Since reading David Graeber’s Debt last fall, I’ve become interested in the relationship between Marxist economic theory and the heterodox theory of money Graeber supports in his work. Graeber holds to a chartalist position, which argues that money is not, as the classic account in Carl Menger goes, simply the most salable commodity, but rather a symbol that has value because the state requires us to pay taxes in it. Though this theory of money dates back to Aristotle, today it has been developed into the body of theory known as ‘Modern Monetary Theory.’
MMT’s focus on the role of the state in making money gives it a very different emphasis from Marx’s analysis in the first three chapters ofCapital. There, Marx argues for something quite similar to Menger, drawing an account of the way that a society based on commodity production has need for one commodity to serve as a universal equivalent. In other words, monetary theory appears to make for strange bedfellows. On one side, we have the neo-classicals, the Austrians, and Marx. On the other, the left-leaning post-Keynesians. What to make of all this?
Personally, I’m pulled by the arguments of MMT. As I began researching what Marxists had to say on the subject, I was relieved to find a number of them arguing that value theory does not require commodity money, and that Marx himself in the later volumes of Capital appears to recognize this. Others, however, argue that capitalism does require a commodity basis for money. David McNally’s recent work, probably the most sophisticated Marxist appraisal of the current crisis we have, lends support to both positions, in a way. On the one hand, his argument for a neoliberal boom clearly implies that capitalism can go through substantial periods of accumulation without a commodity based currency. On the other hand, he argues that the waves of financialization that accompanied this boom, and lit the fuse for the bust, were themselves a product off capital’s need for a different kind of universal equivalent, since money itself was no longer playing that role.
Really, I have no idea where I stand in all of this, having nowhere near the requisite knowledge to judge the debate. But I thought while I’m reading up on the question, I may as well post a bibliography to make it easier for other folks interested in doing the same. Here it is.
Lavoie, Don. “Some Strengths in Marx’s Disequilibrium Theory of Money” Cambridge Journal of Economics 7.1 (1983).