The social relations captured by money in commodityexchange
These simple observations about capitalist markets and moneyappear unobjectionable, what economists call ‘stylised facts’. Con-sequently, it comes as a surprise to find that mainstream economictheory leaves little room for money in its analysis of markets. To besure, there are standard references to money’s functions ineconomics textbooks, but they sit very uneasily with the underlyinganalytical approach of mainstream theory. The theoretical model of ‘general equilibrium’, which underpins mainstream economicthinking, is fundamentally a model of direct commodity exchangebetween market participants (Hahn 1982). Mainstream economicanalysis, which prides itself in being the most advanced socialscience, at bottom sees capitalism as a social system in which thingsexchange directly for other things (barter), rather than for money. Inshort, mainstream economic theory analyses capitalist marketswithout adequately explaining money’s role.
Marxist political economy is vastly different on this score: moneyis shown to emerge spontaneously and necessarily whenever regularcommodity exchange is undertaken. It is deeply misleading toassume, as mainstream economics does, that widespread commodityexchange could take place under barter conditions. There is noevidence (historical, anthropological or sociological) that a durablesystem of entirely money-free commodity transactions has everexisted. Indeed, research into exchange systems in whichcommodity owners regularly and frequently meet each other showsthat money is present and touches all transactions, directly orindirectly.
Economic interactions between owners of particularcommodities inevitably lead to the emergence of money as theuniversal commodity, the ‘independent form of value’ or ‘universalequivalent’. Money and markets are inseparable. In the first volume of
, Marx (1867, ch. 1) provided thebuilding blocs for a theoretical explanation of money’s emergence aspart of his discussion of the ‘form of value’. Money is shown toemerge spontaneously and inevitably whenever commodity owners
Money as Money and Money as Capital in a Capitalist Economy61