One thing that has been mentioned by both Keynes and Friedman is the notion of buying power and how money provides someone with a certain degree of buying power but more money does not always mean more buying power. It is a pretty tricky concept that I have been considering over the last few lectures and has led me to ask a few questions that I am still mulling over and trying to answer for myself. Friedman makes the argument that what makes a person wealthy is their buying power. John Self is always making comments about how when money ‘happens’ to him he can buy this and that. There are references in Emma to a person’s worth and suitability for marriage being directly related to how much money they have and thus their ability to provide for their family. However, in Roxana, Roxana herself does not always have money like John talks about and she does not always have an income like the upperclassmen of Emma, rather, Roxana is in constant possession of a commodity that can be traded, that is always in demand, and that brings returns in the form of shelter, food, and even money itself – her body. What is interesting is that Roxana’s buying power does not stem from the amount of money she has. As Keynes says in his article, if someone has an income of $100 per week and their income doubles at the same time and at the same rate as inflation to the point where that person is making $200 per week, their buying power remains the same. Keynes also notes that inflation and deflation in the valuation of money affect the different classes in different ways, either helping or hurting their ability to exchange money for commodities. To me, this speaks to the uselessness of money and supports the idea of a barter system in which commodities are directly exchanged. Again, I take Roxana as an example as she is able to produce unimaginable monetary wealth with the single commodity of her body. Her body always has value as it is always in demand – fluctuations in the value of currency never hinder her ability to provide for herself and her family.
This all brings me back to the discussion we had in class surrounding the Potlatch and where the function of money in a capitalist society is reversed and it only becomes valuable as it is given away for an intangible return. Is there anyone else who thinks that the novels we have read give evidence to support this idea of money as being this arbitrary mode of exchange that really has no value or at least no stable value? Are there any examples of money providing constant stability?
I couldn’t agree more with your thinking at the end. The last couple of questions you pose make me think of a Friedman quote from the Tratner article, where he asserts that, “money is an excellent veil of its own fiction”. I do not believe there are examples of money providing constant stability. It derives its value from what people are willing to exchange it for. The greatness or utility of cash is that is solves the problem of different people wanting different things, but still accepting cash as a medium of exchange, because, at the end of the day, the bank of canada guarantees its worth, elevating it from a piece of paper.
The problem with this is that while say, within Canada, you and I can agree on a $20 bill having a relatively constant amount of purchasing power, you could see the international economy and exchange rates as social relations between states. That has always meant that currency is vehemently unstable at the international (the CAD vs the USD over the last year for example) level, and can be just as unstable within a country for a myriad of economic phenomena (hyper-inflation, stagflation).
Bartering over commodities I think speaks to the fact that no commodity is inherently valuable, even (especially) gold, contrary to what we have looked at in the novels in class, revolving around the (false) reverence to a gold standard. The power of the popular belief that gold is inherently valuable is clear even now, as commodities like copper and other metals, and especially oil, have fallen in value, gold has increased.