From: Gerald A. Levy (Gerald_A_Levy@MSN.COM)
Date: Fri Apr 30 2004 - 07:33:52 EDT
----- Original Message -----
From: "Jurriaan Bendien" <andromeda246@hetnet.nl>
Sent: Thursday, April 29, 2004 7:44 PM
Subject: Ingham and monetary theory
> There's a discussion of Igham's thesis at:
> http://www.siswo.uva.nl/es/5-2art2.html. I am reminded a little of the
scene
> described by Stuart Hughes in his classic "Consciousness and Society" -
> http://www.h-net.org/reviews/showrev.cgi?path=940974131108 . It is
> characteristic of every period of economic stagnation (relative or
absolute)
> in the history of capitalism, that new theories are mooted about the role
of
> money and credit, basically because the misalignment of buying power and
the
> production of tradable goods and services which that stagnation implies.
But
> really those new theories are only as good as the empirical knowledge of
the
> actual uses of money to which they refer, and their relative quantitative
> importance.
>
> Ingham's inquiry seems perfectly valid, since if money is utilised in new
> ways, then the theory of money ought to be developed further. I've often
had
> the impression that Marxist theoreticians talking about money is a bit
like
> the Pope talking about sex (His Holiness can important insights to offer
> about human spirituality I am sure, just as Marxists have important
insights
> to offer about the social implications of the use of money - but basically
> as far as money is concerned one is often better off studying what
> experienced bankers actually say about it). I haven't had the peace of
mind
> or opportunity yet to develop a really good modern interpretation of money
> myself, but I think theoretically the 16 main use-values of money, such as
> they emerge in Marx's writings, can be summarised as follows:
>
> a. A means for the observation and cognition of economic value relations;
a
> general means of logical abstraction, economic/financial communication and
> economic/financial calculation, applied in exchange negotiations, relating
> prices and values used for general economic valuation purposes (it is not
> necessary to actually possess money for this, it is sufficiently to name
or
> calculate prices, either actually existing prices or ideal prices).
> b. A means of negotiating competition and cooperation between people.
> c. A means of exchange, making possible the purchase/sale and circulation
of
> goods (including other money, commodities and capital) and services
> (including financial services), if exchange can freely occur (inclusion of
> people into a market).
> d. A universal equivalent which makes it possible to purchase or sell any
> particular good or service on offer to the general public, if an open
market
> exists.
> e. A universally recognised means of payment or contractual settlement in
> transactions, insofar as the transition is
> made from ideal money to real money offered in exchange ("hard cash").
> f. A store of economic value enabling the continuity, equilibration and
> regulation of economic processes (production, circulation, distribution
and
> consumption) and the maintenance of economic security.
> g. A unit of value and a standard for pricing.
> h. A practical measure of value expressing the relative values of goods
and
> services; ideal money or money-of-account, as
> distinct from cash or actual prices, can express the value of any good or
> service ("medium of account").
> i. A means for the accumulation of capital (chrematistic activity)
> principally through trading, lending, borrowing, investment, seignorage
and
> (re-)valuation.
> j. A means of hoarding, saving or forming reserves.
> k. An objectified potential or actual claim (entitlement) to ownership of
> goods and services.
> l. An objectified means of appropriation, ownership-acquisition and
> exploitation of goods and services, and the maintenance of asset
ownership.
> m. An objectified means of social exclusion from market activity (market
> closure) or social inclusion through market activity (market expansion) by
> virtue of money-ownership or lack thereof.
> n. An objectified universal means of expression of social and material
> wealth, and of the value of labour effort.
> o. A means of expressing or symbolising a social relation.
> p. A means for enforcing terms of exchange and asserting power among
people,
> social classes and nations.
>
> Function (j) becomes particularly important in contracted reproduction,
the
> opposite of expanded reproduction. In an economy which is mainly
non-market,
> contracted reproduction means mainly an absolute reduction of the physical
> stock of means of production and consumption. This could occur through
> natural disasters, war destruction, or adverse changes in the distribution
> of means of subsistence.
>
> In a market economy, contracted reproduction means an absolute decline in
> real capital, implying an absolute reduction of the value and/or quantity
of
> labour-power (with consequences for the reproduction of labour power) and
an
> inability to renew the real stock of constant capital assets. This takes
the
> form of cumulative devalorisation or devaluation of capital, and the
> application of capital funds for activities which fail to restore the
> necessary proportions for simple and expanded economic reproduction. No
> natural disasters or war destruction are in principle necessary for this,
> i.e. the causes could be due purely to the specific social/financial
> organisation of production and trade.
>
> I think 10 main "novel" monetary features of the current era of capitalist
> development are:
>
> (1) the growth of what Marx called "fictitious capital" in the form of
> credit money, financial claims and potential asset values as a source of
> accumulation in a deregulated market.
> (2) the greater ability of money to transit from one location to another
> very fast, and displace the costs of productive and unproductive
consumption
> in space and time.
> (3) phenomena such as dollarisation and euroisation, discussed e.g. by
> Guglielmo Carchedi, where a treasury or reserve bank controls a currency
of
> which a very large part is not used in its own territory, and where the
> national currency of another country or region is adopted.
> (4) the growth of counter-trade and offset-type agreements in
international
> trade, in which cash payment only plays a subsidiary role.
> (5) new uses of money in trading practices, due to deregulation, a degree
of
> socialisation of consumption, and the loss of privacy, which can revalue
and
> devalue privately owned goods and services, and thereby change the terms
of
> exchange between transactors.
> (6) the relative increase of forged currency (counterfeit money) and
illegal
> transactions facilitated by deregulation and new information technology,
> making the legal regulation of the use of money more difficult.
> (7) the increase of debt management and financial liabilities as a source
of
> capital accumulation.
> (8) the ability, given new information and communication technology, for
> market perceptions to change much faster and have a larger impact on
> monetary phenomena.
> (9) the reduced ability of government authorities to regulate and control
> the utilisation of money.
> (10) the worldwide growth of the formal and informal prostitution economy,
> and real or defacto slavery, among poor people, children and students.
>
> Jurriaan
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