divinization of money

Image: Francesco Ungaro


The consumer society is capitalism's last survival resource

If the commodity is the elementary form of value; money is the general form of value in the capitalist mode of production. Value, then, is the abstract essence of wealth; this, therefore, manifests itself in both of these forms – albeit differently: as a relative form in the commodity and as an equivalent form in money. These two forms, in the last analysis, are forms of the social exchange relation – mediations of the capital relation. Value itself, therefore, is par excellence the form of social relations that constitute this mode of production. Note, now, that there is a synthetic way of presenting all this; behold, it separates the appearance of the essence of the commodity with a slash:

As can be seen in the second expression, money has a functional use value, that is, it fulfills several functions essential to the reproduction of capitalism itself: a means of expressing value in general, a means of circulation, a means of hoarding, a means of lending and a vehicle. form of the valued value. If commodity-money (gold, for example) is the place of the fetish, fiduciary money, still as a general form of value, is the place of deification in modern society. Despite this, a good part of economic theory treats money as something almost superfluous – but not all of it.

Deification? It will be? If this seems to be a strange thesis for many, let economic theory itself be left with the task of proving it. And the latter, as will be seen, seems to confirm it. For now, it is known that “a feeling of something unlimited, without barriers, as if oceanic” can assault the understanding of the world of the human being in general in modern society. As Freud showed, this kind of yearning can even creep into the psyche of highly capable intellectuals, in the form of ideational responses to dissatisfaction, helplessness, and impotence with the state of things, with the pervasive perversity of actually existing society.[I]

Before that, some clarifications need to be made. If the commodity is value and non-value, that is, the contradiction between value and use value, it appears on the market as use value and exchange value. As a use value, it consists of something that has a natural materiality, but as a value, its materiality is purely social, that is, of the order of meaning – of a meaning objectively placed in the functioning of the economic system. Value appears in the form of exchange value; value is the content of exchange value. Taking the commodity with an inverted sign[ii] – that is, in a materialistic way – we have:

Having said that, it must be said that a fetish in modern society becomes the product of human labor placed in the form of a commodity. It consists properly in attributing the character of value to use-value, thus identifying the form-value with the support of that form, that is, with use-value. If the commodity is taken in this way, the exchange value becomes based on the use value, more precisely, on its properties that satisfy human needs. Value, then, appears to be internal to use value. Anyway, a classic example is thinking that gold as such is money. In general, one has:

Commodity-money, therefore, is the place of the fetish. Value is “suppressed” as the essence of exchange value. Consequently, only the appearance of the sign remains, that is, the signifier, now as a value in itself.

Divinization, on the other hand, is the product of thinking that understands the commodity as a use value that gains exchange value in the markets, understood itself, therefore, as value. Exchange value is thus taken as a mere convention created by the “market” subject; and the use-value or good consequently becomes a mere carrier of exchange-value. This, being defined by market interactions between producers and consumers, appears to be external to the good as such. Now, this idealization places the market and its constituent elements as divine entities. In particular, it posits fiduciary money as a divine thing, that is, simply as value.

Now, see that this thesis defended here does not consist of an unfounded accusation, an external criticism of the economists' way of thinking; it is not, therefore, a mere ideological disqualification. On the contrary, it can be proved based on texts by authors who do not criticize the capitalist system as such, but only its apparent results in terms of unemployment, income sharing, etc. Here, two writings by economists belonging to the field of Modern Monetary Theory (MMT) are used for this purpose. The first of them is a book by Warren Mosler, which was written with the aim of pointing out what he considers to be frauds in the field of economic policy.[iii]

The first of them consists of thinking that the State is limited in its expenditures by the sum of the taxes it collects with the loans it takes from the private sector – mainly from the capitalists. In fact, the State does not face this budget constraint that is always imposed on companies and families: it can finance itself by issuing fiduciary money that it creates institutionally. Hence Mosler says: "the federal government can always spend and pay in its own currency, no matter how large the deficit or the insufficiency of the revenues it obtains".

But wouldn't there be other restrictions besides the strictly monetary one? And this is a crucial question that can only be answered later on.

This author knows that the State should not create more effective demand than the aggregate supply can meet; because if you do, it will generate inflation. As he believes, however, that this limit is given by the “full employment” of the workforce and production capacity, he judges that there is ample scope for promoting economic growth by producing large budget deficits. In the face of the crisis of the 1970s, Mosler believed that it would be possible to “promote the restoration of American prosperity” simply by financing this deficit through the issuance of fiat money. As?

Well, he presented three really fantastic proposals, which he shows in his book: 1st) removing all payroll taxes from the payrolls of all state and private organizations; 2nd) make a fund with 150 billion dollars for the state governments so that they could create jobs for everyone who wants to work; 3rd) create a minimum wage employment program for all those who were outside the labor force, but who were wanting to enter it. Together, these three proposals intended to perform a miracle and this would be produced merely through the issuance of currency. Now, thus, he assumes that money is all-powerful, since it has, by itself, the capacity to restore a prosperity that had been lost. Even if he doesn't say so, he takes this extraordinary aptitude as an oceanic, divine force.

Now, it is necessary to examine certain statements from a book by Ann Pettifor that is very illustratively called the power of money.[iv] For her, “the economics profession does not seem to understand money, banks and the credit system”. Now, in a peculiar way, this author considers money as a mere “social construction” whose “production is elastic”, that is, which normally does not suffer great restrictions. Its only limit would be the maximum production capacity that it would be unlikely to reach, but which, if reached by chance, would cause inflation.

In any case, this author believes that the “power to create money comes from the air”, that is, something that falls from the sky on the balance sheets of central banks and commercial banks. Money is for her a “great civilizational advance” since “it allows you to do what you want within the limits of natural and human resources. This is so, because money or credit does not exist as a result of economic activity, as many believe… money creates economic activity”. It will be? Does money have this divine capacity or is this author driven by a reforming desire that can only be satisfied in an imaginary world?

Well, money is neither created by a power exogenous to the economic system nor does it come out of nowhere – despite the appearance to the contrary, something that only holds when its emission is taken in isolation. Now, the production of money is in fact integrated as an intrinsic part of the economic system. It is, therefore, endogenous. The creation of money obeys a logic that is internal to the development of this social complex that includes the production and circulation of goods, the financial system as a whole, as well as the State. And this logic, as is well known, is aimed above all at generating profit. If it is not deterministic, if it imposes itself through politics and techno-politics, it is focused on the production and reproduction of capital – which, as we know, is the driving cause of the capitalist mode of production.

For the adherents of modern monetary theory, the issuance of money seems to result merely from economic policy choices or, even more reductively, seems to be an issue that is resolved in the field of economic theories. To propose miraculous reforms, they always start by pointing out errors in the beliefs of economists and politicians. In doing so, they commit an even greater error which consists in ignoring the nature of the expanded economic system, which cannot but include the State. As pointed out by Anwar Shaikh[v], ignore the connections between state spending, the financing of that spending, the resulting level of employment with the profitability of capital and with the needs for its accumulation – which is insatiable. In doing so, they also ignore the conflicting nature of the interests that move social classes and their fractions.

Roughly speaking, the consideration of the following points undermines the claim to save capitalism that runs through all of modern monetary theory: (a) apparent full employment cannot be achieved, but rarely and for a short time, in the capitalist economy. Behold, if it happens as an event, it drastically reduces the bargaining power of capitalists vis-à-vis workers. A high level of employment tends to raise real wages and thus reduce profit rates; (b) Price formation depends on the competition regime that currently takes place under the command of oligopolies. The deflationary effect of increased productivity, something that occurred in the past, was historically suppressed in such a way that competition today takes place under a creeping but constant rise in prices; (c) As a result, a “dangerous” acceleration of inflation may arise as a response to competition between capitalist companies due to a drop in profitability; episodically, it may arise from supply restrictions due to other causes;

(d) The State is not a “benevolent” institution that is “outside” the economic system and can, therefore, conduct it wisely with a view to the “welfare of society as a whole”. On the contrary, the State is also traversed by the contradictions inherent in the social relations between classes that exist in capitalism. It seeks, however, to somehow constrain its agonistic manifestations, preferably to the detriment of the workers.

(e) As the State is inexorably committed to the accumulation of capital – industrial and financial – the issuance of money by banks is conditioned to this same objective. The issuance of money for other purposes conflicts with the nature of capitalism and suffers, therefore, a fierce opposition from the ruling classes through their representatives in the media and political institutions.

Adherents of modern monetary theory, as a result, are impotent critics of financialization and neoliberalism. They do not understand the connection between the emergence of these processes that have the character of historical “subjects” and the decline of capitalism. The world of contemporary social and cultural life itself is marked by deification. This is how in the disenchanted society, which was presented by Max Weber at the turn of the XNUMXth to the XNUMXth century, human mutants finally fell “under the dependence of a new perverse or Sadean god”.[vi], the Divine Market, which always tells them: enjoy![vii] Now, this appeal of the consumer society is capitalism's last resort for survival, as it is in open conflict with ecological imperatives.

* Eleutério FS Prado is a full and senior professor at the Department of Economics at USP. Author, among other books, of Complexity and praxis (Pleiad).


[I] See Freud, Sigmund – Civilization's Discontents. São Paulo: Cia das Letras, 2011.

[ii] Ferdinand Saussure, who elevated the sign to the central category of modern linguistics, had an idealist understanding of it and, therefore, put the meaning above the signifier. Note, however, that the inverted sign is not the signifier as usually understood.

[iii] Mosler, Warren- The deadly innocent frauds of economic policy. USA: Valance Co., 2010.

[iv] Pettifor, Ann - The production of money – How to break the power of bankers. New York: Verso, 2017.

[v] Johnson, Nick – Modern Monetary Theory and Inflation – Anwar Shaikh's Critique. In: https://eleuterioprado.blog/2019/04/22/a-critica-de-anwar-shaikh-a-tmm/

[vi] Adjective relating to the obscene but revealing tone of the Marquis de Sade's writings.

[vii] Dufour, Dany-Robert – The Divine Market – The Liberal Cultural Revolution. Rio de Janeiro: Company of Freud, 2008.


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