Alfred Amonn’s Review of Robert Liefmann’s Die Geldvermehrung im Weltkriege und die Beseitigung ihrer Folgen (1918/1919)

Alfred Amonn’s review assesses Liefmann’s account of wartime inflation and its implications for postwar economic reconstruction. Its argument moves from a challenge to Liefmann’s claims of theoretical originality through criticism of his exchange-rate explanation to rejection of his policy conclusions. Amonn’s central contention is that Liefmann presents established insights into monetary transmission as discoveries, while introducing errors when he turns to currency depreciation and the conditions for restoring foreign trade.

Liefmann argues that monetary expansion raises prices through increased incomes and demand, rather than through an automatic adjustment to the quantity of money. Amonn accepts the importance of this mechanism but rejects the claim that previous economics had failed to understand it:

Die »Vorstellung von dem Zusammenhang aller Preise« und dem »zwischen Geld, Preise und Einkommen« ist so alt wie die Nationalökonomie überhaupt.

English translation: The "conception of the interconnection of all prices" and of that "between money, prices and income" is as old as political economy itself.

Invoking John Stuart Mill and other predecessors, Amonn treats the mediation of monetary expansion through purchasing power as familiar theory. He likewise denies novelty to Liefmann’s discussion of credit-created purchasing power: inflationary demand can expand without an increase in physical means of payment, but this, too, was already understood. The review thus distinguishes the validity of an economic proposition from the originality claimed for it. Amonn also resists treating demand-mediated price increases as effects originating in commodities rather than money: identifying demand as the transmission channel does not remove the monetary cause.

The exchange-rate discussion exposes a more substantive disagreement. Liefmann makes high domestic prices, produced by wartime isolation and industrial reorganization, the chief explanation for currency depreciation. Amonn counters that domestic price changes cannot affect exchange rates in the proposed manner while a gold currency and free gold exports remain operative. More fundamentally, saying that domestic money buys less at home than foreign money buys abroad already presupposes a conversion ratio—the very relation requiring explanation.

Das Steigen der Inlandspreise und der ausländischen Wechselkurse steht natürlich miteinander im Zusammenhang, aber nicht in der Weise, daß das Steigen der Inlandspreise die Ursache des Steigens der ausländischen Wechselkurse ist.

English translation: The rise of domestic prices and of foreign exchange rates is of course connected, but not in such a way that the rise of domestic prices is the cause of the rise of foreign exchange rates.

Amonn instead attributes both movements to an increase in domestic means of payment. His conceptual move is to replace Liefmann’s causal sequence from prices to exchange rates with two parallel effects of monetary expansion.

This disagreement governs the review’s treatment of reconstruction policy. Liefmann regards reversing wartime price increases and raising the currency’s external value as prerequisites for renewed international exchange. Amonn separates monetary stability from restoration of a lower price level:

Für die „Wiederanknüpfung gedeihlicher Wirtschaftsbeziehungen zum Auslande und die Entwicklung unseres Außenhandels nach dem Kriege“ ist, was das Geld betrifft, höchstens die Stabilisierung des Wechselkurses erforderlich; die „Preisausgleichung“ wird sich dann von selbst vollziehen.

English translation: For the "resumption of prosperous economic relations with foreign countries and the development of our foreign trade after the war," so far as money is concerned, at most the stabilization of the exchange rate is required; the "equalization of prices" will then accomplish itself.

He also faults Liefmann for failing to explain how the proposed price reductions could be achieved. Against the claim that a depreciated mark necessarily forces Germany to surrender more products of its labor for imports, Amonn distinguishes higher prices expressed in domestic currency from a greater real payment in goods or labor. Nominal depreciation, in his argument, does not itself establish diminished real exchange power.

The review closes by noting Liefmann’s advocacy of abandoning gold for paper currency and returning to the discrepancy between his claims of novelty and the standing of his results. Its significance lies in its sharply drawn distinctions: transmission mechanisms versus automatic monetary effects, established knowledge versus theoretical innovation, common causes versus apparent causal sequences, and nominal import costs versus real counterperformance. Amonn offers a polemical critique of inflation theory and reconstruction policy rather than a developed alternative program; the decisive positive recommendation is exchange-rate stabilization, not compulsory restoration of preexisting price levels.