Marx's Concept of Money: The god of commodities

242 Pages·2005·1.51 MB·English

MARX’S CONCEPT OF MONEY
Money is one of the most significant social facts linking all people today and Marx is
widely acknowledged as the nineteenth-century thinker with the single greatest impact on
social developments in the twentieth century. This study links the two in an examination
of Marx’s unique commodity theory of money.
Anitra Nelson places Marx’s theory of money within the wider context of his
philosophical and political as well as economic thought. In particular, she links Marx’s
concept of money with some of his other key concepts, such as ‘alienation’ and ‘abstract
labour’. Offering a comprehensive survey of Marx’s writings on money, Nelson
concludes by reviewing commentaries and contro-versies on the subject since his time.
Marx’s Concept of Money benefits from a broad interdisciplinary approach, examining
an economic concept from historical, sociological, philosophical and political
perspectives. This much-needed work makes an important scholarly contribution to the
recently rekindled debate around Marx’s theories of value and money.
Anitra Nelson is a Postdoctoral Research Fellow at RMIT University, Melbourne,
Australia, investigating models for ecologically sustainable development and the
difficulties of pricing the environment. She researched her PhD in the Philosophy
Department at La Trobe University after gradu-ating with first class honours in History
and Latin American Studies from the same university. She has taught Sociology,
Anthropology, Political Studies and Latin American History through film.
ROUTLEDGE STUDIES IN THE HISTORY
OF ECONOMICS
1 ECONOMICS AS LITERATURE
Willie Henderson
2 SOCIALISM AND MARGINALISM IN ECONOMICS 1870–1930
Edited by Ian Steedman
3 HAYEK’S POLITICAL ECONOMY
The socio-economics of order
Steve Fleetwood
4 ON THE ORIGINS OF CLASSICAL ECONOMICS
Distribution and value from William Petty to Adam Smith
Tony Aspromourgos
5 THE ECONOMICS OF JOAN ROBINSON
Edited by Maria Cristina Marcuzzo, Luigi Pasinetti and Alesandro Roncaglia
6 THE EVOLUTIONIST ECONOMICS OF LÉON WALRAS
Albert Jolink
7 KEYNES AND THE ‘CLASSICS’
A study in language, epistemology and mistaken identities
Michel Verdon
8 THE HISTORY OF GAME THEORY, VOL 1
From the beginnings to 1945
Robert W.Dimand and Mary Ann Dimand
9 THE ECONOMICS OF W.S.JEVONS
Sandra Peart
10 GANDHI’S ECONOMIC THOUGHT
Ajit K.Dasgupta
11 EQUILIBRIUM AND ECONOMIC THEORY
Edited by Giovanni Caravale
12 AUSTRIAN ECONOMICS IN DEBATE
Edited by Willem Keizer, Bert Tieben and Rudy van Zijp
13 ANCIENT ECONOMIC THOUGHT
Edited by B.B.Price
14 THE POLITICAL ECONOMY OF SOCIAL CREDIT AND GUILD SOCIALISM
Frances Hutchinson and Brian Burkitt
15 ECONOMIC CAREERS
Economics and economists in Britain 1930–1970
Edited by Keith Tribe
16 UNDERSTANDING ‘CLASSICAL’ ECONOMICS
Studies in the long-period theory
Heinz Kurz and Neri Salvadori
17 HISTORY OF ENVIRONMENTAL ECONOMIC THOUGHT
E.Kula
18 ECONOMIC THOUGHT IN COMMUNIST AND POST-COMMUNIST EUROPE
Hans Jurgen Wagener
19 STUDIES IN THE HISTORY OF FRENCH POLITICAL ECONOMY
From Bodin to Walras
Edited by Gilbert Faccarello
20 THE ECONOMICS OF JOHN RAE
Edited by O.F.Hamouda, C.Lee and D.Mair
21 KEYNES AND THE NEOCLASSICAL SYNTHESIS
Einsteinian versus Newtonian macroeconomics
Teodoro Dario Togati
22 HISTORICAL PERSPECTIVES ON MACROECONOMICS
Sixty years after the ‘General Theory’
Edited by Philippe Fontaine and Albert Jolink
23 THE FOUNDING OF INSTITUTIONAL ECONOMICS
The leisure class and sovereignty
Edited by Warren J.Samuels
24 TRADITION AND INNOVATION IN AUSTRIAN ECONOMICS
A Mengerian Perspective
Sandye Gloria
MARX’S CONCEPT
OF MONEY
The god of commodities
Anitra Nelson

London and New York
First published 1999
By Routledge
11 New Fetter Lane, London EC4P 4EE
This edition published in the Taylor & Francis e-Library, 2005.
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© 1999 Anitra Nelson
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage
or retrieval system, without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Nelson, Anitra.
Marx’s Concept of Money: The god of commodities/Anitra Nelson.
p. cm.
Includes bibliographical references and index.
1. Marxian economics. 2. Money. I. Title.
HB97.5.N427 1998
335.4’1–dc21
98–8109
CIP
ISBN 0-203-45128-7 Master e-book ISBN
ISBN 0-203-75952-4 (Adobe e-Reader Format)
ISBN 0-415-18200-X (Print Edition)
CONTENTS
Preface vii
Acknowledgements x
Abbreviations xi
1 Introduction: The context of Marx’s ‘money’ in brief 1
2 An alienation theory of money 4
3 Monetary system, credit system, crisis 19
4 The Grundrisse 35
5 A Contribution to the Critique of Political Economy 68
6 Money and the advance of capital 101
7 The money commodity, commodity fetishism and scientific dialectics 132
8 Conclusion: Marxian responses to Marx’s ‘money’ 162
Notes 181
Bibliography 206
Index 219
PREFACE
Marx was a nineteenth-century political intellectual; he was not bound by any of 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 simply from one of those perspectives his work loses
much of its richness and original message. At least, this view seems borne out in this
investigation of Marx’s concept of money. Marx’s theory of money is definitely not just
an economic theory. Marx was an anti-economic heretic; he was both scholarly 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. This study, then, is interdisciplinary; it focuses on an
economic concept from historical, sociological, philosophical and political perspectives
in an effort to explain Marx’s unique commodity theory of money.
Chapter 1 is a very brief introduction to the broader intellectual context within which
Marx developed his rarefied concept of money. Aristotle’s speculation on money,
developed in opposition to Plato’s, raises fundamental issues concerning market
exchange. The immediate theoretical context of Marx’s thinking has three sources:
British political economists, the predominantly French Utopian socialists and German
Hegelian and Young Hegelian philosophers.
Chapter 2 begins the study of Marx’s work in chronological order, looking at
significant passages on money written between 1843 and 1846. Marx offered what might
best be referred to as an ‘alienation theory of money’ at this stage. It had very little
strictly economic content and reflected the philosophical and social content of Marx’s
early works. These thoughts on money set the context for what ultimately appeared as a
rarefied but intriguing ‘theory of the money commodity’.
Chapter 3 covers works in the pre-Grundrisse period, including and subsequent to The
Poverty of Philosophy. At this stage Marx seriously started to consider the technical
details of money; he commented on contemporary debates concerning the supply and
regulation of money by banks and the government, and the role of money in price
formation and crises. However there is little evidence of his beginning to formulate a
concept or theory of money of the kind that was presented in the Grundrisse.
Chapter 4 concentrates solely on the Grundrisse, where Marx first formally elaborates
the theory of the money commodity. The political context of the development of his
concept of money is delineated and matters involving the contribution of Hegel’s
dialectical method are introduced.
Again Chapter 5 focuses on one work, A Contribution to the Critique of Political
Economy, where more strictly economic issues are raised. Since Marx’s theory is as fully
developed as it will ever be in this version, some basic difficulties in Marx’s theory of the
money commodity are discussed. Evolving out of his alienation theory, ‘money’ is
closely connected with ‘abstract labour’ and ‘value’. Consequently what is problematic in
both these latter concepts is problematic for the concept ‘money’, and vice versa.
In Chapters 6 and 7 the chronological order breaks down. Marx’s concept of money is
not initially presented as a theory of capitalist money, but rather one that applies to all
commodity producers. In A Contribution to the Critique of Political Economy, Marx
generally ignores specifically capitalist monetary and financial matters, and gives
examples of simple commodity production instead. This is the context in which his
theory is assessed in Chapter 5, and it proves to be problematic. Chapter 6 draws on many
works mainly written in the 1860s, like the economic manuscripts of 1861–63 and drafts
of what became Capital II and III under Engels’ editorship, to illustrate the various ways
in which Marx’s concept of money remains problematic when the mode of production
being analysed is explicitly capitalist.
Chapter 7 concentrates mainly on the version of Marx’s theory of money that appeared
in Capital I, illustrating how Hegel’s work contributed in various ways to Marx’s unusual
concept of money. Not only Hegel’s dialectical method, but also certain passages on
‘measure’ from the part on ‘Being’ in the Logic, and those on ‘force and understanding’
in the Phenomenology of the Spirit, seem to have provided ideas that Marx adapted for
his novel theory of money. By utilising various frameworks suggested by Hegel’s work
Marx apparently thought that his concept of money was more sound than the theories of
his political opponents, the bourgeois economists and Utopian socialists.
References to significant secondary sources are scarce in all the chapters on Marx’s
work. This material is reserved for discussion in the last chapter, which concentrates on
theoretical comments, questions and debates which have arisen in Marxian circles as a
consequence of Marx’s theory of money. Unlike his theory of value, Marx’s concept of
money was not subjected to much scrutiny or challenge until recently. Hilferding tried to
update it earlier this century and De Brunhoff wrote a sympathetic analysis in 1973.
However, more recently serious challenges have been made to Marx’s theory of money,
mainly from what is sometimes referred to as the ‘Rubin School’. The Rubin school
stress the ‘abstract labour’ aspect of Marx’s law of value, which distinguishes them from
the orthodox ‘embodied labour’ approach. Subsequently several reinterpretations and
even extensive revisions of Marx’s theory of money have been attempted. These attempts
to make a Marxian theory of money consistent with less orthodox interpretations of
Marx’s law of value, and also more obviously relevant to late twentieth-century
capitalism in which credit money reigns supreme, have steered recent theorists towards
nominalist credit theories of money.
But Marx’s theory of money is clearly a commodity theory of money, and he was
opposed to nominalist theories of money in general. Given that the recent literature
reviewed in Chapter 8 raises legitimate concerns and definitely expands on themes in
Marx’s own work, it seemed most pertinent when I started this study to ask exactly why
and how Marx developed what appears to be a rather strange theory of money. In many
respects, especially economic ones, a credit theory of money seems rational, given
Marx’s theoretical concept of the ‘value-form’ and the empirical reality that credit money
dominated British currency even in Marx’s day. Therefore the question which drove this
study and remains the focus in every chapter evolved out of current debates, even if it
was not centred clearly in them. The aim of this study was to explain why it was that
Marx chose a commodity theory of money, a theory of the money commodity, rather than
a nominalist or credit theory of money.
I end this preface with a peculiarly personal note. I began this study both because I
believe that money is one of the most mysterious social facts today and because I
sympathised with a Marxian perspective. I adopted that perspective without a thorough
knowledge of, and belief in, the labour theory of value. In the course of this study I
developed fundamental criticisms of that theory. However I remain convinced that a
humane and environmentally sustainable world is only achievable with the widespread
adoption of the socialist values of sharing and caring. I do not think that Marxism,
communism or socialism stands or falls on Marx’s concept of money, nor indeed on the
labour theory of value, however important economists may make them. Although I regard
the ethical rather than the so-called materialist identification of labour and value as most
significant, I join Marx in opposing monetary reforms proposed by utopian socialists in
his day and my own. Like him I believe that a real revolution requires dethroning money
and overturning the state.
Despite the conclusions I have reached, I maintain a strong and even deeper respect
for the rich and complex thought of Karl Marx. Though flawed in certain respects, the
breadth and depth of his thinking on money is impressive even today. Having read many
and various theories of money in order to study his in a broader context, I am very aware
of the paucity of ambitious and sound analyses in this area. The reasons for this otherwise
surprising fact are fairly clear; as Marx’s biographer Mehring observed ‘how should a
world which had enthroned money as its God aspire to understand it’?1