From: cmgermer@UFPR.BR
Date: Wed Jul 21 2004 - 09:09:51 EDT
Jurriaan wrote: I was merely referring to the fact that the monetary system has evolved very substantially beyond the realities of the 19th century, when you could still make a credible case for a "commodity theory of money" to explain monetary phenomena. In which case, you have to show how the basic theory of money, founded on an understanding of the historical evolution of money, is modified by new conditions. It's just that in the case of a debased or destabilised currency, the real nature and functioning of money in exchange relations becomes much clearer, I think, and the illusions created by fiduciary currency are pierced through. I aim to do more work on this when I get time (just now my life is littered with unfinished projects, which probably proves I am being disorganised). I personally don't think Ernest Mandel's monetary and credit theory, despite shrewd insights, was really very good, but I do recommend that article of his I mentioned. Claus: Why do you think a ‘commodity theory of money’ is only credible in the 19th century setting? Don’t you agree that the so called gold-dollar standard of the Bretton Woods system was based on gold as money at least until the 1970s? Weren’t the currencies of the leading capitalist countries explicitly and officially defined in terms of gold and exchanged on the basis of their gold contents? There is a widespread opinion according to which Marx adopted the concept of money as a commodity because this was commonsense in the 19th century. If this were true, it would mean that he did not have any real theory of money, and it would also mean that those who today stand for a paper fiat form of money can be accused as well of simply following the present commonsense that money is in fact just fiat paper money. Consequently, the conclusion would be that Marx did not elaborate a consistent theory of money and that the Marxists of today haven’t done it either. It might well be that Marx's theory of money is wrong, but in my opinion it is not true that Marx just picked up the appearance of money in his time and worked out a theoretical justification for it. In the time he wrote, there was already a widespread opinion that the relation of the currency to gold was only a practical way of preventing the central bank from issuing banknotes in excess. This is the group Schumpeter called ‘practical metalists’. Marx explicitly discussed and objected the theories of an abstract unit of account that had great acceptance in England at least since the early 18th century (Contribution). His theory of money is based on his concept of the nature of a commodity producing economy and of the ways in which social labor has to be distributed in this case. Claus.
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