Money may be one of the most common things on earth, it may have been just a piece of printed paper, but for Karl Marx money is more than just what it seems to be, more than just piles of minted coins gold, silver of nickel or printed paper. There is something in money that moves the world in many ways and that is what the subject of Marx's theory of money is all about. Money is the foundation of every civilization's growth and prosperity, the mere basis of direction for a nation to either go collapse or dominate. In a nutshell, money is defined as a standard expression of an exchanged value. Karl Marx has explained money in philosophical perspectives in his theories (JCD, Web, 2008).
Duncan Foley has described and elaborated the philosophies of Marx about the theory of money and value. He emphasized the key points that have emerged from the theory and the most important one is that money is a primary form of value. It is quite difficult to decipher the relationship between the two because average individuals are more familiar with the money as it is and not with its value. This is because value doesn't always appear in the physical form of money. Foley took an example of a capitalist's financial report that shows the value of goods that are in the inventory and the amount of fixed capital that is not yet been depreciated. All of those have value, but not literally of money. However, when the capitalist decided to sell what he has in his inventory or sell some of his asset that is the time that the value will turn into money. But the amount of money in exchange for the goods and assets will be determined by their own value.
The philosophy was followed by Marx from Smith in regarding that the exchangeability of commodities has its own property known as value. But when this principle is practically applied in the society, “the products will come to have two distinct character as values and as a use value” (Foley 1). The two characteristics also highlights two powers, one is to satisfy human wants and needs the other power is to make an exchange of goods or services. Marx have also regarded the power of exchangeability that commodities possess. Exchangeability manifests value in the sense that labor is expended to produce the commodities. Therefore, labor is also a form of value being exchanged for money and in return labor produces products that capitalists then exchange for money (Foley 3).
Because of the reason that money is the standpoint of a particular commodity, there is often a misconception about the similarities of value and price. Foley (2) emphasized that commodities commands particular amount of money, which is the price, value however, is the amount of time and effort poured into the production of commodities. It was also mentioned that money is an essential role in the exposition of Marx in clarifying relations between capitalists production and value. This idea embodies the ratio of the amount of labor time and its value in money. Like for example a day's work is valued at three silver coins and to be able to quality to that amount of money, the laborer has to complete a total of six hours of work. Therefore, the value of money is expressed in six hours of labor. Foley argued that Marx's theory of money should have been revised in two ways. One is the value added to be divided by the amount of money and secondly to revise the links between money because of its differences by country and that Marx's basis of money is different from the modern society (Foley 7).
The way the theory of money works in a reality settings is that individuals have unique needs and wants. In order for a person to obtain the commodity that he wants, he needs something valuable to exchange it with and the most common exchange material is money. To put it in a scenario, if a guy wants a new T.V needs to buy one, however if he does not have enough money to buy a new T.V the guy will have to find an alternative, something that was of value that can be exchanged into money and the best source of value is no other than his own labor power. The guy can consider his labor as a commodity that he can sell to capitalists who needs manpower to work on the T.V factory. Then, once hired by the capitalist the guy will have to work within a specified period of time in a day for wages. Salary is money paid to the guy for his labor. Therefore, he have sold his labor for money and that is already a form of exchange of value and money. Once the guy have earned enough from his wages, then he can buy the T.V he wanted using the money he got by selling his labor. Going back to the capitalist, because of the labor he bought from the guy he hired to work in his T.V factory he then be able to produce more goods which means more value to sell, the more the capitalist sold the more money he gets.
Works Cited
Foley, Duncan K. "On Marx'sS Theory of Money." Social Concept 1.1 (1983): 5-19, 1983. Print.
JCD. "Fragments, or: Duncan Foley on Marx’s theory of Money." Fragments, or. Fragments.awedge.net, 6 July :2008. Web. 10 July 2012.
