Unto This Last, and Other Essays on Political Economy

by John Ruskin

And, indeed, it is only through evil conduct, wilfully persisted in, that there is any embarrassment either in the theory or the working of currency. No exchequer is ever embarrassed, nor is any financial question difficult of solution, when people keep their practice honest, and their heads cool. But when Governments lose all office of pilotage, protection, scrutiny, and witness; and live only in magnificence of proclaimed larceny, effulgent mendacity, and polished mendicity; or when the people choosing Speculation (the S usual redundant in the spelling) instead of Toil, pursue no dishonesty with chastisement, that each may with impunity take his dishonest turn; and enlarge their lust of wealth through ignorance of its use, making their harlot of the dust, and setting Earth, the Mother, at the mercy of Earth, the Destroyer, so that she has to seek in hell the children she left playing in the meadows,—there are no tricks of financial terminology that will save them; all signature and mintage do but magnify the ruin they retard; and even the riches that remain, stagnant or current, change only from the slime of Avernus to the sand of Phlegethon;—quicksand at the embouchure;—land fluently recommended by recent auctioneers as "eligible for building leases."

Finally, then, the power of true currency is fourfold.

1. Credit power. Its worth in exchange, dependent on public opinion of the stability and honesty of the issuer.

2. Real worth. Supposing the gold, or whatever else the currency expressly promises, to be required from the issuer, for all his notes; and that the call cannot be met in full. Then the actual worth of the document (whatever its credit power) would be, and its actual worth at any moment is to be defined as being, what the division of the assets of the issuer, and his subsequent will work, would produce for it.

3. The exchange power of its base. Granting that we can get five pounds in gold for our note, it remains a question how much of other things we can get for five pounds in gold. The more of other things exist, and the less gold, the greater this power.

4. The power over labour, exercised by the given quantity of the base, or of the things to be got for it. The question in this case is, how much work, and (question of questions) whose work, is to be had for the food which five pounds will buy. This depends on the number of the population; on their gifts, and on their dispositions, with which, down to their slightest humours and up to their strongest impulses, the power of the currency varies; and in this last of its ranges,—the range of passion, price, or praise (converso in pretium Deo), is at once least, and greatest.

Such being the main conditions of national currency, we proceed to examine those of the total currency, under the broad definition, "transferable acknowledgment of debt";[93] among the many forms of which there are in effect only two, distinctly opposed; namely, the acknowledgments of debts which will be paid, and of debts which will not. Documents, whether in whole or part, of bad debt, being to those of good debt as bad money to bullion, we put for the present these forms of imposture aside (as in analysing a metal we should wash it clear of dross), and then range, in their exact quantities, the true currency of the country on one side, and the store or property of the country on the other. We place gold, and all such substances, on the side of documents, as far as they operate by signature;—on the side of store as far as they operate by value. Then the currency represents the quantity of debt in the country, and the store the quantity of its possession. The ownership of all the property is divided between the holders of currency and holders of store, and whatever the claiming value of the currency is at any moment, that value is to be deducted from the riches of the store-holders, the deduction being practically made in the payment of rent for houses and lands, of interest on stock, and in other ways to be hereafter examined.

At present I wish only to note the broad relations of the two great classes—the currency-holders and store-holders.[94] Of course they are partly united, most monied men having possessions of land or other goods; but they are separate in their nature and functions. The currency-holders as a class regulate the demand for labour, and the store-holders the laws of it; the currency-holders determine what shall be produced, and the store-holders the conditions of its production. Farther, as true currency represents by definition debts which will be paid, it represents either the debtor's wealth, or his ability and willingness; that is to say, either wealth existing in his hands transferred to him by the creditor, or wealth which, as he is at some time surely to return it, he is either increasing, or, if diminishing, has the will and strength to reproduce. A sound currency, therefore, as by its increase it represents enlarging debt, represents also enlarging means; but in this curious way, that a certain quantity of it marks the deficiency of the wealth of the country from what it would have been if that currency had not existed.[95] In this respect it is like the detritus of a mountain; assume that it lies at a fixed angle, and the more the detritus, the larger must be the mountain; but it would have been larger still, had there been none.

Finally, though, as above stated, every man possessing money has usually also some property beyond what is necessary for his immediate wants, and men possessing property usually also hold currency beyond what is necessary for their immediate exchanges, it mainly determines the class to which they belong, whether in their eyes the money is an adjunct of the property, or the property of the money. In the first case, the holder's pleasure is in his possessions, and in his money subordinately, as the means of bettering or adding to them. In the second, his pleasure is in his money, and in his possessions only as representing it. In the first case, the money is as an atmosphere surrounding the wealth, rising from it and raining back upon it; but in the second, it is a deluge, with the wealth floating, and for the most part perishing in it. The shortest distinction between the men is that the one wishes always to buy and the other to sell.

Such being the great relations of the classes, their several characters are of the highest importance to the nation; for on the character of the store-holders depends the preservation, display, and serviceableness of its wealth;—on that of the currency-holders its nature, and in great part its distribution; and on both its production.