Part 16 (1/2)

Hence the price of anything depends on four variables.[85]

1. Its cost.

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.)

[85] The two first of these variables are included in the _x_, and the two last in the _y_, of the formula given at p. 162 of ”Unto This Last,” and the four are the radical conditions which regulate the price of things on first production; in their price in exchange, the third and fourth of these divide each into two others, forming the Four which are stated at p. 186 of ”Unto This Last.”

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 absolute, 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.[86] 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 works 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 a half; so that each might take a 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.

[86] 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.

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,[87]

the relative prices of things are as their costs, or as the quant.i.ties of labour involved in production.

[87] Compare ”Unto This Last,” p. 177, et seq.

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 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, 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, no instrument detect motion either on its surface, or in the depth.

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, 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 Bibliomaniac. 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 Hippomaniac nor an Oinomaniac; but only Bibliomaniac, 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 it is more difficult to choose the one than the other.

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 cognisance of all. Thus the quant.i.ty of the currency in proportion to number of population is materially influenced by the number of the holders in proportion to the non-holders; and this again by the number of 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.

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 everyone wants a little of everything,--if food must be of many kinds, and dress of many fas.h.i.+ons,--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 these cases, the currency enlarges in proportion to the store, and, as a means of exchange and division, as a bond of right, and as an expression of pa.s.sion, plays a more and more important part in the nation's dealings, character, and life.

Against which part, 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 the 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.

III.

THE CURRENCY-HOLDERS AND STORE-HOLDERS. THE DISEASE OF DESIRE.