Singular prepossession of a man of genius, who does not see that to compare, to appraise, to appreciate, is to MEASURE; that every measure, being only a comparison, indicates for that very reason a true relation, provided the comparison is accurate; that, consequently, value, or real measure, and value, or relative measure, are perfectly identical; and that the difficulty is reduced, not to the discovery of a standard of measure, since all quantities may serve each other in that capacity, but to the determination of a point of comparison.In geometry the point of comparison is extent, and the unit of measure is now the division of the circle into three hundred and sixty parts, now the circumference of the terrestrial globe, now the average dimension of the human arm, hand, thumb, or foot.
In economic science, we have said after Adam Smith, the point of view from which all values are compared is labor; as for the unit of measure, that adopted in France is the FRANC.It is incredible that so many sensible men should struggle for forty years against an idea so simple.But no:
The comparison of values is effected without a point of comparison between them, and without a unit of measure, - - such is the proposition which the economists of the nineteenth century, rather than accept the revolutionary idea of equality, have resolved to maintain against all comers.What will posterity say?
I shall presently show, by striking examples, that the idea of the measure or proportion of values, theoretically necessary, is constantly realized in every-day life.
3.-- Application of the law of proportionality of values.
Every product is a representative of labor.
Every product, therefore, can be exchanged for some other, as universal practice proves.
But abolish labor, and you have left only articles of greater or less usefulness, which, being stamped with no economic character, no human seal, are without a common measure, -- that is, are logically unexchangeable.
Gold and silver, like other articles of merchandise, are representatives of value; they have, therefore, been able to serve as common measures and mediums of exchange.But the special function which custom has allotted to the precious metals, -- that of serving as a commercial agent, -- is purely conventional, and any other article of merchandise, less conveniently perhaps, but just as authentically, could play this part: the economists admit it, and more than one example of it can be cited.What, then, is the reason of this preference generally accorded to the metals for the purpose of money, and how shall we explain this speciality of function, unparalleled in political economy, possessed by specie? For every unique thing incomparable in kind is necessarily very difficult of comprehension, and often even fails of it altogether.Now, is it possible to reconstruct the series from which money seems to have been detached, and, consequently, restore the latter to its true principle?
In dealing with this question the economists, following their usual course, have rushed beyond the limits of their science; they have appealed to physics, to mechanics, to history, etc.; they have talked of all things, but have given no answer.The precious metals, they have said, by their scarcity, density, and incorruptibility, are fitted to serve as money in, a degree unapproached by other kinds of merchandise.In short, the economists, instead of replying to the economic question put to them, have set themselves to the examination of a question of art.They have laid great stress on the mechanical adaptation of gold and silver for the purpose of money;
but not one of them has seen or understood the economic reason which gave to the precious metals the privilege they now enjoy.
Now, the point that no one has noticed is that, of all the various articles of merchandise, gold and silver were the first whose value was determined.
In the patriarchal period, gold and silver still were bought and sold in ingots, but already with a visible tendency to superiority and with a marked preference.Gradually sovereigns took possession of them and stamped them with their seal; and from this royal consecration was born money, -- that is, the commodity par excellence; that which, notwithstanding all commercial shocks, maintains a determined proportional value, and is accepted in payment for all things.
That which distinguishes specie, in fact, is not the durability of the metal, which is less than that of steel, nor its utility, which is much below that of wheat, iron, coal, and numerous other substances, regarded as almost vile when compared with gold; neither is it its scarcity or density, for in both these respects it might be replaced, either by labor spent upon other materials, or, as at present, by bank notes representing vast amounts of iron or copper.The distinctive feature of gold and silver, I repeat, is the fact that, owing to their metallic properties, the difficulties of their production, and, above all, the intervention of public authority, their value as merchandise was fixed and authenticated at an early date.
I say then that the value of gold and silver, especially of the part that is made into money, although perhaps it has not yet been calculated accurately, is no longer arbitrary; I add that it is no longer susceptible of depreciation, like other values, although it may vary continually nevertheless.
All the logic and erudition that has been expended to prove, by the example of gold and silver, that value is essentially indeterminable, is a mass of paralogisms, arising from a false idea of the question, ab ignorantia elenchi.
