B. I see; but stop a little. This dose of Economy is rather too strong for once.
F. Be it so. We are agreed, then, upon this point,--that wealth is the mass of useful things Which we produce by labour; or, still better, the result of all the efforts which we make for the satisfaction of our wants and tastes. These useful things are exchanged for each other, according to the convenience of those to whom they belong. There are two forms in these transactions; one is called barter: in this case, a service is rendered for the sake of receiving an equivalent service immediately. In this form, transactions would be exceedingly limited. In order that they may be multiplied, and accomplished independently of time and space amongst persons unknown to each other, and by infinite fractions, an intermediate agent has been necessary,--this is cash. It gives occasion for exchange, which is nothing else but a complicated bargain. This is what has to be remarked and understood. Exchange decomposes itself into two bargains, into two actors, sale and purchase,--the reunion of which is needed to complete it. You sell a service, and receive a crown--then, with this crown, you buy a service. Then only is the bargain complete; it is not till then that your effort has been followed by a real satisfaction. Evidently you only work to satisfy the wants of others, that others may work to satisfy yours. So long as you have only the crown which has been given you for your work, you are only entitled to claim the work of another person. When you have done so, the economical evolution will be accomplished as far as you are concerned, since you will then only have obtained, by a real satisfaction, the true reward for your trouble. The idea of a bargain implies a service rendered, and a service received. Why should it not be the same with exchange, which is merely a bargain in two parts? And here there are two observations to be made. First,--It is a very unimportant circumstance whether there be much or little cash in the world. If there is much, much is required; if there is little, little is wanted, for each transaction: that is all. The second observation is this:--Because it is seen that cash always reappears in every exchange, it has come to be regarded as the sign and the measure of the things exchanged.
B. Will you still deny that cash is the sign of the useful things of which you speak?
F. A louis[6] is no more the sign of a sack of corn, than a sack of corn is the sign of a louis.
B. What harm is there in looking at cash as the sign of wealth?
F. The inconvenience is this,--it leads to the idea that we have only to increase the sign, in order to increase the things signified; and we are in danger of adopting all the false measures which you took when I made you an absolute king. We should go still further. Just as in money we see the sign of wealth, we see also in paper money the sign of money; and thence conclude that there is a very easy and simple method of procuring for everybody the pleasures of fortune.
B. But you will not go so far as to dispute that cash is the measure of values?
F. Yes, certainly, I do go as far as that, for that is precisely where the illusion lies. It has become customary to refer the value of everything to that of cash. It is said, this is worth five, ten, or twenty francs, as we say this weighs five, ten, or twenty grains; this measures five, ten, or twenty yards; this ground contains five, ten, or twenty acres; and hence it has been concluded, that cash is the measure of values.
B. Well, it appears as if it was so.
F. Yes, it appears so, and it is this I complain of, and not of the reality. A measure of length, size, surface, is a quantity agreed upon, and unchangeable. It is not so with the value of gold and silver. This varies as much as that of corn, wine, cloth, or labour, and from the same causes, for it has the same source and obeys the same laws. Gold is brought within our reach, just like iron, by the labour of miners, the advances of capitalists, and the combination of merchants and seamen. It costs more or less, according to the expense of its production, according to whether there is much or little in the market, and whether it is much or little in request; in a word, it undergoes the fluctuations of all other human productions. But one circumstance is singular, and gives rise to many mistakes. When the value of cash varies, the variation is attributed by language to the other productions for which it is exchanged. Thus, let us suppose that all the circumstances relative to gold remain the same, and that the corn harvest has failed. The price of corn will rise. It will be said, "The quarter of corn, which was worth twenty francs, is now worth thirty;" and this will be correct, for it is the value of the corn which has varied, and language agrees with the fact. But let us reverse the supposition: let us suppose that all the circumstances relative to corn remain the same, and that half of all the gold in existence is swallowed up; this time it is the price of gold which will rise. It would seem that we ought to say,--"This Napoleon, which was worth twenty francs, is now worth forty." Now, do you know how this is expressed? Just as if it was the other objects of comparison which had fallen in price, it is said,--"Corn, which was worth twenty francs, is now only worth ten."