Int. Journal of Political Economy, vol. 27, no. 2, Summer 1997, pp. 26-50. © 1998 MLE. Sharpe, Inc. All rights reserved. 0891-1916 / 1998 $9.50 + 0.00. AUGUSTO GRAZIANI The Marxist Theory of Money Money pervades the Marxist conception of the economic process. A capitalist’s activity, summed up in the famous formula “money—com- modity—money,” begins with money and returns to money in a cycle consisting of several stages: from the initial money, to the purchase of labor power, to the utilization of labor power in the technical process of production, to the finished product and its sale on the market, whereby the product is ultimately transformed into new money in a greater quantity. Two orders of relations stand out in this set of successive opera- tions: relations of exchange between capitalists and workers—that is, exchange between different and opposing classes—and relations of exchange within the class of capitalists—that is, exchange within the same class. In particular, the distinction that will prove significant is the one that separates the initial exchange between money-capital and labor power (this exchange initiates the phase of production) from the exchanges by which capitalists, once production has begun, circulate the commodities produced among themselves. The distinction between these two moments takes on major rele- vance for the theoretical analysis of money, so much so that it would be difficult to deal with money within one general theoretical frame- Translation © 1998 MLE. Sharpe, Inc., from the original Italian text: Augusto Graziani, “La teoria marxiana della moneta,” in C, Mancini, ed., Marx e il mondo contempora- neo (Rome: Riuniti, 1986), pp. 207-31. Used by permission of the author. Translated by Michel Vale. The author thanks Marcello Messori and Graziella Cafaro, whose com- ments on the first draft helped vastly to improve the form and content of this study, 26SUMMER 1997 27 work. In particular, as this paper attempts to make clear, whereas in the initial moment of exchange between money capital and labor power it seems impossible to define money as a commodity, and, moreover, seems impossible to avoid conceding to money the nature of pure credit, in the phase marked by internal exchanges within the capitalist class, nothing prevents money from taking on the character of com- modity money. Such conclusions are not new in the Marxist literature. Indeed, there is growing agreement that money should be construed as pure credit in Marx’s theoretical edifice.! The following analysis differs, if at all, from this interpretation in that it adheres more closely to the letter of Marx’s texts. Indeed, where Marx’s most recent interpreters tend to- tally to exclude commodity money from Marxist doctrine, we try to show that there is a valid, if limited, place in it for commodity money; specifically, the latter can function as an intermediary in exchanges between producers whenever said producers find it more expedient to regulate their relations via a tangible money. The Marxist theory of money is based on two fundamental proposi- tions, both widely known, which are a useful point of departure. The first is that money performs the functions of a general equivalent; the second is that money should be studied not, in fact, as a technical means of circulation, but as a means for realizing social relations. Although these two characteristics are certainly paid abundant lip serv- ice, they are not always explored sufficiently in depth or put to ade- quate use. It is not idle, therefore, to dwell a bit on cach of them. Money as general equivalent Capital pursues the acquisition of wealth in general form, and hence the acquisition of generalized exchange value. One could therefore also say that capital’s pursuit is the acquisition of money as wealth. Yet it would not be correct to say that capital pursues the acquisition of money. It is beyond dispute that money, as a general equivalent and as a means of payment that permits the purchase of any other commodity, potentially contains any other material good whatsoever and is, on that account, the representative par excellence of wealth in general. Every particular commodity, writes Marx, insofar as it is an exchange value and has a price, represents a quantity of money in incomplete form, since it must first be put into circulation to be realized. Every particular28 INTERNATIONAL JOURNAL OF POLITICAL ECONOMY commodity is, therefore, money as wealth in general: “As value,” writes Marx, “[the commodity] is money.” Also, “The commodity, as pure exchange value, is money.”” Money, insofar as it is universally accepted and convertible into any other commodity, is the perfect representative of wealth in general. If, therefore, the specific end of the capitalist is to acquire money, in the sense of wealth in general, it still does not follow that the purpose of the capitalist is to accumulate money: What the capitalist pursues is exchange value, of which money is only one form. Marx writes: “Money, as the end of circulation, is exchange value or abstract wealth—not just any material element of wealth—as the specific end and driving force of production.” Even more significantly, when Marx discusses the nature of profit, he makes it clear that profit is acquired by capitalists taken collectively as a class solely in the form of commodities: The mechanism of circulation has shown that although the capitalist class puts money into circulation to spend surplus value, he also with- draws the same money from circulation, and can therefore always begin the same process anew; and that, therefore, qua capitalist class, he al- ways remains in possession of the sum of money necessary to give money form to surplus value. If, then, not only surplus value in the form of commodities is withdrawn from the commodity market by the capi- talist for his consumption fund, but at the same time the money with which he has acquired these commodities flows back to him, he has: manifestly withdrawn the commodities from the market without an equivalent.5 The action of the capitalist is therefore not directed toward the ac- quisition of money as such, but toward the development of the entire cycle of capital on an ever expanded scale, and there is no one phase of the capital cycle that the capitalist may consider more relevant than the others. It is true that once a cycle is underway the capitalist also wishes to conclude it, and thus to convert the commodities produced back into money; but this does not mean that the capitalist stops, content to watch over the money he has taken in, as would be the case if his purpose were to accumulate money. Similarly, for the capitalist, no one material commodity is absolutely the best form in which to place wealth: On the contrary, the capitalist is always ready to change tech- nology, sector, geographic space, or whatever, to find ever more effec-