Abstract

On the Monetarism Debate in “Kredit und Kapital”

In this article, Ihave attempted a general review of the monetarism debate which developed in “Kredit und Kapital” following the paper by Thomas Mayer, “The Structure of Monetarism”. In doing so, I have proceeded from the view that the monetarism debate like all big debates in the history of political economy - among which I feel the monetarism debate can be counted even now - has not only a theoretical, analytical aspect, but also a practical political one. Accordingly, I have systematized the results of the debate on the one hand from the theoretical, analytical standpoint and on on the other from the practical, political standpoint. In summarizing the theoretical debate, my prime concern was to tighten up a little Thomas Maver’s somewhat loose interelationship among his first four main theoretical theses. To this end I have shown that the quantity of money can be ascribed a greater influence on the price trend only if - in line with Mayer’s 2nd, 3rd and 4th theses - the demand of private economic entities for money and goods is assigned a relatively high degree of stability and if a high diffusion capacity of the system for exogenous impulses is assumed. As the presentation of the contrary Keynesian position has been relatively disconnected in the debate up to now, I have formulated the chief theoretical propositions of the Keynesian into four main theses in the same way Mayer has done for the monetarists. Mayer depicts the economic policy theses of the monetarists - though in a relatively loose form - as the consequence of their theoretical conceptions. Accordingly, he relegates the theses based more on value judgments to the end of his list. In contrast, it is my view that fundamental economic policy theses are always set up on certain value conceptions; I have therefore attempted to outline progressively the economic policy conceptions of the monetarists and fiscalists in precisely the reserve order from the basic regulatory policy conceptions to their diverging attitudes to the value of money and unemployment, and on the monetary policy arrangements.