[2) MONEY AS MEANS OF PAYMENT] 

[...] [B~1] obtains. Every peculiarity of the relation between the 
two [parties to the exchange] has been obliterated (exchange value 
as such, the general product of the social circulation, is here alone 
involved), and similarly all the political, patriarchal and other 
relationships stemming from the particularity of the relation. Both 
relate to each other as abstract social persons, merely representing 
exchange value as such before each other. Money has now become 
the sole nexus rerum between them, money sans phrase. The 
peasant no longer confronts the landowner as a peasant with his 
rural product and his rural labour, but as the money owner, for 
through the sale the immediate use value has been alienated and 
has assumed an indifferent form through the medium of the social 
process. On the other hand, the landowner no longer regards him 
as an uncouth individual producing means of subsistence in 
peculiar living conditions, but as one whose product—exchange 
value become independent, the universal equivalent, money—is 
no different from anyone else’s product. Thus, the idyllic aura 
that covered up the transaction in its previous form is dispelled. 

The absolute monarchy, itself already a product of the 
development of bourgeois wealth to a level incompatible with the 
old feudal relationships, is—in accordance with the uniform 
general power which it must be able to exercise at every point of 
the periphery—in need of a material instrument of that power: 
the universal equivalent, wealth in its constant battle-ready form in 
which it is completely independent of particular local, natural, 
individual relations. It needs wealth in the form of money. A 
system of services and deliveries in kind tends to impart, in 
accordance with their specific character, a particular character to 
their use as well. Money is alone capable of being immediately 

converted into any particular use value. So the absolute monarchy 
is actively engaged in converting money into the universal means 
of payment. That can be done only through forced circulation, 
which makes products circulate at below their value. For the 
absolute monarchy, the conversion of all taxes into money taxes is 
a vital matter. So, whereas the conversion of [feudal] services into 
money services at an earlier stage appears as the shedding of 
relationships of personal dependence, as a victory of the bourgeois 
society, which buys its way out of the shackling fetters with 
cash—a process which, on the other hand, appears from the 
romantic viewpoint as a substitution of hard and insensitive money 
relationships for mankind’s motley ties—in the epoch of the rising 
absolute monarchy, whose art of finance consists in the forcible 
conversion of commodities into money, money is itself attacked by 
bourgeois economists as imaginary wealth to which natural wealth 
is being forcibly sacrificed. So, whereas Petty,* for instance, 
actually celebrates in money, as the material for hoarding, merely 
the general energetic drive for enrichment of the young bourgeois 
society in England, Boisguillebert,” in the reign of Louis XIV,. 
denounces money as the universal curse which causes the 
development of the real sources of the production of wealth to 
run dry, and whose dethronement alone can restore to the world 
of commodities, the true wealth and its general enjoyment, its 
good old rights. He could not as yet comprehend that the same 
black art of finance which threw men and commodities into the 
alchemistic retort in order to make gold, simultaneously caused all 
the relationships and illusions hemming the bourgeois mode of 
production to be vaporised, to leave simple money relationships, 
common exchange-value relationships, as a residue. 

“In feudal time cash payment had not grown to be the sole nexus of man 
to man. Not as buyer and seller alone, but in many senses still as soldier and 
captain, as loyal subject and guiding king, etc. was the low related to the high. With 
the supreme triumph of cash, a changed time has entered” (Th. Carlyle, On 
Chartism, London, 1840, p. 58). 

Money is “impersonal” property. I can carry it around with me 
in my pocket as the universal social power and the universal social 
nexus, the social substance. Money puts social power as a thing 
into the hands of the private person, who as such uses this power. 

The social nexus, the social exchange of matter, itself appears in 
money as something entirely external, not having any individual 
relation at all to its possessor, so that the power he wields appears 
to be something quite incidental and external to him. 

[B’-2] Without any further anticipation, this much is clear: With 
the development of the credit system there is an extraordinary 
spread of buying on time. To the extent that the credit system is 
developed, and hence production based on exchange value, the 
role of money as means of payment will increase, as compared 
with its role as means of circulation, as agent of purchase and sale. 
In countries with a developed modern mode of production, and 
therefore a developed credit system, money as specie effectively 
figures almost exclusively in retail trade and in petty trade 
between producers and consumers, while in the sphere of 
large-scale trading transactions it appears almost exclusively in the 
form of the universal means of payment. In so far as the payments 
are in balance, money appears as a transient form, a merely 
notional, imaginary measure of the exchange magnitudes of value. 
Its bodily involvement is confined to the settlement of relatively 
insignificant balances.* 

* “To prove how little,” says Mr. Slater (of the firm of Morrison, Dillon et Co, 
whose transactions are amongst the largest of the metropolis) ‘‘of real money enters 
into the operations of trade”, he gives an “analysis of a continuous course of 
commercial transactions, extending over several millions yearly, and which may be 
considered as a fair example of the general trade of the country. The proportions 
of receipts and payments are reduced to the scale of £1,000,000 only, during the 
year 1856, and are as under, viz.: 

Receipts £ Payments 

In bankers’ drafts and mercan- 

tile bills of exchange, pay- Bills of exchange pay- 

able after date woes 533,596 able after date .......... 302,674 
In cheques of bankers etc. pay- Cheques on London 

able on demand ................. 357,715 banker .......ccceseeeeeee 663,672 
In country banknotes ............... 9,627 
Bank of England Bank of 
MOLES fii oxi ceiscvedes secsseaacsbendadeaean ested 68,554 NOLES 4..ie.ccercsseevardascces 22,743 
GOld vcsiceeiecc: wee 28,089 Gold heccascseuessecdoce “ 9,427 
Silver and copper . a 1,486 Silver and copper 1,484 
Post-office orders 933 

£1,000,000 £1,000,000.” 

p. LXXI (Report from the Select 
Committee on the Bank Acts etc. 
1 July 1858.) [Marx quotes in 
English.] 

The development of money as the universal means of payment 
goes hand in hand with the development of a higher, mediated 
form of circulation—that returns upon itself and that has already 
been taken under social control—in which the exceptional 
importance that money has on the basis of the simple metallic 
circulation, as it does, for instance, in hoarding in the strict sense 
of the term, is transcended. But then, if sudden credit upheavals 
should interrupt the mutual settlement of payments and upset the 
payments mechanism, it is money that is suddenly in demand as 
the real universal means of payment, with the requirement that 
the whole volume of wealth should have a two-fold existence: once 
as commodity and again as money, so that these two modes of 
existence are identical to each other. At such moments of crisis, 
money appears as exclusive wealth, which is manifested as such 
not in some merely imaginary depreciation, as it does in, say, the 
monetary system, but in the active depreciation of all real wealth. 
With respect to the world of commodities, value then continues to 
exist only in its adequate exclusive form—as money. 

The further elaboration of this point is here irrelevant. What is 
relevant, however, is that moments of monetary crises proper 
bring out a contradiction that is immanent to the development of 
money as the universal means of payment. It is not as a measure 
that money is demanded in such crises, since as such its 
corporeal presence is a matter of indifference; nor is it as coin, 
for it does not figure as such in payments; but it is demanded as 
exchange value become independent, as a materially present 
universal equivalent, as the embodiment of abstract wealth; in the 
form, that is, in which it is the object of hoarding in the strict 
sense of the term, as money. Its development as the universal 
means of payment shrouds the contradiction that exchange 
value has assumed forms independent of its mode of existence 
as money; and on the other hand, its mode of existence as money 
is posited precisely as the definitive and solely adequate one. 

In consequence of the balancing out of payments and their 
cancellation of each other as positive and negative amounts, 
money, aS means of payment, can appear as a merely notional 
form of commodity, as in the case with its being the measure [of 
value], and in its functioning in the formation of prices. The 
collision occurs from the fact that—contrary to the arrangement, 
contrary to the general assumption of modern trade, and 
whenever the mechanism of these mutual cancellations and the 
credit system on which it partly rests are disrupted —it must instantly 
be present and to hand in its real form. 

The law that the mass of money in circulation is determined by 
the aggregate price of the commodities in circulation is now 
supplemented as follows: by the aggregate price* of the payments 
falling due in the given period and the economy practised in 
effecting them. 

[B’-3] We have seen that the change in the value of gold and 
silver does not affect their function as measure of value, as money 
of account. By contrast, this value change becomes crucially 
important for money in its function as means of payment. What is 
to be paid is a determined quantity of gold or silver in which a 
determined value, i.e. a determined labour time, was objectified by 
the time the contract was concluded. But, like all other com- 
modities, gold and silver change the magnitude of their value with 
the change in the labour time required for their production, 
falling or rising in value as it falls or rises. Therefore, in the event 
that the realisation of the sale on the part of the buyer occurs later 
in ume than the alienation of the sold commodity, the same 
quantity of gold or silver may contain a different, a greater or 
lesser, value than at the conclusion of the contract. Gold and silver 
retain their specific quality of money, that of always being the 
realised and realisable universal equivalent, of always being 
exchangeable for all the commodities to the extent of their own 
value, regardless of any change in the magnitude of their own 
value. However, the latter is, potentialiter, subject to the same 
fluctuations as is the value of any other commodity. Consequently, 
whether payment is effected in a real equivalent, i.e. in the initially 
anticipated value magnitude, depends on whether or not the 
labour time required for the production of the given quantity of 
gold or silver has remained the same. The nature of money, as 
incarnated in a specific commodity, here comes into collision with 
its function of exchange value become independent. The great 
revolutions in all economic relationships which, in the 16th and 
17th centuries, for instance, were caused by the fall in the value of 
the precious metals, or a similar but smaller-scale revolution in the 
ancient Roman Republic in the period between [the first silver 
denarius in 485 ab urbe condito]” and the start of the Second Punic 
War’ caused by the rise in the value of copper, in which the 
plebeians’ debts were contracted, are well known. A demonstration 

of the influence of a rise or fall in the value of the precious 
metals, the material of money, on economic relationships implies 
an analysis of these relationships themselves, and so is not yet 
feasible at this point. 

What is self-evident is that the fall in the value of the precious 
metals, i.e. of money, always goes to benefit the payer at the 
expense of the payee, and a rise in their value, the other way 
round. 

The complete reification [Versachlichung], externalisation of the 
social exchange of matter on the basis of exchange values is 
strikingly manifested in the dependence of all social relationships 
on the production costs of metallic objects of natural origin which 
have no significance at all as instruments of production, as factors 
in the creation of wealth. 

3) MONEY AS INTERNATIONAL MEANS OF PAYMENT