[OPE-L:2399] RE: commodity money in Marx's theory

Chai-on Lee (conlee@chonnam.chonnam.ac.kr)
Tue, 28 May 1996 21:01:06 -0700

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Dear Duncan,

Thank you for your taking time in commenting on my post. My promise to
summarise the previous debate will take longer time as I am getting
busy with other admin works and my private life. But I will do it later.

Duncan wrote:

in responce to Chai-on's note:
> [3]. Main difference between me and others
> The main difference between us appears to be that I do want to
> discriminate the credit money from money itself while others do not
> care about it. What was a credit money in one zone of trade can be
> seen as money itself in another zone. A credit money cannot settle the
> debt but money can do it. The state paper money is also to be
> distinguished from today's paper money circulating domestically.
> The bank account is another kind of credit money. And so on.

I think you raise a real problem here. But perhaps the final settlement
function has become more political than purely economic in contemporary


Yes, that is the very conclusion that I am going to derive from the
discussion of commodity money. We have to show a highest politics is
involved in the monetary system starting from the commodity money
conception. The commodity money conception does not argue that
fiat money cannot function as the monetary functions but is to show
its practical consequences.

> [4]. With regard to the logical orderings:
> As far as the logical orderings are concerned, I think Duncan, Riccardo,

> fred and I are all in agreement. If the money is not to be a commodity,
> the determination of the value of money must be explained independently
> of the LTV.
> Duncan is unique in trying to do this, in trying to conclude the non-
> commodity money conception. If he succeeds, then the whole system
> of Marx shall be abandoned.

I think this is too strong. You can still see money as representing
abstract labor even if the money is a unit of account linked to the state.
The source of surplus value is still unpaid labor.


Unless the unit of account is linked to a real commodity even if in
imagination, how can the money represent abstract labor? A mere linking to
the state does not seem enough to represent the abstract
labor. I accept one dollar note because I surely know it is linked to
what I am going to buy (not because the state issued it). In your
position, the value of money is predetermined independently of
labor values. How can it be expected as linked to the labor value of
commodities? Yes, it could be linked to a specific kind of concrete labor
like a token. The token is not a money, however.

It seems to me that we have historically experienced an extension of
Marx's value form analysis in which the pure exchange value function has
separated itself from produced commodities like gold
and come to have an independent existence in the unit of account
(like the dollar or Yen) representing the credit of the State. Is this so

"come to have an independent existence in the unit of account"..
Well, it still refers to some labor content. It cannot be a pure

If one doesn't follow this path, then where do you locate the link between
the national currencies and produced commodities in the
present world monetary system?


That is what I have to ask. If money is not a commodity, where do you
locate the link between the national currencies and produced commodities in
the present world monetary system?


> More powerful criticism of marx than ever.
> If the value of money is determined in the way other than the LTV, why
> not the values of other ordinary commodities being determined in the
> same way?

I don't see why the two have to be linked. State credit is a derivative
form of the commodity producing society, and its value is governed (even in
Marx's own analysis of State borrowing) by very different
mechanisms from produced commodities.


Is the value of credit money governed by very different mechanism from
produced commodities even in the case of gold money system?
If it can be shown to be so, your position will be more persuasive than
the analysis of the value of money in the context of speculation.

With high regards,