Subject: [OPE-L:1828] Re: Re: Re: the money supply
From: Akira MATSUMOTO (akiram@mail.ucr.edu)
Date: Sat Dec 04 1999 - 13:40:47 EST
Dear Dr. Cottrell
Still I can't understand what you said.
Money is the measure of value. Therefore it should be the valuabe thing or
the commodity.
In other word, it shoud be reproductible.
Why can "non-reproducible commdities" become money?
bey
Best Wish
Akira
At 5:31 AM -0800 99.12.3, Allin Cottrell wrote:
> On Fri, 3 Dec 1999, Akira asked:
>
> > Can it explain the paper money is money unless it denies the
> > theory of labour value?
>
> Sorry I don't have time to discuss these matters fully, but I'll
> attempt a brief answer to this question.
>
> Ricardo and Marx were quite clear that the labur theory of value
> doesn't apply to non-reproducible commodities. We don't think
> the $11 million fetched by a rare watch at Southeby's yesterday
> was in line with the labour content of the watch. But base
> money in the form of liabilities of the US central bank is not a
> freely reproducible commodity. There is a legally enforced
> monopoly. As with other non-reproducible items, exchange value
> will depend on the interaction of demand and the available
> stock. The insight of the State Theory of Money is that the
> demand for base money ultimately stems from the tax liabilities
> imposed by the state (which can be discharged only using base
> money), and thus the exchange value of money will depend on the
> relationship between the state's emission of base money and the
> tax liability. The Breakdown of Bretton Woods is attributable
> to a break in this relationship, as the US spent freely on the
> Vietnam war but, for political reasons, did not raise the tax
> liability on US residents correspondingly.
>
> Allin Cottrell.
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MATSUMOTO, Akira
Visiting Scholar
Department of Economics,
University of California, Riverside
1150 University Avenue
Riverside, CA 92521-0427 USA
Phone 909-787-5037x1575 or X1570
Fax 909-787-5685
Email: akiram@mail.ucr.edu
________________________
Associate Professor on Money and Banking
Department of Comprehensive Policy Making
school of Law & Letters
EHIME University
Matsuyama, Ehime
790-8577, Japan
Tel:+81-89-927-9237(office)
FaX: +81-89-927-8916
E-mail: amatsu@ll.ehime-u.ac.jp
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