ABSTRACT
This chapter begins by using an alternative approach to economics to help people make sense of the shortcomings of neoclassical models of monetary exchange. The work of the economist Carl Menger and the sociologist Georg Simmel will be given careful scrutiny. The framework provided by Menger and Simmel will be extended by analogizing money’s role in the communication of knowledge in the marketplace to language’s role in the communication of knowledge in other social processes. Much in the same way that the spoken and written word make possible mutual understanding between individuals in society, so do money and money prices make possible orderly processes between economic actors in the market. The economist’s understanding of the market process can bring to Simmel's analysis an explanation of how money operates. Discussions of money and monetary theory within the Austrian approach invariably turn to Carl Menger's theory of the origin of money.
