Suhr, D. (2009) Studies in contemporary economics: the capitalistic cost-benefit structure of money; an analysis of money’s structural Nonneutrality and its effects on the economy. Available at: http://www.sozialoekonomie.info/Info_Foreign_Languages/English_6/Suhr-Structure-of-Money.pdf (Accessed: 5 February 2017).
AUTHOR
Dieter Suhr
TITLE
Studies in Contemporary Economics
The Capitalistic Cost-Benefit Structure of Money
An Analysis of Money’s Structural Nonneutrality and its Effects on the Economy
DATE PUBLISHED
2009
URL
http://www.sozialoekonomie.info/Info_Foreign_Languages/English_6/Suhr-Structure-of-Money.pdf
DATE ACCESSED
5 February 2017
PLACE OF PUBLICATION
Germany
PUBLISHER
Springer-Verlag
PREFACE
This study is concerned with the time–honored problem of the change that is induced when money enters into the economy. As far back as Aristotle (Politics, pp. 1135–1143) the still–unanswered question regarding the dichotomy of the real–exchange and the monetary economy was raised. He contrasted Oeconomic, where
people strive to obtain real utilities (household management), to Chrematistic, where they use money to make more money (art of wealth–acquisition):
The true wealth consists of such values in use; for the quantity of possession of this kind, capable of making life pleasant, is not unlimited. There is, however, a second mode of acquiring things, to which we may by preference and with correctness give the name of Chrematistic, and in this case there appear to be no limits to riches and possessions. Trade does not in its nature belong to Chrematistic, for here the exchange has reference only to what is necessary to themselves. (...) In the case of Chrematistic, circulation is the source of riches. And it appears to revolve about money, for money is the beginning and end of this kind of exchange. Therefore also riches, such as Chrematistic strives for, are unlimited. (...) Oeconomic, not Chrematistic, has a limit (...;) the object of the former is something different from money, of the latter the augmentation of money (...) By confounding these two forms, which overlap each other, some people have been led to look upon the preservation and increase of money ad infinitum as the end and aim of Oeconomic. (Aristotle, Politics; as quoted in Marx, 1890a, p. 167)Still many economists are tempted to look upon the increase of money ad infinitum as an economic end in itself: though seemingly arguing in terms of real welfare, in effect their theories deal not with the real benefits to the members of the economic community but with the highest pecuniary return to capital, that is, to invested money or even to money held. This chrematistic view is reflected in the micro–economic ideal of unlimited accumulation of riches and the macro–economic ideal of unlimited growth of the national product.
Today’s advanced economic and monetary theory operates on the very sophisticated framework of theory–building and mathematical models. My concepts, I am afraid, are relatively crude in comparison to the conventional standards of elaboration. But they are intended to be instructive and revealing as regards the basic understanding of money, interest, finance, and capital. It has been observed that although monetary theory has been steadily refined, monetary policy has been less and less able to implement these refinements (Ott, 1988, p. 57). The fundamental problems remain unsolved (Schelbert–Syfrig, 1988, 323–324). To the
extent that these observations are correct, I might, after all, be able to make a small contribution to the theoretical illumination and practical overcoming of problems of the money economy with my relatively simple yet fundamental efforts. What I need most now is candid criticism and the aid of economists who, better than I, can go into detail and transform into appropriate formulae my laborious reflections, either disproving or confirming them.
Another reservation to be made right at the beginning is that although this is a study in monetary economics, the point of departure in the argument is not money but the capitalistic structure of western market economies. “Money”, as it is dealt with in the first chapters, indicates only the direction of my analysis. This procedure makes allowance for the fact that we are used to thinking in terms of capital’s efficiency or productivity, and of returns to physical or financial capital. By the end of our investigation, however, terms and language will have changed. The phenomena referred to as matters of capital will be described and treated in terms of money, or, more generally, in terms of the market economy’s transaction technology.
Thus many of the statements in the first chapters must be taken as provisional, and they will be questioned and reformulated in the course of the argument. This amounts to what might be considered a gradual translation from a language centered around capital into a language centered around money, with money proving to be the more fundamental category. Friedman (1956, p. 4), for instance, treats the demand for money as a special topic in the theory of capital. By the end of this book, I hope the reader will agree with this the other way round: the return to capital must be looked at mainly as a special subject of monetary economics.
This book also contains a section on the stamp scrip movement from the pen of Hans R. L. Cohrssen (Chapter 13.4). Mr. Cohrssen is well–known to those knowledgeable in the field of monetary science as coauthor of Professor Irving Fisher’s books Stamp Scrip (1933) and Stable Money (1934). I am extremely pleased that Mr. Cohrssen has unhesitatingly contributed his authentic report, a historical retrospective on cost–bearing money, since he himself so energetically supported Professor Fisher more than 50 years ago in the U.S.A. in the attempt to realize a concept of money the theoretical foundations of which are dealt with in this book.
I would never have undertaken these efforts without the initial impetus from Jobst von Heynitz, who put me on the right track. And I would not have continued them without the very early encouragement which I received from Professor Wolfgang Stützel. I deeply regret that he can no longer observe the outcome of his guarded support of my first cautious doubts and ideas. During my work I depended on the instructive criticism and advice of Dr. Hugo Godschalk, my private tutor in monetary economics and co–author of Optimale Liquidität. I am indebted to him for many ideas and insights. Professor Wilhelm Hankel urged me on by insisting on further clarification of the phenomenon of money as the “link between the present and the future” (Chapter 8.2). He and Professor Hans Christoph Binswanger and Professor Hans G. Monissen also pointed out studies that I had overlooked.
I could not have devoted so much time to monetary affairs had not others given me so much support and relief from a variety of other time–consuming activities. So I should like to express my gratitude to Mrs. Christina Tomasak and her successor, Mrs. Gisa Hofmann, for their diligence and care in the office and at the typewriter and computer, and especially to Mr. Peter Lawson of the University of Augsburg Language Center, who transformed my school English into readable and understandable text, while at the same time spurring me on by his precise questions concerning crucial points of my argument. Mr. Hubert Angstenberger, Mr. Armin Trautmann, and Mr. Wolfgang Tzschaschel took over a large share of troublesome work and helped ease my way to and through the relevant literature.
I also gratefully acknowledge the support I received from the Albert–Leimer–Foundation for the publication of this study in English.
Marianne untiringly endured her husband’s spending nearly all of his time in the monetary world. She had to substitute for him in relation to Gesche, Katharina and Helen: all of them have contributed to my monetary studies at the very least by doing without immaterial goods of substantial marginal value to them.
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