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The Review of Austrian Economics

, Volume 13, Issue 2, pp 115–120 | Cite as

Alchian and Menger on Money

  • Charles W. Baird
Article

Abstract

Carl Menger and Armen Alchian told stories of the emergence of money as a spontaneous order involving two types of costs—costs of recognizing attributes of goods and costs of finding willing exchange partners. Menger assumed that the first are zero and the second are positive. Alchian assumed the opposite. In the real world both types of costs are positive, so a truly satisfactory story of the emergence of money as a spontaneous order has yet to be written. This is another example of the complementarity of work done by some Austrian and some neoclassical economists.

Keywords

Real World Public Finance Neoclassical Economist Exchange Partner Spontaneous Order 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Alchian, A. (1950) “Uncertainty, Evolution and Economic Theory.” The Journal of Political Economy 58(3): 211–221.Google Scholar
  2. Alchian, A. (1964) University Economics. Belmont, CA: Wadsworth Publishing Co.Google Scholar
  3. Alchian, A. (1977) “Why Money?” In Economic Forces at Work, pp. 111–123. Indianapolis: Liberty Press.Google Scholar
  4. Baird, C. (1989) “James Buchanan and the Austrians.” The Cato Journal 9(1): 201–230.Google Scholar
  5. Horwitz, S. (1992) Monetary Evolution, Free Banking and Economic Order, p. 42. Boulder, CO: Westview Press.Google Scholar
  6. Menger, C. [1976 (1871)] Principles of Economics, Chap. VIII. (Translated by James Dingwall and Bert F. Hoselitz), New York: New York University Press.Google Scholar
  7. O'Driscoll, J. (1986) “Money: Menger's Evolutionary Theory.” History of Political Economy 18(4): 601–616 at 612.Google Scholar
  8. White, L. (1999) The Theory of Monetary Institutions, p. 10. Oxford: Blackwell Publishers.Google Scholar

Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Charles W. Baird
    • 1
  1. 1.The Smith CenterCalifornia State UniversityHaywardUSA

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