[OPE-L:5136] Re: [CLAUS] RE: use-value of money

Duncan K. Foley (dkf2@columbia.edu)
Wed, 28 May 1997 06:04:26 -0700 (PDT)

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In reply to Claus' OPE-L:4867:

>The problem however is: how can the function of measure of value be
>performed by something that is not a commodity? I dont refer to a
>statistical ex post measure which equates the sum-total of the
>money-value of the net produtct with the sum-total of the work-time
>performed, I refer to the way in which money-values of commodities are
>determined in the market, before we can use them to calculate a
>statistical figure.
>This is my question for you.

I think this is a very important question. Some observations:

1) We live in societies in which the measure of value is the liability of
the State, not a produced commodity. So this is not an abstract question.

2) Why can't a "fictitious capital" (the capitalized value of land rent or
tax revenues) function as the measure of value? This surely requires
capitalists to impute a value to the fictitious capital at the time they
price the commodities, but wouldn't they have to do the same thing with

3) Suppose that a State which has had a convertible currency exchangeable
against gold at a fixed rate goes off the gold standard temporarily because
of a war or civil disturbance (like the United States during the Civil
War.) Won't the market value the debt of that State (the greenback)
speculatively in relation to gold? If the market believes the State will
eventually return to convertibility (as the U.S. did in 1879), won't the
debt of the State function as a measure of value?

4) Suppose now that the moment of return to gold convertibility is very far
off in time, or perhaps may never happen. Isn't there still a possibility
of speculation establishing the value of the liabilities of the State?


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