Arbitrary control and issues of currency affect the production of wealth, by acting on the hopes and fears of men, and are, under certain circumstances, wise. But the issue of additional currency to meet the exigencies of immediate expense, is merely one of the disguised forms of borrowing or taxing. It is, however, in the present low state of economical knowledge, often possible for governments to venture on an issue of currency, when they could not venture on an additional loan or tax, because the real operation of such issue is not understood by the people, and the pressure of it is irregularly distributed, and with an unperceived gradation.
25. The use of substances of intrinsic value as the materials of a currency, is a barbarism;—a remnant of the conditions of barter, which alone render commerce possible among savage nations. It is, however, still necessary, partly as a mechanical check on arbitrary issues; partly as a means of exchanges with foreign nations. In proportion to the extension of civilization, and increase of trustworthiness in Governments, it will cease. So long as it exists, the phenomena of the cost and price of the articles used for currency are mingled with those proper to currency itself, in an almost inextricable manner: and the market worth of bullion is affected by multitudinous accidental circumstances, which have been traced, with more or less success, by writers on commercial operations: but with these variations the true political economist has no more to do than an engineer, fortifying a harbour of refuge against Atlantic tide, has to concern himself with the cries or quarrels of children who dig pools with their fingers for its streams among the sand.
26. III.—Riches. According to the various industry, capacity, good fortune, and desires of men, they obtain greater or smaller share of, and claim upon, the wealth of the world.
The inequalities between these shares, always in some degree just and necessary, may be either restrained by law or circumstance within certain limits; or may increase indefinitely.
Where no moral or legal restraint is put upon the exercise of the will and intellect of the stronger, shrewder, or more covetous men, these differences become ultimately enormous. But as soon as they become so distinct in their extremes as that, on one side, there shall be manifest redundance of possession, and on the other manifest pressure of need,—the terms "riches" and "poverty" are used to express the opposite states; being contrary only as the terms "warmth" and "cold" are contraries, of which neither implies an actual degree, but only a relation to other degrees, of temperature.
27. Respecting riches, the economist has to inquire, first, into the advisable modes of their collection; secondly, into the advisable modes of their administration.
Respecting the collection of national riches, he has to inquire, first, whether he is justified in calling the nation rich, if the quantity of wealth it possesses relatively to the wealth of other nations, be large; irrespectively of the manner of its distribution. Or does the mode of distribution in any wise affect the nature of the riches? Thus, if the king alone be rich—suppose Croesus or Mausolus—are the Lydians or Carians therefore a rich nation? Or if a few slave-masters are rich, and the nation is otherwise composed of slaves, is it to be called a rich nation? For if not, and the ideas of a certain mode of distribution or operation in the riches, and of a certain degree of freedom in the people, enter into our idea of riches as attributed to a people, we shall have to define the degree of fluency, or circulative character which is essential to the nature of common wealth; and the degree of independence of action required in its possessors. Questions which look as if they would take time in answering.[13]
28. And farther. Since the inequality, which is the condition of riches, may be established in two opposite modes—namely, by increase of possession on the one side, and by decrease of it on the other—we have to inquire, with respect to any given state of riches, precisely in what manner the correlative poverty was produced: that is to say, whether by being surpassed only, or being depressed also; and if by being depressed, what are the advantages, or the contrary, conceivable in the depression. For instance, it being one of the commonest advantages of being rich to entertain a number of servants, we have to inquire, on the one side, what economical process produced the riches of the master; and on the other, what economical process produced the poverty of the persons who serve him; and what advantages each, on his own side, derives from the result.
29. These being the main questions touching the collection of riches, the next, or last, part of the inquiry is into their administration.
Their possession involves three great economical powers which require separate examination: namely, the powers of selection, direction, and provision.