About Duncan's OPE-L:4867:
>I think this is a very important question. Some observations:
>1) We live in societies in which the measure of value is the liability of
>the State, not a produced commodity. So this is not an abstract question.
I would make following comments:
1) On the basis of Marx's theory of money, there are three relevant concepts: the general equivalent and the function of measure of value; the standard of prices; and credit money.
Central bank notes, like the dollar, being a liability of the State, are forms of credit money. They cannot perform the function of measure of value, in Marx's terms. The measure of value has the function to measure the amount of social labour contained in a commodity, and the point here is that, according to a rigorous theoretical demonstration by Marx (see my EEA-97 paper, section 2), this function can only be performed by another commodity taken as a standard (Marx: "But only in so far as it is itself a product of labour, and, therefore, potentially variable in value, can gold serve as a measure of value", C, I, Ch. 3,1). This measurement takes place in the market, as gold exchanges against the ordinary commodities. Marx: "Money, like every other commodity, cannot express the magnitude of its value except relatively in other commodities. (...). Such quantitative determination of its relative value takes place at the source of its production by means of barter. When it steps!
!
into circulation as money, its value is already given" (Ib, ch. 2).
The standard of money, like the dollar, on the other hand, is not the measure of value, but a 'measure of prices'. The standard of money, or standard of prices, consists of a given quantity of the money-commodity fixed by law as the unit of prices. In this way, it serves as a unit to measure the amount of the money-commodity that expresses the value of a given commodity.Marx: "As the measure of value it [money] serves to convert the values of all the manifold commodities into prices, into imaginary quantities of gold; as the standard of price it measures those quantities of gold" (Ibidem). In this way, the 'standard of money-prices' of the commodities may change without any change in their values, whenever the standard of money changes. In the United States, after the Civil War and in the thirties, the support to the greenbacks, to silver-money, and to the devaluation
Finally, the dollar as a liability os the State, as the central bank note, is neither measure of value, nor standard of prices. It is credit money, a credit title.