Money as superposition of value and self-expanding value

by Jehu

This is from Moseley:

“Marx’s theory of the circulation of capital also begins in the sphere of circulation (in Part 2 of Volume 1), with the advance of definite quantities of money constant capital and money variable capital to purchase means of production and labor-power (with the famous passage at the end of Part 2 about moving from the “noisy sphere of circulation” to the “hidden abode of production” marking the transition from the sphere of circulation to the sphere of production). Thus, when the second phase of the production of value and surplus-value begins, as analyzed in Part 3 and beyond, the quantities of constant capital and variable capital are assumed to have already been advanced in the sphere of circulation to purchase means of production and labor-power. These already existing quantities of constant capital and variable capital are taken as given as an empirical fact in Marx’s theory of how this previously existing given quantity of money capital becomes more money in subsequent phases of the circulation and the valorization of capital. In this way, the presuppositions of Marx’s theory of surplus-value in the sphere of production come from already existing quantities of money capital previously advanced in the sphere of circulation.”

So, here is my question: Where did the money come from? Where did the commodities come from?

What Marx shows in part 1 of Capital is that capital is logically premised on the prior existence of commodity production and exchange. The production of surplus value is premised on the production of value. Capital assumes not the prior existence of money capital, but of money-becoming-capital. The preexisting money doesn’t actually become money capital until it is exchange for labor power.

Thus Moseley is wrong to speak of “already existing quantities of constant capital and variable capital”. Before the appearance of labor power, there is only money and commodities, not constant and variable capital. Moseley makes the odd argument about “already existing quantities of constant capital and variable capital” in order to argue the transformation problem does not exist. Although Smith thought it existed and Ricardo thought it existed and Marx thought it existed and even Bohm-Bawerk thought it existed Moseley has declared all of these thinkers wrong.

Logically, Moseley argues, capital does not begin with money, but with itself.

A portion of his confusion rests on the commonplace (and wrong) assumption that money is the same as capital. We know this is not true: the wages of the worker is not her ‘capital’; it is merely money. Even in the hands of the capitalist money is only ideally capital. For money to become capital, it must be exchanged for labor power. Only in the form of labor power, variable capital, does the value in the money become real self-expanding value. Never in the long history of money did money spontaneously become capital and begin producing surplus value. Marx’s theory of capital does not simply begin in the sphere of circulation, but with a peculiar and historically unique transaction, the exchange of money for labor power.

After this transaction, money appears in two distinct and incompatible guises: as money and as money-capital. In the hands of the worker, it is money (exchange value) pure and simple; while, in the hands of the capitalist, it is self-expanding value. The argument Moseley makes is that we can ignore money in its determination as exchange value pure and simple, i.e., in the form of wages. This, I think, is a terrible error for a Marxist to make; completely unforgivable. By ignoring money’s function as exchange value, Moseley has unknowingly sided with capital against wage labor.

In the capitalist mode of production, money embodies the moving contradiction that Marx defines a capital. Its movement as money expresses the movement of simple values, but, at the same time, the movement of self-expanding value. There are not two different movements here, but only one: money. As Moseley correctly argues, Marx does not propose two systems moving side by side, but only the singular flows of money. This singular flow of money, however, is the movement of a contradiction between the two determinations of money.

To give an analogy from quantum theory, matter presents as both a wave and as a discrete particle. The two determinations of matter exist simultaneously in the physical body of all matter. It is not, as some might argue, that matter is a wave or a particle, but both at the same time, a physical contradiction.

Likewise, money is not just inert value (commodity money) nor just self-expanding value (credit), but both together. The resolution of this contradiction is not to be found in a return to the gold standard nor in credit money, but in the abolition of both.

Advertisements