General Economic History (classes, 1947)

From Karl Polanyi
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Economics 151


Part I. Theoretical terms

A. Classical system

Definition: Money is a commodity primarily used in exchange.


B. Neo-classical system

(a) Pre-Keynesian system. Mostly some kind […] Schumpeter, e. g., retained the definition of “indirect exchange” for money. Böhm-Bawerk had previously introduced “exchange” as a special type of use for commodities, and Wieser proceeded to elaborate the marginal utility of money. In this early phase, neo-classical theory was yet unconscious of the conceptual difficulty of putting money into the scheme.

(b) Keynesian system. In this system the role of money is purely pragmatic. No attempt is made to deduce its presence from the allocation of scarce means. Money itself is here one of the scarce means, but a means which is contrasted with commodities. The classical system denied this contrast (and, consequently, was unable to explain specifically monetary phenomena). The presence of money is here rightly taken for granted-since it can only be institutionally explained, not conceptually deduced. The phrase about the “veil of money” as used by the classics was a remnant of Humean solepcism in regard to the allegedly conventional value of money, and the (oppposite) Ricardian fallacy of the commodity character of money.Actually, the value of money does not derives from the fact […]

Part II. Institutional terms

[…] Section 1. Means of Payment


The Hebrew Laws of Deuteronomy credited to late 7th Century B.C., but using much earlier material. On Suque (Bak Island) entrance fees, grades, “freemasonry”, Cyril Forde writes: “This system gives a greater importance than in the rest of Melanesia. Payments are made in conventional media of payment, e.g. feathers for dances are paid in dentalia, or shell necklaces; songs for suque admission maid in strings of shell money.

Documents Informations

KPA: 31/04, 1-4 (first version), 5-8 (Second version with hand-written notes)