Capital, Chapter Three:

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Capital, Chapter Three

• Money, or the Circulation of Commodities

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Money as Power

• Defetishize reading
• Class context
• Money as power
• for capital
• for workers

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Structure of Chapter

• Money as Measure of Value
• Money as Standard of Price
• Money as Means of Circulation
• Money as Store of Value (or Hoard)
• Money as Means of Payment
• World Money

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Money as Measure of Value

• Pre-sale C - M(?) - C(?)
• Price is hypothetical, asked for but not paid
• Use value C has been produced, but has not found
  an expression of value
• After-sale C - M - C
• Money paid Price has been realized
• Amount of Money measures value of C

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Money as Standard of Price

• Money Form (zB, yC, ... nN) xAu
• Price form, e.g., zB xAu
• Value is measured by quantity of gold, ounces
• Price is measured by money name of weight of
  gold, e.g., 35/oz, 1.00 1/35oz of Au
• Money names attached to coins

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Contradictions

• As Measure of Value Standard of Price
• The distinction means possible rupture
• Price and value can differ
• e.g., debasement of currency
• e.g., clipped coins value less than nominal
  value
• e.g., Locke recoinage during war

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Money as Means of Circulation - 1

• As facilitator of exchange
• C - M - C represents circulation of commodities
• C - M 1st metamorphosis (of form)
• realization of exchange value
• M - C 2nd metamorphosis (of form)
• realization of use value

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Money as Means of Circulation -2

• Syllogistic mediation
• C - M - C P - U - I
• C is produced for its particularity exchange
  value
• M is the universal equivalent mediator
• C is acquired for its individual use value in
  consumption

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Money as Means of Circulation -3

• Prime example LP - M - C
• LP ability to work (for capital)
• M wage
• C C(MS) means of subsistence
• All this working class view of working for money
  as a means to an end consumption/life

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Possibility of Crisis - 1

• Separation of sale purchase possibility of
  rupture in circuit
• C - M can be accomplished, but
• M - C might not be
• Money can be hoarded
• Says Law doesnt hold in money economy
• Refusal to spend inadequate aggregate D

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Possibility of Crisis - 2

• In the case of LP - M - C
• Workers can refuse to sell LP for M
• e.g., refuse to leave land, strike
• Workers can refuse to spend (today)
• e.g., increase savings, reduce consumption demand

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Quantity Theory - 1

• Classical Quantity Theory of Money
• M ?pq/V
• M money, p price, q goods,
• V velocity of money (e.g., turnover/yr)
• With q V fixed, change in M produces a change
  in p, i.e., p f(M)
• e.g. influx of gold from new world in 16th C
  meant inflation in Europe

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Quantity Theory - 2

• Marxs Interpretation
• M ?vq/V
• Behind price (p) lies value (v)
• So instead of p f(M), we have
• M f(v)
• e.g., 16th C gold had lower value per unit
• so, M had to increase to express ?vq/V

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Quantity Theory - 3

• Marxs interpretation with paper money
• M ?vq/V
• Paper money only represents value
• Amount of value depends on ?vq/V
• Value per unit of money depends on quantity of
  money
• So, Marxs interpretation rejoins Classics

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Money as Store of Value

• Money stores value when hoarded
• Hoard functions in circulation
• Money stored, released
• Like foreign exchange reserves today
• So misers are misguided obstacles to circulation

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Money as Means of Payment

• With credit money purchase preceeds payment
• Payment follows later
• e.g., commerical credit, credit cards
• Separation new potential for crisis
• e.g., debt crisis of 80s 90s

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World Money

• In 19th C, intl money was bullion/metal
• In late 20th C intl money is credit
• gold has been demonitized
• although gold bugs still want it back
• Marxs discussion of credit provides basis for
  analysis of International Monetary System IMF

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