The Theory of Money and Credit - Ludwig von Mises [228]
The first thing to observe is that by metallism Wieser means something different from Knapp. Wieser contrasts the "modern" theory of the value of money with the "metallistic," and describes exactly what he understands by the terms. According to this, the two views are opposed to each other; the one excludes the other. But, for Knapp, the theory that Wieser calls the modern theory is just as metallistic as the others. The truth of this can easily be demonstrated.
In his principal book, Knapp never mentions the names of any writers who themselves have dealt with the problem of money; neither does he quote any work on the subject. He nowhere argues against any of the trains of thought that are usually met with in the abundant literature of money. His quarrel is always only with the metallism that he sets up as the general opinion on money. In his preface, it is true, he refers expressly to two writers as metallists: Hermann and Knies. [24] But both Hermann and Knies expounded theories very similar to the "modern" theory expounded by Wieser. This should not appear strange, for both of these writers take their stand on the subjective theory of value,[25] from which the "modern" doctrine of the value of money logically follows, so that both regard the foundation of the use-value of the precious metals as lying both in their monetary uses and their "other" uses. [26] Between Wieser and Knies there is a difference, it is true, concerning the effect on the monetary function of the possibility of cessation of the "other" functions. Yet Knapp could not have regarded this as the decisive characteristic, or he would have been sure to mention it somewhere, and in fact he has nothing more to say about it than about any other problem of the value of money.
It is, indeed, not among the economists that we must seek the metallists, as they are portrayed by Knapp and his school. Knapp knows very well why he always argues only against this arbitrary caricature of a metallist, and prudently refrains from quoting chapter and verse for the opinions that he puts in the mouth of this metallist. In fact the metallist that Knapp has in mind is none other than Knapp himself; not the Knapp that wrote the State Theory of Money, but the Knapp that, "disregarding all theory" as he himself testifies, used to lecture on the "pragmatic" of the monetary system;[27] the Knapp that, as one of the standard-bearers of historicism in political economy, had thought that a substitute for thinking about economic problems could be found in the publication of old documents. If Knapp had not looked down so arrogantly on the work of the much abused "theorists," if he had not disdained to have anything to do with it, he would have discovered that he had been entertaining an entirely false opinion of its content. The same is true of Knapp's disciples. Indeed, their leader Bendixen openly admits that he was once a "metallist." [28]
It is by no means desirable to follow Wieser's example in giving the title of prevailing doctrine to the view that the value of the monetary material arises solely from its industrial employment. Surely a view concerning money that has been rejected by Knies cannot be regarded as the prevailing doctrine. [29] There can be no question that the whole literature of money, so far as it is based on the conclusions of modern theory is not metallistic in Wieser's sense; but neither, for that matter, is any other catallactic theory of money.
In fact Wieser's opinion of the monetary theories of his precursors has been distorted by his acceptance of the expression metallism. He himself did not fail to notice this; for he supplements the remarks quoted above with the following words: "The dominant doctrine does not remain true to itself, for it ... develops a special theory to explain the exchange value of money. If the value of money was always limited by the use value of the metal, what influence would