Development and Underdevelopment in the History of Economic Thought

Theoretical aspect of Money: from Karl Marx to digital currencies

Maklakova Yulia, Financial Research Institute under the Ministry of finance
Shvandar Kristina, NIFI Ministry of Finance

It makes no sense to talk about who Karl Marx is. Not only economic historians know about him, for example in a different Russian towns there are the streets with his name. In his work «Capital. Criticism of Political Economy» is presented the definition of money and there functions. The essence of money lies in the performance of four mandatory functions and one additional function. The functions which found K. Marx became the subject of discussion instantly. Most world-renowned economists formulated their definitions of money, based on the formulations given by Marx. Disputes over the fifth function - world money - remain relevant in our days. Since the release of «Capital», the world has experienced many economic, political, environmental, geographic and social upheavals, and now we are also experiencing a boom in digitalization and cryptocurrencies. All this also affected the financial system and also affected such an axiomatic category as «money». In this paper, the authors prove the thesis that the changes introduced by digitalization in many areas of the economy have penetrated deep theoretical layers, affecting both the theory of money and the theory of economic development. Ideas have become widespread that countries that will hesitate to create digital currencies and regulate cryptocurrencies will eventually lag behind in economic development. In general, the emergence of digital assets makes one think about a possible theoretical rethinking of money, its nature and meaning. As further evidence that the speed of the market processes makes economic theory rush, the authors argue that central banks are actively engaged in the creation of new digital instruments. The Bank of Russia also did not stand aside from these processes, raising a heated discussion at the theoretical and practical level with its reports about Digital Ruble.

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Keywords: Marx, Digital money