The Determination of the Monetary Expression of Concrete Labor Time under the Inconvertible Credit Money System

Abstract

This paper tries to answer the important question: how is the “monetary expression of labor time” (MELT) determined under the inconvertible credit money system? We provide a clear definition of the inconvertible credit money system by differentiating four monetary regimes. It is argued that the dynamic between changes in the quantity of money and prices should be explained on a sectoral level. A key element in explaining this dynamic is found in the decomposition of the MELT into the “monetary expression of value” (MEV) and the “value expression of labor time” (VELT). In so doing, Marxian value theory is shown to supersede the quantity theory of money because it can explain not only the general price level, but individual prices as well.