where the free exchange of goods and services is unknown, money
is not wanted. In a state of society in which the division of labour
was a purely domestic matter and production and consumption
were consummated within the single household it would be just as
useless as it would be for an isolated man. But even in an economic
order based on division of labour, money would still be unnecessary
if the means of production were socialized, the control of production
and the distribution of the finished product were in the hands of a
central body, and individuals were not allowed to exchange the
consumption goods allotted to them for the consumption goods
allotted to others.
The phenomenon of money presupposes an economic order in
which production is based on division of labour and in which
private property consists not only in goods of the first order (consumption
goods), but also in goods of higher orders (production
goods). In such a society, there is no systematic centralized control
of production, for this is inconceivable without centralized disposal
over the means of production. Production is 'anarchistic'. What is
to be produced, and how it is to be produced, is decided in the first
place by the owners of the means of production, who produce
however, not only for their own needs, but also for the needs ofothers,
and in their valuations take into account, not only the use-value that
they themselves attach to their products, but also the use-value that
these possess in the estimation of the other members of the community.
The balancing of production and consumption takes place
in the market, where the different producers meet to exchange
goods and services by bargaining together. The function of money
is to facilitate the business of the market by acting as a common
medium of exchange.