[OPE-L:4048] [ALEJANDRO R] Marx's "gold"

Gerald Lev (glevy@pratt.edu)
Fri, 24 Jan 1997 10:07:35 -0800 (PST)

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Date: Fri, 24 Jan 1997 11:59:03
From: aramos@aramos.bo
Subject: Re: [OPE-L:3891] Marx's "gold"

In my OPE-L 3841, I wrote:

> >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.

Duncan comments in 3891:

> 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.

Certainly, this is true. However, my hypothesis is that, in
Marx's monetary theory, "gold" is mainly a "functional
determination", that of "reserve money": to conserve and
represent labor-time externally in a stable way.

This would mean that, despite --in Marx's examples-- gold
is a commodity, we shold not consider it as any other
commodity. To put this in another terms: In a scheme of
reproduction, gold could be considered as commodity, but
NOT AS RESERVE MONEY. In its determination as money, "gold"
is, in a certain sense, "out" of the scheme of

Let us suppose that the labor-time to produce gold falls.
This means that "gold money" cannot perform efficiently its
function to conserve and represent in a stable way labor-
time. What will be the reaction of capitalists, given the
cheapening of gold? To increasingly use another "asset"
able to represent and conserve better than gold labor-time,
e.g. "silver". In this case "gold" will rapidly lose its
monetary functions, i.e. it will cease to be "reserve money"
and become a simple commodity.

I think the functional determination performed by gold in
Marx's examples, can be carried out by any socially accepted
asset, e.g. a US Treasury Bond, which is a non-commodity.
When we put the problem in these terms, it is clear that
"reserve money" is out of the scheme of reproduction. The
problem to determine what is the labor-time represented by
this "asset" (or set of "assets") is completely different
from the determination of the labor-time embodied in gold
considered as a commodity similar to "sugar" or "iron".

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

I agree. However, I would suggest two previous problems in
order to "measure the monetary expression of value":

a) Firstly, as I argued in OPE-L 3941, in Marx's text,
"money" is a complex concept, i.e. we have --in the simply
monetary system depicted by him-- "reserve money" ("gold")
and "symbol money" ("coin", "pounds"). This defines TWO
(not ONE) "monetary expressions of value". The relation
between these two ratios is very important in order to
understand the dynamic of the monetary system in any "real

b) Secondly, it is necessary to know what is actually
"reserve money", what is the "asset" able to conserve and
represent labor-time in a stable way. This "asset" can
change through time, but the analysis of this change is
completely different from that involving commodities. So,
it does not make a lot of sense to consider the
"differential rates of increase in cost reductions between
gold and other commodities."

Thanks to Duncan for his comment.

Alejandro Ramos M.