A Contribution to the Critique of Political Economy

FOOTNOTES

[1] Cf. Seligman, “The Economic Interpretation of History.” MacMillan. 1902.

[2] Aristotle, d. Rep. L. l, c. 9 (edit. I Bekkeri Oxonii, 1837)

“??ast?? ??? ?t?at?? d?tt? ? ???s?? ?st?? ... ? ?? ???e?a, ? d ‘??? ???e?a t?? ‘p???at??, ???? ?p?d?at?? ? te ?p?d?s?? ?a? ? eta??t???. ?f?te?a? ??? h?p?d?at?? ???se??? ?a? ??? h? ???att?e??? t? de???? h?p?d?at?? ??t? ???sat?? ? t??f?? ???ta? t? ?p?d?at? ? h?p?d?a, ??? ‘?? t?? ???e?a? ???s??? ?? ??? ???a??? ??e?e? ?????e?. ??? a?t?? d? t??p?? ??e? ?a? pe?? t?? ????? ?t??t??.”

(“Of everything which we possess there are two uses:—one is the proper, and the other the improper or secondary use of it. For example, a shoe is used for wear, and is used for exchange; both are uses of the shoe. He who gives a shoe in exchange for money or food to him who wants one, does indeed use the shoe as a shoe, but this is not its proper or primary purpose, for a shoe is not made to be an object of barter. The same may be said of all possessions.” The Politics of Aristotle, translated into English by B. Jowett, Oxford, 1885, v. I., p. 15.)

[3] That is the reason why German compilers are so fond of dwelling on use-value, calling it a “good.” See e. g. L. Stein, “System der Staatswissenschaften,” v. I., chapter on “goods” (GÜtter). For intelligent information on “goods” one must turn to treatises on commodities.

[4] A ridiculous presumption has gained currency of late to the effect that common property in its primitive form is specifically a Slavonian, or even exclusively Russian form. It is the primitive form which we can prove to have existed among Romans, Teutons, and Celts; and of which numerous examples are still to be found in India, though in a partly ruined state. A closer study of the Asiatic, especially of Indian forms of communal ownership would show how from the different forms of primitive communism different forms of its dissolution have 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 to be elements of value. Cf. e. g. L. Stein, l. c. v. I., p. 110.

[7] Berkeley, The Querist, London, 1750.

[8] Thomas Cooper, Lectures on the Elements of Political Economy, London, 1831, p. 99.

[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. ?? ?? ??? t? p??t? ???????? (t??t? d ‘?st?? ?????) fa?e??? ?t? ??d?? ?st?? ????? a?t?? (namely t?? ???a???) “And in the first community, which is the family, this art is obviously of no use.” Jowett’s transl. l. c.)

[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 Economy, etc. London, 1827, p. 178, 179.

[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 removable” (l. c., ch. 5, p. 298). A singular humor pervades all his 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 Hollanders” (l. c., p. 258). He advocates “Liberty of Conscience” as a 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 the American Paper Money,” 1764, l. c.

[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.)

[29] Steuart, l. c., vol. I., p. 181-183.

[30] Steuart, l. c., vol. I., p. 361-362.

[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 Taxation,” 3rd edition, London, 1821, p. 3.

[35] Sismondi, “Etudes sur l’Economie Politique,” t. II., Bruxelles, 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: “?t? ? ???a?? ?? p??? t? ???sa ???a?, ?????? d?af??e? ??? ??d?? ? e? ????a? p??te ??t? ????a?, ? ?s?? a? p??te ????a?.” (“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. “??? de? p??ta tet??s?a?? ??t? ??? ?e? ?sta? ???a??, e? d? t??t?, ???????a. ?? d? ???sa ?spe? ?t??? s?et?a p???sa? ?s??e?, ??te ??? ?? ? ??s?? ???a??? ???????a ??, ??t ‘???a?? ?s?t?t?? ? ??t’ ?s?t??, ? ??s?? s?et??a?.” (“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. “?? ?? ??? ????e?? ?d??at?? t? t?s??t?? d?af????ta s?et?a ?e??s?a?, p??? d? t?? ??e?a? ??d??eta? ??a???.” (“In truth it is impossible to make things that are so different, commensurable, but for practical purposes it is permissible.”) Aristotle, Ethica Nicomachea. l. 5, c. 8, edit. Bekkeri. Oxonii, 1837.

[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 Currency,” p. 16, London, 1858.

[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 Moneta,” l. c., p. 153 (“Coins which are ideal to-day [i.e., whose 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] “????a?s??, p???a?????? t????, p??? t? ?? ?????e? ????ta? t? ??????? ??pe p??? t? ????e??.” (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 antiquitÉ,” etc., t. 1, p. 78.)

[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.

[50] Steuart, l. c., v. II., p. 154.

[51] The Querist, l. c., (p. 5-6-7.) The “Queries on Money” are 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.

[53] Steuart, l. c., v. II., p. 154, 299 [1st London edition, of 1767, v. I., p. 526-531. Transl.].

[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 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.)

[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.)

[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.”)

[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 “???sa ?????? t?? ???a???.” (“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.: ???? d ‘?p???a?a t?? ??e?a? t? ???sa ??????? ?at? s??????? ?a? d?? t??t? t????a ??e? ???sa. ?t? ?? f?se? ???? ???, ?a? ?f ‘??? etaa?e?? ?a? p???sa? ????st??.” (“In the satisfaction of wants money became the medium of exchange by agreement. And for that reason it bears the name ???sa, because it owes its existence, not to nature, but to law (???), 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. “?e????t??a? ??? ?e?????? t?? ???e?a? t? e?s??es?a? h?? ??dee?? ?a? ??pepe?? ?? ?p????a???, ?? ??????? ? t?? ???sat?? ?p???s?? ???s??? d?? p??? t?? ???a?a? t????t?? t? s????e?t? p??? sf?? a?t??? d?d??a? ?a? ?a??e??, d ‘t?? ???s??? a?t? ?? e??e t?? ??e?a? e?eta?e???st?? ... ???? s?d???? ?a? ??????? ??? e? t? t????t?? ?te???”. (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 ???sa, and that in reality it owes its utility as coin to its function and not to any intrinsic use-value of its own. ????? e??a? d??e? t? ???sa ?a? ???? pa?t?pas?, f?se? d’ ??d?? ?t? eta?e???? te t?? ??????? ??de??? ????? ??d? ???s??? p??? ??d?? t?? ??a??a??? ??t?. (“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 the real and the nominal you 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.)

[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 est une richesse abstraite et 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: “?? ??? t??t? ?? ??? ??da ????? ??d? f???e? ??de?? t??? ?p?s?e?a??????? ... ??????t?? d? ?s? ?? p?e??? fa???ta?, ?a? ???????? p?e??? ?????ta?, t?s??t? p?e???e? ?p? t? ????? t??t? ?????ta? ... ?a? ??? d? ?p?p?a ?? ?pe?d?? ??a?? t?? ?t?s?ta? t? ?????, ?? ??a ??t? p??s?????ta?? ???????? d? ??de?? p? ??t? p??? ??t?sat? ?ste ? ?t? p??s?e?s?a?, ??? ‘?? t?s? ????ta? pap?????, t? pe??tte??? ?at???tt??te? ??d?? ?tt?? ?d??ta? ? ???e??? a?t?? ?a? ?? ?ta? ?e e? p??tt?s?? a? p??e?? ?s?????, ?? ?????p?? ???????? d???ta?. ?? ?? ??? ??d?e? ?f? ?p?a te ?a?? ?a? ?pp??? ??a????? ?a? ????a? ?a? ?atas?e??? e?a??p?epe?? ?????ta? dapa???, a?d? ???a??e? e?? ?s??ta p???te?? ?a? ???s??? ??s?? t??p??ta?? ?ta? de a? ??s?s?s? p??e?? ? ?f???a?? ?a?p?? ? p???? ?t? ?a? p??? ????? t?? ??? ????? ?????e??? ?a? e?? ?p?t?de?a ?a? e?? ?p???????? ???sat?? d???ta?.” (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 allontana e 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.
1852	60-1/8pence	60-1/4pence	61-7/8pence
1853	61-3/8 pence	61-1/2 pence	61-7/8 pence
1854	61-7/8 pence	61-3/4 pence	61-1/2 pence
1855	60-7/8 pence	61-1/2 pence	60-7/8 pence
1856	60-7/8 pence	61-1/4 pence	62-1/8 pence
1857	61-3/4 pence	61-5/8 pence	61-1/2 pence
1858	61-5/8 pence

[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.

[122] David Hume, l. c. p. 307, 308, 303: “It is evident, that the prices do not so much depend on the absolute quantity of commodities, and that of money, which are in a nation, as on that of the commodities, which can or may come to market, and of the money which circulates. If the coin be locked up in chests, it is the same thing with regard to prices, as if it were annihilated; if the commodities be hoarded in magazines and granaries, a like effect follows. As the money and commodities in these cases, never meet, they cannot affect each other. The whole (of prices) at last reaches a just proportion with the new quantity of specie which is in the kingdom.”

[123] See Law and Franklin about surplus value which gold and silver are supposed to acquire from their function of money. Also Forbonnais.

[124] This fiction is literally advanced by Montesquieu. [The passage from Montesquieu is quoted by Marx in his Capital, v. I. Part 1, Ch. III, section 2, b, foot-note. Note by K. Kautsky to 2nd German edition].

[125] Steuart, l. c. v. I., p. 394 seq.

[126] Steuart, l. c., v. 2. p. 377-379 passim (not found in the 1767 London edition. Translator).

[127] Steuart, l. c., p. 379-380 passim (London, 1767 edition, v. l. p. 400. Transl.).

[128] “The additional coin will be locked up, or converted into plate.... As for the paper money, so soon as it has served the first purpose of supplying the demand of him who borrowed it, it will return upon the debtor in it and become realized.... Let the specie of a country, therefore, be augmented or diminished in ever so great a proportion, commodities will still rise and fall according to the principles of demand and competition, and these will constantly depend upon the inclinations of those who have property or any kind of equivalent whatsoever to give, but never upon the quantity of coin they are possessed of.... Let it (namely, the quantity of specie in a country) be ever so low, while there is real property of any denomination in the country, a competition to consume in those who possess it, prices will be high, by the means of barter, symbolical money, mutual prestations and a thousand other inventions.... If this country has a communication with other nations, there must be a proportion between the prices of many kinds of merchandize there and elsewhere, and a sudden augmentation or diminution of the specie, supposing it could of itself operate the effects of raising or sinking prices, would be restrained in its operation by foreign competition.” l. c. v. 1, p. 400-402. “The circulation of every country must be in proportion to the industry of the inhabitants producing the commodities which come to market.... If the coin of a country, therefore, falls below the proportion of the price of industry offered to sale, inventions, like symbolical money, will be fallen upon, to provide for an equivalent for it. But if the specie be found above the proportion of industry, it will have no effect in raising prices, nor will it enter into circulation: it will be hoarded up in treasures.... Whatsoever be the quantity of money in a nation, in correspondence with the rest of the world, there never can remain in circulation, but the quantity nearly proportional to the consumption of the rich and to the labour and industry of the poor inhabitants,” and this proportion is not determined “by the quantity of money actually in the country” (l. c. p. 403-408 passim.) “All nations will endeavor to throw their ready money, not necessary for their own circulation, into that country where the interest of money is high with respect to their own.” (l. c. v. 2. p. 5). “The richest nation in Europe may be the poorest in circulating specie.” l. c., v. 2, p. 6. For the polemics against Steuart see Arthur Young. [In his foot-note in Capital, v. 1, Part 1, ch. III., section 2, b. p. 62, Humboldt ed., Marx says: The theory of Hume was defended against the attacks of J. Steuart and others, by A. Young, in his “Political Arithmetic,” London, 1774, in which work there is a special chapter entitled “Prices depend on quantity of money.” Note by K. Kautsky to 2nd German edition].

[129] Steuart, l. e., v. 2, p. 370. Louis Blanc translates the expression “money of the society” which stands for home or national money, as socialist money, which is perfectly meaningless and makes a Socialist of John Law. (See the first volume of his History of the French Revolution).

[130] Maclaren, l. c. p. 43 seq. Patriotism led Gustav Julius, a German writer who met with very early death, to hold up old BÜsch as an authority as against the Ricardian school. Honest BÜsch rendered Steuart’s elegant English into Hamburg Platt and by trying to improve upon the original spoiled it as often as he could.

[131] Note to the 2nd edition: This is not an exact statement. Adam Smith expresses the law correctly on many occasions. [See Capital, Humboldt edition, p. 62, ft-note 1, where writing seven years later, Marx makes the following qualification: “This statement applies only in so far as Adam Smith, ex officio, treats of money. Now and then, however, as in his criticism of the earlier systems of political economy, he takes the right view. ‘The quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it.... The value of the goods annually bought and sold in any country requires a certain quantity of money to circulate and distribute them to their proper consumers, and can give employment to no more. The channel of circulation necessarily draws to itself a sum sufficient to fill it, and never admits any more.’ Wealth of Nations, Book iv., ch. I.”

[132] The distinction between currency and money is therefore not found in “Wealth of Nations.” Deceived by the apparent impartiality of Adam Smith, who knew his Hume and Steuart very well, honest Maclaren remarks: “The theory of the dependence of prices on the extent of the currency had not as yet, attracted attention; and Doctor Smith, like Mr. Locke (Locke undergoes a change in his view), considers metallic money nothing but a commodity.” Maclaren, l. c. p. 44.

[133] David Ricardo, “The High Price of Bullion, a Proof of the Depreciation of Bank-notes.” 4th edition, London, 1811. (The first edition appeared in 1809). Further, “Reply to Mr. Bosanquet’s Practical Observations on the Report of the Bullion Committee.” London, 1811.

[134] David Ricardo: “On the Principles of Political Economy, etc.” p. 77. “Their value [of metals] [like that of all other commodities], depends on the total quantity of labour necessary to obtain the metal, and to bring it to market.”

[135] l. c. p. 77, 180, 181.

[136] Ricardo, l. c. p. 421. “The quantity of money that can be employed in a country must depend on its value: if gold alone were employed for the circulation of commodities, a quantity would be required, one fifteenth only of what would be necessary, if silver were made use of for the same purpose.” See also Ricardo’s: “Proposals for an Economical and Secure Currency,” London, 1816, p. 89, where he says: “The amount of notes in circulation depends on the amount required for the circulation of the country; which is regulated ... by the value of the standard [of money], the amount of payments, and the economy practised in effecting them.”

[137] Ricardo, “Principles of Political Economy”, p. 432.

[138] David Ricardo, “Reply to Mr. Bosanquet’s Practical Observations, etc.” p. 49. “That commodities would rise or fall in price, in proportion to the increase or diminution of money, I assume as a fact which is incontrovertible.”

[139] David Ricardo, “The High Price of Bullion,” etc. “Money would have the same value in all countries.” p. 4. In his Political Economy Ricardo modified this statement, but not in a way to affect what has been said here.

[140] l. c. p. 3-4.

[141] l. c., p. 4.

[142] Ricardo, l. c., p. 11-12.

[143] Ricardo, l. c., p. 14.

[144] l. c., p. 17.

[145] Ricardo, l. c., p. 74-75. “England, in consequence of a bad harvest, would come under the case of a country having been deprived of a part of its commodities, and, therefore, requiring a diminished amount of circulating medium. The currency which was before equal to her payments would now become super-abundant and relatively cheap, in proportion ... of her diminished production; the exportation of this sum, therefore, would restore the value of her currency to the value of the currencies of other countries.” His confusion of money and commodity, and of money and coin borders on the ludicrous in the following passage: “If we can suppose that after an unfavorable harvest, when England has occasion for an unusual importation of corn, another nation is possessed of a super-abundance of that article, but has no wants for any commodity whatever, it would unquestionably follow that such nation would not export its corn in exchange for commodities: but neither would it export corn for money, as that is a commodity which no nation ever wants absolutely, but relatively.” l. c., p. 75. Pushkin in his hero poem makes the father of his hero incapable of comprehending that commodities are money. But that money is a commodity, the Russians have understood from times of yore as is proven not only by the English corn imports in 1838-1842, but by the entire history of their commerce.

[146] Conf. Thomas Tooke, “History of Prices,” and James Wilson, “Capital, Currency and Banking.” (The latter work is a reprint of a series of articles which appeared in the London Economist in 1844, 1845 and 1847.)

[147] James Deacon Hume: “Letters on the Corn Laws.” London, 1834, p. 29-31. [Letter by H. B. T. on the Corn Laws and on the Rights of the Working Classes. Transl.]

[148] Thomas Tooke, “History of Prices,” etc. London, 1848, p. 110.

[149] Conf. W. Blake’s above quoted “Observations etc.”

[150] James Mill: “Elements of Political Economy.” [London, 1821, p. 95-101 passim. Transl.]

[151] A few months before the outbreak of the commercial crisis of 1857, a committee of the House of Commons was in session to inquire into the effect of the bank-laws of 1844 and 1845. Lord Overstone, the theoretical father of these laws, delivered himself of this boast in his testimony before the committee: “By strict and prompt adherence to the principles of the act of 1844, everything has passed off with regularity and ease; the monetary system is safe and unshaken, the prosperity of the country is undisputed, the public confidence in the wisdom of the act of 1844 is daily gaining strength; and if the committee wish for further practical illustration of the soundness of the principles on which it rests, or of the beneficial results which it has assured, the true and sufficient answer to the committee is, look around you; look at the present state of trade of the country, look at the contentment of the people; look at the wealth and prosperity which pervades every class of the community; and then, having done so, the committee may be fairly called upon to decide whether they will interfere with the continuance of an act under which these results have been developed.” Thus did Overstone blow his own horn on the fourteenth of July, 1857; on the twelfth of November of the same year the Ministry had to suspend on its own responsibility the wonderful law of 1844.

[152] Tooke was entirely ignorant of Steuart’s work, as may be seen from his “History of Prices for 1839-1847,” London, 1848. where he reviews the history of the theories of money.

[153] Tooke’s most important work besides the “History of Prices” which his co-worker Newmarch published in six volumes, is “An Inquiry into the Currency Principle, the Connection of the Currency with Prices” etc., 2nd edition, London, 1844. Wilson’s book we have already quoted. Finally there is to be mentioned John Fullarton’s “On the Regulation of Currencies,” 2d edition, London, 1845.

[154] “We ought to ... distinguish ... between gold ... as merchandise, i.e. as capital, and gold ... as currency” (Tooke, “An Inquiry into the Currency Principle, etc.” p. 10). “Gold and silver may be counted upon to realize on their arrival nearly the exact sum required to be provided ... gold and silver possess an infinite advantage over all other description of merchandize ... from the circumstance of being universally in use as money.... It is not in tea, coffee, sugar or indigo that debts, whether foreign or domestic, are usually contracted to be paid, but in coin; and the remittance, therefore, either in the identical coin designated, or in bullion which can be promptly turned into that coin through the mint or market of the country to which it is sent, must always afford to the remitter, the most certain, immediate, and accurate means of affecting this object, without risk of disappointment from the failure of demand or fluctuation of price.” (Fullerton, l. c. p. 132-133.) “Any other article (except gold or silver) might in quantity or kind be beyond the usual demand of the country to which it is sent.” (Tooke: “An Inquiry, etc.”)

[155] The transformation of money into capital we shall consider in the third chapter which treats of capital and forms the end of the first book.

[156] This introduction was first published in the Neue Zeit (see Translator’s Preface, p. 5) of March 7, 14 and 21, 1903, by Karl Kautsky, with the following explanation:

“This article has been found among the posthumous papers of Karl Marx. It is a fragmentary sketch of a treatise that was to have served as an introduction to his main work, which he had been writing for many years and whose outline was clearly formed in his mind. The manuscript is dated August 23, 1857.... As the idea is very often indicated only in fragmentary sentences, I have taken the liberty of introducing here and there changes in style, insertions of words, etc.... A mere reprint of the original would have made it unintelligible.... Not all the words in the manuscript are legible....

“Wherever there could be no doubt as to the necessity of corrections, I did so without indicating them in the text; in other cases I put all insertions in brackets. Wherever I am not certain as to whether I have deciphered a word correctly, I have put an interrogation point after it; other changes are specially noted. In all other respects this is an exact reprint of the original, whose fragmentary and incomplete passages serve to remind us only too painfully of the many treasures of thought which went down to the grave with Marx, treasures which would have sufficed for generations if Marx had not so anxiously avoided giving to the world any of his ideas until he had tested them repeatedly from every conceivable point of view and had given them a wording that would be incontrovertible. In spite of its fragmentary character it opens before us a wealth of new points of view.”

[157] The original reads “person.”

[158] The manuscript reads “production.”

[159] The manuscript reads “production.”

[160] The German text reads “instruktiv,” which I take to be a misprint of “instinktiv.” Translator.

[161] Compare this with foot-note 1, on p. 34 of Capital, Humboldt edition, New York:

“Truly comical is M. Bastiat, who imagines that the ancient Greeks and Romans lived by plunder alone. But when people plunder for centuries, there must always be something at hand for them to seize; the objects of plunder must be continually reproduced.” K. Kautsky.

[162] The English expression is used by Marx in his German original. Transl.

[163] Marx evidently has in mind here a passage in Adam Smith’s Wealth of Nations (vol. 2, ch. 2) in which he speaks of the circulation of a country as consisting of two distinct parts: circulation between dealers and dealers, and that between dealers and consumers. The word dealer signifies here not only a merchant or shopkeeper, but also a producer. K. Kautsky.

[164] Here two words in the manuscript can not be deciphered. They look like “ausser sich” (“outside of itself”). K. Kautsky.

[165] Distribution (Verkehr) is used here in the sense of physical distribution of goods and not in sense of economic distribution of the shares of the products between the different factors of production. Translator.

[166] As the “notes” written down by Marx in the following eight paragraphs are extremely fragmentary, making translation in some cases impossible without a certain degree of interpretation, and as the original is not accessible in book-form, they are reproduced here in German for the benefit of the student who may feel interested in the original wording as it had been jotted down by Marx.

[167] Im Original ist zu lesenVa

[168] Im Original ist zu lesenegtl.

[169] The site of the “Times” building in London. K. K.

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