Karl Marx. Capital Vol One Ch6

The buying and selling of labor power

In order to make a profit on products labor itself must be considered a commodity. It can be bought and sold. It is generally the amount needed to keep the laborer alive an able to produce the commodity he labors on.

In this way the business man owns the money. He would not consider himself a commodity but only the money he owns. The worker on the other hand is a commodity.

Karl Marx. Capital Vol One Ch5

Contradictions in the general formula for capital

Making money from money presents itself some problems. If you sell something at equal value than what you paid for it, there is no room to profit. Even if you buy a raw materials and sell the product for more than the materials, you are adding the cost of labor.

A profit does not seem possible from the circulation of commodities. You will just the equivalent back. This is good if you want to exchange a commodity but troublesome if you are expecting to make money into more money.

Marx supposes that a profit must be made within the circulation of commodities and out-side of the circulation circuitry.

Karl Marx. Capital Vol One Ch4

The general formula for capital

Marx compares two types exchanges. Money to buy a good to resell for more money (M -> C -> M) and a good to sell to buy another good (C -> M -> C).

To exchange a good for money to buy another good is based on the want of a specific thing that has definite physical attributes. When someone buys something in order to sell it at a higher price the goal is to increase an abstract value which ideally could be any number. The latter exchange is a capital exchange (exchanging money in order to receive more money).

Interest bearing capital seems to Marx to remove commodities from the calculation. Interest just boldly states that money is worth more money.

Marx also contrasts a miser to that of a capitalist. A miser saves money and withdraws money from circulation while a capitalist puts money into circulation.

But the important bit to consider is that a capitalist treats a money like a good and goods like money that is worth more than it was originally. Or at least the role money and goods play is put on their heads in a slightly perverse way.

Karl Marx. Capital Vol One Ch3 Sec3

Money

a. Hoarding

Money is a commodity and it's used to exchange goods. When it's being used it creates currency. It enables trade. But when money is horded it does not create a currant and resembles a commodity rather than a means to exchange commodities.

b. Means of payment

When a person takes on debt to purchase a good it changes the nature of money. The obvious thing it does is allow the consumer to get a good with out paying all the money for it. This will disrupt the currency of money as the buyer has to hoard money to make the cyclical payments towards his debt. The money is taken out of circulation which will reduce the current of money.

The nature of money in the case makes money the medium of contract rather than the medium to exchange goods.

Karl Marx. Capital Vol One Ch3 Sec2

The medium of circulation

a. The metamorphosis of commodities

Commodities exchange with money and that money can be exchanged for other commodities. Marx gives the example of a weaver who makes linen to convert to money to buy a bible.

Division of labor is brought up rather quickly. Since the weaver is not the sole maker of linen, the amount of gold he can exchange the linen for can only be realized when he goes to the market which will aggregate all of the linen sold and the price will be determined by the total amount of linen produced by all the weavers.

Marx rapidly notes that the relationship between the weaver's linen is quirky. The goal of the weaver is to buy a bible. He makes the linen which has value but does not barter the linen directly for the bible. He converts it to money and the money to the bible. But realistically the weaver is bartering for the bible in an extended way.

Something bought is also something that can be sold. Marx is quick to this point. The weaver now has a bible. He does not know how to make a bible but can sell it just the same as the linen he produced. And Marx spends a good amount of time on this cycle of buying and selling and then buying again.

He seems to assume that capitalism requires one to keep buying and selling one's goods. What I mean is that he said if someone purchases something for the sake of consumption, it breaks this cycle of buying and selling. This he says creates crises.

He foreshadows that type of circulation discussed so far is simplistic and as time goes on with these exchanges you will see the exchanges are not as tidy as the simplistic example. The main culprit he points to is this back and forth between physical and abstract account of a commodity.

b.

Currency is like electric current or the current of water. In Capitalism currency is the flow of buyers to sellers and sellers to buyers. The currency of commodities can go in phases when either there is a surplus of commodities or money. The rate that trade takes place also effects the currency of commodities.

c.

Gold is represented into coins and paper money. Although they may not be gold themselves they represent gold. One can not be sneaky and print more money than gold because even it the money says it represents a certain amount of gold, it will just be a ratio to the gold available.

Coins and paper money are also a good way to keep currency moving as they are meant to be exchanged quickly. Basically to be giving the slightest thought in the exchange for one commodity to another. Almost as if the money was somehow embedded in the trade itself rather than an actual thing.

Karl Marx. Capital Vol One Ch3 Sec1

The measures of values

Marx spends his time comparing money to what money symbolizes, gold. Gold is a commodity but has a special role to be a commodity of value. Money is just an abstraction of gold and is based off the weight of gold.

Marx also points out that although a commodity is priced in gold, the gold is not in the commodity (unless it's gold). So this value is abstract until you exchange it for gold.

And of course the value of a commodity is an abstraction of the labor used to take from nature and make a product that otherwise wouldn't exist. Marx also says that something that isn't a commodity can have a price but it doesn't have a value. He gives the example of a manicured field that someone can purchase for farmland. The field does not have any labor put into it yet.