Ron Press re money markets

Steve.Keen at Steve.Keen at
Thu Apr 6 14:19:23 MDT 1995

Ron Press recently posted:

|... commodity exchange....
|C-M-C and then M-C-M. And develops to M-C-M' where M'= M+/\M
|where /\M (Delta M) represents the concept of surplus value.
|My question is. In the money market we have M-M-M or -$-. Whence
|comes M' or /\M
|is there a qualitatively different system governing the money market

The answer, from the original horse's mouth, is yes: there is a
qualitatively different system governing money markets:
"What, now, does the industrial capitalist pay, and what is,
therefore, the price of the loaned capital?... What the buyer of
an ordinary commodity, buys is its use-value; what he pays for
is its value. What the borrower of money buys is likewise its
use-value as capital; but what does he pay for? Surely not its
price, or value, as in the case of ordinary commodities." (Marx
1894,  p. 352.)

Instead, its use-value is paid, and "Its use-value, however,
lies in producing profit" [Ibid., p. 355). Thus credit money is
by its nature set apart from reproducible commodities:

"It is lent as self-expanding value, as a commodity, but a
commodity which, precisely because of this quality, differs from
commodities as such and therefore also possesses a specific form
of alienation." (Marx 1861, Part III., pp. 457-58).

Marx extended this result to assets--factories, mines,
etc.--which are purchased or hired in order to generate a stream
of income (Ibid., p. 458-459; 1894, pp. 353-356). For example,
Marx chastised Ricardo for explaining the price of minerals in
situ on the basis of their "value", when no labor has gone into
their production. Marx points out that they therefore contain no
value--though they have obvious potential quantitative
use-value, determined by the expected sale price of the
estimated quantity of ore. Thus, if mining rights and the like
could be purchased, like commodities, for their cost of
production, they would be free. Hence as with loaned capital,
the exchange-value of assets is determined not by their costs of
production, but by their perceived use-value--that of being a
potential source of exchange-value:

"Ricardo never uses the word value for utility or usefulness or
"value in use". Does he therefore mean to say that the
"compensation" is paid to the owner of the quarries and
coalmines for the "value" the coal and stone have before they
are removed from the quarry and the mine--in their original
state? Then he invalidates his entire doctrine of value. Or does
value mean here, as it must do, the possible use-value and hence
the prospective exchange-value of coal or stone?" (Marx 1861
Part II, p. 249)


Marx 1861: Theories of Surplus Value, Progress Press edition
     1894: Capital Vol. III, Progress Press edition

Steve Keen

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