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<DIV></DIV>>Compared to what, the 19th century? The current fiat regime is a lot
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<DIV></DIV>>more stable than that. I'm not saying we'll never see a generalized
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<DIV></DIV>>flight from paper assets, but it seems rather unlikely.
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<DIV></DIV>>I'm always amazed how similar the analyses of Marxists and
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<DIV></DIV>>right-wingers can be.
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<P>>Doug</P>
<P>As you know Marx's analyzed capitalism from the point of view of commodity production, unraveling the secret of money, as the universal equivalement commodity, that is, as the commodity that is exchangeable as the equivalment of all other commodities. Gold is a commodity because it is produced by labor through a production process. It has an exchange value based on its cost of production, as do all other commodities. It is a real metal that exists in the real world. (Review Marx on the attributes that make the metal, gold, money, par excellance) Is a Federal Reserve Note a commodity, is a a credit on a bank computer a commodity? If the U.S. goverment disappears, so does the federal reserve note. Banks go bankrupt and the credits on their computers disappear. Paper assets disappear all the time. How stable is that? What kind of store of value is something that is here today and gone tomorrow? What ki
nd of measure of value is something that goes up one day and down the next? Marx's point is that the capitalist system, as a system of commodity production, can never break free a monetary system based on a commodity, whose value (labor) is used to measure the value (labor) of other commodities in the exchange process. The monetary history of 20th century has been the history of the attempt to break away from gold-backed monetary system. Britain and the US were on and off, depending on whether they had to inflate to fight wars or not. It was not until 1971-3 that the paper currencies based on the national economy of the issuing country were able to break away from the gold standard. The result has been a system of currency anarchy, stablized only because the U.S. dollar has still operated as a reserve currency because of U.S. economic and military dominance. The inability of capitalist economies to break away from a commodity as
a standard, measure, and store of value is just one of the bar!
riers to continual capitalist accumulation and a signal of its ultimate demise--unless paper assessts (including fiat money) and be issued forever, and forever, amen.</P>
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