In a further article, in the Weekly Worker, Michael Roberts deals with money and inflation. He confuses money with money tokens/currency/standard of prices, and new value/GDP with the total value of commodities. He says,
“as in Marxist theory aggregate values equal prices of production and money is a representation of that value, so ceteris paribus, if value grows, money supply will rise to match that value growth and so there will be no inflation in prices.”
Its necessary to take this apart, and to be more specific on terms. In A Contribution To The Critique of Political Economy, Marx does, indeed, set out a similar argument. In other words, money is the universal equivalent form of value. Value is labour, and is measured by labour-time, and so the total value of commodities to be circulated is equal to the total amount of labour-time required for their production. It is equal to the total social labour-time, and, as described in his Letter To Kugelmann, explaining The Law of Value, each commodity is, then, equal to a proportionate amount of this total social labour-time, determined by the labour-time required for its own production.
Money arises, naturally, out of the process of commodity exchange, as some given commodity is separated out, and used as a general measure of the value of other commodities. As a commodity itself, its own value is determined, as with all other commodities, by the labour-time required for its production, a value that, thereby, inevitably changes, as a result of changes in productivity. The total value of commodities, is tautologically equal to the total value of money – its equivalent form. If the total value of commodities rises, the total value of money, automatically rises, because it is their equivalent form.
However, as Marx sets out, when talking about money in its physical form as a money commodity, this does not at all mean that the physical amount of this given commodity must increase. For example, a country might choose, gold as its money commodity, and, so measures the value of commodities against it. But, if the value of any commodity is assessed, it does not require that this assessment be done physically, against an equivalent amount of gold. The assessment of equivalence occurs only in the mind, it is an equivalence with “imaginary” gold, as Marx puts it. Similarly, if the total value of commodities in an economy is equal to 1 million grams of gold, this does not at all require that there be 1 million grams of gold, physically present in that economy. The assessment of value is again, only in relation to “imaginary” gold. Indeed, its for this very reason, as Marx sets out, that actual physical gold (or any other money commodity) can be replaced, when it comes to currency, the means of circulation of commodities, by mere tokens.
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