EDUCATION | Part 3 | Reading Marx’s "Capital" Volume 1 with David Harvey

okay so maybe we should get underway so welcome to the third session on Marx's capital volume one and I want to just make one very general observation about the chapters that we are into here now what you see is Marx engaging in a process of elaborating upon the meaning of certain concepts there is if you like a sort of an evolution of the concepts and this is a rather different strategy than often exists in studies where you get a fixed definition and it remains fixed right throughout well this is a situation where the concepts do not remain fixed they get evolved and there is in these chapters a coevolution going on and the coevolution is between the concept of value and that which represents value which is money value cannot exist without in a cap in its capitalist form without money but at the same time money can't exist without that which it represents which is value so what you see is that Marx takes these two concepts and sort of starts to push on how to understand them more clearly and so the concept of money which has already been introduced is gradually evolved in these chapters so the chapter on money itself is one further step in that evolution now in Chapter two Marx takes one step further in this coevolution Airi process and wants to look more closely at the process of exchange and as he says the process of exchange two pens on the people doing the exchanging and so he introduces the idea of buyers and sellers he introduces the idea that there must be consent between the parties there should be no coercion there is a contract there is above all the concept of private property and that you're dealing with owners and you're dealing with them in terms of a juridical relation so on the first in a sense this chapter 2 is quite simply setting up the institutional framework within which exchange will take place between buyers and sellers and that institutional framework is the one which would be familiar to people who read Adam Smith or any of the other classical economists and in a sense what Marx does is to accept the idea of a perfectly functioning market economy that we're going to deal with an exchange relation and a perfect market situation and he makes clear of course that in this perfect market situation it's not persons matter but the roles and I've mentioned this before that Marx is interested in roles rather than persons and what he's interested in is the buyers and sellers operating in what we would call a perfectly functioning market which is based upon private property and juridical relations and reciprocity and exchange and all the rest of it now it's an interesting kind of question as to why is it that Marx would say okay I make the assumption which is a utopian assumption of both of our political economy of perfect perfect markets and perfectly functioning markets why is he giving us as it were this framework and why is this going to be the framework for the rest of what follows in capital because we know that markets are not perfect we know there's a lot of distortion and markets we know there's monopoly power we know that there's all kinds of things but at the end of this chapter two Marx comes I think to the conclusion which is that he's gonna be dealing with a kind of apartment market which is on page 297 he says men are henceforth related to each other in their social of production in a purely atomistic way their own relations of production therefore assume a material shape which is independent of their control and their conscious individual action now this is in a sense Marx talking about what Adam Smith called the hidden hand in other words the hidden hand of the market is such that no one individual is in control there is a lack of control now we've already hit this idea before way back when we were talking about wishes back on page 167 68 where Marx talks about the way in which the magnitudes vary continually independent of the will foreknowledge and actions of the exchangers their own movement within society has for them the form of a movement made by things and these things far from being under their control in fact control them now the theory of the hidden hand that that adam smith's laid out suggested that it really didn't matter what the exchanges had in mind that it didn't matter whether they were good people or evil people and this was one of the debates and about the utopianism of the market for Adam Smith none of that mattered because a hidden hand of the market would end up producing the result which is independent of the wishes desires mental conditions or the rest of it of the exchanges and this was Adam Smith's argument tonight man Marx is accepting this which is a bit strange and but then you have to remember the subtitle of capital is a critique of classical political economy and Marx is in effect saying let's take the utopian vision of the market which classical political economy was promoting in order to get the state power out of the way and and all of the distortions that came from price fixing by the state and so on let's get that all out of the way said the classical political economists and everything will be ok everything will be fine and Marx is ok I'll accept that bourgeois utopian vision of a perfect market and then what we will do is we investigate the question is everything gonna be ok and of course what he's gonna show is no it won't be okay in fact it will redound to the benefit of some people in society and destroy the well-being of other members of society in other words what Marx is going to do is is to say let's accept the most perfect form of market that capital can devise and then see what happens and what he'll show is that the Adam Smith's assumption that that market would work to the benefit of all it's wrong but he's gonna show it in Adam Smith's own terms he's not going to say it's wrong because it mystifies and the market is all wrong no Marx is gonna say the market is working in a perfect way now there are occasions in capital where he abandons that assumption but the general argument is making is of that sort so chapter 2 therefore sets up the conditions of a perfectly functioning market which I think pretty easy to comprehend them pretty easy to understand this chapter then is also about the way in which as the market becomes perfected so it is absolutely essential that two things happen first money has to crystallize out of the exchange relations in such a way and this is what he he sets out that the what he called the universal equivalent in his argument in the preceding chapter he's going to be achieved through the as he says at the bottom of page 180 only the action of society can turn a particular commodity into the universal equivalent in other words the universal equivalent is not something that's mandated by state power or invented in some way it arises out of exchange practices and those exchange practices in society conducted under the regime that he's already sort of described about private property rights and reciprocity and free trade and all the rest of it that that the action of in that society will have the effect of defining at a certain point a universal equivalent and as he says 181 money necessarily crystallizes out of the process of exchange and this is I think important because what he's saying here is that that crystallization out is going to seize hold of any other form of money that might already exist in society and there are different forms of money which had existed historically they're going to be absorbed within a very special definition of what money is about which is the money which arises and capitalist structures of exchange so money necessarily crystallizes out of the process of exchange in which different products of Labor are in fact equated with each other and thus converted into commodities missus the historical part the historical broadening and deepening of the phenomenon of exchange develops the opposition between use value and value which is latent in the nature of commodity the need to give an external expression of this opposition to the purpose of commercial intercourse produces the drive towards an independent form of value which finds neither rest nor peace and until an independent form has been achieved by the differentiation of commodities into commodities and money so we started with the commodity which is a unity of a certain kind and now let's use value an exchange value and then value in the commodity and now we're looking at a whole bundle of commodities of one sort in relationship to one commodity which is called money and says at the same rate then as the transformation of the products of labour into commodities that is accomplished one particular commodity is transformed into money okay so this is the coevolution the evolution of the monetary form now in this exchange if you go to the next page 182 Marx introduces the following sets of relations things are themselves external to man and therefore alienable in order that this alienation may be reciprocal it is only necessary for men to agree tacitly to treat each other as a private owners of these alienable things and precisely for that reason as persons who are independent of each other so we have the independence of the exchanges we have the capacity of each of them to alienate the commodities which they control and by alienation here mark simply means parting with getting really rid of and this he then goes into a little discussion about how historically this sorts these forms of capitalist exchange might arise and he talks about commodities the exchange of commodities begins where communities have their boundaries and then he goes on to say the constant repetition of exchange makes it a normal social process now these one of the things that this means is that value only becomes value in its capitalist form under conditions where there is a constant repetition of exchange and exchange relations have become a normal social process so that the universal or social equivalent as he as he calls it arises only in the in the in the conditions of further and further deeper and deeper amounts of commodity exchange and as he says at the bottom 183 the same in the same proportion as exchange bursts its local bonds and the value of commodities accordingly expands more and more into the material embodiment of human labor as such notice that price the value of commodities expands more or more into the material embodiment of human labor as such in that proportion does the money form become transferred to commodities which are by nature fitted to perform the social function of a universal equivalent these those commodities are the precious metals so again this is the toe evolution if you like of the value form and the money forms and miss of course then leads him to say well there are two commodities that really perform this function very well and those commodities are gold and silver and this then suggests that these are going to become the universal forms of money within a capitalist society where value has become as it were the regulatory norm of the exchange relations in this sense he says every commodity is a symbol of value but that symbol is actually then going to be reflected in the monetary form and then that leads him to this conclusion which is that men are henceforth related to each other in their social production in a purely atomistic way now the Adam Smith argument was that in a perfectly functioning market no one individual can actually dictate prices prices form as a result of a market process and no one individual or collection of individuals has control over those prices the prices will arise out of the exchange process independent of the will of any one particular or even one group within the population so this is the exchange process that Marx is envisaging and it is a perfect market system in which money is now well established and clearly established gold and silver in which value is now become more securely established because of the volume of exchange which is going on which is great equating Labor's from all over the world into a single system of exchange relations so I don't think this is a too difficult to chapter but it leads us then of course into the chapter 3 which is money or the circulation of commodities now last week I'd suggested to you this is kind of beer going to be a difficult chapter and probably you would give up on it before you got to the end of it I don't know if you've experienced that maybe maybe you didn't but it is very common to sort of throw up hands in frustration at this particular chapter but it has if you like a simple structure and I would always advise you when you're hitting marks to look at the section headings in volume 1 there they they indicate what is going on section 1 is about the measure of values section 2 is about the medium of circulation means of circulation and section 3 is about money which is the unity of both measure of values and means of circulation and some of the contradictions that attach to that unity so there is a framework a general framework if you like which I try to diagram in that sort of dialectical movement that depicted last time so anyway chapter 3 starts like this the measure of values throughout this work I assume that gold is the money commodity for the sake of simplicity and then he talks about the function of gold is to supply commodities with the material for the expression of their values that is gold is an expression of the value of value it is not value itself but it is an expression or and elsewhere it will be a representation and value and then he goes on the bottom of this first page to say money as a measure of value is the necessary form of appearance of the measure of value which is imminent in commodities namely labour time so money is a representation of labour time and socially necessary labour-time of course and that is something which is imminent in commodities and money seeks to express or represent it and it does it in part by allowing for price formation and so Marx talks about the measure of value in relationship to price formation and this leads him to do a sort of duality around the measure of values that a price is something which is an ideal number which you would hang upon commodities it's the label which says this is going to cost this and this is an ideal determination it is not something which is determined by exchange it's what the seller hopes to get it is therefore as he says a purely ideal or notional form so initially the price or money form of commodities is like their form of value generally quite distinct from their palpable and real bodily form it is therefore a purely ideal or notional form the guardian of the commodities must therefore lend commodities that his tongue or hang a ticket on them in order to communicate their prices to the outside world these are our notional or ideal prices so there's an ideal act by Marx talks about it as an ideal it means it is a mental rather than material fact money therefore he says serves only in an imaginary or ideal capacity you imagine what the value of a commodity is and you say this is I hope that this is worth you know two pounds or five pounds or whatever and this value form is then a very significant way in which markets must work as he says the money that performs this function of measure of value is only imaginary the price depends entirely on the actual substance that is money the value ie the quantity of human labor which is contained in a ton of iron is expressed by an imaginary quantity of the money commodity which contains the same amount of labour as the iron so therefore you would say the value of the gold is equivalent to the value of the iron and this and therefore you would then use the value of the gold as a means to sell the iron but these are all price expressions and this takes Marx immediately into the question of well as an expression gold has Patil particular qualities and this then leads him into saying this on page hundred ninety-two as measure of value and a standard of price money performs two quite different functions so money is at some point going to be a real measure of the value of commodity but it's only a real measure after the exchange before the exchange it's a notional value and it is therefore a standard of price standard a price is an ideal measure which you hope to realize the real measure of value comes after you have exactly exchanged it for the gold gold conserve he says as a measure of value only because it is itself a product of labour and therefore potentially variable in value so you're going to take the labour that is incorporated in the production of gold and you're going to treat that as the norm against which all other commodities are going to be valued this immediately poses a problem of what about the labor content of the gold is it constant no it's not it's constantly changing because it's a product of concrete labor and what we're now gonna see is and if you remember but back in the chapter on relative and equivalent form of value marx started to talk about the equivalent form and the contradictions of the equivalent form that a particular commodity was going to be a measure of labor content in general how can that be and obviously there's a contradiction in that Marx is then resurrecting that contradiction he yeah and this then leads into the possibility of inflation Marx had to deal with that because in 1848 there was the famous gold rush to California suddenly a lot of new gold is coming on the market and suddenly the value of gold is you know going down and so what happens to prices when this happens so he has to deal a bit with with that with that kind of problem but he basically says this doesn't change the relative prices all prices will shift if if gear if gold becomes scarce then all prices will move up but they'll move up in ratio to each other and therefore the value of content will simply bar tira has to recognize that there's the possibility of inflation in the monetary form or deflation of the monetary form because there is some scarcity of gold and will come up upon that later so this then leads him to the conclusion of this little part of the argument the price is the money name of the labor objectified in a commodity the magnitude of the value of a commodity therefore expresses a necessary relation to social labour time which is inherent in the process by which its value is created with the transformation of the magnitude of value into the price this necessary relation appear the the exchange ratio between a single commodity and the money commodity which exists outside it and then he goes on to say this the possibility that therefore exists of a quantitative incongruity between price and magnitude of value this is a bottom of 9600 96 I II the possibility that the price may diverge from the magnitude of value is inherent in the price form itself and then he goes on to say something strange or seemingly strange this is not a defect but on the contrary makes this form the adequate one for a mode of production those laws can only assert themselves as blindly operating averages between constant irregularities what he's talking about here is that if price is going to work in the market in such a way as to represent value then in a situation where there's too much of a commodity in the market then the price is going to have to go down and as the price goes down producers will produce less of the product so you will end up coming into equilibrium in other words equilibrium of supply and demand and the market can only work if prices actually always will be deviating from values sometimes in a positive direction sometimes negative depending upon demand and supply conditions so if the market is going to work perfectly you need something like a price form which can deviate from value if all commodities change exchange that their values all over time there will be no mechanism and here Marx is allowing that demand and supply in the market is significant that demand and supply is going to affect relative prices the relative prices are going to help as it were create an equilibrium situation in the market and that equilibrium situation in the market is going to be a representation of value but in order to get to that equilibrium you need the prices to fluctuate around demand and supply conditions now the way in which the classical political economists talked about this was there were prices and what were called natural prices what they meant by natural prices were equilibrium prices that that price at which demanded supplies in equilibrium and that is the representation of value but in order to get to that prices have to have this quantitative incongruity and as Marx kind of says this is not a defect but on the contrary it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages that is natural prices between constant irregularities he then goes on to say something which is much more problematic however the price form is not only compatible with the possibility of a quantitative incongruity between magnitude of value and price between the magnitude of value and its own expression in money but it may also Harbor a qualitative contradiction with the result that price ceases all together to express value despite the fact that money is nothing but the value form of commodities things which in and for themselves are not commodities things such as conscience honor etcetera can be offered for sale by their holders and thus acquire the form of commodities through their price hence a thing can formally speaking have a price without having a value the expression of price is in this case imaginary like certain quantity in mathematics on the other hand the imaginary price form may also conceal a real value relation or one derived from it as for instance the price of uncultivated land which is without value because no human labor is objectified in it now this is a very important passage and I think over time it's become even more important and I think if Marx is writing this today he would want and feel the necessity to elaborate considerably upon what he's talking about here ok things that are not commodities conscience honor can acquire the form of commodities through their price we have a situation right now where if you said how do you value a company like Apple well you could take all of its inventory of goods and you could take its production and always kind of thought of stuff and you could add it all up and you could get some sort of price of what Apple is worth but under contemporary conditions you would find that would be nowhere near the market price the market price would include if you sold Apple on the market in what are called intangibles reputation and actually reputational value is something which is not necessarily achieved through labor input in the sense that Marx is talking about it it might involve labor in creating the imaginary of what a commodity can do so she took a brand of toothpaste for example you could take whoa okay what's it that's what's the socially necessary labour-time involved in the production of the toothpaste but all toothpaste companies are busy as hell trying to junior alter their reputational value and in fact there's a peculiar way in which the higher the price the more people think there's this substance to the reputational value and therefore they should buy it there's a big study of shampoos you know which there are these classy shampoos which actually turn out to be no better than just soap and water which sell for a huge amount because of their reputation or value so we have a market system in which this quantity qualitative incongruity between value and price is actually very significant to the way in which the market is working and in the case of uncultivated land obviously there's a land price even though nobody's put any labor whatsoever to changing the land and in that instance of course you would start to say well actually the price of something is also dependent not only on the commodity itself but also on externality conditions of other commodities in the case of land the value of a plot of land does not depend solely on what is what labor is incorporated in that piece of land it also depends on labor which is incorporated in the lands around it one of the ways in which the value of a piece of land gets increased dramatically is somebody builds a highway into an empty area if that makes the land accessible nothing's been done to the land but labor has been put into the highway and some of the external effects of that value are then incorporated in the land so this qualitative contradiction it's something which is one when I mentioned last time you know and reading capital or a number of doors that open and you go through and you see different things now Marx doesn't do much with this at all but in our situation in our time we would have to do a lot with this and Marx opens up the possibility to his credit but he doesn't follow it through but if we're going to do what I think Marx would want us to do which is to say okay there's something going on here that needs now to be more thoroughly explored then this item needs to be much more thoroughly explored and how is it that the value of commodities and in fact the whole exercise of branding of commodities and brand value and reputational value and intangibles which are involved in stock market evaluations of the values of companies how is it how do those things work that's again one of the things that is not covered Marx does not cover but opens the possibility in other words here is the possibility but having said this he just says well okay I'm not going to consider this any further but I think we have to and what we would make of it it's an interesting kind of question we can debate so that is about money as a measure of value there are other things about this notion of a measure of value which were significant which is a measure of value you want it to remain stable and that's why gold becomes important because it has a stable character as measure of value it performs money performs quite a few different functions in society Marx is not elaborating very much upon them but we can do so this leads us into the second major section which is money as a means of circulation and here mark starts to get into the flow of exchange this is the conversion of if you'd like a single incident into a flow and I've mentioned that Marx is very much about flows and therefore this conversion into the flow category it's going to be highly significant to the rest of capital and the flow beat begins with him setting up the idea of a metamorphosis of commodities and this then takes him to the concept of a contradictory and mutually exclusive conditions which regulate the flow of commodities as they move from the commodity form into the money form and then from the money form into the commodity form so we get the emergence of this movement of commodity money commodity or C M C and he says that this these mutually exclusive conditions actually set up certain contradictions and he has an interesting remark about the contradictions the further development of the commodity go back to what I started off by saying that Marx is developing the concepts all over time the further development of the commodity does not abolish contradictions but rather provides the form within which they have room to move this is in general the way in which real contradictions are resolved and he has a very interesting parable for instance it is a contradiction that he picked one body is constantly falling towards another and at the same time constantly flying away from it the ellipse is a form of motion within which this contradiction is both realized and resolved in so far as the process of exchange transfers commodities from hands in which they are non use-values two hands in which they are useful use it is a process of social metabolism now he's already introduced the concept of metabolism in natural metabolism but here he's talking about social metabolism the product of one kind of useful labor replaces that of another once a commodity has arrived in a situation in which it can serve as a useful you it falls out of the sphere of exchange we consume it use it and it falls out of the sphere of exchange into that of consumption but the former sphere alone interests us here we therefore have to consider the whole process in its formal aspect that is the aspect of metamorphosis of commodities through which social meta metabolism is mediated the metamorphosis of commodities is a change of the form of expression of value when you start with the commodity value is embodied and congealed in the commodity form when that value is converted into the money equivalent then the value takes a different form it's no longer in the commodity form it's in the money form it is then converted once again from the money form into the commodity form this is what the social metabolism is about so he then takes to analyzing this CMC circulation process and it broken down into two parts c2m how difficult is it to move from the commodity form to the money form and this is the one place where mark starts to talk about that movement it depends very much upon the once needs and desires of a population for the commodity that you have produced it can own the commodity can only be converted into money he says by being socially useful to somebody somewhere but the division of labor he says is an organization of production which has grown up naturally a web which has been continues to be woven behind the backs of the producers of commodities perhaps the commodity is the product of a new kind of labor and claims to satisfy a newly arisen need or is even trying to bring forth a new need this is one of the few places in capital where Marx is talking about conditions of realization that may be problematic he says today the product satisfies the social need tomorrow it may perhaps be expelled partly or completely from its place by a similar product see and so this is about the production of new wants and needs at the end of it however the price of the commodity is merely he says the money name of the quantity of social labour objectified in it and he talks about this again and talks I think in Nice sort of version Shakespearean kind of mode we then see that commodities are in love with money like trumpet of him what's his name but that the course of true love never did run smooth there is there's always a difficulty of getting from C to M and that difficulty is yeah you've got to make that transition but there has to be a one need desire love for what it is that you've got in order for that C to m to occur but this is part of what the organic relation is and the process which is going on in society the quantitative articulation he says and this is bottom 202 a societies productive organism by which is scattered elements are integrated into the system of the division of labor he says haphazard and spontaneous as its qualitative architecture the owners of commodities therefore find out that the same division of labor which turns them into independent private producers also makes the social process of production and the relations of the individual producers to each other within that process independent of the producers themselves they also find out that the independence of the individuals from each other has as its counterpart in supplement a system of all-round material dependence now this is a contradictory argument on the one hand the social division of labor allows people to act in purely independent way as producers but the social metabolism is such but you're not independent because you've got to find a market for your product so on the one hand you're independent and on the other hand you're dependent and you're dependent upon conditions in the markets the division of labor he says converts the product of labor into a commodity and thereby makes necessary its conversion into money at the same time it makes it a matter of chance whether this transubstantiation succeeds or not here however we have to look at the phenomena in its pure shape and must therefore assume it has proceeded normally okay so he's talked about you know the possibility of realization crises and realization difficulties and all difficulties but he's now saying okay I've had enough of that I'm gonna assume there's no problem but you can make the the leap from commodity into money without any difficulty and that therefore the conversion of C into M is easily accomplished this then leads him to say well but what about M into C now seeing the M is taking the particularity of a commodity and trying to find its universal equivalent the move em to C is taking the universal equivalent and trying to find its equivalents in the particularity of the commodity which is easier to do going from C to M or M to C 1 case you're going from the particular to the universal the other going universal to the particular it's not equivalent it's easier to go from the universal to the particular than it is to go from the particular to the universal that is you risk far more when you're contemplating for C and to M then you you risk when you're looking at M into C and gives you the universal power and he starts off looking at MC by talking about Universal alienation that is that you have money and you can use it to buy whatever you want you can go get anything you like furthermore once you've got the money the commodity that you use to get the money disappears entirely from view so you enter the market with nobody knowing what it was that you produced which is again part of the fetish mask you have no idea when somebody comes in with a lot of money where they got it from which is a kind of constant problem for you know dealing with money laundering and all kinds of things like that these days so the complete metamorphosis of the commodity which is C to M and then M to see these two antithetical transmutations he says on 206 are reflected in the antithetical economic characteristics of the two processes they by taking part in the act of sale the commodity owner becomes a seller and the act of purchase he becomes a buyer so the same person two roles being a seller and being a buyer are therefore not fixed roles but constantly attached themselves to different persons in the course of circulation of commodities this whole process he says it creates a circuit circulation process the whole process constitutes the circulation of commodities which then leads him on 208 to 209 to a very interesting passage which we should spend some time looking at circulation he says sweats money from every poor commodities are dropping out of circulation at money in circulation some money keeps on circulating but then Knox goes on to say this on 208 nothing could be more foolish than the dogma but because every sale is a purchase and every purchase of sale the circulation of commodities necessarily implies an equilibrium between sales and purchases and then he goes on to explain what he means by all this and the contradiction is this he says right at the bottom no one can sell unless someone else purchases but no one directly needs to purchase because he has just sold circulation bursts through all the temporal spatial and personal barriers imposed by the direct exchange of products and it does this by splitting up the direct identity present in this case with in between the exchange of one's own product and the acquisition of someone else's to say that these mutually independent and antithetical processes form an internal unity is to say also that their internal unity moves forward through external antitheses these two processes lack internal independence because they complement each other hence if the assertion of their external independence proceeds to a certain critical point their unity violently makes itself felt by producing a crisis what's Marx doing here now there's something in classical political economy called sales law and say is law stated that since every purchase is a sale and every sale is a purchase there can be no general overproduction crises are impossible in perfectly functioning markets so says sales law Marx is saying this is a load of rubbish nothing could be more foolish than the dis Dogma of a simple reason that within this transition if I transfer my commodity into the market and get the money I can then hold the money as well long as I like and if everybody refuses to use their money nobody else can sell their commodities and you get a general crisis in other words holding money but if you feel the some risk in what's going on in society what would you rather hold money or commodities most of the time he probably would refer prefer to hold the universal equivalent unless there's something going along with the universal equivalent huge inflation like in you know Venezuela 2000 cents a day or something of that kind then you don't want to hold money you would rather hold cans of tuna but a lot of the time you'd rather hold money what a corporation's doing right now they've been benefiting from quantitative easing and they've been getting a lot of money what are they doing with their money they're not necessarily investing it at all what are they doing they're buying back their own stock buying back their own stock raises the value of their stock so they buy back more stock so they don't you don't have to spend the money once you've got it what Marx is doing here is saying CMC is problematic because there is a constant temptation to hold money particularly under conditions of uncertainty you withhold that next step and if I as an individual hold money no problem but if everybody starts to hold money big problem and that's where the antithesis is saying here this is the unity between the C and M and the Eman see the unity violently makes itself felt by producing a crisis so that you can get a crisis simply in this circulation process because somebody somewhere or even groups of people will start to hold money rather than keep the process going so as he says the antithetical phases of the metamorphosis of the commodity well the developed forms of motion of this imminent contradiction these forms therefore imply the possibility of crises mr. Keynesian retains later on called the liquidity trap though no more than the possibility he says as Marx for the development of this possibility into a reality a whole series of conditions is required which do not yet even exist from the standpoint of the simple circulation of commodities but notice something here he's already looking at where and how this whole kind of social metabolism can get gummed up and go wrong and produce major crises in society and in the 1930s it was pretty clear the holding of money because everybody felt insecure meant that the market for commodities collapsed and as the market for commodities collapse what did they do it ended up burning all the coffee in Brazil and shooting all cattle in Iowa and things like that so this is this is marks beginning to talk about the possibility of this system collapsing for some reason or other and you can see simply by looking at the CMC that there is a possibility here that this could happen he's not going to say as a probability because he hasn't got all the other conditions later on he will talk about the probability of crises forming in this kind of way but we need a lot more to know a lot more about this situation before we get to that far this then leads him into a general discussion of the circulation of money now I'm gonna pretty much pass over this because the question he's really posing is this in a complicated society where as lots of commodities are being exchanged well how much money do you need to facilitate the exchange and it kind of situations arise where there's a shortage of money or in excess of money what how how is this going to be and this is something that bothered the classical political economists and the question of how much money you need was a question of considerable debate and for the next few pages Marx talks about various ways in which to think of this and I'm gonna skip over these because there are he says basically three factors which tell you how much money you need the first is the movement of prices that is the second is the quantity of commodities in circulation and the third is something called the velocity of circulation of money very important magnitude the Federal Reserve is constantly talking about the velocity of circulation velocity of circulation is how many times in a day does a dollar bill exchange hands if for example this dollar bill only changes once it's a slow velocity if I use the the the dollar bill there and then the dollar bill goes there and then the dollar bill goes there as the velocity of circulation accelerates so velocity of circulation is a very important magnitude and this generates a quantity theory of money sort of version which outlines on to 19 the law but the quantity of circulating medium is determined by the sum of the prices of commodities in circulation and the average velocity of the circulation of money may also be stated as follows given the sum of values of commodities and the average rapidity of their Metamorpho sees the quantity of money or of the material of money in circulation depends on his own value this then leads him also to an intersection in the next section section C on well in mean in the circulation process the various forms that money itself can take it can take the shape of coin it can take its shape in the form of state-issued paper it can take you know in many many different forms and paper money issued by the state and given force currency and so on those are also important and this form of money he says emerges directly out of the circulation of metallic money but there was another kind of money which begins to emerge and this is what becomes significant and this is on 2:24 you talked about credit money implies relations their eyes yet totally unknown from the standpoint of the simple circular commodities but it may be noted in passing that just as true paper money arises out of the function of money as the circulating medium so does credit money take root spontaneously in the function of money as the means of payment credit money is really I Oh use IOU I'll pay it tomorrow day after or something like that or I can write it down where I can just promise you so credit money starts to become part of the way in which money facilitates the circulation of commodities this leads to the third section which is that of money the commodity which functions he says in the 227th as a measure of value and therefore also as a medium of circulation missus he's bringing the two together now a medium of circulation you know this money as a measure of value of money as a medium circulation but there's only one money the end of the day and the bond money is a unity of measure of value and medium circulation and he said the commodity which functions to do this either on its own body or through a representative his money gold or silver is therefore money it functions it money when it has to appear in person as gold and is then the money commodity and so Marx is talking very much about a society in which there is a single money commodity here - we have to recognize that that is not situation today gold is no longer at the root of world money Marx assumes at the beginning that gold is the money form continues to assume throughout that the gold form cannot and will not be challenged this is something which clearly has to give way but before doing so we have some other things to look at and this is when marks then says okay let's look at the process of hoarding and in particular hoarding of money hoarding of money as he says money is petrified into a hoard and the seller of commodities can become a hoarder of money this is going back to the CMC and the hoarding of the money in the very beginnings of the circulation of commodities is only the excess amounts of use value which are converted into money and then he goes on to talk about gold and silver and all the rest of it but the gold in itself starts to become a fetish form and the hoards of gold and silver get piled up he says at all points of commercial Interpol's with the possibility of keeping hold of the commodity as exchange value exchange value of the commodity the lust for gold awakens Gold is a wonderful thing it's owner is master of all he desires cold can gold can even enable souls to enter paradise this is from Christopher Columbus who was stealing gold as much as he can find since money does not reveal what has been transformed into it everything commodity or not is convertible into money everything becomes saleable and purchasable circulation becomes the great social retort into which everything is thrown to come out again as the money Cristal nothing is immune from this alchemy the bones of the Saints cannot withstand it let alone more delicate race sacrosanct I extra commercial hominem which translates into a purchase in the strict sense implies the gold and silver I'm sorry it's from Henry the eighth it's about him robbing the monasteries and all the rest of it and stealing their gold just as in money every qualitative difference between commodities is extinguished so - for its part as a radical level it extinguishes all distinctions but money is itself a commodity an external object capable of becoming the private property of any individual remember that moment back when he's talking about relative and equivalent forms of value and and who talks about the facts and it's not only that the particularity of a commodity is standing in for all the forms of value it's also that private persons can start to hold social wealth because that's what money represents thus he says the social power becomes a private power of private persons it's a very important idea and it's for this reason he says the ancient society therefore denounced money as tending to destroy the economic and moral order modern society which already in its infancy had pulled pluto by the hair of his head from the bowels of the earth greets gold as its holy grail as the glittering incarnation of his innermost principle of life but the history of money has in gold has this dual character filthy lucre it's treated as experiment you should see what Freud says about it it's and that's what how the boys where I live they live by in a lot and then this leads to Marx's come in as follows the commodity as a use-value satisfies a particular need and forms a particular element of material wealth but the value of a commodity measures the degree of assert wracked administer all other elements of material wealth and therefore measures the social wealth from its owner to the simple owner of commodities among the barbarians and even to the peasant of Western Europe value is inseparable from the value form hence an increase in his hoard of gold and silver is an increase of value there is therefore a whole society which is built upon accumulation of gold and hoarding of gold and their mark sort of talks about this the hoarding drive he says his boundless in its nature qualitatively or formally considered money is independent of all limits that is it is the universal representative of material wealth because it is directly convertible into any other commodity the contradiction between the quantitative limitation and the qualitative lack of limitation of money keeps driving the hoarder back to his Sisyphean task accumulation this is the first mention of accumulation with God and it's about the accumulation of wealth in money form and hoarding of that wealth the hoarder therefore sacrifices the lusts of his flesh to the fetish of gold sell much and buy little if the sum of his political economy now hoarding says Marx is antithetical to the continuity of the circulation of capital therefore you have to break with this medieval that and find some way to go past the hoarder but before you do that you have to recognize as he says at 1:02 31 there are actually some purposes where metallics circulation goes alongside of hoarding with productive consequences for society he puts it this way in order the mass of money actually in circulation may always correspond to the saturation level of the sphere of circulation that is some of the prices time the quantity of commodities factored by the velocity it is necessary for the quantity of gold and silver available in a country to be greater than the quantity required to function as coin the reserves created by hoarding service as channels through which money may flow in and out of circulation so that the circulation itself never overflows its banks you have a mass of commodities in circulation and being exchanged you have a mass of money which is required the mass of commodities suddenly increases because a good harvest or people have got very productive therefore you need more money where's the money going to come from if you've got a hoard you can put inject more money from the hoard in much the same way that the Federal Reserve injects more money into the system by you know buying mortgages and all the rest of it so having a hoard there has a function in relationship to the ups and downs of commodity in a moment when was too much money in there then it's taken out and put back into the hoard in us in a sense what Marx is describing here is a hoarding movement which is analogous to the Federal Reserve during quantitative easing and then you know going in the other direction so that you're releasing money in and out depending upon conditions of trade and if the conditions of trade are hot then you release more money in if it's sure you know I mean but then this leads into another function of money which is means of payment and here we start to talk about something in which there is no actual utilization of money at all because I simply state IOU that's the means of payment and this leads them to the way in which somebody will buy a commodity before he pays for it the seller sells an existing commodity the buyer pays as the mere representative of money or rather as the representative of a future money the seller becomes a creditor the buyer becomes a debtor since the metamorphosis of commodities or the development of their form of value has undergone to change here money receives a new function as well it becomes the means of payment and this then introduces into the discussion the role of creditor or debtor and this these roles result from the simple circulation of commodities so you've got the simple circulation of commodities you've seen all the ways in which it can work but debtors and creditors become significant because the timing of the circulation of commodities is complicated it's complicated by the fact that the harvest comes in in September you need money all year round how do you get the money all year round well what you do is you borrow money you borrow money you borrow money harvest comes in you sell your grain and you then pay off your debt so in Britain at the time there was nickel --mess which is they in November which is considered to be the day when all debts were going to be settled but in order for the circulation to continue in order for the person to you know live while they grow their crops they need to work on I our use and debtors and creditors become part and part of the story but there's a power relation in this the opposition now looks he says much less pleasant and capable of more rigid crystallization the same characteristics can emerge independently the circulation of commodities and he talks about the class struggle in the ancient world for instance took the form mainly of a contest between debtors and creditors and ended in Rome with the ruin of the plebeian debtors who are replaced by slaves in the Middle Ages the contest ended with the ruin of the feudal debtors the relation between creditor and debtor does have the form of a money relation was only the reflection of an antagonism which laid deeper at the level of the economic conditions of existence on 234 he converts this discussion of debtors into creditors into the point of origin of capital so finally on page 234 we get the capital the means of payment he says enters circulation but only after the commodity has already left it the money no longer mediates the process it brings it to an end by emerging independently at the absolute form of existence of exchange value in other words the universal commodity the seller turns his commodity into money in order to satisfy some need the hoarder in order to preserve the monetary form of his commodity and the indebted purchaser in order to be able to pay if he does not pay his goods will be sold compulsively the value form of the commodity money has now become the self-sufficient purpose of the sale owing to a social necessity springing from the the process of circulation itself this is a slightly convoluted way of saying debtors and creditors person who holds the money he's going to start to lend the money out and in lending the money out the aim and objective of lending that money out is not to get commodities but to get more money that is you're gonna charge interest you're gonna get more money and out of this comes as he says this social necessity springing from the condition of the process of circulation itself which says there's going to be a transition in the way in which we're looking at circulation from C mc2 mc2 34 is where this transition begins and remember this because it the transition from CMC and MCM isn't is not accidental it arises out of a social necessity because of a certain point those people who control the money need to use it in order for this society the social metabolism to work they have to use it but why would anybody use money to buy commodities and then sell for money why would you go through all of that bother train them up with exactly the same amount of money at the end of this process as you started out with whereas with use values the same value which you get makes sense because you need a shirt as opposed to shoes it doesn't make sense when it comes to see em because you're just getting the same amount of money back at the end as you started out with so the obvious incentive is that it's going to be M C M plus an increment of some kind you're only gonna lend the money out if you can get more back so this is the transition that Marx is going into but this is a contradictory situation the buyer converts money back into commodities before he has turned commodities into money in other words he achieves the second metamorphosis of commodities before the first the quantity involved here wellness then talks about relationships with creditors and debtors and all the rest of it and the means of payment there is a contradiction he says imminent in the function of money as the means of payment when the payments balance each other money functions only nominally as money of account as a measure of value but when actual payments have to be made money does not come onto the scene as a circulating medium in it's merely transient form of an intermediary in the social metabolism but as the individual incarnation of social labour the independent presence of exchange value the universal commodity this contradiction bursts forth in that aspect of an industrial and commercial crisis which is known as a monetary crisis here we go again we're looking at ways in which the social metabolism can get gummed up and screwed up such a crisis occurs Marx says only where the ongoing chain of payments has been fully developed along with an artificial system for settling them whenever there is a general disturbance of the Meccan no matter what it's cause money suddenly and immediately changes from its milli nominal shape money of account into hard cash profane commodities can no longer replace it the use value of commodities becomes valueless and their value vanishes in the face of their own form of value the bourgeois drunk with prosperity and arrogantly certain of himself has just declared that money is a purely imaginary creation commodities alone are money he said but now the opposite cry resounds over the markets of the world only money is a commodity as the heart pants after freshwater so pants his soul after money the only wealth in a crisis the antithesis between commodities in their value for money is raised to the level of an absolute contradiction hence money's form of appearance it is here also a matter of indifference the monetary famine remains where the payments have to be made in gold or credit money such as Bank motives if we now consider the total amount of money in circulation during a given period we find that for any given turnover rate of the medium of circulation and the means of payment it is equal to the sum of prices to be realized and then it goes on to talk about the circulation process of this kind now credit money is the link between the general circulation of commodities and the circulation of capital and the existence of the capital formed but we haven't explored the capital form as yet that is to be done in the next few chapters but what Marx does in these pages is to to set up the way in which capital emerges out of the processes of exchange and it doesn't arise because somebody decided to do it arises because the contradictions of the exchange system can only be resolved by a formal circulation which is going to use money in order to sustain the system and the agent that uses that money is going to be defined as a capital capitalist the development of money says on 240 as a means of payment makes it necessary to accumulate it in preparation for the days when the sums which are owing fall due so this is if you like the point where Marx has brought us and the last sector section is called world money and he kinda says it is in the world market that money first functions to its full extent as the commodity whose natural form is also the directly social form of realization of human labor in the abstract his mode of existence becomes adequate to its concept the concept of abstract labor was given way back he's now defined a mode of existence for abstract grammar which is adequate to that concept and that only exists when the world market has been constructed you can't have value without having the world market you can't have value without money money cannot perform all of its functions in the form Marx is talking without the world market this is where he's brought us to the end of this chapter and hoarding has a very important role to play you understand why reporting occurs but we can also see a form of hoarding which is about taking money out of circulation at a certain point in time holding that money and injecting it back into circulation at another point in time and the only reason you would inject it back into circulation is because you can get more for the money when you inject it back into circulation and that is going to be the theory of capital which is taken up in part two so this is the chapter in money you've gone through a series of stages measures measure of value medium of circulation how much money do you need in exchange what are the social relations that are involved what's involved in the circulation process and the metamorphosis from money to commodities to money what's involved in all of that are there points in here where the potentially IOT exists for the system to come up and to give screwed up and the answer is yes there may be a realization problem people may hoard too much money there's the possibility of monetary crises because too much money is available and no enough is available in relationship to commodities being exchanged and the value relation to the money is problematic so we've got all of these sorts of questions which are being posed in this chapter so it's a complicated chapter but from here on in it gets much easier so we'll do the next three chapters next time but they're much easier but let's talk about if there are questions that people have about the money chapter yeah I guess you're neither hi so you mentioned a while back that there are intangible commodities such as brand reputation whatnot I'm wondering if you could translate this concept into contemporary social media use and how perhaps I think the term has been thrown around as social capital is used to build a presence would you say this falls under the same kind of purview that Marx was talking about well I don't think it's fair to say that Marx talked about this in a way which is adequate to the to the situation lots of things we can learn from capital then there are some things that that that stand out as being requiring as it were both an expansion and potentially a break with some of Marx's conceptual arguments I would say that what we've encountered so far the two areas where though you would need to engage in some serious modification of what he has to say is firstly the question of gold gold is no longer at the basis of the monetary system of monetary structures have changed quite dramatically since Marx is working therefore we need to rework a lot of that but I think you know in in in so doing we also have to recognize some of these other things like he opens up the possibility of price not being equivalent to value and the circumstances are such as to open that door to a consideration of reputational value intangibles and their like how that works when we start to sort of try to look at how do you value Google what is the value of a Google transaction there's some interesting sort of questions there because in effect a lot of the value in Google is created by us we're the ones who are doing the labor but we are were the free gifts of human nature if you like which Google is appropriating now Marx by and large is not going to be analyzing forms of appropriation of that kind except in the chapters on rent in Volume three of capital so when he says in here that he's assumes that the circulation is occurring in his normal way he's going to assume away most of those problems and again I don't know I think I'm fine with him assuming away all those problems what I'm not fine with is people failing to recognize the implications of making those assumptions and trying to actually crammed into Marx's formulations stuff that doesn't fit I think I think this question of intangible value of I mean actually that something's fairly recent in the history of capitalism one of my arguments about this would be that to the degree that capital reached certain what you might call quantitative even qualitative limits in the realm of tangible commodity production in the 1970s 1980s is shifted a lot of its activities into intangibles and to the degree that capital accumulation requires a compounding rate of growth forevermore that quantitative requirement is increasingly be settled by the issue any raises here that money is limitless in terms of how much of it you can accumulate that's not true of tangible use values there's a limit to the number of yachts you can have a number of McMansions you can own number of pairs of shoes there are lots of limits in the use value sphere of issues of that kind but there are no limits to some of these intangibles and of course what's interesting is that these intangibles are often a source of considerable disaster because if there's a merger you've got a value of the company and how is the value made well the values made by doing all of the things you can do with material but then you add in the intangibles and the intangibles are often estimated to be huge far bigger than the actual physical materials and then and then after the merger whoever gets merged with that turns out the intangibles were not as lucrative as everybody thought and so suddenly there's this kind of collapse of either before consummation of the merger or after the consummation of the merger where company effectively goes goes bankrupt you see that very much in the crisis of 2007 2008 where some of the dicey Savings and Loan and other institutions were taken over some of the banks were taken over by say Wells Fargo or Bank of America they thought they were on to a good thing but then they found that supposed intangibles were not there and the value of the housing stock that was in their portfolio was far lower than was you know so off we go so so there are a lot of things of that kind that were I think needs to be looked at and I think in reading in reading marks it's important to say you know what is he but it what does he does he tell us which is valuable to know what didn't he tell us what did he assume away and indicate to us that a deeper consideration we would might want to consider these things and the answer is well questions of realization questions of intangibles questions of financial institutions and structures and so on and the like and so there are a lot of sort of additional things we would want to complete our own analysis of capital accumulation but remember Marx's critique of capital has its own profound messages I think it's very interesting that his critique of says-- law which is the heart of Keynesian economics but Marx picked that up right at the beginning and in fact his theory of crisis applied extremely well in the 1930s and you know the bourgeois economists had to reinvent the wheel as it were to get to the point where Marx had got to sort of hundred years before horror almost and I think this is this is again one of the one of the features I mean the general there was a division within classical political economy over where the crises were possible in a perfectly functioning market system say's law said they were not possible Ricardo accepted sales law and all of 19th century economics took says-- law as being a basis of theory now say his law did not say there couldn't be overproduction of shoes relative to shirts or something like that it just said there could not be a general crisis of overproduction and in the 1930s they began to look to be a very stupid kind of positioned to hold and so actually Keynes wrote a very nice little essay about says-- law and there were a couple of people in Marx's own time who did not accept sales law one was Malthus and unfortunately Marx really detested Malthus a variety of reasons some good and some purely prejudicial about his religiosity and all the rest of it but Malthus was part of what at the time were called general glut theorists that general crisis of overproduction could occur as his Monti was another one and there were two or three people who held to to a general glut theory of crisis but the majority of economists followed Ricardo in adopting sales law so a hold of economic theory up in the 1930s and Kayne's came along and said sales law does not make sense we have to come up with something called the liquidity trap which is essentially the fact that people hold money and in holding money they depress conditions of exchange and the depressed conditions of exchange lead to people to holding more money so you get into a downward spiral of the economy as a results of Keynes did these things over through size law and and therefore Keynesian economics is effectively functioning on that little passage from Marx where he kind of said nothing could be more childish than the dogma and so so Marx is very clear about that so Marx just tell us a whole bunch of things I think which are very very important and very key and which need to be listened to but there are whole bunch of things he doesn't cover and I think that we need to look at them and open them up for for discussion and debate as has happened for instance in the field of financial capital there was an extensive discussion and lots Marxist about how best to you know integrate a theory of finance capital into the general theory of capital accumulation that Marx are proposed we have one question from online what implications this is from Jacob what implications does breaking the tether between gold and money Proust post Bretton Woods have for Marx's consideration of world monies well it has a pretty huge implications Marx gets back into this question in volume 3 of capital and one of the points he makes there is that the credit system and the creation and money creation is something that the state can facilitate and private enterprises can augment I mean banks can create money by simply by leveraging operations and that therefore the creation of money is constantly he put his marks puts it in volume free of capital is constantly striving to overcome the barrier which the material commodity of gold poses towards the expansion of the system and his language is something like it constantly strives but at the same time can never overcome the barrier constantly breaks his head against this barrier of the metallic basis of the monetary system so that was the position that Marx took now as we know in 1971 that all stopped because the relationship of the dollar to gold was was was broken and therefore dollar became open entirely as the form of money and that therefore paper money in the state now this this creates a contradiction within the Marxian scheme of things because money is a representation of value but one of the functions of gold was it's a material representation of value which is immaterial but you've now moved from an immaterial value to a representation which is immaterial now toulon materials don't make a material I mean you're doubling down on the immateriality and one of the immediate results the course of the jumping out of the the gold constraint and I think Marx recognized that was gonna be a constraining effects upon capital accumulation but the metallic base would always be a restraining effect but it was no longer there so one of the things that happened was that inflation rate in the United States went zooming up and if you remember the time it was around 17% you know and the interest rate with Volker went up to I don't know 16% or something like that I mean the end of the 1970s plainly the fact that there was no longer a gold limit put the question of well who's in charge of how much money there is and if you just print money then you're gonna get inflation and so Volker comes along and says well the only way you can stop this is we've got to have a Federal Reserve and world central banks are going to have to collectively decide on controlling inflation and therefore all monetary policy since the 1970s has been about controlling inflation our Federal Reserve was supposed to take unemployment into account but under Volcker no they didn't take unemployment into account so unemployment in the u.s. went up above 10% under Reagan and and so this break was a very significant break and the interesting thing one of interesting things I discovered was the Chinese reckoned that the date when the u.s. went off the gold standard was a complete change in the nature of the capitalist system and the history of the capitalist system was therefore chained was therefore redirected by this abandonment of the gold standard and what the Chinese then recognized is that then who controls the world money okay well it was the u.s. because most transactions in the world or golde the US had already gone to Saudi Arabia and the oil crisis of 1970s and said to them basically if you don't invest all of that money and in in the US dollars and old contracts are in wit u.s. dollars we're going to invade you and occupy your oil wells and and so they so so most of the world's transactions are in dollars and therefore the US had the power of of printing dollars and could print them at will and therefore you get dollar diplomacy and you get dollar imperialism and you get dollar and the Chinese recognize that and of course the US was promoting as a system of free exchange and free exchange and in particular from the 1970s onwards there's been a fierce proponent of free capital flows around the world and it's used those free capital flows as far as the Chinese are concerned to basically rob much of the world of its wealth so if you look at something like the crisis in in East and Southeast Asia which is very close to China obviously the argument was that the the u.s. cut liquidity to commodity producers the commodity producers with no money was the heart pants after you know suddenly found themselves bankrupted because they couldn't roll over their debts and they couldn't get access to liquidity so the US banks and European banks and the Japanese banks bought up all of these productive companies in East and Southeast Asia for almost nothing because they they had no value at that time and then after that they pumped the liquidity in and so the whole thing revives and they sell but at a huge profit this is a huge operation of robbery if you like of value in East and Southeast Asia same things happened in the housing market right in this country before closure crisis comes along all these houses are foreclosed upon who goes in and buys them up all these big sort of black stones and equity companies go in and buy them up for a song and and hope that the thing recovers and they rent them out and all this kind of stuff and they're making a killing out of a financial operation and this is the kind of financial operation which led the Chinese to kind of say we're not going to open our capital markets who's been yelling like crazy at the Chinese about not opening its capital markets the US and the Chinese have said yeah yeah well could open them and they open them for a little bit then they shut them down again they open for a little bit they shut them down again they're probably not gonna open their capital markets except that they also have a view that a certain point they want to be the ones who will control the world currency and their competitors you know if the euro is a competitor the yen no longer yeah obviously the Swiss franc has a kind of peculiar role but the Chinese I think are trying to exercise a condition in which at some point or rather they will control the world currency or they will actually redefine the world in such a way that there are different currency regimes and it's already to the case of the Chinese sign oil come all contracts not in dollars anymore there's a big oil contract between China and Russia which was signed which was signed and was not registered in rubles but by signing in dollars you submit to the course the u.s. regime look at what happened to Argentina some crazy judge in South Manhattan mandated all sorts of things about the Argentinian debt on Argentina had abide by a US judge making a determination of indebtedness and in just down the road here so the Chinese recognize that this is a this is a problem but there is this big big question of how world money is going to be determined in the future in the absence of any kind of metallic base and who has the power to do it and what their policies are now generally speaking all of the world's central banks are nervous about inflation and that therefore you know European Central Bank with very strong German influence which has always been about inflation it's been very much about that but the question arises well what about employment why why on the central banks actually concerned about employment and I think that's one of the one of the big questions for instance the charter of the European Central Bank has nothing about unemployment so when the Greek crisis occurred it was all about getting the debt back and all this kind of stuff and unemployment right could go to 40 or 50 percent and the central bank said it's nothing to do with us that's not our concern it's not part of our constitutional mandate so this is so this is one of the big issues but is he's posed by this jump from Marx's assumption that world money was going to be gold determined and gold fixated which is going to be universal my own view is that what we're seeing right now is the emergence of distinctive currency regimes which are associated with different Bali regimes and this is a different world that we are we're working in and again this is one of those moments where we Capital has evolved and we have to evolve with it checking up those insights which we can get from reading boxes capital and building upon them in such a way as to be able to understand that current conjuncture in a more deeply analytical way than is seems to be possible with contemporary assumptions of economics still being stuck in the free-market thinking good evening professor my question is related with a I was I was thinking about dialectics on chapter number 2 and chapter number 3 and certain moments I was reflecting on the how their 1844 manuscripts like certain of those ideas are retaken in this part and for instance I was trying to think the difference between a dialectic a center or focus on a class struggle and on the other side like this change that Marx car after 1857 with the grundrisse we trying to understand capital as a movement as a logical determination so we find two kinds of dialectics at least is my reading this one that is like very Center on class struggle but at the other side this one like more focus on evolutionary movements so cat how can we rethink Marxist dialectics from this contradiction that we can find in chapter 2 and chapter 3 yeah that's an interesting kind of question because I think marks when he's when he's writing capital is certainly I think has transformed in certain ways his notions of dialectics and his notion of how to approach questions such as alienation and the like so it is rather different from the economic and philosophical scripts Marx is striving for what might be called a more objective or objectified understanding in capital which is why you're getting this language which comes back again and again saying you know you you think you're in control but you're not the system is in control and alienation is no longer about you know somehow other you divorce from your true self or something like that it's about the fact that the system is in control and you're not and this is this is this is a deep deep challenge to liberal theory because liberal theory holds that if you go read higher come Friedman and all the rest of it they kind of say well basically you know they think the highest aspiration of a human society is a society built upon individualism freedom and liberty and when they ask the question how is that best what kind of social order and social system is best and equipped to realize that for them it's going to be private property free markets and free trade what Marx is showing is my private property markets and free trade not about individual liberty and freedom they're about you being actually rendered subservient to this mission this mission machine like social metabolic process and you have to therefore find a means to convey how that process works and I think that Marx is being dialectical in in this in this framework but at the same time he's moving to a more process based understanding of dialect it's no longer logic so much has a process of circulation so when you get to the CMC becomes MCM then you're starting to look at the process of metamorphosis and that is a form of dialectical thinking but it's not the same as a Hegelian logical structure of this kind it's saying all right we're now looking at the process and the process positions us as buyers and sellers in such a way that we have certain freedoms yeah we can I can decide to trade with you or not trade with you but I can't decide not to trade and I can't decide on the price either because the price is going to be determined by processes which are out of my control so so Marx is the view and capital in some ways is much bleaker then is the sort of if you like rather personalized utopianism of the economic and philosophical scripts and that the subjectivity which is involved in the economic and philosophical scripts gives way so if you like the objectivity of Marx's argument in capital my own view of this is that you need to bring some of the subjectivity back in so that I would not abandon the economic philosophic manuscripts as helpless air and others do by saying you know they were just him being humanistic and you know romantic and all that kind of stuff forget it we were interested interested only in the real science so the question for me will be we have to actually think about subjective states of mind and how do we get to that and in what ways can we connect the dialectical formulations which have shifted in their tone from a kind of a a simple kind of logical structure to a process based understanding of what a dialectical process looks like with Metamorpho sees and transformations going on and and spiral forms and organic configurations again if you've noticed the language in here is often organic it's about social metabolism it's about natural metabolism it's it's it's about that which is not there in the economic and philosophical manuscripts but I think that that therefore Marx's as almost all of Marx's work it doesn't it's constantly evolving in terms of how it how it works and I I take encouragement of that it means well we can keep on keep on evolving it to if you you want to follow Marx and doing this will evolve it some some further ways and in in in some ways I take these these minor features where Marx talks about you know the transformation of space and time that occurs with with exchange and exchange relations baked breaking its local bonds forging the world's market this is a kind of again something that can be can be expanded upon but to do that you need to look at the process and then find the mode of representation which is going to be adequate to that process which is nearly always a sort of a process based dialectical form formulation so I think that the that I I would I would argue that if you really want to understand or work with Marxist ways of thinking you work with capital and the economic philosophic manuscripts together and start to argue look at how they might relate be kept in creative tension with each other and that maybe is also because I'm a bit of a sucker for the kind of utopianism of the economic and philosophical script and in a sense the romanticism that's involved in that I thought I kind of find a lot of that attractive and I certainly wouldn't want to abandon it even when I'm deep into the objective representation of what alienation is in capital which is very different from the alienation is described in the economic and philosophical manuscripts professor do you mind announcing the readings for tomorrow's class before we continue all right yeah it's be the next three chapters six which is four five and six they are relatively short they're much easier than money when did people have a hard time at the money one how many people what huh yes is it bit clearer now okay good I mean I mean the best the best way to do is to crash through the whole thing and get out can't the other side lucky I say it's it's it's it's it's easy pickings from now on you know I mean it really is but at a certain point it's useful to go back because I think some of the issues that you raised in this money chapter are critical issues like the relationship between money and value most a lot of Marxist analysis doesn't deal work very well with that it's it's it's really interesting the tendency is to kind of just think they but but they're not they're not the same value and money are not the same and the representation is really clearly doing different things and when he talks about you know prices can actually be determined without any value at all you're seeing that the the representation is free to some degree of constraints imposed by by value even as money is necessary to the formation of the have the law value you know I'm in scanner interesting interesting set of questions which are very relevant to understanding the contemporary condition okay shall we leave it there or is there any other questions my advice to everybody is to is to get through the book and then go back and read it again and the second time you have a lot of fun I mean the second time is really good it really is because because part of the problem with with Marx is you don't know how the concepts are going to end up so you're working with something where you don't know where it's going to end up but when you know where it's going to end up you see more clearly what what it means at the beginning it's so I I would I'm most my general tactic in teaching Marx is to crash through it as fast as you can and get to the end and then then come back and look at some of these other issues and more carefully and you can pick and choose which one you which one you develop on [Applause]

Channel: The People's Forum NYC

Views: 39,667

Keywords: Marx, David Harvey, Capital, Goverment, Theory, Education, TPF, Capitalism, Capitalist, Commodity, Communism, Communist, Das Kapital, Dialectical Materialism, Dialectical Materialist, Dialectical, Economics, Exchange Value, Free Courses, Free Lectures, Friedrich Engels, Geography, Labor, Labor time, Labour time, Left economics, Left education

Id: cpW1Q9sgUB0

Length: 119min 4sec (7144 seconds)

Published: Thu Mar 07 2019