Oskar Engländer, Das Geld ohne Eigenwert und die Preislehre (1922)

Engländer’s theoretical article asks how prices emerge when money has no intrinsic value. Its five sections move from monetary nominalism and competing price theories to individual purchasing decisions, interdependent prices, and distribution. Exchanges mediated by intrinsically valueless money, he argues, cannot simply be explained as exchanges between independently valued goods.

So fordert die Lehre vom Gelde ohne Eigenwert eine Preislehre, die gegenüber der eben kurz bezeichneten schon vom Ausgangspunkt aus eine ganz verschiedene sein muß.

English translation: Thus the doctrine of money without intrinsic value demands a theory of price which, as compared with the one just briefly indicated, must be an entirely different one from its very starting point onward.

Section I maintains that nominalism has raised this problem without adequately solving it. Engländer interprets Knapp’s unit of value as a unit of pricing, payment, and calculation, distinguishing this function from subjective valuation. Neither state creation nor historical continuity with an earlier currency necessarily defines that function. Buyers’ expectations concern concrete purchasing possibilities, not an independently valued monetary unit:

Zunächst knüpft sich, wie wir bereits hervorgehoben haben, die Vorstellung von Preisen — eigentlich von um bestimmte Preise erlangbaren Gütern — nicht an die Werteinheit sondern an bestimmte Beträge von „Wert“einheiten.

English translation: To begin with, as we have already emphasized, the conception of prices — properly speaking, of goods obtainable at particular prices — attaches not to the unit of value but to particular amounts of "value" units.

This distinction supports his criticism of Bendixen and Elster. Giving the monetary unit a content derived from prices cannot explain those prices. Nor can money’s operation be reduced to a claim earned through a previous economic contribution. Purchasing power operates irrespective of how its holder obtained it; equal receipts and expenditures imply neither equal subjective valuations nor equal social usefulness. Engländer therefore separates monetary explanation from judgments about legitimate monetary creation:

Auch letzteres Geld ist doch jedenfalls Geld, ob gegen die Schöpfung selbst welche Einwendungen immer erhoben werden.

English translation: The latter money too is in any case money, whatever objections may be raised against its creation itself.

Section II examines alternative explanations. Equalizing marginal utility per monetary unit could establish relative prices without intrinsic monetary value, leaving an aggregate monetary relation to determine their absolute level. Engländer nevertheless rejects the continuity of satisfaction required for exact marginal equalization. His objection to Cassel concerns explanatory completeness: equations alone neither explain the psychological formation of demand nor demonstrate why given quantities entail particular price ratios.

Section III starts instead with the individual buyer’s maximum bid. For a unique, irreplaceable consumption good, the buyer can offer what remains of available wealth after provision for more important needs. Subjective valuation establishes purchasing priorities rather than directly measuring monetary willingness to pay. When several units are purchased at a uniform price, expenditure reserved for higher-ranking needs and the number of units jointly determine the maximum bid. The maximum aggregate offer can even fall as quantity rises, producing Engländer’s “Preiswilligkeitsparadoxon.”

Competition translates individual bids into price limits. Marginal purchasers, buyers seeking additional units, and excluded buyers constrain the range within which exchange can occur. Closely spaced income levels may make that range effectively determinate. This explanation remains provisional, however, because bids depend on other prices and available quantities are not always fixed.

Section IV extends the account to production. Prices of reproducible goods depend on input costs, while output adjusts to demand. Explanation must ultimately reach resources whose prices cannot be reduced to further production costs. In an initial model with labor as the sole ultimate resource, total monetary income relative to available labor determines labor’s unit price; labor requirements determine product-price ratios. Preferences affect the composition of production, but purchasing power governs allocation: less urgent wants of affluent buyers may prevail over more urgent wants of poorer buyers.

Other scarce resources and unequal production conditions qualify this initial labor-cost model. Preferences, income distribution, and resource quantities jointly affect relative prices. Competition among demands for products establishes equilibrium relations, while aggregate expenditure supplies their monetary scale. Some conditions yield determinate prices; others leave bargaining intervals. Substitution constrains prices without requiring exact marginal-utility equalization.

The conclusion places Engländer’s explanation between cost and marginal-utility theories: resource constraints and individual economic circumstances jointly determine consumption-good and input prices. Applications to wages, rents, and entrepreneurial gains remain schematic, and the absolute interest rate remains unresolved. Distinguishing aggregate spending power from money quantity alone also gives monetary institutions explanatory importance. The article’s central contribution is to connect nominal money with subjective valuation through purchasing priorities, unequal resources, and competition, without assigning the monetary unit an independent value.