[00:00] (bright music)
[00:12] - We ended without talking
about money's four functions.
[00:15] Money as a measure of value,
as a means of circulation,
[00:18] as a store of value and
as a means of payment.
[00:21] There are other related
functions like standard of price.
[00:26] Standard of price simply
means what you're paying in,
[00:32] so and so many dollars.
[00:34] The price will be counted in dollars.
[00:37] The price will be counted in gold.
[00:38] That's a function of the money.
[00:40] It tells you that you're
not gonna be paying
[00:42] in calorie shells or,
[00:46] locks of your hair.
[00:50] That's as a standard of price.
[00:53] As a measure of value
[00:55] it's more substantial.
[01:01] The measure of value is talking
[01:02] about not the particular
content of the measure of value,
[01:07] that is the price.
[01:08] The price is the content
of the measure of value.
[01:10] It just tells you that money
functions to measure value.
[01:16] Okay?
[01:17] Marx is not gonna talk
about how you arrive
[01:19] at specific prices
[01:21] and it turns out the factors
involved in this specific price
[01:25] are too much for even him to calculate
[01:27] or anyone to calculate in advance.
[01:30] There are many factors,
it's highly contingent.
[01:32] They go up and down,
[01:33] but value is still the main determinant.
[01:36] Makes up the body of the price
[01:38] and the the clothing of the
price changes minute by minute,
[01:42] day by day.
[01:45] You can get to where he works
that out in volume three.
[01:47] So, if you stick with me for
the next couple of years.
[01:51] Money as a measure of value
[01:53] is related to money as
a standard of price.
[01:55] It's because that money
[01:57] has stepped out of the commodity
world, become independent
[02:01] and serves only now its main function
[02:05] as being the value of those commodities,
[02:09] as being able to hold the value,
[02:10] as being able to transport the value
[02:13] and also being able to measure
the value in its units.
[02:18] (clears throat)
[02:19] So, first he talks
about a measure of value
[02:21] as values, form of appearance.
[02:26] The determining reflection,
[02:28] the value mirror for labor time.
[02:31] Money as the measure of
value allows the value
[02:34] of any commodity to appear just
like the equivalent formed.
[02:38] It is an equivalent.
[02:39] It's the universal equivalent.
[02:41] It is the mirror.
[02:42] So, if you wanna know what
the value of something is,
[02:44] you can't give me more of that thing.
[02:47] It would be ridiculous to say
[02:48] the value of a banana is a banana,
[02:51] or the value of a ton of
iron is a ton of iron.
[02:56] You have to give it
either in something else
[02:58] or when the system becomes complex enough,
[03:01] you give it in money
[03:03] and the money will tell
you what the value is,
[03:05] tell you that there is value
and will represent that value.
[03:10] So, money as a measure of
value becomes the denominator
[03:16] for all commodities.
[03:17] Iron over gold, wheat over gold,
[03:21] locks of hair over gold
[03:23] and education over gold.
[03:27] It's what he calls the value
expression for a commodity.
[03:30] So, you need to know
these different terms.
[03:31] Again, he's not really laying out
[03:34] a scientifically finished system.
[03:36] He's trying to figure out how it works
[03:39] in the third or fourth iteration here,
[03:42] and figure out how to express it to you
[03:43] in ways you will understand.
[03:45] So, if you think it's one analogy too many
[03:49] or one opposite phrase too many,
[03:53] you can just leave them aside.
[03:55] But money is the value
expression for a commodity.
[03:59] It is the money form of that commodity
[04:02] and that's what measure of value means.
[04:05] It both represents the value
[04:07] and it represents the amount of value,
[04:09] which is the most important
[04:10] and only quality of value
is that it has an amount.
[04:21] One thing that happens here, however,
[04:22] is commodity gets a money name
[04:26] or money gets a money name like pounds
[04:28] and you say, what is the
value of this commodity?
[04:30] Well, it's worth so and so many pounds
[04:33] or it's worth so and so many dollars.
[04:35] This money name,
[04:38] things have a name, they have a form
[04:40] and they have a content.
[04:41] For Marx, this is the way
his philosophical vocabulary
[04:45] is being developed.
[04:47] A name,
[04:49] a form, and a content.
[04:50] The money name,
[04:52] and he's a little bit suspicious of names,
[04:54] they can do both things.
[04:56] They can express something,
[04:58] but they can also conceal something
[05:00] and the money name conceals
this entire process.
[05:03] We say 10 bucks, 10 bucks.
[05:06] I'll give you this thing for 10 bucks.
[05:08] Gimme that thing for 10 bucks
[05:09] and the 10 bucks comes to stand in
[05:11] for the whole ontological machination
[05:14] that makes something into a value.
[05:19] Money is a real concealer
[05:21] and you should remember that
what expresses also conceals
[05:27] because it only expresses something.
[05:29] It's very particular capitalistic,
[05:32] semiotics or capitalistic aesthetics
[05:35] is always made to express
something in particular
[05:38] and hide the rest.
[05:42] (clears throat)
[05:44] Money as a means of circulation.
[05:45] We're just about to overcome all of these.
[05:47] These are, by the way, not
things that Marx invented,
[05:51] they're things that he
found in political economy
[05:53] and he's about to do a critique of it,
[05:55] but calling them insufficient
for understanding capital.
[05:57] Any of them can be working
in other systems and were,
[06:01] the way they work together,
[06:03] plus one extra factor, the extra,
[06:07] the more the surplus,
[06:09] which is what the capital system
is aiming for its purpose.
[06:14] Constitutes his critique
of political economy.
[06:16] They forgot where the more comes from.
[06:18] All of this just explains
value in an equivalent system
[06:21] that circulates around and
doesn't make any more of itself.
[06:26] So, we're working between
chapters three and four.
[06:28] Chapter four is one of
my favorite chapters,
[06:30] really revelatory,
[06:31] especially in the last four or five pages.
[06:34] But we need to understand
how these work so we can see
[06:38] how central money is to
the capitalist economy,
[06:41] capitalistic economy,
[06:43] and how it changes its nature.
[06:47] So, second, money has been traditionally
[06:50] a means of circulation.
[06:51] It facilitates the form change
[06:53] or metamorphosis of commodities
[06:55] that mediates the social metabolism.
[06:58] This is page 79.
[07:00] Marx says this.
[07:02] "Money is a means or a
medium or a mediator,
[07:06] a facilitator.
[07:07] Without it, things couldn't circulate"
[07:09] and so you need a certain amount of money
[07:11] in circulation all the time,
[07:12] so the deals can be happening,
[07:14] the trades can be happening all over.
[07:16] If there's insufficient
money, people can't trade
[07:18] because they're not gonna
suddenly become barterers.
[07:23] This is related but
different function of money.
[07:28] Under capital, things take
on different functions,
[07:32] and in economics things
take on different functions.
[07:35] In economies,
[07:38] money is a means of circulation.
[07:43] As a means of circulation, it,
[07:49] produces a contradiction.
[07:57] Here's what he says,
let's take a look at this.
[08:04] I'm looking at page 79 as
means of circulation, 78.
[08:10] He gives the form of circulation
[08:15] as an ellipse,
[08:19] which is the geometric corollary
[08:22] of what he calls a real contradiction.
[08:30] Here's one contradiction.
[08:32] When a body is both
falling toward another body
[08:35] and falling away from it,
[08:37] the ellipse is one of the forms of motion
[08:39] through which this contradiction
[08:40] is just as much realized as resolved.
[08:43] And this is what happens
in the circulation form.
[08:49] Money is moving away and
coming back at the same time.
[08:55] It takes the form of an ellipse.
[08:59] (clears throat)
[09:05] Value is moving away and
coming back at the same time.
[09:07] In so far as I trade
one thing for another,
[09:10] the value moves along with that thing,
[09:12] but it also comes back to
me in a different form.
[09:16] You could call this a
contradiction unfolded in time.
[09:18] Here we're talking about the
philosophical ideas in play.
[09:23] But nonetheless, if at the
very instant of a trade
[09:28] you said this value is both in the money
[09:31] and in the commodity, it
would be it's an oddity.
[09:35] There has to be a moment in
which it's in both of them
[09:37] and then switches.
[09:39] There is a ontological
contradiction there,
[09:44] and he wants to play that out.
[09:53] Circulation he calls a
moving contradiction.
[09:56] What you have, I want
what I have you want,
[09:59] the value that I have transfers to you,
[10:00] the value that you have transfers to me,
[10:03] value moves in these eccentric ellipses.
[10:08] Sandra.
[10:08] - Where's the contradiction?
[10:10] - The contradiction is
that for a moment at least
[10:13] the value is going in both directions.
[10:17] - How does that non fiction?
[10:19] - Well, it can't,
[10:20] value doesn't double
itself just out of nowhere.
[10:25] - But there there are
two commodities, right?
[10:26] There's the double of value.
[10:27] - Mm-hmm.
- Half of it is going,
[10:28] yeah, who is gonna other place.
[10:30] - No, it's not half of
it going, it's the whole.
[10:33] - Yeah, the whole of one
and the whole of the other.
[10:34] - That's right, but at
a moment they switch.
[10:36] So, he thinks of this as a contradiction,
[10:38] is a real contradiction.
[10:40] That's one way to think
of the transformation
[10:42] or the transfer of value
as a real contradiction.
[10:45] I have the value now you have the value,
[10:47] you have the value now I have the value.
[10:51] How did it become naturalized
[10:52] to think that that makes sense?
[10:56] Where is the thing that's
moving between the two?
[10:58] There is no actual
transfer that takes place.
[11:03] That the physical transfer.
[11:05] - While you're exchanging commodities.
[11:09] - Let's keep going
[11:10] and see if we can get a
better handle on this.
[11:13] He calls it also social metabolism.
[11:17] That is taking something that's
locked inside something else
[11:20] and making it available
[11:23] to be used in a different part of society.
[11:25] This is what happens with
the value in one thing,
[11:27] which is not useful to me
as I give it to someone else
[11:31] for whom it is a value.
[11:36] He calls it social metabolism
[11:37] where these things are getting processed.
[11:40] Another analogy he uses is digestion.
[11:43] These are things becoming digested.
[11:48] (clears throat)
[11:48] And if you think about circulation
as a kind of metabolism
[11:53] on the analogy of a body,
[11:55] you can also think about
the rate of metabolism.
[11:58] That is that things not only
have to get transferred,
[12:02] but if they get transferred
at a certain speed,
[12:04] you need more of them.
[12:06] Like my nemesis, skinny
people who can eat a lot.
[12:11] You need more of it and it
has almost no consequence.
[12:14] Da.
[12:16] (clears throat)
[12:17] All right.
[12:21] Money as a means of circulation
works in this formula,
[12:27] which is the formula
of exchange economies.
[12:30] This is famous.
[12:31] People have taught this
formula for 150 years.
[12:34] It's kind of beautiful that
Marx can boil everything down
[12:37] to a simple formula or a simple visual.
[12:40] But then it's not so simple
[12:42] because here's the
contradiction right there.
[12:47] It's actually happening simultaneously.
[12:49] When I sell my commodity to you for money,
[12:51] you give your money to
me for the commodity.
[12:54] This is a kind of heuristic
[12:57] or an artificial unfolding
[13:01] of what happens like this.
[13:03] So, the money doubles there for a minute.
[13:15] This is a simultaneous thing
[13:18] and you can see also that,
[13:23] let's see,
[13:25] it could go on,
[13:29] right?
[13:31] You have one transaction,
[13:37] a second transaction.
[13:40] This is how circulation
works in simple circulation.
[13:46] (clears throat)
[13:48] When you get money for your
commodity, as you know,
[13:51] the value that's in this
commodity has changed forms.
[13:56] It comes in a different form altogether.
[14:01] This is a change that's absolutely crucial
[14:04] for the capital system
[14:05] just as it's crucial for other
not fully capitalist systems
[14:09] that use a trade economy.
[14:14] One thing you start to
get here in this section,
[14:17] you get even more in the next chapter,
[14:20] is the picture of an economy
as an immense network of trades
[14:25] that are going on all at once
in a fairly chaotic fashion.
[14:29] Except they all have to have this form
[14:30] and to some degree this commodity
[14:32] has to be more or less the same.
[14:34] Say it is iron for money
[14:38] and money for, let's see
what are we doing here?
[14:41] A money for iron, that's that one thing.
[14:44] So, then the iron goes to something else.
[14:52] Let me think about that.
[14:54] (clears throat)
[14:56] What he's showing you above
all here is how the sale
[15:02] is different than the
purchase in its perspective.
[15:05] A purchase is turning a
money into a commodity
[15:09] and a sale is turning
a commodity into money.
[15:13] In a purchase, prices he
calls the bedroom eyes
[15:17] with which commodities wink at money.
[15:20] It's a beautiful line.
[15:22] And it implies the kind
of power and seduction
[15:26] and attraction that's involved in this.
[15:28] You look at a price and you think,
[15:30] my money is attracted to that price.
[15:33] My money is very close to that price.
[15:35] I might even have something
left over for lunch.
[15:37] I'll buy it.
[15:40] But you see also here
a kind of schizophrenia
[15:43] where the seller is also a buyer.
[15:48] The seller is a buyer of money,
[15:52] and the buyer is also a seller.
[15:55] The buyer is a seller of money.
[15:59] Yeah, the buyer's a seller of money.
[16:01] (clears throat)
[16:02] And in this way we begin to see
[16:04] how every economic activity
turns into a circuit
[16:09] that has to be closed.
[16:14] The seller takes their money
[16:15] and goes invest it in something they need.
[16:17] The buyer takes their banana
[16:20] and reproduces their labor-power.
[16:25] It's a kind of perpetual motion machine
[16:27] and this is one of the
characteristics of the capital system
[16:29] that is not characteristic
of feudalism or other things,
[16:32] although in all economic
systems, you need to reproduce.
[16:37] You need to reproduce your own energies,
[16:39] you need to reproduce the society.
[16:42] It doesn't have to become
restless endless notion.
[16:50] Circulation, in case you
wanna know, is taken up,
[16:53] exploded and developed in volume two,
[16:56] which I recommend you reading.
[16:59] If you look at pages 86 to 87,
[17:03] you have here a really
clear initial interpretation
[17:09] of how circulation changes space and time.
[17:17] First of all,
[17:20] if you look in the middle of
the second full paragraph,
[17:24] starting with commodity
circulation differs
[17:26] from the direct exchange of products,
[17:28] not only in terms of form,
but also in its essence.
[17:30] He says in the middle, "We
see here how the exchange
[17:35] of commodities bursts the individual
[17:37] and local limits that go
[17:38] with the direct exchange of products,
[17:40] thereby advancing the
metabolization of human labor.
[17:44] On the other hand,
[17:44] a whole network of natural
social connections develops
[17:47] through commodity circulation.
[17:49] One that human actors
involved can't control.
[17:53] The weaver can sell his linen only
[17:54] because the farmer has
already sold his wheat.
[17:57] The drunk can sell his bible.
[17:59] Ha ha ha.
[18:01] Only because the weaver
has already sold his linen.
[18:04] The distiller can sell his
Eau-de-vie only because the drunk
[18:07] has already sold the water of
everlasting life and so on."
[18:10] Marx's never tires
[18:11] of ridiculing certain aspects of religion.
[18:17] Drunk priests who needed a
buck to buy their schnapps,
[18:22] maybe not in the best taste,
[18:24] but he was not always in the best taste.
[18:27] What happens with circulation?
[18:29] With circulation space spreads out,
[18:33] the limits of a society spread
[18:35] to almost unlimited spatial size.
[18:40] Watch the expense.
[18:42] Look at the title of that TV show.
[18:44] Did you ever watch that show "Expense?"
[18:46] They do mining in the outer belts
[18:48] where they have a bunch of wage slaves
[18:51] who do all the mining, who then rebel.
[18:56] (clears throat)
[18:57] Time also changes because my time
[19:00] is totally dependent on when
you can sell your product.
[19:03] 'Cause I can't sell my product to you
[19:04] until you sell your product
to Austin, for example.
[19:09] This is called turnover times
[19:10] and time becomes the measure of turnovers,
[19:13] and this impinges on us.
[19:14] This is like the new seasons,
the seasons of capital.
[19:18] It's no longer the
harvest, it's the turnover.
[19:22] A new calendar, a new clock,
[19:23] the clock to begin with, Richard.
[19:27] - So, like is time
contractors is (indistinct)
[19:32] - I don't know if it's as simple
[19:33] as to say time is contracted
and space is expanded
[19:36] because space is also abrogated completely
[19:38] by virtual networks.
[19:41] Time becomes much more critical,
[19:46] much more in need of calculation,
[19:50] but not calculable in
a simple clock format.
[19:55] Because there's so many
sets of dependencies,
[19:58] you can't really fully calculate it.
[19:59] So, time is incalculable,
let's say in a human life
[20:03] because you don't know
when you're gonna die.
[20:05] So, you live in a species not of infinity
[20:08] as a certain romantic
imaginary would have it.
[20:11] But confusion and in determination, right?
[20:16] Could be tomorrow, could be whenever.
[20:18] This is not the time of capital.
[20:20] The time of capital is
not the time of existence.
[20:23] Sorry, Martin Heidegger.
[20:26] You can try to be a living
existent under capital,
[20:29] but you're likely to have to
go to work in the meantime.
[20:34] There's a lot to say about that.
[20:36] It is important to understand
[20:37] that money as a means of circulation,
[20:40] if you didn't have money, if
it didn't serve this function,
[20:44] we would have a different universe,
[20:46] a different cosmology, different space
[20:48] and time pressures on ourselves.
[20:56] (clears throat)
[20:57] It also gets right into
the center of beings.
[21:00] Sorry, again, Martin Heidegger, page 87.
[21:06] There is a kind of schizo
tendency in capital
[21:09] to split things apart,
[21:11] like a thing becomes a purchase
thing and a sold thing.
[21:15] Those are not the same thing at all.
[21:18] A sold thing could be
used for its use value.
[21:23] It might be resold,
[21:24] but in simple circulation,
[21:25] we're not talking about capital yet.
[21:28] So, the person who buys it uses it.
[21:31] A thing that is sold
[21:33] is a couple of steps away from use value.
[21:36] It is still a value.
[21:39] The identity of things gets broken.
[21:42] Space and time get transformed.
[21:49] This is the recipe for a set of crises
[21:53] in which the things don't arrive on time.
[21:56] The money doesn't arrive on time.
[21:58] Space becomes an obstacle
rather than a facilitator.
[22:01] You can see here on the bottom of page 87,
[22:04] he mentions for the first time
[22:05] a very important word for Marx.
[22:07] He spent his whole life tracking crises,
[22:10] real crises, monetary crises,
overproduction crises,
[22:16] natural crises like weather,
[22:19] and was interested in
finding out, as you know,
[22:22] where the internal tendencies
towards crises were
[22:25] in the capital system.
[22:27] He was convinced that if there
wasn't gonna be a revolution,
[22:30] there were certainly gonna be
crises that wounded capital
[22:34] and maybe even brought it down.
[22:37] Although he never saw
that in a fateful way,
[22:41] despite some Marxist
readings of this book,
[22:44] there was no prediction
[22:45] that within a certain
amount of generations
[22:47] a crisis would happen
and capital would fall.
[22:57] This is the philosophical explanation
[22:59] of a crisis in the bottom of 87.
[23:01] I just wanna point it out to you.
[23:03] If things that complete
each other internally
[23:06] and thus aren't independent,
[23:08] become externally, independent
past a certain point,
[23:11] then their unity will make
itself felt with great force
[23:14] by way of a crisis.
[23:17] So, money and commodities
[23:18] are absolutely internally
dependent on one another.
[23:21] If you take all the money out
[23:23] of the system one way or the other,
[23:24] that's a crisis,
[23:26] that acts as though money is independent.
[23:29] This is already leading towards
the definition of capital,
[23:33] which is not just money or value,
[23:35] but money in constant circulation
[23:37] and value in constant transformation
for a certain purpose.
[23:43] Does that make sense?
[23:44] That's a very abstract view of a crisis.
[23:46] We can talk about how crises
happen otherwise, yes.
[23:49] - Yeah, I heard actually
his circuit, right?
[23:53] So, it looks like the C, it mixes
[23:55] that CMC will represent
that there's some depend,
[24:00] but like circuits that added in it,
[24:01] because we get to there'll be C prime,
[24:04] C prime prime, C prime prime, right?
[24:07] There could be a sacrificial
way the trinity of one.
[24:10] But I guess my question is to what extent
[24:13] or at what level do we start, right?
[24:15] What level the owners of commodities
[24:19] or the owners of money say, okay,
[24:21] there's a point where I
no longer need a commodity
[24:23] and I want to like see if my body, right?
[24:25] That's my first question.
[24:26] And then the second question-
[24:28] - Death.
- To do with-
[24:29] - That's my answer.
[24:31] - What's the difference?
[24:32] I don't know if Marx says this,
[24:33] but I don't know what's the difference
[24:35] between commodity circulation and barter?
[24:38] The barter system (indistinct)
makes that distinction.
[24:42] - Yeah, no, no, he certainly
makes that distinction.
[24:45] The first question is when
does this commodity exchange
[24:49] or commodity circulation stop?
[24:51] And it only stops when the
whole society is destroyed
[24:54] and it stops for an
individual when they're dead.
[24:57] It has to keep going.
[24:58] That is one of the basic
assumptions of Marxist system
[25:04] that individuals need to
reproduce their life forces
[25:09] and societies need to
reproduce their individuals
[25:12] and their life forces interdependently.
[25:15] 'Cause my life forces depend on all of you
[25:17] and yours all depend on me and each other.
[25:20] Your individuality is not separable.
[25:22] That would be another thing
that if you separated it out,
[25:25] it would be a big crisis.
[25:27] That is if,
[25:32] libertarianism were not
such a ridiculous fantasy,
[25:36] if you could actually carry it out
[25:38] and everyone severed
themselves from everyone else,
[25:42] everyone would die.
[25:44] So, it is libertarianism
is not just a death wish,
[25:47] but a murderous wish.
[25:50] AJ.
[25:51] - So, capital has a tendency
[25:52] to split couple things into
their kind of independent parts
[25:57] and crises arise when that split happened.
[26:00] - No, what one definition of a crisis
[26:02] is when the capital
system can't keep going.
[26:05] So, it must keep going
[26:08] and keep these interdependencies alive.
[26:11] Your second question
was about the difference
[26:14] between the circulation
of commodities and barter.
[26:18] Barter is not according
to Marx circulation,
[26:22] it's not circular.
[26:26] It doesn't send something
out to get something back.
[26:28] Well, it does actually.
[26:30] But it doesn't circulate in society.
[26:32] It goes just usually between individuals.
[26:35] So, I would as a barterer,
barter each one of my what?
[26:41] Pens to individuals who have
individual wants for them.
[26:47] That is not circulation.
[26:48] Circulation is where someone
trades something to me
[26:52] and I trade that to someone else.
[26:55] Yep.
[26:57] - So, does Marx explain
[27:00] the evolution from barter to circulation?
[27:04] - There is no evolution
from barter to circulation,
[27:06] at least historically,
[27:11] they're just different systems.
[27:15] Yep, circulation comes into play
[27:16] when a society is so
big that is big enough
[27:23] and the form simply takes hold.
[27:26] Both of those are true.
[27:27] So, it's contingent,
[27:28] but also there's some necessity in there,
[27:30] that one producer couldn't
get all that they want
[27:34] from bartering their own thing.
[27:39] But that doesn't happen
because barter develops.
[27:41] That happens for all
sorts of other reasons.
[27:44] Does that make sense?
[27:44] Population growth, ideas,
[27:47] trial and error.
[27:49] The strange success of the idea of capital
[27:51] in the 15th century for
trading across large distances,
[27:55] the historical forces
[27:57] and contingencies,
[27:59] accidents that make it possible
[28:02] that the rollercoaster,
[28:05] that the perpetual motion
machine of capital gets started
[28:08] are not part of the
perpetual motion machine.
[28:11] There is no necessity that capitalism
[28:13] would have inaugurated, none whatsoever.
[28:17] And you'll see that in later chapters.
[28:19] It did.
[28:20] Once it got going, it consumes everything
[28:22] and its necessity takes over.
[28:24] That's the problem really.
[28:27] Yeah.
- Yeah, you just-
[28:29] - Another question out.
[28:30] So it looks to me like from Marx
[28:32] the difference between
circulation and barter will be
[28:35] that whereas in the barter system
[28:36] there's a kind of
restriction of place and time
[28:38] as you mentioned earlier
[28:39] in circulation there are restriction,
[28:41] circulation goes beyond presents.
[28:44] - Yeah.
[28:45] And the name for that lack
of restriction is money.
[28:49] So, it's not just an
ideal lack of restriction,
[28:52] it is a material lack of restriction.
[28:54] We have this technology called money
[28:56] that's used in this particular way
[28:58] and as he'll say in commodity circulation,
[29:02] the money is constantly
moving in an eccentric path.
[29:06] It moves from this person to that person,
[29:12] and then from this person to that person,
[29:17] will have a very different circulatory
[29:19] movement under capital.
[29:22] - But this is not the capitalist.
[29:26] - We're not a capital yet.
[29:27] We're in a kind of threshold form,
[29:29] which is commodity circulation
in an exchange market.
[29:32] But no one wants the
capital difference yet,
[29:36] which is getting more from the same.
[29:39] A totally absurd requirement,
which it turns out is a lie.
[29:46] Okay.
[29:48] He spends a while here talking
[29:50] about the circulation of money.
[29:51] It's very important that
money circulate too,
[29:54] because insofar as commodities
change places with money,
[29:59] money has to be there
[30:00] for these commodities to change places.
[30:02] And even though the reason
commodities are sold
[30:07] is because of their use value, I need it.
[30:09] The reason they're sold
[30:11] is because money is there to make them go.
[30:14] So, which of these reasons wins out?
[30:16] Well, in an exchange economy, money does
[30:18] or it comes to look like it does.
[30:20] And so we have phrases
like money is power.
[30:23] Money makes the world go round.
[30:25] It does make the world go round.
[30:27] Of course there would
be no world to go round
[30:28] if we didn't make commodities
[30:30] that people could use to
reproduce their powers,
[30:34] and to just enjoy them.
[30:35] I love a good commodity,
[30:38] sometimes too much.
[30:41] In the commodity system,
[30:42] commodities move towards consumption.
[30:46] Money moves away from its starting point
[30:48] and they move towards consumption.
[30:53] Marx wants you to be absolutely clear,
[30:55] however that commodities move money,
[30:58] not the other way around.
[31:00] Money in fact is a commodity.
[31:01] It has value.
[31:02] Somebody made it.
[31:04] If nobody made it, it would
be valueless like air.
[31:10] Without the commodity
there'd be no system.
[31:13] Marx says, despite the appearance
[31:14] that money makes the world go round,
[31:16] commodities are prime movers.
[31:22] He talks about the need
[31:23] to have a certain amount
of money in circulation
[31:25] and to relate the amount
of money in circulation
[31:30] to the speed by which it circulates.
[31:31] You can have less money in
circulation if it goes faster,
[31:34] obviously 'cause it makes its way
[31:36] to the other transactions more quickly.
[31:39] Okay, quickly these other ones.
[31:41] Well, money has to store value
because of the temporality
[31:45] in an exchange economy.
[31:48] When I'm waiting for something to come in,
[31:50] I have to have the money for it.
[31:51] So, it has to keep the value
that it's representing.
[31:56] This is one of its functions.
[31:58] So, long as I have the money give or take,
[32:01] given inflation and other things,
[32:02] which is another reason it
should be put into circulation.
[32:05] If it's put into circulation,
it can absorb inflation.
[32:10] If it's taken out of circulation
[32:11] is just sitting in the bank,
[32:12] it will deplete along with inflation.
[32:17] It has to be a store of value as well.
[32:19] These are separate functions,
though they're related,
[32:21] insofar as it's a measure of value,
[32:23] it can be a store of value.
[32:26] Insofar as it's a means of circulation,
[32:31] well, really everything derives
[32:32] from it's being a measure of value.
[32:34] I wanna mention this too
[32:36] because it relates to the other aspect
[32:39] that he brackets out
here, which is credit.
[32:43] Money has to be the
accepted means of payment
[32:45] when you take a loan.
[32:47] If they give you a loan of your car
[32:49] and you go to pay it back in bananas,
[32:51] well, you can imagine.
[32:57] This by the way, gives you in
an important set of passages
[33:01] on page 105,
[33:03] the genesis of the specific
type of capitalist wealth.
[33:11] There's no wealth in capitalism,
[33:13] even though people talk about it.
[33:15] There's only capital.
[33:18] We'll see that in the next chapter.
[33:20] In so far as it's wealth, it's
been taken out of circulation
[33:23] and it's steadily becoming less wealthy.
[33:26] Ask Warren Buffet.
[33:28] You gotta have it all
moving, all invested,
[33:31] otherwise it loses.
[33:36] Is this the page I want?
[33:42] In so far as money stores value
[33:45] and can be a means of payment,
[33:47] it's worth accumulating.
[33:51] Also in so far as it's a
future means of circulation,
[33:55] so in fact, these three
go together really well.
[33:59] As a future means of circulation,
[34:01] as a store of value and
as a means of payment,
[34:03] I can accumulate, but my accumulation
[34:05] is called a reserve fund.
[34:09] There's no treasure store.
[34:11] There's no dragon there
sitting on its treasure
[34:14] for eons and eons.
[34:15] As it steadily goes down in value,
[34:17] people look at it and be like,
what are all these trinkets?
[34:20] Imagine if you kept like all the old Marx,
[34:23] well maybe they're worth
something, I dunno.
[34:27] The idea that money can be stored,
[34:34] value can be stored in money,
[34:36] shows you the form of wealth
[34:38] and why it's important for certain people
[34:40] to hoard under the capital system.
[34:43] It's not for their enjoyment,
[34:45] it's not for their
higher purchasing power.
[34:49] Even though these super wealthy people
[34:50] are constantly buying luxury things,
[34:53] it's so that they can put
it back into circulation
[34:55] and it can act as a measure
of value, just to say that.
[34:58] It becomes a market power,
[35:01] not purchasing power, not private power.
[35:04] It's a means of storing market power.
[35:08] That I wanted to mention to you
[35:09] because the transformation of
wealth is really important.
[35:16] Capital is not wealth,
[35:18] it is value in circulation for a purpose,
[35:23] but that value needs to be
sometimes put aside as a reserve,
[35:29] never as wealth for the
individual person always
[35:32] as a bet on future investments.
[35:37] Yeah, Thomas.
[35:39] - So, you say that it must always,
[35:41] any accumulation must always go back
[35:45] or at least that's what the
individual must intend to,
[35:47] but in practice must
actually always go back
[35:50] into circulation or can
it be just accumulated?
[35:56] - Well, it can be,
[35:57] but it runs the risk of becoming worthless
[36:00] in a crisis, for example.
[36:02] If you own capital in a crisis,
[36:04] let's say you own a factory,
[36:06] it's possible that after
the crisis that becomes,
[36:09] goes back up to its value.
[36:11] But in a crisis, the money
you can just burn it.
[36:15] Yeah.
- Yeah.
[36:16] - Yes, please.
[36:19] - I'm a bit confused
because this CMC circulation
[36:24] is also possible in a
pre-capitalist society
[36:27] that uses money.
[36:29] - Yes.
- It's not money
[36:29] that makes the capital, right?
[36:32] - No, but this circulation by
means of money as a mediator
[36:37] is crucial for capital.
[36:39] Capital is like a parasite.
[36:40] It takes older things and it
makes them do its bidding.
[36:44] - But the process
[36:45] we're talking about is
not unique to capitalism.
[36:48] - It's unique to capitalism.
[36:50] The question is, is this
process unique to capitalism?
[36:53] It's unique to capitalism
in its totality and scope.
[36:58] For example,
[36:58] a feudal society did have some
circulation of commodities.
[37:02] There were trades people
[37:03] and there were some exchange of money,
[37:06] but there were other ways
[37:07] to get your needs fulfilled as well.
[37:10] This takes over completely.
[37:17] Alright, we understand a
little bit about money,
[37:19] now we have to understand
money and simple circulation.
[37:22] We have to understand
[37:23] how money gets transformed into capital.
[37:28] The main thrust of this chapter,
[37:30] because this is a critique
of political economy,
[37:32] is to show all the wrong opinions
[37:36] about where capital comes from.
[37:38] It does not come from circulation.
[37:41] He's gonna demonstrate
this to you by showing
[37:43] that it's impossible that
it comes from circulation.
[37:48] I just wanna read because
I love his polemical voice.
[37:58] This is the last two pages
of the chapter 148 to 149,
[38:02] in which he makes fun.
[38:05] Ridicules the people who think
[38:07] that profit comes from circulation.
[38:12] "The sphere of circulation
or commodity exchange
[38:14] within whose limits
[38:15] the movement of buying and
selling labor-power occurs,
[38:18] is in fact a veritable Eden
of innate human rights.
[38:22] You can tell already since
he's got religion in there
[38:25] that he's making fun of somebody.
[38:28] What reigns is exclusively
freedom, equality,
[38:31] property and Bentham.
[38:33] Freedom because only the
free wills of the buyer
[38:36] and seller of a commodity,
[38:37] for example, labor-power
determine how these figures act.
[38:40] They enter into business dealings
[38:42] as free persons equal before the law, ha.
[38:47] The end result is the contract
[38:48] that represents a joint legal
expression of their wills.
[38:51] Equality, because they interact
only as commodity owners
[38:54] and exchange an equivalent
for an equivalent, ha.
[38:58] Property, because each
owner does whatever he wants
[39:01] with only what is his.
[39:03] Ha.
[39:05] Bentham.
[39:06] Bentham, poor Jeremy Bentham,
[39:07] because each cares only about himself.
[39:10] The only force that brings
the two parties together
[39:12] and into a relation with
each other as self concern,
[39:15] private interests, personal gain.
[39:18] This is the view of the market
that he wants to knock down.
[39:24] That profit comes from the market
[39:26] that it is selfishly motivated
that everyone is equal in it.
[39:32] Not that they're unequal
[39:33] because if they had equal
access to the market,
[39:35] they would be equal.
[39:36] But the market is inherently unequal,
[39:38] not because of the market,
[39:41] because of the way production works.
[39:44] This is where he tells us
[39:46] that we will leave together
with the money owner
[39:49] and the labor-powers owner
will leave the surface area
[39:53] and follow them into the
hidden place of production.
[39:56] The rest of the book will be
about the way surplus value
[40:00] is made in production
[40:02] and then the origins
of the capital system.
[40:07] So, before we move on,
we need to understand
[40:10] why this is not true,
[40:12] why he feels so free at
the end of this chapter
[40:14] to ridicule these people.
[40:17] One simple definition of capital
[40:19] is that it is the products
of labor held through time.
[40:25] The products of labor held through time.
[40:27] So, if I make something
and I hold it through time,
[40:29] it becomes worth more.
[40:32] This is a funny economist's
idea of capital.
[40:38] I just hold onto it.
[40:39] Maybe that happens with some things
[40:41] if they disappear off
the face of the earth,
[40:43] but insofar as they're still there,
[40:45] it shouldn't change at
all just by holding it.
[40:47] Of course it has to hold
its value, we know that.
[40:50] But it's more than this.
[40:52] It's more than value.
[40:54] It's more than the super sensible
[40:56] quasi metaphysical substance
[40:59] that we've been talking about.
[41:01] In fact, he's gonna ask you to go beyond.
[41:04] First he asks you to
go beyond the commodity
[41:07] and see it as double.
[41:09] Then he asks you to go beyond
physical and useful things
[41:11] to see them as the bearers
[41:12] of quasi metaphysical
objects called value.
[41:15] Then he asks you to think
that labor is double,
[41:19] which he is gonna now exploit.
[41:22] Then he wants you to understand
[41:23] how commodity exchange makes
money happen and this blows up
[41:26] and changes space and time
[41:28] and changes the identity
of a simple object,
[41:33] and it has to keep going
or else everyone starves.
[41:36] Now he's gonna ask you to put
all that aside to overcome it
[41:41] and see where the more comes from.
[41:46] Because under capital
we need constantly more
[41:49] to keep the minimum of life going.
[41:54] All of social life in the capital system
[41:56] is dedicated to making this more.
[42:00] In youth societies more
comes generally from nature.
[42:04] The idea is that nature is abundant
[42:06] and we can just take some more,
[42:07] which is also perhaps now
clearly a pernicious idea,
[42:13] but it's nature's repetitions
[42:14] that give more in a youth society.
[42:16] It gives more humans, it gives more crops,
[42:19] it gives more air and water,
[42:22] and there's also a sense
[42:23] that there's a cycle there where
we're giving back our water
[42:26] and food in a certain form
and our bodies in the end.
[42:30] This is an idea.
[42:31] This is not the only way,
[42:32] you have to think about the exchange
[42:34] between humans and nature,
[42:35] but it has a kind of virtuous cycle.
[42:38] And Marx makes this as an assumption
[42:40] that there is a virtuous cycle
[42:42] and then there is a vicious cycle.
[42:48] (clears throat)
[42:51] How do we explain this
different kind of more
[42:53] that is capital.
[42:55] Boswell, economists explain
it from circulation.
[43:00] We look at the capital system
and we see circulation.
[43:03] We say, you know, I can
sell to Alan my computer,
[43:06] and I'm like $3,500,
[43:10] why not?
[43:11] And he's gullible and he'll say, sure.
[43:14] But then when Alan goes to buy lunch,
[43:17] he's gonna be about, I don't
know, $2,000 in the hole.
[43:21] Where's it gonna come from?
[43:22] It has to come from someone else.
[43:24] This is Marx's argument.
[43:26] He's gonna then pay
that much less for a car
[43:28] or that much less for his lunch,
[43:30] or his poor partner is gonna be like,
[43:32] where's or where's all
the money gone Alan?
[43:34] We needed to redo the roof
[43:35] on our beautiful 18th century house.
[43:39] Yeah.
[43:42] All of the extra that you could get
[43:44] from circulation Marx
argues, gets passed on.
[43:48] Someone will pay it and
it comes out to the same,
[43:50] because the circulation system
[43:52] is an exchange of equivalence.
[43:54] You can't get more out of the same.
[43:56] But they're saying we
get more out of the same.
[44:01] There is, he says,
[44:04] a formal difference
[44:07] between CMC and MCM.
[44:16] We still don't know how you
get more out of the same,
[44:20] but he's gonna tell us
[44:22] that there's a certain kind of circulation
[44:26] that is necessary for it.
[44:28] Now if you look at this,
[44:33] they're embedded in one another.
[44:34] Obviously this is an infinite series,
[44:37] so what's the difference?
[44:39] It turns out if you cut this series here,
[44:43] it's totally different than
if you cut this series here,
[44:52] which you're an initial starting point
[44:54] is determines whether you're
in a capitalist system
[44:58] or a commodity exchange system.
[45:02] There is a difference in content lurking
[45:05] in the form, he says.
[45:07] Okay, let's just give you the outline
[45:10] and then we'll fill in
the details next time.
[45:12] 'Cause we have only a little time left.
[45:15] The commodity circulation
system starts with production
[45:18] and ends with consumption.
[45:21] It is only about use values
[45:24] and in a system where use values
[45:25] are all that we're concerned
with, you can't get any profit.
[45:29] The extra will be passed
on one way or the other.
[45:35] In this system, the
commodity exchange system,
[45:39] the same piece of money
changes place twice.
[45:42] I give to Alan 10 bucks
[45:44] and Alan gives 10 bucks to Samuel.
[45:49] I won't use you in as an
example forever, I promise,
[45:53] to get something else.
[45:55] The money changes hands twice.
[46:00] Money moves in this eccentric fashion
[46:02] because I have a need and Alan has a need
[46:06] and Samuel has a thing that he wants
[46:07] and I have a thing that Alan wants.
[46:09] You can see where the money
goes just to exemplify it.
[46:11] Marx says this, it's pretty clear,
[46:13] the money goes from me to Alan to Samuel.
[46:16] That's not capitalism.
[46:18] The money has to be back to me.
[46:22] (clears throat)
[46:25] And this produces a
certain kind of disposition
[46:30] in the buyer.
[46:31] The buyer says it's
fine to give money away
[46:34] if I get what I want.
[46:37] I don't need to see that money back.
[46:39] Everyone is this kind
of buyer fundamentally,
[46:42] Marx would say.
[46:45] Our capitalist economy,
our high capitalist economy
[46:48] is still a commodity circulation system.
[46:51] We still need to get our needs
[46:52] and they're in some way primary,
[46:55] but not for the capitalists.
[46:58] There's two primaries here.
[47:01] And again, the ultimate
purpose is consumption
[47:04] and Marx says this is an end outside
[47:06] of the circulation system.
[47:08] You take your thing
outside, you devour it,
[47:10] you sleep with it, you watch it on TV,
[47:13] it doesn't get traded again.
[47:18] The MCM circuit starting with
money, totally different.
[47:21] Obviously your disposition is,
Hey, gimme that money back.
[47:26] What are you gonna get if
you give your money away
[47:28] for a commodity that you don't need?
[47:32] You need to get money out of that.
[47:34] You need to get your money back.
[47:37] In this version, the same
commodity changes place twice.
[47:41] I give money to Alan for his commodity
[47:45] and then what happens?
[47:49] - And you sell it?
[47:50] - Then I sell the commodity.
[47:55] - To get more money.
[47:56] - To get money, to get
more money, exactly.
[47:58] That's right, okay, sorry.
[47:59] I'm not an economist,
[48:00] so all this stuff is like,
why should I waste my time?
[48:03] Sorry.
[48:05] That's right, exactly.
[48:06] Then I get my money back by
selling it on, by selling it on.
[48:09] So, the commodity has
an eccentric movement,
[48:12] because I don't need it.
[48:13] What I need is money.
[48:14] This is a beautiful illustration
of the switch of values,
[48:17] what nature would call
[48:18] the transvaluation of
values under capital.
[48:22] You can see this is not just
a technical or formal switch.
[48:25] This is a switch in
psychology, in valuing,
[48:28] in everything that's gonna
be important in the society.
[48:33] When money flows back
to its starting point,
[48:35] it is a circuit that has to be completed.
[48:39] If I buy something from Alan,
[48:41] and he has the money,
[48:42] there's no reason he has to buy anything.
[48:44] If he's satisfied, he
can just, I don't know,
[48:46] burn the money in his
fireplace if he wants.
[48:49] That's not the case for a money circuit.
[48:55] The ultimate purpose for the money
[48:57] is that it returns to its starting point.
[48:58] So, money has a different purpose.
[49:00] It's not to satisfy wants and needs.
[49:03] Oddly though, the buyer ends up
[49:05] with exactly what they started with.
[49:08] It seems like nothing happened,
[49:10] and this is where this
formula is not sufficient,
[49:26] and we need to discover
[49:31] where this mysterious
change delta comes from,
[49:37] and we'll talk about that next time.
[49:40] (tense music)