File spoon-archives/bhaskar.archive/bhaskar_2003/bhaskar.0312, message 202

Subject: BHA: Re: Money, money, money, monnnney
Date: Sun, 14 Dec 2003 23:11:40 -0500

Hi Gunter,

No, I don't think think your seven points work.  I can be clear about some
of this, then some is just speculation about work I'd like to do.

I suppose your first point is literally true -- money is a social product
and the only limitation on how much paper money can be printed is the
durability of the printing machines and their replacements.  But to say that
"there is no limitation on how much money can be printed," already makes
money funny.  It presupposes, like Steve, that money is arbitrary and
presumably paper.  But that is not Marx's starting point.  And for good

Your second point is not true because it makes money conventional -- to act
as a general equivalent, there must be confidence.  Again that is not the
way Marx presents the problem.  Marx starts with the value as a real entity.
Then he asks, how does value get expressed?  This is a semiotic problem.
Value gets expressed by one product expressing its value in some other
product embodying and equivalent value.  The natural use value body of the
second product -- e.g. yards of linen -- becomes a form for expressing the
value of the first product.  The commodity that comes to do that best is
gold.  That's not money needing "backing up."  It's the other way around:
money is an emergent phenomenon generated by an underlying material economic
relation; money comes about because of the need of products entering
exchange to express their reciprocal values.  There's nothing conventional
about it, and it does not depend on anyone's confidence.  Coins for example
emerge in the ancient world about the 7th century BC give or take.  This is
not just because somebody decided it would be a really good thing to have a
standard of exchange.

Okay, that much is textbook Marx and makes sense of the use of money in
European market economies in the 19th century.  What happened in the 20th?

First,  generalized commodity production, aka capitalism, doesn't occur
without a state.  The flowering of commodity exchange means that exchange
takes place not simply in terms of products which change hands reciprocally
here and now, but exchange takes place in terms of promises enforced by the
state's monopoly of force.  Credit enters the cycle of circulation and
production.  Now, to the extent states centralize political authority, and
do so in a stable way, paper money can stand in for gold.  It's value will
depend, roughly, on how much gold it stands in for.  The world community can
do the same -- all peoples can learn to treat one political authority as
preeminently stable and treat its currency as if it were 'as good as gold.'
That works because of a political conjuncture.  Let there be a rupture in
that political conjuncture and I suspect you'd be back to the way Marx
described crisis -- everybody wants hard cash, and hard cash means a
commodity that will hold its value like gold, not the promise of some
political community that no one knows what it means.

In your last point you argue that "there's a qualitative notion of value
(the labour theory of value for Marxists) but its never actually precisely
quantifiable in monetary terms."

This is a fairly widespread formulation these days.  But it completely
ignores the contribution Marx made not only to political economy but to
semiotics.  In other words, classical political economy faced him with a
semiotic problem he had to solve.  The point is this.  Many marxists seem to
have the peculiar notion that the only way anyone can tell time is with a
clock.  They don't tell us whether the clock is digital or mechanical, etc.
but let that go.  How do you tell time if you've left your watch behind on
one of your expeditions to the outback?  How do you tell time if your
partner is pregnant?  How do you tell the time to dinner?  How do you tell
time if you watch the tree leaves brighten and fall?  The hands on a clock
form a sign which refers to the passage of time.  But there are other things
that can perform that function.  So what do you mean, "but not precisely
quanitifiable in monetary terms"?  You want to quantify the duration of
labor by minutes and hours with the hands of a clock only and notice we
can't do it that way.  If we put a stop watch to some labor process it is
absolutely meaningless when we get to market.  That doesn't mean the notion
of value is not quantifiable in monetary terms.  It just means we happen to
measure minutes and days and hours in terms of ounces of gold.  There is
nothing at all out of the ordinary about this as long as we can keep the
distinction between sign and referent clear in our minds.  So we quantify
value in monetary terms.  Now what happens without gold.  We rely on
promises.  But this depends on the political conjuncture on which their
enforcement depends.


----- Original Message ----- 
From: "GŁnter Minnerup" <>
To: "Howard Engelskirchen" <bhaskar-AT-lists.village.Virginia.EDU>
Sent: Sunday, December 14, 2003 9:44 PM
Subject: Re[4]: BHA: Missing posts

> Dear Howard,
> on Monday, 15 December 2003, you wrote:
> > I can't say much about this, but because the gold standard has been
> > abandoned does not automatically mean that the world economy does not
> > function in terms of gold.  There is marxist work being done now on
> > this.  Unfortunately, I can give you neither substance or reference.
But I
> > will try to track down a reference.
> Yes, that reference would be useful. As I understand it, the whole problem
reduces to something like this:
> 1. Money is a human artifact and there's no limitations on how much money
is printed.
> 2. To act as the general exchange equivalent, however, there has to be
some confidence that it won't lose its value.
> 3. Hence money needs "backing up" by some relationship to something that's
not arbitrarily producible. That's turned out to be gold, though silver also
played that part on occasion.
> 4. The gold standard formalises the relationship, i.e. a government
declares that it's currency is "as good as gold" in order to be usable as an
international reserve andtrading currency with confidence.
> 5. If it then breaks the promise (i.e. the US printing paper dollars to
finance the Vietnam war etc) the formal link with gold is broken (collapse
of Bretton Woods).
> 6. Yet the informal link is still required as the last resort measurement
of a currency's value, even if the international currency markets trade in
bilateral exchange values. The international monetary system just becomes
extremely volatile, with exchangerates fluctuating wildly around real
> 7. In a sense, it's a bit like the price/value problem for all commodities
(the old "transformation problem"): there's a qualitative notion of value
(the labour theory of value for Marxists) but it's never actually precisely
quantifiable in monetary terms. Gold being the (conceptual) equivalent of
labour here.
> Bit rough and ready this, but do you and Par agree on this? I'm sure Steve
> Regards,
> GŁnter
> -- 
> GŁnter Minnerup
> School of History
> University of New South Wales
> Sydney NSW 2052
> Tel. (+61 2) 9385 3668 (work)
> Tel. (+61 2) 9398 3646 (home)
>      --- from list ---

     --- from list ---


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