[OPE-L:1151] Marx, Ricardo and money

Costas Lapavitsas (CL5@soas.ac.uk)
Tue, 20 Feb 1996 09:13:11 -0800

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Allin wrote,

>it's not Paul who is "tying Marx to
> commodity money" -- that's something he does for himself (and to my mind
> it constitutes a problem in his theory of money). "Paper money is a
> symbol of gold, a symbol of money. ... Only in so far as paper money
> represents gold, which like all other commodities has value, is it
> symbol of value" (vol. I, p. 225). Fiat money, therefore, is not a
> "symbol of value" in Marx's scheme, which raises the question of
how it
> is able to function as money at all. Either that, or one insists that
> even fiat money be conceived as "representing gold" in some way; but that
> seems an arbitrary claim: How does it "represent gold" in any more direct
> or intimate a way than it represents wheat, or shoes?

I agree fully that fiat money for Marx is not a symbol of value but a
symbol of gold ('money'). The point is related to Marx's critique of
Hume who saw money as 'a sign of value' in his Essays, and on this
basis he could argue that money derived its (exchange) value from the
ratio of the quantity of commodities to the quantity of money. Marx
stressed that money must have value, ie be a commodity, and fiat
money is, at best, a symbol of the commodity money. In this way, if
one reverts to the Quantity Theory one does so only in the sense that
prices reflect the differential symbolisation of gold by paper. Don
Lavoie in an old paper called this the 'shadow of gold' on Marx's

The question is, does credit-money, eg banknotes, symbolise gold or