is, therefore, observe, no such thing as cheapness (in the common use of that term), without some error or injustice. A thing is said to be cheap, not because it is common, but because it is supposed to be sold under its worth. Everything has its proper and true worth at any given time, in relation to everything else; and at that worth should be bought and sold. If sold under it, it is cheap to the buyer by exactly so much as the seller loses, and no more. Putrid meat, at twopence a pound, is not "cheaper" than wholesome meat at sevenpence a pound; it is probably much dearer; but if, by watching your opportunity, you can get the wholesome meat for sixpence a pound, it is cheaper to you by a penny, which you have gained, and the seller has lost. The present rage for cheapness is either, therefore, simply and literally a rage for badness of all commodities, or it is an attempt to find persons whose necessities will force them to let you have more than you should for your money. It is quite easy to produce such persons, and in large numbers; for the more distress there is in a nation, the more cheapness of this sort you can obtain, and your boasted cheapness is thus merely a measure of the extent of your national distress.
There is, indeed, a condition of apparent cheapness, which we have some right to be triumphant in; namely, the real reduction in cost of articles by right application of labour. But in this case the article is only cheap with reference to its
A form of immediate cheapness results, however, in many cases, without distress, from the labour of a population where food is redundant, or where the labour by which the food is produced leaves much idle time on their hands, which may be applied to the production of "cheap" articles.
All such phenomena indicate to the political economist places where the labour is unbalanced. In the first case, the just balance is to be effected by taking labourers from the spot where pressure exists, and sending them to that where food is redundant. In the second, the cheapness is a local accident, advantageous to the local purchaser, disadvantageous to the local producer. It is one of the first duties of commerce to extend the market, and thus give the local producer his full advantage.
Cheapness caused by natural accidents of harvest, weather, &c., is always counterbalanced, in due time, by natural scarcity, similarly caused. It is the part of wise government, and healthy commerce, so to provide in times and places of plenty for times and places of dearth, as that there shall never be waste, nor famine.
Cheapness caused by gluts of the market is merely a disease of clumsy and wanton commerce.
29
Price has been already defined (p. 9) to be the quantity of labour which the possessor of a thing is willing to take for it. It is best to consider the price to be that fixed by the possessor, because the possessor has absolute power of refusing sale, while the purchaser has no absolute power of compelling it; but the effectual or market price is that at which their estimates coincide.
30
This "greater ease" ought to be allowed for by a diminution in the times of the divided work; but as the proportion of times would remain the same, I do not introduce this unnecessary complexity into the calculation.
31
Compare
32
[That is to say, the love of money is founded first on the intenseness of desire for given things; a youth will rob the till, now-a-days, for pantomime tickets and cigars; the "strength" of the currency being irresistible to him, in consequence of his desire for those luxuries.]
33
Remember this definition: it is of great importance as opposed to the imperfect ones usually given. When first these essays were published, I remember one of their reviewers asking contemptuously, "Is half-a-crown a document?" it never having before occurred to him that a document might be stamped as well as written, and stamped on silver as well as on parchment.
34
I do not mean the demand of the holder of a five-pound note for five pounds, but the demand of the holder of a pound for a pound's worth of something good.
35
[Read and think over, the following note very carefully.] The waste of labour in obtaining the gold, though it cannot be estimated by help of any existing data, may be understood in its bearing on entire economy by supposing it limited to transactions between two persons. If two farmers in Australia have been exchanging corn and cattle with each other for years, keeping their accounts of reciprocal debt in any simple way, the sum of the possessions of either would not be diminished, though the part of it which was lent or borrowed were only reckoned by marks on a stone, or notches on a tree; and the one counted himself accordingly, so many scratches, or so many notches, better than the other. But it would soon be seriously diminished if, discovering gold in their fields, each resolved only to accept golden counters for a reckoning; and accordingly, whenever he wanted a sack of corn or a cow, was obliged to go and wash sand for a week before he could get the means of giving a receipt for them.
36
It is difficult to estimate the curious futility of discussions such as that which lately occupied a section of the British Association, on the absorption of gold, while no one can produce even the simplest of the data necessary for the inquiry. To take the first occurring one,—What means have we of ascertaining the weight of gold employed this year in the toilettes of the women of Europe (not to speak of Asia); and, supposing it known, what means of conjecturing the weight by which, next year, their fancies, and the changes of style among their jewellers, will diminish or increase it?
37
See, in Pope's epistle to Lord Bathurst, his sketch of the difficulties and uses of a currency literally "pecuniary"—(consisting of herds of cattle).
38
Perhaps both; perhaps silver only. It may be found expedient ultimately to leave gold free for use in the arts. As a means of reckoning, the standard might be, and in some cases has already been, entirely ideal.—
39
The purity of the drachma and zecchin were not without significance of the state of intellect, art, and policy, both in Athens and Venice;—a fact first impressed upon me ten years ago, when, in taking daguerreotypes at Venice, I found no purchaseable gold pure enough to gild them with, except that of the old Venetian zecchin.
40
Under which term, observe, we include all documents of debt, which, being honest, might be transferable, though they practically are not transferred; while we exclude all documents which are in reality worthless, though in fact transferred temporarily, as bad money is. The document of honest debt, not transferred, is merely to paper currency as gold withdrawn from circulation is to that of bullion. Much confusion has crept into the reasoning on this subject from the idea that the withdrawal from circulation is a definable state, whereas it is a graduated state, and indefinable. The sovereign in my pocket is withdrawn from circulation as long as I choose to keep it there. It is no otherwise withdrawn if I bury it, nor even if I choose to make it, and others, into a golden cup, and drink out of them; since a rise in the price of the wine, or of other things, may at any time cause me to melt the cup and throw it back into currency; and the bullion operates on the prices of the things in the market as directly, though not as forcibly, while it is in the form of a cup as it does in the form of a sovereign. No calculation can be founded on my humour in either case. If I like to handle rouleaus, and therefore keep a quantity of gold, to play with, in the form of jointed basaltic columns, it is all one in its effect on the market as if I kept it in the form of twisted filigree, or, steadily "amicus lamnæ," beat the narrow gold pieces into broad ones, and dined off them. The probability is greater that I break the rouleau than that I melt the plate; but the increased probability is not calculable. Thus, documents are only withdrawn from the currency when cancelled, and bullion