[Marxism] Marxist perspective on money

James Zarichny zarichny at yahoo.com
Wed Oct 12 23:57:33 MDT 2005

Wayne wrote

“Marx seems adamant on the issue that money is really
a commodity - that is, gold or silver as the
money-commodity is congealed labor-time, in his
phrasing. Does the fiat system of money change this?”

My comment:

This raises the whole question of the relationship
between commodity money and fiat money that was so
intensely debated in America more than half a century
ago.  This was my baptism in political struggle and I
flip-flopped three times on the issue.

This issue was at the core of the debate between
Browder and Foster.  I only partially understood some
of the details of the debate,  But I will try to
remember them.

Foster argued that at a most basic level, money had to
be commodity money. A unit of money had to be defined
as a fixed quantity of some commodity such as gold or
silver or something else that had a specific amount of
labor embedded in it.  Paper money, he argued, was
only a convenience.  It represented a fixed amount of
some specified commodity.  For example maybe $32..
could be defined as an ounce of gold.  For this
reason, Foster argued that Keynes’ ideas were
unworkable because Keynes was talking about credit
money, about breaking the link between paper money and
a specified commodity.  Foster argued that Keynes’
ideas were unworkable because they allowed for a
psychological foundation for money.  Foster claimed
that money had to be defined in a materialist way, or
it would lose all value in a short time.  It could
only survive if it was a fixed quantity of some

Browder argued that Keynes’ ideas could hold up for at
least a generation.,  that  money could take a
generalized psychological form as credit money and did
not necessarily have to be tied to a specific

Foster denounced  Browder’s view as a form of
idealism.  Foster believed that  his  own approach was
the only materialist way of looking at it.  Because
money could only be commodity money, he was able to
develop a thesis of severe economic collapse within
less than ten years after the end of World War II.
Essenttially. Foster argued that workers were not paid
enough to purchase all the goods they produced.  The
capitalists would stop producing because the goods
were piling up unsold in the stores.  The next
depression would be worse than the Hoover depression..
 Socialism in America would be on the agenda in the
short term.  But to get it, America needed a
disciplined party capable of leading the working

Browder believed that Keynes’ ideas were workable for
at least a generation..  He felt that America would
develop a long boom of prosperity.   At the same time,
the labor movement would be strong enough to raise
living standards well above the pre-war level..

Browder  also argued  that the current psychology of
the  American  workers left them unprepared for a
socialist alternative.  He argued that before we could
have socialism, we would have to have unity of the
working class.   The main barrier to working class
unity was the Jim Crow system.  He concluded  that the
best form to carry on the  struggle for integration
would be a political association that included various
tendencies.  The time for a disciplined unitary party
was far in the future.

Because this was the first political struggle I was
involved with, my thoughts have often returned to it.
     Jim Zarichny

Yahoo! Mail - PC Magazine Editors' Choice 2005 

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