The Theory of Money and Credit - Ludwig von Mises [220]
Thus the theory of money was meanwhile surrendered to the acatallactists. Even in the writings of many catallactic theorists, odd relics of acatallactic views are to be found. Now and then statements are met with which are not in harmony with their authors' other statements on the subject of money and exchange and which obviously have been accepted merely because they were traditional and because the author had not noticed that they clashed with the rest of his system.
On the other hand, the currency controversy had aroused greater interest than ever in questions of monetary theory just at the time when the coming modern theory was devoting very little attention to them. Many "practical men" ventured into this sphere. Now the practical man without general economic training who begins to meditate upon monetary problems at first sees nothing else and limits his investigation to their immediate restricted sphere without taking account of their connections with other things; it is therefore easy for his monetary theory to become acatallactic. That the "practical man," so proudly looked down upon by the professional "theorist," can proceed from investigations of monetary problems to the most penetrating comprehension of economic theory, is best shown by the development of Ricardo. The period of which we speak saw no such development. But it produced writers on monetary theory who did all that was necessary for the monetary policy of the time. From among a large number it is only necessary to mention two names—Bamberger and Soetbeer. A considerable portion of their activity was devoted to fighting the doctrines of contemporary acatallactists.
At present, acatallactic doctrines of money find ready acceptance among those economists who have no use for "theory." Those who, openly or implicitly, deny the necessity of theoretical investigation are not in a position to demand of a monetary doctrine that it should be possible to fit it into a theoretical system.
2 The "State" Theory of Money
The common characteristic of all acatallactic monetary doctrines is a negative one; they cannot be fitted into any theory of catallactics. This does not mean that they involve a complete absence of views as to the value of money. Without any such views, they would not be monetary doctrines at all. But their theories of the value of money are constructed subconsciously; they are not made explicit; they are not completely thought out. For if they were consistently thought out to their logical conclusions, it would become obvious that they were self-contradictory. A consistently developed theory of money must be merged into a theory of exchange, and so cease to be acatallactic.
According to the naivest and most primitive of the acatallactic doctrines, the value of money coincides with the value of the monetary material. But to attempt to go farther and begin to inquire into the grounds of the value of the precious metals, is already to have arrived at the construction of a catallactic system. The explanation of the value of goods is sought either in their utility or in the difficulty of obtaining them. In either case, the starting point has been discovered for a theory of the value of money also. Thus this naive approach, logically developed, conducts us automatically to the real problems. It is acatallactic, but it leads to catallactics.
Another acatallactic doctrine seeks to explain the value of money by the command of the state. According to this theory the value of money rests on the authority of the highest civil power, not on the estimation of commerce. [1] The law commands, the subject obeys. This doctrine can in no way be fitted into a theory of exchange; for apparently it would have a meaning only if the state fixed the actual level of the money prices of all economic goods and services as by means of general price regulation. Since this cannot be asserted to be the case, the state theory of money is obliged to limit itself to the thesis that the state command establishes