There should be little disagreement again here considering Mises and Marx basically had the same theory about money.
Money is an expression of all the values in society. It is a measure of value. Value is an ideal quality, and can be ideally (imaginarily) expressed. This is why currency with no legal backing still represents value.
Money, as a measure of value is the incarnation of all human labour, from this it is converted to prices. Price is the monetary expression of value. Value is NOT the same thing as price, but total value in a society will always equal total price. Where price dips below actual value, somewhere else price must rise above actual value.
Marx introduces us to an important equation in this chapter C-M-C. He goes on to talk about this in quite some detail as to how every purchase is at the same time a seller, this does NOT mean that every seller WILL sell their product (Say’s Law). As the C-M-C cycle continues it becomes C-M-C-M-C-M-C etc. There are two poles to this process, the sale and the purchase. The sale converts the use-value of a commodity to exchange-value. Sale converts private labour into social labour. Sale converts power over your own self to power over everyone else. Here I have said the same thing three different ways. Purchase is the USE of that social labour, it becomes solidified in a specific form of use-value and drops out of circulation.
Marx makes the important note that independent producers, that is, they are independent from other producers, become dependent on commodities and things as opposed to being dependent on people.
Marx makes the first mention of crisis here. Stating that it occurs when too long a time-interval is between sale and purchase. Marx pretty much says it best here.
“The antithesis, use-value and value; the contradictions that private labour is bound to manifest itself as direct social labour, that a particularised concrete kind of labour has to pass for abstract human labour; the contradiction between the personification of objects and the representation of persons by things; all these antitheses and contradictions, which are immanent in commodities, assert themselves, and develop their modes of motion, in the antithetical phases of the metamorphosis of a commodity. These modes therefore imply the possibility, and no more than the possibility, of crises. The conversion of this mere possibility into a reality is the result of a long series of relations, that, from our present standpoint of simple circulation, have as yet no existence.”
As we saw earlier, money is social power, power over others. This is of course very attractive, so we get a group of hoarders, those who sell without buying. They accumulate large sums of money. The function of hoarding is necessary though, the hoarder can expand and contract the money supply as the market demands it. If things are needed to circulate quickly, the money supply expands, if things circulate slowly, the money supply contracts.
This next bit a little hard to grasp so I’ll just quote Marx again.
“The debts due to A from B, to B from C, to C from A, and so on, have only to be confronted with each other, in order to annul each other to a certain extent like positive and negative quantities. There thus remains only a single balance to pay. … In so far as the payments balance one another, money functions only ideally as money of account, as a measure of value. In so far as actual payments have to be made, money does not serve as a circulating medium, as a mere transient agent in the interchange of products, but as the individual incarnation of social labour, as the independent form of existence of exchange-value, as the universal commodity. This contradiction comes to a head in those phases of industrial and commercial crises which are known as monetary crises.”
Basically, fictitious value.