[OPE-L:4645] Re: Re: Re: Re: Re: Re:Fiat money andTransformation

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Fri Dec 08 2000 - 14:02:12 EST

re 4644

>Paul Cockshott wrote:
>>  On Wed, 06 Dec 2000, you wrote:
>>  > You're right, in that fiat money is not a produced commodity and
>>  > doesn't participate in any equalization of the rate of profit,
>>  > unlike Marx's commodity money.
>>  >
>>  > Allin Cottrell.
>But the logic seems to be incomplete. The question, first of all, is 
>how is the
>value of fiat money determined?

Ajit, the constancy in the value of Marx's unit of account and the 
labor it commands is fixed by Marx. You find this bloody artibrary, 
but  Marx's assumption regarding the constant value of money is 
arguably similar to Newton's inertial frame of reference: that is, 
Marx's law that the same quanta of value can show no change in price 
no less assumes "an inertial frame of reference" than Newton's first 
law that free bodies subject to no force show no acceleration. If we 
do not assume an inertial frame of reference, a free body itself free 
of forces can indeed undergo acceleration and thereby undermine the 
first law; if we do not assume a constant unit of account, the mere 
redivision of total value in the transformation tables could have 
indeed changed the price expression of a fixed and given quantity of 
value. Marx of course is not arguing that the value of money or the 
labor commanded by a unit of account can indeed ever be constant; he 
assumes such however for the purposes of a theoretical investigation.

Yours, Rakesh

>If you determine its value by taking the GDP
>and dividing it with total money supply, the problem you will have is that you
>cannot claim the the GDP measured by the prices assumed to be proportional to
>value and the GDP measured by the prices of production have any reason to
>remain the same. So, in effect, it amounts to the imposition of the same old
>condition that total values equal total prices of production-- thus no more
>mileage is gotten by this. Cheers, ajit sinha

This archive was generated by hypermail 2b29 : Sun Dec 31 2000 - 00:00:04 EST