its product consequently capable of satisfying the needs of others” (179–80).
This argument as to the socially necessary institutional and legal structure required for capitalism to work is historically specific. Failure to recognize the historical specificity of the bourgeois conception of rights and duties leads to serious errors. It is for this reason that Marx registers, in a lengthy footnote, a vigorous indictment of the anarchist Proudhon,
who creates his idea of justice, of ‘justice éternelle’, from the juridical relations that correspond to the production of commodities: he thereby proves, to the consolation of all good petty bourgeois, that the production of commodities is a form as eternal as justice. Then he turns round and seeks to reform the actual production of commodities, and the corresponding legal system, in accordance with this ideal. (178, n. 2)
Proudhon in effect took the specifics of bourgeois legal and economic relations and treated them as universal and foundational for the development of an alternative, socially just economic system. From Marx’s standpoint, this is no alternative at all since it merely re-inscribes bourgeois conceptions of value in a supposedly new form of society. This problem is still with us, not only because of the contemporary anarchist revival of interest in Proudhon’s ideas but also because of the rise of a more broad-based liberal human rights politics as a supposed antidote to the social and political ills of contemporary capitalism. Marx’s critique of Proudhon is directly applicable to this contemporary politics. The UN Universal Declaration of Human Rights of 1948 is a foundational document for a bourgeois, market-based individualism and as such cannot provide a basis for a thoroughgoing critique of liberal or neoliberal capitalism. Whether it is politically useful to insist that the capitalist political order live up to its own foundational principles is one thing, but to imagine that this politics can lead to a radical displacement of a capitalist mode of production is, in Marx’s view, a serious error.
What follows is a recapitulation—and Marx frequently reiterates earlier arguments in somewhat different language—of the way in which money “crystallizes out of the process of exchange” in an institutional environment of this sort. He echoes this theme when he describes money as “the historical broadening and deepening of the phenomenon of exchange” that “develops the opposition between use-value and value which is latent in the nature of the commodity”:
The need to give an external expression to this opposition for the purposes of commercial intercourse produces the drive towards an independent form of value, which finds neither rest nor peace until an independent form has been achieved by the differentiation of commodities into commodities and money. At the same rate, then, as the transformation of the products of labour into commodities is accomplished, one particular commodity is transformed into money. (181)
There is nothing here that we have not already seen in earlier sections, but now Marx expounds on what this economic relation between things implies for relations between people. This economy of market exchange, he says, implies that we are dealing with “the private owners” of “alienable things,” and this in turn implies that we have “persons who are independent of each other.” “Alienable” refers to the fact that “things are in themselves external to man,” i.e., freely exchangeable. This means that the exchangers are free of any personal attachment or other bond to the things they own. It also implies social relationships “of reciprocal isolation and foreignness” that are unique to capitalism and a concomitant of juridical ownership of commodities (182).
Such conditions did not prevail in the “patriarchal family, an ancient Indian commune or an Inca State”; exchange processes had to break down these preceding social structures. This happens gradually, he suggests, as occasional trade between communities evolves to the point where “the constant repetition of exchange makes it a normal social process” (182):
In the same proportion as exchange bursts its local bonds [note the implication of geographical expansion], and the value of commodities accordingly expands more and more into the material embodiments of human labour as such, in that proportion does the money-form become transferred to commodities which are by nature fitted to perform the social function of a universal equivalent. These commodities are the precious metals. (183)
This is, as I have already pointed out, a somewhat dubious historical argument about the dissolution of preexisting social forms in the face of increasing exchange relations and the rise of money-forms. But its logical content is important for demonstrating that what is socially necessary is “an adequate form of appearance of value,” and that requirement is best satisfied by precious metals such as gold and silver by virtue of their natural qualities. But, as he earlier pointed out, this means that the money commodity internalizes a duality, because it is both a commodity in the ordinary sense of being a product of labor and it also “acquires a formal use-value, arising out of its specific social function.” In this formal social function, “the money-form is merely the reflection thrown upon a single commodity by the relations between all other commodities” (183).
Furthermore, in this role it is perfectly possible to replace the money commodity “by mere symbols of itself.” This capacity for replacement is not surprising, however, given that “every commodity is a symbol, since, as value, it is only the material shell of the human labour expended on it” (185–6). Marx here opens up the possibility to incorporate many aspects of what is now often referred to as “the symbolic economy” directly into his analysis. He does not attempt to do so, and it would undoubtedly require modifications to the mode of presentation, but I think it important to note that the symbolic aspects of how capitalism works are not external to his argument. Those who argue that capitalism is different now because of the degree to which symbolic capital and the symbolic economy have come to the fore, and that capitalism has consequently changed its spots, should mark well that this is not necessarily so.
The danger lies in treating these symbolic qualities, which are very important, as purely imaginary or as “the arbitrary product of human reflection.” What Marx is driving at here is that even the money commodity cannot realize its specific value without exchanging with all other commodities as equivalents, even as it postures as the universal equivalent for all other commodities. “The difficulty,” he says, “lies not in comprehending that money is a commodity, but in discovering how, why and by what means a commodity becomes money” (186):
What appears to happen is not that a particular commodity becomes money because all other commodities universally express their values in it, but, on the contrary, that all other commodities universally express their values in a particular commodity because it is money. (187, emphasis added)
In other words, once money exists, then commodities find a means of measuring their value easily to hand as if the gold drawn “from the bowels of the earth” is “the direct incarnation of human labour.” This, he declares, is “the magic of money” that needs to be unpacked. “The riddle of the money fetish is therefore the riddle of the commodity fetish, now become visible and dazzling to our eyes” (187).
But there is one other vital point to this chapter. With the “magic” and “fetish” of money firmly in place,
men are henceforth related to each other in their social process of production in a purely atomistic way. Their own relations of production therefore assume a material shape which is independent of their control and their conscious individual action. (187)
This sounds suspiciously like a tacit invocation of Adam Smith’s vision of a perfectly functioning market whose hidden hand guides individual decisions. No individual is in command and everyone has to function according to what Marx later calls “the coercive laws of competition” (433).
In Smith’s ideal world, the state would create the institutional framework for perfectly functioning markets and private property and then watch the wealth of the state and the welfare of the citizenry rapidly improve as individual
