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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Nov 11 2004 - 12:36:13 EST

At 11:24 AM -0500 11/11/04, Fred Moseley wrote:
>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

Yes because it is money exclusively represents SNLT--and why does
SNLT have an exclusive representation--that it can become the
exclusive object of demand. JS Mill in fact realized that Say's Law
could break down but he had no theory of money that could explain
what as a social construct it represents (or functions as) that it
could in fact become the exclusive object of demand. It seems that
Marx's theory of money was meant to solve this problem (the
"dazzling" nature of money in a crisis, dazzling meaning here the
overpowering or confounding of mental faculties with excessive
brightness, i.e.  the brilliant or showy qualities of money; the
understanding of money as a dazzle is most important) as well as well
as a serve as a critique of Prodhounian utopianism. As Althusser
argued, it's the questions that Marx's theory of money was meant to
answer (or the demolition of opponents it was meant to carry out)
that our reading has to divulge and highlight, no?

Another point. I am not sure I understand Adler correctly, but he
seemingly had a profound philosophical point to make about money. I
think Max Adler was correct in understanding Marx's critique of the
classical theory of value as similar to classical German philosophy's
critique of empiricism in that both undermine individualist

Adam Smith recognized that objects exchange due to the division of
labor. Marx then asks not only why did this division of labor arise
but also whose labor is it that is divided. To the latter question
Marx answered that it society's labor that is divided. So then we
understand that while Smith argued that exchange of commodities is an
exchange of equal quantities of labor, Marx analyzes the situation
further to show that this labor is not personal or invididual labor
but a social substance, some aliquot of the labor at the disposal of
a society.

So what does it mean to say that social labor is a substance? It
means that individuals producing in society is the starting point,
that production by a Robinsonade individual outside society is just
as much an absurdity as the idea that language could develop without
people living and speaking together (Callinicos notes similarity
between Adler's arguments here and Wittgenstein's critique of private
language hypothesis). It is a recognition that men must associate and
depend on each other and more to the point depend on social
production. Man is in short a zoon politikon. This is the starting
point (it may even be understood as a transcendental condition as Max
Adler argued).

It is thus society that has labor time at its disposal and that
depends on social labor for its reproduction just as the individual
depends on society for her consciousness, individuation and
reproduction: the individual activity of every single person is only
a mode of functioning of the species, and it is this social and
abstractly general labor time that is expressed by way of its
products in the exchange relationship.

The power of money can thus only be understood as the fetishistic
expression of this transcendental condition.

>>  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

Dear Fred,
I fear that I am not getting the point; and if so I apologize. I am
unable to see the point that you are making.

If Greenspan roughly attempts to keep $1000  equal to x barrels of
oil, y grams of gold and z bushels of grain, then $1000 simply
represents the labor time represented by x barrels of oil, y grams of
gold, and z bushels of grain.
Greenspan follows sensitive commodity prices; in doing so, he may be
constructing a loose composite commodity money. For example, he again
raised rates despite continued depression in marginal efficiency of
capital and build up of idle cash reserves only because sensitive
commodity prices are in fact rising. The economy is not getting
stronger; the dollar is depreciating too sharply against that basket
of commodities.


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