In recent exchanges on Marx and MMT, one question has concerned the capacity of government spending to encourage private investment and promote employment. Some Marxists appear to regard MMT as incompatible with Marx on this question. My own view is that Marx and MMT are compatible, both in general and on this particular question, and that the contributions of both, when viewed together, hold an important long-term social implication. What follows is a set of remarks outlining my position. Remark 1 is intended to provide context and to identify what I regard as the main social implication following from a joint reading of Marx and MMT. Remark 2 notes the critical significance of Marx’s ‘law’ of the tendential fall in the profit rate when interpreting the long-term implications of MMT from a Marxist perspective. Remarks 3 to 10 concern private investment under capitalist conditions, its likely responsiveness to government spending, but also its crisis prone nature. Remark 11 questions the appropriateness of society pinning its future aspirations on private investment behavior. It is suggested that a transition to socialism is both preferable and, on the basis of MMT, already technically feasible for societies with their own currencies.
Monthly Archives: October 2021
‘Money’ in Marx and MMT and Social Implications
For both Marx and MMTers, money is a social relationship. For Marx, the social relationship is fetishized in a commodity for reasons that stem from the nature of commodity production. Money only becomes necessary, for Marx, when it is impossible for a currency to represent social labor time directly, which is the case under commodity production in which concrete labors are converted into abstract labor (i.e. marxian value) only indirectly through the workings of the ‘law’ of value. For MMTers, money is a social relationship that originates in debt. Debt relations can apply whether labor is directly social or only indirectly social (as in commodity production). Money, in MMT, is therefore a broader notion than in Marx. If Marx and MMTers meant the same thing by the word ‘money’, Marx’s view of the origins of money – as arising out of commodity production – would be irreconcilable with MMT. But Marx and MMTers do not mean the same thing by the word ‘money’. In MMT’s use of the term, the currency functions as money under commodity and non-commodity production alike, whereas in Marx’s terminology, the currency is a representative of money under commodity production but simply currency under non-commodity production. So far as economic implications go, these naming differences are not important so long as we keep them in mind.
Marx, MMT, and a Currency’s Expression of Labor Time
For Marx, a currency’s representation of the labor performed in commodity production is indirect, mediated through a ‘money commodity’. The reason for this is that labor performed in commodity production is not directly social but only made so, indirectly, according to the ‘law’ of value under which the concrete properties of diverse labors are abstracted from and the amount of labor socially necessary to produce each commodity is determined. Since the currency, at least from the standpoint of the currency issuer, does not require labor for its production, the currency itself is not a commodity and so does not in itself have (marxian) value. Instead, the currency expresses value indirectly by representing a commodity that does have value – the money commodity – which serves as universal equivalent. The indirect determination of social labor time within commodity production contrasts with the direct determination of social labor time when production is not for market. In the latter case, a currency (or labor certificates) can directly represent social labor time, because the labor is directly social.