Marx consistently maintained that in transition towards communism exchange of commodities and the use of money would be eliminated. But is this really possible and what are the consequences of eliminating money? Considering his stance that money is not the ‘real’ of the economy, and that communist transition will eliminate it, it is in fact surprising to find that money plays a large role in his analysis in Capital. And not just in the critical sense that money drives the capitalist monster forward; in fact, quite oppositely, when keeping his frame of reference immanent to capitalist mode of production, Marx identifies money’s many positive functions in spontaneously regulating the system into an organic whole (his determination of the necessity of financially induced crises notwithstanding). The question regarding socialist transition is whether these regulative functions can be replaced within a collectively owned economy?And, more specifically, whether Marx’s preferred transitional measure of labour-time schemes (where workers collect paper entitlement to the proportion of the total social product viz. their own hours spent working), implies either utopian assumptions about the new subjectivity of the collective worker in communist society and/or the need for a centrally controlled command economy?
To answer these questions, we have to begin with the role Marx attributes to money. As is well known, Marx considers money as a spontaneous result of the commodity form abstraction, serving as the universal equivalent in the exchange of goods. Marx further sees money developing its higher functions, such as in the credit system, as also spontaneously developing from experience in using the basic monetary form for capitalist purposes. In a lengthy passage he summarises the functions money plays in the circuitry of advanced capitalist reproduction:
The fluxes and refluxes of money which take place on the basis of capitalist production, for the reconversion of the annual product, and which have grown up spontaneously; the advances of fixed capital at a single stroke, to its entire value, and the progressive withdrawl of this value from circulation by a process that extends over a period of many years, i.e. its gradual reconstitution in the money form by annual hoard formation, a hoard formation … as well as the variation in the size and period of the reflux according to the condition or relative size of the production stocks in different businesses and for the different individual capitalists in the same line of business … all these different aspects of the spontaneous movement had only to be noted and brought to light by experience, in order to give rise both to a methodical use of the mechanical aids of the credit system and to the actual fishing out of available loan capital.
Marx contends that money plays only a functional role in the process of expanded reproduction and accumulation within capitalism. “The money on the one side calls into being expanded reproduction on the other only because the possibility of this already exists without the money; for money in itself is not an element of real reproduction.” Yet what does it mean to say money is not an element of real reproduction when Marx has already established the development of money as one of the preconditions of capitalism? This appears to be attributable to his quantity theory of money, where the total quantity of money maintains an identity with the total value of commodities in circulation, and the value of these commodities in circulation is in identity with the labour-time invested in their production. This monetary theory explains why, at an aggregate level, total price = total value, since money is a universal abstraction of the value of the commodity form: its universal equivalent. The fact that price and value on an industry-specific or commodity-specific basis fall out of sync with each other lies behind periodic crises of accumulation. At the same time, the disequilibrium between value and price – value being the long-term anchor of price variations – is what tendentially drags profit rates across industries towards one another. The formation of a general rate of profit across spheres of production results from the same process by which value comes to determine the rates of exchange between commodities. Through the price mechanism, supply and demand serve to regulate the amount of socially necessary labour expressed in a commodity’s market value; the process of competition perpetually drives down socially necessary labour to its minimum. The point is, the gap between value and price, or what is much the same thing at a higher level of complexity, the difference between the rate of profit and the rate of surplus value, are tendentially reunified through market competition regulating socially necessary labour time.
Capital withdraws from a sphere with a low rate of profit and wends its way to others that yield higher profit. This constant migration, the distribution of capital between the different spheres according to where the profit rate is rising and where it is falling, is that produces a relationship between supply and demsnd such that average profit is the same in the various different spheres, and values are therefore transformed into prices of production.
This process is crucial so that some spheres of production are not, in the long term, able to extract permanent rent from supplying commodities necessary for production in other spheres. Money, then, should not be seen in any crude way as just a reflective, ideal mirror of the real commodity economy underlying it, but serves a systemic function to regulate across capitalist industries and prevent severe sectoral imbalances. This function of money is thrown into stark relief if one attempts to imagine, as Marx does in places, a collectively owned and managed economy in the absence of money as we know it, with labour tokens issued in place of monetary remuneration for workers.
With collective production, money capital is completely dispensed with. The society distributes labour-power and means of production between the various branches of industry. There is no reason why the producers should not receive paper tokens permitting them to withdraw an amount corresponding to their labour time from the social consumption stocks. But these tokens are not money; they do not circulate.
In the Critique of the Gotha Programme Marx makes the same suggestion, only further specifying that (1) these tokens operate in the absence of the exchange of goods and (2) that they are only drawn on the means of consumption (called Department II in Capital).
Accordingly, the individual producer receives back from society—after the deductions have been made—exactly what he gives to it. What he has given to it is his individual quantum of labour. For example, the social working day consists of the sum of the individual hours of work; the individual labour time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such and such an amount of labour (after deducting his labour from the common funds), and with this certificate he draws from the social stock of means of consumption as much as costs the same amount of labour. The same amount of labour which he has given to society in one form he receives back as another.
Significantly, however, Marx qualifies that this process also takes place in the absence of exchange. “Within the cooperative society based on common ownership of the means of production, the producers do not exchange their products; just as little does the labour employed on the products appear here as the value of these products”. Marx has good reason for wishing to write exchange out of the collectively owned and managed economy. As he shows in Capital Vol. III when imagining an economy where workers are in control of the means of production, but continue to exchange their goods according to the labour they have expended in production, the values of commodities would fall radically out of sync and so too would profit rates, since there would not be an equalization between the production prices and value forming the constant capital component. Rather unconvincingly Marx nonetheless claims that despite the possibility of sharply diverging profit rates, “Under these conditions, the difference in the profit-rate would be a matter of indifference, just as for a present-day wage-labourer it is a matter of indifference in what profit rate the surplus-value extorted from his is expressed.” I say unconvincing, first because workers in a cooperative or particular sector could exchange their goods by distorting the labour-time they claim to have invested in production, second because there would be no regulative mechanism for correcting false reporting, and third because such imbalances would, after time, lead to serious systematic imbalances in the economy.
Let us explore this problem in more depth. In the paragraph below we are going to analyze two possibilities resulting from implementation of Marx’s labour value token scheme. Since one of which takes place in the absence of a centrally controlled economy, we will discount Marx’s qualification that products are not exchanged and follow the above scenario from Capital Vol. III. We do this for it is not clear how, in the absence of centralised mediation, exchange could be avoided. The Roussauian-influenced idea that through the revolutionary process a new humanity will emerge around the subjectivity of an altruistic and consistently honest collective worker seems extremely utopian when considered on a national or global scale. Michael Lebowitz, for instance, when describing the birth of the worker subjectivity necessary for the unmediated giving between the network of producer associations, has to resort to the metaphor of unconditional familial love.
Characteristic of the social relation among the producers in this structure is that they recognize their unity as members of the human family and act upon this basis to ensure the well-being of others within this family. Solidarity, in short, is at the very core of the social relation… the productive activity of people flows from a unity and solidarity based upon recognition of their differences.
Granted that the expectation of the revolutionary process giving birth to new worker subjectivity can be found in Marx’s writings right to the end of his days, it is an idea which remains in conceptual externality to the analysis in Capital. Yes, Capital shows capitalism separate workers and pits them against one another; but, no, it does not show how collective ownership of the means of production will create a new humanity – this has to remain a political wager (and in my opinion, an untenably utopian wager) external to the conceptual analysis conducted in the book.
Therefore, on a technical level, where such issues as not supposed to be overcome by the honesty and altruism arising from new communist humanity, the problem with Marx’s suggestion relates to how socially necessary labour will be measured and regulated. Since socially necessary labour is regulated under capitalism by both real subsumption on the level of manufacturing processes and by money acting as a spontaneous universal equivalent exerting convergence tendencies between industries, directly substituting money with labour-time tokens would have two consequences. Across different cooperatives and/or industries in a decentralised economy, a permanent structural disequilibrium would occur in exchange due to the different organic compositions (and rates of change in composition) resulting in inter-sectoral productivity imbalances. Since the labour-time invested in goods is non-transparent between one industry and the other in the absence of an overarching regulative authority, the amount of labour-time tokens exchanged between productive units for each others’ goods would result in permanent disequilibrium. On the other hand, presuming central planning, an enormous, continuing operation of monitoring the labour time used in the production of goods would be necessary, which while technically possible would contradict Marx’s anti-statist principles as proclaimed after the Paris Commune.
In fact, with regard to the latter approach, Marx himself anticipates the problem of labour tokens and how they would give rise to the need for a command economy in the Grundrisse. While it is important to emphasize that in this text he is forwarding a critique of Proudhon on the basis that his schemes are being proposed in the absence of a demand to radically reconfigure the relations of production, nonetheless, Marx’s critique of Proudhon’s labour money proposal – which involves the problem of establishing equivalence of socially necessary labour time, and the way it implies an omnipotent central bank – is no less applicable for thinking post-revolutionary economic transition if exchange is considered necessary.
A second attribute of the [central] bank [issuing labour-time chits] would be necessary: it would need the power to establish the exchange value of all commodities… But its functions could not end there. It would have to determine the labour time in which commodities could be produced… But that also would not be sufficient… The workers would not be selling their labour to the bank, but they would receive exchange value for the entire product of their labour, etc. Precisely seen, then, the bank would not only be the general buyer and seller, but also the general producer.
It is beyond our capability here to explore in any greater depth the problems implicated by Marx’s analysis of money and economic planning in thinking post-capitalist transition. But what the above discussion should make clear is that even once the abstraction of workers from the means of production is overcome in a collective economy (either centralized or decentralized) then issues related to the formal properties of money persist. In order to circumvent these issues Marx places another condition on a communist economy – namely, that no exchange will take place – which merely displaces the problem of the money form on to the utopian suggestion that social production and development can take place on the basis of altruistic giving between the different branches of the collective association of labourers.
If we are to develop a post-capitalist economic vision which seeks to build a spontaneous dynamic into the system, monetary theory emerges as essential even if reading Marx’s Capital as the final word on the economic system.
 Marx, Capital Vol. II, 555-556.
 Marx, Capital Vol. II, 566.
 In chapter 9 of Capital Vol. III on the ‘Formation of the General Rate of Profit’ Marx provides an example of 5 capitals in different spheres of production. On the aggregate level, “The total price of commodities I-V would thus be the same as their total value, i.e. the sum of the cost prices I-V plus the sum of the surplus-value or profit produced; in point of fact, therefore, the monetary expression for the total quantity of labour, both past and newly added, contained in commodities I-V.” (Karl Marx, Capital Vol. III, trans. David Fernbach (London: Penguin Books, 1981), 259.) Therefore, the cost price plus profit of all commodities in the economy is equal to the total value produced: total price = total value.
 Marx, Capital Vol. II, 486.
 Marx, Capital Vol. III, 281, 293-294.
 Marx, Capital Vol. III, 296.
 Marx, Capital Vol. III, 296.
 Marx, Capital Vol. II, 434.
 Marx, “Critique of the Gotha Programme”, 21-22.
 Karl Marx, “Critique of the Gotha Programme” In: Karl Marx and Frederick Engels: Selected Works, Volume II (Moscow: Foreign Languages Publishing House, 1951), 22.
 Marx, Capital Vol. III, 276-277.
 Marx, Capital Vol. III, 277.
 Michael A. Lebowitz, Beyond Capital: Marx’s Political Economy of the Working Class (Houndmills: Palgrave Macmillan, 2003), 202.
 A third option, which we discount for being too utopian, would be the democratic planning of production and consumption and the assumption of honest multilateral reporting of labour productivity across different cooperatives and industries.
 (Karl Marx, Grundrisse )