Relation of Money to Wealth
- Where I shall treat of money
- No categorical answer whether money is wealth
- Some is and some is not wealth
Epigraphs to Book II
Definitions are the basis of systematic reasoning.
The mixture of those things by speech which are by nature divided is the mother of all error.
Bacon made us sensible of the emptiness of the Aristotelian philosophy; Smith, in like manner, caused us to perceive the fallaciousness of all the previous systems of political economy; but the latter no more raised the superstructure of this science, than the former created logic.... We are, however, not yet in possession of an established text-book on the science of political economy, in which the fruits of an enlarged and accurate observation are referred to general principles that can be admitted by every reflecting mind; a work in which these results are so complete and well arranged as to afford to each other mutual support, and that many everywhere and at all times be studied with advantage.
-- J.B. Say, 1803
We may cite as examples of such inchoate but yet incomplete discoveries the great Wealth of Nations by Adam Smith -- a work which still stands out, and will ever stand out, as that of a pioneer, and the only book on political economy which displays its genius to every kind of intelligent reader. But among the specialists and the schools, this work of genius which swayed all Europe in its day, is laid upon the shelf as an antiquated affair, superseded by the smaller and duller men who have pulled his system to pieces and are offering us the fragments as a science most of whose first principles are still under dispute.
-- Professor (Greek) J.P. Mahaffy, "The Present Position of Egyptology," "Nineteenth Century," August, 1894.
The Science of Political Economy
Book II, The Nature of Wealth
The Relation of Money to Wealth
Showing That Some Money Is And Some Money Is Not Wealth
The subject of money, in my view of the matter, properly belongs to this Book, which treats of the nature of wealth. But the subject is at the time I write so complicated and confused by current discussions, especially in the United States, as to require for its complete elucidation a fullness of treatment that would too much expand this Book. And, moreover, these current discussions of what is and what ought to be money involve principles which do not find their proper place in the discussion of the nature of wealth, but which will be treated in the succeeding books on Production and Distribution. For these reasons, I shall postpone the full treatment of Money until after the laws of Production and the laws of Distribution have been discussed. But one question is certain to occur to the reader which must be answered here -- the question, "Is money wealth?"
To this no categorical answer can be given, for the reason that what we properly call money is in all countries in our present stage of civilization of essentially different kinds. Some of the money in use to -- day is wealth, and some of it is not wealth. Some, such for instance as the gold coins of the United States and England, is wealth to the full amount of its circulating value. Some, such as the silver, copper and bronze coins of the same countries, is wealth, but not wealth to the full extent of its circulating value. While some, such as the paper money, which now constitutes so large a part of the money of the civilized world, is not wealth at all. For, as we have seen, nothing is wealth in the economic sense, unless and in so far as the value which attaches to it is a value of production. The value arising from obligation constitutes no part of the wealth of nations.