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Medium of circulation

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Money, qua medium of circulation (also means of circulation), operates also as a means of exchange; but not however, as "a medium of exchange in general, but a medium of exchange adapted to the process of circulation, i.e., a medium of circulation".

Distinguishing characteristics

Distinguishing characteristics of a means of circulation include:

  • The metamorphosis of commodities by either C—M—C (selling in order to purchase) or M—C—M' (money is used to buy a commodity which is resold to obtain a larger sum of money) circuits in circulation


"When, as a result of the establishing of prices, commodities have acquired the form in which they are able to enter circulation and gold has assumed its function as money, the contradictions latent in the exchange of commodities are both exposed and resolved by circulation. The real exchange of commodities, that is the social metabolic process, constitutes a transformation in which the dual nature of the commodity – commodity as use-value and as exchange-value – manifests itself; but the transformation of the commodity itself is, at the same time, epitomised in certain forms of money.

To describe this transformation is to describe circulation. Commodities, as we have seen, constitute fully developed exchange-value only when a world of commodities and consequently a really developed system of division of labour is presupposed; in the same manner circulation presupposes that acts of exchange are taking place everywhere and that they are being continuously renewed. It also presupposes that commodities enter into the process of exchange with a determinate price, in other words that in the course of exchange they appear to confront one another in a dual form – really as use-values and nominally (in the price) as exchange-values." [Karl Marx, A Contribution to the Critique of Political Economy, Part II: Money or Simple Circulation]

“All the differentiations in capital arising from the circulation process—in fact the circulation process itself—are actually nothing but the metamorphosis of commodities (determined by their relationship to wage-labor as capital) as an aspect of the reproduction process.” [Marx, TSV, 3:268.]

See also