Letters from Tomis

Introduction

What would become of money in a future socialist society? This question has long intrigued Marxist theorists, and in the 21st century it remains the subject of lively debate. Classical Marxism envisioned a post-capitalist society where the social relations that give rise to money and commodity exchange are fundamentally transformed. Karl Marx and Friedrich Engels, in the 19th century, argued that a socialist (or communist) society would dispense with the commodity-form and the money-form that dominate capitalist life. Yet the precise role of money in a socialist future – whether it would persist in some form, be radically transformed, or vanish altogether – is a complex theoretical issue. Contemporary Marxist thinkers build on Marx’s value theory and on historical experience to imagine how monetary relations might evolve through the transition from capitalism to socialism. This essay examines the role of money in a future socialist society according to 21st-century Marxist theory, focusing on how money would function, be transformed, or abolished. It discusses Marx’s labor-value theory as it relates to money, the envisioned transition phases (from the early stages of socialism to a higher communist society), and how changes in the role of money reflect changes in social relations and production. Throughout, recent Marxist and critical theorists are cited to illuminate current perspectives on these questions.

Money, Value, and Capitalist Social Relations

Marxist theory begins from the insight that under capitalism, money is not a neutral facilitator of exchange but a social relation that reflects and reinforces the dominance of commodity production. In Marx’s analysis, money emerges as the universal equivalent that expresses the value of all other commodities. It embodies the abstraction of labor and the alienation of producers from their products. Far from a mere technical convenience, money in capitalism is bound up with exploitation (through wage labor) and the accumulation of capital. Marx described how in a commodity-producing society, products of labor only relate to each other as values by virtue of all being compared through money – a “social hieroglyphic” that obscures the human labor and social connections behind products. As one socialist writer succinctly put it, “Money… is not a neutral instrument of measurement. It is the commodity in which all other commodities are reflected.” In other words, money crystallizes the power of exchange-value over society.

Because of this, Marxists hold that a socialist society – which produces for use-value and human need rather than for exchange and profit – must radically change the function of money. In capitalism, money mediates virtually all economic relationships: it serves as the means to buy and sell labor-power, to accumulate private wealth, and to allocate resources through the market. These functions, Marx argued, are historically specific and would be rendered obsolete in a higher form of society. He famously wrote that in a cooperative society based on common ownership, “the producers do not exchange their products; just as little does the labor employed on the products appear here as the value of these products.” In other words, once production is organized collectively for direct use, individual labor no longer needs to be represented by money or value – it becomes directly social. The implication is that money, as the embodiment of exchange-value, loses its rationale. Marx’s collaborator Engels put it even more bluntly: once society seizes the means of production, it “puts an end to commodity production,” and with it the circulation of money as we know it.

Contemporary Marxist theorists emphasize that abolishing the capitalist role of money is essential to overcoming the social relations of capitalism. The transformation is rooted in Marx’s value theory. Under capitalism, the law of value (the regulation of production by socially necessary labor time, via market exchange) asserts itself behind the backs of producers, enforced through the movement of prices and money. In a socialist society governed by associated producers, this indirect regulation is replaced by conscious planning. As recent scholarship notes, Marx’s critique of political economy was always oriented to its negation: in Capital he gestures toward a future society in which no “abstract medium, such as exchange value,” mediates human relations . Instead, products would be “directly objects of utility” and not assume a value form, and “exchange value and universalised commodity production come to an end.” This theoretical vision underpins 21st-century debates on socialism: money, as the lynchpin of the value-form, is expected to wither away as social production for exchange is replaced by production for use.

Transition Phases: From Labor Certificates to the Abolition of Money

Marxists generally agree that the abolition of money in its capitalist form would not be an abrupt, one-time act, but part of a historical process as society transitions from capitalism to full communism. Marx himself distinguished between a lower phase of communism (often equated with socialism) and a higher phase (full communism). In the Critique of the Gotha Programme (1875), he sketched how remuneration and distribution might work immediately after capitalism. Rather than monetary wages for labor, workers would receive certificates (sometimes called labor vouchers) indicating how much labor they contributed, and they would draw goods from the social stores equivalent to that amount of labor. Crucially, these certificates “are not money” in the conventional sense – they do not circulate or become independent stores of value; they are simply a direct accounting of an individual’s contribution, used one-time to withdraw consumer goods. Marx noted that in this initial phase, the same principle as commodity exchange is at work – exchange of equivalents – but now it is labor for labor, not labor for money or commodities. The form and content have changed: no one can accumulate private capital with these labor certificates, and the means of production are common property, yet an element of “bourgeois right” remains insofar as individuals receive back in consumption an amount proportional to their work. This, he says, is a limitation inherited from the old society – a necessary starting point “stamped with its birthmarks.”

Contemporary Marxist theorists have elaborated on this transitional schema. Peter Hudis, for example, emphasizes that in Marx’s conception, value production ends at the very inception of socialism, even if some form of individual accounting remains. Once the producers collectively control the means of production, abstract labor – the impersonal average labor time that underpins exchange-value – “no longer exists” as a regulatory force. The economy is no longer driven by producing commodities for market exchange, so “retail trade, commerce and ‘the market’ die off”, replaced by direct allocation and sharing based on use-values. In this lower phase, labor itself is still required and indeed serves as the measure for distributing the social product, but now actual labor-time (hours worked by each person) is the measure. Each worker receives a token or voucher for the hours they contributed and draws an equivalent amount of society’s output. This is essentially Marx’s labor-certificate idea, which Hudis notes is not a wage paid by an employer but a social accounting of contribution. Because no two individuals are identical in capacity or inclination, some will work more and draw more, others less; absolute equality of consumption is neither expected nor required at this stage. What is critical is that classes have been abolished – no person is consuming the surplus labor of another as profit or interest, and labor-power itself is no longer a commodity to be bought and sold. The “exchange” that occurs is “a world removed from… exchange of abstract equivalents” in the market; what is effectively exchanged are human activities (labor for labor), not commodity-values. This is why Marx defined socialism as the abolition of wage labor – workers are no longer hired for a wage that is less than the value they produce, but instead are associated members of society cooperating and sharing output.

Over time, as productivity and social consciousness develop, Marx envisioned society could move to a higher phase where even these remnants of equal-exchange logic are overcome. In the higher phase of communism, often summarized by the motto “from each according to ability, to each according to need,” distribution would no longer be tied to individual labor contributions. By that stage, society’s abundance and the full development of a communist ethos would allow people to freely take what they need from the common store, and contribute according to their capacity and desire. In such a scenario, money has absolutely no place: not even labor vouchers are necessary. Marx suggested that once the division of labor and the habit of measuring individual worth by labor-time are transcended, society could dispense with the last traces of the value-form. We would be “freed of such abstract formations as socially necessary labour time and wealth expressed in monetary terms.” Modern Marxist writers concur that a fully developed communist society entails the complete abolition of money and commodity exchange. Producers would no longer exchange products at all, but simply allocate resources directly to meet needs. As one commentary summarizes, “Generalised commodity exchange comes to an end in the first, initial phase of communism…Retail trade, commerce and ‘the market’ die off. Sharing, based on use-values, replaces selling, based on exchange-values. Directly social labour replaces indirectly social labour.” In short, the role of money is first diminished to a mere accounting tool during the transition, and ultimately eliminated as a social regulator in the mature socialist/communist order.

Money, Social Relations, and Production in Socialism

Underlying the changing role of money is a profound shift in social relations and the organization of production. Under capitalism, the market (through the medium of money) enforces a dictatorship of abstract economic forces: the individual capitalist must accumulate profit or perish, and the worker must earn money or starve, impelling both to submit to the “cash nexus” of the market. Social relationships are mediated by money and commodities – what Marx called the commodity fetishism of capitalism, where relations between people take the form of relations between things (money and goods). A socialist society, by contrast, aims to re-humanize and demystify these relations. Instead of anonymous market forces allocating resources, the associated producers themselves decide how to organize production to meet human needs. The coordination that money and prices perform under capitalism is replaced by democratic planning and collective decision-making.

In this context, money’s social function is transformed. No longer a medium of exploitation or private accumulation, money (if it exists at all) would serve only as a unit of account in planning – effectively a book-keeping tool – not as independent wealth. Even in the transition phase with labor certificates, what is being “paid” to the worker is not a wage but a social acknowledgement of contribution. As soon as production is oriented toward use and controlled by the community, labor becomes directly social. Marx described this in his vision of freely associated producers: because the producers collectively decide what to do with the social labor and the products, their labor does not need to take the detour of being represented by money or commodity value. A recent analysis puts it thus: with freely associated, democratic control of production, “the producers themselves, and not some external force like socially necessary labour time, govern their interactions. Value production comes to an end from the very inception of a socialist or communist society.” In practical terms, this means that work and distribution are organized through conscious social agreements rather than market transactions. People plan together what to produce, how much, and how to share it out – tasks that, in capitalism, are left to the anarchy of market prices and the pursuit of profit.

Money as we know it – a universal means of exchange valid for all goods and convertible into capital – would have no place in such a system of directly social production. Instead, the community might keep ledgers of resources and labor (possibly using digital accounting units or other record-keeping) to ensure balanced planning, but these units wouldn’t circulate independently or confer power as money does today. They could not be accumulated to command others’ labor, since all major resources are socially owned and decisions about their use are made democratically. Thus, the fetishism of money is broken: rather than society bowing to the “golden calf” of money, money in a socialist society is reduced to a servant of human purposes, if not eliminated entirely.

An important dimension of this transformation is the change in incentives and human behavior. Under capitalism, money incentivizes individuals to act in certain ways – workers work for wages, capitalists invest for profit. Socialism must find new ways to motivate production and distribute output without relying on the profit motive or the fear of destitution. Marxists argue that once the profit motive is removed and basic needs are guaranteed, work can be motivated by a combination of social duty, personal fulfillment, and collective incentives. Early on, there may still be differential rewards for those who work more or take on unpleasant tasks (hence the labor vouchers giving a proportionate share). But these are viewed as transitional measures, to be minimized as productivity increases and work becomes more freely chosen. Indeed, many socialist theorists suggest that as more goods become abundant, they can be provided free of charge as universal public services – effectively decommodified. Contemporary discussions often envision socialism as expanding the realm of the commons (free health care, education, housing, etc.), thereby shrinking the need for money in daily life. Sam Gindin, a modern Marxist thinker, argues that in an egalitarian society with ample public provision, even if people still buy some personal goods on a market, “those markets wouldn’t be a threat to the system” because basic needs and incomes are guaranteed. In his view, what absolutely must disappear are markets for labor and capital – no more buying labor-power or letting private profits govern investment – since allowing those would “institutionalize inequalities” and undermine socialist relations. Thus, one can imagine a socialist society where ordinary consumer buying (shopping for pleasure, etc.) might persist in a limited form, but it no longer carries the weight it did under capitalism. Money in this context has lost its dominance: it cannot hire labor (jobs are filled through collective arrangements and vocation, not “buying” workers) and it cannot command capital (investment is allocated by democratic planning, not by private bank loans or stock markets).

Contemporary Debates in 21st-Century Marxist Thought

While there is broad agreement among Marxists that the end goal is a society where money as capitalist money disappears, there are nuanced debates about how to get there and whether any aspects of monetary exchange should be retained in a socialist design. In the early 20th century, revolutionary thinkers already debated this. Bolshevik leaders like Lenin initially assumed the continued use of wages and money (under state control) during the socialist transition, whereas left communists such as Amadeo Bordiga insisted that the continued existence of wages and money would be a “mortal threat” to the proletarian revolution and would reproduce capitalist social relations. History gave some practical insights: during the Russian Revolution, “war communism” attempted to abolish money outright, but this contributed to economic chaos and was reversed by the New Economic Policy, which reintroduced money and markets under supervision. The lesson drawn by many Marxists is that a gradual approach may be needed – money might initially remain as a tool, but socialist construction should steadily restrict and dilute the power of money, phasing it out as conditions permit. Modern adherents of this view often emphasize the importance of labor-time planning and accounting in kind (measuring and planning in physical quantities or labor hours rather than prices) to erode the reliance on money. The development of computer technology in the late 20th and 21st centuries has given this idea new life: economists and cybernetic planners have explored how big data and algorithms could enable complex planning of production and distribution, making market prices unnecessary for coordination. Proponents of detailed planning (such as Paul Cockshott and others) argue that even large economies can be managed without markets, using optimization algorithms to match resources to needs – thereby rendering money superfluous except as a unit of account. Other socialists take a more cautious line, suggesting that decentralized or limited markets might play a role, especially for non-essential consumer goods, within an overall socialist framework. These market socialist models typically envision worker-owned cooperatives producing for a market and competing, but without a capitalist class. However, more orthodox Marxist critics contend that this would retain the value-form and the pressures of capital accumulation, essentially a recipe for reverting to capitalism. Indeed, Marx’s own stance was unambiguous that a socialist society would not be organized via market exchange. Recent Marxist critiques echo that point: even a market of worker-owned firms would compel those firms to chase money profits or perish, reintroducing the old dynamics. Instead, they argue for democratic planning mechanisms to replace the market in determining investment and production priorities (for example, through elected councils at workplaces, industries, and communities, as Gindin describes ).

A key debate today centers on the speed and scope of transforming monetary relations. One influential current of radical thought, including communization theorists, argues that any prolonged use of money and exchange after a revolution risks regenerating capitalist incentives. They advocate for the immediate abolition of money, wage labor, and private property relations in the revolutionary process itself, essentially collapsing the transition into a single leap. This perspective leans on the idea that only by breaking decisively with the value-form can a new mode of production truly emerge. Most Marxist scholars, however, foresee a period during which some vestiges of monetary accounting or exchange linger – not as capitalist money, but in a subordinate role under the dominance of social planning. The length and complexity of this period would depend on material and cultural development. For instance, if technology advances to provide super-abundance in certain areas (as some optimistic futurists predict with automation), it could accelerate the fading of money. If, on the other hand, socialist society must manage scarcity for a time, it might need careful accounting (perhaps using a token system akin to money) to ensure fairness. As one mid-20th century Marxist text argued, “the correct understanding of the historical role of money… can only be attained from the point of view of its disappearance”  – meaning that socialists should always be oriented to doing away with money’s dominance, even if tactical compromises are made.

In 21st-century Marxist literature, there is also discussion of hybrid models that blend planning and market elements, and how they might eventually converge into fully moneyless coordination. Some theorists draw on the experience of existing socialist-oriented governments (for example, in Venezuela’s so-called “21st Century Socialism”) which have tried to expand the non-market sector while still operating within a money economy. These experiences have shown the difficulty of building new relations in the shell of the old. Ultimately, as Marxists often note, a global transition would be needed – a single socialist country cannot completely abolish money if it must trade on a world market. Thus, the role of money in a socialist society is also tied to the scale of transformation. A worldwide or highly self-sufficient socialist system could move much further in eliminating money than an isolated socialist enclave.

Conclusion

According to 21st-century Marxist theory, a future socialist society would profoundly redefine the role of money, aiming to dethrone and eventually abolish money as the master of human affairs. Money under capitalism embodies value and alienated labor; under socialism it would either wither away or persist only in radically transformed ways that no longer mediate exploitation or class power. In the early phase of socialism, forms of labor credits or vouchers might substitute for money to ensure a just distribution according to work, but these are fundamentally different from capitalist money – they cannot be accumulated as capital or used to command others’ labor. As social wealth grows and production is planned for communal benefit, even these tokens would become unnecessary, giving way to free distribution for need. The value-form of products would vanish: goods would be produced directly for their usefulness, and labor would be allocated by collective decisions rather than the labor market.

Crucially, the fate of money is tied to the transformation of social relations. A socialist society does not simply “abolish money” by decree; it supersedes money by changing the way people relate to each other through production. When associated producers consciously regulate the economy, money’s function as universal mediator is redundant. People no longer require a market to tell them what is needed or profitable – they determine this through democratic deliberation and technical assessment of needs and resources. Thus, what disappears is not only money per se, but the entire network of commodity exchange, wage labor, and accumulation that give money its meaning. As Marx wrote, once the workers unite to directly associate their labor, the product of labor “no longer appears as the value of these products” and exchange among private producers ceases. In the final analysis, the role of money in a socialist future is to have no role at all as an independent power. It will have been sublated – integrated into conscious social accounting where needed, but no longer a thing in its own right that stands above humanity. Human beings, in Marx’s vision, move from being dominated by “the self-expansion of value” (capital/money) to mastering their own material life. Twenty-first century Marxist theorists, drawing on both the classical legacy and contemporary insights, reaffirm that a society beyond capitalism implies beyond money. They continue to debate the practical “nuts and bolts” of how to transition to that point – how to balance efficiency, fairness, and freedom without the crutch of money – but they share the conviction that in a truly socialist society, money as we know it will either be transformed beyond recognition or fade into obsolescence. The long trajectory from capitalist value to communist abundance is, fundamentally, the story of money’s disappearance as the linchpin of social life. Humanity’s social relations of production, once shackled to the cash nexus, would at last be free, conscious, and directly social, with money relegated to a historical curiosity – a relic of humanity’s pre-cooperative past.