The circulation of goods

Question

In the body there is the circulation of blood, it goes in one direction only.

Now consider the circulation of goods in a barter economy; goods move by exchange. Hence we can identify always two circulations which are exactly mirrors of each other in the sense of moving in opposite directions.

Question: Does this always hold, under every circumstance? Even in a modern economy when we consider cash, say, as just another good; and without considering its special status as the medium of exchange?

But then how can an economy grow? Which in fact it appears to do? Or can we consider the economy in a larger context - that of the world - and say that what was fixed and not in motion; ie natural goods such as the coal in the surface of the earth, and trees on its surface; are placed in motion, and this by becoming a commodity?

Answer 1

Oh well, I, a drafter may be s), well then,

You quoted the coal, trees, etc in the surface of the earth are the assumable examples to be non commodities.

Simply thinking, how are we, human beings, able to dig, cut the objects in your question in order for them to take off or out the earth without the work-power of ourselves? Not ridiculing, but can they ( coals, trees ) come to us upon calling them to do so by chanting some magical words? Like, "Hey trees, fly and cut yourself and come to us".

Since the answer is required citations, here is an example, Capital Vol.1, Chapter 16,

So far as the labour-process is purely individual, one and the same labourer unites in himself all the functions, that later on become separated. When an individual appropriates natural objects for his livelihood, no one controls him but himself. Afterwards he is controlled by others. A single man cannot operate upon Nature without calling his own muscles into play under the control of his own brain.

Then if we deny your proposition, then the companies which produce and sell their products in the market will not be listed in Dow, I think.

And regarding your this inquiry,

But then how can an economy grow?

Smith says vaguely but pardon me to search in English text. Well, then I think when the total sum of the commodities only usable to others increase, then can we say for human beings only ( since we have to take into account environment issues too ) the economy for human beings are growing?? I don't think only the increase of the medium-the money can not be regarded ( I am emphasizing the word only ) as the economic growth.

Have a nice day.

Thank you.

Answer 2

I would take your last statement as fact. There are raw inputs to an economy, the flesh of wild animals is a perfect example. And there is pure waste, such as non-recyclable plastic floating in the ocean, or when someone declares bankruptcy.

This notion of circulation does not hold. The system is wide open at both ends. Something becomes economic and something else ceases to be economic and they are not necessarily connected in any way. Even if you want to include the Earth and its contents as an economic actor (which I do not think can actually be done) the sunlight that falls on us is still raw input, and the ultimate waste-heat that can no longer be leveraged is still pure waste. Since by and large whatever sunlight does not happen to fall on a plant, still turns immediately into waste-heat, there is still huge leverage for efficiencies. This creates so great an opening that this is still virtually an open system.

Given that it is really an open system, it seems obvious that the economy grows by pulling more non-economic stuff into economic stuff, or by speeding up the loops that do exist in the system.

This latter is called the 'velocity of money' when the reverse flow involves cash, and I think it explains the vast majority of the growth we see. Most of the increased consumption in modern economies is artificially driven, and most of our production is of psychological value (It is the same food, but it tastes better, or we are happier about the source. It is the same clothing, but it marks our status. It is the same communication, but it happens more automatically.) And these distinctions are amplified by the overall overabundance of goods available, not by naturally occurring levels of psychological needs. Those otherwise non-productive layers of 'production' get people paid, and they spend their earnings, creating more money in the system.

So even a closed economy could still grow quite a bit, by pumping up the speed of circulation.

Answer 3

While the Wikipedia article on economic reproduction is kind of a mess, that seems to be the concept that this question is grasping at. I'll quote the following which is actually a very nice summary of Marx's answer.

Marx distinguishes between "simple reproduction" and "expanded (or enlarged) reproduction".[4] In the former case, no economic growth occurs, while in the latter case, more is produced than is needed to maintain the economy at the given level, making economic growth possible. In the capitalist mode of production, the difference is that in the former case, the new surplus value created by wage-labour is spent by the employer on consumption (or hoarded), whereas in the latter case, part of it is reinvested in production.

So Marx's theory of simple reproduction explains that the circuit of capital must always stay in motion. Note here that the opposite of circulation is basically the "hoarding" of wealth. Capitalists don't hide their money under they mattress, because then they won't make a profit. They keep it circulation by reinvesting it in production (or at least putting it in a bank that can isssue loans). Hoarding (or non-productive investments, like in a real estate bubble) is a basic sign or symptom of an economic crisis. This is where Keynes draws from Marx, although his basic understanding fo the process is very different.

Marx's theory of expanded reproduction gets to the other part of the question, which is economic growth. And for Marx, decisively, this is not just a mere appearance of growth, but an accumulation of value-in-circulation. Picture an electrical circuit where the voltage tends to increase more and more over time. The source of the metaphorical "energy" in the capitalist economic system, for Marx, is human labor. It is the only commodity capable of adding additional new value to the circuit of commodities. The value of machinery and represents previous human labor accumulated in a productive physical form, and that is also part of what allows the scale of circulation to increase over time.

The other kind of circulation Marx touches on, but does not develop in very much detail, is metabolism, that is, the circulation of matter and energy in general, regardless of whether it is commodified. Humans in every society, like all living beings, take water, food, oxygen, sunlight, use it for our own biophysical reproduction, and then turn it into waste. In a health ecoystem, every form of "waste" is potnetially a necessary input for some other lifeform(s). This kind of circulation goes on regardless of whether or not nature is commodified. But the expanded reproduction of capial tends to disrupt circulation of matter and energy through ecosystems. It produces more waste (pollution, greenhouse gases, etc.) then the biosphere can manage to circulate. The circulation of commodities and the circulation of useful matter do not always fit well together. Ecological Marxists refer to this problem as the metabolic rift.