Inicio > Economía marxista > “On Marx’s Theory of Money”: Duncan K. Foley

“On Marx’s Theory of Money”: Duncan K. Foley

The Theory of Money and the Theory of Value

The most important point to emerge from Marx’s theory of money is the idea that money is a form of value. The difficulty with this idea is that we are more familiar with money itself than with value in other forms. But value does appear in forms other than money. For example, the balance sheet of a capitalist firm estimates the value of goods in process and of fixed capital which has not yet been depreciated, as well as the value of inventories of finished commodities awaiting sale. Each of these aggregations of commodities has a value, usually expressed as the equivalent of a certain amount of money, but it is clear that neither goods in process nor fixed capital is money. Marx views the value of commodities in this sense as analytically prior to money; money can be explained according to Marx only on the basis of an understanding of the value of commodities.

Marx follows Smith in regarding value as the property of exchangeability of commodities. In a society where exchange is common, products come to have a dual character as use values and as values. They have two powers: first, to satisfy particular human needs and wants; and second, to exchange for other products. This second power can be thought of quantitatively, as an amount of exchangeability or command over other commodities. The classical economists viewed value as a real, though socially determined, entity, with its own laws of conservation and motion. Value in this sense bears the same relation to commodities as mass bears to physical objects.

It is not surprising that in societies where exchange is widespread value takes on an independent form as money, as an expression of general exchangeability. Value is a central social reality for people; they constantly think and talk about it directly or indirectly; they want some way to transfer it directly among themselves, separate from particular commodities. This is, I think, what we mean by “money.” It is the social expression of value separated from the concrete particularity of any use value.

With this emergence of money as the social expression of value, money stands, in opposition to commodities, as the abstract always stands in opposition to the particular. We will see value in two forms: as particular commodities, and as money. It is crucial to recognize that this development is latent in the commodity form itself. Insofar as commodity relations are well developed, so that exchange of products is common and people are forced willy nilly to consider the value of products separately from their use values, the money form of value will also be present. There is no reason to think of the commodity form emerging historically before the money form. To the degree that we see the first, we will see the second, or reasons why the emergence of money is suppressed in the concrete situation. What we see historically are very different stages of development of commodity relations, corresponding to different degrees of development of social production and to different forms of money.

These differences in levels of development may give the illusion of an historical emergence of money separate from, and subsequent to, the emergence of commodities. But in such cases what is at issue is the particular form of money, or the way in which value manifests itself in the particular society. Even transactions which are apparently barter transactions, in that the equivalents exchanged are both concrete commodities, may best be analyzed as degenerate monetary transactions, in which the parties estimate the abstract value of their respective products, and finding them equal, or nearly equal, are able to avoid transferring money itself.

Marx regards value, the general power of exchangeability that resides in commodities, as an expression of the labor expended in the production of the commodities. If we use the word “labor” for the more accurate phrase, “abstract, socially necessary, simple labor,” this theory suggests that the value in aggregate collections of commodities is proportional to the quantity of labor expended in their production.(1) This proportion is very important to the theory of money, because it implies that each unit of money value can be regarded as expressing a certain amount of labor time. In this paper I call this ratio the “value of money,” the amount of social labor time expressed on average by a unit of money. (This idea should not be confused with the concept of the “value of the money commodity”, which is the labor time embodied in a unit of a particular commodity that may be functioning as money.) The value of money is not the inverse of the wage rate in a capitalist system of production; it is the ratio of the total labor time expended to the total value added in the commodities produced. The average wage rate is the ratio of aggregate wages, which are only a part of the value added, to the total labor time.


Duncan K. Foley, “On Marx’s Theory of Money“, Social Concept 1(1), 5-19, 1983

  1. 06/04/2012 a las 02:36

    Lo mejor de Duncan Foley es su claridad y sencillez para explicar sus profundos análisis. Este artículo lo habia leído hacia 1998 e influye todavía en mi manera de ver a Marx. En lo que sí estoy muy distanciado de él es en su manera de interpretar la estadística matemática. Creo que con Enrique Dussel son dos baluartes del pensamiento crítico contemporáneo -admitiendo que me faltan muchos otros por conocer y leer-. Por eso me gusta esta página que presenta de manera renovada a muchos grandes analistas antiguos y nuevos sobre estos temas.

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