as labor of no individual. Just as it is, therefore, child-
ish to consider these economic bourgeois roles of buyer
and seller as eternal social forms of human individu-
ality, so it is on the other hand, preposterous to lament
in them the extinction of individuality. 1 They are the
necessary manifestations of individuality at a certain
stage of the social system of production. Moreover, in
the opposition of buyer and seller the antagonistic nature
1 How deeply some beautiful souls are wounded by the merely
superficial aspect of the antagonism which asserts itself in buy-
ing and selling, may be seen from the following abstract from
M. Isaac Pereire's: "Lecons sur l'industrie et les finances/'
Paris, 1832. The fact that the same Isaac in his capacity of
inventor and dictator of the "Credit mobilier" has acquired the
reputation of the wolf of the Paris Bourse shows what lurks
behind the sentimental criticism of economics. Says Mr. Pereire.
at the time an apostle of St. Simons: "C'est parceque tous les
individus sont isoles, separes les uns des autres, soit dans leur
travaux, soit pour la consommation, qu'il y a echange entre
eux des produits de leur industrie respective. De la necessity
de l'echange est derivee la necessity de determiner la valeur
relative des objets. Les idees de la valeur et de I'eehange
sont done intimement liees, et toutes deux dans leur forme
actuelle exprime rindividualisme et Tantagonisme ... II
n'y a lieu a fixer la valeur des produits que parcequ'il y a
vente at ^achat, en d'autres termes, antagonisme entre les divers
membres de la society II n'y a lieu a s'occuper du prix, de
valeur que la ou il y avait vente et echat, c'est a dire, on chaque
individu etait oblige de lutter, pour se procurer les object
necessaires a 1'entretien de son existence" (1. c, p. 2, 3 pas-
sim). ("Since individuals are isolated and separated from
one another both in their labors and in consumption, exchange
takes place between them in the products of their respective
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of capitalistic production is expressed as yet so super-
ficially and as mere matter of form, that this opposition
belongs also to precapitalistic forms of society, since it
merely requires that the mutual relations of individuals
should be those of owners of commodities.
Now, if we consider the result of C — M — C, it comes
down to mere interchange of matter, C — C. A com-
modity has been exchanged for a commodity, a use-
value for a use-value, and the transformation of the
commodity into money, or the commodity in its form of
money, serves merely as a means of effecting this inter-
change of matter. Money thus appears merely as a
medium of exchange of commodities; not as a medium
of exchange in general, but as a means of exchange in
the sphere of circulation, i. e., a medium of circulation. 1
> â– i iii. i
industries. From the necessity of exchange arises the necessity
of determining the relative value of things. The ideas of
value and exchange are thus intimately connected and both
express in their actual form individualism and antagonism.
. . . The determination of values of products takes place
only because there are sales and purchases, or, to put it differ-
ently, because there is an antagonism between different mem-
bers of society. One has to occupy himself with price and
value only where there is sale and purchase, that is to say,
where every individual is obliged to struggle to procure for
himself the objects necessary for the maintenance of his ex-
istence.")
1 "L'argent n'est que le moyen et Pacheminement, au lieu que
les denrees utiles a la vie sont la fin et le but." ("Money is
but the ways and means, while the things useful in life are
the end and object.") Boisguillebert : "Le Detail de la France,"
1697, in Eugene Daires' "Economistes financiers du XVIII
ieme siecle, vol. I., Paris, 1843, p. 210.
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We have seen that the process of circulation of com-
modities comes to a completion in C — C, appearing as
mere barter carried on by means of money; further,
that C — M — C represents in general not only two iso-
lated processes, but their dynamic union as well; but
to draw from that the conclusion that purchase and sale
form an indivisible unit, is a mode of thinking the crit-
icism of which belongs to the domain of logic, and not
to that of economics. The separation of purchase and
sale in the process of exchange destroys all local, prim-
itive, patriarchal and naively genial barriers to inter-
change of matter in society. It is, moreover, the gen-
eral form of the separation of the points of coincidence
and opposition in this interchange, carrying within it
the possibility of commercial crises, because the antag-
onism of commodity and money is the abstract and
general form of all antagonisms with which the capi-
talistic system of labor is pregnant. Hence, circulation
of money is possible without crises, but crises can not
occur without money circulation. In other words, where
labor based on the system of private exchange has not
reached the stage marked by the existence of money,
it is less capable of producing those phenomena which
presuppose the full development of the capitalistic
mode of production. Bearing this in mind we can
appreciate the depth of the criticism which proposes to
do away with the "shortcomings" of capitalistic pro-
duction by abolishing the "privilege" enjoyed by the
precious metals and introducing a so-called "rational
monetary system." As a sample of economic defence
of an opposite character may serve the following piece
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of reasoning which has been proclaimed exceedingly
keen. JAMES MILL, the father of the well-known
English economist, John Stuart Mill, says : "Whatever
• . . be the amount of the annual produce, it never
can exceed the amount of the annual demand ...
Of two men who perform an exchange, the one does
not come with only a supply, the other with only a de-
mand; each of them comes with both a demand and a
supply. . . . The supply which he brings is the
instrument of his demand; and his demand and supply
are of course exactly equal to one another. It is there-
fore, impossible that there should ever be in any coun-
try a commodity or commodities in quantity greater
than the demand, without there being, to an equal
amount, some other commodity or commodities in quan-
tity less than the demand." 1
*In November, 1807, William Spence published a pamphlet
in England under the title: "Britain Independent of Com-
merce." The principle set forth in this pamphlet was further
elaborated by William Cobbet in his ''Political Register" under
the virulent title, "Perish Commerce." To this James Mill re*
plied in 1808 in his "Defence of Commerce" which contains the
passage quoted above from his "Elements of Political Econ-
omy" (p. 190-193, Transl.). In his controversy with Sismondi
and Malthus on commercial crises, J. B. Say appropriated this
clever device, and as it would be difficult to point out with
what new idea this comical "prince de la science" had enriched
political economy, his continental admirers have trumpeted him
as the man Who had unearthed the treasure of the metaphysical
balance of purchases and sales; as a matter of fact, his merits
consisted rather of the impartiality with which he equally mis-
understood his contemporaries, Malthus, Sismondi and Ricardo.
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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 circulation. To put it in
his own confused language, during certain periods when
all commodities are unsaleable there are really more
buyers than sellers of one commodity, money, and more
sellers than buyers of all other money, commodities;
such was, e. g., the case at certain moments during the
commercial crisis of 1857-58 in London and Hamburg.
The metaphysical balance of purchases and sales amounts
to this, that every purchase is a sale and every sale is a
purchase, which is a poor consolation to the guardian of
the commodity who can not bring about its sale and
therefore can not buy. 1
The separation of sale and purchase makes possible
1 The manner in which economists explain the different aspects
of the commodity may be seen from the following examples:
"With money in possession, we have but one exchange to
make in order to secure the object of desire, while with other
surplus products we have two, the first of which (procuring the
money) is infinitely more difficult than the second." (G. Opdyke,
"A Treatise on Political Economy," New York, 1851, p. 277-879.)
"The superior saleableness of money is the exact effect or
natural consequence of the less saleableness of commodities."
(Th. Corbet, "An Inquiry into the Causes and Modes of the
Wealth of Individuals," etc., London, 1841, p. 117.)
"Money has the quality of being always exchangeable for
what it measures." (Bosanquet, "Metallic, Paper and Credit
Currency," etc., London, 1842, p. 100.)
"Money can always buy other commodities, whereas other
commodities can not always buy money." (111. Tooke, "An In-
quiry into the Currency Principle," 2d ed., London, 1844, p. 10.)
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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
place. It enables a host of parasites to penetrate the
process of production and exploit the separation. But
this, again, means that with money as the universal
form of labor under the capitalist system, there is the
possibility of the development of its contradictions.
b. THE CIBCULATION OP MONEY.
Actual circulation appears at first sight as a mass
of purchases and sales accidentally taking place side by
side. In buying as in selling, commodities and money
always stand in the same mutual relation : the seller, on
the side of the commodity ; the buyer, on that of money.
Money as a medium of circulation always appears there-
fore as a means of purchase; and in that way the
difference in its destinations in the opposite phases of
the metamorphosis of the commodity becomes indis-
tinguishable.
Money passes into the hands of the seller in the
same transaction in which the commodity passes into
the hands of the buyer. 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 side, occurs simultaneously
at an indefinitely large number of points on the
entire surface of bourgeois society. But the first
step which the commodity makes in the sphere of
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circulation is also its last step. 1 Whether it leaves its
place on account of its attraction for gold (C — M), or
on account of its attraction by gold (M — C), with one
move, with one change of place it falls out of the sphere
of circulation into that of consumption. Circulation is
a continuous flow of commodities, but different com-
modities all the time, since each commodity makes but
one move. Every commodity enters upon the second
phase of its circulation not as the same commodity, but
as another commodity, gold. Hence the movement of a
metamorphosed commodity is the movement of gold.
The same piece of gold or the identical gold coin which
changed places with one commodity in the act C — M,
reappears from the opposite end as the starting point
for M — C and thus changes places for the second time
with another commodity. Just as it passed from the
hands of buyer B into those of seller A, it now leaves
A's hands who has become a buyer and passes into C's
hands. The path described by a commodity in its trans-
formation into money and its retransformation from
money, i. e., the movement of a complete metamor-
phosis of a commodity assumes the aspect of an apparent
movement of the same coin that changes places twice
with two different commodities. No matter in how
scattered and haphazard fashion purchases and sales may
take place near each other, there is always in actual
1 The same commodity can be bought and resold many times.
It circulates, then, not merely as a commodity, but in a capacity
which does not exist from the point of view of simple circula-
tion, of the simple contrast of commodity and money.
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circulation a seller for each buyer and the money which
moves into the place of the commodity sold, before it
came into the hands of the buyer, must have already
changed places with another commodity. Sooner or
later it again leaves the hands of the seller, who turns
buyer, to pass into the hands of a new seller and this
frequently repeated change of place forms the interlac-
ing of the metamorphoses of commodities. The same
coins are moving, some more, others less frequently, from
one place in the sphere of circulation to another, always
in the direction opposite to that of the commodities
moved, thus describing a longer or shorter circulation-
curve. The different movements of the same coin can fol-
low each other in point of time only, and on the contrary,
the many scattered purchases and sales which appear
as so many separate changes of place between commod-
ities and money, occur simultaneously separated only in
point of space.
The circulation of commodities C — M — C in its ele-
mentary 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 latter, as soon as he
has turned buyer, into those of a new seller. This com-
pletes the metamorphosis of the commodity and with it
the movement of money in so far as that movement is
the expression of the metamorphosis. But since new
use-values are continually produced in the shape of new
commodities and must thus be constantly thrown anew
into circulation, the process C — M — C is repeatedly re-
newed by the same commodity owners. The money which
they have spent as buyers gets back into their hands
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as soon as they appear again as vendors of commodities.
The constant renewal of the circulation of commodities
finds its reflection in the continual circulation oyer the
entire surface of bourgeois society of a quantity of money
which, passing from hand to hand, describes at the same
time a number of different small cycles starting from
numberless points and returning each to its own start-
ing point, to repeat the same movement over again.
The change of form on the part of commodities ap-
pears as a mere change of place on the part of money
and the continuity of the circulation movement is all
on the side of money, since the commodity always makes
but one step in the direction opposite to money, while
the latter makes in each case the second step for the
commodity; the entire movement seems, therefore, to
proceed from money, although in the case of a sale the
commodity draws money out of its place, i. e., it circu-
lates money as much as it is circulated by the latter in
the case of a purchase. Furthermore, owing to the fact
that money always confronts commodities in its capac-
ity of a means of purchase, and in that capacity moves
commodities only by realizing their price, the entire
movement o£ circulation appears as a change of place
between money and commodities, the former realiz-
ing the prices of the latter either by separate acts of
circulation taking place simultaneously and side by
side, or by successive transactions when the same coin
realizes the prices of different commodities one after
another. If we consider, e. g., the series C — M — C —
M« — CT — M — C m , etc., without regard to the qualitative
aspects which become indistinguishable in the process
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of circulation, we witness the same monotonous opera*
tion. After realizing the price of C, M successively re-
alizes those of C, C, etc., and commodities C, (T ,
C", etc., constantly take the place which money has left.
Money thus appears to keep commodities in circulation
by realizing their prices. In discharging this function
of realization of prices, money is itself constantly cir-
culating, now changing its place, now describing a curve
of circulation, now completing a small circuit where the
starting and returning points coincide. As a medium of
circulation, money is subject to a circulation of its own.
The change of form of the circulating commodities ap-
pears, therefore, as a movement of money which furthers
the exchange of commodities, motionless in themselves.
The movement of the circulation process of commodities
thus takes on the form of the movement of gold as a
medium of circulation, i. e. of the circulation of money.
Since owners of commodities give the products of their
individual labor the appearance of products of social
labor by turning one object, viz. gold, into the direct
expression of universal labor-time and therefore into
money, 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 object, as the circulation of gold. The social move-
ment itself appears to the owners of commodities partly
as an outward necessity and partly as a mere formal in-
termediary process which enables every individual who
puts any use-value into circulation to get other use-
values out of it of an equal value. The use-value of
commodities comes into play with their disappearance
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from the sphere or circulation, while the use-value of
money ** * medium of circulation is in its very circula-
tion* The movement of a commodity in the sphere ot
circulation is of a transitory kind, while ceaseless mo-
tion in that sphere constitutes the function of money.
Through this special function which it performs within
the sphere of circulation money acquires a new capacity,
which we hare to consider now more closely.
In the first place, we see .that the circulation of money
forms an endlessly split up movement, since it reflects
the splitting up of the process of circulation into an in-
finitely large number of purchases and sales and the in-
dependent separation of the mutually supplementary
phases of metamorphoses of commodities. In the small
cycles described by money, where the starting and re-
turning points coincide, we do find a return movement,
i. e., an actual circular movement, 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 control, measurement, or computation.
The time between the start and the return of a com-
modity is just as indefinite. Moreover, it is immaterial
whether or not such a circuit has been actually described
in a given case. No economic fact is more generally
known than that one can spend money with one hand
without getting it back with the other. Money proceeds
from an endless number of points and returns to as many
different points, but the coincidence of the starting and
returning points is a matter of chance, because in the
movement C — M — C the turning of the buyer again into
a seller is not a necessary condition. Still less does the
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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 centre. The so-
called cycle described by money, as it is pictured,
amounts simply to this, that at all points we observe its
appearance and disappearance, its never ceasing transi-
tion from place to place. In a higher, more involved
form of money circulation, e. g. bank-note circulation,
we shall find that the conditions of emission of money
include those for its return. But in the simple money
circulation it is a matter of chance for the same buyer
to become again a seller. Where we really see constant
cycle motions taking place, they are only reflections of
deeper forces in the sphere of production, e. g., the man-
ufacturer draws money from his banker on Friday, pays
it out to his workingmen on Saturday, the men im-
mediately pay out the greater part of it to the store-
keepers, etc, and the latter turn it in on Monday back
to the banker.
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 time. On
the other hand, in so far as its movement represents the
movement of the combined metamorphoses of commodi-
ties and the interlacing of these metamorphoses, the
same coin realizes the prices of different com-
modities and thu6 makes a larger or smaller number of
moves. If we take the circulation of a country for a
given length of time, say a day, the quantity of gold
required for the realization of prices and, consequently,
for the circulation of commodities, will be determined
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by two conditions : first, the sum total of the prices; sec-
ond, the average number of moves made by one coin.
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 metamorphoses, the rapidity
with which these metamorphoses succeed one another,
and with which those commodities that have gone
through their metamorphoses are replaced by new com-
modities in the process of circulation. 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 — M, first embodied in the commodity, and second,
in gold ; yet gold enjoys the capacity of a medium of cir-
culation not by virtue of its isolated relation to separate
commodities in a state of rest, but owing to its active
presence in the dynamic world of commodities, viz., its
function of expressing the change of form of commodi-
ties by its change of place and expressing the rapidity of
their change of form by the rapidity of its change of
place. The extent to which it is present in the sphere
of circulation, i. e., the actual quantity of gold in cir-
culation, is thus determined by the extent to which it is
discharging its function throughout the entire process.
The circulation of money implies the circulation of
commodities ; money circulates commodities which have
prices, i. e., which are beforehand ideally equated to cer-
tain quantities of gold. In the determination of the
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prices of commodities, the value of the quantity qf gold
which serves as a unit of measure, or the value of gold,
is assumed to be given. Under that assumption the
quantity of gold necessary for circulation is determined
first of all by the 6um total of the prices of commodities
that are to be realized. But this sum is itself determined :
1. By the level of prices, the relatively high or low ex-
change value of commodities estimated in gold; and
2. By the mass of commodities circulating at fixed
prices, i. e. by the number of purchases and sales at
given prices. 1 If one quarter of wheat is worth 60
shillings, then twice as much gold is required to circu-
late it or to realize its price as would be the case if it
were worth only 30 shillings. To circulate 500 quar-
ters of wheat at 60 shillings, twice as much gold is neces-
sary as for the circulation of 250 quarters at the same
price. Finally, to circulate 10 quarters at 100 shillings
only half as much money is necessary as when circu-
1 The quantity of money is immaterial "pourvu qu'il y en ait
asses pour maintenir lea prix contracted par les denrees" (a*
long as it is sufficient to maintain the existing prices of com-
modities). Boisguillebert, 1. c. p. 210.
"If the circulation of commodities of four hundred millions
required a currency of forty millions, and . . . this pro-
portion of one-tenth was the due level, estimating both cur-
rency and commodities in gold; then, if the value of commodi-
ties to be circulated increased to four hundred and fifty millions,
from natural causes ... I should say the currency, in