Reading Marx – Part IX

(Routine Introduction:  For reasons explained here, I’m in the process of slogging through Marx’s Capital.  The plan is to read it in conjunction with watching David Harvey’s free on-line lectures about the book.  I’ll be posting notes and initial impressions as I read.  This will be an extremely long-term project.)

Today:  Vol. I, Book I, Part I, Chapter II.  “Exchange”

Vol. I, Book I, Part I, Chapter II – having established the social relationship of commodities, Marx points out that commodities only exchange themselves through their owners, that exchange must be of mutual assent recognized via contract (explicit or implied), and because exchange requires recognizing that one may not simply take (appropriate) the other’s commodity this exchange is a meeting of wills;

--Marx then goes a bit further than I am willing to go by arguing the actual persons involved in an economic exchange “are merely as representatives of commodities. . . . [T]he characters who appear on the economic stage are but the personifications of the economic relations that exist between them.”  Uhhhmmm . . . no.  The commodities may be the physical form of labor value made concrete, but the owner of the commodity isn’t acting out the commodity’s will – that’s absurd.  More accurate to say the owner is usurping the commodity’s value for his or her own purpose.

--a commodity has no use-value to the owner who brings it to market, else he would not bring it to market.  For him, it has only exchange value.  “All commodities are non-use-values for their owners, and use-values for their non-owners.” (keeping in mind that in order to be a “commodity” it must be an article offered in exchange).

--every owner of a commodity wishes to part with it in exchange for something that the owner finds useful for himself; he desires to realize the value of his commodity irrespective of whether his own commodity has or has not any use-value for the owner of the other.  (I would suggest that this is source of the “suitability for particular purpose” implied warranty in today’s UCC.  If you sell a device to someone whom you know wants the device to do a particular thing, the law imposes upon you the implicit promise to your customer that the device will, in fact, do that thing.  This is a necessary imposition b/c as Marx points out here the sellers of things do not really care whether the buyers can or cannot get any use out of those things, so long as the sellers get their money).

--the owner of a commodity sees it as a universal equivalent, i.e., he is willing to exchange it for a certain amount of every other commodity; but all owners of their various good see their commodities this way; what is needed is a universal equivalent created socially, i.e., by the collective will of everyone involved in exchange – this is how we create money;

--Marx then launches on a history lesson that, as mentioned in the last set of notes, is probably ahistorical; Marx argues that exchange of commodities must have begin at the boundaries of ancient societies, which viewed all property as communal (I’m not sure about that; this may be interjecting Marx’s ultimate views into the beginning, i.e., he may be starting here to assume his ultimate conclusions) and hence only entered into exchange with other societies.  Once exchange became a normal part of social life, he argues that the production of some goods would naturally be set aside for exchange so as to obtain desirable foreign goods that any particular society did not have itself;

--Marx argues that money is invented first by nomads because all their commodities are alienable and because they constantly come in contact with outsiders; he argues that the commodity that eventually becomes money is always either whatever foreign good is most useful to that society using it as currency, or whatever good comprises the society’s chief alienable wealth (for example, cattle);

--eventually the “money” concept attaches itself to precious metals, which are most fit to assume that role; gold and silver, which need to be quantifiable in order to express different quantities of any commodity, can be split apart and then reunited (to the extent Marx is talking about physically separating and then re-integrating gold, this seems suspect as a reason for precious metals to have naturally become “money”; I can only suppose coining wasn’t invented back the mythological past Marx is describing);

--why gold?  well, it has “use-value” as a commodity, “(gold, for instance, serving to stop teeth, to form the raw material of articles of luxury, etc.)”  (NOTE:  I find that “etc.” Marx tacks on at the end revealing.  The truth is that “gold” as a use-value in and of itself does not have a lot of utility.  Linen can be transformed into all kinds of different articles of clothing, protective cloth, insulation, etc.  Cattle are even better, providing milk, meat, animal labor, leather, horns.  But gold is pretty limited – you can’t do much with it.  I suspect Marx couldn’t really come up with anything else – what is “stop teeth” anyway? – so tacked on the “etc.” so as to imply gold’s other uses were so obvious anybody should be able to imagine them.  It is a rather shabby way of avoiding of the issue)

(NOTE:  Personally, I would posit that one of the reasons gold serves as an excellent “universal equivalent” to use Marx’s terminology, is that it is small and relatively easy to carry (or to hide), its relative scarcity means that it isn’t subject (normally) to huge expansions in its supply, (its scarcity is another reason a small bit of it can represent the value of large sums of other, more useful commodities, like iron), like any other metal it is fairly durable but unlike most other metals it doesn’t tarnish.  Iron is more useful than gold, but coins made of iron would tend to wear out and rust; gold does not.  Bury a bar of gold in your backyard for a rainy day and 10 years later it’ll still be right there; bury a bar of iron and ten years later you’ll have some interesting looking red dirt).

--Marx then takes issue with the idea that the value of gold and silver is imaginary and that money is merely a social construct with no inherent value of its own; not so, says Marx:  the value of gold is the human labor required to produce it, it has inherent value determined by the quantity of labor value required to mine, refine, smelt, etc., (however it is that gold is produced; Marx doesn’t say and I don’t know) and that value inures to gold such that “[w]hen it steps into circulation as money, its value is already given.” 

(NOTE:  again, I would be curious to know what Marx would make of our world, which involves a number of international currencies (the yen, the euro, the dollar) traded against each other and none of them pegged to a commodity or to any amount of human labor.  Whenever the gov’t wants, it can simply print more money.  Even assuming Marx’s description of gold and its value – and hence the inherent value of money – was correct back in the day, it wouldn’t seem that this description has much force with respect to today’s currencies, which seem to be based entirely on the idea of money as a “social construct” that Marx declared to be factually wrong back when “money” still meant a specific physical commodity, i.e., gold.)

--Marx’s concluding paragraph:  people (like Ron Paul) are easily confused about the concept of “money” because “[w]hat appears to happen is, not that gold becomes money in consequence of all other commodities expressing their values in it [which is what Marx claims to have just proven], but, on the contrary, that all other commodities universally express their values in gold because it is money.”  In other words, misguided people believe that gold just naturally is money as a matter of natural law – and this is wrong.  Marx hopes to have proved that gold is just another commodity that assumes the money form by virtue of being socially treated as a universal equivalent of all commodities;

CONCLUDING THOUGHTS:  Well, like I said I’m not sure how practically useful this entire examination really is given the nature of currency today.  Although I do like it for its exacting refutation of the idea that “gold is naturally money,” which is an argument I’ve had to refute before with various gold bugs.

Next Up:  Two – count ‘em, two – lectures.  First I’m going to go back and re-watch David Harvey’s second lecture, which dealt with the second half of Chapter I and all of Chapter II, to see what I’ve missed/gotten wrong.  Then it’s on to Harvey’s next lecture, which I believe deals with Chapter 3.  Which, according to Harvey, really, really sucks.  He already has said that Chapter 3 is where most people simply throw in the towel, which is too bad because – looking ahead – it appears to be a fairly long chapter so we’re looking at a fairly extended period of sucking.  (I’m reading this as an ebook, so my ability to judge page length is limited).  Which means the fairly worst part of the slog may be ahead.

But be of good cheer!  My understanding is that after the hump of Chapter 3, things get better.  Stay tuned!




Addendum:  Having re-watched Harvey's Lecture on Chapter 2, I should note that he spells out what it is specifically Marx is trying to do w/Capital.  Marx is accepting the principles of Smith and Ricardo and the liberal understanding of classical political economy, which holds that if only the state is entirely removed from the market, if people are left to their own devices, they operate atomistically, and the invisible hand of the market is allowed to control everything, then we will achieve prosperity and wealth and it will benefit all people.


Marx is critiquing this argument, and is going to attempt to show that by its own terms that promise is a lie -- that unfettered free markets will only benefit the bourgeoisie, in fact, the haute bourgeoisie.  (Harvey explicitly acknowledges that this theory is attempted from time to time -- including over the past 30 years here in the US).  But there is a problem in reading Capital in that one needs to be careful to distinguish, when Marx is describing capitalist societies, between whether Marx is discussing capitalism as it exists or as it is idealized under liberal economic principles.  Sometimes they bleed together and that may confuse the reader.


Good to know.