Money in the theory of Karl Marx


In Karl Marx’s theory, money occupies a central place as a key element in the functioning of the capitalist system. Marx analyzes the nature of money in the context of the non-market economy and the market economy, emphasizing that money is above all a social relation.

In this essay, we will examine the concepts of the non-market economy and the market economy, the importance of money as a social relation, as well as Marx’s three fundamental teachings on the nature of money.

Non-market economy and market economy

The first robust conceptualization of the nature of money as an institution in economics undoubtedly originated in the work of Karl Marx (1818-1883). He establishes an original theoretical difference between a non-market economy and a market economy and his analysis of money stems from this distinction.

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In a non-market economy, the coordination of activities is typically carried out either in a cooperative logic, that is to say that
all members of society decide equally how production activities are organized, either in a hierarchical logic, when an authority imposes its choices on its subordinates, or finally in a community logic, that is to say say with social norms that apply to all.

In a number of traditional or pre-industrial societies, for example, the production of wealth is subject to ex ante centralization within the framework of a system of conventions and pre-established norms, for example by the chiefdom in a tribal society, then a distribution and, where appropriate, a redistribution themselves conventionally pre-established between the members of society.

In this case, Marx shows that work and the exchange of wealth attached to it are the object of a use controlled by a system of norms: norms of kinship to organize domestic production, religious norms to organize offerings, political norms for the payment of tribute, etc.

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Similarly, in certain rural communities of feudal society, there is a mode of coordination that makes it possible, ex ante, to organize the
production of wealth (for example, with a division of labor planned collectively between the inhabitants of a village or placed under the authority of the local lord to sow, cultivate, harvest cereals; then produce flour, bread and finally distribute that within the village population).

The fable of barter is therefore false: in these communities no man has ever produced without knowing in advance to whom he will have to give up the fruit of his labor. The problem of the double coincidence of needs did not arise because it was solved ex ante.

In contrast, a market economy is an economy in which coordination by the market is preponderant to produce wealth and carry out exchanges between all individuals.

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In a market economy, the wealth produced is merchandise, which for Marx means produced for the market and not for oneself or for a member of one’s community.

These commodities have a use value and simultaneously an exchange value. The organization of the economy on the basis of the market
implies that there is no a priori coordination mechanism in the production of commodities.

For example, in a market economy, a carpenter produces a commodity: the service of repairing and maintaining the roofs of houses. The carpenter assumes that he will be able to buy the other goods he needs with the proceeds of the sale of his own goods.

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This mode of coordination is decentralized, it assumes that the market will make the activities of the agents coherent between them, so that the goods can be produced in sufficient quantities and can be efficiently distributed between them.

Money is a social relation

K. Marx shows that the introduction of the market and therefore the transition from the non-market economy to the market economy leads to “de-coordination” of economic activities. Thus in a society based on the market and consequently endowed with a certain division of labour, each time an agent (a carpenter, a tanner, a weaver, etc.) produces a commodity, nothing allows a priori to say how much he will be able to sell, nor at what price, nor if it will allow him and his family to live on the fruits of his labor.

Moreover, nothing allows him to say whether the other agents will, in return, be able to produce the goods he needs to live, nor at what price, etc.

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Faced with this threat of fragmentation, an institutional mechanism for the socialization of private work is essential. Money is thus this institution which, through monetary exchanges, ensures a certain degree of centralization.

Thus, according to Marx, “the social organism of production, whose disjointed members – membra disjecta – arise from the division of labor, bears the imprint of spontaneity and chance, whether one considers or the very functions of its members, or their proportionality ratio.

Also our traders discover that the same division of labor, which makes them independent private producers, makes the course of social production, and the relations it creates, completely independent of their wills, so that the The independence of people from each other finds its necessary complement in a system of reciprocal dependence, imposed by things.

The division of labor transforms the product of labor into a commodity, and thereby necessitates its transformation into money.

Thus, according to Marx, money cannot be reduced to a commodity to which singular functions have been attributed, even if gold is indeed a commodity before becoming money. Money is fundamentally a social relationship, it is the institutional response to the fragmentation produced by market exchange.

Taking up this analysis of Marx, the French economists Michel Aglietta and André Orléan affirm: “In the economic order, money is the instrument for converting the individual into the collective and the private into the social” [AGLIETTA, ORLÉAN, 1998] .

The three teachings of money according to Marx

Three important lessons can be drawn from this conception of the nature of money set out by Marx.

a. To affirm that money is a social relation means that it is not a “thing”, nor a particular commodity chosen from among all those produced in the economy:

Marx disputes any substantialist definition of money. Money is by nature an abstraction. It is a social relationship based on a set of explicit or implicit rules; rules which ensure the articulation between the fragmentation of the market economy and the ex post coordination which makes it possible to ensure the coherence of the whole of the social system.

Money is the instrument allowing the social validation of private work. In the capitalist system, which is a particular case of market economy, this social relation leads to a particularly asymmetrical relation: money is the instrument by which the relations of exploitation are concealed behind the appearance of a market relation. fair.

b. A market economy without money cannot exist.

Not only is barter a “vision of the mind”, but this fable of barter is based on a strong internal inconsistency, because trying to account for market exchange independently of money does not allow us to understand the true nature of this exchange. type of exchange.

c. Money has no reason to exist in an economy that is not based on market exchange:

whether work is socially validated ex ante as by a coercive system of norms based on hierarchy (political, religious, family, etc.) or by horizontal coordination based on cooperation, the question of money and therefore of its existence in the economy does not arise.


In Karl Marx’s theory, money occupies a central position as a social relation in the capitalist system. Distinguishing between the non-market economy and the market economy, Marx emphasizes that money is much more than just a means of exchange. It is a tool that shapes economic relations, exploits workers and maintains class inequalities.

Understanding Marx’s teachings on money allows us to question the foundations of capitalism and consider alternatives that aim to create a more just and equitable economy.

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