This relates to the difference between how things seem to one
individual firm on the market and how they are when viewed at
the level of national accounts.
To the individual firm anything which yields them a profit seems
to be productive. But that profit in a credit money system is
just an entry in the accounts of a bank. There is an offsetting
debit entry of somebody who owes money to the bank.
>From the standpoint of national accounts the two cancel out,
there is no net accumulation of money.
This accumulation of money may parallel an accumulation of real
capital if the borrower had used it to finance purchases of
means of production. If on the other hand the loan had been
made to the state which spent it on paying unemployment benefit,
the apparent accumulation of capital by the owner of the
advertising agency would not be backed by any real capital
in the national accounts.
In a system of pure commodity money, this illusion can not
arise. 'Moneybags' actually has a pile of gold in his safe
at the end of the period, and a net accumulation of money
can only come about by:
1. the mining of new gold,
2. the export of commodities for gold
In these cases the accumulation of money is directly represented
by an accumulation of embodied labour.
In a credit system, monetary accumulation is only contingently
related to the accumulation of embodied labour and thus value.
> >>No other
> > > accumulation of money is an accumulation of value or of capital.
> > > A growth of M1, the mass of banknotes and current accounts, is
> > > merely a measure of the growth of a particular form of debt.
> > > A growth in debt involves a zero accumulation of value and
> > > thus of capital.
>
> In itself, this is of course true, but to the extent that that
> credit-money successfully sets in motion productive labour, it will
> be possble to pay off the debt, and interest and still have some
> surplus value, expressed in money, left over. Then accumulation can
> occur. The value expressed by the new money is the (potential) labour
> set in motion - not the labour that produced the money-commodity.
>
Here you are adopting a teleological view of causality that
typically operates during a stock market boom. During a boom
speculators confuse value that has actually been produced with
value that might be produced in the future. The illusion can
go on for some time, but in the end a crash dispells them.
Credit expansion can lead to the rapid growth of 'new money'
all of it based on promises of future value. This gives
rise to the illusion that credit institutions are themselves
creators of value.
A nation can not accumulate capital by aquiring title to its
own future productive capacity. It can only do so by acquiring
new means of production.