Market exchange

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"Marx's 3 Forms of Market Exchange" with Richard D. Wolff

Market exchange occurs whenever a commodity is bought and sold. Most markets rely on sellers offering their goods or services (including labour) in exchange for money from buyers.

Distinguishing characteristics[edit]

Distinguishing characteristics of market exchange include:

Types[edit]

Marx classifies several types of market exchanges:

Formula Explanation
M-C An act of purchase: a sum of money purchases a commodity, or "money is changed into a commodity."
C-M An act of sale: a commodity is sold for money.
M-M' A sum of money is lent out at interest to obtain more money, or, one currency or financial claim is traded for another. "Money begets money."
C-C' Countertrade, in which a commodity trades directly for a different commodity, with money possibly being used as an accounting referent, for example, food for oil, or weapons for diamonds.
C-M-C' A commodity is sold for money, which buys another, different commodity with an equal or higher value. Money is used as a medium of circulation.
M-C-M' Money is used to buy a commodity which is resold to obtain a larger sum of money.
M-C...P...-C'-M' Money buys means of production and labour power used in production to create a new commodity, which is sold for more money than the original outlay. "The circular course of capital."

See also[edit]