From Money as Universal Equivalent to Money as Currency

Money as the universal measure of value

Last week, I demonstrated that as commodity production and exchange develop, one or at most a few commodities emerge as general equivalents. In their role of general equivalents, they measure the exchange value of commodities in terms of their own use values.

Originally, the commodities that played the role of general equivalents were those that were the main form of wealth of the given society. For example, in the Homeric poems, wealth is measured in terms of cattle. Cattle were indeed an early form of what Marx called money material, the physical material of the use value of the commodity that acts as the universal measure of value. Some societies even measured the exchange value of commodities in terms of slaves. In this case, the enslaved workers not only produced the surplus product for the exploiting non-workers, they served as money material as well!

But as commodity production and exchange developed further, slaves and cattle did not make very good money. Slaves can only be divided so far. A half a slave is a dead man or woman, not a slave. Slaves and cattle aren’t durable but live only a certain number of years. Enslaved humans generally had quite short lifetimes. As commodity production and exchange developed, a universal equivalent emerged whose main use value was its monetary function.

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