Tuesday, 21 March 2023

A Contribution To The Critique of Political Economy, Chapter 2.C Theories of The Medium of Circulation and of Money - Part 3 of 20

Bourgeois society, at that time, consisted only of the expanding role of the merchant and money lender, and the sole purpose of their activity was to acquire more money M – C` - M`, or M – M`, even if, having done so, they had to advance it all over again.

“Money as the end and object of circulation represents exchange-value or abstract wealth, not any physical element of wealth, as the determining purpose and driving motive of production. It was consistent with the rudimentary stage of bourgeois production that those misunderstood prophets should have clung to the solid, palpable and glittering form of exchange-value, to exchange-value in the form of the universal commodity as distinct from all particular commodities. The sphere of commodity circulation was the strictly bourgeois economic sphere at that time. They therefore analysed the whole complex process of bourgeois production from the standpoint of that basic sphere and confused money with capital.” (p 158)

For industrial capital, by contrast, the aim is not an accumulation of more money, but of more capital, in the form of an increased physical mass of capital. It does seek to obtain more iron, rather than more gold, if, for example, its a steel producer, locomotive producer and so on. Its that which enables more labour to be employed, and so more profit to be produced.

“In the reproduction process of capital, the money-form is but transient – a mere point of transit.”

(Capital III, Chapter 24)

Bourgeois economists, as apologists of the bourgeoisie, attempt to present capitalism as simply just the way that society organises production so as to most efficiently meet its needs. That capitalists enrich themselves in this process is just an aspect of the way the system operates. Adam Smith, in describing the operation of “the invisible hand” says that the butcher and baker, in supplying commodities to the market do not do so out of altruism, but in order to make money. Its just that, in doing so, the market relations established between them, founded upon competition, encourages production by the most efficient means, and so maximises the production of the greatest quantity of use values at the lowest prices. And, so far as it goes, this is true, as Marx and Engels described as far back as The Communist Manifesto, in setting out its revolutionary role in smashing apart the old feudal monopolies, and continually revolutionising production.

But, what it fails to take into account of is that, unlike previous modes of production, its aim is not to maximise the production of use values, to meet societies needs, but to maximise exchange-value, and specifically surplus value, so that it can, once more, be thrown into circulation, advanced for the purchase of commodities on an even larger scale, so that even greater sums of exchange-value and surplus value flow back to it. This fact that the aim is not the satisfaction of society's needs, but the continual accumulation of wealth is most stark under Mercantilism.

“The unceasing fight of modern economists against the Monetary and Mercantile systems is mainly provoked by the fact that the secret of bourgeois production, i.e., that it is dominated by exchange-value, is divulged in a naively brutal way by these systems. Although drawing the wrong conclusions from it, Ricardo observes somewhere that, even during a famine, corn is imported because the corn-merchant thereby makes money, and not because the nation is starving. Political economy errs in its critique of the Monetary and Mercantile systems when it assails them as mere illusions, as utterly wrong theories, and fails to notice that they contain in a primitive form its own basic presuppositions. These systems, moreover, remain not only historically valid but retain their full validity within certain spheres of the modern economy.” (p 158-9)


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