The Theory of Money and Credit - Ludwig von Mises [90]
As soon as an uncompleted change in the objective exchange value of any particular kind if money becomes expressed in the foreign-exchange rates, a new opportunity of making a profit is opened up, either for exporters or for importers according as the purchasing power of money is decreasing or increasing. Let us take the former case, that of the diminution in the value of money. Since, according to our assumptions, the changes in domestic prices are not yet finished, exporters derive an advantage from the circumstance that the commodities that they market already fetch the new higher prices whereas the commodities and services that they want themselves and, what is of particular importance, the material and personal factors of production that they employ, are still obtainable at the old lower prices. Who the "exporter" is who pockets this gain, whether it is the producer or the dealer, is impertinent to our present inquiry; all that we need to know is that in the given circumstances transactions will result in profit for some and loss for others.
In any case the exporter shares his profit with the foreign importer and foreign consumer And it is even possible—this depends upon the organization of the export trade—that the profits which the exporter retains are only apparent, not real.
Thus the result is always that the gains of foreign buyers, which in certain cases are shared with home exporters, are counterbalanced by losses that are borne entirely at home. It is clear that what was said of the promotion of exportation by the falsification of monetary accounting applies also to the "export premium" arising from a diminution of the value of money.
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[1] See Dernburg, Pandekten, 6th ed. (Berlin, 1900), vol. 1, p. 84. On the fact that one of the chief characteristics of a fiction is the explicit consciousness of its fictitiousness, see also Vaihinger, Die Philosophie des Als ob, 6th ed. (Leipzig, 1920), p. 173; English trans., The Philosophy of "As If" (London: Kegan Paul, 1924).
[2] L. 80, Dig. de solutionibus et liberationibus 46, 3. Pomponius libro quarto ad Quintum Mucium. See further Seidler, "Die Schwankungen des Geldwertes und die juristische Lehre von dem Inhalt der Geldschulden," Jahrbücher für Nationalökonomie und Statistik (1894), 3d series, vol. 7, pp. 685 ff.; Endemann, Studien in der romanische-kanonistischen Wirtschafts-und Rechtslehre bis gegen Ende des 17 Jahrhunderts (Berlin, 1874), vol. 2, p. 173.
[3] In a review of the first edition (Die Neue Zeit, 30th year, vol. 2, p. 1024-1027), Hilferding criticized the above arguments as "merely funny." Perhaps it is demanding too much to expect this detached sense of humor to be shared by those classes of the German nation who have suffered in consequence of the depreciation of the mark. Yet only a year or two ago even these do not appear to have understood the problem any better. Fisher (Hearings Before the Committee on Banking and Currency of the House of Representatives, 67th Cong., 4th sess., on H.R. 1788 [Washington, D.C., 1923], pp. 5 ff., 25 ff.) gives typical illustrations. It was certainly an evil fate for Germany that its monetary and economic policy in recent years should have been in the hands of men like Hilferding and Havenstein, who were not qualified even for dealing with the depreciation of the mark in relation to gold.
[4] See Knies, Geld und Kredit, (Berlin, 1876), vol. 2, Part I, pp. 105 ff.; Fisher, The Rate of Interest (New York, 1907), pp. 77 ff., 257 ff., 327 ff., 356 ff.
[5] See Clark, Essentials of Economic