[OPE-L:5166] Re: [CLAUS] RE: use-value of money

Allin Cottrell (cottrell@wfu.edu)
Mon, 2 Jun 1997 14:09:57 -0700 (PDT)

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On Mon, 2 Jun 1997, Duncan K. Foley wrote:

> But if you believe this, why do you think hard-headed capitalists are
> willing to accept dollars in exchange for commodities at current price
> levels?

The dollar is legal tender in the US -- wouldn't they be
breaking the law if they refused to accept dollars?
Besides, what is the alternative? The transactions costs of
barter are so high that it would take a disastrous inflation
to make it worth the capitalists' while to try to flee the
currency. Most fundamentally, though, why should a
capitalist, in 1997, be concerned about the rate of exchange
of the dollar for _gold_ in future, rather than the future
rate of exchange of dollars for labour-power and other

Allin Cottrell
Department of Economics
Wake Forest University