[OPE-L:2057] Re: [MIKE WILLIAMS] electronic money

Duncan K Foley (dkf2@columbia.edu)
Wed, 1 May 1996 13:48:33 -0700

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But then the balances (positive or negative) in the banks are functioning
as money capital, and the workers and capitalists are accepting credits
in the banks as payment for labor-power and commodities. Thus these
credits are (by hypothesis, as you describe the model) the measure of
value and the means of circulation and payment in your economy.


On Tue, 30 Apr 1996, Steve Keen wrote:

> Duncan's comments that
> >What this model doesn't address is why agents are holding this bank money
> >at all. One can give a good answer to this question in real-life
> >historical terms by referring to the credit of the state, but the
> >equations you write down, while they determine a path for the price
> >level, don't consider alternative institutional structures... <snip>
> Actually, there is no money held as such in this model: instead, capitalists
> have positive or negative bank balances. The bank balances themselves are
> the vehicle through which all transactions are effected, so the money in
> this system is (a) one capitalist telling the bank to transfer funds from
> his/her account to that of another capitalist; (b) effectively, "bonds"
> letting a worker buy commodities from any capitalist to the value of the
> wage; (c) etc.
> Cheers,
> Steve
> Steve Keen
> Senior Lecturer
> Economics & Finance
> University of Western Sydney
> PO Box 555 Campbelltown NSW 2560
> Australia
> s.keen@uws.edu.au (046) 20-3016 Fax (046) 26-6683
> ________________________________________________________________