Quotes About Money

The phenomenon of money presupposes an economic order in which production is based on division of labour and in which private property consists not only in goods of the first order (consumption goods), but also in goods of higher orders (production goods). In such a society, there is no systematic centralized control of production, for this is inconceivable without centralized disposal over the means of production.

The collapse of an inflation policy carried to its extreme -- as in the United States in 1781 and in France in 1796 -- does not destroy the monetary system, but only the credit money or fiat money of the State that has overestimated the effectiveness of its own policy. The collapse emancipates commerce from etatism and establishes metallic money again.

A metallic money, the augmentation or diminution of the quantity of metal available for which is independent of deliberate human intervention, is becoming the modern monetary ideal. The significance of adherence to a metallic-money system lies in the freedom of the value of money from State influence that such a system guarantees.

When a country has substituted credit money or fiat money for metallic money, because the legal equating of the over-issued paper and the metallic money sets in motion the mechanism described by Gresham's Law, it is often asserted that the balance of payments determines the rate of exchange. But this also is a quite inadequate explanation. The rate of exchange is determined by the purchasing power possessed by a unit of each kind of money.

Even in ancient times general recognition must have been accorded to the view which later in the shape of the maxim pecunia pecuniam parere non potest was to be the basis of all discussion of the problem of interest for hundreds and even thousands of years, and Aristotle undoubtedly did not state it in the famous passage in his Politics as a new doctrine but as a generally-accepted commonplace.2

It is not easy to determine whether there are any who still adhere in good faith to the doctrine that traces back the depreciation of money to the activity of speculators. The doctrine is an indispensable instrument of the lowest form of demagogy; it is the resource of governments in search of a scapegoat. There are scarcely any independent writers nowadays who defend it; those who support it are paid to do so.

For the etatist, money is a creature of the State, and the esteem in which money is held is the economic expression of the respect or prestige enjoyed by the State. The more powerful and the richer the State, the better its money. Thus, during the War, it was asserted that 'the monetary standard of the victors' would ultimately be the best money. Yet victory and defeat on the battlefield can exercise only an indirect influence on the value of money.

The central element in the economic problem of money is the objective exchange-value of money, popularly called its purchasing power.

In the case of money, subjective use-value and subjective exchange-value coincide. Both are derived from objective exchange-value, for money has no utility other than that arising from the possibility of obtaining other economic goods in exchange for it.

The exchange-value of money is the anticipated use-value of the things that can be obtained with it.

By 'the objective exchange-value of money' we are accordingly to understand the possibility of obtaining a certain quantity of other economic goods in exchange for a given quantity of money; and by 'the price of money' this actual quantity of other goods.

The first value of money was clearly the value which the goods used as money possessed (thanks to their suitability for satisfying human wants in other ways) at the moment when they were first used as common media of exchange.

If the objective exchange-value of money must always be linked with a pre-existing market exchange-ratio between money and other economic goods (since otherwise individuals would not be in a position to estimate the value of the money), it follows that an object cannot be used as money unless, at the moment when its use as money begins, it already possesses an objective exchange-value based on some other use.

Before an economic good begins to function as money it must already possess exchange-value based on some other cause than its monetary function. But money that already functions as such may remain valuable even when the original source of its exchange-value has ceased to exist. Its value then is based entirely on its function as common medium of exchange.1

Those economists who have recognized that the value of even the best money is variable have recommended that in settling the terms of credit transactions, that is to say, the terms on which present goods are exchanged for future goods, the medium of exchange should not be one good alone, as is usual nowadays, but a 'bundle' of goods; it is possible in theory if not in practice to include all economic goods in such a 'bundle'.

If this proposal were adopted, money would still be used as a medium for the exchange of present goods; but in credit transactions the outstanding obligation would be discharged, not by payment of the nominal sum of money specified in the contract, but by payment of a sum of money with the purchasing power that the original sum had at the time when the contract was made.

What are the determinants of the objective exchange-value of money?

Ludwig von Mises

the relations between the equilibrium rate of interest and the money rate of interest, which will be dealt with in the Third Part of this book.

In reviewing the determinants of the rate of interest, writers emphasize over and over again that it is not the greater or smaller quantity of money that is of importance, but the greater or smaller quantity of other economic goods.

One thing, however, must be made clear; even now the State has not the power of directly making anything into money, that is to say into a common medium of exchange. Even nowadays, it is only the practice of the individuals who take part in business that can make a commodity into a medium of exchange.

I do not have the money anymore. It was all yours, after all. I slipped the check into the silk lining of the coffin when I kissed you good-bye for the last time.

So what if we would have forfeited money on a vacation? In the grand scheme of things, losing dollars is nothing compared to losing time.

that allows us to have compassion for strangers. Yes, the Nazis made Jews the scapegoats, to the point of near extinction. But that same bit of tissue in the mind is what led others to send money and supplies and relief, even when they were half a world away.