one, except Mr. Giffen and the Political

Economists.

Call it, however, by all means a commo. dity, always provided that you are not the dupe of a word: always provided that you never forget that it is the only Commodity in permanent universal demand, because it does everything, answers every need, stands between man and all his desires. Money is

• Mr. Giffen ‘holds most fully to the view that the ratio of exchange between the precious metals and other commodities is fixed in no other way than is any other ratio, viz. by supply and demand, and by the cost of production of the last margin of supply necessary to meet the last margin of demand.' p. 82.

Apart from speaking here of the 'precious metals' as if it made no difference to their value whether they are used for money or not, (whereas it is just their use as money which makes them precious), Mr. Giffen is arguing sophistically from commodities to money. In the case of the former, there is no doubt a limit to the demand, but to speak of the 'last margin of demand' in the case of money is pure nonThere is no limit to the demand for money, not only in the case of the whole world, but in the case of one Who ever met a man who had enough money?

sense.

man.

It is actually,

When you are

the power of realising your demands. The point is there. Money will do everything (almost) that anything else will: while on the other hand it will do innumerable things that nothing else will. It is a total error to call it a commodity. It is both more and less than any of them all. none: it is potentially, all. hungry, thirsty, or cold, food, drink, and clothing are better than money yet in general, not so: for while you can always get these things for your money, you cannot get money, i.e. other things, for food, drink, or clothing, just when you want to. We might in algebraical language style money the nth power of any commodity. It does not go bad, mouldy, motheaten, rusty; it is not subject to the caprices of fashion: it does not, relatively speaking, wear out: it responds instantly to a call upon its powers and last, but chiefest of all, it in

E

creases when not used: i.e. lent out at interest: it is CAPITAL: the only thing in the world which gives a return without any expenditure on it: for rent and profits are in this respect inferior to capital bearing interest. In production or action, in commerce or trade, in love or in war, money is the human instrument: the instrument of instruments you cannot stir a step in any direction without it, and that's why it DIFFERS essentially from any commodity. It is the only thing in the world of which you can predict with absolute certainty that it will be in constant, universal, inexhaustible

• Nobody pays Interest upon Capital,' in the economical sense of that word, meaning 'commodities reproductively employed.' These are not borrowed, but bought : the Capital on which Interest is paid is the money that buys them. How, then, could Political Economy possibly explain Interest when it denies that money is Capital? The truth is that nothing but money is Capital, i.e. that which bears Interest.

demand: no man ever has enough of it': and it is therefore not subject to the laws of other commodities. It is outside their laws, outside of time, place, and individual caprice or taste, because it holds good equally for all. The value of all commodities depends on and varies with place, time, and person; of money, not its value is not special, but general, equally adapted to all times, places, and preferences: all things to all men: it is itself merely concrete, external, exchangeable demand: the actuality of demand. Mark this, Meg: you will see presently how it solves the difficulty that baffles Mr. Giffen.

f This is the result of the general adoption of payments in money instead of payments in kind. We are all like the Pope was in 1229. If the Pope had been obliged to receive his tenths in kind, as of old, his appetite would have been sooner satisfied, especially if the produce had had to be conveyed to Rome: but when sheep and oxen and other produce became commuted to an absolute money payment, then his appetite became insatiable: he could not have too much.

And now, Meg, when we turn, thus prepared, to Bimetallism, we note, first, that if we may judge from his book, Mr. Giffen does not seem to have grasped what Bimetallism is, or Bimetallists want. Bimetallism is simply an option: payment either in silver or gold, as you please. Yet would you believe it, Meg ?-Mr. Giffen calls this a violation of Free Trade principles. There is no indication that he is trying to be facetious he is reckoning, without doubt, on the gravity of his readers: and yet I must confess that this is almost too much for my own. Free Trade, to compel payment in one metal only, difficult, frequently almost impossible to procure! Free Trade, to give gold a monopoly of money! Free Trade, to eliminate silver! Free Trade, to block up one time-honoured passage, and charge an exorbitant rate for the use of the

8 The Case against Bimetallism, p. 49.