Gold, silver or any other money commodity only fulfils that role because it arises as the physical representative of universal labour, i.e. of money as the equivalent form of value. It represents exchange-value incarnate, alienated from use value. Its only use value is that it is exchange-value. But, the underlying relation is that determined by universal labour. Money is simply universal labour, and ownership of money, in the form of a money-commodity is simply a claim to an equivalent amount of social labour. When money tokens replace the money commodity, then these tokens themselves directly represent that universal labour, and their link to the money commodity is increasingly severed, which is manifest in the continual devaluation of those tokens relative to the money commodity.
The money commodity has value, because it is a commodity, but money tokens only have value in so far as they represent an amount of social labour-time whether determined directly, or indirectly via the intermediary of the money commodity. It does not matter whether we say that 1 million hours of social labour-time has its equivalent in 1 million hours of value, represented by 100,000 ounces of gold, or whether we say it is represented by £100,000 in the form of 100,000 £1 notes. But, it is clearly the case that, in this event, if £200,000, in the form of 200,000 £1 notes is put into circulation, the reality must be that each note is reduced in value by 50%, because it cannot change the fact that it represents only the same amount of value/social labour-time. It means that, instead of 1 hour of value being represented by £0.10, it is now represented by £0.20, and so all prices would double, including the price of gold, which would now rise from £1 per ounce to £2.
There is no reason why these money tokens should retain any fixed relation to gold or any other money commodity, because they can simply represent, directly, a quantity of social labour-time, and the quantum of social labour-time each represents then becomes determined by the quantity of them put into circulation. There is an obvious advantage for the state in that, because it directly fulfils Lowndes' objective. It enables the state to repay its creditors in debased currency, but also in line with Attwood's objective, it makes it a tool of monetary policy, especially when used in conjunction with fiscal policy. It means that the central bank can inflate prices, year on year, in line with the requirements of Fordism/social-democracy described earlier of enabling a fall in real wages, at the same time that nominal wages and living standards rise, so as to increase the rate of surplus value.
In addition, as seen during lockdowns, it can be used to fund budget deficits and fiscal expansion, in the hope of stimulating economic growth, in conditions where economic resources are not fully employed. The aim is then that economic activity expands to such a degree that actual value production increases, so as to expand to meet the amount of currency put into circulation, but, even if it does not, the resultant inflation, means that the state pays back in interest/capital sum less in real terms than it borrowed to finance the fiscal expansion.
As I have set out elsewhere, whether such a strategy is successful or not depends, again, on the phase of the long wave cycle. In a period of initial uptrend, such measures can cut short temporary recessions, and the subsequent resumption of growth increases output in excess of the initial stimulus, so that it is non-inflationary. In the periods of crisis, it tends to be most inflationary, as the additional liquidity is used simply to raise prices rather than expand output, and it also contributes, via inflation, to higher rates of interest. In periods of stagnation, there is already excess money-capital, as its supply from realised profits exceeds the demand for it for productive investment, causing interest rates to fall, which encourages speculation in asset markets. Fiscal expansion during such periods does not lead to increased economic activity, and increased liquidity simply feeds into increasing asset prices further, as witnessed during the 1920's, and during the 1980's/90's.
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