Alfred Amonn, Cassels System der Theoretischen Nationalökonomie

Alfred Amonn’s two-installment journal review examines Gustav Cassel’s Theoretische Sozialökonomik as both a textbook and a systematic theoretical achievement. The documented bound-volume citation is 1924; the issues are reportedly from 1923. Amonn’s discussion concerns Cassel’s first edition. Its introduction, ten numbered sections, and concluding assessment move from conceptual foundations through price formation and distribution to money and business cycles. The governing argument is that Cassel’s considerable achievements neither establish economics on a wholly new foundation nor eliminate subjective valuation. They emerge when his analysis leaves behind its problematic derivation from the general concept of economic activity.

Amonn first distinguishes teaching from research. A textbook must introduce competing problems and solutions within an unfinished science; a research system must justify its conceptual starting point and the logical connections between its problems. Cassel excels in clarity and exposition, especially concerning production, saving, capital formation, and exchange. Yet his price theory is insufficiently elementary for students, while his dismissive treatment of marginal utility and inadequate presentation of Böhm-Bawerk and Schumpeter obscure important alternatives. These pedagogical objections coexist with strong recognition of Cassel’s theoretical originality.

The foundational criticism concerns the difference between economizing and the social relations investigated by theoretical economics. Cassel’s definitions move between activities preparing satisfaction, services performed by others, and conduct under scarcity. Amonn regards scarcity as a fruitful basis for studying the coordination of needs and means, but not as a sufficient definition of the discipline’s distinctive object. Whether cutting hair or feeding someone qualifies as economic activity matters less than whether it enters a price-forming exchange:

Ob das Haarschneiden oder das Füttern einer Person nach irgendeiner Definition »als eine wirtschaftliche Tätigkeit zu betrachten ist«, ist für die nationalökonomische Problemstellung völlig gleichgültig, von Bedeutung ist allein, ob sie Gegenstand eines zur Bildung eines Preises führenden Tauschvorganges bzw. sozialen Verkehrsvorganges ist.

English translation: Whether cutting hair or feeding a person is, according to some definition, “to be regarded as an economic activity” is entirely irrelevant to the formulation of problems in theoretical economics; what matters alone is whether it is the object of an exchange transaction, or a transaction of social intercourse, leading to the formation of a price.

The exchange economy therefore cannot simply be treated as one enlarged household. It connects independently directed economic units without possessing their unified will. Cassel nevertheless transfers to it the requirement that more important needs take precedence over less important ones. Amonn identifies a recurrent confusion between causal necessity and normative obligation: scarcity necessarily limits satisfaction, but does not ensure a socially rational ranking of needs. Purchasing power, not comparative urgency across persons, determines effective demand. Uniform prices cannot supply the missing interpersonal measure, and unequal income distribution cannot be detached from the price process that produces it.

This distinction reorganizes the price problem. Asking what prices should accomplish differs from explaining how prices arise through exchange among holders of goods. Amonn accepts Cassel’s simultaneous equations as an adequate representation of equilibrium interdependence: demand depends on prices, product prices depend on factor prices and technical requirements, and factor supplies constrain production. His objection is explanatory rather than a rejection of mathematics:

Mit einem Worte: Cassels Darstellung des Preisbildungsprozesses ist noch keine Erklärung dieses Prozesses, sondern erst der Anfang einer Erklärung.

English translation: In a word: Cassel’s account of the price-formation process is not yet an explanation of that process, but only the beginning of an explanation.

Showing that demand functions exist does not explain their shape. Marginal-utility theory attempts precisely this further step, relating valuation to needs and available quantities without requiring arithmetically measurable utility. Amonn acknowledges its imperfect formulations while rejecting Cassel’s claim that the inquiry is unnecessary.

The distribution sections praise Cassel’s integration of income formation into price theory. Factor prices determine incomes, while incomes influence demand and factor supplies can themselves depend on prices. Thus distribution is internal to the same interdependent system:

Preisbildungs- und Verteilungsproblem sind also nicht nur etwa auf die gleiche Art zu lösen, sondern werden sogar durch ein- und dieselbe Gedankenoperation gelöst.

English translation: The problems of price formation and distribution are therefore not merely to be solved in the same way; they are actually solved through one and the same operation of thought.

Nevertheless, particular explanations remain incomplete. Entrepreneurial profit is insufficiently distinguished from monopoly gains and quasi-rents. Cassel’s interest theory equivocates between waiting and the positive disposal of capital: interest pays for access to another’s capital, not waiting alone. His scarcity account of rent improves on the differential-rent construction but inadequately integrates mining and urban land. Amonn particularly values the wage theory’s rejection of subsistence-cost explanations and its attention to substitution, occupational barriers, and deliberate restriction of labor supply.

The second installment extends the demand for explanatory completeness to money and cycles. Cassel’s historical comparison of gold supply and prices can corroborate quantity theory, but cannot replace its theoretical justification or explain paper money. Amonn defends conditional reasoning and distinguishes proportional monetary expansion from changes that redistribute purchasing power. He also rejects Cassel’s suggestion that bank-created payment media can reliably increase real capital and establish a permanently lower equilibrium interest rate; rising capital-goods prices counteract the apparent advantage of cheaper credit.

Cassel’s treatment of crises within continuous business-cycle movements receives substantial praise. Its bounded investigation of cycles since 1870 exemplifies theoretical induction without claiming timeless laws of development. Yet fluctuations in fixed-capital production require explanation through changing economic proportions, not merely technical categories. Interest-rate feedback does not explain the movement’s originating impulse, and shortages of savings do not exhaust possible crisis mechanisms.

The conclusion preserves this measured judgment. Cassel advances theory, but his reliance on “estimation” retains subjective valuation despite avoiding its customary terminology:

In der Tat: die Tatsache, daß man das Wort »Wert« auszusprechen vermeidet und anstatt »Wertschätzung« einfach »Schätzung« sagt, ist nicht gleichbedeutend damit, daß man den Begriff des Wertes ausgeschaltet hat.

English translation: Indeed, the fact that one avoids saying the word “value” and simply says “estimation” instead of “valuation” does not mean that one has eliminated the concept of value.

Amonn finally qualifies his earlier severity: stopping at general functional dependence is not logically erroneous, though further analysis provides deeper understanding. The review’s enduring contribution is its separation of normative coordination from causal explanation, and of abandoning a word from dispensing with the concept it names.