been developed. Thus e. g. the various original types of Roman and Teutonic private property can be traced back to various forms of Indian communism.
[5] “La Ricchezza è una ragione tra due persone.” (“Value is a relation between two persons”) Galiani, “Della Moneta,” p. 220 in vol. II.
of Custodi’s collection of “Scrittori classici Italiani di Economia Politica. Parte Moderna,” Milano, 1803.
[6] “In its natural state, matter...is always destitute of value.”
McCulloch, “A Discourse on the Rise, Progress, Peculiar Objects, and Importance of Political Economy,” 2nd edition, Edinburgh, 1825, pg. 48.
It is evident how even a McCulloch stands above the fetishism of German “thinkers”, who declare “matter” and half a dozen other foreign things [8] Thomas Cooper, Lectures on the Elements of Political Economy, [9] F. List could never grasp the difference between labor as a source of use-value and labor as the creator of certain social form of wealth or exchange value, because comprehension was altogether foreign to his practical mind; he therefore saw in the modern English economists mere plagiarists of Moses, the Egyptian.
[10] It can be readily understood what kind of “service” is rendered by the category “service” to economists of the type of J. B. Say and F. Bastiat, whose pondering sagacity, as Malthus has justly remarked, always abstracts from the specially definite forms of economic relations.
[11] “Egli è proprio ancora delle misure d’aver si fatta relazione colle cose misurate, che in certo modo la misurata divien misura della misurante.” Montanari, Della Moneta, p. 48 in v. III of Custodi’s “Scrittori classici Italiani di Economia Politica. Parte Antica.” (“It is the property of measure to be in such a relation to the things measured, that in a certain way the thing measured becomes the measure of the measuring thing.”)
[12] It is in that sense that Aristotle (see the passage quoted at the beginning of this chapter) conceives exchange value.
[13] This expression is used by Genovesi.
[14] Aristotle makes the same remark with reference to the private family as the primitive community. But the primitive form of family is the tribal family, from the historical dissolution of which the private family develops. ἐν μὲν οὔν τῃ πρώτο κοινωνίᾳ (τοῦτο δ’ ἐστὶν οἰκίἀ) φανερὸν ὅτι οὐδέν ἐστιν ἔργον αὐτῆς (namely της ἀλλαγῆς) “And in the first community, which is the family, this art is obviously of no use.”
[15] “Money is, in fact, only the instrument for carrying on buying and selling (but, if you please, what do you understand by buying and selling?) and the consideration of it no more forms a part of the science of political economy, than the consideration of ships, or steam engines, or of any other instrument employed to facilitate the production and distribution of wealth.” Th. Hodgskin, Popular Political [16] A comparative study of the writings and characters of Petty and Boisguillebert, outside of the light which it would throw upon the difference of French and English society at the end of the seventeenth and the beginning of the eighteenth centuries, would disclose the origin of the national contrast between English and French Political Economy. The same contrast reasserts itself in Ricardo and Sismondi.
[17] Petty had illustrated the productive power inherent in the division of labor on a much grander scale than that was done later by Adam Smith. See his “Essay concerning the multiplication of mankind, etc.,” 3rd edition, 1686, p. 35-36. He not only brings out the advantages of the division of labor on the example of the manufacture of a watch, as Adam Smith did later on that of a needle, but considers also a city and an entire country from the point of view of a large manufacturing establishment. The Spectator, of November 26, 1711, refers to this “illustration of the admirable Sir William Petty.”
McCulloch is, therefore, mistaken when he supposes that the Spectator confounded Petty with a writer forty years his junior. See McCulloch, “The Literature of Political Economy, a classified catalogue,” London, 1845, p. 105. Petty is conscious of being the founder of a new science.
His method, he says, “is not yet very usual, for instead of using only comparative and superlative Words, and intellectual Arguments,” he has undertaken to speak “in Terms of Number, Weight or Measure; to use only Arguments of Sense, and to consider only such Causes, as have visible Foundations in Nature; leaving those that depend upon the mutable Minds, Opinions, Appetites, and Passions of particular Men, to the Consideration of others.” (Political Arithmetick, etc., London, 1699. Preface.) (A new edition of “The Economic Writings of Sir William Petty,” edited by Chas. Henry Hull, has been published by the University Press at Cambridge, 1899. The above passage will be found in vol. I., p. 244. The further references are given to this new, more accessible edition. Translator.) His wonderful keenness shows itself e. g. in the proposal to transport “all the moveables and people of Ireland, and of the Highlands of Scotland...into the rest of Great Britain.” Thereby much labor-time would be saved, the productivity of labor increased, and “the King and his Subjects would thereby become more Rich and Strong.” (Political Arithmetick, ch. 4, p. 285.) Or in the chapter of his Political Arithmetic in which he proves that England’s mission is the conquest of the world’s market at a time when Holland still played the leading part as a trading nation and France seemed to be on the way of becoming the ruling trading Power: “That the King of England’s Subjects, have Stock competent and convenient, to drive the Trade of the whole Commercial World” (l. c., ch. 10, p. 311).
“That the Impediments of England’s greatness are but contingent and writings. Thus, he shows that it was by material means that Holland―at that time the model country with English economists, just as England is with continental economists to-day―conquered the world market “without such Angelical Wits and Judgments, as some attribute to the condition of trade, because “Dissenters...are...patient Men, and such as believe that Labour and Industry is their Duty towards God,” and “They believe that...for those who have less Wealth, to think they have the more Wit and Understanding, especially of the things of God which they think chiefly belong to the Poor.” “From whence it follows that Trade is not fixt to any species of Religion as such; but rather...to the Heterodox part of the whole” (l. c., p. 262-264). He advocates an “allowance by Publick Tax” for those “who live by begging, cheating, stealing, gaming, borrowing without intention of restoring,” because “it were more for the publick profit” to tax the country for such persons “than to suffer them to spend extravagantly, at the only charge of careless, credulous, and good natured People” (p. 269-270).
But he is opposed to taxes which transfer the wealth from industrious people “to such as do nothing at all, but eat and drink, sing, play, and dance; nay such as study the Metaphysicks” (ibid.). Petty’s writings are rarities of the bookseller’s trade and are to be found only in scattered poor old editions, which is the more surprising since William Petty was not only the father of English Political Economy, but also the ancestor of Henry Petty, alias Marquis of Lansdowne, the nestor of the English Whigs. However, the Lansdowne family could hardly bring out a complete edition of Petty’s works without prefacing it with his biography, and what can be said of most origins of the great Whig families holds good also in this case, viz., “the less said of them the better.” The keen-witted but cynical army surgeon who was as ready to plunder in Ireland under the shield of Cromwell as to crawl before Charles II. to get the title of baron which he needed for his plunderings, is a model hardly fit for public exhibition. Besides that, Petty seeks to prove in most of his writings which he published in his lifetime, that England’s prosperity reached its climax under Charles II., a heterodox view for the hereditary exploiters of the “glorious revolution.”
[18] In contrast with the “black art of finance” of his time, Boisguillebert says: “La science financière n’est que la connaissance approfondie des intérêts de l’agriculture et du commerce.” Le Détail de la France, 1697. Eugène Daire’s edition of Economistes financiers du XVIII. siècle, Paris, 1843, vol. I., p. 241.
[19] But not _Romance_ Political Economy, since the Italians reproduce the contrast between the English and French economists in the two respective schools of Naples and Milan, while the Spaniards of the earlier period are either pure Mercantilists; modified mercantilists like Ustariz; or, like Jovellanos (see his Obras, Barcelona, 1839-40), hold to the “golden mean” with Adam Smith.
[20] “La véritable richesse...jouissance entière, non seulement des besoins de la vie, mais même de tous les superflus et de tout, ce qui peut fair plaisir à la sensualité,” Boisguillebert, “Dissertation sur la nature de la richesse,” etc., l. c., p. 403. But while Petty was a frivolous, rapacious and unprincipled adventurer, Boisguillebert, though an intendant under Louis XIV, championed the interests of the oppressed classes with a daring that was equal to his keenness of mind.
[21] The French Socialism of the Proudhon type suffers from the same national hereditary disease.
[22] “Benjamin Franklin, The Works of, etc.,” ed. by I. Sparks, vol.
II., Boston, 1836. “A Modest Inquiry into the Nature and Necessity of a Paper Currency.”
[23] L. c., p. 265.
[24] L. c., p. 267.
[25] L. c., “Remarks and Facts relative to the American Paper Money,” 1764.
[26] See “Papers on American Politics; Remarks and Facts relative to [27] See e. g. Galiani, “Della Moneta,” in vol. 3 of Scrittori Classici italiani di Economia politica (Published by Custodi). Parte Moderna, Milano, 1803. “La fatica, he says, è l’unica che dà valore alla cosa” (“only effort can give value to any thing”). The designation of labor as “fatica,” strain, effort, is characteristic of the southerner.
[28] Steuart’s work, “An Inquiry into the Principles of Political Economy, being an Essay on the Science of Domestic Policy in Free Nations,” appeared first in London in two quarto volumes in the year 1767, ten years before Adam Smith’s “Wealth of Nations.” I quote from the Dublin edition of 1770. (The references to pages are the same for the standard London edition of 1767, except where otherwise stated.
Translator.)
[31] See chapter I., book II., vol. I. “of the reciprocal connections between Trade and Industry” (Translator).
[32] He declares, therefore, the patriarchal form of agriculture which is devoted to the direct production of use-values for the owner of the land, to be an “abuse,” not in Sparta, or Rome, or even in Athens, but in the industrial countries of the eighteenth century. This “abusive agriculture” is not “trade,” but a “direct means of subsisting.” Just as capitalistic agriculture clears the country of superfluous mouths, so does the capitalistic mode of manufacture clear the factory of superfluous hands.
[33] Thus e. g., Adam Smith says: “Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer. In his ordinary state of health, strength and spirits, in the ordinary degree of his skill and dexterity, he must always lay down the same portion of his ease, his liberty, and his happiness. The price which he pays must always be the same, whatever may be the quantity of goods which he receives in return for it. Of these, indeed, it may sometimes purchase a greater and sometimes a smaller quantity; but it is their value which varies, not that of the labour which purchases them...Labour alone, therefore, never varying in its own value...is their [commodities’] real price, etc. Adam Smith (Book I., ch. V., p. 34, Oxford, 1869. Translator.)
[34] David Ricardo, “On the Principles of Political Economy and 1837. “C’est l’opposition entre la valeur usuelle...et la valeur échangeable à laquelle le commerce a reduit toute chose,” p. 161.
[Paris edition, p. 229, Transl.]
[36] Sismondi l. c., p. 163-166 seq. [Paris edition, 230 etf. Transl.]
[37] Perhaps the silliest to be found are the annotations of J. B.
Say to the French translation of Ricardo, made by Constancio, and the most pedantically arrogant are the remarks of Mr. MacLeod in his newly published “Theory of Exchange,” London, 1858.
[38] This objection raised against Ricardo by bourgeois economists was taken up later by the socialists. Having assumed the correctness of the formula, they charged the practice with contradiction to the theory and appealed to bourgeois society to realize in practice the conclusions which were supposed to follow from its theoretical principles. That was at least the way in which the English socialists turned Ricardo’s formula of exchange value against political economy. It remained for Mr. Proudhon not only to proclaim the fundamental principle of old society as the principle of the new, but also to declare himself the discoverer of the formula in which Ricardo summed up the combined results of classical English political economy. It has been proven that the utopian interpretation of the Ricardian formula was about forgotten in England when Mr. Proudhon “discovered” it on the other side of the Canal. (Cf. my work: “Misère de la Philosophie,” etc., Paris, 1847, paragraph on la valeur constituée.)
[39] True, Aristotle sees that the exchange value of commodities underlies their prices: “ὅτι ὴ ἀλλαγη ἥν πρὶν τὸ νόμισμα ἔιναι, ὁῆλον· διαφέρει γὰρ οὐδὲν ἡ εί κλίναι πέντε ἀντι οἰκίας, ἣ ὅσου αὶ πέντε κλῖναι.” (“It is clear that exchange existed before coin. For it does not make any difference whether you give five beds for a house, or as much money as five beds are worth”). On the other hand, since commodities acquire only in price the form of exchange value with respect to one another, he makes them commensurable through money. “Διὸ δεῖ πάντα τετιμῆσθαι· οὕτω γὰρ ἀεὶ ἔσται ἀλλαγὴ, εἰ δὲ τοῦτο, κοινωνία. Τὸ δὴ νόμισμα ὥσπερ μέτρον σύμμετρα ποιῆσαν ἰσάζει, οὔτε γὰρ ἃν μὴ οὔσης ἀλλαγῆς κοινωνία ἡν, ὄυτ’ ἀλλαγὴ ἰσότητος μὴ οὔτ’ἰσότης, μὴ οὔσης συμμετρίας.” (“Therefore all has to be appraised. In that way exchange may always take place, and, with it, society can exist. Coin, like measure, makes everything commensurable and equal, for without exchange there would be no society, without equality there would be no exchange, and without commensurability, no equality.”) He does not conceal from himself that these different objects measured by money are entirely incommensurable quantities. What he is after is the common unit of commodities as exchange values, which as an ancient Greek he was unable to find. He gets out of the difficulty by making commensurable through money what is in itself incommensurable, so far as it is necessary for practical purposes. “Τῇ μὲν οὔν ἀληθείᾳ ἀδύνατον τὰ τοσοῦτον διαφέροντα σύμμετρα γενέσθαι, πρὸς δὲ τὴν χρείαν ἐνδέχεται ἰκανῶς.” (“In truth it is impossible to make things that are so different, commensurable, but for practical purposes it is permissible.”) Aristotle, Ethica [40] The peculiar circumstance that, while the ounce of gold serves in England as the unit of the standard of money, it is not divided into aliquot parts has been explained as follows: “Our coinage was originally adapted to the employment of silver only―hence an ounce of silver can always be divided into a certain adequate number of pieces of coin; but as gold was introduced at a later period into a coinage adapted only to silver, an ounce of gold cannot be coined into an adequate number of pieces.” Maclaren: “A Sketch of the History of the [41] “Money may continually vary in value and yet be as good a measure of value as if it remained perfectly stationary. Suppose, for instance, it is reduced in value...Before the reduction, a guinea would purchase three bushels of wheat or 6 days’ labour; subsequently it would purchase only 2 bushels of wheat, or 4 days’ labour. In both cases, the relations of wheat and labour to money being given, their mutual relations can be inferred; in other words, we can ascertain that a bushel of wheat is worth 2 days’ labour. This, which is all that measuring value implies, is as readily done after the reduction as before. The excellence of a thing as a measure of value is altogether independent of its own variableness in value” (p. 11, Bailey, “Money and its Vicissitudes.” London, 1837).
[42] “Le monete lequali oggi sono ideali sono le piu antiche d’ogni nazione, e tutte furono un tempo reali (the latter assertion is too sweeping), e perchè erano reali con esse si contava.” Galiani, “Della names no longer correspond to their value] are among the more ancient with every nation; at one time they were all real, and for that reason served for the purpose of counting.”)
[43] The romantic A. Müller says: “According to our idea every independent sovereign has the right to name the metal money, and to give it a nominal social value, rank, standing and title (p. 276, v.
II., A. H. Müller, “Die Elemente der Staatskunst,” Berlin, 1809). As far as title is concerned the Hon. Hofrath is right; but he forgets the _substance_. How confused his “ideas” were, may be seen, e. g., from the following passage: “Everybody understands how much depends upon the right determination of the mint-price, especially in a country like England, where the government with _magnificent liberality_ coins money gratuitously (Herr Müller seems to think that the members of the English government defray the mint expenses out of their own pockets), where it does not charge any mintage, etc., and thus if the mint-price of gold were set considerably above its market price, if instead of paying as now £3 17s. 10-1/2d. per 1 oz. of gold, it would set the price of an ounce of gold at £3 19s., all money would flow into the mint and exchanging for the silver contained there bring it into the market to be exchanged there for the cheaper gold; the latter would in the same manner be brought again to the mint and the entire coinage system would be upset” (l. c., p. 280-281). To preserve order in English coinage, Müller falls back on “disorder.” While shilling and pence are mere names of certain parts of an ounce of gold represented by signs of silver and copper, he imagines that an ounce of gold is estimated in gold, silver and copper and thus confers upon the Englishmen the blessing of a triple standard of value. Silver as a measure of money, next to gold, was formally abolished only in 1816 by 56 George III., c. 68. As a matter of fact, it was legally abolished as early as 1734 by 14 George II., c. 42, and still earlier by actual practice. There were two circumstances that made A. Müller capable of a so-called higher conception of political economy: first, his wide ignorance of economic facts; second, his dilettanti-like visionary attitude toward philosophy.
[44] “Ἀνάχαρσις, πυνθανομένου τινὸς, πρὸς τί οί Ἕλληνες χρῶνται τῷ ἀργυρίῳ ἕιπε πρὸς τὸ ἀριθμεῖν.” (Athen. Deipn. l. IV. 49. v. 2, ed.
Schweighäuser, 1802.) (When Anacharsis was asked for what purpose the Greeks used money, he replied, “For reckoning.―‘’“”) [45] G. Garnier, one of the early French translators of Adam Smith, conceived the queer notion of fixing a proportion between the use of money of account and that of actual money. His proportion is 10 to 1.
(G. Garnier, “Histoire de la Monnaie depuis les temps de la plus haute [46] The act of Maryland in 1723 by which tobacco was made the legal standard, but its value reduced to terms of English gold money, namely one penny equal to one pound of tobacco, reminds of the “leges barbarorum,” in which, inversely, certain sums of money were expressed in terms of oxen, cows, etc. In that case neither gold nor silver, but the ox and the cow were the actual material of the money of account.
[47] Thus, we read, e. g., in the “Familiar Words” of Mr. David Urquhart: “The value of gold is to be measured by itself; how can any substance be the measure of its own worth in other things? The worth of gold is to be established by its own weight, under a false denomination of that weight―and an ounce is to be worth so many pounds and fractions of pounds. This is falsifying a measure, not establishing a standard.―‘’“” [48] “Money is the measure of Commerce, and of the rate of everything, and therefore ought to be kept (as all other measures) as steady and invariable as may be. But this cannot be, if your money be made of two Metals, whose proportion...constantly varies in respect of one another.” John Locke: Some Considerations on the Lowering of Interest, etc., 1691 (p. 166, p. 65 in his Works 7 ed., London, 1768, vol. III.)
[49] Locke says among other things: “...call that a Crown now, which before...was but a part of a Crown...An equal quantity of Silver is always the same Value with an equal quantity of Silver...For if the abating 1-20 of the quantity of Silver of any Coin does not lessen its Value, the abating 19-20 of the quantity of the Silver of any Coin will not abate its Value. And so a single Penny, being called a Crown, will buy as much Spice, or Silk, or any other Commodity, as a Crown-Piece, which contains 20 times as much Silver...Now [all that may be done] is giving a less quantity of Silver the Stamp and Denomination of a greater...But ’tis Silver and not Names that pay Debts and purchase Commodities” (l. c., p. 135-145 passim). If to raise the value of money means nothing but to give any desired name to an aliquot part of a silver coin, e. g., to call an eighth part of an ounce of silver a penny, then money may really be rated as high as you please. At the same time, Locke answered Lowndes that the rise of the market price above the mint price was due not to the rise of the value of silver, but to the lighter silver coins. Seventy-seven clipped shillings do not weigh a particle more than 62 full-weighted ones. Finally he pointed out with perfect right that, aside from the loss of weight in the circulating coin, the market price of silver bullion in England could rise to some extent above its mint price, since the export of silver bullion was allowed while that of silver coin was prohibited (l. c., p. 54-116 passim). Locke was exceedingly careful not to touch upon the burning question of public debts, and no less carefully avoided the discussion of the delicate economic question, viz., the depreciation of the currency out of proportion to its real loss of silver, as was shown by the rate of exchange and the ratio of silver bullion to silver coin.
We shall return to this question in its general form in the chapter on the Medium of Circulation. Nicholas Barbon in “A Discourse Concerning Coining the New Money Lighter, in Answer to Mr. Locke’s Considerations, etc.,” London, 1696, tried in vain to entice Locke to difficult ground.
generally clever. Among other things Berkeley is perfectly right in saying that by their progress the North American colonies “make it plain as daylight, that gold and silver are not so necessary for the wealth of a nation, as the vulgar of all ranks imagine.―‘’“” [52] Price means here real equivalent in the sense commonly employed by English economic writers in the seventeenth century.
[54] On the occasion of the last commercial crisis the ideal African money received loud praise from certain English quarters, after its seat was this time moved from the coast to the heart of Barbary. The freedom of the Berbers from commercial and industrial crises was ascribed to the ideal unit of measure of their bars. Would it not have been simpler to say that trade and industry are the _conditio sine qua non_ of commercial and industrial crises?
[55] The Currency Question, The Gemini Letters, London, 1844, p.
260-272, passim.
[56] John Gray: “The Social System. A Treatise on the Principle of Exchange, Edinburgh, 1831.” Compare with “Lectures on the Nature and Use of Money, Edinburgh, 1848,” by the same author. After the February revolution Gray sent a memorial to the provisional French government, in which he instructs the latter that France is not in need of an “organization of labour,” but of an “organization of exchange” of which the plan is fully worked out in his money system. Honest John did not suspect that sixteen years after the appearance of his “Social System” a patent for the same discovery would be taken out by the ingenious Proudhon.
[57] Gray, “The Social System,” etc., p. 63: “Money should be merely a receipt, an evidence that the holder of it has either contributed certain value to the national stock of wealth or that he has acquired a right to the same value from some one who has contributed to it.―‘’“” [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 [59] L. c., p. 16.
[61] L. c., p. 169.
[62] “The business of every country ought to be conducted on a national [64] See e. g. W. Thompson: “An Inquiry into the Distribution of Wealth, etc.,” London, 1827. Bray, “Labour’s Wrongs and Labour’s [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 nécessité de l’échange est derivée la nécessité 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 où il y avait vente et echat, c’est à dire, où chaque individu était obligé de lutter, pour se procurer 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 “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., “Money has the quality of being always exchangeable for what it measures.” (Bosanquet, “Metallic, Paper and Credit Currency,” etc., “Money can always buy other commodities, whereas other commodities can not always buy money.” (Th. Tooke, “An Inquiry into the Currency [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).
“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 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.
“Si un écu un peu usé était 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.”
pass for a little less than an entirely new ecu, circulation would be