From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Tue Aug 03 2004 - 13:34:55 EDT
From "Jurriaan Bendien" Rakesh wrote: Gold never had the property of an invariable measure of value, and Marx knew it. But he attributed that property to gold, anyway. The question is why. I think Rakesh must be correct, since, as Marx well knew, the production-costs and supply of gold vary over time. Thus, for example, Marx wrote: "The translation of the values of commodities from gold prices into silver prices and vice versa always depends on the relative value of the two metals; this relative value varying continuously and its determination appearing accordingly as a continuous process. Commodity-owners in every country are compelled to use gold and silver alternately for foreign commerce thus exchanging the metal current as money within the country for the metal which they happen to require as money in a foreign country. Every nation thus employs both gold and silver as world money. (...) As money develops into international money, so the commodity-owner becomes a cosmopolitan. (...) The sublime idea in which for him the whole world merges is that of a market, the world market. http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_3b .htm#money I think Marx explains his view about gold and silver quite well in the "chapter on money" in the Grundrisse. Gold and silver were use-values which, because of their physical characteristics and relative production costs, could practically function as a universal objective standard for value comparisons, and fulfill the basic conditions required of the money-commodity qua universal equivalent (means of purchase and payment, store of value, measure of value, medium of exchange). A good recent discussion of Marx's theory of money is at: userpage.fu-berlin.de/ ~stuetzle/kapitallesen/geldware.pdf In the Grundrisse, Marx raises the question "Can the existing relations of production and the relations of distribution which correspond to them be revolutionized by a change in the instrument of circulation, in the organization of circulation? Further question: Can such a transformation of circulation be undertaken without touching the existing relations of production and the social relations which rest on them?" His answer is: "If every such transformation of circulation presupposes changes in other conditions of production and social upheavals, there would naturally follow from this the collapse of the doctrine which proposes tricks of circulation as a way of, on the one hand, avoiding the violent character of these social changes, and, on the other, of making these changes appear to be not a presupposition but a gradual result of the transformations in circulation. An error in this fundamental premise would suffice to prove that a similar misunderstanding has occurred in relation to the inner connections between the relations of production, of distribution and of circulation. The above-mentioned historical case cannot of course decide the matter, because modern credit institutions were as much an effect as a cause of the concentration of capital, since they only form a moment of the latter, and since concentration of wealth is accelerated by a scarcity of circulation (as in ancient Rome) as much as by an increase in the facility of circulation. It should further be examined, or rather it would be part of the general question, whether the different civilized forms of money -- metallic, paper, credit money, labour money (the last-named as the socialist form) -- can accomplish what is demanded of them without suspending the very relation of production which is expressed in the category money, and whether it is not a self-contradictory demand to wish to get around essential determinants of a relation by means of formal modifications? Various forms of money may correspond better to social production in various stages; one form may remedy evils against which another is powerless; but none of them, as long as they remain forms of money, and as long as money remains an essential relation of production, is capable of overcoming the contradictions inherent in the money relation, and can instead only hope to reproduce these contradictions in one or another form. One form of wage labour may correct the abuses of another, but no form of wage labour can correct the abuse of wage labour itself. One lever may overcome the inertia of an immobile object better than another. All of them require inertia to act at all as levers. This general question about the relation of circulation to the other relations of production can naturally be raised only at the end. But, from the outset, it is suspect that Proudhon and his associates never even raise the question in its pure form, but merely engage in occasional declamations about it." http://www.marxists.org/archive/marx/works/1857/grundrisse/ch02.htm#p115 Jurriaan
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