ABSTRACT
The capital relation In capitalist society, commodity money is hidden by fiat money (paper notes and token coins), and also by credit, which I define broadly, as contracted indebtedness. Credit allows for circulation without formal representations of money. The exchange of commodities coincides with the accumulation of indebtedness. When the debts fall due or cannot be rescheduled or renegotiated, money functions as a means of payment. With the development of credit transactions, even fiat money falls out of use as a means of circulation and becomes the medium for canceling debts, which is the payment for transactions that have already occurred. As means of payment money does not circulate, but lies idle alongside indebtedness as “the independent form of existence of exchange value”.1 In this chapter I show that the functioning of credit involves the interaction between commodity circulation without money, and the emergence of commodity money when debts must be paid.2 Credit brings forth the contradiction between the functions of money, which results in financial crises.3
