An eighth comment on Ricci’s strange argument on MELT …

In this monograph, Ricci doesn’t appear to realize what it is he must explain to his reader. He really has no idea what question he needs to answer.

Instead, at one point we are forced to endure his silly take on David Graeber’s silly take on the alleged history of money as debt, in order to establish that anything can be money:

“Modern anthropological research has shown that the medium of circulation in primitive societies was represented by precious objects of various kinds, having the character of rare and non-reproducible goods, such as pearls, fish teeth, salt, or shells. In this case, the exchange ratio of this “primitive” money, acting as an intermediary in trade with other social groups, resulted from its scarcity rather than from the costs of production in terms of human labour. In the history of humankind, the function of the medium of circulation has been played by the most varied commodities selected on the basis of their material qualities (durability, divisibility, homogeneity) or even their symbolic, social, and sometimes magical properties.”

Notice, here, that Ricci conveniently ignores the primary function of money, described by Marx, to express the value of commodities. He promptly skips over this primary function of money and moves directly to its secondary function as medium of circulation.

Having confined his observation solely to the function of money as medium of circulation, Ricci then appends his own observation that,

“In capitalist societies, in which a disenchanted and utilitarian vision of the world prevailed, the purely material and physical properties of the object predominated, and therefore, the function of medium of circulation was historically assumed by precious metals. Gold became the universal intermediary of exchanges in the early stages of capitalism on the basis of a process of natural selection, replacing all other commodities competing for this function because of its peculiar physical characteristics.”

Following which, Ricci then makes a startling assertion:

“When this happened, the prevailing use of gold served as the general equivalent of exchanges rather than as a luxury good. The simple social act of placing a commodity as the medium of circulation, universally accepted on the market, determines at the same time its use value. Consequently, even an object lacking any use value of its own acquires the use value of general equivalent when it is socially accepted as money.”

So, the use value of money is reduced to a mere medium of exchange. And what happened to its primary function, that of expressing the value of commodities? Is this function, identified by Marx in his theory as the “first chief function of money”, lost completely? Or, is it rather that Ricci believes that such a function never existed in the first place?

No matter.

As a result of the reduction of the use-value of gold to mere medium of circulation, and contrary to Marx, Ricci tells us that gold itself now acquires a price:

“Moreover, when an object with a use value is not freely and gratuitously available, it also becomes an object of market exchange.”

So, there you have it:

1. As medium for circulation of commodities, anything can be, and has been, money;
2. in the capitalist mode of production, a luxury item, precious metals, became medium of exchange because of their peculiar properties;
3. this transition reduced gold from luxury item to a mere medium of circulation;
4. as medium of circulation, gold, a thing with value, could be replaced by a token of itself, a thing having neither value nor use-value but to serve as a replacement for gold as medium of circulation;
5. the displacement of gold from its function as medium of circulation (again, what happened to that other function?) by its token led to gold acquiring a price denominated in its token.

Ricci concludes:

“For these reasons, it was possible to replace gold as the medium of circulation with a legal tender currency, fiat money, whose forced circulation is socially imposed by the state by virtue of a law obligation. Fiat money is a commodity that appears ex novo on the basis of a state decision and replaces gold in the social monopoly of money. Its use value and exchange value are created in the very act of its institution as money, and outside of this function, it is devoid of any use value and exchange value. When this happens, the function of money as medium of circulation, previously performed by a capitalist commodity such as gold, is now performed by a non-capitalist commodity such as fiduciary money devoid of intrinsic value issued by the State in a monopoly regime.”

Bravo! Bravo!!

This is really an amazing performance by a guy who is a proven innovator.

Um, only … uh, I hate to ask this, to throw cold water on this performance … but …

Okay, I’m just going to blurt it out: who cares about this real or imagined history of money? I mean, the really important question we all want to know is what happened to that other function of money that Ricci prefers to ignore.

Why, after serving to express the value of commodities for millennia since ancient Mesopotamia, did all the commodity monies disappear from the world market after 1929?

Can you just explain that, Ricci?

What does modern anthropology and your ‘anything can be a medium of circulation’ theory tell you about that shit?

If anything can be money, why is it that the one thing that has been money for 5,000 years no longer can be money anywhere on this planet?

Since this change does not result from the function of money as medium of circulation, is it just possible that it might result from that other function, missing from this fascinating discussion: namely, to express the value of other commodities in an exchange?

Now why would that be?