What is money

There is no truly independent country in the world, because international capitalism has made sure of this, and our own experience here in Britain, especially since 1964, should have brought it home to us. The past few years should have shown us just how independent Britain is, when foreign "bankers" tell the British government how to spend money, and how it must not spend money, in order to keep the international capitalist class happy. Workers have no country and a post-capitalist, wage-slavery free world to win.

Independence for Scotland therefore is a myth put about by the Scottish National Party, which further confuses the Scottish section of the working class and blinds them from the real struggle – the class struggle. The outcome of the class struggle is the abolition of capitalism and an end to poverty, insecurity and the ever-present threat of war. The SNP is just another capitalist supporting political party, as politically dishonest as Labour and Conservatives and Lib-Dems and Greens or UKIP. Don't follow leaders. Leadership is capitalist principle. How about getting rid of leaders and opting for working towards socialism as capitalism can not be reformed without war (by deed or proxy) and poverty (relative or absolute)?

Don't settle for crumbs take over the bakehouse as we, the 95 percent, produce all of the wealth. Abolish capitalism and its iniquitous wages system.   Marshall Sahlins, perceptively observed:
"The world's most primitive people have few possessions but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all, it is a relation between people. Poverty is a social status. As such, it is the invention of civilization" (Stone Age Economics).

In truth, the majority is impoverished. It is impoverished insofar as it has no other option than to sell its working abilities to those who monopolise the means of living and whose conspicuous wealth must irresistibly provide the very yardstick by which that poverty will be starkly exposed. This may not be the poverty of material destitution. But if the measure of a human being consists in the accumulation of material possessions to which he or she may claim the, by that token, we are demeaned. And, ultimately, it is in this devaluation of our human worth—not simply in the fact of material inequality but in the meaning this society attaches to it—that we may glimpse the very essence of this poverty. The basic income is not a solution, but another form of subsistence ration, effectively relative poverty, while wealth surpluses torrent upwards to an economically dominant capitalist parasite class.

Supporters of capitalism, especially the Von Mises school, may not be able to conceive of production without money and prices, but we socialists can. The definitive answer to your the "economic calculation problem" is a (largely) self-regulating system of stock control in which calculations are made in kind rather than in terms of a common unit like money.

And let us address those currency cranks who believe we can create money by a stroke of the keyboard. Surely, the recent banking crisis has exploded the myth about banks being able to create credit, i.e. money to lend out at interest, by a mere stroke of the pen but apparently not.

Financial crises always spark interest in critics of the system. They see the problems of capitalism—like its vulnerability to crises—as primarily financial in origin. The whole point of production under capitalism is not the satisfaction of needs, but the accumulation of money. In other words, it’s impossible to separate the economic world into a good productive side and a bad financial side; the two are inseparable.

The monetary surpluses generated in production—the profits of capitalist businesses—accumulate over time and demand some sort of outlet: bank deposits, bonds, stocks, whatever. It’s going to be that way until we replace capitalism with something radically different. What we need to ask is why people today tend to blame banks rather than capitalism as a whole.

No bank can lend more than it has, either as deposits or what it has itself borrowed. The idea that money is created through fractional reserve banking is more of a metaphor.

No point in the socialist case arouses such controversy as that of the abolition of money and wages. Marx identified money as one of the two main manifestations of human alienation (the other was the state) and looked forward to its abolition in a communist society where human values would apply: where the standard by which something would be considered ‘valuable’ would be human welfare.

Marx also fully endorsed the slogan “Abolition of the Wages System!” a system which he regarded as a form of slavery. Money is just a means of saying ‘This is mine, not yours’.

Money in various limited forms existed for hundreds of years before the advent of capitalism but because it is an indispensable element in the workings of capitalism its general usage expanded universally with the development of that system. For a start, it is the device whereby capitalism separates the worker from the fruits of his or their labour; an indispensable part of the process whereby a minority class of capitalists ration the consumption of the great majority who as workers of one sort or another produce all the real wealth of society.

Marx saw money as having two basic functions: (1) a medium of exchange or circulation, i.e. the means through which articles produced for sale get bought and sold; and (2) a measure of value, i.e. a common unit in which the value of articles produced for sale can be expressed as a price, and is thus a standard by which they can be compared.

Marx also identified two kinds of paper token money: tokens that were convertible on demand into a fixed amount of the money-commodity and tokens which were not. The former created no problem. The latter, however, could create a problem if they were issued in a greater amount than the amount of the money-commodity that would otherwise circulate. In this case, if they circulated alongside gold or silver, the value of the tokens would depreciate, i.e. they would buy less than their face-value. If they were the only currency (as is the case today) this would result in a rise in the general price level, i.e. in a change in the standard of price.

An inconvertible paper currency has to be managed by the government or some state institution such as a central bank which, to avoid depreciation or inflation, has to calculate the correct amount to issue. In Marx’s day the case where the only currency was paper token money was a hypothetical one which he only discussed in passing.

"Paper coin, that forgery
Of the title-deeds which we
Hold to something of the worth
Of the inheritance of earth."
Shelley

Wee Matt