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> Other theoretical mechanisms have to be put forth for the rate of profit
> the gold industry to decline back to normal (or rise). The obvious one is
> for other prices to rise. But, and that seems to me the problem from a
> Marxist standpoint, that relies on the quantity theory. Specifically,
> capital moves into the gold industry (and, incidentally, it is not
> whether this takes a long time or other mines are discovered), more gold
> produced and enters circulation, other prices rise, the rate of profit for
> gold falls. For Marxist monetary theory, that seems to me unacceptable.
> What would be a solution from a standpoint that rejects the QTM?
I think that you have put your finger on a key point here. There is
no mechanism in marx's theory by which gold will exchange with
other commodities for its value.
Ricardo obviously had such a mechanism which Marx rejected.
Marx's argument was that the quantity of money in circulation was
regulated by the value of gold rather than the exchange value of
gold being regulated by the quantity of money.
This however relies on commodities exchanging at their values
by some prior axiom. If we know that this is necessarily the case,
then what he says would follow. But to me this seems to be a
confusion of long term and short term mechanisms.
A series of long term mechanisms ensures that commodity
exchange ratios oscillate around the ratios of their Smithian
natural prices. The observed tracking of values by prices
is a result of these mechanisms. What Ricardo was doing was
citing one of these mechanisms. It strikes me as invalid for
Marx to use the end result of the mechanism to argue against
the mechanism itself.
I have from my first reading of it, always found his criticisms
of the quantity theory implausible.
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