was something quite other than that with which it was credited by the Political Economy wiseacres: these same wiseacres have still more entirely and radically misunderstood the nature and function of money, and misconceived or overlooked its ordinary operation in the everyday business of production and exchange. They are not only utterly out, judged from the point of view of the Mercantile Theorists; they are also absolutely wrong, even when judged from their own. Their end is, not the power and permanence of the State or Nation, a thing

''Exchange,' by the way, is a question begging word: it ought to be banished from Economics, and 'sale' or 'distribution' substituted. Exchange was valid for the age of barter: now, there is no such thing as 'exchange :' there is buying and selling. The values of commodities are not expressed in each other, but always in money, and nothing else. By exchange-value, if we mean anything, we mean price: quantity of money. Nobody exchanges commodities for commodities: money is always the go-between. Exchange smothers the paramount influence exerted by money and its variations over the movements of commodities.

which they pay no attention to, and even throw aside with contempt, but the increase and accumulation of individual wealth: and yet their theory of money, if consistently and thoroughly acted upon, would utterly and instantaneously defeat their own end and annihilate the wealth. What a glorious tribute to their theoretical genius a severe application of their theory to practice would pay! The instant abolition of wealth,-what a delightful catastrophic vindication of a sound economical method! But luckily, the practice of the world stands in flat contradiction to the economical theory of money: unluckily, this theory has to some extent interfered most disastrously with the practice and welfare of the world.

This error so baneful in its effects is simply, the failure to remark that function of money which DIFFERENTIATES it from all other commodities: which makes it accord

ingly something essentially different from all other commodities, and bestows upon economical laws of its own. The vulgar, says Aristotle, cannot draw fine distinctions; and yet it is just on the drawing of these distinctions, where necessary, that salvation or perdition may depend. It is precisely the want of this discriminating perception that lies at the bottom of the economical dogma; the most fatal and insidious of all pernicious economical dogmas, just because it is apparently so obvious and incontrovertible; the dogma that money is a commodity, or that commodities are purchased with commodities, or that money is subject to the laws of ordinary commodities. Mr. Giffen says truly,

'Is it possible that there should be a deficiency of demand for all commodities for want of the means of payment? Those who think so cannot have considered what it is, which constitutes the means of payment for commodities. It is simply, commodities.' J. S. Mill, Pol. Econ., p. 338. Verily, there is but one J. S. Mill. Is it possible that there should be a deficiency of water on a hill, for want of

-and let us agree with our adversary quickly, Meg, while he is in the way, for we shall never have a chance of agreeing with him again, that this is the crucial point. It is. No man, or maid, Meg, can ever 'make head or tail' of Bimetallism, or of any other question of finance, till he has eradicated from his mind every vestige of the sophistical dogma, that money is a commodity, subject to the laws of commodities in general1.

the necessary pipes to convey it? Those who think so cannot have considered the natural way in which water spontaneously flows. It is simply, uphill.'

How this eminent person ever managed to pass for a 'thinker' is a problem which would have robbed Edipus of his hair and his reputation.

1 The following pages will make this point clear: but to prevent the prejudice possibly existing in the mind of the reader, it is as well to state that what constitutes the essential distinction between money and commodities is, that the demand for money is inexhaustible. Money is to commodities what the potential is to the actual it is the potentiality of any particular commodity; of satisfying any particular demand. Hence the demand for it is the sum of all particular demands. The potential is, in everything, better than the actual for the potential (money) can

Arguing on that assumption, which is the accepted 'creed of economists throughout the world,' the Political Economists have always maintained that the quantity of money in a community is a thing of no moment; which settles itself automatically. Being merely a commodity like the others, it should be left to itself like the others. Why should we make an exception to it alone? It is true, that, outside of economical theories, the world does distinguish and make a great pother about money alone, but Political Economy is not based upon the facts of this world, but a world of its own; a world of arbitrary assumptions and the thin ghosts of antique agricultural conditions, stretched upon Procrustean beds to suit commercial exigencies. The economists, of course, know perfectly well, or at least we may

always become actual (commodity): but not vice versa. The potential, also, endures, but the actual perishes. See below.