Re: measurement of abstract labor

From: cmgermer@UFPR.BR
Date: Fri Jul 16 2004 - 10:59:39 EDT

Hi, Howard,
Thank you for your reply.

> However, I don't find the "very special case" qualification you refer to
> below.  The special case is relevant to your reference to Ch.III, section
> 1
> and the fourth footnote of the section beginning "Wherever gold and silver
> .
> . . ."     By contrast in Ch III, section 3c Marx writes in the second
> paragraph:
> "Within the sphere of home circulation, there can be but one commodity
> which, by serving as a measure of value, becomes money.  In the markets of
> the world a double measure of value holds sway, gold and silver."
> I don't find any of the "very special case" qualification in his
> discussion
> at that point of the text.  Home circulation depends on the legal
> regulation
> of currency, with, among other things, the contradictions developed in the
> fourth footnote.  The world market is different.

You are right. In my opinion there are two aspects in Marx’s presentation
that have to be taken into account here. On the one hand, he attempts to
show that the development of the commodity producing economy leads to the
spontaneous selection of one single commodity as the single or general
equivalent of value, which is money; on the other hand, Marx acknowledges
the existence, in his time, of two different commodities in the function
of money in the leading capitalist countries – gold and silver. What I
think follows from Marx’s presentation is that, as the markets and the
economies of the different capitalist countries become more and more
integrated, the law of a single equivalent of value must impose itself,
and thus they must be subjected to pressures emerging from the process of
exchanges for the adoption of one single commodity as money, which seems
to me to be what happened at the end of the 19th century, with the
adotpion of gold by all the leading capitalist countries. Thus, until the
1970s there existed explicitly and officially one single general
equivalent in the capitalist economy.

> In your second paragraph you challenge the idea that a set of commodities
> could serve as the money unit and point out that historical efforts to
> develop an amalgam never worked.  This makes sense to me.  It seems to me
> implausible that a basket of commodities could serve as a unit of
> measurement, as Fred wrote.  But does that exclude the possibililty that a
> denomination of paper currency, e.g. the dollar, could serve as the unit
> of
> measurement and that it in turn would be able to function in this way
> because it was able to maintain a relatively stable relationship to a
> small
> set of commodities?  The value of the reference commodities could vary
> without compromising the dollar's ability to measure.

What I mean follows from my interpretation of gold as the general
equivalent of value at the international level, as I wrote in the first
paragraph above. If we think of the different currencies (=standards of
prices) of today (dollar, euro, pound, yen) as being money proper, this
would mean that capitalism would have stepped back from a common
equivalent of value to a number of particular equivalents, which seems to
me to be incompatible with the high degree of integration of world
capitalism and with the one single equivalent that must follow from this.

> Finally, I don't understand the point in your third paragraph about a step
> back for capitalism.  Perhaps you could expand on your point that
> "thinking
> of those currencies as forms of national credit money based on a common
> world money, takes us back to Marx's framework."  I had in mind a more or
> less special role for the dollar (in a particular historical conjuncture),
> but perhaps you're suggesting first that this doesn't correspond to the
> facts in this or any other conjuncture and second that once you take other
> currencies into account you need recourse to a common world money.  Is
> that
> it?

Shortly, this is my opinion about this: what we call national currencies
in the international sphere are credits hold by each nation against other
nations, denominated in the debtor’s standard of prices, like the dollar,
the euro etc. The nation which is at the center of the international
trade, having the largest value of trade, issues the largest total value
of credits, which then circulate as the international ‘currency’. With the
development of integrated banking systems lead by central banks, the
credit one nation holds against another one is a banking account at a
commercial bank or at the central bank of the latter, which is the
advanced form of credit money. Thus, national ‘currencies’ at the
international level are credits denominated in the debtor’s standard of
prices. The different national standards of value exchange against each
other according to their different expressions in terms of the general
equivalent, which was explicitly gold until the 1970s.


> Howard
> ----- Original Message -----
> From: <cmgermer@UFPR.BR>
> Sent: Monday, July 12, 2004 2:13 PM
> Subject: Re: [OPE-L] measurement of abstract labor
>> Hi Howard,
>> You wrote:
>> > Now that said, some qualifications are possible.  First, "commodities"
>> > might
>> > serve better than 'commodity'.  In talking about world money, Marx
>> says
>> > gold
>> > and silver can serve as the money commodity simultaneously without
> either
>> > chasing the other out.  It may well be that a small oligarchy of
>> > commodities
>> > could together function as world money today.  I don't know this, but
>> it
>> > seems theoretically possible.
>> However, Marx's statement about gold and silver simultaneously
>> functionning as money is restricted to a very special case, which only
>> holds temporarily: the ratio of the value of one of them [f.i. silver]
>> to
>> that of the other [f.i. gold] must remain unchanged. Marx adds: "Every
>> change in their ratio disturbs the ratio which exists between the
>> gold-prices and the silver-prices of commodities, and thus proves, by
>> OF A STANDARD" (CI, ch. 3.1). There is in effect no reason at all for
>> the
>> expectation that the exchange ratio between two commodities can remain
>> unchanged. For centuries it was thought, perhaps based on the concept of
>> money as an ideal unit of value, that a law could set an arbitrary
>> exchange ratio between gold and silver. The evolution of the monetary
>> system proved it to be wrong;
>> For the same reason, I guess, the function of measure could not be
>> performed by a set of commodities either. About this, I think it was
>> Marshall who once suggested the use of an amalgam of gold and silver as
>> the money unit, but the idea did not move on. There are reports about
>> the
>> existence, in ancient times, of a natural amalgam of gold an silver
>> called
>> ellectrum, that is supposed to have served as one of the first coins.
>> But
>> after the improvement of metallurgical skills made it possible to
>> separate
>> gold from silver, allowing the issuance of separate gold and silver
>> coins,
>> the issue of an artificial amalgam was never tried again, as far as I
>> know.
>> Doesn't Marx's presentation of the development of money rule out the
>> hypothesis you have raised as being compatible with Marx's concept of
>> money? The money form is the *general* equivalent of value, following
>> the
>> *total or expanded form*, where there are several particular equivalent
>> forms. Thus, the existence of a world money would represent the
>> develpment
>> of a general equivalent in the international sphere of capitalism, which
>> has been realized in the form of the so called international gold
>> standard
>> in the late 19th century. In this theoretical frameword, the hypothesis
>> that the present different national currencies are particular equivalent
>> of values, i.e., different 'monies', would mean that capitalism made a
>> step back in its historical development. However, thinking of those
>> currencies as forms of national credit money based on a common world
>> money, takes us back to Marx's framework. But then we need to find out
>> what the common world money is today.
>> Claus.

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