After the Crash, Beyond Liquidity

A final meeting before the conference. We decided that we might meet and consider what we’ve read thus far and to facilitate this review I’ve assembled a number of short extracts. Two members suggested we begin at the beginning with Aristotle’s description of the oikos. I’ve added a doggerel fable by Bernard Mandeville that describes a hive of political animals and is considered one of the earliest defenses of “modern” market economics (so claims Friedrich Hayek). Also on offer: a short chapter from Smith’s Theory of Moral Sentiments, Marx’s description of the general formula for capital, and an extract from Ayn Rand on the “meaning of money.”

The whole should be no more than 40 pages of reading. Feel free to pick and choose, but let’s all try to read Aristotle, Marx, and Rand.

Links to the Reading:

• Aristotle Politics, Book I
• Mandeville’s “Grumbling Hive” from The Fable of the Bees
• Smith on “The origin of ambition and of the distinction of Ranks” (TMS, Part I, Section III, chapter ii)
• Marx, Capital, Chapter 4
• Rand, “On the Meaning of Money” from Atlas Shrugged

For Monday, more from the first volume of Marx’s Capital: Part I, chapter iii (”Money, or the Circulation of Commodities”). I, for one, am immediately struck by the coordinating conjunction (or is it a disjunction?), that very eighteenth-century or.

This third chapter concludes Part I. Again, you might also peek at the short chapter which begins Part II and posits M-C-M’ as “the general formula of capital,” but only if you have time and inclination and didn’t do so for our last meeting.

Chapter iii of Capital at marxists.org: link.

Dipping a toe into Karl Marx’s Capital, we are planning on reading Part I, Chapter 1 (”The Commodity”). It might help to also read Marx’s preface to the first German edition, where we find the following: “The value-form, whose fully developed shape is the money-form, is very simple and slight in content. Nevertheless, the human mind has sought in vain for more than 2,000 years to get to the bottom of it” (Penguin ed. pp. 89-90). The multiple volumes of Capital, David Harvey claims, are an exercise in content delivery.

There’s much more about money in Part I, and we may choose to read chapters 2 and 3 for next time. Those with some extra time and the desire to look ahead might sample Part II, Chapter 4 (”The General Formula for Capital”), in which Marx treats C-M-C and M-C-M circuits.

Capital at Marxists.org:
http://www.marxists.org/archive/marx/works/cw/volume35/index.htm

Simmel. Each found in him what he or she would. He is suspiciously Hegelian, no sociologist, conditioned by anti-Semitism, a stylist above all, an early proponent of creative destruction. The discussion was good; but perhaps the reading assignment was too long.

Prista and Geeta suggest we might go back to Adam Smith’s Wealth of Nations and talk more about a labor theory of value and the accumulation of capital. And a number of other members reminded us that less is more. A lighter assignment and a review then.

For our next meeting let’s read the Introduction and Plan of the work, revisit Book I, chapters 5 – 7 (”Of the Real and Nominal Price of Commodities, or of their Price in Labour, and their Price in Money,” “Of the Component Parts of the Price of Commodities,” and “Of the Natural and Market Price of Commodities”), and Book II, Chapter 3 (”Of the Accumulation of Capital”).

The assigned reading might set up a reading in Marx or of a “no-bullshit” Marxist for our first meeting in October.

Next up, Georg Simmel’s The Philosophy of Money. The money economy is a site of modernity.

Simone warns us not to read chapter 2 with care: Skim’s the word. In fact, the advice originates in Simmel, who instructs the reader to skim over chapter 2 (which is full of definitions and rather complex) and then start reading chapter 6, the last chapter of the ponderous book.

The links below lead to UVA Collab, where scans from Simmel’s books have been ordered by your reading group organizers.

https://uva.hosts.atlas-sys.com/illiad/pdf/944832.pdf
https://uva.hosts.atlas-sys.com/illiad/pdf/945011.pdf

At our previous meeting we treated Smith’s theory of money more closely, departing from his “violent metaphor” of a “waggon-way in the air,” to take up “Daedalian” questions about if and how a gold (or gold and silver) standard operates in The Wealth of Nations. We were  delighted to find Smith a proponent of regulation. We thought about trust, bills of exchange, and we briefly treated Innes’ abstraction of money as credit-debt. Innes, described a “money crank” by one of our participants, makes another appearance at our next meeting.

Reading Assignment
John Maynard Keynes and A. Mitchell Innes are paired here for as representatives of state and credit-centered critique.

• A. M. Innes, “The Credit Theory of Money”
• J. M. Keynes, A Treatise on Money, Vol. I, chap. 1, “The Classification of Money”

At our last meeting we decided we wanted to read a little Smith before forging on. We’re taking up Smith’s theory of money more fully, his comments on paper money, and his thoughts on the colonies.

We’ve selected the following chapters from The Wealth of Nations: II.ii, II.iv, IV.i. Those who are interested in Smith’s description of commerce in a colonial system should read all of IV.vii. Those who are pressed for time or interested more narrowly in the American colonies should focus on part 3 of IV.vii.

In addition to the readings from Smith (about 100 pages in the U. of C. Press edition), A. Mitchell Innes offers a useful critique of Smith’s monetary theory. We’ll most likely revisit Innes when we take up Keynes, as Keynes wrote approvingly of Innes’s 1913 article “What is Money?” (We’ve found a copy of the article online but are still looking for a JSTOR or Muse pdf. See below)

Readings

• Adam Smith, The Wealth of Nations, Book II, chapters ii, iv, Book IV, chapters i, vii (esp. part iii)
• Strongly recommended: A. Mitchell Innes, “What is Money?” (1913). <Link to copy of the article on CES>

At our planning meeting, we sketched out a reading list. A quorum of group members seemed to want to “begin at the beginning” with Adam Smith, even if his monetary theory was discarded by the “neoclassical” tradition. It was suggested we allow our selves more flexibility to pursue distinct thematic constellations after that foundation. The plan is to meet once a week in the run up to the conference (October 31st). And we can adjust our goals as we go.

We’re going to try Monday at 6pm as our meeting time, with Monday August 31st as our first meeting with assigned reading. We’ll meet in the English Faculty Lounge, 2nd floor of Bryan Hall, across from the elevator. If you’re coming late, that’s fine. We may adjust the meeting time in the future.

Here’s our reading assignment:

• Adam Smith, Vol I, Book I, Chapters 3-7, The Wealth of Nations (1776)
• David Hume, “Of Money,” “Of Interest,” “Of the Balance of Trade,” “Of Public Credit,” from Essays: Moral, Political, and Literary (1777)

Both of these texts are available at the “Online Library Liberty” and may be downloaded for free:

• http://oll.libertyfund.org/
• Hume’s Essays
• Smith’s The Wealth of Nations, Vol I

A sketch of reading assignments and suggestions appears pasted in below. Future readings that are protected by copyright may be stored behind a firewall on a UVa Collab worksite.

To Be Scheduled:
Ian Baucom, Specters of the Atlantic
Ritu Birla, Stages of Capital
Thomas Malthus, Essay on Population
Randy Martin, Financialization of Daily Life
Joseph Schumpeter, Capitalism, Socialism, and Democracy

The “Beyond Liquidity” Reading Group
When: August 24, 2009 at 5pm
Where: Faculty Lounge, 2nd floor of Bryan Hall (across from the elevator)

Our interdisciplinary reading/working group will hold its first, organizational meeting on Monday, August 24th. We’re dedicated to reading the classics of economic thought this semester before and after the “Beyond Liquidity” conference on October 31st.

The meeting will be quick. We’ll decide what, exactly, we’re planning to read and what day and time our future meetings will be scheduled.

If you are unable to make the meeting but would like to participate, please feel free to use the comments to suggest readings our meeting times.