Siegmund Feilbogen · 1911
Feilbogen’s third article examines Menger’s monetary theory, his controversy with the German historical school, and his classification of economic sciences. Admiration for conceptual rigor accompanies reservations about an economics centered on exchange and individual action. Menger establishes the independence of theoretical inquiry, but collective phenomena and national well-being, Feilbogen argues, require fuller consideration.
The monetary discussion begins with Menger’s characteristic return to elementary economic relations:
Dans sa théorie de la monnaie, aussi bien que dans celle du capital, Menger remonte aux sources primordiales de la notion dont il s'agit.
English translation: In his theory of money, as in his theory of capital, Menger goes back to the primordial sources of the notion in question.
Money emerges through the superior exchangeability of particular commodities. Precious metals overcome restrictions concerning potential users, geographical reach, quantity demanded, and durability. Their prior use as ornaments explains their broad acceptance. Feilbogen nevertheless questions whether this account of money’s origins establishes circulation as its permanently essential function.
En effet, nous voyons, chaque jour, la monnaie perdre de son importance, comme instrument pratique de circulation, par l'emploi de plus en plus généralisé des billets, des lettres de change, des chèques et des comptes courants.
English translation: Indeed, we see money losing its importance every day as a practical instrument of circulation, through the ever more general use of banknotes, bills of exchange, cheques, and current accounts.
Credit and account transfers sharpen the distinction between monetary circulation and monetary measurement. The Hamburg mark banko, an accounting unit without a corresponding circulating coin, supports Feilbogen’s objection. Menger’s ideal of money with perfectly stable value likewise appears to restore the measuring function that his definition subordinates. This criticism does not imply support for Knapp’s state theory: Feilbogen welcomes Menger’s resistance to making governmental recognition sufficient to confer monetary character independently of economic conditions.
The methodological discussion concerns theory’s independent standing, the isolation of economic phenomena, and the legitimate use of deduction. Feilbogen respects the historical school’s scholarship and practical contributions but rejects its methodological exclusivity. Historical knowledge cannot renew economics without investigation of principles and their relations. History uses generalizations to illuminate particular events; theory uses observations to establish types and relations. Menger defends this theoretical activity against its reduction to historical description.
Feilbogen presents conceptual vigilance as both Menger’s intellectual strength and a source of his combative style:
Il déteste la confusion, il la pourchasse impitoyablement jusque dans ses refuges cachés, la met à nu et la crible de ses sarcasmes.
English translation: He detests confusion; he hunts it down mercilessly even into its hidden refuges, lays it bare, and riddles it with his sarcasms.
Such severity protects scientific distinctions, although personal invective can damage scholarly exchange. The constructive issue is the relation between “empirico-realist” and “exact” inquiry. The former identifies probable regularities through observation; the latter isolates simple elements and derives necessary relations under specified assumptions. The economic individual is thus an analytical hypothesis, not a description of all actual human motivation.
Exact theory requires supplementation when applied to reality. Habit, error, inertia, and motives other than economic self-interest affect conduct, while practical measures must answer to particular historical circumstances. Feilbogen therefore reads Menger’s methodological achievement as a justification for distinct, cooperating modes of inquiry, not for deduction alone.
His agreement becomes qualified where individual explanation excludes an independent national economy. Explaining institutions through individual motives, including institutions arising without deliberate design, does not eliminate collective facts. Feilbogen calls for their theoretical investigation and identifies Wagner and the Durkheim school as relevant beginnings. Individual analysis remains indispensable, but its explanatory value does not settle the limits of economics.
The closing classification of historical, theoretical, and practical sciences extends this concern with scope. Economic morphology accommodates inquiry into complex business organizations. Practical science raises another problem: knowledge confined to existing facts cannot itself supply the ideals required by educators and statesmen. Feilbogen also detects a tension in positivism when it prescribes limits to science while disclaiming prescription.
Menger’s enduring achievement lies in clarifying exchange, value, price, capital, and money. Yet economic goods and human well-being are not identical: shorter working hours may improve welfare precisely through sacrificing goods. Feilbogen’s conclusion preserves rigorous abstraction while pressing economics beyond exchange toward collective life and the well-being of nations.
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