Date: Fri, 07 Apr 1995 06:19:23 +1000 From: Steve.Keen-AT-unsw.edu.au Subject: Ron Press re money markets Ron Press recently posted: |... commodity exchange.... |C-M-C and then M-C-M. And develops to M-C-M' where M'= M+/\M |where /\M (Delta M) represents the concept of surplus value. |My question is. In the money market we have M-M-M or -$-. Whence |comes M' or /\M |... |is there a qualitatively different system governing the money market The answer, from the original horse's mouth, is yes: there is a qualitatively different system governing money markets: ----------------- "What, now, does the industrial capitalist pay, and what is, therefore, the price of the loaned capital?... What the buyer of an ordinary commodity, buys is its use-value; what he pays for is its value. What the borrower of money buys is likewise its use-value as capital; but what does he pay for? Surely not its price, or value, as in the case of ordinary commodities." (Marx 1894, p. 352.) Instead, its use-value is paid, and "Its use-value, however, lies in producing profit" [Ibid., p. 355). Thus credit money is by its nature set apart from reproducible commodities: "It is lent as self-expanding value, as a commodity, but a commodity which, precisely because of this quality, differs from commodities as such and therefore also possesses a specific form of alienation." (Marx 1861, Part III., pp. 457-58). Marx extended this result to assets--factories, mines, etc.--which are purchased or hired in order to generate a stream of income (Ibid., p. 458-459; 1894, pp. 353-356). For example, Marx chastised Ricardo for explaining the price of minerals in situ on the basis of their "value", when no labor has gone into their production. Marx points out that they therefore contain no value--though they have obvious potential quantitative use-value, determined by the expected sale price of the estimated quantity of ore. Thus, if mining rights and the like could be purchased, like commodities, for their cost of production, they would be free. Hence as with loaned capital, the exchange-value of assets is determined not by their costs of production, but by their perceived use-value--that of being a potential source of exchange-value: "Ricardo never uses the word value for utility or usefulness or "value in use". Does he therefore mean to say that the "compensation" is paid to the owner of the quarries and coalmines for the "value" the coal and stone have before they are removed from the quarry and the mine--in their original state? Then he invalidates his entire doctrine of value. Or does value mean here, as it must do, the possible use-value and hence the prospective exchange-value of coal or stone?" (Marx 1861 Part II, p. 249) ----------------- References Marx 1861: Theories of Surplus Value, Progress Press edition 1894: Capital Vol. III, Progress Press edition Cheers, Steve Keen --- from list marxism-AT-lists.village.virginia.edu --- ------------------
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