From: Ian Wright (iwright@GMAIL.COM)
Date: Tue Apr 26 2005 - 20:57:24 EDT
On 4/22/05, Paul Cockshott <email@example.com> wrote: > A crude argument would be that as each capitalist is > going through a circuit of the form > m-c-m'-c'-m'' etc > then during alternate phases of the cycle of capital > each time round each capital has more money. > If we assume that different capitals are randomly > mixed in their phases - some in the money phase > some in the commodity phase then what is true for > individual capitals must be true for capital > as a whole. If the commodity stock held by all > capitals is growing at x% per year, then the > money stock must also be. At each cycle there must > be more money available to purchase the augmented > mass of commodities. Not if prices deflate. > My general point here is that one does not solve the > problem of surplus value by recourse to exploitation > in the labour force. This explains either > > a) how you can get a profit in a simple reproduction > economy > > b) how you can get an accumulation of capital value > through expanded reproduction > > What it does not explain is how it is possible for > an exponentially growing capital value to continue passing > through the monetary form during its cycle. > In this > sense the published volumes of Capital do not fully > solve the problem of surplus value. In my view the > answer is only possible if you downgrade the theoretical > importance of gold, and place much more importance on > the development of characteristically capitalist forms > of banking. This of course is the approach taken by > list member Riccardo Bellafiore. This is not my area at all, but I have some naive questions. In theory only, prices can deflate, allowing a constant money stock to function as before, even though the commodity stock is expanding. Does Marx consider price deflation as a theoretical option at this level of abstraction and thereby postpone an analysis of the creation of new money? If not why not? It would seem a simpler way to proceed. I understand there are a host of practical reasons why price deflation is difficult (e.g., small change will become scarce unless higher denominations are melted down and re-issued in finer-grained denominations), and also institutional reasons for the rise of fractional-reserve banking. But why must an initial explanation of the production of surplus-value necessarily include an account of mechanisms that expand the money supply? -Ian.
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