Marx’s Theory of Money in Historical Perspective

The paper considers two problems related to Marx’s theory of money: first, the definition and measurement of the quantity of social labor time represented by a unit of money; second, the application of Marx’s commodity-money theory to contemporary monetary institutions based on state-credit money. In theory social labor time and the price expression of exchange value emerge simultaneously, so that no ex ante measure of social labor time is possible. In practice adjustments of social labor time through weighting to account for the characteristics of workers or by relative wages, or the assumption of uniform proportions of concrete labor across sectors can illuminate the determinants of profitability. State-credit moneys are analyzed through Marx’s concept of fictitious capital, leading to a critique of the neoclassical view of the value of money as a bubble. The paper concludes with a discussion of the dilemmas involved in the application of Marx’s theory of money to contemporary world monetary