Capital III, Chapter 28 - Part 13

In Capital I, Chapter 3, it was illustrated that in a payments crisis, what Marx calls elsewhere a crisis of the second form, money “... turns from its ideal form into a material and, at the same time, absolute form of value vis-à-vis the commodities.” (p 459). In other words, there is a need to hold on to money rather than to exchange it for commodities. In Theories of Surplus Value, Marx describes it thus.

“At a given moment, the supply of all commodities can be greater than the demand for all commodities, since the demand for the general commodity, money, exchange-value, is greater than the demand for all particular commodities, in other words the motive to turn the commodity into money, to realise its exchange-value, prevails over the motive to transform the commodity again into use-value.” (TOSV2 p 505)

But, this payments crisis, at root, arises because of overproduction, even if that overproduction is exacerbated by credit, and the overproduction is extended by the payments crisis.

“This interruption itself is partly an effect, partly a cause of the instability of credit and of the circumstances accompanying it, such as overstocking of markets, depreciation of commodities, interruption of production, etc.” (p 459)

Fullarton, however, converts this distinction between money as means of purchase and money as means of payment, into a distinction between currency and capital. In a crisis, what is required is capital, but capital in its specific money form. To make international payments, where capital cannot be transferred by the export of commodities, gold must be exported. The gold is not exported as a commodity, but precisely as world money, and thereby diminishes the capital of the exporting country. Today, the payment may be made in dollars, as global reserve currency, but this does not significantly change matters. The dollars still represent a certain amount of value, a given amount of labour-time to be claimed against US capital. It is only to the extent that these dollars become seriously devalued that they may no longer be accepted in this function – a situation that began to arise during the global currency crisis of the 1970's. But, that was clearly outside the scope of Marx’s analysis here.

“Aside from this demand for gold (or silver) it cannot be said that there is any dearth whatever of capital in such periods of crisis. Under extraordinary circumstances, such as rise in the price of corn, or a cotton famine, etc., this may be the case; but these phenomena are not necessary or regular accompaniments of such periods; and the existence of such a lack of capital cannot be assumed beforehand without further ado from the mere fact that there is a heavy demand for pecuniary accommodation. On the contrary. The markets are overstocked, swamped with commodity-capital. Hence, it is not, in any case, a lack of commodity-capital which causes the stringency.” (p 460)

Back To Part 12

Forward To Chapter 29

Back To Volume III Index