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On Tue, 18 Apr 2000, riccardo bellofiore wrote:
> I wish to thank Fred for his very interesting posts, and his patience in
> the dialogue with me.
> Fred, a general point. Probably it's my fault, but your main argument seem
> to me of this kind:
> (i) Marx had a *theory* of money
> (ii) Keynes had not *Marx's* theory of money
> (iii) hence Keynes had no theory of money
> I agree with (i) and (ii), but I do not see how (iii) follows from them,
> and I disagree with (iii).
> BTW, of course if you go and read Keynes you find, more or less explicitly,
> a discourse relate d to the nature of money. Briefly, I would say that in
> the General Theory Keynes links money to uncertainty, and in the Treatise
> on Money (much more implicitly) he has it as a kind of social accountancy
> (what, indeed, Schumpeter said in his Das Wesen des Geldes, and Stiglitz &
> Weiss took up again in some of their papers). These two notions are, IMHO,
> very helpful.
I am not saying that Keynes had NO theory of money, but rather that Marx
had a BETTER theory of money - because Marx's theory explains the
connection between the nature of money and the value of commodities,
and Keynes' theory does not make this crucial connection.
> BTW2, French authors coming *from* Marxism went a long way in trying to
> ground a theory of money. Aglietta & Orlean went so far as to enroll the
> anthropologist René Girard, and Benetti & Cartelier the sociologist Georg
> Simmel. And they all made a serious confrontation with Marx's deduction of
> money from the commodity (serious does not mean I agree with them).
I would like to know more about this French debate. Is there anyting in
English? If so, could you please send me references?
> In arguing your general position you raise many relevant points, which
> however widen the area of debate. I can be very quick, but I try to put
> forward the general line of a possible answer, point by point
> >Marx's circulation of capital does indeed begin with money, and the
> >purchase of labor-power and means of production is prior to the production
> >of value and surplus-value. But Marx had already explained in Chapter 1,
> >what money is, the nature of money, i.e. the social representation of
> >abstract labor. If money is taken as given prior to value, then what is
> >money and what is its relation to value? If money is not understood as
> >objectified labor, then how can surplus-value (or delta M) be explained as
> >objectified surplus labor?
> Three answers (two are inconsistent, but let's put them forward nevertheless!)
> (a) why Keynes should explain surplus value as objectified
> labour? That's Marx!
I was talking about Riccardo here (two c's!), not Keynes. It seems to me
that you also want to take money as given, or at least not derive it from
the value of commodities, as Marx did. If I am wrong about that, please
explain further. But if I am right, then I would repeat the question
quoted above to you: If money is not understood as objectified labor,
then how can surplus-value (or delta M) be explained as objectified
surplus labor? More on this below.
> (c) now let us take a Marxist, e.g. me: he may argue, well, let us assume
> that there is bank finance to production, which allows capital a command
> over labour power in the labour market and in the production process; *if*
> it is possible to argue that abstract labour is the labour commanded by
> capital (hence, that living labour before exchange is *already* posited as
> equal, in as much as it is labour subjected to capital), then (potential)
> surplus value is *already* surplus labour, *before* exchange, though of
> course it has to be validated in exchange.
What is the basis of your *IF* assumption of abstract labor?
How is this assumption grounded or justified?
> What's important in (iii)? The fact that here the abstraction of labour is
> not based, as in Marx, on the fact that the abstract labour of a commodity
> is actually represented in the concrete labour of the money commodity.
> *here* I am not stressing the issue of money commodity yes, money commodity
> no. I am stressing the idea which is the first pages of Capital that the
> abstraction of labour is definitely grounded in commodity exchange.
What don't you like about Marx's derivation of abstract labor from
exchange? What is (are) specific the problem(s) with this derivation
> >I do not understand why "a good theory of finance to production
> >necessitates that money must NOT be a commodity."
> I already gave an argument, which is Graziani's argument: if money is a
> commodity, it must be produced; if production must be financed, how is
> financed the production of the money commodity?
I am afraid that I still do not understand this argument. Are you saying
that: money as a commodity cannot exist prior to production because the
money-commodity itself has to be produced? Therefore, bank money is
necessary in order begin (or finance) production.
As I understand it, the object of Marx's theory is an existing capitalist
economy. Money is being invested and more money is being recovered
through the production and sale of commodities. In this existing
capitalist economy, there are existing stocks of means of production and
existing stocks of the money-commodity, that have been produced in
previous periods. Surely one has to assume a given stock of means of
production. Otherwise means of production would also be impossible,
i.e. means of production cannot exist prior to production because these
means of production themselves have to be produced. Why not also assume
in similar fashion an existing stock of of the money-commodity that has
been produced in prior periods and that functions now as the measure of
value? Your argument seems to deny or ignore prior periods of production.
I also think that we need to more clearly distinguish between the
different functions of money, especially between money as means of
circulation and money as measure of value. You seem to be talking about
money as MEANS OF CIRCULATION, and seem to argue that a commodity-money
has seldom if ever actually functioned as a means of circulation. But I
am talking about (and I think Claus also) money as a MEASURE OF VALUE. I
do not disagree that commodity-money has seldom actually functioned as a
means of circulation. As Marx himself emphasized, commodity-money is
usually replaced in circulation by tokens of itself, including the M at
the beginning of the circulation of capital. However, until recent
decades, these tokens were convertible into the money-commodity in fixed
proportions. Through this convertibility, the money-commodity still
functioned as the measure of value. The key question at the present time
is whether or not, in the absence of this convertibility, gold (or perhaps
some group of commodities?) still functions in some way as the ultimate
measure of value.
> > For a long time
> >(at least), money was a commodity, no? So if a theory requires that money
> >NOT be a commodity, isn't there a problem with this theory? If money is
> >indeed no longer a commodity, but once was, then what we need is a theory
> >of money which can explain both money as a commodity and money not as a
> No. Here I agree with Schumpeter (and Marx's!) that the anatomy of man is
> the key of the anatomy of the monkey, and hence that present non-commodity
> money is the key of what you call the money commodity. If you wish, in
> another post I may quote a phrase from History of Economic Analysis where
> Schumpeter says that one thing is the *logical essence* of a social
> phenomenon, another one is the *historical origin*. Hence the origin of
> money may have been as a commodity, but its essence may well be being not a
> commodity. After all, are you sure money commodity ever existed as such.
> Was not coin etc. (the statual element of the control of money as socially
> recognized purchasing power) the determining factor? And was Keynes wrong
> when he said that the rupee was a banknote printed on metal? This, of
> course, may be a completely different stream of debate.
I am also talking about the *LOGICAL ESSENCE* of money, not the historical
origins. Before one can explain how money is transformed into more money,
one must first explain what money is, the nature or essence of money.
Marx of course did this in Part 1 of Vol. 1. Marx derived the nature of
money as the social representation of abstract labor. This then is the
basis for his later explanation of "more money" as the result of surplus
labor in Chapter 7 and beyond.
Riccardo, if you were writing your book, what would be your Part 1?
Would it be different from Marx's? If so, how?
Would it explain the "logical essence" of money? If so, how?
Thanks again for this stimulating discussion and I look forward to its
P.S. Riccardo, please send me the references to the Schumpeter passages
that you mentioned. Thanks.
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