“Direct barter, the spontaneous form of exchange, signifies the beginning of the transformation of use-values into commodities rather than the transformation of commodities into money. Exchange-value does not acquire an independent form, but is still directly tied to use-value. This is manifested in two ways. Use-value, not exchange-value, is the purpose of the whole system of production, and use-values accordingly cease to be use-values and become means of exchange, or commodities, only when a larger amount of them has been produced than is required for consumption. On the other hand, they become commodities only within the limits set by their immediate use-value, even when this function is polarised so that the commodities to be exchanged by their owners must be use-values for both of them, but each commodity must be a use-value for its non-owner. In fact, the exchange of commodities evolves originally not within primitive communities, but on their margins, on their borders, the few points where they come into contact with other communities. This is where barter begins and moves thence into the interior of the community, exerting a disintegrating influence upon it. The particular use-values which, as a result of barter between different communities, become commodities, e.g., slaves, cattle, metals, usually serve also as the first money within these communities. We have seen that the degree to which the exchange-value of a commodity functions as exchange-value is the higher, the longer the series of its equivalents or the larger the sphere in which the commodity is exchanged. The gradual extension of barter, the growing number of exchange transactions, and the increasing variety of commodities bartered lead, therefore, to the further development of the commodity as exchange-value, stimulates the formation of money and consequently has a disintegrating effect on direct barter. Economists usually reason that the emergence of money is due to external difficulties which the expansion of barter encounters, but they forget that these difficulties arise from the evolution of exchange-value and hence from that of social labour as universal labour. For example commodities as use-values are not divisible at will, a property which as exchange-values they should possess. Or it may happen that the commodity belonging to A may be use-value required by B; whereas B’s commodity may not have any use-value for A. Or the commodity-owners may need each other’s commodities but these cannot be divided and their relative exchange-values are different. In other words, on the plea of examining simple barter, these economists display certain aspects of the contradiction inherent in the commodity as being the direct unity of use-value and exchange-value. On the other hand, they then persistently regard barter as a form well adapted to commodity exchange, suffering merely from certain technical inconveniences, to overcome which money has been cunningly devised. Proceeding from this quite superficial point of view, an ingenious British economist has rightly maintained that money is merely a material instrument, like a ship or a steam engine, and not an expression of a social relation of production, and hence is not an economic category. It is therefore simply a malpractice to deal with this subject in political economy, which in fact has nothing in common with technology.This is not quite as developed as Marx’s views on the origin of money in volume 1 of Capital but we can see that this is an early form of the analysis there.
The world of commodities presupposes a developed division of labour, or rather the division of labour manifests itself directly in the diversity of use-values which confront one another as particular commodities and which embody just as many diverse kinds of labour. The division of labour as the aggregate of all the different types of productive activity constitutes the totality of the physical aspects of social labour as labour producing use-values. But it exists as such – as regards commodities and the exchange process – only in its results, in the variety of the commodities themselves.
The exchange of commodities is the process in which the social metabolism, in other words the exchange of particular products of private individuals, simultaneously gives rise to definite social relations of production, into which individuals enter in the course of this metabolism. As they develop, the interrelations of commodities crystallise into distinct aspects of the universal equivalent, and thus the exchange process becomes at the same time the process of formation of money. This process as a whole, which comprises several processes, constitutes circulation.”
Marx, Karl. 1993 [1859]. A Contribution to the Critique of Political Economy (trans. S.W. Ryazanskaya). Progress Publishers, Moscow.
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/index.htm
Marx’s had even earlier musings on the origin of money in the Grundrisse der Kritik der Politischen Ökonomie (Outlines of the Critique of Political Economy), a manuscript which he wrote from 1857–1858. These 800 manuscript pages by Marx on political economy which were not even published until 1939 (Wheen 2001: 227), and they formed the basis of A Contribution to the Critique of Political Economy (1859) (Sperber 2014: 421).
In the Grundrisse, we read as follows:
“The product becomes a commodity. The commodity becomes exchange value. The exchange value of the commodity acquires an existence of its own alongside the commodity; i.e. the commodity in the form in which (1) it is exchangeable with all other commodities, (2) it has hence become a commodity in general, and its natural specificity is extinguished, and (3) the measure of its exchangeability (i.e. the given relation within which it is equivalent to other commodities) has been determined – this commodity is the commodity as money, and, to be precise, not as money in general, but as a certain definite sum of money, for, in order to represent exchange value in all its variety, money has to be countable, quantitatively divisible.Marx’s views here are explicit: “Money does not arise by convention, any more than the state does. It arises out of exchange, and arises naturally out of exchange.”
Money – the common form into which all commodities as exchange values are transformed, i.e. the universal commodity – must itself exist as a particular commodity alongside the others, since what is required is not only that they can be measured against it in the head, but that they can be changed and exchanged for it in the actual exchange process. The contradiction which thereby enters, to be developed elsewhere. Money does not arise by convention, any more than the state does. It arises out of exchange, and arises naturally out of exchange; it is a product of the same. At the beginning, that commodity will serve as money – i.e. it will be exchanged not for the purpose of satisfying a need, not for consumption, but in order to be re-exchanged for other commodities – which is most frequently exchanged and circulated as an object of consumption, and which is therefore most certain to be exchangeable again for other commodities, i.e. which represents within the given social organization wealth ϰατ᾽ ἐξοχήν [par excellence], which is the object of the most general demand and supply, and which possesses a particular use value. Thus salt, hides, cattle, slaves. In practice such a commodity corresponds more closely to itself as exchange value than do other commodities (a pity that the difference between denrée and merchandise cannot be neatly reproduced in German). It is the particular usefulness of the commodity whether as a particular object of consumption (hides), or as a direct instrument of production (slaves), which stamps it as money in these cases. In the course of further development precisely the opposite will occur, i.e. that commodity which has the least utility as an object of consumption or instrument of production will best serve the needs of exchange as such. In the former case, the commodity becomes money because of its particular use value; in the latter case it acquires its particular use value from its serviceability as money. The precious metals last, they do not alter, they can be divided and then combined together again, they can be transported relatively easily owing to the compression of great exchange value in little space – for all these reasons they are especially suitable in the latter stage. At the same time, they form the natural transition from the first form of money. At somewhat higher levels of production and exchange, the instrument of production takes precedence over products; and the metals (prior to that, stones) are the first and most indispensable instruments of production. Both are still combined in the case of copper, which played so large a role as money in antiquity; here is the particular use value as an instrument of production together with other attributes which do not flow out of the use value of the commodity but correspond to its function as exchange value (including medium of exchange). The precious metals then split off from the remainder by virtue of being inoxidizable, of standard quality etc., and they correspond better, then, to the higher stage, in that their direct utility for consumption and production recedes while, because of their rarity, they better represent value purely based on exchange. From the outset they represent superfluity, the form in which wealth originates. Also, metals preferably exchanged for metals rather than for other commodities.
The first form of money corresponds to a low stage of exchange and of barter, in which money still appears more in its quality of measure rather than as a real instrument of exchange. At this stage, the measure can still be purely imaginary (although the bar in use among Negroes includes iron) (sea shells etc., however, correspond more to the series of which gold and silver form the culmination).”
Marx, Karl. 1973 [1857–1861]. Grundrisse. Foundations of the Critique of Political Economy (trans. Martin Nicolaus). Penguin Books.
https://www.marxists.org/archive/marx/works/1857/grundrisse/ch03.htm
Earlier in the notes, Marx even thinks that money tended to have a unit of account function before its general medium of exchange function arose:
“Money appears as measure (in Homer, e.g. oxen) earlier than as medium of exchange, because in barter each commodity is still its own medium of exchange. But it cannot be its own measure or its own standard of comparison.”Marx’s theory on the origin of money is subject to virtually the same critique as the revised Mengerian theory that I have criticised here.
Marx, Karl. 1973 [1857–1861]. Grundrisse. Foundations of the Critique of Political Economy (trans. Martin Nicolaus). Penguin Books.
https://www.marxists.org/archive/marx/works/1857/grundrisse/ch03.htm
BIBLIOGRAPHY
Marx, Karl. 1973 [1857–1861]. Grundrisse. Foundations of the Critique of Political Economy (trans. Martin Nicolaus). Penguin Books.
https://www.marxists.org/archive/marx/works/1857/grundrisse/ch03.htm
Marx, Karl. 1993 [1859]. A Contribution to the Critique of Political Economy (trans. S.W. Ryazanskaya). Progress Publishers, Moscow.
https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/index.htm
Sperber, Jonathan. 2014. Karl Marx: A Nineteenth-Century Life. Liveright Publishing Corporation, New York.
Wheen, Francis. 2000. Karl Marx. Fourth Estate, London.
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