Re: Exchange value of currencies

[Chris Burford <cburford@xxxxxxxxxx>]

At 18/04/02 12:35 +0200, RK wrote:

> > The exchange value of currencies is the measure of the relative organic
> composition of capital.  Chris Burford
>
>
> I suppose that everybody had understood the sentence this way. There is
> something true in this sentence, but it does not make a Marxian theorem.
>
> In B.3, Ch.35, II, Marx defines the rate of change of currencies as the
> measure of the moves on the international market of metals.


Although I think politically we share a dislike of US dollar hegemony, I do
not quite find the reference you imply. Could you please quote the
sentence? Am I looking in the wrong part of Section 2 - the first part only -?

> Additionally, from a Marxian point of view, the association of rate of
> change with relative org. comp. would lead to the conclusion that the
> higher rate of org. comp. goes hand in hand with the lower currency value,
> as the relative org. comp. reflects the relative productivity, and as
> productivity, according to Marx, tends to depreciate goods (and metals).
> Now, it is more accurately the contrary, as a higher productivity means a
> faster capital turnover, tending to imbalance the flows of capital coming
> in and going out, what is daily determining the rates of change in a
> system of flexible changes.

I am not sure that it is to do directly with the speed of capital turnover.
As Engels puts it at the beginning of the Chapter and Section you cite (v3
Ch35 s2)

"The barometer for the international movement of the money of metals is of
course the rate of exchange. If England has to make more payments to
Germany than Germany to England, in London the price of the mark as
expressed in sterling rises, while in Hamburg and Berlin the price of
sterling expressed in marks falls. If this surplus of English payment
obligations towards Germany does not balance out again, for instance
through a predominance of German purchases from England, the sterling price
for bills of exchange in marks on Germany must rise to a point at which it
pays to send metal from England to Germany in payment - gold coin or
bullion - instead of bills of exchange. This is a typical course of events."

This is actually closer to the argument you put above about an "imbalance
of the flows of capital coming in and going out which is daily determining
the rates of change in a system of flexible changes."

At the beginning of that sentence you refer to higher productivity. I agree
with this, and of course it is close to my old communist friend's
proposition about a higher organic composition of capital.

However he admitted that he did not think that Marx had ever directly said
what he was getting at. Also I have to say that I do not see the speed of
capital turnover within a country, being an intermediate variable between
its increased productivity and the relative exchange rate with another
currency.


> the notion of relative org. comp., that is of relative productivity, was
> discovered by Marx first (B.3, 45th ch.).

Could you check that reference?  In my English edition that chapter is
Absolute Ground Rent.


> Thanks to that, I have got the idea of an economic chain structured by an
> unequal distribution of productivity, and it runs.

Yes, I think we are agreed that the unequal distribution of productivity
has a very important link with the unequal exchange and movement of modern
currencies. Exactly how the variables interact is a bit complicated, as is
the process of studying or restudying how Marx and Engels saw it in their day.

Nevertheless the examples they give are pretty recognisable today.


Thank you for persisting with this "valuable exchange"

> Have a good day, Chris
>
> RK


Chris