How would different currencies effect capitalism?

Christian Patterson
2019-12-03
Underground Mall

Capitalism depends on two values that share a currency: money and capital. Money is liquid currency that freely flows through the economy. Capital is money that has been invested, in order to generate profit.

The function of money is to purchase things with use-value. The function of capital is to generate profit.

Oftentimes, the way that Capital most effectively generates profit is by catering to the consumer’s need for use-value. For example, people need water, so a company invests capital into water, to then sell water for a profit.

But sometimes, what is profitable has a negative use-value to some. For example, when capitalist government contractors make weapons to genocide Yemenis. This has a use-value to the Saudis, but it is destructive. Or, for example, when companies knowingly do things to wreck the environment.

All of this goes to show that we have two currencies: one is used to lubricate the capitalist mode of production, and one is used to purchase things. The problem is, they both use the same currency: the regular form of money.

This is a fundamental shift that informs capitalism. For example, under feudalism, there were separated currencies. The feudal lords and vassals were interested in land, which was functionally the highest currency – the object of primary economic motivation – much in the same way capital is.

The peasants on the other hand, used money to trade, but they also could use a more distributive, less market-based model; peasant economies really differ from place to place and time to time. But either way, the peasant economy revolved around commodity currencies, and the vassal economy revolved around land, so they could extract value.

Although it’s not normally formulated in these terms, the transition from feudalism to capitalism can be seen as money currency overtaking land as the motivation-driving currency.

And, while this was seen as a democratization of the economy, and is still presented that way, there are numerous issues that come from giving the dominant class the same operating currency as the working class (as mentioned above).

But can we think, how an economy would work with multiple operating currencies, with different motivations?

For example, Mesoamerican societies used multiple different currencies. Of course, this is true for many/all older economies, including the nearby Incas, but I know a little bit more about Mesoamerica in this regard than societies with similar economic systems.

In Maya, Aztec, Teotihuacan, etc economies, they used different commodity currencies for different classes. For example, things like chocolate, things that can be easily commodifiable, but are still rare and valuable, were used as commodity money for the upper classes.

Some other examples are jade, which was highly valued by Maya, but was mostly producible in the Guatemalan highlands. Similarly, salt was highly valued, but was mostly producible on the Yucatan Peninsula. Animal skins were most commonly produced in the central lowlands, between the Guatemalan highlands and the Yucatan Peninsula.

There are more highly-valued commodities that existed in different parts of the Maya region: basalt, honey, obsidian, ceramics etc.

Few, or none, of these commodities I’ve highlighted, were widely available throughout Maya territory. The Maya also didn’t utilize a tributary-style empire, the way Aztecs, and other central Mexican civilizations did. This means that the Maya operated as a network of city-states that traded localized commodities amongst each other.

I’m not trying to advocate for a Maya or Aztec style economic currency, per se. That economic system existed at the time because it was historically necessary, or at the very least, was perceived to be the most functional for that historical context.

It would be difficult to completely reformat our contemporary economic system into something like the Maya. It would be impossible to emulate the Maya economy directly, for many historical reasons.

There was also immense inequality under this Maya economic system. For example, chocolate was traded by the elites. It was a commodity that was off-limits to many people at many times, because it was so desired.

Another example is, we don’t know a lot directly about Maya use of psychedelics (contrary to popular belief). We do know that psychedelics were used, but not a ton more. However, it’s reasonable to believe that psychedelics were a commodity strictly for the upper class, carefully controlled by the shamanic priests.

There are plenty of other examples as well. The point is: all economies have some level of exclusion. The capitalist economy depends on excluding some people from owning capital, and consequently excluding them from the higher echelons of wealth.

Feudal economies revolve around excluding some people from owning land, designating them to labor peasantry. The Maya economy revolves around excluding some people from specific commodities in and of themselves.

However, the novelty of the Maya economy raises an interesting question: what if the capitalist class used a different currency than the working class?

If capital was de-tethered from money, then that would effectively end capitalism, but it also wouldn’t result in socialism.

Under capitalism, people have private property. Private property enables the capitalist class to extract surplus value from the workers. The way they do this is under-compensating their workers. They pay them less in wages than the workers generate in value. The surplus is called profit. This dynamic can only function if the capitalist class and the working class use the same currency.

But what if profit was in the form of a currency that was completely divorced from the currency that wages are paid?

There’s no simple answer to this.

If capitalists were getting a different type of value from surplus labor, it would kneecap capitalism. Capitalism depends on capitalist class interest and working class interests butting heads with one another.

However, this would also be an ineffective way of ending capitalism. There are much more direct and easy ways to yield socialism.

So, simply, I don’t have any firm conclusion on this topic. A big reason why is it’s a historical misnomer for this type of economy to develop at this point in time.

But I think it’s important to dissect the economy, and imagined futures, in these terms, because it helps in recognizing what’s inherent to capitalism and what isn’t, and how to diagnose solutions to those characteristics of capitalism.