[OPE-L] Where does the money comer from : was Why aren't non-labourers sources of value?

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Fri Apr 22 2005 - 18:06:50 EDT

A crude argument would be that as each capitalist is
going through a circuit of the form 
m-c-m'-c'-m'' etc
then during alternate phases of the cycle of capital
each time round each capital has more money.
If we assume that different capitals are randomly
mixed in their phases - some in the money phase
some in the commodity phase then what is true for
individual capitals must be true for capital
as a whole. If the commodity stock held by all
capitals is growing at x% per year, then the
money stock must also be. At each cycle there must
be more money available to purchase the augmented
mass of commodities.

This argument is relatively crude but it corresponds
to the level of abstraction at which Marx initially
points out that a problem exists

If the gold stock was growing during the 19th 
century at less than 1% a year, this sets an
upper limit on the growth of gold coin - since
not all gold went into coin.

We know that 1% a year was significantly lower than
the long term rate of interest, and a-fortiori
was lower than the rate of profit.

My general point here is that one does not solve the
problem of surplus value by recourse to exploitation
in the labour force. This explains either

a) how you can get a profit in a simple reproduction

b) how you can get an accumulation of capital value
   through expanded reproduction

What it does not explain is how it is possible for
an exponentially growing capital value to continue passing
through the monetary form during its cycle. In this
sense the published volumes of Capital do not fully
solve the problem of surplus value. In my view the
answer is only possible if you downgrade the theoretical
importance of gold, and place much more importance on
the development of characteristically capitalist forms
of banking. This of course is the approach taken by
list member Riccardo Bellafiore. However one needs to
uncover the historical articulation of the following:

1) Deposit taking banking.
2) The financing of sales between departments I and II
   by means of commercial bills.
3) The issue of private banknotes in the way that the
   Scottish Banks still issue them.
4) The role of state fiat money and the extent to which
   this can solve the problem.
5) The development of German model of financing of industrial
   capital by means of overdraft facilities.
6) The role of the gearing ratio as studied by Steindal.

-----Original Message-----
From: OPE-L on behalf of Ian Wright
Sent: Fri 4/22/2005 6:58 PM
Subject: Re: [OPE-L] Why aren't non-labourers sources of value?
I am behind with replies to Andy and Ajit in particular. In the meantime ...

> The real problem is explaining how this comes to have a monetary
> representation - where does the money come from.
> If we assume a capitalist economy growing at some fraction
> of its von Neumann growth rate then the aggregate circuit
> m-c-m'-c'-m''-c''-m'''
> implies an exponential growth in m.
> However we know that during the 19th century the average growth
> of world gold stock was under 1% per year - see the accompanying
> table that gives growth of stock in million troy ounces.

There is a big assumption here. You seem to be saying that the extra
money is a representation of the surplus product. So as the net
product grows exponentially then so must the money in lock-step. Why
should it?


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