Dead capital. Are all the functions of money performed by modern money?

So, in order to understand what functions modern money performs, it is necessary to understand the very nature of modern money. Like everything in this world, money is not something static, but is constantly changing, moving into new forms. In the process of development of capitalist relations, money first had a commodity form, after that it passed into a paper form, but was still backed by precious metals, today, having a paper form, money has completely ceased to be provided with any commodity value. Here's how it's described on Wikipedia:

"Types of money

1 Real money (expressed in gold, silver or other precious metals) is money whose denomination corresponds to the real value, that is, the value of the metal from which it is made.

2 Now all modern monetary systems are based on fiat money (that is, tokens of value, substitutes for real money). But historically there are four main types of money: commodity, secured, fiat and credit.

The meaning of the allocation of credit money is not entirely clear, because. one section earlier, the same Wikipedia writes:

“The debt nature of modern fiat money

Historically, the first banks were the place to store money and other valuables. A certificate (receipt) was issued about the presence of money in storage, which certified that the money was in the banker's custody, and the bearer of this paper would receive a certain amount. Now, to pay for a large purchase, it was enough to transfer a certificate, and not a stack of coins. Over time, these certificates began to have the same power as real money.

This is how the first paper money appeared, which arose from the practice of using bank certificates (receipts). The word "banknote" itself comes from the English words "bank note", which means "bank note".

The economic essence of the banknote is the obligation of the bank to issue natural money. However, now banks are not required to exchange banknotes for full-fledged natural money. The banknotes themselves are now money.

That is, fiat money itself initially already had a debt nature, that is, it was essentially credit. It can be seen from the evolution of money that their development took place dialectically, that is, initially all money was a commodity, the self-growth of which is carried out at the expense of surplus value (the stage of industrial capitalism) – this is the thesis, then they begin to deny their commodity form, becoming paper, but remaining secured by commodity the form of precious metals (the stage of commercial capitalism) is the antithesis, and in the end, money completely denies its commodity nature and carries out self-growth through usury (the stage of financial capitalism) – this is synthesis.

Now consider what functions money performs at different stages of its development. Today it is customary to attribute five main functions to money, regardless of their type, properties and quality. Here is what Wikipedia writes about the functions of money (the function of forming treasures became a separate “other" function, since its place was taken by a store of value after money ceased to be commodity money or was no longer backed by precious metals, but in essence, the formation of treasures and a store of value are one and the same.

"Basic Functions of Money"

Money manifests itself through its functions. Usually, the following functions of money are distinguished:

A measure of value (sometimes a counting unit). Dissimilar goods are equated and exchanged among themselves on the basis of price (the exchange rate, the value of these goods, expressed in the amount of money). The price of a commodity performs the same measuring function as in geometry the length of segments, in physics the mass of bodies. Measurements do not require a thorough knowledge of what space or mass is, it is enough to be able to compare the desired value with the standard. The monetary unit is the standard for goods. In the context of non-commodity money, the question arises of using money as a measure of the value of money itself (the sale of money as a commodity, the exchange of money for money). A number of authors believe that such a formulation of the question does not make sense. It also depends on the nature of money whether money is a stable measure of value. Some authors consider that stability is maintained only as long as the value of the mass of commodities many times exceeds that of the money. When commodity-money circulation reaches the level of the balance of commodity and money supply, money loses this function.

· Means of treatment. Money is used as an intermediary in the circulation of goods. For this function, the ease and speed with which money can be exchanged for any other commodity (an indicator of liquidity) is extremely important. When using money, the commodity producer gets the opportunity, for example, to sell his product today, and buy raw materials only in a day, week, month, etc. At the same time, he can sell his product in one place, and buy the product he needs in a completely different one. Thus, money as a medium of circulation overcomes temporal and spatial restrictions in exchange.

· Instrument of payment. The money is used to register debts and pay them. This function gets its own value for situations of unstable commodity prices. For example, a product was bought on credit. The amount of the debt is expressed in money, and not in the quantity of goods purchased. Subsequent changes in the price of goods no longer affect the amount of debt that must be paid in cash. This function is also performed by money in monetary relations with financial authorities. A similar role is played by money when it expresses any economic indicators.

· Means of accumulation. Money accumulated but not used allows purchasing power to be transferred from the present to the future. The function of a store of value is performed by money that is temporarily not involved in circulation. Unlike goods, money does not disappear when consumed. However, it should be borne in mind that the purchasing power of money depends on inflation.

world money. Foreign trade relations, international loans, the provision of services to an external partner caused the emergence of world money. They function as universal tender, universal purchasing power, and universal materialization of social wealth. Until the 20th century, noble metals (primarily gold in the form of coins or ingots) played the role of world money. Now world money is usually considered reserve currencies (currently it is the US dollar, Swiss franc, euro, British pound, Japanese yen). For direct international payments, money from other countries can also be used. For example, the CLS payment system allows you to freely convert 18 currencies. Any of them performs the role of an international means of payment.

Other functions of money

Also, sometimes there is such a function of money:

· Treasure formation tool. If, under the conditions of natural money, in order to maintain a balance between the mass of money and the mass of commodities, it was necessary to reduce the amount of money in circulation, they began to be deposited in the form of treasures. Treasure differs from accumulation in that accumulation is a form of accumulation of funds for a specific purpose; when the required size is reached or at the right time, they are spent. Treasures are made without a specific purpose. The main reason for their formation is the impossibility (or unwillingness) of the effective use of the entire amount of cash. Treasures begin to be spent when the economy's need for money increases. In modern conditions of symbolic money, the role of treasures in regulating the money supply is insignificant.

Please note that savings are made for a specific purpose, after which they are spent, while treasures are strangely accumulated aimlessly, but at the same time they also begin to be spent when the need for money supply arises in the economy – this is a pure but skillfully disguised tautology designed to hide the true the nature of modern money.

So, the basic function of money is that money contains a measure of the value of any commodity, but at the initial stage of capitalist relations, each commodity is a measure of the value of any other commodity. That is, a measure of value is an immanent function of any commodity participating in the exchange process, since any product, after it has been produced, contains a certain amount of labor, which, in fact, measures the value of this product, after it becomes a commodity, entering into the process of exchange for any other commodity. Here is what A. Smith writes about this in his work “A Study on the Nature and Causes of the Wealth of Nations”, Book 1 The causes of an increase in the productivity of labor and the order in accordance with which its product is naturally distributed among the different classes of the people,

“Each person is rich or poor, according to the extent to which he can enjoy the objects of necessity, convenience and pleasure. But after the division of labor has been established, a person can obtain only a very small part of these objects by his own labor: he must receive a much larger part of them from the labor of other people; and he will be rich or poor according to the amount of labor he can command or buy. Therefore, the value of any commodity to a person who possesses it and intends not to use it or personally consume it, but to exchange it for other things, is equal to the amount of labor that he can buy with it or get at his disposal. Thus, labor is the real measure of the exchange value of all commodities.

The real price of any object, i.e., what each object really costs to the one who wants to acquire it, is the labor and effort needed to acquire this object. The real value of any object to the man who has acquired it, and who wishes to sell it or exchange it for some other object, consists in the labor and effort which he can save himself and which he can lay on other people. That which is bought with money, or acquired in exchange for other things, is acquired by labor in the same measure as the things acquired by our own labor. Indeed, this money or these commodities save us this labour. They contain the value of a certain quantity of labor which we exchange for what we suppose to contain at a given time the value of the same quantity of labor. Labor was the original price, the original purchase price, which was paid for all items. Not for gold or silver, but only for labor, all the riches of the world were originally acquired; and the value of them to those who own them and who wish to exchange them for some new products, is exactly equal to the amount of labor that he can buy with them or get at his disposal.

And here is what D. Ricardo writes about this in his book “Principles of Political Economy and Taxation”, CHAPTER I On Value, First Division, The value of an object, or the amount of any other object for which it is exchanged, depends on the comparative amount of labor, necessary for its production, and not from the greater or lesser remuneration received for this work:

“Water and air are extremely useful, they are even necessary for existence, and, despite the fact, under ordinary circumstances, nothing can be exchanged for them. On the other hand, gold, having a negligible consumption value in comparison with air and water, is exchanged for a large number of other articles.

Thus, utility is not a measure of exchange value, although the latter is inconceivable without it. If an object has no use value at all, in other words, if we can derive neither pleasure nor benefit from it, then it will have no exchange value, despite its rarity and the amount of labor required to produce it. .

Goods that have utility derive their exchange value from two sources: scarcity and the amount of labor required to obtain them.

And, finally, K. Marx describes the measure of values ​​in his work “Capital” Critique of Political Economy Volume One, BOOK ONE THE PROCESS OF PRODUCTION OF CAPITAL, Section One: Commodity and Money, CHAPTER THREE MONEY, OR THE CIRCULATION OF GOODS, 1. The measure of values:

“In this work, I assume everywhere, for the sake of simplicity, that the monetary commodity is gold.

The first function of gold is to supply the world of commodities with material for the expression of value, i.e., in order to express the values ​​of commodities as quantities of the same name, qualitatively identical and quantitatively comparable. It functions, therefore, as a universal measure of value, and above all, by virtue of this function, gold – this specific equivalent commodity – becomes money.

It is not money that makes goods commensurable. Vice versa. Precisely because all commodities as values ​​represent materialized human labor and, consequently, are in themselves commensurable—that is precisely why they can all measure their values ​​by the same specific commodity, thus transforming this latter into a common commodity for them. measure of value, that is, in money. Money as a measure of value is a necessary form of manifestation of the measure of value immanent in commodities, labor time.

Based on the statements of all three authors, we can conclude that only money that has not yet thrown off its commodity form can be considered a measure of value and continues to be a commodity, for the production of which a certain amount of labor time or labor has been spent. Consequently, modern fiat or unsecured money cannot in any way perform the functions of a measure of value, since are not themselves commodities of a value that contains a corresponding amount of labour-time.

Now consider the following function of money, in which money acts as a medium of exchange. At the initial stage of capitalist relations, when in fact one commodity containing a certain amount of labor is exchanged for another commodity equivalent to it, an exchange of goods actually takes place. That is, in the process of circulation, one commodity is exchanged for another commodity, but as a special type of commodity with certain qualities begins to stand out from the total mass of goods, which eventually turns into money – the universal equivalent of value, commodity exchange takes the form described by Marx, which he called the metamorphosis of goods: T-D-T.

At this stage of socio-economic relations, circulation occurs already through the mediation of a special commodity – money, but this money still retains its commodity nature, otherwise the exchange process loses all meaning, because a commodity having a certain exchange value cannot be exchanged for a commodity having a completely different exchange value, no matter how much or how little. In other words, only commodity money can be a means of circulation, respectively, modern fiat money no longer performs this function, and all purchase and sale transactions today are actually fictitious, because. do not reflect the movement of real commodity values, or, on the other hand, the exchange value of modern goods is just as symbolic as the exchange value of modern fiat money, but this will be discussed in more detail in the next section.

The first two functions of money considered are inherent not only in money, but also in goods, because after the separation of money from the mass of commodities, money, remaining a commodity, retained such functions as a measure of value and a means of circulation. The next three functions are inherent only in money, because commodities can no longer perform such functions as a means of creating treasures, a means of payment and world money. Here is what Marx writes about this in Capital Critique of Political Economy Volume One, BOOK ONE THE PROCESS OF PRODUCTION OF CAPITAL, Section One: Commodity and Money, CHAPTER THREE MONEY, OR THE CIRCULATION OF COMMODITIES, 3. Money:

“The commodity which functions as a measure of value, and therefore also, directly or through its substitutes, and as a medium of exchange, is money. Therefore, gold (or silver) is money. Gold functions as money, on the one hand, in those cases when it must appear in its golden (or silver) corporality, as a monetary commodity, i.e., where it does not appear purely ideally, as in the function of a measure of value, – and not as something capable of being replaced by its representatives – as in the function of a medium of exchange. On the other hand, gold (or silver) functions like money when its function – whether it performs this function itself, in its own person, or through its substitutes – fixes for it the role of the only image of value,

At the same time, such a function as a means of creating treasures, as money denied its commodity nature, gradually transformed into a means of accumulation. The function of treasure today can only be performed by precious metals, but since Today, precious metals have ceased to be money, but have returned to their original commodity nature, then to some extent the function of treasures today is no longer performed by money, but by the so-called national gold reserve of a state. At the same time, it is obvious that such treasures can only belong to the state represented by its national bank, while ordinary citizens can only use various financial instruments for the purpose of accumulation: foreign currency, deposits, securities, etc.

But what is accumulation for a citizen is at the same time an obligation for a bank or a corporation, from which follows such a function of money as a means of payment, respectively, a means of accumulation is more a means of payment than a means of creating treasures. Here is what Marx writes about such a function of money as a means of payment in "Capital" Critique of Political Economy Volume One, BOOK ONE THE PROCESS OF PRODUCTION OF CAPITAL, Section One: Commodity and Money, CHAPTER THREE MONEY, OR THE CIRCULATION OF COMMODITIES, 3. Money, b) instrument of payment:

“In the direct form of commodity circulation we have considered, the same magnitude of value has always been doubly present: in the form of a commodity at one pole, in the form of money at the opposite pole. Commodity owners therefore came into contact with each other only as representatives of mutual equivalents available in cash. However, with the development of commodity circulation, relations develop, thanks to which the alienation of commodities is separated in time from the realization of their price. It will suffice here to note only the most elementary of these relations. One type of goods requires a longer, the other a shorter time for its production. The production of various goods is associated with different seasons. One commodity is born at its very market, the other must make a journey to a distant market. Therefore, one commodity owner may act as a seller before another acts as a buyer. With the frequent repetition of the same transactions between the same persons, the conditions for the sale of goods are regulated by the conditions of their production. On the other hand, the use of a certain type of goods, such as a house, is sold for a certain period of time. In such cases, it is only after the expiry of the term that the buyer actually receives the use-value of the commodity. He therefore buys the goods before he pays for them. One commodity owner sells the present commodity, and another buys it, acting as a mere representative of money or as a representative of future money. The seller becomes a creditor, the buyer becomes a debtor. Since the metamorphosis of the commodity, or the development of its value form, has changed here, money also acquires a different function.

The function of money as a means of payment contains a direct contradiction. Since payments cancel each other out, money functions only ideally as money of account, or measure of value. In so far as actual payments have to be made, money does not appear as a medium of circulation, not merely as a transient and intermediate form of metabolism, but as an individual embodiment of social labour, as an independent existence of exchange value, or an absolute commodity. This contradiction is revealed with particular force at that moment of production and trade crises, which is called the monetary crisis. The latter is possible only where the chain of successive payments and the artificial system of their mutual repayment have reached their full development. With general disturbances in the course of this mechanism, no matter what they arise from, money is suddenly and directly transformed from a purely ideal image of money of account into specie. Now they can no longer be replaced by ordinary goods. The use-value of a commodity loses its value, and the value of a commodity disappears in the face of its value form. Just yesterday, the bourgeois, intoxicated by the flourishing of industry, viewed money through the haze of enlightened philosophy and declared it an empty semblance: "Only a commodity is money." “Only money is a commodity!” yell today the same bourgeois in all parts of the world market. As a deer craves fresh water, so the bourgeois soul now craves money, that only wealth. During a crisis, the opposition between a commodity and the image of its value, money, grows into an absolute contradiction. Therefore, the form of manifestation of money here is indifferent.

Credit money arises directly from the function of money as a means of payment, and debt obligations for goods sold, in turn, begin to circulate, transferring debt claims from one person to another. On the other hand, with the expansion of credit, the function of money as a means of payment also expands. As a means of payment, money acquires its own forms of existence, in which it finds its place in the sphere of large commercial transactions, while gold and silver coins are pushed mainly into the sphere of retail trade.

With a certain level of development and a fairly wide scale of commodity production, the function of money as a means of payment goes beyond the sphere of commodity circulation. Money becomes the universal commodity of contractual obligations. Rents, taxes, etc., are transformed from deliveries in kind into payments in money.”

And finally, this is how Marx describes the last function of money, as world money in "Capital" Critique of Political Economy Volume One, BOOK ONE THE PROCESS OF PRODUCTION OF CAPITAL, Section One: Commodity and Money, CHAPTER THREE MONEY, OR THE CIRCULATION OF COMMODITIES, 3. Money, c) world money:

“World money functions as a universal means of payment, a universal means of purchase and an absolutely social materialization of wealth in general (universal wealth). The function of a means of payment, a means of settling international balances, prevails. Hence the slogan of the mercantilist system – the balance of trade. Gold and silver essentially serve as international means of purchase when the normal balance of metabolism between different nations is suddenly disturbed. Finally, they function as an absolutely social materialization of wealth where it is not a matter of buying or paying, but of transferring wealth from one country to another, and where this transfer in the form of a commodity is excluded either by the conjuncture of the commodity market or by the goal itself.

Both for internal circulation and for circulation on the world market, each country needs a certain reserve fund. Consequently, the functions of the treasure arise partly from the function of money as a means of circulation and means of payment in the internal market, and partly from their function as world money. The latter role always requires a real monetary commodity, gold and silver in all their physicality, as a result of which James Stewart characterizes gold and silver, in contrast to their local substitutes, as money of the world [world money].

The movement of the gold and silver flow has a twofold character. On the one hand, starting from its sources, it spreads throughout the world market, is intercepted to varying degrees by various spheres of national circulation, enters their internal channels of circulation, replaces worn gold and silver coins, supplies material for luxury goods and solidifies in the form of treasures. This first movement takes place through the direct exchange of national labor, realized in commodities, for the labor of the gold- and silver-mining countries, realized in precious metals. On the other hand, gold and silver are constantly moving back and forth between the spheres of circulation of different nations, following in this movement the continuous fluctuations of the exchange rate.

Summing up, we can state that the functioning of modern money is not only fictitious, but also stereotyped, because fiat money, not being a commodity (precious metals) and not being backed by precious metals, cannot perform such functions as a measure of value, a means of circulation, a means of creating treasures and be world money. The only function that fiat money performs today is as a means of payment, which only confirms the fact that the current stage of socio-economic relations is financial capitalism or globalism.