[OPE-L:426] Re: Comments from Riccardo-2

Paul Cockshott (wpc@clyder.gn.apc.org)
Sun, 5 Nov 1995 00:34:04 -0800

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Why this stress on banks? Because the problem of all theories
now has been how money comes in in the economic process. From the sky?
>From hoarded golds (history)? From the State? I think that also with
we must have an ab-ovo analysis, w hich means that we should not
presuppose what must be explained, i.e. stocks of money present somewhere
in the system. And I think (with Marx) that the analysis must start
without the State. Without the State, you don't have deficit financing,
'outside' m oney, and State debt instruments. Though Duncan's post on
thisissue is important, then, it does not resolve the question of the
of money. The only reasonable way out from the conundrum is to let money
come in through bank finance to capitalist pro duction.

I am generally sympathetic to what I have read of your work on
the role of money in reproduction. I also agree that we should
treat bank debt as the normal or characteristic form of money
in capitalist societies. But what constitutes the reserves of
the banks, if one abstracts from state money?

And in the absence of an external determination of their reserves,
how can one conceptualise the effect of the reserve ratio of
the banks on the rate of interest and thus on the division of
surplus value between bank and industrial capital.