Laidler makes it hard on a discussant. It is such a good paper – very insightful, very balanced; there is much in it to admire. The idea of doing the Austrians and the Swedes together is a good one. The juxta-position of the two helps put both in perspective at the same time. In macroeconomics, both start from Knut Wicksell. It is curious that from this common point of departure they would diverge so fast.

My first comment is a bit speculative and has to do with the concepts of “natural values” and “neutrality of money.” I wonder if there might not be a missing strain here. It may not be crucial to Laidler's story about the Austrians and the Swedes, but it might help to explain what they were about and to explain, moreover, why what they tried to do had its limitations in certain directions.

But I am not quite sure about doctrine history on the point I want to make. I tried to bring this up with Don Patinkin when he spoke on the neutrality of money (cf. his article in the New Palgrave) at UCLA in the fall of 1986, but I do not think he saw it my way. So I should stress that this is speculative. I want to point out a connection between old doctrines about natural values on the one hand and neutrality of money (in a particular sense) on the other. It seems to me that there is this line running through nineteenth-century monetary theory. What everybody is trying to accomplish is to figure out how to manage fractional reserve banking under a commodity standard so that it would not be a source of instability. So in the background there is always a gold standard (or a bimetallic standard), and of course gold money was never neutral in the Patinkin sense. Increasing the quantity of gold money would have to change relative values since gold was itself a commodity. Nineteenth-century authors would not have thought of gold as being neutral in the (fiat) quantity theory sense.