Reading Marx – Part X

(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 III, Section 1

Vol. I, Book I, Part I, Chapter III “Money, or the Circulation of Commodities”, Section 1 “The Measure of Values” – I think I’m going to start listing the chapter/section titles; Harvey suggested in the lecture that Chapter III is easier to understand if the reader keeps a firm grip on where he is in Marx’s argument;

--Marx is going to assume gold as the commodity-value; he points out that it is not money that renders commodities measurable against each other; rather, it is the fact that the Value of commodities is always socially useful labor time, which makes it possible for one commodity to become the universal equivalent commodity and thus assume the function of money;

--the expression of the value of a commodity in gold is its “money-form, or price”; money itself has no price, because it would then equate to itself as its own equivalent;

--the Value of any commodity is inherent within the commodity and has actual existence, and furthermore is made perceptible by its equality with an amount of gold; this relationship is non-material, and must be expressed by the owner of the commodity assigning a price to it in the market; at the time of doing so, the owner is stating the money equivalent of the commodity in an idealized sense, i.e., he doesn’t have to compare the commodity to any actual piece of gold, but to his “idea” of gold and of the Value of his commodity; however, its actual Value will always be the same expression of socially useful labor time as is required to produce that price amount of gold;

--because the Value of all commodities may be expressed in the form of some quantity of gold, their Values become magnitudes of the same denomination, gold-magnitudes; this is why, Marx claims, the names given to all standards of money (pound, peso) were originally taken from pre-existing names for the standards of weight/quantities;

--As always, Marx breaks money down into possessing two distinct functions:  (i) a measure of Value, and (ii) a standard of price.  As the measure of Value it converts the values of all commodities into imaginary quantities of gold, as the standard of price it measures those quantities of gold; the establishment of an unvarying unit of measure is “all-important” so the less the unit of measure (a pound?) is subject to variation the better

--gold (or, really, any money-commodity) always renders the same service as an invariable standard of price no matter how much its Value may rise or fall, because 12 oz of gold is always going to be worth exactly 12 times as much as 1 oz of gold; so a change in the Value of gold does not interfere with its function as a standard of price;

--Similarly, a change in the Value of gold does not interfere w/its function as a measure of value; since gold is the universal equivalent any change in its Value will be reflected in commensurate changes in the relative values of all commodities, leaving their relative values unaltered although expressed in higher or lower prices (so if inflation, all prices go up but ratio of gallon of milk to loaf of bread remains the same; if deflation, all prices go down but milk/bread ratio remains the same);

--by the way . . . if the Value of money goes up or down, that only affects the prices of commodities if their Value remains unchanged; it is possible their Value goes up or down commensurate with the Value of gold, in which case the prices remain the same;

--Marx then discusses how discrepancies arise b/w the money names of the weights of precious metal used by money, and the actual weights those names represent; he present three ways these discrepancies arise:  (i) bringing in foreign money into an emerging economy; Marx claims this occurred in the early days of Rome, in which gold and silver coins circulated as foreign commodities whose names did not coincide with “indigenous weights” (maybe, for example, the difference b/w the troy pound and the avoirdupois pound?); (ii) as wealth increases the less precious metals are replaced by more precious metals, but the money names remain the same; so the money name “pound” originally meant a pound of silver, but as gold replaced silver “pound” was retained to refer to about 1/15^th of a pound of gold; (iii) the debasing (“clipping” or “alloying”) of money by kings and princes such that “of the original weights of the coins, nothing in fact remained but the names.”

--this separates the “money name” from the “weight name” in a community; in the end, by law a given weight of gold is officially divided into subdivisions with different names (pound, shilling, penny, etc.); the prices (or quantities of gold) into which commodities are now changed are henceforth expressed in the names of coins; money thus serves as “money of account” whenever it is a question of fixing the value of an article in its money-form;

--now, Marx seems to indicate, is where we begin to lose our way; just as the name of a thing is different than the thing itself (i.e., I know nothing of a man by knowing only that his name is Jacob), every trace of a value relation disappears in the money-names used to price commodities;

--Thus, “price” is the money-name of the (socially necessary) labor realized in a commodity; Marx goes on to state that although price is supposed to be the realization of both the Commodity’s Value and its exchange-ratio with money, that does not mean that the exchange-ratio with money is necessarily the arbiter of the commodity’s Value; supply and demand may change or lower the price of a commodity, even though the socially necessary labor required to produce that commodity (its Value) has not changed;  LESSON – stated price, even market value price at equilibrium, may not necessarily be an accurate measure of the commodity’s Value as defined by Marx;

--just because things have a price does not mean that they have Value; things that are in themselves not commodities (conscience, honor, etc.) are capable of being sold and thus of acquiring, through their price, the form of commodities although they are not commodities; thus an object may have a price without having Value; “On the other hand, the imaginary price-form may sometimes conceal either a direct or indirect real value-relation (??); for instance, the price of uncultivated land, which is without Value, because no human labor has been incorporated into it;

(NOTE:  I understand that the worth of uncultivated land is one of the trickier things to incorporate into Marxian theory; here he appears to be eliding over the subject; it’ll be interesting to see whether he comes back to this;)

(NOTE 2:  I think here we see an example of the limited nature of what we have been looking at so far, maybe even the circular nature of the argument; Marx started by considering “commodities” which he defined as an article produced by human labor that has value to others and that is offered for sale on the market . . . more or less; this, by definition, cannot include uncultivated land, which is clearly not a commodity under this definition; but we then spent a great deal of time considering how to Value commodities; uncultivated land by Marx’s definition cannot have a Value as he has defined it, but that obviously is not the same as saying it has no worth; definitely a limitation)

(NOTE 3:  Maybe this is the beginning of the way uncultivated land was legally apportioned by the gov’t and recognized at law; I seem to remember that settlers in the west could not simply claim an expanse of land, but had to work on it and cultivate it for a certain period of time; perhaps this is the only way in which raw land becomes not just a commodity but an object of private ownership)

--So, to recap:  price expresses the Value of a commodity by stating that a given quantity of the money commodity (gold) is directly exchangeable for it, but that doesn’t mean that the commodity is exchangeable for gold; I think, here, that Marx is saying the money that is used – say, a dollar – is the quantity of gold that is exchangeable for the commodity (say, iron) but just because you can get a dollar measurement of gold does not necessarily mean you can get gold for your commodity; it just means you can get the dollar; to fix the price of the commodity, it must be equated to gold in the imagination, but to become a universal equivalent, it must actually be changeable into gold.

--in other words, if you have a ton of iron worth $20 in gold, you cannot go to the owner of a $20 DVD and tell him that your iron is money; you’ve got to give him the $20 in gold and that means you’ve first got to convert the iron into money, i.e., sell it;

--“A price therefore implies both that a commodity is exchangeable for money, and also that it must be so exchanged.”

Next Up:  Vol. I, Book I, Part I, Chapter III “Money, or the Circulation of Commodities”, Section 2 “The Medium of Circulation”, Subsection a “The Metamorphosis of Commodites” – yeah, look like I’m only getting through one subsection next time out.  Stay tuned!