CHAP. VII.: How the Price of Things is fixed in the Variation of the Sign of Riches.

MONEY is the price of merchandizes or manufactures. But how shall we fix this price? Or in other words, by what piece of money is every thing to be represented?

If we compare the mass of gold and silver in the whole world, with the quantity of merchandizes

therein contained, it is certain, that every commodity or merchandize in particular, may be compared to a certain 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. Let us suppose, that there is only one commodity or merchandize in the world, or only one to be purchased, and that this is divisible like money: a part of this merchandize will answer to a part of the mass of gold and silver; the half of the total of the one, to the half of the total of the other; the tenth, the hundredth, the thousandth part of the one, to the tenth, the hundredth, the thousandth part of the other. But as that which constitutes property amongst mankind is not all at once in trade; and as the metals or money, which are the signs of property, are not all in trade at the same time; the price is fixed in the compound ratio of the total of things with the total of signs, and that of the total of things in trade with the total of signs in trade also: and as the things which are not in trade today may be in trade to-morrow, and the signs not now in trade may enter into trade at the same time, the establishment of the price of things fundamentally depends on the proportion of the total of things to the total of signs.

Thus the prince or the magistrate can no more ascertain the value of merchandizes, that he can establish by a decree, that the relation 1 has to 10, is equal to that of 1 to 20. Julian’s History of the Church, by Socrates, lib. ii. ^†179 lowering the price of provisions at Antioch, was the cause of a most terrible famine.