[OPE-L:4734] money

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Tue Jan 02 2001 - 05:12:41 EST

I was thinking about Riccardo's comments on Colletti in Rivista di 
Politica Economica (April-May 1999). Here are some playful thoughts 
on money as a real hypostatization  (footnote references to Riccardo, 
Makoto Itoh, John Weeks, Robert Paul Wolff, Patrick Murray, Edmund 
Leach are not included, though they'll be obvious to readers here).

For Marx, the puzzle of money already manifests itself in the simple 
equivalent value form, for as Aristotle already recognized to express 
the value of five beds by the physical quantity of one house is no 
different than having it expressed as a physical quantity of so much 
gold. Marx attempts to 'derive' how one commodity (gold as it turned 
out) comes to take a monopolistic position of direct exchangeability 
with all other commodities or, to put it another way,  why all other 
commodities have to express their value by in effect requesting an 
exchange with the money commodity. Money then has the peculiar 
property that it can be immediately converted into any form of social 
labor-it is liquid:  its use value comes to be its exchange value. 
The products of all other concrete labor activities have to be 
ex-changed into money before they can be converted into any form of 
social labor. Marx's analysis of money seems shrouded in the rococo 
of dialectics, but upon closer inspection it seems to be his claim 
that monetary exchange relations implicate their participants in 
logically absurd beliefs and practices.

The central problem here seems again to be a category mistake. As if 
the confounded visitor who asks to be finally shown the university 
after having already been taken to the philosophy, physics, biology, 
etc. buildings could actually find what he is looking for in a visit 
to, say, the mining department alone; abstract labor which seems 
merely to be a general heading comes in fact to be incarnated in a 
single commodity (gold).   It is indeed as if the generalization 
fruit existed not merely in the mental act of abstracting from 
bananas, papayas, coconuts, etc. but was rather incarnated in, say, 
mangoes. Imagine then a tropical island  economy in which, by law, 
only fruit  can be traded.  The essence of fruit is thought here to 
have taken the form of mangoes as a result of some special property 
thereof so if one wants coconuts for his papayas, the papayas first 
have to prove themselves to in fact possess the fruity property by 
being ex-changed into mangoes, which alone is always already fruit by 
its very nature and can thus uniquely be immediately converted into 
any concrete form of fruit.  Routinely accepted as a means of 
payment, mangoes are money; however, what appears to happen is, not 
that the mango has become money in consequence of all other fruits 
expressing their values in it, but, on the contrary, all other fruits 
express their values in mango, because it is money.

  So neither papayas nor coconuts can be immediately traded because 
they do not yet count as fruit which has thus bewilderingly taken on 
an existence independent of its members; moreover, as a real 
hypostatization of fruit, mangoes paradoxically lose for all 
practical purposes the sensuous, concrete attributes of their 
fruitiness, for their use value has become  exchange value, pure and 
simple, since mangoes serve as the embodiment of fruit as such in the 
circulation of commodities. Mangoes just as they come off the tree 
seem to be forthwith the direct incarnation of all fruit. The 
abstract-universal of fruit, which ought to be a predicate-i.e. a 
property of   concrete or the sensate-has become in mangoes the 
subject, a self-subsisting entity. The concrete sensate of the mango 
moreover counts merely as the phenomenal form of the abstract 
universal-i.e., as the predicate of its own substantialized 
predicate.  The sense qualities of mangoes have been reduced to the 
attributes or, to use Marx's Hegelian terminology, forms of 
appearance  of fruit in the abstract.  As Marx puts it:

This inversion (Verkehrung) by which the sensibly-concrete counts 
only as the form of appearance of the abstractly general and, not on 
the contrary, the abstractly general as property of the concrete, 
characterizes the expression of value. At the same, it makes 
understanding it difficult. If I say: Roman Law and German Law are 
both laws, that is obvious. But if I say Law (Das Recht), this 
abstraction (Abstraktum) realises itself in Roman Law or in German 
Law, in these concrete laws, the interconnection becomes mystical.

While there are category mistakes at work here, Marx audaciously 
argues that these logical inversions by which one commodity is 
transubstantiated into value itself are not non-sense to those 
immersed in everyday monetary exchanges. Religious experience 
provides an analogue to what can be called a practical  non-logic. 
Here the three signs of God as Father and Son and Spirit are brought 
into metonymic relation and thought to be not only true but also 
simultaneously true; while this conflicts with the logical rules of 
physical experience by implying that God is  son and father to 
himself,  such mytho-logical statements nonetheless make sense 'in 
the mind' so long as the speaker and his listener, or the actor and 
his audience, share the same conventional ideas about metaphysical 
objects.  For Marx, modern humankind is entangled in mytho-logical 
beliefs about money in its commercial life.  In his remarkable 
expression this ideological and practical world is revealed to be the 
religion of everyday life. 

Money fetishism engenders an illusory understanding of the nature of 
social life.  For example, to our mango mad islanders, the collective 
inability to dispose of their various fruits will then appear as a 
surplus of fruit commodities vis--vis mango money; the general 
crisis in the interruption of trade and the breakdown of their social 
relations  appear to derive from a shortage of a thing-mangoes. The 
islanders have come to subscribe to the fetishistic belief that their 
social intercourse results from and depends on the existence of a 
fruit which as fruit value itself however may be profitable to  hoard 
under certain conditions. If mangoes were merely a valueless means of 
circulation, there would be no motivation to hoard; and if mangoes 
were simply another commodity, there would be no reason why alone it 
was hoarded.  But from our anthropological point of view our 
islanders are self-afflicted by periodic famines in mangoes which are 
not even valued (it should be remembered) for their  sensuous, 
concrete attributes but rather as value as such.  In these periodic 
crises, mango money that is the servant of the exchange of 
commodities, and itself a commodity, is thought by the islanders to 
have fetishistic properties, i.e., magic powers of compulsion by 
itself, so it invariably leads to their belief that the shortage in 
mangoes which has resulted from their hoarding has caused the 
stagnation of trade. 

Led by mango reformers, the islanders may then demand the creation by 
fiat of symbolic or paper mangoes which may not even be convertible 
into a fixed quantity of real mangoes but  which the tribal council 
will still only henceforth accept as the medium for the payment of 
taxes.  This fiat action would serve to establish the social validity 
of the symbolic mango as a means of circulation and thus mark the 
partial end of mango fetishism.  More darkly, the islanders may 
imagine an ethnic sub-group to monopolize the lending of mangoes and 
attack them with collective outbursts of mad violence for an 
excessively high mango rate of interest which has choked the supply 
of the money fruit and crashed the networks of fruit trade. Marx's 
argument of course is simply that the interruption in fruit trades 
only seemed in the first place to be caused by the shortage of the 
special money fruit (the quantity theory of mangoes) so even the fiat 
creation of symbolic  means of circulation  cannot fix the underlying 
problems.*** The fundamental fetishism then is the ascription of our 
sociality to the power of money which induces the search for 
solutions to the breakdown of social relations in the realm of 
money-in the quantity of its bodily form (Hume), in the social 
validity of its symbolic substitutes (Proudhon, Keynes) or in the 
stability of  the value of currency (Ricardo).
***What happens to Marx's theory when the link between money and its 
commodity basis has been broken, that is, when convertibility of 
money to gold has been suspended by governments? There is no 
consensus here among Marxist scholars of the continuing relevance of 
any commodity theory of money. One attractive option is the argument 
that Marx's theory demonstrates that a private exchange economy 
simply cannot do without money as an actual store of value without 
destabilizing exchange relationships; this sets a limit to the 
arbitrary proliferation of symbolic money.  For example, the Federal 
Reserve Board, under Chairman Greenspan, is known to have implicitly 
followed sensitive commodity prices, such as gold and oil, in the 
determination of U.S. monetary policy. That is, it has attempted to 
stabilize the dollar as x amount of gold and y amount of oil. This 
affords some flexibility; for example, the Federal Reserve Bank 
deviated from this policy in wake of the 1998 Asia financial panic by 
increasing the supply of dollars through interest rate reductions in 
order to stop the commodity price deflation. The price of the 
'basket' of sensitive commodities thus fell, including the dollar in 
gold terms. However since then the Federal Reserve Bank has been 
forced to play catch up to maintain confidence in the value of the 
currency. This is especially important of course with respect to the 
dollar since it functions as world money on which world trade largely 
depends.  In short, one implication of Marx's theory of money may be 
that the elimination of money fetishism is simply impossible in a 
private exchange economy.

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