Re: on money substance and abstract labor

From: Paul C (clyder@GN.APC.ORG)
Date: Sat Jun 05 2004 - 18:15:20 EDT

Rakesh Bhandari wrote:

>>> Marx implicitly begins with the recognition that in a system of
>>> general commodity exchange and production one commodity had come to
>>> specialize in the function of expressing the value of all the other
>>> commodities, as universal equivalent. I think Marx is interested in
>>> the history of money insofar as he can lay out the "practical
>>> conditions that made both necessary and possible the the
>>> specialization of a certain category of commodity" in this function
>>> of universal equivalent (Godelier).
> As I said in my last post (reproduced below), Marx begins with the
> apparent:  in a system of generalized commodity production, one
> commodity has been selected in which all the others express their
> value. He then relates the history and logic of how one commodity
> came to be so selected or in other words the logic of practice that
> drove humanity from the simple to the universal value form. Marx is
> concerned not with transitions in forms of consciousness alone but in
> the "institutional" forms of a social form, the forms of the
> equivalent form.  One then gives a rational account of that history,
> that is an ideal genesis of the money form.

Here we have a particular problematic speaking, one which allows a very
selective appreciation of the reality at the time.

It requires a particular theoretical perspective to see the monetary system
as 'one commodity specialising in the function of universal equivalent'
since empirically this is not what one perceived at the time.

1. Gold did not function as the universal measure of value in early
     Britain, the Pound Sterling did.

2.  The Pound Sterling, was a notional unit of account recognised by the
     British state,  commercial transactions were carried out in terms of
     this unit rather than in terms of units of  gold,  or in terms of
     another state unit of account.

3. The Pound Sterling had multiple  representations in common use:
     a) Bank of England Notes.
     b) Bank of Scotland Notes.
     c) Bank notes of other commercial banks.
     d) Cheques drawn on these banks.
      e) Gold sovereigns.
      f) as 4 silver crowns
      g) as 240 copper pennies.
      f) Treasury tallies.

4. Even if one accepts the theoretical premise that money is a commodity,
     there were actually  two commodities that could plausibly be taken to
     be the substance of money - gold and silver, since coins in both forms
     were issued and circulated. Therefore the premise that the
universal equivalent
     was a single commodity was not met.

5. But to define it as a commodity one had to ignore all the
non-metallic forms
     assumed by the Pound.

6. One also had to account for the contiued smooth functioning of the
     system in periods when convertibility of  Bank of England notes
into gold was dropped.
     Why should the Pound still have functioned when it no longer had
any guaranteed
      equivalent in gold?

      We are of course mnuch more familiar with this sate of affairs -
since it is some
       70 years since the British state attempted to define Sterling the
price of  gold.
      Marx might be forgiven for seeing non-convertible currencies as an
      whose operation was to be explained by an absent cause - the gold
that would
      have circulated if, counter-factually, the gold standard had not
been dropped.

>> The problem with an ideal genesis is that it tells you more about your
>> theory than it tells you about what happened.  One can have an arbitrary
>> number of theories from which one can construct ideal histories that
>> purport to explain the present - on what basis does one then choose
>> between them?
> I don't think it's arbitrary for Marx to analyze in logical and
> historical terms why the generalized commodity production came to
> depend on the selection of a universal equivalent.
> He is interested in the relation between commodity and money.
> It's not clear to me what Knapp or chartalist theories of money add
> to or controvert about this, but I shall read Ingaham.
I agree that generalised commodity production does require a universal
scalar measure of value. This is not the same thing as saying that this
scalar measure must be a commodity.

> In defetishizing money, Marx argues that money
> has the power of direct exchangeability only because a system of
> generalized commodity production and exchange demands a commodity be
> selected in which all others express their value (we can trace this
> process of selection from simple to general to universal value form,
> which is both a logical and historical process; tracing the process
> in this way Marx calls an ideal genesis of the money form).

There seems to me to be 2 problems with this argument

1. Generalised commodity production requires a universal scalar measure
     of value, but this does not logically imply that that scalar must
itself be
     a commodity.
     One could as well argue : value is social labour time, the Pound
      measures value, thus the Pound Sterling is just another name for a
     quantity of social time.

2. The logical deductive approach suffers from the Hegelian weakness of
     its premises in order to arrive at pre-ordained conclusions. The
hidden premise
     in Marx's argument is the archetypal bourgeois world view that
commodity exchange
     is the prior, the state superstructure is the consequence. Thus
given that he
     initially considers commodity exchange in the absence of the state,
he is forced
     to conceptualise how such an abstract system could give rise to
money. But
     this is a fetishised inversion of reality imposed by the context of
Marx's work -
     the critique of bourgeois political economy. From a historical
materialist standpoint
     we know that the state was the prior and commodity production came
later. Thus
     the problem that Marx is trying to solve is a problem that is only
meaningfull within
     the context of  bourgeois political economy, for historical
materialism it does not


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