[OPE-L:1864] Re: Re: the money supply

Subject: [OPE-L:1864] Re: Re: the money supply
From: Claus Germer (cmgermer@SOCIAIS.UFPR.BR)
Date: Wed Dec 08 1999 - 11:42:03 EST

Paul wrote in [OPE-L:1851]:

> But the existence of money involves more than just a price list for
> all commodities. It also implies, and this is not adequately emphasized
> in the Marxian analysis of money, existence of a credit account list.
> This is of the form {(subject1 credit1), (subject2 credit2)..}
> associating with each juridical subject a monetary credit or debit.
> The list may exist in the form of ledger entries in the banks,
> database entries in Visa's computers, or more primitively,
> coins in purses. All of these are just different historically evolved
> technologies for recording the same sort of information.

It is not true that credit is not adequately emphasized in the Marxian
analysis. Credit is explained differently from yours, that's all. First, it
is not
implied in the existence of money, but in the social division of labor.
As a result of the incoincidence of the production schedules of the
commodities, they have in part to be sold on deferred payment, which gives
way to the function of means of payment of money. This is the basis for the
appearance of promises to pay that can be - and are - used in the place of
money as means of circulation. The deferred payment and the function of
means of payment of money are the basis of credit money, whose development,
however, requires the development of the banking system, which is explained
in detail in Marx's theory, but which comes into the picture only under

> Whilst price lists and value lists may at first sight seem equally
> useful in cost accounting, credit account lists imply something
> quite different. Here money appears not as a neutral metric,
> but as, what Smith called, the power to command the labour
> of others. Credit accounts encode social hierarchy. Throughout
> history the index of membership of the upper classes was the
> ability to command others to do things.

This seems to be a non sequitur. The existence of credit doesn't change
anything in the nature of money. Credit is the obligation to deliver the
money commodity in a certain date. The credit relation is different from
the money relation. On the other hand, the mere existence of money does not
imply a social hierarchy, which is an important result of Marx's analysis,
and which becomes clear thanks to the fact that he abstracts the value
relation and examines it in isolation. Money is a phenomenon of the
circulation and assumes the independence and equality among the agents of
exchange. In Marx's analysis it is private property of the means of
production that introduces social hierarchy, meaning domination by the
owner over the non-owners of means of production.

> Thus the persistence of
> such accounts in socialist societies is an index of the survival of
> capitalist forms of domination, of lordship.

This seems inaccurate to me. In Marx's analysis capitalism is essentially a
society based on a specific form of the private property of the means of
production. When private property is abolished, so is capitalism (assuming
the transition period has
been overcome). Thus there is no place for money or for money credit, hence
for money or credit accounts either.

> Money is abstract lordship, the abstract ability to comand.
> Lordship primitively belongs to the public power. The public power
> has the original authority to command labour time, which it retains
> directly to this day in the right to conscript citizens to the army.
> Whilst primitively the obligation to perform labour to the state
> is personal and individual, the state later allows it to be transferable.
> I can avoid robot, corvee etc if I can produce a certificate that someone
> else has performed the service for me. These certificates then circulate
> as money. The form of the certificates is not important, they can be
> paper certificates, or as Wray recounts for Britain wooden treasury
> tally sticks which circulated as money up to the start of the 19th

This is a way different from Marx's to explain money and the state, which
is fine, but this is what I'd like to underline. In order to be consistent,
you should provide an explanation of the origin of the state or the public
power. In Marx's analysis there is a difference between the state and a
kind of public power which does not coincide with the notion of the state.
The question to be answered by theory is how labor is distributed among
individual producers in the society when there is division of labor. In non
merchant societies there has to be a public or communal authority, which
differs, however, according to the system of property.

In the absence of private property, there is a communal authority. With the
existence of private property, the state expresses the domination of the
proprietory class, which can coexist with communal systems of distribution
of labor, like in feudalism. However, it isn't the intrinsic function of
the state to distribute the productive functions. In the merchant society
any communitary links are abolished. Thus, there is no conscious mechanism
of distribution of labor. This function is taken over by the law of value,
expressed in the money commodity. Money arises spontaneously as the outcome
of the anarchic confrontation of private producers of commodities. The
necessity that it arises spontaneously derives from the fact that there is
no conscious mechanism of distribution of labor. If the state were to do
it, there would not be a need for money.

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.

Money is the name of the commodity that becomes the general equivalent of
value, whose substance is abstract or social labor.

This archive was generated by hypermail 2a24 : Sun Dec 12 1999 - 15:45:03 EST