Economics for Social Democrats–but not for the Working Class, Part Three: Critique of Jim Stanford’s Theory of Money, Part Three, or How Commodities and Money Dominate Our Lives


I have already criticized Mr. Stanford’s definition of money as purchasing power in two previous posts (see Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One   and Economics for Social Democrats–but not for the Working Class, Part Two: Critique of Jim Stanford’s Theory of Money, Part Two). I turn now to the social effect of commodity and money production as commodity fetishism and money fetishism. 

Mr. Stanford’s definition of money fails to connect it to the peculiar kind of social labour that produces commodities and how this peculiar kind of social labour necessarily gives rise to money as the monopolizer of purchasing power. To repeat his definition of money (from Economics for Everyone: A Short Guide to the Economics of Capitalism, 2008, page 189: 

Very broadly, money is anything that allows its holder to purchase other goods and services. In other words, money is purchasing power.

We can compare this with Marx’s views on money. From pages 168-169: 

The forms which stamp products as commodities and which are therefore the preliminary requirements for the circulation of commodities, already possess the fixed quality of natural forms of social life before man seeks to give an account, not of their historical character, for in his eyes they are immutable, but of their content and meaning. Consequently, it was solely the analysis of the prices of commodities which led to the determination of the magnitude of value, and solely the common expression of all commodities in money which led to the establishment of their character as values. It is however precisely this finished form of the world of commodities – the money form – which conceals the social character of private labour and the social relations between the individual workers, by making those relations appear as relations between material objects, instead of revealing them plainly.

Since money as simply given hides the “social character of private labour and the social relations between the individual workers,” it is necessary to analyze how it arises theoretically (and practically through the actual exchange process)–which is what Stanford precisely fails to do. From Capital, page 139: 

Everyone knows, if nothing else, that commodities have a common value-form which contrasts in the most striking manner with the motley natural forms of their use-values. I refer to the money-form. Now, however, we have to perform a task never even attempted by bourgeois economics. That is, we have to show the origin of this money-form, we have to trace the development of the expression of value contained in the value-relation of commodities from its simplest, almost imperceptible outline to the dazzling money-form. When this has been done, the mystery of money will immediately disappear.

For Stanford, however, there is no mystery to money. It is simply the power of a specific thing to purchase other things. How and why money permits its owner to purchase other things–including the capacity of workers to perform human labour–remains a mystery on the basis of Stanford’s definition. Stanford, in fact, merely assumes the power of money to purchase commodities. At least eighteenth and nineteenth century political economists were able to infer from exchange relations that labour formed their basis as value (although they also assumed that the kind of social labour that produced value was concrete labour). From pages Capital, 173-175: 

Political economy has indeed analysed value and its magnitude, however incompletely,  and has uncovered the content concealed within these forms. But it has never once asked the question why this content has assumed that particular form, that is to say, why labour is expressed in value, and why the measurement of labour by its duration is expressed in the magnitude of the value of the product.  These formulas, which bear the unmistakable stamp of belonging to a social formation in which the process of production has mastery over man, instead of the opposite, appear to the political economists’ bourgeois consciousness to be as much a self-evident and nature-imposed necessity as productive labour itself.

The above quote links up to the theme of commodity fetishism and money fetishism, or the loss of power by workers over their own life process (the production process of their own lives) and the positive acquisition of power of the things they produce–commodities, money and, ultimately, capital. 

Mr. Stanford’s definition of money as “purchasing power” fails miserably to address something which is very relevant for members of the working class: Why does the ownership of money by employers confer so much power over the workers at work? 

By severing the connection between the positive monopoly of immediate purchasing power of money from the negative lack of such power of commodities, Stanford fails to grasp the organic or internal connection between the difference in power between commodity power–especially the commodity called labour power–and money power (represented by the employer)

Part of the answer to the question of the asymmetry in power relations between the owner of commodities and the owner of money is found in Marx’s theory of commodity fetishism, and the associated theory of the money fetish, which is really a development from commodity fetishism. By fetishism is not meant some kind of personal fetish, such as a fetish for a particular part of the human body or a particular item of clothing. Rather, it is a fetish in that human powers appear as the power of things, whether as commodities (commodity fetishism) or as money (money fetishism), or indeed as a thing called capital (capital fetishism). As Elena Lange (2021) notes, Value without Fetish Uno Kōzō’s Theory of ‘Pure Capitalism’ in Light of Marx’s Critique of Political Economy, page 225: 

The inversion of the problem – money is not to be explained on the basis of the fetish character of the commodity, but the commodity is to be explained on the basis of the fetish-character of money – however leaves open the question how money is capable of paradigmatically representing general social exchangeability.

Stanford, with his one-sided positive definition of money as purchasing power, cannot link the power that ownership of money confers to the employer. He cannot do so since he fails to link the nature of money in a capitalist society to the nature of the kind of labour that requires money as an external power (“purchasing power”).  Money for Stanford  just has purchasing power–it appears to have this active power independently of the way in which the producers’ own labour (the labour of the working class) is organized and how they relate to each other by way of the topsy-turvy relation between things (commodities and money).

The Nature of Commodity Fetishism–and the Domination of Workers 

Stanford cannot understand the nature of commodity fetishism since he simply assumes that a thing called money has purchasing power by nature. He obviously rejects connecting the nature of money to the peculiar social labour that produces commodities. In fact, I doubt that he is even aware of the connection (since he interprets Marx’s labour theory of value as some sort of moral theory that is applicable throughout history). 

Commodity fetishism arises because the labour performed by the workers is not social labour as it is being performed and, as a consequence, the relations between the labours of workers who work for different and independent employers lack direct social connections. Materially, though,  they form, interdependent relations. At the brewery where I worked, for example, brewery workers did not produce the bottles that they needed to produce the beer, nor the barrels of soap needed to make the bottles move smoothly along the line, nor the chains on which the bottles moved, nor the machines, such as the soaker, the filler or the labeler. There was thus a material dependence of the workers in the brewery on the workers who produced the bottles, the barrels, the soap, the chains, the soaker, the filler and the labeler. 

The labour performed by us to produce the beer, though materially dependent on other labour processes, did not express its dependent nature directly by means of those who produce beer, along with the whole set of other workers jointly communicating and deciding on what to produce, how much to produce and how to produce according to the diverse productive and personal needs of the producers (and other members of society). Rather, the dependent (and interdependent) nature is only expressed indirectly, through the relations of commodities to each other in the exchange relation and the exchange process–since the labour performed during production in a society characterized by a class of employers is only social labour indirectly. The commodities themselves then obtain human characteristics that appear to arise from the nature of the commodities as natural things (such as beer) rather than through their nature as social things. Thus, beer having a price seems to arise from the nature of beer  whereas price in fact arises in the first place because of the organization of production as private, isolated production.  This attribution of social relations between humans as an attribute of commodities and their relations is what Marx calls commodity fetishism. From Capital, Volume 1, pages 164-166: 

The mysterious character of the commodity-form consists therefore simply in the fact that the commodity reflects the social characteristics of men’s own labour as objective characteristics of the products of labour themselves, as the socio-natural properties of these things. Hence it also reflects the social relation of the producers to the sum total of labour as a social relation between objects, a relation which exists apart from and outside the producers. Through this substitution, the products of labour become commodities, sensuous things which are at the same time suprasensible or social. In the same way, the impression made by a thing on the optic nerve is perceived not as a subjective excitation
of that nerve but as the objective form of a thing outside the eye. In the act of seeing, of course, light is really transmitted from one thing, the external object, to another thing, the eye. It is a physical relation between physical things. As against this, the commodity form,
and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations
arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men’s hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities.

As the foregoing analysis has already demonstrated, this fetishism of the world of commodities arises from the peculiar social character of the labour which produces them.

Objects of utility become commodities only because they are the products of the labour of private individuals who work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their private labours appear only within this exchange. In other words, the labour of the private individual manifests itself as an element of the total labour of society only through the relations which the act of exchange establishes between the products, and, through their mediation, between the producers. To the producers, therefore, the social relations between their private labours appear as what they are, i.e. they do not appear as direct social relations between persons in their work, but rather as material relations between persons and social relations between things.

It is only by being exchanged that the products of labour acquire a socially uniform objectivity as values, which is distinct from their sensuously varied objectivity as articles of utility.

Stanford, by assuming as given that money has purchasing power, fails to derive such power from human relations characteristic of a society where the workers lack the power to direct their own lives and–therefore–money arises as a result that permits others to direct their lives.

Stanford presents the purchasing power of money as natural to money–it is (“that is the way it is” attitude–with a shrug of the shoulders). The purchasing power of money, however, derives from the lack of such power by commodities, and the lack of such power is in turn derived from the nature of the labour that produces value–abstract labour, or labour that is not social as it is being performed but requires a further process–a process of exchange–if it is to form part of the labour of society. 

In a society characterized by the production of commodities and their expression in money (with its immediate power to purchase), the power of workers to produce their social lives (reciprocal production of human life) assumes the form of a relation between things produced. The origin of commodity and money fetishism is thus in production–the way production is organized. From Guido Schulz (2012), “Marx’s Distinction between the Fetish Character of the Commodity and Fetishism,” in pages 25-45, Studies in Social & Political Thought, Volume 20, page 26: 

The fetish character of the commodity, which Marx also calls “mystic character”, originates in the “peculiar social character of the labour” that gives products their commodity form. Therefore, the fetish originates in production. Although production is ultimately social under capitalism, it is privately organized and carried out by atomised producers. Capitalist production thus entails a conflict between sociality and asociality. An objective mediation between the two extremes of sociality and asociality is established through the process of commodity exchange. The social relation between the producers is thereby established. Instead of consciously creating immediate links between the
producers, in place of “rationally regulating [production], bringing it under […] common
control“, the social link gets reified and externalized in commodities.

Abstract labour as labour that is not yet social assumes the form of a relation between commodities, things with physical and supersensible (social) qualities that regulate the participants in exchange rather than the participants regulating the process. From Guide Schulz, page 27: 

But value relations objectified in commodities do not only establish the socializing link between producers. From the viewpoint of the individual producer, these objectified value relations even gain autonomy and regulative social power. This non-imaginary regulative social power is twofold: “[R]elations based on the exchange-value of commodities (‘social relations of things’) come to control the distribution of labour-products and the distribution of the labourers themselves within the production process” (Carver 1975, p.51).

All human production is social in character in that, if we are to produce our lives and continue to live as a species, we must in one way or another work for each other in even a temporary social division of labour. This “working for each other,” however, in a situation where labour is not social as it is being performed, assumes the form of a relation between produced commodities, with the social nature of the labour expressed not in the immediate or material form in which it exists but in another use value (as I have already explained in an earlier post–see  Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One). If there are two commodities produced, say beer and a pair of pants, the social nature of beer production is not expressed in the beer but in the pair of pants. From Samezo Kuruma (2018), Marx’s Theory of the Genesis of Money How, Why, and Through What is a Commodity Money? page 144:

How, exactly, is the value of a commodity indicated? Given that a commodity cannot indicate its value on its own, it is indicated instead by another commodity with which it is in a relation of exchange. Yet in the case of that other commodity as well, its natural form is its use value (not value), and it does not, on its own, have a form of value in addition to its natural form. The natural form of that other commodity must therefore become the form of value. This is indeed what happens … he [Marx] traces the development of the
form itself, and in so doing thoroughly solves the riddle of money.

The pair of pants in this case is immediately exchangeable or convertible into the beer since it represents objectified social labour–objectified labour that is freely convertible into any useful form. Similarly, the  labour that produces the pair of pants represents general social labour, or labour that can assume many different forms. The pair of pants is immediately exchangeable with the beer (its “purchasing power”) despite the concrete labour that produces the pair of pants being separated off and being produced independently of the other commodities  because this particular labour represents general social labour. 

This power of immediate exchangeability, or its purchasing power, is derived from the negative way production is organized in a capitalist society; there is no unity of workers with each other as human beings who produce for each other. The unity arises through the emergence of a special commodity that functions as an external unifier of producers who are socially external to each other despite their material interdependence. 

It is through the development of this simple expression or form of value–the value of the beer being expressed in another use value, the pair of pants or what have you–that there arises the money form, as the final form where value achieves a uniform and general expression in just one commodity that then becomes money as the monopolizer of general exchangeability or purchasing power ultimately emerging from the nature of abstract labour and embodied in one particular use value (and hence one particular form of concrete labour). 

The property or characteristics of commodities as social products requires a form different from their immediate use value as the product of concrete labour. This form–ultimately the money form or money–then has the social characteristic of being immediately exchangeable or convertible into any particular commodity or use value.

This social power is transferred to commodities, but only potentially, not immediately since commodities cannot immediately express their value in their own use value. In turn, this social power becomes concentrated in one commodity–which becomes money.

Stanford, by ignoring completely the process by which money acquires the immediate power to purchase all other commodities, himself contributes to commodity fetishism since he fails to link the property of money of having immediate purchasing power with the lack of such power of commodities and, in turn, their lack being due to the peculiar social nature of the labour that produces the value of commodities. 

The Nature of Money Fetishism

The fetish character of commodities is a simpler form than the money form since the relations between producers is still expressed as a relation–although a relation between things. From Marx, Capital, Volume 1,  page 176: 

As the commodity-form is the most general and the most undeveloped form of bourgeois production, it makes its appearance at an early date, though not in the same predominant and therefore characteristic manner as nowadays. Hence its fetish character is still relatively easy to penetrate. But when we come to more concrete forms, even this appearance of simplicity vanishes. Where did the illusions of the Monetary System come from? The adherents of the Monetary System did not see gold and silver as representing money as a social relation of production, but in the form of natural objects with peculiar social properties.

Does Mr. Stanford enlighten workers on how money has the property of “purchasing power?” Not at all. He assumes such a property as given without explaining it. The money form, however, is a form that hides its own nature. From Marx, Capital, Volume 1, pages 168-169: 

It is however precisely this finished form of the world of commodities – the money form – which conceals the social character of private labour and the social relations between the individual

Commodity fetishism, as a social relation between workers as exchangers that assumes the form of a relation between things, is converted into a money fetishism as money emerges as the unique power of a commodity to be converted immediately into any commodity form.  Money thereby assumes the form of a thing that has–“purchasing power”–by its very nature, apparently  independently of the nature of commodities and commodity production. Money fetishism is a development of commodity fetishism. From Desmond McNeill (2021), 
Fetishism and the Theory of Value: Reassessing Marx in the 21st Century, pages 61-2: 

There is a similar important passage later in the same volume [of Marx’s book A Contribution to the Critique of Political Economy, published in 1859]:

A social relation of production appears as something existing apart from
individual human beings, and the distinctive relations in which they enter
in the course of production in society appear as the specific properties of a
thing. … This perverted appearance manifests itself merely in a more striking
manner in money than it does in commodities. (Marx 1970: 49)

Here, Marx is making the point that money fetishism is a developed form of commodity fetishism.

As Georgios Daremas (2018) says, “The Social Constitution of Commodity Fetishism, Money Fetishism and Capital Fetishism,” in pages 219-249, Judith Dellheim Frieder Wolf, Editors, The Unfinished System of Karl Marx Critically Reading Capital as a Challenge for our Times  page 226: 

An inversion has taken place: money—instead of being seen as a reflector of a commodity’s value (as the universal equivalent or representative, as the passive agent of reflection)—is perceived as the active agent positing the value of the commodities. From a logical point
of view, the basis of money fetishism is the collapse of a relationship of reflection/representation to that of an identity. The inner connection of the commodity’s value represented by the money form is reduced to a social feature inherent in money per se that appears to hold an external, contingent connection to the multiplicity of commodities bestowing value upon them.

Stanford, by assuming the purchasing power of money without explaining it, reinforces the fetishism of money. This is hardly in the interest of workers. 

Probably in a follow-up post, I will in future elaborate on the further development of commodity fetishism and money fetishism as capital fetishism (I have already hinted at such a fetishism in referring several times to the domination of workers’ lives by their own actions and by the products of their labour). 


The way in which the labour process is organized in a society characterized by a class of employers involves the relations between workers assuming the absurd form of a relation between things leads to the mystery of why a particular commodity–money–has the magical ability to purchase all other commodities whereas they, on the contrary, lack such power. 

Commodity fetishism is easier to understand than money fetishism since it relates more directly to the production process and involves the expression of value in a not-yet fixed form. With money fetishism, on the other hand, money seems to have purchasing power capacity immediately, independently of the organizational structure of labour. Stanford, by simply accepting the purchasing power of money without linking it to that structure, contributes to hiding the real nature of money and the real nature of commodities as alienated forms of human social labour. 

It is instructive of how dominant social democracy and social reformism are here in Toronto (and undoubtedly in many other capitalist cities) is the lack of any criticism of Stanford’s definition of money. 

I will conclude this post in anticipation of a possible future post on capital fetishism by quoting from Thomas Hodgskin’s book (1825), Labour Defended against the Claims of Capital: 
Or the Unproductiveness of Capital proved with Reference to the Present Combinations amongst Journeymen, pages 71-73: 

Betwixt him who produces food and him who produces clothing, betwixt him who makes instruments and him who uses them, in steps the capitalist, who neither makes nor uses them, and appropriates to himself the produce of both. With as niggard [stingy] a hand as
possible he transfers to each a part of the produce of the other, keeping to himself the large share. Gradually and successively has he insinuated himself betwixt them, expanding in bulk as he has been nourished by their increasingly productive labours, and separating them so widely from each other that neither can see whence that supply is drawn which each receives through the capitalist. While he despoils both, so completely does he exclude
one from the view of the other that both believe they are indebted him for subsistence. He is the middleman of all labourers … Not only do they appropriate the produce of the labourer; but they have succeeded in persuading him that they are his benefactors and employers. At least such are the doctrines of political economy; and capitalist may well be pleased with a science which both justifies their claims and holds them up to our admiration, as the great means of civilising and improving the world.

Economics for Social Democrats–but not for the Working Class, Part Two: Critique of Jim Stanford’s Theory of Money, Part Two


In a previous post (Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One), I questioned Mr. Stanford’s theory of money as purchasing power, as well as his implied reduction of Marx’s critical dual or twofold theory of commodities to a labour theory of value. I showed that Mr. Stanford fails to explain why money has a monopoly power of immediate purchasability.

In a subsequent post, I also showed how Stanford’s inadequate theory of money leads him to assume a “real economy” that is somehow independent of the process of producing value (and surplus value) and consequently his false conclusion that there is not a trade-off between the economy and the health of workers (in the context of the pandemic, but this trade-off applies generally in the context of a society dominated by a class of employers). (See Economics for Social Democrats–but not for the Working Class, Part Three: The Health and Safety of Workers and an Economy Dominated by a Class of Employers Are at Loggerheads). 

In this post, I will further develop the importance of the nature of money as “purchasing power,” in particular how this power (and the lack of such power at the level of commodities) involves or entails a process that escapes the control of the participants in the exchange process.  

The Expression of the Dual Nature of the Commodity Requires a Double Movement of Sale and Purchase 

I will assume the reader has read the first post on money and therefore is familiar with the dual nature of both the labour that produces commodities and the dual nature of commodities.

The real expression of the dual nature of commodities is expressed in a dual movement, from commodities (represented by C) exchanged for money (represented by M), which is the realization of the value of the commodity, and the opposite movement of the conversion of M into C, which is the realization of the use value, not of the original commodity, but of use values for the original owner of the commodity. The whole movement is thus: C-M, and M-C, or C-M-C, where the dash represents an exchange.

From Capital: A Critique of Political Economy. Volume 1:Capital, pages 199-200:

Let us now accompany the owner of some commodity, say our old friend the linen weaver, to the scene of action, the market. His commodity, 20 yards of linen, has a definite price, £2. He exchanges it for the £2, and then, being a man of the old school, he parts for the £2 in return for a family Bible of the same price. The linen, for him a mere commodity, a bearer of value, is alienated in exchange for gold, which is the shape of the linen’s value, then it is taken out of this shape and alienated again in exchange for another commodity, the Bible, which is destined to enter the weaver’s house as an object of utility and there to satisfy his family’s need for edification. The process of exchange is therefore accomplished through two metamorphoses of opposite yet mutually complementary character – the conversion of the commodity into money, and the re-conversion of the money into a commodity. The two moments of this metamorphosis are at once distinct transactions by the weaver- selling, or the exchange of the commodity for money, and buying, or the exchange of the money for a commodity – and the unity of the two acts: selling in
order to buy.

The end result of the transaction, from the point of view of the weaver, is that instead of being in possession of the linen, he now has the Bible; instead of his original commodity, he now possesses another of the same value but of different utility. He procures his other means of subsistence and of production in a similar way. For the weaver, the whole process accomplishes nothing more than the exchange of the product of his labour for the product of someone else’s, nothing more than an exchange of products.

The process of exchange is therefore accomplished through the following changes of form:


As far as concerns its material content, the movement is C-C, the exchange of one commodity for another, the metabolic interaction of social labour, in whose result the process itself becomes extinguished.

The Escape of the Whole Process of Simple Circulation from the Control of the Participants with the Emergence of Money 

In the external measure of the value of commodities via money as measure, there is, indeed, all commodities on one side and money on the other side, but in the actual exchange of commodities with money (money as a means of purchase or as a means of circulation) this is not the case; on the contrary, there is necessarily a separation in space and time between the act of sale (realization of the value of the commodity in money) and the realization of money in various use values (purchase).

The unity of value and use value, hidden in the commodity, is expressed as mutually exclusive and external forms of sale and purchase so that crisis becomes a possibility as the gap between the realization of the value of a commodity and the realization of use values of an equivalent value becomes intensified. The whole process is what Marx calls simple circulation, and this process escapes the control of the participants in the exchange process.

To make the following a little easier to follow, we can consider the following: 

  1. The owner of linen wants to sell the linen in order to buy a Bible.
  2. The owner of money who buys the linen obtained the money by selling wheat. 
  3. The owner of the Bible sells the Bible to the former linen owner in order to buy brandy (but the brandy does not directly figure in the total metamorphosis or total exchange of the linen for the Bible since we end with the Bible owner possessing money and the linen owner possessing the Bible.
  4. At the beginning of the total exchange process, the linen owners owns the linen (a use value for others) but does not want it.
  5. At the end of the total exchange process, the former linen owner now owns a use value useful to her (and the linen also is useful for the farmer, the former owner of wheat). 
  6. The money stops circulating for the moment at the end of the process with the former owner of the Bible aiming to purchase some brandy (but not yet doing so). 

Pages 207- 209: 

The circulation of commodities differs from the direct exchange of products not only in form, but in its essence. We have only to consider the course of events. The weaver has undoubtedly exchanged his linen for a Bible, his own commodity for someone else’s. But this phenomenon is only true for him. The Biblepusher, who prefers a warming drink to cold sheets, had no intention of exchanging linen for his Bible; the weaver did not know that wheat had been exchanged for his linen. B’s commodity replaces that of A, but A and B do not mutually exchange their commodities. It may in fact happen that A and B buy from each other, but a particular relationship of this kind is by no means the necessary result of the general conditions of the circulation of commodities. We see here, on the one hand, how the exchange of commodities breaks through all the individual and local limitations of the direct exchange of products, and develops the metabolic process of human labour. On the other hand, there develops a whole network of social connections of natural origin, entirely beyond the control of the human agents. Only because the farmer has sold his wheat is the weaver able to sell his linen, only because the weaver has sold his linen is our rash and intemperate friend able to sell his Bible, and only because the latter already has the water of everlasting life is the distiller able to sell his eau-de-vie. And so it goes on.

The process of circulation, therefore, unlike the direct exchange of products, does not disappear from view once the use-values have changed places and changed hands. The money does not vanish when it finally drops out of the series of metamorphoses undergone by a commodity. It always leaves behind a precipitate at a point in the arena of circulation vacated by the commodities. In the complete metamorphosis of the linen, for example, linen-money-Bible, the linen first falls out of circulation, and money steps into its place. Then the Bible falls out of circulation, and again money takes its place. When one commodity replaces another, the money commodity always sticks to the hands of some third person.  Circulation sweats money from every pore.

Circulation bursts through all the temporal, spatial and personal barriers imposed by the direct exchange of products, and it does this by splitting up the direct identity present in this case between the exchange of one’s own product and the acquisition of someone else’s into the two antithetical segments of sale and purchase. To say that these mutually independent and antithetical processes form an internal unity is to say also that their internal unity moves forward through external antitheses. These two processes lack internal independence because they complement each other. Hence, if the assertion of their external independence proceeds to a certain critical point, their unity violently makes itself felt by producing – a crisis. There is an antithesis, immanent in the commodity,
between use-value and value, between private labour which must simultaneously manifest itself as directly social labour, and a particular concrete kind of labour which simultaneously counts as merely abstract universal labour, between the conversion of things into persons and the conversion of persons into things*; the antithetical phases of the metamorphosis of the commodity are the developed forms of motion of this immanent contradiction.

A Limitation of Stanford’s Definition of Money as Purchasing Power: A Lack of Control Over the Total Social Process of Exchange

Stanford, by not linking the purchasing power of money to the dual oppositional nature of labour and commodities characteristic of a capitalist society, fails to address the loss of control over the total process of exchange by the participants in exchange. This loss of control is linked to what Marx called commodity fetishism, where things produced by workers gain independent power over the producers. 

The issue of commodity fetishism will, however, be addressed in another post in this series. Commodity fetishism is both a process of the exchange process becoming independent of the participants in that process and the resulting independence not only appearing to be attributes of things rather than social attributes originating from the producers themselves but actually being social attributes. The issue also has to do with the further development of commodity fetishism in the forms of money fetishism and  capital fetishism, where the process increasingly takes on an independent form that not only escapes the control of workers but increasingly controls their lives. The internal opposition between abstract labour and concrete labour then becomes a nightmare for workers as their own working lives are used against them to exploit and oppress them.

This commodity fetishism  is a process of the products of social labour coming to dominate the producers rather than vice versa. This appears to be and in some senses is independent of the workers.

Hence, Stanford, by failing to link his definition of money to a dual theory of labour and commodities, fails, in other words, to understand the essential relation between the nature of money as purchasing power and the domination, oppression and exploitation of workers on the basis of their own social labour becoming independent of them in exchange and ultimately controlling them at work. 


Mr. Stanford’s theory of money as “purchasing power” is inadequate because it fails to deal with the dual nature of labour and the dual nature of commodities, and this dual nature generally involves a temporal and spatial split between the realization of the value of the commodity and the realization of the use value of the commodity (in the form of many use values). This split leads, in the first instance, to the creation of an exchange process that escapes the control of the participants in that process; it also leads to the possibility of an economic crisis.

Ultimately, it leads to a production process that not only escapes the control of the participants in exchange but also of the producers, leading to their domination and exploitation. That may be  shown in further posts, however. 

Economics for Social Democrats–but Not for the Working Class, Part Two: Critique of the Social Democrat Jim Stanford’s Theory of Money, Part One


In an earlier post, I indicated that Jim Stanford’s view concerning the creation of jobs reflects a social-democratic or social reformist position (see Economics for Social Democrats–but Not for the Working Class, Part One: Critique of Jim Stanford’s One-Sided View of Job Creation in a Capitalist Society). In this post and subsequent posts, I will begin to look in more depth at Mr. Stanford’s economic views. It is all the more necessary since the main title of his major book is Economics for Everyone. His book is most definitely not for everyone since, although it appears to be for the working class, it ultimately opposes their interest as a class to struggle for the abolition of capitalism. Furthermore, despite the subtitle of his book, A Short Guide to the Economics of Capitalism, it certainly does not express the nature of capitalist society adequately. 

For example, Mr. Stanford’s definition of money has little to recommend it since it fails to explain to workers how money (and hence prices) confers upon employers the power to direct workers’ lives. Marx’s theory of money, by contrast, is designed to do just that.

The following necessarily involves a theory of money, and it is not easy.

Stanford’s Inadequate Definition of Money Has a Historical Antecedent

Let us look at one of Mr. Stanford’s references to money (related to prices) in his book. Page 189:

Very broadly, money is anything that allows its holder to purchase other goods and services. In other words, money is purchasing power.

Mr. Stanford’s identification of money with “purchasing power,” interestingly enough, already had been expressed by a nineteenth-century author, Samuel Bailey, whose theory Karl Marx criticized. From Elena Lange (2021), Value without Fetish Uno Kōzō’s Theory of ‘Pure Capitalism’ in Light of Marx’s Critique of Political Economy, pages 225-226:

… this position echoes Bailey’s identification of money with ‘power of purchase.’  [Quoting Bailey] ‘If the value of an object is its power of purchasing, there must be something to purchase. Value denotes, consequently, nothing positive or intrinsic, but merely the relation in which two objects stand to each other as exchangeable commodities’. Although we will return to this, Marx’s critique of the notion of money as ‘power of purchase’ presents a useful summary of the previous discussion, namely the inability of a formal, functionalist and nominalist theory of money to explain money’s function of general social exchangeability, or, which is the same, the measure of value. ‘Power of purchasing’
hence does not explain the logical significance of money, but presents a tautology. It is well worth quoting the passage at length: [from Marx]

[Bailey’s] entire wisdom is, in fact, contained in this passage. ‘If value is nothing but power of purchasing’ (a very fine definition since ‘purchasing’ presupposes not only value, but the representation of value as ‘money’), ‘it denotes’, etc. However let us first clear away from Bailey’s proposition the absurdities which have been smuggled in. ‘PURCHASING’ means transforming money into commodities. Money already presupposes VALUE and the development OF VALUE. Consequently, out with the expression ‘PURCHASING’ first of all. Otherwise we are explaining
VALUE by VALUE. Accurately expressed it would read as follows: ‘If the value of an object is the relation in which it exchanges with other objects, value denotes, consequently’ (viz., in consequence of the ‘if’) nothing, but merely the relation in which two objects stand to each other as exchangeable objects’ (I.e., [pp.] 4–5). Nobody will contest this tautology. What follows from it, by the way, is that the ‘VALUE’ OF AN OBJECT ‘DENOTES NOTHING’. For example, 1lb. of COFFEE = 4 lbs of COTTON. What is then the value of 1lb. of COFFEE? 4 lbs of COTTON. And of 4 lbs of COTTON? 1lb. of COFFEE. Since the value of 1lb. of coffee is 4 lbs of COTTON, and, on the other hand, the value of 4 lbs of COTTON = 1lb. of COFFEE, then it is clear that the value of 1lb. of COFFEE= 1lb. of COFFEE (since 4 lbs of COTTON = 1lb. of COFFEE), a = b, b = a, HENCE a = a. What arises from this explanation is, therefore, that the value of a use value = a [certain] quantity of the same use value.

The problem with Bailey’s and Stanford’s characterization of money is that nowhere do they explain why a specific thing called money has this power to purchase at all, and how this power to purchase is different from (and yet related to) other things that are on the market (call them commodities–products of labour that are produced for sale). Other commodities do not have “purchasing power” directly–whereas money does. Why is that? Is there a connection with the purchasing power of money and the lack of purchasing power of all other commodities? 

If money is the power to purchase, then what it purchases, by implication, is not money and lacks purchasing power. Hence, money has a monopoly of power over purchasing, and all other commodities lack this direct power of purchasing.

At one pole, there is money, with its monopoly power of purchasing commodities directly, and at the other pole are commodities that lack this power of direct purchasing power. What explains this situation? Mr. Stanford does not address the issue since he is undoubtedly unaware of the problem. For him, the purchasing power of money is simply given rather than something to be explained. 

[As an aside, this definition is obviously inadequate even from the point of view of workers’ everyday experience. For instance, I use my Royal Bank Westjet Master Card to purchase almost everything (in order to accumulate Westjet dollars to be used to see my daughter, Francesca. 

Although my credit card has purchasing power and thus falls under Stanford’s definition of money, obviously the day of reckoning will arise if I do not transfer my deposit funds to pay off my credit card. From this point of view, the deposit funds are money, but not my credit card.)

Stanford’s Distortion of Marx’s Labour Theory of Value Related to Ignoring Marx’s Theory of the Commodity, Value Form, Money and Prices 

This lack of an explanation of the unique monopoly power of money goes hand in hand with a distortion of Karl Marx’s theory of value and commodities. Mr. Stanford reduces Marx’s theory to the so-called theory that labour in general, and only labour, produces value. From his book (2008) Economics for Everyone: A Short Guide to the Economics of Capitalism, page 54:

An economic underpinning for this fightback was provided by Karl Marx. Like the classical economists, he focused on the dynamic evolution of capitalism as a system, and the turbulent relationships between different classes. He argued that the payment of profit on private investments did not reflect any particular economic function, but was only a social relationship. Profit represented a new, more subtle form of EXPLOITATION: an indirect, effective way of capturing economic surplus from those (the workers) who truly do the work. Marx tried (unsuccessfully) to explain how prices in capitalism (which include the payment of profit) could still be based on the underlying labour values of different commodities. [my emphasis] 

Mr. Stanford’s evident distortion of Marx’s theory comes out even more clearly from the following passage (page 71): 

For simplicity, the classical economists adopted a labour theory of value. In this theory, the prices of producible commodities reflect the total amount of labour required to produce them (including both direct labour and the indirect labour required to produce machines and raw materials used in production – a complication we’ll discuss in the next chapter). Marx realized this simplified theory was wrong: prices under capitalism must also reflect the payment of profit. But he was politically committed to explaining prices on the basis of their “underlying” labour values, so he undertook a complicated (and ultimately unsuccessful) attempt to explain prices on the basis of labour values  [my emphasis]. Neoclassical economists, responding to Marx, tried to provide an intellectual and moral justification for the fact that profits are paid on capital investments by attempting to show that capital itself is actually productive. These efforts, too, were unsuccessful.

In the end, the relevance of this long controversy is not entirely clear. Productive human effort (“work,” broadly defined) is clearly the only way to transform the things we harvest from our natural environment into useful goods and services. In this sense, work is the source of all value added. For society as a whole, just as for that lazy teenager, if we don’t work, we don’t eat. Nothing else – not alien landings, not divine intervention, and not some mystical property of “capital” – is genuinely productive. Under capitalism, profits are paid on capital investments. These profits reflect a social institution called “private ownership,” not any real productive activity or function. (In fact, as we’ll see, it’s not even possible to clearly measure capital, let alone to prove that it is productive.) Because of this institution of private ownership of capital, profits are reflected in the prices of various goods and services (and hence also in GDP).

We can accept that human work is the sole driving force of production while simultaneously recognizing that prices (and things that depend on prices, like GDP) depend on other factors, too – namely, under capitalism, profit.

There are a couple of points worthy of notice in this passage. Firstly, Mr. Stanford’s view that labour is a primary but not exclusive determinant of value (and price–for him there is really no difference between them since he reduces money to purchasing power) is somewhat similar to David Ricardo’s nineteenth century theoretical position, which held a 90 percent labour theory of value, so to speak since Ricardo argued that it was labour mainly but not exclusively that formed the value (and price) of commodities. . Ricardo (1821/2004)  wrote in his On the Principles of Political Economy and Taxation (page 30):


The principle that the quantity of labour bestowed on the production of commodities regulates their relative value, considerably modified by the employment of machinery and other fixed and durable capital.

In the former section we have supposed the implements and weapons necessary to kill the deer and salmon, to be equally durable, and to be the result of the same quantity of labour, and we have seen that the variations in the relative value of deer and salmon depended solely on the varying quantities of labour necessary to obtain them,—but in every state of society, the tools, implements, buildings, and machinery employed in different trades may be of various degrees of durability, and may require different portions of labour to produce them. The proportions, too, in which the capital that is to support labour, and the capital that is invested in tools, machinery and buildings, may be variously combined. This difference in the degree of durability of fixed capital, and this variety in the proportions in which the two sorts of capital may be combined, introduce another cause, besides the greater or less quantity of labour necessary to produce commodities, for the variations in their relative value—this cause is the rise or fall in the value of labour.

Secondly, like many reformists (as well as some self-proclaimed Marxists), Mr. Stanford identifies Marx’s labour theory of value as either identical to or merely a variant of Ricardo’s labour theory of value. Ricardo identified labour as such or general labour (which was performed in prehistoric times, in ancient Greece, in feudal Europe, etc.) as the main determinant of the value of commodities. Labour as such is what Mr. Stanford calls “human work is the sole driving force of production.”  Mr. Stanford implies that this is supposedly Marx’s position. Such a view is a complete distortion of Marx’s theory–since it lacks any relation to Marx’s theory of commodities, value, use value, money (and hence prices).

It should be pointed out immediately that Ricardo had a labour theory of value but failed to connect his labour theory of value to the existence of money and its monopoly power of immediate purchasing power. The same applies to Mr. Stanford’s own reference to the purchasing power of money, on the one hand, and his attempt to partially dissociate prices from labour on the other (we cannot even talk of “value” in relation to Stanford’s theory since for him there is really only prices). 

If money is purchasing power, or the capacity to immediately be exchangeable with other commodities (with the other commodities lacking this power), then a theory should be able to explain how and why and through what means money has this power. From Capital: A Critique of Political Economy. Volume 1:  page 186: 

The difficulty lies not in comprehending that money is a commodity, but in discovering how, why and by what means a commodity becomes money.

In terms of the structure of the first two chapters of volume one of Capital, Samezo Kuruma (2018), in his Marx’s Theory of the Genesis of Money How, Why, and Through What is a Commodity Money? has this to say (pages 54-55): 

Marx analyses the how of money in the theory of the value form [in the third section of the first chapter of Capital, and the why of money in the theory of the fetish character [the fourth section of the first chapter of Capital], whereas in the theory of the exchange process [chapter two of Capital] he examines the question of through what. …  Marx’s indication of these three difficulties clearly suggests that he managed to brilliantly overcome them, but no hint is provided as to where this is carried out. My view is that Marx answered the questions of how, why, and through what, respectively, in Section Three [of chapter one of Volume 1 of Capital], Section Four [of chapter one of Volume 1 of Capital], and Chapter Two [of Volume 1 of Capital]. So the three problems in the sentence are listed in the order that Marx solves them in Capital.

Incidentally, Marx does not pose these three problems as a sort of logical schema or in some frivolous manner; they are realistic problems. Without solving each, an adequate understanding of money is not possible. Indeed, earlier political economy slipped into a variety of errors by failing to solve those problems.

Marx’s explanation of the purchasing power of money lies, on the one hand, in the specific nature of the labour that results in the existence of money as a monopoly power–abstract labour or general human labour or universal labour without distinction. This general social labour, unlike earlier societies, does not find its expression in the immediate results of the production process (the process of producing our lives as human beings).

The reference to the immediate results of a labour process that does not result in a social product directly means that it can only be expressed indirectly or through a process of mediation–the exchange process. Contrary to Stanford’s characterization of Marx’s theory of value, the kind of labour is therefore historically specific and not some general social labour that exists and acts as or functions exclusively as social labour regardless of  the kind of society. Stanford, however, presents Marx’s labour theory of value as just that: as ahistorical. 

Abstract labour is a kind of negative labour–it is not social labour as workers work concretely or materially, and it is this labour which produces the value of a commodity, say beer, and not the labour which produces the beer as beer concretely.

On the other hand, a definite kind of labour, concrete labour, produces a definite kind of  use value, say beer. But the result of this concrete labour, since it is linked to abstract labour, is a commodity that is not yet social in its concrete form of beer. A further process–the exchange process–is required to convert the beer into a form where it can function as “purchasing power”–by being able to be converted into any form of commodity–money. 

At one pole is the commodity, beer, which lacks “purchasing power,” and at the other pole is money, which monopolizes purchasing power. 

I will elaborate on this in the next section.

Mr. Stanford, therefore, does not have a theory of money that links money to a specific kind of production. His theory of money as purchasing power, like Bailey’s theory, is an exchange theory of money. Marx, on the other hand, had a production theory of money that referred to a specific kind of society. That theory, however, cannot be characterized as merely a labour theory of value; Marx in fact had a dual or twofold theory of labour.

Marx’s Dual or Twofold Theory of Labour and Commodities

This labour that is connected to the monopoly purchasing power of money is not general labour that human beings have performed throughout history, but labour that is organized in a specific way–as I pointed out in one of my published articles, Dewey’s Materialist Philosophy of Education: A Resource for Critical Pedagogues? In pages 259-288, The European Legacy, Volume 11, Issue 3, pages 274-275: 

Marx provided a systematic logical critique of present capitalist society (the contextual basis for the functioning of schools), on the basis of a dual theory of use or a dual theory of labour. It is this theory which provides the ground for his analysis and critique of capital as well as his subsequent account of the history of the emergence of capital. It is an understanding of capital logically via the twin concepts of concrete and abstract labour, and their further development, which constitutes his critique; an understanding of the coming into being of capital presupposes this logical determination.

Marx relied on Aristotle’s distinction between the use of shoes as shoes and the use of shoes as a means for obtaining another commodity (as a means of exchange):

Take for example, a shoe—there is its wear as a shoe and there is its use as an article of exchange; for both are ways of using a shoe, inasmuch as even he that exchanges a shoe for money or food with the customer that wants a shoe uses it as a shoe, though not for the use peculiar to a shoe, since shoes have not come into existence for the purpose of exchange.

Both are uses of shoes, but they are not the same kind of use. Marx expanded the idea of the dual use of things to include labour in capitalist society. Labour in capitalist society has a dual use which constitutes a contradictory dynamic that develops the material production process, while also tending to undermine the material production process through crises. Marx evidently considered that a dual theory of the use of things or a dual theory of labour was central for a critical understanding of capitalist society:

[London], August 24, 1867
The best points in my book are: 1) the two-fold character of labour, according to whether it is expressed in use value or exchange value. (All understanding of the facts depends upon this.) It is emphasised immediately, in the first chapter.

Marx reiterated the importance of the two-fold character of labour for his critique of capitalist society a few months later:

[London], January 8, 1868

It is strange that the fellow [Eugen Duhring] does not sense the three fundamentally
new elements of the book:
. . . 2) That the economists, without exception, have missed the simple point that if the commodity has a double character—use value and exchange value—then the labour represented by the commodity must also have a two-fold character, while the mere analysis of labour as such, as in Smith, Ricardo, etc., is bound to come up everywhere against inexplicable problems. This is, in fact, the whole secret of the critical conception.

It is Marx’s argument that social labour, in the form of abstract human labour, has distinctive characteristics which oppose it to human labour as concrete labour. It is only through being connected to other labours indirectly that it becomes social labour. The concrete labour that is performed has no direct connection to the labour of other people. To put it another way, the material process of life and the social process of life, which form a unity in the case of human beings, since human beings are both material and social beings, is sundered in capitalist society.

This situation can also be expressed in terms of parts and wholes. Each capitalist unit is a part of the total division of labour. However, this part is quite curious. It is a part that does not function as a part qualitatively while human labour is being expended. The labour being performed is not social labour, connected to other human labour and determinate needs. It needs to become a part only after the micro-production process is at an end, if it is to count as a part of the whole.

Since concrete labour is not social labour as it is being performed, and since the latter is not expressed immediately in concrete use-values, the possibility arises that the amount of concrete labour does not translate into the same amount of social labour. This possible non-identity has major implications for the structure of human life: a dynamic quantitative process is built into production. The quantity of labour required to produce output becomes a concern because the mere expenditure of concrete human labour does not necessarily suffice to meet standards set by the general level of productivity in a particular industry. If those standards are not met, the capitalist firm cannot in the long run reproduce itself. For the capitalist firm to survive, an external pressure is brought to bear on producers to meet that standard. The peculiar character of the part of a whole in capitalist production is thus that the quality of functioning as part of total social labour is transformed into a purely quantitative form. The specific quality of social labour in capitalist society is the priority of its quantity over its concrete quality, or abstract labour over concrete labour.

There is further evidence that Marx considered the twofold character of labour to be of major importance. Ironically, Marx explicitly underlines its importance by providing a separate heading for it in the first chapter and emphasizing its importance for his critique of political economy (Capital, Volume 1: pages 131-132):  


Initially the commodity appeared to us as an object with a dual character, possessing both use-value and exchange-value. Later on it was seen that labour, too, has a dual character: in so far as it finds its expression in value, it no longer possesses the same characteristics as when it is the creator of use-values. I was the first to point out and examine critically this twofold nature of the labour contained in commodities. As this point is crucial to an understanding of political economy, it requires further elucidation.

This dual character of labour produces a commodity–a contradictory unity of use value and value, and this is linked to the nature of money.

The Dual or Twofold Character of Labour and Commodities, on the One Hand, and the Nature of Money (or the Form of Value) on the Other: Or How a Commodity Becomes Money 

Marx’s dual theory of labour is related to Marx’s dual theory of commodities. Commodities have two essential aspects to them: they are both use values and values, and concrete labour produces use values whereas abstract labour produces the value of the commodity. 

This nature of commodities as involving two essential aspects is not, however, immediately expressed in the commodities themselves. It is only concrete labour that is expressed in the use value of the commodity as the specific kind of labour that produces the specific kind of commodity, such as beer. The concrete labour which we performed in the Calgary brewery where I worked, for example, resulted in the concrete beer as beer. Simultaneously, the social nature of the labour performed, as forming part of the total labour of society within a division of labour, is not social labour in its immediate form as beer.

Since a social process emerged that resulted in the performance of labour that is not immediately social in nature (a negative process, if you like), another process is required to express the social nature of the labour performed–a process of exchange. 

From Capital, Volume 1, page 165:

Objects of utility become commodities only because they are the products of the labour of private individuals who work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their private labours appear only within this exchange. In other words, the labour of the private individual manifests itself as an element of the total labour of society only through the relations which the act of exchange establishes between the products, and, through their mediation, between the producers. 

Since the concrete labour performed is not social labour directly but only indirectly, its social nature can only be expressed indirectly–through another, different commodity, in the use value of another commodity. However, merely expressing one commodity, say beer, in another commodity, say in steel, would not express the general social nature of the labour that produces value. To express adequately abstract labour and value, it is necessary that the internal opposition of the commodity between the concrete labour and concrete use value, on the one hand, be completely contrasted with abstract labour and value on the other in an external form–ultimately in money as the unique commodity that has the monopoly power of being able to purchase any commodity. This monopoly power of money necessarily excludes such power attaching to the other commodities. Capital, Volume 1, page 161:

Finally, the last form, C [practically, the money form], gives to the world of commodities a general social relative form of value, because, and in so far as, all commodities except one are thereby excluded from the equivalent form. A single commodity, the linen, therefore has the form of direct exchangeability with all other commodities, in other words it has a directly social form because, and in so far as, no other commodity is in this situation. 26

26. It is by no means self-evident that the form of direct and universal exchangeability is an antagonistic form, as inseparable from its opposite, the form of non-direct exchangeability, as the positivity of one pole of a magnet is from the negativity of the other pole. This has allowed the illusion to arise that all commodities can simultaneously be imprinted with the stamp of direct exchangeability, in the same way that it might be imagined that all Catholics can be popes. It is, of course, highly desirable in the eyes of the petty bourgeois, who views the production of commodities as the absolute summit of human freedom and individual independence, that the inconveniences resulting from the impossibility of exchanging commodities directly, which are inherent in this form, should be removed.

Money is the form of value–the expression of value, or the expression of the general nature of the labour that is not directly social. The internal opposition of abstract labour and concrete labour, and value and use value, finds expression through the external opposition of all commodities on the one side expressing their value in one commodity–money.

Stanford’s definition of money as “purchasing power” simply fails to address “how, why and through what means” something can serve as money or purchasing power of commodities. 

Obviously, not all social labour is expressed in this form; when I cooked for my daughter, my cooking was social in nature but it did not assume a form different from the concrete result. In a capitalist society, by contrast, the social nature of labour assumes–and must assume–a form external to the concrete use value produced by concrete labour. 

Political Implications of the Monopoly of the Purchasing Power of Money

The connection between a specific character of social labour and money has political implications since such a connection expresses a kind of society that necessarily escapes the control of the workers and in fact leads, ultimately, to the control over them of their own products. 

To treat Marx’s theory as purely an economic theory without any political implications, of course, is useful for both academics–and for the class of employers. 

Elena Lange(2019) has addressed this issue by noting that Marx’s theory is a theory of fetishism and not just a labour theory of value in her article “The Transformation Problem as a Problem of Fetishism,” pages 51-70, in Filosofski Vestnik, Volume 40, issue Number 3, page 52: 

For Marx, lacking in the classics, and strangely ignored in Marx‘s modern interpreters, the distinction between abstract and concrete labour is the crucial critical heuristic to clear the path to a thoroughgoing critique of the capitalist relations of production and its inverted self-representations. This distinction is directly reflected in the formulation of the labour theory of value, by determining the social substance of value as abstract-general human labour and distinguishing it from concrete labour as manifested in the commodity’s use-value.  This conceptualisation equally allowed Marx to pierce the problem of form and content – the problem of fetishism.

Mr. Stanford, by assuming as a fact the direct purchasing power of money rather than explaining it, misses the connection between the monopoly of the purchasing power of money and the lack of social power of all other commodities–including workers (after all, there is a market for workers, is there not?). 

The nature and implications of this connection between the production of commodities (a contradictory unity of use value and value) via abstract and concrete labour, the expression of the value of a commodity in money and the fetishism of commodities will be addressed in another post in this series, however. The next post in this series will look at how the exchange process escapes the control of the participants in the exchange process 


Mr. Stanford’s definition of money as purchasing power is definitely an inadequate definition of the nature of money since it excludes the conditions for something to be money: concrete labour cannot be directly social labour. His interpretation of Marx’s so-called labour theory of value is also definitely inadequate since it excludes any consideration of the dual nature of labour and commodities in a capitalist society; in effect, he treats Marx’s theory to be a variant of Ricardo’s ahistorical theory of all labour throughout history somehow producing (exchange) value. Ricardo’s labour theory of value has little connection with the necessity for money to arise, on the one hand, and the monopoly nature of money (and the simultaneous exclusion of other commodities) on the other.   

Mr. Stanford’s definition of money as “purchasing power” has also a parallel in Ricardo’s theory in that both fail to connect their theory of money to capitalist production. 

Stanford’s view, similar to Ricardo’s view, that somehow labour is more or less the primary cause of the quantitative price of commodities but not the exclusive cause once “capital” (meaning machinery and other means of production that last longer than one year) fails to engage in any inquiry into the peculiar kind of labour (really a kind of organization of  social labour) that needs to be expressed in something other than the immediate use value (such as beer) which is produced. 

 His reduction of Marx’s theory to Ricardo’s theory leaves Mr. Stanford’s theory of money without any connection to the purchasing power that money has–a power that ultimately is exercised over the working class. The twofold or dual nature of labour necessarily involves the expression of the nature of abstract labour as value in the form of money, which excludes all other commodities from being money; purchasing power on one side necessarily involves a lack of such a power on the other side. 

Mr. Stanford’s economics for everyone–is it really for the working class? 

The connection between a specific character of social labour and money has political implications since such a connection expresses a kind of society that necessarily escapes the control of the workers and in fact leads, ultimately, to the control over them of their own products. That connection will be explored in another post.