Nominalism and the problem of the value of money - G. Dashevsky

Nominalism too like any consistent theory of money, must fit into some more general conception of economy and therewith make its position plain in relation to the basic problem of money, the problem of its value.

It seems to me that we are not mistaken if we indicate the closest connection of nominalism with the psychological conception of economy, especially with the theory of the Austrian school.

The most prominent representatives of modern nominalism - Knapp, Elster, Bendixen, Liefmann and others are subjectivists 1 . Being, on the one hand, the logical extension of the theory of the Austrian School, which passed by until this day the problem of money, nominalism, on the other hand, has common roots with the theory of relational value of Bailey. "Value denotes consequently nothing positive or intrinsic, but merely the relation in which two objects stand to each other as exchangeable commodities 2 . Nominalists likewise don't recognize value as a quality immanent to the very nature of the commodity; the value of a commodity is something relative. But if the commodity fetishist Bailey considers value as the relation of things to things, the psychological fetishists consider value as the relation of men to things 3 , as a mental condition, caused by the influence of things on the evaluating subject's psyche.

The value of commodities does not lie in things, but in human presentations...

The value of things is a consequence of rational [/cerebral] human activities 4 .

In political economy there is no relation between things, but only a relation of things to people.

Therefore there can be no exchange relation between money and goods, but only a "relational assessment", so to speak, an individual relation of each person to commodities on one side, and to money on the other. From these relations, consisting in comparison of utility and costs, stems the economic relation of people..." 5 .

The logical consequence of the assumptions of commodity fetishist and psychological theories of relational value is the identification of price and value.

Arguing that exchange value is the relation of two objects, exchanged as commodities, Bailey takes as a starting point the "superficial form of exchange-value, that is the quantitative relationship in which commodities exchange with one another"6 .

Nominalists likewise proceed from the finished money form of the commodity. The problem of the formation in the subject's mind of the price of commodities is at the same time the problem of the fomation of their value. Thus, value and price are the result of the same mental act. The problem of value completely drops and is replaced by the problem of prices. Indeed, the terms "value" and "price" are used in most cases by nominalists indifferently.

Thus, the connection between nominalism and the theory of relational value of Bailey is undoubted.

Let's consider now in a few words the connection of nominalism with the theory of the Austrian School.

The Austrian school, proceeding from a single individual economy, from what is the favorite bourgeois economy Robinsonade, still somehow solved the problem of the direct exchange of goods. But how to explain the phenomenon of circulation, the phenomenon of money economy, what are the determining principles of the value of money - that is the question which the Austrian School until this day tried to bypass.

Indeed, if the value of commodities can be considered as the result of individual psychological assessment, based on the use properties of purchased goods, then what use value has money, as a result of what subjective psychological states does there arise in the mind of the subject a particular representation about the value of money 7 ? This question the Austrian School was not able to resolve.

Such a pillar of the theory of marginal utility, as Menger, adjoins, e.g., partially the metallists; for Menger, the value of money should follow from "the value of its material and coinage" 8 .

From the point of view of Menger the value of money is due to its use-value as metal, but at the same time as the use-value of other goods is transitory and disappears with the passage of goods from the sphere of circulation into the sphere of consumption, the use-value of money is inherently linked to its function as instrument of circulation.

Thus, the theory of value of metallic money of Menger is dualistic: on the one hand the value of metallic money derives from the technical-use properties of the metal, on the other from the function of money as an instrument of circulation. Even more unsatisfactory is Menger's solution of the problem of the value of paper money. The question of the value of paper money he simply bypasses and only in one place limits to the remark that the value of paper money "like all other property papers, found in circulation, derives from the value of right, connected with ownership" 9 .

Here value is derived from other values, also floundering still in explanation and definition, the economic concept is derived from the legal concept.

The gap between the theory of paper and metal money reveals the weakness of the reasoning of Menger, considering money from the psychological perspective not as an abstract unit of account, but as a commodity.

The question of how from the subjective mediated assessment of commodities (because in commodity-money economy between subject and object stands money) emerge objective prices, not dependent on the individual economic subject's relationship to things, but, in contrast, determining the psychological assessment of things, this question Menger also was not able to solve.

"Knowledge of prices, for the act of assessment, is necessary and sufficient just as much as the use of the unit of value is superfluous and useless (for measuring the value of a good. - G. D.)" 10 . But does this recognition not mean the bankruptcy of Menger's psychological conception, related with the commodity understanding of money, as a good, before the problem of the assessment of price?

In the same circle vicieux, as Menger, Böhm-Bawerk and other theorists of the Austrian school fall. For example, Böhm argues that the subjective exchange value depends: 1) on the objective exchange power of things , 2) on the nature and extent of use and on the property of the owner 11 .

In this way, the theory of money and its value in the Austrians is developed very unsatisfactory and represents the most vulnerable place in the system of the Austrian school.

"The theory of money of the Austrian School plainly reveals the entire theoretical barrenness of all their constructions — their complete theoretical bankruptcy" 12 . In the frame of this article we can not stop in greater detail at the theory of the value of money in the interpretation of the Austrian school. We shall only point out the fact that the failure of the psychological direction in political economy tied up with its vision with the phenomenon of money circulation, has caused among some proponents of the school doubt, whether the general theory of marginal utility is applicable to theories of money. Already Wieser expressively indicates the gaping hole in the theory of the Austrian school. Wicksell also stated the view that the conception of marginal utility applies only for the explanation of relations arising between the direct exchange of goods; that the relations in which money and goods exchange, it is completely unable to explain 13 .

Trying to bring the Austrian school out of this impasse, in which it came, nominalism especially strongly rejects Menger's conception of the commodity nature of money. In fact, it is easy to see that the recognition for money of the property of a commodity is in irreconcilable contradiction with the theory of marginal utility and must inevitably lead to eclecticism and internal discrepancies. Denying the substantial value of money and its commodity nature nominalism consistently develops the psychological conception of economy in theory of money - in this sense logically concluding the theory of the Austrian school.

***

In the "Critique of political economy" Marx gave a comprehensive and deep criticism of the theory of the "nominal standard of money", reborn in the XX century under the name of nominalist theory. Which objective phenomena of economic life constitute the subsoil of the nominalist system, where are its economic roots? It seems necessary to emphasize three moments here:

1) If nominalists of the era when kings spoiled coin, trying to gather in their crucibles its excess fat, justified their views on the fact of the historically only emerging gulf between the function of measure of value and the function of means of circulation, the nominalists of the XXth century take as the basis of their theory the juridical form of this fission of money - paper money.

We know what a strong influence on the nominalists (in significant degree as well on Hilferding, Tugan-Baranovsky et al.) the existence was of the paper-money system in Austria. The inability of the commodity metal theory of money to explain the phenomenon of paper money circulation led to the other extreme - to the desire to throw the paper-money cover onto the essence of money, in its basis being materially congealed universal labour.

From the fact that money in its prominent functions can be replaced by signs, nominalism concludes that money in its own essence is only a sign and can not derive its value from its nature, as commodity. Contrasting money to commodities, as two poles mutually exclusive to each other, nominalists refuse to understand that the contradictions of the commodity can be solved with money only if it itself is a commodity. Nemo contra Mammon nisi Mammon ipse.

2) The other moment, besides the growth of paper money currency in all the capitalist countries, is the unprecedented development of international and inner-economic moneyless[/non-cash] payment, giro circulation. The separation of money into its symbolic form of existence takes place at a higher level of socio-economic development, characterized by the growth and consolidation of credit relations.

How quickly non-cash payments develop in the era of monopoly capitalism, in the era of powerful growth of bank capital and bank transactions, is shown by the following information:

Transactions of the Reichsbank 14 (in billion GOLD MARKS)

1891 1913

Through giro-transaction:

81,1 379,2

Through settlement transactions:

17,6 73,6
____________________________

Total: 98,7 452,8

Cash payments as a percentage of total turnover:

24,7% 9.6%

Thus, the role of cash payments over 22 years fell 2,5 times. And it should be noted that in Germany, moneyless transactions are less developed than in England and the U. States.

In the U. States in 1871 payments with cash banknotes and metal coins made up only 12%, while 88% with checks and promissory notes. In 1881, all sorts of moneyless transactions settled already 92% of all payments, and then later, this percentage has still increased...

On the development of non-cash transactions during the war, England gives a wealth of material. Transactions by mutual settlements of London and provincial banks constituted:

1914. 14.665 mil. £.
1915. 13.408 " "
1916. 15.275 " "
1917. 19.121 " "
1918. 21.198 " " 15

But credit documents, which are means of moneyless operations - promissory note, check, remittances in their various forms and types, - appear at first glance only like an ideal set of abstract computing units. The development in the world economy of moneyless calculations unwittingly pushes bourgeois economists to the idea that money, by its very essence, is no more than an abstract counting unit, in which the value of goods and services is measured. And, in our opinion, it's not at all a coincidence that the prominent representative of "economic" nominalism, Bendixen, was at the same time a major bank figure.

Hence also the idea of the possibility of ​​the organization of a non-cash economy, of world kontokorrent operations, comptabilité sociale, in Schumpeter's expression, with its development leading to the idea of labour money. On the other hand, since the credit relation, outgrowing from the elemental capitalist economy, suggest the presence of organized connections, known agreements between participants of payment operations, the development and growth of non-cash operations calls forth in the nominalists the view of the world monetary economy, as a grand clearing house; and the idea of ​​money as a category of organized society. Circulation is replaced by an organized exchange, the money mass is opposed to the commodity "heap" 16 .

In this way, nominalism is not only a paper-money, a symbolic, but also a credit theory of money, which has found its further development and completion in the well-known credit theory of [L. Albert] Hahn.

That is why nominalists dissolve money in the concept of means of payment, and the latter in its turn (we will attempt to prove this with the example of Knapp) in the concept of money. This is the specific novelty, that nominalists introduced in the theory of the "nominal standard of money", that Berkeley, Lowndes, James Steuart et al. had developed in their time.

3) Finally, the third moment, related to the development of monopolistic tendencies in modern capitalism, is the presence of a restricting monopoly in the sphere of the pricing of metals. Hence the idea that money does not get its value from gold and silver, but on the contrary, gold and silver get their value from money. Hence the peculiar theory of the intervaluta course, which boils down to the point that the value of gold and silver is determined by the status of intervaluta parities, which in turn, is caused by the authoritarian exogenous action of the government 17 .

To this we limit our extremely abridged analysis of economic factors, which created fertile ground for promoting nominalistic ideas and return directly to our topic - the formulation of the problem of the value of money in the theory of nominalism.

***

Denying the commodity nature of money, nominalists consistently arrive also at the denial of the value of money. This follows already from the psychological conception of the nominalists, according to which value arises from the evaluation of the object by the subjects as consumer of the goods.

But since money is not a consumption good, because the essence of it - is not a material substance, but an abstract unit of account, it is impossible also to establish an independent value relationship between money and people 18 . The problem of the value of money is either completely eliminated (Knapp), or finds resolution for itself in the attempt to derive the value of money from the value relations of the whole commodity world opposing it (Simmel, Schumpeter, Bendixen). However, not recognizing an independent value for money, nominalists see themselves forced to reconcile their view with the real fact that money nevertheless measures the value of commodities. But how can you measure a certain property, common to two objects (in this case value) by a body, which does not possess this property? In fact, can one measure the length of any object by a body, not possessing the property of extention? A man who showed a willingness to measure a given period of time not with hours, but with yards, would be considered insane. But how to take nominalists, who consider it possible to measure the value of two objects by a substance devoid of value?

Hic Rhodus, hic salta. And it must be said, that, despite the utilization of the theory of proportional measurement, the theory of relational measurement, nominalism jumps over this conundrum by smashing its forehead to pieces.

Still Jean Buridan in his work published in 1489 "Quaestiones super decem libros ethicorum Aristoteles ad Nicomachum" claimed, that for the measurement of objects it is not always necessary to use things, having the same properties as the measured items.

An ounce measures a weight, a quarter - a barrel of wine, a cubit - a scarf, etc. On this Aristotle speaks in the tenth book of his "Metaphysics". These measures exist of the same property with the measurable things... Otherwise is the case with the measurement of alike relations. (Italics mine. -G. D.) E.g., motion can be defined as space, and also time, because if the motion a happens in time b, but the motion c in time d, then we conclude: a : b = c : d or, rearranging the members of the proportions, a : c = b : d. If time b is twice as long as d, then also motion a is double motion c.

In an equal way can result the instance, when motion is measured by extention. So, I would argue that human need measures objects of exchange by similar proportion, and not by the quantitative way of their comparison 19 .

Thus, in order to measure the relative importance of two values[valuables/quantities], we do not need to directly measure them by a scale of the same property. The latter would be necessary only to measure absolute value; for our purpose it's enough to know the ratio of two different values, that are qualitatively different from the first two, but conjugated with them by a known dynamical dependence.

From the contemporary nominalists the most original proponent of the theory of "proportional measurement" of the value of goods is Georg Simmel.

Let's consider in some more detail the reasoning of Simmel. Simmel refers to the well-known psycho-physical law of Weber and Fechner (in order that the intensity of a sensation may increase in arithmetical progression, the stimulus must increase in geometrical progression). Here the relative magnitude of sensations is measured not by comparing them directly, but by order of proportional connection to the relations of stimuli. "The quantities of different object can be compared only if they are of the same quality; wherever measurement is done by direct comparison of two quantities it presupposes identitical qualities. But wherever a change, a difference or the relation of two quantities is to be measured, it is sufficient for their determination that proportions of the measuring objects are reflected by the proportions of those measured; and there need be no qualitative identity of the objects." 20 .

Let's consider the arguments of Buridan and Simmel.

First of all about motion. Motion occurs in space and time. To measure motion, is possible therefore by both time and space. The ability to measure is already given by the objective fact of real unity of motion, of time and space. Movement outside time and space is a contradictio in adjecto, unadulterated nonsense. Buridan, strictly speaking, is not referring to motion, as such, in the unity of motion, but the measurement of time in relation to the space, traversed by the moving body.

The possibility of measuring the relationship of space related to time is due to the presence of a known regular connection between the two - qualitatively different - proportions; this regularity is based, as we have already pointed out, on the fact that like the relation of space, the relation of time is a different aspect of one and the same substance - motion. We have here a difference in unity.

Let us turn to the psycho-physical example of Simmel.

For the idealist Simmel the phenomenon of psychic life covered, of course, by a mystical shell, appears to be something substantially different from the effects of the material world. For Simmel, the motions of matter and the state of consciousness are "the most heterogeneous objects we know; the two poles of the world view which neither metaphysics nor natural science has succeeded in reducing to each other" 21 .

Simmel does not understand that the relation of stimulus can only measure the relation of sensation because between the one and the other there exists some regular connection, due to the fact that sensation, as well as stimulus are forms of the same substance - matter. The ability to measure the relative magnitude of sensation with proportions of stimuli is given by the fact that in nature, objectively, there is a real regular connection between changes in the magnitude of sensation and changes in magnitude of stimulation - the first magnitude as function of the second. No one would dream of measuring the relation of the power of turbine generators with the relation of the amount of shoes or with the relation of the amount of eaten pies, as between these series there is no dependence at all.

What regular connection exists between money - the measuring substance and the value of commodities? Let's see how Simmel approaches this issue.

Based on the presuppositions of the quantity theory 22 , Simmel puts forward the following postulate: "If the commodity n relates to the sum A of all saleable goods, as the money unit a relates to the sum B of all available money units, then the economic value of n is expressed by a/B" 23 .

In the equation n: A = a: B, where n is the value of the commodity, A - the sum of the values ​​of all commodities, a - the price of the commodity, B - the sum of all commodities, - the relations of value mechanically oppose the relations of price. It's completely unclear what real connection exists between value and price, the sum of the values ​​and the sum of prices, which would give the right to measure the relation of value by the relation of price.

This connection Simmel does not indicate, and can not provide because social labour time, the real substance of both relations he does not understand.

However, trying to fill this gaping hole, Simmel finds, that "it is sufficient that both play a part in human life, within the system of men's practical ends, for the quantitative modification of one [money] to become an index of the other [quantitative modification of goods]" 24 .

This wording is extremely vague and explains absolutely nothing.

But Simmel has to overcome one further difficulty. Usually, under relative measurement of two magnitudes by order of proportional connection with the other two, qualitatively different from the first two, magnitudes, the latter appear as constant, for the given case fully determined magnitudes.

In the expression n : A = a: B, i.e. the sum of the price of all commodities has a magnitude, changing literally every minute, depending on very complex and multiple factors. This alone speaks against the the assumption of the possibility of measuring the proportions of value with proportions of prices. But there is another snag.

How do A and B, the sum of the values ​​and the sum of prices, magnitudes, empirically not recognized at all, find their reflection in the stated proportions?

Simmel also here tries to find a loophole.

The fact that we empirically do not at all imagine to ourselves the quantities A and B, is explained, according to Simmel, by the fact that changes of the sum of prices and the sum of values "are not easily observed and we are not conscious of their function as denominators; we are exclusively interested in the numerators n and a for each individual case. Thus, the idea could emerge that n and a correspond to each other in some absolute and direct way; and if this were so they would indeed have to have some identitical quality"... The reason for this is that "only the distinctive features of each phenomenon, the absolute individuality, enter our consciousness, while the general and fundamental elements remain unconscious. Between these two extremes, there exists at various levels those points or aspects of the total phenomenon upon which the greatest attention is focused. In general, it may be said that theoretical interests direct awareness more to generalities, practical interests more to the specific features of things" 25 .

Let's agree for a moment with the reasoning of Simmel. Let's assume that the proportional measurement of the value of commodities is a mental process, mediated theoretically in the interests of our "greatest attention [/higher consciousness]." But how in reality does this process happen, how does this reduction of the individual to the universal happen? On this Simmel does not give a response.

To relate some phenomenon to that which takes place beyond the threshold of our consciousness, does not yet mean to explain the phenomenon. Only a single negative feature does not go far. The Marxist theory of political economy also argues that the individual boils down into the universal beyond the threshold of human consciousness, but besides this it has an explanation of that real process, by means of which occurs the equation of the individual numerator units of labour expenditure to the common denominator - the empirically not perceived social labour time. The gulf drawn by Simmel between commodities and money, the measured and the measuring substance, is transferred by Simmel into human consciousness, but the announcement of the riddle of the money form of value by a psychological phenomenon still does not mean to solve this riddle.

The denial of the substantial equality of money and commodities leads Simmel to the inability to explain the historical origin of symbolic of money from commodities. Although Schumpeter also argues that "the historical origin of the value of money lies in the value of the money commodity" 26 , such a statement clearly contradicts the presuppositions of nominalism.

The enigmatic leap from commodity to money, from the qualitative amount to pure amount is transferred here from the plane of pure logic to the plane of the historical-genetic. If nominalism could safely make this jump, the riddle of the equivalent would have been disclosed. The historical evolution of money towards its replacement by symbols of money, money surrogates, could be understood only from starting from the proper representation of the mutual correlating functions of money, declared by Simmel from the point of view of marginal utility.

However, although money in its development also seeks to obtain the character of pure symbol, but does not fully achieve this, because, according to Simmel, the atom of the own material of value, embedded in money, is necessary, with the type of imperfection of our knowledge, not comprehending still the much more accurate determination of the proportions, for the substantial equality between the measuring and the measured to become excessive.

Thus, Simmel insurgent with fire and sword against those who claim the qualitative equality of value and prices, money and commodities, has himself come, albeit in the form of minor concessions to the "atom" of substantial value, to the negation of the ideal and abstract nature of the money unit. A more clear bankruptcy of nominalism in the conception of Simmel is found if one turns attention to his previous formula n: A = a : B. Since the total amount of the price - B, regardless of the deviations of the price units from their underlying values, is always equal to the value of the entire mass of commodities - A, then also n = a, i.e. the value of the commodity is its price.

Logical circle finished! In an effort to prove that money does not comprise a single atomic value, i.e. that prices, as the expressed ideal counting function of money 27 and the value of the goods are incommensurable, Simmel in fact did not only arrive to the proof of commensurability, but also their identity. A wonderful illustration of our earlier assertion that "logical consequence of the assumptions of commodity fetishist and psychological theories of relational value is the identification of price and value."

The problem posed by Simmel, - of how money, having no intrinsic value, can measure the value of goods, how the transition of qualitative amount - value to a numerical amount, an abstract number - money, this problem represents the philosopher's stone, in search of which the nominalist sages inevitably become tangled in internal logical contradictions.

Let's take the case of Bendixen.

Like in Simmel, money for Bendixen does not have value. "That what we call the value of money is only a reflective presentation, derivative of to us all known price" 28 .

"At the same time, as the assessment of the value of one thing happens, judgments are made about its relation [ratio] to all other goods. But one value is not determined by itself, but is defined by its relation to other values. Thus, the world of values is a boundless chain of value relations. For comparison of several relations it's necessary to reduce them to a common unit of account. Everyone knows how to deal with a large number of fractions with different denominators. Lead them to a common denominator.

A fraction is nothing other than the relation of two magnitudes (the numerator and the denominator). Just, like the way of bringing to a common denominator solves the relation of numerators to different denominators and the numerators come into a new relation with the common denominator, so also the value are detached from their relations to each other and lead to a common denominator, allowing mutual comparison of an unlimited number of values. This work is done by money"...

"Money is the common denominator of all values" 29 . The analogy with the reduction of fractions to a common denominator does not hold water. First of all, it is entirely unclear how the value denominators in value relations transform in denominators of money. If we take the reduction of fractions to a common denominator then in fact both common denominator and all the other denominators are commensurable, because they all express a determined sum of abstract numerical units.

But in what is expressed the commensurability of value ​​denominators and the common money denominator? On the contrary - the money denominator - for Bendixen - does not contain a single atom of value, is an abstract number; the value ​​denominator expresses a known qualitative, and not an abstract number. On the other hand - common denominator is comparable with all the new numerators, formed by bringing the fractions to a common denominator, because they are all different amounts of the same substance, number. This is not necessary to assert, however, with respect to the money denominator, because, in the opinion of Bendixen, its substance is number, while the substance of the value numerator is value.

How artificial and contrary to reality the substantial separation is of money from commodities, is shown by the fact that in another article "Vom Gelde als Generalnenner" (On money as a common denominator) Bendixen actually abandons his assumption and comes to the recognition of the substantial unity of money and commodity.

"Imagine to yourself that money as means of payment and unit of value has disappeared, and all values ​​are expressed in their relation to other values - one is allowed to conceive this, although it hardly could really happen. Then we would get an unlimited number of relations or fractions with different denominators. One gives an estimate of her dress in boots (D/B = 5/1), another in annual salary (D/AS = 1/7 = 0,143/1). In these cases the value denominator for the value numerator - dresses, is in the first case - boots, in the second - salary. Similarly, owner can express the value of horses in pigs or calves and vice versa. But all these relations are not comparable with each other until they are lead to a common denominator and the latter is used for the expression of the value of all other goods. Then one can take a metal, for example, silver, and express the value of goods in a weight of this metal. The numerator of dress discards the denominator boots and as a denominator takes 1 pound silver (D/lb r.=2/1); boots, make up in value 2/5 lbs silver, give such a relation: B/pounds. r.= 0.4/1; the horse relates to the 1 lb silver as 10:1, pigs as 3: 1 etc. In this way, using a common denominator - 1 lb silver - the value of all goods are presented in connection with each other and gives thus a proportional number (2:0,4:10:3) denoting the ratio of values ​​of the numerators to a common denominator - pound of silver, which, as unit of value, is the number of 1" 30 .

The fundamental error in the reasoning of Bendixen is that 1 lb. silver is not a common denominator, but the generally accepted unit, the universal equivalent. This unit is only the prerequisite for the common denominator. This is evident from the following considerations: the ratio of £ 1 silver is determined; for boots as 2:5, for horses as 10:1, for pigs as 3:1; we get thus the fraction: 2/5, 10/1, and 3/1. Bringing them to a common denominator 5, we get: 2/5, 50/5, 15/5; the ratio of these quantities will correspond 50 : 15 : 2. The resulting numbers in Bendixen: 2 : 0,4 : 10 : 3 are still not brought to a common denominator, because among them there is a decimal fraction. The unit of value - 1 lb silver - is formed here not by the number 1, but the number 2.

The above example of Bendixen has shown well, how with the development of relations of exchange from accidental and simple form value grows the expanded and universal form of value; but the logical leap from the denominator of the value to the abstraction he failed to manage, because 1 lb Silver is not an abstract, but qualitative number. In the given citation Bendixen has disproved himself: he showed that the money is not at all a common denominator, that firstly, "it is not money that renders commodities commensurable" 31 , and secondly that money is not an abstract but a qualitative amount.

Based on the denial of the substantial value of money, Bendixen endeavors to prove that changes in the prices of goods can lie on the side of commodities only, but not money.

If the "value" of money is only a reflection of the reflecting value of the goods, then for business calculations this or other height of price level is indifferent. "For business life this phenomenon (change in prices. - G.D.) does not exist. Rising or falling value of money is only important for monetary credit operations and fluctuating interest rates reflect fluctuations of money prices... Changing purchasing power of money is only the object of theoretical studies, but not business calculations" 32 . Recent facts from the war and postwar era convincingly shatter the arguments of Bendixen.

It was exactly in Germany in the era of the rapid fall of the German Mark that the purchasing power of money was not only an object of theoretic research, but also an object of the most prosaic business calculations. All the speculation on the fall and rise of the rate of the Mark, all concluding trade deals precisely also had for speculative object the changing purchasing power of money.

And in valuta dumping, which gave the possibility of German industry, in spite of the general crisis of the economy, in spite of the heavy plight of the broad masses, to work with a full load on the world market, - had this currency dumping really meaning only for lending operations, was it indifferent for industrial capital?

The facts contradict all those conclusions that lead Bendixen to deny the substantial value of money.

Over the problem of equivalent unsuccessfully fights also another prominent representative of modern nominalism - Karl Elster.

For Elster the unit of value is an amount, a number; money is also a number 33 , but at the same time also "the ability to participate in the social product" 34 . But the one contradicts the other thing, as "participation unit" (Beteiligungseinheit) is not a pure amount, but a qualitatively determined actual unit.

To this comes, however, also Elster himself: "A unit of value is a quantity, a number; but the possibility of participation is a substance, quantitatively expressed through the unit of value" 35 .

Here Elster runs into a clear contradiction: money is at once a pure and substantial amount!

Trying to break the vicious circle of internal contradictions, Elster in the end absolutely abdicates from the search for a connection between commodities and money.

The problem of pricing, the problem of the growth of the subjective in the objective is declared unfathomable. "From values, as subjective perception there is no bridge to prices, as objective numerical expression."

Such a statement - essentially - denotes the recognition of the full bankruptcy of the theory of nominalism before the mystery of the equivalent form of value.

***

Before proceeding to the statement of the problem of the value of money in the system of Knapp, one should ask the question: whether this system in general is the subject of economic analysis?

Such a question, perhaps, may have seemed vacuous, if we would not have with us the widespread understanding about the conception of Knapp, as a purely legal, juridical construction. There could be nothing of economic events, of theoretical economy in common with this conception. This is the widespread opinion, to which adjoin most critics of Knapp - the metallists, the Marxists and even some nominalists. With a light hand Mises divides all theory in catallaxy and acatallaxy, i.e., theory dealing with phenomena of exchange, and theory completely ignoring the latter and built on pure-philosophical, legal, ethical, etc. premises; for the theory of Knapp the name acatallactic is firmly established. The nominalist Liefmann speaks about the work of Knapp as an "absolutely not economic, pure-legal structure" 36 .

In another place we find in him the following - unflattering - characterisation of the Knappian system; "Knapp's ideas are not economic theory, they are nothing but a false (falsch), i.e. merely legally validated confirmation of correct inductive and historical observations" 37 .

With no less force also Block pounces on Knapp, criticised in his book on Marx's theory of money. "The state theory of money is a juridical and historico-legal, but not economic theory. It appears at least from this that the doctrine of the validity (Geltung) of money took the central place in Knappian study, while the central problem of economic theory of money - the value of money Knapp completely ignored" 38 .

Another author, a Soviet scholar, totally denies to the theory of Knapp any connection with nominalism and offers to see it apart from economic nominalistic theories, as a theory purely of law.

The economic formulation in Knapp is so helpless that it can hardly claim serious scientific meaning, in addition tallies little with his whole system ... This obliges us to recognize that in Knapp there is no theory of nominalism. His rightly called state theory, is a system of means of payment in general and the most important of them is money, particularly, from the perspective of the state, the comprehensive determination of the dependence between the development of payment transactions and the state 39 .

If the case was rightly put by the above named authors (to some extent also Hilferding), then attempts to subject Knapp's system to critical analysis, we would need to completely abandon. You can only criticize there, where there is common ground. In as much as Knapp's theory recognizes only juridical, dogmatically legal significance, in so far also the criticism of this theory is only possible on the basis of law, and there the economist has nothing to do. Knapp's system should be equated to the system of Stammler, and subjected to fire from the heights of the general sociological standpoint of dialectical materialism, dissociating itself in this way from the field of study of Marx's theoretical economics.

This interpretation of Knapp's theory seems to us deeply wrong, and based largely on misunderstanding. Partly guilty of this is also Knapp himself, who sticks out in every possible way puffs out the legal nature of his vision and at every step distantiates from the annoying proclivities of market forces. This does not hinder, however, that the economic element, ousted by kapp at the door, unbeknownst to him burst through the window - and this is due to the internal inconsistency of Knapp's system, the vicious circle, in which the notorious "iron logic" of the creator of the theory of the state money hopelessly is entangled 40 .

In this case what interests us is not that the theory of Knapp is a state theory of money, but that it is what is called a nominalist theory of money. The emphasis on the rule of law and the state is not essential for nominalism. On the contrary, in this respect, Knapp is closer not to the Austrian, but to the historical school. Theories of Richard Hildebrand, Diehl, partly Stefenger and others suggest that, based on the historical-legal point of view, you can arrive - consequently or eclecticly - to the recognition of the substantial value of money.

In Knapp's book the economist is not interested in the teaching on valor impositus, rooted in the dark Middle Ages, but the doctrine about the nominal unit of value. Therein just also lies the peculiarity of the state theory of money, that Knapp throws on himself a chartal cloak in order to sing serenades under the windows of nominalists. Chartalism is used here to cover a logical confusion, resulting from the inability of nominalism to solve the mystery of the equivalent.

We are not interested in this case in the question whether Knapp put consciously before himself this puzzle, whether he was trying to resolve or just escape from it; important is that the thought of Knapp moves in the orbit of the same contradictions with the the antithesis of money vs. commodity, in which the thought of Simmel, Bendixen and Elster moves.

From this precise point of view we also attempt - out of necessity extremely brief - to cast a retrospective glance on the construction of Knapp.

Again, I emphasize: from the fact that Knapp's theory of value of money is not developed, not emphasized, it does not at all follow that he has completely no theory of value ​​of money.

The theory of the value of money is constructed subconsciously; it is not made explicit; it is not completely thought out. For if it were consistently thought out to its logical conclusions, it would become obvious that it is self-contradictory 41 .

***

Already in the first chapter, Knapp faces a difficult task: how did the transition occur from real pensatory 42 means of payment that circulated in exchange back in the early stages of human history, to the developed ideal means of payment, money; how to make the leap from qualitative amount to pure amount, number?

We have already mentioned, that for nominalism this problem is unsolvable, because the puzzling somersault from commodity to money, under which nominalism smashes to pieces its forehead, is not eliminated but only transferred from the pure-logical sphere into the historico-genetic sphere.

Arguing that in its historical genesis the means of payment is the exchange of goods and owes its origin to the domain of exchange 43 , Knapp had to in the very first pages to fall in clear contradiction with himself. The circulatory property 44 ; the constituted conception of means of payment 45 , just recognized by an institute for social intercourse, Knapp has transformed already in its historical genesis - in a phenomenon of law of order46 . It follows, tender is a phenomenon of the rule of law.

So, pensatory tender, the most ancient and primitive form of tender, in Knapp - at one and the same time is exchange of goods - a phenomenon of social life, a system of real units of value and a phenomenon of the rule of law, a system of abstract counting units, decreed by the state.

In order to cover up this gaping contradiction in the definition of the basic concepts of his system - the concept of means of payment and to obscure the transition from real to nominal units of value, that nominalism can not afford to explain, Knapp is forced to secretly erase from the concept of means of payment the for it circulating commodities, to oppose to it the exchange of commodities. This is achieved on account of that as the non-pensatory, and also the more advanced means of payment - money - is dissolved in the concept of rule of law, the exchange of goods and the hidden in it traded goods unnoticedly for the reader is detached from means of payment, with which it still on page 3 was integrated.

Instead of commodity exchange on the stage enters debt, the real unit of value is replaced by a nominal one.

Means of payment are declared means of repayment of debts. But, debts emerge in the result of economic exchange, i.e., in the result of the movement of commodities. Means of payment, as mouthpiece of debt obligation, only therefore also can be read per units of value, because goods still before the conclusion of a credit transaction were equated to means of payment, expressed in units of value. Thus, Knapp again encounters the cursed question - "mene tekel peres" of nominalism - the problem of expressing the value of goods with the value of money and escapes out of this trap only, cleverly sweeping the tracks, by replacing the economic circulation of goods with the legal fiction of duty, as a purely legal concept, involving the concept of state and the amphitropy 47 of the members of the payment organization.

Thus, in contradiction with the earlier advanced position on the socio-economic nature of the means of payment, Knapp is forced, in order to cover up the logical leap from real to nominal unit of value, to avow that the development of means of payment is done in the depths of the rule of law, the rating of the money unit 48 , the state, debt, means of payment - in essence are logical categories.

Thus, Knapp is forced to dissolve the means of payment in money, which leads him as a result to the clear absurdity: money exists even before it has emerged, because, if the means of payment under autometallism 49 is a phenomenon of the rule of law, if the unit of value also here is nominal, if it proclaimed by the state, then what is its difference from chartal 50 means of payment, i.e. from money?

It's clear, the issue here is that in Knapp the ends do no meet. Recognition of a nominal unit of value also under autometallism upsets the whole genetic scheme of Knapp. In addition to the contradiction with the determination of the circulatory property and means of payment, the failure of nominalism to resolve the problem of the value of money brings in Knapp in a vicious circle in the determination of the relationship between means of payment and units of value.

There are three definitions of means of payment in Knapp:

1) "A means of payment is... a movable object which can in any case (Jedenfalls) be used for circulation" (S. 6). A thinly disguised tautology! What does it signify to be used for circulation? This signifies to be used as a means of payment.

2) "A means of payment is... a movable thing which has the legal property of being the bearer of units of value" (S. 6). Again in this definition, the concept of unit of value. But what is the unit of value? "The unit of value is nothing but the unit in which the amount of the payment is expressed" (S. 7). So, a great vicious circle! Means of payment is derived from unit of value, and the unit of value from the means of payment.

3) Finally, on page 140 we find an indication that for the conception of means of payment "physical transfer of property is not necessary; sufficient is the legal transfer of demands, expressed in units of value ​​and turned to a central office." Not to mention the inaccuracy of this definition in essence 51 , here again the constitutive moment is the rating of units of value, which in turn, are deduced from means of payment.

Thus, the sphinx of the equivalent form of value, the riddle which Knapp proved unable to solve, avenged - and avenged brutally already in the first chapter in the following points:

a) contradiction in the determination of circulatory property;
b) contradiction in the determination of means of payment;
c) vicious circle in the determination of the ratio of means of payment and nominal units of value.

In the outlined contradictions, due to lack of understanding of money and goods, is in nuce the whole contradiction of Knapp's system, deployed also further in the construction of the genetic and functional schemes.

For lack of space we can not enter into detailed look of both schemes in terms of the development of the basic contradictions, arising from the nominalist conception of the problem of money in Knapp.

We note only that the attempt of Knapp in cash money - primary link in the development of chartal means of payment - to throw a bridge from the real unit of value to the nominal ends in failure. There is no transition from pensatory to chartal tender in Knapp.

As concerns the functional scheme, the scheme, characterizing the modern constitution of means of payment, then, the effort all the same, regardless of the many contradictions, showing that money - is created by the rule of law, that its essence is a nominal unit of value, Knapp with the first thing throws overboard the for him uncomfortable ballast - accessory money 52 .

Accessory money is recognized as commodity.

But since money can not have value 53 , since it can not be a commodity54 , then, being consistent, Knapp would have to deny accessory money, as money, i.e., to go to the destruction of the functional scheme. There remains the last stronghold, - valuta money 55 , in which, as in a focus, concentrate all the nominalist rays of Knapp's system. According to Knapp, valuta money, as opposed to accessory money, can have neither agio, nor disagio, can not be a commodity, can not have value 56 .

But how can you talk about measuring the value of accessory money valuta, if the latter does not posses value? Knapp himself falls into clear contradiction, recognizing that the silver guilders were less valuable than paper guilders (formerly then in Austrian valuta money) 57 .

If silver guilders were less valuable than paper, then paper was more valuable than silver. But how can one say that the paper guilders - valuta money - is more valuable than silver, denying to it the property of value?

In the same contradiction Knapp runs, dividing the transitions to new valuta money in rising (steigend) and falling (sinkend) 58 . The concepts of "rising" and '"falling" suggests a comparison of the old currency of money, become now commodity, and new ones, being in the opinion of Knapp, a system of abstract counting units. The comparison of old and new valuta money, gives Knapp the possibility to assert that the new valuta money is higher or lower than the old, assumes the substantial equality of both types of money. One could have pointed out one more contradiction in the formulation of Knapp: for example, in the chapters about choosing valuta money, the transition to new valuta money etc., Knapp actually rotates inside a vicious circle - the nominal unit of value is derived from price, already read at nominal unit of value 59 .

The main pivot of all above mentioned contradictions, stated - of necessity - very briefly and concisely - is the denial of the substantial unity of money and commodity, the denial of the value of money, as a property, immanent to the very nature of the money commodity.

Original title: Номинализм и проблема ценности денег - Г. Дашевский, Под Знаменем Марксизма

• 1The contention of this may seem somewhat paradoxical for Knapp, but we ignore in this case the objective legal constructions of Knapp and emphasize only those aspects that bring him together with the, so to speak, "economic" nominalists, and these aspects, according to us, boil down to the deep psychologism of Knapp in the conception of economic phenomena. It's hardly necessary to specially prove that in the conception of the problem of value and even the conception of the exchange rate ("The inter-valutary exchange... is a psychological phenomenon", Knapp, Staatliche Theorie, 1923, S. 205 [English edition p. 221]) Knapp is a proponent of the psychological conception of economy.
• 2Bailey, Critical Dissertation, p. 4, 5, cited in Theories of surplus value, v. III, p. 119, ed. 1924
• 3Explaining his conception of value in § 20 of "Staatliche Theorie" (An ill-fated subchapter! The epigones of chartalism try to present it as an artificial and failed construction of Knapp, not having any connection with his conception as a whole), Knapp refers to § 8 of Schopenhauer's "Grundlage der Moral." "Each 'worth' [value] is a valuation by comparison in two ways: First, it is relative, since it exists for some one (dann erstlich ist er relativ, indem er für jemandem ist), and secondly, it is comparative, as being compared with something else, and estimated accordingly. Severed from these two conditions the conception value loses all sense and meaning."

  From these excerpts it is clear that nominalism is inclined to synthesize the presentation about value, as people's attitude towards things, with the presentation of value as a relation of things to things (Bailey). In fact, as we will show later, nominalism knows only the second derivative relation, because the basic relation includes in itself the riddle of the universal equivalent, completely incomprehensible for nominalists.

• 4Bendixen, Geld und Kapital, 1912, S. 21.
• 5Liefmann, Geld und Gold, 1916, S. 101. Of course, neither Bailey, nor the nominalists are right. The value of commodities is not a relation of things to things or of people to things, but the relation of people to people. In this sense the recognition for the commodity's value of the property of "absolute" value does not at all mean that value is really absolute. Absolute value also is relational but in the sense that it expresses the relation of individual labor time to the labor time socially necessary for the production of the commodity. But it is absolute in the sense that its existence does not depend on the material properties or the amount of certain commodities; value is the spirit of the commodity, the change of its bodily shell is the change of its form of manifestation. In distinction to the infinitely varied relational form of its manifestation, value, as social substance of the commodity, is absolute.
• 6Theories and surplus value, III, p 118, edition 1924.
• 7"The use-value of gold as money is to represent exchange-value." (Marx, Critique of..., 1923, page 108.
• 8Menger, Grundsätze der Volkswirtschaftslehre, 1923, S. 260. [Principles of economics]
• 9Menger, ibid., S. 260.
• 10The same, S. 297.
• 11Austrians, as well as nominalists, though in statements start from pure-psychological subjective conception of economy, without noticing it will accept in their conception social, objective elements. Like Menger and Böhm-Bawerk, the nominalist Liefmann puts individual psychological assessment of goods in dependence on the objective existing money price of commodities.
• 12N. Bukharin, The Political Economy of the Leisure Class, 1923, p. 96.
• 13Sr. Wicksell, Geldzins und Güterpreise, 1898, IV, 16. So also pessimistically expressed Helfferich. While Mises, quite the contrary, wrongly believes that both assessments of money, based on "real" and "circulating" - to use the terms of Knapp - properties of money, can in equal degree apply the law of marginal utility (Mises, Theorie des Geldes und der Umlaufsmitel 1924, S. 101).
• 14According to Schulze-Gaevernitz (Die deutsche Kreditbank, Grundriss der Sozialökonomie, V Abt., II Teil: Bankwesen.
• 15Ja.M. Kuyerman, Non-cash payments. Financial Publishing, Moscow, 1927, p. 33, 34.
• 16Most clearly this is expressed in Schumpeter.

  "If, - Schumpeter writes, - in place of money, some central authority were really to issue receipt vouchers for productive contributions, and these receipt vouchers were at the same time claim tickets on the consumption fund of the economy, then we would have before us one of the possible forms of social clearing system (a comptabilité sociale like Solvay's). For this reason the monetary circulation is in its nature and main function in the market economy nothing but a clearing house which is both: I) automatic and 2) very primitive and subject to countless shortcomings and abuses. (Schumpeter, Das Socialprodukt und die Rechenpfennige in Archiv für Socialwissenschaft und Socialpolitik, 44 Band, 3 Heft, S. 637 [International Economic Papers, 1956, page 154-55]). Thus, the sole difference between signs issued by a central authority under organized economy, directly expressing claims to a certain part of the national economic consumers' fond and contemporary money, is the higher perfection of the first system to the second! With the above excerpt from Schumpeter it's not uninteresting to show the following quote from Knapp: "When we give up our coats in the cloak-room of a theatre, we receive a tin disc (Platten) of a given size bearing a sign, perhaps a number. There is nothing more on it, but this ticket or mark has legal significance; it is a proof that I am entitled to demand the return of my coat. When we send letters, we affix a stamp or ticket which proves that we have by payment of postage obtained the right to get the letter carried. The "ticket" is then a good expression, which has long since been naturalised, for a movable, shaped object bearing signs, to which legal ordinance gives a use independent of its material."(Knapp, Staatliche Theorie, 1923, S. 26 [p. 31 English ed.] ). The comparison of money with a ticket, with a certificate for determined concrete goods or services, shows the complete misunderstanding by the nominalists of the nature of money. Number from cloak-room, post stamp, etc. indicate our right to make certain demands to the central authority, issuing these obligations. "Labour money", personified directly with the labour expended by participants of the economy, would be such a ticket, testifying about the [?illegible?] representing known claims to the organ, managing the social fund. But this does not at all hold for money as such.

• 17This question was developed in detail in the article by A.B. Eidel'man "Nominalist theory of money and monopolistic tendencies" ("Socialist Economy" book IV, 1926 "Номиналистическая теория денег и монополистические тенденции"). It should be noted however, that the contradiction in the economic structure of capitalism causes a contradiction also in the nominalist theory of intervaluta courses. In international operations perform not only credit documents, read in ideal counting units, but also gold, serves for repaying the amount on the account balance. You can even say that in the era of monopoly capitalism, money practically performs primarily in the function of world money. Hence among some the idea of the possibility of an ​​ideally existing money in the form of kontokorrent operations, the view about money in the world market as about a commodity. Knapp does not notice what the fact, that on the world market the commodity nature of money breaks through its symbolic shell, shows about the fundamental difference between money and tickets. Money - if it were only a ticket - could be of any value abroad only by the agreement of governments, only in the case of the establishment of an international money system, similar to the universal postal union.
• 18"The question about the value of money is not the subject of modern books about money. If value is understood as purchasing power, then in reality the issue is about price, and not about the value of money. If, however, the subjective value of money is spoken of, i.e. of the psychological assessment of money by the individual, then again a mistake is committed; because such a psychological evaluation in practice doesn't exist; it exists only in the systems of the theorists of value. The so called evaluation (Wertschätzung) of money is nothing but the assessment of the goods which I get by means of money. Nobody perceives the value of money, as value independent of the prices of goods" (Bendixen, Geld und Kapital, 1920, S.30).
• 19Cited in Karl Diehl and Paul Mombert, Ausgewählte Lesestücke zum Studium der politische Oëkonomie, IV Bd., I Abt., S. 41, 1923 ed.
• 20Georg Simmel, Philosophie des Geldes, 1920, S. 103.
• 21The same, S. 89, 1900.ed.
• 22"We assume a very general relationship between the quantity of goods and the quantity of money, which is illustrated by the connection - often obscured and disrupted - between an increasing supply of money and rising prices, an increasing supply of goods and falling prices. (Simmel, Philosophie des Geldes, 1920, S. 104). This empirical perception of the quantity conception is extremely characteristic for nominalism. Both theories deny the substantial value of money, derive the value of money from the value of goods, identify value with price and limit the whole field of their research to the problem of changes of price of commodities, avoiding the cardinal question of assessment of price.

  To Bendixen's claim that the value of money is only reflective value, derivative of all known to us prices, subscribe with both hands also the quantityvists.

  Especially clear the connection between nominalism and quantity theory is shown in Schumpeter. Like Bendixen, Schumpeter sees the value of money or, otherwise "the purchasing power of unit income" derived from the value of all opposing to it goods.

  "Value of money can mean nothing but the purchasing power of the income unit. This is not the same as exchange value, nor is it based on use value. At the core of the concept of purchasing power is the concept of price: purchasing power assumes price" (Schumpeter, Socialprodukt und Rechenpfennige in Archiv für Socialwissenschaft und Socialpolltik, 44 Band, 3 Heft, S. 651 [Eng. ed. page 165]). Here is the barbaric mix of value and purchasing power of money, value and price of commodities. With the introduction of the category of money income unit Schumpeter can escape from the error of quantitative theory, as Wieser was unable to do.

  In what relation stands the sum of money income unit to the sum of the price of all commodities?

  "Given stationary (!) equilibrium, the money value of all consumer goods should equal the money value of all producer goods, and both identically equal the sum of all money incomes"(Ibid, S. 635 [Eng. ed. page 153]). It's easy to see that if the situation was as Schumpeter depicts, there never would be difficulty in the sale of goods, there would be no crises. Substituting a monetary by an exchange economy (and to this leads in the final light nominalism, as well as the quantity theory), Schumpeter comes to the vulgar banalities of the prince de la Science - Say.

  In our opinion, Schumpeter quite correctly stresses that "the basic idea of the quantity theory is not only compatible with the claim theory, but actually postulates the latter as its deeper justification, as Mill already had suggested" (Ibid. S. 649 [Eng. ed. p. 163]). The consequent nominalist has to be a quantityvist, the consequent quantityvist - a nominalist

• 23Simmel [1920], ibid., S. 106.
• 24Simmel, cit ed. 1900, S. 95.
• 25Simmel, ibid., S. 106. [1920 ed.]
• 26Schumpeter, Das Socialprodukt und die Rechenpfennige, - Archiv für Socialwiss. und Socialpolitik. 44 Bd., 3 H., S. 64.
• 27And precisely: to the function of account money the nominalists reduce the whole nature of money. The claim of Katzenelenbaum as if the "abstract-nominalist direction boils down the essence of money to its function of measure the value and dissolves to this function all the others" (Katzenelenbaum. Study on money and credit, Yaroslavl, 1922, Part I, page 29) is to us a wrong presentation if only already because the nominalist, does not realize the problem of value, erodes from price its substance value.
• 28Bendixen, Geld und Kapital, 1912, S. 16.
• 29Bendixen, S. 21, 22. But if the value occurs as a result of psychological assesment it is not clear why there exists a "boundless set of value relations." After all we do not put ourselves at the same time in relation assessment to all objects. The psychological point of view on the evaluation of the value of commodities, professed by nearly all members of nominalism without exception, advertised by them as the product of modern Western thought, in fact returns us to the medieval metaphysics of illusionism. Does not the view of nominalists on the assessment of value remind of the proclamations of Berkeley and Hume, does it not lead to the Cartesian "cogito ergo sum"? This illusionism, driven in Hume toward solipsism, to the dissolving of all the outside world to the "I", like also the illusionism of value of nominalism, stands in clear contradiction with the world, objectively existing regardless of our perceptions, with prices, objectively existing, regardless of how our "assessing thought" (der werfende Gedanke) relates to them.
• 30Bendixen, Geld und Kapital, 1920; article "Vom Geld als Generalnenner", S. 26, 27.
• 31Marx, Capital, Volume I, 1923, ed. "Proletarian", page 51.
• 32Bendixen, Geld und Kapital, 1912, S. 28.
• 33Karl Elster, Die Seele des Geldes, 1920, S. 46.
• 34As well, S. 86.
• 35The same, S, 95.
• 36R. Liefmann, Geld und Gold, 1916, S. 25.
• 37In the same S. 19
• 38Block, Marxsche Geldtheorie, 1926, S. 62. The critique of the Marxist theory of money in Block is based on the following argument: in the theory of money of Marx must be distinguished two theories of money: the first - philosophical-social - should be completely rejected, because "economic categories can not include philosophical content"; the second - an economic theory of money. Thus Block's position is the diametrically opposed position of Petrie, who, likewise distinguishing in Marx's theory two strings, considered as correct, not the economic, but the social-philosophical theory of Marx.

  The objections of both critics (their point of view closely recalls the views of Struve, Stoltzmann, etc., also seeing in Marx two theories), of course, are wide of the mark, since their main premise - the artificial division of the real unity of social forms and the material process of production - is at bottom false.

• 39A. Ugalov, The state theory of money in the work of Knapp and its attempt of economic justification with taxes. "Problems of theoretical economy", 1925, p. 286.
• 40Elster fully founded stresses, that already the very notion of payment and means of payment, on which the state theory of money is based - already these conceptions, leaving aside the impact which the state has on the financial system, have not only a dogmatic-juridical content, but include all important economic issues (Elster, Die Seele des Geldes, 1920, S. 2, 3
• 41Mises, Theorie des Geldes und der Umlaufmittel, 1924, S. 200.
• 42Its purchasing power is determined by weighing.
• 43"General exchange-commodity is... an institution of social intercourse; it is a commodity which has obtained a special use in society, first by custom, then by law." (Staatl. Theorie, S. 3). Thus, for rule of law here is recognized only the second, sanctioning meaning.
• 44The use of means of payment for production payment.
• 45"A means of payment is... a movable object which can in any case (Jedenfalls) be used for circulation." (S. 6 [Eng. ed. page 7)).
• 46"The use in exchange is a legal phenomenon, therefore, even autometallism is a legal form of means of payment." (S. 5 [Eng. ed. page 7)).
• 47The statement about amphitropy, i.e. about a constant ratio of debt obligations during the transition to the new unit of value, on which Knapp bases the rating [nominality] of lytric debt and unit of values, seems to us incorrect for the following reasons: a) Introducing new units of value, the state directly does not decree new monetary value of payments liabilities, the magnitude of the latter in units of new value ​​determines the reflective changes in the prices of commodities. That is why the adaptation to the new money units of payment obligations are always performed with a delay and unevenly, whereby the former ratio of lytric debt is violated. b) It is wrong, as if each member of payment exchange should be considered as both debtor and creditor. In the process of historical development entire classes and class factions get into the position of permanent debtors, others in the position of permanent lenders.

  The state usually acts as an advocate or opponent of one or other social group and seeks the introduction of new money unit not to support amphitropy, but to undermine it and greatly alter the ratio of payment obligations (English money reform in the late XVII century, which went to the benefit of the young British bourgeoisie, acting as the creditor of the government, war and post-war inflation, etc.).

  The desire of Knapp to put the state forward, as some construction above classes, whose supreme task is preserving the integrity of payments exchange, characterizes him as an apologist for the bourgeoisie, seeking to conceal the class character of the state. Equally wrong is also the statement of Knapp, as if the creator of the nominal unit of value, the force, turning amorphous pensatory means in formed chartal - money, was the state. The history of money circulation shows that before the state acted as a body proclaiming a determined value of coins, their shape, etc., this pleasant duty took upon itself (yes also now is taken in some countries, e.g., in China) any organization, directly arising from the economic exchange, any private person who enjoyed authority on the market (cf. Ernest Babelon, Les origines de la Monnaie, Paris 1897, p. 95, 96 etc; Helfferich, Das Geld, 1923, S. 39). Government intervention does not help Knapp to make the logical leap from real to the nominal unit of value, from money - commodity to money - symbol. To present as a force that created money - the state, is the same as to explain the creation of the world - with god.

• 48Rating of the unit of value, therefore, also lytric debt ... will exist eternally; it is related to any distinct means of payments" (emphasis mine. - G. D.), S. 15.
• 49Autometallism - to Knapp is a system of payment, when metal functions in the quality of means of payment.
• 50From the word charta - sign, which usually means a document, the power of which does not depend on the material, which served for its manufacture.
• 51For the following reasons: a) The essence of the payment consists not of juridical transfer of claims, but it is a physical transfer of things: Knapp makes here the same mistake like Schumpeter, imagining to himself money as a counting system, comptabilité sociale, b) Under this definition doesn't fall money, circulating simultaneously in two or more states - in Knapp's terminology - synchartal money [e.g. the Latin Union].
• 52All types of money, that the state does not impose on recipient under their payments and that the recipient can not claim exclusively. It's typical that at the basis of the functional scheme (which Knapp artificially seals off with a Chinese wall from the genetic scheme) lie only centric payments [see Eng. ed. p. 96], i.e. payments, in which one of the subjects is the state.

  Eliminating paracentric payments as "regulating themselves" (!) (what then can be the connection between nominal unit of value and private obligations?) is typical for Knapp. Not being able to solve the mystery of the equivalent, Knapp is forced to lock himself in the circle of organized public sector, from real payment relations, in which goods circulate hidden, from the world price and the market economy, disastrous for nominalism, Knapp is forced, like an ostrich, to bury his head in the sand of a dry formal scholastic scheme, substituting the unorganized by the organized sector, and circulation by exchange, in its logical development leading to the idea of a moneyless economy, to the idea of world kontokorrent accounting.

• 53S. 25.
• 54S. 143.
• 55Money that the state imposes for its payments and which the recipient may demand. [Knapp: The definitive kind of money which the State chooses as final for its own payments and makes compuIsory in dubious cases, is called valuta money. All other kinds of money are called accessory. The valuta money is the " standard", in the narrower sense of the word.]
• 56S. 151. [Knapp: Agio, then, is: the price of an accessory piece of money, treated as commodity, expressed in the units of value of the country (and payable in valuta money) minus the face value of the piece. We have treated this difference of value as positive; then it is called Agio; if it is negative, it will be called Disagio. (Eng. ed. p. 160-1)]
• 57S. 152. [Eng. ed. p. 163]
• 58[Eng. ed. p. 194-5]
• 59Knapp himself acknowledges that an obstructional transition to new valuta, i.e. a transition, "piling up" (stanung) state offices with accessory money - is the most common (allergewöhnichste) transition. The same phenomenon of stanung of accessory money, caused by the market, pantological moments, depends on prices. Thus, the fate of valuta money, therefore, also the fate of nominal unit of value, depends on price, the same price, in its turn, read by the nominal unit of value.