Richard Kerschagl, Die Geldenwertungsliteratur seit dem Krieg (1924)

Richard Kerschagl’s signed literature review surveys postwar writing on monetary depreciation, grouping theories and policy proposals rather than simply listing publications. Completed at the beginning of summer 1924, it treats inflation as both an economic catastrophe and an exceptional opportunity to test monetary explanations:

Die Nachkriegszeit, geradezu ein ideales Gebiet für theoretische Studien über Geldentwertung, hat eine Inflation nicht nur von Geldzeichen, sondern auch gewissermaßen von Geldliteratur mit sich gebracht.

English translation: The postwar period, virtually an ideal field for theoretical studies of monetary depreciation, has brought with it an inflation not only of monetary tokens but also, in a sense, of monetary literature.

The review proceeds through Knapp’s state theory and its followers, critical responses to chartalism, quantity-theoretical studies, and works devoted specifically to inflation. Its governing distinction is between defining money’s legal status and explaining its economic value. Kerschagl repeatedly asks whether conceptual precision actually accounts for purchasing power, exchange rates, credit, and production. His own books receive only bibliographical mention, explicitly to avoid self-review.

Knapp supplies the starting point because his terminology and analysis of payments have become indispensable even outside his school. Kerschagl values the distinctions between payments to the state, payments by the state, and payments between private economic agents, together with the recognition that individuals occupy both debtor and creditor positions. Yet this achievement does not constitute an economic theory of monetary value:

Mit aller Schärfe definiert Knapp seinen Wertbegriff beim Gelde als den der Geltung, somit als einen rein juridischen, und gibt so klar zu erkennen, daß wohl die staatliche Theorie das Stoffwertproblem aufrollt und es vom juristischen Gesichtspunkte der Geltung zu lösen versucht, daß aber das, was man im allgemeinen wirtschaftlich unter Geldwert versteht, d. i. die Kaufkraft und der Kurswert des Geldes, nicht behandelt wird und nicht behandelt werden sollte.

English translation: Knapp defines his concept of value in money with the utmost precision as that of validity, hence as a purely juridical concept, thereby making clear that, although the state theory raises the problem of material value and attempts to resolve it from the juridical standpoint of validity, what is generally understood economically by monetary value—that is, money’s purchasing power and exchange value—is not treated and was not intended to be treated.

This limitation also protects Knapp against responsibility for policies others deduced from his descriptive categories. Kerschagl’s treatment of the followers is less protective. Bendixen connects money creation with commodity bills and production; Elster develops this approach into proposals for credit creation and stable foreign exchanges. Kerschagl finds Elster’s policy discussions stronger than his general economics and criticizes his doctrinal allegiance. Schmidt-Essen earns qualified praise for accessible exposition and institutional description, whereas Singer’s philosophical symbolism and credit classifications lack adequate economic grounding. The recurring objection is that allegiance to a vocabulary cannot substitute for causal explanation.

Palyi and Döring sharpen this objection by separating the static or qualitative problem of money’s constitution from the dynamic or quantitative problem of its operation. Kerschagl presents Palyi’s recognition of Knapp’s terminological achievement alongside his rejection of chartalism’s explanatory adequacy. Calling every chartalist an inflationist is unjustified, but treating goods movements as primary and money movements as secondary does not resolve their relationship. Döring likewise insists on psychological and economic foundations for price theory, rejects an abstract unit of account, and adopts a moderate, functionally grounded metallism.

The quantity-theory section tests how explanatory claims become policy programmes. Raschin’s account documents Czechoslovakia’s monetary separation and his intended drastic contraction of note circulation. Kirmaier interprets virtually every economically meaningful monetary theory as a quantity theory, a formulation Kerschagl considers insufficiently precise. Harburger’s proposal to anticipate depreciation through further monetary creation receives a particularly severe verdict:

Das Buch zeichnet sich sowohl durch falsche Voraussetzungen rein mathematischer Art als auch durch gänzliche Nichtachtung der währungspolitischen Erfahrungstatsachen sowie schließlich durch eine absolute Unkenntnis der Geldliteratur aus.

English translation: The book is distinguished by false premises of a purely mathematical kind, by complete disregard for the empirical facts of monetary policy, and, finally, by absolute ignorance of monetary literature.

The criticism expresses Kerschagl’s methodological standard: mathematical elaboration cannot compensate for defective premises or indifference to experience. His account of Koenig’s attack on Fisher’s purchasing-power stabilization also foregrounds a crucial distinction between stabilizing domestic prices and stabilizing the external exchange value of money.

The inflation literature broadens the inquiry beyond legal definitions and monetary quantities. Kerschagl praises historical and fiscal breadth in Seligman and emphasizes Nicholson’s attention to production, trade, and reciprocal effects between goods and money. Neumark’s reliance on Knapp and Elster, limited engagement with English literature, and preference for recovery through production alone appear correspondingly inadequate. Robert Just receives a more favorable assessment for comparing foreign borrowing, domestic borrowing, fiscal surpluses, and devaluation. Especially important is Just’s recognition that inflation can occur even with metallic money: adequate backing does not by itself settle the inflation problem.

The concluding discussion of Arthur Wolfgang Cohn turns monetary criticism into a question about economic organization. Abolishing money would require barter or administrative allocation; suppressing hoarding could undermine saving and capital formation, while loans and interest are not logically confined to monetary exchange. Kerschagl condenses the institutional consequence:

Man muß sonach nicht das Geld abschaffen, sondern die ganze Wirtschaftsform ändern.

English translation: Accordingly, one must change the entire form of economic organization, not abolish money.

The review thus makes postwar monetary controversy legible as a dispute over the proper object of explanation. Legal validity, purchasing power, exchange stability, fiscal policy, and production must be distinguished without being isolated. Its lasting relevance lies in this critical mapping of the limits of monetary theories—and in its insistence that monetary reform cannot be assessed independently of the economic arrangements it would transform.