[OPE-L:2388] Re: commodity money in Marx's theory

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Tue, 28 May 1996 08:18:41 -0700

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Fred asked in [OPE-L:2386]:

> But if the basis of Marx's earlier argument is that "the measure of value
> must itself possess value," how is this changed by the intervention of the
> state?

I think it's pretty clear that Marx had a commodity-money theory.
However, we have to keep in mind both the level of analysis in Volume 1
and the changes that have occurred since Marx's time when addressing this

What Marx did not consider in _Capital_ was the active role of the state
in the development of montetary systems even though the role of the state
was a pre-condition for those systems. Putting aside the question of
monetary policy (for now), it was clear in Marx's time that a
pre-condition for the issuing of money was state intervention. All Marx
had to do was look at a pound note, a franc, or a DM to see that they were
issued in the name of the state. Surely, Marx was also aware that there
was a relationship in practice between industrial capital, banking
capital, and the capitalist state that could affect the size of the money
supply. Surely, he was also aware of banking controversies in classical
political economy (and mercantilist and physiocratic thought) and the
various policy proposals made by participants. He was also, no doubt,
aware of the role of state policies on money that affected the rate of
inflation (e.g. during the Civil War).

Of course, we have no way of knowing how Marx would analyze the topic of
money in relationship to the state. My point is that there is a "gap" of
sorts that needs to be examined and is a consequence of Marx's inability
to examine the subject of the state systematically as it relates to his
analysis of capital. We can forgive him for this since he had an enormous
project that he wished to accomplish (perhaps best represented by the
"6-book-plan") which was probably beyond the capacity of any one writer.
We can not forgive ourselves, though, if we do not consider the multitude
of topics that need to be addressed that Marx did not address
systematically or if we do not consider how changed historical conditions
have affected the "basic theory."

At the risk of being speculative, however, let me suggest that if Marx
were to consider a non-commodity money regime, he would also want to
suggest that this does not necessarily mean that commodity-money has been
transcended (he gives hints to this effect in Vol 3 where he suggests that
the role of gold reasserts itself forcefully in the crisis). For
methodological reasons, I think he would suggest that a
non-commodity-money system would still retain remnants of the
commodity-money system.

In OPE-L Solidarity,