The Closed Commercial State

Third Chapter: The reciprocal relation of the individuals in this great commercial state

Third Chapter The reciprocal relation of the individuals in this great commercial state To investigate how it came about that men agreed to grant the validity of gold and silver, and nothing in their place, as the sign of all value would take us too far afield. At the very least the reason offered by a famous writer will not do.9 He claims that because the extraction of a certain amount of gold or silver costs just as much time and effort as the extraction or manufacture of some other specific ware, we are able to accept the one as an equivalent for the other. The man who is left to his own devises will value the other’s produce not according to the effort expended on it but rather according to the utility that he intends to draw from it. Hence, even if we presume that there actually was such an equality in the effort expended, we must still ask why the farmer would equate the effort that the miner put into extracting a piece of gold with the effort expended in producing some bushels of grain. Why would he regard this effort to be as well employed as his own? While the miner couldn’t live without grain, the farmer naturally {455} can’t do anything with the miner’s gold. If someone employs his efforts to no purpose, would the human race then regard itself as obliged to repay him for this with purposeful labor? I must, however, explicitly recall that the value of these metals rests merely in the general agreement about their value. Each person accepts these at a certain ratio to his goods since he is certain that everyone with whom he can engage in commerce will accept them in turn from him at this same ratio. The true intrinsic value of these metals, their usefulness as raw materials, is far from equal to their extrinsic value, which rests merely on opinion. The goods manufactured from them obtain their value only in consideration of the fact that one can, or at least should have been able to, again make money out of them. The money material that they contain must also be paid for. 143 144 Second Book Precisely because, as I recall in passing, the value of world currency to goods has no other guarantee than public opinion, this ratio is just as fluctuating and variable as public opinion itself. It is really only through spreading the view that [97] goods become cheaper or more expensive, in place of the more correct view that the value of money rises or sinks, that one has been able to shut the eyes of the great public to this variability. The national currency described above would, in contrast, have an entirely different guarantee, since it would have to be a fundamental law of the state that it will forever accept the money it gives out at the same value in relation to commodities and maintain it at this value among the fellow citizens. If all this is presupposed, the relation of the money circulating in the great commercial state to the goods found in its public trade will be just the same as in the rational state described above. The entire sum of money represents and is worth the same as the entire sum of goods, and so much of a part of the former value represents so much of a part of the latter. With the quantity of the goods remaining constant, it makes absolutely no difference whether {456} a greater or lesser quantity of money is in circulation. Here too, wealth rests not on how much money someone has, but rather on how much of a part of all existing money he possesses. It is at least to be accepted, as the one firm principle amid all this unceasing fluctuation, that so much of a part of the circulating money is equal to so much of a part of the value of the goods (I speak here of the intrinsic value, the value for the maintenance and pleasantness of life), despite the fact that, since one never rightly knows how much gold and how many goods are in circulation—this or that ware can be brought out of circulation and thus made more expensive through artificial means, or a multitude of similar circumstances can also intervene—this ratio is fluctuating, dependent on chance, and exposed to cheating. I still presuppose it to be...