[OPE-L:2375] Re: commodity money

Michael Williams (100417.2625@compuserve.com)
Mon, 27 May 1996 15:22:06 -0700

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Here are some responses to Chai-on on commodity money:

Chai-on (1):
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.

Michael W. (1)
I accept Marx as an authority because I know of no scholar who has a better
systematic understanding of the capitalist system. But his arguments are open to
interpretation, reconstruction and even correction. The value-form account of
money (in R&W 1989) is a radical reconstruction of Marx, which nevertheless is
congruent with Marx's overall project in the quite specific sense that all of
his main arguments in Capital which appear to rest on a commodity account of
money can be re-cast without loss in value-form terms. ( I prepared some notes -
with extensive examples from Capital - on this for an argument with John
Harrison at a CSE working group in a room above a London pub in the early
eighties. Unfortunately the notes were dissolved in split bear during the
resulting fracas [I made some of thatlast bit up]. I plan to return to the
subject, as I mentioned in a recent post. Textual evidence for my position will
have to wait until then. Marx's - historically understandable - commodity theory
is not as undiluted as the orthodox interpretation has it - indeed there are
some footnotes on Parliamentary bullionist debates which point to a credit
interpretation of money. Duncan has interpreted Marx on money in a
non-commodity way, and provided a number of insightful accounts of non-commodity
based money appropriate to the 1990s - although I do not, of course, burden him
with the full value-form heresy.)

It is a common error (IMHO) to treat Marx's theory of commodity fetishismm as an
add-on to Marxist
'economics' proper. Why then is it initiated in Section 3 of Ch. 1 of vol 1?
IMO, because it is not just the basis of some theory of ideology as distortions
of forms of conscious from the reality; but rather a theory of the distorted
nature of that reality.

Chai-on (2)
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.

Michael W. (2)
Your first premise falls, if money has no value, as in the value-form account.
So we need some argument for it if it is to provide the basis for rejecting that
We (R&W 1989) provide a determination from the value-form to its doubling into
commodity and money. This marks our belief that the value-form is more abstract
and more fundamental to a grasp of capitalism than the commodity. (Generalised
capitalist commodity) exchange emerges in the presentation with the commodity.

Chai-on (3)
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.

Michael W. (3)
We do not see money as a MERE value symbol. but as the sole autonomous
expression of the value-form. Nor does the value-form rest on, assume, or imply
any such dichotomy. Banking, credit and money are outlined in their interaction
with the articulation of the tendencies of accumulation in R&W 1989. That
account may be flawed, but it does not reproduce the classical dichotomy.

Chai-on (4)
But if we take it granted that the value of the money
commodity is distinct from its price of production, then we cannot
value the capitals in money terms before the transformation.

Michael W. (4)
But surely that is just what we cannot take for granted in a debate between
value-form and commodity conceptions of money? For the former there is no money

Chai-on (5)
Fifthly, in our theoretical combat against the bourgeois economics:
They criticise Marx's value theory in this way. Ok, fine. Tell me
what advantage are you expecting from the discussion of labor
value along with prices? I think Marx's theory of money is the
most powerful theoretical foothold in suppressing all valgarised
micro and macro economics. They are all stuck in the money
question, aren't they?

Michael W. (5)
'My enemy's friend is my enemy' may be sound strategy, but it is not sound
'science' .
Bourgeois economics functions as ideological support for the capitalist system
because it contains, systematically PARTIAL, truth
The way in which we (R&W) reconstruct Marxist money theory has no connection
with any bourgeois account of money that I know of.
I am not clear that bourgeois economics is stuck in the money question: I am not
sure what you mean; much bourgeois economics procedes without taking money
seriously at all; and one of macroeconomics' major faults is that it tends to
treat money (and, incidently, labour) markets as not significantly different
from any other market.

Chai-on (6)
Since paper money cannot function as the money by a mere decree, I doubt
the ex-socialist economies will last long unless foreign currencies are used
instead. They lack some foundations that are accumulated historically in the
capitalist economies.

Michael W. (7)
IMO, in this regard, as in many others, what they (differentially) lack is some
key historically evolved institutions adequate to the emergence of market
capitalism there.

With comradely greetings,

Michael W.