Re: Inflation, credit, and the 'money expression of labour' within a value-form perspective

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue May 06 2003 - 05:02:37 EDT

Reuten wrote:

> "Clyder" wrote:
> " If one considers that value is labour, then the value of
> money is unproblematic."
> Although Marx is no authority for me (instead my most
> important dead `discussion' partner), I would think that if
> you say "value is labour" then you destroy ALL of his effort
> in Parts Three to Five of Capital I to EXPLAIN value BY
> labour. If you want to break that down, then that is fine
> with me, but then we just seem to be engaged in a different
> research project.

What I am saying is that if one takes value either to be
labour, or even Smith's command over labour, then the
notion of a decline in the value of money is well founded.
If one thinks that value is essentially something specific
to exchange - rather than being founded on something
prior to exchange - then the idea of a decline in the
value of money is no longer well founded.

> "Clyder" also wrote:
> "How do you talk about inflation without mentioning that
> involves a fall in the value of money?"
> Over the last 50 years "inflation" has become a mystical
> term. Most mainstream economists take inflation to be
> identical to price increase (then better say that). Price
> inflation -- in my view -- is a complex of,  inseparatedly,
> monetary factors and pricing factors.
> Most briefly price inflation is a price increase above
> labour productivity increase (and which requires a monetary
> accomodation).

Surely this is wrong. Dont you mean a % rate of price increase
with respect to time that is greater than -1 times the % rate of
labour productivity increase.

Your formulation must be wrong consider the following:

Prices increas 10% per annum,  labour productivity increases
by 20% per annum. In your definition there is no inflation,
wheras I would say that the  value of money is declining by
30% per annum.

But more generally, assuming that it was just a mistake
that you made above rather than your real opinion,
I see that you are still grounding the value of money in
terms of something prior to exchange - labour expended
in production.

> Price inflation was hardly at all discussed by Marx. In the
> way he smartly posited his value theory in Volume I of
> Capital, he could abstract from this.

I agree that price inflation was hardly discussed by Marx,
in my opinion it is a lacunae that when pushed on reveals
serious incoherencies in his monetary theory. In my opinion
the monetary theory in Capital I is a didactic Robinsonade
designed to illustrate his theory of commodity values. I think
the derivation of money from commodities is historically
ill founded and represents just the sort of eternalisation
of contemporary English Victorian relations that he
is in other places so scathing of Ricardo for.

I find Marx's critique of Ricardo's monetary theory

Philip Dunn wrote on the same topic

> I do not see how changes in the value of money over time prevent it
> measuring the value of produced commodities.  Money is purchasing
> power and its intrinsic value is measured by quantity of the immanent
> measure, labour time, it commands.  The value of a nominal unit of
> money, as universal relative, is equal to the the ratio of total living
> labour time to total nominal value added.  What is required to have a
> prior existence is only _equivalent_ value, the labour time
> equivalents of money.  The _relative_ value of produced commodities
> is then expressed by money as universal equivalent.
This if fine from the point of view of defining values at a given
point in time. The problem for the capitalist class is that they
are interested not in simply measuring instantaneous values but
in exerting a trans-temporal social power. They want the
power of command that they exercise with their current
money to remain undiminished or preferably to increase
over time.

A decline in the value of money prevents it from acting
as a store of value, and contracts entered into in terms of
money - the lending of money for example - can lead to
them ending up with less social power than they started.

> The difficulty is due, I think, to Marx's mapping of the
> relative/equivalent distinction onto the value/use-value distinction.
> Equivalent value has nothing to do with use-value.  The
> relative/equivalent distinction is a distinction within the value
> concept.

What is the use of the relative/equivalent distinction. It strikes
me as a bit of pointless Hegelian erudition on Marx's part.
I have never seen any subsequent explanatory theory that
has had to rely upon it.


Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

This archive was generated by hypermail 2.1.5 : Wed May 07 2003 - 00:00:00 EDT