Re: (OPE-L) Re: on money substance and abstract labor

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Jun 09 2004 - 16:36:26 EDT

What you say is probably right with respect to the dollar's role
as a form of reserve holding by other national banks.

But the dollar does not function as money for the purchase of
commodities in any but a few other countries. Each of these countries
has its own currency. One must separate out the conditions that
allow a currency to circulate within national borders from the
measures taken by national banks to manipulate the exchange rates
between currencies.

-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Rakesh Bhandari
Sent: 08 June 2004 23:19
Subject: Re: (OPE-L) Re: on money substance and abstract labor

At 10:33 PM +0100 6/8/04, Paul Cockshott wrote:
>It is worse than that Gerry. If we take Clauses argument seriously
>money no longer exists.

Didn't Claus say he was not talking about money per se? A general
equivalent does not in fact exist: there is no world money in that
all countries adopt the same commodity as the general equivalent. The
key international currency is the US dollar. The privileges that the
US derives therefrom are not derived from taxation but largely
(though not exclusively) from (as Robert Gilpin has explained)
confidence building steps that the US as reserve currency country
will not pursue inflationary policies leading to devaluation of other
countries' reserves and that the US will pay an attractive interest
rate on assets demonimated in its currency and other steps that build
confidence in private and public holders of its currency that its
currency will continue to be convertible into other sound assets and
will not lose value because of inflation or changes in exchange
rates. Confidence is and has not been built primarily through
taxation as the chartalist school which you seem to be defending
suggests. These confidence building measures can (and will likely)
prove very costly. We'll see what happens to the US housing market as
Greenspan begins rate hikes.


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