Principles Of Political Economy
- Автор: Mill John Stuart
- Год: 2022
- Язык: английский
- Год: Strelbytskyy Multimedia Publishing
- Жанр: Политика
Электронная книга - «Principles Of Political Economy». Краткое содержание книги:
Beside discussing descriptive issues such as which nations tended to benefit more in a system of trade based on comparative advantage (Mill's answer: those with more elastic demands for other countries' goods), the work also discussed normative issues such as ideal systems of political economy, critiquing proposed systems such as communism and socialism.
Along with A System of Logic, Principles of Political Economy established Mill's reputation as a leading public intellectual. Mill's sympathetic attitude in this work and in other essays toward contemporary socialism, particularly Fourierism, earned him esteem from the working class as one of their intellectual champions.
Effects of another kind, however, will have been produced: $200,000,000, which formerly existed in the unproductive form of metallic money, have been converted into what is, or is capable of becoming, productive capital. This gain is at first made by the United States at the expense of other countries, who have taken her superfluity of this costly and unproductive article off her hands, giving for it an equivalent value in other commodities. By degrees the loss is made up to those countries by diminished influx from the mines, and finally the world has gained a virtual addition of $200,000,000 to its productive resources. Adam Smith's illustration, though so well known, deserves for its extreme aptness to be once more repeated. He compares the substitution of paper in the room of the precious metals to the construction of a highway through the air, by which the ground now occupied by roads would become available for agriculture. As in that case a portion of the soil, so in this a part of the accumulated wealth of the country, would be relieved from a function in which it was only employed in rendering other soils and capitals productive, and would itself become applicable to production; the office it previously fulfilled being equally well discharged by a medium which costs nothing.
The value saved to the community by thus dispensing with metallic money is a clear gain to those who provide the substitute. They have the use of $200,000,000 of circulating medium which have cost them only the expense of an engraver's plate. If they employ this accession to their fortunes as productive capital, the produce of the country is increased and the community benefited, as much as by any other capital of equal amount. Whether it is so employed or not depends, in some degree, upon the mode of issuing it. If issued by the Government, and employed in paying off debt, it would probably become productive capital. The Government, however, may prefer employing this extraordinary resource in its ordinary expenses; may squander it uselessly, or make it a mere temporary substitute for taxation to an equivalent amount; in which last case the amount is saved by the tax-payers at large, who either add it to their capital or spend it as income. When (a part of the) paper currency is supplied, as in our own country, by banking companies, the amount is almost wholly turned into productive capital; for the issuers, being at all times liable to be called upon to refund the value, are under the strongest inducements not to squander it, and the only cases in which it is not forthcoming are cases of fraud or mismanagement. A banker's profession being that of a money-lender, his issue of notes is a simple extension of his ordinary occupation. He lends the amount to farmers, manufacturers, or dealers, who employ it in their several businesses. So employed, it yields, like any other capital, wages of labor, and profits of stock. The profit is shared between the banker, who receives interest, and a succession of borrowers, mostly for short periods, who, after paying the interest, gain a profit in addition, or a convenience equivalent to profit. The capital itself in the long run becomes entirely wages, and, when replaced by the sale of the produce, becomes wages again; thus affording a perpetual fund, of the value of $200,000,000, for the maintenance of productive labor, and increasing the annual produce of the country by all that can be produced through the means of a capital of that value. To this gain must be added a further saving to the country, of the annual supply of the precious metals necessary for repairing the wear and tear, and other waste, of a metallic currency.
The substitution, therefore, of paper for the precious metals should always be carried as far as is consistent with safety, no greater amount of metallic currency being retained than is necessary to maintain, both in fact and in public belief, the convertibility of the paper.
But since gold wanted for exportation is almost invariably drawn from the reserves of the banks, and is never likely to be taken directly from the circulation while the banks remain solvent, the only advantage which can be obtained from retaining partially a metallic currency for daily purposes is, that the banks may occasionally replenish their reserves from it.
§ 3. Effect of the increase of an inconvertible paper Currency. Real and nominal exchange.
When metallic money had been entirely superseded and expelled from circulation, by the substitution of an equal amount of bank-notes, any attempt to keep a still further quantity of paper in circulation must, if the notes are convertible (into gold), be a complete failure.
This brings up the whole question at issue between the “Currency Principle” and the “Banking Principle.” The latter, maintained by Fullerton, Wilson, Price, and Tooke (in his later writings), held that, if notes were convertible, the value of notes could not differ from the value of the metal into which they were convertible; while the former, advocated by Lord Overstone, G. W. Norman, Colonel Torrens, Tooke (in his earlier writings), and Sir Robert Peel, implied that even a convertible paper was liable to over-issues. This last school brought about the Bank Act of 1844.[284]
(A) new issue would again set in motion the same train of consequences by which the gold coin had already been expelled. The metals would, as before, be required for exportation, and would be for that purpose demanded from the banks, to the full extent of the superfluous notes, which thus could not possibly be retained in circulation. If, indeed, the notes were inconvertible, there would be no such obstacle to the increase in their quantity. An inconvertible paper acts in the same way as a convertible, while there remains any coin for it to supersede; the difference begins to manifest itself when all the coin is driven from circulation (except what may be retained for the convenience of small change), and the issues still go on increasing. When the paper begins to exceed in quantity the metallic currency which it superseded, prices of course rise; things which were worth $25 in metallic money become worth $30 in inconvertible paper, or more, as the case may be. But this rise of price will not, as in the cases before examined, stimulate import and discourage export. The imports and exports are determined by the metallic prices of things, not by the paper prices; and it is only when the paper is exchangeable at pleasure for the metals that paper prices and metallic prices must correspond.
Let us suppose that the United States is the country which has the depreciated paper. Suppose that some American production could be bought, while the currency was still metallic, for $25, and sold in England for $27.50, the difference covering the expense and risk, and affording a profit to the merchant. On account of the depreciation, this commodity will now cost in the United States $30, and can not be sold in England for more than $27.50, and yet it will be exported as before. Why? Because the $27.50 which the exporter can get for it in England is not depreciated paper, but gold or silver; and since in the United States bullion has risen in the same proportion with other things—if the merchant brings the gold or silver to the United States, he can sell his $27.50 (in coin) for $33 (in paper), and obtain as before 10 per cent for profit and expenses.
It thus appears that a depreciation of the currency does not affect the foreign trade of the country: this is carried on precisely as if the currency maintained its value. But, though the trade is not affected, the exchanges are. When the imports and exports are in equilibrium, the exchange, in a metallic currency, would be at par; a bill on England for the equivalent of $25 would be worth $25. But $25, or the quantity of gold contained in them, having come to be worth in the United States $30, it follows that a bill on England for $25 will be worth $30. When, therefore, the real exchange is at par, there will be a nominal exchange against the country of as much per cent as the amount of the depreciation. If the currency is depreciated 10, 15, or 20 per cent, then in whatever way the real exchange, arising from the variations of international debts and credits, may vary, the quoted exchange will always differ 10, 15, or 20 per cent from it. However high this nominal premium may be, it has no tendency to send gold out of the country for the purpose of drawing a bill against it and profiting by the premium; because the gold so sent must be procured, not from the banks and at par, as in the case of a convertible currency, but in the market, at an advance of price equal to the premium. In such cases, instead of saying that the exchange is unfavorable, it would be a more correct representation to say that the par has altered, since there is now required a larger quantity of American currency to be equivalent to the same quantity of foreign. The exchanges, however, continue to be computed according to the metallic par. The quoted exchanges, therefore, when there is a depreciated currency, are compounded of two elements or factors: (1) the real exchange, which follows the variations of international payments, and (2) the nominal exchange, which varies with the depreciation of the currency, but which, while there is any depreciation at all, must always be unfavorable. Since the amount of depreciation is exactly measured by the degree in which the market price of bullion exceeds the mint valuation, we have a sure criterion to determine what portion of the quoted exchange, being referable to depreciation, may be struck off as nominal, the result so corrected expressing the real exchange.
284
See Walker, “Money,” Chap. XIX.