"Jurriaan Bendien" Money don't measure

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Tue Aug 03 2004 - 13:34:55 EDT

 From "Jurriaan Bendien"

Rakesh wrote:

Gold never had the property of an invariable measure of value, and
Marx knew it. But he attributed that property to gold, anyway. The
question is why.

I think Rakesh must be correct, since, as Marx well knew, the
production-costs and supply of gold vary over time. Thus, for example, Marx

"The translation of the values of commodities from gold prices into silver
prices and vice versa always depends on the relative value of the two
metals; this relative value varying continuously and its determination
appearing accordingly as a continuous process. Commodity-owners in every
country are compelled to use gold and silver alternately for foreign
commerce thus exchanging the metal current as money within the country for
the metal which they happen to require as money in a foreign country. Every
nation thus employs both gold and silver as world money. (...) As money
develops into international money, so the commodity-owner becomes a
cosmopolitan. (...) The sublime idea in which for him the whole world merges
is that of a market, the world market.


I think Marx explains his view about gold and silver quite well in the
"chapter on money" in the Grundrisse. Gold and silver were use-values which,
because of their physical characteristics and relative production costs,
could practically function as a universal objective standard for value
comparisons, and fulfill the basic conditions required of the
money-commodity qua universal equivalent (means of purchase and payment,
store of value, measure of value, medium of exchange).

A good recent discussion of Marx's theory of money is at:
userpage.fu-berlin.de/ ~stuetzle/kapitallesen/geldware.pdf

In the Grundrisse, Marx raises the question "Can the existing relations of
production and the relations of distribution which correspond to them be
revolutionized by a change in the instrument of circulation, in the
organization of circulation? Further question: Can such a transformation of
circulation be undertaken without touching the existing relations of
production and the social relations which rest on them?"

His answer is: "If every such transformation of circulation presupposes
changes in other conditions of production and social upheavals, there would
naturally follow from this the collapse of the doctrine which proposes
tricks of circulation as a way of, on the one hand, avoiding the violent
character of these social changes, and, on the other, of making these
changes appear to be not a presupposition but a gradual result of the
transformations in circulation. An error in this fundamental premise would
suffice to prove that a similar misunderstanding has occurred in relation to
the inner connections between the relations of production, of distribution
and of circulation. The above-mentioned historical case cannot of course
decide the matter, because modern credit institutions were as much an effect
as a cause of the concentration of capital, since they only form a moment of
the latter, and since concentration of wealth is accelerated by a scarcity
of circulation (as in ancient Rome) as much as by an increase in the
facility of circulation. It should further be examined, or rather it would
be part of the general question, whether the different civilized forms of
money -- metallic, paper, credit money, labour money (the last-named as the
socialist form) -- can accomplish what is demanded of them without
suspending the very relation of production which is expressed in the
category money, and whether it is not a self-contradictory demand to wish to
get around essential determinants of a relation by means of formal
modifications? Various forms of money may correspond better to social
production in various stages; one form may remedy evils against which
another is powerless; but none of them, as long as they remain forms of
money, and as long as money remains an essential relation of production, is
capable of overcoming the contradictions inherent in the money relation, and
can instead only hope to reproduce these contradictions in one or another
form. One form of wage labour may correct the abuses of another, but no form
of wage labour can correct the abuse of wage labour itself. One lever may
overcome the inertia of an immobile object better than another. All of them
require inertia to act at all as levers. This general question about the
relation of circulation to the other relations of production can naturally
be raised only at the end. But, from the outset, it is suspect that Proudhon
and his associates never even raise the question in its pure form, but
merely engage in occasional declamations about it."


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