Measure Of Prices,—Constant Measure.
If we had a measure of prices with the same universality of application
and the same unchangeableness as the measure of length, which is
determined by astronomical calculation, we should be able, not only to
clearly understand all the data relating to value, that is to say, a not
unimportant portion of historical science, but we should, moreover, have a
practical means to condition and fix even perpetual annuities, in such a
way, that they would always afford the same economic and purchasing power
to the person receiving them. No wonder, therefore, that political
economists since Petty’s time have zealously labored to find a _constant_
measure of prices.(772) If by this we understand a species of goods such
that it should always maintain equal exchange-power, as compared with all
other commodities, the idea of a “constant” measure of prices is
unthinkable. We would have to suppose here, that not a single kind of
goods varied in its price; since, otherwise, at least as compared with
those that varied in price, the measure of prices would itself be
variable.(773) But we may, indeed, search for a kind of goods such that
its inherent elements and the elements peculiar to it, so far as it is
itself concerned, and which go to determine price, should exert the same
uniform influence at all times. If there be such a kind of goods, and its
value in exchange as compared with other kinds of goods were to vary, we
should be certain, at least, that the cause of the change was not in it,
but in them; that _it_ had not grown dearer or cheaper, but that they had
grown cheaper or dearer. Such a kind of goods would have these two
characteristics: A. A given amount of it would, under all circumstances,
have the same value in use for the same number of persons. B. It would
require, under all circumstances, the same cost to produce it, and
therefore the supply might always keep pace exactly with the number of
those who demanded it.(774) In this way the supply and demand of this kind
of goods, abstraction made of the quantity of counter-values, would
preserve forever the same invariable relation.