[OPE-L:1831] Re: the money supply

Subject: [OPE-L:1831] Re: the money supply
From: Gerald Levy (glevy@PRATT.EDU)
Date: Sat Dec 04 1999 - 17:04:55 EST

From: "Claus Magno Germer" <cmg515@zaz.com.br>

Jerry wrote:

> Before we can get to 2) or 3) we must *first* discuss what the facts =

> regarding the current role of gold in the financial system. I would =

> especially, for facts regarding what has happened *since 1971*.

Thank you Jerry for your comments. Your above statement seems to assume =
that the *facts* are something natural and incontrovertible, that there =
are *facts* whose meaning is independent from theory. This remains a =
controversial issue in present day epistemological debate. In opposition =
to this view, Marx indicated that the crude facts form a chaotic =
concrete. The understanding of the facts requires that the chaotic =
concrete be converted into "a reproduction of the concrete by way of =
thought". But in order to do this it is necessary first "to move =
analytically towards ever more simple concepts of the whole", and then =
retrace the journey towards the concrete again, which Marx did, in the =
case of money, providing a complete theoretical representation of the =
role of money in the capitalist economy. In effect Marx=92s theory shows =
the sphere of monetary phenomena in capitalism as "a rich totality of =
many determinations and relations". Thus, Marx=92s theory of money does =
not rely on the mere morphology of the crude facts, hence the change in =
the immediately perceptible shape of one fact or the other is not enough =
to judge the consistency of his theory.=20

Considering that in Marx's case the concrete reproduced by way of =
thought is the capitalist mode of production as a totality, of which his =
theory of money is a coherent part, it follows that in order to replace =
the later, it is necessary either to provide an alternative theory =
coherently connected to the general framework of Marx=92s theory, whose =
basis is the labor theory of value, or another theory of capitalism as a =
whole. This may seem overstated, but a little reflection will show that =
it isn't.

Everything I have been saying, based on Marx=92s theory of money, =
relates to contemporary facts, because Marx=92s theory of money is =
supposed to be not the theory of money of the 19th century, but the =
theory of money of advanced capitalism. Thus the number of the century =
is meaningless, as long as capitalism as a concrete totality has not =

However, I=92m not trying to say that Marx=92s theory of money is =
correct because it is Marx=92s theory. I don=92t care about this, what I =
care is about having a theory that is in the first place internally =
consistent, which Marx=92s seems to be, and in the second place =
consistent with contemporary facts - facts meaning the concrete =
reproduced by way of thought - which I agree is what remains to be =
proven or disproven.

That *facts* are not incontrovertible is illustrated, in our debate, by =
the different interpretations of the reserves of gold at present, by the =
different understandings of which "object" is money, and so on. On the =
other hand, there are also "conceptual facts", f.i. the meaning of the =
concept "gold standard", which I already mentioned, and which I sustain =
to be meaningless in the context of Marx=92s theory. Notwithstanding =
that, the concept is frequently used in the Marxist debate as if it had =
a clear and undisputable meaning.

Claus Germer
Departamento de Economia
Universidade Federal do Paran=E1
Rua Dr. Faivre, 405 - 3=BA andar
80060-140 Curitiba - Paran=E1

Tel: (041) 360-5214 - Ufpr
       (041) 254-3415 Res.

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