chap3 by yaofenji


									Capital, Chapter Three:

 Money, or the Circulation of
Money as Power
 Defetishize reading
 Class context
 Money as power
     for capital
     for workers
Structure of Chapter
 Money as Measure of Value
 Money as Standard of Price
 Money as Means of Circulation
 Money as Store of Value (or Hoard)
 Money as Means of Payment
 World Money
Money as Measure of Value
   Pre-sale: C - M(?) - C(?)
     “Price”is hypothetical, asked for but not paid
     Use value C has been produced, but has not
      found an expression of value
   After-sale: C - M - C
     Moneypaid; Price has been realized
     Amount of Money measures value of C
Money as Standard of Price
 Money Form: (zB, yC, ... nN) = xAu
 Price form, e.g., zB = xAu
 Value is measured by quantity of gold,
 Price is measured by money name of weight
  of gold, e.g., $35/oz, $1.00 = 1/35oz of Au
 Money names attached to coins
 As Measure of Value & Standard of Price
 The distinction means possible rupture
 Price and value can differ
 e.g., debasement of currency
 e.g., clipped coins’ value less than nominal
 e.g., Locke & recoinage during war
Money as Means of Circulation - 1

   As facilitator of exchange
   C - M - C represents circulation of commodities
   C - M = 1st metamorphosis (of form)
     realization   of exchange value
   M - C = 2nd metamorphosis (of form)
     realization   of use value
Money as Means of Circulation -2

 Syllogistic mediation
C-M-C =P-U-I
 C is produced for its particularity exchange
 M is the universal equivalent & mediator
 C is acquired for its individual use value in
Money as Means of Circulation -3

 Prime example: LP - M - C
 LP = ability to work (for capital)
 M = wage
 C = C(MS) = means of subsistence
 All this working class view of working for
  money as a means to an end:
Possibility of Crisis - 1
 Separation of sale & purchase = possibility
  of rupture in circuit
 C - M can be accomplished, but
 M - C might not be
 Money can be hoarded
 Say’s Law doesn’t hold in money economy
 Refusal to spend = inadequate aggregate D
Possibility of Crisis - 2
 In the case of LP - M - C
 Workers can refuse to sell LP for M
 e.g., refuse to leave land, strike
 Workers can refuse to spend (today)
 e.g., increase savings, reduce consumption
             Quantity Theory - 1

 Classical Quantity Theory of Money
                   M = ∑pq/V
 M = money, p = price, q = goods,
  V = velocity of money (e.g., turnover/yr)
 With q & V fixed, change in M produces a
  change in p, i.e., p = f(M)
   e.g. influx of gold from new world in 16th C
    meant inflation in Europe
Quantity Theory - 2

 Marx’s Interpretation
                  M = ∑vq/V
 Behind price (p) lies value (v)
 So instead of p = f(M), we have
        M = f(v)
 e.g., 16th C gold had lower value per unit
 so, M had to increase to express ∑vq/V
Quantity Theory - 3

 Marx’s interpretation with paper money
 M = ∑vq/V
 Paper money only represents value
 Amount of value depends on ∑vq/V
 Value per unit of money depends on
  quantity of money
 So, Marx’s interpretation rejoins Classics’
Money as Store of Value
 Money “stores” value when hoarded
 Hoard functions in circulation
 Money stored, released
 Like foreign exchange reserves today
 So misers are misguided obstacles to
Money as Means of Payment
 With “credit money” purchase preceeds
 Payment follows later
 e.g., commerical credit, credit cards
 Separation = new potential for crisis
 e.g., debt crisis of 80s & 90s
World Money
 In 19th C, int’l money was bullion/metal
 In late 20th C int’l money is credit
     gold has been demonitized
     although gold bugs still want it back

   Marx’s discussion of credit provides basis
    for analysis of International Monetary
    System & IMF

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