Bastiat, in his "Harmonies Economiques," describing money, used the
following illustration:
You have a crown piece. What does it mean in your hands? If you
can read with the eye of the mind the inscription it bears, you
can distinctly see these words: Pay to the bearer a service
equivalent to that which he has rendered to society. Value
received and stated, proved and measured by that which in on me.
No words could more correctly describe the unit in a properly regulated
system of money. And notwithstanding the attempt to discredit silver
coinage, no piece of money, as I have already shown, would better
answer, by its steadiness of value, this description of Bastiat's than
would the American silver dollar if silver were remonetized.
So far as it applied to gold Bastiat's description was much nearer
accuracy in his day than it is in ours. In his life-time the mints of
France and of the Continent were open for the coinage of silver equally
with gold, and the money supply of the world was not constantly
narrowing by being limited to the yield of a single metal whose annual
output would hardly more than meet the demand for the arts.
Were Bastiat alive at this time he would reform his description so as to
make it read as follows: "You have an American gold piece. You have had
it hoarded in a bank vault for fifteen years. What does it mean in your
hands? If you can read with the eye of the mind the inscription it
bears, you can distinctly see these words: 'Pay to the bearer 50 per
cent. more service than he has rendered to society; value not received
or stated on me, but resulting from a cunning manipulation of the law of
legal tender, through the influence of the holders of gold and of
obligations payable therein, and as a reward to the bearer for having
had this money hid away and for depriving society of its use for
seventeen years.'"
When people are found everywhere working for money and not for the
things which they really need, it is clear that they are working for
money, not because of the material of which it is composed, but because
it is an order for property which they can at any time obtain by parting
with the money. To modify and elaborate Bastiat's description of the
crown piece, it might be said of the Money Unit of the United States
under a properly regulated system:
"You have a dollar. What does it mean in your hands? If you can read
with the eye of the mind the inscription it bears, you can distinctly
see these words: To all to whom this may come: Greeting. This is a
dollar--a unit of money--part of the great instrumentality created by
society to effect the multitudinous exchanges of property and services
among men. The amount of its command is constant, because the increase
in the volume of money is regulated by the sovereign authority of the
nation, with strict regard to the increase of population and
demand--hence the value of this unit remains unchanging through time. It
is an order for all property on sale, and all services for hire; the
proportionate amount of such property and service to which its possessor
is entitled being fixed by the universal competition to get it."