11: Measuring the Objective Exchange Value of Money
The problem of measuring the objective exchange value of money "has attracted more attention than its significance warrants." It is a problem of tremendous mathematic complexity, given that money is the measure by which all goods are traded. It would necessitate an understanding of the exchange value of each good for every other good, and it would require the exchange ratios among goods to remain fixed.
And therein lies the problem: that in a free market, the exchange value of one good against another is subject to the use-value placed upon those goods by the parties to the exchange. This value is neither consistent nor constant, making the equation ultimately unsolvable.
An attempt to define an objective exchange value of money rests upon the assumption that, were it possible to subject the price movements of large quantities of commodities and consider them by a "particular method of calculation," the variances in price would effectively cancel one another out, such that one could isolate the determinants of price according to monetary factors.
This approach is foiled by the fact that process are effected by the subjective assessment of value asserted by the individuals who engage in each market exchange. And as such, the factors that influence these subjective evaluations are disparate and random, and are not subject to functional prediction.
Consequentially, the methods of statistical analysis have historically proven to be no more reliable than the degree to which the model on which they are based happens to coincide with the innumerable number of subjective factors that influence trade.
(EN: Von Mises continues to poke holes in existing theories of the day, namely that of Weiser, but it ultimately comes to the same conclusion: that it is a fruitless endeavor, and even if solved, would reveal no insight that has any utility or significance.)
Interest in determining objective exchange value is of little value to those involved in commerce, though it does represent a method of observing the fluctuations in the demand for money as a medium of exchange for consumer goods, which may appear to serve "useful workaday services for the politician." But economists and consumers should be wary of such estimations, particularly in "demanding more from them than they are able to perform" (in terms of predicting the variation of money, in terms of its purchasing power).