The Value of Money by Benjamin M. Anderson and Jr.

Page 1 of 347

HARVARD COLLEGE LIBRARY

FROM THE

QUARTERLY JOURNAL OF ECONOMICS

THE MACMILLAN COMPANY NEW YORK . BOSTON . CHICAGO . DALLAS ATLANTA . SAN FRANCISCO

MACMILLAN & CO., LIMITED LONDON . BOMBAY . CALCUTTA MELBOURNE

THE MACMILLAN CO. OF CANADA, LTD. TORONTO

THE VALUE OF MONEY

B. M. ANDERSON, JR., PH. D. ASSISTANT PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY AUTHOR OF "SOCIAL VALUE"

New York THE MACMILLAN COMPANY 1917

_All rights reserved_

B. M. A., III AND J. C. A.

WHO OFTEN INTERRUPTED THE WORK BUT NONE THE LESS INSPIRED IT

PREFACE

The following pages have as their central problem the value of money. But the value of money cannot be studied successfully as an isolated problem, and in order to reach conclusions upon this topic, it has been necessary to consider virtually the whole range of economic theory; the general theory of value; the role of money in economic theory and the functions of money in economic life; the theory of the values of stocks and bonds, of "good will," established trade connections, trade-marks, and other "intangibles"; the theory of credit; the causes governing the volume of trade, and particularly the place of speculation in the volume of trade; the relation of "static" economic theory to "dynamic" economic theory.

"Dynamic economics" is concerned with change and readjustment in economic life. A distinctive doctrine of the present book is that the great bulk of exchanging grows out of dynamic change, and that speculation, in particular, constitutes by far the major part of all trade. From this it follows that the main work of money and credit, as instruments of exchange, is done in the process of dynamic readjustment, and, consequently, that the theory of money and credit _must be a dynamic theory_. It follows, further, that a theory like the "quantity theory of money," which rests in the notions of "static equilibrium" and "normal adjustment," abstracting from the "transitional process of readjustment," touches the real problems of money and credit not at all.

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