Academic journal article History of Economics Review

Marx's Theory of the Money Commodity

Academic journal article History of Economics Review

Marx's Theory of the Money Commodity

Article excerpt

Abstract Marx defines the commodity in a unique way. His theory of the money commodity is a unique commodity theory of money. It developed from a political critique of the utopian socialists' concepts of money, labour time and exchange value. Besides using Hegel's dialectical method, Marx also adapted certain ideas from his elaboration of 'measure' in the Logic to develop his concept of money. Similarly his framework for relating 'price', which appears in circulation, and 'value', the essential relation in production, can be compared with Hegel's passages on the 'force' and its 'manifestation' in the Phenomenology of the Spirit. These influences on Marx's thoughts on money appear in the Grundrisse but inform the final version of his theory of money in Capital I, too.

1 Introduction

Marx was a nineteenth century political intellectual unconstrained by the disciplinary rigour or specialisation insisted on by late twentieth century academia. Marx's writings can be studied as sociology, philosophy, politics, economics, history, even as literature, though if studied from simply one perspective his work loses much of its richness and original message. An interdisciplinary approach is especially pertinent to Marx's theory of money, which is definitely not just an economic theory. Marx was a scholar and a revolutionary. The development of his unique concept of money seems to have been strongly influenced by his background in Hegelian and Young Hegelian philosophy as well as by his political views. Certainly if looked at purely as an economic theory various aspects of it make little sense.

Hilferding ([1910] (1981) tried to up-date Marx's concept of money earlier this century and De Brunhoff wrote a sympathetic analysis in 1973 (English edn 1976). More recently serious challenges to Marx's theory of money have appeared, along with reinterpretations, and even extensive revisions such as the neoMarxian credit theories of Foley (1982) and Lipietz (1983). But Marx's theory of money is clearly a commodity theory of money. He was opposed to nominalist theories of money in general. 'Though Marx hinted at a theory of money as social symbol and at a theory of banks as creators of money', writes Bellofiore (in Bellofiore (ed.), 1998d: 213), 'the substance of his argumentation is that true money must eventually be a commodity'. Yet the necessity for a commodity theory of money is not convincing because, as Foley and Wray (in Bellofiore (ed.) 1998c: 266, 295 respectively) point out, there are parallels between gold standard and state credit systems and the solid materialism of labour lies equally well at the base of credit and commodity monetary systems (Ganssmann cited in Bellofiore, in Bellofiore (ed.) 1998a: xx). Given that recent literature--for a review, see Nelson (1997: chapter 8)--raises legitimate questions about and develops on Marx's work, it seems most pertinent to ask exactly why and how Marx created his rather strange theory of money.

Marx's theory of money is not a conventional commodity theory of money. True, for money as a unit of account or measure of value, he argues the need for a commodity standard, the value of which is determined by the costs of production. However, he defines the commodity in a unique way; the commodity is understood in philosophical or social terms as alienated human being, labour. Marx also borrows from nominalist theories in that he describes the means of circulation as a symbol. But he doesn't regard money primarily as a means of circulation; Marx gave priority to money as a measure of value. This priority is related to the importance of his law of value for his economic analysis. To distinguish it from more conventional approaches and to emphasise his identification of the necessity of money with abstract alienated labour, Marx's commodity theory of money is best referred to as 'the theory of the money commodity'.

Marx's 'money' evolved as part of a critical analysis of capitalist society in the literary context of British political economy, utopian socialism and Hegelian philosophy. …

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