by An economy’s minimum wage equates a unit of the currency to an amount of labor time. For instance, in marxist terms, a minimum wage of /hour sets a dollar equal to 4 minutes of simple labor power. At a macro level, this enables currency value to be defined in terms of simple labor. There are, however, at least two ways in which this connection between currency value and labor could be drawn. One way would be to adopt a labor command theory of currency value. In effect, modern monetary theory (MMT) takes this approach. A second way would be to link the value of the currency to the commodity labor power. Adopting the second approach leads to a definition of currency value that is distinct from the MMT definition but closely (and simply) related to it. So far as policy implications go,
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Mike Norman considers the following as important: currency value, Labor Theory of Value, MMT JG
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An economy’s minimum wage equates a unit of the currency to an amount of labor time. For instance, in marxist terms, a minimum wage of $15/hour sets a dollar equal to 4 minutes of simple labor power. At a macro level, this enables currency value to be defined in terms of simple labor. There are, however, at least two ways in which this connection between currency value and labor could be drawn. One way would be to adopt a labor command theory of currency value. In effect, modern monetary theory (MMT) takes this approach. A second way would be to link the value of the currency to the commodity labor power. Adopting the second approach leads to a definition of currency value that is distinct from the MMT definition but closely (and simply) related to it. So far as policy implications go, especially in relation to MMT’s proposed job guarantee and prescriptions for price stability, there appear to be no important differences between the two approaches.Important now that we are getting into the nitty gritty stage of public debate on MMT.
To be clear, the purpose of the post is not to promote one approach over the other. So far as I can tell, on the question of currency value they are equally valid and fully compatible. The purpose is simply to consider, for readers who might be more inclined toward a commodity theory of money, how some form of commodity theory (though not a metalist one) might be reconcilable with MMT’s depiction of institutional realities and the opportunities open to monetarily sovereign societies, this understanding seeming, to me at least, both unassailable and fundamental to any worthwhile macroeconomics....
Peter Cooper is the preeminent authority on the relationship of Marx and MMT, and MMT JG opts for a labor theory of value by anchoring the value of the currency to an hour of unskilled labor. Peter explains this in terms of Marx's analysis. There is no comparable analysis in economics. Marx dug deep while marginalism — "vulgar economics" is Marx's terminology — takes only the surface into account.
heteconomist
Currency Value in Terms of Socially Necessary Labor
Peter Cooper
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It is why class (in Marx’s terms) has to be at the forefront of the analysis. Nothing in MMT denies that status!
Another way of thinking about this is that Marx lifted the veil of free market ideology to expose what is actually going on in the capital-labour exchange.
We should always being aware that these veils are often used to disguise power relations or other things that the elites do not want to be made transparent....Bill Mitchell – billy blog
Marxists getting all tied up on MMT
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia