Date: Tue Apr 29 2003 - 06:02:24 EDT
There has been much debate on ope over the years on whether value exists objectively prior to being validated by sale. The point made by some participants has been that it is money which is the objective social validation of socially necessary labour time, and until the commodity is translated into money the labour time in it can not be said to be socially necessary. I want to consider the obverse situation - what validates the money issued by the state bank and or the credit system. The initiation of state banks gave rise to the initial illusion that they could create value - an illusion repeated in every credit boom. In practice however the issuers of paper currency found that the currency depreciated on excessive issue. One take on this would be to say that such currency is a claim on the flow of labour being performed, and when the rate of expenditure of the currency exceeds the labour being performed the value of the currency, falls because the share of social labour it commands falls. I was wondering if there is a literature on seigneurage from the value form theorists.
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