> All of that is interesting. But it does absolutely nothing to help
> us explain this crisis or any other crisis. "Passions" and the
> attribution of worth to money are *constants*. They are always there
> under capitalism. Crises are *variables*. So why does liquidity
> preference *sometimes* shoot up and at other times decline, causing
> crises and recoveries? Why do some periods have rare, shallow crises
> and other periods have frequent, severe crises? And is there any way
> to reduce the frequency or amplitude of these cycles? Silence from
> Marx.
This misses the point.
Marx has the capitalist "passions" changing their expression over time. They change from a "barbaric" to a more "civilized" form.
In particular, what Keynes calls "the love of money as a possession" becomes hidden from view. It continues, however, to constitute the "inner man" of the capitalist. This is the insight Marx attributes to the "monetary" and "mercantile" systems of political economy, an insight missing, so he claims, from the "classical" political economy of Smith and Ricardo.
"How little the inner man of the individual owner of commodities has changed even when he has become civilized and turned into a capitalist is for instance proved by a London representative of an international banking house who displayed a framed £100,000 note as an appropriate family coat of arms. The point in this case is the derisory and supercilious air with which the note looks down upon circulation." <http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_3.htm
>
This "inner man" resurfaces in a "monetary crisis", i.e. the form of expression of the capitalist "passions" is treated as variable in the short as well as the long run. In a monetary crisis there is a reversion - a "regression" - from their more "civilized" to their more "barbaric" form.
"The function of money as the means of payment implies a contradiction without a terminus medius. In so far as the payments balance one another, money functions only ideally as money of account, as a measure of value. In so far as actual payments have to be made, money does not serve as a circulating medium, as a mere transient agent in the interchange of products, but as the individual incarnation of social labour, as the independent form of existence of exchange-value, as the universal commodity. This contradiction comes to a head in those phases of industrial and commercial crises which are known as monetary crises. Such a crisis occurs only where the ever-lengthening chain of payments, and an artificial system of settling them, has been fully developed. Whenever there is a general and extensive disturbance of this mechanism, no matter what its cause, money becomes suddenly and immediately transformed, from its merely ideal shape of money of account, into hard cash. Profane commodities can no longer replace it. The use-value of commodities becomes valueless, and their value vanishes in the presence of its own independent form. On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination. Commodities alone are money. But now the cry is everywhere: money alone is a commodity! As the hart pants after fresh water, so pants his soul after money, the only wealth." <http://www.marxists.org/archive/marx/works/1867-c1/ch03.htm#S3>
As I pointed out, this account of a "monetary crisis" in terms of the psychology of the capitalist "passions" has much in common with Keynes's.
"partly on reasonable and partly on instinctive grounds, our desire to hold money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future. Even though this feeling about money is itself conventional or instinctive, it operates, so to speak, at a deeper level of our motivation. It takes charge at the moments when the higher, more precarious conventions have weakened. The possession of actual money lulls our disquietude; and the premium which we require to make us part with money is the measure of the degree of our disquietude." (Collected Writings, vol. XIV, p. 116)
Keynes's account, however, draws its understanding of this psychology from psychoanalysis,
Taken together, these accounts do provide answers to the questions above. Whether or not these answers are insightful is, of course, a different question.
This idea of the capitalist "passions" is missing from most self- described "Marxist" and "Keynesian" (incousding Post Keynesian) accounts of liquidity crises.
Ted