On Mon, 2 Jun 1997, Duncan K. Foley wrote:
> But if you believe this, why do you think hard-headed capitalists are
> willing to accept dollars in exchange for commodities at current price
> levels?
The dollar is legal tender in the US -- wouldn't they be
breaking the law if they refused to accept dollars?
Besides, what is the alternative? The transactions costs of
barter are so high that it would take a disastrous inflation
to make it worth the capitalists' while to try to flee the
currency. Most fundamentally, though, why should a
capitalist, in 1997, be concerned about the rate of exchange
of the dollar for _gold_ in future, rather than the future
rate of exchange of dollars for labour-power and other
commodities.
Allin Cottrell
Department of Economics
Wake Forest University