The Communist Manifesto and Das Kapital by Karl Marx

Author:Karl Marx
Language: eng
Format: epub
Publisher: Knickerbocker Classics

Number of moves by coins of same denomination

This law holds generally. Hence if the number of moves made by the separate pieces increase, the total number of those pieces in circulation diminishes. If the number of the moves diminish, the total number of pieces increases. Since the quantity of money capable of being absorbed by the circulation is given for a given mean velocity of currency, all that is necessary in order to abstract a given number of sovereigns from the circulation is to throw the same number of one-pound notes into it, a trick well known to all bankers.

Just as the currency of money, generally considered, is but a result and a reflex of the circulation of commodities, so, too, the velocity of that currency reflects the rapidity with which commodities circulate—not inversely. Thus the retardation of the currency reflects the stagnation in the circulation of commodities. The circulation itself, of course, gives no clue to the origin of this stagnation. The general public, who, simultaneously with the retardation of the currency, see money appear and disappear less frequently at the periphery of circulation, naturally attribute this retardation to a quantitative deficiency in the circulating medium.3

The total quantity of money functioning during a given period as the circulating medium, is determined, on the one hand, by the sum of the prices of the circulating commodities, and on the other hand, by the rapidity of their circulation. But the sum of the prices of the circulating commodities depends on the quantity, as well as on the prices, of the commodities. These three factors, however, state of prices, quantity of circulating commodities, and velocity of money-currency, are all variable in different proportions, and can therefore compensate each other. Consequently we find, especially if we take long periods into consideration, that the deviations from the average level of the quantity of money current in any country, are much smaller than we should at first sight expect, apart of course from excessive perturbations mostly arising from industrial and commercial crises.

The erroneous opinion that it is prices that are determined by the quantity of the circulating medium, and that the latter depends on the quantity of the precious metals in a country; this opinion was based by those who first held it, on the absurd hypothesis that commodities are without a price, and money without a value, when they first enter into circulation, and that, once in the circulation, an aliquot part of the medley of commodities is exchanged for an aliquot part of the heap of precious metals.

That money takes the shape of coin, springs from its function as the circulating medium. The weight of gold represented in imagination by the prices of commodities, must confront those commodities, within the circulation, in the shape of coins or pieces of gold of a given denomination. The only difference, therefore, between coin and bullion, is one of shape, and gold can at any time pass from one form to the other. But no sooner does coin leave the mint, than it immediately find itself on the high-road to the melting pot.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.