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Edited by Philip Arestis and Malcolm Sawyer
Suzanne de Brunhoﬀ and Duncan K. Foley From the point of view of later heterodox economics, three features of Marx’s theory are particularly important: (1) Marx sees the function of measure of value rather than as medium of circulation as the primary property of money; (2) he treats the quantity of circulating money as endogenous, and the prices of commodities as exogenous, in contrast to the quantity of money theory of prices; (3) he refutes ‘Say’s Law’, the view that because every sale is a purchase there cannot be an excess or deﬁciency of money demand for commodities in the aggregate. Marx presents a theory of commodity money, where a produced commodity (typically gold) functions as money. This perspective allows him to resolve all the outstanding monetary issues of his time, but raises the question of how to adapt his theory to monetary systems based on the credit of the state, which is not convertible into a money commodity such as gold. Marx situates his theory of money in the context of his broader theory of the capitalist mode of production. He sees money as inherent in the commodity as a unity of usevalue and exchange-value. While the commodity form, and with it money, appear in civilized societies such as the ancient empires of the Mediterranean, the Middle East, and Asia before capitalism develops, it is only with the full ﬂowering of capitalism as a mode of production that the commodity and money reach their full development, deeply entwined...
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