From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Thu Nov 11 2004 - 12:28:22 EST
Fred, thanks for your message. I am not in a period, for several reasons, to be able to go into a detailed commentary to it, or even reading it with the necessary care. But I assume you are putting forward the same interpretation we discussed in Maine this summer. My comments then are the same: (i) I am happy that you agree with me that your interpretation rested on the value of money (the MELT) being given ex ante, and that this in Marx holds because of his theory of money as a commodity: I always urged you either to endorse it or to show how the same thesis could be maintained with non-commodity money; (ii) your first attempt at the conference you are publishing went towards the quantity theory of money (ground: Marx's own approach with inconvertible paper money). Value of money being, roughly, MV/SNLT. But SNLT is "socially" eventually on the market, so you cannot have it fully ex ante, but only ideally or latently (in you is different since you have a kind of Says's Law: I have the opposite, firms in Vol. I produce for effective demand, like in Keynes; but this is not the leter of Marx, of course). And MV is of course for the quantity *identity*, shared by all, = PY, so again your value of money is NOT independent of P. The Ps are already there. (iii) I do not see how this (something partly quantity *theory* oriented) can be accepted, since rather I would like to pursue Marx's hints towards endogenous money in vol III; (iv) this is actually what I do with the help of the circuit approach. Now you, as me, go from M to P. I have, thanks to the circuitist approach (bank finance), a completely endogenous view. And you? (v) My view of the MELT is different from the NI strictly speaking, because I go back to bank finance at the beginning of the circuit, this in turn is linked to wage bargaining, and this again is linked to *expected* magnitudes (expected effective demand, expected real wages, expected exploitation in the labour process). This gives way to production and actual exploitation. (vi) you say I or the NI have no quantity theory of price. Why? There is a quantitative determination of prices in NI. I agree with you that that kind of simultaneous determination has not much to do with the labour *theory* of value. Exactly: the LTV has to do with the *constitution* of these magnitudes, that is with what is going on in the buying and selling of labour power and in the process of production. This is what *I* have stressed all the time. The point is usually disregarded by all Marxists who take as granted that the new value is the monetary representation of nothing but labour. But why? This is the *theory* of value. With the monetary ante-validation of production, and the conflictual extraction of living labour as ideal, I have an answer to this. This answer is that the methods of production from which the determination of prices starts are constituted by the dynamics of money as finance and exploitation as the use of a potentially counter-productive labour power. The judgement that this is not a theory is unfair. It is not *your* theory. It is *mine*, and it has to do with the *processual* constitution of what is analyzed by NI. And it is quantitative. (vii) this is crystal clear in your approach, of course, because dropping the money as a commodity, as I have stressed several times in the ISMT, you are dropping Marx's justification for value exhibiting nothing but labour, the argument according to which the abstract labour in a commodity being represented in the concrete labour producing money as a commodity. It is this that in Marx avoids the contradiction between the abstract labour being given prior the exchange, or within exchange. Too long for the couple of comments I wanted to do. But the synthesis is that I do not see how you escape the circularity you want to escape since both MV and SNLT are not independent from what is going on on the commodity market and the prices there. The only way out would be to go behind objectified labour to labour as a 'fluid', labour in becoming, and having M endogenous because it is bank initial finance. This would give you an expected MELT. But this is what *I* do, and has nothing to do with a different theory of the individual determination of prices in the simultaneous setting. I hope to have the possibility to think about this with more calm in the future. riccardo -- Riccardo Bellofiore Dipartimento di Scienze Economiche "Hyman P. Minsky" Via dei Caniana 2 I-24127 Bergamo, Italy e-mail: riccardo.bellofiore@unibg.it direct +39-035-2052545 secretary +39-035 2052501 fax: +39 035 2052549 homepage: http://www.unibg.it/dse/homepage/bellofiore.htm
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