What is the meaning of this quote by Karl Marx? "Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth...

What is the meaning of this quote by Karl Marx? "Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs"

Expert Answers
jameadows eNotes educator| Certified Educator

By this quote, Marx means that money has value beyond just its monetary value. Instead, money can be converted into a process by which it is turned into a commodity. It is then capable of being turned back into money. Marx referred to this as the "process M-C-M," or money-capital-money. To him, the importance was that at the end of the equation the amount of money created is more than the original amount of money. Marx referred to the increase in the original value as the "surplus value." Capital is therefore a process rather than just an amount of money, and capital exists in different forms, including money, machines, factories, and means of production. The capitalist is always involved in the process of using money to make a profit. 

Because of the process of M-C-M, money acquires a kind of "occult" value, Marx writes with some degree of irony (according to Harvey; see the source below). As money that is invested often leads to increased money (for example, money deposited into a savings account increases in value), the process acquires a magical quality because the investor does not see the phase in which the money is turned into a commodity before generating more money. Instead, it seems like the money itself can lay a golden egg or cause its own increase. 

Source:

A Companion to Marx's Capital, Volume I, by David Harvey.

steppsm14 | Student

Marx is saying that capital, whether currency or commodity can add value upon itself to become more than it would be worth by itself. In business we call this "added value".  If you pay $.50 for water at your grocery store and sell it for $1 at a construction site, the currency has made more than it could have at the beginning. You doubled the value of your currency based upon its environment. Capital is an asset that increases or decreases based upon variable conditions. 

The end of the quote references that this is an almost magical quality.  Money is a tangible asset that you can hold in your hand that can generate more of itself or less of itself depending upon its use.  You cannot turn one gallon of water into two, but you can turn one dollar into two by using it in different circumstances.