The Political Economy of Essence of Money and Recent Development

Research output: Contribution to journalArticle

Abstract

This paper attempts to examine the essence of money theory and the mainstream interpretation of money and the financial crisis of 2008. In order to understand the financial crisis, it is important to analyse both classical and Marx’s commodity money theory. This study is important because in recent decades the rapid expansion of financial sectors, ballooning of debts and spectacular growth of fictitious capital requires a deep analysis of the capitalist system, and for this there is a need to revisit Marx wisdom, especially his theory of money. He also says that when there is excessive speculation over the future distributions of surplus value then there is a possibility for great instability in the system. Such tendencies were clearly seen during the 2008 financial crisis. Keynes found money’s macroeconomic impact, namely uncertainty, which he explains in universal terms. For Marx, the reason for uncertainty is associated with capitalist production decisions, which means capitalists are undertaking production for needs which are unknown to them; they are producing for other individuals not known to them. The study found that a materialist analysis of monetary phenomena is crucial to fully understanding this issue, including the financial crisis of 2008.
Original languageEnglish
Pages (from-to)85-108
Number of pages24
JournalInternational Critical Thought
Volume9
Issue number1
Early online date18 Mar 2019
DOIs
Publication statusPublished - Apr 2019

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Financial crisis
Political economy
Uncertainty
Karl Marx
Wisdom
Commodity money
Capitalist systems
Debt
Financial sector
John Maynard Keynes
Speculation
Surplus value
Macroeconomic impacts

Cite this

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abstract = "This paper attempts to examine the essence of money theory and the mainstream interpretation of money and the financial crisis of 2008. In order to understand the financial crisis, it is important to analyse both classical and Marx’s commodity money theory. This study is important because in recent decades the rapid expansion of financial sectors, ballooning of debts and spectacular growth of fictitious capital requires a deep analysis of the capitalist system, and for this there is a need to revisit Marx wisdom, especially his theory of money. He also says that when there is excessive speculation over the future distributions of surplus value then there is a possibility for great instability in the system. Such tendencies were clearly seen during the 2008 financial crisis. Keynes found money’s macroeconomic impact, namely uncertainty, which he explains in universal terms. For Marx, the reason for uncertainty is associated with capitalist production decisions, which means capitalists are undertaking production for needs which are unknown to them; they are producing for other individuals not known to them. The study found that a materialist analysis of monetary phenomena is crucial to fully understanding this issue, including the financial crisis of 2008.",
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The Political Economy of Essence of Money and Recent Development. / Siddiqui, Kalim.

In: International Critical Thought, Vol. 9, No. 1, 04.2019, p. 85-108.

Research output: Contribution to journalArticle

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