Laws on the Use of Money on Superphysics

Why we use Money

Mon, 01 Jan 0001 00:00:00 +0000

The following people trade by exchange:

savages who have few merchandise
civilized nations who have only two or three species.

The caravans of Moors who go to Timbuktu, in the heart of Africa, do not need money.

Ideal [Nominal] Money

Mon, 01 Jan 0001 00:00:00 +0000

THERE is both real and ideal money.

Civilized nations generally only use ideal money, because they have converted their real money into ideal.

Their real money was initially some metal of a certain weight and standard. But soon dishonesty or lack made them reduce that metal from money, but money retained the same name.

Why Interest was lowered one half after the Conquest of the Indies

Mon, 01 Jan 0001 00:00:00 +0000

According to Garcilasso, interest fell from 10% to 5% in Spain after the conquest of South America.

That conquest brought in a lot of money suddenly into Europe.
Many persons got money and had a need for it.
The price of all things increased, while the value of money declined.
The proportion was then broken, and all the old debts were discharged.

We may recollect the time of the system when everything was at a high price except specie.

How the Price of Things is fixed in the Variation of the Sign of Riches

Mon, 01 Jan 0001 00:00:00 +0000

MONEY is the price of merchandise or manufactures. But how shall we fix this price? By what piece of money is everything to be represented?

If we compare the mass of gold and silver in the whole world, with the quantity of merchandise in it, every merchandize may be compared to a portion of the entire mass of gold and silver. As the total of the one is to the total of the other, so part of the one will be to part of the other.

Exchange

Mon, 01 Jan 0001 00:00:00 +0000

THE relative abundance and scarcity of coin in different countries leads to the course of exchange. Exchange is a fixing of the actual and momentary value of coin.

Silver, as metal, has a value like all other merchandise.

The relative Scarcity of Gold and Silver

Mon, 01 Jan 0001 00:00:00 +0000

BESIDES the positive plenty and scarcity of gold and silver, there is still a relative abundance and a relative scarcity of one of these metals compared to the other.

The avaricious hoard up their gold and silver.

Exchange

Mon, 01 Jan 0001 00:00:00 +0000

A prince may amass great wealth in his dominions. Yet coin may be really scarce, and relatively common.

For instance, if France is indebted for many merchandizes to a foreign conntry, the exchange will be low even if specie is scarce.

How Rome Devalued their Money

Mon, 01 Jan 0001 00:00:00 +0000

Our 2 successive ministers exerted much authority over our French coin. But this was vastly exceeded by the Romans after they conquered Italy and had war with the Carthaginians when they raised their coin:

How the Emperors Devalued their Coin

Mon, 01 Jan 0001 00:00:00 +0000

The Roman republic devalued their coin by adding alloys because of the unwise spending of their leaders. They even plated or covered cheap metals like copper with a thin plate of silver. This money is mentioned in the 77th book of Dio.

How the Exchange is a Constraint on Despotic Power

Mon, 01 Jan 0001 00:00:00 +0000

Moscow would have descended from its despotic power, but could not.

The establishment of commerce depended on that of the exchange, and the transactions were inconsistent with all its laws.

Public Debts

Mon, 01 Jan 0001 00:00:00 +0000

SOME have imagined that it was advantageous for a state to be indebted to itself.

They thought that this multiplied riches, by increasing the circulation. They confounded a circulating paper which represents money or profits with a paper which represents a debt.

Lending on Interest

Mon, 01 Jan 0001 00:00:00 +0000

SPECIE is the sign of value. He who has occasion for this sign, should pay for the use of it, as well as for everything else that he has occasion for.