One way to think of power is as the ability to realise the ends aimed at by an acting agent. In the absence of non-coercive market relations, direct power (physical, social, political, military) is required to achieve any end. Therefore, the monetary unit is a discrete packet of sublimated power that replaces violence with exchange.
Money is an emergent property that arises out of the interaction of multiple agents aiming at differing ends. The competitive process, in its tendency toward establishing efficient mechanisms capable of allocating resources, makes the emergence of money inevitable because direct power is far less efficient a means to get what you want than exchange in a free market.
Power, as defined in this way, is also a function of one’s ability to labour, and so the monetary unit is in essence an exchangeable unit of societies’ aggregated labour power. Whoever holds money, holds the power of other men in their hand.
The problem with a monetary system which sublimates power into individual units of currency, is that it makes it possible for the power of others to be monopolised through the subtle manipulation of that currency. Whoever can control the money supply is therefore capable of breaking the link between labour and power — thus placing into the hands of a small number, the power of an entire society, and the moral entitlement of other peoples effort.
Marx, in an early essay entitled The Power of Money, wrote about money’s ability to transform the limited, natural powers of an individual into a potential for power that does not exist in nature.
The extent of the power of money is the extent of my power. Money’s properties are […] the possessor’s properties and essential powers. Thus, what I am and am not capable of is by no means determined by my individuality. I am ugly, but I can buy for myself the most beautiful of women. [..] I, according to my individual characteristics, am lame, but money furnishes me with twenty-four feet. Therefore I am not lame. I am bad, dishonest, unscrupulous, stupid; but money is honoured, and hence its possessor.
[…] Assume man to be man and his relationship to the world to be a human one: then you can exchange love only for love, trust for trust, etc. If you want to enjoy art, you must be an artistically cultivated person; if you want to exercise influence over other people, you must be a person with a stimulating and encouraging effect on other people.
[…] Money, then, appears as this distorting power both against the individual and against the bonds of society, etc., which claim to be entities in themselves. It transforms fidelity into infidelity, love into hate, hate into love, virtue into vice, vice into virtue, servant into master, master into servant, idiocy into intelligence, and intelligence into idiocy.
Marx was wrong in seeing money as a purely corrupting influence on society, for if money permits the wicked to become good, and the dishonest to become honoured, then it also has the potential to make the dependent self-sufficient, the excluded included, the displaced settled, and the violent peaceful.
It is not money that is inherently corrupting — in truth, the maxim of “from each according to his ability, to each according to his need” is only possible through transformative attributes it endows on its possessor (furnishing the ‘lame’ with the opportunity to stand on their own twenty-four feet). No, it is the distributive pattern of money (and hence power) that dictates whether a society remains corrupted once markets emerge, and this distributive pattern is the result of vast state distortions in the natural operation of the market itself.
Whilst it may be argued that individuals differ in their natural labouring ability, no person is greatly more powerful than another by virtue of the fact we generally all have two legs, two arms, a brain, etc. A relative labouring equality exists. This equality is, in primitive society, negated through socially exclusive institutions (castes, tribes, clans and classes etc.) — institutions that are an inevitable result of competing interests in a world with scarce resources that are, by their very nature, indivisible and so conducive to monopoly control.
If state coercion is used, which it always has been throughout history, to preserve the normative values of one class against the other once markets emerge, then the primitive divisions of past societies become imprinted on the modern market society. For this reason, the emergence of a market economy does not necessarily destroy the underlying power structure, it merely transforms it into something hidden — something that avoids the wastage of labour that is needed for constant class warfare.
And because this sublimation of violence appears to benefit both parties equally, it leaves any prior comparative advantage of one party over another (due to the aforementioned social exclusions) intact. Instead of replacing violence with exchange, the market finds efficiencies within the violent act that are then manifested in unequal exchange relationships.
This is the case in our current corporatist/statist market system, but in a genuinely free market the effect of a currency is to permit the physical immovability of capital to become liquid, and to cause the monopoly power of ruling classes to shatter into a billion exchangeable units.
“Money is the alienated ability of mankind,” writes Marx disparagingly — but viewed from the perspective presented here, this is exactly the same characteristic that gives money its edifying potential. The returns on labour, that are presently usurped by the monopolisers of capital, could finally be returned to where they originate — the labourer. The equal exchange of love for love and trust for trust is once again accompanied by the equal exchange of labour value for labour value.
Make use of the following additional resources to expand knowledge and understanding of the topic covered in this unit.
The entire unit, including all additional resources, can also be downloaded as a workbook to be used offline.