in every country is regulated by the value of the commodities which are to be circulated by it; that the value of goods annually bought and sold in any country requires a certain quantity of money to circulate and distribute them to their proper consumers and can give employment to no more. The channel of circulation necessarily draws to itself a sum sufficient to fill it and never admits any more. (Wealth of Nations, Bk. IV, ch. I.)"
Explanation:—The term price level, as used by us, means the general range of prices. Marx's own word for this is Preisgrad. Price sum means the total amount of sales. Marx's word for this is Preissumme. It is the product of the total quantity of commodities sold multiplied by the price level.
Money means the money in actual circulation, not including hoards and reserves.
Commodities means the commodities actually on the market for sale, not including stored or warehoused commodities.
Products mean articles that have been produced, but have not yet been put upon the market for sale as merchandise or commodities. Products includes articles produced for use as well as those produced for sale.
These distinctions, if kept clearly in mind, will aid us to express ourselves with more brevity and precision.
The quantity theory according to Marx.
Marx admits that the quantity theory of money applies in the following cases:
First, to fiat money.
Second, to partially fiat money, as light weight silver coins under limited coinage.
Third, to times of great changes in the value of gold, which generally occur on the discovery of new and productive mines.
Fourth, to full weight free coinage gold money in gold producing countries, where the gold is coined direct for the miners' account without being first bartered for commodities. (At least this is as we understand Marx.)
Fifth, to cases where the weight of the unit is changed. But it does not apply, Marx claims, to full weight, free coinage gold money in non-gold producing countries, where the gold has to be imported after having been bartered at the mines for commodities, provided, and mark well only on this proviso, viz., that the value of gold, that is, the price level, remains unchanged during all the changes in the quantity of money! Wer lacht da? What are you laughing about? We claim that the value of money depends on its quantity. Marx claims that the quantity of money has nothing to do with its value, provided its value always remains the same. We claim that a change in the quantity of money will cause a change in its value. Marx says no, a change in the
