On Marx's Analysis of Money Hoarding in the Turnover of Capital
The formation of money hoards, which underpins the demand for money, is typically treated by mainstream monetary theory as originating in the motives of the rational individual. In contrast, Marx's discussion of money hoarding treats hoard formation as a necessary tendency of capitalist production and circulation rather than as a result of the individual's predilections. Based on Marx's analysis, this article identifies several structural reasons for money hoard formation in the circuit of capital. It is also shown that Marx's discussion, despite its insight, suffers from a technical error in analysing the overlapping of production and circulation time in the circuit, and in drawing the implications for hoarding. Finally, it is argued that the broader significance of capitalist money hoarding lies in the foundations it provides for the emergence of the credit system.
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Volume (Year): 12 (2000)
Issue (Month): 2 ()
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- Foley, Duncan K., 1982. "Realization and accumulation in a Marxian model of the circuit of capital," Journal of Economic Theory, Elsevier, vol. 28(2), pages 300-319, December.
- Costas Lapavitsas, 1997. "Two Approaches to the Concept of Interest-Bearing Capital," International Journal of Political Economy, M.E. Sharpe, Inc., vol. 27(1), pages 85-106, April.
- Lapavitsas, Costas, 1994. "The Banking School and the Monetary Thought of Karl Marx," Cambridge Journal of Economics, Oxford University Press, vol. 18(5), pages 447-61, October.
- Arie Arnon, 1984. "Marx's Theory of Money: the Formative Years," History of Political Economy, Duke University Press, vol. 16(4), pages 555-575, Winter.
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