MONEY
In his treatise on the Revenues of Athens, Xenophon shows some appreciation of the theory of money. He appears to take for granted that money must have intrinsic value. At least, he understands that silver is a commodity whose value is affected by its use as such, as well as by its employment for currency.[[448]] He also apprehends the value of a silver currency for international commerce.[[449]] His naïvely enthusiastic argument for the indefinite increase of the stock of silver, however, is suggestive of the mercantile fallacy, which identified money with wealth.[[450]] But perhaps he is merely using for practical purposes of argument the fact that the Athenians were accustomed to look upon silver as the metal for fixed and constant value.[[451]] In any event, he sees that the increase of silver must be attended by a corresponding increase in business activity, if its value is not to depreciate,[[452]] and he cannot be accused of the error of the mercantilists, that a country is impoverished by the export of money.[[453]] He must also have understood clearly the importance of stability of value in a currency, since he deems it necessary to show that the increased output of silver will not decrease its value, and that silver is the least changeable of the monetary metals.[[454]] Despite his enthusiasm for his thesis, which causes him to exaggerate the stability of silver, he does not fail to grasp the direct effect of supply and demand upon it,[[455]] just as upon gold[[456]] and other commodities.[[457]] He shows also some understanding of the quantitative theory of the relation between gold and silver.[[458]] It need hardly be added that, in strong contrast to Plato, his attitude toward the precious metals, especially silver, is very favorable.[[459]]