Brief Two — The Chapter on Money The critique of labour-money, money as the autonomous form of exchange-value, and money as impersonal social power — the real community of bourgeois society.

The Chapter on Money opens the analysis proper, and it does so polemically, through a critique of the Proudhonist Alfred Darimon's scheme for a reformed money that would abolish the crises of capitalism by abolishing gold. Marx uses the occasion to establish a thesis that governs the whole critique: money is not an arbitrary device that could be reformed or legislated away while leaving commodity production intact; it is the necessary product of a society in which labour is private and social only through exchange. The contradictions that money seems to cause are really the contradictions of the commodity form itself, merely brought to visible existence in money. From this negative starting point Marx develops the positive analysis: how the contradiction latent in the commodity — that each product is a particular use-value yet must count as general, exchangeable value — drives toward money as the independent, autonomous existence of exchange-value; and how money, precisely because it is the general form of social wealth held by private individuals, becomes an impersonal social power, the "real community" of a society that has dissolved all personal bonds. Much of what Capital Chapters 1–3 present in compressed form is worked out here at greater length and with a more explicit philosophical horizon — above all the account of money as the alienated social bond, in which the social power of individuals confronts them as the property of a thing. This brief carries those load-bearing formulations, which are among the passages the value-form tradition most often reads against Capital.

Darimon, following Proudhon, proposed that the crises of capitalism arise from the special privilege of gold and silver, and that a bank issuing "time-chits" — certificates representing hours of labour, exchangeable directly against products — would let commodities circulate at their labour-values without the tyranny of precious money, abolishing crisis at a stroke. Marx's refutation is patient and devastating, and its logic is the same one he would use against every reformist monetary scheme thereafter. The scheme wants to keep commodity production — private production for exchange — while removing money, its necessary form. But money is not the cause of the contradictions of exchange; it is their solution and their expression. A commodity's price and its realization in sale can diverge; a producer's private labour may or may not prove socially necessary; these possibilities are inherent in a system where labour is validated as social only after the fact, through exchange. Time-chits would not abolish that gap — they would merely rename it, since a chit certifying an hour of individual labour cannot guarantee that the hour was socially necessary. The bank would have to become the general buyer and seller, the planner of all production, which is to abolish commodity production altogether — the opposite of what Proudhon intends. Marx's conclusion is that one cannot reform the money form while preserving the commodity form; to attack money without attacking the private, exchange-mediated character of labour is to attack a symptom and leave the disease. The critique establishes the internal necessity of money and clears the ground for its derivation.

Marx states the fundamental question at the outset, and it is the question every circulation-reform scheme since has had to face.

Can the existing relations of production and the relations of distribution which correspond to them be revolutionized by a change in the instrument of circulation, in the organization of circulation? Further question: Can such a transformation of circulation be undertaken without touching the existing relations of production and the social relations which rest on them? If every such transformation of circulation presupposes changes in other conditions of production and social upheavals, there would naturally follow from this the collapse of the doctrine which proposes tricks of circulation as a way of, on the one hand, avoiding the violent character of these social changes, and, on the other, of making these changes appear to be not a presupposition but a gradual result of the transformations in circulation.

Marx, Grundrisse, The Chapter on Money, page 122.

The technical refutation of the time-chit follows: the certificate of labour time could never coincide with the labour time the market actually validates.

The time-chit, representing average labour time, would never correspond to or be convertible into actual labour time; i.e. the amount of labour time objectified in a commodity would never command a quantity of labour time equal to itself, and vice versa, but would command, rather, either more or less, just as at present every oscillation of market values expresses itself in a rise or fall of the gold or silver prices of commodities.

Marx, Grundrisse, The Chapter on Money, page 139.

And the reductio is drawn out step by step until the reformist programme confesses what it would actually require.

In this last formulation the problem would have reduced itself to: how to overcome the rise and fall of prices. The way to do this: abolish prices. And how? By doing away with exchange value. But this problem arises: exchange corresponds to the bourgeois organization of society. Hence one last problem: to revolutionize bourgeois society economically. It would then have been self-evident from the outset that the evil of bourgeois society is not to be remedied by ‘transforming’ the banks or by founding a rational ‘money system’.

Marx, Grundrisse, The Chapter on Money, page 134.

From the critique Marx moves to the positive derivation, which anticipates the value-form analysis of Capital. The commodity is a contradiction in motion: it is a particular, sensuous use-value, and at the same time it must count as exchange-value — as a definite quantity of general, abstract social labour, indifferent to its natural form. These two aspects cannot coexist in the same body without splitting apart. The commodity's exchange-value must acquire an existence distinct from its use-value, a separate form in which it can confront all other commodities as their common measure and universal equivalent. That separate, autonomous existence of exchange-value is money. Money is thus not a thing added to commodities from outside but the necessary form that the value-side of the commodity takes on when it becomes independent — the commodity's own exchange-value set free and given a body of its own.

Marx traces money's determinations in an order Capital would later formalize: money as measure of value (the ideal reckoning of prices), money as means of circulation (the vanishing mediator of C–M–C), and money as money — the autonomous form of wealth that is hoarded, that serves as means of payment, and that becomes the goal of accumulation. The crucial dialectical point is that in the third determination money ceases to be a mere servant of commodity circulation and becomes an end in itself: value that seeks to preserve and augment itself as value, the seed of the transition to capital. The Chapter on Money thus does not end in money but points beyond itself to the Chapter on Capital, exactly as the value-form analysis in Capital Part One drives forward into the general formula M–C–M′. Here, in the rough draft, the Hegelian logic of the contradiction unfolding through its forms is on open display, and reading it clarifies the compressed derivation of the published text.

The chapter's most far-reaching pages — richer here than anywhere in Capital — concern money as a social relation. In a society where production is private and the connection between producers is established only through exchange, the social character of each person's labour and the social bond itself take on the form of a thing, money, that individuals carry and command as private owners. Social power is privatized into a thing, and the thing then rules its owners. Marx states the alienation with unusual directness.

Each individual possesses social power in the form of a thing. Rob the thing of this social power and you must give it to persons to exercise over persons.

Marx, Grundrisse, The Chapter on Money, page 158.

The formulation compresses the analysis of the pages just before it, where exchange value itself is named as the social bond between persons who are indifferent to one another — and where the individual’s social power is located, with deliberate bathos, in his pocket.

The reciprocal and all-sided dependence of individuals who are indifferent to one another forms their social connection. This social bond is expressed in exchange value, by means of which alone each individual’s own activity or his product becomes an activity and a product for him; he must produce a general product – exchange value, or, the latter isolated for itself and individualized, money. On the other side, the power which each individual exercises over the activity of others or over social wealth exists in him as the owner of exchange values, of money. The individual carries his social power, as well as his bond with society, in his pocket.

Marx, Grundrisse, The Chapter on Money, pages 156–157.

Marx situates this within a great three-stage sketch of history that recurs throughout the notebooks: first, relations of personal dependence (the pre-capitalist communities, where the social bond is direct, personal, and limited); second, "personal independence founded on objective [sachlich] dependence" — the present, in which individuals are formally free and independent but bound together by their common dependence on the market, on money, on impersonal objective relations; and third, a possible future of free individuality founded on the universal development of individuals and their common, communal control of their social wealth. The second stage is capitalism, and its signature is that the social relations that individuals themselves produce escape them and return as an alien objective power.

The sketch itself deserves quotation in full.

Relations of personal dependence (entirely spontaneous at the outset) are the first social forms, in which human productive capacity develops only to a slight extent and at isolated points. Personal independence founded on objective [sachlicher] dependence is the second great form, in which a system of general social metabolism, of universal relations, of all-round needs and universal capacities is formed for the first time. Free individuality, based on the universal development of individuals and on their subordination of their communal, social productivity as their social wealth, is the third stage. The second stage creates the conditions for the third.

Marx, Grundrisse, The Chapter on Money, page 158.

The second form is ours, and Marx names its signature: rule by abstractions.

these objective dependency relations also appear, in antithesis to those of personal dependence … in such a way that individuals are now ruled by abstractions, whereas earlier they depended on one another. The abstraction, or idea, however, is nothing more than the theoretical expression of those material relations which are their lord and master.

Marx, Grundrisse, The Chapter on Money, page 164. The ellipsis drops the parenthetical restating that objective relations are social relations become independent.

This is the philosophical heart of the money chapter and one of the passages most read against Capital's fetishism section: money is the "real community" [Gemeinwesen] of bourgeois society, the impersonal bond that replaces the personal ties of earlier forms, and "rule by abstractions" is not a metaphor but the precise description of a society governed by value, money, and capital — abstractions that are the congealed expression of the producers' own material relations, turned against them. Marx is careful that these abstractions are not illusions to be dispelled by criticism: they are the real form of a real domination, and can be superseded only by superseding the mode of production that generates them. The passage thus binds the money analysis to the whole critique and to the emancipatory horizon — the third stage — that the notebooks keep in view.

Against every romantic reading of that diagnosis, Marx closes the door in both directions: neither back to the old fullness nor a halt in the present emptiness.

In earlier stages of development the single individual seems to be developed more fully, because he has not yet worked out his relationships in their fullness, or erected them as independent social powers and relations opposite himself. It is as ridiculous to yearn for a return to that original fullness as it is to believe that with this complete emptiness history has come to a standstill. The bourgeois viewpoint has never advanced beyond this antithesis between itself and this romantic viewpoint, and therefore the latter will accompany it as legitimate antithesis up to its blessed end.)

Marx, Grundrisse, The Chapter on Money, page 162.

And the chapter’s later pages, looking back from the threshold of capital, give the "real community" thesis its sharpest statements: money does not merely dissolve the older communities — it takes their place.

Monetary greed, or mania for wealth, necessarily brings with it the decline and fall of the ancient communities [Gemeinwesen]. Hence it is the antithesis to them. It is itself the community [Gemeinwesen], and can tolerate none other standing above it.

Marx, Grundrisse, The Chapter on Money, page 223.

Money thereby directly and simultaneously becomes the real community [Gemeinwesen], since it is the general substance of survival for all, and at the same time the social product of all. But as we have seen, in money the community [Gemeinwesen] is at the same time a mere abstraction, a mere external, accidental thing for the individual, and at the same time merely a means for his satisfaction as an isolated individual. The community of antiquity presupposes a quite different relation to, and on the part of, the individual. The development of money in its third role therefore smashes this community.

Marx, Grundrisse, The Chapter on Money, pages 225–226.