Edited by Ingo Barens, Volker Caspari and Bertram Schefold
Chapter 3: The Political Element in Monetary Theory
Marcello de Cecco INTRODUCTION As this conference takes place in Darmstadt, I think it ﬁt to begin my lecture today by quoting a book whose English translation was preceded by an author’s introduction written in Darmstadt. It is, of course, Die Staatliche Theorie des Geldes, written by Georg Friedrich Knapp in 1905 and whose English translation appeared in 1924. In the introduction Knapp thanks J.M. Keynes, who we know had been the moving force behind the translation. This does not surprise us, coming directly after the publication of Keynes’s Tract on Monetary Reform. Keynes was always searching for elective aﬃnities with thinkers in his own as well as in other countries. The proposal of monetary stabilization by devaluation and straightforward monetary management, which he advanced in the Tract had been ﬁrst put forward, a few years before, by Piero Sraﬀa in his undergraduate dissertation. Keynes was in close contact with Sraﬀa and, by 1924, had succeeded in bringing him to Cambridge, snapping him up from Benito Mussolini’s vindictive clutches. It was natural for him to bring to the attention of English readers also the work on money which had, in the years before the war, caused such a stir in Germany. In the introduction to the ﬁrst German edition, G.F. Knapp had written: ‘I hope for the approval and perhaps the help of those who take the monetary system (or better, the whole system of payments) to be a branch of political science. I hold the attempt...
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