[OPE-L:2367] commodity money in Marx's theory

Fred Moseley (fmoseley@laneta.apc.org)
Sun, 26 May 1996 22:54:37 -0700

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Thanks very much to Chai-on for his response (2314) to my question about why
he thinks money has to be a commodity in Marx's theory. The subsequent
discussion of money has taken off in other directions, but I would like to
return to this fundamental point.

Chai's answer to my question was:

Firstly, in regard to the LTV,:
The main message Marx delivered in his discussion on the FORM
of VALUE in Chapter 1, Section 3 of Capital, vol 1 was this: money
is also a commodity. The appearance that money is something
other than a commodity is a fetishism.

Secondly, in regard to the holistic logical orderings.
The value of money needs to be explained prior to the commodity
values. Duncan's explanation is still not successful. Riccardo's
and Michael's are circular. As for Marx, the commodity itself is
differentiated into two categories, money and ordinary commodity.
The differentiation is activated by the development of exchange as
discussed in marx's Chapter 2 of Capital vol 1.

Thirdly, in regard to the crisis theory:
To see the money as a mere value symbol cannot but lead to
the dichotomy of the classical macro economics. Of course,
Duncan's conception of credit money is different from the value
symbol. So, I think his conception would eventually arrive at the
commodity money conception if the debate should continue
further. This is very important to me because different money
conception would provide us quite different visions of the future of
world capitalism.

I am afraid that, in my opinion, Chai-on has not provided much of an
explanation of why money must be a commodity in Marx's theory. The first
point only states that this was Marx's main conclusion in Section 3 of
Chapter 1, without explaining how Marx arrived at this conclusion. The
second point only states that the value of money has to be explained prior
to the value of commodities, again without explaining why this is true
(besides the reference to "holistic logical orderings"). I guess it may be
implied that in order to determine the value of money, money must be a
commodity, but this would seem to assume what is to be proved (that in order
for money to have value or to measure value, money itself must be a
commodity). The third point does not provide a reason internal to Marx's
theory why money must be a commodity, but only refers to the difficulties
one encounters if money is not a commodity or to the different vision of the
future of capitalism that this conception implies. Maybe Chai-on has
explained these and other points more in his published works, but I do not
have these with me.

I am still not clear in my own mind if Marx intended to argue (predict) that
money in capitalism must always be a commodity or instead to explain why
actual commodity-money in 19th century capitalism performed the functions
that it did. But, it seems to me that, *IF* Marx intended to argue that
money must be a commodity, then it primarily was because of the function of
money as MEASURE OF VALUE. Marx's argument seems to be (1) that commodities
must possess an independent, objective measure of their values and (2) that

My main question has to do with (2). Is (2) is a necessary deduction from
Marx's labor theory of value or from the objective nature of Marx's logical
method? Or is it instead based on a particular conception of "measure"? Or
is it perhaps a temporary assumption that Marx made at the beginning of his
theory but which can be relaxed at later stages in the theory?

Chai-on argued in (2304) that money does not have to be a commodity in its
function as measure of value, but only in its function as means of
debt-payment. I agree that Marx may have argued that money must be a
commodity in its function as debt payment (I am still not sure about that
either), but it seems to me that the fundamental function of money in Marx's
theory is as a measure of value and that the prior question is whether money
must be a commodity in this fundamental function. This is the function of
money derived in Section 3 of Chapter 1 to which Chai-on refers in the first
point of his answer to me quoted above.

I would appreciate any thoughts Chai-on or others might have about this
question (including especially Riccardo, who I think has stated in several
posts that he thinks that money must be a commodity in Marx's theory, but
has not yet explained why, so far as I can tell).

Thanks very much.

P.S. I also want to mention that I agree with Chai-on in his recent
exchange with Simon. Chai-on argues that Simon "distorts the causal
ordering in Marx's value theory" when he argues that the value of money is
derived from the price of commodities, rather than the reverse. I agree.
This is perhaps another reason why money must be a commodity in Marx's
theory: so that the value of money can be determined prior to and
independent of prices. But maybe not. As I understand Duncan's recent
work, he is trying to show that the value of money can be determined prior
to and independent of prices without money being a commodity.