Karl Theodor von Inama-Sternegg: Review of Karl Knies’s Das Geld (1887)

Inama-Sternegg’s 1887 review of the second, revised and enlarged edition of Karl Knies’s Das Geld concentrates on developments in an already influential account of money. His starting point is the book’s assimilation into contemporary economic theory:

Das Buch ist in Aller Händen, ja noch mehr, es ist in seinem wesentlichsten Inhalte von der neueren Theorie recipirt und äussert noch fortwährend nachhaltige, fruchtbare Wirkung.

English translation: The book is in everyone's hands; indeed, still more than that, in its most essential content it has been received by the more recent theory and still continues to exert a lasting, fruitful effect.

Rather than recapitulating its established arguments, the reviewer examines additions concerning capital, the relationship between economics and jurisprudence, and monetary policy. His praise leaves room for substantive qualifications: economic criticism can clarify legal and institutional problems without finally resolving them.

The opening discussion emphasizes Knies’s distinction between capital as a real means of production and capital as a possession. Inama-Sternegg credits this distinction with restoring the concept of national capital as the productive resources available to a people, beyond the perspective of individual ownership. He identifies the disciplinary centre of this analysis explicitly:

Der Schwerpunkt dieser Ausführungen liegt allerdings auf dem rein volkswirthschaftlichen Gebiete.

English translation: The centre of gravity of these expositions lies, to be sure, in the purely economic field.

Yet the economic emphasis does not make the discussion irrelevant to law. On the contrary, the boundary between economic and juridical concepts becomes a principal concern of the review:

Daneben ist es nun aber doch auch höchst wichtig, den Untersuchungen zu folgen, welche Knies über das Verhältniss von Jurisprudenz und Nationalökonomie im Anschluss an diese Ausführungen über das Capital anstellt.

English translation: Alongside this, however, it is also of the highest importance to follow the investigations which Knies, in connection with these expositions on capital, undertakes concerning the relation between jurisprudence and political economy.

Knies assigns capital to economics because its definition concerns the factual availability of goods for future needs. Property and wealth, by contrast, involve legally protected ownership, claims, and debts. Inama-Sternegg examines this allocation through Kühnast’s attempt to construct a juridical concept of capital from production and profitability understood through positive law. The dispute bears directly on company law, particularly non-cash contributions to share capital. The reviewer endorses Knies’s objection that Kühnast replaces the legally determinate concept of wealth with an insufficiently clear concept of capital.

Nevertheless, Inama-Sternegg finds that objection incomplete. A company’s wealth cannot simply be equated with its working capital, and bank capital likewise denotes something more specific than bank wealth generally. He therefore proposes legal or contractual dedication to an enterprise as a possible basis for a juridical concept of capital. Goods committed to a business, whether generally or in prescribed forms and amounts, could constitute its distinctive object. This proposal both preserves Knies’s conceptual criticism and reveals deficiencies in legislation concerning banks, joint-stock companies, and cooperatives. The reviewer thus seeks a legally meaningful distinction without merely importing an economic definition.

Turning to money, Inama-Sternegg regards the expanded discussions of its functions as a measure of value and general medium of exchange as chiefly addressed to economists. For jurists, he foregrounds its statutory functions, especially Knies’s distinction between paper money and a claim to money. In the account presented, paper money is neither the bearer of such claims nor a means of payment in Knies’s terminology, but a legally constituted means of discharge. Its operation nevertheless presupposes another statutory measure of value and standard of prices. The crucial distinction is between money’s economic functions and its legally conferred capacity to extinguish obligations.

The final discussion concerns international monetary cooperation. Inama-Sternegg accepts Knies’s criticism of contractual international bimetallism, particularly Cernuschi’s proposals, as unrealistic under existing international conditions. But he draws a constructive conclusion from Knies’s concessions concerning Germany’s “limping” currency and the possible effects of cooperation among economically important states. If agreement could reduce the value gap between gold and silver and strengthen their relative stability, it would address pressing monetary difficulties. Political connections among states might provide a basis for such limited coordination even where a comprehensive bimetallic arrangement remained unattainable.

The review’s distinctive contribution lies in these qualified extensions of Knies’s arguments. Inama-Sternegg accepts the force of conceptual and practical criticism while resisting exclusively negative conclusions. His discussion opens space both for a juridical concept of capital grounded in dedication to an enterprise and for international monetary cooperation directed toward achievable stabilization.