CAPITAL BY KARL MARX, VOL. I. 
BOOK ONE—THE PROCESS 
OF CAPITALIST PRODUCTION"! 

Chapter I 
COMMODITIES AND MONEY * 

1. COMMODITIES AS SUCH 

The wealth of societies in which capitalist production prevails 
consists of commodities. A commodity is a thing that has use-value; 
the latter exists in all forms of society, but in capitalist society, 
use-value is, in addition, the material depository of exchange-value. 

Exchange-value presupposes a tertium comparationis” by which it 
is measured: labour, the common social substance of exchange-. 
values, to be precise, the socially necessary labour-time embodied in it. 

Just as a commodity is something twofold: use-value and 
exchange-value, so the labour contained in it is twofold determined: 
on the one hand, as definite productive activity, weaving labour, 
tailoring labour, etc.— useful labour; on the other, as the simple 
expenditure of human labour-power,. precipitated abstract labour. The 
former produces use-value, the latter exchange-value; only the 
latter is quantitatively comparable (the differences between skilled 
and unskilled, complex and simple labour confirm this). 

Hence the substance of exchange-value is abstract labour and its 
magnitude is the measure of time of abstract labour. Now to 
consider the form of exchange-value. 

(1) x commodity a=y commodity 6; value of a commodity 
expressed in the use-value of another is its relative value. The 
expression of the equivalence of two commodities is the simple 
form of relative value. In the above equation y commodity b is the 

equivalent. In it x commodity a acquires its value-form in contrast to 
its [the commodity’s] natural form, while y commodity b acquires at 
the same time the property of direct exchangeability, even in its 
natural form. Exchange-value is impressed upon the use-value of a 
commodity by definite historical relations. Hence the commodity 
cannot express its exchange-value in its own use-value, but only in 
the use-value of another commodity. Only in the equation of two 
concrete products of labour does the property of the concrete 
labour contained in both come to light as abstract human labour, 
i.e., a commodity cannot be related to the concrete labour 
contained in itself, as the mere form of realisation of abstract 
labour, but it can be so related to the concrete labour contained in 
other kinds of commodities. 

The equation x commodity a=y commodity 6 necessarily 
implies that x commodity a can also be expressed in other 
commodities, thus: 

(2) x commodity a=y commodity b=z commodity c=v com- 
modity d=u commodity e=, etc., etc. This is the expanded relative 
form of value. Here x commodity a no longer refers to one, but 
to all commodities as the mere forms of manifestation of the 
labour represented in it. But through simple reversal it leads to 

(3) the converse second form of relative value: 

y commodity b=x commodity a 
v commodity c=x commodity a 
u commodity d=x commodity a 
t commodity e=x commodity a 

etc., etc. 

Here the commodities are given the general relative form of value, 
in which all of them are abstracted from their use-values and 
equated to x commodity a as the materialisation of abstract labour; 
x commodity a is the generic form of the equivalent for all other 
commodities; it is their universal equivalent; the labour materialised 
in it at once represents in itself the realisation of abstract labour, 
general labour. Now, however, 

(4) every commodity of the series can take over the role of 
universal equivalent, but only one of them can do so at a time, 
since if all commodities were universal equivalents, each of them 
would in turn exclude the others from that role. Form 3 is not 
obtained by x commodity a, but by the other commodities, 
objectively. Hence a definite commodity must take over the 
role—for a time, it can change—and only in this way does a 
commodity become a commodity completely. This special com- 

. modity, with whose natural form the universal equivalent form 
becomes identified, is money. 

The difficulty with a commodity is that; like all categories of the 
capitalist mode of production, it represents a personal relationship 
under a material wrapping. The producers relate their different 
kinds of labour to one another as general human labour by 
relating their products to one another as commodities—they cannot 
accomplish it without this mediation of things. The relation of 
persons thus appears as the relation of things. 

For a society in which commodity production prevails, Christian- 
ity, particularly Protestantism, is the fitting religion. 

2. THE PROCESS OF COMMODITY EXCHANGE 

A commodity proves that it is a commodity in exchange. The 
owners of two commodities must be willing to exchange their 
respective commodities and therefore to recognise each other as 
private owners. This legal relation, the form of which is the contract, 
is only a relation of wills, reflecting the economic relation. Its 
content is given by the economic relation itself. (P. 45.) 

A commodity is a use-value for its non-owner, a non-use-value 
for its owner. Hence the need for exchange. But every commodity 
owner wants to get in exchange specific use-values that he 
needs—to that extent the exchange is an individual process. On 
the other hand, he wants to realise his commodity as value, that is, 
in any suitable commodity, whether or not his commodity is 
use-value to the owner of the other commodity. To that extent the 
exchange is for him a generally social process. But one and the 
same process cannot be simultaneously both individual and 
generally social for all commodity owners. Every commodity owner 
regards his own commodity as the universal equivalent, while all 
other commodities are so many particular equivalents of his own. 
Since all commodity owners do the same, no commodity is the 
universal equivalent, and hence no commodity possesses a general 
relative form of value, in which they are equated as values and 
compared as magnitudes of value. Therefore they do not confront _ 
each other at all as commodities, but only as products. (P. 47.) 

Commodities can be related as values and hence as commodities 
only by comparison with some other commodity as the universal 
equivalent. But only the social act can make a particular commodity the 
universal equivalent— money. 

The immanent contradiction in a commodity as the direct unity 
of use-value and exchange-value, as the product of useful private 

labour ... and as the direct social materialisation of abstract human 
labour—this contradiction finds no rest until it results in 
duplicating the commodity into commodity and money. (P. 48.) 

Since all other commodities are merely particular equivalents of 
money, and money is their universal equivalent, they are related to 
money as particular commodities to the universal commodity. 
(P. 51.) The process of exchange gives the commodity which it 
converts into money, not its value, but its value-form. (P. 51.) 
Fetishism: a commodity does not seem to become money only 
because the other commodities all express their values in it, but 
conversely, they seem to express their values in it because it is 
money. 

3. MONEY, OR THE CIRCULATION OF COMMODITIES 

A. The Measure of Values (Assuming Gold= Money) 

Money, as the measure of value, is the necessary form of 
mantfestation of the measure of value immanent in commodities, 
i.e., labour-time. The simple, relative expression of the value of 
commodities in money, x commodity a=y money, is their price. 
(P.. 55.) 

The price of a commodity, its money-form, is expressed in 
imaginary money; hence money is the measure of values only ideally. 
(Eby) 

Once the change from value to price is effected, it becomes 
technically necessary to develop the measure of values further, 
into the standard of prices; i.e., a quantity of gold is fixed, by which 
different quantities of gold are measured. This is quite different from 
the measure of values, which itself depends upon the value of 
gold, while the latter is immaterial for the standard of prices. 
(P. 59.) 

Once prices are expressed in accounting names of gold, money 
serves aS money of account. 

If price, as the exponent of the magnitude of a commodity’s 
value, is the exponent of its exchange ratio with money it does not 
follow conversely that the exponent of its exchange ratio with 
money is necessarily the exponent of the magnitude of its value. 
Assuming that circumstances permit or compel the sale of a 
commodity above or below its value, these selling prices do not 
correspond to its value, but they are none the less prices of the 
commodity, for they are (1) its value-form, money, and (2) 
exponents of its exchange ratio with money. 

The possibility, therefore, of quantitative incongruity between 
price and magnitude of value is given in the price -form itself. That is 
no defect of this form, but on the contrary makes it the adequate. 
form of a mode of production in which the rule can impose itself 
only as a blindly-acting law of averages of irregularity. The 
price-form, however, can_also ... harbour a qualitative contradic- 
tion, so that price ceases altogether to be an expression of value... 
Conscience, honour, etc., can ... acquire the form of commodities 
through their price. (P. 61.) 

Measurement of values in money, the price-form, implies the 
necessity of alienation, the ideal pricing implies the actual. Hence 
circulation. 

B. The Medium of Circulation 

a. The Metamorphosis of Commodities 

Simple form: C—M—C. Its material content=C—C. Ex- 
change-value 1s alienated and use-value appropriated. 

a) First phase: C—M=sale, for which two persons are 
required, hence the possibility of failure, i.e., of sale below value, 
or even below the cost of production, if the social value of the 
commodity changes. “The division of labour converts the product 
of labour into a commodity, and thereby makes necessary its 
further conversion into money.”* At the same time it also makes 
the accomplishment of this transubstantiation quite accidental. 
(P. 67.) But, considering the phenomenon in its pure form, C—M 
presupposes that the possessor of the money (unless he is a 
producer of gold) previously got his money through exchange for 
another commodity; hence it is not only conversely M—C for the 
buyer, but it presupposes that he made a previous sale, etc., so that 
we have an endless series of purchases and sales. 

8) The same takes place in the second phase, M—C,  Le., 
purchase, which is, at the same time, a sale for the other party. 

y) The total process hence is a circuit of purchases and sales. 
The circulation of commodities. This is quite different from the 
direct exchange of products; first, the individual and local bounds 
of the direct exchange of products are broken through, and the 
interchange of matter of human labour is effected; on the other 
hand, here it already appears that the whole process depends upon 

social relations spontaneous in their growth and independent of the 
actors. (P. 72.) Simple exchange was extinguished in the one act of 
exchange, where each exchanges non-use-value for use-value; 
circulation proceeds indefinitely. 

(P. 73.) Here the false economic dogma: the circulation of 
commodities involves a necessary equilibrium of purchases and sales, 
because every purchase is also a sale and vice versa—which 1s to say that 
every seller also brings his buyer to market with him. (1) Purchase and 
sale are, on the one hand, an identical act of two polarly opposite 
persons; on the other hand, they are two polarly opposite acts of 
one and the same person. Hence the identity of purchase and sale 
implies that the commodity is useless unless it is sold, and likewise 
that this case can occur. (2) C—M, as a partial process, is similarly 
an independent process and implies that the acquirer of money 
can choose the time when he again converts this money into a 
commodity. He can wait. The inner unity of the independent 
processes C—M and M-—C moves in external antitheses precisely 
because of the independence of these processes; and when these 
dependent processes reach a certain limit of independence, their 
unity asserts itself in a crisis. Hence the possibility of the latter is 
already given here. 

Being the intermediary in commodity circulation, money is the 
medium of circulation. 

b. The Currency of Money 

Money is the medium by which each individual commodity goes 
into, and out of, circulation; it always remains therein itself. 
Hence, although the circulation of money is merely the expression 
of commodity circulation, the circulation of commodities appears to 
be the result of money circulation. Since money always remains 
within the sphere of circulation, the question is: how much money 
is present in it? 

The quantity of money in circulation is determined by the sum 
of the prices of commodities (money-value remaining the same), and 
the latter by the quantity of commodities in circulation. Assuming 
that this quantity of commodities is given, the circulating quantity 
of money fluctuates with the fluctuations in the prices of 
commodities. Now, since one and the same piece of money always 
mediates a number of transactions in succession in a given time, 
for a given interval of time we have: 

Sum of the prices of commodities _ Quantity of money functioning as the 
Number of moves made by a piece of circulation medium. (P. 80.) 
money 

Hence paper money can displace gold money if it is thrown into 
a saturated circulation. 

Since the currency of money only reflects the process of 
commodity circulation, its rapidity reflects that of the change in 
the form of the commodities, its stagnation, the separation of 
purchase from sale, the stagnation of social interchange of matter. 
The origin of this stagnation cannot, of course, be seen from 
circulation itself, which merely puts in evidence the phenomenon 
itself. The philistines attribute it to a deficient quantity of the 
circulation medium. (P. 81.) 

Ergo: (1) If the prices of commodities remain constant, the 
quantity of money circulating rises when the quantity of circulat- 
ing commodities increases or the circulation of money is retarded; 
and drops vice versa. 

(2) With a general rise in the prices of commodities, the quantity 
of money circulating remains constant if the quantity of com- 
modities decreases or the velocity of circulation increases in the 
same proportion. 

(3) With a general drop in the prices of commodities, the 
converse of (2). 

In general, there is a fairly constant average from which 
significant deviations occur almost exclusively as a result of crises. 

c. Coin: Symbol of Value 

The standard of prices is fixed by the state, as are also the 
denomination of the particular piece of gold—the coin, and its 
coining. In the world market the respective national uniforms are 
doffed again (seigniorage is disregarded here), so that coin and 
bullion differ only in form. But a coin wears away during 
circulation; gold as a circulation medium differs from gold as a 
standard of prices. The coin becomes more and more a symbol of 
its official content. 

Herewith the latent possibility is given of replacing metallic 
money by tokens or symbols. Hence: (1) small coinage of copper 
and silver tokens, the permanent establishment of which in place 
of real gold money is prevented by limiting the quantity in which 
they are legal TENDER. Their metallic content is determined purely 

arbitrarily by law, and thus their function as coinage becomes 
independent of their value. Hence the further step to quite 
worthless symbols is possible. (2) Paper money, i.e., paper money issued 
by the state, having compulsory rate (credit money not to be discussed 
here as yet). So far as this paper money actually circulates in place 
of gold money, it is subject to the laws of gold circulation. Only 
the proportion in which paper replaces gold can be the object of a 
special law, which is that the issue of paper money is to be limited 
to the quantity in which the gold represented by it would actually 
have to circulate. The degree of saturation of the circulation 
fluctuates, to be sure, but everywhere experience determines a 
minimum below which it never falls. This minimum can be issued. 
If more than the minimum is issued, a_ portion becomes 
superfluous as soon as the degree of saturation drops to the 
minimum. In that case the total amount of paper money within 
the commodity world still represents only the quantity of gold 
fixed by that world’s immanent laws, and hence alone represent- 
able. 

Thus, if the amount of paper money represents twice the 
absorbable amount of gold, each piece of paper money is 
depreciated to half its nominal value. Just as if gold were changed 
in its function as the measure of prices, in its value. (P. 89.) 

C. Money 

a. Hoarding 

With the earliest development of commodity circulation there 
develops the need, and the passionate desire, to hold fast the 
product of C—M, money. From a mere agency of interchange of 
matter, this change of form becomes an end in itself. Money petrifies 
into a hoard; the commodity seller becomes a money hoarder. (P. 91.) 

This form was dominant precisely in the beginnings of 
commodity circulation. Asia. With further development of com- 
modity circulation every producer of commodities must secure for 
himself the nexus rerum,’ the social pledge—money. Thus Hoarps 
accumulate everywhere. The development of commodity circula- 
tion increases the power of money, the absolutely social form of 

wealth always ready for use. (P. 92.) The urge for hoarding is by 

nature boundless. Qualitatively, or with respect to its form, money 
is unrestricted, i.e., the universal representative of material wealth, 
because it is directly convertible into any other commodity. But 
quantitatively, every actual sum of money is limited, and therefore 
of only limited efficacy as a means of purchasing. This contradic- 
tion always drives the hoarder back, again and again, to the 
Sisyphus-like labour of accumulation. 

Besides, the accumulation of gold and silver in pate creates both 
a new market for these metals and a latent source of money. 

Hoarding serves as a conduit for supplying or withdrawing 
circulating money with the continuous fluctuations in the degree of 
saturation of the circulation. (P. 95.) 

b. Means of Payment 

With the development of commodity circulation new relations 
appear: the alienation of a commodity can be separated in time 
from the realisation of its price. Commodities require different 
periods of time for their production; they are produced. in 
different seasons; some must be sent to distant markets, etc. 
Hence A can be a seller before B, the buyer, is able to pay. 
Practice regulates the conditions of payment in this way: A 
becomes a creditor, B a debtor; money becomes a means of payment. 
Thus the relation of creditor and debtor already becomes more 
antagonistic. (This can also occur independently of commodity 
circulation, e.g., In antiquity and the Middle Ages.) (P. 97.) 

In this relation, money functions: (1) as the measure of value in 
the determination of the price of the commodity sold; (2) as an 
ideal means of purchase. In the hoard, money was withdrawn from 
circulation; here, being a means of payment, money enters 
circulation, but only after the commodity has left it. The indebted 
buyer sells in order to be able to pay, or he will be put up for 
auction. Therefore, money now becomes the sale’s end in itself 
through a social necessity arising out of the relations of the very 
circulation process. (Pp. 97-98.) 

The lack of simultaneity of purchases and sales, which gives rise 
to the function of money as a means of payment, at the same time 
effects an economy of the circulation media, payments being 
concentrated at a definite place. The virements* in Lyons in the 
Middle Ages—a sort of clearing-ouse, where only the net balance 
of the mutual claims is paid. (P. 98.) 

In so far as the payments balance one another, money functions 

only ideally, as money of account or measure of values. In so far as 
actual payments have to be made, it does not appear as a circulation 
medium, as only the vanishing and mediating form of interchange of 
matter, but as the individual embodiment of social labour, as the 
independent existence of exchange-value, as the absolute commodity. 
This direct contradiction breaks out in that moment of production and 
commercial crises that is called a monetary crisis. It occurs only where 
the progressing chain of payments, and an artificial system of settling 
them, are fully developed. With more general disturbances of this 
mechanism, no matter what their origin, money changes suddenly 
and immediately from its merely ideal shape of money of account into 
hard cash; profane commodities can no longer replace it. (P. 99.) 

Credit money originates in the function of money as a means of 
payment; certificates of debt themselves circulate in turn to 
transfer these debts to others. With the system of credit the 
function of money as a means of payment again expands; in that 
capacity money acquires its own forms of existence, in which it 
occupies the sphere of large-scale commercial transactions, while 
coin is largely relegated to the sphere of retail trade. (P. 101.) 

At a certain stage and volume of commodity production the 
function of money as a means of payment spreads beyond the 
sphere of circulation of commodities; it becomes the universal 
commodity of contracts. Rents, taxes, and the like are transformed from 
payments in kind into money payments. Cf. France under Louis XIV. 
(Boisguillebert? and Vauban)'*; on the other hand, Asia, Turkey, 
Japan, etc. (P. 102.) 

The development of money into a means of payment necessi- 
tates the accumulation of money against the date when payment is 
due. Hoarding which, as a distinct form of acquiring riches, 
vanished as society further developed, again appears as a reserve 
fund of the means of payment. (P. 103.) 

c. World Money 

In world trade the local forms of coin, small coinage, and tokens 
of value are discarded and only the bullion form of money is valid 
as world money. Only in the world market does money function to the full 
extent as the commodity whose natural form is at the same time the 
immediate social materialisation of human labour in the abstract. Its 
mode of existence becomes adequate to its concept. (P. 104; details 
p. 105.) 

Chapter II