Arthur on money and exchange.

Author:Sekine, Thomas T.
Position:Christopher Arthur - Critical essay


Christopher Arthur has taken the trouble to critique the Unoist approach to value-form theory (Arthur, 2006), while celaborating on his own reformulation of Marx's seminal contribution to this important subject (Marx, 1987[1857]: 43-96). Though I greatly respect Arthur's philosophical acumen, I believe that he is largely on the wrong track with regard to this particular issue. For he altogether misses the economics of value-forms, while being overly keen to state his 'dialecticised' exposition in Hegelese (which has its own pitfalls). I nevertheless welcome his overture, since it points to some possible flaws in my previous formulation of Unoist value-form theory. Perhaps I did not spell out a few crucial details with sufficient clarity, and thus unwittingly led Arthur to his misunderstandings.

Specifically, in my previous formulation of the simple and expanded value-forms, I may have given the false impression that the commodity seller was an active consumer (1) irrevocably interested in the use-values of the equivalent (or desired) commodities (Sekine, 1997: 34-49). I adopted the image of the 'consumer' as an heuristic device, intending for it to fade away gradually as the theory progressed until, in the end, it was replaced by the other, more appropriate image of the genuine 'merchant'. But I was overly optimistic. For the first impression, once engraved upon the mind of the reader, was not so easily blotted out, as Arthur's criticisms of the Uno School's approach demonstrate. I therefore take this opportunity to address that problem in some depth.

I also wish to comment on Arthur's proposed dialectic of money as 'actualised value', especially as he formulated it in Part I of his paper. There, he inherits Marx's unfortunate failure to clearly separate the commodity's value expression from money's measurement of value, thus perpetuating a stunted economic theory in both fields.

  1. The economic meaning of value-forms

    The economic theory of value-forms (or value expressions) has to do with the pricing of the commodity. The commodity is an object for sale. Therefore, whoever owns a commodity must sell it, for which the first step is to price and market it. That alone is what the value expression is concerned with. Like Arthur, I presuppose a fully developed capitalist society as the object of study of the dialectic of capital (although, unlike him, I am not referring to the degenerate, contemporary version still popularly believed to be 'capitalist (2). For me, therefore, the commodity seller is in fact nothing other than the most abstract (least specified) representation of the capitalist who must sell a capitalistically produced commodity in his possession.

    Now, the commodity is not only a use-value (concrete-specific and material wealth, which satisfies a finite want of some individuals) but also value (part of the abstract-general, mercantile wealth of society, the demand for which is unbounded). The commodity as use-value or object of consumption is desired by individual consumers (direct and productive) only up to a satiation point. That is why in a pre-capitalist economy, in which use-values do not generally take the commodity form, there is no such thing as an unbounded pursuit of wealth (except perhaps as a pathological aberration). Capitalist society, in contrast, is predicated upon a boundless pursuit of abstract-general wealth, i.e. wealth as value. But within the commodity, its value is inextricably tied to the correlative use-value. It becomes, therefore, necessary to 'release' value from that constraining use-value by converting the commodity into money, which, as a more direct representation of abstract-general wealth, will be demanded by all commodity sellers in any amount. This is what the selling of the commodity involves.

    Money, too, since it is itself a commodity, consists of value and use-value. But it is distinct from other commodities in that its material-sensuous use-value has been attenuated to the extent of becoming secondary to its 'social' or 'formal' (i.e. commodity-economically acquired) use-value of being the direct means of purchase. It is in this form that wealth (as value) can be accumulated for some time. Indeed, if too much money is earned, since it cannot all be dissipated in the pursuit of a sybaritic life, it necessarily becomes 'idle funds' convertible into capital, in which form it can then be accumulated forever.

    No one can sell a commodity without first pricing it. Pricing (or the value expression) is, therefore, the first step its owner must take. His or her commodity is actually sold for money, however, when someone already in possession of physical money presents him- or herself in the market to execute his or her purchase plan. However, before we reach the point at which we may legitimately investigate the theory of the uses of physical money, commodities must already be in the market waiting to be purchased, with their supply prices indicated. In the dialectic of capital, therefore, the first discourse on 'the commodity' should deal only with what its owner (seller) must do before he or she actually confronts the buyer (money owner), and receives real money to complete the sale. In other words, in the theory of the commodity one should be concerned only with ideal or imagined money, sought after subjectively, i.e. in the mind of the commodity seller, and not with physical money already in the hands of the commodity buyer, ready to be used as the means of purchase. For we are here not yet concerned with an exchange as such, but only with a call for an exchange.

    Commodities, of course, cannot be exchanged directly in capitalist society, but only with the mediation of money. There were certain ambiguities on this point in Marx's exposition, which may have led to his writing two chapters (the first on 'Commodities', and the second on 'Exchange') at the beginning of Capital, volume I. Maybe Marx wanted to explain the logic of money's birth in Chapter I, and the fact of commodity exchange in Chapter 2. If so, the owners (or the 'guardians' as he calls them) of commodities that Marx introduces at the outset of Chapter z are really empirical merchants with physical money already in their pockets, rather than the strictly conceptual commodity seller with only imagined money in his head. I wish to emphasise that we do need this conceptual commodity-owner (the capitalist in the abstract) in order to be able to trace the logic of the emergence of money from out of the nature of the commodity itself. For otherwise, we would be deducing the necessity of money arbitrarily, i.e. in the absence of the capitalist (who enacts the logic of capital), and that would not fail to end in a completely futile, if vicarious, exercise in idle speculation (3).

    Arthur overlooks this point completely, since he makes no distinction between the empirical and the conceptual commodity owner. But insensitivity at such a critical juncture renders his 'dialectical' argument highly suspect. Indeed, much of what Marx deals with in his Chapter z has to do with empirical-historical (i.e. illustrative) facts pertaining to commodity exchanges already mediated by money, and not with a strictly logical derivation of money from the nature of the commodity. Unoists, therefore, believe that Marx's Chapter 2 on 'Exchange' should be regarded as an appendix (or a set of footnotes) to his Chapter I on 'Commodities'.

  2. An introductory overview in the reverse order of value-forms

    Let us now see what the commodity seller must do before actually meeting a purchaser (who is still hiding, invisible and anonymous, in the background of the open market). Suppose that, as a capitalist, I have 200 yards of linen (X) and I want to sell them for, say, $100 of gold money. In my estimation and hope, it is a good price for my linen, i.e. as much gold as I can realistically hope to earn by selling it. But I am not sure if the market will accept my proposal. I am stating here my supply price in gold money of $100 (or $0.5 per yard) tentatively to test the market, and I stand ready to revise it depending on how the market responds to my offer. Although, in stating my price, I must have surveyed the market in advance and have taken into consideration how other sellers of linen in it are behaving and performing, I am in no position to guess with any accuracy the value of linen that the market will in the end determine. This sort of thing is familiar to all capitalists in their daily experience, and the money form of value must take that experience into account.

    But suppose that gold is not yet established (or socially recognised) as money, and that there is no other single commodity present in the market to act in its place as the universal equivalent. Then, my sale of zoo yards of linen must take quite a different form. Since I can no longer propose a supply price of my linen in money terms, I must instead express the value of linen in coats, sugar, tea, iron, etc. (i.e. in a coat price, a sugar price, etc.), where these commodities may be supposed to be of some interest to me as use-values (that is to say, something I would like to have, or do not mind having, in some definite quantities in return for my linen). In other words, I must propose to sell my linen for these various other commodities directly, circumstances permitting. These other commodities are supposed to be available in the market, and so are all deemed value-objects (forming part of society's mercantile wealth). In proposing an exchange of my linen for such commodities I am merely reasserting the fact that my linen too is a commodity and, as such, commensurate with them. Now that I have multiple 'equivalents' for my linen, it is as though I have become a 'consumer' in the usual sense of the term, actively interested in their use-values.

    But it is not said anywhere that these use-values must be consumed by me as soon as they are acquired. (I...

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