Paper money is promises to pay gold, which is directly exchangeable with all other commodities. Paper money, therefore, is merely a symbol of the exchange really effected by gold.
This universal equivalent takes the place of barter, which is the primitive and direct form of exchange,195 and at which stage the distinction between buyer and seller has not arisen. It now gives 250 place to the first form of indirect exchange, in which a third term is interposed between the articles that are to be parted with and acquired. Now for the first time the above distinction takes shape. The seller has a commodity which he does not propose to consume, and therefore he acquires with it money, with which money he buys in turn another commodity equal in quantity to that with which he has parted, but different from it in quality. Marx has indicated this transaction by the wellknown and useful formula, Commodity, Money, Commodity: C—M—C.
The habit of hoarding, which is common amongst ancient societies, and also among barbarous peoples, is a natural concomitant of this stage of exchange, and is the first germ of capital. It 1s brought about by the arrest of the above process at its first phase thus, C—M— , the seller of the commodity does not go on to buy. Under these conditions money becomes a social power; and being a commodity like other commodities, can be acquired by private persons, whom it invests with social power. Therefore in 251 those states of society which had not outgrown their primitive social ethics, money was considered the embodiment of all evil.
This stage of exchange marks the precommercial use of money; after a while it tends to develop into another stage, which carries the exchange a step further. The holder of a commodity which he does not propose to consume exchanges it for money, which he again exchanges for a