The Theory of Money and Credit - Ludwig von Mises [230]
When Knapp's mistakes about the views on monetary theory of earlier and contemporary economists have been accepted by two such eminent experts in the history and literature of political economy as Wieser and Philippovich, it should not surprise us if the majority of those now at work in Germany on monetary problems base their history of theory entirely on Knapp.
6 Note: The Relation of the Controversy About Nominalism to the Problems of the Two English Schools of Banking Theory
A writer identifies the metallistic theory with the currency principle and calls the chartal theory "a variety of the old banking principle." [37] Again, another writer is of the opinion that there is "a certain justification for giving the name of economic nominalism to the doctrine of the Currency School, so far as it is based upon a like treatment of both metallic and paper money." [38] Both would appear to be mistaken. The opposition between the two famous schools of the theory of credit lies in quite another sphere. [39] Knapp and his disciples have never so much as perceived the problems with which they were concerned, much less attempted to solve them.
Bendixen's doctrine of the creation of money, which is connected only accidentally and loosely with Knapp's nominalism, is admittedly nothing but an exaggerated and extremely naive version of the Banking principle. It is a particularly characteristic sign of the low state of German economic theory that for many years Bendixen's doctrine could have been regarded as something new without it being remarked that it was at most only in the way in which it was expounded that it differed from the doctrine that had been predominant in Germany for decades.
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[1] See Endemann, Studien in der romanisch-kanonistischen Wirtschafts-und Rechtslehre bis gegen Ende des 17. Jahrhunderts (Berlin, 1874-1883), vol. 2, p. 199.
[2] See Voigt, "Die staatliche Theorie des Geldes," Zeitschrift für die gesamte Staatswissenschaft 62: 318 f.
[3] Bendixen, Währungspolitik und Geldtheorie im Lichte des Weltkriegs (Munich and Leipzig, 1916), p. 37 (2d ed., 1919, p. 44).
[4] Dühring, Cursus der National-und Sozialökonomie, 3d ed. (Leipzig, 1892), pp. 42 ff., 401.
[5] See also Palyi, Der Streit um die staatliche Theorie des Geldes (Munich and Leipzig, 1922), pp. 88 ff.
[6] Knapp, Staatliche Theorie des Geldes, 3d ed. (1921), pp. 445 ff.
[7] To imagine that the state theory is a juristic theory, is to be ignorant of the purpose that a juristic theory of money has to fulfill. Anybody who holds this opinion should refer to any work on the law of contract and note what questions are there dealt with in the chapter on money.
[8] Knapp, op. cit., pp. 206, 214.
[9] Lexis, "Papiergeld," in Handwörterbuch der Staatswissenschaften, 3d. ed., vol. 6, pp. 987 ff.
[10] Schumpeter, "Das Sozialprodukt und die Rechenpfennige," Archiv für Sozialwissenschaft und Sozialpolitik 44: 635, 647 ff.
[11] Ibid., pp. 665 f.
[12] See above, pp. 146 ff.
[13] Knapp, op. cit., p. 281; "Die Beziehungen Oesterreichs zur staatlichen Theorie des Geldes," Zeitschrift für Volkswirtschaft, &c. 17: 440.
[14] Knapp, Staatliche Theorie, pp. 6 f.
[15] "Alle unsere Nationalökonomen sind Metallisten," Knapp, "Über die Theorien des Geldwesens," Jahrbuch für Gesetzgebung, &c. 33: 432.
[16] Knapp, "Die Währungsfrage vom Staat aus betrachtet," Jahrbuch für Gesetzgebung, &c. 41: 1528.
[17] Knapp, "Über die Theorien des Geldwesens," p. 430.
[18] Ibid., p. 432.
[19] See also pp. 298 f. above.
[20] From the pamphlet of Ricardo's referred to above it may suffice to quote the following passage only: "A well-regulated paper currency is so great an improvement in commerce that I should greatly regret if prejudice should induce us to return to a system of less utility. The introduction of the precious