Acta Oeconomica 13. (1974)

1974 / 2. szám - Hagelmayer István: The Role of Gold in the Capitalist Monetary System

Acta Oeconomica Vol. 13 (2), pp. 213— 230 (1974) I. Hagelmayer THE ROLE OF GOLD IN THE CAPITALIST MONETARY SYSTEM Two questions are dealt with in this paper. On the one hand, the author wants to demon­strate that gold has ceased to measure value even on the scope of international economic relations, thus it does not fulfil the Marxist criteria of money (“the unity of being a measure of value and a means of exchange” and “being a universal equivalent”) any more. On the other hand, he proves that the failure of the “gold brake” to function as a regulator of international liquidity was not ac­cidental but followed inevitably from the nature of the state monopolistic capitalism. Gold and the measurement of value I think it is not my task to prove that gold has ceased to be a measure of value on the national market as a consequence of the fact that banknotes are no longer exchangeable for gold. This has been convincingly proved in Hungarian liter­ature [1,2]. The historical antecedents and the process leading to the present situa­tion are also well-known. The only question open to dispute is whether, with the banks still accumulating gold as a possible means of settling international debts and thus with gold circulating in a restricted sphere, together with money based on credit — whether gold still measures value in this restricted sphere, where it does circulate — i.e. on the world market. Marx clearly proved that gold can measure value only be­cause of, and by, its taking part in transacting turnover - i. e. because it circulates, and, of course, because it has an imminent value — and even if it circulates together with banknotes (I could even add today, only because it does so), it is gold that mea­sures value. Even if this circulation was not, and could not, be exclusive, even if li­mited in scope, it was directly connected with the turnover of commodities. A clear assessment of the situation prevailing in the international monetary system in this respect was also rendered difficult because until August 1971 the role of world money was played by a national currency that could be exchanged for gold by central banks. Under such circumstances the fact that the dollar was losing its purchasing power in absolute and-what is important-in relative terms (i.e. in rela­tion to other currencies) and that demand for gold, the price of which was stabilized by intervention, was increasing, led to the almost obvious conclusion that the dollar was over-valued both against other currencies and gold alike. By having inserted the word “and” here, the consequence arousing from the orthodox theory of money was virtually stressed or at least hinted at, that even in such circumstances gold still measures value - though in a distorted way - thus suggesting that it was the monopolistic low price of gold, and thus the tension engendered by this distortion which had caused the problems of the monetary system. This line of reasoning leads Acta Oeconomica 13, 1974

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