[OPE-L:7428] Re: RE: Aoki on money II

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Fri Jul 19 2002 - 10:48:36 EDT

re Andrew T's 7427

I too look forward to replies by other OPE-L'ers.

>I also found the Aoki piece very interesting. Can I try a question out on
>you? Aoki argues that C-M-C, simple commodity production, is Marx's starting

I do not think Aoki actually conflates C-M-C with simple commodity 
production; after all he says this is the circuit in which wage labor 
is caught, and proletarians are not simple commodity producers.  Aoki 
says that by simple commodity production he means only a society 
where the basic production relations are ambiguous or unspecified.

In a society in which the commodity has become the general form of 
wealth, we find that commodities are not exchanged for commodities 
(C-C) but through money (C-M-C). Those exchanging commodities could 
be capitalists and wage workers, rather than simple commodity 
producers. It's not that capitalists do not sell commodities for 
money which is then exchanged for commodities. Their behavior can 
usually be described as C-M-C but their motivation cannot. So that 
Marx begins with C-M-C does not mean that he has begun his analysis 
with simple commodity producers rather than capitalists. It only 
means the latter's behavior is analyzed first in terms of the 
exchange of commodities rather than the expansion of money capital.

  I agree with the arguments presented by Chris Arthur, Martha 
Campbell and Fred Moseley that Marx is assuming from the beginning of 
Capital a fully capitalist society in which the basic relation is 
that of the production of commodities by means of wage labor. In fact 
I think only when we have such production relations is the commodity 
the general form of wealth, so that Marx begins with the commodity as 
general form of wealth implies the existence of truly capitalist 
relations of production, even if Marx does not specify so 
unambiguously from the beginning. After all to introduce wage labor 
properly Marx first has to develop logically the distinction between 
use value and exchange value. That is, for logical relations Marx 
does not specify unambiguously the relations of production which he 
assumes from the outset: a developed bourgeois society is however the 
object of his analysis (and revolutionary ire) from the very first 

  My argument with Gil has been that Marx is not attempting a logical 
transition from simple commodity production to wage labor relations 
of production in chapters five and six. He has assumed the latter 
from the inception--this is where I seem to disagree with you as 
well.  What Marx is attempting to clarify is what the latter has to 
alienate in exchange if the expansion of money capital is to be 
effected in a generalized commodity society. On the basis of the 
distinction between exchange and use value Marx discovers that wage 
labor cannot alienate labor time itself in exchange but only its 
labor power.

In the first part Marx focuses on the capitalist exchange of 
commodities implicitly produced by wage laborers (which is not to say 
that Marx does not make forays into the history of commodity 
exchange, but his basic object of investigation is a fully developed 
capitalist society). Marx underlines that these commodities are not 
exchanged directly against each other but through the mediation of 
money. Marx thus analyzes the puzzling, if not dazzling, nature of 

The question quicky becomes why money monopolizes direct 
exchangeability and what other properties it has as a result of said 
monopoly (see last chapter in Alfredo's book). Further, why does 
money then allow for the possibility of a general crisis? All these 
questions can be asked without assuming those who are exchanging 
commodities for money and repurchasing commodities with money are 
simple commodity producers.

I agree with Aoki when he writes:

>     In Crotty's interpretation, Marx traced capitalism' s crisis potential
>  to
>  the insertion of money as a medium of exchange into what would otherwise
>  be a
>  barter system and theorized how this crisis potential increases in
>  complexity
>  and potential severity with the multiplication of the functions of money
>  and
>  the development of the credit system and institutions of financial
>  intermediation--in short, with the development of capitalism. Marx's
>  analysis
>  develops in three major phases: (1) the implications of money's function
>  as
>  means of circulation in the C-M-C circuit, (2) the additional implications
>  of
>  money's function as means of payment in C-M-C, and (3) the complications
>  resulting from the contradictory unity of circulation and production
>  embodied
>  in the M-C-M circuit.

>  in the first three chapters of Capital, Volume 1. Now this is is a
>closed system, a closed circuit of commodities in which there is an
>equilibrium solution.

While I agree that there is a closed character to C-M-C, I don't see 
how and why Marx commits himself to any equilibrium notions in the 
first part of Capital.
Aoki's point seems to be that even analysis of the nature of the 
money in terms of its mediation of commodity exchange reveals that it 
has greater complexity than classical economics allowed. And the 
nature of money is already such that even the smoothness of C-M-C 
cannot be guaranteed.  Of course once we introduce the function of 
money as a capital even greater complexity is discovered (for 
example, time constraints on the completion of the circulation of 
capital). I do not see where Aoki commits himself to equilibrium 
thinking in this piece.

>  I agree that once money is introduced in M-C-M' then a
>more open system is introduced, but as a METHODOLOGICAL STARTING POINT a
>closed equilibrium model is where Marx builds from.

I don't think Marx begins with
1. simple commodity production or commodities exchanged by simple or 
   commodity producers. Marx does begin with C-M-C, but that does not mean that
   the actors whose existence he assumes at the outset are simple commodity
2. any notion of equilibrium; in fact in explores the possibility of 
a general crisis even in part one of Capital, vol 1.

Comradely Rakesh

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