Since no one replied to the question, I will take a stab at it. I will restrict my answer to the question of what consttutes "means of payment."

In the simple circulation of commodities, the commodity (C1) is sold for money (M); the value of the commodity is realized by one party and its use value to another party--simultaneously.  Then the owner of M realizes value in the form of M in another commodity (C2) (or diverse other commodities), or use value flows to the owner of money, and money flows to the owner of the commodity or commodities (C2)--simultaneously. The complete circulation is C1-M-C2: both value and use value are realized. 

In the case of money functioning as a means of payment, there is a one-sided flow of commodities or money.. Take the case of a one-sided flow of commodities. I obtain the use value of, say, a car, without having paid any money for it-now. C flows without a corresponding flow of M. M, however, must flow at a later date (depending on the terms of the contract of sale--or debt/credit). That flow of money at a later date involves money functioning as a means of payment. 

A case of commodities flowing at a later date would be in the case of a payment advance on a condo that has yet to be built. 

If this is incorrect, others should correct it. 

Fred

@EdGeorge  @anthonyboynton

Hi Engin: I am not sure I understand your question. Marx does not write about the means of payment function of money in Volume 1 Chapter 1 Section 3. He talks about how the equivalent form of value becomes the money form, which in his time and place concretely had become gold. He also does not talk about credit money there.

 

Marx does write extensively about the means of payment function in his 1859 A Contribution to the Critique of Political Economy.

 

https://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_3b.htm Hello everyone

In any case, you wrote, “Marx indicates the  money-goods-money transaction, which reflects Means of payment function, as opposed to the goods-money-goods transaction, which reflects the function of purchase (means of circulation).”

 

IMHO, money functions as a means of payment in both m-c-m and c-m-c. M (money) is exchanged for C (a commodity or commodities) in the second transaction of m-c-m and in the first transaction of c-m-c.

You also asked, “What I particularly want to ask here is that credit-money is emphasised in the money-goods-money process. What is the credit money exactly?

 

Marx discusses this at some length in A Contribution to the Critique of Political Economy.

(Chapter 2, Section 3, Part b: See the link above.) Credit money arises through the process of exchange. It is possible because the use value of money is to serve as the equivalent form of value and because of the possibility of deferred payment.

 

“All the distinct forms evolved by gold as money are merely manifestations of aspects latent in the metamorphosis of commodities, but these aspects did not assume a separate form in the simple circulation of money, in money as it appears as coin and the circuit C—M—C as a dynamic unity, or else they emerged merely as potentialities, as did for example the interruption of the metamorphosis of commodities. We have seen that in the course of the transaction C—M the commodity as a real use-value and nominal exchange-value is brought into relation with money as a real exchange-value and only nominal use-value. By alienating the commodity as use-value the seller realises its exchange-value and the use-value of money. In contrast, by alienating money as exchange-value, the buyer realises its use-value and the price of the commodity. Commodity and money, accordingly, change places. The active process of this bilateral polar antithesis is in its turn separated while it is being carried through. The seller actually alienates the commodity but realises its price in the first place only nominally. He has sold the commodity at its price, but the price will only be realised at a predetermined later date. The buyer buys as the representative of future money, whereas the seller sells as the owner of a commodity available here and now. On the one hand, the seller actually hands over the commodity as use-value without actually realising its price; on the other hand, the buyer actually realises his money in the use-value of the commodity without actually handing over the money as exchange-value. Just as formerly money was represented by a token of value, so now it is symbolically represented by the buyer himself. Just as formerly the value-token as a universal symbol entailed a State guarantee and a legal rate, so now the buyer as a personal symbol gives rise to private, legally enforcible, contracts among commodity-owners.

 

“Conversely, in the transaction M—C, money as a real means of purchase may be alienated, thus realising the price of the commodity before the use-value of the money is realised, or before the commodity is handed over. This happens, for instance, in the well-known form of advance payment; also in the form of payment used by the English government to buy opium from Indian ryots, and is largely used by foreign merchants living in Russia to buy goods produced in that country. In these cases, however, money functions only in the familiar form of means of purchase and therefore requires no new definition, [1] or any further discussion. With regard to the changed form which the two transactions M—C and C—M assume here, we shall only note that the purely conceptual distinction of purchase and sale as it appears directly in circulation becomes now a real distinction, since there is only money in one case and only commodity in the other; in each of them, however, only the extreme is actually available from which the initiative comes. Both forms, moreover, have in common the fact that in each of them one equivalent exists only by common decision of buyer and seller, a decision which is mutually binding and is given a distinct legal form.

 

“Seller and buyer become creditor and debtor. Whereas the commodity-owner as the guardian of a hoard was a rather comical figure, he now becomes terrifying, because he regards, not himself, but his neighbour as the embodiment of a definite sum of money, and turns his neighbour and not himself into a martyr to exchange-value. The former believer becomes a creditor [In German a pun on the words “der Gläubige,” the believer, and “der Gläubiger,” the creditor. – Ed] and turns from religion to Jurisprudence.”

 

Here, in my opinion, Marx is writing about the social relations involved in the process of commodity exchange, foreshadowing the rise of finance capital.

 

Put simply, credit money is an “I owe you”, a piece of paper saying that the buyer will pay the seller an equivalent exchange value (gold in Marx’s time) at a later date. This is what US dollars and all other currencies ultimately say today. The government of whatever country will pay the holder of the piece of paper, or the electronic account, a certain amount of exchange value at a future date. Today, there is no clear form with which they promise to pay, but the whole world still trusts them to pay up, someday, somehow, and with something of real value (fat chance!)

 

Anthony