Re: on money substance and abstract labor

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Mon Jun 07 2004 - 14:34:57 EDT

>The alternative explanation of the evolution of money attributes
>it to the process of surplus extraction by the state.
>To simplify a great deal, Coinage was
>introduced as a mechanism to simplify the raising of taxes and
>for the paying of troops. It is thus always the creation of the
>state, marked by the insignia of the state. The issue of money
>is a primary sovereign function of the state, as it is the key
>to the state's ability to appropriate part of the social product.

Seems to me that you (Paul C) have overstimated the autonomy of the
state today. Doug Henwood raised long ago some questions on lbo-talk.

   The state today often declares something money only for it to lose
that function as de facto unit of account, store of value, means of
circulation. I would like to know more about what has led to
dollarization in Ecuador for example. Carchedi has written about this.

   If governments could force the acceptance of a money merely by
collecting taxes in it, then why do governments even bother borrowing
money from abroad to finance their deficits?

And to return to Claus Germer's perspective:  we do see even today
gold prices in particular rise in an inflationary period.

You also write:

>The use of gold or silver is not essential to money tokens, as is
>shown by their abandonment in favour of the use of paper money
>printed using sophisticated   techniques that make it difficult
>to copy. The use of bullion was a low-tech anti-forgery expedient.
>The use of gold was not at all essential to the pound functioning as money
>so long as some other technology made forgery hard. The development of
>high quality intaglio printing provided that, allowing hard to copy
>to be produced. If we consider all the forms of money existing in
>early 19th century Britain - why conceptually privilige gold coin. We know
>that gold convertiblity could be suspended without interrupting the
>of the capitalist economy. If however one removed all forms of  bank money,
>then the economy would have collapsed. Which then was key ?
Gold, or paper money?

Thanks for the history of anti forgery technique! It squares well
with your earlier emphasis on the importance of copying technologies.
Let me think about what you are saying here and find time to read
Costas' book as well as Ingraham's. S#MONEY AS 'UNIVERSAL EQUIVALENT' AND ITS ORIGIN IN
MAY 2003

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