Money tokens are coins, bits of paper or other material that act as a representative of money. They are the first form of credit, as trust. Those accepting the tokens do so trusting that the claim to money represented by the token will be honoured. To understand the true nature of money tokens, therefore, it is necessary to understand the nature of money itself, the money commodity, and credit.
Marx, in A Contribution To The Critique of Political Economy, and in Capital I, Chapter 3, sets out the way that a money commodity develops inevitably out of the process of commodity production and exchange. This materialist analysis of money, is quite different to the idealist view of money provided by bourgeois economists, like Ricardo, who viewed it as arising because those involved in trade saw it as being “more convenient” than barter. In other words, that it was the result of a conscious decision, the idea of money simply came to them, leading them to develop it. Marx's materialist analysis shows that no such conscious decision to create money was required. Marx's analysis of value, exchange-value and price in Theories of Surplus Value, further elaborates this point.
Commodity production and exchange arises as primitive communities begin to expand the occasional exchange of surplus products, during various ceremonial gatherings, into regular trade. The trade itself expands, because each community realises that it has advantages in the production of certain products, whilst other communities have advantages in the production of other products they require. Trade enables both to obtain more of these products with no additional expenditure of labour.
Initially, trade takes place on the basis of pairs, and an exchange value for each commodity is established on the basis of such paired trades. For example, cattle are traded for wine, and so an exchange value of wine to cattle is established; cloth is exchanged for salt, and an exchange value of salt to cloth is established, etc. Cattle are also exchanged for cloth, and wine is exchanged for salt, so that an exchange value for cloth in cattle, and salt in wine, is also established. This is what Marx terms, in his Value Form Analysis, the Relative Form of Value.
As he sets out, most clearly, in Theories of Surplus Value, in polemicising against Samuel Bailey, what this means is this. Value is labour, and the measure of value is labour-time. When society produces products for direct consumption, value and use value is inextricably joined within the product. Value takes the form of individual value. In other words, when a primitive commune decides that its welfare is maximised by producing 1 ton of potatoes, and half a ton of carrots, it arrives at this conclusion by balancing the use value/utility it obtains from potatoes as against carrots, and the labour-time required to produce the given quantities of both. As Engels put it, this will also be the basis of planning in a communist society.
“The useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan.”
“As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the politico-economic concept of value. (Deutsch-Französische Jahrbücher, p. 95) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital.”
(Anti-Duhring, Chapter 26)
As Marx describes, its not necessary that the primitive commune should understand the concept of value, or use that term, in this process. On the contrary, the etymology of the word “value” or “worth”, indicates that it was originally to describe use value. But, the primitive commune as with the example of Robinson Crusoe, used by Marx in Capital I, to describe value, and this process, can only obtain the use value of any given product by engaging in the required amount of its own labour to produce it. To obtain any given amount of use value, it must give up a given amount of labour-time/value.
However, when these societies begin to produce commodities for the purpose of exchange, this is no longer true. If communities A-D, all produce cloth, and community X produces wine, then, in determining how much cloth it wants for any given amount of wine, X forces A-D into competition with each other. Suppose A produces a metre of cloth in 1 hour, B in 1.1 hours, C in 1.2 hours, and D in 1.3 hours. X produces a litre of wine in 1 hour. What X actually exchanges is an hour of their labour for an hour of cloth producing labour. However, they will not want to exchange an hour of their labour for an hour of D's labour, because it produces 30% less cloth than does A's labour. If X can meet all of their needs for cloth by exchanging only with A, they will do so, exchanging 1 litre of wine for 1 metre of cloth.
In short, the value of cloth is no longer inextricably tied to it as a use value, as it is with the production of products, and becomes, separated from it. The value of cloth, as a commodity, as opposed to the value of cloth as a product, is no longer its individual value, but becomes a social value, or market value, and this social or market value, is the average amount of labour-time required for its production. The individual value does not cease to exist, because, firstly, the market value is itself the mean average of all these individual values, for any given commodity, and, secondly, although every commodity sells at its market value, that does not change the individual value of it for each producer. So, some producers will produce at an individual value lower than the market value, and others at an individual value above the market value.
The former will prosper and expand, and the latter will falter and go out of business. This creates the process of differentiation of the small commodity producers, resulting in the creation of a bourgeoisie and proletariat, and also is the basis of the continued process of concentration and centralisation of capital that results in the expropriation of the expropriators, and creation of large-scale socialised capital as the transitional form of property between Capitalism and Socialism.
But, this process separates value from use value in another sense. Individual value is replaced by market value for the commodity for the simple reason that the producer is concerned not with their own consumption of the use value, but with what they can get in exchange for it, and in this process of exchange, its not only their commodity that is compared to that of others, but their labour itself. Their labour itself ceases being private labour, and becomes social labour, or as Marx puts it in The Critique, universal labour. It forms an integral part of all social labour, and can claim a proportion of the products of that total social labour, only on that basis. Producer D cannot claim a litre of wine in exchange for an hour of their cloth producing labour, because, their hour of cloth producing labour creates 30% less social value than does the cloth producing labour of A.
If all of the cloth produced by A-D finds a market, then its value will be determined by the average labour-time required for its production. In other words, if 4 metres is produced, the total labour-time required for its production, will be 4.6 hours, giving an average value of 1.15 hours. So, a metre of cloth would exchange for 1.15 litres of wine, if the market value of wine is 1 hour per litre. Producers A and B, producing at a lower individual value than the market value, would exchange less labour for more labour, i.e. A would exchange 1 hour of their labour for 1.15 hours of wine producing labour, and B would exchange 1.1 hours of their labour for 1.15 hours of wine producing labour. They would prosper and expand. But, C and D would exchange more labour for less, C exchanging 1.2 hours of their labour, and D 1.3 hours of their labour, for just 1.15 hours of wine producing labour. They would falter.
Moreover, it is not just the case that individual value is now replaced by market value, both being measured in labour-time, but as this trade develops, the value of each commodity comes to be viewed as how much of these other commodities it can claim in exchange. Value is measured directly in labour-time, but now, value comes to be measured indirectly, in terms of the quantities of other commodities that can be obtained in exchange for it, its exchange-value. Where value is hidden, this exchange value of the commodity, becomes its visible expression, written on its face, most clearly as its price. Money is value completely alienated from use value, as abstract social-labour-time, and money is recombined in physical form with a use value as the money commodity, but this use value is now that of acting only as the physical form of money, of exchange-value incarnate.
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