ANALYTICAL TABLE OF CONTENTS

[PART I. THE VALUE OF MONEY AND THE GENERAL THEORY OF VALUE]

CHAPTER I
ECONOMIC VALUE
PAGE
Problem of value of money special case of general theory of value; present chapter concerned with general theory[1]
Formal and logical aspects of value: value as quality; value as quantity; value and wealth[5-6]
Absolute vs. relative conceptions of value: value of money vs. "reciprocal of price-level"; value prior to exchange; value and exchangeability; do prices correctly express values?[6-12]
Doctrine so far in accord with main current of economic opinion[12-14]
Causal theory of value new: marginal utility, labor theory, etc., rejected[14-16]
Social explanation required: "individual" a social product, both in history of individual and in history of race[16-19]
And above individual impersonal psychic forces, law, public opinion, morality, economic values[19-20]
Three types of theory have dealt with these: theory of extra-human objective forces; extreme individualism; social value theory[20-21]
Illustrated in jurisprudence, ethics, and economic theory[21-26]
Law, morals, and economic values generically alike, but have differentiæ[26-28]
But not differentiated on basis of states of consciousness of individual immediately moved by them, because many minds in organic interplay involved[28-33]
Economic social value (a) of consumers' goods and services:"utility" and scarcity; "marginal utility"; social explanationof marginal utility; marginal utilities the consciousfocus of economic values of consumers' goods; butonly minor part of these values; individuals, classes andinstitutions heavily weighted by legal, moral, and othersocial values, in power over economic values of consumers'goods[33-38]
Economic social value (b) of labor, land, stocks, bonds, "good will," etc.; based only in part on values of consumers' goods; partially independent, directly influenced by contagion, and centers of power and prestige[38-41]
Pragmatic character of theory[41-43]
Relation of social values to individual values[43-45]
CHAPTER II
SUPPLY AND DEMAND, AND THE VALUE OF MONEY
Hiatus between general theory of value and theory of value of money[46-47]
Partly because former has been developed by different writers from those who have developed latter[47-49]
But chiefly because supply and demand, cost of production, etc., assume fixed value of money, and are theories of price, rather than value[49]
Supply and demand useful but superficial formula, common property of many value theories[49-50]
Crude and unanalyzed in Smith and Ricardo; first made precise by J. S. Mill, who gives essentials of modern doctrine[49-51]
Böhm-Bawerk's pseudo-psychology spoils Mill's clean-cut doctrine[51-52]
Supply and demand assumes fixed value of money-unit, and hence inapplicable to money itself[52-56]
But supply and demand does not assume fixed price-level[56-57]
Cairnes vs. Mill[57-58]
Mill's unsuccessful effort to apply supply and demand to money[59-62]
Walker's attempt[62]
Supply and demand in the "money market"[62-63]
CHAPTER III
COST OF PRODUCTION AND THE VALUE OF MONEY
Types of cost theory: modern cost doctrine is "money costs" doctrine, and inapplicable to value of money[64]
Labor cost: Smith; Ricardo; Ricardo's confession of failure; "real costs" in Senior and Cairnes; Mill's "money-outlay" cost doctrine, and Cairnes' criticism; but "money-cost" has survived[64-67]
Because "real cost" doctrine does not square with facts[67-69]
"Money-cost" of producing money-metal[69-70]
Austrian cost doctrine runs still in money terms, assuming value, money, and fixed value of money[70-71]
"Negative social values" as "real costs"note, [71]
CHAPTER IV
THE CAPITALIZATION THEORY AND THE VALUE OF MONEY
Money as "capital good," and "money-rates" as rentals[72-73]
Capitalization theory; formula; capital value passive resultant of annual income and rate of discount[73-74]
But in case of money, rental and rate of discount not independent variables[74-76]
And in case of money, capital value not passive shadow, but active cause of income[76]
Capitalization theory assumes money, and fixed value of money[76-77]
Assumed fixed value of money absolute, and not relative[77-78]
Capitalization theory, in current formulation, inapplicable to value of money[78-79]
CHAPTER V
MARGINAL UTILITY AND THE VALUE OF MONEY
Marginal utility theory usually thinly disguised version of supply and demand, and hence inapplicable to money[80]
View that money is unique in having no utility per se[81-83]
Marginal utility and "commodity theory" of money-value[81-82]
Quantity theorists and marginal utility of money[81-82]
Money an instrumental good, and marginal utility no less applicable here than elsewhere; marginal utility invalid as general theory of value, hence invalid when applied to money[82-120]
Wieser's theory of value of money[83-88]
A circle in reasoning[88-90]
Schumpeter's similar circle[100]
But Schumpeter's general utility theory, though inapplicable to value of money, in form avoids a causal circle[90-98]
Schumpeter's conspectus; different from Böhm-Bawerk and most utility theorists[90-92], [113-120]
Defects and limitations of Schumpeter's general theory[90-98]
Schumpeter's substitutes for social value concept[98-99]
Von Mises sees circle of Wieser and Schumpeter[100]
Seeks to avoid it by construing utility theory as historical, instead of static, theory[101]
But this departs from fundamentals of utility theory; other difficulties[101-110]
Kinley's doctrine[110-111]
General criticism of utility theory[111-115]
Davenport, Wicksteed, Fisher, Perry[113-120]

[PART II. THE QUANTITY THEORY]

CHAPTER VI
THE QUANTITY THEORY OF PRICES. INTRODUCTION
Preliminary statement of quantity theory, and of criticaltheses to be developed in following chapters. Virtuallyevery contention and every assumption of quantitytheory to be challenged[123-129]
CHAPTER VII
DODO-BONES
Quantity theory doctrine that valueless objects can serve asmoney; Nicholson's assumption: money made of dodo-bones[130-131]
Fisher's view also[130]
And Ricardo's[131-132]
Will dodo-bones circulate? Dodo-bones and poker chips;circular reasoning[132]
Both medium of exchange and standard of value must bevaluable[133]
Is inconvertible paper an exception?[133-134]
Doctrine that money gives legal claim to things in general[134]
Kemmerer's assumptions; money made of commodity, oncevaluable, now used only as money[135]
Commodity theory requires present commodity value[135]
Historical vs. cross-section view: possibility that such moneywould circulate[135-136]
Value not tied up with marginal utility or commodities:social value theory; derived values often become independentof original presuppositions, in economic aswell as legal and moral spheres[136-139]
But this no basis for quantity theory: social psychology, notmechanics[139]
"Banker's psychology" vs. psychology of blind habit: India,Austria, United States; monetary phenomena of wartimes; "credit theory" of Greenbacks[139-142]
Question-begging definitions[142-143]
Assumptions of quantity theory: blind habit and fluid prices[143-144]
Extreme commodity theory denies that money-use adds tovalue of money; usually not true; analysis of money-functions[144-150]
Hypothetical case in which whole value of money comes fromcommodity value[150-152]
Money must have value apart from monetary employments,but, in general, gains additional value from employmentas money[152-153]
CHAPTER VIII
THE "EQUATION OF EXCHANGE"
Fisher leading, most consistent, most uncompromisingquantity theorist: wide acceptance of his views[154]
Taussig vs. Fisher[155]
Fisher and dodo-bone doctrine: logical part of quantitytheory; Fisher's value concept[155-156]
"Equation of exchange": analysis of Fisher's version, typicalof all[156-171]
In what sense equality between two sides of equation? Meaningof "T"[158-161]
No "goods side" to equation; both sides sums of money;equal because identical; equation meaningless[161-162]
All factors in equation highly abstract[162-163]
"P" and "T" cannot both be given independent definitions:P defined as weighted average, with T in denominator;and must be changed from year to year, as elements in Tchange, even though no prices change[164-166]
This makes circular theory: problem defined in terms of explanation[165-166]
Causal theory associated with equation of exchange[166]
Equation amplified to include credit; not acceptable toNicholson or Walker, and caricature of conditions inGermany and France[166-170]
Book-credit, bills of exchange, etc., excluded[167-170]
Why a one-year period?[170-171]
CHAPTER IX
THE VOLUME OF MONEY AND THE VOLUME OF CREDIT
Mill thought credit acts on prices like money, and that thisreduces quantity theory tendency to indeterminatedegree; Fisher holds volume of money in circulation governsvolume of credit, so that quantity theory stands[172]
Fisher's arguments for fixed ratio, money to bank-deposits[172-173]
Argument a non-sequitur, even if contentions true[173-177]
Contentions untrue: no fixed ratio between reserves and deposits,or reserves and demand liabilities, either inAmerica or Europe[177-182]
Taussig's views; virtually surrender of quantity theory inmodern conditions[182-185]
Bulk of quantity theorists in between Fisher and Taussig,but nearer to Fisher's view than to Taussig's[185]
CHAPTER X
"NORMAL" VS. "TRANSITIONAL" TENDENCIES
Quantity theory qualified by distinction between "normal"and "transitional" effects of change in quantity ofmoney, etc.[186]
Meaning of distinction, and extent of qualification hard todetermine: is "normal period" real period in time?How long is "transitional period"? Is it realistic, orhypothetical? Is equation of exchange realistic? Concretevs. hypothetical price-levels[186-189]
Legitimate and illegitimate abstraction[189-190]
Causation and temporal order[190-191]
Fisher admits very slight qualification of "normal theory"[192]
Mill's quantity theory "short run" theory; Taussig's "longrun" theory; radically different logic in the two[192-193]
Fisher's theory sometimes "long run" and sometimes "shortrun"[194-195]
CHAPTER XI
BARTER
Quantity theory spoiled if resort to barter possible and important[196]
Extent of barter and other flexible substitutes for money andbank-credit; simple barter; different methods of corporateconsolidations; flexibility, with state of money-market;clearing-house arrangements in speculative exchanges;offsetting book-credits[197-200]
Barter made easier under money economy, by measure ofvalue function of money[201]
Bills of exchange; foreign trade[201]
CHAPTER XII
VELOCITY OF CIRCULATION
Velocity conceived by quantity theory as causal entity,independent of quantity of money and prices; necessaryassumption for law of proportionality[203]
"Coin-transfer" vs. "person-turnover" concepts[203-204]
Velocity really non-essential by-product, meaningless average[204-205]
Doctrine that velocity independent of money; habit and convenience;hoarding; hoarding by banks[205-209]
Velocity and volume of trade; vary together[209-214]
Value of money causally governs velocity[214-215]
CHAPTER XIII
THE VOLUME OF MONEY AND THE VOLUME OF TRADE—TRADE AND SPECULATION
Quantity theory doctrine that volume of trade, and volumeof money (and credit), are independent; trade governedby physical and technical conditions, not money[216-219]
View that quantity of money vitally affects production andtrade[219]
Walker, Sombart, Withers, Price, Holt[219-222]
Increase of money increases trade, even on static theory:increase of money increase of capital; lowered margin inexchanges; money-rates and interest; money tool ofexchange; elasticity of demand for money-service; inArizona and New York City[222-225]
Trade distinguished from production and from stock[225-226]
Trade chiefly speculation; Fisher's $387,000,000,000 of tradein U. S. in 1909 analyzed; index of variation in trade;figure based on Kinley's returns from 12,000 banks;double-counting[227-230]
Figure largely represents speculation; statistics of totalwealth of U. S.; small rôle of wholesale and retail deposits;"all other deposits" bunched in speculative centers,especially New York; trifling "deposits" in countrybanks; evidence of bank-clearings: clearings and stockspeculation; clearings and ordinary business[230-241]
Measurement of "ordinary trade"[241-248]
Volume of stock speculation[248-251]
Commodity speculation[251-252]
Unorganized speculation[252-254]
Bill and note speculation[255]
Fisher's and Kemmerer's indicia of trade variation whollymisleading[255-257]
Production waits on trade; selling costs vs. "cost of production";"good will"; are banks useless?[257-262]
"Normal vs. transitional": statics vs. dynamics; money andcredit make static assumptions possible; very little tradein "normal equilibrium" or static state; volume of tradedepends on transitions and dynamic changes; functionaltheory of money and credit must be dynamic theory;abstraction from money by static theory; no statictheory of money and credit possible; quantity theorymisses whole point of money-functions[262-266]
APPENDIX TO CHAPTER XIII
THE RELATION OF FOREIGN TO DOMESTIC TRADE IN THE UNITED STATES
Ambiguity of "domestic trade": figures comparable withexport and import figures cannot include turnovers; netincome of United States, minus imports on retail basis,counted as domestic trade; exports on retail basiscounted as foreign trade; net income for 1910; index ofvariation for other years; cautions and qualifications;ratio of foreign to domestic trade, 1890-1916[267-278]
CHAPTER XIV
THE VOLUME OF TRADE AND THE VOLUME OF MONEY AND CREDIT
Interdependence of trade, and money (and credit); increasingtrade causes increase of money and credit[279-281]
Quantity theory doctrine: Fisher vs. Laughlin[281-282]
Quantity theory has no explanation of elastic bank credit:"Currency Theory" of deposits[282-285]
Loans and deposits[285-288]
Bills of exchange[288-290]
Summary of quantity theory doctrine[290-291]
CHAPTER XV
THE QUANTITY THEORY: THE "PASSIVENESS OF PRICES"
Heart of quantity theory: price-level cannot change withoutprior change in money, deposits, trade, or velocities:independently rising price-level, unable to alter trade orvelocities, would drive money away, and so be unable tosustain itself; individual prices can rise independently,but other prices must fall to compensate[292-295]
Criticism: argument impressive only because it assumes anuncaused rise in general price-level; when causes assigned,prices can independently rise, compelling modificationin other factors in "equation of exchange"; "transitional"and "normal" effects: instances[295-299]
Quantity theory conflicts with supply and demand: supplyand demand holds good: particular prices and price-level[299-300]
Generalization of conflict to include cost of production,capitalization theory, imputation theory[300]
Capitalization theory vs. quantity theory; different psychologicalassumptions of the two theories[300-306]
Cost of production vs. quantity theory; money-income vs.quantity of money[306-308]
Quantity theory false, granting all its assumptions[308-310]
Doctrine that price-level independent of particular prices,and presupposed by them, false; absolute value of money,not price-level, presupposed; price-level may changewith value of money constant, through changes in absolutevalues of goods[310-314]
CHAPTER XVI
THE QUANTITY THEORY AND INTERNATIONAL GOLD MOVEMENTS
Quantity theory holds that gold movements depend onprice-levels; but price-level mere average, cause of nothing[315-316]
Some prices, rising, tend to repel gold, but most prices haveno such effect[316-317]
Some prices, rising, bring in gold[317-319]
Gold movements and money-rates[319-320]
CHAPTER XVII
THE QUANTITY THEORY vs. GRESHAM'S LAW[321-323]
CHAPTER XVIII
THE QUANTITY THEORY AND "WORLD PRICES"
Types of quantity theory: world's volume of gold vs. quantityof money in given country; standard vs. token money;abandonment of dodo-bone theory and "equation ofexchange"[324-326]
Credit does not rest on money: measure of values vs. reserves;loans and wealth; value of money vs. price-level[326-328]
Loose relation of reserves and credit in world as whole; noproportionality of quantity of gold to value of gold; noquantity theory needed to assert that value of gold relatedto its quantity[328-330]
CHAPTER XIX
STATISTICAL DEMONSTRATIONS OF THE QUANTITY THEORY—THE REDISCOVERY OF A BURIED CITY
Criticism of quantity theory statistics yields constructiveconclusions; Mitchell and Greenbacks; Kemmerer's andFisher's statistics of "equation of exchange"; Kemmerer'scriticism of earlier statistics[331-335]
Kemmerer's and Fisher's figures all wrong except for volumeof money and deposits, and prices in base year; if correct,would not prove quantity theory[335-337]
Fisher's statistics, resting on Kemmerer's, chiefly studied:their relation to Kinley's "deposits" figures[337-338]
M´V´ calculated: errors in calculation; New York very incompletein Kinley's figures; private banks and trust companies;clearings and "deposits," in New York andoutside; "total transactions" and clearings; Fisher exaggeratescountry checks by at least 116 billions, for 1909;major part of all "check deposits" in New York City[348-353]
New York as "clearing house" for United States: extent of,and influence of on New York clearings, much overestimated;bulk of New York clearings and New York"deposits" grow out of New York business[353-361]
Index of variation for M´V´ wrongly weighted; V´ wronglycalculated for all years; which upsets calculation of V[361-363]
Volume of trade: greatly exaggerated by bank transactions,which include vast deal of duplications in checks, loansand repayments, etc.[363-368]
Fisher's reply; undercounting offsets overcounting[368-369]
Main items of undercounting in clearing houses of speculativeexchanges; measurement of, in New York StockExchange, and Chicago Board of Trade; swamped bycall loan transactions, which exceed security sales[369-381]
Price-indexes of Kemmerer and Fisher, dominated by wholesaleprices, have no relevance to their "equations of exchange"[381-383]
In general, their figures bury speculation and New York City[383]

[PART III. THE VALUE OF MONEY]

CHAPTER XX
RECAPITULATION OF POSITIVE DOCTRINE
Recapitulation of constructive theses of Parts I and II, andprogram of Parts III and IV[387-396]
CHAPTER XXI
THE ORIGIN OF MONEY, AND THE VALUE OF GOLD
Problem stated[397-401]
Value vs. saleability: degrees of saleability; theory of saleability;"buying price" vs. "selling price"; indirect exchangein barter economy; development of commodity of superiorsaleability into money[401-406]
Money never unique[406-407]
Origin of gold money: ornament; store of value; social prestigeof prodigality and of ornament; love of approbation,sex-impulse, and competitive display; elastic value-curveof gold; industrial employments of gold[407-413]
Distribution of wealth and power, and value of gold[413-416]
CHAPTER XXII
THE FUNCTIONS OF MONEY AND THE VALUE OF MONEY
Classification[417-418]
Measure of values (standard of value) distinguished frommedium of exchange; former does not add value tomoney metal, latter does[418-424]
Reserve function[424]
Money as "bearer of options"; distinguished from store ofvalue; the dynamic function of money par excellence; explanationof low rates on call loans, and short loans, andlow yield of high grade bonds, which share "bearer ofoptions" function; "pure rate" of interest vs. "moneyrates": Austria; the New York money market[424-432]
Legal tender; the Staatliche Theorie[432-436]
Standard of deferred payments; which functions add to valueof money metal?[436]
Relation of money rates to capital value of money[436-442]
Agio when coinage is restricted: India vs. Western World[442-450]
Equilibrium of gold in arts and gold as money: difficulties ofmarginal analysis; the money-market phenomena[450-458]
CHAPTER XXIII
CREDIT
Analysis rather than definition: "futurity" not essence ofcredit; credit part of general value system; stocks ascredit instruments; juridical and accounting phases[459-462]
Confidence; involved in general value phenomena as well ascredit; social psychology of confidence; contagions; influenceof centers of prestige; nothing unique in credit;selling vs. borrowing[462-469]
Definition of credit; credit vs. credit transaction; credit andexchange; bulk of credit grows out of dynamic conditions[469-474]
Functions of credit; increasing saleability of non-pecuniarywealth; corporate organization; limits of credit expansion[475-478]
Consideration of objections: that personal loans do not reston wealth; public loans; that value behind loan wouldnot exist if loan were not made[478-484]
Schumpeter's "heresies"; his view of the function of thebanker: "dynamic credit"; America vs. ContinentalEurope[484-488]
Peculiarities and functions of bank credit; technique ofbanking: capital; assets; reserves; "liquidity"; moneymarket[488-496]
CHAPTER XXIV
CREDIT—BANK ASSETS AND BANK RESERVES
Traditional view that liquid commercial loans normal anddominant type of bank asset disproved; cannot exceed11½ per cent of assets of American banks; analysis ofbank assets: "other loans and discounts"; stock collateralloans; loans on "other collateral security";stocks and bonds held by banks; classes of banks; variouscombinations; excluding real estate loans, morethan half of credit extended by State and nationalbanks and trust companies is to stock market; rapiddevelopment of stock collateral loans: New York;Europe[498-512]
Activity of different types of loans: banking assets getliquidity chiefly from stock market, and from producespeculators[512-516]
Credit extended to Wall Street not at expense of ordinarycommerce; country banks and Wall Street[516-518]
Federal Reserve Banks should rediscount stock collateralloans; "Money Trust" a trust in financing corporations,not ordinary commerce; panics and Federal ReserveSystem[520]
Quantity theory, putting all exchanges on a par, grotesque:volume of trade and prices in the stock market[520-523]
Direct and indirect financing of corporations by banks;"margin dealer" as "banker"[523-526]
Adam Smith's view of banker's functions, and of safe bankloans[526]
Correct on basis of facts of his day, but corporate organizationand organized stock market have made smeltinghouse as liquid as consumers' goods[527]
Division of labor in banking: America vs. Germany[527-528]
Agriculture in money market[528-529]
Reserve problem: special case of problem of liquid assets;many flexible substitutes for cash[529-532]
Causal relation runs from deposits to reserves; gold productionand reserve-ratio[532-535]
No static law or "normal ratio" possible; reserve functionentirely dynamic function; reserve not needed in "staticstate"; illustrated by London money market; "idealcredit economy"[536-544]

[PART IV. THE RECONCILIATION OF STATICS AND DYNAMICS]

CHAPTER XXV
THE RECONCILIATION OF STATICS AND DYNAMICS
Theory of money as focus of general economic theory, exhibitinginterdependence of doctrines; basis of furtherunification of statics and dynamics in higher synthesis[547-548]
Statics vs. dynamics, normal vs. transitional, and related contrasts;illustrations; divergent lines of doctrine: tariffs,wars, overproduction, extravagance, etc.[548-552]
Statics quantitative; dynamics qualitative[552-553]
Statics and dynamics both abstract[553-554]
Dynamics and "friction"[554-555]
"Theory of prosperity" and dynamics[555-556]
Statics and cross-section analysis; statics as price-theory; dynamics as value-theory[556-560]
Generalization of statics: price-theory applied to dynamicphenomena: capitalization; costs; "taxonomy;" "discounting"dynamic changes; money the static measuring-rod:wide scope of money-measure; measurement ofnon-economic values[560-569]
Generalization of dynamics: all values, whether of wheat or "good will," have social psychological explanation; technological and biological factors, and the static equilibrium; business cycles[569-575]
Business man vs. economic theorist, and value-theory; manipulation of values and prices[575-578]
Statics and time[578-580]
Immaterial capital[580-582]
Statics and dynamics have not different subject-matter[583-586]
Equilibrium of all social values: statics and dynamics of the law: social forces and social control[586-589]
Summary of Part IV[589-591]