Marking the release of Marxist Monetary Theory: Collected Papers by Costas Lapavitsas, I was delighted to be the discussant in the ‘Thinking about Money’ Symposium launching it at SOAS, University of London (18 January).
The Wolfson Lecture Theatre (Senate House) was full and lively as Costas led off the afternoon by putting Marx’s analysis of ‘the universal equivalent’ to work in explaining money today in the current conjuncture and its role in overthrowing capitalism. His emphasis was more on the forms than the functions money has taken: commodity money (gold), simple fiat money, credit money, central bank fiat money and electronic monies.
Costas foregrounded four ‘stylised facts’ of our current system: first, legal inconvertibility after 1971–1973; second, the quantitative dominance of credit money within the sphere of domestic money; third, the qualitative significance of legal tender as central bank created fiat money; and fourth, the pre-eminence of inconvertible legal tender from a small number of central banks forming international money. Furthermore, Costas made a significant comparison between Bitcoin and gold.
Enter Geoffrey Ingham, who has locked horns with Costas in public debates on the character of money — Geoffrey with his credit theory of money versus Costas with his commodity theory of money, representing the two major streams into which monetary thought tends to flow. In a complementary way, Geoffrey argues that money requires an authority but not necessarily a state, as contended by those with a state theory of money.
Although Marx’s monetary work is generally identified within commodity theories of money, his conceptualisation of ‘commodity’ makes it a unique theory of money that I refer to as ‘the theory of the money commodity’. Consequently, interpretations and debates of Marx’s thoughts on money and those developed from them are commensurately complex.
Geoffrey’s entrenched position emphasises the contingent character of money as a claim on future commodities, a position that makes even gold as money a non-commodity, a symbol or credit with which to buy commodities (whether means of production or consumables). This position focuses on the social meaning of money in the future for purchasers and purchases.
Conversely, the focus of those with a commodity theory of money is on grounding its value and money’s specific use value as the independent form of money/exchange value. This is not to suggest value is a thing but that value evolves within a specific pattern of social relations as activities, as with digging for gold and gold being exchanged for commodities.
The book ranges on topics from art to interest rates, from the gift — as opposed, or compared with, the commodity — to ‘financialised capitalism’, and the emergence of money. Louis Moreno centred his commentary on Costas’s introductory chapter of ‘Money as Art’ and his perspectives on ‘the social basis of money power’ — drawing on Marx’s early works, which develop a veritable alienation theory of money. Louis highlighted the ways in which Costas’s work shows that money has very real roles in everyday life: ‘Marx’s economic theory has no use-value unless it provides something of use for the non-economist’.
Indeed, the ‘non-economic’ is a leitmotif in these papers of Costas’s, and of great interest in revealing a methodological challenge for both economists and non-economists to separate and either contradictorily or dialectically integrate the two. One of Marx’s remarkable intellectual achievements was to highlight the opposition between the use value and exchange value of the commodity in ways that can be made to resonate in any analysis of the rest of the ‘upside-down’ world of capitalism.
Where are the boundaries between the economic and non-economic in commodity exchange and production for trade and in gift exchange and the gift economy? How far does the market and the culture of monetary calculation penetrate, dominate and subvert non-market activities, values and relationships? What is potentially and really active and passive in these instances relies on intent and will, the revolutionary seed in the flower of capitalism, the death knell the child represents to the parent.
Engelbert Stockhammer is a post-Keynesian whose analysis centres on the endogeneity of money creation, its nature as a promise to pay, its origins in the state, and evolution in a public-private form. Playfully, Engelbert’s slideshow had smiley bullet points on class struggle, exploitation and critical/historical/mode of production approaches but a glum-face blaming the labour theory of value and its commodity money for miscommunication between Marxist and non-Marxist economists.
As such Engelbert’s talk emphasised those key connections between thinkers in Post-Keynesian and Marxist traditions alongside a deep chasm. For me, the attention Post-Keynesians have paid to the practical processes of money creation and functions is their great intellectual contribution. As Costas points out in this new book (15): ‘There is an ideology of money in capitalist society that is similar to religion in both its falseness and necessity.’
I have a firm opinion that everyone on the Left needs to better acknowledge the worth of understanding money as a concept and set of processes, in order to better appreciate money as a weapon of control and to actively resist the power of money to substitute for substantive democracy and genuine governance.
Internationally, money is remarkably potent. In his talk, Costas emphasised it as ‘a lever for hierarchy among states’; our global history cannot be told without reference to the British pound, the US dollar and, more recently the €uro — as shown in the sorry story of Syriza’s reign in Greece. So, too, it becomes ‘a mechanism to entrench commercial advantage’ and ‘exercises power over entire societies through fear and identity’.
Thus, he concluded: ‘Money cannot overthrow capitalism.’
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