Richard Kerschagl, Theorie des Geldes und der Geldwirtschaft (1923)

Kerschagl’s book is a postwar reconstruction of money theory written against inflation, exchange-rate disorder, and the older quarrel between metallism and chartalism. Its thesis is that money cannot be understood from its material, its legal name, or its quantity alone, but only from its function inside the organized total economy. He states the methodological premise at the outset:

Für diese Art des Vorgehens war die Auffassung des Geldes als eines mit der Variabilität der Wirtschaft sich ändernden Funktionsbegriffes bestimmend.

English translation: Determinative for this approach was the conception of money as a functional concept that changes with the variability of the economy.

This “functional” concept also explains why he refuses the usual doctrinal sorting. Kerschagl draws on the Austrian and universalist milieu—Wieser, Schumpeter, Spann—but rejects being captured by either side of the metal/state debate:

Der Verfasser legt auch an dieser Stelle energischen Protest ein gegen eventuelle Einreihung in eine der beiden angeführten Richtungen.

English translation: The author here again enters a vigorous protest against any possible classification of his work into either of the two schools mentioned.

The first part, “Das Geld,” builds the conceptual foundation. Money emerges from indirect exchange in a division-of-labour economy: it is not consumed but passed on, a medium through which production and consumption are socially connected. Hence its essence is not gold, paper, or state decree, but the function of a medium of exchange.

From this follows Kerschagl’s treatment of value. The inner value of money is not a mysterious property but purchasing power, always mediated through prices, income formation, and the distribution of the social product:

Der Geldwert ist die Kaufkraft des Geldes gegenüber den Waren; man kann ihn auch mit Rücksicht auf seine Gegebenheit innerhalb einer Volkswirtschaft als den sogenannten Binnenwert des Geldes bezeichnen²).

English translation: The value of money is the purchasing power of money over goods; with regard to its manifestation within a national economy, it may also be designated the so-called internal value of money.

Equally important is his separation of inner and outer value. The “outer value” or exchange rate is not value in the same sense at all; it is a market price of one money against another:

Wir sehen somit, daß der sogenannte Kurswert eigentlich kein Wert ist, sondern ein Preis.

English translation: We thus see that the so-called exchange-rate value is in fact not a value at all, but a price.

This distinction allows him to reinterpret crises of currency: tensions between purchasing-power parity and exchange-rate parity can create temporary export premiums and speculative movements, but such tensions are symptoms of disturbed economic organization, not autonomous monetary magic.

The second part, “Die Geldwirtschaft,” turns from concept to mechanism. Its core argument is that sound money creation must run with goods creation. Metal can limit quantity and aid international parity, but it cannot by itself guarantee correct monetary issue; commercial-bill money is closer to the productive process, while lending on securities or land easily becomes mere credit policy. Kerschagl condenses the norm sharply:

Stabilisation des Geldwesens bedeutet aber nichts anderes als die beste Geldschöpfung, und es bedeutet die beste Geldschöpfung nichts anderes als die geringste Erschütterung der wirtschaftlichen Entwicklung von der Geldseite her, mit anderen Worten, die Garantie der Stetigkeit wirtschaftlicher Entwicklung bei ruhiger Entwicklung des Preisniveaus²).

English translation: Stabilization of the monetary system, however, means nothing other than the best possible creation of money, and the best possible creation of money means nothing other than the least disturbance of economic development from the monetary side—in other words, the guarantee of continuity of economic development together with a steady evolution of the price level.

Inflation is therefore not merely “too much money” in the abstract but false money creation joined to overconsumption, state claims on the social product, and distorted income distribution:

Wie schon der Name sagt, versteht man darunter eine Überschwemmung, und zwar eine Überschwemmung mit Geldzeichen.

English translation: As the name itself indicates, one understands by it a flood—specifically, a flood of monetary tokens.

His analysis of index wages follows from this: indexing cannot preserve everyone’s real income when the social product itself has shrunk. Devaluation, depreciation, and gold re-linking are treated as technical devices, never substitutes for economic repair.

The third part, “Die Geldpolitik,” applies the theory to stabilization, discount policy, exchange management, gold, and European note-bank data. Kerschagl’s policy is neither laissez-faire nor command socialism: the note bank must influence production through credit, discount, and exchange policy, but it cannot replace the real conditions of production, consumption, trade balance, and fiscal discipline. Gold remains useful above all as an international settlement and confidence device, not as an automatic cure.

The relevance of the work lies in this refusal of monetary reductionism. Kerschagl reads money as the distributive form of a value-producing economy; monetary disorder reveals disorder in the whole. Thus the book ends by making money theory a test of economics itself:

Genau so, wie vielfach die Lösung des Verteilungsproblems als der Prüfstein für den Aufbau und die Funktion einer Volkswirtschaft nicht mit Unrecht betrachtet wird, genau so ist die Geldtheorie die Probe jedes volkswirtschaftlichen Lehrgebäudes, da sie ja nichts anderes ist als das Problem der Wertverteilung in der werterzeugenden und wertverbrauchenden Gesamtwirtschaft.

English translation: Just as the solution of the problem of distribution is often, and not unjustly, regarded as the touchstone for the construction and functioning of a national economy, so too is monetary theory the test of every economic doctrinal system, since it is nothing other than the problem of the distribution of value within the value-producing and value-consuming economy as a whole.