[OPE-L:5777] Re: Re:Commodity Money (Questions)

Duncan K. Foley (dkf2@columbia.edu)
Sun, 30 Nov 1997 12:46:27 -0500 (EST)

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In reply to John's "Commodity Money (Questions)":

>Sorry for the unclarity about "natural monopoly." I've always taken
>it to mean a sector in which part of the surplus value takes
>the form of rent in the Marxian sense.

Duncan: I'm not familiar with this usage. I always took "natural monopoly"
to mean an industry with strongly increasing returns to scale, so that it's
inefficient to have more than one producer.

>Are you saying that any commodity could be the money commodity?
As I read Marx's theory of money in the first 3 chapters of Volume I of
Capital, in principle, yes. But he points out that some commodities are
better suited to becoming the socially accepted general equivalent because
of their durability, divisibility, and the ease with which the accepter can
check their quality. (I think these points are commonplaces of 18th century
economics, by the way.) Gold, silver, and copper fit the bill best on these

It seems more logical to me to work out the theory of money on the
assumption of constant returns to scale in the production of the money
commodity, so there is no complication of rent to be dealt with, and then,
if necessary, extend it to take account of the rent issue.


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