Money

Wealth incessantly circulates from producers to consumers through money.

All kinds of exchange are done through money.

Money is a thing which all contractors desire. It lets them find what they immediately require.

Money performs several functions at once. It is the sign of all other values. It is their pledge and also their measure.

Money as a sign represents every other kind of wealth.

by transmitting it from hand to hand we transmit a right to all other values. It is not money itself which the day-labourer requires;

but food, clothing, lodging, of which it is the sign.

It is not for money that the manufacturer wishes to exchange his produce, but for raw materials, that he may again begin to work; and for objects of consumption, that he may begin to enjoy.

It is not money which the capitalist lends the merchant to profit by; it is all that the merchant will purchase with this money immediately afterwards; for so long as the merchant keeps it in the original shape, he can draw no advantage from it, and his capital will not begin its course of production till the money is out of his hands.

By an abuse of language, the words ‘money’ and ‘capital’ have become almost synonymous.

• This has caused much error and confusion
• Money represents all other capital.
  • But it is itself the capital of no man
  • It is always barren by nature

Wealth only increases after money has left the hands of its possessor.

Money is also the pledge of wealth, as its worth.

Like wealth, it has been produced by a labour which it wholly compensates. In work and advances of all sorts employed in extracting it from the mine, it has cost a value equal to what it passes for in the world.

It furnishes to trade a commodity which is expensive; because purchased like every other, it is the sole kind of wealth which is not increased by circulation, or dissipated by enjoyment.

It issues, still without alteration from the hands of him who employs it usefully, and of him who squanders it upon his pleasures. But the high price at which society acquires money, though at first view it appears an inconvenience, is precisely what gives it the merit of being an imperishable pledge for its possessors.

As its value was not given by arbitrary convention, arbitrary convention cannot take its value away. It may be more or less sought after according as it occurs more or less abundantly in the market; but its price can never deviate very far from what would be required to extract an equal quantity from the mine.

Money, in the last place, is a common measure of values.

Before the invention of money, it was very difficult to compare the value of a bag of corn with that of a yard of cloth.

Dress was equally necessary with food.

• But the processes by which men procured them, seemed scarcely susceptible of being compared. Money has furnished a common and invariable unity to which every thing can be referred.

Nations, who are not acquainted with the use of metals, have nevertheless felt the advantages of using money that they have formed an ideal unity, to which they refer every kind of value.

The importance of money in political economy has led to the illusion which has misled the people as well as most statesmen.

They thought that money is:

• the efficient cause of labour, and
• the creator of all wealth

But this is wrong.

In our current civilization, labour can only be accomplished through a capital which sets it in motion.

But this capital is almost constantly represented by money. But it is quite a different thing.

An increase of the national capital is the most powerful encouragement to labour.

But an increase in the circulating medium does not necessarily have the same effect.

Capitals co-operate powerfully in the annual reproduction of wealth.

• This gives rise to an annual revenue.

But money continues barren, and gives rise to no revenue.

The competition between those capitals, which are offered to accomplish the annual labour of the nation, forms the basis for the interest of money.

But the greater or less abundance of the circulating medium, has no influence in the fixing of this interest.

During the famines in Europe, it was commonly observed that it was not corn or food which was lacking, but money.

Vast magazines of corn have often remained full till the next harvest.

Those provisions, if proportionably shared among the people, would have almost always been sufficient to feed them.

But the poor had no money to offer.

And so they were not able to buy them.

They could not obtain enough money in exchange for their labour to subsist.

Money was lacking though natural wealth was superabundant.

This phenomenon confirms the universal prejudice which looks for wealth in money, not in consumable capital.

But the money, which is lacking in a time of scarcity, is the wage offered to the worker to make him work.

The wage, by means of which, he would have purchased a subsistence.

The worker never labours, except when some of those who have accumulated capitals, or in other words, the fruit of preceding labours, can profit from those capitals, by furnishing, on one hand, the raw material, on the other, a subsistence for the artisan.

Labour cannot be carried on so as to produce any material fruit, any fruit capable of becoming wealth, without raw materials on which to operate; the workman cannot labour without food to support him.

Therefore, every kind of labour is impossible without a capital previously existing in objects of consumption, to furnish his materials and his wages; and, if the workman himself lay out these advances, it is because he combines for this little object, the two characters of capitalist and artisan.

As the workman requires a capitalist, so the capitalist requires workmen; because his capital will be unproductive if it continue idle; and the revenue which he expects and has to live upon springs from the labour which he causes to be executed.

Hence, whenever he is occupied in a productive enterprise, he employs all his capital in causing labour, and leaves no part of it in idleness.

If he is a cloth-maker, and has devoted ten thousand pounds to his manufacture, he does not stop till his ten thousand pounds are done, and he no longer has new sums to employ in the operation.

If it be then asked why he stops, he will answer, like the workman, that money is wanting, that money does not circulate.

It is not, however, money which is then wanting any more than in the former case; it is consumption, or the consumer’s revenue.

On commencing his manufacture, the capitalist studied to adjust it to the demand; and he reckoned that as soon as his cloths should be ready, they would be purchased by consumers, whose money, the sign of their revenue, would replace his capital, and become the sign of subsistence to new workmen, to whom he would pay new wages.

It is not money which the consumer is in want of, but revenue.

Some have had inferior harvests this year; some have gained a smaller interest on their capitals, a smaller share on the annual re-production of the fruits of industry; others, who have no income but what arises from their labour, have not found employment; or else the whole three classes are not poorer than they were, but the manufacturer had imagined them to be richer, and regulated his production according to an income which does not exist.