Schumpeter’s Das Wesen des Geldes reconstructs monetary theory from the standpoint of social accounting rather than from commodity substance, psychological utility, or legal proclamation alone. Its central move is to treat money as a claim-form embedded in the circulation of income and product: monetary payment is intelligible only within a structured economy in which incomes, prices, debts, and goods are mutually recorded. The work therefore resists both simplified metallism and any purely formal nominalism. Money is not explained by intrinsic value, but neither is its economic function exhausted by state naming.
¹¹ Vgl. einen ähnlichen Zirkel, den scheinbar die Grenznutzentheoretiker begehen: Das Geld hat Gebrauchswert, weil es Tauschwert, Tauschwert weil es – eben jenen – Gebrauchswert hat.
English translation: ¹¹ Cf. a similar circle which the marginal utility theorists apparently commit: money has use value because it has exchange value, and exchange value because it has—precisely that—use value.
This remark captures Schumpeter’s dissatisfaction with circular explanations of money. If money is said to be useful because it exchanges, and exchangeable because it is useful, theory has merely redescribed the phenomenon. Schumpeter’s alternative is to locate money within a system of claims on the social product. The value and function of money arise from the organized process by which purchasing power is distributed, transferred, and redeemed against goods and services.
The book’s argument is directed against theories that isolate one aspect of money and mistake it for the whole. Commodity theories overstate material backing; quantity theories risk abstraction from institutional mediation; chartalist theories identify the legal form without explaining the economic mechanism. Schumpeter is especially careful not simply to extend Knapp’s chartalism, but to distinguish his own economic account from a doctrine of state fiat.
den Knappschen Nominalismus oder Chartalismus etwa nach der wirtschaftlichen Seite hin „ausbaue“⁷¹, sondern man trägt eine Lehre vor, die sachlich andern Quellen alles und Knapp nichts verdankt.
English translation: one is not, so to speak, "building out" Knapp's nominalism or chartalism on the economic side; rather, one is putting forward a doctrine that in substance owes everything to other sources and nothing to Knapp.
The passage indicates that Schumpeter’s nominalism is not merely legal. Money is conventional and institutional, yet its convention is anchored in production, income, and credit. The decisive question is how command over goods is created and allocated. In this sense, the analysis connects money to the structure of capitalism itself: credit is not an accidental supplement to exchange but a formative element in capitalist development, especially where banks create purchasing power for entrepreneurial use.
Schumpeter’s argument also distinguishes monetary claims from saving in a narrow sense. Not every withholding of consumption explains the creation of investible means; capitalist credit can mobilize future production before prior saving has taken the corresponding form. This is why his monetary theory supports his broader theory of development: innovation is financed not simply by transferred existing goods but by newly constituted purchasing power.
¹⁶ Das ist, wie man festhalten wolle, nicht als Definition des Sparens gemeint und zielt nur auf einen Sonderfall ab.
English translation: This, be it noted, is not intended as a definition of saving and aims only at a special case.
The caution is characteristic. Schumpeter repeatedly avoids reducing complex monetary relations to single definitions. Saving, credit, income, and payment must be analyzed according to their place in the whole circuit. Money’s “essence” is therefore not a metaphysical property but a functional position in a social-economic accounting system.
His engagement with earlier credit theorists reinforces this orientation. By invoking writers such as Macleod, Schumpeter places himself in a tradition that treats credit and banking as central, not derivative, monetary phenomena.
¹⁸ Henry Dunning Macleod, Lectures on Credit and Banking, London 1882; The Theory and Practice of Banking, 5. Aufl. London 1892; The Theory of Credit, 2. Aufl. London und New York 1893, 1897.
English translation: Henry Dunning Macleod, Lectures on Credit and Banking, London 1882; The Theory and Practice of Banking, 5th ed., London 1892; The Theory of Credit, 2nd ed., London and New York 1893, 1897.
The work’s lasting significance lies in its refusal of “real” analysis that treats money as a veil. For Schumpeter, a capitalist economy cannot be understood without monetary forms, because those forms organize access to resources, validate prices, and make development possible. Das Wesen des Geldes thus presents money as a historically specific institution of capitalist coordination: a unit of account, means of payment, and credit relation through which society distributes claims on its product.
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