[OPE-L:1845] Re: Re: the money supply

Subject: [OPE-L:1845] Re: Re: the money supply
From: clyder (wpc@dcs.gla.ac.uk)
Date: Mon Dec 06 1999 - 08:45:48 EST

> Paul wrote:
> >
> > Money is whatever the state is willing to accept in the form of tax
> payment.
> I don't understand this. Considering that in Marx's theory of money one of
> its basic functions is to measure values, and considering that value is
> produced in the form of commodities and represents amounts of social
> how does your above statement fit these assumptions?

I do not think we have to start out from Marx's analysis of money. Around
or so I was doing some reading for a project to write a book on marxist
political economy. As part of the reading for this I went into the
on the historical origins of money, literature that was semi-economic semi
numismatic. One thing that came as a revelation to me from this was the
fact that from the earliest history of coinage, the account put forward
in marx whereby gold coins are simply certified weights of gold or silver
did not hold up.
The earliest coins, the Lydian 'lions' are already debased, being made of
electrum rather than gold. Isotopic analysis of the silver content indicates
that the debasement was deliberate. The weights of the coins were pretty
accurately controlled, but the gold content varied.
Repeatedly one finds that the issue of money has been a source of profit
to the state through debasement. This is not a periperal matter but a
feature of real money.

The idealism of Marx's analysis of money is to try and examine it in an
world without the state where all that exists are simple commodity
The state is historically prior to money and central to its history. In the
of money in capital I we have a presentation that is as fanciful and
ahistoric as
anything put forward by Marx's predecessors.
What he presents there, gold money as a certified quantity of gold, is not a
point, but the product of a long historical development and a specific early
state, what Meiksins Wood calls the pristine culture of capitalism. As such,
gold standard
Britain was a historical anomaly and not a sound basis for theorising money
in general.

> > It is wrong to seek the full explanation of money in the sphere of
> commodity
> > exchange, free and voluntary exchange. You have to look to involuntary
> > payments, the directly social appropriation of the surplus as taxes to
> > explain
> > the currency of state monies.
> If by state money you refer to the present forms of credit money, it would
> be correct to look for its explanation in other factors than the mere
> exchange of commodities.

State money covers a multitude of forms, coins, tallies, accounts with the
bank, paper issued by the state bank. These are not in general credit money,
they are debit cancelling money, which is something slightly different.

>But money as the expression of values representing
> social labor materialized in commodities and that make their independent
> appearance through the exchange can only be explained in the spheres of
> commodity production and exchange.

Any arbitrage free set of exchange values implies the possibility of mapping
commodities onto an evaluation vector that is invariant up to a scalar. The
of that scalar is determined by social circumstances that are not deducible
the logic of exchange itself.
The fact that what the normalised evaluation vector is close ( in terms of
inner product ) to the normalised vector of labour values can not be deduced
simply from the process of exchange either, but requires some hypothesis
about feedback mechanisms in social reproduction.

> Claus Germer
> cmgermer@sociais.ufpr.br
> Departamento de Economia
> Universidade Federal do Paraná
> Rua Dr. Faivre, 405 - 3º andar
> 80060-140 Curitiba - Paraná
> Brasil
> Tel: (041) 360-5214 - Ufpr
> (041) 254-3415 Res.
> ----------

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