Tài liệu The Centrality of Money, Credit, and Financial Intermediation in Marx’s Crisis Theory: An Interpretation of Marx’s Methodology pptx

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fundamentally incomplete, however, because conditions in the sphere of circulation in
any era codetermine the vigor of accumulation, the degree and character of the
vulnerability of accumulation to adverse financial or nonfinancial developments, the
timing of the onset of crisis, and the depth and duration of contraction. Indeed, in the
absence of an analysis of circulation it is not clear why a fall in the rate of profit should
lead to crisis at all; a lower but positive rate of growth is a more logical outcome of a
decline in the profit rate taking only production relations into consideration. Marx’s
views on accumulation and crisis are neither complete nor compelling unless understood
as the unity of circulation and production.
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Seen in this light, the fundamental reason that the traditional crisis theory
literature incorrectly relegates monetary and financial aspects of crisis theory to such an
inferior analytical status is its failure to appreciate the theoretical significance of Marx’s
analysis of the crisis potential of commodity exchange. The centrality of money and
credit is established at the highest level of abstraction in the analysis of SCP with which
Marx opens Capital while the function of the analysis in Parts Four and Five of Volume
Three is to provide a detailed and institutionally concrete elaboration of the role of money
and finance in specifically capitalist macrodynamics. Banks and securities markets are
capitalist institutions. Within SCP, the analysis of money and credit is restricted to
commodity money and commercial or trade credit. Marx’s introduction and analysis of
capitalist production relations in Capital enables him to radically transform and enrich
the theory of commodity circulation and its forms of crisis because it permits credit
money, bank loans, and stock and bond markets to be theorized. Marx did not relegate his
discussion of financial intermediation to the end of Volume Three because circulation is
of secondary importance in his crisis theory; rather, its location was dictated by the fact
that financial intermediation could not be analyzed until the concepts of capital, interest-
bearing capital and surplus value had been theorized.
One caveat is in order before proceeding: our emphasis on the importance of
monetary and financial phenomena in Marx’s theory of accumulation and crisis should
not be misinterpreted as an argument that circulation should have logical priority over
production in Marxian theory. It is certainly not our intention to commit the traditional
error in reverse. Marx repeatedly criticized all economists – “bourgeois” and socialist
alike - who argued that the credit system is the cause, indeed the only possible cause, of

6
capitalist crises. Much of the first section of the Grundrisse, for example, is taken up with
an attack by Marx on Proudhonist schemes designed to eliminate crises by replacing
money and credit with a system of labor-time chits. Marx’s main point in these polemics
is that a commodity-exchange economy is crisis prone or anarchic, and a capitalist
economy even more so, independently of credit. Therefore, you cannot surgically remove
capitalist instability (or exploitation) by replacing its financial system with utopian credit
or labor-bank schemes. Unfortunately, Marx’s criticisms of schools of thought that see all
crises as imposed by “irresponsible” financial activity on an otherwise crisis-free
capitalism have been frequently misinterpreted as an argument that the financial system is
an unimportant aspect of his crisis theory. It is this misinterpretation that we wish to
correct.
In the remaining sections of this paper we will further develop these ideas,
attempting to justify and support the arguments made here. We begin with a discussion of
Marx’s theory of the crisis potential of simple commodity circulation.

III. Simple Commodity Production and Abstract Forms of Crisis
Perhaps the best statement by Marx on the role of monetary and financial
phenomena in his theory of capitalist crisis can be found in Chapter 17 of Theories of
Surplus Value. In this chapter Marx lays out with clarity the appropriate theoretical
relation between the analysis of SCP and the analysis of capitalist production relations in
the complete theory of capitalist crisis.
In Chapter 17, Marx introduces a concept that is central to his development of the
methodology of capitalist crisis theory and central to our argument about the key role
played by monetary and financial behavior in his theory: the concept of an abstract form
of crisis. The term form refers to an economic model, in this case a model of simple
commodity circulation. The adjective abstract indicates that the models to be considered
are quite simple, incorporate little or no institutional detail, and, most important, abstract
as much as possible from reference to specific relations of production: the analysis of
these abstract forms of commodity exchange never leaves the sphere of circulation. They
are forms or models of crisis because Marx uses them to demonstrate that a commodity
exchange economy is crisis prone or has crisis potential independently of its specific

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production relations. Disequilibrium, aggregate supply-demand imbalance, and instability
are characteristics of the models or forms of SCP examined by Marx in this Chapter.
In Chapter Three of Volume One of Capital, Marx discusses five different
“functions” performed by money in SCP: as measure of value (hereafter MMV), means
of circulation (MMC), store of value or hoard (MH), means of payment (MMP) and as
means of international payments settlement or world money. In Chapter 17, Marx
differentiates his abstract forms of SCP on the basis of the functions of money that each
form or model incorporates. He concentrates on two such abstract forms of crisis. The
first abstract form of crisis explicitly incorporates MMC and implicitly considers MMV
and MH. The second, more complete, or “more concrete” abstract form incorporates
MMP as well. We label the first form SCP-through-MMC and the second SCP-through-
MMP. In both Chapter Three of Volume One of Capital and Chapter 17 of Theories of
Surplus Value, Marx uses his analysis of the functions of money in SCP to attack Say’s
Law and to demonstrate that commodity exchange economies contain the ‘‘formal
possibilities of crisis”; they are anarchic. Moreover, the more important the advanced
functions of money - such as MMP or world money - in the economy, the more crisis-
prone the economy becomes.
Both chapters present these same basic arguments; nevertheless, they are
complements, not substitutes. The analysis in Capital presents a richer, more detailed
discussion of the various functions of money, while in Chapter 17 Marx is much more
explicit about the analytical method or logic he is using to develop his theory of capitalist
crisis. In Chapter 17 he argues that because capitalism is a commodity exchange
economy its general or abstract laws of circulation must be developed from an analysis of
SCP such as the one presented in Part One of Volume One of Capital. This analysis of the
sphere of circulation produces abstract forms of crisis, models that demonstrate the crisis
potential of capitalism and stress monetary and financial phenomena. But, Marx goes on
to argue, the crisis potential of SCP or, indeed, of capitalist commodity circulation is not
a theory of the causes of crisis in capitalism or of capitalism’s laws of motion. A
complete theory of crisis requires the analysis of the general laws and tendencies inherent
in the specific production relations of the capitalist mode of production, the subject
matter of the traditional crisis theory literature. This analysis provides the “concrete,”
“compelling motivating factors” missing from the analysis of abstract forms. The analysis

8
of circulation provides the framework, the structure, the abstract forms within which the
contradictions of capitalist production relations take place or are embedded.
8
Although
choppy and unpolished, Chapter 17 has the great advantage of being methodologically
more self-conscious than Chapter Three of Volume One of Capital.
9


III. a. The First Abstract Form of Crisis: Money As Means of Circulation
In Part One of Volume One Marx compares two logically distinct forms of
noncapitialist commodity exchange: barter and simple commodity production. In direct
barter, C-C, products are exchanged for products without the intermediation of money as
a means of commodity circulation. In Marx’s concept of barter economy, “the bulk of
production is intended by the producer to satisfy his own needs, or, where the division of
labour is more developed, to satisfy the needs of his fellow producers that are known to
him. What is exchanged as a commodity is the surplus and it is unimportant whether this
surplus is exchanged or not.”
10
Barter, therefore, represents a relatively primitive form of
commodity production and exchange, one in which exchange value, the market system,
or the “law of value” does not yet dominate and control the social division of labor. It
reflects a simple, uncomplicated way of economic life, one implicitly assumed to take
place within limited geographic boundaries.
As such, C-C holds no interest for Marx insofar as his task is to develop a crisis
theory. In barter, the individual act of commodity exchange is a complete act; C-C
represents simultaneous purchase and sale, not only in the tautological sense that each
commodity is purchased in the same act in which it is sold, but also because each
transactor makes a sale through the same act by which he purchases.
When we proceed to SCP, however, money as means of circulation ruptures the
simultaneity of purchase and sale. In SCP the individual act of exchange is by its nature
incomplete; it is only one link in an ever-expanding chain of actions and interactions. C-
M-C consists of two logically distinct phases, C-M and M-C. C-M may represent the
final stage of exchange for the money holder, who must have previously sold a
commodity in exchange for the money he uses here to obtain a product for consumption
as a use-value, but it only represents the starting point for the commodity owner who has
exchanged his product for money. This transactor must now go on to attempt to complete

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the exchange cycle through a third party. The third agent, of course, must find a fourth,
who desires to engage in a C-M transaction with the third agent. And so on.
SCP is thus qualitatively different from barter in that it separates the acts of
purchase and sale in time and space and inevitably draws vast numbers of producers into
a complex, interlocked, interdependent system of social relations of production and
exchange. As Marx puts it:
We see here on the one hand, how the exchange of commodities [SCP] breaks
through all the individual and local limitations of the direct exchange of products
[barter], and develops the metabolic process of human labour. On the other hand,
there develops a whole network of social connections of natural origin, entirely
beyond the control of the human agents.
11


Since each individual agent’s sale of his or her commodity is dependent upon
successful sales and purchases by “innumerable” others, the entire society of commodity
producers is drawn together in a network of mutual interdependence, a system in which
rupture at any point can lead to disruption everywhere, a system beyond anyone’s
control. And the creation of this system, the weaving together of this web, the breaking
through the boundaries and limitations of barter, is accomplished by and through money.
Because it is the medium of circulation, money becomes the medium of social cohesion,
the tie that binds the fortunes of economic agents one to another.
The existence of MMC, of the requirement that economic agents must first
convert the commodities they produce into money before they can obtain use-values,
dramatically alters the system characteristics of commodity exchange in SCP from those
associated with its barter form: Say’s Law cracks under the weight of MMC. Indeed,
Marx’s analysis of crisis in SCP can be thought of as extensive critique of the idea
enshrined in Say’s Law that commodity exchange economies with money can be
adequately theorized as very complex systems of barter in which money really does not
matter. The fundamental distinction between Marx’s analysis of the dynamics of
advanced commodity exchange and “the childish babble of a Say”
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or, one might add, of
a Walras or a Friedman, is precisely the distinction between a monetary economy and
barter.
The following quotation shows quite clearly that Marx believed that the
introduction of MMC into the commodity exchange model created a mode of economic
organization in which crises were possible:

10
No one can sell unless someone else purchases. But no one directly needs
to purchase because he has just sold. Circulation [splits] up the direct identity
between the exchange of one’s own product and the acquisition of someone else’s
into the two antithetical segments of sale and purchase. To say that these mutually
independent and antithetical processes form an internal unity is to say also that
their internal unity moves forward through external antithesis. These two
processes lack internal independence because they complement each other.
Hence, if the assertion of their external independence proceeds to a certain critical
point, their unity violently makes itself felt by producing a crisis. There is an
antithesis, immanent in the commodity, between use-value and exchange-value,
between private labour which simultaneously manifests itself as directly social
labour, and a particular concrete kind of labour which simultaneously counts as
merely abstract universal labour. ; the antithetical phases of the metamorphoses
of the commodity are the developed forms of motion of this immanent
contradiction. These forms therefore imply the possibility of crisis, though no
more than the possibility. For the development of this possibility into a reality a
whole series of conditions is required, which do not yet even exist from the
standpoint of the simple circulation of commodities.
13


One of the most important logical implications of letting money stand between
purchase and sale is the elimination of the analytically instantaneous character of
commodity exchange in barter: money introduces the passage of time into the model. In
turn, the separation of purchase and sale, or the passage of time while money is
suspended between acts of circulation, implicitly introduces two new related monetary
concepts into Marx’s analysis: money as an asset, “hoard” or store of wealth, and the
“velocity” of money or its speed of circulation. Money as a hoard, MH, is a component of
the SCP -through- MMC form.
Marx’s argument above clearly implies that the velocity of money as a medium of
circulation may slow down; that is, the time during which it stands suspended between
acts of exchange may lengthen. “No one needs to purchase because he has just sold”;
money can be held rather than spent for some variable period of time. Moreover, the idea
that velocity can slow down is intimately related to Marx’s assertion that there can be a
general excess supply of commodities - a crisis of reproduction - in SCP. For example:
the velocity of circulation of money is merely a reflection of the rapidity
with which commodities change form. In the velocity of circulation, therefore,
appears the fluid unity of the antithetical and complementary phases, or the two
processes of sale and purchase. Inversely, when the circulation of money slows
down, they assert their independence and mutual antagonism; stagnation occurs
The circulation itself, of course, gives no clue to the origin of this stagnation; it
merely presents us with this phenomenon.
14


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What Marx is doing here is considering disequilibrium aspects of SCP, arguing
that the aggregate supply of commodities can exceed the aggregate demand for
commodities - hence crisis - precisely because money exists not just as a medium of
circulation but as an asset or store of wealth as well. Indeed, in Theories of Surplus Value
he states his argument in the modern form we associate with Walras Law, defined here as
the statement that the sum of the excess demands of all commodities including money is
equal to zero. There can be an excess supply of all commodities - a general glut - if at the
same time there is an excess demand to hold money. If we consider SCP, Marx tells us:
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 commodites, in other
words the motive to turn the commodity into money, to realize its exchange-
value, prevails over the motive to transform the commodity into use-value.
15

We turn briefly to the function of money as a measure of value. Money - here
gold - is the universal general equivalent and hence “the necessary form of appearance of
the measure of value which is immanent in commodities, namely labour-time.”
16
The
interesting aspect of MMV for us is that money acts as a measure of value before it acts
as a means of circulation: time intervenes between the two functions. By MMV, Marx
refers to the estimate of the value of a commodity made by its owner or by others prior to
its actual sale.
Since the expression of the value of commodities in gold is purely an ideal act, we
may use purely imaginary or ideal gold to perform this operation. Every owner of
commodities knows that he is nowhere near turning them into gold when he has
given their value in the form of a price or of imaginary gold. In its function as
measure of value, money therefore serves only in an imaginary or ideal capacity.
17


Thus, MMV measures the expectations of commodity owners as to the value they
will receive in the market when they actually exchange their commodity for gold; that is,
when money acts as a means of circulation.
Nothing guarantees, however, that the expectations of commodity owners will be
fulfilled. Indeed, the lack of any pre-coordinating mechanism in a commodity exchange
economy practically guarantees that these expectations will not be fulfilled. If the value
actually received at sale is greater than, equal to, or not much below expectations,
reproduction need not be disrupted. But if conditions change substantially between the

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time that money acts as measure of value and as means of circulation, a crisis could
develop.
The real significance of the separation of money into MMV and MMC (or the
recognition of the passage of time between the decision to produce and the sale of the
product) for monetary and crisis theory cannot be established, however, until the point
has been reached where Marx introduces money as a means of payment into the analysis
of SCP. It will not attain its maximum significance until production, especially capitalist
production, is incorporated into the model. It is only with contracts, credit and financial
intermediation, and with time-consuming interdependent production and circulation
processes involving long-lived capital goods that the potential differences between the
price expectations that guide decisions to produce and prices actually prevailing at the
time of sale take on a key, and often a dominating, role in crisis theory.
Even so, Marx comments right at this point about the anarchic character of a
mode of production in which expected values and realized values diverge. The fact that a
producer accurately estimates the average or trend value of his commodity does not
guarantee that the market price will adequately reflect that value when the good is sold.
The price of a commodity, Marx tells us:
may express both the magnitude of value of the commodity and the greater or
lesser quantity of money for which it can be sold under the given circumstances.
The possibility, therefore, of a quantitative incongruity between price and the
magnitude of value, i.e., the possibility that the price may diverge from the
magnitude of value, is inherent in the price-form itself. This is not a defect, but,
on the contrary, it makes this form the adequate one for a mode of production
whose laws can only assert themselves as blindly operating averages between
constant irregularities.
18


Chapter Three of Volume One of Capital thus contains Marx’s basic argument
that it is the intervention of money into direct commodity circulation, the monetization of
the exchange economy, MMC, that creates the potential for crises. In Chapter 17 of
Theories of Surplus Value Marx presents the same basic analysis, but the language he
uses there makes it harder to misunderstand the theoretical status of the abstract forms of
crisis in SCP and their centrality in his theory of capitalist crisis. We quote Marx from
Chapter 17 in order to call attention to the important terms and concepts that he uses
there:

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Crisis results from the impossibility to sell. The difficulty of converting the
commodity into money, of selling it, arises from the fact that the commodity must
be turned into money but the money need not be immediately turned into
commodity, and therefore sale and purchase can be separated. We have said that
this form contains the possibility of crisis. that is to say, the possibility that
elements which are correlated, which are inseparable, are separated.
19


The SCP model theorized only through the function of money as means of
circulation thus respresents a “form” within which crisis is possible because sale and
purchase are separated and thus have the potential to temporarily lose their unity, to
become, for a time, independent. Having established this point about the SCP-through-
MMC form, Marx immediately tells us that a theory of a form with crisis potential is not
yet a theory of crises, an explanation of why capitalist crises must take place:
The general abstract possibility of crisis denotes no more than the most abstract
form of crisis, without content, without a compelling motivating factor. Sale and
purchase may fall apart. They thus represent potential crisis and their coincidence
always remains a critical factor for the commodity. The transition from one to the
other may, however, proceed smoothly. The most abstract form of crisis (and
therefore the form of possibility of crisis) is thus the metamorphosis of the
commodity itself; the contradiction of exchange-value and use-value, and
furthermore of money and commodity, comprised within the unity of the
commodity, exists in metamorphosis only as an involved movement. The factors
which turn this possibility of crisis into [an actual] crisis are not contained in this
form itself; it only implies that the framework for a crisis exists.
20


SCP-through-MMC constitutes an abstract form of crisis, indeed the most abstract
form of crisis. It has crisis potential. But crisis need not occur; this form provides no
content, no compelling, motivating factor to cause crisis. “The transition” from sale
through purchase “may, however, proceed smoothly.” SCP-through-MMC therefore
“only implies that the framework for crisis exists.”
The same basic point is made in the following argument:
The general possibility of crisis is the formal metamorphosis of capital itself, the
separation in time and space, of purchase and sale. But this is never the cause of
the crisis. For it is nothing but the most general form of crisis, i.e., the crisis in its
most generalized expression. But it cannot be said that the abstract form of crisis
is the cause of crisis. If one asks what its cause is, one wants to know why its
abstract form, the form of its possibility, turns from possibility to actuality.
21


And if one does want to know why crisis “turns from possibility to actuality,” one
must shift the focus of the analysis from circulation to production or from SCP to

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capitalist production relations. What one should not do is forget that the abstract forms of
crisis constitute the framework within which the analysis of production takes place, a
framework which is itself transformed in that analysis.
Even this framework is incomplete, however: the completion of the abstract
framework for crisis in SCP requires the integration of the remaining functions of money
in the model.
22
The incorporation of the function of money as means of payment, MMP,
represents the most significant extension of the crisis framework. Theorizing MMP in
SCP constitutes a qualitative increase in the analytical power of the framework as a form
within which to build a concrete theory of capitalist crisis. And it is with the SCP-
through-MMP abstract form of crisis that Marx introduces contracts, and commercial
credit and paves the way for the introduction of financial intermediation into his theory of
crisis.

III. b. The Second Abstract Form of Crisis: Money as a Means of Payment or
the Contract Economy
In Chapter 17, Marx introduces a second abstract form of crisis in SCP:
It can therefore be said that the crisis in its first form is the metamorphosis of the
commodity itself, the falling asunder of purchase and sale. The crisis in its second
form is the function of money as a means of payment, in which money has two
different functions and differs in two different phases, divided from each other in
time. Both these forms [SCP-through MMC and SCP through-MMP] are as yet
quite abstract, although the second is more concrete than the first.
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The introduction of money as means of payment - money used by a borrower to
fulfill a legally-binding contract - in the theory of SCP is the key analytical step required
to demonstrate the basic thesis of this paper that money, commercial credit and financial
intermediation play a central role in Marx’s crisis theory. With his analysis of MMP in
SCP, Marx introduces the concepts of contracts and credit, extends the degree of
systematic interdependence of economic agents in SCP, substantially alters the impact of
time and the role of history in the model, theorizes the monetary crisis and lays the
foundation for the financial crisis, and introduces the essential notion of a contractually
rigid or fragile reproduction process. Clearly, the significance of MMP for Marx’s crisis
theory is more profound than most of the modem Marxian crisis literature acknowledges.