Tag Archives: fiat money

A Marxist called “Jehu” who writes at The Real Movement blog challenges me here with four questions: Jehu, “Four Questions for LK on Money,” The Real Movement, February 20, 2016. His four questions are as follows: (1) Did not Marx predict the collapse of production on the basis of exchange value?(2) Did this collapse occur in the 1930s just as Marx predicted it would?(3) To save capitalism was it not necessary to sever gold from fiat?(4) What was the implication of the collapse of the gold...

This can be clearly seen from Marx’s statement in Chapter 3 of volume 1 of Capital: “The State puts in circulation bits of paper on which their various denominations, say £1, £5, &c, are printed. In so far as they actually take the place of gold to the same amount, their movement is subject to the laws that regulate the currency of money itself. A law peculiar to the circulation of paper money can spring up only from the proportion in which that paper money represents gold. Such a law...

Well, sort of agrees in the post that can be read here: Jehu, “Reply to LK: How Labor Theory of Value destroys Fiat ‘Money’,” The Real Movement, June 12, 2015. My original post is here.We must remember that for Marx money is a special commodity that itself must have a labour value so it can function as a universal medium of exchange and numéraire. That is the basis by which money can exchange for other produced commodities under the law of value in volume 1 of Capital. But fiat money...