Philip I, King of France, mixed with the livre tournois of Charlemagne one- third alloy, imagining that, since he held the monopoly of the power of coining money, he could do what every merchant does who holds the monopoly of a product.What was, in fact, this adulteration of money, for which Philip and his successors are so severely blamed? A very sound argument from the standpoint of commercial routine, but wholly false in the view of economic science, -- namely, that, supply and demand being the regulators of value, we may, either by causing an artificial scarcity or by monopolizing the manufacture, raise the estimation, and consequently the value, of things, and that this is as true of gold and silver as of wheat, wine, oil, tobacco.
Nevertheless, Philip's fraud was no sooner suspected than his money was reduced to its true value, and he lost himself all that he had expected to gain from his subjects.The same thing happened after all similar attempts.
What was the reason of this disappointment?
Because, say the economists, the quantity of gold and silver in reality being neither diminished nor increased by the false coinage, the proportion of these metals to other merchandise was not changed, and consequently it was not in the power of the sovereign to make that which was worth but two worth four.For the same reason, if, instead of debasing the coin, it had been in the king's power to double its mass, the exchangeable value of gold and silver would have decreased one-half immediately, always on account of this proportionality and equilibrium.The adulteration of the coin was, then, on the part of the king, a forced loan, or rather, a bankruptcy, a swindle.
Marvelous! the economists explain very clearly, when they choose, the theory of the measure of value; that they may do so, it is necessary only to start them on the subject of money.Why, then, do they not see that money is the written law of commerce, the type of exchange, the first link in that long chain of creations all of which, as merchandise, must receive the sanction of society, and become, if not in fact, at least in right, acceptable as money in settlement of all kinds of transactions?
"Money," M.Augier very truly says, "can serve, either as a means of authenticating contracts already made, or as a good medium of exchange, only so far as its value approaches the ideal of permanence; for in all cases it exchanges or buys only the value which it possesses."(1*)
Let us turn this eminently judicious observation into a general formula.
Labor becomes a guarantee of well-being and equality only so far as the product of each individual is in proportion with the mass; for in all cases it exchanges or buys a value equal only to its own.
Is it not strange that the defence of speculative and fraudulent commerce is undertaken boldly, while at the same time the attempt of a royal counterfeiter, who, after all, did but apply to gold and silver the fundamental principle of political economy, the arbitrary instability of values, is frowned down?
If the administration should presume to give twelve ounces of tobacco for a pound,(2*) the economists would cry robbery; but, if the same administration, using its privilege, should increase the price a few cents a pound, they would regard it as dear, but would discover no violation of principles.
What an imbroglio is political economy!
There is, then, in the monetization of gold and silver something that the economists have given no account of; namely, the consecration of the law of proportionality, the first act in the constitution of values.Humanity does all things by infinitely small degrees: after comprehending the fact that all products of labor must be submitted to a proportional measure which makes all of them equally exchangeable, it begins by giving this attribute of absolute exchangeability to a special product, which shall become the type and model of all others.In the same way, to lift its members to liberty and equality, it begins by creating kings.The people have a confused idea of this providential progress when, in their dreams of fortune and in their legends, they speak continually of gold and royalty; and the philosophers only do homage to universal reason when, in their so- called moral homilies and their socialistic utopias, they thunder with equal violence against gold and tyranny.Auri sacra fames! Cursed gold! ludicrously shouts some communist.As well say cursed wheat, cursed vines, cursed sheep; for, like gold and silver, every commercial value must reach an exact and accurate determination.The work was begun long since; today it is making visible progress.
Let us pass to other considerations.
It is an axiom generally admitted by the economists that all labor should leave an excess.
