| This question <97|109> overall <99|101> Neolib: <59|111>. graded B |
| Question 180: The difference between the Money form and the General equivalent form is small; nevertheless it has important implications. Elaborate. |
| [100] Neolib: Money Form and General Equivalent. Admittedly, when I went to post my answer to the question, I realized that Young Celtic [97] had already attempted the question. While I agree with his general assertions regarding the “universal” need of the money form, he doesn't fully address the differences other than referring to the amount of said commodity in circulation (ie money). While this is a difference in itself, I feel more elaboration is in need (at least from my perspective). |
| Let's walk through the argument in order to garner solidity on the subtle differences between the Money form and the General Equivalent form. |
| Firstly, as Dr. Ehrbar demonstrates (rather painstakingly I might add) the money form of value is “embedded” in the commodity form of production that is organized by exchange. |
| During this exchange a definitive quantity of one commodity (20 yards linen) is equated with a definitive amount of another (2 oz gold). In the equation described the gold measures the value of the linen, the linen is a value relative to the gold, and the gold is equivalent to the linen. This value relationship can be expanded to equivocate a definitive quantity of all other commodities as its equivalent. This expanded form of value can be reversed to see the general equivalent form of value (ie looking at relating commodity values). Dr. Ehrbar demonstrates this repeatedly, but this does not answer our question. |
| “It was however of decisive importance to discover the inner necessary connection between the form of value, substance of value, and magnitude of value, ie, expressed ideally, to prove that the form of value springs from the concept of value (Ehrbar 137).” |
| Dr. Ehrbar states that this last statement is significant. Marx feels that due to the core-surface paradigm in which capitalistic production functions, that MONEY is the appropriate surface equivalent to attract economic agents. Social abstract labor is the organizer behind the core, which leads to Marx's concept of value. Exchange of commodities on the surface (ie the forms of value) need an appropriate equivalent to send signals (channel) economic agents “in such a way that they heed the core principles in their production decisions (Ehrbar 137).” |
| In 162:5 (135-136) Marx explains this metamorphose from General Equivalent to Money commodity, and from the general form of value, to the money form. While this explains in depth the birth (genesis) of money, it still does not account for the differences in money form and the general equivalent form. |
| The following is an abstract from the entry on Money and General Equivalent in “A Dictionary of Marxist Thought.” |
| Money is the socially accepted general equivalent, a particular commodity which emerges in social reality to play the role of general equivalent, and EXCLUDES all other commodities from that role. Marx usually refers to to the money-commodity as gold, and that the money form of value is embedded and arises directly from the commodity form of production. (as with all commodities, not just gold). |
| The most fundamental property of money in Marx's theory is its function as the measure of value of other commodities. The concept of a pure barter economy has no place in Marxist theory. (can you fathom international exchange relations?) “Once a commodity emerges as a socially accepted general equivalent, definite quantities of the money-commodity come to be used as a ‘standard of price,’ and bear special names, such as pound, dollar, franc etc. The state may then play a role in regulating and manipulating the standard of price (194:1).” |
| This is a subtle difference as well, as theoretically the value of the money commodity, like the value of other commodities, should change as conditions of production change (ie labor/kapital/technology). Keep in mind this is the gold standard, which gives Marx's labor theory arguments regarding value much more credence and merit. Firing up the presses today, is much different than excavating raw material from the earth in yesteryear. |
| A form of value must emerge, and Marx asserts (correctly so) that once a money commodity emerges it begins to play other roles besides that of measures of value: “as a medium of circulation, as and immobilized hoard of value, as means of payment, and as universal money... Since money makes only a fleeting appearance in commodity circulation, it is possible for tokens or symbols of the money commodity to replace it there as long as these tokens or symbols (forms) can in fact be converted into the money commodity at face value (338).” Hence, coins or cash with little value (or abstract labor) can circulate in place of gold. This too is a difference between the money form and general equivalent form. |
| The circulation of money allows the formation of hoards (requires it for capitalism) in order to accumulate the “crystallized abstract labor of the society as an end in itself.” Marx also alludes to money capital being stored for future productive endeavors, this would not be feasible with the general equivalent as its value would fluctuate dependent on production factors. In modern capitalist economies this link between the money form and general equivalent has been disbanded, and credit extensions are routine without regard to the money form as a commodity. Fort Knox is a relic of the past (not literally, but...) and our money form owes its allegiance to a slogan, “In God We Trust”, and certainly not backing from gold. (nor labor imbedded value). Yet the circulation exists... |
| Marx demonstrates that the money form mediates a social relation. It sets standards that allow all of us to gauge what the general equivalent is. “When money functions as a measure of value it expresses the equivalence of socially necessary abstract labour in exchange, the relation between commodity producers. Money in circulation permits the social validations of the products of private labor. The use of the money as means of payment mediates the relation between debtor and creditor, and money capital expresses the capitalists command over labor power (340).” |
| None of these relationships would be feasible with simply the general equivalent form, and in fact require the money form. Even the most ardent socialist society, (short of a self contained commune) would require the form of money. |
| I hope my classmates (as well as Dr. Ehrbar) appreciate this entry, as it was quite tiresome. I hope that MY interpretation is sound. rr |
| 1- A Dictionary of Marxist Economic Thought , Harris, Laurence. et al |
| Hans: You are right: a lot of monetary phenomena would be unthinkable if you just had a temporarty general equivalent and not a commodity once and for all designated to play this role. |
| I hope writing this long summary was helpful to you. By the way, don't start the development of the value form with linen versus gold, because your readers will think of gold as the money commodity. Begin with two ordinary commodities, perhaps linen versus potatoes or something similar. |
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