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Will dodo-bones circulate? Dodo-bones and poker chips; circular reasoning 132 Both medium of exchange and standard of value must be valuable 133 Is inconvertible paper an exception? 133-134 Doctrine that money gives legal claim to things in general 134 Kemmerer's assumptions; money made of commodity, once valuable, now used only as money 135 Commodity theory requires present commodity value 135 Historical vs. cross-section view: possibility that such money would circulate 135-136 Value not tied up with marginal utility or commodities: social value theory; derived values often become independent of original presuppositions, in economic as well as legal and moral spheres 136-139 But this no basis for quantity theory: social psychology, not mechanics 139 "Banker's psychology" vs. psychology of blind habit: India, Austria, United States; monetary phenomena of war times; "credit theory" of Greenbacks 139-142 Question-begging definitions 142-143 Assumptions of quantity theory: blind habit and fluid prices 143-144 Extreme commodity theory denies that money-use adds to value of money; usually not true; analysis of money-functions 144-150 Hypothetical case in which whole value of money comes from commodity value 150-152 Money must have value apart from monetary employments, but, in general, gains additional value from employment as money 152-153   CHAPTER VIII

THE "EQUATION OF EXCHANGE" Fisher leading, most consistent, most uncompromising quantity theorist: wide acceptance of his views 154 Taussig vs. Fisher 155 Fisher and dodo-bone doctrine: logical part of quantity theory; Fisher's value concept 155-156 "Equation of exchange": analysis of Fisher's version, typical of all 156-171 In what sense equality between two sides of equation? Meaning of "T" 158-161 No "goods side" to equation; both sides sums of money; equal because identical; equation meaningless 161-162 All factors in equation highly abstract 162-163 "P" and "T" cannot both be given independent definitions: P defined as weighted average, with T in denominator; and must be changed from year to year, as elements in T change, even though no prices change 164-166 This makes circular theory: problem defined in terms of explanation 165-166 Causal theory associated with equation of exchange 166 Equation amplified to include credit; not acceptable to Nicholson or Walker, and caricature of conditions in Germany and France public@vhost@g@gutenberg@html@files@34823@[email protected]#Page_166" class="pginternal"