The General Equivalent and the Unity of Marx’s Capital

One of the most striking aspects of Marx on Money (de Brunhoff Reference Brunhoff1976a), as well as Suzanne de Brunhoff’s other books, is their discrepancy from other well-known readings of the first section of Capital: whether Friedrich Engels’s understanding of it as the historical reconstruction of the simple market mode of production, or the Neue Marx Lektüre interpretation, which makes it the theoretical exposition of the value-form (Elbe Reference Elbe2013). While most approaches to money in Marx seem to be based on a cursive reading of this section, and Althusser famously recommended to skip it when reading Capital for the first time, de Brunhoff writes: “All who want to understand the whole contribution of Marx’s historical materialism should read the first section, of Volume 1 of Capital, where a theory of commodities and money is presented” (de Brunhoff Reference Brunhoff1976a, p. 125). Yet, Marx on Money does not offer a general reconstruction of Capital based on this initial premise; and neither does de Brunhoff use this section as the raw material for a social theory of alienation or reification by money. It could not even be argued that de Brunhoff seeks to update or to adapt Capital to more recent monetary and financial phenomena, i.e., to sort out these elements of the book that the movement of history has left behind from those that still remain actual. Her approach is more modest in appearance, yet its theoretical effects are far-reaching: above all, de Brunhoff seeks to demonstrate the crucial importance of the concept of general equivalent, and the particular nature of the monetary form within Marxist commodity theory (de Brunhoff Reference Brunhoff1976a, p. xiv).

The strength of Suzanne de Brunhoff’s analysis stems from her ability to demonstrate that, without its prior genesis in the first section of Capital, the notion of general equivalent could not have been elaborated. If we failed to consider it, she suggests, we would not be able to grasp the crucial importance of the general equivalent for the entire capitalist economy and would also lack the means of understanding how it continues to operate in forms of financial circulation that are removed from monetary circulation itself. General equivalent has two different meanings, depending on whether considered from a theoretical or practical perspective. It means, of course, that money represents the value of all commodities and that, conversely, all commodities relate to each other through their relationship to money. But above all, it also means that all commodities must be exchanged for money in order to validate their existence as commodities, i.e., their existence as a social use value (Marx Reference Marx[1867] 1990, p. 201). In other words, the concept of general equivalent refers both to the general representative of all values and to the monetary constraint weighing on the exchange of values. This constraint is specific to any market economy and irreducible to the capitalist mode of production, and continues to impose itself as such in the most developed forms of monetary circulation. This dual aspect of monetary constraint—as both specific to the capitalist economy as a market economy and distinct from the capitalist economy as properly capitalist—explains the particular status of the first section of Capital: it is both separate from and absolutely essential to understanding the rest of the work, justifying and overshadowing all the subsequent sections.

Despite the fact that Suzanne de Brunhoff traces the genesis of the general equivalent without referring to any particular mode of production, she nevertheless draws from her analysis of commodity and money a decisive insight on the social structure corresponding to this genesis. Regardless of the mode of production in which money is used as a general equivalent, the economic sanction of the market reflects the fact that commodities and money are not socially neutral. The relationship that underlies social existence and determines the role of money is therefore “a sign of an essential division of society, on which the economic power of money rests” (de Brunhoff Reference Brunhoff1976a, p. 47). The general equivalent is both an economic phenomenon and a social relationship, and these two aspects must always be properly measured in the analysis of the various monetary and financial practices of capitalism.

The Universal Equivalent versus the Universality of the Equivalent

In contrast to de Brunhoff’s approach, institutionalist understandings of money are typically based on the “elimination of Marxist notions of value and general equivalent and the highlighting of equivalence relations as the basis of market exchanges” (de Brunhoff Reference Brunhoff1979, p. 9). Such elimination inverts the relationship between wealth and money. While using money as a starting point, institutionalism seeks to determine how money produces a space of equivalence for the wealth exchanged on the market (Aglietta and Cartelier Reference Aglietta, Cartelier, Aglietta and Orléan1998, p. 133). According to de Brunhoff, while no market society can indeed exist without money (Mollo Reference Mollo, Bellofiore, Cohen, Durand and Orléan2018, p. 95), money should not be seen as something that precedes the existence of market society. Defining money as a general equivalent requires starting from commodities in order to determine how the exchange of wealth produces an equivalent of its value that determines the specific monetary nature of money. It is only through this process that a market constraint gets imposed on the capitalist economy, regardless of the nature of the monetary regime (commodity or fiat money) (de Brunhoff Reference Brunhoff1979, p. 10).

Like institutionalists, Suzanne de Brunhoff views money as a social relationship, as the ultimate expression of the market social order (Bellofiore Reference Bellofiore, Bellofiore, Cohen, Durand and Orléan2018). But a social relationship based on money cannot be universal, as claimed by modern monetary theory (Ingham Reference Ingham2004). Money is undoubtedly everywhere and has always been. The existence of a monetary social order, however, requires that money be exchanged for all the products of social labor or, rather, for the social labor power. It is on this condition, and this condition only, that money achieves the socialization of individuals in the market order. This helps explain why de Brunhoff’s incursions into monetary history are not directly concerned with the accumulation of capital, and why the labor or valorization process becomes of interest only if “the analysis of money is part of that of the conditions of capital formation and functioning” (de Brunhoff Reference Brunhoff1979, p. 10). De Brunhoff does not seek to universalize monetary forms and functions based on existing monetary structures. On the contrary, her goal is to shed light on the monetary system specific to the capitalist organization of exchanges through the motley history of monetary practices.

In reality, the universalization of the monetary fact separates money from the world of commodities in two ways: on the one hand, it posits money as an institution prior to any exchange of commodities; on the other hand, it reduces money to its supposed generic functions of measuring and settling debts, thereby making it pending on a debt system (Innes Reference Innes and Wray1914), hence confidence as the sole guarantor of the value of money and the validity of the monetary system. Thus, monetary crises are always crises of confidence, which manifest themselves in the search for “an anchor outside the financial system” (Aglietta and Cartelier Reference Aglietta, Cartelier, Aglietta and Orléan1998, p. 143) (precious metals, foreign currency, substitute commodities). However, these crises of confidence precisely reveal the specific nature of money in market societies, which distinguishes it entirely from all other forms of settlement. It is during these crises that the generic functions of money as a unit of account and a means of payment rely on its role as a general equivalent, even when crises displace it onto a foreign currency or precious metals. For Suzanne de Brunhoff, then, what needs to be explained is “the economic basis for the existence of money, not merely as a measure of value and a means of circulation, but as the object of a specific demand even when its predominant form is inconvertible paper” (de Brunhoff Reference Brunhoff1976a, p. xv). By generalizing the debt economy of the capitalist credit system through history, institutionalism abolishes the difference between money and credit (Wray Reference Wray2010), thus ignoring the market constraint posed by money as a general equivalent within the credit system itself.

Money and Time as Class Policy

From her Marxist standpoint, Suzanne de Brunhoff is not troubled by the end of the gold standard and subsequent transition to the regime of unconvertible fiat money, which she does not see as contradictory with Marx’s theory of money. Indeed, instead of wondering whether and how the theory of commodity money remains valid under this regime or whether the law of value still applies in the absence of any market base for money, de Brunhoff asks: How does the general equivalent reproduce itself when credit money coexits with base money that itself is no longer convertible into gold? In other words, how does monetary constraint operate in a credit system consisting of book entries, notes issuance, and the creation of ex nihilo deposits that seem to depend on the sole will of banks (de Brunhoff Reference Brunhoff1971, p. 10)?

Suzanne de Brunhoff does not deny the fact that, within the monetary system, the issuance of unconvertible central money can lead to an excess of money supply and therefore to inflation (Aglietta Reference Aglietta1977, p. 654). Unlike monetarism, however, she does not understand inflation as a result of wrong monetary policy. Rather, she sees it as the expression of a realization crisis affecting capitalist production relations, which monetary policy can hardly control: “Inflation is the form taken by a crisis of realisation when the social validation of private labour is carried out through the state, as issuer of inconvertible banknotes” (de Brunhoff Reference Brunhoff1978, p. 47). As a product of the forced conversion of private bank money into central bank money, inflation makes it possible to spread the crisis of overaccumulation through the pseudo-social validation of production (de Brunhoff and Cartelier Reference Brunhoff, Cartelier and de Brunhoff[1974] 1979), instead of letting it end abruptly as used to be the case at the time of the gold standard. It makes it possible to transfer to all money users (and in particular to wage earners, as monetarism demonstrates a contrario by denouncing the cumulative effects of price and wage increases following the excess supply of money) the risk of the non-realization of commodities and the devaluation of credits.

While this crisis escapes the immediate control of the bourgeoisie, its particular form, however, is not the consequence of a misguided monetary policy but of a deliberate class policy. Even if not desired, inflation is always the effect of a monetary policy geared towards a specific goal: to free the capitalist present from the past and the future. Antonio Negri has convincingly demonstrated this point in his analysis of John Maynard Keynes’s thought (Negri Reference Negri1988, p. 13). Monetary policy must not only contribute to increasing the marginal efficiency of capital; above all, it must also release the bourgeoisie from the anguish of a risky future. Thanks to the convertibility of private monies into central money, the monetary authorities reduce the burden of the past by guaranteeing the value of investments, while simultaneously removing a part of uncertainty through the social validation of future production (de Brunhoff Reference Brunhoff1978, p. 47).Footnote ²

But Suzanne de Brunhoff emphasizes an important element that Keynes refused to consider. As in a system of communicating vessels, at the same time as it diminishes uncertainty for the bourgeoisie through its money management, the State increases it for the workers through its labor power management: by establishing a division between employees receiving indirect wages and hourly employees, between permanent contracts and fixed-term contracts, between stable and precarious jobs, etc. As de Brunhoff writes: “this is why that ‘anachronism’, the poor relief of the early nineteenth century, still remains embedded within the procedures of the most modern forms of social security, particularly in the United States. Changes within capitalist accumulation, and in the forms of class struggle, have transformed the conditions in which state management of labour-power operates, but there is a permanent residue derived from previous phases” (Reference Brunhoff1978, p. 11). Once again, in addition to introducing class relations into her analysis of the management of money, de Brunhoff adds the element of time into her understanding of class relations. In other words, by viewing the differential relationship to time as the expression of a class relationship, this relationship to time becomes a political variable. From that perspective, inflation can be viewed as the return in the capitalist present of both the burdens of the past and the uncertainties of the future, hence the need for a new class strategy that will have a direct impact on the workers’ present. Thus, a few years after the first oil crisis, de Brunhoff explains in her afterword to the third edition of Marx on Money: “That the bourgeoisie today seeks to manage the crisis by a frontal attack on the level of wages and employment shows us that capitalist money and credit can be not the instruments of economic control, but the auxiliaries of a class policy” (Reference Brunhoff1976b, p. 204).

Distance Action and State Ideology

In a credit system based on a regime of unconvertible money and consisting of deposit-taking banks and a central money-issuing bank, what is known as “monetary policy” refers primarily to a centralized method of determining the various forms of money circulating in a given monetary area. This is due to the fact that, taken separately, each type of money (scriptural and central) equals less money than the other: on the one hand, scriptural money can form a whole only if it is guaranteed by the existence of central money; on the other hand, central money does not fully circulate as a means of payment among the public. In other words, neither form of money is the “base money” of the other, and only their regulated combination can guarantee the functioning of credit money as a general equivalent.

In addition, these two types of money are constantly differentiated by their mode of issuance and their respective uses, hence the permanent problem of their relationship, which threatens the role of money as a general equivalent and therefore requires what is called a “monetary policy adjustment of the money supply” (de Brunhoff Reference Brunhoff1971, p. 126). As Suzanne de Brunhoff warns, however, this is a misleading expression, since money issuance always originates from the demand for money to second-tier banks. The central bank can react to this demand, whether in a pro-cyclical or counter-cyclical way, only in an accommodating or restrictive way but always according to a given situation that it can certainly influence but never determine or control (de Brunhoff Reference Brunhoff1973, pp. 65–66). Yet, since the central bank stands at the top of the monetary system, the “conflicting centralization” (de Brunhoff Reference Brunhoff1986, p. 104) relationship between private banks and the central bank is wrongly presented as a monetary policy. Thus, concerning the management of money, there is always a “monetary policy” as an ideology directly resulting from the central bank’s position in the monetary space of capitalism. For de Brunhoff, this State ideology is first and foremost a question of distance, i.e., of distance relationship among the individuals, classes, and State institutions involved in the economic and social life.

Let us now consider the State action during the Fordist era, which began around the 1930s. From that moment onwards, the State was based on its two main pillars of societal intervention: monetary policy on the one hand, and employment and wage policies on the other hand. And what gave State action its formal unity was a profound change in the way the State related to labor and whose novelty and specificity necessarily escaped the conception of the State as a power over life, as a biopower (Foucault Reference Foucault2008). The nature of this change in the relationship between the State and capitalist society is that labor power was henceforth viewed as a single wage bill, as a large flow of monetary income. This is indeed what the Keynesian revolution was all about: the inclusion of the working class as an economic subject in a circuit flow representing the formation and allocation of monetary income under State control. In other words, Keynes’s contribution to economic thought was the evacuation and substitution of labor value for objects of determined behavior expressed only in monetary flows. But as Suzanne de Brunhoff insists, at the level of State practice, economic policy operates simultaneously on two fronts: money and labor power. With the development of capitalism, she notes, these two elements “must in a way be treated as homogeneous flows, able to merge with each other” (de Brunhoff Reference Brunhoff1978, p. 8). Indeed, “[t]he ability of money to function as a means of payment now depends upon the extent to which bank credits can be transformed into wage payments, which can then be expended upon consumer goods; in their turn, wages as a ‘strategic’ form of income are nourished by bank finance” (Reference Brunhoff1978, p. 8). The function of the State is precisely to unify the diversity of these flows and to give them a political coherence. If one presupposes the unity of the State, manipulating and adjusting these flows, “then it is not possible to grasp the real processes creating unity, and the political articulation of the different elements at any given moment” (Reference Brunhoff1978, p. 84). Thus, in order to grasp the effective movement of this unification, any theory of the modern State must begin with State interventions (economic policy) in order to infer the resulting form of the political State at any stage of capitalism.

The aim of Suzanne de Brunhoff’s The State, Capital and Economic Policy (Reference Brunhoff1978) is thus to examine the way in which the State operates in relation to the capitalist circuit, from which it necessarily remains external. We have seen that State intervention in money consists in ensuring the maintenance of the quality of the means of payment, whose issuance is beyond the control of the central bank, and how its role is circumscribed by the development of private credit relations and financial circulation. We must therefore consider money management as both immanent and external to the relations of capitalist circulation. More fundamentally, money and labor power management by the State demonstrates that, far from suppressing it, the immanence of the State implies an exteriority in relation to the movement of capital that articulates the elements of the M-C-M (Money-Commodity-Money) circuit between them. This is what leads de Brunhoff to argue that the State functions not only “through violence” and “ideology” but also “at distance” (Reference Brunhoff1978, p. 102). And it is precisely this distance, required by capitalist production itself, that makes it appear as a socially neutral Subject carrying rules applicable to all (de Brunhoff Reference Brunhoff1973, p. 191). Rather than as an ideological apparatus, then, the State is itself defined as an ideological construct arising from its particular position within a particular social topos. From that perspective, the State is less concerned with individuals as subjects than with presenting itself to these individuals as a third body capable of mastering money and labor power management under the name of economic policy.

The Non-contemporaneity of Capitalism with Itself

According to Suzanne de Brunhoff, monetary policy and, more generally, economic policy are both an action at a distance on capital and an action on the temporality of capitalism. But monetary policy, as a late product of the credit system on which it acts, is also a balancing act between ante- and post-capitalism. This is due to the dual nature of the credit system, which is composed of both financial products that push capitalism beyond itself and a monetary base that predates the emergence of capitalism and continues to act as a constraint on the current capitalist system.

The crises of modern capitalism are typically described as monetary or financial crises because the credit system is always both ahead and behind the dynamics of capital, never coinciding with the capitalist present. Marx says, “The world would still be without railways if it had had to wait until accumulation had got a few individual capitals far enough to be adequate for the construction of a railway. Centralization, however, accomplished this in the twinkling of an eye, by means of joint-stock companies” (Marx Reference Marx[1867] 1990, p. 780). But while the credit system creates the necessary conditions for accelerating the development of production and exchanges beyond its current possibilities, it always remains dependent on a monetary base inherited from commodity production, one that precedes capitalism and makes it a heterogeneous system. The credit system is both post-capitalist—through its sophisticated credit instruments and financial assets—and ante-capitalist—because financial securities must be able to be converted into money at any given time. In short, the credit system is never truly contemporary with capitalism; it is constantly torn between its tendency to bypass the constraints of the capitalist present (through credit itself) and the need to convert all these securities into sound and stumbling cash, which becomes brutally manifest in times of crisis. Despite being adapted to the needs of capitalism, the system that was born out of capitalist circulation remains a bastard financing system, the “monetary base” of which “becomes apparent whenever it is at risk of going out of service, whether in domestic or international financial circuits” (de Brunhoff Reference Brunhoff1979, p. 147). Insofar as this system is inherent to the capitalist mode of production, we can go further by generalizing this combination of relic and novelty to all dimensions of capitalism.

Marx has repeatedly pointed out how the respective levels of economic development of different countries entail the coexistence of archaic and modern forms of the bourgeoisie and the State apparatus. Thus, in the midst of the Industrial Revolution, the German bourgeoisie was busy with processes of industrialization that the French and British had accomplished during the age of mercantilism. Likewise, at a time when England had a cheap State that was adapted to the needs of industrial development, France was developing an expensive State apparatus as a result of the hold of the banks and stock exchange on the country (de Brunhoff Reference Brunhoff1978, p. 119). But Suzanne de Brunhoff is most interested in those cases when Marx demonstrates the presence of anachronistic aspects in the making of the present, such as when, in order to accomplish its revolution, the French bourgeoisie had to borrow elements from the Roman Empire that made it the bearer of universal interests. As de Brunhoff points out, however, this kind of process “was no mere ideological duplicity, but a necessity for the establishment of bourgeois hegemony” (Reference Brunhoff1978, p. 119). More specifically, these observations lead her to draw lessons on class relations, as well as on the articulation of space and time in capitalist social formations.

Far from being a hallmark of the financial system, this combination of old and new is to be found at each stage of capitalism, in various forms and to varying degrees. No matter the period considered, there always exists a combination of relatively disparate elements, i.e., elements of different origins and ages that make it very difficult to identify and define the stages of capitalism. The periods illustrated in terms of the monetary practices of the State do not directly reflect those that traditionally make it possible to define stages of capitalism, because of the division linked to the concept of general equivalent, and the transformations of practices related to the reproduction of the equivalent. We therefore cannot apply the same mode of temporal division when dealing with money and monetary practices, or labor and the composition of labor power.

Like money management, labor power management involves the coexistence of old and new elements. Assistance to the poor, for example, coexists with a system of employer and employee contributions, and “this ‘anachronism’ has a class function, serving to disaggregate the proletariat through the co-existence of different forms of managing labour-power at any given moment, and by maintaining insecurity for the class as a whole” (de Brunhoff Reference Brunhoff1978, p. 11). And the reduction of unemployment benefits or the difficulties for accessing them cannot be understood without considering the transformation of the role of unemployment in the relationship between employment and consumption: during the Fordist era, for example, the maintenance of the unemployed, insofar as it gave rise to a demand for consumption goods, was essential to maintaining the level of employment and therefore the level of wages of the labor power being employed. Conversely, the security of the unemployed depended on the retention of contributing employees. Thus, the fragmentation of the labor power was both the condition and the result of the complementarity of the various components of this labor power.

This composite character of capitalism, this non-contemporaneity of capitalism with itself that Suzanne de Brunhoff first identifies in monetary practices and later extends to all relations internal to capitalism, contributes to the renewal of the notion of unequal and combined development by introducing the notion of time—whereas Rosa Luxemburg (Reference Luxemburg[1913] 2003) and Leon Trotsky (Reference Trotsky[1932–1933] 2008) conceived the relationship between capitalism and non-capitalist formations only in terms of space. Undoubtedly, the law of combined development depends on unequal rhythms of social formations development, but it subordinates this inequality to the combination of archaic and modern spaces, i.e., it subordinates time to space. For de Brunhoff, in contrast, the heterogeneity of capitalism gives rise to a truly relativistic conception of capitalist space-time. Much has been written on the relationship of Capital with Newtonian physics and the laws of thermodynamics, often relegating Marxism to a science of the past. But if classical physics helps in understanding the ways in which capital produces, another paradigm is needed in order to grasp how capital reproduces itself by expanding its field of valorization. Another time-space is required here, as each social formation must be understood as a system of differential relations between spatial and temporal elements, as a distinctive formal arrangement of space and time. Not unlike in the theory of relativity, where space-time is determined by phenomena (rather than conditioning their appearance), each social formation of capitalism determines a particular space-time, instead of being conditioned by a uniform global space and linear time. Thus, each period in the history of capitalism constitutes a distinctive block of space-time. Moreover, each economic space within a period forms a separate block of space-time. Let us ask the question: Why is England the only nation that seems to have developed entirely in a capitalist mode, whether in the countryside or in the city? As de Brunhoff explains, this is due to the fact that, as a result of its international commercial and colonial domination over pre-capitalist formations that were forced to become contemporary with capitalism, which they “preceded” (Reference Brunhoff1978, p. 120), it was able to homogenize the relations of capitalist production within its internal borders. As she says, “If the ‘new’ always requires the ‘old’, it is because capital does not exist in a totally capitalist context, and can never do so” (Reference Brunhoff1978, p. 120). Thus, England substituted the unequal and combined space of its empire with the heterogeneous time of its national space, in which archaisms and novelties coexisted as “vestiges of the past within the capitalist present” (Reference Brunhoff1978, p. 120). But English capitalism still remained a multiple-time system, i.e., a system whose social field is never entirely contemporary with itself.