Talk presented by Anitra Nelson, Friday morning, 24 February 2001, Melbourne University

Money and Social Justice

This series of lectures is linked by a theme: investigating how ideals can both conserve our social system and galvanise people to act and create new futures. On the one hand ideals, ideas and ideology can be conservative and traditional. They can be powerful tools in preserving a long established social system because they rationalise social habits, make them seem right and/or natural and counteract resistance or movements for change. On the other hand ideas, ideals and ideology can be revolutionary in their consequences, moving people to act collectively towards overturning conventions and instituting new worlds, new forms of social behaviour and new kinds of civilisations.

In this context, the concept of the idea, what we think, is dialectically linked with the material, what we do:


Today I'm going to talk about an idea, money, and money creating activities that are central to our lives. I suggest that the way we think about money, about what money is or should be, affects our behaviour in a dominating fashion. And right from the start I want you to know that my perspective is a long range one. I look at our capitalist society as we experience it today as a peculiar society made unique by the central importance that we give money.

Social anthropologists and Marxians highlight the fact that only in capitalist society is money the central organising principle. Even in other societies where there are markets and some form of money, these markets are marginal and money subordinate to the mainsprings of social organisation. That is why Marx referred to money as it functions in modern capitalism as a god and indicated that economics was a religion.

Within capitalist societies money is an integral force in our social and material relations. Money mediates our relations with one another and with nature. Money isn’t just a measure of value and medium of exchange-it’s a judgement. Monetary values dominate peoples thinking actions and values so much today that many people believe and argue that we can only protect, say a forest, by giving it a price. Monetary values are so often the ultimate arbiter and final criteria for decision making, money seems like a god.

My talk is divided into three sections. First-and this is the main part -I want to describe how Marx conceptualised money, how he developed his thoughts about economics and capital as the dominating social arrangements in our kind of society. Then I will talk about where we are now, in particular about the ecological crisis felt globally by all people. And about the links that this environmental crisis has with our behaviour. And some of the ideas that characterise groups pushing for social justice and ecological sustainability. Finally I briefly want to suggest what a world without money might look like. That ultimate vision points towards the panel discussion this afternoon.

But, to begin at the beginning, let’s look at Marx, in fact at Marx and Hegel and dialectics. Marx was a nineteenth century political intellectual unconstrained by the disciplinary rigour or specialisation insisted on by late twentieth century academia. If seen from simply one perspective-as a sociologist, philosopher, political scientist, literary critic, economist or historian-his work loses much of its richness and original message. An interdisciplinary approach is especially important for Marx’s theory of money because it is definitely not just an economic theory. Marx was an anti-economic heretic, a scholar and a revolutionary. The development of his unique concept of money was strongly influenced by his background in Hegelian and Young Hegelian philosophy as well as by his political views. In fact, if looked at purely as an economic theory many aspects of his theory of money make little sense.

The scattered work that has been done on Marx’s concept of money includes serious challenges to it along with reinterpretations and even extensive revisions. To put these positions in context: the history of theories of money is divided into those who believe in a commodity theory of money and those who subscribe to a credit theory of money. The distinction revolves around the importance given money as a symbol. Credit theories of money are the most popular today. Credit theories emphasise money as a symbol of value, as a note of credit. Commodity theories of money were the most popular in Marx’s day. Instead they suggest that there must be a commodity which is identified as money at the base of the monetary system. Gold is the typical example. While Marx’s theory of money is a commodity rather than a credit theory of money, it is a unique commodity theory of money. It is precisely to differentiate it from other commodity theories of money, that I refer to it as ‘the theory of the money commodity’.

The most coherent revisions of Marx have been by the neoMarxian credit theorists Duncan Foley and Alain Lipietz who have argued via eloquent interpretations of Marx’s theory of value that a credit theory of money is most adequate for his broader economic analysis. However Marx was opposed to nominalist or credit theories of money in general. Given that this recent literature raised legitimate questions about and developed on Marx’s work, when I started my doctoral research, it seemed most pertinent to ask exactly why and how Marx created his rather strange theory of money.

Marx’s concept of money evolves within an economic framework that is strongly based on social analysis. It is not a conventional commodity theory of money because, although with respect to money as a unit of account or as a measure of value Marx argues the need for a commodity standard-the value of which is determined by the costs of production-Marx defines the commodity in a unique way. The commodity is understood in philosophical or social terms as alienated human being, as labour. Marx also borrows from nominalist or credit theories in that he describes the means of circulation as a symbol. But he doesn’t regard money primarily as a means of circulation as some do. Marx gave priority to money as a measure of value. That is why, to distinguish Marx from more conventional approaches and to emphasise his identification of the necessity of money with abstract alienated labour, I suggest that Marx’s commodity theory of money is more accurately referred to as ‘the theory of the money commodity’.

What I think is most useful about Marx’s discussion of money is the social perspective. Marx shows how the activities of people create the functions of money. He develops an engaging theory of commodity fetishism which ultimately demonstrates how and why money assumes the significance of a God in our world. Of how and why people may starve in the interests of repaying a national debt, for instance. His theory of money presents money as the form of value, form not in the Kantian sense separate from content, but Hegel’s form, i.e. intrinsically related to its content. Money is the “value-form”. Money is intrinsically related to exchange value which is created by labour.

Now, baldly stated Marx’s theory of value claims that the exchange of commodities implies the exchange of the various labours involved in their production; a commodity is objectified labour and its value is derived from the socially necessary labour-time involved in its production. Marx asserts that this process is not obvious because commodities are exchanged according to prices, in a common monetary unit, but that this standard of price is also a measure of value and is a money commodity, its most appropriate material being a precious metal, say gold, or silver. Furthermore this universal equivalent is produced like all other commodities and obtains its value from the socially necessary labour-time involved in its production. In Marx’s schema, labour produces (exchange) value which results in money. The substance of value is labour and the form of value is monetary. (Socially necessary labour time is the averaged out labour time necessary to produce what the market demands at a particular time and place, i.e. with a given set of resources and level of technology. In a purely qualitative sense the labour time of waged labour is referred to as “abstract labour”.)

In my book I try to show how Marx’s concept of money evolved as part of a critical analysis of capitalist society in the literary context of British political economy, utopian socialism and Hegelian philosophy. I argue that this peculiar amalgam of sources is responsible for his rarefied theory of money. Defining money was a matter of critical political significance; it was Marx’s contention that the utopian socialists and British Owenites exaggerated the potential of monetary reform to alter the social system. They falsely imagined that the defects of the economic system could be removed by tinkering with money, just as certain “bourgeois apologists” like Bastiat and Carey did, even if in a different way and for different ends. While Bray and Gray conjectured over creating new forms of money, Marx contended that money was a surface phenomenon so notions about redefining or controlling money were useless and idealistic. While Marx’s theory of money developed out of a critique of the utopian socialists’ concepts of money, labour-time and exchange-value and had definite political implications, Marx intended it to be a sound materialist theory of money.

Defining precisely Marx’s intellectual debt to the German philosopher Hegel is difficult, and controversial. Hegel’s influence on Marx’s thoughts is underrated so I focus on this aspect in my book. It is difficult to summarise the detail there, suffice to say that, while Marx’s concept of money was initially inspired by Young Hegelian writings, Marx adapted Hegel’s dialectical method and certain ideas from Hegel’s Logic-especially Hegel’s passages on ‘measure’ in the section on ‘Being'-for its further development. Added to that, aspects of Marx’s framework for relating ‘price'-which appears in circulation-and ‘value'-the essential relation in production-seem similar to the elaboration of what Hegel referred to as “the force” and its “manifestation” in the Phenomenology of the Spirit. In this section Hegel discusses how real forces associated with understanding are inverted in superficial appearances from which common sense derives. Marx uses this distinction of Hegel’s in a materialist way when he refers to the ‘capitalist mode of thought'-a world of appearances and superficialities-that vulgar political economists are locked into, denying them any appreciation of the real inner workings of the capitalist system. The views Marx scorns look exclusively at the world of money, prices and profit and ignore the world of value and surplus value. Marx points out that classical political economists and utopian socialists both accept the connection between labour and value, focus on production and understand that two levels of reality exist, one based on values and the other on prices. However, he contends that they don’t understand and cannot define the precise, i.e. ‘abstract’ nature of the labour which characterises production for trade. Marx regarded his concept of ‘abstract labour’, which was fundamental to his law of value, as a crucial discovery. However, if Marx’s theories successfully explain the common sense world, they do so primarily from an Hegelian perspective. According to Marx the ‘inner world’ of scientifically discovered forces and laws is the real basis of the lived reality of exploited workers and competitive capitalists and represents both the condition and the combined effect of their individual productive and trading activities. Hegel enters the inner world by way of appearances. Marx admits that mental appropriation has no other choice, yet he presents his analysis starting with the inner world and value, and works his way out to the surface phenomenon of prices. Thus Capital I concentrates on production, Capital II on the circulation of commodities, and Capital III on monetary and financial relations. In Chapter One of the first German edition (1976b: 22n) of Capital I, a footnote reads:

“It is scarcely surprising that economists have overlooked the form-content of the relative value-expression (subjected as they are to the influence of material interests), if professional logicians before Hegel even overlooked the content of form in the paradigms of judgments and conclusions.”

Hegel seems to have offered Marx ways to re-interpret the theories and terms of political economy, especially with respect to the concept ‘money’, but also ‘value’ and ‘price’, and their connection to ‘labour’, so that in Marx’s view the labour theory of value becomes more coherent and relevant to the struggle of the proletariat. It seems then that Marx’s theory of money both reflects and is created as a critical reflection on, pre-existing theories of money together with certain Hegelian concepts, rather than being created in an original way with reference in the first instance to mundane reality.

Yet Marx criticised Hegel, especially for his idealism and conservatism. And, in contrast, Marx intended his own concept of money to be both materialist and revolutionary. In fact I contend in my book that it doesn’t wholly escape Hegel’s idealism, and that the dialectical interpretation and presentation has many analytical weaknesses. So the general thrust of Marx’s intellectual development was as if he were emerging like a butterfly from the cocoon of Hegel’s dominating influence on German thought at the time.

Marx’s conscious and unique adaptation of ‘Hegelian’ dialectics and Young Hegelian ideas to his study of money is what makes Marx’s analysis distinct from most analyses by bourgeois political economists or utopian socialists, excepting Proudhon who was also influenced by Hegel. Marx’s theory of money, as developed in the first chapter of Capital I, is overtly Hegelian. This hides a simpler exposition directly related to the common functions of money, which is the main way I will present it today. Marx criticised his opponents for overlooking the qualitative character of money in capitalism. He argued that the value-form is the result of a particular historical development and of a sophisticated social process. We know people can and do exchange goods and services outside the market and that it is only in capitalism that market exchange comes to dominate all the exchanges of goods and services between people.

Marx talks about value forms 1, 2, 3, and 4. These are analytical stages or levels showing how the products of labour, commodities, become money which is a special form of social power. In the first instance two small commodity producers meet in the market and exchange a coat for 20 yards of linen. Marx suggests that even though there is no money used in this exchange it is clear from the fact that specific quantities of the two different sorts of goods are exchanged that a similar quantity of labour is involved in the production of both goods. In value-form 1, then, Marx focuses on the measure of value function of money which is the fundamental tenet in his theory of value. With value-form 2, Marx concentrates on the medium of exchange function of money, referring to a single producer, say of the coat, facing a plethora of other producers and their goods, not just the cloth maker and his linen. The distinction between producing for use and for exchange is accentuated here; once we produce for a market we look at our product as an equivalent for all sorts of other goods and services. This leads to the concept of value-form 3, as producers exchanging in a common market identify a particular product, like gold, as a common means of payment that credit and debts are denominated in. Marx’s value-form 4 is a further social elaboration of the role of this commodity, say gold, as money. We now have the entity money which has been created purely from special types of social behaviour.

As many indigenous people point out we cannot eat money; it is purely abstract. While commodities are objects and services are visible behaviour, money is purely a social creation. It is created by a particular kind of society and capitalism cannot function without money. Because monetary exchange is essential to market behaviour Marx contends that:

“As, in religion, man is governed by the products of his own brain, so in capitalist production, he is governed by the products of his own hand.”

This religious framework for referring to money, his theory of commodity fetishism, has produced some of the most compelling descriptions of money and its role in advanced capitalism as we experience it today.

Over twenty years before he completed Capital I, when he first looked at money, Marx decided that money was a secular god. ‘Money is the universal self-established value of all things,’ he wrote. ‘Money is the estranged essence of man’s work and man’s existence, and this alien essence dominates him, and he worships it.’ He decided that the commercial spirit led to: ‘the estrangement of man from himself and from nature.’ In the first instance Marx’s concept of money was an alienation theory of money. Money is power, the god within practical everyday alienation. At the same time the state, the government, becomes dominated by financial powers. It follows directly from this depiction of money that liberation must involve the dethroning of the god, money, and the state with it. Marx’s concept of money was crucial to his argument for social, not just political, revolution.

As with religious thinking where god becomes everything and humans nothing, writes Marx in the Economic and Philosophic Manuscripts of 1844, the objectification of labour in production creates an alien power, money, and an alien world, economics, of ever increasing proportions. Just as the power of religion evolves from denial of one’s passions and thoughts as if they were an ‘alien , divine or diabolical activity’, the workers’ daily labour process and its result are controlled and estranged by ‘capital’. This is what Marx calls ‘real practical world self-estrangement'; money is ‘omnipotent’.

While he stresses money as a form of private property, he still emphasises money as a medium, means and mediator. Money ‘mediates’ between the need and its fulfilment, between the natural and the social, between one and another. In purchasing the other, the ‘other’ becomes ‘me’. The coin separates and divides. Shakespeare’s ‘visible divinity’ inverts and homogenises. The heavenly power of money represents the unity of people’s alienated ‘species-nature’. In the separation characteristic of alienation, ‘contradictions embrace’. Money enables one person’s dreams to be realised while lack of money frustrates the realisation of another’s ideas and plans. Money is effective ‘being’ and becomes the ‘truly creative power’. Yet it is an ‘alien objective being’.

To summarise, the essentials in Marx’s theory of the money commodity in Chapter One of Capital I, are that the exchange of commodities necessarily leads to money, and that money must be a commodity, the money commodity. The money commodity, like all others, only receives a ‘specific-value form’ in exchange; the money commodity has an already determined value and it is simply recognised in circulation. The value of money is neither imaginary nor symbolic, although the money commodity is symbolic in as much as all commodities are symbols as bearers of value. Money, says Marx, is the ‘necessary form of appearance of the measure of value which is immanent in commodities, namely labour-time’. In the context of political economists’ theories, like Ricardo’s, or even the utopian socialists’ monetary ideas, Marx’s elaboration of his theory of money is quite distinctive. This alone makes its derivation intriguing.

In the second edition of Capital I Marx collected together various passages into a new section on ‘commodity fetishism’ at the end of Chapter One. He describes how things become personified and autonomous while people are depersonalised, become things and dependent. Commodities, money and capital seem to have by nature properties that are in fact projected on them by social forces, by social beings producing and circulating the products of their labour, so that ultimately the world of things assumes a dominating, independent and alien power over its human subjects. Commodity fetishism features again in Chapter Two, and in later volumes of Capital; in Volume III Marx writes about the ‘bewitched, distorted and upside-down world’ of prices and profits that competitive capitalists work within. But even in simple circulation, which does not necessarily imply capitalist relations of production, commodity fetishism appears and especially in money, that ‘god of commodities’, as this summary from Chapter Two of Capital I conveys:

“We have already seen, from the simplest expression of value, x commodity A = y commodity B, that the thing in which the magnitude of another thing is represented appears to have the equivalent form independently of this relation, as a social property inherent in its nature. We followed the process by which this false semblance became firmly established, a process which was completed when the universal equivalent form became identified with the natural form of a particular commodity, and thus crystallised into the money form... This physical object, gold or silver in its crude state, becomes, immediately on its emergence from the bowels of the earth, the direct incarnation of all human labour. Hence the magic of money. Men are henceforth related to each other in their social process of production in a purely atomistic way. Their own relations of production therefore assume a material shape which is independent of their control and their conscious individual action. This situation is manifested first by the fact that the products of men’s labour universally take on the form of commodities. The riddle of the money fetish is therefore the riddle of the commodity fetish, now become visible and dazzling to our eyes.”

Marx’s main point is that commodity producers indirectly exchange their labour in commodities, the products of their labour, so that their own social relations seem only to be relations between objects, commodities. Furthermore, and most significantly, because exchange-value appears in money-form, money itself enjoys or comes to be seen to embody all the properties of labour. Marx’s concepts of abstract labour, socially necessary labour-time, and the money commodity, are all intended to scientifically ground the phenomenal world of prices on that of real values. He maintains that commodity fetishism is not simply a subjective or superficial appearance of real relations, it is an objectively occurring and necessary aspect of these social relations.

Marx argues that in bourgeois society the product of private labour is only acknowledged as socially useful because it is sold. In practice then relations between producers become, in appearance, relations between things; ‘these contradictions’ he concludes, ‘are innate in the subject-matter’. To explain his expression ‘commodity fetishism’, Marx points to the analogy with religious projection; commodity fetishism, however, involves not just thoughts but the projection of the whole human being, through the objectification of labour and its alienation and appropriation in circulation. This leads to ‘an alienated and independent form of labour which is hostile to labour itself’, for instance in fixed capital, in the produced means of production (like a factory). The product is no longer used or owned by its producer, the worker, rather the reverse is true.

According to Marx, Hodgskin, in contrast to Bailey, reveals that social labour is expressed materially in commodities, yet he too fails to see commodity fetishism as an objective process integral to capitalist production. Rather like other utopian socialists, who would rid the world of capitalists and money but not of capital or commodities, Hodgkinson sees commodity fetishism as a misinterpretation of reality. In opposing economic fetishism in a one-sided manner he ‘underestimates’ the importance of past labour for living labour in Marx’s opinion, although Marx concedes that this is an advance on the classical political economists who exaggerate the significance of past labour or capital. Marx’s theory of commodity fetishism, no less than any other part of his socio-economic analysis, was designed to counter all such misinterpretations of capitalist reality (as he conceived them). Marx’s method, which accounted for everyday categories like price in terms of ‘scientific’ concepts like value, seemed to him a real intellectual breakthrough. For Marx there was a realm of appearances, which was nonetheless a reality, along with the deeper determining reality of values. While others tended to emphasise one rather than the other, Marx believed that, by employing a dialectical approach, he had shown that in reality the two exist together. Although the section on commodity fetishism in Capital I Chapter One concentrates on simple commodity circulation, the inversion characteristic of commodity fetishism in capitalism was not for Marx merely a circulatory phenomena, but involved the production process as well.

It has been said that Marx’s theory of commodity fetishism is a ‘further development of the concept of alienation’. Similarly Marx’s theory of the money commodity might be seen as an advance on his early alienation theory of money, as he increasingly brings down to earth, or makes more concrete, his initially rather abstract analysis of bourgeois society. Just as alienation is epitomised by money in the ‘money system’ of his early writings, later the highest expression of commodity fetishism in simple circulation is the money commodity, and in capitalism it is interest bearing capital, money capital. For Marx commodity fetishism refers to a way of being which involves a state of mind, but is not purely a state of mind, just as alienation actually happens, and is not simply a subjective perspective or personal attitude. Alienation is not merely a perception or misconception of reality, it is a social experience. The commodity fetishist errs, not in a purely mistaken or fanciful interpretation, but in a partial interpretation of social reality, which if taken as the whole is an unscientific ‘misreading’. Similarly money is not merely an idea and cannot be managed as bourgeois political economists like Ricardo think, or eradicated or reformed as the utopian socialists desire. The money commodity is an integral aspect of commodity production as well as circulation, a material aspect of capitalist relations of production.

One expects Marx’s theory of the money commodity to be consistent with his theory of value and his theory of commodity fetishism. For Marx money was both basic to the esoteric world of prices and profits, of appearances, and evolved from and was determined in its qualitative and quantitative aspects by the exoteric world of value (and surplus value) which Marx believed he had scientifically analysed.

But, is Marx’s development of a theory of a money commodity out of an alienation theory of money successful? The framework which inspires the theory of commodity fetishism, and which is integral to Marx’s development of the value(money)-form, was primarily significant for his critique of bourgeois political economy, and especially Ricardo. For a destructive critique of Ricardo, Marx’s reference to Hegel’s appearance-essence framework is useful. But does this framework offer the basis for a constructive scientific analysis of capitalism? Can Marx’s theory of value and his complementary theory of the money commodity be empirically demonstrated or confirmed? I think not.

So, why was Marx so confident in his theory of the money and so oblivious to its deficiencies? An answer to this must involve the connections that his theory of money had with certain aspects of Hegel’s works. In certain significant ways Marx structured his concept of money along the lines of Hegel’s elaboration of ‘measure’. Also it seems that Marx found Hegel’s exposition of ‘self-consciousness’, in which Hegel suggests that laws are immanent in phenomena, a useful way to view the relation between price and value, and one he believed supported his labour theory of value. Marx’s concept of money had novel sources, and served political purposes in his general social analysis, which seemed to make Marx less concerned with actually verifying the theory with respect to empirical facts.

Here I just want to reiterate that it is controversial to what extent and in what ways Marx adapted Hegel’s method for his own materialist analysis of bourgeois society. But, what is striking and undeniable is that Marx’s theory of money, both as value-form and money commodity, is quite unlike other economic and political theories of money. This is largely due to his dialectical interpretation and arrangement, for the content, based on the functions of money, is not so rarefied. Money already appears as a measure of value in Chapter One of Capital I. In Chapter Three Marx outlines and details all the functions of money in circulation, first and foremost again in its quality as measure, then as medium of exchange (with special emphasis on the quantity necessary for circulation), and finally as money as money. For Marx ‘money as money’ referred to money hoards, trade credit and so-called ‘world money’. The term ‘money as money’ has at least literal resonances with Hegel’s ‘Notion as Notion’ and has conceptual associations with Hegel’s qualitative quantum. This is one of the ways in which Marx’s presentation shows certain parallels with Hegel’s dialectical elaboration of logic, as in the Minor Logic and Science of Logic.

Marx’s theory of money has been criticised because his dialectical presentation indicates that commodity circulation presupposes money. In my book I suggest that a more fundamental criticism seems justified, i.e. Marx presupposes a labour theory and law of value in which the quality and exchange ratios of commodities is based on labour and the relations of production. To support this theory Marx not only applied a dialectical method of exposition adapted from Hegel’s work, but also appropriated various Hegelian terms to suit his own political ends. Marx is mainly engaged in criticising, correcting and perfecting abstract theories, despite his claims to being a materialist, which one might expect to imply a more empirical bent. Since he could not clearly demonstrate the links between everyday prices and circulating monies and the abstraction ‘value’, and because he presented ‘money’ in such a dialectical fashion, it seems that not only the concept money, but also the intrinsically linked idea of abstract labour, is presupposed in his analysis of the bourgeois economy. That is why I stress that Marx’s concept of money must be understood in the political and philosophical context of its making given that many aspects of it make little strictly economic sense.

Despite my criticisms I maintain a strong respect for the rich and complex thought of Karl Marx. Though flawed, the breadth and depth of his thinking on money is impressive even today. Having read many and various theories of money in order to study Marx’s in a broader context, I am very aware of the paucity of ambitious and sound analyses in this area. The reasons for this otherwise surprising fact are fairly clear; as Marx’s biographer Franz Mehring observed ‘how should a world which had enthroned money as its God aspire to understand it'?

Now let’s try and link this theory with the concrete situation we face today. I've always been fascinated by money because how much or how little money we have controls so many mundane and significant decisions in our lives. In particular: my political involvement in the peace, green and women’s movements; my academic focus on underdevelopment in Latin America; and my creative work, always brought the power of money owners to the fore and made me aware of how much fruitless time is spent just trying to raise funds.

The big issue for socialist political movements is having to speak the language of our oppressor, the language of conventional economics. It is not just a language. It is a ritual; our behaviour is so ruled by and constrained by monetary considerations. And that’s the main reason I was attracted to studying Marx’s concept of money as my PhD topic.

When I started that research, the first thing that surprised me-though it shouldn’t have given that I already had a rather cynical alternative social analysis of capitalism-was that even intellectual economists assume money and simply define it by its functions rather than asking what is money and why does money exist at all. There are no really sophisticated theories of money. I wondered whether a complex society like ours could function without money and why it is that money is a totalising social force when conventional economists simply talks of it as a neutral tool.

The point is that I can ignore money as a determining value for the things I value but I cannot ignore that monetary value is the determining one in the society in which I live. If I refuse to pay money for something in a shop, to pay my taxes or question economic laws involving interest and profits, then I am considered truly troublesome and mad in the way heretics in traditional societies were persecuted when they didn’t believe in the god and religious rules that determined the way their societies worked. It’s that basic; it’s like money is a god in our society. It’s scary for people to hear us questioning whether we can have a complex society like ours without money. We are looney to even question whether or not money is a sensible social institution.

The diverse and global environmental crises- and a certain eagerness even on the part of many conservationists to give artificial prices to ecological factors like oceans and forests - made me really eager to question whether we can completely side step monetary evaluations and producing and exchanging on market terms, that is money, terms. It seems to me that a lot of the global environmental crisis have resulted from capitalist activities and will only become more complicated and worse if made more part of that system. Can monetary values can reflect ecological values? Economists argued for centuries about the reasons why water is less valuable than diamonds. The reason is that market values have no relevance to social or ecological values. We know that for ecological and social reasons water is one of the most precious substances on earth. But the market values diamonds more because the market does not need to embody or reflect social and ecological values. People who talk about giving artificial prices to protect environmental values forget this. If we set prices for some things, that affects the prices of many others things. Set prices aren’t free market prices so we are already setting off in a new non market direction while pretending that the context is still the market.

Over time my pondering about the necessity of money has gained a significance beyond a mere intellectual exercise. That’s mainly because of the environmental crisis that hangs like a shadow over all the world today and threatens our future. Two and a half years ago I joined the staff of the School of Social Science and Planning at RMIT University to do research on the conflict between monetary and ecological values looking at Goolengook in East Gippsland Forests and at the Wombat Forest Society in Central Victoria as case studies.

This year the international peer reviewed Ecological Economics journal will publish an article of mine called “The Poverty of Money; Marxian Insights for Ecological Economists”. The title is a rather cheeky reference to the young Marx’s work entitled “The Poverty of Philosophy” in which Marx calls into question the utopian socialist Proudhon’s arguments for reforms which Marx believed unworkable. In my article I give arguments based on Marxian analyses for why I think that giving monetary values or prices to natural “assets” like forests will only make our environmental crisis more severe in the long run. I suggest, in fact, that we need to be discussing whether money has outlived its usefulness as in instrument for social organisation and envisage instead futures without economics as we know it as the organising force in production and exchange between people.

Marx himself imagined that there would be neither state nor money in the ultimate form of communism. This is hard for us to conceive when in the twentieth century communist models like the Soviet Union, Mao’s China and Castro’s Cuba, the state apparatus and monetary transactions are all too obvious. The radical interpretation of Marx-"radical” used here to refer to the interpretation that seems most authentic in terms of Marx’s early philosophical works-uses an anarcho-communist approach. Harry Cleaver has elaborated this interpretation of Marx in a lively book entitled, Reading Capital Politically.

Cleaver urges us to use Marx’s dialectical method to analyse our current situation. He describes how many events and struggles between capital and labour can be read dialectically. He shows how useful it is to adopt a Marxian perspective of the commodity as a social category with two clear aspects, as a use-value and as an exchange-value. He points out how these are not just abstract categories but are actually dramatised in mundane life as:

the two-sided contradiction characteristic of the class relations in capitalism. Use value and exchange-value are opposed in a contradictory unity in the same way that capitalist and working classes are opposed and united...”

“...the view of the commodity as use-value is the perspective of the working class. It sees commodities(e.g. food or energy) primarily as objects of appropriation and consumption, things to satisfy its needs. Capital sees these same commodities primarily as exchange-values-mere means toward the end of increasing itself and its social control via the realization of surplus value and profit.”

(Cleaver:21-22, his italics).

Money...is both one commodity among many and also the unique expression of their interactions as moments in the world of capital... money is the quintessential expression of the commodity-form itself. In capitalist society, to have a coin in the hand is to have a golden drop of that society itself. Look deeply into that coin, as you might with a crystal ball, and behind its golden lustre, which has stopped many an eye you discover the blood and sweat of the class struggle.”

Cleaver sees money as a weapon and a tool of capital. The ultimate strategy for labour, for the working class, is to disregard money, to stop working for wages paid by capital. It is only because workers infuse money with the energy of their labour as wage workers for capitalists that money is worth anything at all. As soon as people start working in a non-capitalist, voluntary way they do not have to suffer the domination of capital. Cleaver calls voluntary, co-operative labour “zero-work”. This is the work of the artist who creates for arts sake or the doctor or plumber who apply their skills without concern for monetary reward. If money and capital are intellectual categories defined by social actions, then social acts will redefine or completely eradicate these categories.

Cleaver’s work parallels writings by non-market socialists who also talk about establishing future societies without money or state. If you're interested in following up their writings, I suggest you read the collection of essays edited by John Crump and Maximilien Rubel called Non-market Socialism. What these theorists have to offer people analysing the current environmental crisis is a tradition of envisaging social production and exchange without the interference and contortions of monetary values and flows. I caution that they do not have much in the way of concrete visions but they certainly focus on establishing the broad principles for stateless and moneyless societies.

One of the most interesting-indeed alarming as well as comforting-aspects of the environmental crisis is that we know most of the answers in technical terms, in terms of the necessary life style changes and regulations of natural resources. The great problem is achieving those environmental principles along with capitalist growth. Capitalism is based on bigger is better competition and ever increasing growth. However the planet’s health requires the modest use of resources, the precautionary principle and the encouragement of biodiversity, all of which are more easily ensured when people care and share in both material and social terms.

While nonmarket socialists are a small heterodox clan, there are indications that much larger associations of environmental and social movements are moving in this direction today. I refer to one example that you can read about on the internet-the Anti-capitalist Convergence whose acronym is CLAC. The CLAC is a grouping not unlike the set of social and environmental groups that actively composed the S11 Alliance against the World Economic Forum held here in Melbourne last September. CLAC has formed specifically to counteract the Summit of the Americas meeting in Quebec City this coming April. On their web page, you will find a statement called the CLAC “Basis of Unity”. The CLAC explicitly rejects exploitation, private property, profit, consumerism and simple reforms. From the Basis of Unity document one can derive a short set of positive points:

Certain values are inferred in the Basis of Unity document-these are values giving priority to humanity, ecosystems and culture.

Many criticisms of our current economic and political systems, especially with respect to environmental sustainability, emphasise the values outlined by CLAC. Concretely what will such a world look like? That is the subject of our session this afternoon.


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