Wojtek talks about Marxism "subsuming" the mechanisms of capitalist finance. I think that this is the idea most Marxists have, but I think it's inadequate. What it means, in practical terms, is the state bank's overwhelming the intricacies of capitalist finance and, essentially, ignoring them. All the complexities of finance are meant to disappear into the ledger sheet of the state bank. But of course they don't. The typical Marxist idea of the state bank is flawed, primarily because there is no mechanism for valuing risk. Indeed risk is almost assumed away. The state finances that which is politically popular, interest-free, without any regard to risk. The idea is "if we build it, they will come". But while a command economy may be able to command producers to produce, it cannot command consumers to buy. If it does – when it has in the past – it simply distributes goods the way goods are distributed to soldiers – people are assigned their rations and equipment without regard to what they think of them. This is not a real economy. It's a dictatorship of the politically-connected producer.
The early developments of capitalism were two. First was the joint stock company, which is the main one focused on by Marxists. The second was the government bond (these were one and the same at a few junctures). Capitalists developed the concept of lending to the government in a market which priced risk. Later, Keynes recognized that an adequately taxed populace reduced this risk by a huge amount. In fact Keynesianism almost assumed away the risk of default by the state. This notion predominated through WW2 when states were found to be able to borrow enormous amounts relative to GNP and repay them (after constructively defaulting by inflating away much of the debt burden). In fact the notion led Walter Wriston, great scion of New York banking to utter the famous words: "a country does not go bankrupt".
Clearly even a country can go bankrupt, as Wriston and his bank found out. And a factory certainly can. Between the laborer and the consumer there lies risk and that risk should reasonably be valued. I know of no system that most Marxists propose which values risk. That doesn't mean one can't be devised, but you have to see the need for it.
Comrade Adx talks about currency being tied inextricably to wage slavery. This is a notion straight out of Marx but I think it's very wrong. Currency is a natural, rational means of exchange. It is the rational means of expressing the relationship between labor-value and use-value. As for its leading to wage slavery, the worker may have the right to all the value the product of his labor commands from the consumer, but no more or less than that. And the consumer communicates his estimate of that value in terms of money.
More than that, currency represents something positive. It values the system of exchange itself, which, in an interdependent economy, is something valuable. Marx assumed that labor-value could simply be distributed. This is just not true. Different work has different value to different people. A Beretta Giubileo 28-gauge shotgun with its emery-polished components, exhibition-grade walnut stock and silver and 24-carat gold hand inlay may represent 125 hours skilled labor in engraving alone but that doesn't mean it should be worth well over ten grand to most people. More importantly, the currency of a country which can market even the most niche item across the world on Ebay is more valuable than the currency of a country where things must be hauled to a central market by donkey.
Comrade adx asks "What is your evidence that "trust" exists in the "virtuous cycle" of capital of markets?" Compare the living standard achievable in a system where sellers require barter-on-demand versus the living standards achievable in systems where Internet purchases can be made on easy terms of almost instantly securitizable credit. So many relationships of trust are necessary for the latter compared to the former that the question nearly answer itself.
He also asks "What is your evidence that "trust naturally eroded" in "Marxist" systems?" Well, in the beginning of the war Stalin actually asked citizens for their money in war bonds. A few years later the very idea of Stalin asking for anything was an absurdity. "Trust" was inflicted through the barrel of the executioners gun.
Finally, I think we Marxists cannot any longer both casually discard and extol the virtues of the putatively Marxist states at our convenience. It seems to me that almost every time I have critiqued the Soviet Union I have either gotten: "well, it wasn't really Marxist" or "you are a counter-revolutionary and a capitalist apologist!". We can't have it both ways.
I also don't accept the argument that one cannot judge the Soviet Union economically because of an international capitalist conspiracy against it. From the late 1800's onwards, the tsar was able to borrow money on good terms in the Western capital markets, borrowing more cheaply than the Austrian empire late in the game. Yet despite a total repudiation of debts after the revolution and subsequent ostracism from capital markets, the Soviet Empire was able to expand in scope and influence beyond anything the tsar could even have dreamed of. Clearly there was a successful Soviet financial system. Clearly it collapsed, and not because of inadequate international presence.
If the prevailing theory of U.S. dollar seigniorage is to be that American military might creates the value of the dollar, wither ruble seigniorage? Did anyone ever want rubles during the Soviet era? No. "Hard currency" was defined as Western currency, despite the fact that the Soviet System dominated the economies of countries from Cuba to Kyrgyzstan. Artificial economic relationships, inflicted by military force may prop up the vcalue of currencies within that sphere of military influence and for a while, but when the military power comes into question, the financial system that rides on the back of it collapses.
The dollar has value in places the American military doesn't even care about. The ruble never had value in any place that wasn't part of the Soviet military empire. I am naïve enough to believe that socialists can create a financial system that has even more "organic" value than the capitalist dollar system through ingenuity instead of guns.
Peace
boddi