[OPE-L:2456] Re: Commodity Money

Michael Williams (100417.2625@compuserve.com)
Mon, 3 Jun 1996 17:23:46 -0700

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In your reply to my brief account of the value-form conceptualisation of
capitalist money Chai-on makes a number of points:

Chai-on (1):
The most essential function of money is not in the measure of value nor
in the means of circulation but in the means of debt-payment. See
Marx's Capital vol 1, Chap. 3.

Michael W.
(1) I agree that this a necessary function of money, although the most
fundamental abstract determinant of money is as the sole autonomous quantitative
expression of value. (See Capital vol 1, ch 1, section 3).

Chai-on goes on:
1 and 2 [measure of value and means of circulation] are taken by any money
substitute as its roles.

Michael W.
(2) I would need a clear conceptual distinction between money and money
subsitutes (which does not assume what has to be argued, that money is
necessarily commodity based).

I (like Duncan subsequently) can see no reason for a negative answer to
Chai-on's question:
(3) "can the credit money function as the means of debt-payment?"

Chai-on then goes on:
(4) You are in the rejection of embodied labor theory of value not because
you rejected the commodity money conception but because of your
peculiar value form analysis.

Michael W.
(4) Yes - the value-form approach has implications for our theory of value (the
value theory of labour - Elson), and our theory of money. So?

Chai-on again:
(5) I feel no more like to argue that you are
already against Marx in every aspect. S. Bailey are the most vulgarised
economist Marx try to criticise in the first chapter of Capital vol. 1.
Your conception of value has no difference from Bailey's.

Michael W.
(5) Personal abuse can be fun - but rarely advances a debate. I cannot recall
the details of Bailey's position, nor of Marx's response. If you think I would
learn something useful from checking them out, let me know, and I will have a
In the meantime, perhaps you could indicate the vulgar components in my
value-form approach?
Embodied labour, being a Ricardian remnant in Marx's work, cannot then be
characterised as vulgar in Marx's sense. It is, however, IMHO, one-sided,
mystical and confused. (This abuse is catching!)

Chai-on (6) says:
Your position is confusing in the above. Value is determined in the
exchange with money, but the value of money is determined as the
inverse of the general level of commodity values. Do you think this is
logically cogent? Money's value is determined by the value of
commodities but the latter is determined by the former? Or by the play of
supply and demand?

Michael W:
The position is cogent - it is not viciously circular, but systemic. Rationally,
money is but a medium of exchange. But in the irrationality of the capitalist
system, the expansion of money - valorisation, becomes the driving force of
production and exchange.
Money has no value, it rather has various social functions.
The attractor of money prices is just that determined by the system of
generalised capitalised commodity production and exchange, of which the exchange
ratios implied by simple or expanded reproduction of the physical structure of
capitalist production in the face of the neo-Ricardian, post -Sraffian
technologically determined production coeficients are but some kind of
outer-bound, binding only in contingent conditions of catastrophic crisis - ie
when capitalism is tendentially NOT reproducing itself..
All this may not persuade you - but where is the lack of cogency?

Chai-on (7):
No. You misunderstood my point. I never referred to the importance
of bullion in underpinning confidence in the international
transactions. I insisted money would not be replaced with a mere value
symbol. Gold can be replaced with any product of labor. But
money cannot be disconnected entirely from the product of labor.

Michael W.:

(7) Fine, I must have confused your argument with a common labour-embodied
position by which commodity money closes the value system, enabling the
quantitative derivation of 'exploitation'. At the more concrete level of 'many
states', this view then insists on commodity money to transcend the interruption
of the global circuits of value at national boundaries (I argued something like
this in the Journal f Public Economics, 1982). Still more concretely (after the
introduction of subjectivity), this is often
grounded in the confidence building role of bullion-holdings.
I do not argue that money is a MERE value symbol - nothing mere about it. Nor,
strictly, is it disconnected from labour, since the manifestation of value as
money price requires the systemic determination of the money expression of
labour. But in the sense you mean, it is so disconnected - which was always a
systemic potential, and has now been realised, whether you like it or not.

Comradely greetings,

Michael W.