[OPE-L:132] Re: the "law of value" (was: Marx's goals)

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Sun, 24 Sep 1995 13:43:07 -0700

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Paul writes:

> Irrationality of calling interest the price of money
> ----------------------------------------------------
> It is irrational to call interest the price of money
> not because of any dependence on the labour theory of
> value, but on the purely formal terms in which the
> universal equivalent form is analysed in chap 1 vol 1.
> It relates to the mathematical type or dimensionality
> of price. In type theoretic terms, prices are operators
> that map between two types of numbers, where the first
> is a type used to measure physical quantities of
> commodities - what Marx calls a use value, and the
> other is a type used to measure quantities of money.....

(I've omitted the rest purely for brevity's sake, but I beg fellow
OPE's to read Paul's comments in full.)

Whoa. Once again Paul C. has responded to a relatively simple-minded
observation of mine with an analytically sophisticated and insightful
commentary that will go into my permanent files (we engaged once
before on the question of whether exchange "expresses something
equal"), for which many thanks.

However, again I must say that his comments in no way derail my
point. Paul took issue with my speaking of money operating within
the circuit of capital as a "commodity", and correspondingly with
referring to the interest rate it received as a "price". I responded
by saying that my usage was simply Marx's usage from Vol III, Ch. 21.

To which I now add that first, Paul's arguments for the irrationality
of interest considered as a price having nothing whatsoever to with
Marx's arguments for same. Paul advertises this himself when he says
the irrationality he speaks of has nothing to do with the connection of prices to
values. For Marx, as noted in the passages I referred to, it has
*everything* to do with the connection of prices to values. So if
Paul has a critique here, it's of Marx, not me.

Second, the following sense of interest as price surely remains: granting
everything Paul says, an interest rate is a market entity (e.g., it
characterizes "money markets") which establishes a *rate of exchange*
between "dollars today" and "dollars tomorrow", in much the same way
that a price *ratio* (note the difference from simple "price")
establishes a rate of exchange between some good x and some other
good y.

The fundamental difficulty, I think, is not with rate of interest as rate of
exchange, but in that it establishes the basis for a monetary return on
something which is itself money. One can infer from Marx's tortured
prose in Vol III, Ch. 21, that he's troubled by the notion of
treating money in its form of capital as a *commodity*, even as he
invokes it --money-as-capital clearly isn't a commodity in the strict sense
of his usage in Vol. I, Ch.1.

I reiterate, then, that my usage is simply Marx's usage, and that the
latter permits a coherent interpretation of interest rate as price:
i.e., as a market-determined entity which establishes a rate of
exchange between dollars loaned today and dollars repaid tomorrow.

This was the sense used in my original comments. Gil Skillman