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.
Chapter VII. Of A Double Standard And Subsidiary Coins.
§ 1. Objections to a Double Standard.
Though the qualities necessary to fit any commodity for being used as money are rarely united in any considerable perfection, there are two commodities which possess them in an eminent and nearly an equal degree—the two precious metals, as they are called—gold and silver. Some nations have accordingly attempted to compose their circulating medium of these two metals indiscriminately.
There is an obvious convenience in making use of the more costly metal for larger payments, and the cheaper one for smaller; and the only question relates to the mode in which this can best be done. The mode most frequently adopted has been to establish between the two metals a fixed proportion (to decide by law, for example, that sixteen grains of silver should be equivalent to one grain of gold); and it being left free to every one who has a (dollar) to pay, either to pay it in the one metal or in the other.
If (their) natural or cost values always continued to bear the same ratio to one another, the arrangement would be unobjectionable. This, however, is far from being the fact. Gold and silver, though the least variable in value of all commodities, are not invariable, and do not always vary simultaneously. Silver, for example, was lowered in permanent value more than gold by the discovery of the American mines; and those small variations of value which take place occasionally do not affect both metals alike. Suppose such a variation to take place—the value of the two metals relatively to one another no longer agreeing with their rated proportion—one or other of them will now be rated below its bullion value, and there will be a profit to be made by melting it.
Suppose, for example, that gold rises in value relatively to silver, so that the quantity of gold in a sovereign is now worth more than the quantity of silver in twenty shillings. Two consequences will ensue. No debtor will any longer find it his interest to pay in gold. He will always pay in silver, because twenty shillings are a legal tender for a debt of one pound, and he can procure silver convertible into twenty shillings for less gold than that contained in a sovereign. The other consequence will be that, unless a sovereign can be sold for more than twenty shillings, all the sovereigns will be melted, since as bullion they will purchase a greater number of shillings than they exchange for as coin. The converse of all this would happen if silver, instead of gold, were the metal which had risen in comparative value. A sovereign would not now be worth so much as twenty shillings, and whoever had a pound to pay would prefer paying it by a sovereign; while the silver coins would be collected for the purpose of being melted, and sold as bullion for gold at their real value—that is, above the legal valuation. The money of the community, therefore, would never really consist of both metals, but of the one only which, at the particular time, best suited the interest of debtors; and the standard of the currency would be constantly liable to change from the one metal to the other, at a loss, on each change, of the expense of coinage on the metal which fell out of use.
This is the operation by which is carried into effect the law of Sir Thomas Gresham (a merchant of the time of Elizabeth) to the purport that “money of less value drives out money of more value,” where both are legal payments among individuals. A celebrated instance is that where the clipped coins of England were received by the state on equal terms with new and perfect coin before 1695. They hanged men and women, but they did not prevent the operation of Gresham's law and the disappearance of the perfect coins. When the state refused the clipped coins at legal value, by no longer receiving them in payment of taxes, the trouble ceased.[234] Jevons gives a striking illustration of the same law: “At the time of the treaty of 1858 between Great Britain, the United States, and Japan, which partially opened up the last country to European traders, a very curious system of currency existed in Japan. The most valuable Japanese coin was the kobang, consisting of a thin oval disk of gold about two inches long, and one and a quarter inch wide, weighing two hundred grains, and ornamented in a very primitive manner. It was passing current in the towns of Japan for four silver itzebus, but was worth in English money about 18s. 5d., whereas the silver itzebu was equal only to about 1s. 4d. (four itzebus being worth in English money 5s. 4d.). The earliest European traders enjoyed a rare opportunity for making profit. By buying up the kobangs at the native rating they trebled their money, until the natives, perceiving what was being done, withdrew from circulation the remainder of the gold.”[235]
It appears, therefore, that the value of money is liable to more frequent fluctuations when both metals are a legal tender at a fixed valuation than when the exclusive standard of the currency is either gold or silver. Instead of being only affected by variations in the cost of production of one metal, it is subject to derangement from those of two. The particular kind of variation to which a currency is rendered more liable by having two legal standards is a fall of value, or what is commonly called a depreciation, since practically that one of the two metals will always be the standard of which the real has fallen below the rated value. If the tendency of the metals be to rise in value, all payments will be made in the one which has risen least; and, if to fall, then in that which has fallen most.
While liable to “more frequent fluctuations,” prices do not follow the extreme fluctuations of both metals, as some suppose, and as is shown by the following diagram.[236] A represents the line of the value of gold, and B of silver, relatively to some third commodity represented by the horizontal line. Superposing these curves, C would show the line of extreme variations, while since prices would follow the metal which falls in value, D would show the actual course of variations. While the fluctuations are more frequent in D, they are less extreme than in C.
§ 2. The use of the two metals as money, and the management of Subsidiary Coins.
The plan of a double standard is still occasionally brought forward by here and there a writer or orator as a great improvement in currency.
It is probable that, with most of its adherents, its chief merit is its tendency to a sort of depreciation, there being at all times abundance of supporters for any mode, either open or covert, of lowering the standard. (But) the advantage without the disadvantages of a double standard seems to be best obtained by those nations with whom one only of the two metals is a legal tender, but the other also is coined, and allowed to pass for whatever value the market assigns to it.
When this plan is adopted, it is naturally the more costly metal which is left to be bought and sold as an article of commerce. But nations which, like England, adopt the more costly of the two as their standard, resort to a different expedient for retaining them both in circulation, namely (1), to make silver a legal tender, but only for small payments. In England no one can be compelled to receive silver in payment for a larger amount than forty shillings. With this regulation there is necessarily combined another, namely (2), that silver coin should be rated, in comparison with gold, somewhat above its intrinsic value; that there should not be, in twenty shillings, as much silver as is worth a sovereign; for, if there were, a very slight turn of the market in its favor would make it worth more than a sovereign, and it would be profitable to melt the silver coin. The overvaluation of the silver coin creates an inducement to buy silver and send it to the mint to be coined, since it is given back at a higher value than properly belongs to it; this, however, has been guarded against (3) by limiting the quantity of the silver coinage, which is not left, like that of gold, to the discretion of individuals, but is determined by the Government, and restricted to the amount supposed to be required for small payments. The only precaution necessary is, not to put so high a valuation upon the silver as to hold out a strong temptation to private coining.
234
See Macaulay, “History of England,” chap. xxi.
235
“Money and the Mechanism of Exchange,” p. 84.
236
Jevons, ibid., p. 138.