[OPE-L:3891] Re: givens in Marxs theory

Duncan K. Foley (dkf2@columbia.edu)
Mon, 30 Dec 1996 06:42:29 -0800 (PST)

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In (belated) reply to some of Alejandro's [OPE-L:3841]:

Alejandro puts forward an example in which the monetary and labor rates of
profit differ because of a change in the monetary expression of value
during the production process. He then remarks:

>... in this case it is clear to me that the
>rate of profit in paper money terms is not reflecting the
>real magnitude of the exploitation. It is, in a certain
>sense, a "nominal" rate of profit, "inflated" by the
>depreciation of paper money: now $1 only represents 1/2
>How is then expressed "externally" ("phenomenically") the
>labor-time ("real") rate of profit? It should be expressed
>through another "kind of money", a money which relation
>against labor-time has not been changed. IMO, this the
>function which performs "gold" in Marx text. The labor-time
>magnitudes can be easily translated into gold magnitudes,
>yielding the same rate or profit. The final result of this
>process would be that the relation between the 2 kinds of
>money --"gold" and paper money-- changes: paper money is
>depreciated against "gold", the "reserve money". The latter
>could be a non-commodity, e.g. a "financial asset" (US
>dollar in Latinamerican countries) whose relation against
>labor-time is "constant" or "stable" in relation to that of
>paper money.

The problem is that the monetary expression of value in terms of gold money
can also change, because of differential rates of increase in cost
reductions between gold and other commodities.

I think this problem underlines the practical importance of measuring the
monetary expression of value and its changes in real economies.


Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
fax: (212)-854-8947
e-mail: dkf2@columbia.edu