Re: OPE request

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Fri Aug 29 2003 - 02:37:01 EDT

Hi Fred,
I have interspersed in your very interesting post (and thanks for
having taken the time to write it) a few questions for the experts of
monetary theory and institutions. The experts should feel free to
reword the questions if they can be made interesting.

>In response to Rakesh's question, the subject of this year's meeting of
>our group (which we call the International Symposium of Marxian Theory, or
>ISMT) was "Marx's Theory of Money".  In addition to our eight regular
>members (myself, Chris Arthur, Riccardo Bellofiore, Martha Campbell,
>Patrick Murray, Geert Reuten, Tony Smith, and Nicky Taylor), we invited
>other specialists on this subject to join us this year (Suzanne de
>Brunhoff, Duncan Foley, Claus Germer, Makoto Itoh, Costas Lapavitsas,
>Pichit Likitkijsomboon, and Anitra Nelson).  The conference was held in
>early August at Mount Holyoke College, and we had a great time.
>As Tony has pointed out, the preliminary conference drafts are available
>on the conference website (along with comments on the papers by other
>participants).  I repeat that these are preliminary drafts that should not
>be quoted or cited without permission of the author.
>Very briefly, the main issues we discussed (at least in my view) were the
>1.  Does Marx's theory have to be a commodity in Marx's theory?  Even
>though there remains disagreement on this question, we made progress by
>more clearly distinguishing between the different functions of money, and
>especially by more clearly distinguishing between money as measure of
>value and money as means of circulation.  We all agree that money as means
>of circulation does not have to be a commodity.  The only question is
>whether money has to be a commodity in Marx's theory as the measure of
>2.  If money has to be a commodity in order to function as the measure of
>value, then how is the "monetary expression of labor" (MEL) determined in
>today's economy?  Is it still determined by the inverse of the value of
>gold, or by some other way?

Isn't the Federal Reserve Board under Greenspan  known to have
implicitly followed sensitive commodity prices such as gold and oil
in the determination of US monetary policy (I think Barkley Rosser
mentioned this years ago on the pkt list)? Could something like a
modified gold standard be developing  with central banks attempting
to maintain the value of their currency as some tradeable basket of
goods and services, e.g. x amounts of gold and y amount of crude oil
and z amount of corn?  Do central banks find themselves limited in
deviating from such a policy or having to play a catch up if they do
deviate temporarily from this policy? If the "producers" of
government monies fail to maintain fairly constant measures of
purchasing power--that is, if they allow their money to 'inflate' or
'deflate'--will "private producers" of monetary numeraires gain
acceptance for their products (as Hayek perhaps fantastically

Yours, Rakesh

>3.  If money does not have to be a commodity as the measure of value, then
>how is value measured today, and how is the "monetary expression of labor"
>(MEL) determined?
>How significant are the differences between the determination of the MEL
>with commodity money and with non-commodity money?
>4.  Does Marx's theory assume that abstract labor EXISTS, as a separate
>entity from money and exchange, which MUST BE EXPRESSED as money, or does
>Marx's theory assume that abstract labor DOES NOT EXIST except as money?
>5.  What is the method of causation or determination in Marx's theory?
>Does Marx's theory presume that quantities of socially necessary
>labor-time cause or determine money prices, or that money prices and
>socially necessary labor-time "emerge jointly" in exchange, with no
>direction of causation between them, or with causation running in both
>6.  How valid is Marx's critique of the quantity theory of money?
>7.  What is the role of money in the "transformation problem"?  Does the
>transformation of values into prices of production result in a transfer of
>surplus-value between the gold industry and other industries, such that
>total prices of production is NOT EQUAL to total values.
>Rakesh, I start teaching next week, so I have only very limited time for
>substantial email discussions right now.  I will write an introduction to
>the conference volume in January, and I would be happy to post this on
>OPEL for discussion.  Perhaps that would be a better time and more
>efficient way to discuss these issues.  But I would by happy to try to
>answer specific questions, if you wish.
>Also, the papers will be revised by January 1, and perhaps there could be
>a discussion of one or more of these papers at that time.
>Rakesh, thanks for your interest.

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