The Value of MoneyAnderson, Benjamin M. (Benjamin McAlester)
General
The Value of Money
Anderson, Benjamin M. (Benjamin McAlester)
Money
In the marginal utility scheme above outlined there is no place
for money, on the assumptions laid down. It is a scheme of barter
relations. The utilities which come into equilibrium are not
subjective-exchange-values, which, as Schumpeter, with Wieser, contends,
are the only subjective values money has, but are real subjective use
values--marginal utilities. The scheme, assuming as it does, perfect
exchangeability of all goods, with infinitesimal increments in
consumption, has no place for money. There really is no money service to
be performed. Schumpeter, indeed, speaks of money as a mere "Schleier,"
which does not touch the essence of the phenomena, and such it is on his
assumptions. In a similar situation, Professor Irving Fisher gives up
the effort to find a psychological explanation of the value of
money,[93] and offers the quantity theory as a mechanical principle,
additional to the psychological barter scheme. Schumpeter, however, does
lip service still to the need for a psychological explanation. His
answer runs in Wieser's terms--indeed, he attributes it to Wieser. The
_Preis_ of money[94]--Schumpeter does not use Wieser's absolute value
concept, but lets his value of money run in purely relative terms--the
price of money in goods depends on the subjective value of money. This
subjective value of money rests on the experience of each individual in
making purchases--rests on the prices of consumption goods, determined
by the relation between real income and money income. The circle is as
clear as day.
Public-domain text, read in full here on John Shaqi.
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