The Abolition of Money.

The Cash Nexus

Contrary to the moralizing of DAILY MAIL editorials, the whining sermonizing of priests and the empty rhetoric of the capitalist Left, there is no intrinsic “greed” associated with money making either by capitalists generally or by City bankers in particular. It was the sentimental Tory, Thomas Carlyle who once remarked that capitalism’s “morality” was a “cash nexus” in which all social relationships were reduced to monetary gain. Marx and Engels were to throw Carlyle’s remark back at the Capitalist class when they wrote:

It [the bourgeoisie] has pitilessly torn asunder the motely feudal ties that has bound man to his “natural superiors” and left remaining no other nexus between man and man than naked self-interest, than callous "cash payment” (COMMUNIST MANIFESTO 1848).

Making vast amounts of money or, as Marx put it: “the accumulation of capital for accumulation’s sake” is just the normal behaviour to be expected of capitalists in a competitive and profit-making economy. Marx went on to say: “To accumulate is to conquer the world of social wealth” (CAPITAL VOLUME 1, Ch. 24, p. 592). And that is precisely what capitalists try to do. The aim and compelling motive of capitalist production and exchange is the self-expansion of value, the making of money to reinvest and accumulate anew. Profit is not a “dirty word”; it is the alpha and omega of capitalism.

Making profit, amassing capital and being obsessed with creating more money than when initially invested is forced upon capitalists by the pain of competition. To remain capitalists they have to behave as capitalists and this is reflected in the values of the social system where the amount of money or lack of it defines someone as a success or failure. In capitalism “greed is good”.

Marx and the Power of Money

Money under capitalism gives the owner power. In a trivial way owners of money can buy commodities. The more money the greater amount of commodities can be bought.

However, under capitalism, the owner of capital as money can buy the labour power of others. He can buy and exploit the ability to work of the working class. He can make more than his original investment. The illusion of money breeding more money is in fact the working class producing more than they receive back in wages and salaries. Under capitalism they are the golden goose.

Having money capital gives the capitalist class power. Marx commented on the power of money early on his adult life:

The extent of the power of money is the extent of my power. Money’s properties are my – the possessor’s – properties and essential powers. Thus, what I am and am capable of is by no means determined by my individuality. I am ugly, but I can buy for myself the most beautiful of women. Therefore I am not ugly, for the effect of ugliness – its deterrent power – is nullified by money. 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.

And he went on to conclude:

Money is the supreme good; therefore its possessor is good. Money, besides, saves me the trouble of being dishonest: I am therefore presumed honest. I am brainless, but money is the real brain of all things and how then should its possessor be brainless? Besides, he can buy clever people for himself, and is he who has power over the clever not more clever than the clever? Do not I, who thanks to money am capable of all that the human heart longs for, possess all human capacities? Does not my money, therefore, transform all my incapacities into their contrary? (THE ECONOMIC AND PHILOSOPHICAL MANUSCRIPTS OF 1844

Money has its origins in the development of the exchange of commodities but also represents a social relation of production. Marx showed that:

All the illusions in regard to the monetary system are due to the fact that money is not regarded as something representing a social relation of production, but as a product of nature endowed with certain properties (Marx, A CRITIQUE OF POLITICAL ECONOMY, Chapter 1, The Commodity, p. 31 Chicago 1918).

And Marx dismissed the shallow analysis of money made by the economists:

The modern economists, who sneer at illusions of the monetary system, betray the same illusion as soon as they have to deal with higher economic forms, as, e.g., capital. It breaks forth in their confession of naïve surprise, when what they have just thought to have defined with great difficulty as a thing suddenly appears as a social relation and then reappears to tease them again as a thing, before they have barely managed to define it as a social relation (loc it p. 31).

The Ascent of Money?

Economists ignore the social role of money and treat it as merely a technical function within circulation. And this would include the celebrity television superstar, Tory historian and economic pundit, Niall Ferguson. In his book THE ASCENT OF MONEY (2008), Ferguson has written hundreds of pages on the question of money without once understanding his subject matter.

Obsessed with the development of money from shells to the electronic transactions of modern capitalism, Professor Ferguson fails to grasp that money represents definite social relations between people not just metallic material and bits of paper. In his analysis of money Ferguson gets no further in an understanding of money than the 19th century anarchist Pierre-Joseph Proudhon.

Marx did understand money both technically and as a social relationship masquerading as a thing. The starting point of Marx's theory of money is the observation that:

Gold becomes the measure of value, because all commodities measure their exchange values in gold, in proportion as certain quantity of gold and a certain quantity of the commodity contains the same amount of labour-time… (A CRITIQUE OF POLITICAL ECONOMY, loc cit, p. 75).

The function of money and its relationship to other economic categories can only be understood through the use of a Marxian labour theory of value and the rigorous analysis of the commodity which Marx undertook in the first five chapters of CAPITAL VOLUME 1. Under capitalism, the existence of money allows a comparison to be made between value-carrying commodities each containing socially necessary labour time. To understand money is to foremost understand that labour is the source of all social wealth.

Here is Marx criticising Proudhon but it could easily have been Professor Fergusson:

Money is not a thing, it is a social relation…If M. Proudhon had clearly ascertained this relation he would not have seen money as an exception, a member detached from a series, unknown or to be discovered…He would, on the contrary, have recognised that this relation is a link of, and as such, intimately attached to a whole chain of the other economic relations, and this relation corresponds to a determined mode of production… (THE POVERTY OF PHILOSOPHY Prometheus Books 1995 p. 8)

Professor Ferguson gives the impression that he has read Marx’s work on capitalism although he only cites Marx three times in the index of his book. He might have a passing acquaintance with Marx’s writings on money but he has clearly not understood him. He claims that Marx did not recommend the abolition of money (page 364) but in fact Marx did, first in the COMMUNIST MANIFESTO, where he wrote of “…the Communistic abolition of buying and selling…” and later in VALUE, PRICE AND PROFIT where he urged the working class to struggle for “…the ultimate abolition of the wages system…”. There is a current trend to separate Marx the student of economics from Marx the Socialist revolutionary but it is a false dichotomy. Marx’s analysis and critique of capitalism can lead only to a Socialist conclusion.

From Ashes to Ashes

Professor Fergusson is an admirer of Lady Thatcher, former Tory Prime Minister during the 1980’s. It was Thatcher who coined the dogmatic phrase “There is no alternative (to the market)” and Fergusson agrees with her. His objective is to show the use of money and by extension capitalism will carry on forever into the future. He has no time for any counter argument and the Socialist case for the abolition of money, put consistently by the Socialist Party of Great Britain since 1904, is dismissed in his book in a couple of lines on page 17.

The title of Fergusson’s book is an allusion to Jacob Bronowski’s television series THE ASCENT OF MAN; itself a nod towards Darwin’s DESCENT OF MAN. Fergusson obviously does not understand Bronowski’s irony. In Part 11 of Bronowski’s series entitled, "Knowledge or Certainty”, he describes the conflict between dogmatic claims to absolute knowledge, and scientific claims regarding inherently uncertain theory. The programme begins by showing a photograph of Stefan Borgrajewicz as an elderly man. At the end of the programme, after Bronowski shows us the ruins of Hiroshima and the ash-strewn pond of the concentration camp at Auschwitz, there follows an image of a younger man, with the name "Borg-grajewicz, Stefan" and the number 125558, a reference to his official record in the archives of Auschwitz.

Fergusson, like all free-market fundamentalists, possesses an arrogant certainty that capitalism is the last social system in human history. He has no time for Marx’s critique of political economy underscored by his theory of history which points to a future where e-banking and credit cards are not the final stage in social evolution. His historical writings bear all the hall marks of the dogmatism and the shallowness of a closed mind.

Fools and fanatics are so certain of themselves. For Fergusson, the certainty he holds without question, is that there will always be money, the buying and selling of commodities and a price mechanism informing the private ownership of the means of production and distribution. Fanatical fundamentalists like Fergusson, either religious or of the free market variety, are usually destroyed by the supressed and guilty secret of self-doubt, although, judging by his interview in the DAILY TELEGRAPH (September 5th 2011) in which he paints himself as one of the cleverest historians on the planet, his enormous ego blocks out any chance of doubt entering into his thinking.

Unlike Marx –who’s favourite motto was doubt everything (de omnibus dubitandum), Ferguson totally dismisses the possibility of a future Socialist society. He has no imagination to conceive of a social system in which the means of production and distribution are held in common under democratic control and where there is no need for money; a world in which the free association of individuals would expend: “their many different forms of labour power in full awareness as one single social labour force” (Marx, CAPITAL VOLUME 1 page 171). Arguments for the abolition of money are ridiculed by the Professor as the pursuit of cranks and eccentrics. Yet the abolition of money is central to Marx’s conception of Socialism in which there will be the abolition of buying and selling and money including the wages system.

And Marx was in good company. The Red Republican was a Chartist newspaper published from June 22nd 1850 to November 30th 1850 running for some 24 issues. It was founded by George Julian Harney after he was removed from editing the NORTHERN STAR. The newspaper published in November 1850 the first English translation by Helen Macfarlane of Marx and Engel’s COMMUNIST MANIFESTO. In the RED REPUBLICAN there is a lively exchange of correspondence relating to the abolition of money. The first letter is by a George Smith published on 27th July 1850 under the heading “Abolition of Money” This is what he wrote: “…to prepare the way for the absolute supremacy of the working class, preparatory to the abolition of the system classes, what should be done? Evidently something more than getting possession of political rights, or even destroying those twin monsters, rent and usury; for had we the possession of the one and successfully destroyed the other, there would yet remain in existence a monster which would reproduce its kind to torment humanity; and that monster is money,…so long as mankind will have a circulating medium – will allow everything in life to be measured by money – so long will they suffer the evil consequences springing therefrom… (THE RED REPUBLICAN ed. John Saville Merlin 1966 can be read at the Marx Memorial Library in Clerkenwell, London by arrangement with the Librarian).

Primitive Communism and the absence of money

Fergusson has to concede that societies once existed without recourse to money. However he gives a trite example from the Amazonian tribe, the Jivaro of Ecuador, to support his argument of the irresistible ascent of money. The tribe no longer lives in a moneyless hunter gatherer society but on State hand-outs which he sneeringly applauds as a positive step-up from primitive communism to the 21st century welfare state capitalism enjoyed by “the feckless and the undeserving poor” denigrated by Free Market think tanks like the Centre for Policy Studies.

For an understanding of why the Jivaro are forced to live on State hand-outs Fergusson should have read the ECONOMIST, no Socialist magazine. This is what the ECONOMIST reported:

Though half of Ecuador lies in the Amazon basin, its rainforest is shrinking faster than in neighbouring countries (by 1.67% a year). It has been ravaged by logging, poachers and oil extraction . . . Native tribes have been uprooted, forced deeper into the forest or have disappeared (TREES OR OIL July 4th 2009).

The ascent of money, like the ascent of man, as Bronowski, standing in a pool of human ash at Auschwitz knew only too well, comes with a human cost.

A recent ABC news item JUNGLE JOURNEY; LIVING WITH AN ISOLATED AMAZON TRIBE (September 22nd 2008), reports on a moneyless tribal society, the Enawene Nawe, increasingly being decimated by the encroachment of capitalism. The same genocide of indigenous native populations is taking place elsewhere in the world as the scramble for mineral resources, oil, and timber take their toll on native tribes.

But there is still a positive side to the story. Here is what the ABC reporter said about the Enawene Nawe:

The Enawene Nawe don't have high technology or high finance (or last names or currency, for that matter), but they also don't have crime, poverty, hierarchy or drugs. Living here, you don't have to worry about losing your job, getting ahead or having as much stuff as your neighbour.

And outside the rarefied world of vulgar economics, disinterested writers have long given supporting evidence for moneyless primitive societies. As E. Tymoigne and L. R. Wray write:

In primitive societies, there is no notion of private property in the sense of ownership of the means of production (agricultural land, forests, fisheries) and so no possibility of a society based on barter (in the economic sense of the term) or commercial exchange: these are marketless economies. Redistribution (in the sense of a central institution that collects and allocates resources) is also nonexistent as the products of hunting and gathering are provided to everybody according to custom on the basis of needs and social status… (MONEY: AN ALTERNATIVE STORY, University of Missouri-Kansas City, Working Paper No. 45, 2005,

The Abolition of Money

Professor Fergusson, working within the shallow and apologetic framework of economic liberalism, uncritically celebrates the development and use of money associated with capitalism as the pinnacle of human evolution.

As Marx wrote of the economists who came after Smith and Ricardo:

…the vulgar economists confine themselves to systematizing in a pedantic way, and proclaiming for everlasting truths, the banal and complacent notions held by the bourgeois agents of production about their own world, which is to them the best possible one” (CAPITAL VOLUME 1 page 175).

The abolition of money follows logically from the abolition of the wages system with its exploitive buying and selling of labour power. In a Socialist society free and voluntary labour would produce goods and services just to meet human need. Common ownership and democratic control of the means of production and distribution by all of society is a simple and rational proposition clouded by ruling class ideas which see greed as a defining feature of human nature and capitalism the best of all possible worlds. This is the twin mind-set of conservatism; a dark conservatism shared by all the capitalist political parties and their politicians, journalists and academics like Professor Ferguson.

In his latest book, CIVILIZATION: THE WEST AND THE BEST (2011) –this time the title is an allusion to Lord Clark’s 1970’s programme of the same name - Ferguson mocks the “few die-hard devotees of Karl Marx” still ploughing their lonely furrow towards a moneyless society. At least it is a furrow without the presence of Niall Ferguson whose histiography only goes to confirm the observation that conservatism is the highest form of ignorance and the lowest form of thought.

Addendum: From “Popular Capitalism” to Unpopular Capitalism

Professor Fergusson is no disinterested scholar but one-time board member of the free market think tank, the Centre for Policy Studies founded by Sir Keith Joseph and Margaret Thatcher in 1974 to produce ideas to undermine the ruling orthodoxy of Keynesianism and limit the role of the state in the economy. The think tank’s foundations were always built on political sand.

Sir Keith Joseph was economically inept and this was aptly demonstrated by his woeful debate with the Socialist Party of Great Britain at the Philippa Fawcett College on the 24th April 1975, forcing Joseph, for his own enlightenment, to later order a copy of Marx’s CAPITAL.

How Sir Keith Joseph got on reading CAPITAL we do not know for he seemed to be too interested in eugenics rather than economics. A year before, in a speech Joseph gave in Birmingham, he warned of the dangers of single parent mothers living on Council estates threatening, “the balance of our population, our human stock…”?

Joseph should have been ashamed of himself for making this comment since similar political rhetoric had been used in Hitler’s Third Reich, some forty years earlier against the Jews. Joseph’s speech had been written by the former Communist Party member Sir Alfred Sherman, another Jew and confidant of Margaret Thatcher, but the phrase about single parent mother’s threatening the quality of the gene pool was Joseph’s own insertion into the text. Ironically, Thatcher was to describe State Socialism as “something alien” (1984) to British politics, a euphemism for it being either Jewish (the Tories Alien Act against the Jews at the beginning of the 20th century) or Germanic (Bismarck’s policies used against the Socialist Democratic Party) Of course, “State Socialism” is a contradiction in terms. Where there is a State there cannot be Socialism and where there is Socialism there cannot be a State. Of course Marx never advocated “state Socialism” but a free association of men and women without the wages system and the “executive of the bourgeoisie” which protected this peculiar form of class exploitation.

And Margaret Thatcher was never a traditional conservative but instead a Manchester free trade liberal who, when elected leader of the Tory Party, threw down a copy of F. A. Hayek’s CONSTITUTION OF LIBERTY on the table and said “This is what we believe in” – it was not the conservatism of Disraeli, Baldwin, MacMillan and Heath but the Free Trade and Free Market ravings of Cobden and Bright. She was then asked by the waiter what she would like to eat and she replied raw beef. “What about the vegetables” the waiter replied. “Oh”, said Thatcher looking at her shadow cabinet, “they will have the same as me” (For the visual splendour of this sketch see SPITTING IMAGES on YouTube).

Although her father was a cockroach capitalist, Thatcher understood and furthered the unscrupulous workings of capitalism as a young chemist graduate at Lyons where she helped to develop whipped Ice Cream. In an attempt to save money in production costs she developed a technique of adding more air into the process of producing the ice cream much like the ability of some publicans “to do a reverse Jesus” and transform alcohol into water.

If you look at Thatcher’s time in office the doctrine of monetarism to which she subscribed failed miserably as did the Keynesianism favoured by previous governments before her. Thatcher’s “popular capitalism” became a very unpopular capitalism when “Sid” lost his shares and businesses went bankrupt in the economic crisis and depression which took place shortly after she was deposed of by a faction in her own Party.

By 1990, she was seen as an electoral liability particularly following the Poll Tax Riots, a wheeze thought up by reactionary economists at the mis-named Adam Smith Institute. The poll tax was disastrous for the Thatcher government and is widely seen as a complete failure which precipitated the downfall of her leadership. Ironically, for the “iron Lady”, the free market policies produced by free market think tanks actually contributed to the destruction of her government.

And whatever happened to the “property owning democracy”? Consistent economic liberalism finds democracy anathema. The Adam Smith Institute believed that the market was more democratic than the use of the vote in politics; that it reflected real choice. What the ASI forgot to add is that in the market those with lots of money can choose to live well while the majority are free to lose.

And this is precisely what happened to Thatcher’s working class after she fell from power. In the economic depression of the early 1990’s when millions of workers lost their jobs and many who had sunk their redundancy money into becoming self-employed found there was no work. Consequently they could no longer pay the mortgage and lost their homes.

Why was a previously failed political economy raised to an “ism”? There was nothing new in Thatcher’s policies; they all had their origins in the 19th century. “Thatcherism”, in any case, was an invention of the discredited political clowns at MARXISM TODAY under the editorship of Martin Jacques; who, when they saw that the game was up in Russia, became ardent supporters of Tony Blair’s New Labour project.

Apparently when Lady Thatcher dies her supporters have organised a State Funeral to honour her political life while street parties celebrating her death are to be held by her detractors on the capitalist Left wearing their “I still hate Thatcher” T shirts. There is already a song “Dancing on Thatcher’s Grave” shown on You Tube although many Feminists have yet to decide to join the celebratory party on the grounds that Thatcher was a woman.

Socialists have no time for defenders of the capitalist class. But why weight Thatcher’s defence of capitalism anymore differently than either the generations of capitalist-supporting politicians who have led the anti-working class Labour Party or the would-be professional revolutionaries in the SWP and other similar political organisations whose vile and poisoned politics stains political discourse in this country? At least Thatcher had the virtue of describing capitalism as capitalism, whereas, until Blair, the Labour Party misleadingly described itself as Socialist and the SWP still do.

If any grave should be dug it should be for capitalist politics as a whole along with the social system it supports. It is no good shouting “the wicked witch is dead” when the politics of the Labour Party and the agitprop street politics of the SWP are equally harmful to the interest of the working class. As a matter of principle Socialists “…wage war against all other parties, whether alleged labour or avowedly capitalist” (Clause 8, DECLARATION OF PRINCIPLES).

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Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.