Modern monetary systems

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Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

THE NOTION OF MONEY 173 for it is the value of the coined metal and of the monetary unit itself which varies. But this objection is not valid. For the purchasing power of a given sum of money does not vary any more for the producer of gold than for any other producer who receives it in exchange for what he sells; and if the former is exposed, like anyone else, to fluctuations in the purchasing power of the currency, due to price variation, it nevertheless remains true that he sells his produce for a constant number of monetary units, or, in other words, at a fixed price. This peculiarity means that the cost of production! of a metal accepted for free coinage does not exercise the same influence over its rate as in the case of any other commodity ; and this is true even of a metal which is used for monetary pur- poses, but is not brought under this system. For the principle already enunciated shows that if the cost of production rises the producer cannot obtain a larger number of monetary units than he obtained before. This is easy to understand ; for if his gold were bought at a higher price under the system of free coinage, the result would be that he would obtain more gold in the form of coin than he handed over for minting ; otherwise the scaling, i.e., the definition of the monetary unit, would have to be altered for all existing coins, and while this would perhaps be the logical consequence of conceiving money as a commodity, it has never yet been done in the case of gold or even seriously considered since the system of free coinage has been in force. Hence the only direct effect of an increase in the cost of production is to limit ! We do not hesitate to use here the phrase “cost of production,” although there is a tendency to discard it in certain theories of value. For we are unable to support those theories which merely set it aside because the influence of the cost of production is not always apparent. Moreover, it will be conceded by those who support this theory that in accordance with their own principles the value of money is independent of this cost, which they set aside. As for the remaining theories, even if they ultimately analyse away the notion of cost and give it only a relative value, this does not prevent the notion from being a very real thing from the point of view of the producer and from the point of view of the economist who analyses it, at every stage of economic equilibrium which he has under consideration.

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