Sebrof [he/him, comrade/them]

Also, another comment. I love the literature and history referenced throughout Capital. It makes it fun to read, and it feels like you're reading a work of literature as momentous as the sources he cites. He references Dante and Shakespeare to just make a further point about dense political economy. And I love the last line of the fifth chapter, after Marx notes that surplus value can't be found in circulation yet capitalists are able to buy and sell commodities and yet still get back more value than they put in...

These are the conditions of the problem. Hic Rhodus, hic salta!

This isn't a smarty pants theoretical point, but your comment about the worshipping of small business owners remind me of an early, somewhat, darkly humorous, memory in my radicalization. On the TV news there was some report about a pretty bad flood in Pennsylvania (or some state), and while they were showing a rescue boat in the waters carrying away what survivors they could find, the TV anchor had to chime in to remind us to "think about all those small businesses, oh gosh main street is just under water, it's gonna take some time to rebuild those businesses!" I don't remember them mentioning anything about the people being saved. Just harping about the flooded ma and pop shops while rescue workers were trying to look for real people to save.

Anyway, once I saw it back then I just never stopped noticing it. Nothing new, it was just memorable the first time my baby leftist brain noticed it.

I'd love to look forward to any notes of yours, especially on the petrodollar.

I know that someone on hexbear made a thread a while back asking for essays on the petrodollar, but it didn't get much traction. The only response was about how the petrodollar is overblown is a concept and doesn't really exist? Idk enough to say one way or the other... but the thread got me to do some searchong and I did find an article from the Historical Materialism journal that discusses the dollar and it's relation to the oil commodity. This stuff is beyond my level, though, so it'd take a lot of time for me to go through it and actually get something out of it. I think I just read the abstract and placed it on my to do list.

So any notes to aid in understanding or get the gears going would be welcomed if youd like to post them later!

I like that explanation, and this liminal gap in time where paper money can expand and be detached is what I had in mind when I was reading what Shaikh had to say about the history of paper money. And I also read that into what Marx, or was it Kozlov?, that said that paper money mist refer to gold for value in the final analysis.

So I like the explanation you gave. That's my working theory I'll use in the meantime. And from what I remember reading about Roberts' critique of MMT he agrees that paper money is still bounded by the law of value. I'll need to read it again to double check though

Thanks!

This is motivating me to give Michael Robert's critique of MMT a better read, but also see what the other Michael, Roberts, has to read. Because I pretty have these same questions and general confusions about how or where MMT meets Marx

Chapters 4 and 5 are nice and relaxing reading compared to Chapter 3 imo.

In Chapter 4 we see M-C-M’ for the first time. The big idea in this chapter is capital as a process of self-expanding value.

Value in process, money in process, … It comes out of circulation, enters into it again, preserves and multiplies itself within circulation, emerges from it with an increased size, and starts the same cycle again and again.

And we have the general formula for capital, M-C-M’

In Chapter 5, Marx explores where this increment of surplus value ($\Delta$ M) comes from. In equilibrium, or pure exchange, only equivalent values are exchanged. And while prices can diverge from values, this arbitrage can’t provide a constant and reproducible system of surplus extraction, arbitrage can’t provide a system for aggregate surplus value. If looking at only arbitrage in circulation, a gain ‘here’ is offset by a loss ‘there’

After the exchange we still have the same total value… The value in circulation has not increased by one iota; all that has changed is its distribution between [persons] A and B. What appears on one side as a loss of value appears on the other side as surplus value…

Arbitrage causes a change in distribution, but not a change in total value - no aggregate surplus value.

If equivalents are exchanged, no surplus-value results, and if non-equivalents are exchanged, we still have no surplus-value. Circulation, or the exchange of commodities, creates no value.

So the source of surplus value cannot exist in circulation, the source must be “something in the background which is not visible in the circulation itself”

So, as others have said, it feels like the build up to the arguments we are expecting.

Chapter 3, though, that’s a lot to digest. I think my brain has some sort of block where it freaks out about money, and I just expect that I can’t understand it. But, overall it wasn’t too bad. A lot of information, though. And I would like to hear what others, especially those fond of MMT, would say about Chapter 3. I feel as if I have these two “competing” ideas about money floating in my head. On one side, we have this Graber-esque/MMT idea of debt arising first, and money coming out by taxes of the state. And on the other side, there is a Marxist critique (along the lines of the Michael Roberts article I shared) that is closer to the ideas in Chapter 3.

Along the lines of these critiques, money still must have value and MMT throws out too much of the theory of value. The state can’t set the prices through taxation, because prices are “an exponent of value,” the “money-name of the labor objectified in a commodity” (Marx) and value isn’t something subjective and controllable by our wills - it has an objective existence. A state can set the standard of price, I suppose, but not prices, not the measure of value?

Marx actually seems to throw some critiques at these proto-Chartalist, proto-MMT theories of money, and there is a good section on paper money that I’ll need to go back to. This is a section before part 3 of Chapter 3, so it may be best to discuss it in the previous thread. Essentially, Marx critiques this idea that because the money commodity can be replaced by symbols (paper money) in circulation it implies that it is superfluous as a measure of value.

Marx also mentions that paper money can be thrown into circulation and act effectively only if the issuance of paper money is restricted to the quantity of gold which would have been in circulation, and “only insofar as paper money represents gold, which like all commodities has value, is it a symbol of value.”

I’d be interested in hearing how, or if, the present American dollar works under this framework Marx presents.

Going on a bit about paper money, Anwar Shaikh in his book Capitalism has a whole chapter about money, and goes through the history of how tokens and paper money came about in England and in Massachusetts through further and further abstractions of gold commodity money. People used gold and when they deposited their gold to banks and goldsmiths and got receipts, then these receipts became banknotes and served as paper money, etc.

The vibe I got form Shaikh is that these “abstract” versions of money are like a network or spider's web that sprawls out from the original use of gold. And as long as there is no crisis these “abstractions” or “symbols” work as money in the local economy’s circulation. But when crises hit the more abstract versions of money are the first to fall, and the network starts to “collapse”. People want more “real” money during the crisis, so they dump their local bank’s deposits to get the city bank’s deposits, and they may further dump those to get their original gold back.

Eventually, gold as the measure of value reasserts itself. And again, I wonder about how this plays out in our world today.

Something else from Kozlov (the Editor of a Soviet Political Economy textbook I mentioned earlier) that I'd like to share is its section on Critique of Bourgeoise Theories of Money, since this seems to be coming up with MMT. The following isn't explicitly in Capital, it is mostly from Kozlov, but when reading Chapter 3 I was on the lookout for the below arguments.

Kozlov, writing in 1977, mentions that there are essentially three basic bourgeoise theories of money that Marx critiques. The 1.) metallist, 2.) quantity, and 3.) nominalist theories.

1.) The metallist theory of money claims that "gold and silver were money virtue of their nature, and that they had this property and would always have it, irrespective of the social structure." Any other form of money apart from gold is "unnatural". Marx's critique is that money is a product of a long development of commodity production and its consequences. Objects of one kind or another become money when social relations require it, under definite social and historical conditions - the high degree of commodity production and exchange. Commodities, being an embodiment of human labor - value, need some expression of this embodiment. A need for a universal equivalent starts to evolve. And the gold commodity is a convenient material for fulfilling this function as universal equivalent. It has properties similar to value in that it can be divided up into smaller parts, it differs in itself only by quantity, it also is a product of human labor - gold has value.

2.) The nominalist theory of money claim that "money is simply a nominal unit of account, lacking any material content, a conventional token established by the state for measuring the value of goods... value has no value itself and, consequently, no inner connections with commodities either, and receives its force entirely form the state authorities.

So MMT theory and Chartalism fall under this category.

The critique Marx brings is that this nominalist theory "replaces objective economic laws and categories by legal concepts and norms. It reduces the essence of money as a historically determined social and production relationship to its outward and visible form, i.e. to the standard of price." While the state can establish any standard of price (fix the weight of a metal to be the standard unit of money), it is not in a position to fix value. And Marx discusses how the paper money placed in circulation can only work if it replaces the same amount of gold that it displaces, and that it is gold, in the final analysis, that gives paper money its purchasing power.

There is an interesting tidbit in this book where the nominal theory of money is critiqued as justifying excessive issues of paper money and inflation, which "are additional ways of robbing and exploiting the working people."

3.) The last bourgeois theory is the quantity theory of money, where the value of money is determined exclusively by the quantity of it in circulation. The book then offers a a critique of Ricardo who, apparently, tried to combine the labor theory of value with the quantity theory of money in his analysis of gold (I haven't read Ricardo, so I'm just taking their word), as well as a dig at Keynes. We saw in Chapter 3 where Marx critiques the quantity theory of money in the part of Chapter 3 before section 3. Essentially, the quantity of money needed in circulation depends on the sum of the prices of the circulating commodities, and the velocity of money. But prices aren't determined by the quantity of the circulating medium, as commodities enter the market first with a price and money enters the market with a value (because gold, being a product of labor, has a value and is the source of the value of paper money as well).

Does all this hold today? This is where I shrug my shoulders. Now fight, everyone!

One last thing to mention is that I liked the list of the five functions of money that are presented in Soviet Political Economy textbooks, like Kozlov’s. It helps me keep the arguments in Capital’s Chapter 3 in order. These five functions are:

• 1.) Money functions as a Measure of Value
• 2.) Money functions as a Medium of Commodity Circulation
• 3.) Money functions as a Means of Hoarding
• 4.) Money as a Means of Payment
• 5.) Money functions World Money

From reading the comments here, I also would like to apologize for posting anything too esoteric, or boring, or just turned people off. I'll post some of my thoughts here, and a lot of them are just my questions about money, paper money, and what applies to today. I saw that @blackbread@lemmygrad.ml and @quarrk@hexbear.net were talking about MMT and paper money too. I have nothing to add, but just more questions lol.

Though, I did think about the possibility that paper money today may have taken on forms that Marx didn't originally discuss explicitly? But even if so, Marx would analyze fiat money through contradictions of the money-form. I'm not knowledgeable enough about this, so any thoughts would definitely be helpful. But I kept a quote about contradictions from the beginning of Chapter 3 in mind when thinking about money today and whatever contradictions may exist between fiat money and money as a measure of value:

The further development of the commodity does not abolish these contradictions, but rather provides the form within which they have room to move. This is, in general, the way in which real contradictions are resolved.

Whatever tensions exist between commodities, value, and money that fiat money aided in, it hasn't gotten rid of the tensions - It just moves them to a new arena.

I also am hoping others comment too. I am the process of writing up notes for my own understanding. But they are not yet complete (are notes ever complete), and so I'm stuck in this liminal space where I feel like I'm stuck between posting small thoughts or interesting tidbits that spring to mind, and wanting to post something more "polished"

Finished the first two chapters and am in the process of writing notes.

I'd like to ask for others' comments on a section in the middle of the second chapter. Maybe some context or further explanation.

This is where Lenin mentions the decline of the Stock Exchange (citing a review from Die Bank) as an expression in the decline of free competition and the rise of monopoly:

The review, Die Bank, writes: "The Stock Exchange has long ceased to be the indispensable medium of circulation that it formally was..."

In the same way, Reiser, a still more authoritative economist and himself a banker, makes shift with meaningless phrases in order to explain away undeniable facts: "... the Stock Exchange is steadily losing the feature which is absolutely essential for national economy as a whole and for the circulation of securities in particular - that of being not only a most exact measuring-rod, but also an almost automatic regulator of the economic movements which converge on it"

In other words, the old capitalism, the capitalism of free competition with its indispensable regulator, the Stock Exchange, is passing away. A new capitalism has come to take its place, bearing obvious features of something transient, a mixture of free competition and monopoly.

Now we still have a Stock Exchange, but is this more of a comment that the stock exchange we have today is less of a way for capital to reallocate and regulate investments in industry, and today it is almost like a Ponzi scheme (maybe that's too simplistic) or just a place for people to dump money into without serving as the role of "regulator"? And any actual regulation is done by larger financial institutions rather than individual capitalist investing in different stocks? Thanks for any clarifications!

Something I want to be on the lookout for when reading Imperialism are arguments against the claim that Lenin wrote only about horizontal conflict between great powers (inter-imperialism) and not about exploitation of dominated nations by great powers.

An MR article I recently read and highly suggest, The New Denial of Imperialism on the Left, discusses how there is a trend amongst Western Leftists (who deny imperialism) to abuse and misquote Lenin’s work to reduce imperialism to horizontal great power conflict, and minimize vertical core-periphery exploitation. They then use this to justify that China and Russia are one big imperialist bloc locked into rivalry with NATO.

Hence, it is commonly argued today by the Eurocentric left that Lenin did not focus on issues of inequality between colonizing and colonized countries or between center and periphery. Rather, we are told that he saw his work as mainly concerned with horizontal conflict between the great capitalist powers… Here, China and Russia are portrayed as constituting a single bloc (though representing very different political-economic systems), engaged in an imperialist rivalry with the triad of the United States, Europe, and Japan.

I got this vibe (from what I remember) when watching Prolekult’s mini-doc on the Ukraine War, where they seem to reduce the conflict to inter-imperialist rivalry between Russia and the US, which doesn’t sit with me. And unfortunately I know too many leftists who seem to only be able to analyze the world-situation in this lens of equal-footing, horizontal great power rivalry. As if 1914 is just copy-pasted onto today.

Hopefully I can keep it up! The flip side of notetaking is that there's more inertia in reading a book. So I read less now, but get more out of a given book

I've pretty much gotten to the point where if I'm not taking notes while reading theory, I don't really bother. It's just not gonna stick in my head otherwise. I've been trying the Zettelkasten note system while reading, and am using it with Capital too. I write my initial notes by hand on a little index card while reading. Sometimes I'll type them - but I've heard elsewhere too that handwriting helps with retention. But I don't stick to one method over the other. Linking the notes I make within the system is what I find important.

I 'm still experimenting with note taking strategies, so we'll see if this sticks!

Ping me please. Thanks everyone for the community and for setting this up!

I noted that "rebound effect" when I read it as well. I related it to what I've read about cybernetics and complexity science as an examples of Ashby's Law, and I recently shared some notes about cybernetics in a discussion @yogthos@lemmygrad.ml and I were having about complex systems.

It's possible this is a stretch and these are my quack pet-theories, so be forwarned, but I see parallels with what Marx said to Ashby's Law of Variety in cybernetics. If viewed from this perspective, it is as if that once a community (system) becomes exposed to commodity exchange (from an environment), it is confronted with a system of higher "complexity" or "variety", and this forces an adaptation (or "extinction") of the previous non-commodity modes. Commodity exchange is able to encode more information and can increase the scale and efficiency of the production of use-values by having a "rebound effect" on the communities division of labor. That isn't meant to be a moral judgement, though. Commodity exchange isn't "good" or "better" than the pre-commodity systems, but commodity exchange allows for an increase in information encoding, and so societies that adopt to it are then able to further reproduce. This is how I interpret Marx when he says that exchange bursts local bonds and expands more and more.

Now, this may sound like some Hayekian market triumphalism ("only the Holy Market can encode all economic information, kneel before my prices!"), but Ashby's Law would be no stranger to cyberneticians like Stafford Beer who worked on Project Cybersyn and tried to build these planned economies. Someone like Beer may just respond that once we are able to design a planned economy that can "outcompete" the market, then planned economies will be that which rebounds and bursts through their local bonds. Quantity transforming to quality.

I don't have any notes for Chapter 3 that I feel are complete, so hopefully I don't fall behind.

But, for anyone still reading or struggle with Chapter 3 I'd like to share some encouraging words from David Harvey. This is his last paragraph of his chapter on Money from this Companion, and I return to it when I'm feeling bogged down about what Marx has to say about money.

One final point. This chapter on money is rich, complicated and hard to absorb on first reading. For this reason, as I began by remarking, many people give up on Capital by chapter 3. I hope you have found enough that is intriguing to stay with it. But you will also be glad to know that you do not have to understand everything in the chapter in order to move on. Much of what is said here is more relevant to later volumes than to the rest of Volume I. Armed with some basic, but essential, propositions from this chapter, it is possible to grasp the rest of the material without too much difficulty. From here on in, the argument becomes much easier.

One Last Question About Money and MMT

There’s one last thing I’d like to tie-in with other articles I’ve read, as well as ask readers here. There was a dig at Proudhon in the footnotes and it reminded me of Michael Robert's critique of MMT? The Modern Monetary Trick

Marx mentions that money “crystallizes out of the process of exchange”. Money comes out of commodity exchange and footnote (4) critiques the “craftiness of petit-bourgeoise socialism, which wants to perpetuate the production of commodities while simultaneously abolishing the ‘antagonism between money and commodities’.

This reminds me of Michael Robert’s critique of MMT theory, posted above, where he says that MMT “separates money from value, and … fails to recognize the reality of social relations under capitalism…”

A more in-depth quote form the article

MMT differs from Marx’s theory of money in saying that money is not tied to any law of value that drags it into place like “gravity”; instead, it has the freedom to expand and indeed change value itself. Money is the primary causal force on value, not vice versa!

This echoes the ideas of French socialist Pierre Proudhon in the 1840s. He argued that what was wrong with capitalism was the monetary system itself, not the exploitation of labour and the capitalist mode of production. Here is what Marx had to say about Proudhon’s view in his chapter on money in the Grundrisse: “can the existing relations of production and the relations of distribution which correspond to them be revolutionised by a change in the instrument of circulation?” For Marx, “the doctrine that proposes tricks of circulation as a way of, on the one hand, avoiding the violent character of these social changes and on the other, of making these changes appear not to be a presupposition but gradual result of these transformations in circulation” would be a fundamental error and misunderstanding of the reality of capitalism.

In other words, separating money from value, and indeed making money the primary force for change in capitalism, fails to recognise the reality of social relations under capitalism and production for profit. Without a theory of value, MMTers enter a fictitious economic world — one where the state can issue debt and have it converted into credits on the state account by a central bank at will and with no limit or repercussions in the real world of productive capital.

Now I know that MMT is very popular among leftists and our friends in the News Mega. So I may be opening a huge can of worms, but this appeared very interesting and I’d love to hear ideas on Robert’s criticisms if anyone is familiar with them. I am still absorbing it, so I have nothing to add. When reading Marx’s passage about money, I immediately think about how it compares and contrasts to Graeber’s work on debt. So any ideas would help in my understanding.