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Jevons (1875):

Currency is to the science of economy what the squaring of the circle is to geometry, or perpetual motion to mechanics.

I can't make any sense of this quote. I know that the "squaring of the circle" and "perpetual motion" are impossible, but Jevons probably doesn't mean to say that "currency" is likewise impossible?

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  • $\begingroup$ Based on the subsequent remarks on that page, it seems he simply/actually meant to say it's a deep and difficult topic, rather than intractable. $\endgroup$ Commented Apr 17, 2020 at 13:05
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    $\begingroup$ A quick glance at Wikipedia suggests that perpetual motion being impossible under the modern laws of thermodynamics was not settled in 1875. It would have been an extremely arcane debate at the time of writing, and Jevons may have only been aware of the science of an earlier date. $\endgroup$ Commented Apr 17, 2020 at 14:40

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Yes, I think he was referencing impossibility or at least paradox. Jevons was an English mathematician and logician. I believe he references De Morgan later as support for this quote. De Morgan had written a book on mathematical paradoxes.

Many paradoxes of specie and money, in general, were being explored at that time. He references some of them.

Let me give you a simple example that was in exploration around that time.

One use of money is as a measuring device. It is a yardstick, to use the imperial measures that Jevons would have been thinking in terms of. Something may cost five pounds, six shillings. If you have an accountant, they will record it that way. You just measured something. It may go into the account called "total assets."

However, six months later, that same object may have a different price. It may now be four pounds or six pounds, two pence. In the former case, your yardstick shrank; in the latter, it lengthened. How can something both properly measure something and not have a constant definition?

To be honest, that is still a paradox. Modern inflation theory does not do a good job at discussing this. Price theory does a pretty good job, but if you want to see if we are doing a good job, give an economist a list of 5000 SKUs and ask them for the price at a local Walmart on June 7th, 2025. Ask them by February 1st, 2022 so there is plenty of time ahead. Wait until then and see how we did. How close did we predict the true prices?

If we really understood money and its relationships to goods and services, there would be few surprises. Why did the vastly superior Apple almost get destroyed by the marginal IBM PC? Why were people unwilling to pay for a vastly superior machine. It was so undesirable that Microsoft had to buy 40% of Apple to keep it afloat so that had a competing operating system so it could tell the courts it was not a monopoly. Why pay more for an inferior machine, when just months prior people were begging for Apples?

The yardstick moves.

If we think of utility as a measure of satisfaction, some economists would dispute that characterization, then it is measured by our emotions. That is how humans and animals process such decisions. We feel them. How many married couples do you know where the couple or at least one person in the marriage has changed how they feel about the other?

Jevons warns that the content he is covering would, in truth, cover a vast library. He was correct. Money as an idea is non-trivial. There are many paradoxical elements, particularly if you look at 19th century issues.

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Not only was Jevons not looking at the same science, he was using perpetual motion as a metaphor of a difficult quest.

By currency Jevons seems obviously to mean simply wealth, in an archaic dialect of the United States.

He is simply saying in a belabored way, wealth is hard to achieve the way alchemists could not find gold, or the way perpetual motion was a magical quest.

This technique of scaring the reader can be popular for writers and lecturers trying to look more appealing for lack of better alternatives and because they may find it more enjoyable than sounding boring or vague.

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