A response to Karl Thisell

by Jehu

This essay, by Karl Thisell, Capital Without Organs, raises two important questions about the state, money and capital in my writings on the subject:

“a) Is there really a necessity for money to be tied to the gold-standard for it to be a universal exchange commodity? Is it not rather so that it’s exactly that it’s character of universal exchange that makes it valuable as a commodity?

b) The very idea that money is today controlled by the state. This I believe to be an underestimation of the force of capital itself, and an idea with perhaps dire consequences for Jehu’s own theories.”

The writer says he does not intend to refute my argument but only intends to brainstorm, i.e., raise significant questions about my approach. I think the questions are important and tried to avoid addressing them for a few days until they had time to ferment in my head so to speak.


The first question concerns the nature of money itself: does it have to be a commodity? Could not the function of money as medium for circulation of commodities attach itself to a non-commodity? And wouldn’t this object have value solely as a result of serving in this function?

One possible way to address this objection is to distinguish between what Marx called exchange (labor) value from use value. There is no doubt that a valueless currency of this sort has a use value arising solely from its function as means of exchange. In Marx’s labor theory, however, this usefulness is not the same thing as having labor value, as possessing some definite quantity of socially necessary labor time.

With the debased inconvertible fiat currency in use today, the use value of money as medium for circulation of commodities is now completely separated from the labor value of money as the independent embodiment of a definite quantity of socially necessary labor time.

This is important to recognize because use value and labor value are not the same thing. Many objects we encounter every day have use value for us, but no labor value — the best example being virgin land or water. And Marx gives a tongue in cheek example of an object that may have exchange value but no use value: personal honor — if my honor is for sale, it obviously has no use for anyone.

It is not difficult to imagine a situation where the use value of money becomes detached from its labor value in the form of inconvertible fiat. However, Marx adds the caveat that should this fiat become detached from commodity money, prices would no longer have any socially recognized standard by which to measure the labor values of commodities.

The first chief function of money is to supply commodities with a material for expression of their labor values. The second is to supply commodities with a medium for circulation. Today, these two functions have now devolved on different objects — gold (i.e., commodity money) and an inconvertible fiat. There is no definite relation between the first function of money and the second function of money once the currency has been debased from the commodity.

My reading of Marx is that the fiat still serves in the function of medium for circulation of commodities, but this function cannot give it any labor value.

Now, contrary to Marx’s theory, it may shown that inconvertible fiat has exchange value solely arising from its function as means of exchange, but this must be proven. Marx did not think it did and directly addresses the issue in chapter 3 of Capital.

Neoclassical theory is founded on the assumption that commodities have value because of their usefulness, not their labor times. It follows from this that economists believe money in its function as means of exchange expresses the usefulness of commodities.

This is bourgeois economics, not Marx’s theory.


The second objection raised in the essay raises an important point: can the state control money? Let me say at the outset that the state cannot control money, since money is determined by society.

This is one of the reasons why I raise the question of whether inconvertible fiat (modern money) can be called money in Marx’s sense. By money, or ‘modern money’, bourgeois simpletons refer only to the currency controlled by the fascist state. They either conflate money with this currency or ignore money altogether and only address fiat.

Further, the bourgeois simpletons conflate money with currency, but they also conflate both money and currency with capital. Even if we grant that the state controls fiat currency, this by no means implies it controls money, nor does it imply the state controls capital.

I have at times been unclear on this point in some of my formulations and can only apologize for this. I am learning myself as I write.

To be clear on Karl’s second objection: the state doesn’t control capital, capital controls the state. The policies of the state are no less determined by the mode of production than are the business practices of any private capital.

I hope this clears the issue up for the author of the essay and apologize for any misunderstanding on the point.

That the state becomes the manager of the national capital does not imply the state determines the operation of the mode of production; rather, it implies the opposite: the state itself becomes subject to the forces of the world market and must eventually succumb to them. On this basis we can confidently predict the demise of the state resulting solely from the operation of the mode of production alone.

Even if the proletarians do not put an end to the state, the development of the forces of production bound up with capital will.


Final Note: Let me at this point answer the objection that “nothing is correct for the simple reason Marx said so”.

We are talking about Marx’s theory here, not someone else’s theory. An accurate restatement of Marx’s theory is essential if we are using Marx’s theory to solve a problem or answer a question. If you want to invent another theory or use someone else’s theory, this is perfectly fine. However, if you expect to reach the same results as Marx you need to accurately restate his theory.

This fetish in academia of not directly quoting Marx is just that: a fetish, adopted from bourgeois simpletons. If you say Marx said one thing, but I find Marx said another thing, I am going to quote Marx at you and it will be correct precisely because Marx said it and for no other reason. That does not mean Marx is correct and you can try to disprove him, but it does mean Marx’s theory is what he wrote, not something else.