At 14:50 27/03/01 -0800, Jim Devine wrote:
>Chris Buford:
>>What on earth is the problem about understanding the role of "credit
>>money and debt" in the present crisis from the point of view of the
>>labour theory of value (to be more correct the Marxist law of value)?
>
>right you are! Marx talks a lot about the role of "credit money and debt"
>in volume III of CAPITAL, among other places. It's part of his
>non-monetarist business cycle theory (or part-theory, since he didn't
>finish it). He wasn't held back by his law of value at all.
>
>I'd say the only problem with Marx's vision on credit money and debt is
>that it's limited by his assumption that gold is the only form of
>international money (where the value of gold is determined by how much
>labor is needed to produce it). During the last 30 years, we've made a
>tradition to a dollar standard. That, in turn, is based on the power of
>the United States. If the US hegemony collapses and nothing replaces it,
>then we'll revert to the gold standard. But in the meantime, we have a
>power-based system of money, where the hegemon can claim the privileges of
>seigneurage.
Perhaps we need to move on from the helpful exchanges about Steve Keen's
interesting but IMO ineffective challenges to marxism.
As Jim indicates we do not have to be rigidly dogmatic about Marx's
approach to claim that he wrote not a little about credit money and debt,
and about capitalist crises.
The point Jim makes about the hegemonic position of the US in global
capitalism is important in current world politics. I suppose it is a small
step towards demystifying gold.
(Interesting that the price of gold has not yet risen significantly.)
Of course some would say it is reformist and therefore not marxist, but
even if the majority of peoples and states of the world are not yet ready
to abandon capitalism, they could begin to see the advantages of a world
financial system that is a little more rational than relying on US hegemony.
Although Marx did assume the gold standard, he analyses it as universal
money, and one of the things that is needed now is a more rational form of
universal money.
To some extent capitalism is groping towards such an entity in that the
Federal Reserve does consider to a degree its communications with other
central banks and the overall shape of the global economy as part of its
decisions. To some extent conceptual tools are emerging like baskets of
currencies. There are also IMF special drawing rights.
The US probably calcuates that is has several more decades before the
dollar needs to be threatened in its role of universal money, by the
renminbi. When that happens the US will also be in favour of a more
rational form of universal money. But perhaps the process can and will be
accelerated.
Once there really is universal money it will be possible to look at the
global economy, and implement deficit financing to devalue dead labour, and
reactivate living labour, in a way which is no longer possible for the
economies of individual states.
But the privileges of seigneurage will not be given up without a struggle,
at times brutal, at others subtle and devious.
Chris Burford
London
