Marx’s Monetary Theory And Its Contemporary Value Of Research

Marx’s monetary theory plays a very important part of his economic theory. Theclassical political economists before Marx had research on currency. From Petty,Locke and Hume to Stewart, the classical economists had gradually deepenedunderstanding of the currency, and there were two different monetary theories.According the division of labor theory, Adam Smith discussed the origin and natureof the currency. David Ricardo, as a master of classical economics, while adhering tothe Smith’s monetary theory, but also affected by the quantity theory of money.Marx believed that the most important problems of monetary theory were theorigin and nature of the currency. Marx started from the commodities, hedifferentiate three concepts of the use value, exchange value and value. Marxsystematically elaborated the theory on the dual nature of labor, and then hediscovered the source of the use value and value. Finally the monetary theory wasbuilt on the scientific labor theory of value.The quantity theory of money in Ricardo’s monetary theory was widelyaccepted by the later bourgeois economists and further developed. Based on Fisher’scash transactions equation, Marshall’s and Pigou’s Cambridge equation, Keynesestablished a modern monetary theory which was intrinsically linked with the outputand employment. Friedman developed a new quantity theory of money, hoping tosolve the problems of economic growth and inflation. Modern Western monetarytheory lacked an appropriate microscopic foundation, which shake the basicframework of modern Western monetary theory.Marx believed that when the capitalist production relation was established therewas the possibility of the economic crisis in capitalism, which was determined by thebasic contradictions of capitalism. The current financial crisis occurred in the Westprecisely had proved the assertion of Marx. In essence, the crisis was originated by the defects of the capitalist system itself, but we could not ignore the effect of U.S.monetary policy to the crisis.Because of the financial crisis China’s current economic situation is facingcertain difficulties. China’s economy is heavily dependent on external demand, whilethe Western countries, due to the impact of the financial crisis, sharply dropped indemand for Chinese goods. The Chinese government’s fiscal stimulation plan keptthe economic growth, but led to inflation. The Chinese government had recognizedthe problem, and will make the appropriate adjustments on economic policy in2012.