From: Allin Cottrell (cottrell@wfu.edu)
Date: Sun Jun 20 2004 - 21:11:12 EDT
Thanks, Fred, for your thoughts on money as "measure of value." On Sat, 19 Jun 2004, Fred Moseley wrote: > Marx discussed the concept of money as "measure of value" in Chapter > 3, Section 1 of Volume 1. According to Marx's theory of money, > derived earlier in Section 3 of Chapter 1, money is the "necessary > form of appearance" of the socially necessary labor-time (SNLT) > contained in commodities. In other words, the SNLT contained in > commodities is "objectively expressed" in terms of the quantity of > the money commodity that contains the same amount of labor-time. > > Therefore, it is in this sense that money is described as the > "measure of value" in Section 1 of Chapter 3 - in the sense of an > indirect measure of the quantities of SNLT contained in commodities > in terms of the the quantity of the money commodity that contains > the same amount of labor-time > > Marx said it is analogous to iron functioning as the "measure of > weight" - quantities of iron function as the indirect measure of the > weight of other objects (pp. 148-49). It seems to me there is a play here on "measure" versus "standard". Suppose we have a standard kilogram, made of iron. This standard iron kilo does not itself measure anything: rather, we measure the weight of other objects using a definite mechanism -- say, a balance -- in which the iron kilo plays the role of a standard unit. Similarly, money does not "measure" the values of commodities. It provides a standard unit of account in which prices are expressed. In this case the measuring mechanism is much more complex than a physical balance, which directly compares the weights of the standard item and the target item. The "balance" for commodities is the whole process of social reproduction, in which the scale of production of the various commodities is adjusted upward or downward in relation to the schedules of demand. Thus the equilibrium price of a given commodity in terms of a given monetary standard is the result of a highly complex process, not at all reducible to a simple comparison of the commodity with the money. A better physical example of one phenomenon "measuring" others (better than Marx's example of iron "measuring" weight) is that of the height of a column of mercury in a thermometer measuring temperature (of the air in a room, of a liquid in a jar). Here it is enough to put the thermometer "up against" (or into) the object to be measured, and to read off the result. But the disanalogy with money is clear: there's no question of putting money "up against" a commodity and reading off the commodity's value from this bilateral relationship. Further, it should not be irrelevant to a basic theory of money that money is perfectly capable of playing its role as standard (not "measure") of value even when money itself has no value (that is, requires negligible or no labour-time for its production) as in modern capitalism. Allin.
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