Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

5 MONEY we tend to diminish the demand for it and conse quently to reduce its value. For the most part every week or month or year we give as much as we get, and the temporary ups and downs of our stocks cancel each other quickly; but when we increase our holding for good or diminish it for good we exercise a permanent influence. The exposition so far given may seem to leave no place for the theory of value being connected with marginal utility, as taught in the economic text- books in regard to ordinary commodities. But marginal utility plays just the same part with regard to gold (both for ordinary purposes and for currency) as it does with other commodities. The lower the value of gold, the lower will be the uses to which it will be put, and the poorer will be the classes of people who are able to use it ; as has been suggested above, if gold were cheap enough, it would be used for roofs, and many people who do not have things which are now made of gold because they cannot afford them would have them. This is really easy enough to understand, but it may be a little difficult to see how the marginal utility theory applies to currency. Can we say that the value of sovereigns falls as they become more plentiful and their marginal utility diminishes ? Where is the marginal purchaser or the marginal purchase? Where the elasticity of demand? The answer is that the difficulty we feel is only the result of the strangeness of estimating the value of sovereigns in other things instead of, as usual, the value of other things in sovereigns. The marginal purchaser is the man who is only just convinced, or in practice in modern times the bank or Government which is only just convinced, of the desirability of increasing or diminishing the stock of coin in hand, just as the marginal purchaser of house room is the man who is only just convinced of the

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