The measure of values

With regard to money as the measure of values, the values of commodities are:

presented as qualitatively equal (all in gold);

quantitatively comparable.

However,

it is not money that makes commodities commensurable (they are commensurable as values);

rather, money is the necessary form of appearance of the values of commodities.

The price form and the measure of prices

The price formThe value of commodities is ideally expressed in the money commodity. Real money is not required. A price tag is sufficient for communicating prices.

The measure of pricesA certain gold weight, which serves as the unit of measurement for the amount of gold, for example 1 ounce.

Value and price

Price is the money-name of the labour objectified

in a commodity.(pp. 195–96)

However, price and value are not identical!

Valueexpresses the relation between individually expended labour time and the total labour of society.

Priceexpresses the exchange relation between a commodity and the money commodity.

C M

Transformation of commodity into money: sale

Complications in the metamorphosis of the commodity

C – M – C = The process of exchange

Transformation of money into commodity: purchase

M C

C M

M C

Economic characters

C – M – C = The process of exchange

seller buyer

buyer seller

C C

The exchange of products and commodity circulation

Exchange of products

Commodity circulationC M C

The circulation of commodities differs from the direct exchange of products not only in

form, but in its essence.(p. 207)

The possibility of crisis

These forms [the poles of the metamorphosis of the commodity]

therefore imply the possibility of crises, though no more than the possibility. For the development

of this possibility into a reality a whole series of conditions is required, which do not yet

even exist from the standpoint of the simple circulation of commodities.

(p. 209)

The circulation of money

vP M=

the quantity of money functioning as the circulating medium

sum of commodity prices

speed of money’s turnover

=

Coins and symbols of value

Paper bills issued by the state, as a replacement for gold coins (legal tender)

Gold coins, which function as money

Money as money

hoarding

means of payment

international currency

C M

Hoarding

M C

The seller becomes a hoarder

C promise to pay

Money as means of payment

creditor debtor

money = means of payment

Another possibility of crisis

There is a contradiction immanent in the function of money as

the means of payment. When the payments balance each other, money functions only

nominally, as money of account, as a measure of value. But when actual payments have to be made,

money does not come onto the scene as a circulating medium […], but as the […] universal

commodity. This contradiction bursts forth in that aspect of an industrial and commercial crisis which is known

as a monetary crisis.(pp. 235–36)

International currency

When money leaves the domestic sphere of circulation it loses

the local functions it has acquired there, as the standard of prices, coin, and small

change, and as a symbol of value, and falls back into its original form as precious metal

in the shape of bullion. (p. 240)