Chapter 8

[58]An estimated value being previously put upon produce, let it be lodged in a bank, and drawn out again, whenever it is required, merely stipulating, by common consent, that he who lodges any kind of property in the proposed National Bank, may take out of it an equal value of whatever it may contain, instead of being obliged to draw out the self-same thing that he put in.” L. c., p. 68.

[59]L. c., p. 16.

[60]Gray: “Lectures on Money, etc.,” p. 182.

[61]L. c., p. 169.

[62]“The business of every country ought to be conducted on a national capital.” John Gray, “The Social System,” etc., p. 171.

[63]“The land to be transformed into national property.” L. c., p. 298.

[64]See e. g. W. Thompson: “An Inquiry into the Distribution of Wealth, etc.,” London, 1827. Bray, “Labour’s Wrongs and Labour’s Remedy,” Leeds, 1839.

[65]Alfred Darimont’s “De la Reforme des banques,” Paris, 1856, may be considered as a compendium of this melodramatic theory of money.

[66]“Di due sorte è la moneta, ideale e reale; e a dui diversi usi è adoperata, a valutare le cose e a comperarle. Per valutare è buona la moneta ideale, cosi come la reale e forse anche più. L’altro uso della moneta è di comperare quelle cose istesse, ch’ella apprezza ... i prezzi e i contratti si valutano in moneta ideale e si eseguiscono in moneta reale.” Galiani, l. c., p. 112 sq. (“Money is of two kinds, ideal and real; and is adapted to two different uses: to determine the value of things and to buy them. For the purpose of valuation ideal money is as good as real and perhaps even better. The other use of money is to buy the same things which it appraises ... prices and contracts are determined in ideal money and are executed in real money.”)

[67]This, of course, does not prevent the market price of commodities to be above or below their value. However, this consideration is foreign to simple circulation and belongs to quite another sphere to be considered later, when we shall investigate the relation between value and market price.

[68]How deeply some beautiful souls are wounded by the merely superficial aspect of the antagonism which asserts itself in buying and selling, may be seen from the following abstract from M. Isaac Pereire’s: “Leçons sur l’industrie et les finances,” Paris, 1832. The fact that the same Isaac in his capacity of inventor and dictator of the “Credit mobilier” has acquired the reputation of the wolf of the Paris Bourse shows what lurks behind the sentimental criticism of economics. Says Mr. Pereire at the time an apostle of St. Simons: “C’est parceque tous les individus sont isolés, séparés les uns des autres, soit dans leur travaux, soit pour la consommation, qu’il y a echange entre eux des produits de leur industrie respective. De la necessité de l’échange est derivée la necessité de determiner la valeur relative des objets. Les idées de la valeur et de l’échange sont donc intimement liées, et toutes deux dans leur forme actuelle exprime l’individualisme et l’antagonisme.... Il n’y a lieu a fixer la valeur des produits que parcequ’il y a vente at achat, en d’autres termes, antagonisme entre les divers membres de la societé. Il n’y a lieu à s’occuper du prix, de valeur que là oú il y avait vente et echat, c’est à dire, oú chaque individu était obligé de lutter, pour se procurer les object nécessaires a l’entretien de son existence” (l. c., p. 2, 3 passim). (“Since individuals are isolated and separated from one another both in their labors and in consumption, exchange takes place between them in the products of their respective industries. From the necessity of exchange arises the necessity of determining the relative value of things. The ideas of value and exchange are thus intimately connected and both express in their actual form individualism and antagonism.... The determination of values of products takes place only because there are sales and purchases, or, to put it differently, because there is an antagonism between different members of society. One has to occupy himself with price and value only where there is sale and purchase, that is to say, where every individual is obliged to struggle to procure for himself the objects necessary for the maintenance of his existence.”)

[69]“L’argent n’est que le moyen et l’acheminement, au lieu que les denrées utiles à la vie sont la fin et le but.” (“Money is but the ways and means, while the things useful in life are the end and object.”) Boisguillebert: “Le Détail de la France,” 1697, in Eugene Daires ‘“Economistes financiers du XVIIIieme siècle, vol. I., Paris, 1843, p. 210.

[70]In November, 1807, William Spence published a pamphlet in England under the title: “Britain Independent of Commerce.” The principle set forth in this pamphlet was further elaborated by William Cobbet in his “Political Register” under the virulent title, “Perish Commerce.” To this James Mill replied in 1808 in his “Defence of Commerce” which contains the passage quoted above from his “Elements of Political Economy” (p. 190-193, Transl.). In his controversy with Sismondi and Malthus on commercial crises, J. B. Say appropriated this clever device, and as it would be difficult to point out with what new idea this comical “prince de la science” had enriched political economy, his continental admirers have trumpeted him as the man who had unearthed the treasure of the metaphysical balance of purchases and sales; as a matter of fact, his merits consisted rather of the impartiality with which he equally misunderstood his contemporaries, Malthus, Sismondi and Ricardo.

[71]The manner in which economists explain the different aspects of the commodity may be seen from the following examples:“With money in possession, we have but one exchange to make in order to secure the object of desire, while with other surplus products we have two, the first of which (procuring the money) is infinitely more difficult than the second.” (G. Opdyke, “A Treatise on Political Economy,” New York, 1851, p. 277-278.)“The superior saleableness of money is the exact effect or natural consequence of the less saleableness of commodities.” (Th. Corbet, “An Inquiry into the Causes and Modes of the Wealth of Individuals.” etc., London, 1841, p. 117.)“Money has the quality of being always exchangeable for what it measures.” (Bosanquet, “Metallic, Paper and Credit Currency,” etc., London, 1842, p. 100.)“Money can always buy other commodities, whereas other commodities can not always buy money.” (Th. Tooke, “An Inquiry into the Currency Principle,” 2d ed., London, 1844, p. 10.)

[71]The manner in which economists explain the different aspects of the commodity may be seen from the following examples:

“With money in possession, we have but one exchange to make in order to secure the object of desire, while with other surplus products we have two, the first of which (procuring the money) is infinitely more difficult than the second.” (G. Opdyke, “A Treatise on Political Economy,” New York, 1851, p. 277-278.)

“The superior saleableness of money is the exact effect or natural consequence of the less saleableness of commodities.” (Th. Corbet, “An Inquiry into the Causes and Modes of the Wealth of Individuals.” etc., London, 1841, p. 117.)

“Money has the quality of being always exchangeable for what it measures.” (Bosanquet, “Metallic, Paper and Credit Currency,” etc., London, 1842, p. 100.)

“Money can always buy other commodities, whereas other commodities can not always buy money.” (Th. Tooke, “An Inquiry into the Currency Principle,” 2d ed., London, 1844, p. 10.)

[72]The same commodity can be bought and resold many times. It circulates, then, not merely as a commodity, but in a capacity which does not exist from the point of view of simple circulation, of the simple contrast of commodity and money.

[73]The quantity of money is immaterial “pourvu qu’il y en ait assez pour maintenir les prix contractés par les denrées” (as long as it is sufficient to maintain the existing prices of commodities). Boisguillebert, l. c. p. 210.“If the circulation of commodities of four hundred millions required a currency of forty millions, and ... this proportion of one-tenth was the due level, estimating both currency and commodities in gold; then, if the value of commodities to be circulated increased to four hundred and fifty millions, from natural causes ... I should say the currency, in order to continue at its level, must be increased to forty-five millions.” (William Blake, “Observations on the Effects Produced by the Expenditure of Government, etc.,” London, 1823, p. 80.)

“If the circulation of commodities of four hundred millions required a currency of forty millions, and ... this proportion of one-tenth was the due level, estimating both currency and commodities in gold; then, if the value of commodities to be circulated increased to four hundred and fifty millions, from natural causes ... I should say the currency, in order to continue at its level, must be increased to forty-five millions.” (William Blake, “Observations on the Effects Produced by the Expenditure of Government, etc.,” London, 1823, p. 80.)

[74]“E la velocità del giro del danaro, non la quantità dei metalli che fa apparir molto a poco il danaro.” (Galiani, l. c. p. 99.) (“It is the rapidity of the circulation of money and not the quantity of metals that causes a greater or smaller amount of money to appear.”)

[75]An example of an extraordinary decline of metallic circulation from its average level was furnished by England in 1858, as may be seen from the following extract from the London Economist: “From the nature of the case (namely, the isolated nature of simple circulation) very exact data cannot be procured as to the amount of cash that is fluctuating in the market, and in the hands of the not banking classes. But, perhaps, the activity or the inactivity of the mints of the great commercial nations is one of the most likely indications in the variations of that amount. Much will be manufactured when it is wanted; and little when little is wanted.... At the English mint the coinage was in 1855 £9,245,000; 1856, £6,476,000; 1857, £5,293,855. During 1858 the mint had scarcely anything to do.” (Economist, July 10, 1858.) But at the same time about eighteen million pounds sterling were lying in the bank vaults.

[76]Dodd, “Curiosities of Industry,” etc., London, 1854.

[77]“The Currency Question Reviewed, etc., by a Banker.” (Edinburgh, 1845, p. 69.)“Si un écu un peu usé etait reputé valoir quelque chose de moins qu’un écu tout neuf, la circulation se trouverait continuellement arrêtée, et il n’y aurait pas un seul payement qui ne fut matière à contestation.” (G. Garnier, l. c. t. I., p. 24.) (“If an ecu slightly used would pass for a little less than an entirely new ecu, circulation would be continually interfered with, and not a payment would take place that would not give rise to controversy.”)

[77]“The Currency Question Reviewed, etc., by a Banker.” (Edinburgh, 1845, p. 69.)

“Si un écu un peu usé etait reputé valoir quelque chose de moins qu’un écu tout neuf, la circulation se trouverait continuellement arrêtée, et il n’y aurait pas un seul payement qui ne fut matière à contestation.” (G. Garnier, l. c. t. I., p. 24.) (“If an ecu slightly used would pass for a little less than an entirely new ecu, circulation would be continually interfered with, and not a payment would take place that would not give rise to controversy.”)

[78]W. Jacob, “An Inquiry Into the Production and Consumption of the Precious Metals.” (London, 1831, vol. II., ch. XXVI.)

[79]David Buchanan, “Observations on the Subjects Treated of in Dr. Smith’s Inquiry on the Wealth of Nations,” etc. (Edinburgh, 1841, p. 3.)

[80]Henry Storch, “Cours d’Economic Politique.” etc., avec des notes par J. B Say. Paris, 1823, tom. IV., p. 179. Storch published his work in French at St. Petersburg. J. B. Say immediately issued a Parisian reprint, supplemented with alleged “notes,” which as a matter of fact contain nothing but commonplaces. Storch (see his “Considerations sur la Nature du Revenue National,” Paris, 1824) took by no means kindly to this annexation of his work by the “prince de la science.”

[81]Plato de Rep. L. II “νόμισμα ξύμβολον τῆς ἀλλαγῆς.” (“Money symbol of exchange.”) Opera omnia, etc., ed. G. Stallbumius, London, 1850, p. 304. Plato develops money only in two capacities—as a measure of value and a token of value, but demands, in addition to the token of value serving for home circulation, another one for trade between Greece and foreign countries. (See also Book V of his Laws.)

[82]Aristotle, Ethic. Nicom, l. 5., ch. 8, l. c.: οἶον δ ‘ὑπάλλαγμα τῆς χρείας τὸ νόμισμα γέγονου κατὰ συνθήκην καὶ διὰ τοὔτο τοὔνομα ἔχει νόμισμα. ὅτι οὐ φὐσει ἀλλὰ νόμῳ, καὶ ἐφ ‘ἡμῖν μεταβαλεῖν καὶ ποιῆσαι ἄχρηστον.” (“In the satisfaction of wants money became the medium of exchange by agreement. And for that reason it bears the name νόμισμα, because it owes its existence, not to nature, but to law (νόμω), and it is in our power to change it and make it void.”) Aristotle had a far more comprehensive and deep view of money than Plato. In the following passage he beautifully shows how barter between different communities creates the necessity of assigning the character of money to a specific commodity, i. e., one which has itself an intrinsic value. “Ξενικωτέρας γὰρ γενομένης τῆς βοηθείας τῷ εἰσάγεσθαι hὦν ἐνδεεῖς καὶ ἔκπεμπειν ὥν ἐπλέοναζον, ἐξ ἀνάγκης ἡ τοῦ νομίσματος ἐπορίσθη χρῆσις· διὸ πρὸς τὰς ἀλλαγας τοιοῦτόν τι συνέθεντο πρὸς σφᾶς αὐτοὺς διδόναι καὶ λαμβάνειν, δ ‘τῶν χρησίμων αὐτὸ ὂν εἶχε τὴν χρείαν εὐμεταχείριστον ... οἶον σίδηρος καὶ ἄργυρος κἂν εἴ τι τοιοῦτον ἕτερον”. (Arist. De Republica, l. i. p. 9, [secs. 7, 8] l. c.)(“When the inhabitants of one country became more dependent on those of another, and they imported what they needed and exported the surplus, money necessarily came into use ... and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver and the like.” Trans, by B. Jowett, “The Politics of Aristotle, Oxford, 1885, p. 16). This passage is quoted by Michel Chevalier, who either has not read Aristotle or did not understand him, to prove that in Aristotle’s opinion currency must consist of a substance having intrinsic value. On the contrary, Aristotle says expressly that money as a mere medium of circulation seems to owe its existence to agreement or law, as is shown by its name νόμισμα, and that in reality it owes its utility as coin to its function and not to any intrinsic use-value of its own. λῆρος εἶναι δοκεῖ τὸ νόμισμα καὶ νόμος παντάπασι, φύσει δ’ οὐδὲν ὅτι μεταθεμένων τε τῶν χρωμένων οὐδενὸς ἄξιον οὐδὲ χρήσιμον πρὸς οὐδὲν τῶν ἀναγκαίων ἑοτί. (“Others maintain that coined money is a mere sham, a thing not natural, but conventional only, which would have no value or use for any of the purposes of daily life if another commodity were substituted by the users.” (l. c. sec. 11.)

(“When the inhabitants of one country became more dependent on those of another, and they imported what they needed and exported the surplus, money necessarily came into use ... and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver and the like.” Trans, by B. Jowett, “The Politics of Aristotle, Oxford, 1885, p. 16). This passage is quoted by Michel Chevalier, who either has not read Aristotle or did not understand him, to prove that in Aristotle’s opinion currency must consist of a substance having intrinsic value. On the contrary, Aristotle says expressly that money as a mere medium of circulation seems to owe its existence to agreement or law, as is shown by its name νόμισμα, and that in reality it owes its utility as coin to its function and not to any intrinsic use-value of its own. λῆρος εἶναι δοκεῖ τὸ νόμισμα καὶ νόμος παντάπασι, φύσει δ’ οὐδὲν ὅτι μεταθεμένων τε τῶν χρωμένων οὐδενὸς ἄξιον οὐδὲ χρήσιμον πρὸς οὐδὲν τῶν ἀναγκαίων ἑοτί. (“Others maintain that coined money is a mere sham, a thing not natural, but conventional only, which would have no value or use for any of the purposes of daily life if another commodity were substituted by the users.” (l. c. sec. 11.)

[83]Mandeville, Sir John, “Voyages and Travels,” London, 1705, p. 105: “This Emperor (of Cattay or China) may dispende ols muche as he wile withouten estymacion. For he despendethe not, nor makethe no money, but of lether empredeth, or of papyre. And when that money bathe ronne so longe that it begynethe to waste, than men beren it to the Emperoure Tresorye, and then they taken newe Money for the old. And that money gothe thorghe out all the contree, and thorge out all his Provynces.... They make no money neither of Gold nor of Sylver,” and “therefore,” thinks Mandeville, “he may despende ynew and outrageously.”

[84]Benjamin Franklin, “Remarks and Facts Relative to the American Paper Money,” 1764, p. 348, l. c. “At this very time, even the silver money in England is obliged to the legal tender for part of its value; that part which is the difference between its real weight and its denomination. Great part of the shillings and sixpences now current are by wearing become 5, 10, 20, and some of the sixpences even 50 per cent., too light. For this difference between therealand thenominalyou have no intrinsic value. You have not so much as paper, you have nothing. It is the legal tender, with the knowledge that it can easily be repassed for the same value, that makes three-pennyworth of silver pass for a sixpence.”

[85]Berkeley, l. c., p. 5-6. “Whether the denominations being retained, although the bullion were gone ... might not nevertheless ... a circulation of commerce (be) maintained?”

[86]“Non solo i metalli ricchi son segni delle cose ...; ma vicendevolmente le cose ... sono segni dell’oro e dell’argento.” (A. Genovesi, “Lezioni di Economia Civile,” 1765. p. 281 in Custodi, Parte Mod. 1. VIII.) (“Not only are precious metals tokens of things, but vice versa, things are tokens of gold and silver.”)

[87]Petty. “Gold and silver are universal wealth.” (Political Arithmetic, l. c., p. 242.)

[88]E. Misselden. “Free Trade, or the Means to Make Trade Flourish,” etc., London, 1622. “The natural matter of Commerce is Merchandise, which Merchants from the end of Trade have stiled Commodities. The Artificiall matter of Commerce is Money, which hath obtained the title of sinewes of warre and of State.... Money, though it be in nature and time after Merchandise, yet forasmuch as it is now in use become the chiefe.” (p. 7.) He compares his own treatment of merchandise and money with the manner of “Old Jacob, who, blessing his Grandchildren, crost his hands, and laide his right hand on the yonger, and his left hand on the elder.” (l. c.) Boisguillebert, “Dissert. sur la Nature Des Richesses,” etc. “Voilà donc l’esclave du commerce devenu son maître.... La misère des peuples ne vient que de ce qu’on a fait un maître, ou plutôt un tyran de ce qui était un esclave.” (p. 395, 399.)

[89]Boisguillebert, l. c. “On a fait une idole de ces métaux (l’or et l’argent) et laissant là, l’objet et l’intention pour lesquels ils avaient été appelés dans le commerce, savoir, pour y servir de gages dans l’échange et la tradition réciproque, on les a presque quittés de ce service pour en former des divinités, aux quelles on a sacrifié et sacrifie toujours plus de biens et de besoins précieux et même d’hommes, que jamais l’aveugle antiquité n’en immola à ces fausses divinités,” etc. (l. c., p. 395.)

[90]In the first halt of the perpetuum mobile,i. e., in the suspension of the function of money as a medium of circulation, Boisguillebert at once suspects its independent existence from commodities. Money, he says, must be “in constant motion, it can be money only by being mobile, but as soon as it becomes motionless all is lost.” (“Dans un mouvement continuel, ce qui ne peut être que tant qu’il est meuble, mais sitôt qu’il devient immeuble tout est perdu.” (“Le Détail de la France,” p. 231.) What he overlooks is that this halt constitutes the condition of its movement. What he really wants is that the value form of commodities should appear merely in the transitory form of their change of matter, but should never become an end in itself.

[91]“ ... The more the stock ... is ... encreased in wares, the more it decreaseth in treasure.” (E. Misselden, l. c., p. 23.)

[92]l. c., p. 11-13 passim.

[93]Petty, “Political Arith.,” l. c., p. 196 (1899 edition, v. I, p. 269. Transl.)

[94]Francois Bernier, “Voyage contenant la description des états du Grand Mogul.” (Paris edition, 1830, t. l., conf., p. 312-314.

[95]Dr. Martin Luther, “Bücher vom Kaufhandel und Wucher,” 1524. In the same passage Luther says: “Gott hat uns Deutsche dahin geschleidert, dass wir unser gold und silber müssen in fremde Länder stossen, alle Welt reich machen und selbst Bettler Bleiben. England sollte wohl weniger Goldes haben, wenn Deutschland ihm sein Tuch liesse, und der König von Portugal sollte auch weniger haben, wenn wir ihm die Würze liessen. Rechne Du, wie viel eine Messe zu Frankfurt aus Deutschen Landen gefürt wird, ohne Not und Ursache: so wirst Du Dich wundern, wie es zugehe, dass noch ein heller in Deutschen Landen sei. Frankfurt ist das Silber- und Goldloch, dadurch aus Deutschem Lande fleisst, was nur guillet und wächst, gemünzt oder geschlagen wird bei uns; wäre das Loch zuegestopft, so dürft man itzt der Klage nicht hören, die allethalben eitel Schuld und kein Geld, alle Land und Städte ausgewuchert sind. Aber lass gehen, es will doch also gehen; wir Deutsche müssen Deutsche bleiben! wir lassen nicht ab, wir müssen denn.”In the work quoted above Misselden wishes to retain the gold and silver at least within the confines of Christendom: “The other forreine remote causes of the want of money, are the Trades maintained out of Christendome to Turky, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendome within itselfe. For although the trades within Christendome are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendome. There is indeede a fluxus and refluxus, a flood and ebbe of the monies of Christendome traded within it selfe; for sometimes there is more in one part of Christendome, sometimes there is lesse in another, as one Country wanteth and another aboundeth: It cometh and goeth, and whirleth about the Circle of Christendome, but is still contained within the compasse thereof. But the money that is traded out of Christendome into the parts aforesaid is continually issued out and never returneth againe.” (p. 19-20.)

In the work quoted above Misselden wishes to retain the gold and silver at least within the confines of Christendom: “The other forreine remote causes of the want of money, are the Trades maintained out of Christendome to Turky, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendome within itselfe. For although the trades within Christendome are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendome. There is indeede a fluxus and refluxus, a flood and ebbe of the monies of Christendome traded within it selfe; for sometimes there is more in one part of Christendome, sometimes there is lesse in another, as one Country wanteth and another aboundeth: It cometh and goeth, and whirleth about the Circle of Christendome, but is still contained within the compasse thereof. But the money that is traded out of Christendome into the parts aforesaid is continually issued out and never returneth againe.” (p. 19-20.)

[96]“A nummo prima origo avaritiae ... haec paulatim exarsit rabie quadam, non jam avaritia, sed fames auris.” (Plin., Hist. Nat., l. XXXIII., c. XIV.)(“From money first springs avarice ... the latter gradually grows into a kind of madness, which is no more avarice, but a thirst for gold.”)

[96]“A nummo prima origo avaritiae ... haec paulatim exarsit rabie quadam, non jam avaritia, sed fames auris.” (Plin., Hist. Nat., l. XXXIII., c. XIV.)

(“From money first springs avarice ... the latter gradually grows into a kind of madness, which is no more avarice, but a thirst for gold.”)

[97]Horace thus understands nothing of the philosophy of hoarding when he says (Satir. l. II., Satir. III): “Siquis emat citharas, emptas comportat in unum, Nec studio citharae nec musae deditus ulli; Si scalpra et formas non sutor; nautica vela Aversus mercaturis; delirus et amens, Undique dicatur merito. Qui discrepat istis, Qui nummos aurunque recondit nescius uti Compositis metuensque velut contingere sacrum?”“If one buys fiddles, hoards them up when bought,Though music’s study ne’er engaged his thought,One lasts and awls, unversed in cobbler’s craft,One sails for ships, not knowing fore from aft,You’d call them mad: but tell me, if you please,How that man’s case is different from these,Who as he gets it, stows away his gain,And thinks to touch a farthing were profane?”(Transl. by John Covington, London, 1874, p. 60.)Mr. Senior understands the question much better: “L’argent paraît etre la seule chose dont le désir est universel, et il en est ainsi parceque l’argent estune richesse abstraiteet parceque les hommes, en la possédant peuvent satisfaire à tous leur besoins de quelque nature qu’ils soient.” (“Principes Fondamentaux de l’Economie Politique, tirés de leçons edites et inedites de N. W. Senior, par Comte Jean Arrivabene,” Paris, 1836, p. 221. (The corresponding passage in the English edition of his Political Economy, London, 1863, is to be found on p. 27. Translator.) So does Storch: “Since money represents all other forms of wealth, it is only necessary to accumulate it to provide for oneself all kinds of wealth existing in the world.” (l. c., v. 2, p. 134.)

“If one buys fiddles, hoards them up when bought,Though music’s study ne’er engaged his thought,One lasts and awls, unversed in cobbler’s craft,One sails for ships, not knowing fore from aft,You’d call them mad: but tell me, if you please,How that man’s case is different from these,Who as he gets it, stows away his gain,And thinks to touch a farthing were profane?”

“If one buys fiddles, hoards them up when bought,

Though music’s study ne’er engaged his thought,

One lasts and awls, unversed in cobbler’s craft,

One sails for ships, not knowing fore from aft,

You’d call them mad: but tell me, if you please,

How that man’s case is different from these,

Who as he gets it, stows away his gain,

And thinks to touch a farthing were profane?”

(Transl. by John Covington, London, 1874, p. 60.)

Mr. Senior understands the question much better: “L’argent paraît etre la seule chose dont le désir est universel, et il en est ainsi parceque l’argent estune richesse abstraiteet parceque les hommes, en la possédant peuvent satisfaire à tous leur besoins de quelque nature qu’ils soient.” (“Principes Fondamentaux de l’Economie Politique, tirés de leçons edites et inedites de N. W. Senior, par Comte Jean Arrivabene,” Paris, 1836, p. 221. (The corresponding passage in the English edition of his Political Economy, London, 1863, is to be found on p. 27. Translator.) So does Storch: “Since money represents all other forms of wealth, it is only necessary to accumulate it to provide for oneself all kinds of wealth existing in the world.” (l. c., v. 2, p. 134.)

[98]To what extent the inner man of the commodity owner remains unchanged, even when he has become civilized and has developed into a capitalist, is shown by the example of a London representative of a cosmopolitan banking house who adopted as a fitting coat of arms for his family a £100,000 bank note, which he had hung up in a glass frame. The point here is in the mocking contempt of the note for circulation.

[99]See the passage from Xenophon, quoted below.

[100]Jacob, l. c., v. 2, ch. 25 and 26.

[101]“In times of great agitation and insecurity, especially during internal commotions or invasions, gold and silver articles are rapidly converted into money; whilst during periods of tranquility and prosperity, money is converted into plate and jewelry.” (l. c., v. 2, p. 357.)

[102]In the following passage Xenophon develops money in its specific forms of money and hoard: “ἐν μόνω τούτῳ ὦν ἐγω οἴδα ἔργων οὐδὲ φθονεῖ οὐδεις τοῖς ἐπισκευαζομένοις ... ἀργυρῖτις δὲ ὅσω ἄν πλείων φαίνηται, καὶ ἀργύριον πλεῖον γίγνηται, τοσούτῳ πλείονες ἐπί τὸ ἔργον τοῦτο ἔρχονται ... καὶ γὰρ δὴ ἔπιπλα μὲν ἐπειδὰν ἰκανά τις κτήσηται τῇ οἰκίᾳ, οὐ μάλα ἔἱτι προσωνοῦνται· ἀργύριον δὲ οὐδείς πω οὔτω πολὺ ἐκτήσατο ὥστε μὴ ἔτι προσθεῖσθαι, ἀλλ ‘ἤν τισι γένηται παμπληθὲς, τὸ περιττεῦον κατορύττοντες οὐδὲν ἥττον ἥδονται ἥ χρώμενοι αὐτᾠ· καὶ μὲν ὅταν γε εὗ πράττωσιν αἰ πόλεις ἰσχυρῶς, οἰ ἄνθρωποι ἀργυρίου δέονται. Οἰ μὲν γὰρ ἄνδρες ἀμφι ὅπλα τε καλὰ καὶ ἵππους ἀγαρθοὺς καὶ οἰκίας καὶ κατασκευὰς μεγαλοπρεπεῖς βοὐλονται δαπανᾶν, αἰδὲ γυναῖκες εἰς ἐσθῆτα πολυτελῆ καὶ χρυσοῦν κόσμον τρέπονται· ὅταν δε αὔ νοσήσωσι πόλεις ἠ ἀφορίαις καρπῶν ῆ πολέμω ἔτι καὶ πολὺ μἄλλον τῆς γῆς ἀρυοῦ γιγνομενης καὶ εἰς ἐπιτήδεια καὶ εἰς ἐπικουροὺς νομίσματος δέονται.” (Xen. de Vectigalibus, c. IV.) (“Of all operations with which I am acquainted, this is the only one in which no sort of jealousy is felt at a further development of the industry ... the larger the quantity of ore discovered and the greater the amount of silver extracted, the greater the number of persons ready to engage in the operation.... No one when he has got sufficient furniture for his house dreams of making further purchases on this head, but of silver no one ever yet possessed so much that he was forced to cry “Enough.” On the contrary, if ever anybody does become possessed of an immoderate amount he finds as much pleasure in digging a hole in the ground and hoarding it as an actual employment of it.... When a state is prosperous there is nothing which people so much desire as silver. The men want money to expend on beautiful armor and fine horses, and houses and sumptuous paraphernalia of all sorts. The women betake themselves to expensive apparel and ornaments of gold. Or when states are sick, either through barrenness of corn and other fruits, or through war, the demand for current coin is even more imperative (whilst the ground lies unproductive), to pay for necessaries or military aid.” (Transl. by H. G. Dakyns, London, 1892, v. 2, Revenues, p. 335-336.) Aristotle develops in Book I., ch. 9 of his Politics the two opposite movements of circulation. C-M-C and M-C-M, calling them “economics” and “chrematistics” respectively. The two forms are represented by the Greek tragedian Euripides as Sikn (right) and Keodos (profit).

[103]Of course, capital also is advanced in the shape of money, and the money thus advanced may be advanced capital, but this point of view does not fall within the horizon of simple circulation.

[104]“The difference between the means of purchase and the means of payment” is emphasized by Luther.

[105]Mr. MacLeod, in spite of his doctrinaire conceit about definitions, fails so utterly to grasp the most elementary economic relations that he tries to deduce the very origin of money from its crowning form, viz., that of a means of payment. He says among other things that since people do not always need each other’s services at the same time, and not to the same extent, “there would remain over a certain difference or amount of service due from the first to the second—debt.” The owner of this debt needs the services of a third person, who does not directly need those of the second, and “transfers to the third the debt due to him from the first. Evidence of debts changes so hands—currency.... When a person received an obligation expressed by metallic currency, he is able to command the services not only of the original debtor, but of the whole of the industrious community.” (MacLeod, “Theory and Practice of Banking,” etc., London, 1855, v. I., ch. I.)

[106]Bailey, l. c., p. 3. “Money is the general commodity of contracts, or that in which the majority of bargains about property, to be completed at a future time, are made.”

[107]Says Senior (in his Lectures, published by Comte Arrivabene, l. c., p. 117): “Since the value of everything changes within a certain period of time, people select as a means of payment an article whose value changes least and which retains longest a given average ability to buy things. Thus, money becomes the expression or representative of values.” On the contrary: just because gold, silver, etc., have become money, i. e., the embodiment of independently existing exchange value, they become the universal means of payment. When the consideration as to the stability of the value of money mentioned by Mr. Senior comes into play, i. e., in periods when money asserts itself as the universal means of payment through the force of circumstances, then is just the time when fluctuations in the value of money are discovered. Such was the time of Elizabeth in England, when Lord Burleigh and Sir Thomas Smith, in view of the manifest depreciation of the precious metals, put through an act of parliament which obliged the universities of Oxford and Cambridge to stipulate the payment of one-third of their ground rents in wheat and malt.

[108]Boisguillebert, who would stem the development of bourgeois relations of production and violently attacks the bourgeois personally, has a soft heart for those forms of money in which it appears only ideally or transiently. Thus he speaks first of the medium of circulation and next of the means of payment. What he does not see is the direct transition of money from its ideal to the material form, since the hard cash is latently present in the ideal measure of value. That money is but another form of commodities, he says, is shown by wholesale trade, in which exchange takes place without the intervention of money, after “les marchandises sont appreciés.” (“Le Detail de la France,” l. c. p. 210.)

[109]Locke, l. c., p. 17, 18.

[110]“Il danaro ammassato supplisce a quella somma, che per essere attualmente in circolazione, per l’eventuale promiscuità de ‘commerci si allontanae sorte della sfera della circolazione medesima.” (“The accumulated money supplements that amount which, in order to be actually in circulation and to meet all possible perturbations of trade, retires from that sphere of circulation.” (G. R. Carli, note to Berri’s “Meditazioni sulla Economia Politica,” p. 196, t. XV. of Custodi’s l. c.)

[111]Montanari, “Della Moneta,” 1683, l. c., p. 40. “È cosi fattamente diffusa per tutto il globo terrestre la communicazione de ‘populi insieme, che puo quasi dirsi esser il mondo tutto divinuto una sola citta in cui si fa perpetua fiera d’ogni mercanzia, e dove ogni uomo di tutto cio che la terra, gli animali e l’umana industria altrove producono, puo mediante il danaro stando in sua casa provedersi e godere. Maravigliosa invenzione.” (“The communication of nations among themselves is so widely extended all over the globe that it may be almost said that the entire world has become one city in which a perpetual fair of merchandise is held and where every man may by means of money acquire and enjoy, while staying at home, all that the earth, the animals and human industry produce elsewhere. Marvelous invention.”)

[112]I metalli han questo di proprio e singulare che in essi soli tutte le ragioni si riducono ad una che è la loro quantità, non avendo ricevuto delle natura diversa qualità nè nell’interna loro constituzione nè nell’externa forma e fattura.” (Galiani, l. c., p. 130.) (“Metals have this singular property, that everything in them is reduced to one consideration, viz., that of quantity, since they are not endowed by nature with any differences in quality either in their internal structure or in their external form and shape.”)

[113]De Orbe Novo. “O, happy coin, which furnishes mankind with a pleasant and useful beverage and keeps its possessors immune from the hell-born pest of avarice, since it can not be either buried or preserved long.”

[114]In 760 a multitude of poor people emigrated to the south of Prague to wash the gold sand found there, and three men were able to extract three marks of gold a day. As a result of that the run on the “diggings” and the number of hands taken away from agriculture became so great that the country was visited by a famine the following year. See M. G. Körner, “Abhandlung von dem Alterthum des Böhmischen Bergwerks,” Schneeberg, 1758.

[115]So far the Australian and other discoveries have not affected the ratio of the values of gold and silver. The assertions to the contrary of Michel Chevalier are worth as much as the Socialism of this ex-St. Simonist. The quotations of silver on the London market prove, however, that the average gold price of silver during 1850-1858 is not quite 3 per cent. higher than the price during 1830-1850. But this rise in price is accounted for simply by the Asiatic demand for silver. In the course of the years 1852-1858 the price of silver was changing in certain years and months only with a change in this demand, and in no case with the importation of gold from the newly discovered sources. The following is a summary of the gold prices of silver on the London market.PRICE OF SILVER PER OUNCE.Year—March.July.November.185260-1/8 pence60-1/4 pence61-7/8 pence185361-3/8 pence61-1/2 pence61-7/8 pence185461-7/8 pence61-3/4 pence61-1/2 pence185560-7/8 pence61-1/2 pence60-7/8 pence185660-7/8pence61-1/4 pence62-1/8 pence185761-3/4 pence61-5/8 pence61-1/2 pence185861-5/8 pence

PRICE OF SILVER PER OUNCE.

[116]“Gold is a wonderful thing! Whoever possesses it, is master of all that he desires. By means of gold even admission to Heaven may be gained for souls.” (Columbus in a letter from Jamaica in 1503).

[117]The slowness of the process was admitted by Hume, although it but little agrees with his principle. See David Hume “Essays and Treatises on several subjects.” London, 1777, v. I, p. 300.

[118]Conf. Steuart, l. c. v. I, p. 394-400.

[119]David Hume, l. c. p. 300.

[120]David Hume, l. c. p. 303.

[121]David Hume, l. c. p. 303.

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