Chapter XV: The Quantity Theory: The “Passiveness of Prices”
IS the price-level passive? Is it true that while changes may occur from causes outside the equation of exchange in volume of money, volume of trade, and velocities of circulation, a change in the price-level from causes outside the equation is impossible? Must the average of prices be a passive function of M, the V′s, M′ and T? Such is the general contention of the quantity theory, and such, very explicitly, is Fisher’s contention.
Chapter XVI: The Quantity Theory and International Gold Movements
THE quantity theory explanation of international gold movements is as follows: if money comes into a country, it raises prices. If the price-level of the country is raised more rapidly than the price-levels of other countries are rising, then the country becomes a bad place in which to buy and a good place in which to sell; its exports fall off, its imports increase, and finally the inflow of money is checked, and, perhaps, money flows out again.
Chapter XVII: The Quantity Theory vs. Gresham’s Law
THERE is a pretty obvious conflict between the quantity theory and GreshaM′s Law. The latter is, essentially, a “quality” theory of money. For the quantity theory, dodo-bones, or anything else will do.
Chapter XVIII: The Quantity Theory and “World Prices”
SOME writers, who would call themselves quantity theorists, would repudiate many of the doctrines for which Fisher stands, and which the historical quantity theory involves. The recognition which Fisher’s book has received from quantity theorists generally, justifies me in treating his book as the “official” exposition of the modern quantity theory, and, indeed, it is easy to show that Fisher is fundamentally true to the quantity theory tradition.
Chapter XIX: Statistical Demonstrations of the Quantity Theory—The Rediscovery of A Buried City
IN the following chapter, as in most of the preceding chapters, constructive doctrine is aimed at, even though the discussion takes, in considerable part, the form of critical analysis of opposing views.
Part III. The Value of Money
Chapter XX: Recapitulation of Positive Doctrine
THE chapters which have gone before have been, in considerable degree, concerned with the analysis of unsuccessful efforts to solve the problem of the value of money, as the quantity theory, or the attempts to apply the notions of supply and demand, marginal utility, and cost of production, to the problem. Not all that has gone before has been, even in form, primarily critical.
Chapter XXI: The Origin of Money, and the Value of Gold
THIS chapter is not concerned with history or anthropology for their own sake. The present writer has made no independent historical or anthropological researches, in connection with the question of the origin of money. The chapter is primarily concerned with giving an exposition of the theories of two writers, Karl Menger and W. W.
Chapter XXII: The Functions of Money and the Value of Money
IN preceding chapters, I have spoken of the “money-service” as a source of additional value of money, under certain conditions. Before money can function as money at all, it must have value from some non-monetary source.1 But, given this prior value, money performs valuable services.
Chapter XXIII: Credit
ANALYSIS and description are much more important than definition. Definition at the beginning of a study is frequently a fetter, rather than an aid to thought. This is especially true in a field where phenomena overlap and interlace, and where the “pure principle,” “essence” or “Wesen” of the thing defined never presents itself, but is only to be reached by violent abstraction.
