[OPE-L:2260] Re: New Solution

riccardo bellofiore (bellofio@cisi.unito.it)
Fri, 17 May 1996 01:33:18 -0700

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At 9:10 16-05-1996 -0700, Chai-on Lee wrote:
>Dear Riccardo, Duncan, Simon, Paul, Fred, Michaels and others:
>To make our debates more succinct and that shorter, I would like you to
>enumerate the necessities and/or the reasons to change the notion of
>money from a commodity-money into the non-commodity money. I will
>take the lead by enumerating the theoretical difficulties that arise
>when we take the non-commodity money conception.
>(1) You must explain how the value of money is determined. And,
>if it can be determined *with no reference to labor content*, then
>the values of other ordinary commodities have no reason to be
>determined by the labor contents. Why the two cases can be
>justified in the determination of money-value and commodity-value?

I have already said on the list several times that for Marx the value of
money *is* determined with reference to labor content*: more precisely,
that the abstract labour concealed in the commodity exchanged is
represented by the concrete labour producing the money comodity. May be you
directed this criticism of yours also to me because you know that I do not
accept this deduction of money present at the beginning of Capital. But,
let me repeat myself as the point is important, for Marx the link between
value and the money-commodity was truly essential in his own way to shape
the theory. I fear that all the recent "solutions" to the trasformation has
the value of money wrong in their approaches, as an interpretation of Marx.
But I also think that we cannot stick to Marx's definition of the notion.

>(2) Money is put on a more abstract level than commodity values in
>your money conception since your conception is in the context of
>"monetary theory of labor value". Money is something other than the
>commodity. The value of money is therefore to be explained *with no
>reference to commodity values*. The exchange between money
>and other ordinary commodity is of course not on an equivalent

Sorry, I do not understand the point. Marx's was a monetary labour theory
of value because, when value and money are deduced at the beginning of
Capital, the abstract labour become eventually social in the exchange with
money. I hold that when we realise that the commodities in the first
chapters are capitalist commodities, that capitalist production must be
financed, and that initial finance must be given in money-sign [I know,
Chai-on, that you do not agree with these points, but this is what I
think], *that kind* of monetary labour theory of value collapses. But
another one, which has strong roots in Marx, is available. The link between
money and value becomes the link between initial finance as pre-validation
of abstract labour and as command over labour time, on one side, and the
valorisation process going on in capitalist labour processes which must
eventually end with the actualization of value on the market, on the other.
If you wish:

finance (labour market-labour power) => abstract labour (production-living
labour of the wage worker) and potential value => actualized value and
relative prices (circulation/distribution-dead labour)
>(3) In view of the above two points, the labor theory of value in a
>commodity money system should be radically different from that in a
>non-commodity money system. This is why there have been so
>wide varieties between us.
>In my commodity money conception, however, the first two
>questions do not apply and Marx's value theory is seen correct and
>right in every aspect.

I make compliments to your efforts, since they are very clever. I do not
agree, at the moment, with your interpretation. I do not claim to have Marx
on my side. I take Marx to be an author whose construction was
contradictory in many ways: in this sense, I think that the simultaneists,
the new interpretation, the sequentialists, the non dualist etc. all have
there good points to play [and in a sense I borrow from all of them]. I
have an interpretation of Marx which is *different* from what I take to be
a positive (tentative) solution to the difficulties, a solution which wants
to remain in the Marxian camp. I think there is a core in Marx, and that
this core is exploitation in capitalist production as part of a monetary
sequence. Marx must be made coherent with his part of himself. So my
originality - may be a bad one - is to try to link a credit theory of money
to labour theory of value as a theory of the origin of the surplus value in
production, hence a credit theory of exploitation in which the labour
theory of value is quite fundamental - but definitely not the money
>To repeat, please be explicit about *why* you so obstinately
>oppose the commodity money conception. If the only reason for your
>conception is nothing but this that today's paper money is no more a
>labor-product, then you must have a serious misconception of today's
>world capitalism. [with far more serious misconception of Marx's value

I am opposed for reasons you know. Surely I have expounded them better in
written papers than my awful English (and the lack of time) would permit
here. I think that the monetary theory of production, since Wicksell to
Schumpeter to Keynes, has shown that money is not in its essence a
commodity, but credit. I have written on it several times. This argument
has nothing to do with paper money, or gold, or whatever, in actual worl
payments. I have a paper from the EEA in Boston in which I show that Marx's
insistence on gold as world money is not incoherent with thiw wicksellian
outlook on money. I accept the role that commodity money, or other means,
may have in pegging the standard of value function of money.

Let me stress: (i) I *distinguish* my reading of Marx from my 'solutions';
(ii) you already *know* my arguments, and you do *not* accept them, and
that is quite natural - well, they may be wrong, after all. There are
differences between us both in the interpretatio, and in our theoretical
system: but these two kinds of differences are not identical.

I think the surprise I read in your words may be due to the fact that you
think that I lend my views to Marx (this is not the case), or that I do not
accept your masterful interpretation and use of Marx (which is the case).

>Alas the day!
>For the sake of solidarity,
>Chai-on from the far East.



Riccardo Bellofiore e-mail: bellofio@cisi.unito.it
Department of Economics Tel: (39) -35- 277505 (direct)
University of Bergamo (39) -35- 277501 (dept.)
Piazza Rosate, 2 (39) -11- 5819619 (home)
I-24129 Bergamo Fax: (39) -35- 249975