The Value of Labor Theory: Money as an unconscious class war raging in society
One of the difficulties I often encounter when discussing money is that the discussion is so couched in incomprehensible philosophical or scholastic bullshit that the absolutely vital stake ordinary working folks have in the debate never sees the light of day. The question at issue in the debate is not just “What is money?” Rather, the question posed is “What would be the socially necessary labor time of society today if the money we used was a commodity money as Marx argued?”
Labor theorists have a number of very interesting answers to the question, “What is money?” But not a single one of them has ever actually investigated the implications for wage slavery if their pet answer were true. You can look at the writings of people like Moseley, Foley, Nelson, Arthur, Campbell, etc. All have very interesting answers to the question, “Must money be a commodity?” However, one thing you will notice in common in all of these papers is that not one of these useless academics ever manages to explain how their particular answer affects the labor time of the working class.
It is time to put an end to this sort of nonsense: money is class warfare and labor theorists are fighting on the wrong side.
In labor theory, money is an expression of value, of the socially necessary labor time of society. Who in society labors? Does the Queen of England punch a clock? What about Paris Hilton? Or Warren Buffett? Isn’t it at least indirectly of significance which object expresses the socially necessary labor time of society? And what, if any, impact does the material serving as money have on what is considered socially necessary labor in society?
Academics like Chris Arthur or Fred Moseley have never once considered this question in a single paper they have written, because, frankly, they don’t give a fuck about ending wage slavery and have never given a fuck about it. As Kurz has written, for these Marxists, the end of wage labor exists in some utopian future and has no practical role in the daily struggle of society.
So, in this part of this series I want to turn my attention to showing why what serves as money has real significance for working people. I will show how, by manipulating currency, the fascists can make you think you need to work 40 hours a week, when you don’t. You don’t have to work 40 hours a week — you don’t even need to work ten hours a week. Effectively, in this society today, you don’t need to work at all. If it appears to you that wage labor remains necessary in society, this is only because the fascists are covertly using the state’s control of fiat currency to keep you on the edge of starvation.
But first, I want to briefly show why what serves as money in our society is a political question, i.e., a question of a mostly unconscious class war (at least insofar as one side is concerned) raging between the capitalist class and the working class — and labor theorists are fighting on the wrong side.
Money is NOT a class neutral category in Marx’s theory
To understand why this is true, we have to revisit a critical point Paulani made in her paper. In her paper, Paulani wrote:
“If we consider the second and third movements together, it’s easy to see that the conditions are given for money to become free from the intrinsic value that commodity money bears and assume the form of inconvertible money, thus resolving the contradiction between the matter of money and the social role it should play.”
Paulani’s argument is simple: as the expression of socially necessary labor time, money is very problematic; she employs the problems money poses for society as the reason why society adopts an inconvertible fiat currency as its money.
This is a very popular explanation for why the US ended the gold standard in 1971. The end of Bretton Woods is ascribed to all sorts of incidental causes: it was difficult to maintain the peg between the dollar and gold or it was difficult to work around the monopoly the Soviet Union and South Africa has over the gold market or it was draining US gold reserves.
Surprisingly, the most important reason usually given by labor theorists is an argument first advanced by the fascists themselves: the gold standard is, in some vague way, implicated in the Great Depression. The argument that gold was in some fashion responsible for the Great Depression was first made by the notorious fascist, Milton Friedman, and his colleague, Anna Schwartz, in the 1960s. According to one review of Friedman’s and Schwartz’s work, the two writers established that the Great Depression was caused, not by overproduction of capital, but by too little money in circulation:
“Of special importance is the evidence on monetary disturbances: sharp declines in economic activity were precipitated by sharp reductions in the money supply, while episodes of sustained inflation were invariably produced by monetary growth in excess of the growth of real output. For both types of disturbance the historical record provides instances where inappropriate actions by the monetary authorities were to blame. Thus the Great Depression of 1929-33 was a consequence of an unprecedented reduction in the quantity of money that the Federal Reserve System could have prevented, while episodes of inflation during the Civil War and World Wars I and II were the product of wartime issues of fiat currency.”
This fascist nonsense finds its own echo in the writings of some of the most important labor theorists today. For instance, in a 2004 paper arguing against Marx’s theory of money, Fred Moseley makes this statement:
“Until the 1930s, capitalists required that the general equivalent (and hence the measure of value) had to be a commodity, or at least convertible into a commodity at legally defined rates. However, in the Great Depression it became impossible to maintain the convertibility of paper money into commodity money. Convertibility required tight monetary policy, which was making the depression worse. In order to escape this “cross of gold”, governments ended convertibility, and made credit money, without gold backing, the general equivalent. Capitalists had no choice but to accept inconvertible paper money by itself as the general equivalent, and hence as the measure of value.”
Now why would labor theorists like Moseley have so much affinity for an answer first advanced by such dyed in the wool fascists as Milton Friedman?
In fact, the reason the US left the gold standard had nothing to do with any of these reasons; rather it had to do with the breakdown of production on the basis of exchange value itself. As mentioned earlier, value is the socially necessary labor time required for the production of a commodity. However the value of a capitalistically produced commodity is also socially necessary labor time. This would suggest that with the emergence of wage labor, the value of any commodity acquires two separate and distinct measures.
What leads to breakdown of exchange value is that a single money cannot express two unequal and antagonistic durations of socially necessary labor time; the only practical basis on which these two measures of socially necessary labor time can coexist for any period of time is if capitalism constantly expands.
While commodity exchange itself only provides for the possibility of a breakdown in exchange value, capitalist commodity production turns this possibility into an inevitability. There is, in the capitalist mode of production, two unequal and antagonistic determinations of socially necessary labor time; and with this, two distinct and antagonistic use values, giving rise to two contradictory expressions of the socially necessary labor time of society. There is, in first place, the determination of the socially necessary labor time required for the production of the commodity as a simple commodity; but there is also the determination of the socially necessary labor time required for production of the commodity in its capitalistic form. Likewise, there is the use value of the commodity that arises from its specific qualities that satisfy human need; but there is also the use value of the value of the commodity — a use value that arises from its function as means for the production of surplus value. Finally, there is the expression of the value of the commodity as a simple commodity in the form of a commodity money and the expression of the value of the commodity as capital, i.e., as self-expanding value, in the form of a money-capital.
Capital further complicates the analysis of the commodity form by presenting it simultaneously as a simple commodity and as commodity capital. Our analysis of all the categories that Marx introduces in the first chapter of capital — commodity, use value, value, exchange value, etc. — is complicated by whether we intend to analyze it as a simple commodity, as commodity capital, or both together.
Certain labor theorists, like Paulani, want to collapse everything into the analysis of the simple commodity, while others, like Arthur, wants to treat everything as a form of capital. In fact, both categories coexist side by side in the movement of a single act of social production.
The question, “Does money have to be a commodity?” requires additional specification in order to make it comprehensible:
“For which class in society does money have to be a commodity?”
Labor theorists never make this further specification. Although society is divided into classes, they make the assumption one answer can be given for society as a whole.
But it obviously makes all the difference in the world whether food, medical care, housing, etc. is consider means for satisfaction of relevant human needs or means for self-expansion of capital. While such a distinction may be more or less obvious with regards to the commodity itself, labor theorists seem completely unable to comprehend it also has implications for the labor time expended on production of the commodity. The labor time expended on production of a simple commodity, like a house, can never be the same as the labor time expended on the same house when it serves means for self-expansion of capital. The duration of the total labor time of society, insofar as this labor time is expended for the self-expansion of capital, will always be longer than the labor time of society spent on simple satisfaction of human needs.
Since these two labor times are always unequal, they cannot have a single measure. At the same time, there can only be one socially valid, universal, measure of the socially necessary labor time of society. The conflict between classes in society, whether they realize this or not, is which measure of socially necessary labor time will prevail.
It is quite disturbing to consider that most, if not all, labor theorists today routinely embrace the money-form of the capitalist class. But this is exactly why I call them useless.
To be continued