The Value of Money by Benjamin Anderson

Author:Benjamin Anderson [Benjamin Anderson]
Language: eng
Format: epub
ISBN: 978-1-61016-277-7
Publisher: The Macmillan Company
Published: 1917-11-06T16:00:00+00:00

1 Vide ch. 16 for a more precise statement of this part of quantity theory doctrine.

1 Purchasing Power of Money, pp. 169–170.

2 Ibid., p. 170.

3 Ibid., p. 171.

4 Ibid., p. 172.

1 Ibid., p. 172. Italics mine.

2 Ibid., pp. 174–181.

1 I call attention, in passing, to Fisher’s confusion, in this sentence, of “commodities” with “trade.” This occurs frequently in his argument. Cf. pp. 225–226, supra.

1 The capitalization theory is briefly outlined by Böhm-Bawerk, in the critical and historical volume of his Kapital und Kapitalzins (English title of the volume, Capital and Interest), in his criticisms of the theories of Henry George and Turgot. It has subsequently been elaborated, and much improved, by Fetter, in his Principles of Economics, and, more recently, has been restated, with mathematical formulæ, by Fisher, in his Rate of Interest. A good brief statement will be found in Seligman, Principles of Economics, ch. on “The Capitalization of Value.” Extensive use has been made of it by Veblen. More recently, it has been elaborated in the controversy over the theory of interest participated in by Seager, Fisher, Brown and Fetter, in the American Economic Review, 1912–13–14, and the Quarterly Journal of Economics, 1913.

1 Italics mine.

2 The criticisms I should make of the present formulations of the time-preference theory of interest, as presented by Böhm-Bawerk, Fetter and Fisher, rest on the individualistic method of approach, and are at many points analogous to the criticisms I have made of the utility theory of value. These criticisms need not affect the points at issue here. On the particular point involved, I agree with Fisher that the productivity theory gives a wrong answer.

1 E. g., Fisher, Purchasing Power of Money, p. 179.

1 This confusion is a companion of the confusion between volume of goods in existence, or volume of production, and volume of goods exchanged. The errors growing out of this confusion have been dealt with in ch. 13, especially pp. 225–226. Virtually all quantity theorists make both these mistakes.

2 The fundamental causation is psychological, and calls for a theory of value, as distinguished from exchange-relations.

1 Supra, chapter on “Velocity of Circulation.”

2 This distinction is clearly made and developed by von Wieser, in the two articles referred to in our chapter on “Marginal Utility.” It is used by him in criticisms of the quantity theory. “Der Geldwert und seine geschichtlichen Veränderungen,” Zeitsch. für Volkswirtschaft, Sozialpolitik und Verwaltung, XIII, 1904; discussions in Schriften des Vereins für SozialPolitik, 1909, no. 132. A similar distinction runs through J. A. Hobson’s Gold, Prices and Wages, London, 1913. The present writer had worked out the line of argument here presented before reading either of these discussions.

1 I have chosen maid-servants, to avoid complications of costs of production in the reasoning that might come if other labor, engaged in producing goods for the market, were selected. To tighten the argument a little further, I assume that the masters receive their monthly incomes on the first day of the month; that they pay the maids on the same day;

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