Published under the name Charles Menger, this article challenges the doctrine that money measures a quantity of value inherent in goods. Across six sections, Menger distinguishes monetary valuation, purchasing power, and the causes of price changes. His central argument is that monetary calculation presupposes prices; it does not establish them by comparing independently measurable quantities of value.
Suivant la doctrine régnante, la fonction primitive et principale de la monnaie consiste à mesurer la valeur d'échange des biens d'après sa propre valeur d'échange.
English translation: According to the reigning doctrine, the original and principal function of money consists in measuring the exchange value of goods according to its own exchange value.
Menger identifies two connected errors: treating exchange value as a property of an isolated object, and imagining that the monetary unit measures that property. Against the first, he defines exchange value relationally.
Pour comprendre combien la première thèse est insoutenable, il suffit de considérer que la valeur d'échange est une relation des biens entr'eux et, par conséquent, ne saurait d'aucune manière se trouver déterminée dans un bien pris isolément.
English translation: To understand how untenable the first thesis is, it suffices to consider that exchange value is a relation of goods to one another and consequently could in no manner be found determined in a good taken in isolation.
Estimating what wheat will fetch requires knowledge of exchange conditions, not an independently ascertainable quantity of value contained in a coin. Needs, available quantities, and market circumstances determine the relations that monetary prices express. Money is not a physical measuring instrument applied to a substance called value.
Section II finds a sounder starting point in the practical understanding of a commodity’s value as its monetary equivalent. Yet this usage needs qualification: buying and selling do not necessarily occur at the same price.
L'équivalent monétaire d'une marchandise signifie des quantités variables — déterminées par le prix qu'on en offre et par le prix qu'on en demande.
English translation: The monetary equivalent of a commodity signifies variable quantities — determined by the price offered for it and by the price asked for it.
The distinction between offered and demanded prices undermines the notion of a single market price available indifferently to buyers and sellers. Even their midpoint does not establish one exact exchange value. Menger describes monetary equivalents as valeur d’échange extrinsèque; applied to money, extrinsic value concerns the goods it commands. “Intrinsic” value instead designates the monetary side’s causal contribution to changes in exchange relations, without restoring the idea of value as a substance inherent in objects.
Sections III–V distinguish three problems: comparing nominal wealth with real command over goods, identifying price changes attributable to money, and considering whether monetary stability can be deliberately secured. Purchasing-power comparisons are exact only for goods specified in quantity and quality. The cost of maintaining household consumption can be compared across dates or places, but households experience different changes because their purchases differ. Unweighted averages disregard commodities’ unequal economic importance; weighted aggregates remain tied to their selected bundle. Neither supplies an exact, universally applicable measure of changes in money’s purchasing power.
The causal problem is different. A widespread uniform rise in prices may suggest a monetary cause without proving one. Commodity-side changes can produce similar observations, while averages cannot distinguish causes merely by combining their effects.
Parmi les causes du mouvement du prix, on peut bien distinguer entre celles qui concernent le numéraire et celles qui concernent la marchandise, mais ces causes ne résident pas dans telle pièce d'argent ou dans tel objet vendable particulier.
English translation: Among the causes of the movement of price one may well distinguish between those which concern the money and those which concern the commodity, but these causes do not reside in any particular piece of money or in any particular saleable object.
Opposing influences on one commodity can offset each other, but a fall in wheat prices and a rise in iron prices do not cancel their respective causes. Likewise, cheaper clothing may compensate a household for dearer bread without demonstrating monetary stability. Price statistics record outcomes; explaining them requires a theory of price formation and evidence about the factors involved.
Section V turns this distinction toward monetary policy. Purchasing power cannot remain constant against every good unless all relevant exchange ratios remain unchanged. A currency whose own conditions introduce no disturbance into prices, however, is theoretically conceivable. Regulating the quantities of money reaching the market could in principle neutralize changes originating on the monetary side. Menger recognizes substantial informational and practical obstacles, while emphasizing such stability’s importance for debtors and creditors. The objective is causal stability, not the immobility of every commodity price.
The conclusion grounds exchange in each participant’s expectation of improving their economic position, rather than in an equality of values transferred. Money facilitates commerce and calculation without altering that logic. The article’s contribution is a disciplined separation of monetary accounting, purchasing-power comparison, and causal monetary analysis: related operations whose differences disappear when money is mistaken for a literal measure of value.
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