Commodity production and exchange does not spring into the world, fully formed, like Minerva from the head of Zeus. Its origins lie in the exchange of gifts at ceremonies and rituals between different tribes. The exchange is of products, and, as products, their value can only be individual value, i.e. the value determined by the actual labour used in their production. But, as these exchanges become more frequent, forming the basis of trade, it was not even this individual value that was the basis of the rates of exchange.
What was exchanged was accidental surpluses of products, so that exchange-values were a function of supply and demand. Its only when trade between communities expands to a degree that they begin to produce these products deliberately for the purpose of exchange that it is the value of the respective products that determines the rates of exchange. But, then, competition between suppliers reduces a range of individual values to an average market value, as the basis of exchange-value, and a range of different concrete labours must also be reduced to a standard, abstract, universal measure of labour, which takes the form of the labour used in the production of the money commodity. It is this process which separates this money commodity from the rest.
“Once the necessity for a specific agency of exchange, that is, for money, has been recognized, all that remains to be explained is why this particular function has developed upon gold and silver rather than upon any other commodity. This is a secondary question, which is explained not by the chain of production relations, but by the specific qualities inherent in gold and silver as substances. If all this has made economists for once "go outside the domains of their own science, to dabble in physics, mechanics, history and so on,” as M. Proudhon reproaches them with doing, they have merely done what they were compelled to do. The question was no longer within the domain of political economy.” (p 76-7)
In other words, once all of the complex of economic and social relations brings you to the point that money arises, the question of exactly which commodity will perform that function is secondary, and becomes a question not of political economy, but of historical development, chemistry and so on. What commodity best meets the requirement depends upon which commodities are most commonly produced and traded, and whose value is most accurately known, which have the specific qualities as use-values to be durable, divisible, portable and so on.
“To say that, of all commodities, gold and silver were the first to have their value constituted, is to say, after all that has gone before, that gold and silver were the first to attain the status of money. This is M. Proudhon's great revelation, this is the truth that none had discovered before him.” (p 77)
But, Proudhon's assumption was wrong.
“If we wished to harp on this patriarchal erudition, we would inform M. Proudhon that it was the time needed to produce objects of prime necessity, such as iron, etc., which was the first to be known. We shall spare him Adam Smith's classic bow.” (p 77)
Marx's reference is to Smith's account, in The Wealth of Nations, Vol.I, Book 1, Chapter II, in which he describes a social division of labour in a primitive tribe arising from the fact that some individuals find they can produce bows in less labour-time than others, and so exchange bows for venison.
“But, after all that, how can M. Proudhon go on talking about the constitution of a value, since a value is never constituted by itself? It is constituted, not by the time needed to produce it by itself, but in relation to the quota of each and every other product which can be created in the same time. Thus the constitution of the value of gold and silver presupposes an already completed constitution of a number of other products.” (p 77-8)
Note that, as with Smith's bow, these values are not even yet market values of commodities, but individual values of products, i.e. still in the historical process of evolution to becoming market values of commodities. Indeed, as Marx points out, Smith made the mistake of believing that the social division of labour is the consequence of trade, whereas it is trade that is the consequence of the social division of labour that creates within the commune, driven by The Law of Value's requirement to maximise productivity, i.e. the maximum output of use values for any given amount of labour/value.
“It is then not the commodity that has attained, in gold and silver, the status of “constituted value,” it is M. Proudhon's “constituted value” that has attained, in gold and silver, the status of money.” (p 78)
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