[OPE-L:2459] RE: A Responce to Duncan Foley

Michael Williams (100417.2625@compuserve.com)
Mon, 3 Jun 1996 17:34:19 -0700

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In a response to me, Chai-on writes:

(1) The money issuer is not among the commodity producers. So, the
issuer mobilizes social resources with the money with no cost,
which resembles the primitive accumulation. Within the commodity
producers, however, nobody has such a right and so any producer
must give away his/her product in order to get a piece of money.
As for me, all the money in my hand is the result of my labor.

Michael W.:
A. I don't understand the second sentance: the issuing of money is constrained
by social and economic forces - at bottom the tax base and taxable capacity. The
analogy with primitive accumulation (via trading, robbery and separation of
workers from the land and other means of production) completely escapes me.

B. As I have earlier argued, obtaining money by labour-power or commodity
exchange is entirely disanalagous to obtaining gold by the expenditure of

(2) The deposit account in my bank might be increased by the bank in
the name of a loan with no cost from the bank, which we call
the creation of deposit. In this case, what was created is not money
but a money substitute, the credit money.

Money substitutes have no intrinsic value but can function as the
measure of value, the means of circulation, etc. but cannot function
as the means of debt-payment and as the store of value.

Michael W.:
(2) Again, I have recently queried the basis of your distinction between money
and money substitute, and rejected your notion that credit cannot function as
debt-repayment. It is true that there are inflationary and other consequences if
circuits of credit opened are not eventually closed by the production of
sucessful commodities (see Aglietta and the French 'regulation school'). But
that doesn't reinstate the necessity of commodity money. It only speaks to the
tensions between the 'real' and the monetary moments of the capitalist economy.

(3) You said, 'since the commodity is in the unity of exchange and production,
value and the substance of value both are not existent prior
to the exchange'. For the same reason, I can argue, 'since the commodity
is in the unity of exchange and production, value can be existent
(partially, though) not only in exchange but also in production.

Michael W.:
Ah! maybe now we are getting somewhere. Value is pre-commensurated in
production, in anticipation of its successful exchange for a price which covers
its costs and a going rate of profit. This pre-commensuration, in stable times,
is often accurate. In that sense, value exists in production - but only
potentially. It is important to picture this as the intersection of an ongoing
system of generalised capitalist commodity production and exchange.

If you could say "value is existent in exchange only", then the commodity
should not be in the unity of production and exchange but in the
exchange alone.

Michael W.:
(4) But, of course, I do not say that. I have a holist dialectical conception of

The substance of value, which is said to be the creator of value, should
exist, by definition, before the value is created, for "A is created by B"
implies "B exists prior to A". Otherwise, how can the B create the A?
My mother gave a grth to me. She existed before I was born. In like
manner, the abstract labor must exist before the value that is created
by abstract labor.

Michael W.:
Your biological relation to your mother is beside the point.
Labour is the creator of potential value, but value is intrinsically social.
That potential is only realised on the entry of the commodity of which it is a
dimensioninto generalised capitalist commodity exchange. Reference to the
substance of value is a mystical red-herring - how can a dimension have a
substance? Labour creates potential value, and (if you like), as concrete
labour, pre-exists it. But in an on-going, repeated, system, this statement has
little force.

If the value is in the unity of production and exchange, by the same
token, the substance of value (the abstract labor) must exist in the least
and at the latest prior to the exchange.

Michael W.:
All the above (5) applies. In addition, even in your terms, I do not see how the
conclusion follows from the antecedent.

Because of the organism of social production, value is in the organic
unity of production and exchange. Nevertheless, value's mode of
existence is differentiated into two forms, potential (latent) form and
real form, not because the abstract labor exists in the exchange alone but
because the receptacle of value (value cannot exist without its
container) must pass through the two distinct phases of production and
exchange discretely. So, one form is called a latent form and the other
a realised form.

Michael W.:
I would rather say value has two moments. Value IS a 'container' in the sense
that it is indeed pure quantitiative form, with no content. It is the systemic
irrationality of capitalism that form dominates over content.

The value that failed to be realised must have been a
non-value before it failed. Only non-values can be realised as a non-
value. A latent value, if it fails to be realised, can only be destroyed.

Michael W.:
I agree with the last sentance. A potential value cannot cease to be a potential
value by not being realised - it is simply not realised, and therefore is
destroyed. So?

Labor does not always produce a value. Some labors, eg. domestic
labor, commercial labor, etc. cannot produce a value. So, it is a false
to identify labor with value.

Michael W.:
Fine - I don't.

Abstract labor must exist before value can be existent.

Michael W.:
We disagree: fully fledged abstract labour comes into existence as such only in
the form of money price.

I then failed to make myself clear, it would seem when I said:
In plain language,
>commodities are produced and reproduced with a view to their
>sale. Thus it is just dogmatic (IMHO) to insist that some
>value-substance prexists commodity exchange, in commodity
>production, since exchange is present in that production.

Chai-on responds:
Quite contrarily [sic]. Because commodities are produced with a view to
their sale, the exchange is already premised the moment a
commodity is produced.

Michael W.:
(11) Which is exactly what I thought I had said - so we agree?

Chai-on goes on
In the same manner, value is already
premised to be realised, value needs not wait till the commodity is
sold in order to be realised.

Michael W.:
(12) I don't agree with the last phrase. I do not understand what the
argumentative force of 'in the same manner' is here?

So, a credit money can thus be validated.

Michael W.:
It can - but 'So'?

But, if, for instance, a book has its form as a book, it must have a
content as the book, too. A form with no content is impossible.
A price form with no price content is also impossible.
Land has a price-form and so it has a content of it: Marx said "it
conceals a real value-relation, one derived from it. The price of land is
therefore to be analised in the context of labor-value, as the
capitalisation of the rent.

Michael W.:
A book is a disanalogy. The value-form is a dimension. A dimension has no
substantial content.
The capitalisation of rent is certainly a value-form - but we do not need the
reference to labour-value to argue that.

Not just workers but any entrepreneurs. Commodity producers must
provide a labor or a product of their labor to get money from the state.
The state does not give money free from the helicopter. The government
gives money only to the people who provides products of labor or
direct labors. The supply of money by the central bank is executed in
exchange with bonds (not free from the helicopter).
The demand for money corresponds to the supply of bonds.
The demand for money is not the one for imaginary quantities.
Sometimes, we can obtain money with no cost in the cases that the
government gives a subsidy or a loan. Yet, the subsidy is provided
not by the state but from the whole society (indirectly). The loan is
also a sort of primitive accumulation. If I have to repay the debt incurred by
the loan, the loan, too was provided not by the state but from the society.

Michael W.:
With a few quibbles about state subsidies and welfare payments, I don't think I
disagree with any of this. However, I can see no analogy between obtaining money
by selling a commodity or labour power, and producing gold by the expenditure of
labour under capitalist relations of production. I don't understand the
attempted analogy between a state loan and primitive accumulation.

Well, time for bed. Why do I have this feeling we are talking past each other?

Comradely greetings,

Michael W.