This quote essentially suggests that before money can circulate or be exchanged, there must be commodities—or goods and services—to be traded. In other words, money is a medium that facilitates the exchange of commodities. Without goods and services, there would be no need for money.

This idea is rooted in the barter system, where people directly exchanged goods and services for other goods and services. For example, a farmer might exchange a bushel of apples for a pair of shoes. However, as societies grew and became more complex, it became difficult to directly exchange goods because of the problem of ‘double coincidence of wants’. This means that in order for a transaction to occur, each participant must want what the other has. To solve this problem, money was introduced as a common medium of exchange.

In today’s world, this concept is still very much relevant. The circulation of commodities is still the original precondition of the circulation of money. Every transaction we make, whether it’s buying a cup of coffee or investing in stocks, involves the exchange of money for a good or service. The money we use has value because we all agree it does, and we trust that we can exchange it for goods or services.

In terms of personal development, understanding this concept can help individuals make better financial decisions. For example, if you’re considering starting a business, you must first identify a commodity that you can sell—whether it’s a physical product, a digital product, or a service. Without a commodity, you won’t be able to generate money. Furthermore, understanding the relationship between commodities and money can help individuals better understand economic trends and make informed decisions about spending, saving, and investing.