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

From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Thu Nov 11 2004 - 12:28:22 EST

Fred, thanks for your message.

I am not in a period, for several reasons, to be able to go into a
detailed commentary to it, or even reading it with the necessary
care. But I assume you are putting forward the same interpretation we
discussed in Maine this summer. My comments then are the same:

(i) I am happy that you agree with me that your interpretation rested
on the value of money (the MELT) being given ex ante, and that this
in Marx holds because of his theory of money as a commodity: I always
urged you either to endorse it or to show how the same thesis could
be maintained with non-commodity money;

(ii) your first attempt at the conference you are publishing went
towards the quantity theory of money (ground: Marx's own approach
with inconvertible paper money). Value of money being, roughly,
MV/SNLT. But SNLT is "socially" eventually on the market, so you
cannot have it fully ex ante, but only ideally or latently (in you is
different since you have a kind of Says's Law: I have the opposite,
firms in  Vol. I produce for effective demand, like in Keynes; but
this is not the leter of Marx, of course). And MV is of course for
the quantity *identity*, shared by all, = PY, so again your value of
money is NOT independent of P. The Ps are already there.

(iii) I do not see how this (something partly quantity *theory*
oriented) can be accepted, since rather I would like to pursue Marx's
hints towards endogenous money in vol III;

(iv) this is actually what I do with the help of the circuit
approach. Now you, as me, go from M to P. I have, thanks to the
circuitist approach (bank finance), a completely endogenous view. And

(v)  My view of the MELT is different from the NI strictly speaking,
because I go back to bank finance at the beginning of the circuit,
this in turn is linked to wage bargaining, and this again is linked
to *expected* magnitudes (expected effective demand, expected real
wages, expected exploitation in the labour process). This gives way
to production and actual exploitation.

(vi) you say I or the NI have no quantity theory of price. Why? There
is a quantitative determination of prices in NI. I agree with you
that that kind of simultaneous determination has not much to do with
the labour *theory* of value. Exactly: the LTV has to do with the
*constitution* of these magnitudes, that is with what is going on in
the buying and selling of labour power and in the process of
production. This is what *I* have stressed all the time. The point is
usually disregarded by all Marxists who take as granted that the new
value is the monetary representation of nothing but labour. But why?
This is the *theory* of value. With the monetary ante-validation of
production, and the conflictual extraction of living labour as ideal,
I have an answer to this. This answer is that the methods of
production from which the determination of prices starts are
constituted by the dynamics of money as finance and exploitation as
the use of a potentially counter-productive labour power. The
judgement that this is not a theory is unfair. It is not *your*
theory. It is *mine*, and it has to do with the *processual*
constitution of what is analyzed by NI. And it is quantitative.

(vii) this is crystal clear in your approach, of course, because
dropping the money as a commodity, as I have stressed several times
in the ISMT, you are dropping Marx's justification for value
exhibiting nothing but labour, the argument according to which the
abstract labour in a  commodity being represented in the concrete
labour producing money as a commodity. It is this that in Marx avoids
the contradiction between the abstract labour being given prior the
exchange, or within exchange.

Too long for the couple of comments I wanted to do. But the synthesis
is that I do not see how you escape the circularity you want to
escape since both MV and SNLT are not independent from what is going
on on the commodity market and the prices there. The only way out
would be to go behind objectified labour to labour as a 'fluid',
labour in becoming, and having M endogenous because it is bank
initial finance. This would give you an expected MELT. But this is
what *I* do, and has nothing to do with a different theory of the
individual determination of prices in the simultaneous setting.

I hope to have the possibility to think about this with more calm in
the future.


Riccardo Bellofiore
Dipartimento di Scienze Economiche
"Hyman P. Minsky"
Via dei Caniana 2
I-24127 Bergamo, Italy
direct    +39-035-2052545
secretary +39-035 2052501
fax:      +39 035 2052549

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