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At 20:21 +0100 11-04-2000, Fred B. Moseley wrote:
>This is response to Riccardo's recent posts.
>
>Riccardo, you are no doubt correct that Keynes and the Keynesians and the
>Post-Keynesians would not understand what it means to explain the
>"necessity of money". Because they, like most mainstream economists take
>capitalism as given, as "natural" (like air to breathe, as you say). They
>do not treat money as a historically specific social form, whose existence
>therefore needs to be explained.
Wrong. Look the recent work by Wray and the paper on the origin of money by
Heinshohn and Steiger (this doesn't mean I agree with them, of course).
>
>But philosophers of science (including philosophers of economics) should
>be able to understand what this means. In the philosophy of science, one
>important criterion in the appraisal of the relative validity of different
>theories, is the range of important phenomena that can be explained in an
>integrated way, on the basis of one fundamental premise (or the fewest
>premises possible). On the basis of this criterion, surely a theory that
>can explain the existence of money from its fundamental value theory is
>preferred to a theory that simply takes the existence of money as a given
>fact, without explaining it.
No, if one thinks that money is prior (is the condition of the production
of) value (and surplus value).
However, the discussion about Hegel shows that to shift the discussion on a
philosophical terrain does not create any consensus but higher
disagreements!
>
>Actually, microeconomists, have tried mightily for a long time to explain
>the existence of money from the fundamental premises of their utility
>theory of value, without success. As Frank Hahn (one of those who has
>tried) concluded: "The most serious challenge that the existence of money
>poses to the theorist is this: the best developed model of the economy
>cannot find room for it." (*Money and Inflation*, 1983, p. 1)
This is exactly what Keynesians (the true Keynesians!) quote in their support!!
>
>Paul Davidson, a critic of neoclassical theory, has argued that the
>repeated efforts of general equilibrium theorists (e.g. Patinkin, Clower,
>Grandmont) to explain the essential role of money in a commodity economy
>have all been ad hoc, artificial, and contrived adjustments. Davidson
>argues further that such ad hoc hedging of general equilibrium theory is
>suggestive of a "degenerate research program" in the sense of Lakatos.
And I agree.
>
>So I would argue that this is one important area in which Marx's theory is
>superior to all other economic theories:
No, because also Keynesian theory is superior to Neoclassical's one.
> it can explain the existence of
>money as a necessary consequence of its fundamental labor theory of value.
See above. Some Keynesians would argue that money is the necessary
condition of capitalist production.
>
>This is not just a "difference" between Marx and Keynes. This is an area
>in which, on the basis of standard criteria of the philosophy of science,
>Marx's theory is superior to Keynes' theory.
No: philosophy of science has dissolved the idea of this kind of
comparisons. (see my review article on your book about Blaug).
>
>I think even Benetti and Cartilier
Cartelier
> might agree that it is preferrable to
>explain the necessary existence of money on the basis of fundamental value
>theory, rather than just take money as given.
The opposite is exactly their research programme!!! How could have you
missed that, being a strong critic of Benetti?
> But they argue that so far
>no theory of value has been accomplish this explanation, including Marx's
>theory. Their attitude seems to be that since it appears to be impossible
>to explain the existence of money on the basis of value theory, we have to
>just take it as given.
They simply show that Marx's deduction is faulty. Hence the other way
(trying to deduce money from value) is barren.
>
>I have answered at length Benetti and Cartilier's critique of Marx's
>theory of money in a paper (presented as Riccardo knows at a conference in
>Bergamo three years ago), which I will put on my web site. But I will
>save that for another occasion.
OK
>The relevant point for the current
>discussion is that, if Marx could explain the existence of money as a
>necessary consequence of his theory of value (which I think he can),
>this would be preferred to simply taking money as given, without
>explaining its necessary existence.
I would say that, since general exchange is *capitalist* general exchange,
and since capitalist production of commodities needs to be finaced, even if
Marx is successful (and I doubt that), his explanation must be coherent
with a good theory of finance to production, which necessitates money not
be a commodity.
BTW: Benetti and Cartelier, positively speaking, criticize Marx because
they think that money is not a commodity. You ((and Martha) criticize them
because you think that thei cirticism of Marx is wrong, but you *too* agree
that money is not commodity (the same for Marx). *If* this is right, both
of you agree positively (with me, and Benetti, and Cartelier), that money
in capitalism is not a commodity. OK?
BTW2: I agree with Claus that money in Capital is a money-commodity. If
this is true, and if what is said above is true, Marx was wrong.
Riccardo Bellofiore
Office: Department of Economics
Piazza Rosate, 2
I-24129 Bergamo, Italy
Home: Via Massena, 51
I-10128 Torino, Italy
e-mail bellofio@cisi.unito.it, bellofio@unibg.it
tel: +39 035 277545 (direct)
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fax: +39 035 249975
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