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There is a basic divide in economics on answers to the question: what determines the value of money vis-à-vis non-money commodities? One answer is the monetarist one: the value of money in any period is determined by its demand and supply. The other answer states that the value of money is fixed from ‘outside’ the realm of demand and supply, whether by the relative quantity of labour embodied in it (Marx), or because some commodity’s price is fixed in terms of it (money wages in Keynes). The tradition offering this latter answer, to which both Marx and Keynes belong, is christened the ‘propertyist’ tradition in this book.
The basic divide logically entails two entirely different economic world-views. Monetarism, to be logically consistent, must preclude any role for money as a form in which wealth is held; it can cognize money only as a medium of circulation. By precluding the role of money as a form of wealth-holding, monetarism also precludes any possibility of ‘involuntary unemployment’ (Keynes) or ‘over-production crises’ (Marx), and hence invariably sees the capitalist economy as spontaneously achieving full employment.
The monetarist position is not only factually wrong, but also logically untenable, since the medium-of-circulation role of money cannot be separated from its form-of-wealth role. While functioning as medium of circulation, money is also being held, no matter for how fleeting a period, as wealth. Once this is recognized, a coherent monetarist story cannot be constructed. ‘Propertyism’ is superior to monetarism both in its ability to explain observed phenomena and in its logical consistency.....
ISBN - 9788189487423
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Pages : 254
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