From: "Karl Carlile" <joseph-AT-indigo.ie> Subject: Re: M-TH: Labor Theory of Value and Keynesianism Date: Mon, 11 Aug 1997 02:39:13 -0700 This is a multi-part message in MIME format. KARL: Hi Boddhisatva! This is a duplicate of my last posting to you.Just in case you missed as happens. BODDHISATVA: It is credit, not accumulation, that increases the velocity of money. KARL: There exist a necessary link between credit and the character of the accumulation of capital. Clearly under conditions of accelerated accumulation credit tend to expand. Under conditions of contracting accumulation credit tends to contract. Accumulation of capital, the expansion of the valorisation process, is the source of both credit and medium of exchange under capitalism. Under conditons of accelerated accumulation of capital the velocity of circulation of money tends to increase as does the expansion of credit. Both forms have their source in the accumulation of capital. BODDHISATVA: It is true that the breakdown of a credit system and the devaluation of a currency are linked. However, a government devaluation, or any government action which puts the value of the currency in doubt (Mexico, a couple years ago, Thailand a few weeks ago) can cause the credit system to collapse (or be weakened). KARL: In so far as this is true it is because conditons of accumulation in those particular countries are in difficulty. As I said the accumulation of capital, the valorisation process, is the source of these developments and not any particualr government. BODDHISATVA: As well, a collapsing credit system can devalue a currency because of asset over-valuation (Japanese and Korean real estate in the 80's and today, respectively; American stocks in the 20's) or because of poor prospects for economic production and growth (any country subject to war, natural disaster or recession). Internal deflation in a country which is undergoing recession is associated with slackening consumption, not decreasing accumulation. KARL:Slackening consumption is a function of contractions in the accumulation of capital. Recession is an euphemism for a slackening in the rate of accumulation of capital. If the rate of accumulation diminishes then this tends to lead to a diminution in the quantity of variable capital advanced in the form of wages. This tends to lead to a decline in the volume of consumption by the working class. Concerning the rest of yoour message I fail to see what it has got to do with modern capitalist society. It is in the context of the latter that the discussion, as far as it involved me, has been taking place. Finally why do you regularly sign of with the logo 'peace'? Are you a pacificst? Greetings, Karl Carlile ---------- boddhisatva <kbevans-AT-panix.com> To: marxism-thaxis-AT-jefferson.village.Virginia.EDU Subject: Re: M-TH: Labor Theory of Value and Keynesianism Date: 06 August 1997 14:47 Karl, It is credit, not accumulation, that increases the velocity of money. It is true that the breakdown of a credit system and the devaluation of a currency are linked. However, a government devaluation, or any government action which puts the value of the currency in doubt (Mexico, a couple years ago, Thailand a few weeks ago) can cause the credit system to collapse (or be weakened). As well, a collapsing credit system can devalue a currency because of asset over-valuation (Japanese and Korean real estate in the 80's and today, respectively; American stocks in the 20's) or because of poor prospects for economic production and growth (any country subject to war, natural disaster or recession). Internal deflation in a country which is undergoing recession is associated with slackening consumption, not decreasing accumulation. The absence of commodity production - a distant and somewhat utopian goal - would not obviate the need for money by any means. Money is the measuring unit of credit, and credit is essential for an interdependent economy, and economic growth. One can only compare apples grown today with cider sold next month using money. If one looks, for example, at small towns in pre-revolutionary America, one finds a currency-scarce and largely barter economy, engaged primarily in simple reproduction. In that economy, vast, cumbersome networks of barter credit were created spontaneously. If not for that credit, the economy would have stood still, as will any interdependent economy without an adequate credit system. Credit needs a measuring unit, and money is and will be that unit for the foreseeable future. Even the allocation of resources by political edict does not obviate the need for money. People need to be paid now for work that will not have any economic benefit for some time. That work needs to be valued against future demand. Money is the only reasonable unit of valuation and credit is the only reasonable method of valuation. Obviously under socialism access to credit must be generalized to the greatest extent possible. Eventually, under communism, credit and democracy become synonymous. Yet even then credit must be measured, and money is the obvious way to bridge the gap between promise and delivery. peace --- from list marxism-thaxis-AT-lists.village.virginia.edu ---
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