Exchange value is the substance of money; price is the sum of money that an individual consumer, producer or intermediary is willing to pay for a given good. Exchange value is the measure of use value, price is the measure of utility. Although the meanings of existence are ordered among themselves, they are not ordered with the meanings of communication or self-expression. Exchange value is not the measure of dreams, morals and ideals, they cannot be bought with money. But exchange value and money are impossible without dreams, morals and ideals, since they make social choice possible and hence social necessity and value as a socially necessary mass of cultural bits embodied in use values. Loves and hopes, morals and ideals are not for sale, money is not paid for them. But goods are sold (or not sold) at a price determined with loves and hopes, morals and ideals in mind.

Value as a socially necessary mass of use values evolves in the process of self-reproduction of culture-society, while price as an individually necessary mass of utility develops in scattered acts of individual or collective self-reproduction. Value and price are linked through money: “Economists have the habit of thinking about prices starting from value, while for us their basis is to be found in money” (Aglietta and Orléan 2006, p. 27).

The evolution of value and money, commodities and prices depends on the evolution of meanings in general. The increase of meanings is manifested in their complication: division, addition and multiplication. The opposite is also true: the evolution of value and money, commodities and prices is a prerequisite for the evolution of all other meanings, since circulation is a necessary phase of the self-reproduction of culture-society. The complication of competition, cooperation and administration is necessary for socio-cultural development. Activity, order and knowledge are divided by purposeful choice and by spontaneous cultural selection:

“The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a co-ordinated utilization of resources based on an equally divided knowledge has become possible” (Hayek 1988-2022, vol. 15, pp. 101-102).

With the advent of money, people had the opportunity to hoard it instead of spending it on goods, that is, not to consume goods but to store value and spend it later. The second function of money is therefore a means of accumulation, that is, a vehicle for saving and investing value. Money is a way to establish a relationship between a resource and the future costs and benefits it brings.

Since money is both a means of calculation and circulation and a means of saving and investing, it requires, first, cooperation and trust, that is, an agreement between subjects, and, second, administration and coercion, that is, institutions that ensure compliance with this agreement. Money and the state formalize the duties and obligations of members of society. Money is a horizontal way of formalizing mutual obligations. The state is a vertical way of formalizing the responsibility of the individual to society as a whole.

Originally, money had to have the properties of utility and scarcity, later it also had to be portable, divisible and long-storable, which is why precious metals were used as currency. As money evolved, it shifted from hard material form to abstract social content, from gold or silver coins to fiat money.

2. Profit and interest

Surplus activity and its norm

A culture-society reproduces itself through added activity. A hunter-gatherer society, with its modest cultural experience and comparatively low complexity of meanings, produced activities that only enabled it to reproduce itself on a constant scale. The added activity of a primitive society was approximately equal to the sum of the necessary activity of the individuals who composed it. The accumulation of cultural experience, the division, addition and multiplication of meanings during the transition to agriculture, enabled the culture-society to carry out more complex activities and to produce more means of activity—more than was required for the simple reproduction of the active power of the individuals:

“At the dawn of civilization the productiveness acquired by labor is small, but so too are the wants which develop with and by the means of satisfying them. Further, at that early period, the portion of society that lives on the labor of others is infinitely small compared with the mass of direct producers. Along with the progress in the productiveness of labor, that small portion of society increases both absolutely and relatively” (Marx and Engels 1975-2004, vol. 35, p. 513).

In its ability to give more than it gets, a producing culture-society resembles nature. Just as the land can produce a harvest in excess of the amount sown, so an agrarian culture-society can produce more than is required for its self-reproduction. However, an agrarian culture-society is not able to maintain stable productivity, let alone stable productivity growth. Due to sudden changes in both socio-cultural and environmental conditions, population growth could be replaced by a sharp decline. Epidemics and crop failures led to the collapse of cultures-societies, that is, to a drop in their complexity. The ascending and descending phases of the demographic cycle replaced each other:

“With the huge population losses caused by the Black Death in many parts of Afro-Eurasia, cities shrank, farmlands were abandoned, and economies contracted. However, as had happened so many times in the past, growth soon resumed to kick-start a new Malthusian cycle that would last well into the 18th century” (Benjamin 2016, p. 267).

Cumulative cultural evolution continued through successive rises and falls of cultures-societies. Paradoxically, social collapse is an inherent element of cultural evolution. Increasing meaning complexity is like climbing the peaks of an adaptive landscape: the higher meaning climbs, the more complex it is. But neither people nor meanings know in advance which peaks are the highest and most promising. Sometimes a collapse is necessary to come back down and begin climbing a new, possibly higher peak.

The collapse of culture-societies meant a fall in socio-cultural complexity, but for the people who formed these societies, it meant the restoration of justice and freedom, which were necessary for any further development:

“What I wish to challenge here is a rarely examined prejudice that sees population aggregation at the apex of state centers as triumphs of civilization on the one hand, and decentralization into smaller political units on the other, as a breakdown or failure of political order. We should, I believe, aim to ‘normalize’ collapse and see it rather as often inaugurating a periodic and possibly even salutary reformulation of political order” (Scott 2017, p. 210). “There may well be, then, a great deal to be said on behalf of classical dark ages in terms of human well-being. Much of the dispersion that characterizes them is likely to be a flight from war, taxes, epidemics, crop failures, and conscription. As such, it may stanch the worst losses that arise from concentrated sedentism under state rule. The decentralization that arises may not only lessen the state-imposed burdens but may even usher in a modest degree of egalitarianism. Finally, providing that we not necessarily equate the creation of culture exclusively with apical state centers, decentralization and dispersal may prompt both a reformulation and a diversity of cultural production” (ibid., p. 217).

Collapses and dark ages also create conditions for meaning drift. Meaning drift is a random change in the frequency of a meaning due to the small population among which this meaning is common. Meaning drift results in a small number of meanings being distributed among a disproportionately large number of people. After their dark ages, the Greeks did not return to Linear B script but adopted the Phoenician alphabet (Scott 2017, pp. 147-148).

Collapses break down the dead ends of cultural evolution and open up paths to meanings that allow for more efficient adaptation. The division of activity, order and active power enables the creation of new counterfacts. The traditional choice between counterfacts, in turn, increases the variety of men and meanings, albeit slowly:

“It is, then, not simply more men, but more different men, which brings an increase in productivity. Men have become powerful because they have become so different: new possibilities of specialization depending not so much on any increase in individual intelligence but on growing differentiation of individuals—provide the basis for a more successful use of the earth’s resources” (Hayek 1988-2022, vol. 1, pp. 122-123).

The evolution of meanings accelerated due to the accumulation of cultural experience and the expansion of the set of counterfacts on the basis of which the traditional choice was made. Traditional society and order became more complex. As socio-cultural development progressed, the multiplicity and mass of activities required for the reproduction of culture-society gradually exceeded the multiplicity and mass of activities required for the reproduction of individuals. In other words, the complexity of the culture-society increasingly surpassed the complexity of its individuals. Since the mass of added activity exceeded the mass of necessary activity, a difference arose between them—surplus activity and surplus product.

“If the laborer wants all his time to produce the necessary means of subsistence for himself and his race, he has no time left in which to work gratis for others. Without a certain degree of productiveness in his labor, he has no such superfluous time at his disposal; without such superfluous time, no surplus labor and therefore no capitalists, no slave-owners, no feudal lords, in one word, no class of large proprietors” (Marx and Engels 1975-2004, vol. 35, p. 512).

The entire product is made in production, but its division into necessary and surplus products occurs in circulation, in the relations of gift-giving, redistribution and commodity exchange. This means that the growth of surplus activity and surplus product is linked not only to the division of activity and active power, but also to the division of order: chiefdoms and states based on voluntary and forced tributes evolved as they “learned” to increase and extract the surplus product:

“The imperative of collecting people, settling them close to the core of power, holding them there, and having them produce a surplus in excess of their own needs animates much of early statecraft. … The means by which a population is assembled and then made to produce a surplus is less important in this context than the fact that it does produce a surplus available to nonproducing elites. Such a surplus does not exist until the embryonic state creates it. Better put, until the state extracts and appropriates this surplus, any dormant additional productivity that might exist is ‘consumed’ in leisure and cultural elaboration. Before the creation of more centralized political structures like the state, what Marshall Sahlins has described as the domestic mode of production prevailed” (Scott 2017, pp. 171-172).

The ratio between surplus and necessary activity (and their products) forms the rate of surplus activity. The more the complexity of the culture-society exceeds the complexity of the individuals, the higher the rate of surplus activity.

Since, as we have seen above, Marx did not yet know and could not know that complex labor cannot in principle be reduced to simple labor, he could not have known either that added activity cannot be reduced to necessary activity. If for Marx surplus labor and surplus product were produced by the workers and other exploited classes, and appropriated by the exploiting classes, then from our point of view the surplus activity and its products are produced by culture-society as a whole, and the manner of their appropriation depends on the relative political, economic and cultural* power (or authority) of the state, social categories and individuals.

As long as the surplus product was redistributed for the benefit of officials and the army, states were satisfied with a vertical, i.e. centralized, calculation and accounting. The growth of crafts and cities led to a horizontal, i.e. decentralized, circulation of the surplus product. Surplus activity and the need to put its product into circulation were the driving force behind the long process of value and money development. Money spread where the surplus product was extracted from the immediate producers and transferred to an indefinite number of people through the mechanisms of competitive circulation.