5. Marxism after the death of money?
Think of it this way: If Marx was wrong about money, he is just another dead guy whose significance is highly over-rated. Things continue much the same way as they did before. However, if Marx was right, the entire system of commodity production no longer exists and the fascist state is running the entire economy as if it were the floor of some factory.
When Nixon closed the gold window in 1971 and severed the dollar from a definite standard of prices, the consequences of this act were not as simple and straightforward as commonly assumed. It is true there is a danger of hyperinflation, financial crises and currency crises always lurking in the wings, but these minor, secondary, issues should not concern us at all, as they are mere symptoms of a much more profound crisis.
Nixon’s act did not simply sever the connection between the dollar and gold, but also severed the connection between prices — denominated in dollars — and values — expressed in some definite quantity of a commodity money. A number of consequences result immediately once currency is severed from a commodity that can serve as the measure of value and standard of prices — these consequences profoundly effect not just money itself, but every category Marx initially analyzed in Capital. Moreover, it is precisely the expansion of capital that undermines money and all the categories that serve as the premises of capital itself. I will turn to describing a few of these implications now.
In the first part of this series, I make the following statements:
These starkly different results demonstrate that state issued fiat money does not behave at all like commodity money and, moreover, there is no research (nor could there ever be research) that demonstrates state issued inconvertible debased fiat created out of nothing (“fiat” for short) can ever behave like commodity money for the ridiculously simple reason that while no institution in society determines what serves as money, the state alone creates fiat and forces it into circulation.
Money does not simply manifest the production relations of individuals engaged in a certain sort of social production, it implies those production relations are outside the control of the individuals creating them. Because the production relations individuals enter into are not mastered by them, these relation’s manifest themselves as an independent force standing over against them in the form of money.
It follows from this that gold did not formerly play a role in managing national or international transaction, as Caffentzis argues, but, rather, expressed the fact the relations of production and exchange were entirely unregulated.
1. Was Marx fundamentally wrong in his theory of money
Does the end of Bretton Woods and of the gold standard invalidate Marx’s argument on money? (When I say ‘gold’ in this case, of course, I mean any commodity serving in the role of money.) This is the question raised by George Caffentzis, in a 2009 paper, Marxism After the Death of Gold. Caffentzis writes:
“Marx clearly argues that gold is necessary for the functioning of capitalism; but since Nixon’s decision to “shut the gold window” on August 15, 1971, gold has played a peripheral role at best in the managing of national or international transactions. The last thirty-seven years have seen many crises in capitalism without, however, a crisis of capitalism (to use Lebowitz’s distinction) (Leibowitz 2003). Capitalism is surviving without the working class’s “cross of gold” in the same way it survived the end of chattel slavery. What might have seemed essential at one point in capitalist history has been shown to be a mere “accident” in the case of chattel slavery. Does the same error apply to gold as money? I.e., does the end of gold (and indeed of any precious metal) as the money commodity constitute the crucial negative experimental test of Marxism?”
This begs a question for labor theory analysis of post-1971 economic events: Who said gold was no longer a commodity money? It is by no means unprecendented to have an entire territory where an inconvertible debased state issued fiat created out of nothing serves as the currency of that territory. Indeed, inconvertible fiat dates at least to 13th century China.
“The most famous Chinese issuer of paper money was Kublai Khan, the Mongol who ruled the Chinese empire in the 13th century. Kublai Khan established currency credibility by decreeing that his paper money must be accepted by traders on pain of death. As further enforcement of his mandate, he confiscated all gold and silver, even if it was brought in by foreign traders.”
Did the establishment of inconvertible paper currency in China displace gold as a money commodity? Of course not. So the argument Caffentzis makes in his paper must be that because all nations have dispensed with commodity money as the standard of price, somehow this makes gold no longer a commodity money. Nothing happened to gold in the interim, the only change was what nation states defined as currency in the territories they control.
Restated, the argument that gold is not money means the fascist state determines what is money. This proposition is not consistent with labor theory. Mr. George Caffentzis, however, thinks labor theory must be ‘stretched’ to include the possibility of non-commodity money in analysis. He does not explain why this has to be done, however.
7. The Centrality of Labor in Marx
At the start of this series I noted that, according to Elmar Flatschart, wertkritik states the abolition of labor is not the same as social emancipation. In his view, the abolition of value is only a condition of social emancipation, but social emancipation itself is a more complex problem.
At first glance this conclusion might be seen as very pessimistic, since it implies that even in the absence of any material need for labor, the great mass of society might still be trapped in compulsory labor and the debilitating division of labor to the sole benefit of an ever diminishing group of exploiters.
This is not a minor point. The concept of the abolition of labor is central to Marx’s and Engels’ theory. Uri Zilbersheid calls the abolition of labor one of Marx’s most important ideas; he notes the concept is central at least in “his early writings and to some degree in his later writings”. Yet, Zilbersheid observes, the abolition of labor receives little attention from Marxists:
“the radical Marxian vision—the abolition of labour—has not gained due recognition. Marxian thought is devoted to liberating humanity from all kinds of servitude, and the abolition of labour constitutes a major aspect of this liberation.”
Certain Marxists have their own weasel words to cover their statist inclination. Unless pressed to demonstrate it, they routinely refer to the Dictatorship of the Proletariat (as one person stated to me) as “a ruling class’ instrument of the suppression of class enemies”. The employment of coercion against the capitalists, they assert, means the association of the working class is a working class state.
This idea is not to be found in Marx or Engels writings and it isn’t even in the anarchist criticism leveled against Marx by Bakunin.
This really makes it appear as if the difference between working class association and a bourgeois state is who gets suppressed by violence. It poses the problem of association in a way that isn’t even close to understanding how association differs from the state.
In one of my earlier posts, I accused some Marxists of being fascists. Needless to say this did not go over well with those Marxists who might fall into the category of people who, although claiming to be communists, nevertheless believe any attempt to actually dismantle the present state amounts to a neoliberal assault on the so-called ‘social safety net’ allegedly provided by some fascist state spending.
One person on reddit who might fit the description of a statist communist responded to my argument this way:
1. That’s a lie; 2. Even if that were true, that analysis is bollocks.
Congratulations, you have posted something which does not actually raise any questions but instead goes on about Communists being fascists without any material analysis of what either is.
And aside from all that, all the article really does is state a fact, a fact that we are well aware of and spend our time actually analysising in a Marxist framework. The article does not analyse it in any framework, it just states it and rubbishes Communism at the same time. Absolutely useless.
Here’s a criticism: you are full of shit. Fuck you, fuck off.
Okay fine. I guess this writer and I aren’t going to find any common ground soon.