The Decrease of the Value of Gold

The opening of new gold fields and the revolution in the process of gold extraction has reduced the cost of gold production.

The value of gold has decreased, since society needs less labour for its extraction. This fact is responsible for the transformation in the exchange relation, which has occurred, between gold and goods. The decrease of the value of gold reflects itself in the increase in the price of goods.

The evidence for this opinion has been contested by certain economists. It must be granted to the opponents of this opinion that the cost of gold extraction is not the only – nor even the main – reason for the high cost of living. Nevertheless, together with other reasons, it must be admitted that the decrease of the value of gold is also a cause for the high cost of living. The possibility of producing gold at a low production price has had the effect of a considerable increase in gold production. We have already pointed out that the increase of gold production is one of the reasons for the acceleration in economic development, leading to changes causing rising prices.

Capitalist production is based on the social division of labour. Each branch of industry manufactures goods for the needs of society and, in exchange, receives from society, equivalent labour products from other branches of production. However, as long as social production is based on private property of the means of production, the allotment of the product of social labour to the different branches of production will not be made by the conscious and regulated action of society itself; but through buying and selling, by the exchange of goods against money and of money against goods. The social character of labour, the relations of the social production embody themselves into things, into gold, into silver. The fate of these things revolutionises therefore the relations of social production. The transformation of the conditions of production of gold, revolutionises social relations between men. If the working class rebels against the high cost of living, it revolts also against the fact that social relations between men mask the relations of prices between things. It thus rebels against the continuation of the existing capitalist mode of production, and against the existing contrast between social production and private property of the means of production.