[OPE-L:5323] Re: use-value of money

Hans Ehrbar (ehrbar@marx.econ.utah.edu)
Fri, 4 Jul 1997 08:57:32 -0700 (PDT)

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I agree with most of what you wrote in OPE-L 5322, Jerry, except
perhaps the following:

>Here, I think, we'd have to examine the role of
>*cartels* in changing the "mode of regulation" and the distribution of
>income among different classes on the world market.

Here I would go with Robert Guttmann, *How Credit Money Shapes the
Economy*, Sharpe 1994, pp. xvii, 56-59, and elsewhere, who emphasizes
the role of the *monetary system* in these "modes of regulation".
Guttmann says that the "monopolistic regulation", which started at the
turn of the century, really came into its own only with the abolition
of the gold standard during the Great Depression. This made things
much more elastic, and therefore provided the institutional
underpinnings for monopolistic pricing strategies, regulation of wages
by collective bargaining, deficit spending by the public sector, and
lender of last resort. I.e., this allowed much more rigidity in the
exoteric sphere.

The stagflation of the 1970s was a sign of the inherent limitations of
this system, and the decay of the monetary structures in place at that
time in the USA facilitated the tremendous increase of speculation and
fictitious capital in the 1980s and 1990s, which are the fireworks
marking the end of US hegemony.

Guttmann says that nowadays we have entered a new mode of regulation,
best called "global" regulation, and the capitalist system is in need
of a new international monetary system, a true supranational credit
money. But his own proposal for such a monetary system is a rather
idyllic multilateral system. I am doubtful whether it incorporates
the economic mechanisms which are necessary for the function of this
international money as measure of value, and it also clearly lacks the
bite of military force which would be necessary to impose any
capitalist monetary system on the world.

I apologize for being rather vague here, but in order to be more
precise we have to answer the original theoretical question: how can
credit money serve as measure of value, and what is the role of
monetary policies or, more generally, state intervention in the
economy, in this?

Hans G. Ehrbar                                    ehrbar@econ.utah.edu
Economics Department                              (801) 581 7797
1645 E. Central Campus Dr. Front                  (801) 581 7481
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