William J. Blake: An American Looks at Karl Marx
The process of exchange requires, of course, a fully developed legal system (that is, apart from occasional barter among primitive peoples). It is based on the recognition of private property and it guarantees the proprietors of commodities that all acts of trade require consent on both sides. The persons contemplated by the law are considered merely as adjuncts, that is, as related to each other merely as owners of goods. As Marx states, “the characters who appear on the economic stage are but the personifications of the economical relations that exist between them,” as in an old Morality Play. The phrase of Lord Macaulay, “Law was made for property and for property alone,” stresses this.
Commodities Unwanted by Owners
Commodities, to begin with, are not wanted by their owners. These proprietors confront each other as people who want to get rid of what they have so as to acquire something else. As far as they are concerned, they do not care what the use-value is of the objects they own. The beautiful question of Omar Khayyam about wine dealers is pathetic,
I wonder often what the Vintners buy,
One half so precious as the stuff they sell.
Another attribute of any commodity is that to it every other commodity is a brother, if it is exchangeable equally. Bibles look kindly on chewing gum, swords on Peace-Society pamphlets, flea-powders on flea-circuses. It is the old phrase, “Money doesn’t care to whom it belongs.”
As for the owner of this surprisingly democratic affair, the commodity, he regards it merely as a device for obtaining goods that he can use. (We are now going behind the money-mask.) All commodities are non-use-values for their owners and use-values for their nonowners. Since each of these worthy folk can attain his heart’s desire only by exchange, it follows that the act of exchange, which realizes value, must precede the consumption of use-value by the acquirers of each commodity.
But the use-value itself must exist prior to the exchange, for unless there is an exchange possible, there is no proof that the commodity is socially useful. Unless it is socially useful its labor has produced no value, for it was not social but wasted labor.
Exchange is the proof of the commodity. The commodity owners as private persons desire to acquire other use-values than those they had. But they also seek to realize value (their proportion of social labor), whether or not the commodity they have got rid of has use-value for its acquirer. For the act of exchange is the realization of value. This act is social.
Money Reconciles Particular and General Equivalence
But the same transaction cannot be wholly private and wholly social. Every owner thinks of his commodity as the general equivalent for any other. Every other commodity is, of course, a particular equivalent of his. But unless there is an agreed universal equivalent there is no general form under which their quantities of value can be equated. In order to achieve a universal equivalent, they have to pass from private transactions to an agreed social action, the isolation of one universal equivalent. This is money.
From Barter to Money
It arises almost as soon as the commodity form becomes important. For barter is even simpler than the elementary form of value. It exchanges use-values of two isolated objects. These objects are produced not to sell but to use, and so it is the act of barter that, for the first time, converts them into commodities. As soon as there is a surplus of goods, tribes begin trading with other tribes, and that is true even of communistic societies as complex as the Inca empire. That builds up the need for foreign objects of utility, for uses not provided for by production within the tribe.
The repetitions of exchange make it normal. Then certain objects are made with a view only to being exchanged for other utilities. They are made for the other tribe, not for their own. Exchange value, as against use-value, is born. The trading of multiple articles means that valuation by way of barter becomes unworkable, and soon a general equivalent is used to create order out of the anarchy of commodities trying to express their values in an infernal congress. These commodities at first are not permanent. First one, and then another, commodity is elected, according to convenience. But as trading grows more varied and important, fewer and more constant commodities are used. They are less accidental. Two possibilities for this function are the most important articles got from outside or the principal object of the tribe’s internal life, like cattle.
Nomad races are the first employers of the money form because nothing they own is fixed, like houses, plowed fields, etc. They are exposed to the influence of more outside tribes than are stay-at-homes. Slaves are sometimes used by them as the universal equivalent, but land, never. Not until the English squires of the days of William III tried to break the back of the money-men by creating a Land Bank was nonportable money conceived of. Such desires, too, sprang from a shortage of hard cash.
Adaptability of the Precious Metals
The precious metals eventually become the money expression of the general form of value. The precious metals, gold and silver, perfectly fit the need and will fit so long as commodity society exists, whatever the hopes of inflationary theorists. Money (i.e., gold and silver) shows uniform qualities in every sample. They are the perfect embodiment, then, of abstract undifferentiated labor, for they are alike in every form and subdivision. The differences of quantity of value are expressed perfectly by a perfectly divisible commodity. They can be divided or reunited at practically no loss.
These two fundamental attributes, homogeneity of quality and perfect divisibility, or increase without change of nature, make gold and silver the ideal embodiments of what is hidden behind exchange value, to wit, value.
It is hardly an accident, but rather a vivid social teleology that made these metals money. It might be said that any other metal might do as well, say iron. But it is too heavy. Here are two metals, malleable, ductile, fairly rare as compared to the common metals (therefore prized as embodying an appreciable amount of labor), shiny, durable, decorative, prized in the arts, for plate, etc., produced at a reasonably even rate, divisible into coins without loss, and portable. No better combination was found in the Lydian days of the sixth century before Christ, and in our time it is still intact. All governments that run away from it have their shoddy money valued against it, whatever their devices.
Gold and silver then are not fetiches, but selected commodities, surviving among many contenders. They most conveniently and durably serve as universal equivalent.
All commodities thus become the particular equivalents of money. As Balzac put it, at last there is something that closes the cycle of needs.
Money a Commodity
Money, therefore, is only a commodity delegated to do a certain job, that of representing universal value. It is not a mere symbol. It is not a mere convention. Prior to its use as money, it too has value as a commodity. Ten pounds of gold have a value, and this value is the labor-time spent in their production. If the labor-time of ten pounds of gold be expressed as two thousand hours, it is worth two thousand hours embodied in umbrellas, Mickey Mouse toys, or books of Marxist economic theories. At the mines, its value became manifest in barter.
The so-called mystery of money is the mystery of commodities, except that since money is the last term of the series, we see it most sharply there.
We have seen that a commodity having the equivalent form of value appears to have that form independently of its relation to the other commodity; that is, the property of reflecting value seems given to it by nature. The same error applies to money. It appears that all other commodities express their value in gold because it is money, whereas it is gold that has become money in consequence of all other commodities expressing their values in it. Since commodities find their own value completely represented in gold, gold as it comes out of the mines is at once the incarnation of all human labor. With the usual faculty of every economic appearance standing on his head, the money appears to be inherently the measure of value. But it is the measure of value of its own labor-time; money merely represents that value, that is all.