The Precious Metals The Best Measure Of Prices.
It is no more possible to find a constant measure of prices than it is to
square the circle. (_J. B. Say._) If the two magnitudes to be compared are
separated from each other in space but not in time, the precious metals
constitute not only the best measure of their prices, but also a very good
one. But the precious metals are subject to very sensible and accidental
variations in price in long periods of time. If, therefore, we would
compare sums of money belonging to different times with one another, we
must first construct a price-current list of all the more important
articles of commerce for the time in question, and in the quantities they
are needed in every day life. We would next have to calculate the average
of these mean prices, and thus to determine the relative value of the
amounts to be estimated.(781) The person who should limit his comparison
to a few species of commodities, says von Mangoldt, would lose in
exactness what he gained in comprehensibility.
In every such list, the wages of a day would occupy a very important
place. The desire of exerting an influence over the lives and actions of
other men, and the desire of relatively greater social distinction as
compared with the social distinction of others, is very general; and there
is scarcely any better evidence that it has been attained than the
possession of the power of controlling a large number of days’ work. The
man who can keep one thousand day laborers is certainly, in a
politico-economical sense, an important personage. Besides, the height of
day-wages has the most direct influence on the price of many other
commodities.(782)
No less important is the price of wheat, or rather of the principal
article of food of the people, for the time being, with which the price of
inland raw material—in so far as it can be produced from the same soil
alternately with wheat—and, in the long run, also the wages of labor, are
so essentially connected.(783) The same indispensable necessity of wheat
which causes its price to fluctuate so largely from year to year, and from
month to month, promotes the uniformity of its average price,(784) when
many years are taken into the account.(785)(786) (_Malthus._) If, by
reason of great progress made in the art of agriculture, the cost of the
production of wheat should fall to one-half of what it was, a large
increase of population would certainly not be delayed long. And so, on the
other hand, there would be a decrease of population if, by the destruction
of artificial means of irrigation, or other steps in the direction of a
retrogressive civilization, the cost of the production of wheat were to be
permanently increased.
But even the average price of wheat, during a long series of years, is not
entirely invariable. The increasing consumption compels the nation, as a
whole, to provide for its requirement of wheat from less fertile sources,
which increases its price generally. It is true that the progress of the
science of agriculture and of the corn-trade counteract this tendency,
retard the advance of the price of wheat, and may, for a time, produce an
opposite tendency. It is true, also, that the people are induced by their
most general and vital interests to take advantage of this possibility.
But spite of the frequency of exceptions to it, the rule remains.(787) If,
therefore, we wished to so fix a perpetual annuity that it should always
be worth as much money as a certain quantity of wheat had cost, on an
average, during the three preceding decades, the thing-value of this
annuity would, on the whole, rise with an advance in civilization.(788) To
obtain something that would remain the same, it would be necessary to
combine wheat with at least one chief commodity, the intrinsic basis of
the price of which had a development independent of the price of grain;
but the whole to be made payable in money. The precious metals are, in
many respects, so diametrically opposed in properties to wheat, in their
dispensableness, transportable character and durability, for instance,
that these two classes of commodities are best adapted to act as
counter-balances to each other.(789)