Sociology assignment

Karl marx – Money and Commodities

A component of commodities and market exchange is money. Marx's view is that "value" is
labour objectified and alienated in commodities, where it manifests itself in circulation as
"exchange-value," which turns into money, the "value-form," and becomes "independent."
Every owner of a commodity wants to give it up only for other commodities whose worth
meets a need of his. When seen in this light, exchange is just a personal deal for him.
However, regardless of whether his own commodity has any use-value for the owner of the
other, he wants to realise the worth of his and convert it into any other acceptable
commodity of equal value. From this vantage point, he views exchange as a broad social
transaction. The movement of money as capital is an aim in and of itself since only within
this ever-renewing system of proprietors of goods—both solely private and strictly social
and general—can value something.In the course of trades, when various labour outputs
are essentially equated to one another and subsequently transformed into commodities by
practice, money is a crystal that is made out of need. The development of the latent
contrast between use-value and value in commodities is a result of the historical
progression and expansion of exchanges. The need to provide this difference an outward
manifestation for the purposes of trade pushes towards the creation of a separate kind of
value and won't stop until the differentiation of commodities finally satisfies this need. The
fundamental characteristic of commodities that establishes their commensurability is the
amount of human labour they all contain, which determines their "value." One worker's
specific labour time, however, cannot be immediately substituted for another worker's
specific labour time. . A worker's specific labor time must first assume an objective form,
one that is distinct from itself—the form of the universal equivalent—in order to achieve
general exchangeability (i.e., money). Every commodity (work product) manifests as value
in the form of money. This look can be imagined when money serves as a unit of account or
measure of value, or it can be genuine when money is used as a method of exchange or
purchase for a tangible item. Marx highlights the distinction in this context between actual
money and accounting money, or money as a medium of exchange and a measure of
worth. Money has no intrinsic value, but commodities have prices when they are first put
into circulation. Value and prices are established outside of the market. Marx's main
criticism of the QTM is that it confuses the many purposes of money to the extent that it
ignores the existence of these distinct purposes. Only an increase in the worth of goods
can lead to a widespread increase in their pricing.the value of money staying the same, or
the values of commodities staying the same in the event that the value of money declines.
However, a general decline in prices can only come about as a result of either a decline in
the value of commodities, the value of money being the same, or an increase in the value
of money . Additionally, if their value increases more quickly or more slowly than that of
money, the differential between the two will determine whether their prices grow or
decline. The primary idea of the lengthy work, which was how to explain the contradiction
of harmony and discord in the economy, was originally presented in the fragment on
Bastiat and Carey. The majority of thinkers urged government intervention to address the
discord or blamed it on state meddling. By portraying harmony as the inherent condition or
pinnacle of capitalism, they unilaterally detached themselves from the paradox. Rather,
Marx provided a dialectical explanation for the coexistence of harmony and disharmony by
highlighting the connection between simple circulation and production. The process must
start with a particular value in the form of a commodity and conclude with the same value
in the form of a commodity due to the change in form, C——M——C, which caused the
circulation of the material products of labor. The Chapter "Money" includes both overt and
covert refutations of credit theories, monetary theories, and doable reforms put out by
British Owenites like Bray and Gray as well as utopian socialists like Proudhon and
Darimon. Marx argues that their conclusions are absurd, and their presumptions are
equally erroneous. Marx argues that the dual nature of the commodity—that is, that it
exists simultaneously as exchange value and as use value—implies the potential of a crisis
(i.e., as money). The bulk of the payment instruments produced by the credit system had a
tendency to revert to the monetary base on a regular basis under the commodity-money
regime. The bulk of the payment instruments produced by the credit system had a
tendency to revert to the monetary base on a regular basis under the commodity-money
regime. Marx's theory of money originated as a critique of the popular notion of labor
money at the time, which was advanced by ambitious social reformer Jean-Baptiste
Proudhon and his adherents. A chapter in Grundrisse's introduction critiques Alfred
Darimon's suggestion for a monetary reform based on that theory. Following in Proudhon's
footsteps, Darimon suggested a bank reform that would eliminate the dominance of
precious metals in exchange and circulation as "the root of the evil."A more basic critique
appears to be warranted; that is, Marx assumes a labor theory and law of value that base
the exchange ratios and quality of commodities on labor and the relations of production. In
the sections that follow, I apply Marx's doubts about monetary policy and reforms as
solutions to social and economic issues to an examination of modern monetary policy,
with a focus on the Fed's unconventional monetary policy. "Gold is an amazing substance!
Whoever has it is supreme over anything they desire. Gold can even be used to transfer
souls to paradise." (In Columbus's 1503 letter from Jamaica.) Everything, whether or not it
is a commodity, can be converted into gold because it does not reveal what has been
changed into it.Everything turns into a marketable product. Marx's examination of the
structure and dynamics of interest rate formation leads to two conclusions. First off, the
level of interest is not solely or even mostly determined by monetary policy. As a result, the
central bank's capacity to affect macroeconomic circumstances is, at most, restricted.
The second conclusion is that the secular decline in government bond yields and interest
rates is more likely to be explained by the overproduction of profits over the last few
decades, which has created an excess of loanable money, rather than the Fed's monetary
policy in and of itself. Marx rejects the Keynesian idea that the average rate of profit is
determined by the money rate of interest. There is a chance that these two variables could
be causally related However, the opposition is significantly more likely to crystallize and is
not nearly as pleasant. When money exits its domestic circulation, it sheds its regional
disguises, assuming the shape of local coinage, tokens, standards of pricing, and value
symbols before reverting to its original form as bullion. The expression of commodities'
value in international trade aims to achieve universal recognition. Thus, in these situations,
their autonomous value-form also confronts them in the guise of universal money. Marx's
labor theory of value and his theory of money are intertwined and cannot be studied or
comprehended separately. Marx views money as a social relation of production ,Because
money as credit generated by the banking system differs fundamentally from money as
revenue generated in the economy, the socio-economic foundation of money cannot be
suspended by manipulating interest rates, or the price of credit. The zero lower bound of
nominal interest rates is increasingly being held responsible for the falling returns to
monetary policy by those who reject the nature of money as a social production
connection. In this regard, some central banks have been hesitantly experimenting with
the concept and use of negative interest rates on excess reserves held by commercial
banks. The zero lower bound of nominal interest rates is increasingly being held
responsible for the falling returns to monetary policy by those who reject the nature of
money as a social production connection. In this regard, some central banks have been
hesitantly experimenting with the concept and use of negative interest rates on excess
reserves held by commercial banks. One theory is that banks would try to make up for their
losses by enacting negative rates on retail deposits if the practice of low or negative
interest rates keeps eating away at bank margins. It makes sense that bank clients could
choose to hoard cash instead of making interest payments. Because of this potential,
some prominent figures in the economy have begun to discuss doing away with cash and
switching to a cashless monetary system that is based on an artificial unit of account that
is unrelated to actual currency. However, breaking through the zero lower bound will
always remain a pipe dream, surpassed only by a more outrageous fantasy: the idea that
the problem may be solved by doing away with money in the form of currency. Without a
terminus medius, the use of money as a payment method suggests a contradiction. Money
only serves as a measure of value and a money of account when the payments are in
balance with each other. When it comes to making actual payments, money is not merely a
means of trade or a fleeting agent in the exchange of goods; rather, it is the unique
manifestation of social work, the stand-alone form of exchange-value, and the universal
good.During the stages of industrial and commercial crises known as monetary crises, this
conflict reaches a breaking point. Only in those cases when an artificial payment system
and an ever-expanding payment chain have been completely formed can such a crisis
arise. A country's commerce depends on a specific amount of money, more or less of
which might negatively impact the same. Lust because, in a modest retail transaction, a
certain amount of farthings are required to convert silver money and even to make
calculations that cannot be changed using the tiniest pieces of silver. The proportion of
money [gold and silver specie] required in our trade is to be taken from the frequency of
commutations, just as the proportion of farthings required in commerce is to be taken from
the number of people and the frequency of their exchanges, as well as, and primarily, from
the value of the smallest silver pieces of money. it's assume, instead, that the buyer is
entitled to acquire goods at a lower price than their actual value. In this instance, it is no
longer important to remember that he would eventually change into a seller. He was so
before he became a buyer; prior to making a 10% profit as a buyer, he had already lost 10%
when selling. Nothing has changed from how it was. Consequently, neither the
assumption that commodities are acquired below their value nor the premise that they are
sold above their value can account for the formation of surplus-value and the subsequent
conversion of money into capital. Capital is created through the movement of goods. The
historical foundation from which commerce emerges is formed by the manufacture of
goods, their distribution, and that more sophisticated method of distribution known as
commerce. The development of a global market and global commerce in the sixteenth
century is when the history of capital today began.
Money is the ultimate product of the circulation of commodities and the first form in which
capital appears if we remove ourselves from the material substance of this process, that
is, from the exchange of the various use-values, and only look at the economic forms
created by it. History shows that capital always takes precedence over landed property.i
order to use labour, a capitalist must purchase it, and work is labour when it is employed.
By putting the vendor of labour to work, the buyer consumes the labour. Through
employment, the individual transforms from what he was only capable of being—labor
force in action—to a real labourer. Before all else, he needs to invest his work on
something valuable, something that can fill a need of some kind, in order for it to
materialise into a commodity. So, a specific object with a specific use-value is what the
capitalist assigns the worker to manufacture. It doesn't change the essence of that
production in general that use-values, or things, are produced under the supervision of and
on behalf of capitalists.