The objective of the study is to evaluate Marx's theory of money in detail and to propose some major modifications in the light of theoretical achievements of Classical monetary writers, to provide a modified Marxian theory of money, inflation and crisis.

There are two sides of Marx's monetary theory: the theory of value-form, capital-form and money in accumulation and crisis, and the theory of monetary mechanisms. The former constitutes Marx's one most important and original contribution to political economy. Marx, using the Hegelian dialectic, derives the category of money from the categories of commodity, labour, value, value-form, to money as the pure, independent form of value, containing the possibility of crisis. Under capitalism, money performs a peculiar function as capital, becoming the general form of capital whereas the commodity is the particular form. Money here exists as reserve-funds to sustain the turnover of capital and the reproduction process. Money is further ramified into different kinds of money, developing a credit superstructure, the banking system and the loan market. All this, the credit ramification, interacts with the accumulation process to transform the possibility of crisis into actuality with a pattern of cycles and periodic crises.

Marx's theory of concrete monetary mechanisms embodies an anti-quantity theory of money, the hoarding mechanism and the law of reflux, whereby changes in the money-supply are always consequences, never the cause. Marx's account lacks certain necessary links and leaves a number of questions concerning the indeterminate money-velocity, the passiveness of the financial system and certain inconsistency with Marx's own analysis of money and crises. An examination of Marx's predecessors, Tooke and Fullarton, shows that this anti-quantity theory contains serious logical flaws as regards the definition of money and credit, the macro-monetary mechanisms, the insignificance of the interest-rate, the passiveness of the financial system and the central bank. It is concluded that the anti-quantity theory must be discarded from Marx's general theory.

A study of Ricardo's theory of money, modified by Thornton, Senior and Torrens, shows that the Classical monetary theory is logically superior to Tooke and Fullarton's, covering the regimes of purely metallic money to convertible paper-money and inconvertibility. All this with the Classical doctrine of 'forced-saving' and Robertson's lags, gives a full account of the inflationary process and its effect upon capital accumulation and class-income transfers. All this is not logically inconsistent with Marx's theory of value-form and capital-form. The study is concluded by putting together Marx's theory of money and crisis and the Classical theory of monetary mechanisms, to provide a modified Marxian theory of money, inflation and crisis.