As a self-identified non-Marxist who probably doesn’t know better, but who clearly knows Capital better than Jamie Merchant, I felt it necessary to point out how much of a complete charlatan Jamie Merchant is by throwing a really fucking long quote from Engels in his face that completely contradicts him on just about every fucking point he made in the following footnote.
Fuck. You. Jamie.
There is a widespread, mistaken tendency to attribute the barter theory of money to Marx, even by some self-identified Marxists who really should know better. This mainly results from reading the first few chapters of the book Capital as if they were introducing a historical sequence, in which one first has basic commodity trade, then labor values, then money is introduced to measure labor values, leading to the analysis of C-M-C as if it were describing a simple market for exchange, and so on. This tendency is baffling, since the very first sentence of the book Capital tells you what Marx is dealing with: “The wealth of societies in which the capitalist mode of production prevails …'” Capital, vol. I (London: Penguin, 1990 ) 125. In other words, the object is a fully developed, modern capitalist society in which barter is irrelevant or nonexistent. The presentation of the categories of commodity, labor, and money in the opening chapters of the book are steps in an immanent critique of bourgeois political economy, revealing how the terms of that science systematically misapprehend, or fetishize, economic phenomena by analyzing them solely as they appear, rather than as parts of the whole that is their historical essence. Money becomes mediated by its place within the larger theory as it emerges across the entire work, including, crucially, the analysis of the process of production, accumulation, and class struggle. This will become evident later in the argument.Jamie Merchant, The Money Theory of the State: Reflections on Modern Monetary Theory
We all know that at the beginning of society, products are consumed by the producers themselves, and that these producers are spontaneously organized in more or less communistic communities; that the exchange of the surplus of these products with strangers, which ushers in the conversion of products into commodities, is of a later date; that it takes places at first only between individual communities of different tribes, but later also prevails within the community, and contributes considerably to the latter’s dissolution into bigger or smaller family groups. But even after this dissolution, the exchanging family heads remain working peasants, who produce almost all they require with the aid of their families on their own farmsteads, and get only a slight portion of the required necessities from the outside in exchange for surplus products of their own. The family is engaged not only in agriculture and livestock-raising; it also works their products up into finished articles of consumption; now and then it even does its own milling with the hand-mill; it bakes bread, spins, dyes, weaves flax and wool, tans leather, builds and repairs wooden buildings, makes tools and utensils, and not infrequently does joinery and blacksmithing; so that the family, or family group, is in the main self-sufficient.
The little that such a family had to obtain by barter or buy from outside, even up to the beginning of the 19th century in Germany, consisted principally of the objects of handicraft production — that is, such things the nature of whose manufacture was by no means unknown to the peasant, and which he did not produce himself only because he lacked the raw material or because the purchased article was much better or very much cheaper. Hence, the peasant of the Middle Ages knew fairly accurately the labor-time required for the manufacture of the articles obtained by him in barter. The smith and the cartwright of the village worked under his eyes; likewise, the tailor and shoemaker — who in my youth still paid their visits to our Rhine peasants, one after another, turning home-made materials into shoes and clothing. The peasants, as well as the people from whom they bought, were themselves workers; the exchanged articles were each one’s own products. What had they expended in making these products? Labor and labor alone: to replace tools, to produce raw material, and to process it, they spent nothing but their own labor-power; how then could they exchange these products of theirs for those of other laboring producers otherwise than in the ratio of labor expended on them? Not only was the labor-time spent on these products the only suitable measure for the quantitative determination of the values to be exchanged: no other way was at all possible. Or is it believed that the peasant and the artisan were so stupid as to give up the product of 10 hours’ labor of one person for that of a single hours’ labor of another? No other exchange is possible in the whole period of peasant natural economy than that in which the exchanged quantities of commodities tend to be measured more and more according to the amounts of labor embodied in them. From the moment money penetrates into this mode of economy, the tendency towards adaptation to the law of value (in the Marxian formulation, nota bene!) grows more pronounced on the one hand, while on the other it is already interrupted by the interference of usurers’ capital and fleecing by taxation; the periods for which prices, on average, approach to within a negligible margin of values, begin to grow longer.
The same holds good for exchange between peasant products and those of the urban artisans. At the beginning, this barter takes places directly, without the medium of the merchant, on the cities’ market days, when the peasant sells and makes his purchases. Here, too, not only does the peasant know the artisan’s working conditions, but the latter knows those of the peasant as well. For the artisan is himself still a bit of a peasant — he not only has a vegetable and fruit garden, but very often also has a small piece of land, one or two cows, pigs, poultry, etc. People in the Middle Ages were thus able to check up with considerable accuracy on each other’s production costs for raw material, auxiliary material, and labor-time — at least in respect of articles of daily general use.Frederick Engels, Capital, Volume III, Supplement
Again, Fuck you Jamie, very much.