Karl Marx: Critique of Political Economy



Money as distinguished from coin is the result of the circuit C—M—C and constitutes the starting point of the circuit M—C—M, that is the exchange of money for commodities so as to exchange commodities for money. In the form C—M—C it is the commodity that is the beginning and the end of the transaction; in the form M—C—M it is money. Money mediates the exchange of commodities in the first circuit, the commodities mediates the evolution of money into money in the second circuit. Money, which serves solely as a medium in the first circuit, appears as the goal of circulation in the second, whereas the commodity, which was the goal in the first circuit, appears simply as a means in the second. Because money itself is already the result of the circuit C—M—C, the result of circulation appears to be also its point of departure in the form M—C—M. The exchange of material is the content of C—M—C, whereas the real content of the second circuit, M—C—M, is the commodity in the form in which it emerged from the first circuit.

In the formula C—M—C the two extremes are commodities of the same value, which are at the same time however qualitatively different use-values. Their exchange, C— C, is real exchange of material. On the other hand, in the formula M—C—M both extremes are gold and moreover gold of the same value. But it seems absurd to exchange gold for commodities in order to exchange commodities for gold, or if one considers the final result M— M, to exchange gold for gold. But if one translates M—C—M into the formula – to buy in order to sell, which means simply to exchange gold for gold with the aid of an intermediate movement, one will immediately recognise the predominant form of bourgeois production. Nevertheless, in real life people do not buy in order to sell, but they buy at a low price in order to sell at a high price. They exchange money for commodities in order then to exchange these for a larger amount of money, so that the extremes M, M are quantitatively different, even if not qualitatively. This quantitative difference presupposes the exchange of non-equivalents, whereas commodities and money as such are merely antithetical forms of the commodity, in other words, different forms of existence of the same value. Money and commodity in the circuit M—C—M therefore imply more advanced relations of production, and within simple circulation the circuit is merely a reflection of movement of a more complex character. Hence money as distinct from the medium of circulation must be derived from C—M—C, the immediate form of commodity circulation.

Gold, i.e., the specific commodity which serves as standard of value and medium of circulation, becomes money without any special effort on the part of society. Silver has not become money in England, where it is neither the standard of value nor the predominant medium of circulation, similarly gold ceased to be money in Holland as soon as it was deposed from its position of standard of value. In the first place, a commodity in which the functions of standard of value and medium of circulation are united accordingly becomes money, or the unity of standard of value and medium of circulation is money. But as such a unity gold in its turn possesses an independent existence which is distinct from these two functions. As the standard of value gold is merely nominal money and nominal gold; purely as a medium of circulation it is symbolic money and symbolic gold, but in its simple metallic corporeality gold is money or money is real gold.

Let us for a moment consider the commodity gold, that is money, in a state of rest and its relations with other commodities. All prices of commodities signify definite amounts of gold; they are thus merely notional gold or notional money, i.e., symbols of gold, just as, on the other hand, money considered as a token of value appeared to be merely a symbol of the prices of commodities.[1] Since all commodities are therefore merely notional money, money is the only real commodity. Gold is the material aspect of abstract wealth in contradistinction to commodities which only represent the independent form of exchange-value, of universal social labour and of abstract wealth. So far as use-value is concerned, each commodity represents only one element of physical wealth, only one separate facet of wealth, through its relation to a particular need. But money satisfies any need since it can be immediately turned into the object of any need. Its own use-value is realised in the endless series of use-values which constitute its equivalents. All the physical wealth evolved in the world of commodities is contained in a latent state in this solid piece of metal. Thus whereas the prices of commodities represent gold, the universal equivalent or abstract wealth, the use-value of gold represents the use-values of all commodities. Gold is, therefore, the material symbol of physical wealth. It is the "epitome of all things" (Boisguillebert), the compendium of social wealth. As regards its form, it is the direct incarnation of universal labour, and as regards its content the quintessence of all concrete labour. It is universal wealth in an individual form.[2] Functioning as a medium of circulation, gold suffered all manner of injuries, it was clipped and even reduced to a purely symbolical scrap of paper. Its golden splendour is restored when it serves as money The servant becomes the master.[3] The mere underling becomes the god of commodities. [4]

a. Hoarding

Gold as money was in the first place divorced from the medium of circulation because the metamorphosis of the commodity was interrupted and the commodity remained in the form of gold. This happens whenever a sale is not immediately turned into a purchase. The fact that gold as money assumes an independent existence is thus above all a tangible expression of the separation of the process of circulation or of the metamorphosis of commodities into two discrete and separate transactions which exist side by side. The coin itself becomes money as soon as its movement is interrupted. In the hands of the seller who receives it in return for a commodity it is money, and not coin; but when it leaves his hands it becomes a coin once more. Everybody sells the particular commodity which he produces, but he buys all other commodities that he needs as a social being. How often he appears on the market as a seller depends on the labour-time required to produce his commodity, whereas his appearance as a buyer is determined by the constant renewal of his vital requirements. In order to be able to buy without selling, he must have sold something without buying. The circuit C—M—C is indeed the dynamic unity of sale and purchase only in so far as it is simultaneously the continuous process of their separation. So that money as coin may flow continuously, coin must continuously congeal into money. The continual movement of coin implies its perpetual stagnation in larger or smaller amounts in reserve funds of coin which arise everywhere within the framework of circulation and which are at the same time a condition of circulation. The formation, distribution, dissolution and re-formation of these funds constantly changes; existing funds disappear continuously and their disappearance is a continuous fact. This unceasing transformation of coin into money and of money into coin was expressed by Adam Smith when he said that, in addition to the particular commodity he sells, every commodity-owner must always keep in stock a certain amount of the general commodity with which he buys. We have seen that M—C, the second member of the circuit C—M—C, splits up into a series of purchases, which are not effected all at once but successively over a period of time, so that one part of M circulates as coin, while the other part remains at rest as money. In this case, money is in fact only suspended coin and the various component parts of the coinage in circulation appear, constantly changing, now in one form, now in another. The first transformation of the medium of circulation into money constitutes therefore merely a technical aspect of the circulation of money.[5]

The first spontaneously evolved form of wealth consists of an overplus or excess of products, i.e. of the portion of products which are not directly required as use-values, or else of the possession of products whose use-value lies outside the range of mere necessity. When considering the transition from commodity to money, we saw that at a primitive stage of production it is this overplus or excess of products which really forms the sphere of commodity exchange. Superfluous products become exchangeable products or commodities. The adequate form of this surplus is gold and silver, the first form in which wealth as abstract social wealth is kept. It is not only possible to store commodities in the form of gold and silver, i.e., in the material shape of money, but gold and silver constitute wealth in preserved form. Every use-value fulfils its function while it is being consumed, that is destroyed, but the use-value of gold as money is to represent exchange-value, to be the embodiment of universal labour-time as an amorphous raw material. As amorphous metal exchange-value possesses an imperishable form. Gold or silver as money thus immobilised constitutes a hoard. In the case of nations with purely metallic currency, such as the ancients, hoarding becomes a universal practice extending from the individual to the State, which guards its State hoard. In Asia and Egypt, during their early period, these hoards were in the custody of kings and priests and served mainly as evidence of their power. In Greece and Rome the creation of State hoards became a principle of public policy, for excess wealth in this form is always safe and can be used at any moment. The rapid transfer of such hoards by conquerors from one country to another and their sudden effusion in part into the sphere of circulation are characteristics of the economy of antiquity.

As materialised labour-time gold is a pledge for its own magnitude of value, and, since it is the embodiment of universal labour-time, its continuous function as exchange-value is vouched for by the process of circulation. The simple fact that the commodity-owner is able to retain his commodities in the form of exchange-value, or to retain the exchange-value as commodities, makes the exchange of commodities, in order to recover them transformed into gold, the specific motive of circulation. The metamorphosis of commodities C—M takes place for the sake of their metamorphosis, for the purpose of transforming particular physical wealth into general social wealth. Change of form – instead of exchange of matter – becomes an end in itself. Exchange-value, which was merely a form, is turned into the content of the movement. Commodities remain wealth, that is commodities, only while they keep within the sphere of circulation, and they remain in this liquid state only in so far as they ossify into silver and gold. They remain liquid as the crystallisation of the process of circulation. But gold and silver establish themselves as money only in so far as they do not function as means of circulation. They become money as non-means of circulation. The withdrawal of commodities from circulation in the form of gold is thus the only means of keeping them continuously in circulation.

The owner of commodities can recover as money from circulation only as much as he put into it in the form of commodities. Looked at from the standpoint of the circulation of commodities, the first condition of hoarding is constant selling, the incessant throwing of commodities into circulation. On the other hand, money as a medium of circulation constantly disappears in the process of circulation itself, since it is all the time being realised in use-values and dissolved in ephemeral enjoyments. It must, therefore, be withdrawn from the stream of circulation; in other words commodities must be retained in the first stage of their metamorphosis in order to prevent money from functioning as means of purchase. The owner of commodities who has now become a hoarder of money must sell as much as possible and buy as little as possible, as even old Cato preached – patrem familias vendacem, non emacem esse. [The head of the family should be eager to sell, not eager to buy. Cato the Elder, De re rustica. – Ed.] Parsimony is the negative pre-condition of hoarding, just as industry is its positive pre-condition. The smaller the proportion that is withdrawn from circulation as an equivalent for the commodities [thrown into it] consisting of particular commodities or use-values, the larger the proportion that consists of money or exchange-value. [6] The appropriation of wealth in its general form therefore implies renunciation of the material reality of wealth. Hence the motive power of hoarding is avarice, which desires not commodities as use-values, but exchange-value as a commodity. So as to take possession of superfluous wealth in its general form, particular needs must be treated as luxuries and superfluities. For instance, in 1593 the Cortes sent a petition to Philip II, which among other matters contains the following passage:

"The Cortes of Valladolid requested Your Majesty in 1586 not to permit the further importation into this kingdom of candles, glassware, jewellery, knives and similar articles coming from abroad, which, though they are of no use to human life, have to be exchanged for gold, as though the Spaniards were Indians."

The hoarder of money scorns the worldly, temporal and ephemeral enjoyments in order to chase after the eternal treasure which can be touched neither by moths nor by rust, and which is wholly celestial and wholly mundane.

In the above-quoted work Misselden writes: "The general remote cause of our want of money is the great excesse of this Kingdom in consuming the Commodities of Forreine Countries, which prove to us discommodities, in hindering us of so much treasure, which otherwise would bee brought in, in lieu of those toyes.... Wee ... consume amongst us, that great abundance of the Wines of Spaine, of France, of the Rhene, of the Levant ... the Raisins of Spaine, the Corints of the Levant, the Lawnes and Cambricks of Hannaults ... the Silkes of Italie, the Sugers and Tobaco of the West Indies, the Spices of the East Indies: All which are of no necessetie unto us, and yet are bought with ready mony." [7]

Wealth in the shape of gold and silver is imperishable because exchange-value is represented by an indestructible metal and especially because gold and silver are prevented from functioning as means of circulation and thus from becoming a merely transient monetary aspect of commodities. The perishable content is thus sacrificed to the nonperishable form.

"Suppose that Money be taken (by means of Taxation) from one who spendeth the same ... in superfluous eating and drinking, or any other perishing Commodity; and the same transferred to one that bestoweth it on Cloaths. I say, that even in this case the Commonwealth hath some little advantage; because Cloaths do not altogether perish so soon as Meats and Drinks. But if the same be spent in Furniture of Houses, the advantage is yet a little more, if in Building of houses yet more; if in improving of Lands, working of Mines, Fishing, etc. yet more; but most of all, in bringing Gold and Silver into the Country; because those things are not only not perishable, but are esteemed for Wealth at all times and every where; whereas other Commodities [which are perishable, or whose value depends upon the Fashion; or which are contingently scarce and plentiful,] are Wealth, but pro hic et nunc." [At a particular place and a particular time. – Ed.] [8]

An outward expression of the desire to withdraw money from the stream of circulation and to save it from the social metabolism is the burying of it, so that social wealth is turned into an imperishable subterranean hoard with an entirely furtive private relationship to the commodity-owner. Doctor Bernier, who spent some time at Aurangzeb's court at Delhi, relates that merchants, especially non-Moslem heathens, in whose hands nearly the entire commerce and all money are concentrated – secretly bury their money deep in the ground,

"being held in thrall to the belief that the money they hide during their lifetime will serve them in the next world after their death." [9]

Incidentally, in so far as the hoarder of money combines asceticism with assiduous diligence he is intrinsically a Protestant by religion and still more a Puritan.

"It cannot be denied that buying and selling are necessary practices, which cannot be dispensed with and may surely be used in a Christian manner, especially as regards things that serve necessity and honour; for thus cattle, wool, corn, butter, milk and other goods were bought and sold by the patriarchs. These are gifts of God, which He produces from the soil and divides among men. But foreign trade, which brings merchandise from Calicut and India and other places – merchandise such as precious silks and jewellery and spices, which are used only for display and serve no need – and drains money from the country and the people, should not be permitted if we had a government and princes. But I do not want to write of this now, for I consider that in the end when we have no more money, it will have to be abandoned, and finery and gluttony as well; for all writing and preaching will be in vain until we are compelled by necessity and poverty."[10]

Even in advanced bourgeois societies hoards of money are buried at times of upheaval in the social metabolic process. This is an attempt to save social cohesion – for the commodity-owner this cohesion is represented by the commodity and the adequate embodiment of the commodity is money – in its compact form from the social movement. The social sinews of things are buried alongside the body whose sinews they are.

If the hoard were not constantly in tension with circulation, it would now simply be a heap of useless metal, its monetary soul would have disappeared and nothing but burnt-out ashes of circulation, its caput mortuum, would remain. Money, i.e., exchange-value which has assumed an independent existence, is by nature the embodiment of abstract wealth; but, on the other hand, any given sum of money is a quantitatively finite magnitude of value. The quantitative delimitation of exchange-value conflicts with its qualitative universality, and the hoarder regards the limitation as a restriction, which in fact becomes also a qualitative restriction, i.e., the hoard is turned into a merely limited representation of material wealth. Money as the universal equivalent may be directly expressed, as we have seen, in terms of an equation, in which it forms one side while the other side consists of an endless series of commodities. The degree in which the realisation of exchange-value approaches such an infinite series, in other words how far it corresponds to the concept of exchange-value, depends on its magnitude. After all, movement of exchange-value as such, as an automaton, can only be expansion of its quantitative limits. But in passing one set of quantitative limits of the hoard new restrictions are set up, which in turn must be abolished. What appears as a restriction is not a particular limit of the hoard, but any limitation of it. The formation of hoards therefore has no intrinsic limits, no bounds in itself, but is an unending process, each particular result of which provides an impulse for a new beginning. Although the hoard can only be increased by being preserved, on the other hand it can only be preserved by being increased.

Money is not just an object of the passion for enrichment, it is the object of it. This urge is essentially auri sacra fames. [The accursed greed for gold. – Ed.] The passion for enrichment by contrast with the urge to acquire particular material wealth, i.e., use-values, such as clothes, jewellery, herds of cattle, etc., becomes possible only when general wealth as such is represented by a specific thing and can thus be retained as a particular commodity. Money therefore appears both as the object and the source of the desire for riches. [11] The underlying reason is in fact that exchange-value as such becomes the goal, and consequently also an expansion of exchange-value. Avarice clings to the hoard and does not allow money to become a medium of circulation, but greed for gold preserves the monetary soul of the hoard and maintains it in constant tension with circulation.

The activity which amasses hoards is, on the one hand, the withdrawal of money from circulation by constantly repeated sales, and on the other, simple piling up, accumulation. It is indeed only in the sphere of simple circulation, and specifically in the form of hoards, that accumulation of wealth as such takes place, whereas the other so-called forms of accumulation, as we shall see later, are quite improperly, and only by analogy with simple accumulation of money, regarded as accumulation. All other commodities are accumulated either as use-values, and in this case the manner of their accumulation is determined by the specific features of their use-value. Storing of corn, for example, requires special equipment; collecting sheep makes a person a shepherd; accumulation of slaves and land necessitates relations of domination and servitude, and so on. Unlike the simple act of piling things up, the formation of stocks of particular types of wealth requires special methods and develops special traits in the individual. Or wealth in the shape of commodities may be accumulated as exchange-value, and in this case accumulation becomes a commercial or specifically economic operation. The one concerned in it becomes a corn merchant, a cattle-dealer, and so forth. Gold and silver constitute money not as the result of any activity of the person who accumulates them, but as crystals of the process of circulation which takes place without his assistance. He need do nothing but put them aside, piling one lot upon another, a completely senseless activity, which if applied to any other commodity would result in its devaluation.[12]

Our hoarder is a martyr to exchange-value, a holy ascetic seated at the top of a metal column. He cares for wealth only in its social form, and accordingly he hides it away from society. He wants commodities in a form in which they can always circulate and he therefore withdraws them from circulation. He adores exchange-value and he consequently refrains from exchange. The liquid form of wealth and its petrification, the elixir of life and the philosophers' stone are wildly mixed together like an alchemist's apparitions. His imaginary boundless thirst for enjoyment causes him to renounce all enjoyment. Because he desires to satisfy all social requirements, he scarcely satisfies the most urgent physical wants. While clinging to wealth in its metallic corporeality the hoarder reduces it to a mere chimaera. But the accumulation of money for the sake of money is in fact the barbaric form of production for the sake of production, i.e., the development of the productive powers of social labour beyond the limits of customary requirements. The less advanced is the production of commodities, the more important is hoarding – the first form in which exchange-value assumes an independent existence as money – and it therefore plays an important role among ancient nations, in Asia up to now, and among contemporary agrarian nations, where exchange-value has not yet penetrated all relations of production. Before, however, examining the specific economic function that hoarding fulfils in relation to metallic currency, let us note another form of hoarding.

Gold and silver articles, quite irrespective of their aesthetic properties, can be turned into money, since the material of which they consist is the material of money, just as gold coins and gold bars can be transformed into such articles. Since gold and silver are the material of abstract wealth, their employment as concrete use-values is the most striking manifestation of wealth, and although at certain stages of production the commodity-owner hides his treasures, he is impelled to show to other commodity-owners that he is a rich man, whenever he can safely do so. He bedecks himself and his house with gold.[13] In Asia, and India in particular, where the formation of hoards does not play a subordinate part in the total mechanism of production, as it does in bourgeois economy, but where this form of wealth is still considered a final goal, gold and silver articles are in fact merely hoards in an aesthetic form. The law in mediaeval England treated gold and silver articles simply as a kind of treasure-hoard, since the rough labour applied to them added little to their value. They were intended to be thrown again into circulation and the fineness of the metal of which they were made was therefore specified in the same way as that of coin. The fact that increasing wealth leads to an increased use of gold and silver in the form of luxury articles is such a simple matter that ancient thinkers[14] clearly understood it, whereas modern economists put forward the incorrect proposition that the use of silver and gold articles increases not in proportion to the rise in wealth but in proportion to the fall in the value of precious metals. There is therefore always a flaw in their otherwise accurate explanations regarding the use of Californian and Australian gold, for according to their views the increased employment of gold as raw material is not justified by a corresponding fall in its value. As a result of the fight between the American colonies and Spain and the interruption of mining by revolutions, the average annual output of precious metals decreased by more than one-half between 1810 and 1830. The amount of coin circulating in Europe decreased by almost one-sixth in 1829 as compared with 1809. Although the output thus decreased and the costs of production (provided they changed at all) increased, nevertheless an exceptionally rapid rise in the use of precious metals as articles of luxury took place in England even during the war and on the continent following the Treaty of Paris. Their use increased with the growth of wealth in general.[15] It may be regarded as a general law that the conversion of gold and silver coin into luxury goods predominates in times of peace, while their reconversion into bars and also into coin only predominates in turbulent periods.[16] How considerable a proportion of the gold and silver stock exists in the shape of luxury articles compared with the amount used as money is shown by the fact that in 1829, according to Jacob, the ratio was as 2 to 1 in England, while in Europe as a whole and America, 25 per cent more precious metal was used in luxury goods than in coins.

We have seen that the circulation of money is merely a manifestation of the metamorphosis of commodities, or of the transformation which accompanies the social metabolism. The total quantity of gold in circulation must therefore perpetually increase or decrease in accordance with the varying aggregate price of the commodities in circulation, that is in accordance, on the one hand, with the volume of their metamorphoses which take place simultaneously and, on the other hand, with the prevailing velocity of their transformation. This is only possible provided that the proportion of money in circulation to the total amount of money in a given country varies continuously. Thanks to the formation of hoards this condition is fulfilled. If prices fall or the velocity of circulation increases, then the money ejected from the sphere of circulation is absorbed by the reservoirs of hoarders; if prices rise or the velocity of circulation decreases, then these hoards open and a part of them streams back into circulation. The solidification of circulating money into hoards and the flowing of the hoards into circulation is a continuously changing and oscillating movement, and the prevalence of the one or the other trend is solely determined by variations in the circulation of commodities. The hoards thus act as channels for the supply or withdrawal of circulating money, so that the amount of money circulating as coin is always just adequate to the immediate requirements of circulation. If the total volume of circulation suddenly expands and the fluid unity of sale and purchase predominates, so that the total amount of prices to be realised grows even faster than does the velocity of circulation of money, then the hoards dwindle visibly; whenever an abnormal stagnation prevails in the movement as a whole, that is when the separation of sale from purchase predominates, then the medium of circulation solidifies into money to a remarkable extent and the reservoirs of the hoarders are filled far above their average level. In countries which have purely metallic currency or are at an early stage of development of production, hoards are extremely fragmented and scattered throughout the country, whereas in advanced bourgeois countries they are concentrated in the reservoirs of banks. Hoards must not be confused with reserve funds of coin, which form a constituent element of the total amount of money always in circulation, whereas the active relation of hoard and medium of circulation presupposes that the total amount of money decreases or increases. As we have seen, gold and silver articles also act both as channels for the withdrawal of precious metals and latent sources of supply. Under ordinary circumstances only the former function plays an important role in the economy of metallic currency.[17]


[1.] "Not only are precious metals tokens of things ... but alternatively things ... are also tokens of gold and silver." A. Genovesi, Lezioni di Economia Civile, 1765, in Custodi, Parte Moderna, t. VIII, p. 281

[2.] Gold and silver are "universal wealth". Petty, Political Arithmetick, p. 242

[3.] E. Misselden, Free Trade, or the Means to Make Trade Florish, London, 1622. "The natural matter of Commerce is Merchandize, which Merchants from the end of Trade have stiled Commodities. The Artificiall matter of Commerce is Money, which hath obtained thc title of sinewes of Warre and of State.... Money, though it be in nature and time after Merchandize, yet forasmuch as it is now in use become the chiefe" (p. 7). He compares the position of commodity and money with that of the descendents of "Old Jacob", who "blessing his Grandchildren, crost his hands, and laide his right hand on the yonger, and his left hand on the elder" (I.c.). Boisguillebert, Dissertation sur ia nature des richesses. "Thus the slave of commerce has become its master.... The misery of the peoples is due to the fact that the slave has been turned into a master or rather into a tyrant" (pp. 395, 399).

[4.] "These metals (gold and silver) have been turned into idols, and disregarding the goal and purpose they were intended to fulfil in commerce, i.e., to serve as tokens in exchange and reciprocal transfer, they were allowed to abandon this service almost entirely in order to be transformed into divinities to whom more goods, important needs and even human beings were sacrificed and continue to be sacrificed, than were ever sacrificed to the false divinities even in blind antiquity..:' (Boisguillebcrt, o.p. cit.. p. 395)

[5.] Boisguillebert suspects that the first immobilisation of the perpetuum mobile, i.e., the negation of its function as the medium of circulation, will immediately render it independent in relation to commodities. Money, he says, must be "in constant motion, which is only the case so long as it moves, but as soon as it becomes immobile all is lost" (Boisguillebert, Le détail de la France, p. 213). What he overlooks is that this inactivity is the prerequisite of its movement. What he actually wants is that the value form of commodities should be a quite insignificant aspect of their metabolism, but should never become an end in itself.

[6.] "The more the stock ... is ... encreased in wares, the more it decreaseth in treasure." E. Misselden, op. cit., p. 23

[7.] E. Misselden, op. cit., pp. 11-13 passim.

[8.] Petty, Political Arithmetick, p. 196

[9.] Francois Bernier, Voyages contenant la description des états du Grand Mogol, Paris edition of 1830, t. 1, cf. pp. 312-14

[10.] Doctor Martin Luther, Bucher vom Kaufhandel und Wucher, 1524. Luther writes in the same passage: "God has brought it about that we Germans must thrust our gold and silver into foreign countries making all the world rich while we ourselves remain beggars. England would surely have less gold if Germany refused to take her cloth, and the King of Portugal, too, would have less, if we refused to take his spices. If you calculate how much money is extracted, without need or cause from the German territories during one fair at Frankfurt, you will wonder how it comes about that even a single farthing is still left in Germany. Frankfurt is the silver and gold drain through which everything that arises and grows, that is minted or struck here flows out of the country; if this hole were plugged one would not hear the present complaint that there is everywhere unmitigated debts and no money, that the entire country and all the towns are despoilt by usury. But never mind things will nevertheless continue in this way: we Germans have to remain Germans, we do not desist unless we have to."
          In the above-quoted work Misselden wants gold and silver to be retained at all events within the bounds of Christendom: "The other forreine remote causes of the want of money, are the Trades maintained out of Christendome to Turky, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendome within it selfe. For although the trades within Christendome are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendome. There is indeede a fluxus and refluxus, a flood and ebbe of the monies of Christendome traded within it selfe; for sometimes there is more in one part of Christendome, sometimes there is lesse in another, as one Countrey wanteth and another aboundeth: It cometh and goeth, and wirleth about the Circle of Christendome, but is still contained within the compasse thereof. But the money that is traded out of Christendome into the parts aforesaid is continually issued out and never returneth againe.

[11.] "But from money first springs avarice ... this grows by stages into a kind of madness, no longer merely avarice but a positive hunger for gold." (Plinius, Historia naturalis, L. XXXIII, C. III.)

[12.] Horace, therefore, knows nothing of the philosophy of hoarding treasures, when he says (Satir. L. II, Satir. III): "If a man were to buy harps, and soon as bought were to pile them together, though feeling no interest in the harp or any Muse; if, though no cobbler, he did the same with shoes, knives and lasts; with ships' sails, though set against a trader's life – everyone would call him crazy and mad, and rightly too. How differs from these the man who hoards up silver and gold, though he knows not how to use his store, and fears to touch it as though hallowed?" [Horace, Satires, Epistles, Ars Poetica, London, 1942, p. 163.]
          Mr. Senior knows more about the subject:
         "Money seems to be the only object for which the desire is universal; and it is so, because money is abstract wealth. Its possessor may satisfy at will his requirements whatever they may be." Principes fondamentaux de l'économie politique, traduit par le Comte Jean Arrivabene, Paris, 1836, p. 221 [The English passage is taken from Senior Political Economy, 1850, p. 27]. And Storch as well: "As money represents all other forms of wealth, one needs only to accumulate it in order to obtain all other kinds of wealth that exist on earth" (op. cit., t. II, p. 135)

[13.] How little the inner man of the individual owner of commodities has changed even when he has become civilised and turned into a capitalist is for instance proved by a London representative of an international banking house who displayed a framed £100,000 note as an appropriate family coat of arms. The point in this case is the derisory and supercilious air with which the note looks down upon circulation.

[14.] See the passage from Xenophon quoted later

[15.] Jacob, op. cit., Vol. 11, ch. 25 and 26

[16.] "In times of great agitation and insecurity, especially during internal commotions or invasions, gold and silver articles are rapidly converted into rnoney; whilst, during periods of tranquillity and prosperity, money is converted into plate and jewellery" (op. cit., Vol. II, p. 357).

[17.] In the following passage Xenophon discusses money and hoard, two specific and distinct aspects of money: "Of all operations with which I am acquainted, this is the only one in which no sort of jealousy is felt at a further development of the industry ... the larger the quantity of ore discovered and the greater the amount of silver extracted, the greater the number of persons ready to engage in the operation.... No one when he has got sufficient furniture for his house dreams of making further purchases on this head, but of silver no one ever yet possessed so much that he was forced to cry 'Enough'. On the contrary, if ever anybody does become possessed of an immoderate amount he finds as much pleasure in digging a hole in the ground and hoarding it as an actual employment of it.... When a state is prosperous there is nothing which people so much desire as silver. The men want money to expend on beautiful armour and fine horses, and houses and sumptuous paraphernalia of all sorts. The women betake themselves to expensive apparel and ornaments of gold. Or when states are sick, either through barrenness of corn and other fruits, or through war, the demand for current coin is even more imperative (whilst the ground lies unproductive), to pay for necessaries or military aid." (Xenophon De Vectigalibus, C. IV [transl. by H. G. Dakyns, London, 1892, Vol. II, pp. 33i-36].) In Ch. 9, Book I of his Politics, Aristotle sets forth the two circuits of circulation C—M—C and M—C—M, which he calls "economics" and "Chrematistics", and their differences. The two forms are contrasted with each other by the Greek tragedians, especially Euripides.