[OPE-L:5795] Re: commodity money

Claus Germer (cmgermer@SOCIAIS.UFPR.BR)
Thu, 4 Dec 1997 14:33:03 -0200

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Alfredo, on 28 nov:

> I think that the fact that
> central banks still hold large gold reserves is neither here nor there.
> Recent movements (most famously in Germany) to revalue their gold stocks
> market values can be seen as a first step to selling them. (...) (See
also the piece in >The Economist which Duncan
> has mentioned.) More broadly, we have to distinguish between what has
> happened historically (and still rules in the minds of a lot of people,
> including some central bankers and prominent academics) and what is
> theoretically necessary from a Marxian angle.

Claus: I'm surprised with Alfredo's statement, because the size and role of
gold reserves are a relevant element in the debate, especially when one
takes into account the old 'strong' commitments to reduce the role of gold
as a reserve at least for the last 20 years. It is striking that in spite
of this, gold has not significantly dropped as a proportion of the total
reserves. On the other hand, the increasing role intended for SDR's has not
become a reality. I don't think this phenomenon can just be assumed away as
irrelevant. By the way, it seems unnecessary to mention that the
recognition of the monetary role of gold doesn't mean that it should, or
even could, take over again *circulation* functions, even at the
international level.

It cannot be forgotten that the opposition to the monetary role of gold is
almost as old as its use as money, at least in capitalism. Marx: "... with
the development of the credit system, capitalist production continually
strives to overcome the metal barrier, which is simultaneously a material
and imaginative barrier of wealth and its movement, but again and again it
breaks its back on this barrier" (C, III, Intern. Publ. ch. 35, p. 574).


> I think that a careful analysis of the text will show that a gold-based
monetary > system is *irrelevant* to the substance of Marx's argument.

Claus: this is apparently not what Marx himself thinks: Marx: "But it
should always be borne in mind that, in the first place, money - *in the
form of precious metal* - remains the foundation from which the credit
system, by its very nature, can *never* [Marx's emphasis] detach itself"
(C, III, ch. 36, p. 606)

>Gold is not necessary for the derivation of
> banking capital from productive capital, the determination of the
category of
> interest, the analysis of the limits of the interest rate, and so on.

Claus: This is partly true, but only in the sense that there is a chain of
intermediary steps between money (gold) and the credit system and credit
money. Money and credit money are two different categories, one doesn't
cancel out the other. The development of the credit system and of credit
money, which replaces money in its *circulation functions*, is at the basis
of the gradual withdrawal of gold from these functions, but this does not
mean that gold can be replaced as measure of value, which has still to be
proved. With the development of the credit system money is necessarily
replaced by credit money, since the function of means of circulation is
increasingly overcome by the function of means of payment. As a matter of
consequence, the circulation of commodities is increasingly mediated by
debt instruments and even in the function of means of payment money is
replaced by the cancelling out of opposite debts. But all of this says
nothing about the function of measure of value, and this is crucial in
Marx's theory because the necessity of a money commodity derives from the
need to convert private labour, objectified in commodities, into social
labour, according to his demonstration in the Grundrisse, with which the
theoretical developments throughout Capital are always consistent.

Claus Germer
Departamento de Economia
Universidade Federal do Paraná
Rua Dr. Faivre, 405 - 3º andar
80060-140 Curitiba - Paraná

Tel: (041) 362-3038 ext. 2537
(041) 254-3415 Res.