Re: (OPE-L) recent references on 'problem' of money commodity?

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Fri Nov 19 2004 - 09:51:32 EST 

Hi Rakesh,

I have come to realize that there is a more fundamental problem
(besides the determination of the MELT) with your suggestion of a basket
of commodities as money today, and in particular as the measure of value
today (which I discussed in my last post in response to Paul B.)

According to Marx's theory, a commodity can function as the measure
of value only if it functions as the general equivalent, i.e. only if it
is directly exchangeable with all other commodities.  Oil and gold and
grain are not general equivalents, i.e. they are not directly exchangeable
with all other commodities, not individually and certainly not as a basket
of all three.  Therefore, this basket of commodities cannot function as
the measure of value.

Greenspan may be trying to conduct monetary policy in order to keep the
price of this basket of commodities stable, but that is a separate issue
from money functioning as the measure of value and the determination of
the MELT.

Comradely,
Fred

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