Saturday, 5 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 7

[3.] Petty, Sir Dudley North, Locke

“By comparing North’s and Locke’s writings with Petty’s Quantulumcunque (1682), A Treatise of Taxes, and Contributions (1662), [and The Political] Anatomy of Ireland (1672), their indebtedness to Petty can be seen in connection with (1) lowering of interest: (2) raising and abasing of money

(3) North’s calling interest the rent of money, etc.” (p 364)

North and Locke both wrote at the same time on interest and money, but from opposing standpoints. Locke argues a similar position to the view presented currently, in relation to Quantitative Easing, as a means of reducing interest rates. That is, Locke argues, that a high rate of interest is due to a shortage of money. Locke also sees this as the reason that commodities are unable to realise their value in the market.

However, Marx points out that North has the correct position, because he distinguishes between money and capital. It is not a shortage of money, i.e. currency, that causes interest rates to be high, but a shortage of capital, or more correctly a shortage of loanable money-capital, relative to its demand.

“North shows the opposite, that it is not want of money but of capital or revenue. We find in his works the first definite concept of stock or capital, or rather of money as a mere form of capital, in so far as it is not means of circulation. In Sir Dudley North’s writings we find the first correct conception of interest as opposed to Locke’s idea.” (p 364)

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