Chris Wright: “… the turn away from commodity money is the monetary expression of the crisis of valorization of capital”

by Jehu

Chris Wright offered this comment to my post, You can’t beat UBI without a real alternative. As a restatement of my argument, I find it far more succinct and intelligible than my own writing. I print it here for readers of this blog to see for themselves.


Hey Jehu,

Do I have this correct below, as far as it goes? I am trying to tease out in my own head why whether or not fiat/nominal/credit money can function as measure of value (which is what fiat currency cannot do, even though it can perform the other functions of money as far as I can tell) matters. You clearly draw theoretical and political conclusions from it about next steps (reduce the working day), what communism is (free time, that is, a world without labor or money, though based on some recent arguments, one has to investigate “labor” as a concept rather carefully, since if it equates with productive activity, then we will never be free of labor despite accelerationist fantasies, though we may well be free of commodified labor or servile forms of labor, that is, productive activity as form of domination), and why orthodox Marxism and the Left in general are functionally apologists for labor and/or money. I do disagree that they are “charlatans” or “liars”, but rather that they have ideological commitments, desires for political effectivity (the militancy/activist gig), and a material existence that strongly lends itself to labor ontologies, market socialism, etc., just like most of the rest of humanity when it comes to thinking this through, they don’t need to lie. they just need to be far more normal and critical than they would like to imagine themselves to be. And frankly, those of us who do not subscribe to such things appear to be crazy. Why wouldn’t we?

Okay, sorry, too much preface.

You argue that we have to ask ourselves: Can fiat currency replace commodity money in the measurement of value as Marx argues real money must do (otherwise it does not act as money and is merely an arbitrary symbol, which for Marx money simply cannot be reduced to)? Your answer is that it cannot, not because you are a “gold bug” and think everything would be okay if we went back to the gold standard and fiscal responsibility, but because the turn away from commodity money (gold or otherwise) to fiat currency is the monetary expression of the crisis of valorization of capital that finds one of its turning points in the 1971-3 conversion to inconvertible paper money, but which had intimations as early as the move to the Gold Dollar standard and Bretton Woods. Given the necessity of money to generalized commodity society (c.f. “The Commodity Nature of Money in Marx’s Theory”, Claus Germer, in Marx’s Theory of Money, Fred Moseley ed., Palgrave 2005 for a clear defense of the necessity of commodity money in Marx), whether or not one has a value-form notion of value, something akin to Postone and Kurz, or an old-fashioned embodied labor theory of value, a crisis of the money-form indicates a crisis in the essence of capital, not merely the surface. Or to put it another way, if the surface of money, the appearance of appearance, is in crisis, then the crisis is fundamental in nature.

The move to IPM reflected a necessary move in relation to the crisis of valorization, in which the superfluity of labor power for the production of material wealth is coming into fatal contradiction with labor as the social form of wealth. It was going to be impossible for gold or any commodity money to represent the total claims to wealth because the amount of “fictitious capital” associated with financial transactions, military production, and other kinds of unproductive labor was increasingly far beyond the amount of value being generated by productive labor. As a result of this, pegging currencies to commodity money would directly express this crisis, but not merely express, it would exacerbate it by causing the total system of payments to become paralyzed.

Thus, currencies had to “float”, that is, become dependent on the stability of states (initially and largely still the stability of the United States and hence the dollar because ot its central role as world currency thanks to its role after WWII and in the purchase of primary commodities, such as oil), who had the ability to print currency on demand to meet quantitative currency requirements, whereas they could not simply add to stocks of money commodity (gold in this case). [Why not? Why not just dig up more gold? Why not go to bimetallism? Why not platinum? Why not simply choose suitable commodity as money commodity? What made commodity money unable to accommodate the crisis of growing quantities f fictitious capital?]

However, this relies on a fundamental irrationality even from the perspective of capital: currency ceases to function as a measure of value, which it had as commodity money, just as with a a 1lb metal weight. That is, a pound of metal that exists only as measure of other “things” with weight, not as a metal object as such, though if it were not also a thing with weight, it could not serve as an objective measure of weight. Same with commodity money. Fiat, not being related to a money commodity, which could be gold, silver, etc., it honestly matters less than that money be a commodity, has no capacity to function as “measure of value”, even as it can function as means of exchange and circulation.

Why should this matter?

Firstly, for everyday people it doesn’t matter.

Secondly, capital seems to get along just fine as is. However, the argument would have to be that not only does this indicate a crisis, but also that it masks the crisis on one level and also exacerbates it on another.

The masking matters insofar as not understanding the nature of the problem precludes grasping the actual situation of capital and the Left then simply expresses the reigning ideology of financialization and is as irrational as ‘economics”. This means that the Left cannot perform the only possible useful task it has, which is to grasp the conditions of the possibility of communism, instead of being defenders of shortening the working week and following on the undermining of money and value, they support 1) more jobs (arbeit mach frei) and 2) Universal Basic Income, which reinforces the validity of more money as solution. Rather, for Jehu the crisis of commodity money indicates that capital itself is bringing about the end of jobs and money and instead of opposing it, we should embrace it with radical conclusions, to the extent that it matters at all what the Left embraces.