(2.) Its attainable quant.i.ty at that cost.

(3.) The number and power of the persons who want it.

(4.) The estimate they have formed of its desirableness.

Its value only affects its price so far as it is contemplated in this estimate; perhaps, therefore, not at all.

63. Now, in order to show the manner in which price is expressed in terms of a currency, we must a.s.sume these four quant.i.ties to be known, and the "estimate of desirableness," commonly called the Demand, to be certain. We will take the number of persons at the lowest. Let A and B be two labourers who "demand," that is to say, have resolved to labour for, two articles, _a_ and _b_. Their demand for these articles (if the reader likes better, he may say their need) is to be conceived as absolute, their existence depending on the getting these two things.

Suppose, for instance, that they are bread and fuel, in a cold country, and let a represent the least quant.i.ty of bread, and _b_ the least quant.i.ty of fuel, which will support a man's life for a day. Let _a_ be producible by an hour's labour, but _b_ only by two hours' labour.

Then the _cost of a_ is one hour, and of _b_ two (cost, by our definition, being expressible in terms of time). If, therefore, each man worked both for his corn and fuel, each would have to work three hours a day. But they divide the labour for its greater ease.[30] Then if A works three hours, he produces 3 _a_, which is one a more than both the men want. And if B works three hours, he produces only 1-1/2 _b_, or half of _b_ less than both want. But if A work three hours and B six, A has 3 _a_, and B has 3 _b_, a maintenance in the right proportion for both for a day and half; so that each might take half a day's rest. But as B has worked double time, the whole of this day's rest belongs in equity to him. Therefore the just exchange should be, A giving two _a_ for one _b_, has one _a_ and one _b_;--maintenance for a day. B giving one _b_ for two _a_, has two _a_ and two _b_; maintenance for two days.

But B cannot rest on the second day, or A would be left without the article which B produces. Nor is there any means of making the exchange just, unless a third labourer is called in. Then one workman, A, produces _a_, and two, B and C, produce _b_:--A, working three hours, has three _a_;--B, three hours, 1-1/2 _b_;--C, three hours, 1-1/2 _b_. B and C each give half of _b_ for _a_, and all have their equal daily maintenance for equal daily work.

To carry the example a single step farther, let three articles, _a_, _b_, and _c_ be needed.

Let _a_ need one hour's work, _b_ two, and _c_ four; then the day's work must be seven hours, and one man in a day's work can make 7 _a_, or 3-1/2 _b_, or 1-3/4 _c_.

Therefore one A works for _a_, producing 7 _a_; two B's work for _b_, producing 7 _b_; four C's work for _c_, producing 7 _c_.

A has six _a_ to spare, and gives two _a_ for one _b_, and four _a_ for one _c_. Each B has 2-1/2 _b_ to spare, and gives 1/2 _b_ for one _a_, and two _b_ for one _c_.

Each C has 3/4 of _c_ to spare, and gives 1/2 _c_ for one _b_, and 1/4 of _c_ for one _a_.

And all have their day's maintenance.

Generally, therefore, it follows that if the demand is constant,[31] the relative prices of things are as their costs, or as the quant.i.ties of labour involved in production.

64. Then, in order to express their prices in terms of a currency, we have only to put the currency into the form of orders for a certain quant.i.ty of any given article (with us it is in the form of orders for gold), and all quant.i.ties of other articles are priced by the relation they bear to the article which the currency claims.

But the worth of the currency itself is not in the slightest degree founded more on the worth of the article which it either claims or consists in (as gold) than on the worth of every other article for which the gold is exchangeable. It is just as accurate to say, "so many pounds are worth an acre of land," as "an acre of land is worth so many pounds." The worth of gold, of land, of houses, and of food, and of all other things, depends at any moment on the existing quant.i.ties and relative demands for all and each; and a change in the worth of, or demand for, any one, involves an instantaneously correspondent change in the worth of, and demand for, all the rest;--a change as inevitable and as accurately balanced (though often in its process as untraceable) as the change in volume of the outflowing river from some vast lake, caused by change in the volume of the inflowing streams, though no eye can trace, nor instrument detect, motion, either on its surface, or in the depth.

65. Thus, then, the real working power or worth of the currency is founded on the entire sum of the relative estimates formed by the population of its possessions; a change in this estimate in any direction (and therefore every change in the national character), instantly alters the value of money, in its second great function of commanding labour. But we must always carefully and sternly distinguish between this worth of currency, dependent on the conceived or appreciated value of what it represents, and the worth of it, dependent on the _existence_ of what it represents. A currency is _true, or false_, in proportion to the security with which it gives claim to the possession of land, house, horse, or picture; but a currency is _strong or weak_,[32] worth much, or worth little, in proportion to the degree of estimate in which the nation holds the house, horse, or picture which is claimed. Thus the power of the English currency has been, till of late, largely based on the national estimate of horses and of wine: so that a man might always give any price to furnish choicely his stable, or his cellar; and receive public approval therefor: but if he gave the same sum to furnish his library, he was called mad or a biblio-maniac.

And although he might lose his fortune by his horses, and his health or life by his cellar, and rarely lost either by his books, he was yet never called a Hippo-maniac nor an Oino-maniac; but only Biblio-maniac, because the current worth of money was understood to be legitimately founded on cattle and wine, but not on literature. The prices lately given at sales for pictures and MSS. indicate some tendency to change in the national character in this respect, so that the worth of the currency may even come in time to rest, in an acknowledged manner, somewhat on the state and keeping of the Bedford missal, as well as on the health of Caractacus or Blink Bonny; and old pictures be considered property, no less than old port. They might have been so before now, but that it is more difficult to choose the one than the other.

66. Now, observe, all these sources of variation in the power of the currency exist, wholly irrespective of the influences of vice, indolence, and improvidence. We have hitherto supposed, throughout the a.n.a.lysis, every professing labourer to labour honestly, heartily, and in harmony with his fellows. We have now to bring farther into the calculation the effects of relative industry, honour, and forethought; and thus to follow out the bearings of our second inquiry: Who are the holders of the Store and Currency, and in what proportions?

This, however, we must reserve for our next paper--noticing here only that, however distinct the several branches of the subject are, radically, they are so interwoven in their issues that we cannot rightly treat any one, till we have taken cognizance of all. Thus the need of the currency in proportion to number of population is materially influenced by the probable number of the holders in proportion to the non-holders; and this again, by the number of holders of goods, or wealth, in proportion to the non-holders of goods. For as, by definition, the currency is a claim to goods which are not possessed, its quant.i.ty indicates the number of claimants in proportion to the number of holders; and the force and complexity of claim. For if the claims be not complex, currency as a means of exchange may be very small in quant.i.ty. A sells some corn to B, receiving a promise from B to pay in cattle, which A then hands over to C, to get some wine. C in due time claims the cattle from B; and B takes back his promise. These exchanges have, or might have been, all effected with a single coin or promise; and the proportion of the currency to the store would in such circ.u.mstances indicate only the circulating vitality of it--that is to say, the quant.i.ty and convenient divisibility of that part of the store which the _habits_ of the nation keep in circulation. If a cattle breeder is content to live with his household chiefly on meat and milk, and does not want rich furniture, or jewels, or books--if a wine and corn grower maintains himself and his men chiefly on grapes and bread;--if the wives and daughters of families weave and spin the clothing of the household, and the nation, as a whole, remains content with the produce of its own soil and the work of its own hands, it has little occasion for circulating media. It pledges and promises little and seldom; exchanges only so far as exchange is necessary for life. The store belongs to the people in whose hands it is found, and money is little needed either as an expression of right, or practical means of division and exchange.

67. But in proportion as the habits of the nation become complex and fantastic (and they may be both, without therefore being civilized), its circulating medium must increase in proportion to its store. If every one wants a little of everything,--if food must be of many kinds, and dress of many fashions,--if mult.i.tudes live by work which, ministering to fancy, has its pay measured by fancy, so that large prices will be given by one person for what is valueless to another,--if there are great inequalities of knowledge, causing great inequalities of estimate,--and, finally, and worst of all, if the currency itself, from its largeness, and the power which the possession of it implies, becomes the sole object of desire with large numbers of the nation, so that the holding of it is disputed among them as the main object of life:--in each and all of these cases, the currency necessarily enlarges in proportion to the store; and as a means of exchange and division, as a bond of right, and as an object of pa.s.sion, has a more and more important and malignant power over the nation's dealings, character, and life.

Against which power, when, as a bond of Right, it becomes too conspicuous and too burdensome, the popular voice is apt to be raised in a violent and irrational manner, leading to revolution instead of remedy. Whereas all possibility of Economy depends on the clear a.s.sertion and maintenance of this bond of right, however burdensome. The first necessity of all economical government is to secure the unquestioned and unquestionable working of the great law of Property--that a man who works for a thing shall be allowed to get it, keep it, and consume it, in peace; and that he who does not eat his cake to-day, shall be seen, without grudging, to have his cake to-morrow.

This, I say, is the first point to be secured by social law; without this, no political advance, nay, no political existence, is in any sort possible. Whatever evil, luxury, iniquity, may seem to result from it, this is nevertheless the first of all Equities; and to the enforcement of this, by law and by police-truncheon, the nation must always primarily set its mind--that the cupboard door may have a firm lock to it, and no man's dinner be carried off by the mob, on its way home from the baker's. Which, thus fearlessly a.s.serting, we shall endeavour in next paper to consider how far it may be practicable for the mob itself, also, in due breadth of dish, to have dinners to carry home.

FOOTNOTES:

[14] Remember carefully this statement, that Wealth consists only in the things which the nature of humanity has rendered in all ages, and must render in all ages to come, (that is what I meant by "constant") the objects of legitimate desire. And see Appendix II.

[15] The _Wanderings_, observe, not the Right goings, of Imagination.

She is very far from despising these.

[16] _See_ Appendix III.

[17] I would beg the reader's very close attention to these 37th and 38th paragraphs. It would be well if a dogged conviction could be enforced on nations, as on individuals, that, with few exceptions, what they cannot at present pay for, they should not at present have.

[18] _See_ Appendix IV.

[19] I little thought, what _Trionfo della Morte_ would be, for this very cause, and in literal fulfilment of the closing words of the 47th paragraph, over the fields and houses of Europe, and over its fairest city--within seven years from the day I wrote it.

[20] The meaning of which is, that you may spend a great deal of money, and get very little work for it, and that little bad; but having good "air" or "spirit," to put life into it, with very little money, you may get a great deal of work, and all good; which, observe, is an arithmetical, not at all a poetical or visionary circ.u.mstance.

[21] More especially, works of great art.

[22] The meaning of that, in plain English, is, that we must find out how far poverty and riches are good or bad for people, and what is the difference between being miserably poor--so as, perhaps, to be driven to crime, or to pa.s.s life in suffering--and being blessedly poor, in the sense meant in the Sermon on the Mount. For I suppose the people who believe that sermon, do not think (if they ever honestly ask themselves what they do think), either that Luke vi. 24. is a merely poetical exclamation, or that the Beat.i.tude of Poverty has yet been attained in St. Martin's Lane and other back streets of London.

[23] Large plans!--Eight years are gone, and nothing done yet. But I keep my purpose of making one day this balance, or want of balance, visible, in those so seldom used scales of Justice.

[24] These are nearly all briefly represented by the image used for the force of money by Dante, of mast and sail:--

Quali dal vento le gonfiate vele Caggiono avvolte, poi che l'alber fiacca Tal cadde a terra la fiera crudele.

The image may be followed out, like all of Dante's, into as close detail as the reader chooses. Thus the stress of the sail must be proportioned to the strength of the mast, and it is only in unforeseen danger that a skilful seaman ever carries all the canvas his spars will bear, states of mercantile languor are like the flap of the sail in a calm; of mercantile precaution, like taking in reefs; and mercantile ruin is instant on the breaking of the mast.

[I mean by credit-power, the general impression on the national mind that a sovereign, or any other coin, is worth so much bread and cheese--so much wine--so much horse and carriage--or so much fine art: it may be really worth, when tried, less or more than is thought: the thought of it is the credit-power.]

[25] The object of Political Economy is not to buy, nor to sell labour, but to spare it. Every attempt to buy or sell it is, in the outcome, ineffectual; so far as successful, it is not sale, but Betrayal; and the purchase-money is a part of that thirty pieces which bought, first the greatest of labours, and afterwards the burial-field of the Stranger; for this purchase-money, being in its very smallness or vileness the exactly measured opposite of the "vilis annona amicorum," makes all men strangers to each other.

[26] Cicero's distinction, "sordidi quaestus, quorum operae, non quorum artes emuntur," admirable in principle, is inaccurate in expression, because Cicero did not practically know how much operative dexterity is necessary in all the higher arts; but the cost of this dexterity is incalculable. Be it great or small, the "cost" of the mere perfectness of touch in a hammer-stroke of Donatello's, or a pencil-touch of Correggio's, is inestimable by any ordinary arithmetic.

[Old notes, these, more embarra.s.sing I now perceive, than elucidatory; but right, and worth retaining.]

[27] Only observe, as some labour is more destructive of life than other labour, the hour or day of the more destructive toil is supposed to include proportionate rest. Though men do not, or cannot, usually take such rest, except in death.

[28] There is, therefore, observe, no such thing as cheapness (in the common use of that term), without some error or injustice. A thing is said to be cheap, not because it is common, but because it is supposed to be sold under its worth. Everything has its proper and true worth at any given time, in relation to everything else; and at that worth should be bought and sold. If sold under it, it is cheap to the buyer by exactly so much as the seller loses, and no more. Putrid meat, at twopence a pound, is not "cheaper" than wholesome meat at sevenpence a pound; it is probably much dearer; but if, by watching your opportunity, you can get the wholesome meat for sixpence a pound, it is cheaper to you by a penny, which you have gained, and the seller has lost. The present rage for cheapness is either, therefore, simply and literally a rage for badness of all commodities, or it is an attempt to find persons whose necessities will force them to let you have more than you should for your money. It is quite easy to produce such persons, and in large numbers; for the more distress there is in a nation, the more cheapness of this sort you can obtain, and your boasted cheapness is thus merely a measure of the extent of your national distress.

There is, indeed, a condition of apparent cheapness, which we have some right to be triumphant in; namely, the real reduction in cost of articles by right application of labour. But in this case the article is only cheap with reference to its _former_ price; the so-called cheapness is only our expression for the sensation of contrast between its former and existing prices. So soon as the new methods of producing the article are established, it ceases to be esteemed either cheap or dear, at the new price, as at the old one, and is felt to be cheap only when accident enables it to be purchased beneath this new value. And it is no advantage to produce the article more easily, except as it enables you to multiply your population. Cheapness of this kind is merely the discovery that more men can be maintained on the same ground; and the question how many you will maintain in proportion to your additional means, remains exactly in the same terms that it did before.

A form of immediate cheapness results, however, in many cases, without distress, from the labour of a population where food is redundant, or where the labour by which the food is produced leaves much idle time on their hands, which may be applied to the production of "cheap" articles.

All such phenomena indicate to the political economist places where the labour is unbalanced. In the first case, the just balance is to be effected by taking labourers from the spot where pressure exists, and sending them to that where food is redundant. In the second, the cheapness is a local accident, advantageous to the local purchaser, disadvantageous to the local producer. It is one of the first duties of commerce to extend the market, and thus give the local producer his full advantage.

Cheapness caused by natural accidents of harvest, weather, &c., is always counterbalanced, in due time, by natural scarcity, similarly caused. It is the part of wise government, and healthy commerce, so to provide in times and places of plenty for times and places of dearth, as that there shall never be waste, nor famine.

Cheapness caused by gluts of the market is merely a disease of clumsy and wanton commerce.

[29] Price has been already defined (p. 9) to be the quant.i.ty of labour which the possessor of a thing is willing to take for it. It is best to consider the price to be that fixed by the possessor, because the possessor has absolute power of refusing sale, while the purchaser has no absolute power of compelling it; but the effectual or market price is that at which their estimates coincide.

[30] This "greater ease" ought to be allowed for by a diminution in the times of the divided work; but as the proportion of times would remain the same, I do not introduce this unnecessary complexity into the calculation.