In the mid 1990s, Duncan Foley was working on a book whose first few chapters made it into what became this book: http://www.amazon.com/Growth-Distribution-Duncan-K-Foley/dp/0674364201
He had that and other related material online (on his Barnard web site, before he moved for good to the New School in 1996 or so). I took his advanced political economy class (he was replacing Anwar Shaikh, who was then taking a sabbatical) and we had to read big chunks of that material. He had a chapter on fiat money and government debt that didn't make it into the book above, where he made a point I found persuasive -- namely that one has to think of fiat money (and this is my interpretation, which may or may not coincide with how Duncan really means) as another form of debt, significantly different from government bonds, but debt nonetheless -- which markets priced using the same logic involved in pricing any other financial instrument (discounting of future value -- or power! -- flows). In my view, Duncan pointed things in the right direction, but he didn't completely connect things with what Marx left. Quickly: In his writings (I'm not checking sources, so bear with me as my memory is slipping at an increasing rate), Marx referred to two historical ways in which modern capitalist monetary systems emerge. And by "modern," I mean here 19th century, silver and gold standard, with bank notes, and occasional disruptive adjustments in the metal-bank note parity usually prompted by crises. One of these ways is simply the gradual replacement of gold with certificates issued at first by private entities but then monopolized by the state (via central bank or treasury). He goes over this to some extent in the 1859 contribution, in Grundrisse, and in Capital. The second way is via credit, and its result is what Marx calls "credit money." In his writings, this part is a bit underdeveloped (in fact, a bunch of very suggestive thoughts that he interrupted at some point), because he kept postponing its treatment, as its full development required that he straighten out modern credit in general, which is based "interest-bearing" capital (i.e. based on surplus value production rather than on some other form of necessary product or surplus product production). We all know where this detour ended. According to Engels' preface to volume 3, Marx's stuff on interest-bearing capital was the messiest and most frustrating of all the manuscripts he had to edit after Marx's death. Engels wrote that these manuscripts included a portion that Marx fittingly titled "The Confusion." Indeed. Anyway, IMO Marx left enough hints for us to imagine where his mind was going -- or would have gone -- if he had witnessed the evolution of monetary systems after his death, with time to piece things together with his study of the general laws of capitalist production. Along those lines, which I think are fundamentally correct, modern fiat currency -- although significantly different from regular public debt (e.g. Treasuries) -- appears to me as a form of *credit* money in the most *general* sense of the term "credit" as used by (IMO) Marx, i.e. to include a zero nominal interest unredeemable kind of public debt meant to stay in circulation, yielding seigniorage, etc. I won't push this further, except to repeat a point I made a few times here and there that -- ultimately -- Marx pointed towards what I'd call a *labor theory of value **and** political power*. Both value (not flows, but stocks) and political power are particular alienated forms of existence of the productive force of labor. (The productive force of labor is the stock that corresponds to the flow of socially necessary labor time, and -- yes! -- we should think of the PFL as SLT flows discounted to the present. Analogously, the taxing power of the state is an aspect of political power; and tax revenues are the flow correlate). These connections are required to dissipate once and for all the mystification that Keynesianism and other conventional views of money continue to propagate. Unfortunately, I find that explaining these points to people without familiarity with Marx's extant work is incredibly hard. So, talk about mystification if you cannot get your point across simply and directly to our actually existing readers! :) PS: If you want to read Duncan's unpublished chapter 7, let me know and I'll forward it to you with a correction that Duncan made just today as he re-read his manuscript. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
