Capital and Nature

[chlamor]

If you have a list of acceptable links that can be used to support Marxist analysis please present that. Your not so cleverly disguised insults aside it seems you have little desire to reach back to a historical sense of how money came to be money and what it represents.

Au contraire, my friend. 'What it [money] represents' - and the analysis of such which Marx failed to perform is the point of my writing. By failing to adequately understand the true nature of 'money', with it's inherent, systemic and structural deficiencies, Marx bases his entire analysis on no real foundations.

Your reformist perspective takes us not so far from where we are.

Since my (Gesell's) analysis examines the nature of 'money' at a deeper level than Marx (who just takes it as read that 'it is what it is', without further critical examination), how on earth can you suggest that this approach is 'reformist'? It is fundamentally more 'revolutionary', in the true sense of the word, than that of Marx. Marx is the 'reformist', merely tinkering with the controls of the machine, the inner workings of which he fails to understand.

It seems that what are dealing with here is a form of sophistic argument on the web and here the web helps you in that you can ignore the very basic foundation of the argument that has been introduced in the hopes that the short half-life of individual debating points on the internet can get you back on solid ground.

Perhaps you could elucidate as to the nature of this 'very basic foundation'? Thus far I remain somewhat unconvinced that the 'foundation' of Marxist analysis lies deeper than that of Gesell.

So, you repeat your previous points with disdain, hoping that what was written will go away.

I repeat my points in the vain hope that they will sink in, hoping that what will be written will either answer the points, directing me to some of Marx's words which deal with the fundamental nature of money, or graciously concede that he never actually did so.

You repeat the saw about Marx without concern that you have yet to make it clear what exactly you want to have Marx say or "explain" (then you will admit he is wrong).

I'm stuggling to find a way to make it any clearer. I'll try again: What has Marx to say on the fundamental nature of 'money'? - that is, what it 'is' rather than what it does. We know what it 'does'. That is governed by it's innate nature - it cannot do otherwise.

You also repeat the contention about the "magic" of money but now with a side trip on the durability of the money commodity (gold and silver also "rots", but unless we are taking yet another side trip into the "natural" money-ness of rotten gold and silver, this leads us nowhere).

Gold and silver 'rot'? News to me, I must concede. Whatever, unless you are suggesting that your own money is some hitherto unknown form of gold which rots - as opposed to 'figures on a balance sheet' which obviously doesn't, no matter how you look at it, 'money' possesses a *magical* quality (that of non-perishability) in relation to the goods it is supposed to represent. To argue otherwise is absurd.

In all of this, you see the complexity of the modern forms, not as smoke obscuring your vision, but as your friend: "what about this and what about that?"

The 'complexity of the modern forms' are but the inevitable result of the innate, fundamental nature of 'money'. No 'friends' of mine, Sir!

A cogent analysis lies on a different tack. Instead of looking backward with all of the issues of the modern day befuddling us, we can go back and derived money looking forward (i.e. historically).

Which surely is precisely what Gesell does and Marx fails to do.

In truth, there are only two places that you correspondent can legitimately go:

Either you can argue that my short summary of the origins of money is incorrect,

or...

you can point to that point in history when the nature of money as we have outlined it, changes into something entirely different (with documentary material, please).

With regard to 'option 1', I argue that your 'short summary of the origins of money' is incomplete, inadequate and superficial. It does not comprehend the nature of money, nor it's fundamental *magical* difference (resistence to atrophy) from the goods which it is supposed to represent.

With regard to 'option 2', I have already done so above - with 'documentary material', no less.

We are way past Marx by this point. "Here is what money is", and the only possible response that does not tread on sophistry is to say, "that is not what it is".

At this point, nothing else matters... Not Marx, not Gesell, and not what you "think".

Yes - we are way past Marx - we always were, for the reason that Marx does not say 'What money is'. If he had attempted to enquire into it's nature, I could read his description and offer an opinion as to it's validity. He did not, so I cannot. All I can do is point to what Gesell and others said of 'What money is'. Your own failure to comprehend 'what money is' or offer a counter argument does not make those who can 'sophists'.

Did you know that Anarchis was once asked what the Greeks used money for? "For figuring", he said.

There is another related discussion to this one. It is that of where such ideas come from, and the subject matter is by no means simply confined to "money". Many of the early socialists point to one or another category of political economy and say, "There is your problem". Robert Owen's "labor money" no less than Prudhoun's "interest", is an example of this.

You - erm... wouldn't be trying to sidetrack the discussion, would you? Gesell points to the fundamental nature of money and says "There is your problem". He says that unless we address the fundamental systemic problems with the nature of money (sic), we're not going to get anywhere. He then proposes real world, workable solutions ('stamp scrip' - or 'money that rusts') which when put into practice (see my post above) yield startlingly positive results, thus proving the validity of his position. The practice of these solutions then gets stamped (excuse the pun) out by the beneficiaries of the existing system, to the point where (for instance) support for such ideas is criminalised in post WWII Russia.

The entire purpose of your post is to say "Marx was wrong". Nothing else is meaningful. You are simply trying to derail the original post (and to repeat the mantra). You don't want to talk about "Nature and Capital" and, this is not because you want to talk about "Nature and Money" instead.

'The entire purpose of my post' is to highlight the fundamental deficiencies in Marxist analysis of economics.

By failing to understand the root, fundamental systemic problem with what we call money, Marx and his followers would doom us to remain within a system which is inherently flawed. The fact that 'money' has the *magical* properties which differentiate it from the goods that it is supposed to represent, it matters not what one does with it nor how one seeks to control it. It is a system, a machine which can only and will only ever yield one inevitable result, regardless of the political will or affiliations of those whose lives it permeates.

The present system, with it's *magic* money, enables two things: Hoarding, which artificially restricts the supply of money, rendering it a powerful political tool, rather than the 'neutral medium of exchange' that Marx supposed, and Usury, the bastard child, whereby those restricting the supply may 'profit' from it. So embedded has the practice become, that the actual creation of money is via usury - money is 'borrowed' into existence which yields interest. Logically, since the only money that exists is that which is 'created' in this manner, there can never be enough in existence to pay off the principle debt plus the interest.

This fact creates a system that's very existance is predicated upon 'growth', where anything that is merely 'sustainable' has by definition 'failed'. The inevitable consequences of this mechanism upon this planet and it's population are all to apparent. Is that not what your original post was about?

Here's some solid ground:

The circulation of commodities is the starting-point of capital. The production of commodities, their circulation, and that more developed form of their circulation called commerce, these form the historical ground-work from which it rises. The modern history of capital dates from the creation in the 16th century of a world-embracing commerce and a world-embracing market.

If we abstract from the material substance of the circulation of commodities, that is, from the exchange of the various use-values, and consider only the economic forms produced by this process of circulation, we find its final result to be money: this final product of the circulation of commodities is the first form in which capital appears.

As a matter of history, capital, as opposed to landed property, invariably takes the form at first of money; it appears as moneyed wealth, as the capital of the merchant and of the usurer. [1] But we have no need to refer to the origin of capital in order to discover that the first form of appearance of capital is money. We can see it daily under our very eyes. All new capital, to commence with, comes on the stage, that is, on the market, whether of commodities, labour, or money, even in our days, in the shape of money that by a definite process has to be transformed into capital.

The first distinction we notice between money that is money only, and money that is capital, is nothing more than a difference in their form of circulation.

The simplest form of the circulation of commodities is C-M-C, the transformation of commodities into money, and the change of the money back again into commodities; or selling in order to buy. But alongside of this form we find another specifically different form: M-C-M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes capital, and is already potentially capital.

Now let us examine the circuit M-C-M a little closer. It consists, like the other, of two antithetical phases. In the first phase, M-C, or the purchase, the money is changed into a commodity. In the second phase, C-M, or the sale, the commodity is changed back again into money. The combination of these two phases constitutes the single movement whereby money is exchanged for a commodity, and the same commodity is again exchanged for money; whereby a commodity is bought in order to be sold, or, neglecting the distinction in form between buying and selling, whereby a commodity is bought with money, and then money is bought with a commodity. [2] The result, in which the phases of the process vanish, is the exchange of money for money, M-M. If I purchase 2,000 lbs. of cotton for £100, and resell the 2,000 lbs. of cotton for £110, I have, in fact, exchanged £100 for £110, money for money.

Now it is evident that the circuit M-C-M would be absurd and without meaning if the intention were to exchange by this means two equal sums of money, £100 for £100. The miser’s plan would be far simpler and surer; he sticks to his £100 instead of exposing it to the dangers of circulation. And yet, whether the merchant who has paid £100 for his cotton sells it for £110, or lets it go for £100, or even £50, his money has, at all events, gone through a characteristic and original movement, quite different in kind from that which it goes through in the hands of the peasant who sells corn, and with the money thus set free buys clothes. We have therefore to examine first the distinguishing characteristics of the forms of the circuits M-C-M and C-M-C, and in doing this the real difference that underlies the mere difference of form will reveal itself.

Let us see, in the first place, what the two forms have in common.

Both circuits are resolvable into the same two antithetical phases, C-M, a sale, and M-C, a purchase. In each of these phases the same material elements - a commodity, and money, and the same economic dramatis personae, a buyer and a seller - confront one another. Each circuit is the unity of the same two antithetical phases, and in each case this unity is brought about by the intervention of three contracting parties, of whom one only sells, another only buys, while the third both buys and sells.

What, however, first and foremost distinguishes the circuit C-M-C from the circuit M-C-M, is the inverted order of succession of the two phases. The simple circulation of commodities begins with a sale and ends with a purchase, while the circulation of money as capital begins with a purchase and ends with a sale. In the one case both the starting-point and the goal are commodities, in the other they are money. In the first form the movement is brought about by the intervention of money, in the second by that of a commodity.

In the circulation C-M-C, the money is in the end converted into a commodity, that serves as a use-value; it is spent once for all. In the inverted form, M-C-M, on the contrary, the buyer lays out money in order that, as a seller, he may recover money. By the purchase of his commodity he throws money into circulation, in order to withdraw it again by the sale of the same commodity. He lets the money go, but only with the sly intention of getting it back again. The money, therefore, is not spent, it is merely advanced. [3]

In the circuit C-M-C, the same piece of money changes its place twice. The seller gets it from the buyer and pays it away to another seller. The complete circulation, which begins with the receipt, concludes with the payment, of money for commodities. It is the very contrary in the circuit M-C-M. Here it is not the piece of money that changes its place twice, but the commodity. The buyer takes it from the hands of the seller and passes it into the hands of another buyer. Just as in the simple circulation of commodities the double change of place of the same piece of money effects its passage from one hand into another, so here the double change of place of the same commodity brings about the reflux of the money to its point of departure.

Such reflux is not dependent on the commodity being sold for more than was paid for it. This circumstance influences only the amount of the money that comes back. The reflux itself takes place, so soon as the purchased commodity is resold, in other words, so soon as the circuit M-C-M is completed. We have here, therefore, a palpable difference between the circulation of money as capital, and its circulation as mere money.

The circuit C-M-C comes completely to an end, so soon as the money brought in by the sale of one commodity is abstracted again by the purchase of another.

If, nevertheless, there follows a reflux of money to its starting-point, this can only happen through a renewal or repetition of the operation. If I sell a quarter of corn for £3, and with this £3 buy clothes, the money, so far as I am concerned, is spent and done with. It belongs to the clothes merchant. If I now sell a second quarter of corn, money indeed flows back to me, not however as a sequel to the first transaction, but in consequence of its repetition. The money again leaves me, so soon as I complete this second transaction by a fresh purchase. Therefore, in the circuit C-M-C, the expenditure of money has nothing to do with its reflux. On the other hand, in M-C-M, the reflux of the money is conditioned by the very mode of its expenditure. Without this reflux, the operation fails, or the process is interrupted and incomplete, owing to the absence of its complementary and final phase, the sale.

The circuit C-M-C starts with one commodity, and finishes with another, which falls out of circulation and into consumption. Consumption, the satisfaction of wants, in one word, use-value, is its end and aim. The circuit M-C-M, on the contrary, commences with money and ends with money. Its leading motive, and the goal that attracts it, is therefore mere exchange-value.

In the simple circulation of commodities, the two extremes of the circuit have the same economic form. They are both commodities, and commodities of equal value. But they are also use-values differing in their qualities, as, for example, corn and clothes. The exchange of products, of the different materials in which the labour of society is embodied, forms here the basis of the movement. It is otherwise in the circulation M-C-M, which at first sight appears purposeless, because tautological. Both extremes have the same economic form. They are both money, and therefore are not qualitatively different use-values; for money is but the converted form of commodities, in which their particular use-values vanish. To exchange £100 for cotton, and then this same cotton again for £100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd. [4] One sum of money is distinguishable from another only by its amount. The character and tendency of the process M-C-M, is therefore not due to any qualitative difference between its extremes, both being money, but solely to their quantitative difference. More money is withdrawn from circulation at the finish than was thrown into it at the start. The cotton that was bought for £100 is perhaps resold for £100 + £10 or £110. The exact form of this process is therefore M-C-M', where M' = M + D M = the original sum advanced, plus an increment. This increment or excess over the original value I call “surplus-value.” The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital.
http://www.marxists.org/archive/marx/wo ... 1/ch04.htm

[chlamor]

If you have a list of acceptable links that can be used to support Marxist analysis please present that. Your not so cleverly disguised insults aside it seems you have little desire to reach back to a historical sense of how money came to be money and what it represents.

Au contraire, my friend. 'What it [money] represents' - and the analysis of such which Marx failed to perform is the point of my writing. By failing to adequately understand the true nature of 'money', with it's inherent, systemic and structural deficiencies, Marx bases his entire analysis on no real foundations.

Your reformist perspective takes us not so far from where we are.

Since my (Gesell's) analysis examines the nature of 'money' at a deeper level than Marx (who just takes it as read that 'it is what it is', without further critical examination), how on earth can you suggest that this approach is 'reformist'? It is fundamentally more 'revolutionary', in the true sense of the word, than that of Marx. Marx is the 'reformist', merely tinkering with the controls of the machine, the inner workings of which he fails to understand.

It seems that what are dealing with here is a form of sophistic argument on the web and here the web helps you in that you can ignore the very basic foundation of the argument that has been introduced in the hopes that the short half-life of individual debating points on the internet can get you back on solid ground.

Perhaps you could elucidate as to the nature of this 'very basic foundation'? Thus far I remain somewhat unconvinced that the 'foundation' of Marxist analysis lies deeper than that of Gesell.

So, you repeat your previous points with disdain, hoping that what was written will go away.

I repeat my points in the vain hope that they will sink in, hoping that what will be written will either answer the points, directing me to some of Marx's words which deal with the fundamental nature of money, or graciously concede that he never actually did so.

You repeat the saw about Marx without concern that you have yet to make it clear what exactly you want to have Marx say or "explain" (then you will admit he is wrong).

I'm stuggling to find a way to make it any clearer. I'll try again: What has Marx to say on the fundamental nature of 'money'? - that is, what it 'is' rather than what it does. We know what it 'does'. That is governed by it's innate nature - it cannot do otherwise.

You also repeat the contention about the "magic" of money but now with a side trip on the durability of the money commodity (gold and silver also "rots", but unless we are taking yet another side trip into the "natural" money-ness of rotten gold and silver, this leads us nowhere).

Gold and silver 'rot'? News to me, I must concede. Whatever, unless you are suggesting that your own money is some hitherto unknown form of gold which rots - as opposed to 'figures on a balance sheet' which obviously doesn't, no matter how you look at it, 'money' possesses a *magical* quality (that of non-perishability) in relation to the goods it is supposed to represent. To argue otherwise is absurd.

In all of this, you see the complexity of the modern forms, not as smoke obscuring your vision, but as your friend: "what about this and what about that?"

The 'complexity of the modern forms' are but the inevitable result of the innate, fundamental nature of 'money'. No 'friends' of mine, Sir!

A cogent analysis lies on a different tack. Instead of looking backward with all of the issues of the modern day befuddling us, we can go back and derived money looking forward (i.e. historically).

Which surely is precisely what Gesell does and Marx fails to do.

In truth, there are only two places that you correspondent can legitimately go:

Either you can argue that my short summary of the origins of money is incorrect,

or...

you can point to that point in history when the nature of money as we have outlined it, changes into something entirely different (with documentary material, please).

With regard to 'option 1', I argue that your 'short summary of the origins of money' is incomplete, inadequate and superficial. It does not comprehend the nature of money, nor it's fundamental *magical* difference (resistence to atrophy) from the goods which it is supposed to represent.

With regard to 'option 2', I have already done so above - with 'documentary material', no less.

We are way past Marx by this point. "Here is what money is", and the only possible response that does not tread on sophistry is to say, "that is not what it is".

At this point, nothing else matters... Not Marx, not Gesell, and not what you "think".

Yes - we are way past Marx - we always were, for the reason that Marx does not say 'What money is'. If he had attempted to enquire into it's nature, I could read his description and offer an opinion as to it's validity. He did not, so I cannot. All I can do is point to what Gesell and others said of 'What money is'. Your own failure to comprehend 'what money is' or offer a counter argument does not make those who can 'sophists'.

Did you know that Anarchis was once asked what the Greeks used money for? "For figuring", he said.

There is another related discussion to this one. It is that of where such ideas come from, and the subject matter is by no means simply confined to "money". Many of the early socialists point to one or another category of political economy and say, "There is your problem". Robert Owen's "labor money" no less than Prudhoun's "interest", is an example of this.

You - erm... wouldn't be trying to sidetrack the discussion, would you? Gesell points to the fundamental nature of money and says "There is your problem". He says that unless we address the fundamental systemic problems with the nature of money (sic), we're not going to get anywhere. He then proposes real world, workable solutions ('stamp scrip' - or 'money that rusts') which when put into practice (see my post above) yield startlingly positive results, thus proving the validity of his position. The practice of these solutions then gets stamped (excuse the pun) out by the beneficiaries of the existing system, to the point where (for instance) support for such ideas is criminalised in post WWII Russia.

The entire purpose of your post is to say "Marx was wrong". Nothing else is meaningful. You are simply trying to derail the original post (and to repeat the mantra). You don't want to talk about "Nature and Capital" and, this is not because you want to talk about "Nature and Money" instead.

'The entire purpose of my post' is to highlight the fundamental deficiencies in Marxist analysis of economics.

By failing to understand the root, fundamental systemic problem with what we call money, Marx and his followers would doom us to remain within a system which is inherently flawed. The fact that 'money' has the *magical* properties which differentiate it from the goods that it is supposed to represent, it matters not what one does with it nor how one seeks to control it. It is a system, a machine which can only and will only ever yield one inevitable result, regardless of the political will or affiliations of those whose lives it permeates.

The present system, with it's *magic* money, enables two things: Hoarding, which artificially restricts the supply of money, rendering it a powerful political tool, rather than the 'neutral medium of exchange' that Marx supposed, and Usury, the bastard child, whereby those restricting the supply may 'profit' from it. So embedded has the practice become, that the actual creation of money is via usury - money is 'borrowed' into existence which yields interest. Logically, since the only money that exists is that which is 'created' in this manner, there can never be enough in existence to pay off the principle debt plus the interest.

This fact creates a system that's very existance is predicated upon 'growth', where anything that is merely 'sustainable' has by definition 'failed'. The inevitable consequences of this mechanism upon this planet and it's population are all to apparent. Is that not what your original post was about?

Here's some solid ground:

The circulation of commodities is the starting-point of capital. The production of commodities, their circulation, and that more developed form of their circulation called commerce, these form the historical ground-work from which it rises. The modern history of capital dates from the creation in the 16th century of a world-embracing commerce and a world-embracing market.

If we abstract from the material substance of the circulation of commodities, that is, from the exchange of the various use-values, and consider only the economic forms produced by this process of circulation, we find its final result to be money: this final product of the circulation of commodities is the first form in which capital appears.

As a matter of history, capital, as opposed to landed property, invariably takes the form at first of money; it appears as moneyed wealth, as the capital of the merchant and of the usurer. [1] But we have no need to refer to the origin of capital in order to discover that the first form of appearance of capital is money. We can see it daily under our very eyes. All new capital, to commence with, comes on the stage, that is, on the market, whether of commodities, labour, or money, even in our days, in the shape of money that by a definite process has to be transformed into capital.

The first distinction we notice between money that is money only, and money that is capital, is nothing more than a difference in their form of circulation.

The simplest form of the circulation of commodities is C-M-C, the transformation of commodities into money, and the change of the money back again into commodities; or selling in order to buy. But alongside of this form we find another specifically different form: M-C-M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes capital, and is already potentially capital.

Now let us examine the circuit M-C-M a little closer. It consists, like the other, of two antithetical phases. In the first phase, M-C, or the purchase, the money is changed into a commodity. In the second phase, C-M, or the sale, the commodity is changed back again into money. The combination of these two phases constitutes the single movement whereby money is exchanged for a commodity, and the same commodity is again exchanged for money; whereby a commodity is bought in order to be sold, or, neglecting the distinction in form between buying and selling, whereby a commodity is bought with money, and then money is bought with a commodity. [2] The result, in which the phases of the process vanish, is the exchange of money for money, M-M. If I purchase 2,000 lbs. of cotton for £100, and resell the 2,000 lbs. of cotton for £110, I have, in fact, exchanged £100 for £110, money for money.

Now it is evident that the circuit M-C-M would be absurd and without meaning if the intention were to exchange by this means two equal sums of money, £100 for £100. The miser’s plan would be far simpler and surer; he sticks to his £100 instead of exposing it to the dangers of circulation. And yet, whether the merchant who has paid £100 for his cotton sells it for £110, or lets it go for £100, or even £50, his money has, at all events, gone through a characteristic and original movement, quite different in kind from that which it goes through in the hands of the peasant who sells corn, and with the money thus set free buys clothes. We have therefore to examine first the distinguishing characteristics of the forms of the circuits M-C-M and C-M-C, and in doing this the real difference that underlies the mere difference of form will reveal itself.

Let us see, in the first place, what the two forms have in common.

Both circuits are resolvable into the same two antithetical phases, C-M, a sale, and M-C, a purchase. In each of these phases the same material elements - a commodity, and money, and the same economic dramatis personae, a buyer and a seller - confront one another. Each circuit is the unity of the same two antithetical phases, and in each case this unity is brought about by the intervention of three contracting parties, of whom one only sells, another only buys, while the third both buys and sells.

What, however, first and foremost distinguishes the circuit C-M-C from the circuit M-C-M, is the inverted order of succession of the two phases. The simple circulation of commodities begins with a sale and ends with a purchase, while the circulation of money as capital begins with a purchase and ends with a sale. In the one case both the starting-point and the goal are commodities, in the other they are money. In the first form the movement is brought about by the intervention of money, in the second by that of a commodity.

In the circulation C-M-C, the money is in the end converted into a commodity, that serves as a use-value; it is spent once for all. In the inverted form, M-C-M, on the contrary, the buyer lays out money in order that, as a seller, he may recover money. By the purchase of his commodity he throws money into circulation, in order to withdraw it again by the sale of the same commodity. He lets the money go, but only with the sly intention of getting it back again. The money, therefore, is not spent, it is merely advanced. [3]

In the circuit C-M-C, the same piece of money changes its place twice. The seller gets it from the buyer and pays it away to another seller. The complete circulation, which begins with the receipt, concludes with the payment, of money for commodities. It is the very contrary in the circuit M-C-M. Here it is not the piece of money that changes its place twice, but the commodity. The buyer takes it from the hands of the seller and passes it into the hands of another buyer. Just as in the simple circulation of commodities the double change of place of the same piece of money effects its passage from one hand into another, so here the double change of place of the same commodity brings about the reflux of the money to its point of departure.

Such reflux is not dependent on the commodity being sold for more than was paid for it. This circumstance influences only the amount of the money that comes back. The reflux itself takes place, so soon as the purchased commodity is resold, in other words, so soon as the circuit M-C-M is completed. We have here, therefore, a palpable difference between the circulation of money as capital, and its circulation as mere money.

The circuit C-M-C comes completely to an end, so soon as the money brought in by the sale of one commodity is abstracted again by the purchase of another.

If, nevertheless, there follows a reflux of money to its starting-point, this can only happen through a renewal or repetition of the operation. If I sell a quarter of corn for £3, and with this £3 buy clothes, the money, so far as I am concerned, is spent and done with. It belongs to the clothes merchant. If I now sell a second quarter of corn, money indeed flows back to me, not however as a sequel to the first transaction, but in consequence of its repetition. The money again leaves me, so soon as I complete this second transaction by a fresh purchase. Therefore, in the circuit C-M-C, the expenditure of money has nothing to do with its reflux. On the other hand, in M-C-M, the reflux of the money is conditioned by the very mode of its expenditure. Without this reflux, the operation fails, or the process is interrupted and incomplete, owing to the absence of its complementary and final phase, the sale.

The circuit C-M-C starts with one commodity, and finishes with another, which falls out of circulation and into consumption. Consumption, the satisfaction of wants, in one word, use-value, is its end and aim. The circuit M-C-M, on the contrary, commences with money and ends with money. Its leading motive, and the goal that attracts it, is therefore mere exchange-value.

In the simple circulation of commodities, the two extremes of the circuit have the same economic form. They are both commodities, and commodities of equal value. But they are also use-values differing in their qualities, as, for example, corn and clothes. The exchange of products, of the different materials in which the labour of society is embodied, forms here the basis of the movement. It is otherwise in the circulation M-C-M, which at first sight appears purposeless, because tautological. Both extremes have the same economic form. They are both money, and therefore are not qualitatively different use-values; for money is but the converted form of commodities, in which their particular use-values vanish. To exchange £100 for cotton, and then this same cotton again for £100, is merely a roundabout way of exchanging money for money, the same for the same, and appears to be an operation just as purposeless as it is absurd. [4] One sum of money is distinguishable from another only by its amount. The character and tendency of the process M-C-M, is therefore not due to any qualitative difference between its extremes, both being money, but solely to their quantitative difference. More money is withdrawn from circulation at the finish than was thrown into it at the start. The cotton that was bought for £100 is perhaps resold for £100 + £10 or £110. The exact form of this process is therefore M-C-M', where M' = M + D M = the original sum advanced, plus an increment. This increment or excess over the original value I call “surplus-value.” The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital.

http://www.marxists.org/archive/marx/wo ... 1/ch04.htm

[bean fidhleir]

Welcome to the club, bean.

Thanks!

To be honest, I spent my first year or so thinking everyone there was utterly bonkers. Took me that long to work out that it was me who was mad (and not just in their eyes).

I read an interesting account a few years ago. I can't completely remember the details any more, but it concerned an anthropologist living among one of the last stone-age peoples. It was in Oceania or SEA, I don't recall which.

Anyhow, in exchanging information with the people he was studying, he mentioned the urban homeless population in the US, and pointed out two men who for some reason had got their names in the paper back home (his family sent him copies of the paper along with their letters so he wouldn't lose touch).

The tribal people were totally stunned by the idea that anyone could be homeless. Why didn't other people build them homes if they didn't have them? What's wrong with those people in your country? Can you bring those men here? We'll be happy to build homes and plant gardens for them, and they can join our tribe.

They had no concept at all of rich and poor, or that people could be prevented from getting the necessities of life. To them, the idea that anyone would try to keep more than they needed while others didn't have enough was worse than crazy. They could only explain it to themselves in terms of demonic possession.

He had quite a difficult time explaining why their simple, honest offer wouldn't work.

[bean fidhleir]

Welcome to the club, bean.

Thanks!

To be honest, I spent my first year or so thinking everyone there was utterly bonkers. Took me that long to work out that it was me who was mad (and not just in their eyes).

I read an interesting account a few years ago. I can't completely remember the details any more, but it concerned an anthropologist living among one of the last stone-age peoples. It was in Oceania or SEA, I don't recall which.

Anyhow, in exchanging information with the people he was studying, he mentioned the urban homeless population in the US, and pointed out two men who for some reason had got their names in the paper back home (his family sent him copies of the paper along with their letters so he wouldn't lose touch).

The tribal people were totally stunned by the idea that anyone could be homeless. Why didn't other people build them homes if they didn't have them? What's wrong with those people in your country? Can you bring those men here? We'll be happy to build homes and plant gardens for them, and they can join our tribe.

They had no concept at all of rich and poor, or that people could be prevented from getting the necessities of life. To them, the idea that anyone would try to keep more than they needed while others didn't have enough was worse than crazy. They could only explain it to themselves in terms of demonic possession.

He had quite a difficult time explaining why their simple, honest offer wouldn't work.

[chlamor]

If you have a list of acceptable links that can be used to support Marxist analysis please present that. Your not so cleverly disguised insults aside it seems you have little desire to reach back to a historical sense of how money came to be money and what it represents.

Au contraire, my friend. 'What it [money] represents' - and the analysis of such which Marx failed to perform is the point of my writing. By failing to adequately understand the true nature of 'money', with it's inherent, systemic and structural deficiencies, Marx bases his entire analysis on no real foundations.

Your reformist perspective takes us not so far from where we are.

Since my (Gesell's) analysis examines the nature of 'money' at a deeper level than Marx (who just takes it as read that 'it is what it is', without further critical examination), how on earth can you suggest that this approach is 'reformist'? It is fundamentally more 'revolutionary', in the true sense of the word, than that of Marx. Marx is the 'reformist', merely tinkering with the controls of the machine, the inner workings of which he fails to understand.

It seems that what are dealing with here is a form of sophistic argument on the web and here the web helps you in that you can ignore the very basic foundation of the argument that has been introduced in the hopes that the short half-life of individual debating points on the internet can get you back on solid ground.

Perhaps you could elucidate as to the nature of this 'very basic foundation'? Thus far I remain somewhat unconvinced that the 'foundation' of Marxist analysis lies deeper than that of Gesell.

So, you repeat your previous points with disdain, hoping that what was written will go away.

I repeat my points in the vain hope that they will sink in, hoping that what will be written will either answer the points, directing me to some of Marx's words which deal with the fundamental nature of money, or graciously concede that he never actually did so.

You repeat the saw about Marx without concern that you have yet to make it clear what exactly you want to have Marx say or "explain" (then you will admit he is wrong).

I'm stuggling to find a way to make it any clearer. I'll try again: What has Marx to say on the fundamental nature of 'money'? - that is, what it 'is' rather than what it does. We know what it 'does'. That is governed by it's innate nature - it cannot do otherwise.

You also repeat the contention about the "magic" of money but now with a side trip on the durability of the money commodity (gold and silver also "rots", but unless we are taking yet another side trip into the "natural" money-ness of rotten gold and silver, this leads us nowhere).

Gold and silver 'rot'? News to me, I must concede. Whatever, unless you are suggesting that your own money is some hitherto unknown form of gold which rots - as opposed to 'figures on a balance sheet' which obviously doesn't, no matter how you look at it, 'money' possesses a *magical* quality (that of non-perishability) in relation to the goods it is supposed to represent. To argue otherwise is absurd.

In all of this, you see the complexity of the modern forms, not as smoke obscuring your vision, but as your friend: "what about this and what about that?"

The 'complexity of the modern forms' are but the inevitable result of the innate, fundamental nature of 'money'. No 'friends' of mine, Sir!

A cogent analysis lies on a different tack. Instead of looking backward with all of the issues of the modern day befuddling us, we can go back and derived money looking forward (i.e. historically).

Which surely is precisely what Gesell does and Marx fails to do.

In truth, there are only two places that you correspondent can legitimately go:

Either you can argue that my short summary of the origins of money is incorrect,

or...

you can point to that point in history when the nature of money as we have outlined it, changes into something entirely different (with documentary material, please).

With regard to 'option 1', I argue that your 'short summary of the origins of money' is incomplete, inadequate and superficial. It does not comprehend the nature of money, nor it's fundamental *magical* difference (resistence to atrophy) from the goods which it is supposed to represent.

With regard to 'option 2', I have already done so above - with 'documentary material', no less.

We are way past Marx by this point. "Here is what money is", and the only possible response that does not tread on sophistry is to say, "that is not what it is".

At this point, nothing else matters... Not Marx, not Gesell, and not what you "think".

Yes - we are way past Marx - we always were, for the reason that Marx does not say 'What money is'. If he had attempted to enquire into it's nature, I could read his description and offer an opinion as to it's validity. He did not, so I cannot. All I can do is point to what Gesell and others said of 'What money is'. Your own failure to comprehend 'what money is' or offer a counter argument does not make those who can 'sophists'.

Did you know that Anarchis was once asked what the Greeks used money for? "For figuring", he said.

There is another related discussion to this one. It is that of where such ideas come from, and the subject matter is by no means simply confined to "money". Many of the early socialists point to one or another category of political economy and say, "There is your problem". Robert Owen's "labor money" no less than Prudhoun's "interest", is an example of this.

You - erm... wouldn't be trying to sidetrack the discussion, would you? Gesell points to the fundamental nature of money and says "There is your problem". He says that unless we address the fundamental systemic problems with the nature of money (sic), we're not going to get anywhere. He then proposes real world, workable solutions ('stamp scrip' - or 'money that rusts') which when put into practice (see my post above) yield startlingly positive results, thus proving the validity of his position. The practice of these solutions then gets stamped (excuse the pun) out by the beneficiaries of the existing system, to the point where (for instance) support for such ideas is criminalised in post WWII Russia.

The entire purpose of your post is to say "Marx was wrong". Nothing else is meaningful. You are simply trying to derail the original post (and to repeat the mantra). You don't want to talk about "Nature and Capital" and, this is not because you want to talk about "Nature and Money" instead.

'The entire purpose of my post' is to highlight the fundamental deficiencies in Marxist analysis of economics.

By failing to understand the root, fundamental systemic problem with what we call money, Marx and his followers would doom us to remain within a system which is inherently flawed. The fact that 'money' has the *magical* properties which differentiate it from the goods that it is supposed to represent, it matters not what one does with it nor how one seeks to control it. It is a system, a machine which can only and will only ever yield one inevitable result, regardless of the political will or affiliations of those whose lives it permeates.

The present system, with it's *magic* money, enables two things: Hoarding, which artificially restricts the supply of money, rendering it a powerful political tool, rather than the 'neutral medium of exchange' that Marx supposed, and Usury, the bastard child, whereby those restricting the supply may 'profit' from it. So embedded has the practice become, that the actual creation of money is via usury - money is 'borrowed' into existence which yields interest. Logically, since the only money that exists is that which is 'created' in this manner, there can never be enough in existence to pay off the principle debt plus the interest.

This fact creates a system that's very existance is predicated upon 'growth', where anything that is merely 'sustainable' has by definition 'failed'. The inevitable consequences of this mechanism upon this planet and it's population are all to apparent. Is that not what your original post was about?

You simply repeat again all that you have said before and without additional substance. Yet you give us a way to resolve the matter.

First, a word is needed on the physical properties of the money commodity or its durability. Even metallic coins are worn away in use, and that rather quickly. By this standard, gold ought to be among the least likely of precious metals to be used as money, because it is among the softest of the precious metals and wears away the fastest. To the extent that the value of money is embodied in the body of money itself, all money “rots”. To the extent that money is representational, i.e. a promise to pay 1 ounce of gold undiminished through circulation, any commodity will do. The promise to pay 20 pounds of fish which have not rotted is an equivalent. There are practical considerations that favor precious metals (including, as I have said, durability) but they are by no means the only commodity used for this purpose. It is not the physical traits of gold and silver which yield “magic”.

So let’s focus on where this “magic” appears (instead of repeating ad nauseam that “money is magic” or that “Gesell was right” because of his “cogent analysis”). By “magic”, we can only be talking about the ability of money to not merely serve as medium of circulation but to produce value of its own accord. It does not matter if we call this value “theft” or usury or any other term. It is either created within the process of circulation itself or it is a deduction from values produced by others. How does that work?

In this regard, we are asking nothing more than what was asked of the Mercantilists who claimed that all value was to be found in the act of commerce, i.e. in “buying cheap and selling dear”. Really? How is that sustained?

We left our narrative in ancient Mesopotamia, with money merely serving as a simplified medium for exchange. In our example, commodities are transformed into money (often only figuratively) in order that they be transformed again into commodities. The process described is selling in order to buy (and presumably to consume). If we turn this process on its head and now have buying in order to sell, there is nothing in the “nature” of money that changes the fact that equivalents exchange (even the Mercantilists agree). Neither does “advancing” money change anything; as advancing an amount of the commodity that begins the cycle of commodity-money-commodity serves exactly the same purpose (and is the more common form of “lending” in early history). If something is “made” in the transaction, it has nothing whatever to do with money itself which remains a simple equivalent.

So please pick up where we left off in our example and since you call it “incomplete”, complete it for us. How and when does money acquire its “magic”?

Marx very clearly points to the circuit M-C-M as the circuit in which the “magical” properties of money appear. It is decisive to note, however, that it is money as Capital that is being discussed. In order for money itself to have such properties, we must find them in the circuit C-M-C. How does that work? When does that magic first appear? How is it sustained?

[bean fidhleir]

Apologies if my buttinskiness isn't welcome.

You state

To the extent that the value of money is embodied in the body of money itself, all money “rots”. To the extent that money is representational, i.e. a promise to pay 1 ounce of gold undiminished through circulation, any commodity will do. The promise to pay 20 pounds of fish which have not rotted is an equivalent.

This isn't really true. Money doesn't "rot" within human timeframes, and it's not the same as a promise because it's not something you get in the future, you get it now, and the value of "it" is enforced by the whole community. You don't have to gather people together and hope that it won't end up with them telling you that the promise you relied on isn't worth the wind it took to make it.

That's why bank failures, inflation, and deflation are such problems - they're unpredictable and affect the magical permanence of value.

It's the "get it now" aspect combined with the "keep it forever undiminished" aspect that makes money unlike yams or promises of yams.

[chlamor]

Just a bit of history to support the above:

It is not clear when money first appears. Silver coins are in circulation by the 6th Century B.C. in the Mediterranean but whether these carry all of the attributes of "money" as we define it remains debatable. The use of gold and silver (and other things) as "money commodities", for the purpose of acting as intermediaries in trade and as repositories of wealth predates even that by another 2000 years, though this "money" lacks specific denominations and does not circulate as such (it is used to "figure", as Anarchis said). The interesting point is that debt predates even that:

Among the earliest writings of human beings (in Mesopotamia) is this poem:

How lowly is the poor man!
A mill the edge of the oven;
His ripped garment will not be mended;
What he has lost will not be sought for!
The poor man --- by debts is he brought low!
What is snatched out of his mouth must repay debts.

No money, no magic, no economic categories or abstractions... Simple exploitation of one human by another, as early as either could write... The real birth pangs of human civilization.

Just how complex life grew in these early metropolises can be glimpsed in the world's oldest accounting records: 8,162 tiny clay tokens excavated from the floors of village houses and city temples across the Near East and studied in detail by Denise Schmandt-Besserat, an archeologist at the University of Texas at Austin. The tokens served first as counters and perhaps later as promissory notes given to temple tax collectors before the first writing appeared.

By classifying the disparate shapes and markings on the tokens into types and comparing these with the earliest known written symbols, Schmandt-Besserat discovered that each token represented a specified quantity of a particular commodity. And she noticed an intriguing difference between village tokens and city tokens. In the small communities dating from before the rise of cities, Mesopotamians regularly employed just five token types, representing different amounts of three main goods: human labor, grain, and livestock like goats and sheep. But in the cities, they began churning out a multitude of new types, regularly employing 16 in all, with dozens of subcategories representing everything from honey, sheep's milk, and trussed ducks to wool, cloth, rope, garments, mats, beds, perfume, and metals. "It's no longer just farm goods," says Schmandt-Besserat. "There are also finished products, manufactured goods, furniture, bread, and textiles."

Faced with this new profusion, says Wyrick, no one would have had an easy time bartering, even for something as simple as a pair of sandals. "If there were a thousand different goods being traded up and down the street, people could set the price in a thousand different ways, because in a barter economy each good is priced in terms of all other goods. So one pair of sandals equals ten dates, equals one quart of wheat, equals two quarts of bitumen, and so on. Which is the best price? It's so complex that people don't know if they are getting a good deal. For the first time in history, we've got a large number of goods. And for the first time, we have so many prices that it overwhelms the human mind. People needed some standard way of stating value."

More on the use of commodities other than precious metals as the "money commodity" (grains were very commonly used) and the existance of ruinous debt previous to the establishment of such "standards", no matter how primitive or imperfectly established. By the way, "shekels" are a measure of weight, equal to one third of an ounce.

Measurable commodity money such as silver and barley both simplified and complicated daily life. No longer did temple officials have to sweat over how to collect a one-sixth tax increase on a farmer who had paid one ox the previous year. Compound interest on loans was now a breeze to calculate. Shekels of silver, after all, lent themselves perfectly to intricate mathematical manipulation; one historian has suggested that Mesopotamian scribes first arrived at logarithms and exponential values from their calculations of compound interest.

"People were constantly falling into debt," says Powell. "We find reference to this in letters where people are writing to one another about someone in the household who has been seized for securing a debt." To remedy these disastrous financial affairs, King Hammurabi decreed in the eighteenth century B.C. that none of his subjects could be enslaved for more than three years for failing to repay a debt. Other Mesopotamian rulers, alarmed at the financial chaos in the cities, tried legislating moratoriums on all outstanding bills.

While the cities of Mesopotamia were the first to conceive of money, others in the ancient Near East soon took up the torch. As civilization after civilization rose to glory along the coasts of the eastern Mediterranean, from Egypt to Syria, their citizens began abandoning the old ways of pure barter. Adopting local standards of value, often silver by weight, they began buying and selling with their own local versions of commodity moneys: linen, perfume, wine, olive oil, wheat, barley, precious metals--things that could be easily divided into smaller portions and that resisted decay.

What we have here is an earlier form of the expropriation (of surplus labor), prior to the advent of money or capital. The form shares with another even more common ancient form, slavery, the appearance of direct exploitation, but that it is the expropriation of the surplus portion of human labor is obvious in the observation that if the debt was large enough to actually starve rather than impoverish the debter, the debt would never be repaid, just as if the slave was fed nothing, he would soon cease to be a slave. There is nothing special about money. Rather, money merely lubricates a social process that is already well underway.

[alloneword]

To be honest, Chlamor, by quoting undigested reams of Marx's waffle, you're making my point for me.

Look:

<snip>

The first distinction we notice between money that is money only, and money that is capital, is nothing more than a difference in their form of circulation.

*DING!*

So does Mr. Marx notice any distinction between 'money' and the goods it is supposed to represent? Apparently not.

<snip-snippety-snip>

We have here, therefore, a palpable difference between the circulation of money as capital, and its circulation as mere money.

*DONG!*

'Mere money'? As in 'mere' simple and honest 'neutral medium of exchange' money? I think not, Mr. Marx!

<Kerrrr-snip!>

...for money is but the converted form of commodities...

*KLANG!!!*

Get the drift? He fails absolutely to enquire as to the fundamental nature of money.

He appears to be as aware of it as a goldfish might be of the water it swims in.

Hey - but thanks for making the effort.

[alloneword]

By “magic”, we can only be talking about the ability of money to not merely serve as medium of circulation but to produce value of its own accord.

No. YOU may 'only be talking about the ability of money to not merely serve as medium of circulation but to produce value of its own accord' - I, on the otherhand, am talking about the fundamental difference between 'money' and what it is commonly supposed to represent, as outlined by bean above.

If you hoard 'money' under your bed, there is no disadvantage to you, it remains there, under the bed.

Do the same with fish, however...


(Thanks for the contributions, bean - especially the 'demonic possession' anecdote, which is similar to experiences of mine. )

[chlamor]

By “magic”, we can only be talking about the ability of money to not merely serve as medium of circulation but to produce value of its own accord.

No. YOU may 'only be talking about the ability of money to not merely serve as medium of circulation but to produce value of its own accord' - I, on the otherhand, am talking about the fundamental difference between 'money' and what it is commonly supposed to represent, as outlined by bean above.

If you hoard 'money' under your bed, there is no disadvantage to you, it remains there, under the bed.

Do the same with fish, however...


(Thanks for the contributions, bean - especially the 'demonic possession' anecdote, which is similar to experiences of mine. )

Evidently you've bailed.

Pretty sloppy stuff you're peddling.

How you cannot see your position as a reformist position of the Slavemaster should disturb any onlooker. It's okay. It's not an uncommon malaise.



Eliminating the class struggle by destroying the classes themselves; making the economic struggle of individuals impossible and unnecessary by abolishing commodity production and the competition connected with it; briefly, putting an end to the struggle for existence between individuals, classes and whole societies, it renders unnecessary all those social organs which have developed as the weapons of that struggle during the many centuries it has been proceeding.

Without falling into utopian fantasies about the social and international organisation of the future, we can already now foretell the abolition of the most important of the organs of chronic struggle inside society, namely, the state, as a political organisation opposed to society and safeguarding mainly the interests of its ruling section. In exactly the same way we can already now foresee the international character of the impending economic revolution. The contemporary development of international exchange of products necessitates the participation of all civilised societies in this revolution.

"...abolishing commodity production and the competition connected with it." The phrase has passed out of usage (probably because it was hard to explain), but many have thought about it since.

Abolish commodities, money, capital, buying, selling, property and with them, the state that maintains and enforces all of it.

Yep.

[bean fidhleir]

You can't just handwave a dismissal, Chlamor.

I was tired, so I forgot to fully call out the differences between money and a contract for fish: money is abstracted and generalised "value", immediately exchanged, not limited in what it can later be exchanged for, not unique to the two immediate contracting parties, and not dependent on the survival of the one handing it over.

It's only because everyone in a political domain agrees these characteristics that symbolic yams and pigs can be transformed into capital AKA wealth that's surplus to immediate requirements. Without such an agreement, money can never be capitalised.

If the money supply represents the wealth of the community that uses it, and a few people hoard most of it, then the rest of the community is going to be in trouble. It works the same whether the money is pieces of gold or pieces of yam.

If some bastard can come along and, based on some theory such as wearing a fancy hat and having a legbreaker to enforce his will, take half the yams and pigs you raise, then you have to work twice as hard to get your living.

He doesn't have it all his own way of course, since real yams rot and pigs grow old and die no matter who claims ownership of them. But once the yams and pigs are generalised and abstracted, the guy with the hat and legbreaker is suddenly in a very powerful position because abstractions don't grow mouldy or die on their own. The only way to prevent people from sequestering wealth and impoverishing the rest of the community is for everyone to agree that even abstract yams get mouldy and abstract pigs die.

As a1w says, what you're trying to do with your marxist stuff is orthogonal to this very basic issue.

[erosoplier]

The only way to prevent people from sequestering wealth and impoverishing the rest of the community is for everyone to agree that even abstract yams get mouldy and abstract pigs die.

There might be something to that, but while ever we have fractional-reserve for-private-profit banking (read "privatised money printing"), looking at any of the finer details is pointless. With the current system it is mathematically impossible for everyone to prosper.

* * *
nWow, 130,000 views for Money as Debt at google video. That's not an insignificant number.

[bean fidhleir]

while ever we have fractional-reserve for-private-profit banking (read "privatised money printing"), looking at any of the finer details is pointless. With the current system it is mathematically impossible for everyone to prosper.

Yep. So what we have to do is define automatic mechanisms for keeping politicians from diluting the money supply. Which is what they'll do just before every election, unless they're prevented, because it suddenly makes everyone rich...for about a fortnight.

[erosoplier]

No bean fidhleir, you misunderstand the situation. The politicians are only responsible for government spending - which is a nice little earner for the usurers, to be sure - but the fundamental mathematical concern is that the whole economy is based upon fictionally created money which, when an interest fee is charged, makes the repayment of loans in-full impossible because there simply isn't enough money in existence for all debts to be repayed.

[bean fidhleir]

No bean fidhleir, you misunderstand the situation. The politicians are only responsible for government spending - which is a nice little earner for the usurers, to be sure - but the fundamental mathematical concern is that the whole economy is based upon fictionally created money which, when an interest fee is charged, makes repayment in full impossible because there simply isn't enough money in existence for all debts to be repayed.

I suspect we're saying the same thing in different ways.

The current system is, as you say, a nice little earner for the elites. They pretend to lend money to the rest of us, and we have to pay them for it forever.

So to stop that, we have to get rid of the Federal Reserve System, shift the creation of money back to the Treasury, and make sure that the money supply matches the real wealth of the nation.

But politicians control the Treasury at present, so they can tell it to roll the presses and inflate the money supply to, let's say, double the size of the actual wealth. Which gets them re-elected (their goal) but buggers those of us who have any savings. So we need to automatically prevent them from screwing around with it.

The sole benefit of the FRS is that the politicians can't manipulate the money supply. But it's a pyrrhic benefit for the reason you state.