Re: Monetary production versus monetary exchange economies

["Harry Veeder" <eo200@xxxxxxxxxxxxxxxxxxx>]

Two quotes from Greg Ransom's web site on Hayek.
The first is Keynes on Hayek. The second is Cottrell on Keynes.


"I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart
Mill's well-known dictum that 'there cannot, in short, be intrinsically a
more insignificant thing, in the economy of society, than money,' [when
Hayek writes]: "it means also that the task of monetary theory is a much
wider one than is commonly assumed; that its task is nothing less than to
cover a second time the whole field which is treated by pure theory under
the assumption of barter, and to investigate what changes in the conclusions
of pure theory are made necessary by the introduction of indirect exchange.
The first step towards a solution of this problem is to release monetary
theory from the bonds which a too narrow conception of its task has
created.'" (John Maynard Keynes, "The Pure Theory of Money: A Reply to Dr.
Hayek", Economica, Nov. 1931, pp. 395-396.)


"Keynes was shortly to develop his own approach to the general
task identified by Hayek [i.e. the task of monetary theory], under the
rubric of `A Monetary Theory of Production' (Keynes, 1973, pp. 381, et
seq.)." (A. Cottrell, 1994, p. 199)


Harry Veeder