Re: (OPE-L) recent references on 'problem' of money commodity?

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Nov 14 2004 - 10:14:46 EST

On Thu, 11 Nov 2004, Rakesh Bhandari wrote:

> >>  You also asked:  Is there any sense in which money is a commodity
> >>  today? I tried an affirmative answer with my hypothesis of a
> >>  composite commodity theory of money. But you were dismissive of it,
> >>  unfairly I of course think!
> >
> >I wasn't dismissive of your idea.  I said that I didn't see how a
> >composite commodity could function as the measure of value, because I
> >don't see how it is possible to define the BASIC UNIT of such a composite
> >commodity, and thus how to determine the quantity of labor-time that is
> >contained in a unit of the money commodity, which is what is necessary in
> >order to function as the measure of value (and to determine the MELT).
> >If you could explain this point to me, then I would be happy to consider
> >further.
> >
> >
> >Comradely,
> >Fred
> Dear Fred,
> I fear that I am not getting the point; and if so I apologize. I am
> unable to see the point that you are making.
> If Greenspan roughly attempts to keep $1000  equal to x barrels of
> oil, y grams of gold and z bushels of grain, then $1000 simply
> represents the labor time represented by x barrels of oil, y grams of
> gold, and z bushels of grain.
> Greenspan follows sensitive commodity prices; in doing so, he may be
> constructing a loose composite commodity money. For example, he again
> raised rates despite continued depression in marginal efficiency of
> capital and build up of idle cash reserves only because sensitive
> commodity prices are in fact rising. The economy is not getting
> stronger; the dollar is depreciating too sharply against that basket
> of commodities.

Rakesh, with Marx's commodity money (e.g. gold), the MELT is determined by
the quantity of gold produced in one hour (e.g. 0.5 shillings).

In your suggested bundle-of-commodities money, HOW WOULD THE MELT BE
DETERMINED?  This is what I don't see.  Maybe a weighted average of the
quantity of oil and gold and grain produced in one hour?  But how obtain
this weighted average, since one cannot add together oil and gold and


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