By Georg Friedrich Knapp, James Bonar, H. M. Lucas
2013 Reprint of 1924 variation. complete facsimile of the unique version, no longer reproduced with Optical reputation software program. Georg Friedrich Knapp (1842-1926) was once a German economist who in 1895 released "The kingdom idea of Money," which based the chartalist college of economic conception, which takes the statist stance that money should have no intrinsic price and strictly be used as governmentally-issued token, i.e., fiat funds. released initially in 1905, it created a stir between teachers and coverage makers, with proponents and critics either arguing forcefully approximately it. It used to be written at a time while financial concerns have been in an exceptional flux. through the global, international locations debated the optimum metal regular for his or her financial structures. should still or not it's silver, gold, either in a hard and fast relation (bimetallism), a mixture of the 2 (symmetalism), or may still the choice of the normal be left to the industry? Knapp placed the controversy on new flooring via suggesting that there don't need to be a steel commonplace in any respect. rules in regards to the desirability of paper cash now not subsidized through gold or different metals were offered earlier than yet have been by no means in a position to command educational respectability.
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All acts of this control, so far as they are directed to that end, we will call hylodromy for short. (i) Only hylic metal can be made amenable to such price I p~ Y M E N T , MONEY A N D METAL 79 regulation. This explains the first part of the new word. (ii) As to the second part, certain prices are called usually '' current " prices ; so as to make a more convenient adjective we use the Greek word " dromos," arbitrary but permissible proceeding ; hylodromy, therefore, means for us the deliberate fixing of the price of a hylic metal, or, still more accurately, the deliberate delimitation, both upwards and downwards, of the price of a hylic metal.
The norm has nothing to do with the Mint standard, for the question is not one of coins. It is only laid down that the hylic metal can be converted without limit into money, and that by the prescribed validity one unit of weight shall give rise to a given number of units of value in money. When in Germany before 1871 silver was a hylic metal, the norm said that from one pound of silver, money to the amount of thirty thalers was to be made. Now that gold is the hylic metal, the norm says that, from one pound of gold, money to the amount of 1395 marks is to be made.
The question who bears the burden is worth consideration, but it belongs rather to the domain of NO 76 T H E STATE THEORY OF MONEY CHAP financial policy. From the lytrological point of view another question arises : What is the governing principle? If the State redeems by weight, it is treating money as pensatory. If, however, it redeems the money in accordance with its validity by proclamation, then its action is consistent, for it is not permissible to consider money first in one light and then in another in accordance with the balance of advantage and disadvantage.