CIRCUIT OF CAPITAL AND MONEY ISSUANCE

A MARXIST INTERPRETATION

Abstract

The monetary theme is central to the economic theory initiated by Marx. From the 1970s onward, Marx’s theory of money became a primary research focus for several Marxist authors. Although this is an evident development, the analysis of the articulation between monetary issuance by commercial banks and the circuit of capital accumulation remains theoretically insufficient. Developing this theme is the central objective of this article. The fundamental hypothesis is that modern capital accumulation is grounded in a system in which the connection of the reproduction process rests upon credit. The article concludes that, on the one hand, the banking system must pursue profitability through banking spreads and service fees (which pushes banks to systematically issue credit money), and, on the other hand, accumulation, competition, and the turnover of functioning capital depend on the banks. In other words, the issuance of credit money by the banking system both depends on and conditions the accumulation of functioning capital.