From Gold to Euro: On Monetary Theory and the History of by Heinz-Peter Spahn

By Heinz-Peter Spahn

This publication bargains with the evolution of financial structures. to start with, it argues that cash kinds a constitutional aspect in any private-ownership economic climate, estab­ lishing a nominal-standard order for the marketplace behaviour of person brokers. The industry financial system is essentially a fee society the place cash buildings and values monetary actions, and plays itself as a marketplace asset. using re­ assets and the creation of commodities are ruled through calculations in mone­ tary values which subordinate construction and employment to the common sense of asset markets. The "veil" of cash can't be withdrawn, in reality and in theoretical research, with out altering the industrial order of society. cash originates from a credits relation among industry brokers, therefore spot funds re­ position intertemporal alternate. difficulties of low belief and data in mutual monetary kinfolk are projected onto the money medium in a financial economic system, thereby bettering its potency and dynamics. the speed of curiosity isn't really concerning time; it's the rate for conserving the brokers' solvency within the present interval, and it determines a good cost of go back on capital and creation. Secondly, the publication exhibits that community externalities within the use of cash ended in monopoly strategies within the nationwide and hegemonic leader-follower kin within the foreign economy.

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E. rising prices). But we may not expect lower interest rates from capital accumulation, as the rate of interest - contrary to a widely held myth - does not express the relative scarcity of some physical factor of production but rather the relative scarcity of means of payments. 56 Keynes himself also succumbed to this confusion. Whereas, on the one hand, he argued that liquidity preference is the reason why "the world after several millenia of steady individual saving, is so poor as it is in accumulated capital-assets", he also, on the other hand, hoped for a continuing process of investment to bring down the marginal efficiency of capital, which then should lead to an "euthanasia of the rentier".

Machines) is no longer regarded as the basic reason for a positive rate of interest; rather, the crucial factor is the impatience on the part of consumers. They can only be induced to place resources at the investors' disposal by receiving interest which makes up for their time preference. Hence, for all firms an additional cost element is introduced: a minimum rate of profit (covering interest costs) which cannot be eroded by competition. 3D This equilibrium rate of profit is independent from productivity and is finally paid - as a deduction from the real wage - by the consumers.

149, Keynes 1933/34, Kurz 1998. Hicks (1974) noted that classical economists in general stuck to the "business man's concept" of capital as a fund, with an eye on the debt side of balance sheets, whereas the neoclassicals after 1871 adopted the view of capital essentially consisting of goods. 43 Keynes 1937b: 213, cf. Hicks 1989: 64-71. 44 Hicks 1969: 73-4, cf. Riese 1988: 383. Money, interest and capital 35 general advantages and convenience of possessing wealth in a private-property economy where individuals fear for their economic livelihood.

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