The Theory of Money and Credit

OFall branches ofeconomic science, that partwhichrelates to

moneyand credit has probablythe longest historyand the most

extensiveliterature. Theelementarytruths ofthe QuantityTheory

wereestablished at a time whenspeculation on other types of

economic problemhadhardlyyetbegun. Bythe middleofthe

nineteenthcenturywhen,in the generaltheory ofvalue, a satis-factory statical system hadnotyetbeenestablished, the pamphlet

literature ofmoneyandbankingwastackling, oftenwithmarked

success, manyofthe subtler problemsofeconomic dynamics. At

thepresentday,withallourdifferences,thereis nopartofeconomic

theory whichwefeel to bemoreefficientto lend practicalaidto the

statesman andto the manofaffairs,than the theory ofmoneyand

credit.

Yetfor allthis thereis nopartofthesubjectwheretheestablished

results ofanalysis and experience havebeenso little systematized

and broughtinto relation withthe maincategories oftheoretical

economics. Specialmonographsexist bythe hundred. Thepam-phletliteratureis soextensiveastosurpassthepowerofanyoneman

completelyto assimilateit. Yetin English,atanyrate, there has

beensolittleattemptatsynthesisofthis kindthat, whenMr.Keynes

cameto writehis TreatiseonMoney,hewascompelledto lament the

absence, notonlyofanestablished tradition ofarrangement,but

evenofasingleexampleofasystematictreatmentofthe subjecton

a scale and ofa quality comparable withthat ofthe standard

discussionsofthe centralproblemsofpureequilibriumtheory.

Inthese circumstancesitis hopedthatthepresentpublicationwill

meetarealneedamongEnglish-speakingstudents. Forthe workof

whichit is atranslation, the TheoriedesGeldesund der Umlaufsmittel

ofProfessorvonMisesofVienna,doesmeetjust this deficiency. It

deals systematically withthe chiefpropositions ofthe theory of

moneyandcredit,andit bringsthem into relation bothwiththe

mainbodyofanalyticaleconomicsandwiththe chiefproblemsof

contemporarypolicyto whichthey arerelevant. Commencingwith

a rigid analysisofthe natureandfunction ofmoney,it leads bya