I am still looking for a good formulation of the idea that Washington is using the dollar to control all capital in the world market.
And it ain’t easy.
I think the elements of the basic argument can be found in Anitra Nelson’s, Claus Germer’s and Suzanne de Brunhoff’s chapters in “Marx’s Theory of Money“. The three together establish that insofar as labor theory is concerned the dollar is not money; doesn’t behave like money; and doesn’t serve any of the functions of money. At best the dollar can be considered a token of money with the caveat that tokens do not behave like money, nor do they fulfill any of the functions of money beyond that minimum required as medium for the circulation of commodities.
The first point is obvious: the dollar is not a commodity, nor does it possess anything more than a negligible value of its own. This fact is aggravated by such glaring problems as that a sheet of one dollar bills requires no less time for production than a sheet of twenty, fifty, or one hundred dollar bills. The problems is further aggravated by the instantaneous creation of any quantity of dollars at a computer terminal. (During the recent crisis, for instance, Bernanke showed the television audience that he simply created the currency to bail out the banks at a computer terminal.) This suggests not only is the labor time required for the creation of a dollar negligible, it is, in addition, indeterminant.
The second argument — the dollar does not behave like money — is equally easy to establish. In labor theory, the circulation of money is merely a reflex of the circulation of commodities. This reflexive movement is not the least bit true for any fiat currency at present, including the dollar. Although this might seem to be a small point, it is, in fact, quite significant, since it implies the dollar is not a medium of circulation. As medium for the circulation of commodities, money no more explains the movement of commodities than water explains the movement of fish. This argument, of course, does not deny that money, like water itself, is subject to forces that influence the movement of commodities, as water might for fish, but it suggests the effect on their movement is secondary. It is altogether the opposite with fiat dollars otherwise how could fascist state monetary policy exist at all?
The third argument is that fiat dollars neither can serve as measure of value nor standard of prices as money does in labor theory. I would argue that it is not as if these two core functions of money are separate: no money can serve as a measure of value if it cannot serve as a standard of price. Although as measure of value the function of money is merely an ideal one, this ideal function must be grounded in some actual relationship between the socially necessary labor time contained both in the money and in the commodity.
Assuming for the sake of this argument that these three problems of fiat currency are settled in labor theory, what then is fiat currency? I would argue 99% of the problem Marxist academics encounter with fiat money in labor theory is that they have no explanation for it if fiat dollars are not money. We are, in effect, dealing with an economy that functions entirely without money — which appears absurd. So far as labor theory is concerned, a moneyless economy is incompatible with capitalist relations of production. Since we are apparently dealing with a capitalist economy, the default theoretical position must be that fiat dollars are money unless proven otherwise. Read the rest of this entry »