Re: [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: Wed May 04 2005 - 09:40:04 EDT


I think one has to be careful not to substitute a contingent, historical
explanation for a theoretical explanation.  After all, eventually even
the UK under the gold standard, that "tight limit" was removed, wasn't

The point I was suggesting was simply that there doesn't _have to be_ a
"tight limit" between the quantity of gold and the accumulation of
capital.  _For instance_,  paper currency _can_ be issued by the state
which alters that relation.

Paul C

As I understand it, although the bank act was temporarily suspended 
a few times during commercial crises, it remained in effect until
1914. The gold standard did attempt to establish a tight limit
between the quantity of gold and the accumulation of capital, and
this tight limit eventually proved to be an insuperable obstacle
to capital accumulation during the 1920s and 1930s. 


The point that you make about Ricardo v. Marx is interesting but
undeveloped:  what specifically did you find unconvincing about
Marx's critique of Ricardo re the exchange value of gold?  Is
there an advantage to Ricardo's conception?  If so, what is it?

The question for me is why does Marx treat gold as something special.
Other commodities are expected to have their exchange values fluctuate
with respect to excess supply. For gold he assumes instead that
it will always exchange at its value. Ricardo argued that an increase
in the quantity of gold will lead to price inflation, Marx argued
against this that any increase in gold stocks would be absorbed by
hoarding without any change in prices. But why?

One can see that some speculative hoarding might take place in
of prices falling later, but to trigger such hoarding, there would
have to be a price rise in the first place. Why should capitalists,
having larger stocks of gold, not simply attempt to expand their 
capital stocks with this gold?

If it is used to purchase new commodities, then one would expect
it to have an inflationary effect.

The context for all this was of course for Ricardo a trade
imbalance. If exporters of say machinery lead to a trade surplus,
then, unless capital exports occur, the machinery producers will
try to accumulate the excess gold as capital locally. This will
create excess domestic demand and push up prices as Ricardo predicted.
For them to simply hoard the gold, would be to assume that they
no longer acted as capitalists.

This archive was generated by hypermail 2.1.5 : Thu May 05 2005 - 00:00:01 EDT