Throughout this book, to keep things simple, I will assume that gold is the money-commodity.

Gold's first job is to give the world of commodities the material for expressing their values — to present commodity-values as quantities of the same kind, equal in quality and comparable in quantity. That is how it works as the universal measure of value. And only through this function does gold, the specific equivalent-commodity, first become money.

Commodities do not become commensurable through money. It's the other way around. All commodities, as values, are objectified human labour — and that is exactly what makes them commensurable in themselves, already, before money enters the picture. Because they are already commensurable, they can measure their values together in one and the same commodity, and this turns that commodity into their shared measure of value, into money. Money, as measure of value, is the necessary form in which the commodities' own inner measure — labour-time — has to appear.

A commodity's value expressed in gold — x commodity A = y money-commodity — is its money-form, or its price. A single equation now does the job: 1 ton of iron = 2 ounces of gold is enough to give iron's value social validity. The equation no longer has to line up alongside the value-equations of every other commodity, because gold, the equivalent commodity, already carries the character of money. So the general relative form of value that commodities once needed has folded back into its original, simple, single form.

On the other hand, the expanded relative expression of value — the endless series of equations — now becomes the specific relative form of value belonging to the money-commodity itself. And this series is already given socially, in the prices of actual commodities. Read the quotations of a price-list backwards, and you find the magnitude of money's own value expressed in every kind of commodity. Money itself, though, has no price. For money to take part in this same relative form the way other commodities do, it would have to be related to itself, as its own equivalent.

Price, or the money-form of commodities, is — like their value-form generally — quite distinct from their solid, tangible bodily form. It is only an ideal or imagined form. The value of iron, linen, wheat, and so on exists in these very things, though invisibly; it becomes representable only through their equality with gold, a relation that, so to speak, haunts only their own heads. So the owner of the commodity has to lend it his tongue, or hang a price-tag on it, to tell the outside world what it's worth.

Since expressing commodity-values in gold is only an ideal act, only imagined or ideal gold is needed to do it. Every owner of commodities knows that giving his goods the form of a price, an imagined gold-form, does not gild them in the least, and that he needs not one grain of real gold to value millions worth of commodities in gold. So in its function as measure of value, money serves only as imagined or ideal money. This has given rise to the wildest theories.

Yet — although only imagined money serves in the function of measure of value — the price depends entirely on the real material of the money-commodity. The value contained in, say, a ton of iron, the quantity of human labour in it, gets expressed as an imagined quantity of the money-commodity containing the same amount of labour. So depending on whether gold, silver, or copper serves as the measure of value, the value of that ton of iron gets a completely different price-expression, represented in quite different quantities of gold, silver, or copper.

So if two different commodities, say gold and silver, serve at the same time as measures of value, every commodity ends up with two different price-expressions: a gold-price and a silver-price. These run peacefully side by side only as long as the value-ratio between silver and gold stays fixed — say, at 1:15. But any change in that ratio throws the relation between the gold-prices and the silver-prices out of step, and this proves, in practice, that doubling the measure of value contradicts its own function.

All priced commodities present themselves in the form: a commodity A = x gold, b commodity B = z gold, c commodity C = y gold, and so on — where a, b, c stand for definite quantities of commodities A, B, C, and x, z, y for definite quantities of gold. So commodity-values turn into imagined gold-quanta of different sizes — that is, despite the bewildering variety of the commodity-bodies themselves, into quantities of the same kind, gold-quantities. As such different gold-quanta, they compare and measure themselves against one another, and the technical need arises to relate them to some fixed quantity of gold as their unit of measure. This unit itself, through further division into equal parts, develops into a standard. Even before becoming money, gold, silver, and copper already possess such standards in their metal weights — a pound, for instance, serves as the unit, divided on one side into ounces and added up on the other into hundredweights. So wherever metal circulates as money, the existing names of the weight-standard also become the original names of the money-standard, the standard of price.

As measure of value and as standard of price, money performs two entirely different functions. It is measure of value as the social incarnation of human labour; it is standard of price as a fixed weight of metal. In its function as measure of value, it serves to turn the values of all the wildly different commodities into prices — into imagined quantities of gold; as standard of price, it measures those quantities of gold. Against the measure of value, commodities measure themselves as values; the standard of price, by contrast, measures quantities of gold against a quantity of gold, not the value of one quantity of gold against the weight of another. For the standard of price, a definite weight of gold has to be fixed as the unit of measure. Here, as in every other measurement of quantities of the same kind, what matters is the fixity of the measuring relations. So the standard of price does its job all the better, the less variable one and the same quantity of gold remains as the unit of measure. Gold can serve as measure of value only because it is itself a product of labour — and therefore, in principle, a value that can change.

First, it's clear that a change in gold's own value doesn't affect its function as standard of price in any way. However gold's value shifts, different quantities of gold always stay in the same value-ratio to one another. If gold's value fell by 1,000 percent, 12 ounces of gold would still be worth 12 times as much as 1 ounce — and prices only ever concern the ratio between different quantities of gold. And since a change, up or down, in an ounce of gold's value never changes its weight, it doesn't change the weight of its equal parts either. So gold, as the fixed standard of price, does exactly the same job no matter how its value changes.

Nor does a change in gold's value stop it from working as measure of value. The change hits all commodities at once, so — other things being equal — it leaves their relative values to one another unchanged, even though all of them now express themselves in higher or lower gold-prices than before.

Just as when a commodity's value is expressed in the use-value of some other commodity, valuing commodities in gold assumes only this: that, at a given time, producing a given quantity of gold costs a given quantity of labour. As for how commodity-prices move in general, the laws worked out earlier for the simple relative expression of value still hold.

Commodity-prices in general can rise only in two cases: if money's value stays the same and commodity-values rise, or if commodity-values stay the same and money's value falls. The reverse holds too: commodity-prices in general can fall only if money's value stays the same and commodity-values fall, or if commodity-values stay the same and money's value rises. So it is by no means true that a rising value of money must produce a proportional fall in commodity-prices, or a falling value of money a proportional rise in prices. That only holds for commodities whose own value stays unchanged. Take commodities whose value rises evenly and at the same rate as money's value — their prices stay the same. If their value rises slower or faster than money's, then whether their prices fall or rise, and by how much, is decided by the difference between how their own value moves and how money's value moves.

Let's now return to looking at the price-form.

The money-names of metal weights gradually separate from their original weight-names, for various reasons — historically, three decisive ones. First: the introduction of foreign money among less developed peoples — in ancient Rome, for instance, silver and gold coins first circulated as foreign goods, and the names of this foreign money differ from the native weight-names. Second: as wealth develops, the less noble metal gets pushed out of the function of measure of value by the more noble one — copper by silver, silver by gold — however much this order may run against poetic chronology. 'Pound' was originally the money-name for an actual pound of silver. Once gold pushes silver out as measure of value, the same name attaches instead to maybe a fifteenth of a pound of gold, depending on the value-ratio between gold and silver. 'Pound' as a money-name and 'pound' as the ordinary weight-name for gold are now two different things. Third: centuries of coin-debasement by princes, which left nothing of the coins' original weight but the name.

These historical processes turn the separation of the money-name from the ordinary weight-name into popular custom. And because the standard of money is, on one hand, purely conventional, and on the other hand needs to hold generally, it ends up regulated by law. A given weight of the precious metal — an ounce of gold, say — gets officially divided into equal parts, which receive legal, official names, like pound, taler, and so on. That equal part, which then counts as the actual unit of money, gets further divided into other equal parts with their own legal names, like shilling, penny. Definite weights of metal remain the standard of metallic money exactly as before. What has changed is only the division and the naming.

Prices — the gold-quanta that commodity-values are ideally converted into — now get expressed in the money-names, the legally valid reckoning-names of the gold standard. So instead of saying a quarter of wheat equals one ounce of gold, in England one would say it equals £3 17s. 10 1/2d. In their money-names, commodities tell us what they are worth, and money serves as money of account whenever something needs to be fixed as a value, and therefore given a money-form.

The name of a thing has nothing to do with its nature. I learn nothing about a man by learning that his name is Jacob. In the same way, every trace of the value-relation disappears in the money-names pound, taler, franc, ducat, and so on. The confusion over what these 'cabalistic signs' secretly mean is all the greater because the money-names express both the value of commodities and, at the same time, equal parts of a weight of metal, the money-standard. And yet it is necessary that value, in order to stand apart from the colourful bodies of the world of commodities, should develop into this bare, thing-like, yet also simply social form.

Price is the money-name for the labour objectified in a commodity. So saying that a commodity is equivalent to the quantity of money whose name is its price is a tautology — just as the relative expression of a commodity's value is always, at bottom, an expression of the equivalence of two commodities. But granted that price, as the exponent of a commodity's magnitude of value, is also the exponent of its exchange-ratio with money, it does not follow the other way round — that the exponent of its exchange-ratio with money must be the exponent of its magnitude of value.

Suppose equal amounts of socially necessary labour are represented in 1 quarter of wheat and in £2 (roughly half an ounce of gold). The £2 is the money-expression of the quarter of wheat's magnitude of value — its price. Now suppose circumstances let it be quoted at £3, or force it down to £1: as expressions of the wheat's magnitude of value, £1 and £3 are too small or too large. But they are still its prices all the same — first, because they are its value-form, money; and second, because they are exponents of its exchange-ratio with money.

As long as the conditions of production, or labour's productive power, stay the same, reproducing the quarter of wheat still costs the same amount of social labour-time as before. This doesn't depend on the will of the wheat-grower, or of any other commodity-owner. So a commodity's magnitude of value expresses a necessary relation to social labour-time, one built into the very process that forms its value. Once magnitude of value turns into price, this necessary relation appears instead as an exchange-ratio between a commodity and the money-commodity that exists outside it. But this ratio can express either the commodity's magnitude of value, or the greater or smaller quantity for which, under given circumstances, it happens to be exchangeable. So the possibility that price and magnitude of value quantitatively fail to match — that price diverges from magnitude of value — lies in the price-form itself. This is no defect of the form. On the contrary, it is exactly what makes the price-form the adequate form for a mode of production whose own rule can only ever assert itself as a blindly working average law amid disorder.

But the price-form doesn't only allow for a quantitative mismatch between magnitude of value and price — between a value and its own money-expression. It can also harbour a qualitative contradiction, so that price stops being an expression of value at all, even though money is nothing but the value-form of commodities. Things that are not, in themselves, commodities — conscience, honour, and so on — can be put up for sale by their owners for money, and so take on the commodity-form through their price. A thing, then, can formally have a price without having any value. Here the price-expression becomes imaginary, like certain quantities in mathematics.

On the other hand, this imaginary price-form can also — as with the price of uncultivated land, which has no value because no human labour has been objectified in it — conceal a real value-relation, or some relation derived from one.

Like the relative form of value in general, price expresses the value of a commodity — a ton of iron, say — by showing that a given quantity of its equivalent, an ounce of gold, is directly exchangeable for iron. It in no way says the reverse: that iron, for its part, is directly exchangeable for gold. So for a commodity to actually act as exchange-value, it has to shed its natural body and turn from merely imagined gold into real gold — even though this transubstantiation may come 'harder' for it than the Hegelian 'concept' finds the passage from necessity into freedom, or a lobster finds the cracking of its shell, or the Church Father Jerome found the shedding of the old Adam.

Alongside its real shape — iron, say — a commodity can hold, in its price, an ideal shape of value, an imagined gold-shape. But it cannot actually be iron and gold at the same time. To set its price, it's enough to equate it, in imagination, with gold. To actually serve its owner as a universal equivalent, it has to be replaced by gold. If the owner of the iron were to face the owner of some pleasure-giving commodity and point to the iron's price as proof that it was already money-form, the other would answer the way, in heaven, St. Peter answered Dante, once Dante had recited the creed to him:

The price-form includes both the fact that commodities can be alienated for money, and the necessity of that alienation. On the other hand, gold functions as an ideal measure of value only because it is already moving about in the exchange-process as the money-commodity. So hard cash lurks inside the ideal measure of value.

We have already seen that exchanging commodities involves relations that contradict and exclude one another. The commodity's development does not get rid of these contradictions — it creates the form in which they can move. This is, in general, the method by which real contradictions get resolved.

Take an example: it is a contradiction for one body to keep falling toward another and, just as constantly, to keep flying away from it. The ellipse is one of the forms of motion in which this contradiction plays itself out fully — realizing it just as much as resolving it.

Insofar as this exchange process moves commodities out of hands where they are not use-values, and into hands where they are, it is the social metabolism — the material exchange of the products of social labour. One kind of useful labour's product replaces another's.

Once a commodity reaches the place where it serves as a use-value, it falls out of the sphere of commodity exchange and into the sphere of consumption. Only the first of these spheres concerns us here. So we have to look at the whole process from the side of its form — only the change of form, the metamorphosis of commodities, that carries out this social metabolism.

People grasp this change of form very poorly. Aside from confusion about the concept of value itself, the reason is that every commodity's change of form happens through the exchange of two commodities: an ordinary commodity and the money-commodity. If you fix on this material side alone — a commodity exchanged for gold — you miss exactly what you should be watching: what happens to the form. You miss that gold, as a mere commodity, is not money, and that the other commodities, in their own prices, already relate themselves to gold as their own money-shape.

Commodities first enter the exchange process just as they naturally are — plain, unadorned, however they happen to come. The process doubles the commodity into commodity and money, an external opposition in which the commodity displays the contradiction already built into it: use-value against value. In this opposition, commodities stand as use-values facing money as exchange-value.

But on the other hand, both sides of this opposition are themselves commodities — unities of use-value and value. Only this unity of differences shows up at each pole in an inverted way, and by that very inversion it displays the relation between the two poles.

The commodity is really a use-value; its being-value appears only ideally, in the price, which relates it to the gold standing opposite it as its real shape of value. Turned around, the gold material counts only as the embodiment of value, as money — it is really exchange-value. Its use-value now appears only ideally, in the series of relative expressions of value in which it relates to the commodities standing opposite it as the range of its real use-shapes.

These opposed forms of commodities are the real forms of motion of their exchange process.

Let's follow some commodity-owner — our old friend the weaver, say — to where the exchange process happens: the commodity market.

The weaver's commodity, 20 yards of linen, has a price: £2. He exchanges it for the £2, and then — a man of the old, solid sort — exchanges the £2 again for a family Bible of the same price. The linen, for him only a commodity, a bearer of value, is alienated for gold, its shape of value, and from that shape sold back again for another commodity, the Bible — which, as an object of use, is meant to travel into the weaver's house and there satisfy needs of edification.

So the commodity's exchange process runs through two opposite and complementary metamorphoses: the commodity's transformation into money, and its retransformation from money back into a commodity. These moments of the metamorphosis are, at the same time, dealings of the commodity-owner — selling, the exchange of commodity for money; buying, the exchange of money for commodity; and the unity of both acts: selling in order to buy.

If the weaver now looks at the whole deal's end result, he has a Bible instead of linen — instead of his original commodity, another one of the same value but different usefulness. He gets his other means of subsistence and means of production in the same way. From his own standpoint, the whole process only carries out the exchange of his labour's product for someone else's labour's product — an exchange of products.

So the commodity's exchange process runs through the following change of form:

Looked at by its material content, the movement is commodity — commodity: commodity exchanged for commodity, the social metabolism of social labour — a movement whose result extinguishes the process itself.

Commodity — money. The first metamorphosis of the commodity, or sale.

The leap value takes from the commodity's own body into the body of gold is — as I have called it elsewhere — the commodity's salto mortale, its death-defying leap. If the leap fails, the commodity itself is not hurt, but its owner certainly is. The social division of labour makes his labour as one-sided as his wants are many-sided. That is exactly why his product serves him only as exchange-value. But it can only get a universally valid equivalent-form through money — and the money sits in somebody else's pocket.

To draw that money out, his commodity must, above all, be a use-value for the money's owner: the labour spent on it must have been spent in a socially useful way, must prove itself a link in the social division of labour. But the division of labour is a spontaneously grown organism of production, whose threads were woven, and go on being woven, behind the producers' backs. Perhaps the commodity is the product of some new way of working, meant to satisfy a want that has just arisen — or even meant to call a want into being on its own account. Yesterday still one function among the many functions performed by one and the same producer, some particular piece of work may tear itself loose from that connection today, make itself independent, and for that very reason send its partial product to market as an independent commodity. Conditions may or may not be ripe for this splitting-off. The product satisfies a social want today; tomorrow it may be driven from its place, wholly or partly, by some similar kind of product. And even where the weaver's labour, like ours, is a patented link in the social division of labour, that guarantees nothing at all about the use-value of these particular 20 yards of linen. If the social want for linen — and like every other want, it has its measure — is already satisfied by rival weavers, our friend's product becomes superfluous, redundant, and therefore useless. Nobody looks a gift horse in the mouth — but he does not go to market to hand out presents.

Suppose, though, that his product's use-value does hold up, and money is drawn to the commodity. The question then is: how much money? The answer, admittedly, is already anticipated in the commodity's price, the exponent of its magnitude of value. We leave aside any purely subjective miscalculations by the owner — the market corrects those on the spot soon enough. He is only supposed to have spent the socially necessary average of labour-time on his product. So the commodity's price is only the money-name for the quantity of social labour objectified in it.

But without anyone's permission, and behind our weaver's back, the old, trusted conditions of production in weaving have been fermenting and shifting. What was yesterday, beyond doubt, the socially necessary labour-time for producing a yard of linen ceases to be so today — as the money-owner is only too eager to demonstrate from the price-quotations of our friend's various rivals. Unluckily for him, there are a great many weavers in the world.

Suppose, finally, that every piece of linen on the market contains only socially necessary labour-time. Even so, the total sum of these pieces may still contain labour-time spent to no purpose. If the market's stomach cannot absorb the whole quantity of linen at the normal price of 2 shillings a yard, that proves that too great a share of society's total labour-time was spent in the form of weaving. The effect is the same as if every individual weaver had spent more than the socially necessary labour-time on his own product. Here the saying holds: caught together, hung together. All the linen on the market counts only as a single article of trade, and each piece only as an aliquot part of it. And indeed the value of each individual yard is itself only the embodiment of that same, socially fixed quantity of labour of the same kind.

So we see: the commodity is in love with money, but the course of true love never did run smooth. The quantitative division of the social organism of production — which shows its scattered limbs, its membra disjecta, in the system of the division of labour — comes about just as spontaneously and accidentally as its qualitative division. Our commodity-owners discover, then, that the very division of labour which makes them independent private producers also makes the social process of production, and their own relations within it, independent of their will — and that the independence of persons from one another is completed by a system of all-round dependence mediated by things.

The division of labour turns the labour-product into a commodity, and by that very fact makes its transformation into money necessary. At the same time it makes it a matter of chance whether this transubstantiation succeeds. Here, though, we want to consider the phenomenon in its pure form, so we assume its normal course. And if it does go through at all — if the commodity is not simply unsaleable — its change of form always does take place, even though, abnormally, substance, meaning magnitude of value, may be lost or added in that change.

For one commodity-owner, gold replaces his commodity; for the other, the commodity replaces his gold. The phenomenon that strikes the eye is the change of hands, or of place, between commodity and gold — 20 yards of linen and £2 — in other words, their exchange. But what does the commodity exchange itself with? With its own universal shape of value. And the gold? With one particular shape of its own use-value.

Why does gold confront linen as money? Because the linen's price of £2, its money-name, has already related it to gold as money. The commodity's original form is stripped away through its alienation — that is, at the moment its use-value actually attracts the gold that its price had only represented ideally. So realizing the price, the commodity's merely ideal value-form, is at the same time, conversely, realizing money's merely ideal use-value: turning commodity into money is, at the same time, turning money into commodity.

This one process is a two-sided process — from the commodity-owner's pole it is a sale, from the money-owner's opposite pole it is a purchase. Or: sale is purchase, commodity-for-money is at the same time money-for-commodity.

So far we know no economic relation among people except that of commodity-owners — a relation in which each appropriates another's labour-product only by alienating his own. So one commodity-owner can only meet another as the owner of money, either because the other's labour-product is by nature in the money-form — is money-material, gold and so on — or because his own commodity has already shed its skin and stripped off its original use-form.

To function as money, gold must of course enter the commodity-market at some point. That point lies at its source of production, where it exchanges, as a direct labour-product, against another labour-product of the same value. But from that moment on, it constantly represents realized commodity-prices. Apart from this exchange of gold for a commodity at its source of production, gold in any commodity-owner's hand is the alienated shape of his sold commodity — the product of a sale, of the commodity's first metamorphosis, commodity-for-money.

Gold became ideal money, a measure of value, because all commodities measured their values in it and so made it the imagined opposite of their use-shape — their shape of value. It becomes real money because commodities, through their all-sided alienation, turn it into their really alienated, really transformed use-shape, and therefore into their real shape of value. In its shape of value, the commodity strips off every trace of its naturally grown use-value and of the particular useful labour it owes its origin to, so as to turn itself into the uniform social embodiment of undifferentiated human labour. So you cannot tell, by looking, what kind of commodity has been turned into a piece of money — one looks in its money-form exactly like another. Money, then, may be dirt, even though dirt is not money.

Let's assume that the two gold pieces our weaver gets for his linen are the transformed shape of a quarter of wheat. The sale of the linen, commodity-for-money, is at the same time its purchase, money-for-commodity. But as a sale of linen, this process opens a movement that ends with its opposite, the purchase of the Bible; as a purchase of linen, it closes a movement that began with its opposite, the sale of wheat. Commodity-for-money, linen-money, the first phase of commodity-money-commodity, linen-money-Bible, is at the same time money-for-commodity, money-linen, the last phase of another movement, commodity-money-commodity, wheat-money-linen. The first metamorphosis of one commodity, its transformation from commodity-form into money, is therefore always, at the same time, the second, opposite metamorphosis of some other commodity — its retransformation from money-form back into a commodity.

Money-for-commodity. The second, or concluding, metamorphosis of the commodity: purchase.

Because money is the alienated shape of all other commodities, the product of their general alienation, it is the absolutely alienable commodity. It reads all prices backward, and so mirrors itself in every commodity-body as the yielding material of its own becoming-commodity. At the same time, the prices — the loving eyes with which commodities wink at it — show the limit of its power to transform itself: namely, its own quantity.

Since the commodity vanishes the moment it becomes money, you cannot tell, by looking at the money, how it reached its owner's hands, or what it was turned from. Non olet — it does not smell — whatever its origin. If on one side it represents a sold commodity, on the other side it represents commodities that can be bought.

Money-for-commodity, the purchase is at the same time a sale, commodity-for-money; the last metamorphosis of one commodity is therefore, at the same time, the first metamorphosis of another. For our weaver, the life-course of his commodity ends with the Bible, into which he has retransformed his £2. But the Bible-seller turns the £2 released by the weaver into brandy. Money-for-commodity, the closing phase of commodity-money-commodity, linen-money-Bible, is at the same time commodity-for-money, the first phase of commodity-money-commodity, Bible-money-brandy.

Since the commodity-producer supplies only a one-sided product, he often sells it in large quantities, while his many-sided wants force him to keep splitting the price he realizes — the sum of money he has released — into many separate purchases. So one sale flows out into many purchases of various commodities. The concluding metamorphosis of one commodity thus forms a sum of first metamorphoses of other commodities.

Now consider the complete metamorphosis of one commodity — linen, say. We see, first, that it consists of two opposite and complementary movements, commodity-for-money and money-for-commodity. These two opposite transformations of the commodity take place through two opposite social processes on the commodity-owner's part, and are reflected in two opposite economic characters of that same owner: as agent of the sale, he becomes a seller; as agent of the purchase, a buyer.

But just as, in every transformation of the commodity, its two forms — commodity-form and money-form — exist at the same time, only at opposite poles, so the same commodity-owner faces, as a seller, another person as buyer, and, as a buyer, another person as seller. And just as the same commodity runs successively through the two inverse transformations — becoming money out of commodity, and commodity out of money — so the same commodity-owner swaps the roles of seller and buyer. These, then, are not fixed characters, but ones that keep changing persons, constantly, within the circulation of commodities.

The complete metamorphosis of one commodity presupposes, in its simplest form, four extremes and three personae dramatis — acting persons. First, money confronts the commodity as its shape of value, possessing, over there, in someone else's pocket, a hard material reality; so a money-owner confronts the commodity-owner. As soon as the commodity is turned into money, that money becomes its vanishing equivalent-form, whose use-value or content exists, over here, in other commodity-bodies. As the end-point of the first transformation of the commodity, money is at the same time the starting-point of the second. So the seller of the first act becomes the buyer of the second, where a third commodity-owner confronts him as seller.

The two inverse phases of movement in the commodity's metamorphosis form a circuit: commodity-form, stripping-off of the commodity-form, return to the commodity-form. Here, though, the commodity itself is determined oppositely at each end: at the starting-point it is a non-use-value, at the end-point a use-value for its owner. So money first appears as the solid crystal of value into which the commodity transforms itself — only afterward to melt away again into its mere equivalent-form.

The two metamorphoses that make up one commodity's circuit are, at the same time, the inverse partial metamorphoses of two other commodities. The same commodity, linen, opens the series of its own metamorphoses, and closes the complete metamorphosis of another commodity, wheat. During its first transformation, the sale, it plays both these roles in its own person. But as a gold chrysalis — in which it travels the way of all flesh — it simultaneously closes the first metamorphosis of a third commodity. So the circuit each commodity's series of metamorphoses describes gets entangled, inextricably, with the circuits of other commodities. The whole process presents itself as the circulation of commodities.

Commodity circulation is not just formally, but essentially, different from the direct exchange of products. Just look back over what has happened. The weaver has, without a doubt, exchanged linen for a Bible, his own commodity for someone else's. But this phenomenon is only true for him. The Bible-agent, who prefers something warm to something cool, never thought of exchanging linen for his Bible, just as the weaver has no idea that wheat was exchanged for his linen, and so on. B's commodity replaces A's commodity, but A and B do not exchange their commodities with each other. It can, of course, happen that A and B buy from each other in turn — but that particular relation is by no means required by the general conditions of commodity circulation.

On one side, we see here how the exchange of commodities breaks through the individual and local limits of direct product-exchange, and develops the social metabolism of human labour. On the other side, a whole circle of natural-social connections develops that lie beyond the control of the acting persons. The weaver can sell his linen only because the farmer sells wheat; the Hotspur can sell only the Bible because the weaver sells linen; the distiller can sell only his eau-de-vie because someone else has already sold the water of everlasting life — and so on.

The process of circulation, for this reason, does not, like direct product-exchange, extinguish itself the moment use-values change place or hands. Money does not disappear just because it eventually drops out of one commodity's series of metamorphoses. It always comes to rest on some place in circulation that a commodity has just vacated. For instance, in the complete metamorphosis of linen — linen, money, Bible — first the linen falls out of circulation and money steps into its place; then the Bible falls out of circulation and money steps into its place again. Replacing one commodity with another, at the same time, leaves the money-commodity sticking in some third pair of hands. Circulation constantly sweats money out.

Nothing could be sillier than the dogma that commodity circulation necessarily requires an equilibrium of sales and purchases, because every sale is a purchase and vice versa. If this means that the number of sales actually carried out equals the number of purchases, it is a flat tautology. But what it's meant to prove is that the seller brings his own buyer to market with him.

Sale and purchase are one identical act, seen as the relation between two opposed persons, the commodity-owner and the money-owner. And they form two opposite acts, seen as actions of one and the same person. The identity of sale and purchase therefore implies that the commodity becomes useless if, once thrown into the alchemical retort of circulation, it does not come back out as money — if it is not sold by its owner, and so bought by the money-owner. That identity further implies that the process, when it succeeds, forms a point of rest for the commodity, a stretch of its life that can last longer or shorter. Because the commodity's first metamorphosis is at once a sale and a purchase, this partial process is at the same time an independent process on its own. The buyer has the commodity; the seller has the money — that is, a commodity that keeps a form fit for circulation, whether it turns up on the market again sooner or later.

No one can sell without someone else buying. But no one has to buy right away just because he has sold. Circulation bursts apart the temporal, local, and personal limits of product-exchange precisely because it splits the immediate identity — present in product-exchange — between giving away one's own labour-product and taking in someone else's, into the opposition of sale and purchase. That these two processes, which face each other independently, form an inner unity means, just as much, that this inner unity moves through outer oppositions. If the outward independence of these inwardly non-independent, mutually completing processes is carried far enough, the unity asserts itself by force — through a crisis.

The commodity's immanent opposition — between use-value and value, between private labour that must at the same time present itself as directly social labour, between particular concrete labour that at the same time counts only as abstract, general labour, between things taking on personal powers and persons' social relations taking the form of relations between things — this immanent contradiction gets its developed forms of motion in the oppositions of the commodity's metamorphosis. These forms therefore include the possibility of crises — but only the possibility. Turning this mere possibility into an actuality calls for a whole circle of conditions that, from the standpoint of simple commodity circulation, do not yet exist at all.

As the mediator of commodity circulation, money now acquires the function of a medium of circulation.

The change of form that carries labour's products through their metabolism — commodity to money to commodity — requires that the same value start the process as a commodity and come back to that same point as a commodity. So this movement of commodities is a circuit: it closes. The very same form, though, rules out any circuit for money. What money gets instead is constant removal from its starting point, never a return to it. As long as a seller holds onto the transformed shape of his commodity — the money — his commodity is still stuck in the first half of its journey, its first change of form. Only once he completes the process, once he buys with what he sold, does the money leave the hands of its first owner.

True, if the weaver, after buying his Bible, goes on to sell more linen, money does come back into his hands. But it does not come back through the circulation of that first 20 yards of linen — that circulation sent the money away from the weaver and into the Bible-seller's hands for good. It comes back only because the same circulation process starts over again with a new piece of linen, and this second round ends exactly like the first: money moving on. So the kind of movement that commodity-circulation directly gives to money is constant removal from its starting point — its course from the hand of one commodity-owner into the hand of another. This course is what we call its currency.

The currency of money is the same process endlessly repeating itself, monotonously. The commodity always sits on the seller's side; the money always sits on the buyer's side, as the means of purchase. It acts as means of purchase by realizing the commodity's price. In realizing that price it hands the commodity from seller to buyer, while at the same moment it moves away from the buyer's hand into the seller's, ready to repeat the same process with a different commodity.

That this one-sided movement of money springs out of the two-sided movement of the commodity's own form-change is hidden from view. The very nature of commodity-circulation itself produces the opposite appearance. A commodity's first change of form is visible not only as money's movement but as its own movement too; its second change of form, though, is visible only as money's movement. In the first half of its circulation the commodity trades places with money — and with that, its useful shape drops out of circulation into consumption, and its value-shape, its money-disguise, steps into its place. The second half of its circulation it no longer travels in its own natural skin, but in its golden one. So the continuity of the movement falls entirely on money's side: the very same movement that, for the commodity, splits into two opposite processes, is, as money's own movement, always the same process repeating — money simply changing hands for one fresh commodity after another.

The outcome of commodity-circulation — one commodity replaced by another — therefore looks as though it were brought about not by the commodities' own change of form, but by money acting as medium of circulation: an agency that sets the otherwise motionless commodities moving, that carries them out of the hand where they are not use-values and into the hand where they are, always moving in the direction opposite to its own course. Money is constantly pulling commodities out of the circulation-sphere by constantly stepping into their place there, and in doing so constantly moves itself further from its own starting point. So although money's movement is really only the expression of commodity-circulation, it looks the other way around: commodity-circulation appears to be merely the result of money's movement.

Money, on the other hand, only ever gets to function as medium of circulation because it is the commodities' own value, made independent. So its movement as medium of circulation is, in truth, nothing but their own change of form. And this has to show up concretely in the way money actually moves. Take the linen: it first converts its commodity-form into its money-form. The final term of that first change, commodity into money, then becomes the first term of its last change, money back into the Bible it buys. But each of these two changes of form happens through an exchange between commodity and money — the two trading places with each other. The very same coins arrive in the seller's hand as the alienated shape of his commodity, and leave it again as the fully alienable shape of a commodity. They change hands twice: the linen's first change of form brings those coins into the weaver's pocket, its second change of form draws them back out. So the two opposite changes of form undergone by one and the same commodity show up as the two changes of place, in opposite directions, of one and the same money.

But where only one-sided changes of a commodity's form happen — pure sales on one side, pure purchases on the other, whichever way you look at it — the same piece of money changes place only once. Its second change of place always expresses the commodity's second change of form, its conversion back out of money. So the frequent, repeated change of place of the same coins reflects not just the sequence of changes a single commodity goes through, but also the way countless changes of countless commodities interweave across the whole commodity-world. Of course, all of this holds only for the simple form of commodity-circulation we are looking at here.

Every commodity, the moment it takes its first step into circulation and undergoes its first change of form, drops back out of circulation again — and some new commodity always takes its place. Money, by contrast, as medium of circulation, stays put inside the sphere of circulation and keeps moving around within it. So the question arises: how much money does this sphere constantly soak up?

Every day, in any country, countless one-sided changes of commodity-form happen at the same time, side by side in different places — in other words, pure sales on one side, pure purchases on the other. In their prices, commodities are already set equal, in imagination, to definite quantities of money. And since this immediate form of circulation always sets commodity and money bodily against each other — one at the pole of sale, the other at the opposite pole of purchase — the amount of circulating medium the commodity-world's circulation-process needs is already fixed by the sum of the commodities' prices. In fact, money only really represents the sum of gold that the commodities' price-sum has already expressed in the imagination. So it goes without saying that these two sums are equal.

But we already know that, with commodity-values staying the same, their prices change with the value of gold itself — the money-material — rising as gold's value falls, and falling as gold's value rises. So whether the commodities' price-sum rises or falls this way, the mass of circulating money must rise or fall right along with it. Here, the change in the mass of circulating medium does come from money itself — but not from money's function as medium of circulation, rather from its function as measure of value. The commodities' price changes first, inversely to money's value; only then does the mass of circulating medium change, directly with the commodities' price. Exactly the same thing would happen if, say, gold's value didn't fall but silver simply replaced it as measure of value, or if silver's value didn't rise but gold simply pushed it out of that role. In the one case more silver would have to circulate than gold did before; in the other, less gold than silver did before. Either way, what changed was the value of the money-material itself — the commodity that functions as the measure of values — and with it the price-expression of commodity-values, and with that the mass of circulating money needed to realize those prices.

We have already seen that the commodity-world's circulation-sphere has an opening through which gold (or silver, or whatever serves as money-material) enters it as a commodity of a given value. That value is already assumed the moment money functions as measure of value — that is, the moment prices get set. So if the value of the measure of value itself now falls, this shows up first in the price-changes of the commodities that get traded directly, as commodities, at the very sources where the precious metals are produced. Above all in the less developed stages of bourgeois society, a large part of the other commodities keeps being priced, for quite a while longer, at the measure's old, now-obsolete and illusory value. Still, one commodity infects another through their shared value-relation, so gold- or silver-prices gradually settle into the proportions actually set by the commodities' own values — until finally every commodity's value gets priced according to the money-metal's new value. This settling-out process goes along with a continuing inflow of precious metal, streaming in to replace the commodities directly traded for it. So exactly as far as this corrected pricing spreads — as commodity-values get priced according to the metal's new, lower (and, up to a point, still falling) value — the extra mass of money needed to realize those prices is already there to do it. A one-sided reading of what followed the discovery of new gold and silver sources misled economists in the 17th century, and especially the 18th, into a fallacy: that commodity-prices had risen because more gold and silver were functioning as circulating medium. From here on, we will take gold's value as given — which is, in fact, how it stands at the very moment any price gets set.

On this assumption, then, the mass of circulating medium is fixed by the price-sum of the commodities that has to be realized. And if we go on to assume that the price of each kind of commodity is given, then the commodities' price-sum obviously depends on the mass of commodities in circulation. It takes very little thought to see that if 1 quarter of wheat costs £2, then 100 quarters cost £200, 200 quarters cost £400, and so on — so the mass of wheat and the mass of money that changes hands to buy it must grow together.

With the mass of commodities held fixed, the mass of circulating money rises and falls with the swings in commodity-prices. It rises and falls because the commodities' price-sum grows or shrinks as their prices change. For this, it isn't remotely necessary that every commodity's price rise or fall at once. A price-rise in some number of leading articles, in one case, or a price-fall in another, is enough on its own to raise or lower the price-sum of everything in circulation that has to be realized — and so to put more or less money into circulation. Whether a commodity's price-change reflects a real change in its value or just a swing in market price, the effect on the mass of circulating medium is exactly the same.

Say there is a set of unrelated sales, or partial changes of form, all happening at once in different places — 1 quarter of wheat, 20 yards of linen, 1 Bible, 4 gallons of corn-brandy. If each article costs £2, so the price-sum to be realized is £8, then £8 in money has to enter circulation. But suppose instead these same commodities are links in the chain of changes we already know: 1 quarter of wheat — £2 — 20 yards of linen — £2 — 1 Bible — £2 — 4 gallons of corn-brandy — £2. Now the same £2 makes each commodity circulate in turn, realizing each one's price in turn, and so realizing the whole £8 price-sum, before finally coming to rest in the distiller's hand. That one coin makes four circuits.

This repeated change of place of the same coin represents the commodity's double change of form — its passage through two opposite stages of circulation — and the way different commodities' changes of form interweave. The opposite, complementary phases this process runs through cannot happen side by side in space; they can only follow one another in time. So stretches of time measure how long it takes, and the number of circuits the same coin makes in a given stretch of time measures the speed of money's currency. Say the circulation of those four commodities takes one day. Then the price-sum to realize is £8, the number of circuits the same coin makes during the day is 4, and the mass of circulating money is £2 — or, for a given stretch of the circulation process:

the price-sum of the commodities, divided by the number of circuits made by coins of the same denomination, equals the mass of money functioning as medium of circulation. This law holds generally.

A country's circulation-process, over a given stretch of time, is made up, on one hand, of countless scattered sales (or purchases) — partial changes of form happening at once, side by side, in which the same coin changes place only once, making only one circuit — and, on the other hand, of many chains of changes, some running alongside each other, some interweaving, longer or shorter, in which the same coin makes more or fewer circuits. But the total number of circuits made by all the circulating coins of one denomination gives you the average number of circuits a single coin makes — the average speed of money's currency. The mass of money thrown into, say, a day's circulation-process at the start is of course fixed by the price-sum of the commodities circulating at once, side by side. But once inside the process, one coin is, so to speak, held responsible for another: if one speeds up its circulation, another's slows down, or it drops out of the circulation-sphere altogether — because that sphere can only absorb a mass of gold which, multiplied by the average number of circuits its individual coins make, equals the price-sum to be realized. So if the number of circuits the coins make goes up, the mass of them in circulation goes down; if the number of circuits goes down, their mass goes up. Because the mass of money that can function as medium of circulation is fixed once the average speed is given, all a bank has to do to draw a certain number of sovereigns out of circulation is throw the same number of one-pound notes into it — a trick every bank knows well.

Just as money's currency, in general, is only a reflection of commodities' circulation-process — their circuit through opposite changes of form — so the speed of that currency reflects the speed of the commodities' own change of form: the constant interlocking of one chain of changes with another, the rush of the social metabolism, the quick disappearance of commodities from the circulation-sphere and their equally quick replacement by new ones. So the speed of money's currency shows the fluid unity of those opposite, complementary phases — the conversion of useful shape into value-shape and the conversion back of value-shape into useful shape, or, put differently, the unity of the two processes of sale and purchase.

Conversely, when money's currency slows down, what shows up is the split and antagonistic separation of those two processes — a stall in the change of form, and so a stall in the social metabolism itself. Where that stall actually comes from is not something circulation itself can show you; circulation only displays the phenomenon, not its cause. The popular view, seeing money appear and vanish less often at every point around the edge of circulation once its currency slows, finds it natural to read the slowdown as a shortage in the quantity of circulating medium.

So the total quantity of money functioning as medium of circulation in any stretch of time is fixed, on one hand, by the price-sum of the circulating commodity-world, and on the other, by how slowly or quickly its opposite circulation-processes flow — since that speed decides what fraction of that price-sum the same coins can realize. But the commodities' price-sum itself depends on both the mass and the prices of each kind of commodity. These three factors — the movement of prices, the mass of commodities in circulation, and the speed of money's circulation — can all change in different directions and different proportions, so the price-sum to be realized, and with it the mass of circulating medium it sets, can go through a great many combinations. Here we will only list the ones that matter most in the actual history of commodity-prices.

With commodity-prices staying the same, the mass of circulating medium can grow because the mass of circulating commodities grows, or because money's circulation-speed slows down, or both together. It can shrink, conversely, with a shrinking mass of commodities or a rising circulation-speed.

With commodity-prices generally rising, the mass of circulating medium can stay the same, if the mass of circulating commodities shrinks in the same proportion that their price rises, or if money's circulation-speed rises just as fast as the price-rise while the mass of circulating commodities stays constant. The mass of circulating medium can fall, if the commodity-mass shrinks faster, or the circulation-speed rises faster, than prices do.

With commodity-prices generally falling, the mass of circulating medium can stay the same, if the commodity-mass grows in the same proportion that its price falls, or if money's circulation-speed slows in the same proportion as prices. It can grow, if the commodity-mass grows faster, or the circulation-speed slows faster, than commodity-prices fall.

The swings in these different factors can offset one another, so that despite their constant restlessness, the total price-sum of commodities to be realized stays constant — and so does the mass of circulating money. That is why, especially over somewhat longer stretches of time, you find a much steadier average level of the money-mass circulating in any country, and — apart from sharp disturbances that arise periodically from crises in production and trade, and more rarely from a change in money's own value — much smaller swings around that average level than you would expect just from appearances.

The law that the quantity of circulating medium is fixed by the price-sum of circulating commodities and the average speed of money's currency can also be put this way: given a fixed sum of commodity-values, and a given average speed for their changes of form, the quantity of circulating money — or money-material — depends on its own value. There is an illusion that runs the other way: that commodity-prices, instead, are fixed by the mass of circulating medium, and that mass, in turn, by the quantity of money-material sitting in a country. In its original champions, this illusion is rooted in the tasteless hypothesis that commodities enter the circulation-process without a price, and money without a value, so that some fraction of the whole commodity-mush simply gets swapped for some fraction of the whole metal-mountain.

Money takes the shape of coin because of its job as the medium of circulation. The weight of gold that a commodity's price names has to actually show up, in circulation, as a matching gold coin. Fixing that coin — like fixing the standard of prices — is the state's business. Gold and silver wear different national uniforms as coins: they put these on at home, and strip them off again on the world market. That change of clothes is where the split between each country's own sphere of trade and the wider world-market sphere becomes visible.

Gold coin and gold bar start out differing only in shape — gold can always turn from one into the other. But the road out of the mint is also the road toward the melting pot. As coins circulate, they wear down, some faster than others. The name stamped on a coin and the actual gold in it, the coin's face value and its real content, begin to pull apart. Coins of the same denomination end up worth different amounts, because they weigh different amounts. The gold that actually circulates now differs from the gold that still serves as the standard for prices, and so it stops being a real equivalent for the goods whose prices it is settling. The confusion this causes runs through the whole coin-history of the Middle Ages and the modern period, right up to the eighteenth century. Circulation has a built-in tendency to turn a coin's real gold-being into a mere show of gold — to turn the coin into a symbol of the metal content it is officially supposed to contain. Even the most modern laws admit as much, when they fix the amount of wear that makes a gold coin unfit to circulate, or officially worthless as money.

Once circulation itself splits a coin's real content from its face value — its existence as a lump of metal from its existence as a working coin — it already contains, latent within it, the possibility of replacing metal money, in its coin-function, with tokens made of some other material, or with symbols. Two things explain, historically, why silver and copper tokens came to stand in for gold coin: it is technically hard to mint gold or silver in truly tiny amounts, and lower metals originally served as the measure of value in place of nobler ones — silver instead of gold, copper instead of silver — circulating as money right up to the moment the nobler metal dethroned them. These tokens replace gold precisely where coins circulate fastest and so wear out fastest — where buying and selling, on the smallest scale, never lets up. To stop these satellites settling permanently into gold's own place, the law fixes very small amounts as the only amounts in which they may be accepted instead of gold. The separate circuits that the different kinds of coin travel naturally run into one another: small change appears alongside gold to pay the fractional parts of the smallest gold coin; gold keeps pouring into retail trade, and is just as constantly thrown back out again in exchange for small change.

The law fixes the metal content of these silver or copper tokens arbitrarily. In circulation, they wear away even faster than gold coin does. Their function as coin becomes, in effect, completely independent of their weight — and so of any value at all. Gold's existence as a working coin has now split apart, completely, from its existence as a substance of value. So things that are, in themselves, of relatively no value — slips of paper — can function as coin in gold's place. In metal tokens this purely symbolic character is still somewhat hidden; in paper money it comes out into full view. As the saying goes: it's only the first step that costs.

What's at issue here is only paper money issued by the state with forced currency. It grows directly out of metallic circulation. Credit-money is a different matter — it presupposes conditions that, from where we stand, looking only at simple commodity circulation, are still completely unknown to us. Just in passing, though: genuine paper money springs from money's function as circulating medium, and credit-money, in the same way, has its natural root in money's function as means of payment.

The state puts slips of paper stamped with money-names — £1, £5, and so on — into circulation from outside. So long as they really do circulate in place of the matching sum of gold, their movement simply reflects the laws of money's circulation itself. A law specific to paper circulation can only come from paper's relation of representing gold. And that law is simply this: the issue of paper money has to be limited to the quantity of gold (or silver) that would actually have to circulate if the paper weren't standing in for it. Now, the quantity of gold that the sphere of circulation can absorb is always fluctuating a bit above or below some average level. Still, the mass of the circulating medium in any given country never sinks below a certain minimum, which experience can establish. That this minimum mass keeps changing which particular gold pieces make it up doesn't change its size or its constant movement through circulation at all. So it can be replaced by paper symbols. But if every channel of circulation is filled today with as much paper money as it can absorb, fluctuations in the trade of commodities can leave those channels overflowing tomorrow. Then there is no measure left at all. And if the paper does exceed its proper measure — the quantity of gold coin of the same denomination that could actually circulate — then, setting aside the danger of the whole issue losing credit, it still represents, within the world of commodities, only the quantity of gold that circulation's own laws determine, which is the only quantity it was ever capable of representing. Say the paper slips represent, on average, 2 ounces of gold for every ounce they're supposed to: then £1 becomes, in effect, the money-name for about an eighth of an ounce instead of a quarter. The effect is the same as if gold itself had been altered in its function as the standard of prices. The same values that used to be expressed by a price of £1 are now expressed by a price of £2.

Paper money is a sign of gold, a sign of money. Its relation to the values of commodities consists only in this: those values are expressed, in the mind, in the very same quantities of gold that the paper stands in for, visibly and symbolically. Paper money is a sign of value only because — and only insofar as — it represents quantities of gold that are themselves, like every other commodity in some quantity, quantities of value.

This finally raises the question: why can gold be replaced by mere valueless signs of itself? It is replaceable, as we've seen, only to the extent that it is picked out and made to stand alone in its function as coin, as circulating medium. Now this standing-alone doesn't happen to any individual gold coin — though it does show up in the way a worn coin just keeps on circulating. Any single gold piece is nothing but coin, nothing but circulating medium, for exactly as long as it is actually circulating, and no longer. But what doesn't hold for a single gold coin does hold for the minimal mass of gold that paper money can replace. That mass lives permanently inside the sphere of circulation, functions there without interruption as circulating medium, and so exists purely and only as the carrier of that function. Its whole movement is nothing but the ceaseless flipping of one commodity-metamorphosis into its opposite and back — commodity into money, money into commodity — in which a commodity's value-form appears to it only to vanish again at once. The independent existence of a commodity's exchange-value is, here, only a passing moment; another commodity replaces it immediately. So the merely symbolic existence of money is enough for a process that keeps sending it out of one hand and into another. Its functional existence, so to speak, swallows up its material existence. As a fleeting, objectified reflection of commodity-prices, it now functions only as a sign of itself — and can therefore also be replaced by a sign. There is just one thing this token needs: an objective, socially recognized validity of its own, and the paper symbol gets this through its forced currency. But this state-compulsion holds only inside the inner sphere of circulation bounded by a community's own borders — and it is only there, too, that money goes completely over into its function as circulating medium, as coin, and so can take on, in paper money, a mode of existence that is functional only, cut off on the outside from its metal substance.

The commodity that works as the measure of value, and therefore also — either in its own body or through a stand-in — as the medium of circulation, is money. Gold (or silver) is therefore money. It works as money in two ways. First, wherever it has to show up in its own golden (or silver) body — that is, as the money-commodity, neither merely ideal, the way it is in the measure of value, nor able to be represented by a stand-in, the way it is in the circulating medium. Second, wherever its function — whether it performs this in its own person or through a stand-in — fixes it as the sole shape of value, the only fully existing form of exchange-value, set against all other commodities as mere use-values.

The endless cycle of a commodity's two opposite changes of shape — the constant back-and-forth of sale and purchase — shows up in the restless motion of money, in money's job as the perpetual motion machine of circulation. But money stops moving, or turns, as Boisguillebert puts it, from meuble into immeuble, from movable into immovable, from coin into money, the moment that chain of changes breaks off — the moment a sale is not completed by a purchase that follows it.

As soon as the circulation of commodities gets going at all, there arises, along with it, both the need and the passionate urge to hold onto the product of that first change of shape — the commodity's transformed body, its gold chrysalis. A commodity gets sold, now, not in order to buy another commodity, but in order to swap its commodity-form for its money-form. What began as a mere means for keeping goods moving becomes, here, an end in itself: the change of form. The commodity's outward-turned shape is kept from doing its job — from acting as its own freely alienable shape, its own passing money-form. The money hardens into a hoard, and the seller of the commodity turns into a hoarder.

It's precisely in the early stages of a commodity economy that only the surplus of use-values — over and above what's needed — turns into money. Gold and silver become, in this way, all by themselves, the social expression of surplus, of wealth. This simple form of hoarding lasts on and on among peoples whose way of producing stays traditional and aimed at their own needs, within a fixed, closed circle of wants — among the peoples of Asia, the Indians above all. Vanderlint, who imagines that the prices of goods in a country are fixed by the sheer mass of gold and silver sitting inside it, asks himself why Indian goods are so cheap. His answer: because the Indians bury their money. From 1602 to 1734, he notes, they buried 150 million pounds sterling of silver that had originally come to Europe from America. From 1856 to 1866 — ten years — England exported 120 million pounds sterling in silver to India and China (most of the metal sent to China flows on again into India), silver that had first been exchanged for Australian gold.

Once commodity production has developed further, every producer of commodities has to secure, for himself, the vital resource — the 'social pledge.' His wants keep renewing themselves without let-up, and they call, without let-up, for buying other people's goods, while producing and selling his own good costs time and depends on chance. To buy without selling, he must first have sold without buying. Carried out on a general scale, this operation looks like it contradicts itself. And yet, at their sources of production, the precious metals trade directly for other commodities. Here we get sale (on the side of the commodity-owners) without purchase (on the side of the gold- and silver-owners). And later sales without any purchase that follows them merely carry the further distribution of the precious metals among all commodity-owners. This is how hoards of gold and silver, of every size, spring up at every point where trade happens. With the possibility of holding onto a commodity as exchange-value, or exchange-value as a commodity, the greed for gold awakens. As the circulation of commodities widens, the power of money grows too — money, the ever-ready, absolutely social form of wealth.

'Gold is a wonderful thing! Whoever owns it is lord of everything he could wish for. With gold, one can even get souls into paradise.' (Columbus, in a letter from Jamaica, 1503.)

Since you can't tell, just by looking at money, what got turned into it, everything — commodity or not — turns into money. Everything becomes something you can sell, something you can buy. Circulation becomes the great social retort into which everything gets thrown, to come back out as a money-crystal. Not even the bones of saints can resist this alchemy — still less can more delicate res sacrosanctae, extra commercium hominum ('sacred things, outside human commerce'). Just as money wipes out every qualitative difference between commodities, so money, on its own side, wipes out all differences whatsoever, like the radical leveller it is. But money is itself a commodity, an external thing that can become anyone's private property. In this way social power turns into the private power of a private person. Ancient society, for that reason, denounces money as the small change of its whole economic and moral order. Modern society — which, back in its childhood, was already dragging Plutus by the hair out of the bowels of the earth — greets, in the golden grail, the glittering incarnation of the very principle of its own life.

A commodity, as a use-value, satisfies one particular need and forms one particular piece of material wealth. But a commodity's value measures the degree of its pull on all the elements of material wealth — and so measures the social wealth of whoever owns it. To a commodity-owner as unrefined as a barbarian — even to a West-European peasant — value is inseparable from the value-form, so that growing your hoard of gold and silver just is growing your value. It's true that the value of money changes, whether because money's own value changes or because commodities' values change. But that doesn't stop 200 ounces of gold from still containing more value than 100, 300 more than 200, and so on; nor does it stop this metal's own natural shape from remaining the universal equivalent-form of every other commodity, the directly social incarnation of all human labour. The drive to hoard is, by its very nature, without limit. Looked at qualitatively, by its form, money has no boundary at all — it is the universal representative of material wealth, because it can be turned directly into any commodity. But at the same time, every actual sum of money is quantitatively limited, and so has only a limited power to buy. This contradiction, between money's quantitative limit and its qualitative limitlessness, keeps driving the hoarder back to the Sisyphean labour of accumulating. It goes for him the way it goes for a conqueror of the world, who, with every new country, only wins a new border.

To hold onto gold as money, and so as an element of hoarding, it has to be kept from circulating — kept from dissolving, as a means of buying, into a means of enjoyment. The hoarder, then, sacrifices the pleasures of the flesh on the altar of his gold fetish. He takes the gospel of self-denial seriously. On the other hand, he can only pull out of circulation, in money, what he has put into it in the form of commodities. The more he produces, the more he can sell. Industriousness, thrift, and avarice are, therefore, his cardinal virtues — to sell much and buy little, the whole of his political economy.

Alongside the hoard's direct form runs its aesthetic form: owning articles of gold and silverware. This form grows with the wealth of bourgeois society. 'Soyons riches ou paraissons riches' ('Let us be rich, or seem rich' — Diderot). In this way there forms, on one side, an ever more extensive market for gold and silver, independent of their money-functions, and on the other, a latent source of supply that flows above all in periods of social upheaval.

Hoarding fulfils several different functions within the economy of metallic circulation. Its nearest function arises from the very conditions under which gold or silver coin circulates. We have seen how, with the constant fluctuations of commodity circulation — in extent, in prices, in speed — the circulating mass of money restlessly ebbs and flows. It must, therefore, be able to contract and expand. At one moment money must be drawn in to become coin; at the next, coin must be pushed back out to become money again. For the actually circulating mass of money to always match the saturation-point of the sphere of circulation, the quantity of gold or silver present in a country must be greater than the quantity tied up in the coin-function. This condition is met by money's hoard-form. The hoard-reservoirs serve, at once, as outlet and inlet channels for circulating money — so that the channels of circulation, as a result, are never overfilled.

So far, in the simple form of buying and selling we've been looking at, the same amount of value always showed up twice at once: the commodity on one side, money on the other. The two owners met each other only as people who already held equal values, ready to trade on the spot.

But as trade develops, situations arise where selling a commodity gets split apart in time from actually collecting its price. A few simple examples show why. One kind of good takes longer to make than another. Different goods depend on different seasons. One good is made right where it's sold; another has to travel to a distant market. So one owner may be ready to sell before the other is ready to buy. When the same two people keep dealing with each other, the terms of sale start to follow the terms of production. Or take something like a house: its use gets sold for a fixed stretch of time, and the buyer only actually gets that use once the term is up — he buys it before he pays for it.

So one owner sells a commodity he already has, while the other buys only as a stand-in for money — for money that doesn't exist yet. The seller becomes a creditor, the buyer a debtor. Since the commodity's transformation, the way its value takes shape, now looks different, money takes on a different job too. It becomes the means of payment.

Being a creditor or a debtor comes out of this same simple buying and selling. The change in how the sale takes shape stamps buyer and seller with this new mark. At first these are roles just as fleeting and interchangeable as buyer and seller themselves, played in turn by the same people. But now the opposition feels less easygoing, and it can harden much further.

The same two roles can also show up with nothing to do with buying and selling. The class struggles of the ancient world, for instance, mostly took the shape of a fight between creditor and debtor, ending in Rome with the ruin of the plebeian debtor, who was replaced by the slave. In the Middle Ages the fight ended with the ruin of the feudal debtor, who lost his political power along with the economic ground it stood on. Still, even though this relation between creditor and debtor takes the form of a money relation, here it only mirrors an antagonism rooted in deeper economic conditions of life.

Let's go back to buying and selling. The two equivalents, commodity and money, no longer show up together at the two ends of a sale. Money now does two jobs. First, it works as the measure of value in fixing the price of the commodity sold: the price set in the contract measures what the buyer owes — the sum of money due on a fixed date. Second, it works as an ideal means of purchase: even though it exists only as the buyer's promise to pay, it's enough to make the commodity change hands.

Only when the payment falls due does the means of payment actually enter circulation — passing from the buyer's hand into the seller's. Earlier, the circulating medium turned into a hoard because the process broke off after its first phase, because the commodity's converted shape, money, was pulled out of circulation. Here it's different: the means of payment enters circulation only after the commodity has already left it. Money no longer mediates the process. It closes it out on its own, standing in as the absolute existence of exchange-value, the universal commodity.

The seller turned his commodity into money to satisfy some need by means of that money; the hoarder did it to keep the commodity preserved in money-form; the debtor-buyer does it in order to be able to pay. If he doesn't pay, his belongings get sold off by force. So the value-shape of the commodity — money — now becomes the very purpose of the sale, through a social necessity that springs from the relations of the circulation process itself.

The buyer turns money back into a commodity before he's turned a commodity into money — he carries out the second transformation before the first. The seller's commodity circulates and does realize its price, but only as a private legal claim to money. It turns into a use-value before it has turned into money. The completing of its first transformation only happens afterward.

At any given stretch of the circulation process, the obligations falling due stand for the sum of prices of the commodities whose sale created them. The amount of money needed to settle that sum depends, first, on how fast the means of payment circulate. And that in turn depends on two things: the chain linking creditors and debtors — so that A, getting money from his debtor B, pays it straight on to his own creditor C, and so on — and the length of time between the different payment dates.

This ongoing chain of payments, these delayed first transformations, is essentially different from the interweaving of chains of transformation we looked at earlier. When the circulating medium moves, it doesn't just express the connection between sellers and buyers — that connection is actually created by the circulation of money itself, and only comes into being through it. The movement of the means of payment is the opposite: it expresses a social connection that was already fully there before it.

Sales happening at the same time, side by side, limit how far coin can be replaced by faster circulation. But this same fact also becomes a new lever for economizing on means of payment. Once payments concentrate in one place, their own institutions and methods for settling up develop naturally — the virements of medieval Lyon, for example. The debts owed by A to B, B to C, C to A, and so on, only need to be set against each other to cancel out, up to a point, like positive and negative amounts. That leaves only a single balance to settle. The more massively payments are concentrated, the smaller that balance is relative to the total — and so the smaller the mass of means of payment actually in circulation.

Money's job as means of payment carries a contradiction inside it, with nothing to soften the clash. As long as payments cancel each other out, money works only in the mind, as money of account, as a measure of values. But wherever an actual payment has to be made, money doesn't show up as circulating medium — as a mere passing, mediating form in the exchange of matter — it shows up as the individual embodiment of social labour, as the independent existence of exchange-value, the absolute commodity.

This contradiction breaks out into the open at the moment of crises in production and trade — the moment called a monetary crisis. That only happens where the ongoing chain of payments, and an artificial system for settling them, are fully developed. When this whole mechanism suffers a widespread disturbance — whatever sets it off — money suddenly and without warning flips over, from the merely ideal shape of money of account into hard cash. No ordinary commodity can stand in for it any longer. The use-value of the commodity becomes worthless, and its value vanishes in the face of its own value-form.

Only a moment before, the bourgeois — drunk on prosperity, smug with Enlightenment conceit — was declaring money an empty illusion. Now it shrieks across the world market: only the commodity is money — no, only money is a commodity! As the deer cries out for fresh water, so his soul cries out for money, the only wealth. In the crisis, the opposition between the commodity and its value-shape, money, is driven up to an absolute contradiction. So it makes no difference here what shape money takes. The money-hunger is exactly the same whether payment has to be made in gold or in credit-money — in banknotes, say.

Now consider the total sum of money circulating over a given stretch of time. Given how fast the circulating medium and the means of payment move, this total equals: the sum of prices still to be paid, plus the sum of payments falling due, minus the payments that cancel each other out, minus, finally, the number of times the very same piece of money serves first as circulating medium, then as means of payment, then back again.

Take a farmer who sells his grain for £2 — that money serves as circulating medium. When his own payment falls due, he uses it to pay the weaver for linen already delivered — now the same £2 serves as means of payment. The weaver then buys a Bible with cash — it serves again as circulating medium — and so on.

So even with prices, the speed of money's circulation, and the economizing of payments all fixed, the money circulating during a period — a day, say — no longer matches the mass of commodities circulating in that same period. Money circulates that stands for commodities withdrawn from circulation long ago. Commodities circulate whose money-equivalent will only appear at some point in the future. And the debts contracted on any given day, and the payments falling due that same day, are simply not measurable against each other.

Credit-money grows directly out of money's function as means of payment: certificates of debt for commodities already sold go on circulating themselves, to transfer the debt-claim from one person to another. And as the credit system expands, so does money's function as means of payment along with it. In that role it takes on forms of its own, making itself at home in the sphere of large commercial dealings, while gold or silver coin gets pushed back mainly into the sphere of retail trade.

Once commodity production reaches a certain scale and level, money's function as means of payment reaches beyond the sphere of buying and selling itself. It becomes the general commodity of contracts. Rents, taxes, and the like turn from payments in kind into money payments. How much this change depends on the whole shape of the production process is shown, for instance, by the Roman Empire's attempt — twice made, twice failed — to collect all its dues in money. The immense misery of the French countryside under Louis XIV, so eloquently denounced by Boisguillebert, Marshal Vauban, and others, was owed not only to how heavy the taxes were but also to the change from tax in kind to tax in money.

On the other hand, where ground-rent in kind — in Asia, also the main element of the state's tax — rests on production relations that reproduce themselves with the unchangeableness of natural conditions, that payment-form works back to preserve the old form of production. It's one of the secrets behind how the Ottoman Empire has kept itself going. If the foreign trade forced on Japan by Europe brings with it the change from rent in kind to money rent, then Japan's exemplary agriculture is finished — the narrow economic conditions it depends on will dissolve.

In every country, certain general payment dates become fixed. Leaving other cycles of reproduction aside, these dates rest partly on the natural conditions of production tied to the changing seasons. They govern payments that have nothing directly to do with buying and selling too, like taxes and rents. The mass of money needed for these payments — scattered across the whole of society, falling due on certain days of the year — causes disturbances in the economizing of means of payment that are periodic, but only on the surface.

From the law about how fast the means of payment circulate, it follows that for all periodic payments, whatever gives rise to them, the necessary mass of the means of payment stands in direct proportion to the length of the payment periods.

Money developing into a means of payment makes it necessary to build up stores of money for the dates when sums owed fall due. Hoarding, as a way of getting rich on its own, disappears as bourgeois society advances — but at the very same time, in reverse, it grows again in the form of reserve funds of the means of payment.

Once money leaves the sphere of circulation inside one country, it strips off the local forms it took on there — a standard of prices, coin, small change, signs of value — and falls back into the plain bar-shape of gold and silver. In world trade, goods show their value in a way that holds everywhere, for everyone. So here too their independent value-shape confronts them — only now under the shape of world money. It is only on the world market that money functions in its full range as the commodity whose own natural body is directly the social form that abstract human labor takes. Its mode of existence now becomes adequate to its concept.

Inside one country's own circulation, only a single commodity can serve as the measure of value, and so as money. On the world market two measures of value hold at once: gold and silver.

World money works as a general means of payment, a general means of purchase, and the absolutely social materialization — the Materiatur — of wealth as such, of universal wealth. Its job as a means of payment, settling the balances between nations, is the main one. That is where the mercantilists got their watchword: the balance of trade! Gold and silver serve as an international means of purchase mainly at those moments when the usual balance in the exchange of goods between different nations is suddenly thrown off. And finally, gold and silver serve as the absolutely social materialization of wealth itself in cases where it is a question of neither buying nor paying, but of moving wealth from one country to another — moving it in a way the commodity-form itself rules out, whether because of how the goods market happens to be moving, or because of the very purpose the transfer is meant to serve.

Every country needs a reserve fund for circulation on the world market, just as it needs one for its own circulation at home. So the hoard's functions spring partly from money's job as the medium of circulation and payment at home, and partly from its job as world money. In this second role, what is always required is the real money-commodity itself — gold and silver in the flesh, never a stand-in. That is why James Steuart, to mark them off from their merely local substitutes, called gold and silver, in so many words, "money of the world."

The gold and silver stream moves in two ways. On one side, it rolls out from its sources across the whole world market, where the different national spheres of circulation catch it, each to a different extent, and draw it into their own inner channels — to replace worn gold and silver coins, to supply the material for luxury goods, and to freeze into hoards. This first movement runs through a direct exchange: the national labor realized in goods, traded against the labor realized in precious metal by the countries that produce gold and silver. On the other side, gold and silver keep flowing back and forth between the different national spheres of circulation, a movement that follows the constant ups and downs of the exchange rate.

Countries with developed bourgeois production keep the hoards massed together in bank reserves down to the minimum their specific jobs require. With some exceptions, a noticeable swelling of the hoard reserves above their usual level shows a stoppage in the circulation of goods, or a break in the flow of their metamorphosis.