Of Money Wealth incessantly circulates from producers to consumers, by means of money. All kinds of exchange are accomplished under this form, whether the means of producing wealth are transmitted from one proprietor to another, or when land or movable capital changes its owner, or when labour is sold, or when the object destined to be consumed reaches the hands that are to use it.
Money facilitates all these exchanges; it occurs among the different contractors as a thing which all desire, and by means of which every one may find what he immediately requires; as a thing, moreover, submitted to invariable calculation, and by means of which all other values may be appreciated, this alone being their scale.
Money performs several functions at once: it is the sign of all other values; it is their pledge and also their measure. As a sign, money 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, which has caused much error and confusion, the words money and capital have become almost synonymous: money indeed represents all other capital, but it is itself the capital of no man; it is always barren by nature, and wealth does not begin to increase, till after money has left the hands of its possessor.
Money is not only the sign of wealth, it is also the pledge of it. It not only represents wealth, it contains the worth of it. 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 must have been 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, so felt the advantages of this common measure that they have formed an ideal unity, to which they refer every kind of value.
The important part which money performs in political economy, and the various properties by which it animates exchanges, and protects and serves to measure them, explain the illusion which has misled, not only the vulgar, but even the greater part of statesmen, and exhibited this commodity in their eyes as the efficient cause of labour, and the creator of all wealth. It is essential for us, however, to pause here, that we may both display those errors in a clear point of view, and firmly demonstrate the principles which follow. In the epoch of civilization, at which we are arrived, no labour can be accomplished without a capital to set it in motion; but this capital, though almost constantly represented by money, is yet quite a different thing. An increase of the national capital is the most powerful encouragement to labour; but an increase in the circulating medium has not of necessity the same effect. Capitals co-operate powerfully in the annual reproduction of wealth, giving rise to an annual revenue; but money continues barren, and gives rise to no revenue. Indeed, 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.
Painful experience has shown all the inhabitants of Europe what a dearth was, and a period of general penury among a civilized people. At these mournful epochs, every one has heard it a hundred times observed, that it was not corn or food which was wanting, but money. Indeed, 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 for their support; but the poor, having no money to offer, were not able to buy them; they could not, in exchange for their labour, obtain money, or at least enough of it, to subsist. Money was wanting, natural wealth superabundant. What phenomenon could appear more proper to confirm the universal prejudice which looks for wealth in money, not in consumable capital?
