RE: Re: RE: Re: The exchange value of currencies

["Devine, James" <jdevine@xxxxxxx>]

> Looking for where the money of surplus value comes from, Marx answers :
gold producers (B.2, addendum to 21th chapter). This means that he did not
envisage issuing money, but from an exchange against some gold production.
Is it not a gold standard?

I said that Marx _assumed_ the existence of a gold standard (because he
couldn't imagine hegemonic money of the sort we use now). The above doesn't
contradict that statement.

> As for Marx's value of money with respect to gold, it is nothing but
Locke's, that is to say the following quantity theory of money which is
highly controversial. Is it not?<

Obviously, most of Marx's ideas come from previous political economists and
not just from Hume (who developed quantity theory of money, not Locke). The
theory of money had developed a bit since Hume's day, producing the
controversy between the Currency school (following Hume) and the Banking
school (which did not). Marx clearly sided with the latter. However, there
are elements of the quantity theory in Marx, as seen in the fact that for
him an over-issuance of pounds could cause their devaluation relative to
gold. But his theory of money was unfinished, only a small part of his
project, and reflected the political-economic conditions of his time.

Of course, this tells us what we should already know: we should never let
Marx -- or any other individual -- do our thinking for us. Marx's ideas are
not some dogma, some set of formulas that can be applied to every situation.
Rather, they are ideas that might be used in the development of political
economy. Similarly, we shouldn't reject his _corpus_ because some of his
ideas were wrong, just as we shouldn't reject Newtonian physics simply
because Newton believed in astrology or searched for the "philosopher's
stone." (I don't remember which it was.)

By the way, the quantity theory of money is a bit like Newtonian physics: it
applies in very specific situations but fails in other situations. The
quantity theory applies best with countries with very poorly developed
financial systems if they are at full employment of resources.

JD