Marx’s Theory of Money: A Reappraisal in the Light of Unconventional Monetary Policy

Ivanova, Maria N. 2020. Marx’s Theory of Money: A Reappraisal in the Light of Unconventional Monetary Policy. Review of Radical Political Economics, 52(1), pp. 137-151. ISSN 0486-6134 [Article]

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The paper analyzes key aspects of Marx’s theory of money in order to reassert its continued relevance for understanding monetary developments in contemporary capitalism. Unlike theorists who become preoccupied with particular functions and forms of money, Marx develops a comprehensive concept of money integrating its various functions and emphasizing the socio-economic basis of its existence. Money performs different functions including a measure of value, a means of purchase/exchange, a means of payment, and a means of hoarding, which are independent of money’s concrete forms. The functions of money as a means of purchase and means of payment relate to each other as money (income) and credit (money), which are fundamentally different. The quantity and availability of credit (money) may be influenced by the activities of the central bank and the private banking system. Credit (money), however, can only become money (income) if and when it enters the domain of social production as embodiment of the value of social labor and social purchasing power. This inextricable link between money and social production sets natural limits to the ability of monetary policy to influence both monetary and nonmonetary developments in contemporary capitalism. An analysis grounded in Marx’s theory of money can provide insights into a range of contemporary monetary phenomena including hoarding, the rush to liquidity during financial crises, the scramble for government debt as a source of ultimate liquidity, and the limits to conventional and unconventional monetary policy.

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17 May 2019Accepted
19 September 2019Published Online
1 March 2020Published

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13 Jun 2019 10:47

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04 Jun 2020 10:10

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Yes, this version has been peer-reviewed.


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