Re: (OPE-L) Measurement of abstract labor

From: cmgermer@UFPR.BR
Date: Tue Jul 27 2004 - 09:01:26 EDT

Hi, Jurrian, thank you for your reply.

I had written:
> It seems to me that this statement of yours is based on implicit unproven
> pressupositions, which are: 1) that in Marx's time the massive creation of
> credit and of fiduciary money were phenomena of minor significance, of
> which people seem to have been unaware, which I think is not true; 2) that
> Marx's theory of money did not contemplate and/or is unable to take into
> account and explain those phenomena, which I think is also not true; 3)
> that what you call the abandonment of the gold-dollar standard implies
> that gold has lost its monetary role, which in my opinion cannot be taken
> as a proven fact.

You replied:
> As regards 1), Marx was well aware of credit-creation, and Engels mentions
> it in Cap. Vol. 3, but if today for example British households
> collectively carry more than £1 trillion of debt, or given that the total
> net
> indebtedness of the USA (household, federal, state, local govt and
> household debt) is in excess of US$40 trillion (i.e. four times the size
> of annual GDP) while more US currency and dollar-denominated claims
> circulate overseas than inside the country, then we're talking about a
> phenomenon of quite a different order and magnitude I think.

In this regard there are, in my opinion, two aspects that need to be taken
into account: 1) the quantitative increase in the figures does not imply a
qualitative change in the nature of the phenomenon, when we compare its
present  state with how it was in the times of Marx. Do you think there is
such a qualitative change? 2) Marx pointed out very strongly that one has
to distinguish between money and the instruments of circulation that
derive from it, such as credit money and state paper money, on the one
side, and interest bearing money capital on the other. Only after defining
them abstractly one can proceed to the analysis of more concrete problems,
such as the public debt and the international payments system.

> As regards
> 2), I agree with you in principle. As regards 3), the USA still holds very
> substantial gold stocks. The IMF reports that the US holds 261.59 million
> troy ounces, worth $11 billion.
> But other
> industrialised countries, including e.g. Britain and Holland, have been
> auctioning off gold in recent years.
> So you are correct, gold is still part of the monetary system. Point is
> that its role has been vastly diminished, simply because the volume of
> monetary claims in circulation is much larger than the value of gold. The
> classical commodity theory, according to which the long-run value of money
> is related to the production-costs of the precious metals used as monetary
> standard was counterposed to the quantity theory, according to which the
> "value" of money is simply determined by the quantity of money available
> in the economy. Obviously, currency itself is also a commodity, in the
> sense of a tradeable object that can be the source of capital
> accumulation, hence the phenomenon of "money-markets".

Iím very pleased with your agreement that gold is still part of the
monetary system. I would however make two remarks: 1) There is again
necessary to distinguish between quantitative and qualitative aspects. The
small relative size of the reserves of gold against the volume of monetary
claims is not in itself relevant for the determination of the exact role
gold plays in the monetary sphere. Marx is very conscious of the fact that
the development of the banking system leads to the gradual and finally
complete withdrawal of gold from the circulation, where it is increasingly
replaced by credit money, as well as of the fact that the relation of
credit money to the gold reserves increases with the development of the
banking system. Those facts do not contradict his theory of money. 2) if
with the term currency you mean paper money, then it is in itself not a
commodity, because its value is not the value of the paper of which it is

> One of the goals (not the only goal) of socialist economy is to encourage
> the transcending of a system of resource allocation exclusively on the
> basis of buying power or profit criteria, through legally sanctioned
> citizens entitlements and rights, which include a guaranteed subsistence
> and educational opportunities. But that doesn't mean the abolition of
> money, rather it means restricting money-economy to those spheres where it
> is useful, efficient and serves socially decided goals - and this is done
> by clearly demarcating which goods and services may be generally traded,
> and which may not, and by whom they may or may not be traded. Moreover,
> money remains a unit of account, along with physical unit accounts and
> labor-accounts. All of this is discussed in the more intelligent East
> European literature.
> The dispute among real Marxists has never been about whether there should
> be a market or no market, but (1) where markets are effective and
> efficient, and where they are not, or violate social priorities, (2) how
> these markets should function, and (3) to what extent it is possible to
> replace markets by superior forms of resource allocation, which is the
> overall aim. That is how Lenin, Trotsky and Bukharin approached it as
> well. The goal is to abolish a situation where production of output is
> mainly conditional on accumulation of private capital, rather than
> conditional on social priorities agreed to by the majority of society. But
> this does not mean that a private sector would not continue to exist to
> some extent, in areas where that is useful and productive, for example,
> entrepreneurship. In large part, the large corporations are internally
> already functioning as planned economies, and for basic consumer goods the
> demand is known, predictable and stable, and is supplied by just a few
> corporations. In that sense, socialisation is objectively already
> occurring.
> Personally, I have never belonged to that school of Marxists which
> believes that money is the root of all evil, because it isn't.
> Marx's critique is that money becomes an autonomous force as private
> capital, in which case people are used and exploited in the pursuit of
> property ownership and private enrichment, and moral and social priorities
> of human life are disregarded.

I fully agree with Paul Cís reply about this (I must remark that when I
said socialism I was thinking of communism, not of a transition stage).
Communism and market or communism and money are contradictions in terms.
As I said in the previous post, your interpretation of Marxís theory of
money is very problematic if you believe they are compatible, because they
are in fact not. The reason is that money is the instrument of the social
unconscious mechanism (the law of value) that provides for the
distribution of labor and of the products of labor in the absence of a
social plan of production and distribution. The absence of such a plan is
what characterizes the market economy in contrast to both pre-capitalist
societies and the communist society. The acknowledgement of this fact is
fundamental for the understanding of Marxís theory of the general
equivalent of value or money and of the reason why it has to be a
commodity in his theory.

The essential change (not the only important one, but the essential one)
in the transition from capitalism to communism is the abolition of the
private property of the means of production and the institution of social
or common property. If there is no private property, there is no sense in
selling and buying, i.e., in the existence of a market, since people
cannot sell what does not belong to them, and donít need to buy what they
already own. On the other hand, there is no reason for the existence of a
hidden or unconscious mechanism for the distribution of labor and its
products if there is a social plan of production and distribution, in
which labor and its products are distributed according to known and
explicit criteria.


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