Thoughts on the mechanism of societies

by marquis de Charles Casaux

When such revolutions are brought about by slow degrees, no one is sensible either of the effect, or of the cause; but, at last, both are attended to. Let us then suppose, that the generality of the people reflect that gold and silver, considered as coin, derive all their value from imagination;—that money is, strictly speaking, nothing more than a medium adopted to facilitate the division and transport of all other kinds of property;—that it is but a sign, the place of which may be easily supplied by any other, which by general consent may be honoured with the same distinction, or ordered for the same use;—that its value, in this point of view, rises or falls unavoidably, according to its quantity, without influencing the intrinsic or relative value of the articles it represents, a value constantly determined by the sum of the labour that produces them, just as their relative, common quantity follows, servilely and closely, the demand.—All these remarks cannot prevent us from observing a value far more essential in gold and silver, considered as metals susceptible of all the forms that can be useful, or can please the eye, while the nature and texture of their parts secure them from accidents equally disagreeable and dangerous, to which all other metals are liable: we should not therefore be surprised, if some reflexions, suggested by wisdom and humanity, were to lead us to that point which first originated in the extravagance of ambition, and the rage of politics; I mean, that, after having considered that no manner of good was produced by that disparagement of coin, which always resulted from its multiplication, and that the health of man was, on the contrary, interested in putting to a better use those metals, the quantity of which, being doubled in circulation, only served to double the price of every thing;—we should not be surprised, I say, not only that nothing was spared to encourage the goldsmith’s trade, but even, that half of the coin was melted down, and transformed into plate, and the deficit supplied by a quantity of paper-currency, answering to that of the coin thus employed; a paper-currency, which it would be sufficient to distinguish by some mark or token agreed upon, to give it in circulation, exactly the same properties as that part of the metals which was transferred to a more advantageous purpose.

In regard to the danger of paper-currency increasing above the quantity wanted, it is as little to be feared, and its superabundance would soon be made as sensible by its effect, as that of a superfluity of coin.—If you double the mass of money intended for circulation, how will you prevent such articles as sold for 4 only, from rising to 8, or the additional 4 from becoming useless?—And if paper-currency be in question, how will you prevent the extravagantly-avaricious wretch, who envies others the enjoyments he denies to himself, how can you prevent him, I say, from observing that paper rots in the ground, and that to bury his wealth he must exchange it for cash?—how will you prevent this want of money, immediately felt, from destroying, without resource, the credit which that mass of buried money had hitherto given to paper-currency? So long, therefore, as the paper keeps up its credit, one may rest assured that the public is not over-loaded with it. I shall, in the sequel, venture some reflexions on the true cause of that part of the increase in prices, which is attributed to the quantity of paper-currency in circulation; contenting myself here with a recapitulation of what I have just said on the different causes of the alteration in prices, according to the foregoing hypothesis, by concluding,

First, That a nation which should rejoice in being possessed (for the convenience of covetous individuals) of a vortex, into which they could cast, at pleasure, without profit, but also without anxiety, an immense treasure, which was the produce of the pains taken by so many useful and industrious hands, would, in fact, only congratulate herself on being possessed of the effectual means of robbing the present and succeeding ages, of all the advantages that must have accrued from the use made of that money, in any part of the world, where it might have produced, and encouraged a new branch of industry, the reaction of which would have turned to the profit of the nation in possession of such vortex.

Secondly, That a nation, which should rejoice in being the owner of an immense quantity of coin in circulation, would, in fact, congratulate herself on that want of credit which renders such quantity indispensable.

Thirdly, That as soon as government, in such a nation, should have solemnly given up the right, supposed to be unalienable, of paying its debts, from no other motive but that of extreme honour and benevolence, the nation might then part with half her coin, and without impeding the circulation, increase her enjoyments and her wealth, which can be nothing more than the total of her annual labour, together with the monuments still subsisting of the labour of preceding years: a total, which could not but increase in the case now supposed.

Fourthly, That, in regard to the coin, the most wretched paper-factory, assisted with that credit which is founded, not on kindness, but on justice and interest, is far preferable to the richest mine in America.

Fifthly, That the difference in the real value between one article and another, is only the difference of the labour which produces it; and that all regulation, tending to throw a veil on the quantity of labour contained in one article, is unjust; since it turns to the prejudice of any individual in the community, who is not the author of this unknown labour.

Sixthly, That the nominal price of the essential article, to which that of the others must finally revert and conform, fixed at first by its proportion in the quantity of articles to be represented, and by the divisions and subdivisions of the mass of money then existing for that use, this nominal common price will certainly rise or fall, constantly, and without the least inconvenience, just as that first quantity of coin shall cease to answer, by more or by less, to the quantity of the objects of which it was calculated to transfer the property.

Seventhly, That, supposing it to be a fact, proved incontestably by the mint-registers, and the average price at Windsor, that from the year 1300 to 1309, wheat, at its highest rate, was not above 7s. per quarter, the shilling weighing 264 grains of silver, which made the quarter come only to 1848 grains; that in the year 1551, the same sold for 8s. the shilling containing then only 60 grains, which made it exactly 160 grains per quarter; and that the same sells now, I will say, at 40s. the shilling containing 86 grains, which is 3440 grains for a quarter of wheat; yet, from these facts no inference can be drawn that could affect any individual whatever, unless it should be proved, that money makes part of our food, or that it is impossible, at this present time, to procure, with any given labour, more or less wheat than that identical labour could procure at that period.