RE: Interest Rates, Inflation, Exchange Rates and Credit inBull A nd Bear Markets

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

You do not need to resort or even for a purely physical surplus of goods in
order to generate M'>M. Incidentally, M-C-M' describes the mercantile
circuit of exchange-not the capitalist sphere of exchange. The merchant buys
C from the home producer and sells it in a market for more than the merchant
paid the home producer. There is no transformation of the product.

In capitalism, we start with M and go to C, and then to C'. C' is a "new"
thing. Marx gives it a little Hegelian twist: C' aufgeheben (transforms,
overcomes, passes through to a new level of being) C. This happens due to
the nature of capitalist production where the production process is
continually revolutionized and Capital (in its liquid form) enters into
production (as opposed to mercantile exchange where capital in a liquid form
is not necessary for production. Hence, we do not need to make any
assumptions about whether nor not value comes from labor, about the rate of
surplus value-we only need a new product that can be sold for a profit in
the capitalist market. This new profit is in money form (M') and is liquid
and is reinvested in production.

While I am sharply critical of Marx on many other points, this is an area
where Marx comes very close to a modern Post-Keynesian view of money and
capital ( or rather, let me say, the non-horizontalist PK version). I know
that Steve Shaklian has done some work on this.

-----Original Message-----
From: William B. Ryan [mailto:william_b_ryan@xxxxxxxxx]
Sent: Sunday, December 03, 2000 8:00 PM
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: Interest Rates, Inflation, Exchange Rates and Credit inBull
And Bear Markets


1.  [Liu] http://csf.colorado.edu/forums/pkt/2000/msg02399.html

"...Alan, Randy Wray may not qualify as astute in your book, but he
does in mine.  He wrote me: 'Production starts with money and ends up
with net money...'"
-----//

Which is of course nothing more than a restatement of Marx's M-C-M'.
The inference is that capitalist production entails a monetary
"surplus" corresponding to a physical "surplus" that is "expropriated"
from the "value" added by "labor."  So we have endless metaphysical
discussions such as those that have congested the PKT list for the
past several days.  However, it can be demonstrated both empirically
and analytically that such a surplus does not exist nor has ever
existed since the commencement of the capitalist mode of production.
In an expanding economy capitalists in the aggregate (actually
entrepreneurs) are always disbursing more money (actually credit
broadly defined) than they are receiving back (in reflux) through
sales.  They nonetheless book a profit through the conventions of
double-entry accounting.

2. [McFarling] http://csf.colorado.edu/forums/pkt/2000/msg02397.html

"The VALIDITY of an axiomatic construct can only be challenged by
finding a logical flaw in the construct.  While that is the most
complete attack on the use of an axiomatic construct -- because if it
is invalid, it is useless -- it is not the most direct.  The most
direct is to attack the RELEVANCE of the construct..."
-----//

Exactly.

william_b_ryan@xxxxxxxxxxx


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