Exchange

Roman food vendor and customer engaging in an exchange, from the Insula Volusiana (c. 150 CE).

Exchange is the social process through which the products or services of human labour are traded with one another as commodities. Exchange is as old as humanity, as humans have exchanged products and services within their communities but especially with other ones. The products exchanged are initially surpluses, items that have no use-value for their owners, with the exchange driven by the mutual desire of both owners to give away what they do not need in return for what they need or want. The constant repetition of exchange transforms it into a normal action and over time, some portion of production is done with the intent of exchange.

Nomads were one of the first to develop the money-form, because their herds functioned as an holder of their labour-time but also because their mode of life brings them into constant contact with foreign communities. Every commodity possesses a dual character. It is simultaneously a use-value (something satisfying human wants) and an value (a holder of socially necessary labour-time). It is this dual character that creates the need for exchange, as for the owner, a commodity has no use-value otherwise it would not be brought to be exchanged. But for it to be exchanged it must first demonstrate that it has a use-value for someone else. Each commodity owner wants to part with his commodity only for another whose use-value satisfies their personal want or need, but at the same time he wants validation that his commodity is worth it regardless of whether his own commodity has use-value for the other owner.

It is through this contradiction that an universal equivalent is created, this universal equivalent being money, the universal equivalent becomes socially tied to a specific commodity, historically it was gold and silver but gold and silver are not money in nature. Money took the shape of gold and silver in nature, because the physical properties of silver and gold, specifically their divisibility, durability, high value in small volume made them perfect for representing labour-time and in so molded for the social function of the universal equivalent.