Capital Vol. 1, Ch. 2 — mind map

Economic Manuscripts: Capital Vol. I - Chapter Two — marxists.org

Capital Vol. I : Chapter Two (Exchange)

Ch. 2 — The Process of Exchange

How the money-form, derived logically in Ch.1, arises as an actual social process out of the contradictions of exchange.

Commodities cannot themselves go to market and perform exchanges in their own right. We must, therefore, have recourse to their guardians, who are the possessors of commodities. Commodities are things, and therefore lack the power to resist man. If they are unwilling, he can use force; in other words, he can take possession of them.

In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another as persons whose will resides in those objects … They must therefore recognize each other as owners of private property. This juridical relation, whose form is the contract, whether as part of a developed legal system or not, is a relation between two wills which mirrors the economic relation. The content of this juridical relation is itself determined by the economic relation.

Here the persons exist for one another merely as representatives, and hence owners, of commodities … the characters who appear on the economic stage are merely personifications of economic relations; it is as the bearers of these economic relations that they come into contact with each other.

All commodities are non-use-values for their owners, and use-values for their non-owners. Consequently, they must all change hands. But this changing of hands constitutes their exchange, and their exchange puts them in relation with each other as values and realizes them as values. Hence commodities must be realized as values before they can be realized as use-values.

Every owner of a commodity wishes to part with it in exchange only for those commodities whose use-value satisfies his own need. To this extent, exchange is for him only an individual process. On the other hand, he desires to realize his commodity, as a value, in any other suitable commodity of the same value … To this extent exchange is for him a general social process. But one and the same process cannot be simultaneously for all owners of commodities both exclusively individual and exclusively social and general.

Our owner of commodities … would like every other commodity to be the universal equivalent for his own, while his own commodity is not that equivalent for the others. The commodity-owners therefore find themselves in the same situation as they were before the development of exchange.

In their difficulties our commodity-owners think like Faust: “In the beginning was the deed.” They have therefore already acted before thinking.

A particular commodity cannot become the universal equivalent except by a social act. The social action of all other commodities, therefore, sets apart the particular commodity in which they all represent their values. Thereby the natural form of this commodity becomes the socially recognized equivalent form. Through the agency of the social process it becomes the specific social function of the commodity which has been set apart to be the universal equivalent. It thus becomes — money.

The exchange of commodities begins where communities have their boundaries, at their points of contact with other communities, or with members of the latter. However, as soon as products have become commodities in the external relations of a community, they also, by reaction, become commodities in the internal life of the community.

Nomadic peoples are the first to develop the money-form, because all their worldly possessions are in a movable and therefore directly alienable form.

Money necessarily crystallizes out of the process of exchange, in which different products of labour are in fact equated with each other, and thus converted into commodities. The historical broadening and deepening of the phenomenon of exchange develops the opposition between use-value and value which is latent in the nature of the commodity. The need to give an external expression to this opposition for the purposes of commercial intercourse produces the drive towards an independent form of value.

The difficulty lies not in comprehending that money is a commodity, but in discovering how, why and by what means a commodity becomes money.

Gold confronts the other commodities as money only because it previously confronted them as a commodity. Like all other commodities, it also functioned as an equivalent, either as a single equivalent in isolated exchanges or as a particular equivalent alongside other commodity-equivalents. Gradually it began to serve as a universal equivalent in narrower or wider fields.

Since all other commodities are merely particular equivalents for money, and money is their universal equivalent, they relate to money as particular commodities relate to the universal commodity.

The riddle of the money fetish is therefore the riddle of the commodity fetish, now become visible and dazzling to our eyes.

Where the money-form attaches

…either to the most important articles arriving in exchange from outside, or to the chief element of indigenous alienable wealth — e.g. cattle.

It settles finally on the precious metals: uniform in quality, divisible, re-combinable — the material adequate to the concept of a universal equivalent.

Two roads to the same result

Ch.1 §3 — the logical derivation: simple → expanded → general → money form. A development of the forms of value.

Ch.2 — the social derivation: the same money-form as the practical outcome of a contradiction no commodity-owner can think his way out of.

Same destination, different road. The exclusion of one commodity is a collective act nobody decides on.

Ch.1 examined the commodity at rest; Ch.2 sets it in motion. Only now do people appear — and they appear only as bearers of economic relations, not as agents with purposes of their own.

The legal form follows the economic relation, not the reverse. Contract and private property are the juridical mirror of exchange — against the liberal story in which property rights come first and markets follow from them.

The engine of the chapter. Exchange must be both individual (I need a particular use-value) and social (my commodity must count as value in general). No individual can resolve this: each wants his own commodity to be the universal equivalent and everyone else to accept it.

In the beginning was the deed. Money is not invented by agreement, convention or the state. It is precipitated out of practice — behind the backs of the producers — and only afterwards understood.

Historical genesis: exchange is external before it is internal. It begins at the seams between communities and then works inward, dissolving the community’s own products into commodities.

Money fetish: gold’s power to command all other commodities looks like a natural property of the metal, when it is a congealed social relation. Ch.1’s fetishism made visible and dazzling — and the doorway into Ch.3 on the functions of money.