Money… Chapter 3 reaches a further level of concreteness, in its analysis of the role(s) of money and the circulation of commodities in exchange. Marx begins the analysis with commodity money, which breaks into an analysis of money as measure of values and money as means of circulation. The section on measure of values itself breaks into sections on measure of value and a second on the standard of price. The section on money as means of circulation breaks into two sections; one on concrete money and a second on symbols. The final section analyses hoarding, money as a means of payment and concludes with a section on world money, which is basically summed up in some brief notes.
Due to how late I have left this, these notes are not nearly as thorough as they could be, and I have also drawn quite heavily on Harry Cleaver’s notes, and included some of his questions concerning this chapter at the bottom… Hope that is not a problem for people.
Section I, ‘The measure of values’
Firstly, Marx begins by stating that for the sake of simplicity he assumes that the money commodity is gold.
Secondly, in this section Marx makes clear a number of times that at this point of the analysis we are at an ideal point… “Since the expression of the value of commodities in gold is purely an ideal act, we may use purely imaginary or ideal gold to perform this operation” (p189-190). That is, at this point there is as yet no realisation, or actualisation, of the value of the commodity, there is no completion of the process exchange… “In this discussion Marx is speaking of the ideal or imaginary expression of value and price that occurs before commodities are actually sold. In terms of C-M-C we are only at the first C, neither C – M (sale) nor M – C (purchase) has actually been completed. We can picture this phase of the analysis as concerning: C – M – C or C – potential M – potential C” (Cleaver).
Pages 188-189 identify the two parts of section 1 – measure of values and standard of price.
Gold performed the function of the universal measure of value, thus becoming money. “Money as a measure of value is the necessary form of appearance of the measure of value which is immanent in commodities, namely labour time.” Measure of value as social incarnation of human labour. Money as measure of value serves to convert the value of a commodity into an imaginary quantity of gold – standard of price. Measures commodities considered as values.
The socially necessary labour time in 1 ton of iron is the same as that embodied in 1 ounce of gold, therefore the gold serves as the expression of value of the iron. This measurement of gold informs the standard of price. “The value, i.e. the quantity of human labour, which is contained in a ton of iron is expressed by an imaginary quantity of the money commodity which contains the same amount of labour as the iron.” Measure of value is a notion of value prior to the actual exchange-value is realised through operations of market.
(With commodity money – value due to SNLT to produce commodity (gold), therefore the value of it can vary, as it can in other commodities, however this doesn’t affect the relative values of all other commodities. Harvey’s eg of shirts and shoes)
“The expression of the value of a commodity in gold – x commodity A = y money commodity – is its money form or price.”
“The price or money-form of commodities is, like their form of value generally, quite distinct from their palpable and real bodily form; it is therefore a purely ideal or notional form.”
“There is no longer any need for this equation to figure as a link in the chain of equations that express the values of all other commodities, because the equivalent commodity, gold, already possesses the character of money.”
Money completes the fetishism of the commodity articulated in chapter one. The naming of moneys as they become further removed from the actual commodity money contributes to this process.
Here is a section from Cleaver’s notes:
“Money (gold) is a standard of price in so far as “it is a fixed weight of metal,” i.e., a measure of the quantity of gold (the w in w gold). The setting of this standard is a function of the State. The State sets both the weight unit or quantum with which to measure the amount of gold, eg., ounce, and it gives the money names to those units” (Cleaver).
“The 1 oz. measures the quantity of gold by a unit weight of gold. It thus gives the price of the iron. The 1 oz. is the weight-name for the price of iron. The State also gives such a measure a money-name, e.g., $35.00. In the days of commodity money, these money-names were attached to gold coins minted by the state at a given, standard weight. To summarize:
Commodity: iron, Quantity: 1 ton, Measure of value: = 1 oz. gold, Standard of Price: = 1 oz. gold or 35 dollars.”
“The possibility…that the price may diverge from the magnitude of value, is inherent n the price form itself. This is not a defect, but, on the contrary, it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities.”
The quantitative incongruity between value and price. Recognising impacts of supply and demand. The money system accommodates these incongruities. SNLT is still relevant to price, but fluctuations still affect price at any given time and place.
Qualitative incongruities also occur – the price names given to things with no value…
“measure of value, standard of price, movement” (Harvey).