[OPE-L:1864] RE: electronic money

Chai-on Lee (conlee@chonnam.chonnam.ac.kr)
Mon, 22 Apr 1996 08:36:04 -0700

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I would like to reply to the following Jerry's questions from the =
position of the commodity money. =20
Q1: Why is electronic money "necessary" for the reproduction of highly =
developed capitalism?

Because it is silly enough to expend labor for the unproductive =
consumption of gold as the means of circulation. =20

Q2; Why haven't nations sold off their gold reserves? Are the reserves =
entirely redundant or are they still required (and, if so, for what =

Because the electronic money can never replace the gold unless we can =
have a single world-wide government. =20

Q3: Are there limitations and problems with the process of making =
electronic money universal? For instance:

No limitations and no problems as far as the electronic money is used as =
the means of circulation. It has not replaced money in all its =
functions, nor will ever replace the present money in every aspect of =
monetary function. =20

Q4: If traditional forms of currency in circulation (coins and paper =
currency) were eliminated, this would change the relationship between =
the citizen and the state since it would mean that the state would =
(rather easily) have records of all earned income. Effectively, this =
would eliminate "unreported income" and the "underground economy." While =
this might be seen as a worthwhile objective from the standpoint of the =
state, one would imagine that there would be rather strong (in some =
cases, quite literally) social forces opposed to this process.=20

Money is in the spirit of a bourgeois freedom. If its spirit is =
occupies by the state, the bourgeois class might have already =
eliminated. No more bourgeoisie? Then, it is guaranteed no longer =
money. =20

Q5: Wouldn't it - ironically - lead to a partial return to the barter =
system? For instance, if currency in circulation was eliminated, if you =
wanted to "sell" a chair to me, how would that exchange be effected? =
Wouldn't we either have to go to a bank to have the transaction recorded =
(an unlikely occurrence) or wouldn't I have to exchange some object or =
service for the chair? Or, relating to the above,suppose a capitalist =
employs undocumented laborers. Wouldn't it mean, in practice, that the =
workers would have to be paid directly with consumption goods?=20

Not at all. A complete replacement of money with the electronic units =
would imply the perfect exchange economy. No one can sell more than he =
(or she) buys, although temporarily not impossible. =20

Q6: What would happen in a crisis or hyperinflation if capitalists =
and/or workers demanded payment in some more tangible material object =
like gold or silver or some other state token of account, e.g. the =

All the electronic money becomes nothing. The bubble monetary unit =
accumulation simply disappears. =20

In OPE-L Solidarity,