The forms of world money

Labrinidis, George (2014): The forms of world money. Published in: Research on Money and Finance Discussion Papers No. 45 (7 May 2014)

Abstract

Distinguishing between the money that functions in the world market and the money that functions internally in an economy has troubled many theorists. This paper is informed by the Marxist approach to money in general and world money in particular and argues that the theoretical difficulty derives from a fundamental misconception with regard to the forms of money. Consequently, the paper offers an analysis of the forms of money and shows that a new form emerged as early as 1914 associated with the world market, which might be called quasi-world-money, such as the US dollar. The analysis provides a framework within which to comprehend the residual but essential role of gold in parallel to quasi-world-money. The framework also allows for money convertibility to be redefined appropriately.

• Item Type: MPRA Paper
• Language: English
• Keywords: forms of money, quasi-world money, gold, convertibility, USD
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; F - International Economics > F3 - International Finance > F33 - International Monetary Arrangements and Institutions

References

Arnon, A., 1984. Marx’s theory of money: the formative years. History of Political Economy, 16(4), pp.555-575.

Bell, S., 2001. The role of the state and the hierarchy of money. Cambridge Journal of Economics, 25, pp.149-163.

Bellofiore, R., 2005. The monetary aspects of the capitalist process in the Marxian system: an investigation from the point of view of the theory of the monetary circuit. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.124-139.

Benetti, C. and Cartelier, J., 1998. Money, form and determination of value. In: R. Bellofiore, ed. Marxian Economics: a reappraisal, Vol. 1. London: Macmillan, pp.157-171.

Bruce II, C.R. and Shafer, N. eds., 2000. World paper money: standard catalog of, Vol.2, general issues 1368-1960. 9th ed. Iola, WI: Krause.

Bordo, M., 2003. Gold as a commitment mechanism. In: M.Tcha, ed. Gold and the modern world economy. London: Routledge, pp.19-63.

de Brunhoff, S., 1976. Marx on Money. New York: Urizen Books.

de Brunhoff, S., 2003. Value, finance and social classes. In: R. Westra and A. Zuege, eds. Value and the World Economy today. New York: Palgrave MacMillan, pp.40-56.

de Brunhoff, S., 2005. Marx’s contribution to the search for a theory of money. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.209-221.

Bryan, D., 2003. Bridging differences: value theory, international finance and the construction of global capital. In: R. Westra and A. Zuege, eds. Value and the World Economy today. New York: Palgrave MacMillan, pp.57-70.

Campbell, M., 2005. Marx’s explanation of money’s functions@ overturning the quantity theory. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.143-159.

Capie, F.H. and Wood, G.E., 2001. Monetary problems, monetary solutions and the role of gold. World Gold Council Research Study, 25. London: Centre for Public Policy Studies.

Central Banking Newsdesk, 2012. Venezuela completes repatriation of gold reserves. Central Banking, [online] 23 January. Available at: <http://www.centralbanking.com/central-banking/news/2142593/venezuela-completes-repatriation-gold-reserves> [Accessed 11 December 2012].

Clarke, S., 2003. The rationality and irrationality of money. In: R. Westra and A. Zuege, eds. Value and the World Economy today. New York: Palgrave MacMillan, pp.25-39.

Cunliffe Committee, 1997 [1918]. First interim report on currency and foreign exchange after the war. In: B. Eichengreen and M. Flandreau, eds. The gold standard in theory and history. 2nd ed. London: Routledge, ch.12, pp.166-176.

Farchy, J. and Mander, B., 2011. Traders prepare for Chávez gold transfer. The Financial Times, [online] (Last updated 7.21 PM on 18 August 2011) Available at: <http://www.ft.com/cms/s/0/e08657a4-c9b9-11e0-b88b-00144feabdc0.html#axzz2Em4xD1ze> [Accessed 11 December 2012].

Fazio, A., 2000. The euro, the dollar and gold. In: World Gold Council, The euro, the dollar and gold. Rome, Italy, 17 November 2000. London: World Gold Council, pp.11-22.

Fields, D. and Vernengo, M., 2011. Hegemonic Currencies during the Crisis: The Dollar versus the Euro in a Cartalist Perspective. The Jerome Levy Economics Institute Working Paper, 666, [online] Available at: <http://www.levyinstitute.org/pubs/wp_666.pdf> [Accessed 13 December 2012].

Fine, B., 2003. Value theory and the study of contemporary capitalism. In: R. Westra and A. Zuege, eds. Value and the World Economy today. New York: Palgrave MacMillan, pp.3-22.

Fleetwood, S., 2000. A Marxist theory of commodity money revisited. In: J. Smithin, ed. What is Money? London: Routledge, pp.174-193.

Foley, D., 1998. Asset speculation in Marx’s theory of money. In: R. Bellofiore, ed. Marxian Economics: a reappraisal, Vol. 1. London: Macmillan, pp.254-270.

Foley, D., 2005. Marx’s theory of money in historical perspective. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.36-49.

Germer, C., 2005. The commodity nature of money in Marx’s theory. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.21-35.

Hilferding, R., 1981 [1910]. Finance Capital. Translated from German by T. Bottomore, ed., M. Watnick and S. Gordon. London: Routledge and Kegan Paul.

Innes, A.M., 1913. What is money? Banking Law Journal, May, 30, pp.377-408.

IMF, 2011. Articles of agreement of the International Monetary Fund. Washington, D.C.: International Monetary Fund.

Itoh, M. and Lapavitsas, C., 1999. The Political Economy of money and finance. London: Macmillan.

Itoh, M., 2006. Political economy of money, credit and finance in contemporary capitalism: remarks on Lapavitsas and Dymski. Historical Materialism,14 (1) pp.97-112.

Ivanova, M.N., 2013. The dollar as world money. Science and Society, January, 77(1), pp.44-71.

Jackson, D., 2000. New money for the new economy. In: World Gold Council, The euro, the dollar and gold. Rome, Italy, 17 November 2000. London: World Gold Council, pp.82-90.

Kennedy, P., 2000. A Marxist account of the relationship between commodity money and symbolic money in the context of contemporary capitalist development. In: J. Smithin, ed. What is Money? London: Routledge, pp.194-216.

Lapavitsas, C., 1991. The Theory of Credit Money: A Structural Analysis. Science and Society, 55(3), pp.291-322.

Lapavitsas, C., 2000. Money and the analysis of Capitalism: the significance of commodity money. Review of Radical Political Economics, 32(4), pp.631-656.

Lapavitsas, C., 2005. The universal equivalent as monopolist of the ability to buy. In: F. Moseley, ed. Marx’s theory of money: modern appraisals. New York: Palgrave Macmillan.

Lapavitsas, C., 2013. The Eurozone crisis through the prism of world money. In: M.H. Wolfson and G.A.Epstein, eds. The handbook of the political economy of financial crises. New York: Oxford University Press, ch.18.

Lenin, V.I., 1964 [1916]. Imperialism, the Highest Stage of Capitalism. Collected Works, vol.22, Moscow: Progress.

McKinnon, R.I., 1979. Money in international exchange: the convertible currency system. New York: Oxford University Press.

McKinnon, R.I., 2005. Trapped by the international dollar standard. Journal of Policy Modeling, 27, pp.477-485.

McNamara, K.R., 2008. A rivalry in the making? The Euro and international monetary power. Review of International Political Economy, 15(3), pp.439-459.

Marx, K., 1976 [1867]. Capital: a critique of political economy, Vol.I. Translated from German by B. Fowkes. London: Penguin and New Left Review.

Marx, K., 1978. (1885). Capital: a critique of political economy, Vol.II. Translated from German by D. Fernbach. London: Penguin/New Left Review.

Marx, K., 1980 [1857-8]. Marx’s Grundrisse. 2nd ed. Translated from German by D. McLellan. London: Macmillan.

Marx, K., 1982. Θεωρίες για την υπεραξία (τέταρτος τόμος του «Κεφαλαίου»), Μέρος Δεύτερο [Theories of surplus value (volume IV of Capital), part two]. Translated from German by P. Mavromatis. Athens: Σύγχρονη Εποχή.

Marx, K., 1989. Βασικές γραμμές της κριτικής της πολιτικής οικονομίας, τόμος Α’ [Grundrisse: foundations of the critique of political economy, vol. A]. Translated from German by D. Divaris. Athens: Στοχαστής.

Milios, J., Dimoulis, D. and Economakis, G., 2002. Karl Marx and the classics: an essay on value, crisis and the capitalist mode of production. Hampshire: Ashgate.

Moseley, F., 2005. Introduction. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.1-18.

Nelson, A., 2005. Marx’s objections to credit theories of money. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.

Papadatos, D., 2009. Central banking in contemporary capitalism: monetary policy and its limits. Research on Money and Finance Discussion Papers, 5, [online] Available at: <http://www.researchonmoneyandfinance.org/media/papers/RMF-05-Papadatos.pdf> [Accessed 3 October 2012].

Plaschke, H., 2010. Challenging the dollar in international monetary relations? The lost opportunities of the Euro. In: L.S. Talani, ed. The Global Crash: towards a new global financial regime? London: Palgrave MacMillan, ch.4.

Reuten, G., 2005. Money as constituent of value. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.78-92.

Salmon, F., 2011. How to get $12 billion of gold to Venezuela. Reuters [Online] 23 August. Available at: <http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/> [Accessed 11 December 2012].

Smith, T., 2005. Towards a Marxian theory of world money. In: F. Moseley, ed. Marx’s theory of money. Houndmills: Palgrave Macmillan, pp.222-235.

Smithin, J., 2003. Controversies in monetary economics. 2nd ed. Cheltenham: Edward Elgar.

Steen, M., 2013. Bundesbank weighs bullion against public pressure. The Financial Times, [online] (Last updated 6:51 PM on 16 January 2013). Available at: <http://www.ft.com/intl/cms/s/0/97970542-5fd2-11e2-b128-00144feab49a.html#axzz2KjVo4r6n> [Accessed 13 February 2013].

Vilar, P., 1976. A history of gold and money: 1450-1920. Translated from Spanish by J. White. London: NLB.

Weber, E.J., 2003. The misuse of central bank gold holdings. In: M. Tcha, ed. Gold and the modern world economy. London: Routledge, pp.64-80.

Weeks, J., 2012. The theory and empirical credibility of commodity money. Science and Society, January, 76(1), pp.66-94.

Williams, M., 2000. Why Marx neither has nor needs a commodity theory of money. Review of Political Economy, 12(4), pp.435-451.