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UNIVERSAL WEALTH SHOWN TO
BE EASILY ATTAINABLE.
PART FIRST. BY LYSANDER SPOONER.
___________
BOSTON: [*2] Entered
according to Act of Congress, in
the Year 1879, By
LYSANDER SPOONER, In
the Office of the Librarian of
Congress, at Washington [*3] UNIVERSAL
WEALTH. SECTION
I. THE wealth of
the world is proportionate to
the number of different
things mankind possess, rather
than to the quantity of any one
thing. Thus, if every human
being had as much wheat as he
could eat, and had no other
wealth, all would still be poor.
But if, in addition to all the
wheat they desire, every human
being has a thousand, ten
thousand, or a hundred thousand
other things - each,
on an average, of equal value
with the wheat -
the wealth
of each individual, and of the
world, is multiplied a thousand,
ten thousand, or a hundred
thousand fold. Individuals
usually desire, for their own
use or consumption, but a very
limited amount of any one thing;
but we as yet know no limit to
the number of different things
they desire. And we shall never
know any such limit, until the
ingenuity of the human race, in
the invention of new
commodities, shall have been
exhausted. The great
problem of universal wealth,
therefore, is comprised in these
two, viz.: First, how shall we
give to every person the
greatest possible variety of
commodities? and, secondly, how
shall we give to each individual
as much as he desires of each
and all these various
commodities? Men are
able to produce almost no wealth
at all by their hands alone.
Until they make discoveries in
science, and inventions in
implements and machinery, they
remain savages, few in number,
and living upon such wild fruits
as they can gather, and such
wild [*4] animals as they can
kill. But they have proved
themselves capable of such
discoveries in science, and such
inventions in implements and
machinery, as will, each of
them, enable a man to produce a
hundred, a thousand, some of
them a million, or even a
hundred or a thousand million
times as much wealth as he could
before create with his hands
alone. What labor could Watt
perform with his hands, compared
with that performed by his
steam-engine? What labor could
Arkwright perform with his hands
alone, compared with that
performed by his spinning
machine? What labor could
Stephenson perform, in the transportation
of freight and passengers,
compared with that performed by
his locomotive? What could Morse
do, on foot, in the transmission
of intelligence, compared with
what can be done with his
telegraph? What could the
Assyrian do, with his tablets of
baked clay, in supplying the
world with reading matter,
compared with what can be done
with a Hoe printing press? What
could men do, with their hands
alone, in tunnelling mountains,
building suspension
bridges,
and laying deep sea cables,
compared with what can be done
by the machinery they have
invented for those purposes? These
things should teach us that it
is brains, and not hands, that
must be relied on for the
creation of wealth. And it would
be well for us to realize, much
more fully than we ever have
done, that brain labor, no less
than hand labor, must be paid
for, if we would have the
benefit of it. The
discoveries in science, the
invention of implements and
machinery, and the invention of
new commodities for consumption,
have already multiplied the
wealth of some portions of
the world by millions and
thousands of millions of what it
once was. And yet it is but
recently that inventions have
begun to add much to the wealth
of the world. For thousands, and
tens, perhaps hundreds of
thousands of years, mankind
remained savages, or at best
barbarians, for the want of such
inventions as are now just
beginning to be made. At the
present time, the people of the
United States are acknowledged
to take the lead of the whole
world, especially in mechanical
inventions. And yet
substantially all our inventions
[*5] have
been made within a hundred
years; most of them within fifty
years. We are now making from
ten to fifteen thousand new
inventions per annum. Some of
these are of great, in fact of
immeasurable, value. Many of
them, although of less value,
are nevertheless valuable. And
yet we are probably not
producing a tenth, perhaps not a
hundredth, part so many
inventions, in proportion to
population, as we ought to do,
and should do, if inventors were
protected, as they ought to be,
in a perpetual right to their
inventions, and they and the
public had the capital-that is,
the money -
necessary
for producing inventions, and
putting them into operation. The people
of the United States constitute
not more than a twenty-fifth
part of the population of the
globe. In not more than a
fourth, fifth, perhaps even a
tenth, part of the world are any
considerable number of
inventions now being made. Not
because the peoples of those
other portions are naturally
incapable of invention; but
because they have no protection
for their property in their
inventions, and no money, no
capital, no opportunity to make
inventions, or bring them into
operation. Their poverty,
ignorance, and servitude
suppress all their efforts in
this direction. What will
be the number and value of the
inventions made, and what the
variety and amount of wealth
produced by means of them, when,
if ever, all mankind shall be
protected in their property in
their inventions, and shall have
all the money necessary to bring
their inventions into successful
operation, no one now can form
any idea. SECTION
II. MONEY is
the great instrumentality- the
indispensable capital - by means
of which inventions are
produced, machinery operated,
and their products distributed
to consumers. The
inventor must have money, with
which to make his experiments,
subsist while making them,
perfect his inventions, demonstrate
their utility, and bring them
into practical operation. And to
do all these often requires
years of time, and large
expenditures of money. [*6] The
operator of machinery must have money,
with which to buy his
machinery, his raw materials,
and his means of subsistence
while he is manufacturing his
goods for the- market. Then he
must be able to sell his goods
for money, in order to
buy new materials, and subsist
himself while manufacturing new
goods. The
merchant must have money, with
which to buy his goods; and he
must be able to sell his goods
for money, in order that
he may buy new goods. And,
finally, the consumers of all
these goods must have money, to
buy and pay for all the goods
that are to be manufactured. Thus every
man, who either makes
inventions, operates machinery,
or distributes or consumes the
commodities produced, is
constantly dependent upon money,
for his means of production,
distribution, and consumption. And the
amount of money that each
one must have depends upon the
market value of the commodities
he has to buy, whether he buys
them for production,
distribution, or consumption;
since the money, in each
individual case, must, in order
to make the contract an
equitable one, be a bona fide
equivalent of the commodity
bought and sold.<fn1> What, then,
will be the amount of money
requisite to bring out fully the
inventive faculties of all
mankind ; set in motion all the
machinery invented; distribute
all the products; and thus give
to mankind, for final
consumption, the full benefits
of all the inventions that can
be made? To answer
this vital question, it is
necessary to consider that the
market value of all commodities,
relatively to any fixed [*7]
standard of value -
or
to such a standard as a gold
dollar, for the want of a
better, is assumed to be - will
depend wholly upon the variety
and amount of commodities
produced, distributed, and consumed.
In other words, the market value
of each man’s particular
product will depend wholly upon
the variety and amount of commodities
which other men produce, and are
willing to give in exchange for
it. To
illustrate this principle, let
us suppose that Mr. A is a
hatter; and that he has acquired
such science, skill, machinery,
and money capital, that he is
able, by himself alone, to
manufacture ten thousand hats
per annum. He manufactures these
hats for sale, and not for his
own consumption. Their value to
himself therefore, depends
wholly upon the number and
amount of other commodities
which he desires, and which
other persons can, and will,
give him in exchange for hats.
If there be no one who desires a
hat, or who - though
desiring one -
has
anything desirable that he can
give in exchange for it, A’s
ten thousand hats are of no
value to him; simply because he
can get nothing desirable in
exchange for them. But if there
are ten thousand other men who
desire hats, and who are
producing each a different
commodity from all the others - a
commodity as much desired by A
as one of his hats is desired by
each of the others-then A will
be able to sell one of his hats
to each of these ten thousand
men, and get in exchange for it,
a commodity as desirable to
himself as the hat is to each of
these ten thousand men. He will
thus get the full and true value
of his ten thousand hats, where,
but for the power of these other
men to produce something
desirable to give in exchange,
he would have got nothing at all
for them; and would have utterly
lost the labor of producing
them. Thus it
will be seen that the market value
of each man’s own product
depends entirely upon the number
and amount of desirable things
which other men produce, and are
willing to give him in exchange
for his particular product. Every man,
therefore, who has the science,
skill, machinery, and money
capital that are necessary to
enable him to produce, say, ten
thousand hats per annum, has the
highest interest that ten [*8]
thousand other men, who desire
hats, shall have all the
science, skill, machinery, and
money capital that shall enable
them to produce ten thousand
other commodities that shall be
as desirable to him as one of
his hats is to each of these ten
thousand men. Suppose the
publisher of the New York
Herald has such science,
skill, machinery, and money
capital, that he is able to
produce a hundred thousand
copies of the Herald daily.
And suppose there are a hundred
thousand other men, and only a
hundred thousand, who desire the
Herald. The value of the Herald
to its producer will depend,
in this case, wholly upon the
number and amount of other
desirable things which these
hundred thousand other men can,
and will, give in exchange for
the Herald. If they are
so destitute of science, skill,
machinery, and capital that they
can produce nothing desirable
that they can give in exchange
for it, the Herald will
have no value to its producer;
and his labor in producing it
will be thrown away. But if each
one of these hundred thousand
men has science, skill,
machinery and capital equal to
the publisher of the Herald, and
is producing a commodity
different from all the others-a
commodity as desirable to the
publisher of the Herald as
the Herald is to him - he
will then be able and willing to
give, in exchange for the Herald,
a commodity as desirable and
intrinsically as valuable, as
the Herald itself. And
the publisher of the Herald will
get the full value of, or a full
equivalent for, his hundred
thousand copies of the Herald. Is it not,
therefore, perfectly plain, in
this case, that the publisher of
the Herald has the
highest interest that every man,
who desires to buy the Herald,
shall have all the science,
skill, machinery, and capital,
that may enable him to produce,
and give in exchange for the Herald
something that is equally as
desirable and valuable as is the
Herald itself? Would it
not be fatuity and suicide for
the publisher of the Herald to
advocate the tyranny and
villainy of depriving all these
hundred thousand men, who desire
to buy the Herald, of all
the science, skill, machinery,
and capital, which alone can
enable them to give, in exchange
for it, something that is
intrinsically as desirable and
valuable as itself? Yet this is
precisely what the Herald, and
the press generally of [*9] the
country, have been doing in all
past time, and are doing to-day. Of course,
we cannot know, beforehand, what
varieties and amounts of
commodities mankind will invent
and produce in the future, when,
if ever, they shall have all the
facilities and inducements for
invention, production,
distribution, and consumption,
which ample legal protection to
the rights of inventors, and
ample money capital, will give
them. Nor can we know, beforehand,
the amount of money that will be
required to bring science,
skill, invention, machinery, and
production to their highest
points, and to distribute to the
consumers the commodities
produced. But the following
article, which has been
previously published, <fn2>
on “THE LAW
OF PRICES,” will aid us
in understanding how utterly and
ludicrously inadequate, unworthy
of consideration, how nearly
useless in fact, are all such
amounts of money as we have been
accustomed to think of, as
sufficient for these purposes. In truth,
nobody claims that our present
amounts of money are at all
adequate to the needs of
industry and traffic, if the
latter is to be carried on upon
the principle that money should
be a bona fide equivalent
of the labor and property that
are to be bought with it. All
that those, who advocate
restrictions upon money, can say
in defence of them, is, that by
coercing men into selling their
labor and property for less than
they are worth, a small amount
of money can be made to have as
much “purchasing power” as a
larger one. This is only saying
that, by establishing a monopoly
of money, the few holders of
that monopoly will be enabled to
coerce all other men into
selling their labor and property
for less than they are worth.
And this is the whole purpose of
the monopoly. It is only a
cunning species of robbery,
which has hitherto been
successful, solely because the
victims did not understand the
jugglery by which it was
accomplished. [*10] THE
LAW OF PRICES: A
DEMONSTRATION OF THE NECESSITY
FOR AN INDEFINITE I. THE writers
on money seem never to have
obtained the first glimpse of
the fundamental law which
governs prices, and which
necessitates a constant and
indefinite increase in the
volume of money. That law may be
illustrated in this manner: Suppose an
island cut off from all
communication with the rest of
the world, and inhabited by one
hundred men. Suppose that these
hundred men know no industry
except the production of wheat;
that they produce annually one
thousand bushels, each man
producing ten bushels,
which is enough for his own
consumption. Suppose further
that these hundred men have
money to the amount of five
dollars each in gold. silver,
and copper coins, and that these
coins are valued by them as
highly as similar coins are now
by us. What will be the price of
wheat among these men, compared
with the coins? Plainly, it will
bear no price at all. Each man
producing for himself all he can
eat, no one has any occasion to
buy. Therefore none can be sold
at any price. But suppose
that one after another of these
hundred men leave wheat-growing,
and engage in the production of
other commodities, -each
producing a different commodity
from all the others,-until there
shall be a hundred different
commodities produced; only one
man being left to produce wheat.
And suppose that this one man
has increased his product from
ten bushels to one thousand.
There is now just as much wheat
as there was when all were
employed in producing it. The
only differences are, first,
that the whole amount is
produced now by one man, where
before it was produced by a
hundred men; and, secondly, that
the ninety-nine men have each
engaged in the production of
some commodity, different from
that produced by any oilier, but
of which, we will suppose, all
the others wish to purchase each
his proportionate share for
consumption. There is
now a hundred times as much
wealth produced as when all
produced wheat and nothing else.
But each kind has only a single
producer, while it finds a
hundred consumers. And each
man’s product, we will
suppose, has the same value with
every other man’s product. What, now,
will be the price of wheat among
these hundred men relatively to
the coins? Doubtless a dollar a
bushel. When the first man
abandoned wheat-growing, and
betook himself to some other
occupation, he created a demand
for ten bushels of wheat, which
he still wanted for consumption
as before. This demand for ten
bushels would doubtless be
sufficient to give wheat the
price of one cent per bushel,
where it had no price before.
When a second man of the hundred
abandoned wheat-growing, he
created a demand for ten bushels
more; making twenty bushels in
all. This increased demand would
doubtless be sufficient to raise
the market price of wheat to two
cents a bushel. [*11] When a
third man of the hundred left
wheat-growing for some other pursuit,
his demand for ten bushels would
raise the market price another cent; and
so on, until by the time
the
ninety-nine had left wheat
growing, the continually
increasing demand would have
raised the price to ninety-nine
cents a bushel; for convenience
of round numbers, say a dollar a
bushel. Here, then,
wheat has been raised from no
price at all to a dollar a
bushel, not because there is any
less wheat produced, or any more
consumed, than before, but
solely because the whole
thousand bushels are now
produced by one man, instead of
being produced, ten bushels
each, by the hundred different
men who were to consume it; and
because, further, each of the
ninety-nine men, who have left
wheat-growing, is able to
purchase wheat, inasmuch as he
has been producing some other
commodity which brings him as
good a price as the wheat brings
to the man who still produces
wheat. Under this
new state of things, then, the
man who continues to produce
wheat produces a thousand
bushels, worth a dollar a
bushel; that is, a thousand
dollars’ worth in all. Each of
the other ninety-nine produces
an equal amount of’
market
value in some other commodity.
The whole hundred men, then,
produce wealth that has now a
market value of one hundred
thousand dollars, where
originally they had produced
nothing that had any market value
at all. This change
in the price of wheat has been
produced, then, solely by reason
of the diversity of industry and
production that has taken place
among these hundred men. And the
market prices of all the other
ninety-nine commodities have
been affected by the same law,
and to the same extent, as has
been the price of wheat. Here, then,
is a hundred thousand dollars’
worth of commodities produced,
each man producing a thousand
dollars’ worth. As each man
retains a hundredth part of his
product - that
is, ten dollars’
worth-for his own consumption,
he has
nine
hundred and ninety dollars’
worth for sale. The whole
hundred men, therefore, have one
hundred times nine hundred and
ninety dollars’ worth for
sale, which is equal to
ninety-nine thousand dollars in
all; for convenience of round
numbers, say one hundred
thousand dollars. The hundred
men, having each five dollars in
coins, have in the aggregate
five hundred dollars. To make
the purchases and sales of these
hundred thousand dollars’
worth of commodities, will
require each of these five
hundred dollars to be exchanged
for commodities, on an average,
two hundred times. That is, in
carrying on the commerce of
these hundred men for a year,
their whole stock of money must
be exchanged, on an average,
once in a little less than two
days. Or if we reckon but three
hundred business days in a year,
we shall find that the whole
stock of money must be
exchanged, on an average, once
in every day and a half. Such
rapidity of exchange would be
practicable enough, if the
holders of the coins should all
part with them readily at their
true and natural value, instead
of holding them back in the hope
of getting for them more than
they were really worth. But
where there was so active a
demand for the coins as to
require that the whole stock be
sold, on an average, once in
every day and a half, it is
natural to suppose that the
holders of the coins would hold
them back, in [*12] order
to get more for them than their
true and natural value. And in
so far as they should do so,
they would obstruct trade, and
by obstructing trade obstruct
and discourage production, and
thus obstruct time natural
increase of wealth. II. But
suppose, now, that the number of
men on this island be increased
from one hundred to one
thousand, and that they are all
engaged in producing wheat only;
each man producing ten bushels,
which is all lie wants for his
own consumption. And suppose
that each mass has five dollars
in gold, silver, and copper
coins. What will be the price of
wheat among these men,
relatively to the coins?
Clearly, it will have no market price
at all, any more than it had ‘when
there were
but a hundred men. But suppose
that nine hundred and
ninety-nine of these thousand
men leave wheat-growing, and
engage each in the production of
a commodity different from that
produced by any one of the
others. And suppose that the one
who still continues to produce
wheat is able, from his
increased science, skill, and
machinery, to produce ten
thousand bushels - ten
bushels for each of the thousand
men -
where
before he produced only ten
bushels for himself. There is
now just as much wheat produced
as there was before. But it is
now all produced by one man - nine
hundred and ninety-nine
thousandths of it being produced
for sale - instead
of being produced by a thousand
men, each producing ten bushels
for his own consumption. What, now,
will be the price of wheat among
these thousand men? Why, being
governed by the same law that
has already been illustrated in
the case of the hundred men, it
will go on rising one cent at a
time, as each man leaves
wheat-growing for some other
pursuit, until, when nine
hundred and ninety-nine shall
have left wheat-growing, and
shall have become purchasers of
wheat, instead of producers, the
price will be nine hundred and
ninety-nine cents a bushel -
for
convenience of round numbers,
say ten dollars a bushel -
where
before it bore no price at all. In this
state of things, then, the man
who still continues to produce
wheat, will produce ten thousand
bushels; worth, in the market,
ten dollars a bushel, or a
hundred thousand dollars in all. Here, then,
we have the price of a hundred
thousand dollars for ten
thousand bushels of wheat,
which, when produced by a
thousand different men, each
producing ten bushels for Isis
own consumption, had no market
value at all. And the other
nine hundred and ninety-nine
men, we will suppose, produce
each a different commodity from
all the others; the whole annual
produce of each having the same
market value as the
wheat-growers crop of wheat. The
market value, then, of all the
products of the whole thousand
men will be one thousand times
one hundred thousand dollars - that
is, one hundred million
dollars-where before, when they
were all producing wheat and
something else, their whole
products had no market price
at all. When we
consider that each producer
retains for his own consumption
but a thousandth part of his
products (a hundred dollars
worth), and that, consequently,
nine hundred and ninety-nine
parts of all these products are
not only [*13] to
be sold,
but to be sold twice, as
they would now have to be, -
that is,
once by the producer to the merchant, and
once by the merchant to the
consumer, -
we see that
there will be sales to the
amount of one hundred and
ninety-nine million eight
hundred thousand dollars - for
convenience of round numbers,
say two hundred million dollars - where
before, when all were producing
wheat, there was no such thing
as a sale of a cent’s worth of
anything. These
thousand men, we have supposed,
hail each five dollars in coins -
making
five thousand dollars in all -
with which to make these
purchases and sales of
two hundred millions. How many
times over will all these coins,
on an average, have to be bought
and sold, in order to effect
these exchanges? Dividing two
hundred millions by five
thousand, we have the answer;
namely, forty
thousand
times! Dividing
this number by three hundred, -
which we
will suppose to be the number of
business days in a year, -
we
find that, in order to snake
their exchanges, their whole
stock of money must be bought
and sold,
on an average, one
hundred and
thirty-three
times every day! Thus we see
that one thousand men, with such
a diversity and amount of production
as we .have supposed, would have
two thousand times as many purchases
and sales to make as the one
hundred men. And in making these
purchases and sales, we see that
their whole stock of
money would have to be bought
and sold two hundred times
oftener than would the whole
stock of money of the one
hundred men, in making their
purchases and sales of one
hundred thousand dollars. We
see, too, that, if we call eight
hours a day, -that
being the usual number of
business hours, -
their whole
stock of money would have to be
bought and sold, on an average, sixteen
times over every hoar, or
once in
every four
minutes; whereas the
whole stock of money of the one
hundred men would have to be
bought and sold only once in a
day and a half; or -
calling
eight hours a day - once
in twelve hours. Such, let
it be specially noticed, is the
difference in the rapidity
required in the purchase and
sale of money in making the
exchanges among a thousand men,
on the one hand, and a hundred
men, on the other, although
the thousand men have the
same amount of money, man for
man, as the hundred men; the
thousand men having five
thousand dollars, and the
hundred having but five hundred
dollars. This
illustration gives some idea of
the effect produced upon prices
by the expansion of industry
amid the diversity of
production. And yet the writers
on money tell us that a large
number of men need no more
money, man
for man, than
a small number; that, if a
hundred men need but five
hundred dollars of money, a
thousand men will, by the same
rule, need but live
thousand
dollars. In the case
already supposed, - of
the one thousand men, -
how
far would their five thousand
dollars avail as money toward in
making their exchanges of two
hundred million dollars?
Plainly, they would avail
nothing. The holders of them,
seeing the necessities of the
people for money, would hold
beck their coins, and demand so
much more than their trite and
natural value, as to put a stop
substantially to all production,
except of such few things as
could be exchanged by barter, or
as each one could produce for
his owls consumption. The obvious
truth is that, in order to carry
on their commerce with money at
its true and natural value, amid
consequently without obstruction
or extortion [*14] from the
money holders, it is necessary
that these thousand men, with
their increased diversity and
amount of production, should
have two hundred times as much
motley, man for
man, - and
two thousand times as much in
the aggregate, - as was
necessary for the one hundred
men, as before supposed. In other
words, the thousand men have two
hundred million dollars of sales
to make, where the hundred men
had but one hundred thousand.
Dividing two hundred million by
one hundred thousand, we find
that the thousand much,
with such
diversity and amount of
production as we have supposed,
have two thousand times as many
sales to make as the one hundred
had; and consequently that they
require two thousand times as
much money as did the one
hundred. III. But to show
still further the ratio in which
diversity of industry tends to
increase the price of
commodities, relatively
to any fixed standard, let us
suppose that the number of men
on the island be still further
increased from one thousand to
ten thousand. And suppose that
all these ten thousand are
engaged in producing wheat
alone; each producing ten
bushels for his own consumption,
that being all he wants. And
suppose they have each five
dollars in gold, silver, and
copper coins. What will be the
price of wheat, relatively to
the coins? Clearly, it will have
no price at all, hot even so
much as one cent a bushel. But suppose
that all but one of the ten thousand
men should leave wheat-growing,
and engage in other industries;
each one producing a different
commodity from all the others.
And suppose that the one who
still continues wheat-growing
has acquired such science,
skill, and machinery, that lie
is now able to produce a hundred
thousand bushels - that
is, ten bushels each for teem
thousand men -
where
before he only produced ten
bushels for himself. What will
now be the price of wheat among
these ten thousand men? Why, by
the same law that has been
already illustrated, it will be
ninety-nine dollars and
ninety-nine cents a bushel - for
convenience of round numbers,
say one hundred dollars a bushel
- where
before it had no market
value at
all. And yet
there is just as much wheat
produced as there was before,
and every maim
gets just
as much wheat to eat as he had
before, when all were producing
wheat. In this
state of things, the one hundred
thousand bushels of wheat,
produced by one man, at a
hundred dollars a bushel - which
will then be its market value -
are worth one hundred thousand
times one hundred dollars; that
is, ten million dollars. And
suppose that all the other nine
thousand nine hundred and
ninety-nine men are each engaged
in an industry as profitable as
that of the remaining wheat
grower. The aggregate production
of the whole ten thousand men
will now have a market value
equal to ten thousand times ten
million dollars; that is, one
hundred thousand million
dollars. And if we
suppose that all these
commodities are to be sold three
times <fn3>
[*15] over, - that
is, once by the producer to the
wholesale dealer, once by the
wholesale dealer to the
retailer, and once by the
retailer to the consumer, - we
shall see that there are to be
sales equal to three hundred
thousand million dollars, where
before, when all were producing
wheat, and nothing else, there
was no sale of a cent’s worth
of any thing, and no market
value at
all for any thing. Now suppose
that the coins, which these men
had, have remained fixed at the
same value they had when the men
were all producing wheat. How
many times over, then, must they
necessarily be bought and sold,
in the course of a year, in
order to effect the purchase and
sale of these three hundred
thousand millions -
or one
hundred thousand millions three
times over - of
property that are to be
exchanged? There are
ten thousand men, each having
five dollars in coins; that is,
fifty thousand dollars in all.
Dividing three hundred thousand
millions by fifty thousand, we
find that the whole of these
fifty thousand dollars in coins must
be bought and sold six million times?
Six million
times annually, to effect the
exchanges of the products of ten
thousand men! Dividing
six million by three hundred
(which we will suppose to be the
number of business days in a
year, we find that, on an
average, their whole stock of
money must be bought and sold twenty
thousand times over every day. Or
supposing the business day to be
eight hours, the coins would all
have to be bought and sold
twenty-five hundred times over
every hour; equal to forty-one
and two-thirds times every
minute. And this
happens, too, whets the ten
thousand men have the same
amount of coin, man
for man,
as the one
hundred and the one thousand men
had, in the cases before
supposed. Thus we see
that, with such a diversity and
amount of production as we have
supposed, the exchanges of the
ten thousand men would require
that their whole stock of money
should be bought and sold one
hundred and fifty times oftener
than the whole stock of the one
thousand men, and thirty
thousand times oftener than the
whole stock of the one hundred
men. We also see
that, in the cases supposed, the
ten thousand men, having three
hundred thousand millions of
exchanges to make, have fifteen
hundred times as many as the one
thousand men, who had but two
hundred millions; and that they
have three million times as many
exchanges to make as the one
hundred men. Consequently the
ten thousand men require fifteen
hundred times as much money as
the one thousand men, and three
million times as much money as
the one hundred men. IV. According
to the foregoing calculations,
the ratio of increase required
in the volume of money is this:
Supposing the diversity amid
amount of production to keep
pace with the increase in the
number of men, and supposing
their commodities to be sold
but once, -
that is,
directly from producer to
consumer, - a
hundred men would require a
thousand times as much money as
ten men; a thousand men would
require a thousand times as much
money as a hundred men; ten
thousand men would require a
thousand times as much money as
a thousand men; and so on. [*16] But
inasmuch as, in the case of a
thousand men, their commodities
would have to be sold twice,
- that
is, once by the producer to the
merchant, and once by the
merchant to the consumer, - the
thousand men would require two
thousand
times as much money as the
hundred men. And inasmuch as, in
the case of the ten thousand
men, their commodities would
have to be sold three
times over, -
that is,
once by the producer to the
wholesale dealer, once by the
wholesale dealer to the
retailer, and once by the
retailer to the consumer, - the
amount of money required,
instead of being either one
thousand or two thousand times
as much as in the case of the
one thousand men (whose
commodities were sold but
twice), would be one and a half
thousand times (as three sales
are one and a half times as much
as two) - that is, fifteen
hundred times-as much as in the
case of the one thousand men. Stating the
results of the preceding
calculations in the simplest
form, we find that different
numbers of men, having a
diversity and amount of
production corresponding to
their numbers, in making their
exchanges with each other,
require money in the following
ratios, relatively to each
other; namely, - 10 men
require
$100 But as the
same money could be used many
times over in the course of a
year, they would not need an
amount of money equal to the
amount of their annual
exchanges. If, then, we suppose
the aggregate of their annual
exchanges to be as above, and
their whole stocks of money to
be used three hundred times over
in a year, -
that is,
once a day, calling three
hundred the number of business
days in a year, -we find that
the stocks of money required
would be as follows: 10 men
would require
$ .33 1/3 Or, to
state the case in still another
form, supposing their aggregate
annual exchanges to be as above,
and supposing their whole stocks
of money to be bought and sold
three hundred times over in the
year, the money required, per
man, would be as
follows:- 10 men
would require
$ .03
1/3 each. If any body
thinks he can dispute these
figures, let him attempt it. If
they cannot be disputed, they
settle the law of prices. V. The
foregoing suppositions are, first,
that the ten thousand men
came finally to have ten
thousand different kinds of
commodities, where they
originally had
but one, -
namely,
wheat; secondly, that
they finally came to have ten
thousand
times as much wealth, in
quantity, as they had
originally, when all were producing
wheat; thirdly, that
wheat, which at it-s
first sales
brought only one cent a
bushel, came afterwards to sell
for ten thousand cents a bushel,
- although the amount of wheat
produced, and the supply of
wheat for each individual, were
the same in the
one case as in the other; fourthly,
that the
same effect is produced upon the
prices of all the rest of the
ten thousand different kinds of
commodities as upon the price of
wheat; and, fifthly, that
the annual sales, made
by the ten
thousand men, amounted finally
to three hundred thousand
million dollars, where
their first
sales had amounted to but ten
cents, - the amount which
the first
man who left wheat-growing paid
for his yearly supply of ten
bushels. It is not
necessary to suppose that such a
diversity and amount of
production will ever be realized
in actual life, although that is
not impossible It is sufficient
that these figures give the law
that governs prices, and
consequently demonstrate that a
constant and enormous increase
of money must be necessary to
keep pace with the increase of
population, wealth, and trade,
if we wish to give free scope to
diversity and amount of
production. Unless
money should be increased so as
to keep pace with this increased
demand, the result would be, first,
obstruction to trade; secondly,
obstruction to, and
discouragement of, industry; and
thirdly, a corresponding
obstruction to the increase of
wealth. In fact,
unless the amount of money were
increased, these hundred men,
thousand men, and ten thousand
men, instead of having a
hundred, a thousand, or ten
thousand different kinds of
commodities, would advance very
little beyond the state they
were in when all were producing
wheat and nothing else. Some
feeble attempts at other
industries might possibly be
made, but their money, like the
shells and wampum of savages,
would aid these attempts but
slightly; and the men, unless
they invented some other money,
would either remain absolute
savages, or attain only to a
very low state of barbarism. The
practical question, then, is,
whether it is better that these ten
thousand
men should remain mere savages,
scratching the earth with rude
sticks and stones
to produce
each ten bushels of wheat, or
whether it is better that they
should all have the money -
which
stands in political economy for
all the ingenuity, skill,
science, machinery, and other
capital which money can buy -
that may be necessary to enable
them to produce, in the greatest
possible abundance, and of the
greatest possible excellence,
all the ten thousand
commodities that will
contribute to their happiness. A full
discussion of this subject would
require much more space than can
here be given to it. It may
perhaps be continued at a future
time, if that should be
necessary. But enough has doubtless
now been said
to show the general law that
governs prices, and consequently
to show, the necessity for an immense
increase of
money; an increase dependent
upon the diversity and amount of
production, and the natural
laws of trade applicable thereto;
such an increase as no
legislation can ascertain
beforehand, or consequently
prescribe. [*18] SECTION
III. It will now
perhaps be said by some, in
opposition to this theory of
the rise in
prices, that it is not sustained
by the experience of mankind;
that, on the contrary,
the
introduction of machinery makes
some things wonderfully cheap,
which before, relatively to
other commodities, were very
dear. And as an illustration of
this, perhaps we shall be
pointed to the present cheapness
of printed matter, as compared
with the price of written matter
before the discovery of the
present modes of printing, and
the present modes of making
paper; a man now being able,
probably, to buy as much printed
matter for one cent, as one
could have bought of written
matter, five hundred years ago,
for five, or perhaps ten,
dollars. But the man
who makes this objection, does
not take into account all the
facts upon which the rise in
prices depends. He does not take
into account the fact that the
market price of any commodity,
whether produced in less or
greater quantity, or by less or
more labor, depends only very
slightly, if at all, upon the
greater or less amount of labor
it costs the producer, but
mainly, if not wholly -
as has
already been explained- upon the
power and disposition of other
men to buy it, and give him
something equally desirable in
exchange for it. The
producer of any particular
commodity, however desirable a
one it may be, can get no just
compensation for it, except from
those who are themselves
producing something equally
desirable, which they are
willing to give in exchange. If, for
example -
to repeat
an illustration already given - a
hundred thousand copies of the New
York Herald were printed in
a country containing only a
hundred thousand men, who
desired it, and these men were
producing nothing that they
could spare, or give in
exchange, the Herald would
plainly bring no price at all,
however much these hundred
thousand men might desire it.
But if these hundred thousand
men should become producers of
such commodities as they could
spare, and give in exchange for
the Herald the market price
of the Herald would rise
just in proportion to the
value of these other
commodities. And if these
hundred thousand men should
finally, through the aid of
invention, science, skill,
machinery, and capital, become
producers of a [*19] hundred
thousand different commodities - each
man producing a different
commodity from all the
others-and each man should be
willing to give, in exchange for
the Herald, such a
portion of his own particular
product as would be as desirable
for the producer of the Herald,
as a copy of the
Herald was
to him, the Herald, which
before brought no price at all,
will now obtain for its producer
a hundred thousand different
commodities, each of which will
be as valuable to him, as a copy
of the Herald will be to
each of these hundred thousand
purchasers. And the price of the
Herald, relatively to any
fixed standard of value, will
have risen -
in
accordance with the “Law of
Prices” already given - from
nothing, to a price
corresponding to the value of
these hundred thousand different
commodities that will be given
in exchange for it. The reason
why printed matter has become so
cheap, in comparison with many
or most other commodities, is
not at all that the knowledge
conveyed by it has become less
desirable or valuable than it
was before the art of printing
was discovered -
for both
the desire for knowledge, and
the value of the knowledge
conveyed, have been constantly
increasing ever since that time - but
it is because invention and
production in paper -making and
printing have altogether outrun
invention and production in most
other
directions; and mankind are
consequently unable, except in
comparatively few cases, to give
real equivalents for printed
matter. Printed matter,
therefore, has now to be sold
for only what the producers of
other commodities are able to
pay. But if invention and
production, in other directions
than paper-making and printing,
should go on increasing to such
a degree that all other men will
be able to offer, in exchange
for printed matter, commodities
as desirable as the printed
matter itself, the prices of
printed matter
will then
rise to their true level. And what is
true of printed matter, is
equally true of certain other
commodities, in whose production
science and invention have
outrun the science and invention
that are employed in ordinary
pursuits. These
commodities now command no
equitable price
in the market,
solely because mankind in
general, for the want of
invention, science, skill,
machinery, and capital, are
[*20] unable to produce
commodities of equal value, to
be given in exchange. From all
this, it will be seen that the market
value of each man’s
product depends, not at all, or
at best very slightly, upon the
greater or less labor it costs
him to produce it - for when all
labor is performed by machinery,
and men are required only to
tend the machinery, it can
hardly be said that anything
costs human labor; but
it depends mainly, if not
wholly, upon the number of other
men who can buy if, and give him
something desirable in exchange
for it. At present
no such diversity or amount of
production exists, as we shall
sometime see; and, consequently,
prices have never risen to any
such height as they sometime
will. But as surely as the
diversity and amount of
production go on increasing,
just so surely will the rise of
prices, relatively to any fixed
standard of
value, also go on increasing in
the ratio, and according to the
rule, that have now being.
explained. And the amount of
money required for the exchanges
of property will of course go on
increasing in like ratio. And
any attempt to keep down prices,
by limiting the amount of money,
will only result in suppressing
invention, science, skill,
machinery, and production, and
in the inequitable distribution
of the little wealth that is
permitted to be produced. But this
theory will be more fully
confirmed in subsequent papers. SECTION
IV. Fr will now be seen how clearly - as a general rule - it is the interest of all that each and every individual shall have all the capital - that is, all the money - that may be necessary to enable them to produce the greatest variety and amount of wealth; to make the most discoveries in science, the most inventions in implements and machinery; to produce the greatest number of new commodities for direct consumption; and also to enable all those who are neither discoverers nor inventors, t |