What is money? While it seems like that question might have an easy answer, it’s actually much more nuanced than just “what I use to buy stuff”. Money is, in essence, a commodity. We’ll return to commodities later, but for now, just know that money is in the same class as wheat, flour, bolts of cloth, and really anything you could assign value to as an object or service that’s being sold. What places money here is its usage as a signifier for exchange value. While money seems separate from what we use it to buy, it’s actually more complex than that. The dollars you use to buy your groceries are no different than the groceries you’re buying economically, but what does that mean?
When we talk about money, we’re used to the owning-class analysis setting it aside as something that just holds value. A signifier of wealth and exchange, but nothing more. Marx disagrees in Capital vol. 1, and states that money itself is a commodity that has taken a universal role in exchange. When all other goods’ value for exchange is expressed in another, singular commodity, that commodity goes through two things.
Firstly, its value becomes redundant. One dollar is worth exactly that, one dollar. While there are different exchange rates between different currencies, the placement of that currency in its country or countries’ economy places it in the money form. Before fiat currency, the current system we have today, gold was the standard of money, and dollars were representative of gold’s value, not the inherent natural value of the currency. Each currency could be thought of as different ways to quantify gold, where a dollar was worth a certain amount of gold by weight. Marx explains this again in Capital, saying exactly that. While Capital was written to explain the economic system of Great Britain during the time of Marx, this still reigns true, with the US dollar, the Euro, and the Yuan being the standard that other currencies are reliant on their stability in the best case, and tied to by value in the worst case.
Secondly, it becomes elevated to a universal exchange object. Money is the only way value can effectively be expressed. We as an economy find it extremely hard to express value in other commodities. Even if we could theoretically express everything in, let’s say bolts of cloth, that would then become the money for that society. No matter what the commodity in question is, as soon as other objects’ value is measured by it en masse, it is money. While we may joke that Americans will measure things in everything but the metric system, we have to reconcile that money is value in the commodity form.
Since exchange is expressed now in other commodities, as we have just shown that money is a commodity, exchange itself can be seen as the movement of commodities between owners, with money acting the same way as any other commodity, but this all hinges on what a commodity is. A commodity in the Marxist sense is a good or service created or done not out of necessity, but out of a desire to have something to exchange. An item can be an item without being a commodity, and can even be exchanged without becoming a commodity, but a commodity is always created for exchange. What I mean by this is that you can make an object and even trade it, but when you begin making and trading objects solely to gain value through exchange, it becomes a commodity.
Lets, for example, take another bolt of cloth. It can be created to be used, either by the weaver or by someone else, or, conversely, it can be created to make a profit, regardless of when it would be used. In the first case, this would just be a good, and exchanging it to someone who needs and asks for it would be just that, exchanging a good for another good. In the second case, however, the cloth becomes a commodity, as its primary usage is for trade only. Again, in Capital, Marx explains that this form of production, the creation of objects solely for exchange, leads to a drive to overproduce. Businesses need stock to sell to make profit, but to grow and gain more exchange value, or in this case, capital, they are required to create more, sell more, and create more markets. This leads to worker exploitation, imperialism, and elite control of the economy.