[OPE-L:1858] Re: the money supply

Subject: [OPE-L:1858] Re: the money supply
From: Gerald Levy (glevy@PRATT.EDU)
Date: Wed Dec 08 1999 - 06:21:27 EST

---------- Forwarded message ----------
Date: Wed, 8 Dec 1999 09:07:28 -0200
From: Claus Germer <cmgermer@sociais.ufpr.br>

Jerry wrote in [OPE-L:1854]:

> OK, fine. If you want to put the post-1971 history/facts in the context
> how you interpret the pre-1971 history/facts, that's great. My point is
> that the post-1971 history/facts have to be included in at attempt to
> understand the role of gold in the contemporary international capitalist
> economy (as well as individual economies, of course).

I fully agree with you.

> What's wrong with the summary from my perspective is that it assumes that
> all those in this debate who believe that gold is not currently the money
> commodity in the international economy thereby see "Marx's theory of
> as an inadequate tool".

I may have overstated it. However, what I said is at least in part true,
because, as I understand from what you say below, you not only object to
gold being money today, but you also object that in Marx's theory money has
to be a commodity. My strongest statement is not that gold is money today,
but that there can't be the least doubt that in Marx's theory money must be
a commodity. This means that the assumption of a purely abstract money must
have a theoretical explanation, which Marx didn't provide. My second point
is that the end of the monetary functions of gold is not so easy to
demonstrate as is sometimes suggested. In this sense is that the date of
the end of the so called "gold standard" is of importance. This date is
generally believed to have been the I World War, while I think one can
sustain that gold has performed plainly the role of money until at least
1971, which changes the picture very much. In addition, in view of the
relevance of gold as both an official and private reserve until today, I
think it is a scientific requirement to maintain the hypothesis that gold
is still money, because it can be consistently sustained theoretically and
still has strong empirical evidence in favour of it.

> While this seems to be Allin's position, it is not mine. From my
> perspective, the role of gold as a money commodity is not an *essential*
> (i.e. non-contingent) part of understanding capitalism. Thus, if we say
> that gold is no longer the money commodity (which I don't believe it is)
> then nothing crucial to Marx's theory is thereby lost. And, yes, I
> recognize that you conceive of the role of gold within Marx's theory in a
> different way. Perhaps this relates to our different understandings about
> what are necessary vs. what are contingently necessary aspects of
> both Marx's theory and capitalism.
See above.

> I also agree that an alternative explanation in which there is no longer
> money commodity needs to explain how the magnitude of value comes to be
> measured and determined. As I noted in my last post, Marxian empirical
> research has generally skipped-over this question.
> On the other hand, have there been any empirical investigations using
> categories which have assumed that gold *is* the money commodity?

Not that I know. If somebody has information about it, I would very much
like to know.

Claus Germer
Departamento de Economia
Universidade Federal do Paraná
Rua Dr. Faivre, 405 - 3º andar
80060-140 Curitiba - Paraná

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

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