From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Jun 09 2004 - 16:36:26 EDT
What you say is probably right with respect to the dollar's role as a form of reserve holding by other national banks. But the dollar does not function as money for the purchase of commodities in any but a few other countries. Each of these countries has its own currency. One must separate out the conditions that allow a currency to circulate within national borders from the measures taken by national banks to manipulate the exchange rates between currencies. -----Original Message----- From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Rakesh Bhandari Sent: 08 June 2004 23:19 To: OPE-L@SUS.CSUCHICO.EDU Subject: Re: (OPE-L) Re: on money substance and abstract labor At 10:33 PM +0100 6/8/04, Paul Cockshott wrote: >It is worse than that Gerry. If we take Clauses argument seriously >money no longer exists. Didn't Claus say he was not talking about money per se? A general equivalent does not in fact exist: there is no world money in that all countries adopt the same commodity as the general equivalent. The key international currency is the US dollar. The privileges that the US derives therefrom are not derived from taxation but largely (though not exclusively) from (as Robert Gilpin has explained) confidence building steps that the US as reserve currency country will not pursue inflationary policies leading to devaluation of other countries' reserves and that the US will pay an attractive interest rate on assets demonimated in its currency and other steps that build confidence in private and public holders of its currency that its currency will continue to be convertible into other sound assets and will not lose value because of inflation or changes in exchange rates. Confidence is and has not been built primarily through taxation as the chartalist school which you seem to be defending suggests. These confidence building measures can (and will likely) prove very costly. We'll see what happens to the US housing market as Greenspan begins rate hikes. Rakesh
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