewelry1
 knives and similar articles2  these    
things useless to human life come from  
abroad to be exchanged  for gold1 as    
though the ,spaniards were ,indians40   

,the hoarder despises  the worldly1     
temporary and transitory enjoyments in  
his hunt after  the eternal treasure1   
which neither moth nor rust can eat1    
which is  perfectly celestial and       
earthly at the same time4 8,the general 
remote  cause of our want of money is   
the great excess of this ,kingdom in    
consuming the ,commodities of ,forreine 
,countries1 which prove to us           
discommodities1 in hindering us of so   
much treasure1 which otherwise  would   
bee brought in1 in lieu of those        
toyes4444 ,wee 444 consume  amongst us1 
that great abundance of the ,wines of   
,spaine1 of ,france1 of  the ,rhene1 of 
the ,levant 444 the ,raisins of ,spaine1
 the ,corints of the  ,levant1 the      
,lawnes and ,cambricks of ,hannaults 444
 the ,silkes of ,italie1  the ,sugers   
and ,tobaco of the ,west ,indies1 the   
,spices of the ,east  ,indies3 ,all     
which are of no necessetie unto us and  
yet are bought with  ready mony40#ib    
,in the form of gold and silver1 wealth 

is indestructible1 both  because        
exchange value is preserved in the shape
 of indestructible  metal1 and1         
especially1 because gold and silver are 
prevented from  becoming1 as mediums of 
circulation1 mere vanishing money forms 
of  the commodity4 ,the destructible    
substance is thus sacrificed for the    
indestructible form4 8,if money be taken
 7by means of taxation7 from  him1 who  
spendeth the same 444 upon eating and   
drinking1 or any other  perishing       
,commodity2 and the same transferred to 
one that bestoweth it  on ,cloaths2 ,i  
say that even in this case the          
,commonwealth hath some  little         
advantage2 because ,cloaths do not      
altogether perish so soon as  ,meats and
 ,drinks4 ,but if the same be spent in  
,furniture of ,houses1  the advantage is
 yet a little more2 if in ,building of  
,houses1 yet  more2 if in improving of  
,lands1 working of ,mines1 ,fishing1    
etc41 yet  more2 but most of all1 in    
bringing ,gold and ,silver into the     

,country2  because those things are not 
only not perishable1 but are esteemed   
for ,wealth at all times and everywhere2
 whereas other ,commodities  which are  
perishable1 or whose value depends upon 
the ,fashion2 or  which are contingently
 scarce and plentiful1 are ,wealth1 but 
pro hic  et nunc40#ic ,the withdrawal of
 money from the stream of circulation   
and the saving of it from the social    
interchange of matter reaches  its      
extreme form in the burying of money1 so
 that social wealth is  brought as an   
underground indestructible treasure into
 a perfectly  secret private relation   
with the owner of commodities4 ,dr4     
,bernier1 who  stayed for some time at  
the court of ,aurenzeb at ,delhi1 tells 
us how  the merchants1 especially the   
,mohammedan heathens1 who control nearly
  all the trade and all money1 secretly 
bury their money deep in the  ground1   
8being imbued with the faith that the   
gold and silver which  they put away    
during their lives will serve them after

 death in the  next world40#id ,however1
 in so far as the asceticism of the     
hoarder is  combined with active        
industry1 he is rather a ,protestant by 
religion  and still more a ,puritan4    
8,it can not be denied that buying and  
selling  are necessary1 that one can not
 get along without them1 and that one   
can buy like a ,christian especially    
things that serve in need and in  honor2
 for the patriarchs had also bought and 
sold cattle1 wool1 grain1  butter1 milk 
and other goods4 ,they are gifts of ,god
 which ,he gives out  of the earth and  
divides among men4 ,but foreign trade   
which brings  over from ,calcutta1      
,india and other such places commodities
 consisting  of costly silks1 and gold  
ware1 and spices which only serve for   
luxury  and are of no use1 draining the 
land and the people of their money1     
should not be tolerated if we but had a 
government of princes4 ,yet ,i  do not  
wish to write of that now1 for ,i       
believe it will have to stop  of itself1

 when we have no money any longer2 and  
so will luxury and  gluttony2 for no    
writing or teaching will help until want
 and poverty  will force us40#ie    ,in 
times of disturbance in the process of  
the social interchange of  matter1 the  
burying of money takes place even in    
bourgeois societies  which are at a high
 stage of development4 ,the social bond 
in its  compact form is being saved from
 the social movement 7with the owner  of
 commodities this bond is the commodity 
and the adequate form of the  commodity 
is money74 ,the social nervus rerum is  
buried next to the  body whose nerve it 
is4    ,the hoard would now become mere 
useless metal1 its money soul would     
depart from it and it would remain as   
the burnt ashes of circulation1  as its 
caput mortuum1 if it did not constantly 
tend to get back into  circulation4     
,money1 or crystallized exchange value1 
is1 according to  its nature1 the form  
of abstract wealth2 but1 on the other   
hand1 any  given sum of money is a      

quantitatively limited magnitude of     
value4  ,the quantitative limitation of 
exchange value is in contradiction  with
 its qualitative universality and the   
hoarder conceives in it a  barrier which
 turns1 in fact1 into a qualitative     
barrier as well and  makes of the hoard 
merely a limited representative of      
material wealth4  ,money1 in its        
capacity of a universal equivalent1     
appears1 as we have  seen1 as a member  
of an equation1 the other member of     
which consists  of an endless series of 
commodities4 ,it depends on the         
magnitude of  the exchange value to what
 extent money will be realized in such  
an  endless series1 i4 e41 to what      
degree it corresponds to the conception 
of it as an exchange value4 ,the        
automatic movement of exchange value  as
 exchange value can only tend to its    
passing beyond its quantitative  limits4
 ,but by exceeding the quantitative     
limits of the hoard a new  limit is     
created which must be removed in its    

turn4 ,there is no  definite limit which
 appears as a barrier to further        
hoarding1 every  limit plays that part4 
,hoard accumulation has1 therefore1 no  
inherent  limits1 no inherent measure2  
it is an endless process which finds in 
each successive result an impulse for a 
new beginning4 ,while the hoard  is     
increased only by being preserved1 it is
 preserved only by being  increased4    
,money is not only an object of the     
passion for riches2 it is the  object of
 that passion4 ,the latter is           
essentially auri sacra fames4  ,the     
passion for riches1 contrary to that for
 special kinds of natural  wealth or    
use-values1 such as clothing1 ornaments1
 herds1 etc41 is  possible only when    
universal wealth has been individualized
 as such  in a particular object and    
can1 therefore1 be retained in the form 
of  a single commodity4 ,money appears  
then no less as an object than as  a    
source of the passion for riches4#if    
,the underlying fact of the  matter is  

that exchange value as such and with it 
its increase become  the final aim4     
,greed holds the hoard fast by not      
allowing the money  to become a medium  
of circulation1 but the thirst for gold 
saves the  money soul of the hoard by   
keeping up the lasting affinity of gold 
for  circulation4    ,to sum up1 the    
activity by which hoards are built up   
resolves itself  into withdrawal of     
money from circulation by continually   
repeated  sales1 and simple hoarding or 
accumulation4 ,in fact1 it is only  in  
the sphere of simple circulation and1   
especially1 in the form of  hoarding1   
that accumulation of wealth as such     
takes place1 while1 as we  shall see    
later1 in the case of other so-called   
forms of accumulation  it is only a     
misnomer to call them by that name in   
mere recollection  of the simple        
accumulation of money4 ,all other       
commodities are hoarded  either as      
use-values1 in which case the manner of 
storing them up is  determined by the   

peculiarities of their use-value3 the   
storing of  grain1 e4 g41 requires      
special equipment2 the accumulation of  
sheep  makes one a shepherd2 the        
accumulation of slaves and land creates 
relations of master and servant1 etc42  
the accumulation of particular  kinds of
 wealth requires special processes      
different from the simple  act of       
hoarding1 and develops special          
individual traits4 ,or1 wealth  in the  
form of commodities is hoarded as       
exchange-value and in that  case        
hoarding appears as a commercial or a   
specific economic operation4  ,the one  
who carries on such operations becomes a
 dealer in corn1 in  cattle1 etc4 ,gold 
and silver are money not through some   
activity of  the individual who         
accumulates it1 but as crystals of the  
process of  circulation which goes on   
without any aid on his part4 ,he has    
nothing  to do but to put them aside1   
adding new weights of metal to his      
hoard1 a perfectly senseless operation  

which1 if applied to all other          
commodities1 would deprive them of all  
value4#ig    ,our hoarder appears as a  
martyr of exchange value1 a holy ascetic
  crowning the metal pillar4 ,he cares  
for wealth only in its social  form and 
therefore he buries it away from        
society4 ,he wants to have  the         
commodity in the form in which it is    
always capable of entering  circulation 
and therefore he withdraws it from      
circulation4 ,he dreams  of exchange    
value and therefore does not exchange4  
,the fluid form of  wealth and its      
petrification1 the elixir of life and   
the stone of  wisdom madly haunt each   
other in alchemic fashion4 ,in his      
imaginary  unlimited passion for        
enjoyment he denies himself all         
enjoyment4  ,because he wishes to       
satisfy all social wants1 he barely     
satisfies  his elementary natural wants4
 ,while holding fast to his wealth in   
its metallic bodily form1 the latter    
escapes him as a phantom4 ,as a  matter 

of fact1 however1 the hoarding of money 
for the sake of money  is the barbaric  
form of production for production's     
sake1 i4 e41 the  development of the    
productive forces of social labor beyond
 the limits  of ordinary wants4 ,the    
less the production of commodities is   
developed1  the more important is the   
first crystallization of exchange value 
into  money1 or hoarding1 which plays1  
therefore1 an important part among  the 
ancient nations1 in ,asia until the     
present day1 and among modern           
agricultural nations where exchange     
value has not as yet taken hold of  all 
the relations of production4 ,before    
taking up the consideration  of the     
specific economic function of hoarding  
within the sphere of  metallic          
circulation1 let us mention another form
 of hoarding4    ,quite apart from their
 aesthetic properties1 silver and gold  
commodities are convertible into money1 
since the material of which  they are   
made is a money material2 and1          

inversely1 gold money and gold  bullion 
can be converted into commodities4      
,because gold and silver  constitute the
 material of abstract wealth1 the       
greatest display  of wealth consists of 
the utilization of these metals as      
concrete  use-values1 and if the owner  
of commodities hides his treasure at    
certain stages of production1 he is very
 anxious to appear before  other owners 
of commodities as rico hombre whenever  
he can do so  with safety4 ,he gilds    
himself and his house4#ih ,in ,asia1    
especially  in ,india1 where1 unlike    
under the capitalist system1 the        
hoarding  of wealth appears not as a    
subordinate function of the system of   
production1 but as an end in itself1    
gold and silver commodities are         
practically but aesthetic forms of      
hoards4 ,in mediaeval ,england gold  and
 silver commodities were considered     
before the law as mere forms of         
treasure1 since their value was but     
slightly increased by the crude  labor  

spent upon them4 ,they were destined to 
re-enter circulation  and their fineness
 was therefore prescribed in the same   
manner as  that of coin4 ,the increasing
 use of gold and silver as objects of   
luxury with the growth of wealth is such
 a simple matter that it was  perfectly 
clear to the ancients1#ii while modern  
economists have  advanced the erroneous 
proposition that the use of silver and  
gold  articles increases not in         
proportion to the growth of wealth1 but 
in proportion to the fall in value of   
the precious metals4 ,their  otherwise  
accurate references to the use of       
,californian and ,australian  gold are  
inconclusive1 since the increased       
consumption of gold as a  raw material  
does not find justification1 according  
to their theory1  in any corresponding  
decline in its value4 ,from #ahaj to    
#ahcj1 in  consequence of the struggle  
of the ,american colonies against ,spain
 and  the interruption of mining caused 
by revolutions1 the annual average      

production of precious metals declined  
by more than one-half4 ,the  decline of 
coin in circulation in ,europe amounted 
to nearly one-sixth1  comparing the     
years #ahbi and #ahji4 ,although the    
quantity produced had  thus declined and
 the cost of production1 if it had      
changed at all1  had increased1 yet the 
consumption of precious metals as       
objects of  luxury increased to an      
extraordinary extent in ,england during 
the very  war and on the continent after
 the ,peace of ,paris4 ,the consumption 
increased with the general growth of    
wealth4#ajj ,it may be stated  as a     
general law that the conversion of gold 
and silver money into  articles of      
luxury prevails in times of peace1 while
 their reconversion  into bullion or    
even coin takes place in stormy         
periods4#aja ,how  considerable the     
proportion is of the gold and silver    
treasure in the  form of articles of    
luxury to the quantity of precious      
metals serving  as money may be seen    

from the fact that in #ahbi the         
proportion in  ,england1 according to   
,jacob1 was two to one1 and in entire   
,europe and  ,america the precious      
metals in the form of articles of luxury
 exceeded  those in the form of money by
 one-fourth4    ,we have seen that the  
circulation of money is but the         
manifestation of  the metamorphoses of  
commodities1 or of the form under which 
the social  interchange of matter takes 
place4 ,with the change in the total    
price  of commodities in circulation or 
in the volume of their simultaneous     
metamorphoses1 the rapidity of their    
change of form in each case being       
given1 the total quantity of gold in    
circulation must always expand  or      
contract4 ,that is possible only under  
the condition that the total  quantity  
of money in the country continually bear
 a varying ratio to  the quantity of    
money in circulation4 ,this condition is
 met by the  process of hoarding4 ,with 
a fall in prices or rise in the rapidity

  of circulation1 the hoard-reservoirs  
absorb that part of money which  is     
thrown out of circulation2 with a rise  
in price or a decline in  the rapidity  
of circulation1 the hoards open up and  
return a part  of their contents to the 
stream of circulation4 ,the             
solidification  of circulating money    
into hoards and the outpouring of hoards
 into  circulation is a constantly      
oscillating movement in which the       
prevalence of the one or the other      
tendency is determined exclusively  by  
fluctuations in the circulation of      
commodities4 ,hoards thus serve as      
conduits for the supply and withdrawal  
of money to or from circulation1  so    
that every time only that quantity of   
money circulates as coin which  is      
required by the immediate needs of      
circulation4 ,if the volume of the      
entire circulation suddenly expands and 
the fluent unity of sale and  purchase  
assumes such dimensions that the total  
sum of prices to be  realized increases 

more rapidly than the rapidity of the   
circulation of  money1 the hoards       
decrease perceptibly2 but when the      
combined movement  slackens to an       
unusual extent1 or the movement of      
buying and selling  steadies itself1 the
 medium of circulation solidifies into  
money in  large measure1 and the        
treasure reservoirs fill up far above   
their  average level4 ,in countries with
 an exclusively metallic circulation  or
 where production is at a low stage of  
development1 the hoards are  endlessly  
split up and scattered all over the     
land1 while in countries  where the     
capitalist system is developed they are 
concentrated in bank  reservoirs4       
,hoards are not to be confounded with   
coin reservoirs1 which  form a          
constituent part of the total supply of 
money in circulation1  while the        
interaction between hoards and currency 
implies the decline  or rise of its     
total supply4 ,gold and silver          
commodities form1 as we  have seen1 both

 conduits for the withdrawal of precious
 metals1 as  well as sources of their   
supply4 ,in ordinary times only their   
former  function is of importance to the
 economy of metallic circulation4#ajb   
b4 ,,means ,,of ,,payment4    ,the two  
forms which have so far distinguished   
money from the  circulating medium are  
those of suspended coin and of the      
hoard4  ,the temporary transformation of
 coin into money in the case of the     
former means that the second phase of   
,c,m,c1 namely purchase ,m,c1  must     
break up within a certain sphere of     
circulation into a series  of successive
 purchases4 ,as to hoarding1 it is      
simply based on the  isolation of the   
act ,c,m when it does not immediately   
pass into ,m,c1  or is but an           
independent development of the first    
metamorphosis of  a commodity2 it       
represents money as the result of the   
alienation of  all commodities in       
contradistinction to the medium of      
circulation as  the embodiment of       

commodities in their always alienable   
form4 ,coin  reserves and hoards are    
money only as non-circulating mediums   
and  are non-circulating mediums only   
because they do not circulate4 ,in  the 
capacity in which we consider money now1
 it circulates or enters  circulation1  
but does not perform the function of a  
circulating medium4  ,as a medium of    
circulation money is always a means of  
purchase1 now it  does not act in that  
capacity4    ,as soon as money develops 
through the process of hoarding into the
  embodiment of abstract social wealth  
and the tangible representative  of     
material wealth1 it assumes in that     
capacity special functions  within the  
process of circulation4 ,if money       
circulates merely as a  medium of       
circulation and therefore as a means of 
purchase1 it is  understood that        
commodity and money confront each other 
at the same  time1 i4 e41 that the same 
value is present in a double form3 at   
one  pole1 as a commodity in the hands  

of the seller2 at the other pole as     
money in the hands of the buyer4 ,this  
simultaneous existence of the two       
equivalents at opposite poles and their 
simultaneous change of places  or mutual
 alienation presupposes in its turn that
 seller and buyer  enter into relations 
as owners of equivalents that are on    
hand4 ,but in  the course of time1 the  
process of the metamorphosis of         
commodities  which produces the         
different forms of money1 transforms    
also the owners  of commodities or      
changes the character in which they     
appear before  each other in the        
community4 ,in the process of           
metamorphosis of the  commodity the     
guardian of the latter changes his skin 
as often as  the commodity changes place
 or as the money assumes new forms4     
,thus1  the owners of commodities       
originally confronted each other only as
  commodity owners1 but later on they   
became one a buyer1 the other a  seller2
 then each became alternately buyer and 

seller1 then hoarders1  and finally rich
 men4 ,in that manner1 the owners of    
commodities do not  come out of the     
process of circulation the same men that
 they entered4  ,in fact the different  
forms which money assumes in the process
 of  circulation are but crystallized   
changes of form of the commodities      
themselves1 which in their turn are but 
concrete expressions of the  changing   
social relations in which commodity     
owners carry on the  interchange of     
matter with one another4 ,new trade     
relations spring up  in the process of  
circulation1 and1 as representatives of 
these changed  relations1 commodity     
owners assume new economic roles4 ,just 
as gold  becomes idealized within the   
process of circulation and plain paper1 
in its capacity of a representative of  
gold1 performs the function  of money1  
so does the same process of circulation 
lend the weight of  actual seller and   
buyer to the buyer and seller who enter 
it merely as  representatives of future 

money and future commodities4    ,all   
the forms in which gold develops into   
money1 are but the unfolding  of        
potentialities which the metamorphosis  
of commodities bears within  itself4    
,these forms did not become distinctly  
differentiated in the  process of simple
 money circulation where money appears  
as coin and  the movement ,c,m,c forms a
 dynamic unity2 at most1 they appeared  
as mere potentialities as1 e4 g41 in the
 case of the break in the  metamorphosis
 of a commodity4 ,we have seen that in  
the process ,c,m  the relations between 
the commodity and money were those of an
 actual  use-value and ideal            
exchange-value to an actual exchange    
value and  only ideal use-value4 ,by    
alienating his commodity as a use-value 
the  seller realized its own exchange   
value and the use-value of money4 ,on   
the contrary1 the buyer1 by alienating  
his money as exchange value1  realized  
its own use-value and the price of the  
commodity4 ,commodity  and money changed

 places accordingly4 ,when it comes to a
 realization  in actual life of this    
bi-polar contrast1 a new break occurs4  
,the  seller actually alienates his     
commodity1 but realizes its price only  
in  idea3 he has sold his commodity at  
its price1 which is to be realized1     
however1 only subsequently1 at a time   
agreed upon4 ,the purchaser buys  as the
 representative of future money1 while  
the vender sells as the  owner of       
present goods4 ,on the part of the      
vender1 the commodity as  use-value is  
actually alienated1 without the price   
being actually  realized2 on the part of
 the purchaser1 money is actually       
realized  in the use-value of the       
commodity1 without being actually       
alienated  as exchange value4 ,instead  
of a token of value representing money  
symbolically as was the case before1 the
 purchaser himself performs  that part  
now4 ,and just as in the former case the
 symbolic nature of  the token of value 
called forth the guarantee of the state 

which has  made it legal tender1 so does
 the personal symbolism of the buyer    
bring  about legally enforcible private 
contracts among commodity owners4       
,the contrary may happen in the process 
,m,c1 where the money can be  alienated 
as a real means of purchase1 and in that
 way the price of the  commodity can be 
realized before the use-value of the    
money is realized  and the commodity    
actually delivered4 ,this occurs        
constantly under  the everyday form of  
pre-payments4 ,and it is under this form
 that the  ,english government purchases
 opium from the ryots of ,india1 or1    
foreign  merchants residing in ,russia  
mostly buy agricultural products4 ,in   
these  cases1 however1 the money always 
acts in its well known role of a means  
of purchase and therefore1 does not     
assume any new forms4#ajc ,we need  not 
dwell1 therefore1 on this case any      
longer2 but with reference to  the      
changed form which the two processes    
,m,c and ,c,m assume now1 we  may note  

that the difference between purchase and
 sale which appeared  but imaginary in  
the direct process of circulation1 now  
becomes a real  difference1 since in the
 former case only the money is present  
and in  the latter only the commodity1  
and in either case only that extreme is 
present from which the initiative comes4
 ,besides1 the two forms have  this in  
common3 that in either1 one of the      
equivalents is present only  in the     
common will of the buyer and seller1a   
will that is binding on  both and       
assumes definite legal forms4    ,seller
 and buyer become creditor and debtor4  
,while the commodity  owner looked      
comical as the guardian of a treasure1  
he now becomes  awe-inspiring1 since he 
no longer identifies himself but his    
neighbor  with a certain sum of money   
and makes him and not himself a martyr  
of  exchange value4 ,from a believer he 
becomes a creditor1 for religion he     
substitutes law4      8,i stay here on  
my bond60    ,thus1 in the modified form

 ,c,m in which the commodity is present 
and  money is only represented1 money   
plays first of all the part of a        
measure of value4 ,the exchange value of
 the commodity is estimated in  money as
 its measure2 but as exchange value1    
established by contract1  price exists  
not only in the mind of the seller1 but 
also as a measure  of obligation on the 
part of the buyer4 ,besides serving as a
 measure of  value1 money plays here the
 part of a means of purchase1 although  
in  that capacity it only casts ahead   
the shadow of its future existence4  ,it
 attracts the commodity from its        
position in the hand of the seller  into
 that of the buyer4 ,as soon as the term
 of the contract expires1  money enters 
circulation1 since it changes its       
position by passing  from the hands of  
the former buyer into those of the      
former seller4  ,but it does not enter  
circulation as a circulating medium or  
as a  means of purchase4 ,it performed  
those functions before it was present   

and it appears after it has ceased to   
perform them4 ,it now enters            
circulation as the only adequate        
equivalent of the commodity1 as the     
absolute form of existence of exchange  
value1 as the last word of the  process 
of exchange1 in short as money1 and     
money in its distinct role  of a        
universal means of payment4 ,in this    
capacity of a means of  payment money   
appears as the absolute commodity1 but  
within the sphere  of circulation and   
not without it as was the case with     
hoards4 ,the  difference between the    
means of purchase and the means of      
payment makes  itself unpleasantly felt 
in periods of commercial crises4#ajd    
,originally1 the conversion of the      
product into money in the sphere of     
circulation appears only as an          
individual necessity for the commodity  
owner in so far as his own product has  
no use-value to him1 but has  to acquire
 it first by being alienated4 ,but in   
order to pay at the  expiration of the  

contract1 he must have sold commodities 
before that4  ,thus1 entirely apart from
 his individual wants1 the movement of  
the  circulation process makes selling a
 social necessity with every owner  of  
commodities4 ,as a former buyer of a    
commodity he is compelled to  become a  
seller of another commodity in order to 
get money not as a  means of purchase   
but as a means of payment1 as the       
absolute form of  exchange value4 ,the  
conversion of commodity into money as a 
final act1  or the first metamorphosis  
of a commodity as an end in itself which
 in  the case of hoarding seemed to be a
 matter of caprice on the part of  the  
commodity owner1 becomes now an economic
 function4 ,the motive and  essence of  
sale for the sake of payment becomes    
from a mere form of the  process of     
circulation its self emanating          
substance4    ,in this form of sale the 
commodity completes its change of       
position2  it circulates while it       
postpones its first metamorphosis1 viz4 

its  transformation into money4 ,on the 
contrary1 on the part of the buyer  the 
second metamorphosis is completed1 i4 e4
 money is reconverted  into a commodity 
before the first metamorphosis has taken
 place1  i4 e41 before the commodity has
 been turned into money4 ,the first     
metamorphosis thus takes place after the
 second in point of time2  and thereby1 
money i4 e4 the form of the commodity in
 its first  metamorphosis1 acquires a   
new destination4 ,money or the          
spontaneous  development of exchange    
value1 is no longer a mere intermediary 
form of  the circulation of commodities1
 but its final result4    ,that such    
time sales in which the two poles of the
 sale are separated  in point of time1  
have their natural origin in the simple 
circulation  of commodities1 requires no
 elaborate proof4 ,in the first place1  
the  development of circulation leads to
 a continual repetition of the  mutual  
transactions between the same commodity 
owners who confront  each other as      

seller and buyer4 ,the repetition is not
 accidental2 on  the contrary1 goods are
 ordered1 let us say1 for a certain date
 in the  future when they are to be     
delivered and paid for4 ,in that case   
the  sale is ideal1 i4 e4 it is legally 
accomplished without the actual         
presence of the goods and money4 ,both  
forms of money1 those of a medium  of   
circulation and of a means of payment   
still coincide here1 since  in the first
 place1 commodity and money change      
places simultaneously1  and secondly1   
the money does not buy the commodity1   
but realizes the  price of the commodity
 purchased before4 ,in the second place1
 the  nature of a great many use-values 
makes the simultaneous alienation  and  
delivery of the goods impossible1 and   
delivery has to be postponed  for a     
certain time2 e4 g41 when the use of a  
house is sold for one  month1 the       
use-value of the house is delivered only
 at the expiration  of the month1       
although it changes hands at the        

beginning of the month4  ,since the     
actual transfer of the use-value and its
 virtual alienation  are separated here 
in point of time1 the realization of its
 price  occurs also after its change of 
place4 ,finally1 the difference in  the 
seasons and in the length of time       
required for the production of  various 
commodities brings about a situation    
where one tries to sell  his goods1     
while the other is not ready to buy2 and
 with the repeated  purchases and sales 
between the same commodity owners the   
two ends  of sale fall apart according  
to the conditions of production of the  
respective commodities4 ,thus arises a  
relation of creditor and debtor  between
 the owners of commodities which1 though
 constituting the  natural foundation of
 the credit system1 may be fully        
developed before  the latter comes into 
existence4 ,it is clear that with the   
extension  of the credit system1 and1   
consequently1 with the development of   
the  capitalist system of production in 

general1 the function of money as a     
means of payment will extend at the     
expense of its function as a means  of  
purchase and1 still more1 as an element 
of hoarding4 ,in ,england1 e4  g41 money
 as coin has been almost completely     
banished into the sphere  of retail and 
petty trade between producers and       
consumers1 while it  dominates the      
sphere of large commercial transactions 
as a means of  payment4#aje    ,as the  
universal means of payment money becomes
 the universal  commodity of all        
contracts1 at first only in the sphere  
of  circulation of commodities4#ajf ,but
 with the development of this  function 
of money1 all other forms of payment are
 gradually converted  into money        
payments4 ,the extent to which money is 
developed as the  exclusive means of    
payment indicates the degree to which   
exchange value  has taken hold of       
production in its depth and breadth4#ajg
    ,the volume of money in circulation1
 as a means of payment1 is  determined  

in the first place1 by the amount of    
payments1 i4 e4 by the  sum total of the
 prices of the commodities alienated1   
but not about to  be alienated1 as in   
the case of the simple circulation of   
money4 ,the  quantity thus determined is
 subject1 however1 to two modifications4
  ,the first modification is due to the 
rapidity with which the same  piece of  
money repeats the same function1 i4 e4  
with which the several  payments succeed
 one another4 ,a pays ,b1 whereupon ,b  
pays ,c1 and so  forth4 ,the rapidity   
with which the same coin repeats its    
function  as a means of payment1 depends
 first1 upon the continuity of the      
relation of creditor and debtor among   
the owners of commodities1 the  same    
commodity owner being the creditor of   
one person and the debtor  of another1  
etc41 and secondly1 upon the interval   
which separates the  times of various   
payments4 ,this chain of payments or of 
supplementary  first metamorphoses of   
commodities is qualitatively different  

from the  chain of metamorphoses which  
is formed by the circulation of money as
 a  circulating medium4 ,the latter not 
only makes its appearance gradually1    
but is even formed in that manner4 ,a   
commodity is first converted  into      
money1 then again into a commodity1     
thereby enabling another  commodity to  
become money1 etc42 or1 seller becomes  
buyer1 whereby  another commodity owner 
turns seller4 ,this successive          
connection is  accidentally formed in   
the very process of the exchange of     
commodities4  ,but when the money which 
,a has paid to ,b is passed on from ,b  
to ,c1  from ,c to ,d1 etc41 and that1  
too1 at intervals rapidly succeeding one
  another1 then this external connection
 reveals but an already existing  social
 connection4 ,the same money passes     
through different hands not  because it 
appears as a means of payment2 it passes
 as a means of  payment because the     
different hands have already clasped    
each other4  ,the rapidity with which   

money circulates as a means of payment  
thus  shows that individuals have been  
drawn into the process of circulation   
much deeper than would be indicated by  
the same rapidity of the  circulation of
 money as coin or as a means of         
purchase4    ,the sum total of prices   
made up by all the purchases and sales  
taking  place at the same time1 and1    
therefore1 side by side1 constitutes the
  limit for the substitution of the     
volume of coin by the rapidity of its   
circulation4 ,if the payments that are  
to be made simultaneously are           
concentrated at one placewhich naturally
 arises at first at points  where the   
circulation of commodities is largestthe
 payments balance  each other as        
negative and positive quantities3 ,a is 
under obligations  to pay ,b1 while he  
has to be paid by ,c4 etc4 ,the quantity
 of money  required as a means of       
payment will1 therefore1 be determined  
not by  the total amount of payments    
which have to be made simultaneously1   

but  by the greater or less             
concentration of the same and by the    
magnitude  of the balance remaining     
after their mutual neutralization as    
negative  and positive quantities4      
,special arrangements are made for      
settlements  of this kind even where the
 credit system is not developed at all1 
as was the case e4 g4 in ancient ,rome4 
,the consideration of these             
arrangements1 however1 as well as that  
of the general time limits of  payment1 
which are everywhere established among  
certain elements in the  community1 does
 not belong here4 ,we may add that the  
specific influence  which these time    
settlements exert on the periodic       
fluctuations in the  quantity of money  
in circulation1 has been scientifically 
investigated  but lately4    ,in so far 
as the payments mutually balance as     
positive and negative  quantities1 no   
money actually appears on the scene4 ,it
 figures here  only in its capacity of a
 measure of value3 first1 in the prices 

of  commodities1 and second1 in the     
magnitude of mutual obligations4 ,aside 
from its ideal form1 exchange value does
 not exist here independently1  not even
 in the form of a token of value2 that  
is to say1 money plays  here only the   
part of ideal money of account4 ,the    
function of money  as a means of payment
 thus implies a contradiction4 ,on the  
one hand1  in so far as payments        
balance1 it serves only ideally as a    
measure of  value4 ,on the other hand1  
in so far as a payment has actually to  
be  made1 money enters circulation not  
as a transient circulating medium1  but 
as the final resting form of the        
universal equivalent1 as the  absolute  
commodity1 in a word1 as money4         
,therefore1 whenever such a  thing as a 
chain of payments and an artificial     
system of settling them1  is developed1 
money suddenly changes its visionary    
nebulous shape as a  measure of value1  
turning into hard cash or means of      
payment1 as soon  as some shock causes a

 violent interruption of the flow of    
payments and  disturbs the mechanism of 
their settlement4 ,thus1 under          
conditions of  fully developed          
capitalist production1 where the        
commodity owner has  long become a      
capitalist1 knows his ,adam ,smith1 and 
condescendingly  laughs at the          
superstition that gold and silver alone 
constitute money  or that money differs 
at all from other commodities as the    
absolute  commodity1 money suddenly     
reappears not as a medium of            
circulation1  but as the only adequate  
form of exchange value1 as the only form
 of  wealth1 exactly as it is looked    
upon by the hoarder4 ,in its capacity   
of such an exclusive form of wealth1 it 
reveals itself1 unlike under  the       
monetary system1 not in mere imaginary1 
but in actual depreciation  and         
worthlessness of all material wealth4   
,that is what constitutes  the          
particular phase of crises of the world 
market which is known as  a money       

crisis4 ,the summum bonum for which     
everybody is crying at  such times as   
for the only form of wealth1 is cash1   
hard cash2 and by  the side of it all   
other commodities just because they are 
use-values1  appear useless like so many
 trifles and toys1 or1 as our ,dr4      
,martin  ,luther says1 as mere objects  
of ornament and gluttony4 ,this sudden  
reversion from a system of credit to a  
system of hard cash heaps  theoretical  
fright on top of the practical panic2   
and the dealers by  whose agency        
circulation is affected shudder before  
the impenetrable  mystery in which their
 own economical relations are           
involved4#ajh    ,payments1 in their    
turn1 require the formation of reserve  
funds1  the accumulation of money as a  
means of payment4 ,the building up of   
reserve funds appears no longer as a    
practice carried on outside of  the     
sphere of circulation1 as in the case of
 hoarding2 nor as a mere  technical     
accumulation of coin1 as in the case of 

coin reserves2 on the  contrary1 money  
must now be gradually accumulated to be 
available on  certain future dates when 
payments become due4 ,while hoarding1 in
 its  abstract form as a means of       
enrichment1 declines with the           
development  of the capitalist system of
 production1 that species of hoarding   
which  is directly called for by the    
process of production1 increases2 or1 to
  put it differently1 a part of the     
treasure which is generally formed  in  
the sphere of circulation of            
commodities1 is absorbed as a reserve   
fund of means of payment4 ,the more     
developed the capitalist system of      
production1 the more these reserve funds
 are limited to the necessary  minimum4 
,locke1 in his work 8,on the ,lowering  
of ,interest0#aji  furnishes interesting
 data with reference to the size of     
these reserve  funds in his time4 ,they 
show what a considerable part of the    
total  money in circulation the         
reservoirs for means of payment absorbed

 in  ,england just at the time when     
banking began to develop4    ,the law as
 to quantity of money in circulation1 as
 it has been  formulated in the analysis
 of the simple circulation of money1    
receives  an essential modification when
 the circulation of the means of payment
  is taken into account4 ,the rapidity  
of the circulation of money whether  as 
circulating medium or as means of       
paymentbeing given1 the total  amount of
 money in circulation at a given time   
will be determined by  the sum total of 
the prices of commodities to be         
realized1 plus the  total amount of     
payments falling due at the same time1  
minus the  amount of payments balancing 
each other4 ,the general law that the   
volume of money in circulation depends  
on the prices of commodities is  not    
affected by this in the least1 since the
 extent of the payments  is itself      
determined by the prices stipulated in  
contracts4 ,what is1  however1          
strikingly demonstrated1 is that even if

 the rapidity of  circulation and the   
economy of payments be assumed to remain
 the same1  the sum total of the prices 
of the commodities circulating in a     
given  period of time1 say one day1 and 
the volume of money in circulation on   
the same day are by no means equal1     
because there is a large number  of     
commodities in circulation whose prices 
have yet to be realized in  money at a  
future date1 and there is a quantity of 
money in circulation  which constitutes 
the payment for commodities which have  
long gone out  of circulation4 ,the     
latter amount will depend on the sum of 
payments  falling due on the same day   
although contracted for at entirely     
different periods4    ,we have seen that
 a change in the values of gold and     
silver does not  affect their function  
as measures of value or money of        
account4 ,but  this change is of        
decisive importance for money as a      
hoard1 since  with the rise or fall of  
value of gold and silver1 the total     

value  of a gold or silver hoard will   
also rise or fall4 ,of still greater    
importance is the effect of this change 
on money as a means of payment4  ,the   
payment takes place after the sale of   
the commodity1 or the money  serves in  
two different capacities at two         
different periods2 first1 as  a measure 
of value1 then as a means of payment    
corresponding to the  measurement4 ,if1 
during this interval1 the value of the  
precious metals  or the labor-time      
necessary for their production undergoes
 a change1  the same quantity of gold or
 silver will be worth more or less when 
it appears as a means of payment than   
what it was when it served as a  measure
 of value1 i4 e41 when the contract was 
concluded4 ,the function  of a          
particular commodity1 like gold or      
silver1 to serve as money or            
independent exchange value comes here in
 conflict with the nature of  the       
particular commodity whose magnitude of 
value depends on changes in  the cost of

 its production4 ,the great social      
revolution which caused  the fall in    
value of the precious metals in ,europe1
 is as well known as  the revolution of 
an opposite character which had been    
brought about  at an early period in the
 history of the ancient ,roman republic 
by the  rise in value of copper in terms
 of which the debts of the plebeians    
had been contracted4 ,without attempting
 here to follow any further  the        
fluctuations of value of the precious   
metals and their effect on  the system  
of bourgeois political economy1 it is at
 once apparent  that a fall in the value
 of the precious metals favors the      
debtors at  the expense of the          
creditors1 while a rise in their value  
favors the  creditors at the expense of 
the debtors4      c4 ,,world ,,money4   
,gold becomes money as distinguished    
from coin only after it is  withdrawn   
from circulation in the shape of a      
hoard2 it then enters  circulation as a 
non-medium of circulation1 and finally  

breaks through  the barriers of home    
circulation to assume the part of a     
universal  equivalent in the world of   
commodities4 ,it becomes world money4   
,while the general measures of weight of
 the precious metals served as  their   
original measures of value1 the reverse 
process takes place now  in the world   
market1 and the reckoning names of money
 are turned back  into corresponding    
weight names4 ,in the same way1 while   
shapeless crude  metal 7aes rude7 was   
the original form of the medium of      
circulation  and the coin form          
constituted but the official stamp      
certifying that a  given piece of metal 
was of a certain weight1 now the        
precious metal  in its capacity of a    
world coin throws off its stamp and     
shape and  reassumes the                
indistinguishable bullion form2 and even
 if national  coins1 such as ,russian   
imperials1 ,mexican dollars1 and        
,english  sovereigns1 do circulate      
abroad1 their name is of no importance1 

and only their contents count4 ,finally1
 as international money1 the  precious  
metals come again to perform their      
original function of  mediums of        
exchange1 which1 like the exchange of   
commodities1 arose  first not within the
 various primitive communities1 but at  
their points  of contact with one       
another4 ,as world money1 money thus    
reassumes its  primitive form4 ,on      
leaving the sphere of home circulation1 
it strips  off the particular forms     
which it has acquired in the course of  
the  development of the process of      
exchange within that particular national
  sphere1 those local garbs of standard 
of price1 of coin1 of auxiliary  coin1  
and of token of value4    ,we have seen 
that in the home circulation of a       
country1 only one  commodity serves as a
 measure of value4 ,since1 however1 that
 function  is performed by gold in some 
countries and by silver in others1 there
  is a double standard of value in the  
world market and money assumes  two     

forms in all its other functions4 ,the  
translation of the values  of           
commodities from gold prices into silver
 prices and vice versa  depends in each 
case upon the relative value of the two 
metals1 which  is constantly changing   
and1 therefore1 appears to be constantly
 in the  process of determination4      
,commodity owners in every national     
sphere  of circulation have to use gold 
and silver alternately for foreign      
circulation and thus to exchange the    
metal which is accepted as money  at    
home for the metal which they happen to 
need as money abroad4 ,every  nation is1
 therefore1 utilizing both metals1 gold 
and silver1 as world  money4    ,in the 
international circulation of            
commodities1 gold and silver appear  not
 as mediums of circulation1 but as      
universal mediums of exchange4  ,the    
universal medium of exchange performs   
its function only under its  two        
developed forms of a means of purchase  
and of a means of payment1  whose mutual

 relation in the world market is the    
very reverse of what  it is at home4 ,in
 the sphere of home circulation1 money  
in the form of  coin1 played exclusively
 the part of a means of purchase1 either
 as the  intermediary in the dynamic    
unity ,c,m,c or as the representative of
 the  transient form of exchange value  
in the unceasing change of positions  by
 commodities4 ,in the world market it is
 just the contrary4 ,gold and  silver   
appear here as a means of purchase when 
the exchange of matter  is but          
one-sided1 and purchase and sale do not 
coincide4 ,the frontier  trade at       
,kiachta e4 g4 is both actually and     
according to treaty1 one  of barter1 in 
which silver plays only the part of a   
measure of value4  ,the war of #aheg-eh 
compelled the ,chinese to sell without  
buying4 ,silver  suddenly appeared now  
as a means of purchase4 ,out of regard  
to the  letter of the treaty1 the       
,russians made up the ,french five frank
 coins  into crude silver commodities1  

which were made to serve as a means  of 
exchange4 ,silver has always served as a
 means of purchase between  ,europe and 
,america on one side and ,asia on the   
other1 where it settles  down in the    
form of hoards4 ,furthermore1 the       
precious metals serve  as international 
means of purchase whenever the ordinary 
balance of  exchange of matter between  
two nations is suddenly upset1 as e4 g4 
when  a failure of crops forces one of  
them to buy on an extraordinary scale4  
,finally1 the precious metals are       
international means of purchase in  the 
hands of gold and silver producing      
countries1 in which case they  directly 
constitute a product and commodity and  
not merely a converted  form of a       
commodity4 ,the more the exchange of    
commodities between  different national 
spheres of circulation is developed1 the
 more  important becomes the function of
 world money to serve as a means of     
payment for the settlement of           
international balances4    ,like home   

circulation1 international circulation  
requires a constantly  changing quantity
 of gold and silver4 ,a part of the     
accumulated hoards  serves therefore1 in
 each country as a reserve fund of world
 money1  which now declines1 now rises1 
according to the fluctuations of the    
exchange of commodities4#aaj ,besides   
the special movements which take  place 
between national spheres of circulation1
 world-money possesses  a universal     
movement1 whose starting points are at  
the sources of  production from which   
gold and silver streams spread out in   
different  directions all over the world
 market4 ,here gold and silver enter the
  world circulation as commodities and  
are exchanged for commodity  equivalents
 in proportion to the labor-time        
contained in them1 before  they         
penetrate national spheres of           
circulation4 ,in the latter1 they       
appear now with a given magnitude of    
value4 ,every fall or rise in the  cost 
of their production equally affects1    

therefore1 their relative  value        
throughout the world market2 on the     
other hand1 that value is  entirely     
independent of the extent to which the  
different national  spheres of          
circulation absorb gold or silver4 ,the 
part of the metal  stream which is      
caught up by every separate sphere in   
the world of  commodities1 partly enters
 directly the home circulation of money 
to make up for worn out coin2 partly is 
dammed up in the different  reservoirs  
containing hoards of coin1 means of     
payment and world-money2  partly is     
turned into articles of luxury1 while   
the rest simply forms  a treasure4 ,at  
an advanced stage of development of the 
capitalist  system of production the    
formation of hoards is reduced to the   
minimum  required by the various        
processes of circulation for the free   
play  of their mechanism4 ,the hoard as 
such becomes idle wealth1 unless it     
appears as a temporary form of a surplus
 resulting from a favorable  balance of 

payments or as the result of an         
interrupted exchange of  matter1 i4 e4  
as the solidification of a commodity in 
its first  metamorphosis4    ,gold and  
silver1 in their capacity of money1     
being by conception  universal          
commodities1 assume in their capacity of
 world money the  form adapted to a     
universal commodity4 ,to the extent to  
which all  commodities are exchanged for
 them1 they become the transformed      
impersonation of all commodities and1   
therefore1 universally alienable        
commodities4 ,their function of serving 
as the embodiment of universal          
labor-time is realized more and more as 
the interchange of matter  produced by  
concrete labor embraces increasing parts
 of the world4  ,they become universal  
equivalents to the extent to which the  
series  of particular equivalents which 
constitute their spheres of exchange1   
increases4 ,since in the sphere of world
 circulation commodities unfold  their  
own exchange value on a universal scale1

 they assume the form  of world money   
when transformed into gold and silver4  
,as commodity  owning nations are thus  
turning gold into money by their        
diversified  industry and universal     
trade1 industry and trade appear to them
 only as  a means of getting money out  
of the world market in the shape of gold
  and silver4 ,gold and silver1 as world
 money1 are1 therefore1 as much         
products of the universal circulation of
 commodities as they are means  of      
widening its sphere4 ,like chemistry    
which grew up behind the backs  of the  
alchemists who tried to find a way of   
making gold1 so do the  sources of world
 industry and world trade spring up     
behind the backs  of the owners of      
commodities1 while they are hunting for 
the commodity  in its magic form4 ,gold 
and silver help to create the world     
market by  anticipating its existence in
 their conception of money4 ,that this  
magic effect of the precious metals is  
by no means confined to the  period of  

infancy of capitalist society but is a  
necessary outgrowth  of the perverse    
conception which the representatives of 
the commodity  world have of their own  
work in society1 is shown by the        
extraordinary  influence exerted in the 
middle of the nineteenth century by the 
discovery of new gold fields4    ,just  
as money develops into world-money1 so  
the commodity owner  develops into a    
cosmopolitan4 ,the cosmopolitan relation
 of men is  originally only a relation  
of commodity owners4 ,the commodity as  
such  rises above all religious1        
political1 national1 and language       
barriers4  ,price is its universal      
language and money1 its common form4    
,but with  the development of           
world-money as distinguished from       
national coin1  there develops the      
cosmopolitanism of the commodity owner  
as the faith  of practical reason       
opposed to traditional1 religious1      
national and  other prejudices which    
hinder the interchange of matter among  

mankind4  ,as the identical gold that   
lands in ,england in the form of        
,american  eagles1 turns there into     
sovereigns and three days later         
circulates in  ,paris in the form of    
,napoleons1 only to emerge in ,venice in
 a few weeks  as so many ducats1        
retaining all the while the same value1 
it becomes  clear to the commodity owner
 that nationality 8is but the guinea's  
stamp40 ,the lofty idea which he        
conceives of the entire world is that   
of a market1 the world market4#aaa      
#d4 ,,the ,,precious ,,metals4    ,the  
process of capitalist production first  
of all takes hold of the  metallic      
circulation as of a ready1 transmitted  
organ which1 though  undergoing a       
gradual transformation1 always retains  
its fundamental  structure4 ,the        
question as to why gold and silver and  
not other  commodities serve as money   
material falls outside the limits of the
  capitalist system4 ,we shall1         
therefore1 confine ourselves to summing 

up the most essential points4    ,since 
universal labor-time admits of          
quantitative differences only1  the     
object which is to serve as its specific
 incarnation must be  capable of        
representing purely quantitative        
differences1 i4 e41 it  must be         
homogeneous and uniform in quality      
throughout4 ,that is the  first         
condition a commodity must satisfy to   
perform the function of  a measure of   
value4 ,if commodities were estimated in
 oxen1 hides1  grain1 etc41 they would  
really have to be estimated in an ideal 
average  ox1 or average hide1 since     
there are qualitative differences       
between  an ox and an ox1 grain and     
grain1 hide and hide4 ,on the contrary1 
gold and silver1 as elementary          
substances1 are always the same1  and   
equal quantities of them represent1     
therefore1 values of equal              
magnitude4#aab ,the other condition     
which a commodity that is to serve  as a
 universal equivalent must satisfy and  

which follows directly from  its        
function of representing purely         
quantitative differences1 is that  it   
must be capable of being divided and    
re-united at will1 so that  money of    
account may be represented materially as
 well4 ,gold and  silver possess these  
properties to a superior degree4    ,as 
mediums of circulation1 gold and silver 
have this advantage over  other         
commodities1 that their high specific   
gravity which condenses  much weight in 
little space1 corresponds to their      
economic specific  gravity which        
condenses relatively much labor-time1 i4
 e4 a great  quantity of exchange value 
in a small volume4 ,this insures        
facility  of transport1 of transition   
from hand to hand and from one country  
to  another1 the ability to appear as   
rapidly as to disappear1 in short1  that
 material mobility which constitutes the
 sine qua non of the  commodity that is 
to serve as the perpetuum mobile of the 
process of  circulation4    ,the high   

specific value of the precious metals1  
their durability1  comparative          
indestructibility1 insusceptibility of  
oxidation through  the action of the    
air1 in the case of gold insolubility in
 acids  except in aqua regia1all these  
natural properties make the precious    
metals the natural material for         
hoarding4 ,peter ,martyr who seems to   
have been a great lover of chocolate1   
remarks1 therefore1 of the  cacao-bags  
which formed a species of ,mexican gold3
 8,o felicem monetam1  quae suavem      
utilemque praebet humano generi potum1  
et a tartarea peste  avaritiae suos     
immunes servat possessores1 quod suffodi
 aut diu servari  nequeat40#aac    ,the 
great importance of metals in general in
 the direct process of  production is   
due to the part they play as instruments
 of production4  ,apart from their      
scarcity1 the great softness of gold and
 silver as  compared with iron and even 
copper 7in the hardened state in which  
it  was used by the ancients71 makes    

them unfit for that application and     
deprives them1 therefore1 to a great    
extent1 of that property on which  the  
use-value of metals is generally based4 
,useless as they are in the  direct     
process of production1 they are easily  
dispensed with as means  of existence1  
as articles of consumption4 ,for that   
reason any desired  quantity of them may
 be absorbed by the social process of   
circulation  without disturbing the     
processes of direct production and      
consumption4  ,their individual         
use-value does not come in conflict with
 their  economic function4 ,furthermore1
 gold and silver are not only negatively
  superfluous1 i4 e4 dispensable        
articles1 but their aesthetic properties
  make them the natural material of     
luxury1 ornamentation1 splendor1        
festive occasions1 in short1 the        
positive form of abundance and wealth4  
,they appear1 in a way1 as spontaneous  
light brought out from the  underground 
world1 since silver reflects all rays of

 light in their  original combination1  
and gold only the color of highest      
intensity1  viz4 red light4 ,the        
sensation of color is1 generally        
speaking1 the most  popular form of     
aesthetic sense4 ,the etymological      
connection between  the names of the    
precious metals1 and the relations of   
colors1 in the  different               
,indo-,germanic languages has been      
established by ,jacob ,grimm  7see his  
,history of the ,german ,language74     
,finally1 the susceptibility of gold and
 silver of being turned from  coin into 
bullion1 from bullion into articles of  
luxury and vice versa1  i4 e4 the       
advantage they possess as against other 
commodities in not  being tied down to a
 definite1 exclusive form in which they 
can be  used1 makes them the natural    
material of money1 which must constantly
  change from one form to another4      
,nature no more produces money than it  
does bankers or discount  rates4 ,but   
since the capitalist system of          

production requires the  crystallization
 of wealth as a fetich in the form of a 
single article1  gold and silver appear 
as its appropriate incarnation4 ,gold   
and silver  are not money by nature1 but
 money is by nature gold and silver4 ,in
 the  first place1 the silver or gold   
money crystal is not only the product   
of the process of circulation1 but in   
fact its only final product4 ,in  the   
second place1 gold and silver are ready 
and direct products of  nature1 not     
distinguished by any difference of form4
 ,the universal  product of the social  
process or the social process itself as 
a product  is a peculiar natural        
product1 a metal hidden in the bowels of
 the  earth and extracted therefrom4#aad
    ,we have seen that gold and silver  
are unable to fulfill the  requirements 
which they are expected to meet in their
 capacity of  money1 viz4 to remain     
values of unvarying magnitude4 ,still1  
as  ,aristotle had already observed1    
they possess a more constant value than 

the average of other commodities4 ,apart
 from the universal effect of an        
appreciation or depreciation of the     
precious metals1 the fluctuations  in   
the ratio between the values of gold and
 silver has a special  importance1 since
 both serve side by side in the world   
market as money  material4 ,the purely  
economic causes of this change of value 
must be  traced to the change in the    
labor-time required for the production  
of  these metals2 conquests and other   
political upheavals which exercised  a  
great influence on the value of metals  
in the ancient world1 have  nowadays    
only a local and transitory effect4 ,the
 labor-time required  for the production
 of the metals will depend on the degree
 of their  natural scarcity1 as well as 
on the greater or less difficulty with  
which they can be obtained in a purely  
metallic state4 ,as a matter of  fact1  
gold is the first metal discovered by   
man4 ,this is due to the  fact that     
nature itself furnishes it partly in    

pure crystalline form1  individualized1 
free from chemical combination with     
other substances1  or1 as the alchemists
 used to say1 in a virgin state2 and so 
far as  it does not appear in that      
state1 nature does the technical work in
  the great gold washeries of rivers4   
,only the crudest kind of labor is  thus
 required of man in the extraction of   
gold1 either from rivers or  from       
alluvial deposits2 while the extraction 
of silver presupposes the  development  
of mining and a comparatively high      
degree of technical  skill generally4   
,for that reason the value of silver is 
originally  greater than that of gold in
 spite of the lesser absolute scarcity  
of  the former4 ,strabo's assertion that
 a certain ,arabian tribe gave ten      
pounds of gold for one pound of iron and
 two pounds of gold for one  pound of   
silver1 seems by no means incredible4   
,but as the productive  powers of labor 
in society are developed and the product
 of unskilled  labor rises in value as  

compared with the product of skilled    
labor2  as the earth's crust is more    
thoroughly broken up and the original   
superficial sources of gold supply give 
out1 the value of silver begins  to fall
 in proportion to that of gold4 ,at a   
given stage of development  of          
engineering and of the means of         
communication1 the discovery of  new    
gold or silver fields become the        
decisive factor4 ,in ancient ,asia  the 
ratio of gold to silver was #f to #a or 
#h to #a2 the latter ratio  prevailed in
 ,china and ,japan as late as the       
beginning of the nineteenth  century2   
#aj to #a1 the ratio in ,xenophon's     
time1 may be considered as  the average 
ratio of the middle period of antiquity4
 ,the exploitation  of the ,spanish     
silver mines by ,carthage and later by  
,rome had about the  same effect in     
antiquity1 as the discovery of the      
,american mines in  modern ,europe4 ,for
 the period of the ,roman empire #ae or 
#af to #a may be  assumed as a rough    

average1 although we frequently find    
cases of still  greater depreciation of 
silver in ,rome4 ,the same movement     
beginning  with the relative            
depreciation of gold and concluding with
 the fall  in the value of silver1 is   
repeated in the following epoch which   
has  lasted from the ,middle ,ages to   
the present time4 ,as in ,xenophon's    
times  the average ratio in the ,middle 
,ages was #aj to #a1 changing to #af or 
#ae to #a in consequence of the         
discovery of the ,american mines4 ,the  
discovery of the ,australian1           
,californian and ,columbian gold sources
  makes a new fall in the value of gold 
probable4#aae      ,c4 ,,theories ,,of  
,,the ,,medium ,,of ,,circulation ,,and 
,,of ,,money4    ,as the universal      
thirst for gold prompted nations and    
princes in the  sixteenth and           
seventeenth centuries1 the period of    
infancy of modern  bourgeois society1 to
 crusades beyond the sea in search of   
the golden  grail1#aaf the first        

interpreters of the modern world1 the   
founders  of the monetary system1 of    
which the mercantile system is but a    
variation1 proclaimed gold and silver1  
i4 e4 money1 as the only thing  that    
constitutes wealth4 ,they were quite    
right when1 from the point  of view of  
the simple circulation of commodities1  
they declared that  the mission of      
bourgeois society was to make money1 i4 
e4 to build up  everlasting treasures   
which neither moth nor rust could eat4  
,it is  no argument with the monetary   
system to say that a ton of iron whose  
price is #c constitutes a value of the  
same magnitude as #c worth  of gold4    
,the point here is not the magnitude of 
the exchange value1  but as to what     
constitutes its adequate form4 ,if the  
monetary and  mercantile systems single 
out international trade and the         
particular  branches of national        
industry directly connected with that   
trade as  the only true sources of      
wealth or money1 it must be borne in    

mind1  that in that period the greater  
part of national production was still   
carried on under forms of feudalism and 
was the source from which  producers    
drew directly their means of            
subsistence4 ,products1 as a  rule1 were
 not turned into commodities nor1       
therefore1 into money2  they did not    
enter into the general social           
interchange of matter2 did  not1        
therefore1 appear as embodiments of     
universal abstract labor2  and did not1 
in fact1 constitute bourgeois wealth4   
,money as the end  and object of        
circulation is exchange value or        
abstract wealth1 but  it is no material 
element of wealth and does not form the 
directing  goal and impelling motive of 
production4 ,true to the conditions as  
they prevailed in that primitive stage  
of bourgeois production1 those          
unrecognized prophets held fast to the  
pure1 tangible1 and resplendent  form of
 exchange value1 to its form of a       
universal commodity as against  all     

special commodities4 ,the proper        
bourgeois economic sphere of that       
period was the sphere of the circulation
 of commodities4 ,hence1 they  judged   
the entire complex process of bourgeois 
production from the  point of view of   
that elementary sphere and confounded   
money with  capital4 ,the unceasing war 
of modern economists against the        
monetary  and mercantile system is      
mostly due to the fact that this system 
blabs  out in brutally naive fashion1   
the secret of bourgeois production1 viz4
  its subjection to the domination of   
exchange value4 ,ricardo1 though  wrong 
in the application he makes of it1      
remarks somewhere that even in  times of
 famine1 grain is imported not because  
the nation is starving1  but because the
 grain dealer is making money4 ,in its  
criticism of the  monetary and          
mercantile system1 political economy1 by
 attacking that  system as a mere       
illusion and as a false theory1 fails to
 recognize in  it the barbaric form of  

its own fundamental principles4         
,furthermore1  this system has not only 
an historic justification1 but within   
certain spheres of modern economy       
retains until now the full rights  of   
citizenship4 ,at all stages of the      
bourgeois system of production  in which
 wealth assumes the elementary form of a
 commodity1 exchange  value assumes the 
elementary form of money and in all     
phases of the  process of production    
wealth reassumes for a moment the       
universal  elementary commodity form4   
,even at the most advanced stage of     
bourgeois  economy1 the specific        
functions of gold and silver to serve as
 money1  in contradistinction to their  
function of mediums of circulationa     
function which distinguishes them from  
all other commoditiesis not  done away  
with1 but only limited1 hence the       
monetary and mercantile  system retains 
its right of citizenship4 ,the ,catholic
 fact that gold  and silver are         
contrasted with other profane           

commodities as the direct  incarnation  
of social labor1 that is as the         
expression of abstract  wealth1         
naturally offends the ,protestant point 
d'honneur of bourgeois  economy1 and out
 of fear of the prejudices of the       
monetary system  it had lost for a long 
time its grasp of the phenomena of money
  circulation1 as will be shown         
presently4    ,it was quite natural     
that1 contrary to the monetary and      
mercantile  system which knew money only
 in its form of a crystallized product  
of circulation1 classical political     
economy should have conceived  money    
first of all in its fluent form of      
exchange value arising and  disappearing
 within the process of the metamorphosis
 of commodities4  ,and since the        
circulation of commodities is regarded  
exclusively in the  form of ,c,m,c and  
the latter in its turn1 exclusively in  
its aspect of  a dynamic unity of sale  
and purchase1 money comes to be regarded
 in  its capacity of a medium of        

circulation as opposed to its capacity  
of  money4 ,and when that medium of     
circulation is isolated in its function 
of coin1 it turns1 as we have seen1 into
 a token of value4 ,but since  classical
 political economy had to deal with     
metallic circulation as  the prevailing 
form of circulation1 it defined metallic
 money as coin1  and metallic coin as a 
mere token of value4 ,in accordance with
 the  law governing the circulation of  
tokens of value1 the proposition was    
advanced that the prices of commodities 
depend on the quantity of money  in     
circulation instead of the opposite     
principle that the quantity of  money in
 circulation depends on the prices of   
commodities4 ,we find  this view more or
 less clearly expressed by the ,italian 
economists of  the seventeenth century2 
,,locke now asserts1 now denies that    
principle2  it is clearly elaborated in 
the 8,spectator0 7of ,october #ai1      
#agaa7  by ,,montesquieu ,,and ,,hume4  
,since ,hume was by far the most        

important  representative of this theory
 in the eighteenth century1 we shall    
commence our review with him4    ,under 
certain assumptions1 an increase or     
decrease in the quantity  either of the 
metallic money in circulation1 or of the
 tokens of value  in circulation seems  
to affect uniformly the prices of       
commodities4  ,with each fall or rise of
 the value of gold or silver in which   
the  exchange values of commodities are 
estimated as prices1 there is a rise  or
 fall of prices1 because of the change  
in their measure of value2 as  a result 
of the rise or fall of prices1 a greater
 or smaller quantity  of gold and silver
 is circulating as coin4 ,but the       
apparent phenomenon  is the fall in     
pricesthe exchange value of commodities 
remaining the  sameaccompanied by an    
increased or diminished quantity of the 
medium  of circulation4 ,on the other   
hand1 if the quantity of tokens of value
  rises above or falls below its        
required level1 it is forcibly reduced  

to the latter by a fall or rise of      
prices4 ,in either case the same  effect
 seems to be brought about by the same  
cause1 and ,hume holds fast  to this    
semblance4    ,every scientific inquiry 
into the relation between the volume of 
the  circulating medium and the movement
 of prices must assume the value  of the
 money material as given4 ,hume1 on the 
contrary1 considers  exclusively periods
 of revolution in the value of the      
precious metals1  i4 e4 revolutions in  
the measure of value4 ,the rise of      
prices which  occurred simultaneously   
with the increase of metallic money     
after the  discovery of the ,american   
mines forms the historical background of
 his  theory1 while his polemic against 
the monetary and mercantile system      
furnishes its practical motive4 ,the    
importation of precious metals can      
naturally increase while their cost of  
production remains the same4  ,on the   
other hand1 a decrease in their value1  
i4 e4 in the labor-time  required for   

their production will reveal itself     
first of all in  their increased        
imports4 ,hence1 said the later         
followers of ,hume1 a  decrease in the  
value of the precious metals1 reveals   
itself in an  increased volume of the   
circulating medium1 and the increased   
volume  of the latter is shown in the   
rise of prices4 ,as a matter of fact1   
however1 the rise in price affects only 
exported commodities1 which  are        
exchanged for gold and silver as        
commodities and not as mediums  of      
circulation4 ,thus1 the prices of these 
commodities1 which are now  estimated in
 gold and silver of lower value1 rise as
 compared with  the prices of all other 
commodities whose exchange value        
continues  to be estimated in gold or   
silver according to the standard of     
their  old cost of production4 ,this    
twofold appraisement of the exchange    
values of commodities in the same       
country can naturally be only           
temporary1 and the gold and silver      

prices must become equalized in  the    
proportions determined by the exchange  
values themselves1 so that  finally the 
exchange values of all commodities come 
to be estimated  according to the new   
value of the money material4 ,the       
development of  this process1 as well as
 the ways and means in which the        
exchange value  of commodities asserts  
itself within the limits of the         
fluctuations  of market prices1 do not  
fall within the scope of this work4 ,but
 that  this equalization takes place but
 gradually in the early periods of      
development of bourgeois production and 
extends over long periods of  time1     
never keeping pace with the increase of 
cash in circulation1  has been          
strikingly demonstrated by new critical 
investigations of  the movement of      
prices of commodities in the sixteenth  
century4#aag  ,the favorite references  
of ,hume's followers to the rise of     
prices  in ancient ,rome in consequence 
of the conquests of ,macedonia1 ,egypt  

and ,asia ,minor1 are quite irrelevant4 
,the characteristic method of  antiquity
 of suddenly transferring hoarded       
treasures from one country  to another1 
which was accomplished by violence and  
thus brought about  a temporary         
reduction of the cost of production of  
precious metals  in a certain country by
 the simple process of plunder1 affects 
just  as little the intrinsic laws of   
money circulation1 as the gratuitous    
distribution of ,egyptian and ,sicilian 
grain in ,rome affected the  universal  
law governing the price of grain4 ,hume1
 as well as all  other writers of the   
eighteenth century1 was not in          
possession of the  material necessary   
for the detailed observation of the     
circulation  of money4 ,this material1  
which first becomes available with the  
full  development of banking1 includes  
in the first place a critical history   
of prices of commodities1 and in the    
second1 official and current  statistics
 relating to the expansion and          

contraction of the circulating  medium1 
the imports and exports of the precious 
metals1 etc4 ,hume's  theory of         
circulation may be summed up in the     
following propositions3  #a4 ,the prices
 of commodities in a country are        
determined by the  quantity of money    
existing there 7real or symbolic money72
 #b4 ,the  money current in a country   
represents all the commodities to be    
found  there4 ,in proportion 8as there  
is more or less of this representation10
  i4 e4 of money1 8there goes a greater 
or less quantity of the thing           
represented to the same quantity of it02
 #c4 ,if commodities increase  in       
quantity1 their price falls or the value
 of money rises4 ,if money  increases in
 quantity1 then1 on the contrary1 the   
price of commodities  rises and the     
value of money declines4#aah    8,the   
dearness of everything10 says ,hume1    
8from plenty of money1 is a             
disadvantage1 which attends an          
established commerce1 and sets bounds   

to it in every country1 by enabling the 
poorer states to undersell  the richer  
in all foreign markets40#aai 8,where    
coin is in greater  plenty2 as a greater
 quantity of it is required to represent
 the same  quantity of goods2 it can    
have no effect1 either good or bad1     
taking  a nation within itself2 any more
 than it would make an alteration on  a 
merchant's books1 if1 instead of the    
,arabian method of notation1  which     
requires few characters1 he should make 
use of the ,roman1 which  requires a    
great many4 ,nay1 the greater quantity  
of money1 like the  ,roman characters1  
is rather inconvenient1 and requires    
greater trouble  both to keep and       
transport it40#abj ,in order to prove   
anything1 ,hume  should have shown that 
under a given system of notation the    
quantity  of characters used does not   
depend on the magnitude of the numbers1 
but that on the contrary1 the magnitude 
of the numbers depends on  the quantity 
of the characters used4 ,it is perfectly

 true that there  is no advantage in    
estimating or 8counting0 values of      
commodities  in depreciated gold and    
silver1 and that is the reason why      
nations  have always found it more      
convenient with the growth of the value 
of the commodities in circulation to    
count in silver in preference  to       
copper1 and in gold rather than in      
silver4 ,in proportion as the  nations  
became richer1 they converted the less  
valuable metals into  subsidiary coin   
and the more valuable ones into money4  
,furthermore1  ,hume forgets that in    
order to count values in gold and       
silver1 it is  not necessary that either
 gold or silver should be 8on hand40    
,money of  account and the medium of    
circulation are identical with him and  
both  are 8coin40 ,hume concludes that a
 rise or fall of prices depends on  the 
quantity of money in circulation1       
because a change in the value  of the   
measure of value1 i4 e4 of the precious 
metals which serve as  money of account1

 causes a rise or fall of prices and1   
consequently1  also a change in the     
amount of money in circulation1 the     
rapidity of  the latter remaining the   
same4 ,that not only the quantity of    
gold and  silver increased in the       
sixteenth and seventeenth centuries1 but
 that  the cost of their production had 
declined at the same time1 ,hume could  
know from the closing up of the         
,european mines4 ,in the sixteenth and  
seventeenth centuries the prices of     
commodities increased in ,europe  with  
the influx of the mass of ,american gold
 and silver2 hence the  prices of       
commodities in every land are determined
 by the mass of  gold and silver to be  
found there4 ,this was ,hume's first    
8necessary  consequence40#aba ,in the   
sixteenth and seventeenth centuries     
prices  had not risen uniformly with the
 increase of the quantity of precious   
metals2 more than half a century passed 
before any change in  prices became     
perceptible1 and even then it took a    

long time before  the exchange values of
 commodities came to be generally       
estimated  according to the depreciated 
value of gold and silver1 i4 e4 before  
the  revolution affected the general    
price level4 ,hence1 concludes ,hume1   
who1 quite contrary to the principles of
 his philosophy1 generalizes            
indiscriminately from imperfectly       
observed facts1 prices of commodities   
or the value of money depend not on the 
total amount of money to be  found in   
the country1 but rather on the quantity 
of gold and silver  which is actually in
 circulation2 but in the long run all   
the gold  and silver in the country must
 be absorbed by circulation in the  form
 of coin4#abb ,it is clear that if gold 
and silver have a value  of their own1  
then1 apart from all other laws of      
circulation1 only a  definite quantity  
of gold and silver can circulate as the 
equivalent  of commodities of a given   
value4 ,if1 therefore1 every quantity of
 gold  and silver which happens to be in

 a country must enter the sphere of     
exchange of commodities as a medium of  
circulation without regard  to the total
 value of the commodities1 then gold and
 silver have no  intrinsic value and are
 in fact no real commodities4 ,that is  
,hume's  third 8necessary consequence40 
,he makes commodities enter the process 
of circulation without price and gold   
and silver without value4 ,that  is the 
reason why he never speaks of the value 
of commodities and of  gold1 but only of
 their relative quantities4 ,locke had  
already said  that gold and silver had  
merely an imaginary or conventional     
value2 the  first brutal expression of  
opposition to the assertion of the      
monetary  8system0 that gold and silver 
alone have true value4 ,that gold and   
silver owe their character of money to  
the function they perform in  the social
 process of exchange is interpreted to  
the effect that they  owe their own     
value and therefore the magnitude of    
their value to a  social function4#abc  

,gold and silver are thus worthless     
things1 which1  however1 acquire a      
fictitious value within the sphere of   
circulation  as representatives of      
commodities4 ,they are converted by the 
process  of circulation not into money1 
but into value4 ,this value of theirs is
  determined by the proportion between  
their own volume and that of the        
commodities1 since the two must balance 
each other4 ,thus1 ,hume makes  gold and
 silver enter the world of commodities  
as non-commodities2  but as soon as they
 appear in the form of coin1 he turns   
them1 on  the contrary1 into mere       
commodities1 which must be exchanged for
  other commodities by simple barter4   
,in that manner1 if the world of        
commodities consisted of but one        
commodity1 say one million quarters  of 
grain1 the idea would work itself out   
very simply2 viz41 one  quarter of grain
 would be exchanged for two ounces of   
gold if there  were altogether two      
million ounces of gold1 and for twenty  

ounces of  gold1 if there were a total  
of twenty million ounces1 the price of  
the  commodity and the value of money   
rising or falling in inverse ratio to   
the quantity of gold in existence4#abd  
,but the world of commodities  consists 
of an endless variety of use-values1    
whose relative values are  by no means  
determined by their relative quantities4
 ,how1 then1 does  ,hume conceive this  
exchange of the volume of commodities   
for the volume  of gold8 ,he contents   
himself with the meaningless1 hollow    
idea that  every commodity is exchanged 
as an aliquot part of the entire volume 
of  commodities for a corresponding     
aliquot part of the volume of gold4 ,the
  process of the movement of commodities
 due to the antagonism between  exchange
 value and use-value which commodities  
bear within themselves1  and which      
manifests itself in the circulation of  
money1 becoming  crystallized in        
different forms of the latter1 is thus  
done away with1  giving place to the    

imaginary mechanical equalization       
process between  the quantity of        
precious metals to be found in a country
 and the volume  of commodities existing
 there at the same time4    ,,sir       
,,james ,,steuart opens his inquiry into
 the nature of coin and  money with an  
elaborate criticism of ,hume and        
,montesquieu4#abe ,he  is really the    
first to ask this question3 is the      
quantity of current  money determined by
 the prices of commodities1 or are the  
prices of  commodities determined by the
 quantity of current money8 ,although   
his  analysis is obscured by his        
fantastic conception of the measure of  
value1 his vacillating view of exchange 
value and by reminiscences  of the      
mercantile system1 he discovers the     
essential forms of money  and the       
general laws of the circulation of      
money1 because he makes  no attempt at a
 mechanical separation of commodities   
from money1 but  proceeds to develop its
 different functions from the different 

aspects  of the exchange of commodities4
 ,money is used1 he says1 for two       
principal purposes3 for the payment of  
debts and for the purchase of  what one 
needs2 the two together form 8ready     
money demands40 ,the state  of trade and
 industry1 the mode of living1 the      
customary expenditures  of the people1  
taken all together regulate and         
determine the volume  of 8ready money   
demands10 i4 e4 the number of           
8alienations40 ,in order  to effect this
 multitude of payments1 a certain       
proportion of money  is required4 ,this 
proportion may increase or decrease     
according to  circumstances1 even while 
the number of alienations remains the   
same4  ,at any rate1 the circulation of 
a country can absorb only a definite    
quantity of money4#abf 8,it is the      
complicated operations of demand  and   
competition which determines the        
standard price of everything02  the     
latter 8does not in the least depend on 
the quantity of gold and  silver in the 

country40#abg ,what then will become of 
the gold and  silver that is not        
required as coin8 ,they are hoarded or  
used in the  manufacture of articles of 
luxury4 ,if the quantity of gold and    
silver  fall below the level required   
for circulation1 symbolic money or other
  substitutes take its place4 ,if a     
favorable rate of exchange brings  about
 a surplus of money in the country and  
cuts off at the same time  the demand   
for its shipment abroad1 it will        
accumulate in strong-boxes1  where the  
8riches will remain without producing   
more effect than if  they had remained  
in the mine40    ,the second law        
discovered by ,steuart is that of the   
reflux of credit  circulation to its    
starting point4 ,finally1 he works out  
the effects  which the disparity of the 
rates of interest in different countries
  produces upon the international export
 and import of precious  metals4 ,the   
last two points we mention here only for
 the sake of  completeness1 since they  

have but a remote bearing on the subject
 of  our discussion4#abh ,symbolic money
 or credit money,steuart does not  as   
yet distinguish between the two forms of
 moneymay take the place  of precious   
metals as a means of purchase or means  
of payment in the  sphere of home       
circulation1 but never in the world     
market4 ,paper notes  are therefore     
8money of the society10 while gold and  
silver are 8money  of the world40#abi   
,it is characteristic of nations with an
 8historical0 development1 in  the sense
 in which the term is used by the       
historical school of law1  to keep      
forgetting their own history4 ,although 
the controversy as to  the relation of  
prices of commodities to the volume of  
the circulating  medium has been        
continually agitating ,parliament for   
the last half a  century1 and has       
precipitated in ,england thousands of   
pamphlets1 large  and small1 ,steuart   
has remained even more of a 8dead dog0  
than ,spinoza  seemed to be to ,moses   

,mendelson in ,lessing's time4 ,even the
 latest  writer on the history of       
8currency10 ,maclaren1 makes ,adam      
,smith the  original author of          
,steuart's theory1 and ,ricardo of      
,hume's theory4#acj  ,while ,ricardo    
elaborated ,hume's theory1 ,adam ,smith 
registered the  results of ,steuart's   
investigations as dead facts4 ,adam     
,smith applied  the ,scotch saying that 
8mony mickles mak a muckle0 even to his 
spiritual wealth1 and therefore         
concealed with petty care the sources   
to which he owed the little out of which
 he tried to make so much4  ,more than  
once he prefers to break off the point  
of the discussion1  whenever he feels   
that an attempt on his part clearly to  
formulate the  question would compel him
 to settle his accounts with his        
predecessors4  ,so in the case of the   
money theory4 ,he tacitly adopts        
,steuart's theory  when he says that the
 gold and silver existing in a country  
is partly  utilized as coin2 partly     

accumulated in the form of reserve funds
 for  merchants in countries without    
banks1 or of bank reserves in countries 
with a credit currency2 partly serves as
 a hoard for the settling of            
international payments2 partly is turned
 into articles of luxury4 ,he  passes   
over without remark the question as to  
the quantity of coin in  circulation1   
treating money quite wrongly as a mere  
commodity4#aca  ,his vulgarizer1 the    
dull ,j4 ,b4 ,say1 whom the ,french have
 proclaimed  prince de la sciencelike   
,johann ,christoph ,gottsched1 who      
proclaimed  his ,schnaich a ,homer and  
himself a ,pietro ,aretino to the terror
  principum and lux mundihas with great 
pomp raised this not altogether         
innocent oversight of ,adam ,smith to a 
dogma4#acb ,it must be said1  however1  
that his hostile attitude to the        
illusions of the mercantile  system     
prevented ,adam ,smith from taking an   
objective view of the  phenomena of     
metallic circulation1 while his views on

 credit money are  original and deep4   
,as in the eighteenth century           
petrification theories  there is always 
felt the presence of an undercurrent    
which springs from  either a critical or
 apologetic attitude toward the biblical
 tradition  of the flood1 so there is   
concealed behind all the money theories 
of  the eighteenth century a secret     
struggle with the monetary system1 the  
ghost which had stood guard over the    
cradle of bourgeois economy and         
continued to throw its shadow over      
legislation4    ,in the nineteenth      
century1 inquiries into the nature of   
money were not  prompted directly by    
phenomena of metallic circulation1 but  
rather by  those of bank-note           
circulation4 ,the former was touched    
upon only in  order to discover the laws
 governing the latter4 ,the suspension  
of  specie payments by the ,bank of     
,england in #agig1 the rise of prices of
  many commodities which followed it1   
the fall of the mint price of gold      

below its market price1 the depreciation
 of bank-notes1 especially  since #ahji1
 furnished the direct practical occasion
 for a party  struggle in parliament and
 a theoretical tournament outside of it1
  both conducted with like passion4 ,the
 historical background for the          
controversy was furnished by the history
 of paper money during the  eighteenth  
century3 the fiasco of ,law's bank2 the 
depreciation of the  provincial         
bank-notes of the ,english ,colonies in 
,north ,america from the  beginning to  
the middle of the eighteenth century    
which went hand in  hand with the       
increase in the number of tokens of     
value2 further1 the  ,continental bills 
issued as legal tender by the ,american 
government  during the ,war of          
,independence2 and finally1 the         
experiment with the  ,french assignats  
carried out on a still larger scale4    
,most of the  ,english writers of that  
period confound the circulation of      
bank-notes1  which is governed by quite 

different laws1 with the circulation of 
tokens of value or government legal     
tender paper money2 and while they      
claim to explain the phenomena of this  
legal tender circulation by the  laws of
 metallic circulation1 they proceed1 as 
a matter of fact1 just  the opposite    
way1 viz41 deducting laws for the latter
 from phenomena  observed in connection 
with the former4 ,we omit all the       
numerous  writers of the period of      
#ahjj-ahji and turn directly to         
,,ricardo1 both  because he embodies the
 views of his predecessors1 which he    
formulates  with greater precision1 and 
because the shape he gave to the theory 
of  money governs ,english bank         
legislation until this moment4 ,ricardo1
 like  his predecessors1 confounds the  
circulation of bank-notes1 or credit    
money1 with the circulation of mere     
tokens of value4 ,the fact which        
impresses him most is the depreciation  
of paper currency accompanied by  the   
rise of prices of commodities4 ,what the

 ,american mines had been to  ,hume1 the
 paper-bill presses in ,threadneedle    
street were to ,ricardo1  and he himself
 expressly identifies the two factors at
 some place in  his works4 ,his first   
writings1 which dealt exclusively with  
the money  question belong to the time  
of the most violent controversy between 
the ,bank of ,england1 which had on its 
side the ministers and the war  party1  
and its opponents about whom were       
centered the parliamentary  opposition1 
the ,whigs and the ,peace party4 ,they  
appeared as immediate  forerunners of   
the famous ,report of the ,bullion      
,committee of #ahaj1 in  which          
,ricardo's views were adopted4#acc ,the 
singular circumstance1  that ,ricardo   
and his adherents1 who held money to be 
merely a token  of value1 are called    
bullionists1 is due not only to the name
 of that  committee1 but also to the    
nature of their theory4 ,in his work on 
political economy1 ,ricardo repeated and
 developed further the same  views1 but 

nowhere has he investigated the nature  
of money as such1 as  he had done in the
 case of exchange value1 profit1 rent1  
etc4    ,to begin with1 ,ricardo        
determines the value of gold and silver1
 like  that of all other commodities1 by
 the quantity of labor-time embodied  in
 them4#acd ,by means of them1 as        
commodities of a given value1 the       
values of all other commodities are     
measured4#ace ,the volume of the        
circulating medium in a country is      
determined by the value of the  unit of 
measure of money on the one hand1 and by
 the sum total of  the exchange values  
of commodities1 on the other4 ,this     
quantity is  modified by economy in the 
method of payment4#acf ,since the       
quantity  of money1 of a given value1   
which can be absorbed by circulation1   
is thus determined and since the value  
of money within the sphere of           
circulation manifests itself only in its
 quantity1 it follows that  mere tokens 
of value1 if issued in proportions      

determined by the value  of money1 may  
replace it in circulation1 and in fact1 
8a currency is  in its most perfect     
state when it consists wholly of paper  
money1 but  of paper money of an equal  
value with the gold which it professes  
to represent40#acg ,so far ,ricardo     
determines the volume of the            
circulating medium by the prices of     
commodities1 assuming the value of      
money to be given2 money as a token of  
value means with him a token of  a      
definite quantity of gold and not a mere
 worthless representative of            
commodities as was the case with ,hume4 
,when ,ricardo suddenly gets off the    
straight path of his presentation  and  
takes the very opposite view1 he does so
 to turn his attention  to the          
international circulation of precious   
metals and thus brings  confusion into  
the problem by introducing              
considerations that are  foreign to the 
subject4 ,let us follow his own course  
of reasoning1 and1  in order to remove  

everything that is artificial and       
incidental1 let  us assume that the gold
 and silver mines are located in the    
interior  of the countries in which the 
precious metals circulate as money4     
,the only inference which follows from  
,ricardo's reasoning as so far          
developed1 is that1 the value of gold   
being given1 the quantity of  money in  
circulation will be determined by the   
prices of commodities4  ,thus1 at a     
given moment1 the quantity of gold in   
circulation in a  country is simply     
determined by the exchange value of the 
commodities  in circulation4 ,let us    
suppose now that the sum total of these 
exchange  values has declined either    
because there are less commodities      
produced  at the old exchange values1 or
 because1 in consequence of an increased
  productivity of labor1 the same       
quantity of commodities has a smaller   
value4 ,or1 we may assume on the        
contrary that the sum total of exchange 
values has increased1 either because the

 quantity of commodities  has increased 
while the cost of their production has  
remained the  same1 or because the value
 of the same or of a smaller quantity of
  commodities has risen in consequence  
of a diminished productivity of  labor4 
,what becomes in either case of the     
given quantity of metal  in circulation8
 ,if gold is money merely because it is 
current as a  medium of circulation2 if 
it is compelled to remain in circulation
  like government legal tender paper    
money 7and that is what ,ricardo has  in
 mind71 then the quantity of money in   
circulation will rise above  the normal 
level1 as determined by the exchange    
value of the metal1  in the former case1
 and fall below that level in the       
latter4 ,although  possessing a value of
 its own1 gold will become in the former
 case  a token of a metal of lower      
exchange value than its own1 and in the 
latter1 a token of a metal of higher    
value4 ,in the former case it will      
remain as a token of value less than its

 own1 in the latter greater  than its   
own 7again an abstract deduction from   
legal tender paper  money74 ,in the     
former case it is the same as though    
commodities were  estimated in a metal  
of lower value than gold1 in the latter1
 as though  they were estimated in a    
metal of higher value4 ,in the former   
case1  prices of commodities would rise 
therefore1 in the latter they would     
fall4 ,in either case the movement of   
prices1 their rise or fall1 would       
appear as the effect of a relative      
expansion or contraction of the  volume 
of gold in circulation above or below   
the level corresponding  to its own     
value1 i4 e4 above or below the normal  
quantity which is  determined by the    
proportion between its own value and    
that of the  commodities in circulation4
    ,the same process would take place  
if the sum total of the prices of  the  
commodities in circulation remained     
unchanged1 while the volume  of gold in 
circulation came to be below or above   

the right level3 the  former in case the
 gold coin worn out in the course of    
circulation  were not replaced by the   
production of a corresponding quantity  
of  gold in the mines2 the latter1 if   
the output of the mines exceeded the    
requirements of circulation4 ,in either 
case it is assumed that the cost  of    
production of gold or its value remain  
the same4    ,to sum up3 the money in   
circulation is at its normal level1 when
 its  volume is determined by its own   
bullion value1 the exchange value of    
commodities being given4 ,it rises above
 that level1 bringing about a  fall in  
the value of gold below its own bullion 
value and a rise of  prices of          
commodities1 whenever the sum total of  
the exchange values of  commodities     
declines1 or the output of gold from the
 mines increases4  ,it sinks below its  
right level1 leading to a rise of gold  
above its  own bullion value and to a   
fall of prices of commodities1 whenever 
the  sum total of the exchange values of

 the commodities or the gold output  of 
the mines is not sufficient to replace  
the quantity of outworn  gold4 ,in      
either case the gold in circulation     
becomes a token of value  greater or    
smaller than that it really possesses4  
,it may become an  appreciated or       
depreciated token of itself4 ,as soon as
 all commodities  would come to be      
estimated in gold of this new value and 
the general  price level would          
accordingly rise or fall1 the quantity  
of current  gold would again answer the 
requirements of circulation 7a          
consequence  which ,ricardo emphasizes  
with great pleasure71 but would be at   
variance  with the cost of production of
 the precious metals and1 therefore1    
with their relation as commodities to   
all other commodities4 ,according  to   
the general ,ricardian theory of        
exchange value1 the rise of gold  above 
its exchange value1 i4 e41 above the    
value as determined by the  labor-time  
contained in it1 would cause an increase

 in the production  of gold until the   
increased output of it would reduce its 
value to  the proper magnitude4 ,and in 
the same manner1 a fall of gold below   
its value would cause a decline in its  
production until its value  rose again  
to its proper magnitude4 ,by these      
opposite movements the  discrepancy     
between the bullion value of gold and   
its value as a medium  of circulation   
would disappear1 the normal level of the
 volume of gold  in circulation would be
 restored1 and the price level would    
again  correspond to the measure of     
value4 ,these fluctuations in the value 
of  gold in circulation would to the    
same extent affect gold in the form  of 
bullion1 because by assumption1 all gold
 that is not utilized as an  article of 
luxury1 is supposed to be in            
circulation4 ,since gold itself  may    
become1 both as coin and bullion1 a     
token of value of greater  or smaller   
magnitude than its bullion value1 it is 
self understood  that convertible       

bank-notes in circulation have to share 
the same  fate4 ,although bank-notes are
 convertible1 i4 e4 their real value and
  nominal value agree1 8the aggregate   
currency consisting of metal and of     
convertible notes0 may appreciate or    
depreciate according as to whether  it  
rises or falls1 for reasons already     
stated1 above or below the level        
determined by the exchange value of the 
commodities in circulation  and the     
bullion value of gold4 ,inconvertible   
paper money1 has1 from  this point of   
view1 only that advantage as against    
convertible paper  money1 that it may   
depreciate in a twofold manner4 ,it may 
fall below  the value of the metal which
 it is supposed to represent1 because it
  has been issued in too great quantity1
 or it may depreciate because  the metal
 it represents has itself fallen in     
value4 ,this depreciation1  not of paper
 as compared with gold1 but of gold and 
paper together1  or of the aggregate    
currency of a country1 is one of the    

principal  discoveries of ,ricardo1     
which ,lord ,overstone and ,co4 pressed 
into their  service and made a          
fundamental principle of ,sir ,robert   
,peele's ,bank  legislation of #ahdd and
 #ahde4    ,what should have been proven
 was that the price of commodities or   
the  value of gold depends on the       
quantity of gold in circulation4 ,the   
proof consists in the assumption of what
 is to be proven1 viz4 that  any        
quantity of the precious metal employed 
as money must become a  medium of       
circulation or coin1 and thereby a token
 of value for the  commodities in       
circulation1 no matter in what          
proportion to its own  intrinsic value  
and no matter what the total value of   
those commodities  may be4 ,to put it   
differently1 the proof consists in      
overlooking all  the other functions    
which money performs besides its        
function of a  medium of circulation4   
,when hard pressed1 as in his           
controversy with  ,bosanquet1 ,ricardo1 

completely under the influence of the   
phenomenon of  depreciated tokens of    
value caused by their quality1 takes    
recourse to  dogmatic assurances4#ach   
,if ,ricardo had built up this theory by
 abstract reasoning1 as we  have done it
 here1 without introducing concrete     
facts and incidental  matters which only
 distract his attention from the main   
question1 its  hollowness would be      
striking4 ,but he takes up the entire   
subject in its  international aspect4   
,it will be easy to prove1 however1 that
 the  apparent magnitude of scale does  
not make his fundamental ideas less     
diminutive4    ,his first proposition   
was as follows3 the volume of metallic  
currency  is normal when it is          
determined by the total value of the    
commodities  in circulation estimated in
 its bullion value4 ,expressed so as to 
apply to international conditions1 it   
reads thus3 in a normal state of        
circulation every country possesses a   
quantity of money 8according to  the    

state of its commerce and wealth40      
,money circulates at a value            
corresponding to its real value or to   
its cost of production1 i4 e4  it has   
the same value in all countries4#aci    
,that being the case1  8there could be  
no temptation offered to either for     
their importation  or exportation40#adj 
,there would thus be established a      
balance of  currencies between the      
different countries4 ,the normal level  
of a  national currency is now expressed
 in terms of an international  balance  
of currencies1 which practically amounts
 to the statement that  nationality does
 not change anything in a universal     
economic law4 ,we  have reached again   
the same fatal point as before4 ,how is 
the normal  level disturbed8 ,or1       
speaking in terms of the new            
terminology1 how is  the international  
balance of currencies disturbed8 ,or1   
how does money  cease to have the same  
value in all countries8 ,or1 finally1   
how does  it cease to pass at its own   

value in every country8 ,we have seen   
that  the normal level was disturbed by 
an increase or decrease of the volume   
of money in circulation while the total 
value of commodities remained  the same2
 or1 because the quantity of money in   
circulation remained  the same while the
 exchange values of commodities rose or 
fell4 ,in the  same manner1 the         
international level1 determined by the  
value of the  metal itself1 is disturbed
 by an increase in the quantity of gold 
in a  country brought about by the      
discovery of new gold mines1#ada or by  
an increase or decrease of the total    
exchange-value of the circulating       
commodities in any particular country4  
,just as in the former case the  output 
of the precious metals decreased or     
increased according as  to whether it   
was necessary to contract or expand the 
currency and  thereby to lower or raise 
prices1 so are the same effects produced
  now by export and import from one     
country to another4 ,in the country  in 

which prices would rise or the value of 
gold would fall below the  bullion value
 in consequence of a redundant currency1
 gold would be  depreciated1 and the    
prices of commodities would rise as     
compared with  other countries4 ,gold   
would1 therefore1 be exported1 while    
commodities  would be imported1 and vice
 versa4 ,just as in the former case the 
output of gold1 so now the import or    
export of gold and1 with it1 the  rise  
or fall of prices of commodities would  
continue until1 as we would  have said  
before1 the right value relation would  
be restored between  the metal and      
commodities1 or as we shall say now1 the
 international  balance of currencies   
would be restored4 ,just as in the      
former case  the production of gold     
increased or decreased because gold     
stood  above or below its value1 so now 
the international migration of gold     
would take place for the same reason4   
,just as in the former case1  every     
change in the production of the         

circulating metal affected its  quantity
 and1 thereby1 prices1 so would the same
 effect be produced  now by             
international import and export4 ,as    
soon as the relative values  of gold and
 commodities or the normal quantity of  
currency would be  restored1 no further 
production would take place in the      
former case1  and no further export or  
import in the latter1 except in so far  
as  would be necessary to replace       
outworn coin and to meet the demand of  
manufacturers of articles of luxury4 ,it
 follows 8that the temptation to  export
 money in exchange for goods1 or what is
 termed an unfavorable  balance of      
trade1 never arises but from a redundant
 currency40#adb  8,the exportation of   
the coin is caused by its cheapness1 and
 is not  the effect1 but the cause of an
 unfavourable balance40#adc ,since the  
increase or decrease in the production  
of gold in the former case and  the     
importation or exportation of gold in   
the latter1 take place only  whenever   

its volume rises above or sinks below   
its normal level1 i4  e4 whenever gold  
appreciates or depreciates in comparison
 with its  bullion value1 or whenever   
prices of commodities are too high or   
too  low2 it follows that every such    
movement works as a corrective1#add     
since1 through the resultant expansion  
or contraction of the currency1  prices 
are restored to their true level3 in the
 former case this level  represents the 
balance between the respective values of
 gold and of  commodities2 in the       
latter1 the international balance of    
currencies4 ,to  put it in other words3 
money circulates in different countries 
only in  so far as it circulates as coin
 in every country4 ,money is but coin   
and  all the gold existing in a country 
must therefore enter circulation1  i4 e4
 it can rise above or fall below its    
value as a token of value4  ,thus we    
safely land again1 by the round-about   
way of this international  complication1
 at the simple dogma which constituted  

our starting point4    ,with what       
violence to actual facts ,ricardo has to
 explain them in  the sense of his      
abstract theory1 a few illustrations    
will suffice  to show4 ,he maintains1 e4
 g4 that in years of poor crops1 which  
happened frequently in ,england during  
#ahjj-ahbj1 gold is exported not        
because corn is needed and gold as money
 is at all times an effectual  means of 
purchase in the world market1 but       
because gold is in such  cases          
depreciated in its value as compared    
with other commodities  and1 therefore1 
the currency of the country in which    
there has been  a failure of crops is   
depreciated with respect to other       
national  currencies4 8,in consequence  
of a bad harvest1 a country having been 
deprived of a part of its commodities   
444 the currency which was  before at   
its just level 444 become7s7 redundant10
 and prices of all  commodities rise in 
consequence4#ade ,contrary to this      
paradoxical  interpretation it has been 

proven statistically that from #agic to 
the present time1 whenever ,england had 
a bad harvest the available  supply of  
currency not only did not become        
superabundant1 but became  inadequate   
and that1 therefore1 more money         
circulated and had to  circulate on such
 occasions4#adf    ,in the same manner1 
,ricardo maintained1 with reference to  
,napoleon's  ,continental ,system and   
the ,english ,blockade ,decree1 that the
 ,english  exported gold instead of     
commodities to the ,continent1 because  
their  money was depreciated with       
respect to the money on the ,continent1 
that  their commodities were1 therefore1
 more high priced1 which made it  a more
 profitable commercial speculation to   
export gold than goods4  ,according to  
him ,england was a market in which      
commodities were dear  and money was    
cheap1 while on the ,continent          
commodities were cheap  and money was   
dear4 ,the trouble1 according to an     
,english writer1 was  8the ruinously low

 prices of our manufactures and of our  
colonial  productions under the         
operation 444 of the #8,continental     
,system' during  the last six years of  
the war4444 ,the prices of sugar and    
coffee1  for instance1 on the           
,continent1 computed in gold1 were four 
or five  times higher than their prices 
in ,england1 computed in bank-notes4 ,i 
am speaking 444 of the times in which   
the ,french chemists discovered  sugar  
in beet-root1 and a substitute for      
coffee in chicory2 and when  the        
,english grazier tried experiments upon 
fattening oxen with treacle  and        
molassesof the times when we took       
possession of the island of             
,heligoland1 in order to form there a   
depot of goods to facilitate1 if        
possible1 the smuggling of them into the
 north of ,europe2 and when  the lighter
 descriptions of ,british manufactures  
found their way into  ,germany through  
,turkey4444 ,almost all the merchandise 
of the world  accumulated in our        

warehouses1 where they became impounded1
 except when  some small quantity was   
released by a ,french ,license1 for     
which the  merchants at ,hamburgh and   
,amsterdam had1 perhaps1 given ,napoleon
 such  a sum as forty or fifty thousand 
pounds4 ,they must have been strange    
merchants 444 to have paid so large a   
sum for liberty to carry a cargo  of    
goods from a dear market to a cheap one4
 ,what was the ostensible  alternative  
the merchant had8444 ,either to buy     
coffee at #f;d4 a pound  in bank-notes1 
and send it to a place where it would   
instantly sell at  #cs4 or #ds4 a pound 
in gold1 or to buy gold with bank-notes 
at #e an  ounce1 and send it to a place 
where it would be received at #c #ags4  
#aj-a_/b;d4 an ounce4444 ,it is too     
absurd1 of course1 to say 444 that the  
gold was remitted instead of the coffee1
 as a preferable mercantile             
operation4444 ,there was not a country  
in the world in which so large a        
quantity of desirable goods could be    

obtained1 in return for an ounce  of    
gold1 as in ,england4444 ,bonaparte 444 
was constantly examining the  ,english  
,price ,current4444 ,so long as he saw  
that gold was dear and  coffee was cheap
 in ,england1 he was satisfied that his 
#8,continental  ,system' worked         
well40#adg    ,at the very time when    
,ricardo first formulated his theory of 
money1  and the ,bullion ,committee     
embodied it in its parliamentary report1
  namely in #ahaj1 a ruinous fall of    
prices of all ,english commodities  as  
compared with those of #ahjh and #ahji  
took place1 while gold rose  in value   
accordingly4 ,only agricultural products
 formed an exception1  because their    
importation from abroad met with        
obstacles and their  domestic supply was
 decimated by unfavorable crop          
conditions4#adh  ,ricardo so utterly    
failed to comprehend the rle of precious
 metals as  an international means of   
payment1 that in his testimony before   
the  ,committee of the ,house of ,lords 

in #ahai he could say 8that drains for  
exportation would cease altogether so   
soon as cash payments should be         
resumed1 and the currency be restored to
 its metallic level40 ,he died  just in 
time1 on the very eve of the crisis of  
#ahbe1 which belied his  prophesies4    
,the time when ,ricardo wrote was       
generally little adapted for the        
observation of the function of precious 
metals as world money4 ,before  the     
introduction of the ,continental        
,system1 the balance of trade  had      
almost always been in favor of ,england1
 and while that system  lasted1 the     
commercial intercourse with the         
,european continent was  too            
insignificant to affect the ,english    
rate of exchange4 ,the money            
transmissions were mostly of a political
 nature and ,ricardo seems to  have     
utterly failed to grasp the part which  
subsidy payments played at  that time in
 ,english gold exports4#adi    ,among   
the contemporaries of ,ricardo who      

formed the school which  adopted his    
economic principles1 ,,james ,,mill was 
the most important  one4 ,he attempted  
to work out ,ricardo's theory of money  
on the basis  of simple metallic        
circulation1 without the irrelevant     
international  complications which      
served ,ricardo to hide the inadequacy  
of his  theory1 and without any         
controversial regard for the operations 
of the  ,bank of ,england4 ,his main    
arguments are as follows3    8,by value 
of money1 is here to be understood the  
proportion in which  it exchanges for   
other commodities1 or the quantity of it
 which  exchanges for a certain quantity
 of other things4444 ,it is the total   
quantity of the money in any country1   
which determines what portion of  that  
quantity shall exchange for a certain   
portion of the goods or  commodities of 
that country4 ,if we suppose that all   
the goods of the  country are on one    
side1 all the money on the other1 and   
that they are  exchanged at once against

 one another1 it is evident 444 that the
 value  of money would depend wholly    
upon the quantity of it4 ,it will appear
  that the case is precisely the same in
 the actual state of the facts4  ,the   
whole of the goods of a country are not 
exchanged at once against  the whole of 
the money2 the goods are exchanged in   
portions1 often  in very small portions1
 and at different times1 during the     
course of  the whole year4 ,the same    
piece of money which is paid in one     
exchange  to-day1 may be paid in another
 exchange tomorrow4 ,some of the pieces 
will be employed in a great many        
exchanges1 some in very few1 and  some1 
which happen to be hoarded1 in none at  
all4 ,there will1 amid all  these       
varieties1 be a certain average number  
of exchanges1 the same  which1 if all   
the pieces had performed an equal       
number1 would have been  performed by   
each2 that average we may suppose to be 
any number we  please2 say1 for example1
 ten4 ,if each of the pieces of the     

money in  the country perform ten       
purchases1 that is exactly the same     
thing as if  all the pieces were        
multiplied by ten1 and performed only   
one purchase  each4 ,the value of all   
the goods in the country is equal to ten
 times  the value of all the money4444  
,if the quantity of money instead of    
performing ten exchanges in the year1   
were ten times as great1 and  performed 
only one exchange in the year1 it is    
evident that whatever  addition were    
made to the whole quantity1 would       
produce a proportional  diminution of   
value1 in each of the minor quantities  
taken separately4  ,as the quantity of  
goods1 against which the money is all   
exchanged at  once1 is supposed to be   
the same1 the value of all the money is 
no  more1 after the quantity is         
augmented1 than before it was augmented4
  ,if it is supposed to be augmented    
one-tenth1 the value of every part1     
that of an ounce for example1 must be   
diminished one-tenth4444 ,in  whatever  

degree1 therefore1 the quantity of money
 is increased or  diminished1 other     
things remaining the same1 in that same 
proportion1  the value of the whole1 and
 of every part1 is reciprocally         
diminished  or increased4 ,this1 it is  
evident1 is a proposition universally   
true4  ,whenever the value of money has 
either risen or fallen 7the quantity  of
 goods against which it is exchanged and
 the rapidity of circulation  remaining 
the same71 the change must be owing to a
 corresponding  diminution or increase  
of the quantity2 and can be owing to    
nothing  else4 ,if the quantity of goods
 diminish1 while the quantity of money  
remains the same1 it is the same thing  
as if the quantity of money  had been   
increased20 and vice versa4444 8,similar
 changes are produced  by any alteration
 in the rapidity of circulation4444 ,an 
increase in  the number of these        
purchases has the same effect as an     
increase in  the quantity of money2 a   
diminution the reverse4444 ,if there is 

any  portion of the annual produce which
 is not exchanged at all1 as what  is   
consumed by the producer2 or which is   
not exchanged for money2  that is not   
taken into the account1 because what is 
not exchanged for  money is in the same 
state with respect to the money1 as if  
it did not  exist4444 ,whenever the     
coining of money 444 is free1 its       
quantity is  regulated by the value of  
the metal4444 ,gold and silver are in   
reality  commodities4444 ,it is cost of 
production 444 which determines the     
value  of these1 as of other ordinary   
productions40#aej    ,the whole wisdom  
of ,mill resolves itself into a series  
of arbitrary and  absurd assumptions4   
,he wishes to prove that the price of   
commodities or  the value of money is   
determined by 8the total quantity of the
 money  in any country40 ,assuming that 
the quantity and the exchange value  of 
the commodities in circulation remain   
unchanged and that the same  be true of 
the rapidity of circulation and of the  

value of precious  metals as determined 
by the cost of production1 and assuming 
at  the same time that the quantity of  
the metallic currency increases  or     
decreases in proportion to the quantity 
of money existing in a  country1 it     
becomes really 8evident0 that what was  
to have been proven  has been assumed4  
,mill falls1 moreover1 into the same    
error as ,hume  by assuming that        
use-values and not commodities with a   
given exchange  value are in            
circulation1 and that vitiates his      
statement1 even if we  grant all of his 
8assumptions40 ,the rapidity of         
circulation may remain  the same2 this  
may also be true of the value of the    
precious metals  and of the quantity of 
commodities in circulation2 and yet a   
change  in the exchange value of the    
latter may require now a larger and now 
a smaller quantity of money for their   
circulation4 ,mill sees that a  part of 
the money in a country is in            
circulation1 while another is  idle4    

,with the aid of a most absurd average  
calculation he assumes  that1 although  
it really appears to be different1 yet  
all the gold in  a country does         
circulate4 ,assuming that ten million   
silver thalers  circulate in a country  
twice a year1 there could be twenty     
million such  coins in circulation1 if  
each circulated but once4 ,and if the   
entire  quantity of silver to be found  
in a country in any form amounts to  one
 hundred million thalers1 it may be     
supposed that the entire one  hundred   
million can enter circulation1 if each  
piece of money should  circulate once in
 five years4 ,one could as well assume  
that all the  money of the world        
circulate in ,hempstead1 but that each  
piece of  money instead of being        
employed three times a year1 is employed
 once  in #c1jjj1jjj years4 ,the one    
assumption is as relevant as the other  
for  the purpose of determining the     
relation between the sum total of prices
  of commodities and the volume of      

currency4 ,mill feels that it is a      
matter of decisive importance to him to 
bring the commodities in direct  contact
 not with the money in circulation1 but 
with the entire supply  of money        
existing in a country4 ,he admits that  
8the whole of the goods  of a country   
are not exchanged at once against the   
whole of the money10  but that the goods
 are exchanged in different portions and
 at different  times of the year for    
different portions of money4 ,to do away
 with this  difficulty he assumes that  
it does not exist4 ,moreover1 this      
entire  idea of direct contact of       
commodities and money and direct        
exchange is  a mere abstraction from the
 movement of simple purchase and sale or
  the function of money as a means of   
purchase4 ,already in the movement  of  
money as a means of payment1 commodity  
and money cease to appear               
simultaneously4    ,the commercial      
crises of the nineteenth century1       
namely1 the great  crises of #ahbe and  

#ahcf1 did not result in any new        
developments in  the ,ricardian theory  
of money1 but they did furnish new      
applications  for it4 ,they were no     
longer isolated economic phenomena1 such
 as the  depreciation of the precious   
metals in the sixteenth and seventeenth 
centuries which interested ,hume1 or the
 depreciation of paper money  in the    
eighteenth and early nineteenth         
centuries which confronted  ,ricardo2   
they were the great storms of the world 
market in which the  conflict of all the
 elements of the capitalist process of  
production  discharge themselves1 and   
whose origin and remedy were sought in  
the  most superficial and abstract      
sphere of this process1 the sphere of   
money circulation4 ,the theoretical     
assumption from which the school  of    
economic weather prophets proceeds1     
comes down in the end to the  illusion  
that ,ricardo discovered the laws       
governing the circulation of  purely    
metallic currency4 ,the only thing that 

remained for them to do  was to subject 
to the same laws the circulation of     
credit and bank-note  currency4    ,the 
most general and most palpable          
phenomenon in commercial crises is  the 
sudden1 general decline of prices       
following a prolonged general  rise4    
,the general decline of prices of       
commodities may be expressed as  a rise 
in the relative value of money with     
respect to all commodities1  and the    
general rise of prices as a decline of  
the relative value  of money4 ,in either
 expression the phenomenon is described 
but not  explained4 ,whether ,i put the 
question thus3 explain the general      
periodic rise of prices followed by a   
general decline of the same1 or         
formulate the same problem by saying3   
explain the periodic decline and  rise  
of the relative value of money with     
respect to commodities2 the  different  
wording leaves the problem as little    
changed as would its  translation from  
,german into ,english4 ,ricardo's theory

 of money was  exceedingly convenient1  
because it lends a tautology the        
semblance of  a statement of causal     
connection4 ,whence comes the periodic  
general  fall of prices8 ,from the      
periodic rise of the relative value of  
money4 ,whence the general periodic rise
 of prices8 ,from the periodic  decline 
of the relative value of money4 ,it     
might have been stated  with equal truth
 that the periodic rise and fall of     
prices is due  to their periodic rise   
and fall4 ,the problem itself is stated 
under  the assumption that the intrinsic
 value of money1 i4 e41 its value  as   
determined by the cost of production of 
precious metals remains  unchanged4 ,if 
it is more than a tautology then it is  
based on a  misconception of the most   
elementary principles4 ,if the exchange 
value  of ,a measured in terms of ,b1   
declines1 we know that this may be      
caused  by a decline of the value of ,a 
as much as by a rise of the value of    
,b2 the same being true of the case of a

 rise of the exchange value of  ,a      
measured in terms of ,b4 ,the tautology 
once admitted as a statement  of cause1 
the rest follows easily4 ,a rise of     
prices of commodities is  caused by a   
decline of the value of money and a     
decline of the value  of money is       
caused1 as we know from ,ricardo1 by a  
redundant currency1  i4 e41 by a rise of
 the volume of currency over the level  
determined  by its own intrinsic value  
and the intrinsic value of the          
commodities4  ,in the same manner1 the  
general decline of prices of commodities
 is  explained by the rise of the value 
of money above its intrinsic value  in  
consequence of an inadequate currency4  
,thus1 prices rise and fall             
periodically1 because there is          
periodically too much or too little     
money in circulation4 ,should a rise of 
prices happen to coincide  with a       
contracted currency1 and a fall of      
prices with an expanded  one1 it may be 
asserted in spite of those facts that in

 consequence  of a contraction or       
expansion of the volume of commodities  
in the  market1 which can not be proven 
statistically1 the quantity of money  in
 circulation has1 although not          
absolutely1 yet relatively increased  or
 declined4 ,we have seen that according 
to ,ricardo these universal             
fluctuations must take place even with a
 purely metallic currency1 but  that    
they balance each other through their   
alternations2 thus1 e4 g41  an          
inadequate currency causes a fall of    
prices1 the fall of prices  leads to the
 export of commodities abroad1 this     
export causes again an  import of gold  
from abroad1 which1 in its turn1 brings 
about a rise  of prices2 the opposite   
movement taking place in case of a      
redundant  currency1 when commodities   
are imported and money is exported4     
,but1  since in spite of these universal
 fluctuations of prices which are in    
perfect accord with ,ricardo's theory of
 metallic currency1 their acute  and    

violent form1 their crisis-form1 belongs
 to the period of advanced  credit1 it  
is perfectly clear that the issue of    
bank-notes is not  exactly regulated by 
the laws of metallic currency4 ,metallic
 currency  has its remedy in the import 
and export of precious metals which     
immediately enter circulation and thus1 
by their influx or efflux1  cause the   
prices of commodities to fall or rise4  
,the same effect on  prices must now be 
exerted by banks by the artificial      
imitation of the  laws of metallic      
currency4 ,if gold is coming in from    
abroad it proves  that the currency is  
inadequate1 that the value of money is  
too high  and the prices of commodities 
too low1 and1 consequently1 that bank   
notes must be put in circulation in     
proportion to the newly imported  gold4 
,on the contrary1 notes have to be      
withdrawn from circulation in           
proportion to the export of gold from   
the country4 ,that is to say1  the issue
 of bank notes must be regulated by the 

import and export  of the precious      
metals or by the rate of exchange4      
,ricardo's false  assumption that gold  
is only coin1 and that therefore all    
imported gold  swells the currency1     
causing prices to rise1 while all       
exported gold  reduces the currency     
leading to a fall of prices1 this       
theoretical  assumption is turned into a
 practical experiment of putting in     
every  case an amount of currency in    
circulation equal to the amount of gold 
in existence4 ,lord ,overstone 7the     
banker ,jones ,loyd71 ,colonel ,torrens1
  ,norman1 ,clay1 ,arbuthnot and a host 
of other writers1 known in ,england  as 
the adherents of the 8currency          
principle10 not only preached this      
doctrine1 but with the aid of ,sir      
,robert ,peel succeeded in #ahdd and    
#ahde in making it the basis of the     
present ,english and ,scotch bank       
legislation4 ,its ignominous failure1   
theoretical as well as practical1       
following upon experiments on the       

largest national scale1 can be  treated 
only after we take up the theory of     
credit4#aea ,so much can be  seen1      
however1 that the theory of ,ricardo    
which isolates money in its  fluent form
 of currency1 ends by ascribing to the  
ebbs and tides in the  supply of        
precious metals an influence on         
bourgeois economy such as the  believers
 in the superstitions of the monetary   
system had never dreamt  of4 ,thus did  
,ricardo1 who proclaimed paper currency 
as the most perfect  form of money1     
become the prophet of the bullionists4  
,after ,hume's theory or the abstract   
opposition to the monetary system  was  
thus developed to its ultimate          
conclusions1 ,steuart's concrete        
conception of money was finally restored
 to its rights by ,,thomas  ,,tooke4#aeb
 ,tooke arrives at his principles not   
from any theory1 but  by a conscientious
 analysis of the history of prices of   
commodities  from #agic to #ahef4 ,in   
the first edition of his ,history of    

,prices which  appeared in #ahbc1 ,tooke
 is still under the complete influence  
of the  ,ricardian theory1 and vainly   
tries to reconcile it with actual facts4
  ,his pamphlet 8,on the ,currency10    
which appeared after the crisis of      
#ahbe might even be considered as the   
first consistent presentation  of the   
views which were later given the force  
of law by ,overstone4  ,continued       
studies in the history of prices forced 
him1 however1 to the  conclusion that   
the direct connection between prices and
 the volume of  currency1 as it is      
pictured by the theory1 is a mere       
illusion2 that  the expansion and       
contraction of currency which takes     
place while the  value of the precious  
metals remains unchanged1 is always the 
effect  but never the cause of price    
fluctuations2 that the circulation of   
money is in any event but a secondary   
movement2 and that money assumes  quite 
different forms in the actual process of
 production in addition  to that of a   

circulating medium4 ,his detailed       
investigations belong  to a sphere      
outside of that of simple metallic      
circulation and can be  discussed here  
as little as the investigations of      
,,wilson and ,,fullarton  which belong  
to the same class4#aec ,none of these   
writers takes a  one-sided view of      
money1 but treat it in its various      
aspects2 the  treatment1 however1 is    
mechanical1 without an attempt to       
establish an  organic connection either 
between these various aspects           
themselves1  or between them and the    
combined system of economic categories4 
,they  fall1 therefore1 into the error  
of confusing money as distinguished     
from medium of circulation with capital 
or even with commodity1  although they  
are forced elsewhere to differentiate it
 from both4#aed  ,when gold1 e4 g41 is  
shipped abroad1 it practically means    
that capital  is sent abroad1 but the   
same thing takes place when iron1       
cotton1  grain1 or any other commodity  

is exported4 ,both are capital and are  
distinguished not as capital1 but as    
money and commodity4 ,the function  of  
gold as the international medium of     
exchange springs1 therefore1  not from  
its being capital1 but from its specific
 character of money4  ,similarly1 when  
gold1 or bank notes in its place1       
circulate in the home  trade as means of
 payment1 they constitute capital at the
 same time4  ,but they could not be     
replaced by capital in the form of      
commodities1  as has been demonstrated  
very palpably by crises1 for instance4  
,that  is to say1 it is the fact that   
gold is distinguished from commodities  
in its capacity of money and not in that
 of capital1 that makes it the  means of
 payment4 ,even when capital is exported
 directly as capital1  as1 e4 g41 when  
it is done for the purpose of lending   
abroad a certain  amount on interest1 it
 depends on circumstances1 whether it   
will be  exported in the form of        
commodities or in that of gold1 and if  

in the  latter form1 it is due to the   
specific destination of the precious    
metals as distinguished from commodities
 to serve as money4 ,in general1  these 
writers do not consider money in its    
abstract form1 as it is  developed      
within the sphere of simple circulation 
of commodities1  and as it spontaneously
 grows out of the relation of the       
circulating  commodities4 ,as a result1 
they constantly vacillate between the   
abstract forms of money which           
distinguish it from commodity and those 
forms of it beneath which are concealed 
concrete relations1 such as  capital1   
revenue1 etc4#aee          ,introduction
    to the    ,critique of ,political   
,economy4#aef        #a4 ,,production   
,,in ,,general4    ,the subject of our  
discussion is first of all material     
production  by individuals as determined
 by society1 naturally constitutes the  
starting point4 ,the individual and     
isolated hunter or fisher who forms  the
 starting point with ,smith and         

,ricardo1 belongs to the insipid        
illusions of the eighteenth century4    
,they are ,robinsonades which do  not by
 any means represent1 as students of the
 history of civilization  imagine1 a    
reaction against over-refinement and a  
return to a  misunderstood natural life4
 ,they are no more based on such a      
naturalism  than is ,rosseau's 8contrat 
social10 which makes naturally          
independent  individuals come in contact
 and have mutual intercourse by         
contract4  ,they are the fiction and    
only the aesthetic fiction of the small 
and  great ,robinsonades4 ,they are1    
moreover1 the anticipation of 8bourgeois
  society10 which had been in course of 
development since the sixteenth  century
 and made gigantic strides towards      
maturity in the eighteenth4  ,in this   
society of free competition the         
individual appears free from  the bonds 
of nature1 etc41 which in former epochs 
of history made him  a part of a        
definite1 limited human conglomeration4 

,to the prophets of  the eighteenth     
century1 on whose shoulders ,smith and  
,ricardo are still  standing1 this      
eighteenth century individual1          
constituting the joint  product of the  
dissolution of the feudal form of       
society and of the new  forces of       
production which had developed since the
 sixteenth century1  appears as an ideal
 whose existence belongs to the past2   
not as a  result of history1 but as its 
starting point4    ,since that          
individual appeared to be in conformity 
with nature and  corresponded to their  
conception of human nature1 he was      
regarded  not as a product of history1  
but of nature4 ,this illusion has been  
characteristic of every new epoch in the
 past4 ,steuart1 who1 as an  aristocrat1
 stood more firmly on historical ground1
 contrary to  the spirit of the         
eighteenth century1 escaped this        
simplicity of  view4 ,the further back  
we go into history1 the more the        
individual  and1 therefore1 the         

producing individual seems to depend on 
and  constitute a part of a larger      
whole3 at first it is1 quite naturally1 
the family and the clan1 which is but an
 enlarged family2 later on1  it is the  
community growing up in its different   
forms out of the  clash and the         
amalgamation of clans4 ,it is but in the
 eighteenth  century1 in 8bourgeois     
society10 that the different forms of   
social  union confront the individual as
 a mere means to his private ends1  as  
an outward necessity4 ,but the period in
 which this view of the  isolated       
individual becomes prevalent1 is the    
very one in which the  interrelations of
 society 7general from this point of    
view7 have  reached the highest state of
 development4 ,man is in the most       
literal  sense of the word a zoon       
politikon1 not only a social animal1 but
  an animal which can develop into an   
individual only in society4  ,production
 by isolated individuals outside of     
societysomething which  might happen as 

an exception to a civilized man who by  
accident  got into the wilderness and   
already dynamically possessed within    
himself the forces of societyis as great
 an absurdity as the idea  of the       
development of language without         
individuals living together  and talking
 to one another4 ,we need not dwell on  
this any longer4  ,it would not be      
necessary to touch upon this point at   
all1 were not  the vagary which had its 
justification and sense with the people 
of  the eighteenth century transplanted 
in all earnest into the field of        
political economy by ,bastiat1 ,carey1  
,proudhon and others4 ,proudhon  and    
others naturally find it very pleasant1 
when they do not know the  historical   
origin of a certain economic phenomenon1
 to give it a quasi                     
historico-philosopohical explanation by 
going into mythology4 ,adam or          
,prometheus hit upon the scheme cut and 
dried1 whereupon it was adopted1  etc4  
,nothing is more tediously dry than the 

dreaming locus communis4    ,whenever we
 speak1 therefore1 of production1 we    
always have in mind  production at a    
certain stage of social development1 or 
production  by social individuals4      
,hence1 it might seem that in order to  
speak  of production at all1 we must    
either trace the historical process of  
development through its various phases1 
or declare at the outset that  we are   
dealing with a certain historical       
period1 as1 e4 g41 with modern          
capitalistic production which1 as a     
matter of fact1 constitutes the  subject
 proper of this work4 ,but all stages of
 production have certain  landmarks in  
common1 common purposes4 ,production in 
general is an  abstraction1 but it is a 
rational abstraction1 in so far as it   
singles  out and fixes the common       
features1 thereby saving us repetition4 
,yet  these general or common features  
discovered by comparison constitute     
something very complex1 whose           
constituent elements have different     

destinations4 ,some of these elements   
belong to all epochs1 others are  common
 to a few4 ,some of them are common to  
the most modern as well  as to the most 
ancient epochs4 ,no production is       
conceivable without  them2 but while    
even the most completely developed      
languages have  laws and conditions in  
common with the least developed ones1   
what  is characteristic of their        
development are the points of departure 
from the general and common4 ,the       
conditions which generally govern       
production must be differentiated in    
order that the essential points  of     
difference be not lost sight of in view 
of the general uniformity  which is due 
to the fact that the subject1 mankind1  
and the object1  nature1 remain the     
same4 ,the failure to remember this one 
fact is the  source of all the wisdom of
 modern economists who are trying to    
prove  the eternal nature and harmony of
 existing social conditions4 ,thus they 
say1 e4 g41 that no production is       

possible without some instrument of     
production1 let that instrument be only 
the hand2 that none is possible  without
 past accumulated labor1 even if that   
labor consist of mere  skill which has  
been accumulated and concentrated in the
 hand of the  savage by repeated        
exercise4 ,capital is1 among other      
things1 also an  instrument of          
production1 also past impersonal labor4 
,hence capital is  a universal1 eternal 
natural phenomenon2 which is true if we 
disregard  the specific properties which
 turn an 8instrument of production0 and 
8stored up labor0 into capital4 ,the    
entire history of production  appears to
 a man like ,carey1 e4 g41 as a         
malicious perversion on the  part of    
governments4    ,if there is no         
production in general1 there is also no 
general  production4 ,production is     
always some special branch of production
 or  an aggregate1 as1 e4 g41           
agriculture1 stock raising1             
manufactures1  etc4 ,but political      

economy is not technology4 ,the         
connection between  the general         
destinations of production at a given   
stage of social  development and the    
particular forms of production1 is to be
 developed  elsewhere 7later on74       
,finally1 production is not only of a   
special kind4 ,it is always a  certain  
body politic1 a social personality that 
is engaged on a larger  or smaller      
aggregate of branches of production4    
,the connection between  the real       
process and its scientific presentation 
also falls outside  of the scope of this
 treatise4 ,we must thus distinguish    
between  production in general1 special 
branches of production and production as
  a whole4    ,it is the fashion with   
economists to open their works with a   
general  introduction1 which is entitled
 8production0 7see1 e4 g41 ,john ,stuart
  ,mill7 and deals with the general     
8requisites of production40    ,this    
general introductory part treats or is  
supposed to treat3    #a4 ,of the       

conditions without which production is  
impossible1 i4 e41  of the most         
essential conditions of production4 ,as 
a matter of fact1  however1 it dwindles 
down1 as we shall see1 to a few very    
simple  definitions1 which flatten out  
into shallow tautologies2    #b4 ,of    
conditions which further production more
 or less1 as1 e4 g41 ,adam  ,smith's    
discussion of a progressive and stagnant
 state of society4    ,in order to give 
scientific value to what serves with him
 as a mere  summary1 it would be        
necessary to study the degree of        
productivity by  periods in the         
development of individual nations2 such 
a study falls  outside of the scope of  
the present subject1 and in so far as it
 does  belong here is to be brought out 
in connection with the discussion  of   
competition1 accumulation1 etc4 ,the    
commonly accepted view of the  matter   
gives a general answer to the effect    
that an industrial nation  is at the    
height of its production at the moment  

when it reaches its  historical climax  
in all respects4 ,or1 that certain      
races1 climates1  natural conditions1   
such as distance from the sea1 fertility
 of  the soil1 etc41 are more favorable 
to production than others4 ,that  again 
comes down to the tautology that the    
facility of creating  wealth depends on 
the extent to which its elements are    
present both  subjectively and          
objectively4 ,as a matter of fact a     
nation is at its  industrial height so  
long as its main object is not gain1 but
 the  process of gaining4 ,in that      
respect the ,yankees stand above the    
,english4    ,but all that is not what  
the economists are really after in the  
general  introductory part4 ,their      
object is rather to represent production
  in contradistinction to               
distributionsee ,mill1 e4 g4as subject  
to  eternal laws independent of history1
 and then to substitute bourgeois       
relations1 in an underhand way1 as      
immutable natural laws of society  in   

abstracto4 ,this is the more or less    
conscious aim of the entire  proceeding4
 ,on the contrary1 when it comes to     
distribution1 mankind  is supposed to   
have indulged in all sorts of arbitrary 
action4 ,quite  apart from the fact that
 they violently break the ties which    
bind  production and distribution       
together1 so much must be clear from the
  outset3 that1 no matter how greatly   
the systems of distribution may  vary at
 different stages of society1 it should 
be possible here1 as  in the case of    
production1 to discover the common      
features and to  confound and eliminate 
all historical differences in           
formulating  general human laws4 ,e4 g41
 the slave1 the serf1 the wage-workerall
  receive a quantity of food1 which     
enables them to exist as slave1  serf1  
and wage-worker4 ,the conqueror1 the    
official1 the landlord1 the  monk1 or   
the levite1 who respectively live on    
tribute1 taxes1 rent1  alms1 and the    
tithe1all receive a part of the social  

product which  is determined by laws    
different from those which determine the
 part  received by the slave1 etc4 ,the 
two main points which all economists    
place under this head1 are3 first1      
property2 second1 the protection  of the
 latter by the administration of        
justice1 police1 etc4 ,the  objections  
to these two points can be stated very  
briefly4    #a4 ,all production is      
appropriation of nature by the          
individual within  and through a        
definite form of society4 ,in that sense
 it is a tautology  to say that property
 7appropriation7 is a condition of      
production4 ,but  it becomes ridiculous1
 when from that one jumps at once to a  
definite  form of property1 e4 g4       
private property 7which implies1        
besides1 as  a prerequisite the         
existence of an opposite form1 viz4     
absence of  property74 ,history points  
rather to common property 7e4 g4 among  
the  ,hindoos1 ,slavs1 ancient ,celts1  
etc47 as the primitive form1 which still

  plays an important part at a much     
later period as communal property4  ,the
 question as to whether wealth grows    
more rapidly under this or that  form of
 property1 is not even raised here as   
yet4 ,but that there can  be no such a  
thing as production1 nor1 consequently1 
society1 where  property does not exist 
in any form1 is a tautology4            
,appropriation  which does not          
appropriate is a contradictio in        
subjecto4    #b4 ,protection of         
property1 etc4 ,reduced to their real   
meaning1 these  commonplaces express    
more than what their preachers know1    
namely1 that  every form of production  
creates its own legal relations1 forms  
of  government1 etc4 ,the crudity and   
the shortcomings of the conception  lie 
in the tendency to see but an accidental
 reflective connection in  what         
constitutes an organic union4 ,the      
bourgeois economists have a  vague      
notion that it is better to carry on    
production under the modern  police1    

than it was1 e4 g4 under club-law4 ,they
 forget that club law  is also law1 and 
that the right of the stronger continues
 to exist in  other forms even under    
their 8government of law40    ,when the 
social conditions corresponding to a    
certain stage of  production are in a   
state of formation or disappearance1    
disturbances  of production naturally   
arise1 although differing in extent and 
effect4    ,to sum up3 all the stages of
 production have certain destinations in
  common1 which we generalize in        
thought2 but the so-called general      
conditions of all production are nothing
 but abstract conceptions which  do not 
go to make up any real stage in the     
history of production4        #b4 ,,the 
,,general ,,relation ,,of ,,production  
,,to ,,distribution1 ,,exchange1 ,,and  
,,consumption4    ,before going into a  
further analysis of production1 it is   
necessary  to look at the various       
divisions which economists put side by  
side  with it4 ,the most shallow        

conception is as follows3 ,by           
production1 the  members of society     
appropriate 7produce and shape7 the     
products of  nature to human wants2     
distribution determines the proportion  
in which  the individual participates in
 this production2 exchange brings him   
the  particular products into which he  
wishes to turn the quantity secured  by 
him through distribution2 finally1      
through consumption the products  become
 objects of use and enjoyment1 of       
individual appropriation4  ,production  
yields goods adopted to our needs2      
distribution distributes  them according
 to social laws2 exchange distributes   
further what has  already been          
distributed1 according to individual    
wants2 finally1 in  consumption the     
product drops out of the social         
movement1 becoming the  direct object of
 the individual want which it serves and
 satisfies in  use4 ,production thus    
appears as the starting point2          
consumption as the  final end2 and      

distribution and exchange as the middle2
 the latter  has a double aspect1       
distribution being defined as a process 
carried  on by society1 while exchange1 
as one proceeding from the individual4  
,in production the person is embodied in
 things1 in consumption#aeg  things are 
embodied in persons2 in distribution1   
society assumes  the part of go-between 
of production and consumption in the    
form of  generally prevailing rules2 in 
exchange this is accomplished by the    
accidental make-up of the individual4   
,distribution determines what proportion
 7quantity7 of the products the         
individual is to receive2 exchange      
determines the products in which the    
individual desires to receive his share 
allotted to him by distribution4        
,production1 distribution1 exchange1 and
 consumption thus form a  perfect       
connection1 production standing for the 
general1 distribution  and exchange for 
the special1 and consumption for the    
individual1 in  which all are joined    

together4 ,to be sure this is a         
connection1 but  it does not go very    
deep4 ,production is determined         
according to the  economists by         
universal natural laws1 while           
distribution depends  on social chance3 
distribution can1 therefore1 have a more
 or less  stimulating effect on         
production3 exchange lies between the   
two as a  formal 787 social movement1   
and the final act of consumption which  
is  considered not only as a final      
purpose1 but also as a final aim1 falls1
  properly1 outside of the scope of     
economics1 except in so far as it       
reacts on the starting point and causes 
the entire process to begin all  over   
again4    ,the opponents of the         
economistswhether economists themselves 
or  notwho reproach them with tearing   
apart1 like barbarians1 what is an      
organic whole1 either stand on common   
ground with them or are below  them4    
,nothing is more common than the charge 
that the economists  have been          

considering production as an end in     
itself1 too much to  the exclusion of   
everything else4 ,the same has been said
 with regard  to distribution4 ,this    
accusation is itself based on the       
economic  conception that distribution  
exists side by side with production as  
a self-contained1 independent sphere4   
,or they are accused that the  various  
factors are not treated by them in their
 connection as a  whole4 ,as though it  
were the text books that impress this   
separation  upon life and not life upon 
the text books2 and the subject at issue
  were a dialectic balancing of         
conceptions and not an analysis of real 
conditions4    a4 ,production is at the 
same time also consumption4 ,twofold    
consumption1 subjective and objective4  
,the individual who develops his        
faculties in production1 is also        
expending them1 consuming them in the   
act of production1 just as procreation  
is in its way a consumption  of vital   
powers4 ,in the second place1 production

 is consumption of  means of production 
which are used and used up and partly   
7as e4 g4 in  burning7 reduced to their 
natural elements4 ,the same is true of  
the  consumption of raw materials which 
do not remain in their natural form  and
 state1 being greatly absorbed in the   
process4 ,the act of production  is1    
therefore1 in all its aspects an act of 
consumption as well4 ,but  this is      
admitted by economists4 ,production as  
directly identical with  consumption1   
consumption as directly coincident with 
production1  they call productive       
consumption4 ,this identity of          
production  and consumption finds its   
expression in ,spinoza's proposition1   
,determinatio est negatio4 ,but this    
definition of productive  consumption is
 resorted to just for the purpose of    
distinguishing  between consumption as  
identical with production and           
consumption  proper1 which is defined as
 its destructive counterpart4 ,let us   
then  consider consumption proper4      

,consumption is directly also           
production1 just as in nature the       
consumption of the elements and of      
chemical matter constitutes  production 
of plants4 ,it is clear1 that in        
nutrition1 e4 g41 which  is but one form
 of consumption1 man produces his own   
body2 but it is  equally true of every  
kind of consumption1 which goes to      
produce the  human being in one way or  
another4 ,it is consumptive production4 
,but1 say the economists1 this          
production which is identical with      
consumption1 is a second production     
resulting from the destruction  of the  
product of the first4 ,in the first1 the
 producer transforms  himself into      
things2 in the second1 things are       
transformed into human  beings4         
,consequently1 this consumptive         
productionalthough constituting  a      
direct unity of production and          
consumptiondiffers essentially from     
production proper4 ,the direct unity in 
which production coincides with         

consumption and consumption with        
production1 does not interfere with     
their direct duality4    ,production is 
thus at the same time consumption1 and  
consumption is at  the same time        
production4 ,each is directly its own   
counterpart4 ,but  at the same time an  
intermediary movement goes on between   
the two4  ,production furthers          
consumption by creating material for the
 latter  which otherwise would lack its 
object4 ,but consumption in its turn    
furthers production1 by providing for   
the products the individual  for whom   
they are products4 ,the product receives
 its last finishing  touches in         
consumption4 ,a railroad on which no one
 rides1 which is1  consequently not used
 up1 not consumed1 is but a potential   
railroad1  and not a real one4 ,without 
production1 no consumption2 but1 on the 
other hand1 without consumption1 no     
production2 since production would  then
 be without a purpose4 ,consumption     
produces production in two ways4    ,in 

the first place1 in that the product    
first becomes a real product  in        
consumption2 e4 g41 a garment becomes a 
real garment only through  the act of   
being worn2 a dwelling which is not     
inhabited1 is really no  dwelling2      
consequently1 a product as distinguished
 from a mere natural  object1 proves to 
be such1 first becomes a product in     
consumption4  ,consumption gives the    
product the finishing touch by          
annihilating it1  since a product is the
 result of production not only as the   
material  embodiment of activity1 but   
also as a mere object for the active    
subject4    ,in the second place1       
consumption produces production by      
creating the  necessity for new         
production1 i4 e4 by providing the      
ideal1 inward1  impelling cause which   
constitutes the prerequisite of         
production4  ,consumption furnishes the 
impulse for production as well as its   
object1  which plays in production the  
part of its guiding aim4 ,it is clear   

that while production furnishes the     
material object of consumption1         
consumption provides the ideal object of
 production1 as its image1  its want1   
its impulse and its purpose4 ,it        
furnishes the object of  production in  
its subjective form4 ,no wants1 no      
production4 ,but  consumption reproduces
 the want4    ,in its turn1 production3 
,first1 furnishes consumption#aeh with  
its material1 its object4  ,consumption 
without an object is no consumption1    
hence production works  in this         
direction by producing consumption4     
,second4 ,but it is not only the object 
that production provides for            
consumption4 ,it gives consumption its  
definite outline1 its character1  its   
finish4 ,just as consumption gives the  
product its finishing touch  as a       
product1 production puts the finishing  
touch on consumption4 ,for  the object  
is not simply an object in general1 but 
a definite object1  which is consumed in
 a certain definite manner prescribed in

 its turn  by production4 ,hunger is    
hunger2 but the hunger that is satisfied
 with  cooked meat eaten with fork and  
knife is a different kind of hunger     
from the one that devours raw meat with 
the aid of hands1 nails1 and  teeth4    
,not only the object of consumption1 but
 also the manner of  consumption is     
produced by production2 that is to say1 
consumption is  created by production   
not only objectively1 but also          
subjectively4  ,production thus creates 
the consumers4    ,third4 ,production   
not only supplies the want with         
material1 but  supplies the material    
with a want4 ,when consumption emerges  
from its  first stage of natural        
crudeness and directnessand its         
continuation  in that state would in    
itself be the result of a production    
still  remaining in a state of natural  
crudenessit is itself furthered by its  
object as a moving spring4 ,the want of 
it which consumption experiences  is    
created by its appreciation of the      

product4 ,the object of art1 as  well as
 any other product1 creates an artistic 
and beauty-enjoying  public4 ,production
 thus produces not only an object for   
the individual1  but also an individual 
for the object4    ,production thus     
produces consumption3 first1 by         
furnishing the latter  with material2   
second1 by determining the manner of    
consumption2  third1 by creating in     
consumers a want for its products as    
objects of  consumption4 ,it thus       
produces the object1 the manner1 and the
 moving  spring of consumption4 ,in the 
same manner1 consumption creates the    
disposition of the producer by setting  
787 him up as an aim and by  stimulating
 wants4 ,the identity of consumption and
 production thus  appears to be a three 
fold one4    ,first1 direct identity3   
production is consumption2 consumption  
is  production4 ,consumptive production4
 ,productive consumption4 ,economists   
call both productive consumption1 but   
make one distinction by calling  the    

former reproduction1 and the latter     
productive consumption4 ,all  inquiries 
into the former deal with productive and
 unproductive labor2  those into the    
latter treat of productive and          
unproductive consumption4    ,second4   
,each appears as the means of the other 
and as being brought  about by the      
other1 which is expressed as their      
mutual interdependence2  a relation1 by 
virtue of which they appear as mutually 
connected and  indispensable1 yet       
remaining outside of each other4        
,production creates the material as the 
outward object of consumption2          
consumption creates the want as the     
inward object1 the purpose of           
production4 ,without production1 no     
consumption2 without consumption1 no    
production2 this maxim figures 787 in   
political economy in many forms4        
,third4 ,production is not only directly
 consumption and consumption  directly  
production2 nor is production merely a  
means of consumption  and consumption   

the purpose of production4 ,in other    
words1 not only  does each furnish the  
other with its object2 production1 the  
material  object of consumption2        
consumption1 the ideal object of        
production4 ,on  the contrary1 either   
one is not only directly the other1 not 
787 only  a means of furthering the     
other1 but while it is taking place1    
creates  the other as such for itself   
7874 ,consumption completes the act of  
production by giving the finishing touch
 to the product as such1 by  destroying 
the latter1 by breaking up its          
independent material form2 by  bringing 
to a state of readiness1 through the    
necessity of repetition1  the           
disposition to produce developed in the 
first act of production2  that is to    
say1 it is not only the concluding act  
through which the  product becomes a    
product1 but also the one through which 
the  producer becomes a producer4 ,on   
the other hand1 production produces     
consumption1 by determining the manner  

of consumption1 and further1 by         
creating the incentive for consumption1 
the very ability to consume1 in  the    
form of want4 ,this latter identity     
mentioned under point #c1 is much       
discussed in political economy in       
connection with the treatment of the    
relations of demand and supply1 of      
objects and wants1 of natural wants  and
 those created by society4    ,hence1 it
 is the simplest matter with a ,hegelian
 to treat production  and consumption as
 identical4 ,and this has been done not 
only by  socialist writers of fiction   
but even by economists1 e4 g4 ,say2 the 
latter maintained that if we consider a 
nation as a whole1 or mankind  in       
abstractoher production is at the same  
time her consumption4  ,storch pointed  
out ,say's error by calling attention to
 the fact that  a nation does not       
entirely consume her product1 but also  
creates  means of production1 fixed     
capital1 etc4 ,to consider society as a 
single individual is moreover a false   

mode of speculative reasoning4  ,with an
 individual1 production and consumption 
appear as different  aspects of one act4
 ,the important point to be emphasized  
here is that  if production and         
consumption be considered as activities 
of one  individual or of separate       
individuals1 they appear at any rate as 
aspects of one process in which         
production forms the actual starting    
point and is1 therefore1 the            
predominating factor4 ,consumption1  as 
a natural necessity1 as a want1         
constitutes an internal factor  of      
productive activity1 but the latter is  
the starting point of  realization and1 
therefore1 its predominating factor1 the
 act into  which the entire process     
resolves itself in the end4 ,the        
individual  produces a certain article  
and turns again into himself by         
consuming  it2 but he returns as a      
productive and a self-reproducing       
individual4  ,consumption thus appears  
as a factor of production4    ,in       

society1 however1 the relation of the   
producer to his product1  as soon as it 
is completed1 is an outward one1 and the
 return of  the product to the          
individual depends on his relations to  
other  individuals4 ,he does not take   
immediate possession of it4 ,nor does   
the  direct appropriation of the product
 constitute his purpose1 when he        
produces in society4 ,between the       
producer and the product distribution   
steps in1 which determines by social    
laws his share in the world of          
products2 that is to say1 distribution  
steps in between production and         
consumption4    ,does distribution form 
an independent sphere standing side by  
side with  and outside of production8   
b4 ,production and ,distribution4 ,in   
perusing the common treatises on        
economics one can not help being struck 
with the fact that everything  is       
treated there twice2 e4 g41 under       
distribution1 there figure rent1  wages1
 interest1 and profit2 while under      

production we find land1  labor1 and    
capital as agents of production4 ,as    
regards capital1 it  is at once clear   
that it is counted twice3 first1 as an  
agent of  production2 second1 as a      
source of income2 as determining factors
 and  definite forms of distribution1   
interest and profit figure as such also 
in production1 since they are forms1 in 
which capital increases and  grows1 and 
are consequently factors of its own     
production4 ,interest and  profit1 as   
forms of distribution1 imply the        
existence of capital as  an agent of    
production4 ,they are forms of          
distribution which have for  their      
prerequisite capital as an agent of     
production4 ,they are also  forms of    
reproduction of capital4    ,in the same
 manner1 wages is wage-labor when       
considered under another  head2 the     
definite character which labor has in   
one case as an agent  of production1    
appears in the other as a form of       
distribution4 ,if  labor were not fixed 

as wage-labor1 its manner of            
participation in  distribution#aei would
 not appear as wages1 as is the case e4 
g4 under  slavery4 ,finally1 rentto take
 at once the most developed form of     
distributionby means of which landed    
property receives its share of  the     
products1 implies the existence of large
 landed property 7properly  speaking1   
agriculture on a large scale7 as an     
agent of production1  and not simply    
land1 no more than wages represents     
simply labor4  ,the relations and       
methods of distribution appear1         
therefore1 merely  as the reverse sides 
of the agents of production4 ,an        
individual who  participates in         
production as a wage laborer1 receives  
his share of the  products1 i4 e4 of the
 results of production1 in the form of  
wages4 ,the  subdivisions and           
organization of distribution are        
determined by the  subdivisions and     
organization of production4             
,distribution is itself a  product of   

production1 not only in so far as the   
material goods are  concerned1 since    
only the results of production can be   
distributed2 but  also as regards its   
form1 since the definite manner of      
participation  in production determines 
the particular form of distribution1 the
 form  under which participation in     
distribution takes place4 ,it is quite  
an  illusion to place land under        
production1 rent under distribution1    
etc4    ,economists1 like ,ricardo1 who 
are accused above all of having paid    
exclusive attention to production1      
define distribution1 therefore1  as the 
exclusive subject of political economy1 
because they  instinctively#afj regard  
the forms of distribution as the        
clearest  forms in which the agents of  
production find expression in a given   
society4    ,to the single individual   
distribution naturally appears as a law 
established by society determining his  
position in the sphere of  production1  
within which he produces1 and thus      

antedating production4  ,at the outset  
the individual has no capital1 no landed
 property4  ,from his birth he is       
assigned to wage-labor by the social    
process of  distribution4 ,but this very
 condition of being assigned to         
wage-labor  is the result of the        
existence of capital and landed property
 as  independent agents of production4  
,from the point of view of society as a 
whole1 distribution seems to  antedate  
and to determine production in another  
way as well1 as a  pre-economic fact1 so
 to say4 ,a conquering people divides   
the land  among the conquerors          
establishing thereby a certain division 
and  form of landed property and        
determining the character of production2
  or1 it turns the conquered people into
 slaves and thus makes slave  labor the 
basis of production4 ,or1 a nation1 by  
revolution1 breaks up  large estates    
into small parcels of land and by this  
new distribution  imparts to production 
a new character4 ,or1 legislation       

perpetuates  land ownership in large    
families or distributes labor as an     
hereditary  privilege and thus fixes it 
in castes4    ,in all of these cases1   
and they are all historic1 it is not    
distribution that seems to be organized 
and determined by production1  but on   
the contrary1 production by             
distribution4    ,in the most shallow   
conception of distribution1 the latter  
appears as  a distribution of products  
and to that extent as further removed   
from  and quasi-independent of          
production4 ,but before distribution    
means  distribution of products1 it is  
first1 a distribution of the means of   
production1 and second1 what is         
practically another wording of the  same
 fact1 it is a distribution of the      
members of society among the  various   
kinds of production 7the subjection of  
individuals to certain  conditions of   
production74 ,the distribution of       
products is manifestly  a result of this
 distribution1 which is bound up with   

the process of  production and          
determines the very organization of the 
latter4 ,to  treat of production apart  
from the distribution which is comprised
 in  it1 is plainly an idle abstraction4
 ,conversely1 we know the character  of 
the distribution of products the moment 
we are given the nature of  that other  
distribution which forms originally a   
factor of production4  ,ricardo1 who was
 concerned with the analysis of         
production as it is  organized in modern
 society and who was the economist of   
production  par excellence1 for that    
very reason declares not production  but
 distribution as the subject proper of  
modern economics4 ,we have  here another
 evidence of the insipidity of the      
economists who treat  production as an  
eternal truth1 and banish history to the
 domain of  distribution4    ,what      
relation to production this             
distribution1 which has a determining   
influence on production itself1 assumes1
 is plainly a question which  falls     

within the province of production4      
,should it be maintained  that at least 
to the extent that production depends on
 a certain  distribution of the         
instruments of production1 distribution 
in that  sense precedes production and  
constitutes its prerequisite2 it may  be
 replied that production has in fact its
 prerequisite conditions1  which form   
factors of it4 ,these may appear at     
first to have a natural  origin4 ,by the
 very process of production they are    
changed from natural  to historical1 and
 if they appear during one period as a  
natural  prerequisite of production1    
they formed at other periods its        
historical  result4 ,within the sphere  
of production itself they are undergoing
 a  constant change4 ,e4 g41 the        
application of machinery produces a     
change  in the distribution of the      
instruments of production as well as in 
that  of products1 and modern land      
ownership on a large scale is as much   
the  result of modern trade and modern  

industry1 as that of the application  of
 the latter to agriculture4    ,all of  
these questions resolve themselves in   
the last instance to this3  ,how do     
general historical conditions affect    
production and what part  does it play  
at all in the course of history8 ,it is 
evident that this  question can be taken
 up only in connection with the         
discussion and  analysis of production4 
,yet in the trivial form in which these 
questions are raised above1  they can be
 answered just as briefly4 ,in the case 
of all conquests  three ways lie open4  
,the conquering people may impose its   
own methods  of production upon the     
conquered 7e4 g4 the ,english in        
,ireland in the  nineteenth century1    
partly also in ,india72 or1 it may allow
 everything  to remain as it was        
contenting itself with tribute 7e4 g4   
the ,turks  and the ,romans72 or1 the   
two systems by mutually modifying each  
other  may result in something new1 a   
synthesis 7which partly resulted  from  

the ,germanic conquests74 ,in all of    
these conquests the method  of          
production1 be it of the conquerors1 the
 conquered1 or the one  resulting from a
 combination of both1 determines the    
nature of the new  distribution which   
comes into play4 ,although the latter   
appears now  as the prerequisite        
condition of the new period of          
production1 it is  in itself but a      
product of production1 not of production
 belonging to  history in general1 but  
of production relating to a definite    
historical  period4 ,the ,mongols with  
their devastations in ,russia e4 g4     
acted  in accordance with their system  
of production1 for which sufficient     
pastures on large uninhabited stretches 
of country are the main  prerequisite4  
,the ,germanic barbarians1 with whom    
agriculture carried  on with the aid of 
serfs was the traditional system of     
production and  who were accustomed to  
lonely life in the country1 could       
introduce  the same conditions in the   

,roman provinces so much easier since   
the  concentration of landed property   
which had taken place there1 died away  
completely with the older systems of    
agriculture4 ,there is a prevalent      
tradition that in certain periods       
robbery constituted the only source  of 
living4 ,but in order to be able to     
plunder1 there must be something  to    
plunder1 i4 e4 there must be            
production4#afa ,and even the method  of
 plunder is determined by the method of 
production4 ,a stockjobbing  nation#afb 
e4 g4 can not be robbed in the same     
manner as a nation of  shepherds4    ,in
 the case of the slave the instrument of
 production is robbed  directly4 ,but   
then the production of the country in   
whose interest he  is robbed1 must be so
 organized as to admit of slave labor1  
or 7as in  ,south ,america1 etc47 a     
system of production must be introduced 
adapted  to slavery4    ,laws may       
perpetuate an instrument of production1 
e4 g4 land1 in certain  families4 ,these

 laws assume an economic importance if  
large landed  property is in harmony    
with the system of production prevailing
 in  society1 as is the case e4 g4 in   
,england4 ,in ,france agriculture had   
been carried on on a small scale in     
spite of the large estates1 and  the    
latter were1 therefore1 broken up by the
 ,revolution4 ,but how about  the       
legislative attempt to perpetuate the   
minute subdivision of the  land8 ,in    
spite of these laws land ownership is   
concentrating again4 ,the  effect of    
legislation on the maintenance of a     
system of distribution  and its         
resultant influence on production are to
 be determined  elsewhere4    c4        
,exchange and ,circulation4 ,circulation
 is but a certain aspect  of exchange1  
or it may be defined as exchange        
considered as a whole4  ,since exchange 
is an intermediary factor between       
production and its  dependent1          
distribution1 on the one hand1 and      
consumption1 on the  other2 and since   

the latter appears but as a constituent 
of production1  exchange is manifestly  
also a constituent part of production4  
,in the first place1 it is clear that   
the exchange of activities and          
abilities which takes place in the      
sphere of production falls directly     
within the latter and constitutes one of
 its essential elements4 ,in  the second
 place1 the same is true of the exchange
 of products1 in  so far as it is a     
means of completing a certain product1  
designed  for immediate consumption4 ,to
 that extent exchange constitutes an    
act included in production4 ,thirdly1   
the so-called exchange between  dealers 
and dealers#afc is by virtue of its     
organization determined by  production1 
and is itself a species of productive   
activity4 ,exchange  appears to be      
independent of and indifferent to       
production only in the  last stage when 
products are exchanged directly for     
consumption4 ,but  in the first place1  
there is no exchange without a division 

of labor1  whether natural or as a      
result of historical development2       
secondly1  private exchange implies the 
existence of private production2        
thirdly1  the intensity of exchange1 as 
well as its extent and character are    
determined by the degree of development 
and organization of production1  as e4  
g4 exchange between city and country1   
exchange in the country1 in  the city1  
etc4 ,exchange thus appears in all its  
aspects to be directly  included in or  
determined by production4    ,the result
 we arrive at is not that production1   
distribution1 exchange1  and consumption
 are identical1 but that they are all   
members of one  entity1 different sides 
of one unit4 ,production predominates   
not only  over production itself in the 
opposite sense of that term1 but over   
the other elements as well4 ,with it the
 process constantly starts over  again4 
,that exchange and consumption can not  
be the predominating  elements is self  
evident4 ,the same is true of           

distribution in the  narrow sense of    
distribution of products2 as for        
distribution in the  sense of           
distribution of the agents of           
production1 it is itself but a  factor  
of production4 ,a definite form of      
production thus determines  the forms of
 consumption1 distribution1 exchange1   
and also the  mutual relations between  
these various elements4 ,of course1     
production  in its one-sided form is in 
its turn influenced by other elements2  
e4  g4 with the expansion of the market1
 i4 e4 of the sphere of exchange1       
production grows in volume and is       
subdivided to a greater extent4    ,with
 a change in distribution1 production   
undergoes a change2 as  e4 g4 in the    
case of concentration of capital1 of a  
change in the  distribution of          
population in city and country1 etc4    
,finally1 the  demands of consumption   
also influence production4 ,a mutual    
interaction  takes place between the    
various elements4 ,such is the case with

 every  organic body4        #c4 ,,the  
,,method ,,of ,,political ,,economy4    
,when we consider a given country from a
 politico-economic standpoint1  we begin
 with its population1 then analyze the  
latter according to  its subdivision    
into classes1 location in city1 country1
 or by the  sea1 occupation in different
 branches of production2 then we study  
its exports and imports1 annual         
production and consumption1 prices of   
commodities1 etc4 ,it seems to be the   
correct procedure to commence  with the 
real and concrete aspect of conditions  
as they are2 in the  case of political  
economy1 to commence with population    
which is the  basis and the author of   
the entire productive activity of       
society4  ,yet1 on closer consideration 
it proves to be wrong4 ,population is an
  abstraction1 if we leave out e4 g4 the
 classes of which it consists4  ,these  
classes1 again1 are but an empty word1  
unless we know what are  the elements on
 which they are based1 such as          

wage-labor1 capital1  etc4 ,those imply1
 in their turn1 exchange1 division of   
labor1 prices1  etc4 ,capital1 e4 g4    
does not mean anything without          
wage-labor1 value1  money1 price1 etc4  
,if we start out1 therefore1 with       
population1 we do  so with a chaotic    
conception of the whole1 and by closer  
analysis we  will gradually arrive at   
simpler ideas2 thus we shall proceed    
from the  imaginary concrete to loss and
 less complex abstractions1 until we    
get at the simplest conception4 ,this   
once attained1 we might start  on our   
return journey until we would finally   
come back to population1  but this time 
not as a chaotic notion of an integral  
whole1 but as a  rich aggregate of many 
conceptions and relations4 ,the former  
method  is the one which political      
economy had adopted in the past at its  
inception4 ,the economists of the       
seventeenth century1 e4 g41 always      
started out with the living aggregate3  
population1 nation1 state1  several     

states1 etc41 but in the end they       
invariably arrived1 by means  of        
analysis1 at certain leading1 abstract  
general principles1 such  as division of
 labor1 money1 value1 etc4 ,as soon as  
these separate  elements had been more  
or less established by abstract         
reasoning1  there arose the systems of  
political economy which start from      
simple  conceptions1 such as labor1     
division of labor1 demand1 exchange     
value1  and conclude with state1        
international exchange and world market4
 ,the  latter is manifestly the         
scientifically correct method4 ,the     
concrete is  concrete1 because it is a  
combination of many objects with        
different  destinations1 i4 e4 a unity  
of diverse elements4 ,in our thought1 it
  therefore appears as a process of     
synthesis1 as a result1 and not as a    
starting point1 although it is the real 
starting point and1 therefore1  also the
 starting point of observation and      
conception4 ,by the former  method the  

complete conception passes into an      
abstract definition2 by  the latter1 the
 abstract definitions lead to the       
reproduction of the  concrete subject in
 the course of reasoning4 ,hegel fell   
into the error1  therefore1 of          
considering the real as the result of   
self-coordinating1  self-absorbed1 and  
spontaneously operating thought1 while  
the method of  advancing from the       
abstract to the concrete is but a way of
 thinking  by which the concrete is     
grasped and is reproduced in our mind as
  a concrete4 ,it is by no means1       
however1 the process which itself       
generates the concrete4 ,the simplest   
economic category1 say1 exchange  value1
 implies the existence of population1   
population that is engaged  in          
production under certain conditions2 it 
also implies the existence  of certain  
types of family1 clan1 or state1 etc4   
,it can have no other  existence except 
as an abstract one-sided relation of an 
already given  concrete and living      

aggregate4    ,as a category1 however1  
exchange value leads an antediluvian    
existence4  ,and since our philosophic  
consciousness is so arranged that only  
the  image of the man that it conceives 
appears to it as the real man  and the  
world as it conceives it1 as the real   
world2 it mistakes  the movement of     
categories for the real act of          
production 7which  unfortunately 787    
receives only its impetus from outside7 
whose  result is the world2 that is     
truehere we have1 however1 again a      
tautologyin so far as the concrete      
aggregate is a thought aggregate1  in so
 far as the concrete subject of our     
thought is in fact a product  of        
thought1 of comprehension2 not1 however1
 in the sense of a product  of a        
self-emanating conception which works   
outside of and stands  above observation
 and imagination1 but of a mental       
consummation of  observation and        
imagination4 ,the whole1 as it appears  
in our heads as  a thought-aggregate1 is

 the product of a thinking mind which   
grasps  the world in the only way open  
to it1 a way which differs from the one 
employed by the artistic1 religious1 or 
practical mind4 ,the concrete  subject  
continues to lead an independent        
existence after it has been  grasped1 as
 it did before1 outside of the head1 so 
long as the head  contemplates it only  
speculatively1 theoretically4 ,so that  
in the  employment of the theoretical   
method in political economy1 the        
subject1 society1 must constantly be    
kept in mind as the premise from  which 
we start4    ,but have these simple     
categories no independent historical or 
natural  existence antedating the more  
concrete ones8 a depend4 ,for instance1 
in his ,philosophy of ,law ,hegel       
rightly starts out with possession1  as 
the simplest legal relation of          
individuals4 ,but there is no such      
thing as possession before the family or
 the relations of lord and  serf1 which 
are a great deal more concrete          

relations1 have come into  existence4   
,on the other hand1 one would be right  
in saying that there  are families and  
clans which only possess1 but do not own
 things4  ,the simpler category thus    
appears as a relation of simple family  
and  clan communities with respect to   
property4 ,in earlier society the       
category appears as a simple relation of
 a developed organism1 but the  concrete
 substratum from which springs the      
relation of possession1 is  always      
implied4 ,one can imagine an isolated   
savage in possession of  things4 ,but in
 that case possession is no legal       
relation4 ,it is not  true that the     
family came as the result of the        
historical evolution of  possession4 ,on
 the contrary1 the latter always implies
 the existence  of this 8more concrete  
category of law40 ,yet so much may be   
said1 that  the simple categories are   
the expression of relations in which the
  less developed concrete entity may    
have been realized without entering     

into the manifold relations and bearings
 which are mentally expressed  in the   
concrete category2 but when the concrete
 entity attains fuller  development it  
will retain the same category as a      
subordinate relation4    ,money may     
exist and actually had existed in       
history before capital1 or  banks1 or   
wage-labor came into existence4 ,with   
that in mind1 it may be  said that the  
more simple category can serve as an    
expression of the  predominant relations
 of an undeveloped whole or of the      
subordinate  relations of a more        
developed whole1 relations which had    
historically  existed before the whole  
developed in the direction expressed in 
the  more concrete category4 ,in so far1
 the laws of abstract reasoning which   
ascends from the most simple to the     
complex1 correspond to the actual       
process of history4    ,on the other    
hand1 it may be said that there are     
highly developed but  historically      
unripe forms of society in which the    

highest economic  forms are to be found1
 such as co-operation1 advanced division
 of  labor1 etc41 and yet there is no   
money in existence1 e4 g4 ,peru4    ,in 
,slavic communities also1 money1 as well
 as exchange to which it  owes its      
existence1 does not appear at all or    
very little within the  separate        
communities1 but it appears on their    
boundaries in their  inter-communal     
traffic2 in general1 it is erroneous to 
consider  exchange as a constituent     
element originating within the          
community4  ,it appears at first more in
 the mutual relations between different 
communities1 than in those between the  
members of the same community4          
,furthermore1 although money begins to  
play its part everywhere at an  early   
stage1 it plays in antiquity the part of
 a predominant element  only in         
one-sidedly developed nations1 viz4     
trading nations1 and even  in most      
cultured antiquity1 in ,greece and      
,rome1 it attains its full  development1

 which constitutes the prerequisite of  
modern bourgeois  society1 only in the  
period of their decay4 ,thus1 this quite
 simple  category attained its          
culmination in the past only at the most
 advanced  stages of society4 ,even then
 it did not pervade 787 all economic    
relations2 in ,rome e4 g4 at the time of
 its highest development taxes  and     
payments in kind remained the basis4 ,as
 a matter of fact1 the money  system was
 fully developed there only so far as   
the army was concerned2  it never came  
to dominate the entire system of labor4 
,thus1 although the simple category may 
have existed historically before  the   
more concrete one1 it can attain its    
complete internal and external          
development only in complex 787 forms of
 society1 while the more  concrete      
category has reached its full           
development in a less advanced  form of 
society4    ,labor is quite a simple    
category4 ,the idea of labor in that    
sense1 as  labor in general1 is also    

very old4 ,yet1 8labor0 thus simply     
defined  by political economy is as much
 a modern category1 as the conditions   
which have given rise to this simple    
abstraction4 ,the monetary system1  e4  
g4 defines wealth quite objectively1 as 
a thing 787#afd in money4  ,compared    
with this point of view1 it was a great 
step forward1 when  the industrial or   
commercial system came to see the source
 of wealth  not in the object but in the
 activity of persons1 viz4 in commercial
  and industrial labor4 ,but even the   
latter was thus considered only  in the 
limited sense of a money producing      
activity4 ,the physiocratic  system     
marks still further progress in that it 
considers a certain  form of labor1 viz4
 agriculture1 as the source of wealth1  
and wealth  itself not in the disguise  
of money1 but as a product in general1  
as  the general result of labor4 ,but   
corresponding to the limitations of  the
 activity1 this product is still only a 
natural product4 ,agriculture  is       

productive1 land is the source of       
production par excellence4 ,it  was a   
tremendous advance on the part of ,adam 
,smith to throw aside all  limitations  
which mark wealth-producing activity and
 to define it as  labor in general1     
neither industrial1 nor commercial1 nor 
agricultural1  or one as much as the    
other4 ,along with the universal        
character of  wealth-creating activity  
we have now the universal character of  
the  object defined as wealth1 viz4     
product in general1 or labor in general1
  but as past incorporated labor4 ,how  
difficult and great was the  transition1
 is evident from the way ,adam ,smith   
himself falls back from  time to time   
into the physiocratic system4 ,now1 it  
might seem as though  this amounted     
simply to finding an abstract expression
 for the simplest  relation into which  
men have been mutually entering as      
producers from  times of yore1 no matter
 under what form of society4 ,in one    
sense this  is true4 ,in another it is  

not4    ,the indifference as to the     
particular kind of labor implies the    
existence of a highly developed         
aggregate of different species of       
concrete labor1 none of which is any    
longer the predominant one4 ,so  do the 
most general abstractions commonly arise
 only where there is  the highest       
concrete development1 where one feature 
appears to be  jointly possessed by     
many1 and to be common to all4 ,then it 
can not  be thought of any longer in one
 particular form4 ,on the other hand1   
this abstraction of labor is but the    
result of a concrete aggregate of       
different kinds of labor4 ,the          
indifference to the particular kind of  
labor corresponds to a form of society  
in which individuals pass with  ease    
from one kind of work to another1 which 
makes it immaterial to  them what       
particular kind of work may fall to     
their share4 ,labor has  become here1   
not only categorically but really1 a    
means of creating  wealth in general and

 is no longer grown together with the   
individual  into one particular         
destination4 ,this state of affairs has 
found its  highest development in the   
most modern of bourgeois societies1 the 
,united ,states4 ,it is only here that  
the abstraction of the category         
8labor10 8labor in general10 labor sans 
phrase1 the starting point  of modern   
political economy1 becomes realized in  
practice4 ,thus1  the simplest          
abstraction which modern political      
economy sets up as  its starting point1 
and which expresses a relation dating   
back to  antiquity and prevalent under  
all forms of society1 appears in this   
abstraction truly realized only as a    
category of the most modern  society4   
,it might be said that what appears in  
the ,united ,states as an  historical   
product1viz4 the indifference as to the 
particular kind of  laborappears among  
the ,russians e4 g4 as a natural        
disposition4 ,but it  makes all the     
difference in the world whether         

barbarians have a natural               
predisposition which makes them         
applicable alike to everything1 or      
whether civilized people apply          
themselves to everything4 ,and1 besides1
  this indifference of the ,russians as 
to the kind of work they do1            
corresponds to their traditional        
practice of remaining in the rut of a   
quite definite occupation until they are
 thrown out of it by external           
influences4    ,this example of labor   
strikingly shows how even the most      
abstract  categories1 in spite of their 
applicability to all epochsjust because 
of their abstract characterare by the   
very definiteness of the  abstraction a 
product of historical conditions as     
well1 and are fully  applicable only to 
and under those conditions4    ,the     
bourgeois society is the most highly    
developed and most highly               
differentiated historical organization  
of production4 ,the categories  which   
serve as the expression of its          

conditions and the comprehension  of its
 own organization enable it at the same 
time to gain an insight  into the       
organization and the conditions of      
production which had  prevailed under   
all the past forms of society1 on the   
ruins and  constituent elements of which
 it has arisen1 and of which it still   
drags along some unsurmounted remnants1 
while what had formerly been  mere      
intimation has now developed to complete
 significance4 ,the anatomy  of the     
human being is the key to the anatomy of
 the ape4 ,but the  intimations of a    
higher animal in lower ones can be      
understood only if  the animal of the   
higher order is already known4 ,the     
bourgeois economy  furnishes a key to   
ancient economy1 etc4 ,this is1 however1
 by no means  true of the method of     
those economists who blot out all       
historical  differences and see the     
bourgeois form in all forms of society4 
,one can  understand the nature of      
tribute1 tithes1 etc41 after one has    

learned  the nature of rent4 ,but they  
must not be considered identical4       
,since1 furthermore1 bourgeois society  
is but a form resulting from  the       
development of antagonistic elements1   
some relations belonging  to earlier    
forms of society are frequently to be   
found in it but in  a crippled state or 
as a travesty of their former self1 as  
e4 g4  communal property4 ,while it may 
be said1 therefore1 that the categories 
of bourgeois economy contain what is    
true of all other forms of  society1 the
 statement is to be taken cum grano     
salis4 ,they may  contain these in a    
developed1 or crippled1 or caricatured  
form1 but  always essentially different4
 ,the so-called historical development  
amounts in the last analysis to this1   
that the last form considers its        
predecessors as stages leading up to    
itself and perceives them always        
one-sidedly1 since it is very seldom and
 only under certain conditions  that it 
is capable of self-criticism2 of course1

 we do not speak here  of such          
historical periods which appear to their
 own contemporaries as  periods of      
decay4 ,the ,christian religion became  
capable to assist us  to an objective   
view of past mythologies as soon as it  
was ready for  self-criticism to a      
certain extent1 dynamei so-to-say4 ,in  
the same  way bourgeois political       
economy first came to understand the    
feudal1  the ancient1 and the oriental  
societies as soon as the self-criticism 
of the bourgeois society had commenced4 
,so far as bourgeois political  economy 
has not gone into the mythology of      
purely 787 identifying the  bourgeois   
system with the past1 its criticism of  
the feudal system  against which it     
still had to wage war resembled         
,christian criticism  of the heathen    
religions or ,protestant criticism of   
,catholicism4    ,in the study of       
economic categories1 as in the case of  
every historical  and social science1 it
 must be borne in mind that as in       

reality so  in our mind the subject1 in 
this case modern bourgeois society1 is  
given and that the categories are       
therefore but forms of expression1      
manifestations of existence1 and        
frequently but one-sided aspects of     
this subject1 this definite society2 and
 that1 therefore1 the origin of         
political economy as a science does not 
by any means date from the  time to     
which it is referred as such4 ,this is  
to be firmly held in  mind because it   
has an immediate and important bearing  
on the matter of  the subdivisions of   
the science4    ,for instance1 nothing  
seems more natural than to start with   
rent1 with  landed property1 since it is
 bound up with land1 the source of all  
production and all existence1 and with  
the first form of production in  all    
more or less settled communities1 viz4  
agriculture4 ,but nothing  would be more
 erroneous4 ,under all forms of society 
there is a certain  industry which      
predominates over all the rest and whose

 condition  therefore determines the    
rank and influence of all the rest4     
,it is the universal light with which   
all the other colors are tinged  and are
 modified through its peculiarity4 ,it  
is a special ether which  determines the
 specific gravity of everything that    
appears in it4    ,let us take for      
example pastoral nations 7mere hunting  
and fishing  tribes are not as yet at   
the point from which real development   
commences74 ,they engage in a certain   
form of agriculture1 sporadically4  ,the
 nature of land-ownership is determined 
thereby4 ,it is held in  common and     
retains this form more or less according
 to the extent to  which these nations  
hold on to traditions2 such e4 g4 is    
land-ownership  among the ,slavs4 ,among
 nations whose agriculture is carried on
 by a  settled populationthe settled    
state constituting a great advancewhere 
agriculture is the predominant industry1
 such as in ancient and feudal          
societies1 even the manufacturing       

industry and its organization1 as  well 
as the forms of property which pertain  
to it1 have more or less  the           
characteristic features of the          
prevailing system of land ownership2    
society is then either entirely         
dependent upon agriculture1 as in the   
case of ancient ,rome1 or1 as in the    
middle ages1 it imitates in its  city   
relations the forms of organization     
prevailing in the country4  ,even       
capital1 with the exception of pure     
money capital1 has1 in the  form of the 
traditional working tool1 the           
characteristics of land  ownership in   
the ,middle ,ages4    ,the reverse is   
true of bourgeois society4 ,agriculture 
comes to be more  and more merely a     
branch of industry and is completely    
dominated by  capital4 ,the same is true
 of rent4 ,in all the forms of society  
in which  land ownership is the         
prevalent form1 the influence of the    
natural  element is the predominant one4
 ,in those where capital predominates   

the  prevailing element is the one      
historically created by society4 ,rent  
can not be understood without capital1  
nor can capital1 without rent4  ,capital
 is the all dominating economic power of
 bourgeois society4 ,it  must form the  
starting point as well as the end and be
 developed before  land-ownership is4   
,after each has been considered         
separately1 their  mutual relation must 
be analyzed4    ,it would thus be       
impractical and wrong to arrange the    
economic  categories in the order in    
which they were the determining factors 
in  the course of history4 ,their order 
of sequence is rather determined  by the
 relation which they bear to one another
 in modern bourgeois  society1 and which
 is the exact opposite of what seems to 
be their  natural order or the order of 
their historical development4 ,what we  
are  interested in is not the place     
which economic relations occupy in the  
historical succession of different forms
 of society4 ,still less are we         

interested in the order of their        
succession 8in idea0 7,proudhon71  which
 is but a hazy 787 conception of the    
course of history4 ,we are  interested  
in their organic connection within      
modern bourgeois society4    ,the sharp 
line of demarkation 7abstract precision7
 which so clearly  distinguished the    
trading nations of antiquity1 such as   
the  ,phenicians and the ,carthagenians1
 was due to that very predominance  of  
agriculture4 ,capital as trading or     
money capital appears in that           
abstraction1 where capital does not     
constitute as yet the predominating     
element of society4 ,the ,lombardians   
and the ,jews occupied the same         
position among the agricultural nations 
of the middle ages4    ,as a further    
illustration of the fact that the same  
category plays  different parts at      
different stages of society1 we may     
mention the  following3 one of the      
latest forms of bourgeois society1 viz4 
stock  companies1 appear also at its    

beginning in the form of the great      
chartered monopolistic trading          
companies4 ,the conception of national  
wealth which is imperceptibly formed in 
the minds of the economists of  the     
seventeenth century1 and which partly   
continues to be entertained  by those of
 the eighteenth century1 is that wealth 
is produced solely  for the state1 but  
that the power of the latter is         
proportional to that  wealth4 ,it was as
 yet an unconsciously hypocritical way  
in which wealth  announced itself and   
its own production as the aim of modern 
states  considering the latter merely as
 a means to the production of wealth4   
,the order of treatment must manifestly 
be as follows3 first1 the  general      
abstract definitions which are more or  
less applicable to  all forms of        
society1 but in the sense indicated     
above4 ,second1 the  categories which go
 to make up the inner organization of   
bourgeois  society and constitute the   
foundations of the principal classes2   

capital1 wage-labor1 landed property2   
their mutual relations2 city and        
country2 the three great social classes1
 the exchange between them2             
circulation1 credit 7private74 ,third1  
the organization of bourgeois  society  
in the form of a state1 considered in   
relation to itself2 the  8unproductive0 
classes2 taxes2 public debts2 public    
credit2 population2  colonies2          
emigration4 ,fourth1 the international  
organization of  production2            
international division of labor2        
international exchange2  import and     
export2 rate of exchange4 ,fifth1 the   
world market and  crises4        #d4    
,,production1 ,,means ,,of ,,production1
 ,,and ,,conditions ,,of ,,production1  
,,the ,,relations ,,of ,,production     
,,and ,,distribution4#afe ,,the         
,,connection         ,,between ,,form   
,,of ,,state ,,and ,,property ,,on ,,the
 ,,one ,,hand ,,and ,,relations         
,,of ,,production ,,and                 
,,distribution7#a7 ,,on ,,the ,,other4  

,,legal ,,relations4         ,,family   
,,relations4      ,notes on the points  
to be mentioned here and not to be      
omitted3#aff    #a4 ,war attains        
complete development before peace2 how  
certain  economic phenomena1 such as    
wage-labor1 machinery1 etc41 are        
developed  at an earlier date through   
war and in armies than within bourgeois 
society4 ,the connection between        
productive force and the means of       
communication is made especially plain  
in the case of the army4    #b4 ,the    
relation between the idealistic and     
realistic methods of writing  history2  
namely1 the so-called history of        
civilization which is all a  history of 
religion and states4    ,in this        
connection something may be said of the 
different methods  hitherto employed in 
writing history4 ,the so-called         
objective method4  ,the subjective4     
7,the moral and others74 ,the           
philosophic4    #c4 ,secondary and      
tertiary4 ,conditions of production     

which have been  taken over or          
transplanted2 in general1 those that are
 not original4  ,here is to be treated  
the effect of international relations4  
#d4 ,objections to the materialistic    
character of this view4 ,its relation   
to naturalistic materialism4    #e4 ,the
 dialectics of the conceptions          
productive force 7means of  production7 
and relation of production1 dialectics  
whose limits are to  be determined and  
which does not do away with the concrete
 difference4    #f4 ,the unequal        
relation between the development of     
material production  and art1 for       
instance4 ,in general1 the conception of
 progress is not  to be taken in the    
sense of the usual abstraction4 ,in the 
case of  art1 etc41 it is not so        
important and difficult to understand   
this  disproportion as in that of       
practical social relations1 e4 g4 the   
relation between education in the       
,united ,states and ,europe4 ,the really
  difficult point1 however1 that is to  

be discussed here is that of the        
unequal 787 development of relations of 
production as legal relations4  ,as1 e4 
g41 the connection between ,roman civil 
law 7this is less true of  criminal and 
public law7 and modern production4      
#g4 ,this conception of development     
appears to imply necessity4 ,on the     
other hand1 justification of accident4  
,varia4 7,freedom and other  points74   
7,the effect of means of communication74
 ,world history does not  always appear 
in history as the result of world       
history4    #h4 ,the starting point is  
to be found in certain facts of nature  
embodied subjectively and objectively in
 clans1 races1 etc4    #d4 ,produktion1 
,produktions-mittel und                 
,produktionsverhltnisse4                
,produktionsverhltnis und               
,verkehrsverhltnisse4 ,staats- und      
,eigenthumsformen im ,verhltnis zu den  
,produktions- und                       
,verkehrsverhltnissen4                  
,rechtsverhltnisse4                     

,familienverhltnisse4    ,notabene in   
bezug auf ,punkte1 die hier zu erwhnen  
und nicht vergessen  werden drfen3      
#a4 ,der ,krieg ist frher ausgebildet1  
wie der ,frieden3  ,auszufhren wre die  
,art1 wie durch den ,krieg und in den   
,armeen  etc4 gewisse konomische        
,verhltnisse wie ,lohnarbeit1           
,maschinerie  etc4 frher entwickelt     
werden als im ,inneren der brgerlichen  
,gesellschaft4 ,auch das ,verhltnis von 
,produktivkraft und                     
,verkehrsverhltnissen wird besonders    
anschaulich in der ,armee4    #b4       
,verhltnis der bisherigen idealen       
,geschichtsschreibung zur realen4       
,namentlich die sogenannte              
,kulturgeschichte1 die alle             
,religions-und  ,staatengeschichte4     
,bei der ,gelegenheit kann auch etwas   
gesagt werden ber die  verschiedenen    
,arten der bisherigen                   
,geschichtsschreibung4 ,sogenannte      
objektive4 ,subjektive4 7,moralische und
 andere47 ,philosophische4    #c4       

,sekundres und ,tertires4 ,ueberhaupt   
abgeleitete1  bertragene1 nicht         
ursprngliche ,produktionsverhltnisse4   
,hier  ist das ,einspielen der          
internationalen ,verhltnisse zu         
behandeln4    #d4 ,vorwrfe ber          
,materialismus dieser ,auffassung4      
,verhltnis zum  naturalistischen        
,materialismus4    #e4 ,dialektik der   
,begriffe ,produktivkraft               
7,produktions-mittel7 und               
,produktionsverhltnis1 eine ,dialektik1 
deren ,grenzen zu bestimmen sind  und   
den realen ,unterschied nicht aufhebt4  
#f4 ,das unegale ,verhltnis der         
,entwicklung der materiellen ,produktion
  zum ,beispiel zur knstlerischen4      
,ueberhaupt ist der ,begriff des        
,fortschritts nicht in der gewhnlichen  
,abstraktion zu fassen4 ,bei der  ,kunst
 etc4 ist diese ,disproportion noch     
nicht so wichtig und schwierig  zu      
fassen als innerhalb praktisch-sozialer 
,verhltnisse selbst1 zum  ,beispiel das 
,bildungsverhltnis der ,vereinigten     

,staaten zu ,europa4 ,der  eigentlich   
schwierige ,punkt1 der hier zu errtern  
ist aber der1 wie  die                  
,produktionsverhltnisse als             
,rechtsverhltnisse in ungleiche 787     
,entwicklung treten4 ,also zum ,beispiel
 das ,verhltnis des rmischen            
,privatrechts 7im ,kriminalrecht und    
ffentlichen ist das wenige der  ,fall7  
zur modernen ,produktion4    #g4 ,diese 
,auffassung erscheint als nothwendige   
,entwicklung4 ,aber  ,berechtigung des  
,zufalls4 ,varia4#afg 7,die ,freiheit   
und  anderes noch47 7,einwirkung der    
,kommunikationsmittel47 ,weltgeschichte 
eigentlich#afh nicht immer in der       
,geschichte als weltgeschichtliches     
,resultat4    #h4 ,der ,ausgangspunkt   
ist natrlich von der ,naturbestimmtheit 
zu  nehmen2 subjektiv und objektiv1     
,stmme1 ,rassen etc4    ,it is well     
known that certain periods of highest   
development of art  stand in no direct  
connection with the general development 
of society1  nor with the material basis

 and the skeleton structure of its      
organization4 ,witness the example of   
the ,greeks as compared with the  modern
 nations or even ,shakespeare4 ,as      
regards certain forms of art1 as  e4 g4 
the epos1 it is admitted that they can  
never be produced in the  world-epoch   
making form as soon as art as such comes
 into existence2 in  other words1 that  
in the domain of art certain important  
forms of it  are possible only at a low 
stage of its development4 ,if that be   
true of  the mutual relations of        
different forms of art within the domain
 of art  itself1 it is far less         
surprising that the same is true of the 
relation  of art as a whole to the      
general development of society4 ,the    
difficulty  lies only in the general    
formulation of these contradictions4 ,no
 sooner  are they specified than they   
are explained4 ,let us take for instance
  the relation of ,greek art and of that
 of ,shakespeare's time to our own4  ,it
 is a well known fact that ,greek       

mythology was not only the arsenal  of  
,greek art1 but also the very ground    
from which it had sprung4 ,is the  view 
of nature and of social relations which 
shaped ,greek imagination  and ,greek   
art possible in the age of automatic    
machinery1 and  railways1 and           
locomotives1 and electric telegraphs8   
,where does ,vulcan  come in as against 
,roberts  ,co42 ,jupiter1 as against the
 lightning  rod2 and ,hermes1 as against
 the ,credit ,mobilier8 ,all mythology  
masters  and dominates and shapes the   
forces of nature in and through the     
imagination2 hence it disappears as soon
 as man gains mastery over  the forces  
of nature4 ,what becomes of the ,goddess
 ,fame side by side  with ,printing     
,house ,square8#afi ,greek art          
presupposes the existence  of ,greek    
mythology1 i4 e4 that nature and even   
the form of society are  wrought up in  
popular fancy in an unconsciously       
artistic fashion4 ,that  is its         
material4 ,not1 however1 any mythology  

taken at random1 nor any  accidental    
unconsciously artistic elaboration of   
nature 7including  under the latter all 
objects1 hence also society74 ,egyptian 
mythology  could never be the soil or   
womb which would give birth to ,greek   
art4  ,but in any event there had to be 
a mythology4 ,in no event could  ,greek 
art originate in a society which        
excludes any mythological  explanation  
of nature1 any mythological attitude    
towards it and which  requires from the 
artist an imagination free from         
mythology4    ,looking at it from       
another side3 is ,achilles possible side
 by side with  powder and lead8 ,or is  
the ,iliad at all compatible with the   
printing  press and steam press8 ,does  
not singing and reciting and the muses  
necessarily go out of existence with the
 appearance of the printer's  bar1 and  
do not1 therefore1 disappear the        
prerequisites of epic poetry8    ,but   
the difficulty is not in grasping the   
idea that ,greek art and  epos are bound

 up with certain forms of social        
development4 ,it rather  lies in        
understanding why they still constitute 
with us a source of  aesthetic enjoyment
 and in certain respects prevail as the 
standard  and model beyond attainment4  
,a man can not become a child again     
unless he becomes childish4 ,but does   
he not enjoy the artless ways of the    
child and must he not strive to         
reproduce its truth on a higher plane8  
,is not the character of every  epoch   
revived perfectly true to nature in     
child nature8 ,why should the  social   
childhood of mankind1 where it had      
obtained its most beautiful             
development1 not exert an eternal charm 
as an age that will never  return8      
,there are ill-bred children and        
precocious children4 ,many of  the      
ancient nations belong to the latter    
class4 ,the ,greeks were normal         
children4 ,the charm their art has for  
us does not conflict with the  primitive
 character of the social order from     

which it had sprung4 ,it is  rather the 
product of the latter1 and is rather due
 to the fact that  the unripe social    
conditions under which the art arose and
 under which  alone it could appear can 
never return4      7,end of             
,manuscript47      ,,footnotes3      #a 
,cf4 ,seligman1 8,the ,economic         
,interpretation of ,history40           
,mac,millan4  #aijb4    #b ,aristotle1  
d4 ,rep4 ,l4 l1 c4 #i 7edit4 ,i ,bekkeri
 ,oxonii1 #ahcg7    8       444   1  '  
1        4                      1  '    
4           40    78,of everything which
 we possess there are two uses3one is   
the proper1  and the other the improper 
or secondary use of it4 ,for example1 a 
shoe  is used for wear1 and is used for 
exchange2 both are uses of the shoe4    
,he who gives a shoe in exchange for    
money or food to him who wants  one1    
does indeed use the shoe as a shoe1 but 
this is not its proper  or primary      
purpose1 for a shoe is not made to be an
 object of barter4  ,the same may be    

said of all possessions40 ,the ,politics
 of ,aristotle1  translated into        
,english by ,b4 ,jowett1 ,oxford1 #ahhe1
 v4 ,i41 p4 #ae47    #c ,that is the    
reason why ,german compilers are so fond
 of dwelling  on use-value1 calling it a
 8good40 ,see e4 g4 ,l4 ,stein1 8,system
 der  ,staatswissenschaften10 v4 ,i41   
chapter on 8goods0 7,gtter74 ,for       
intelligent information on 8goods0 one  
must turn to treatises on  commodities4 
#d ,a ridiculous presumption has gained 
currency of late to the effect  that    
common property in its primitive form is
 specifically a ,slavonian1  or even    
exclusively ,russian form4 ,it is the   
primitive form which we  can prove to   
have existed among ,romans1 ,teutons1   
and ,celts2 and of  which numerous      
examples are still to be found in       
,india1 though in a  partly ruined      
state4 ,a closer study of the ,asiatic1 
especially of  ,indian forms of communal
 ownership would show how from the      
different  forms of primitive communism 

different forms of its dissolution have 
been developed4 ,thus e4 g4 the various 
original types of ,roman and  ,teutonic 
private property can be traced back to  
various forms of ,indian  communism4    
#e 8,la ,ricchezza  una ragione tra due 
persone40 78,value is a relation        
between two persons07 ,galiani1 8,della 
,moneta10 p4 #bbj in vol4 ,,ii4  of     
,custodi's collection of 8,scrittori    
classici ,italiani di ,economia         
,politica4 ,parte ,moderna10 ,milano1   
#ahjc4    #f 8,in its natural state1    
matter 444 is always destitute of       
value40  ,mc,culloch1 8,a ,discourse on 
the ,rise1 ,progress1 ,peculiar         
,objects1 and  ,importance of ,political
 ,economy10 #bnd edition1 ,edinburgh1   
#ahbe1 pg4 #dh4  ,it is evident how even
 a ,mc,culloch stands above the         
fetishism of ,german  8thinkers01 who   
declare 8matter0 and half a dozen other 
foreign things  to be elements of value4
 ,cf4 e4 g4 ,l4 ,stein1 l4 c4 v4 ,i41 p4
 #aaj4    #g ,berkeley1 ,the ,querist1  

,london1 #agej4    #h ,thomas ,cooper1  
,lectures on the ,elements of ,political
 ,economy1  ,london1 #ahca1 p4 #ii4     
#i ,f4 ,list could never grasp the      
difference between labor as a source  of
 use-value and labor as the creator of  
certain social form of wealth  or       
exchange value1 because comprehension   
was altogether foreign to his  practical
 mind2 he therefore saw in the modern   
,english economists mere  plagiarists of
 ,moses1 the ,egyptian4    #aj ,it can  
be readily understood what kind of      
8service0 is rendered  by the category  
8service0 to economists of the type of  
,j4 ,b4 ,say and  ,f4 ,bastiat1 whose   
pondering sagacity1 as ,malthus has     
justly remarked1  always abstracts from 
the specially definite forms of economic
  relations4    #aa 8,egli  proprio     
ancora delle misure d'aver si fatta     
relazione  colle cose misurate1 che in  
certo modo la misurata divien misura    
della  misurante40 ,montanari1 ,della   
,moneta1 p4 #dh in v4 ,,iii of          

,custodi's  8,scrittori classici        
,italiani di ,economia ,politica4 ,parte
 ,antica40 78,it  is the property of    
measure to be in such a relation to the 
things  measured1 that in a certain way 
the thing measured becomes the measure  
of the measuring thing407    #ab ,it is 
in that sense that ,aristotle 7see the  
passage quoted at the  beginning of this
 chapter7 conceives exchange value4     
#ac ,this expression is used by         
,genovesi4    #ad ,aristotle makes the  
same remark with reference to the       
private  family as the primitive        
community4 ,but the primitive form of   
family is  the tribal family1 from the  
historical dissolution of which the     
private  family develops4       7 '  7  
7namely  7 8,and in the  first          
community1 which is the family1 this art
 is obviously of no use40  ,jowett's    
transl4 l4 c4    #ae 8,money is1 in     
fact1 only the instrument for carrying  
on buying  and selling 7but1 if you     
please1 what do you understand by buying

 and  selling87 and the consideration of
 it no more forms a part of the  science
 of political economy1 than the         
consideration of ships1 or  steam       
engines1 or of any other instrument     
employed to facilitate the  production  
and distribution of wealth40 ,th4       
,hodgskin1 ,popular ,political          
,economy1 etc4 ,london1 #ahbg1 p4 #agh1 
#agi4    #af ,a comparative study of the
 writings and characters of ,petty and  
,boisguillebert1 outside of the light   
which it would throw upon the           
difference of ,french and ,english      
society at the end of the seventeenth   
and the beginning of the eighteenth     
centuries1 would disclose the  origin of
 the national contrast between ,english 
and ,french ,political  ,economy4 ,the  
same contrast reasserts itself in       
,ricardo and ,sismondi4    #ag ,petty   
had illustrated the productive power    
inherent in the  division of labor on a 
much grander scale than that was done   
later by  ,adam ,smith4 ,see his 8,essay

 concerning the multiplication of       
mankind1  etc410 #crd edition1 #afhf1 p4
 #ce-cf4 ,he not only brings out the    
advantages of the division of labor on  
the example of the manufacture  of a    
watch1 as ,adam ,smith did later on that
 of a needle1 but considers  also a city
 and an entire country from the point of
 view of a large  manufacturing         
establishment4 ,the ,spectator1 of      
,november #bf1 #agaa1  refers to this   
8illustration of the admirable ,sir     
,william ,petty40  ,mc,culloch is1      
therefore1 mistaken when he supposes    
that the ,spectator  confounded ,petty  
with a writer forty years his junior4   
,see ,mc,culloch1  8,the ,literature of 
,political ,economy1 a classified       
catalogue10 ,london1  #ahde1 p4 #aje4   
,petty is conscious of being the founder
 of a new science4  ,his method1 he     
says1 8is not yet very usual1 for       
instead of using  only comparative and  
superlative ,words1 and intellectual    
,arguments10  he has undertaken to speak

 8in ,terms of ,number1 ,weight or      
,measure2  to use only ,arguments of    
,sense1 and to consider only such       
,causes1 as  have visible ,foundations  
in ,nature2 leaving those that depend   
upon  the mutable ,minds1 ,opinions1    
,appetites1 and ,passions of particular 
,men1 to the ,consideration of others40 
7,political ,arithmetick1 etc41         
,london1 #afii4 ,preface47 7,a new      
edition of 8,the ,economic ,writings of 
,sir  ,william ,petty10 edited by ,chas4
 ,henry ,hull1 has been published by the
  ,university ,press at ,cambridge1     
#ahii4 ,the above passage will be found 
in vol4 ,i41 p4 #bdd4 ,the further      
references are given to this new1 more  
accessible edition4 ,translator47 ,his  
wonderful keenness shows itself  e4 g4  
in the proposal to transport 8all the   
moveables and people of  ,ireland1 and  
of the ,highlands of ,scotland 444 into 
the rest of ,great  ,britain40 ,thereby 
much labor-time would be saved1 the     
productivity of  labor increased1 and   

8the ,king and his ,subjects would      
thereby become  more ,rich and ,strong40
 7,political ,arithmetick1 ch4 #d1 p4   
#bhe47 ,or  in the chapter of his       
,political ,arithmetic in which he      
proves that  ,england's mission is the  
conquest of the world's market at a time
 when  ,holland still played the leading
 part as a trading nation and ,france   
seemed to be on the way of becoming the 
ruling trading ,power3 8,that the  ,king
 of ,england's ,subjects1 have ,stock   
competent and convenient1 to  drive the 
,trade of the whole ,commercial ,world0 
7l4 c41 ch4 #aj1 p4 #caa74  8,that the  
,impediments of ,england's greatness are
 but contingent and  removable0 7l4 c41 
ch4 #e1 p4 #bih74 ,a singular humor     
pervades all his  writings4 ,thus1 he   
shows that it was by material means that
 ,hollandat  that time the model country
 with ,english economists1 just as      
,england  is with continental economists
 to-dayconquered the world market       
8without such ,angelical ,wits and      

,judgments1 as some attribute to the    
,hollanders0 7l4 c41 p4 #beh74 ,he      
advocates 8,liberty of ,conscience0 as a
  condition of trade1 because           
8,dissenters 444 are 444 patient ,men1  
and  such as believe that ,labour and   
,industry is their ,duty towards ,god10 
and 8,they believe that 444 for those   
who have less ,wealth1 to think  they   
have the more ,wit and ,understanding1  
especially of the things  of ,god which 
they think chiefly belong to the ,poor40
 8,from whence it  follows that ,trade  
is not fixt to any species of ,religion 
as such2 but  rather 444 to the         
,heterodox part of the whole0 7l4 c41 p4
 #bfb-bfd74 ,he  advocates an 8allowance
 by ,publick ,tax0 for those 8who live  
by begging1  cheating1 stealing1 gaming1
 borrowing without intention of         
restoring10  because 8it were more for  
the publick profit0 to tax the country  
for  such persons 8than to suffer them  
to spend extravagantly1 at the only     
charge of careless1 credulous1 and good 

natured ,people0 7p4 #bfi-bgj74  ,but he
 is opposed to taxes which transfer the 
wealth from industrious  people 8to such
 as do nothing at all1 but eat and      
drink1 sing1 play1  and dance2 nay such 
as study the ,metaphysicks0 7ibid474    
,petty's  writings are rarities of the  
bookseller's trade and are to be found  
only in scattered poor old editions1    
which is the more surprising since      
,william ,petty was not only the father 
of ,english ,political ,economy1  but   
also the ancestor of ,henry ,petty1     
alias ,marquis of ,lansdowne1 the       
nestor of the ,english ,whigs4 ,however1
 the ,lansdowne family could hardly     
bring out a complete edition of ,petty's
 works without prefacing it  with his   
biography1 and what can be said of most 
origins of the great  ,whig families    
holds good also in this case1 viz41 8the
 less said of  them the better40 ,the   
keen-witted but cynical army surgeon who
 was as  ready to plunder in ,ireland   
under the shield of ,cromwell as to     

crawl  before ,charles ,,ii4 to get the 
title of baron which he needed for his  
plunderings1 is a model hardly fit for  
public exhibition4 ,besides that1       
,petty seeks to prove in most of his    
writings which he published in his      
lifetime1 that ,england's prosperity    
reached its climax under ,charles       
,,ii41 a heterodox view for the         
hereditary exploiters of the 8glorious  
revolution40    #ah ,in contrast with   
the 8black art of finance0 of his time1 
,boisguillebert says3 8,la science      
financire n'est que la connaissance     
approfondie des intrts de l'agriculture 
et du commerce40 ,le ,dtail de  la      
,france1 #afig4 ,eugne ,daire's edition 
of ,economistes financiers du  ,,xviii4 
sicle1 ,paris1 #ahdc1 vol4 ,i41 p4 #bda4
    #ai ,but not ,romance ,political    
,economy1 since the ,italians reproduce 
the contrast between the ,english and   
,french economists in the two           
respective schools of ,naples and       
,milan1 while the ,spaniards of the     

earlier period are either pure          
,mercantilists2 modified mercantilists  
like ,ustariz2 or1 like ,jovellanos 7see
 his ,obras1 ,barcelona1 #ahci-dj71     
hold to the 8golden mean0 with ,adam    
,smith4    #bj 8,la vritable richesse   
444 jouissance entire1 non seulement des
  besoins de la vie1 mais mme de tous   
les superflus et de tout1 ce qui  peut  
fair plaisir  la sensualit10            
,boisguillebert1 8,dissertation sur  la 
nature de la richesse10 etc41 l4 c41 p4 
#djc4 ,but while ,petty was  a          
frivolous1 rapacious and unprincipled   
adventurer1 ,boisguillebert1  though an 
intendant under ,louis ,,xiv1 championed
 the interests of the  oppressed classes
 with a daring that was equal to his    
keenness of mind4    #ba ,the ,french   
,socialism of the ,proudhon type suffers
 from the same  national hereditary     
disease4    #bb 8,benjamin ,franklin1   
,the ,works of1 etc410 ed4 by ,i4       
,sparks1 vol4  ,,ii41 ,boston1 #ahcf4   
8,a ,modest ,inquiry into the ,nature   

and ,necessity of a  ,paper ,currency40 
#bc ,l4 c41 p4 #bfe4    #bd ,l4 c41 p4  
#bfg4    #be ,l4 c41 8,remarks and      
,facts relative to the ,american ,paper 
,money10  #agfd4    #bf ,see 8,papers on
 ,american ,politics2 ,remarks and      
,facts relative to  the ,american ,paper
 ,money10 #agfd1 l4 c4    #bg ,see e4 g4
 ,galiani1 8,della ,moneta10 in vol4 #c 
of ,scrittori ,classici  italiani di    
,economia politica 7,published by       
,custodi74 ,parte ,moderna1  ,milano1   
#ahjc4 8,la fatica1 he says1  l'unica   
che d valore alla cosa0  78only effort  
can give value to any thing074 ,the     
designation of labor  as 8fatica10      
strain1 effort1 is characteristic of the
 southerner4    #bh ,steuart's work1    
8,an ,inquiry into the ,principles of   
,political  ,economy1 being an ,essay on
 the ,science of ,domestic ,policy in   
,free  ,nations10 appeared first in     
,london in two quarto volumes in the    
year  #agfg1 ten years before ,adam     
,smith's 8,wealth of ,nations40 ,i quote

 from  the ,dublin edition of #aggj4    
7,the references to pages are the same  
for  the standard ,london edition of    
#agfg1 except where otherwise stated4   
,translator47    #bi ,steuart1 l4 c41   
vol4 ,i41 p4 #aha-ahc4    #cj ,steuart1 
l4 c41 vol4 ,i41 p4 #cfa-cfb4    #ca    
,see chapter ,i41 book ,,ii41 vol4 ,i4  
8of the reciprocal connections  between 
,trade and ,industry0 7,translator74    
#cb ,he declares1 therefore1 the        
patriarchal form of agriculture which   
is devoted to the direct production of  
use-values for the owner of the  land1  
to be an 8abuse10 not in ,sparta1 or    
,rome1 or even in ,athens1 but  in the  
industrial countries of the eighteenth  
century4 ,this 8abusive  agriculture0 is
 not 8trade10 but a 8direct means of    
subsisting40 ,just  as capitalistic     
agriculture clears the country of       
superfluous mouths1  so does the        
capitalistic mode of manufacture clear  
the factory of  superfluous hands4      
#cc ,thus e4 g41 ,adam ,smith says3     

8,equal quantities of labour1 at all    
times and places1 may be said to be of  
equal value to the labourer4 ,in  his   
ordinary state of health1 strength and  
spirits1 in the ordinary  degree of his 
skill and dexterity1 he must always lay 
down the same  portion of his ease1 his 
liberty1 and his happiness4 ,the price  
which  he pays must always be the same1 
whatever may be the quantity of goods   
which he receives in return for it4 ,of 
these1 indeed1 it may sometimes         
purchase a greater and sometimes a      
smaller quantity2 but it is their  value
 which varies1 not that of the labour   
which purchases them4444  ,labour alone1
 therefore1 never varying in its own    
value 444 is their  commodities' real   
price1 etc4 ,adam ,smith 7,book ,i41 ch4
 ,v41 p4 #cd1  ,oxford1 #ahfi4          
,translator47    #cd ,david ,ricardo1   
8,on the ,principles of ,political      
,economy and  ,taxation10 #crd edition1 
,london1 #ahba1 p4 #c4    #ce ,sismondi1
 8,etudes sur l',economie ,politique10  

t4 ,,ii41 ,bruxelles1  #ahcg4 8,c'est   
l'opposition entre la valeur usuelle 444
 et la valeur  changeable  laquelle le  
commerce a reduit toute chose10 p4 #afa4
  ,paris edition1 p4 #bbi1 ,transl4     
#cf ,sismondi l4 c41 p4 #afc-aff seq4   
,paris edition1 #bcj etf4 ,transl4      
#cg ,perhaps the silliest to be found   
are the annotations of ,j4 ,b4  ,say to 
the ,french translation of ,ricardo1    
made by ,constancio1 and the  most      
pedantically arrogant are the remarks of
 ,mr4 ,mac,leod in his newly  published 
8,theory of ,exchange10 ,london1 #aheh4 
#ch ,this objection raised against      
,ricardo by bourgeois economists was    
taken up later by the socialists4       
,having assumed the correctness of the  
formula1 they charged the practice with 
contradiction to the theory and         
appealed to bourgeois society to realize
 in practice the conclusions  which were
 supposed to follow from its theoretical
 principles4 ,that  was at least the way
 in which the ,english socialists turned

 ,ricardo's  formula of exchange value  
against political economy4 ,it remained 
for  ,mr4 ,proudhon not only to proclaim
 the fundamental principle of old       
society as the principle of the new1 but
 also to declare himself the  discoverer
 of the formula in which ,ricardo summed
 up the combined  results of classical  
,english political economy4 ,it has been
 proven that  the utopian interpretation
 of the ,ricardian formula was about    
forgotten  in ,england when ,mr4        
,proudhon 8discovered0 it on the other  
side of the  ,canal4 7,cf4 my work3     
8,misre de la ,philosophie10 etc41      
,paris1 #ahdg1  paragraph on la valeur  
constitue47    #ci ,true1 ,aristotle    
sees that the exchange value of         
commodities  underlies their prices3 8  
1           1      40 78,it is clear    
that exchange existed before coin4 ,for 
it does not  make any difference whether
 you give five beds for a house1 or as  
much  money as five beds are worth074   
,on the other hand1 since commodities   

acquire only in price the form of       
exchange value with respect to one      
another1 he makes them commensurable    
through money4 8         1   1 4        
1         1 '    '1    40 78,therefore  
all has to be appraised4 ,in that way   
exchange  may always take place1 and1   
with it1 society can exist4 ,coin1 like 
measure1 makes everything commensurable 
and equal1 for without exchange  there  
would be no society1 without equality   
there would be no exchange1  and without
 commensurability1 no equality407 ,he   
does not conceal from  himself that     
these different objects measured by     
money are entirely  incommensurable     
quantities4 ,what he is after is the    
common unit of  commodities as exchange 
values1 which as an ancient ,greek he   
was unable  to find4 ,he gets out of the
 difficulty by making commensurable     
through  money what is in itself        
incommensurable1 so far as it is        
necessary for  practical purposes4 8    
1      40 78,in truth  it is impossible 

to make things that are so different1   
commensurable1  but for practical       
purposes it is permissible407           
,aristotle1 ,ethica  ,nicomachea4 l4 #e1
 c4 #h1 edit4 ,bekkeri4 ,oxonii1 #ahcg4 
#dj ,the peculiar circumstance that1    
while the ounce of gold serves  in      
,england as the unit of the standard of 
money1 it is not divided  into aliquot  
parts has been explained as follows3    
8,our coinage was  originally adapted to
 the employment of silver onlyhence an  
ounce of  silver can always be divided  
into a certain adequate number of pieces
  of coin2 but as gold was introduced at
 a later period into a coinage  adapted 
only to silver1 an ounce of gold cannot 
be coined into an  adequate number of   
pieces40 ,maclaren3 8,a ,sketch of the  
,history of the  ,currency10 p4 #af1    
,london1 #aheh4    #da 8,money may      
continually vary in value and yet be as 
good a  measure of value as if it       
remained perfectly stationary4 ,suppose1
 for  instance1 it is reduced in        

value4444 ,before the reduction1 a      
guinea  would purchase three bushels of 
wheat or #f days' labour2 subsequently  
it would purchase only #b bushels of    
wheat1 or #d days' labour4 ,in both     
cases1 the relations of wheat and labour
 to money being given1 their  mutual    
relations can be inferred2 in other     
words1 we can ascertain that  a bushel  
of wheat is worth #b days' labour4      
,this1 which is all that  measuring     
value implies1 is as readily done after 
the reduction as  before4 ,the          
excellence of a thing as a measure of   
value is altogether  independent of its 
own variableness in value0 7p4 #aa1     
,bailey1 8,money  and its               
,vicissitudes40 ,london1 #ahcg74    #db 
8,le monete lequali oggi sono ideali    
sono le piu antiche d'ogni  nazione1 e  
tutte furono un tempo reali 7the latter 
assertion is too  sweeping71 e perch    
erano reali con esse si contava40       
,galiani1 8,della  ,moneta10 l4 c41 p4  
#aec 78,coins which are ideal to-day i4 

e41 whose  names no longer correspond to
 their value are among the more ancient 
with every nation2 at one time they were
 all real1 and for that reason  served  
for the purpose of counting407    #dc   
,the romantic ,a4 ,mller says3          
8,according to our idea every           
independent sovereign has the right to  
name the metal money1 and to  give it a 
nominal social value1 rank1 standing and
 title 7p4 #bgf1 v4  ,,ii41 ,a4 ,h4     
,mller1 8,die ,elemente der             
,staatskunst10 ,berlin1 #ahji74 ,as  far
 as title is concerned the ,hon4        
,hofrath is right2 but he forgets  the  
substance4 ,how confused his 8ideas0    
were1 may be seen1 e4 g41  from the     
following passage3 8,everybody          
understands how much depends  upon the  
right determination of the mint-price1  
especially in a country  like ,england1 
where the government with magnificent   
liberality  coins money gratuitously    
7,herr ,mller seems to think that the   
members  of the ,english government     

defray the mint expenses out of their   
own  pockets71 where it does not charge 
any mintage1 etc41 and thus if the      
mint-price of gold were set considerably
 above its market price1 if  instead of 
paying as now #c #ags4 #aj-a_/b;d4 per  
#a oz4 of gold1 it would  set the price 
of an ounce of gold at #c #ais41 all    
money would flow  into the mint and     
exchanging for the silver contained     
there bring  it into the market to be   
exchanged there for the cheaper gold2   
the  latter would in the same manner be 
brought again to the mint and the       
entire coinage system would be upset0   
7l4 c41 p4 #bhj-bha74 ,to preserve      
order in ,english coinage1 ,mller falls 
back on 8disorder40 ,while  shilling and
 pence are mere names of certain parts  
of an ounce of gold  represented by     
signs of silver and copper1 he imagines 
that an ounce  of gold is estimated in  
gold1 silver and copper and thus confers
 upon  the ,englishmen the blessing of a
 triple standard of value4 ,silver as a 

measure of money1 next to gold1 was     
formally abolished only in #ahaf by  #ef
 ,george ,,iii41 c4 #fh4 ,as a matter of
 fact1 it was legally abolished  as     
early as #agcd by #ad ,george ,,ii41 c4 
#db1 and still earlier by actual        
practice4 ,there were two circumstances 
that made ,a4 ,mller capable of  a      
so-called higher conception of political
 economy3 first1 his wide  ignorance of 
economic facts2 second1 his             
dilettanti-like visionary  attitude     
toward philosophy4    #dd 81  1         
40 7,athen4 ,deipn4 l4 ,,iv4 #di4 v4 #b1
 ed4  ,schweighuser1 #ahjb47 7,when     
,anacharsis was asked for what purpose  
the  ,greeks used money1 he replied1    
8,for reckoning4#8'807    #de ,g4       
,garnier1 one of the early ,french      
translators of ,adam ,smith1  conceived 
the queer notion of fixing a proportion 
between the use of  money of account and
 that of actual money4 ,his proportion  
is #aj to #a4  7,g4 ,garnier1 8,histoire
 de la ,monnaie depuis les temps de la  

plus haute  antiquit10 etc41 t4 #a1 p4  
#gh47    #df ,the act of ,maryland in   
#agbc by which tobacco was made the     
legal  standard1 but its value reduced  
to terms of ,english gold money1  namely
 one penny equal to one pound of        
tobacco1 reminds of the 8leges          
barbarorum10 in which1 inversely1       
certain sums of money were expressed  in
 terms of oxen1 cows1 etc4 ,in that case
 neither gold nor silver1 but  the ox   
and the cow were the actual material of 
the money of account4    #dg ,thus1 we  
read1 e4 g41 in the 8,familiar ,words0  
of ,mr4 ,david  ,urquhart3 8,the value  
of gold is to be measured by itself2 how
 can  any substance be the measure of   
its own worth in other things8 ,the     
worth of gold is to be established by   
its own weight1 under a false           
denomination of that weightand an ounce 
is to be worth so many pounds  and      
fractions of pounds4 ,this is falsifying
 a measure1 not establishing  a         
standard4#8'80    #dh 8,money is the    

measure of ,commerce1 and of the rate of
 everything1  and therefore ought to be 
kept 7as all other measures7 as steady  
and  invariable as may be4 ,but this    
cannot be1 if your money be made of  two
 ,metals1 whose proportion 444          
constantly varies in respect of one     
another40 ,john ,locke3 ,some           
,considerations on the ,lowering of     
,interest1  etc41 #afia 7p4 #aff1 p4 #fe
 in his ,works #g ed41 ,london1 #agfh1  
vol4 ,,iii47    #di ,locke says among   
other things3 8 444 call that a ,crown  
now1 which  before 444 was but a part of
 a ,crown4444 ,an equal quantity of     
,silver is  always the same ,value with 
an equal quantity of ,silver4444 ,for if
 the  abating #a-bj of the quantity of  
,silver of any ,coin does not lessen its
  ,value1 the abating #ai-bj of the     
quantity of the ,silver of any ,coin    
will  not abate its ,value4 ,and so a   
single ,penny1 being called a ,crown1   
will  buy as much ,spice1 or ,silk1 or  
any other ,commodity1 as a              

,crown-,piece1  which contains #bj times
 as much ,silver4444 ,now all that may  
be done  is giving a less quantity of   
,silver the ,stamp and ,denomination of 
a  greater4444 ,but 'tis ,silver and not
 ,names that pay ,debts and purchase    
,commodities0 7l4 c41 p4 #ace-ade       
passim74 ,if to raise the value of      
money means nothing but to give any     
desired name to an aliquot part  of a   
silver coin1 e4 g41 to call an eighth   
part of an ounce of silver  a penny1    
then money may really be rated as high  
as you please4 ,at the  same time1      
,locke answered ,lowndes that the rise  
of the market price  above the mint     
price was due not to the rise of the    
value of silver1  but to the lighter    
silver coins4 ,seventy-seven clipped    
shillings do not  weigh a particle more 
than #fb full-weighted ones4 ,finally he
 pointed  out with perfect right that1  
aside from the loss of weight in the    
circulating coin1 the market price of   
silver bullion in ,england could  rise  

to some extent above its mint price1    
since the export of silver  bullion was 
allowed while that of silver coin was   
prohibited 7l4 c41  p4 #ed-aaf passim74 
,locke was exceedingly careful not to   
touch upon the  burning question of     
public debts1 and no less carefully     
avoided the  discussion of the delicate 
economic question1 viz41 the            
depreciation of  the currency out of    
proportion to its real loss of silver1  
as was shown  by the rate of exchange   
and the ratio of silver bullion to      
silver coin4  ,we shall return to this  
question in its general form in the     
chapter on  the ,medium of ,circulation4
 ,nicholas ,barbon in 8,a ,discourse    
,concerning  ,coining the ,new ,money   
,lighter1 in ,answer to ,mr4 ,locke's   
,considerations1  etc410 ,london1 #afif1
 tried in vain to entice ,locke to      
difficult ground4    #ej ,steuart1 l4   
c41 v4 ,,ii41 p4 #aed4    #ea ,the      
,querist1 l4 c41 7p4 #e-f-g47 ,the      
8,queries on ,money0 are  generally     

clever4 ,among other things ,berkeley is
 perfectly right in  saying that by     
their progress the ,north ,american     
colonies 8make it  plain as daylight1   
that gold and silver are not so         
necessary for the  wealth of a nation1  
as the vulgar of all ranks imagine4#8'80
    #eb ,price means here real          
equivalent in the sense commonly        
employed by  ,english economic writers  
in the seventeenth century4    #ec      
,steuart1 l4 c41 v4 ,,ii41 p4 #aed1 #bii
 #ast ,london edition1 of #agfg1  v4    
,i41 p4 #ebf-eca4 ,transl44    #ed ,on  
the occasion of the last commercial     
crisis the ideal ,african  money        
received loud praise from certain       
,english quarters1 after its  seat was  
this time moved from the coast to the   
heart of ,barbary4 ,the  freedom of the 
,berbers from commercial and industrial 
crises was  ascribed to the ideal unit  
of measure of their bars4 ,would it not 
have  been simpler to say that trade and
 industry are the conditio sine qua  non

 of commercial and industrial crises8   
#ee ,the ,currency ,question1 ,the      
,gemini ,letters1 ,london1 #ahdd1 p4    
#bfj-bgb1 passim4    #ef ,john ,gray3   
8,the ,social ,system4 ,a ,treatise on  
the ,principle of  ,exchange1           
,edinburgh1 #ahca40 ,compare with       
8,lectures on the ,nature and  ,use of  
,money1 ,edinburgh1 #ahdh10 by the same 
author4 ,after the ,february  revolution
 ,gray sent a memorial to the           
provisional ,french government1  in     
which he instructs the latter that      
,france is not in need of an            
8organization of labour10 but of an     
8organization of exchange0 of which  the
 plan is fully worked out in his money  
system4 ,honest ,john did not  suspect  
that sixteen years after the appearance 
of his 8,social ,system0  a patent for  
the same discovery would be taken out by
 the ingenious  ,proudhon4    #eg ,gray1
 8,the ,social ,system10 etc41 p4 #fc3  
8,money should be merely  a receipt1 an 
evidence that the holder of it has      

either contributed  certain value to the
 national stock of wealth or that he has
 acquired a  right to the same value    
from some one who has contributed to    
it4#8'80    #eh ,an estimated value     
being previously put upon produce1 let  
it be  lodged in a bank1 and drawn out  
again1 whenever it is required1 merely  
stipulating1 by common consent1 that he 
who lodges any kind of property  in the 
proposed ,national ,bank1 may take out  
of it an equal value of  whatever it may
 contain1 instead of being obliged to   
draw out the  self-same thing that he   
put in40 ,l4 c41 p4 #fh4    #ei ,l4 c41 
p4 #af4    #fj ,gray3 8,lectures on     
,money1 etc410 p4 #ahb4    #fa ,l4 c41  
p4 #afi4    #fb 8,the business of every 
country ought to be conducted on a      
national  capital40 ,john ,gray1 8,the  
,social ,system10 etc41 p4 #aga4    #fc 
8,the land to be transformed into       
national property40 ,l4 c41 p4 #bih4    
#fd ,see e4 g4 ,w4 ,thompson3 8,an      
,inquiry into the ,distribution of      

,wealth1 etc410 ,london1 #ahbg4 ,bray1  
8,labour's ,wrongs and ,labour's        
,remedy10 ,leeds1 #ahci4    #fe ,alfred 
,darimont's 8,de la ,reforme des        
banques10 ,paris1 #ahef1 may be         
considered as a compendium of this      
melodramatic theory of money4    #ff    
8,di due sorte  la moneta1 ideale e     
reale2 e a dui diversi usi   adoperata1 
a valutare le cose e a comperarle4 ,per 
valutare  buona  la moneta ideale1 cosi 
come la reale e forse anche pi4 ,l'altro
 uso  della moneta  di comperare quelle 
cose istesse1 ch'ella apprezza 444  i   
prezzi e i contratti si valutano in     
moneta ideale e si eseguiscono  in      
moneta reale40 ,galiani1 l4 c41 p4 #aab 
sq4 78,money is of two kinds1  ideal and
 real2 and is adapted to two different  
uses3 to determine  the value of things 
and to buy them4 ,for the purpose of    
valuation  ideal money is as good as    
real and perhaps even better4 ,the other
  use of money is to buy the same things
 which it appraises 444 prices  and     

contracts are determined in ideal money 
and are executed in real  money407      
#fg ,this1 of course1 does not prevent  
the market price of commodities  to be  
above or below their value4 ,however1   
this consideration is  foreign to simple
 circulation and belongs to quite       
another sphere to be  considered later1 
when we shall investigate the relation  
between value  and market price4    #fh 
,how deeply some beautiful souls are    
wounded by the merely  superficial      
aspect of the antagonism which asserts  
itself in buying  and selling1 may be   
seen from the following abstract from   
,m4 ,isaac  ,pereire's3 8,leons sur     
l'industrie et les finances10 ,paris1   
#ahcb4 ,the  fact that the same ,isaac  
in his capacity of inventor and dictator
  of the 8,credit mobilier0 has acquired
 the reputation of the wolf of  the     
,paris ,bourse shows what lurks behind  
the sentimental criticism  of economics4
 ,says ,mr4 ,pereire at the time an     
apostle of ,st4 ,simons3  8,c'est       

parceque tous les individus sont isols1 
spars les uns des  autres1 soit dans    
leur travaux1 soit pour la consommation1
 qu'il y a  echange entre eux des       
produits de leur industrie respective4  
,de la  ncessit de l'change est derive  
la ncessit de determiner la valeur      
relative des objets4 ,les ides de la    
valeur et de l'change sont donc         
intimement lies1 et toutes deux dans    
leur forme actuelle exprime             
l'individualisme et l'antagonisme4444   
,il n'y a lieu a fixer la valeur  des   
produits que parcequ'il y a vente at    
achat1 en d'autres termes1  antagonisme 
entre les divers membres de la societ4  
,il n'y a lieu   s'occuper du prix1 de  
valeur que l o il y avait vente et      
echat1 c'est   dire1 o chaque individu  
tait oblig de lutter1 pour se procurer  
les object ncessaires a l'entretien de  
son existence0 7l4 c41 p4 #b1  #c       
passim74 78,since individuals are       
isolated and separated from one  another
 both in their labors and in            

consumption1 exchange takes place       
between them in the products of their   
respective industries4 ,from the        
necessity of exchange arises the        
necessity of determining the relative   
value of things4 ,the ideas of value and
 exchange are thus intimately  connected
 and both express in their actual form  
individualism and  antagonism4444 ,the  
determination of values of products     
takes place  only because there are     
sales and purchases1 or1 to put it      
differently1  because there is an       
antagonism between different members of 
society4  ,one has to occupy himself    
with price and value only where there is
  sale and purchase1 that is to say1    
where every individual is obliged  to   
struggle to procure for himself the     
objects necessary for the  maintenance  
of his existence407    #fi 8,l'argent   
n'est que le moyen et l'acheminement1 au
 lieu que les  denres utiles  la vie    
sont la fin et le but40 78,money is but 
the ways  and means1 while the things   

useful in life are the end and object407
  ,boisguillebert3 8,le ,dtail de la    
,france10 #afig1 in ,eugene ,daires'    
8,economistes financiers du             
,x,v,i,i,iieme sicle1 vol4 ,i41 ,paris1 
#ahdc1 p4  #baj4    #gj ,in ,november1  
#ahjg1 ,william ,spence published a     
pamphlet in ,england  under the title3  
8,britain ,independent of ,commerce40   
,the principle set  forth in this       
pamphlet was further elaborated by      
,william ,cobbet in  his 8,political    
,register0 under the virulent title1    
8,perish ,commerce40  ,to this ,james   
,mill replied in #ahjh in his 8,defence 
of ,commerce0 which  contains the       
passage quoted above from his 8,elements
 of ,political  ,economy0 7p4 #aij-aic1 
,transl474 ,in his controversy with     
,sismondi and  ,malthus on commercial   
crises1 ,j4 ,b4 ,say appropriated this  
clever  device1 and as it would be      
difficult to point out with what new    
idea  this comical 8prince de la        
science0 had enriched political economy1

 his  continental admirers have         
trumpeted him as the man who had        
unearthed  the treasure of the          
metaphysical balance of purchases and   
sales2 as a  matter of fact1 his merits 
consisted rather of the impartiality    
with  which he equally misunderstood his
 contemporaries1 ,malthus1 ,sismondi    
and ,ricardo4    #ga ,the manner in     
which economists explain the different  
aspects of  the commodity may be seen   
from the following examples3    8,with  
money in possession1 we have but one    
exchange to make in order  to secure the
 object of desire1 while with other     
surplus products  we have two1 the first
 of which 7procuring the money7 is      
infinitely  more difficult than the     
second40 7,g4 ,opdyke1 8,a ,treatise on 
,political  ,economy10 ,new ,york1      
#ahea1 p4 #bgg-bgh47    8,the superior  
saleableness of money is the exact      
effect or natural  consequence of the   
less saleableness of commodities40 7,th4
 ,corbet1 8,an  ,inquiry into the       

,causes and ,modes of the ,wealth of    
,individuals40 etc41  ,london1 #ahda1 p4
 #aag47    8,money has the quality of   
being always exchangeable for what it   
measures40 7,bosanquet1 8,metallic1     
,paper and ,credit ,currency10 etc41    
,london1 #ahdb1 p4 #ajj47    8,money can
 always buy other commodities1 whereas  
other commodities  can not always buy   
money40 7,th4 ,tooke1 8,an ,inquiry into
 the ,currency  ,principle10 #b;d ed41  
,london1 #ahdd1 p4 #aj47    #gb ,the    
same commodity can be bought and resold 
many times4 ,it  circulates1 then1 not  
merely as a commodity1 but in a capacity
 which  does not exist from the point of
 view of simple circulation1 of the     
simple contrast of commodity and money4 
#gc ,the quantity of money is immaterial
 8pourvu qu'il y en ait  assez pour     
maintenir les prix contracts par les    
denres0 7as long  as it is sufficient to
 maintain the existing prices of        
commodities74  ,boisguillebert1 l4 c4 p4
 #baj4    8,if the circulation of       

commodities of four hundred millions    
required a  currency of forty millions1 
and 444 this proportion of one-tenth was
  the due level1 estimating both        
currency and commodities in gold2 then1 
if the value of commodities to be       
circulated increased to four hundred    
and fifty millions1 from natural causes 
444 ,i should say the currency1  in     
order to continue at its level1 must be 
increased to forty-five  millions40     
7,william ,blake1 8,observations on the 
,effects ,produced by the  ,expenditure 
of ,government1 etc410 ,london1 #ahbc1  
p4 #hj47    #gd 8,e la velocit del giro 
del danaro1 non la quantit dei metalli  
che fa apparir molto a poco il danaro40 
7,galiani1 l4 c4 p4 #ii47 78,it is  the 
rapidity of the circulation of money and
 not the quantity of metals  that causes
 a greater or smaller amount of money to
 appear407    #ge ,an example of an     
extraordinary decline of metallic       
circulation  from its average level was 
furnished by ,england in #aheh1 as may  

be  seen from the following extract from
 the ,london ,economist3 8,from the     
nature of the case 7namely1 the isolated
 nature of simple circulation7  very    
exact data cannot be procured as to the 
amount of cash that is  fluctuating in  
the market1 and in the hands of the not 
banking classes4  ,but1 perhaps1 the    
activity or the inactivity of the mints 
of the  great commercial nations is one 
of the most likely indications in the   
variations of that amount4 ,much will be
 manufactured when it is wanted2  and   
little when little is wanted4444 ,at the
 ,english mint the coinage  was in #ahee
 #i1bde1jjj2 #ahef1 #f1dgf1jjj2 #aheg1  
#e1bic1hee4 ,during #aheh  the mint had 
scarcely anything to do40 7,economist1  
,july #aj1 #aheh47 ,but  at the same    
time about eighteen million pounds      
sterling were lying in  the bank vaults4
    #gf ,dodd1 8,curiosities of         
,industry10 etc41 ,london1 #ahed4    #gg
 8,the ,currency ,question ,reviewed1   
etc41 by a ,banker40 7,edinburgh1       

#ahde1 p4 #fi47    8,si un cu un peu us 
tait reput valoir quelque chose de moins
 qu'un  cu tout neuf1 la circulation se 
trouverait continuellement arrte1 et  il
 n'y aurait pas un seul payement qui ne 
fut matire  contestation40  7,g4        
,garnier1 l4 c4 t4 ,i41 p4 #bd47 78,if  
an ecu slightly used would  pass for a  
little less than an entirely new ecu1   
circulation would be  continually       
interfered with1 and not a payment would
 take place that  would not give rise to
 controversy407    #gh ,w4 ,jacob1 8,an 
,inquiry ,into the ,production and      
,consumption of the  ,precious ,metals40
 7,london1 #ahca1 vol4 ,,ii41 ch4       
,,xxvi47    #gi ,david ,buchanan1       
8,observations on the ,subjects ,treated
 of in ,dr4  ,smith's ,inquiry on the   
,wealth of ,nations10 etc4 7,edinburgh1 
#ahda1 p4 #c47    #hj ,henry ,storch1   
8,cours d',economic ,politique40 etc41  
avec des notes  par ,j4 ,b ,say4 ,paris1
 #ahbc1 tom4 ,,iv41 p4 #agi4 ,storch    
published his work  in ,french at ,st4  

,petersburg4 ,j4 ,b4 ,say immediately   
issued a ,parisian  reprint1            
supplemented with alleged 8notes10 which
 as a matter of fact  contain nothing   
but commonplaces4 ,storch 7see his      
8,considerations sur  la ,nature du     
,revenue ,national10 ,paris1 #ahbd7 took
 by no means kindly to  this annexation 
of his work by the 8prince de la        
science40    #ha ,plato de ,rep4 ,l4    
,,ii 8   40 78,money symbol  of         
exchange407 ,opera omnia1 etc41 ed4 ,g4 
,stallbumius1 ,london1 #ahej1 p4  #cjd4 
,plato develops money only in two       
capacitiesas a measure of value  and a  
token of value1 but demands1 in addition
 to the token of value  serving for home
 circulation1 another one for trade     
between ,greece and  foreign countries4 
7,see also ,book ,v of his ,laws47      
#hb ,aristotle1 ,ethic4 ,nicom1 l4 #e41 
ch4 #h1 l4 c43  '                4     1
  '      40 78,in the satisfaction of   
wants money became the medium of        
exchange by agreement4 ,and for that    

reason it bears the name 1  because it  
owes its existence1 not to nature1 but  
to law 771 and it  is in our power to   
change it and make it void407 ,aristotle
 had a far  more comprehensive and deep 
view of money than ,plato4 ,in the      
following  passage he beautifully shows 
how barter between different communities
  creates the necessity of assigning the
 character of money to a specific       
commodity1 i4 e41 one which has itself  
an intrinsic value4 8        h      1   
1  '         444          04 7,arist4   
,de ,republica1  l4 i4 p4 #i1 secs4 #g1 
#h l4 c47    78,when the inhabitants of 
one country became more dependent on    
those of  another1 and they imported    
what they needed and exported the       
surplus1  money necessarily came into   
use 444 and hence men agreed to employ  
in  their dealings with each other      
something which was intrinsically useful
  and easily applicable to the purposes 
of life1 for example1 iron1  silver and 
the like40 ,trans1 by ,b4 ,jowett1 8,the

 ,politics of ,aristotle1  ,oxford1     
#ahhe1 p4 #af74 ,this passage is quoted 
by ,michel ,chevalier1 who  either has  
not read ,aristotle or did not          
understand him1 to prove that  in       
,aristotle's opinion currency must      
consist of a substance having  intrinsic
 value4 ,on the contrary1 ,aristotle    
says expressly that money  as a mere    
medium of circulation seems to owe its  
existence to agreement  or law1 as is   
shown by its name 1 and that in reality 
it owes  its utility as coin to its     
function and not to any intrinsic       
use-value  of its own4        1  '      
' 78,others maintain that coined money  
is a mere  sham1 a thing not natural1   
but conventional only1 which would have 
no  value or use for any of the purposes
 of daily life if another commodity     
were substituted by the users407 7l4 c4 
sec4 #aa47    #hc ,mandeville1 ,sir     
,john1 8,voyages and ,travels10 ,london1
 #agje1 p4 #aje3  8,this ,emperor 7of   
,cattay or ,china7 may dispende ols     

muche as he wile  withouten estymacion4 
,for he despendethe not1 nor makethe no 
money1 but  of lether empredeth1 or of  
papyre4 ,and when that money bathe ronne
 so  longe that it begynethe to waste1  
than men beren it to the ,emperoure     
,tresorye1 and then they taken newe     
,money for the old4 ,and that money     
gothe thorghe out all the contree1 and  
thorge out all his ,provynces4444  ,they
 make no money neither of ,gold nor of  
,sylver10 and 8therefore10  thinks      
,mandeville1 8he may despende ynew and  
outrageously40    #hd ,benjamin         
,franklin1 8,remarks and ,facts         
,relative to the ,american  ,paper      
,money10 #agfd1 p4 #cdh1 l4 c4 8,at this
 very time1 even the silver  money in   
,england is obliged to the legal tender 
for part of its value2  that part which 
is the difference between its real      
weight and its  denomination4 ,great    
part of the shillings and sixpences now 
current  are by wearing become #e1 #aj1 
#bj1 and some of the sixpences even #ej 

per cent41 too light4 ,for this         
difference between the real and the     
nominal you have no intrinsic value4    
,you have not so much as paper1  you    
have nothing4 ,it is the legal tender1  
with the knowledge that it  can easily  
be repassed for the same value1 that    
makes three-pennyworth  of silver pass  
for a sixpence40    #he ,berkeley1 l4   
c41 p4 #e-f4 8,whether the denominations
 being  retained1 although the bullion  
were gone 444 might not nevertheless 444
  a circulation of commerce 7be7        
maintained80    #hf 8,non solo i metalli
 ricchi son segni delle cose 4442 ma    
vicendevolmente le cose 444 sono segni  
dell'oro e dell'argento40 7,a4          
,genovesi1 8,lezioni di ,economia       
,civile10 #agfe4 p4 #bha in ,custodi1   
,parte  ,mod4 #a4 ,,viii47 78,not only  
are precious metals tokens of things1   
but  vice versa1 things are tokens of   
gold and silver407    #hg ,petty4 8,gold
 and silver are universal wealth40      
7,political  ,arithmetic1 l4 c41 p4     

#bdb47    #hh ,e4 ,misselden4 8,free    
,trade1 or the ,means to ,make ,trade   
,flourish10  etc41 ,london1 #afbb4 8,the
 natural matter of ,commerce is         
,merchandise1  which ,merchants from the
 end of ,trade have stiled ,commodities4
 ,the  ,artificiall matter of ,commerce 
is ,money1 which hath obtained the title
  of sinewes of warre and of ,state4444 
,money1 though it be in nature  and time
 after ,merchandise1 yet forasmuch as it
 is now in use become  the chiefe40 7p4 
#g47 ,he compares his own treatment of  
merchandise and  money with the manner  
of 8,old ,jacob1 who1 blessing his      
,grandchildren1  crost his hands1 and   
laide his right hand on the yonger1 and 
his left  hand on the elder40 7l4 c47   
,boisguillebert1 8,dissert4 sur la      
,nature  ,des ,richesses10 etc4 8,voil  
donc l'esclave du commerce devenu son   
matre4444 ,la misre des peuples ne vient
 que de ce qu'on a fait un  matre1 ou   
plutt un tyran de ce qui tait un        
esclave40 7p4 #cie1 #cii47    #hi       

,boisguillebert1 l4 c4 8,on a fait une  
idole de ces mtaux 7l'or  et l'argent7  
et laissant l1 l'objet et l'intention   
pour lesquels ils  avaient t appels dans
 le commerce1 savoir1 pour y servir de  
gages  dans l'change et la tradition    
rciproque1 on les a presque quitts  de  
ce service pour en former des divinits1 
aux quelles on a sacrifi  et sacrifie   
toujours plus de biens et de besoins    
prcieux et mme  d'hommes1 que jamais    
l'aveugle antiquit n'en immola  ces     
fausses  divinits10 etc4 7l4 c41 p4     
#cie47    #ij ,in the first halt of the 
perpetuum mobile1 i4 e41 in the         
suspension of the function of money as a
 medium of circulation1  ,boisguillebert
 at once suspects its independent       
existence from  commodities4 ,money1 he 
says1 must be 8in constant motion1 it   
can be  money only by being mobile1 but 
as soon as it becomes motionless all  is
 lost40 78,dans un mouvement continuel1 
ce qui ne peut tre que tant  qu'il est  
meuble1 mais sitt qu'il devient immeuble

 tout est perdu40  8,le ,dtail de la    
,france10 p4 #bca47 ,what he overlooks  
is that this halt  constitutes the      
condition of its movement4 ,what he     
really wants is that  the value form of 
commodities should appear merely in the 
transitory  form of their change of     
matter1 but should never become an end  
in  itself4    #ia 8 444 ,the more the  
stock 444 is 444 encreased in wares1 the
 more  it decreaseth in treasure40 7,e4 
,misselden1 l4 c41 p4 #bc47    #ib l4   
c41 p4 #aa-ac passim4    #ic ,petty1    
8,political ,arith410 l4 c41 p4 #aif    
7#ahii edition1 v4 ,i1 p4  #bfi4        
,transl47    #id ,francois ,bernier1    
8,voyage contenant la description des   
tats du  ,grand ,mogul40 7,paris        
edition1 #ahcj1 t4 l41 conf41 p4        
#cab-cad47    #ie ,dr4 ,martin ,luther1 
8,bcher vom ,kaufhandel und ,wucher10   
#aebd4  ,in the same passage ,luther    
says3 8,gott hat uns ,deutsche dahin    
geschleidert1 dass wir unser gold und   
silber mssen in fremde ,lnder  stossen1 

alle ,welt reich machen und selbst      
,bettler ,bleiben4 ,england  sollte wohl
 weniger ,goldes haben1 wenn            
,deutschland ihm sein ,tuch  liesse1 und
 der ,knig von ,portugal sollte auch    
weniger haben1 wenn wir  ihm die ,wrze  
liessen4 ,rechne ,du1 wie viel eine     
,messe zu ,frankfurt  aus ,deutschen    
,landen gefrt wird1 ohne ,not und       
,ursache3 so wirst ,du  ,dich wundern1  
wie es zugehe1 dass noch ein heller in  
,deutschen ,landen  sei4 ,frankfurt ist 
das ,silber-und ,goldloch1 dadurch aus  
,deutschem  ,lande fleisst1 was nur     
guillet und wchst1 gemnzt oder          
geschlagen  wird bei uns2 wre das ,loch 
zuegestopft1 so drft man itzt der ,klage
  nicht hren1 die allethalben eitel     
,schuld und kein ,geld1 alle ,land und  
,stdte ausgewuchert sind4 ,aber lass    
gehen1 es will doch also gehen2 wir     
,deutsche mssen ,deutsche bleiben6 wir  
lassen nicht ab1 wir mssen denn40    ,in
 the work quoted above ,misselden wishes
 to retain the gold and silver  at least

 within the confines of ,christendom3   
8,the other forreine  remote causes of  
the want of money1 are the ,trades      
maintained out of  ,christendome to     
,turky1 ,persia and the ,east ,indies1  
which trades are  maintained for the    
most part with ready money1 yet in a    
different  manner from the trades of    
,christendome within itselfe4 ,for      
although  the trades within             
,christendome are driven with ready     
monies1 yet  those monies are still     
contained and continued within the      
bounds of  ,christendome4 ,there is     
indeede a fluxus and refluxus1 a flood  
and ebbe  of the monies of ,christendome
 traded within it selfe2 for sometimes  
there is more in one part of            
,christendome1 sometimes there is lesse 
in another1 as one ,country wanteth and 
another aboundeth3 ,it cometh  and      
goeth1 and whirleth about the ,circle of
 ,christendome1 but is still  contained 
within the compasse thereof4 ,but the   
money that is traded out  of            

,christendome into the parts aforesaid  
is continually issued out and  never    
returneth againe40 7p4 #ai-bj47    #if  
8,a nummo prima origo avaritiae 444 haec
 paulatim exarsit rabie  quadam1 non jam
 avaritia1 sed fames auris40 7,plin41   
,hist4 ,nat41 l4  ,,xxxiii41 c4 ,,xiv47 
78,from money first springs avarice 444 
the latter gradually grows into  a kind 
of madness1 which is no more avarice1   
but a thirst for gold407    #ig ,horace 
thus understands nothing of the         
philosophy of hoarding when  he says    
7,satir4 l4 ,,ii41 ,satir4 ,,iii73      
8,siquis emat citharas1 emptas          
comportat in unum1 ,nec studio citharae 
nec musae deditus ulli2 ,si  scalpra et 
formas non sutor2 nautica vela ,aversus 
mercaturis2 delirus  et amens1 ,undique 
dicatur merito4 ,qui discrepat istis1   
,qui nummos  aurunque recondit nescius  
uti ,compositis metuensque velut        
contingere  sacrum80      8,if one buys 
fiddles1 hoards them up when bought1    
,though music's study ne'er engaged his 

thought1    ,one lasts and awls1        
unversed in cobbler's craft1    ,one    
sails for ships1 not knowing fore from  
aft1    ,you'd call them mad3 but tell  
me1 if you please1    ,how that man's   
case is different from these1    ,who as
 he gets it1 stows away his gain1       
,and thinks to touch a farthing were    
profane80      7,transl4 by ,john       
,covington1 ,london1 #ahgd1 p4 #fj47    
,mr4 ,senior understands the question   
much better3 8,l'argent parat tre  la   
seule chose dont le dsir est universel1 
et il en est ainsi parceque  l'argent   
est une richesse abstraite et parceque  
les hommes1 en la  possdant peuvent     
satisfaire  tous leur besoins de quelque
 nature  qu'ils soient40 78,principes   
,fondamentaux de l',economie ,politique1
  tirs de leons edites et inedites de   
,n4 ,w4 ,senior1 par ,comte ,jean       
,arrivabene10 ,paris1 #ahcf1 p4 #bba4   
,the corresponding passage in the       
,english edition of his ,political      
,economy1 ,london1 #ahfc1 is to be found

  on p4 #bg4 ,translator47 ,so does     
,storch3 8,since money represents all   
other forms of wealth1 it is only       
necessary to accumulate it to provide   
for oneself all kinds of wealth existing
 in the world40 7l4 c41 v4 #b1  p4      
#acd47    #ih ,to what extent the inner 
man of the commodity owner remains      
unchanged1 even when he has become      
civilized and has developed into a      
capitalist1 is shown by the example of a
 ,london representative of a            
cosmopolitan banking house who adopted  
as a fitting coat of arms for  his      
family a #ajj1jjj bank note1 which he   
had hung up in a glass frame4  ,the     
point here is in the mocking contempt of
 the note for circulation4    #ii ,see  
the passage from ,xenophon1 quoted      
below4    #ajj ,jacob1 l4 c41 v4 #b1 ch4
 #be and #bf4    #aja 8,in times of     
great agitation and insecurity1         
especially during  internal commotions  
or invasions1 gold and silver articles  
are rapidly  converted into money2      

whilst during periods of tranquility and
  prosperity1 money is converted into   
plate and jewelry40 7l4 c41 v4 #b1  p4  
#ceg47    #ajb ,in the following passage
 ,xenophon develops money in its        
specific  forms of money and hoard3 8   
444      1     1         444           1
                 1 '    1               
1    4                    1             
40 7,xen4 de ,vectigalibus1 c4 ,,iv47   
78,of all operations with which ,i am   
acquainted1 this is the only one  in    
which no sort of jealousy is felt at a  
further development of the  industry 444
 the larger the quantity of ore         
discovered and the greater  the amount  
of silver extracted1 the greater the    
number of persons  ready to engage in   
the operation4444 ,no one when he has   
got sufficient  furniture for his house 
dreams of making further purchases on   
this  head1 but of silver no one ever   
yet possessed so much that he was       
forced to cry 8,enough40 ,on the        
contrary1 if ever anybody does become   

possessed of an immoderate amount he    
finds as much pleasure in digging  a    
hole in the ground and hoarding it as an
 actual employment of it4444  ,when a   
state is prosperous there is nothing    
which people so much desire  as silver4 
,the men want money to expend on        
beautiful armor and fine  horses1 and   
houses and sumptuous paraphernalia of   
all sorts4 ,the women  betake themselves
 to expensive apparel and ornaments of  
gold4 ,or when  states are sick1 either 
through barrenness of corn and other    
fruits1  or through war1 the demand for 
current coin is even more imperative    
7whilst the ground lies unproductive71  
to pay for necessaries or  military     
aid40 ,transl4 by ,h4 ,g4 ,dakyns1      
,london1 #ahib1 v4 #b1 ,revenues1  p4   
#cce-ccf47 ,aristotle develops in ,book 
,i41 ch4 #i of his ,politics  the two   
opposite movements of circulation4      
,c-,m-,c and ,m-,c-,m1 calling  them    
8economics0 and 8chrematistics0         
respectively4 ,the two forms are        

represented by the ,greek tragedian     
,euripides as ,sikn 7right7 and ,keodos 
7profit74    #ajc ,of course1 capital   
also is advanced in the shape of money1 
and  the money thus advanced may be     
advanced capital1 but this point of view
  does not fall within the horizon of   
simple circulation4    #ajd 8,the       
difference between the means of purchase
 and the means of  payment0 is          
emphasized by ,luther4    #aje ,mr4     
,mac,leod1 in spite of his doctrinaire  
conceit about  definitions1 fails so    
utterly to grasp the most elementary    
economic  relations that he tries to    
deduce the very origin of money from its
  crowning form1 viz41 that of a means  
of payment4 ,he says among other  things
 that since people do not always need   
each other's services at  the same time1
 and not to the same extent1 8there     
would remain over  a certain difference 
or amount of service due from the first 
to the  seconddebt40 ,the owner of this 
debt needs the services of a third      

person1 who does not directly need those
 of the second1 and 8transfers  to the  
third the debt due to him from the      
first4 ,evidence of debts  changes so   
handscurrency4444 ,when a person        
received an obligation  expressed by    
metallic currency1 he is able to command
 the services  not only of the original 
debtor1 but of the whole of the         
industrious  community40 7,mac,leod1    
8,theory and ,practice of ,banking10    
etc41 ,london1  #ahee1 v4 ,i41 ch4 ,i47 
#ajf ,bailey1 l4 c41 p4 #c4 8,money is  
the general commodity of  contracts1 or 
that in which the majority of bargains  
about property1 to  be completed at a   
future time1 are made40    #ajg ,says   
,senior 7in his ,lectures1 published by 
,comte ,arrivabene1 l4  c41 p4 #aag73   
8,since the value of everything changes 
within a certain  period of time1 people
 select as a means of payment an article
 whose  value changes least and which   
retains longest a given average ability 
to buy things4 ,thus1 money becomes the 

expression or representative of         
values40 ,on the contrary3 just because 
gold1 silver1 etc41 have become  money1 
i4 e41 the embodiment of independently  
existing exchange value1  they become   
the universal means of payment4 ,when   
the consideration as  to the stability  
of the value of money mentioned by ,mr4 
,senior comes  into play1 i4 e41 in     
periods when money asserts itself as the
 universal  means of payment through the
 force of circumstances1 then is just   
the  time when fluctuations in the value
 of money are discovered4 ,such was  the
 time of ,elizabeth in ,england1 when   
,lord ,burleigh and ,sir ,thomas        
,smith1 in view of the manifest         
depreciation of the precious metals1 put
  through an act of parliament which    
obliged the universities of ,oxford  and
 ,cambridge to stipulate the payment of 
one-third of their ground  rents in     
wheat and malt4    #ajh ,boisguillebert1
 who would stem the development of      
bourgeois  relations of production and  

violently attacks the bourgeois         
personally1  has a soft heart for those 
forms of money in which it appears only 
ideally or transiently4 ,thus he speaks 
first of the medium of  circulation and 
next of the means of payment4 ,what he  
does not see is  the direct transition  
of money from its ideal to the material 
form1  since the hard cash is latently  
present in the ideal measure of value4  
,that money is but another form of      
commodities1 he says1 is shown by       
wholesale trade1 in which exchange takes
 place without the intervention  of     
money1 after 8les marchandises sont     
apprecis40 78,le ,detail de la          
,france10 l4 c4 p4 #baj47    #aji       
,locke1 l4 c41 p4 #ag1 #ah4    #aaj 8,il
 danaro ammassato supplisce a quella    
somma1 che per essere  attualmente in   
circolazione1 per l'eventuale promiscuit
 de' commerci  si allontana e sorte     
della sfera della circolazione          
medesima40  78,the accumulated money    
supplements that amount which1 in order 

to  be actually in circulation and to   
meet all possible perturbations of      
trade1 retires from that sphere of      
circulation40 ,g4 ,r4 ,carli1 note  to  
,berri's 8,meditazioni sulla ,economia  
,politica10 p4 #aif1 t4 ,,xv4 of        
,custodi's l4 c47    #aaa ,montanari1   
8,della ,moneta10 #afhc1 l4 c41 p4 #dj4 
8 cosi fattamente  diffusa per tutto il 
globo terrestre la communicazione de'   
populi  insieme1 che puo quasi dirsi    
esser il mondo tutto divinuto una sola  
citta in cui si fa perpetua fiera d'ogni
 mercanzia1 e dove ogni uomo  di tutto  
cio che la terra1 gli animali e l'umana 
industria altrove  producono1 puo       
mediante il danaro stando in sua casa   
provedersi e  godere4 ,maravigliosa     
invenzione40 78,the communication of    
nations  among themselves is so widely  
extended all over the globe that it may 
be almost said that the entire world has
 become one city in which a  perpetual  
fair of merchandise is held and where   
every man may by means  of money acquire

 and enjoy1 while staying at home1 all  
that the earth1  the animals and human  
industry produce elsewhere4 ,marvelous  
invention407    #aab ,i metalli han     
questo di proprio e singulare che in    
essi soli  tutte le ragioni si riducono 
ad una che  la loro quantit1 non  avendo
 ricevuto delle natura diversa qualit n 
nell'interna loro  constituzione n      
nell'externa forma e fattura40          
7,galiani1 l4 c41 p4  #acj47 78,metals  
have this singular property1 that       
everything in them is  reduced to one   
consideration1 viz41 that of quantity1  
since they are  not endowed by nature   
with any differences in quality either  
in their  internal structure or in their
 external form and shape407    #aac ,de 
,orbe ,novo4 8,o1 happy coin1 which     
furnishes mankind with a  pleasant and  
useful beverage and keeps its possessors
 immune from  the hell-born pest of     
avarice1 since it can not be either     
buried or  preserved long40    #aad ,in 
#gfj a multitude of poor people         

emigrated to the south of  ,prague to   
wash the gold sand found there1 and     
three men were able to  extract three   
marks of gold a day4 ,as a result of    
that the run on  the 8diggings0 and the 
number of hands taken away from         
agriculture  became so great that the   
country was visited by a famine the     
following  year4 ,see ,m4 ,g4 ,krner1   
8,abhandlung von dem ,alterthum des     
,bhmischen  ,bergwerks10 ,schneeberg1   
#ageh4    #aae ,so far the ,australian  
and other discoveries have not affected 
the  ratio of the values of gold and    
silver4 ,the assertions to the contrary 
of ,michel ,chevalier are worth as much 
as the ,socialism of this ex-,st4       
,simonist4 ,the quotations of silver on 
the ,london market prove1 however1  that
 the average gold price of silver during
 #ahej-aheh is not quite  #c per cent4  
higher than the price during #ahcj-ahej4
 ,but this rise in  price is accounted  
for simply by the ,asiatic demand for   
silver4 ,in  the course of the years    

#aheb-aheh the price of silver was      
changing in  certain years and months   
only with a change in this demand1 and  
in no  case with the importation of gold
 from the newly discovered sources4     
,the following is a summary of the gold 
prices of silver on the ,london  market4
    ,,price ,,of ,,silver ,,per ,,ounce4
     ,year      ,march4       ,july4    
,november4    #aheb      #fj-a_/h pence 
#fj-a_/d pence   #fa-g_/h pence    #ahec
      #fa-c_/h pence   #fa-a_/b pence   
#fa-g_/h pence    #ahed      #fa-g_/h   
pence   #fa-c_/d pence   #fa-a_/b pence 
#ahee      #fj-g_/h pence   #fa-a_/b    
pence   #fj-g_/h pence    #ahef      #fj
     pence   #fa-a_/d pence   #fb-a_/h  
pence    #aheg      #fa-c_/d pence      
#fa-e_/h pence   #fa-a_/b pence    #aheh
      #fa-e_/h pence    #aaf 8,gold is a
 wonderful thing6 ,whoever possesses it1
 is master of  all that he desires4 ,by 
means of gold even admission to ,heaven 
may be  gained for souls40 7,columbus in
 a letter from ,jamaica in #aejc74      

#aag ,the slowness of the process was   
admitted by ,hume1 although it but      
little agrees with his principle4 ,see  
,david ,hume 8,essays and ,treatises  on
 several subjects40 ,london1 #aggg1 v4  
,i1 p4 #cjj4    #aah ,conf4 ,steuart1 l4
 c4 v4 ,i1 p4 #cid-djj4    #aai ,david  
,hume1 l4 c4 p4 #cjj4    #abj ,david    
,hume1 l4 c4 p4 #cjc4    #aba ,david    
,hume1 l4 c4 p4 #cjc4    #abb ,david    
,hume1 l4 c4 p4 #cjg1 #cjh1 #cjc3 8,it  
is evident1 that the  prices do not so  
much depend on the absolute quantity of 
commodities1  and that of money1 which  
are in a nation1 as on that of the      
commodities1 which can or may come to   
market1 and of the money which          
circulates4 ,if the coin be locked up in
 chests1 it is the same thing  with     
regard to prices1 as if it were         
annihilated2 if the commodities be      
hoarded in magazines and granaries1 a   
like effect follows4 ,as the money  and 
commodities in these cases1 never meet1 
they cannot affect each  other4 ,the    

whole 7of prices7 at last reaches a just
 proportion with  the new quantity of   
specie which is in the kingdom40    #abc
 ,see ,law and ,franklin about surplus  
value which gold and  silver are        
supposed to acquire from their function 
of money4 ,also  ,forbonnais4    #abd   
,this fiction is literally advanced by  
,montesquieu4 ,the passage  from        
,montesquieu is quoted by ,marx in his  
,capital1 v4 ,i4 ,part #a1 ,ch4  ,,iii1 
section #b1 b1 foot-note4 ,note by ,k4  
,kautsky to #bnd ,german edition4       
#abe ,steuart1 l4 c4 v4 ,i41 p4 #cid    
seq4    #abf ,steuart1 l4 c41 v4 #b4 p4 
#cgg-cgi passim 7not found in the #agfg 
,london edition4 ,translator74    #abg  
,steuart1 l4 c41 p4 #cgi-chj passim     
7,london1 #agfg edition1 v4 l4 p4  #djj4
 ,transl474    #abh 8,the additional    
coin will be locked up1 or converted    
into  plate4444 ,as for the paper money1
 so soon as it has served the first     
purpose of supplying the demand of him  
who borrowed it1 it will  return upon   

the debtor in it and become realized4444
 ,let the specie  of a country1         
therefore1 be augmented or diminished in
 ever so great  a proportion1           
commodities will still rise and fall    
according to the  principles of demand  
and competition1 and these will         
constantly  depend upon the inclinations
 of those who have property or any kind 
of equivalent whatsoever to give1 but   
never upon the quantity of coin  they   
are possessed of4444 ,let it 7namely1   
the quantity of specie  in a country7 be
 ever so low1 while there is real       
property of any  denomination in the    
country1 a competition to consume in    
those who  possess it1 prices will be   
high1 by the means of barter1 symbolical
  money1 mutual prestations and a       
thousand other inventions4444 ,if  this 
country has a communication with other  
nations1 there must  be a proportion    
between the prices of many kinds of     
merchandize  there and elsewhere1 and a 
sudden augmentation or diminution of the

  specie1 supposing it could of itself  
operate the effects of raising  or      
sinking prices1 would be restrained in  
its operation by foreign  competition40 
l4 c4 v4 #a1 p4 #djj-djb4 8,the         
circulation of every country  must be in
 proportion to the industry of the      
inhabitants producing  the commodities  
which come to market4444 ,if the coin of
 a country1  therefore1 falls below the 
proportion of the price of industry     
offered  to sale1 inventions1 like      
symbolical money1 will be fallen upon1  
to  provide for an equivalent for it4   
,but if the specie be found above the   
proportion of industry1 it will have no 
effect in raising prices1 nor  will it  
enter into circulation3 it will be      
hoarded up in treasures4444  ,whatsoever
 be the quantity of money in a nation1  
in correspondence with  the rest of the 
world1 there never can remain in        
circulation1 but the  quantity nearly   
proportional to the consumption of the  
rich and to the  labour and industry of 

the poor inhabitants10 and this         
proportion is  not determined 8by the   
quantity of money actually in the       
country0 7l4  c4 p4 #djc-djh passim47   
8,all nations will endeavor to throw    
their ready  money1 not necessary for   
their own circulation1 into that country
 where  the interest of money is high   
with respect to their own40 7l4 c4 v4   
#b4  p4 #e74 8,the richest nation in    
,europe may be the poorest in           
circulating  specie40 l4 c41 v4 #b1 p4  
#f4 ,for the polemics against ,steuart  
see ,arthur  ,young4 ,in his foot-note  
in ,capital1 v4 #a1 ,part #a1 ch4       
,,iii41 section  #b1 b4 p4 #fb1         
,humboldt ed41 ,marx says3 ,the theory  
of ,hume was defended  against the      
attacks of ,j4 ,steuart and others1 by  
,a4 ,young1 in his  8,political         
,arithmetic10 ,london1 #aggd1 in which  
work there is a special  chapter        
entitled 8,prices depend on quantity of 
money40 ,note by ,k4  ,kautsky to #bnd  
,german edition4    #abi ,steuart1 l4   

e41 v4 #b1 p4 #cgj4 ,louis ,blanc       
translates the  expression 8money of the
 society0 which stands for home or      
national  money1 as socialist money1    
which is perfectly meaningless and makes
  a ,socialist of ,john ,law4 7,see the 
first volume of his ,history of the     
,french ,revolution74    #acj ,maclaren1
 l4 c4 p4 #dc seq4 ,patriotism led      
,gustav ,julius1 a  ,german writer who  
met with very early death1 to hold up   
old ,bsch as  an authority as against   
the ,ricardian school4 ,honest ,bsch    
rendered  ,steuart's elegant ,english   
into ,hamburg ,platt and by trying to   
improve  upon the original spoiled it as
 often as he could4    #aca ,note to the
 #bnd edition3 ,this is not an exact    
statement4 ,adam  ,smith expresses the  
law correctly on many occasions4 ,see   
,capital1  ,humboldt edition1 p4 #fb1   
ft-note #a1 where writing seven years   
later1  ,marx makes the following       
qualification3 8,this statement applies 
only  in so far as ,adam ,smith1 ex     

officio1 treats of money4 ,now and then1
  however1 as in his criticism of the   
earlier systems of political  economy1  
he takes the right view4 #8,the quantity
 of coin in every  country is regulated 
by the value of the commodities which   
are to be  circulated by it4444 ,the    
value of the goods annually bought and  
sold  in any country requires a certain 
quantity of money to circulate and      
distribute them to their proper         
consumers1 and can give employment to   
no more4 ,the channel of circulation    
necessarily draws to itself a sum       
sufficient to fill it1 and never admits 
any more4' ,wealth of ,nations1  ,book  
iv41 ch4 ,i40    #acb ,the distinction  
between currency and money is therefore 
not found in 8,wealth of ,nations40     
,deceived by the apparent impartiality  
of ,adam ,smith1 who knew his ,hume and 
,steuart very well1 honest ,maclaren    
remarks3 8,the theory of the dependence 
of prices on the extent of the  currency
 had not as yet1 attracted attention2   

and ,doctor ,smith1 like  ,mr4 ,locke   
7,locke undergoes a change in his view71
 considers metallic  money nothing but a
 commodity40 ,maclaren1 l4 c4 p4 #dd4   
#acc ,david ,ricardo1 8,the ,high ,price
 of ,bullion1 a ,proof of  the          
,depreciation of ,bank-notes40 #dth     
edition1 ,london1 #ahaa4 7,the first    
edition appeared in #ahji74 ,further1   
8,reply to ,mr4 ,bosanquet's ,practical 
,observations on the ,report of the     
,bullion ,committee40 ,london1 #ahaa4   
#acd ,david ,ricardo3 8,on the          
,principles of ,political ,economy1     
etc40 p4 #gg4 8,their value of metals   
like that of all other  commodities1    
depends on the total quantity of labour 
necessary to  obtain the metal1 and to  
bring it to market40    #ace #a p4 #gg1 
#ahj1 #aha4    #acf ,ricardo1 l4 c4 p4  
#dba4 8,the quantity of money that can  
be  employed in a country must depend on
 its value3 if gold alone were  employed
 for the circulation of commodities1 a  
quantity would be  required1 one        

fifteenth only of what would be         
necessary1 if silver were  made use of  
for the same purpose40 ,see also        
,ricardo's3 8,proposals for  an         
,economical and ,secure ,currency10     
,london1 #ahaf1 p4 #hi1 where he says3  
8,the amount of notes in circulation    
depends on the amount required for  the 
circulation of the country2 which is    
regulated 444 by the value  of the      
standard of money1 the amount of        
payments1 and the economy  practised in 
effecting them40    #acg ,ricardo1      
8,principles of ,political ,economy01 p4
 #dcb4    #ach ,david ,ricardo1 8,reply 
to ,mr4 ,bosanquet's ,practical         
,observations1  etc40 p4 #di4 8,that    
commodities would rise or fall in price1
 in  proportion to the increase or      
diminution of money1 ,i assume as a fact
  which is incontrovertible40    #aci   
,david ,ricardo1 8,the ,high ,price of  
,bullion10 etc4 8,money would  have the 
same value in all countries40 p4 #d4 ,in
 his ,political ,economy  ,ricardo      

modified this statement1 but not in a   
way to affect what has  been said here4 
#adj l4 c4 p4 #c-d4    #ada l4 c41 p4   
#d4    #adb ,ricardo1 l4 c41 p4 #aa-ab4 
#adc ,ricardo1 l4 c41 p4 #ad4    #add l4
 c41 p4 #ag4    #ade ,ricardo1 l4 c41 p4
 #gd-ge4 8,england1 in consequence of a 
bad  harvest1 would come under the case 
of a country having been deprived  of a 
part of its commodities1 and1 therefore1
 requiring a diminished  amount of      
circulating medium4 ,the currency which 
was before equal to  her payments would 
now become superabundant and relatively 
cheap1  in proportion 444 of her        
diminished production2 the exportation  
of  this sum1 therefore1 would restore  
the value of her currency to the  value 
of the currencies of other countries40  
,his confusion of money  and commodity1 
and of money and coin borders on the    
ludicrous in  the following passage3    
8,if we can suppose that after an       
unfavorable  harvest1 when ,england has 
occasion for an unusual importation of  

corn1  another nation is possessed of a 
superabundance of that article1 but  has
 no wants for any commodity whatever1 it
 would unquestionably follow  that such 
nation would not export its corn in     
exchange for commodities3  but neither  
would it export corn for money1 as that 
is a commodity  which no nation ever    
wants absolutely1 but relatively40 l4   
c41 p4  #ge4 ,pushkin in his hero poem  
makes the father of his hero incapable  
of comprehending that commodities are   
money4 ,but that money is a  commodity1 
the ,russians have understood from times
 of yore as is proven  not only by the  
,english corn imports in #ahch-ahdb1 but
 by the entire  history of their        
commerce4    #adf ,conf4 ,thomas ,tooke1
 8,history of ,prices10 and ,james      
,wilson1  8,capital1 ,currency and      
,banking40 7,the latter work is a       
reprint of a  series of articles which  
appeared in the ,london ,economist in   
#ahdd1 #ahde  and #ahdg47    #adg ,james
 ,deacon ,hume3 8,letters on the ,corn  

,laws40 ,london1 #ahcd1 p4  #bi-ca4     
,letter by ,h4 ,b4 ,t4 on the ,corn     
,laws and on the ,rights of the         
,working ,classes4 ,transl4    #adh     
,thomas ,tooke1 8,history of ,prices10  
etc4 ,london1 #ahdh1 p4 #aaj4    #adi   
,conf4 ,w4 ,blake's above quoted        
8,observations etc40    #aej ,james     
,mill3 8,elements of ,political         
,economy40 ,london1 #ahba1 p4  #ie-aja  
passim4 ,transl4    #aea ,a few months  
before the outbreak of the commercial   
crisis of  #aheg1 a committee of the    
,house of ,commons was in session to    
inquire  into the effect of the         
bank-laws of #ahdd and #ahde4 ,lord     
,overstone1 the  theoretical father of  
these laws1 delivered himself of this   
boast in  his testimony before the      
committee3 8,by strict and prompt       
adherence  to the principles of the act 
of #ahdd1 everything has passed off with
  regularity and ease2 the monetary     
system is safe and unshaken1 the        
prosperity of the country is undisputed1

 the public confidence in  the wisdom of
 the act of #ahdd is daily gaining      
strength2 and if the  committee wish for
 further practical illustration of the  
soundness of  the principles on which it
 rests1 or of the beneficial results    
which it  has assured1 the true and     
sufficient answer to the committee is1  
look  around you2 look at the present   
state of trade of the country1 look  at 
the contentment of the people2 look at  
the wealth and prosperity  which        
pervades every class of the community2  
and then1 having done so1  the committee
 may be fairly called upon to decide    
whether they will  interfere with the   
continuance of an act under which these 
results have  been developed40 ,thus did
 ,overstone blow his own horn on the    
fourteenth  of ,july1 #aheg2 on the     
twelfth of ,november of the same year   
the ,ministry  had to suspend on its own
 responsibility the wonderful law of    
#ahdd4    #aeb ,tooke was entirely      
ignorant of ,steuart's work1 as may be  

seen  from his 8,history of ,prices for 
#ahci-ahdg10 ,london1 #ahdh4 where he   
reviews the history of the theories of  
money4    #aec ,tooke's most important  
work besides the 8,history of ,prices0  
which  his co-worker ,newmarch published
 in six volumes1 is 8,an ,inquiry into  
the ,currency ,principle1 the           
,connection of the ,currency with       
,prices0  etc41 #bnd edition1 ,london1  
#ahdd4 ,wilson's book we have already   
quoted4  ,finally there is to be        
mentioned ,john ,fullarton's 8,on the   
,regulation of  ,currencies10 #b;d      
edition1 ,london1 #ahde4    #aed 8,we   
ought to 444 distinguish 444 between    
gold 444 as merchandise1  i4 e4 as      
capital1 and gold 444 as currency0      
7,tooke1 8,an ,inquiry into  the        
,currency ,principle1 etc40 p4 #aj74    
8,gold and silver may be counted  upon  
to realize on their arrival nearly the  
exact sum required to be  provided 444  
gold and silver possess an infinite     
advantage over all  other description of

 merchandize 444 from the circumstance  
of being  universally in use as         
money4444 ,it is not in tea1 coffee1    
sugar or  indigo that debts1 whether    
foreign or domestic1 are usually        
contracted  to be paid1 but in coin2 and
 the remittance1 therefore1 either in   
the  identical coin designated1 or in   
bullion which can be promptly turned    
into that coin through the mint or      
market of the country to which  it is   
sent1 must always afford to the         
remitter1 the most certain1  immediate1 
and accurate means of affecting this    
object1 without risk  of disappointment 
from the failure of demand or           
fluctuation of price40  7,fullerton1 l4 
c4 p4 #acb-acc47 8,any other article    
7except gold or  silver7 might in       
quantity or kind be beyond the usual    
demand of the  country to which it is   
sent40 7,tooke3 8,an ,inquiry1 etc407   
#aee ,the transformation of money into  
capital we shall consider in the  third 
chapter which treats of capital and     

forms the end of the first  book4       
#aef ,this introduction was first       
published in the ,neue ,zeit 7see       
,translator's ,preface1 p4 #e7 of ,march
 #g1 #ad and #ba1 #aijc1 by ,karl       
,kautsky1 with the following            
explanation3    8,this article has been 
found among the posthumous papers of    
,karl ,marx4  ,it is a fragmentary      
sketch of a treatise that was to have   
served as an  introduction to his main  
work1 which he had been writing for many
 years  and whose outline was clearly   
formed in his mind4 ,the manuscript is  
dated ,august #bc1 #aheg4444 ,as the    
idea is very often indicated only in    
fragmentary sentences1 ,i have taken the
 liberty of introducing here and  there 
changes in style1 insertions of words1  
etc4444 ,a mere reprint of  the original
 would have made it unintelligible4444  
,not all the words in  the manuscript   
are legible4444    8,wherever there     
could be no doubt as to the necessity of
 corrections1  ,i did so without        

indicating them in the text2 in other   
cases ,i put all  insertions in         
brackets4 ,wherever ,i am not certain as
 to whether ,i have  deciphered a word  
correctly1 ,i have put an interrogation 
point after  it2 other changes are      
specially noted4 ,in all other respects 
this is  an exact reprint of the        
original1 whose fragmentary and         
incomplete  passages serve to remind us 
only too painfully of the many treasures
  of thought which went down to the     
grave with ,marx1 treasures which  would
 have sufficed for generations if ,marx 
had not so anxiously  avoided giving to 
the world any of his ideas until he had 
tested them  repeatedly from every      
conceivable point of view and had given 
them a  wording that would be           
incontrovertible4 ,in spite of its      
fragmentary  character it opens before  
us a wealth of new points of view40     
#aeg ,the original reads 8person40      
#aeh ,the manuscript reads 8production40
    #aei ,the manuscript reads          

8production40    #afj ,the ,german text 
reads 8instruktiv10 which ,i take to be 
a misprint  of 8instinktiv40            
,translator4    #afa ,compare this with 
foot-note #a1 on p4 #cd of ,capital1    
,humboldt  edition1 ,new ,york3         
8,truly comical is ,m4 ,bastiat1 who    
imagines that the ancient ,greeks and   
,romans lived by plunder alone4 ,but    
when people plunder for centuries1      
there must always be something at hand  
for them to seize2 the objects  of      
plunder must be continually reproduced40
 ,k4 ,kautsky4    #afb ,the ,english    
expression is used by ,marx in his      
,german original4  ,transl4    #afc     
,marx evidently has in mind here a      
passage in ,adam ,smith's ,wealth  of   
,nations 7vol4 #b1 ch4 #b7 in which he  
speaks of the circulation of  a country 
as consisting of two distinct parts3    
circulation between  dealers and        
dealers1 and that between dealers and   
consumers4 ,the word  dealer signifies  
here not only a merchant or shopkeeper1 

but also a  producer4 ,k4 ,kautsky4     
#afd ,here two words in the manuscript  
can not be deciphered4 ,they look  like 
8ausser sich0 78outside of itself074 ,k4
 ,kautsky4    #afe ,distribution        
7,verkehr7 is used here in the sense of 
physical  distribution of goods and not 
in sense of economic distribution of the
  shares of the products between the    
different factors of production4        
,translator4    #aff ,as the 8notes0    
written down by ,marx in the following  
eight  paragraphs are extremely         
fragmentary1 making translation in some 
cases  impossible without a certain     
degree of interpretation1 and as the    
original is not accessible in book-form1
 they are reproduced here in  ,german   
for the benefit of the student who may  
feel interested in the  original wording
 as it had been jotted down by ,marx4   
#afg ,im ,original ist zu lesen ,va     
#afh ,im ,original ist zu lesen egtl4   
#afi ,the site of the 8,times0 building 
in ,london4 ,k4 ,k4          ,,authors  

,,quoted ,,in ,,zur ,,kritik            
,arbuthnot1 #beh4      ,aristotle1 #ai1 
#da1 #ec1 #gh-gi1 #aec1 #aed1 #ahd4     
,athenaeus1 #hg4      ,attwood1 #ajj4   
,bailey1 #hd4      ,barbon1 #ie4        
,bastiat1 #cd4      ,berkeley1 ,bischop1
 #cb1 #ie-if1 #aee4      ,bernier1 #agc4
      ,blake1 #acc1 #bej4      ,blanc1  
,louis1 #bca4      ,boisguillebert1 #ef1
 #ei1 #aba1 #acc1 #aff1 #afh1 #aih4     
,bosanquet1 #abd1 #bce1 #bdb4           
,bray1 #ajf4      ,brougham1 #gj4       
,buchanan1 #adg4      ,bsch1 #bca4      
,carli1 #bje4      ,castlereagh1 ,lord1 
#ajj4      ,cato1 #agj4      ,chevalier1
 #aed1 #bae4      ,clay1 #beh4          
,cobbet1 #abc4      ,cooper1 #cb4       
,corbet1 #abd4        ,darimont1 #ajg4  
,dodd1 #ada4      ,forbonnais1 #bbf4    
,franklin1 #fb-c1 #aee1 #bbf4           
,fullarton1 #bfj4        ,galiani1 #cj1 
#fe1 #he1 #aaa1 #acd4      ,garnier1    
#hg1 #ada4      ,genovesi1 #ea1 #afd4   
,gladstone1 #gc4      ,gray1 #ajc sq4   
,grim1 #baa4        ,hodgskin1 #ee4     

,horace1 #agh4      ,hume1 ,d41 #bai1   
#bba sq1 #bca4      ,hume1 ,j4 ,d41     
#bdi4        ,jakob1 #ada1 #aha4        
,jovellanos1 #fa4      ,julius1 #bca4   
,krner1 #bab4      ,law1 #bbf1 #bca4    
,list1 #cd4      ,locke1 #ia1 #ic sq41  
#aii1 #bai1 #bbf1 #bcc4      ,lowndes1  
#id4      ,luther1 #agd-e1 #aij4        
,mc,culloch1 #ca1 #eg4      ,maclaren1  
#hb1 #bca1 #bcc4      ,macleod1 #ga1    
#aic4      ,malthus1 #cd4               
,mandeville1 ,sir ,j41 #aed4      ,mill1
 ,james1 #abc-d1 #bej sqq4              
,misselden1 #afe1 #aga1 #agd-e4         
,montanari1 #ch4      ,montesquieu1     
#bai1 #bbg4      ,mller1 #he4           
,norman1 #beh4        ,opdyke1 #abd4    
,overstone1 ,lord1 #bda1 #beh4          
,peel1 ,sir ,r41 #gc1 #ajj1 #bda1 #beh4 
,pereire1 #abj4      ,peter ,martyr1    
#baj4      ,petty1 ,sir ,w41 #cb1 #ef   
sq41 #afe1 #agb-c4      ,plato1 #aec4   
,pliny1 #agg4      ,proudhon1 #fa1 #gb1 
#ajc1 #ajg4        ,ricardo1 #ef1 #fi   
sq41 #ga1 #bag1 #bca1 #bce1 #bej1 #bei4 

,say1 #cd1 #ga1 #abc1 #aec1 #bcc4       
,senior1 #agh1 #aid4      ,sismondi1    
#ef1 #gg4      ,smith1 #cd1 #eg1 #fa1   
#fg-fh1 #hj1 #bca sq4      ,spence1     
#abc4      ,stein1 #ba1 #ca-b4          
,steuart1 ,sir ,james1 #fe sq41 #id sq41
 #bbb1 #bbg sq41 #bfj4      ,storch1    
#aeb-c1 #agi4        ,thompson1 #ajf4   
,tooke1 #abd1 #bdg1 #bdi1 #bfj sq4      
,torrens1 #eh4        ,urquhart1 #hi4   
,ustariz1 #fa4        ,wilson1 #bfj4    
,xenophon1 #aha1 #ahd4        ,young1   
#bca4