The Reproduction of money material in Marx’s Capital II (by way of a critique of Sandemose’s ‘gold digging’)

Abstract

The question of the reproduction of money material is a crucial feature in the investigation of the cycle of the total social capital that Marx tackled in the context of simple reproduction analysis in Part Three of Capital II. However, his inquiry was left unfinished, so the problem remained ultimately unsolved. This unsettled character was first identified by Luxemburg and later by Grossman. Sandemose attempted to reconstruct the ‘missing fragment’ of Marx’s investigation, where the analysis of the reproduction of the constant capital of gold producers should have been accomplished, alleging that its absence contributed to keep out of sight a central problem addressed there by Marx: that is, ‘the problem of the excess money necessary for the passage from simple reproduction to accumulation’. Sandemose claims also to have accurately reconstructed the passage, attaining a definite solution to the problem that Marx left unanswered. This article shows that both allegations are completely unwarranted. First, it demonstrates that under simple reproduction assumptions there is actually no (net) hoard formation (‘excess money’), in spite of Sandemose’s claim. This also entails a critique of Marx’s conclusions. As a corollary, Sandemose’s thesis that the central problem Marx addressed there was that of the ‘excess money’ needed for accumulation proves to be untenable. Second, the article also demonstrates that Sandemose’s reconstruction of Marx’s ‘missing fragment’ is fundamentally flawed, offering at the same time a consistent alternative. By this means, the investigation initiated by Marx is finally completed. As a result, and beyond its outward polemic character, this article actually renders an ideal (i.e. in thought) simple reproduction of the real process of reproduction of the total social capital, where replacement of the money material is fully taken into account.