Currency Acceptance, Currency Value, and Transcending Capitalism

While revisiting earlier discussions on Marx and Modern Monetary Theory (MMT), I came across an interesting comments thread. In it, a commenter raised an argument that seems worth addressing (the full comment can be found here). The commenter writes:

MMT treats money as a public utility, while Marxism treats it as an expression of value. And I think that no matter the engagement between these two schools of thought, one has to choose either one or another. Either money is an abstract public utility (grounded only in people’s accepting it, through the force of taxation or whatever), which can then be used quite unproblematically for public goods within any context whatsoever … or one realises that money is not an abstract public utility, but is concretely rooted in material processes, i.e. is a concrete expression of value. In which case the one can’t really treat it unproblematically as a public utility to be used by fiscal policy to achieve any ends under any circumstances.

Disregard the references to policy being viable “within any context whatsoever” and “under any circumstances”. MMT emphasizes that policy is constrained by the availability of real resources, as well as political factors. The focus, instead, can be on the substance of the comment, which concerns what I consider to be an insightful distinction between currency as public utility and currency as expression of value.

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Currency Value in Terms of Socially Necessary Labor

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.

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