20. (v.) Works of art. The value of these is of the same nature as that of books; but the laws of their production and possible modes of distribution are very different, and require separate examination.
21. II.—Money. Under this head, we shall have to examine the laws of currency and exchange; of which I will note here the first principles.
Money has been inaccurately spoken of as merely a means of exchange. But it is far more than this. It is a documentary expression of legal claim. It is not wealth, but a documentary claim to wealth, being the sign of the relative quantities of it, or of the labour producing it, to which, at a given time, persons, or societies, are entitled.
If all the money in the world, notes and gold, were destroyed in an instant, it would leave the world neither richer nor poorer than it was. But it would leave the individual inhabitants of it in different relations.
Money is, therefore, correspondent in its nature to the title-deed of an estate. Though the deed be burned, the estate still exists, but the right to it has become disputable.
22. The real worth of money remains unchanged, as long as the proportion of the quantity of existing money to the quantity of existing wealth or available labour remains unchanged.
If the wealth increases, but not the money, the worth of the money increases; if the money increases, but not the wealth, the worth of the money diminishes.
23. Money, therefore, cannot be arbitrarily multiplied, any more than title-deeds can. So long as the existing wealth or available labour is not fully represented by the currency, the currency may be increased without diminution of the assigned worth of its pieces. But when the existing wealth, or available labour is once fully represented, every piece of money thrown into circulation diminishes the worth of every other existing piece, in the proportion it bears to the number of them, provided the new piece be received with equal credit; if not, the depreciation of worth takes place, according to the degree of its credit.
24. When, however, new money, composed of some substance of supposed intrinsic value (as of gold), is brought into the market, or when new notes are issued which are supposed to be deserving of credit, the desire to obtain the money will, under certain circumstances, stimulate industry: an additional quantity of wealth is immediately produced, and if this be in proportion to the new claims advanced, the value of the existing currency is undepreciated. If the stimulus given be so great as to produce more goods than are proportioned to the additional coinage, the worth of the existing currency will be raised.