Marx's Theory of Money: Modern Appraisals
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This book provides a contemporary assessment of Marx's theory of money. This theory is often praised as one of Marx's greatest achievements, especially when compared with either classical or neoclassical economics. On the other hand, Marx's theory of money has also been severely criticized, especially that is seems to require that money be a produced commodity. The contributors to the volume provide a wide-ranging and in-depth appraisal of the strengths and weaknesses of Marx's theory of money, compared to other theories of money.
Relatedly, what is the relation between the quantity of money and the sum of prices in the case of pure credit money: does the quantity of money determine prices, or do prices determined the quantity of money? Further, what are the different forms of credit money, and what determines the quantity of each of these different forms? These are some of the important questions that should be explored in the further development of a Marxian theory of credit money. Campbell suggests in chapter 9 that Marx’s analysis of the function of means of payment provides the beginnings of a Marxian theory of credit money.
But labour is not actual apart from a specific social form. 20 Ricardian value theory posits labour as existing without any determinate social form. This is its deepest mistake, a phenomenological error. Because Ricardian theory is lost in ‘the illusion of the economic’, it cannot understand money. 4 Demand, value, price A common view holds that Marx thoughtlessly allots no role to demand. 21 After all, does not Marx not have a labour value theory of price? And does that not mean that price is determined by labour?
All transactions can be settled by trading in the bills of exchange in the foreign exchange market without actual gold transfers ‘as if the trade were barter’. Any excess or shortage of gold money in the economy brings about the deviation of domestic prices from equilibrium, a trade imbalance, the deviation of the market exchange rate from par, and international specie-flow, which will adjust the domestic price to equilibrium again. 6 Ricardo’s analysis of convertible paper money and the effect of inconvertibility is well known in literature on monetary theory.
6 Conclusion Instead of understanding so-called ‘labour values’ as ontologically prior to money prices, the position adopted here is that order and regularity in the inter-relations of units of capitalist production is possible only because there is a form of value, namely money, as a precondition for it. Only once this form of commensurating products obtains is there any meaning to the supposition of a law of value rooted in labour time and appearing as price. The moneyform structures such determinations as socially necessary labour time, deciding to what degree actual labour times are socially validated, or replaced by socially imputed amounts of labour.
Tells us why money and value are inseparable yet not identical. It gives us that window on the fundamental difference between Marx’s theory of value and the classical one, and on what is fundamentally wrong with economics. If money is the necessary manifestation of the specific social form of labour and wealth in a capitalist society, then to conceive of labour and its products in a capitalist society as independent of money is to imagine that labour and wealth can exist without any specific social form.