Tuesday, 8 August 2017

Theories of Surplus Value, Part I, Chapter 7 - Part 10

As set out earlier, North is the first to have a correct view of interest as determined by the demand and supply of capital rather than of money, as proposed by Locke and Petty. North also recognises that price is only the money form of the exchange value of a commodity, and the means by which one use value is transformed into another via exchange.

“... it is one of the earliest recognitions of the fact that in this transaction we are dealing with gold and silver only as a form of existence of the exchange-value of commodities, as a phase in their metamorphosis, not with gold and silver as such.” (p 370)

Marx also quotes a passage from North which he himself paraphrases in Capital, to indicate that the cause of crises is not shortage of money, even though, for the sellers of commodities, it appears that way.

““What do these People want, who cry out for Money? I will begin with the Beggar…it is not Money, but Bread, and other Necessaries for Life that he wants…the Farmer complains, for the want of Money…he thinks that were more Money in the Country, he should have a Price for his Goods. Then it seems Money is not his want, but a Price for his Corn, and Cattel, which he would sell, but cannot…why he cannot get a price? …1. Either there is too much Corn and Cattel in the Country, so that most who come to Market have need of selling, as he hath, and few of buying; Or 2. There wants the usual vent abroad, by Transportation, as in time of War, when Trade is unsafe, or not permitted; Or 3. The Consumption fails, as when men by reason of Poverty, do not spend so much in their Houses as formerly they did; wherefore it is not the increase of specifick Money, which would at all advance the Farmers Goods, but the removal of nay of these three Causes, which do truly keep down the Market.”” (p 370)

North also recognises the difference between value stored up as a hoard, and value stored up as capital, for the purpose of creating surplus value.

““No Man is richer for having his Estate all in Money, Plate, etc., lying by him, but on the contrary, he is for that reason the poorer. That Man is richest, whose Estate in a growing condition, either in Land at Farm, Money at Interest, or Goods in Trade” (p. 11).” (p 370)

Marx also quotes John Bellers, Essays about the Poor, Manufactures, Trade, Plantations, and Immorality, etc., London, 1699, cited by North.

““Altho’ every one desires to have it” (money) “yet none, or very few care for keeping it, but they are forthwith contriving to dispose it; knowing that from all the Money that lies dead, no benefit is to be expected, but it is a certain loss” ([North, l.c.], p. 21).” (p 371) 

North also noted the role of gold and silver as world money, being shipped to cover payments, and he also noted that it is the circulation of commodities which determines the quantity of money in circulation.

““If never so much be brought from abroad, or never so much coyned at home, all that is more than what the Commerce of the Nation requires, is but Bullion, and will be treated as such; and coyned Money, like wrough Plate at Second hand, shall sell but for the Intrinsick” (pp.17-18).” (p 371)

The point made earlier about why North opposed any restriction on interest rates is also highlighted by the comment detailing who was most affected by them.

““The Moneys imployed at Interest in this Nation, are not near the Tenth part, disposed to Trading People, wherewith to manage their Trades; but are for the most part lent for the supplying of Luxury, and to support the Expense of Persons, who though great Owners of Lands, yet spend faster than their Lands bring in; and being loath to sell, choose rather to mortgage their Estates” (North, l.c., pp.6-7).” (p 371)

That is a good summary of the economic model pursued by conservatives over the last thirty years, which led to the financial meltdown of 2008!

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