Alfred Amonn, “Die Quantitätstheorie in der älteren, neueren und neuesten Literatur” (1953)

Amonn’s essay reconstructs the quantity theory in response to what he regards as its mid-century simplification. Hansen and Schneider present the doctrine as $P=f(M)$—prices as a simple function of the money stock—and then reject it as mechanistic. Amonn’s first move is historical: even the oldest monetary writers related money to goods brought to market, and therefore saw money value as a relation, not as an automatic effect of money alone.

Man wird selbst in der ältesten geldtheoretischen Literatur vergeblich nach einer derart primitiven Fassung der Quantitätstheorie suchen.

English translation: Even in the oldest monetary-theoretical literature one will search in vain for so primitive a formulation of the quantity theory.

The main thesis follows: serious quantity theory explains the purchasing power of money through effective monetary demand in relation to the volume of goods and transactions. It does not deny human action; it assumes dispositions to spend, hold, borrow, or produce. The “mechanistic” criticism therefore mistakes shorthand for doctrine.

Was die Vertreter der Quantitätstheorie meinen, ist also, dass, wenn mehr Geld in die Hände der Wirtschaftssubjekte kommt, es von diesen ausgegeben wird, dass eine zusätzliche Geldmenge eine zusätzliche Nachfrage zur Folge hat und dass, wenn diese zusätzliche Nachfrage nicht durch ein zusätzliches Angebot kompensiert wird, die Preise entsprechend steigen müssen.

English translation: What the proponents of the quantity theory mean is therefore that, when more money comes into the hands of economic agents, it is spent by them, that an additional quantity of money results in an additional demand, and that, if this additional demand is not compensated by an additional supply, prices must rise accordingly.

The structure is dogmenhistorisch. Amonn traces a line from Bodin, Davanzati, and Montanari through Locke, Cantillon, Hume, the classics, Fisher, and Keynes. Each stage adds a determination: first the ratio of money to market goods; then circulating rather than merely existing money; then velocity; then the turnover of goods; then credit and credit media. Hume is decisive because he already allows dynamic and behavioral qualifications: new money may first stimulate enterprise and production before raising prices, while habits and “customs and manners” alter the relevant magnitudes. The theory is thus an evolving framework, not a fixed proportionality dogma.

The central technical discussion concerns Fisher’s equation, $MV+M'V'=PT$. Amonn stresses that $PT$ abbreviates $\sum pq$, not a real aggregate commodity quantity multiplied by a single concrete price level. The equation is therefore neither a strict logical identity nor itself a causal law. It states a functional relation among exchange magnitudes; causal interpretation begins only when the equation is brought to empirical reality.

Das ist richtig, aber kein Einwand.

English translation: That is correct, but it is no objection.

This answer to the charge of non-causality is central. A simultaneous equation cannot decide which variable moves first. It can show that if one magnitude changes, others must change in determinate ways; but whether money quantity, velocity, transaction volume, or credit is independent in a given case is a historical and institutional question. Hence Amonn’s quantity theory is conditional: at full employment $M$ may dominate because $T$ is relatively fixed and $V$ comparatively stable; underemployment or crisis can make $T$ and $V$ more important, and new money may expand output rather than prices.

Sections V and VI supply the conceptual culmination. Since J. St. Mill, Amonn says, the “purified” quantity theory is simply general value theory applied to money. Prices are the exchange relation between goods and money; unless money is exempt from supply and demand, its value must be explained by them. Against Hegeland’s narrower reinterpretation, he insists that since Hume the central problem has been money value and price determination.

Die Quantitätstheorie in ihrer neueren, sozusagen «geläuterten» Form – seit J. St. Mill – ist tatsächlich nichts anderes als die Erklärung des Geldwerts nach demselben Prinzip, nach dem auch der Wert der Güter erklärt zu werden pflegt, d. h. sie bedeutet nichts anderes als die Anwendung des Prinzips der Wert-erklärung durch Angebot und Nachfrage auf den besonderen Fall des Geldwerts.

English translation: The quantity theory in its more recent, so to speak «purified» form – since J. St. Mill – is in fact nothing other than the explanation of the value of money according to the same principle by which the value of goods is customarily explained; that is, it means nothing other than the application of the principle of value-explanation through supply and demand to the special case of the value of money.

The relevant money supply is not the stock “in the country”; it is money offered for goods, including credit purchasing power and multiplied by velocity. Money remains a special case because, as medium of exchange, it is not demanded for direct want-satisfaction. Its offer against goods is a quantity, not an ordinary price-quantity schedule; demand for it is likewise not for a definite consumable amount, but for as much purchasing power as sellers can obtain.

Dadurch, dass es sich bei der Nachfrage und beim Angebot in bezug auf Geld (als Tauschmittel) lediglich um einfache Quantitäten handelt – und nicht um eine Beziehung zwischen Quantität und Preis –, dass Nachfrage und Angebot hier einfach Quantitäten sind, liegt die besondere Art der Bestimmtheit des Geldwertes gegenüber der Art der Bestimmtheit der Preise der Güter (oder « Waren ») und das rechtfertigt für die Theorie der Geldwertbestimmtheit die Bezeichnung Quantitätstheorie.

English translation: In the fact that, with respect to demand and supply in relation to money (as a medium of exchange), it is merely a matter of simple quantities – and not of a relation between quantity and price –, that demand and supply here are simply quantities, lies the peculiar kind of determinateness of the value of money as against that of the prices of goods (or « wares »); and this justifies, for the theory of the determination of the value of money, the designation quantity theory.

Amonn separates three levels often confused in criticism: the functional exchange relation, the causal sequence, and the empirical situation that decides which variable is operative. He admits that older formulations need refinement, but rejects criticism directed at a simplified version of the doctrine. Like the law of free fall, quantity theory may retain analytical validity even where disturbances prevent pure empirical realization. The proper task, he concludes, lies in refinement rather than polemic:

Darin wäre die heutige Aufgabe zu sehen anstatt in einer völlig überflüssigen und sinnlosen Polemik gegen eine alte, längst überholte, im Grunde genommen überhaupt nie vertretene Theorie.

English translation: Herein the task of the present would lie, rather than in a wholly superfluous and senseless polemic against an old, long-superseded theory that, at bottom, was in fact never held at all.