Ludwig von Mises: Review of Otto Heyn’s Erfordernisse des Geldes (1912)

This brief review assesses Heyn’s contribution to monetary theory through a tension between intellectual promise and theoretical omission. Mises opens by crediting Heyn with insufficiently recognized insights: despite errors, his writings offer ideas that further research could fruitfully develop. Yet the pamphlet exposes especially clearly what Mises regards as Heyn’s fundamental weakness.

Den Kernpunkt der Geldtheorie muß das Problem der Bestimmungsgründe der Kaufkraft des Geldes bilden.

English translation: The core of the theory of money must be formed by the problem of the determinants of the purchasing power of money.

The determinants of money’s purchasing power provide Mises’s criterion for judging the work. As he presents Heyn’s argument, participants in ordinary commodity exchange assume that sufficient money exists and will remain available; they do not adjust the goods they offer for money according to changes in its quantity. Heyn consequently assigns monetary quantity a principally direct influence on interest, especially the discount rate, while treating its influence on money’s commodity-market exchange value as indirect, through credit.

Mises’s objection concerns both explanatory scope and the burden of proof. Such claims sharply oppose prevailing doctrine and resist reconciliation with the facts from which quantity theory proceeds. They therefore require a detailed justification that Heyn does not supply.

In weitem Bogen weicht er der Frage nach den Bestimmungsgründen der Kaufkraft des Geldes aus; ebenso behutsam vermeidet er die Berührung des Kapital- und Geldzinsproblems.

English translation: He gives the question of the determinants of the purchasing power of money a wide berth; with equal caution he avoids touching upon the problem of capital interest and money interest.

The review thus moves from appreciation to a precise methodological criticism: discussion of monetary requirements cannot bypass purchasing power, nor can an appeal to interest substitute for examining capital and monetary interest. Mises does not construct an alternative theory here; he identifies the problems a satisfactory account must confront. His closing regret preserves the opening respect for Heyn, making the criticism a demand for fuller explanation from a writer whose work remains valuable.