[OPE] State theory of money

Dave, there are numerous books on "primitive money" systems. I do not argue
that the state theory of money is completely wrong, merely that the
development of money systems is subject to an historical evolution which can
be subdivided into qualitatively different phases. A largely "fiduciary"
system of money such as we have now in the West was completely impossible in
the Middle Ages, for example.

Such an historical perspective implies, that the way that money functions
nowadays, is "qualitatively different" from the ways in which it functioned
in previous epochs, beside some basic similarities due to the fact that the
most elementary functions of money stay fairly much the same. It is
meaningful to talk about a state theory of money, if the state has a real
"grip" over monetary and credit policy. But if there is no state, or if the
state that exists has no control over the circulation of money, a state
theory of money is not really applicable.

So, the "commodity theory of money" has a certain validity in certain
historical epochs in which exchange was indeed facilitated by one or several
money commodities. But in fact if Marx is read carefully, I think it is
clear that he never claims that the money-commodity describes the essence of
money, nor that the forms that money can take, are fixed once and for all.
His main claim is only that the appearance of money is "the necessary
consequence and outcome of the development of the exchange process", once it
has overcome important obstacles and restrictions on trade - but this says
nothing yet about the role which states may, or may not play, in
facilitating this process.

The left-keynesians discovered the connections between taxation systems and
monetary systems, concluding that monetary regimes are basically political
regimes, but in Marxian thought a broad distinction is also drawn between
developments in the economic structure of society (production relations) and
its ideological and legal-institutional superstructure, so that the
political regime is more an adaptation which regulates pre-existing
processes of a more fundamental nature and doesn't fully determine them.

Because of certain misadventures, my studies of the history of money and
credit got put on the backburner, and I haven't yet had the time to put my
ideas in order about all this, working systematically through the different
problems in order to reach an adequate depiction of the historical
development of monetary systems. Hence I am rather reluctant to pronounce on
these questions right now.

The main thing to understand is I think that the theoretical knowledge of
monetary, credit and trading systems is in reality very ancient, and that
its principles were understood at least by the urban elites for thousands of
years. An adequate theory of historical materialism has to radically
exterminate the ideas of the Stalinist, Maoist and Trotskyist New Exploiting
Classes, and take full stock of the real historical-empirical research of
the last half-century about humanity's past. The amount of new knowledge
generated in the last decades, with much larger funding and much larger
groups of intellectuals working on different topics, is so great that it
brings the understanding of world history to a qualitatively new level; in a
sense there is now a real problem of integrating the new findings in a more
coherent picture.

Jurriaan

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Received on Tue Jun 9 21:34:27 2009