Re: (OPE-L) recent references on 'problem' of money commodity?

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Thu Nov 11 2004 - 11:24:16 EST

Brief, belated replies to Rakesh below.  Rakesh, thanks for your comments.

On Fri, 29 Oct 2004, Rakesh Bhandari wrote:

> I agree with you when you write: "the necessity of money is derived
> from the necessity to objectively represent the abstract labour
> contained in commodities;"

This is an important agreement.

> Would you agreee that Marx was primarily interested in virtue of the
> exclusive re-presentation of what does money create the possibility
> in a money mediated economy of a general crisis. Isn't this what Marx
> means by the failure of all hitherto thought to get behind the
> dazzling money form, i.e. to disclose that which money exclusively
> re-presents which allows it to go from a force of to a fetter on
> production?

I agree that this is a very important point about money, but I think it is
a separate point from the necessity to represent SNLT as quantities of

> You write:
> "(3) the quantity of money in circulation is derived from the sum of
> prices." The best reconstruction of Marx's argument that I know of is
> in the first volume of Ranganayakamma's book on Capital.

I took a quick look at Ranganayakamma's exposition because of your
suggestion, and I agree that it is very good.  She also discusses briefly
that the relation between the quantity of money and the sum of prices is
different in the case of inconvertible paper money (pp. 184-88).  In the
latter case, prices depend on the quantity of money, rather than the other
way around (as in the case of commodity money).

> You also asked:  Is there any sense in which money is a commodity
> today? I tried an affirmative answer with my hypothesis of a
> composite commodity theory of money. But you were dismissive of it,
> unfairly I of course think!

I wasn't dismissive of your idea.  I said that I didn't see how a
composite commodity could function as the measure of value, because I
don't see how it is possible to define the BASIC UNIT of such a composite
commodity, and thus how to determine the quantity of labor-time that is
contained in a unit of the money commodity, which is what is necessary in
order to function as the measure of value (and to determine the MELT).
If you could explain this point to me, then I would be happy to consider


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