Volume 7, No.1 (Spring 2004)
It is pretty well established within Austrian economics that the optimum quantity of money is whatever level is established at any given time. The logical implication of this claim is that any amount of the commodity that intermediates trade will do as well as any other in acquitting this task. This being the case, there is no social or even private gain to be obtained by anyone adding to the money stock. The present paper challenges this view, but from within the praxeological tradition. That is, we shall argue that although prominent Austrian economists have indeed made this argument, they are incorrect from their own basic perspective, which is shared in full by the present authors. Our thesis, in contrast to theirs, is that “more is better,” or, more strictly speaking, at the very least it is possible that additional stocks of money can make a positive contribution to economic welfare.
