Rival Theories 


Money and Credit

The second half of the twentieth century witnessed the rise of an intellectual movement known as Postmodernism. It questioned the notion that humans have experienced scientific and social progress after the Ages of Reason and the Enlightenment and to date. Theories in the natural and social sciences were therefore viewed by postmodernists as relative to their philosophical foundations, such as the epistemologies and methodologies that gave rise to those theories. As a result, the postmodernist thesis effectively denies that rival theories describing the workings of the natural and social worlds can be compared for the purpose of adjudicating between their propositions. This means that scientists cannot determine which theory is superior to the other because each theory is born within a different paradigm and therefore each has different means for verifying its descriptions of the world it observes.  This doctoral dissertation challenges the relativist propositions of the Postmodernist school of philosophy that rival theories derived from rival paradigms are incommensurable. It chooses two prominent economists that belong to different political, philosophical, and economic schools and demonstrates how their epistemologies and methodologies shape their economic thinking. It discusses the monetary theories of Alfred Marshall and Karl Marx as representatives of two rival and opposing conceptions of money. It tests the hypothesis that the two opposing interpretations of the role of money in production exist because they are generated by different philosophical traditions. If that hypothesis were to be affirmed, it may therefore also be concluded that the different interpretations survive next to each other because each interpretation validates its arguments by an appeal to different epistemological and methodological foundations. In other words, is it futile to evaluate a rival theory that is generated by a different philosophical foundation? This doctoral dissertation conducts a logical test that provides a negative answer to the latter question by showing that Marx’s interpretation of Money can be derived with Marshall’s philosophical foundations. The “test” also shows that Marshall’s theory of money is contained as a one-sided abstract determination within Marx’s multi-sided theory. The work concludes that the consequences of each interpretation of money can be evaluated according to the rival’s criteria for validity and truth. Therefore, the fact that the rival interpretations of money were generated by rival epistemologies and methodologies should not preclude rational dialogue between theories of different philosophical traditions. Furthermore, rival interpretations of the nature of money and its role in capitalist production should not continue to survive on philosophical grounds. When they do survive, then one has to look for other reasons beyond science and philosophy.