Reflections on the Formation and Distribution of wealth [9]
represent it.
Corn is not only exchanged for wine, but also for any object which the proprietors of the corn may stand in need of as wood, leather, woollen, cotton, &c. it is the same with wine and every other particular species. If a bushel of corn is equivalent to six pints of wine, and a sheep is equivalent to three bushels of corn, the same sheep will be equivalent to eighteen pints of wine. He who having the corn, wants the wine, may, without inconvenience, exchange his corn for a sheep, in order afterwards to exchange the sheep for the wine he stands in need of.
34. Every merchandize may serve as a scale or common measure, by which to compare the value of any other.
It follows from hence, that in a country where the commerce is very brisk, where there are many productions and much consumption, where there are great supplies and a great demand for all sorts of commodities, every sort will have a current price, having relation to every other species; that is to say, that a certain quantity of one will be of equal value to a certain quantity of any others. Thus the same quantity of corn which is worth eighteen pints of wine, is also the value of a sheep, a piece of leather, or a certain quantity of iron; and all these things have, in the transactions of trade an equal value. To express or make known the value of any particular thing, it is evident, that it is sufficient to announce the quantity of any other known production, which will be looked on as an equivalent for it. Thus, to make known what a piece of leather of a certain size is worth, we may say indifferently, that it is worth three bushels of corn, or eighteen pints of wine. We may by the same method express the value of a certain quantity of wine, by the number of sheep, or bushels of corn it will bring in trade. We see by this, that every species of commodity that can be an object of commerce, may be measured, as I may say, by each other, that every one may serve as a common measure, or scale of comparison to describe the value of every other species, and in like manner every merchandize becomes in the hands of him who possesses it, a means to procure all others -- a sort of universal pledge.
35. Every species of merchandize does not present a scale equally commodious. It is proper to prefer the use of such as are not susceptible of any great alteration in quality, and have a value principally relative to the number and quantity.
But although all merchandize has essentially this property of representing any other, is able to serve as a common measure, to express its value, and to become a universal pledge to procure any of them by way of exchange, yet all cannot be employed with the same degree of facility for these two uses. The more susceptible any merchandize is to change its value by an alteration in its quality, the more difficult it is to make it a scale of reference for the value of others. For example, if eighteen pints of wine of Anjou are equivalent in value to a sheep, eighteen pints of Cape wine may be equivalent to eighteen sheep. Thus he who to express the value of a sheep, would say it is worth eighteen pints of wine, would employ an equivocal language, and would not communicate any precise idea, at least until he added some explanation, which would be very inconvenient. We are, therefore, obliged to choose for a scale of comparison, such commodities as being more commonly in use, and consequently of a value more generally known, are more like each other, and of which consequently the value has more relation to the quantity than the quality.
36. For want of an exact correspondence between the value and the number or quantity, it is supplied by a mean valuation, which becomes a species of real money.
In a country where there are only one race of sheep, we may easily take the value of a fleece or of a sheep by the common method of valuation, and we may say that a barrel of wine, or a piece of stuff, is worth a certain number of fleeces or of sheep. There is in reality some inequality in sheep,
Corn is not only exchanged for wine, but also for any object which the proprietors of the corn may stand in need of as wood, leather, woollen, cotton, &c. it is the same with wine and every other particular species. If a bushel of corn is equivalent to six pints of wine, and a sheep is equivalent to three bushels of corn, the same sheep will be equivalent to eighteen pints of wine. He who having the corn, wants the wine, may, without inconvenience, exchange his corn for a sheep, in order afterwards to exchange the sheep for the wine he stands in need of.
34. Every merchandize may serve as a scale or common measure, by which to compare the value of any other.
It follows from hence, that in a country where the commerce is very brisk, where there are many productions and much consumption, where there are great supplies and a great demand for all sorts of commodities, every sort will have a current price, having relation to every other species; that is to say, that a certain quantity of one will be of equal value to a certain quantity of any others. Thus the same quantity of corn which is worth eighteen pints of wine, is also the value of a sheep, a piece of leather, or a certain quantity of iron; and all these things have, in the transactions of trade an equal value. To express or make known the value of any particular thing, it is evident, that it is sufficient to announce the quantity of any other known production, which will be looked on as an equivalent for it. Thus, to make known what a piece of leather of a certain size is worth, we may say indifferently, that it is worth three bushels of corn, or eighteen pints of wine. We may by the same method express the value of a certain quantity of wine, by the number of sheep, or bushels of corn it will bring in trade. We see by this, that every species of commodity that can be an object of commerce, may be measured, as I may say, by each other, that every one may serve as a common measure, or scale of comparison to describe the value of every other species, and in like manner every merchandize becomes in the hands of him who possesses it, a means to procure all others -- a sort of universal pledge.
35. Every species of merchandize does not present a scale equally commodious. It is proper to prefer the use of such as are not susceptible of any great alteration in quality, and have a value principally relative to the number and quantity.
But although all merchandize has essentially this property of representing any other, is able to serve as a common measure, to express its value, and to become a universal pledge to procure any of them by way of exchange, yet all cannot be employed with the same degree of facility for these two uses. The more susceptible any merchandize is to change its value by an alteration in its quality, the more difficult it is to make it a scale of reference for the value of others. For example, if eighteen pints of wine of Anjou are equivalent in value to a sheep, eighteen pints of Cape wine may be equivalent to eighteen sheep. Thus he who to express the value of a sheep, would say it is worth eighteen pints of wine, would employ an equivocal language, and would not communicate any precise idea, at least until he added some explanation, which would be very inconvenient. We are, therefore, obliged to choose for a scale of comparison, such commodities as being more commonly in use, and consequently of a value more generally known, are more like each other, and of which consequently the value has more relation to the quantity than the quality.
36. For want of an exact correspondence between the value and the number or quantity, it is supplied by a mean valuation, which becomes a species of real money.
In a country where there are only one race of sheep, we may easily take the value of a fleece or of a sheep by the common method of valuation, and we may say that a barrel of wine, or a piece of stuff, is worth a certain number of fleeces or of sheep. There is in reality some inequality in sheep,