Report – What is money?

15 Apr
discussion of 27 march 2012, Vienna

Here follows the report of the discussion about money. It turned out to become a discussion about economic fundamentals, the economic crisis and self-management as an eventual way to a post-capitalist society. Again, every question brought a bunch of other questions and further clarification of these will be necessary. We have however succeeded to get together and talk about it in a constructive and critical way. I hope this report will be a good basis for future discussions. As usual, I regrouped the contributions per theme and not necessarily chronologically. All comments and critiques are welcome.

A small part of the discussion was devoted to the discussion group itself. It was recalled that Discussion Group Spartacus is a group aimed at political clarification of a large range of societal themes, judged important by the participants. All people willing to discuss and clarify are welcome. They do not have to define themselves as politically “left”. Taking part in the discussions is the only thing that binds the people of the “group” or “circle”. It doesn’t want to become an activist group or a platform for the build-up of a political party or front.

Why do we discuss about money? In the discussion on the economic crisis we decided to pick out the money question to further deepen our economic understanding of society. To my opinion the purpose of this is to understand capitalism and its history, in order to overcome it, because capitalism is destroying us and the nature we live in. If we do not understand a minimum of this, we will never be able to build a new society. More on this new society will follow later in the report.

Here’s a list of questions from the discussion: what is money? What are prices and what determines them? What are needs (in German: Bedürfnisse) and how do they arise? What is wealth? Are people in the “Western world” wealthy and living in luxury, whereas people in the “3rd world” are poor?  Is money the problem? Is it money in itself that creates problems like poverty, hunger and the destruction of ecosystems? Do we need a world without money? Not of all these have been discussed, although they all deserve it.

What determines the value of things? This is a question that was advanced during the discussion on the economic crisis. A product, e.g. a table, can be of value to someone, because he/she needs it. In the case he/she doesn’t need it, it is of no value to this person. This kind of value is very subjective and economic thinkers (e.g. Adam Smith) have called this “use value”. There is however at the same time something objective about products, as soon as they enter onto the market to be selled and bought. We can see this objective character of value in prices. According to the classical economist Ricardo, which later inspired Marx, prices are not determined on a purely subjective basis, but fluctuate around an average price, which is the value given by the socially necessary amount of labour to produce the product in question (the table). This kind of value is refered to as “exchange value”. This little paragraph was not discussed as intensively in the discussion, but I hope this rough sketch of value theory can spur the discussion further.

What is money? No clear answers were formulated during the discussion, but several aspects of it have been named:

  • Money is a means of exchange. It is therefore a product of society. It wasn’t invented consciously by someone, but has appeared in history for a reason. Why did money appear? This remained an open question.
  • Money is something that “organizes”, “regulates” or “mediates” production.  This is one of the strange things about it. Today, the worldwide production doesn’t seem to be organized consciously by (wo)men for the satisfying of their needs. It is the other way round: (wo)men produce in the search for money, e.g. privately and state owned companies and many smaller producers (farmers, handicraftsmen…) produce to sell on the market, whereas workers produce for a wage on which they depend.
  • To what does money refer? Some participants pretended that money does not have any reference value (in German: Bezugswert) anymore. What is meant by this?
  • I’d like to refer to the introduction, which poses the following: money is everything, that the function has of a means of payment (in German: Zahlungsmittel), means of value storer (in German: Wertaufbewahrungsmittel) and value measurer (in German: Wertmaßstab). Besides this, the introduction gives us a rough overview of money’s history. It also brings into question the role of currencies, these are the different money-systems that historically evolved in different geographical/economical regions. These systems employ standards that define the value of money, in its different currency-entities, as the value of a particular amount of a commodity (often gold and silver). In other words, the standards define how much gold you get for an amount of money. Originally you did not obtain the same amount of gold for 1 British Pound Sterling as for 1 American Dollar.

Is money the problem? Money in itself doesn’t kill. It is however intrinsically bound to capitalism, a society that lives for the accumulation of money. Today, the ways in which it does this are destructive. Has it always been like that? Was capitalism always destructive or did it once have a constructive side as well? If yes, does it still have this progressive character?

Why is there an economic crisis? According to one participant money is not the problem, but virtual money is. The economic crisis is the consequence of this speculation. Political leaders should therefore control the money currents on the stock-markets to reduce “abuses”.  I however think it is the other way round: the rise of “virtual” money (money which is not covered by a real value, objectified in real products of human labour) due to speculation, is the consequence of the economic crisis. Because no real profits can be made anymore, capitalism tries to find a way out. One of these pseudo-solutions is speculation. This economic crisis is basically a crisis of overproduction: more commodities are produced than can be sold. Why is this so? Why can’t it be sold? To me this is due to capitalist exploitation: the wage which workers receive doesn’t correspond to the value of the commodities they’ve produced. All the workers of the Ford company couldn’t possibly buy all the cars they’ve produced. That’s why capitalism must expand and find new unsaturated markets in non-capitalist parts of the world. If we follow this theory (which is the theory advanced by Rosa Luxemburg) there are limits to capitalist growth, because ever since the whole planet became part of capitalism, it couldn’t find any non-capitalist markets anymore to make profits. This leads to an imperialist dynamic, where all states try to conquer other states to rob them off their markets.

These ideas were formulated very crudely during the discussion, and still demand more precision. In response to it, new questions were posed: can capitalism grow eternally? On what is capitalist growth based? Can’t capitalism create markets indefinitely?  What are markets?

What are markets and where do they come from? Basically, markets are the places where exchange of goods happens. Today this exchange is in the form of buying and selling. Can these be created indefinitely? Since the discussion I tend to say they can. It is still not clear to me where they come from. A market can however become insolvable, when there is no buying/purchasing power to buy the offered commodities. I guess, this is what Rosa Luxemburg means by saturated markets.

A world without money? Can we invent systems from scratch? I don’t think so. In order to change the system you have to understand a minimum of how the actual and past systems (dis)functioned. Someone answered to this: when will we understand enough? Doesn’t this discussing inhibit us from acting for change? The questions remain open. In any case, everyone willing to do something “active” besides the discussion group is free to do so.

How to overcome capitalism? Apart from understanding the system, we also need to understand the resistance against it. In the past and the present there have been thousands of struggles against capitalism and its effects. There have also been a handful  of attempts to overcome capitalism. Unfortunately all of them have failed, since we still live in the same system. What is a failure however? Have they really failed? There were disagreements here. According to a participant, first steps were made to a post-capitalist system in several attempts for self-management. The basic idea is simple: the workers should take the means of production in the factories, the mines, the farms… into their own hands and run them on their own, without leaders, but through general assemblies. Some examples were given: the LIP-factory in France is an elder example, the Zanon-factory in Argentina is a more recent one (an interesting brochure on Zanon was published by Wildcat). Another one, which wasn’t mentioned, but which is a classical one in the anarchist tradition, is the Mondragon Corporation. Can these initiatives for self-management in a capitalist system work? Why did some fail and others stayed? Wasn’t there always a tendency to fall back into the classical capitalist work schemes? Aren’t these cooperatives a form of self exploitation? Can they work in a world, where the capitalist mode of production is expanded on a worldwide scale? The formulation of the questions already express that I am no great supporter of these initiatives, however rich they may be in experiences for the future. The discussion on this was however not finished and can be taken up in a future discussion.

Next time we will discuss on traffic and mobility. A second theme was proposed: “What is normal?” On “(ab)normality”, standardization, prejudices… (?) This subject is however quite broad and there was the suggestion to frame it in a discussion about sexual and/or racist discrimination. This is still open.

Yann / 16.04.2012

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3 Responses to “Report – What is money?”

  1. Yann April 15, 2012 at 8:08 pm #

    It must be said, that many anarchists/anarcho-syndicalists do not agree on whether to support the Mondragon Co-operative Corporation, e.g. http://libcom.org/forums/news/mondragon-capitalists-exploitation-repression-poland-20072008

    And here’s an opposite opinion: http://dwardmac.pitzer.edu/dward/classes/powpart/benellomondragon.html

  2. Yann April 16, 2012 at 12:53 pm #

    I think it would be good to discuss about the wealth-poverty-question. What is wealth and what is poverty? Are people in the “Western world” wealthy and living in luxury, whereas people in the “3rd world” are poor? These questions came up during several discussions. It would be very helpfull to understand eachother better on this subject, because it is in a way linked to the social class subject. Some participants in the discussions use the class terms and some the rich-poor categories. What is howver a social-economic class? Are the poor = the working class, and the rich = the ‘upper’ class?

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