XI.: Money finds its own value, according to the whole quantity of it in circulation.

40. The quantities of all commodities are proportioned, as near as may be, according to the demand or vent for them; and their ultimate prices include the prime cost, and the profits taken by the several dealers, thro’ whose hands they pass: If the quantity of any commodity exceeds, or falls short of that proportion, its price will fall or rise accordingly; and sometimes, a change of fashion, or humour, may reduce the price of a particular commodity, almost to nothing. The prices of things in general are proportioned sufficiently near, according to the above rule; or, according to their prime cost to the manufacturer, and the progress they make from him to the consumer. But some things, as above observed, are subject to be reduced by caprice much below this standard; whilst others are raised much above it, by the arts and avarice of monopolizers. And although the silver and gold mines, are in few hands; yet, perhaps, there is nothing whose value is so little in the power of men to regulate, or that keeps so even a pace with the quantity sent to the great market of the world, as bullion. For,

Money, exchanging universally for all commodities, the demand for it is without any limits; it is every where coveted, and never out of fashion: And therefore, on the one side, the whole quantity of money, cannot exceed the whole demand; and on the other side, the whole demand must not exceed, or it must rest satisfied with, the whole quantity. For money, is not like food, cloaths, and other things, that must be proportioned to our bodies.

Therefore, as soon as money becomes properly diffused throughout any community; the value of the sum total of it in circulation, will be equal to the whole quantity of commodities in traffic, in that country: For so much money and goods as lie dormant, or are out of currency and traffic, fall not within the present consideration. And so far as gold and silver, make the money of the world; so far, the whole quantity of these metals in circulation, may be said to be equal in value to all the commodities of the world, exchangeable by them: And as the total of the one, is to the total of the other; so will any given part of the one, be to a like part or proportion of the other.

And hence, the value of a given quantity or sum of money, in any country, will be less or more, according as the sum total, or the whole quantity of money in currency, is greater or less, in proportion to the whole of the commodities of that country, exchangeable for money: Or, the value of a given sum of money will be always, pretty exactly, in a reciprocal proportion to the sum total, or the whole quantity in circulation; that is, the more money there is in currency, the less will be the value of a given sum in proportion to other things; and vice versâ. Hence again, it naturally follows, that, if, in any country, the whole quantity of money in circulation, be either increased, or diminished; the value of a given sum will be accordingly lessened or increased; and that in proportion, as the said sum becomes thereby, a lesser or a greater part, of the whole stock in currency.

The above proposition, is a very fundamental one as to the property of money; and the doctrine it contains is undoubtedly proved, as far as the nature of the thing will admit of, by universal experience: Nor is there room for any doubt to remain, when it is considered that money, by its very institution, is an exchange for all commodities; and applicable, as money, to no other purpose whatsoever. Money being universally diffused, no one hath the power to command the market, or to settle the prices of things; and every one being desirous to have his share of things, according to his income; all the money, in the long run, will be brought into the great market of the world; and its value, or the prices of things, will naturally be adjusted, notwithstanding any efforts to the contrary, according to the proportions above explained.

By way of farther illustration of this subject: Let us suppose that in a certain district, there is ordinarily consumed a thousand bushels of corn a week; and that, (after their money is duly proportioned for the purchasing of all other necessaries, according to the ways of living of the inhabitants,) the weekly allotment for the purchase of corn, is a thousand ounces of money: The price of a bushel of corn, at an average of the several markets within this district, will be an ounce of money. Let us suppose again, that within the said district, the ordinary consumption of a labouring man, or rather of a poor family, is about the value of a bushel of corn a week; part of which is expended in bread, part in other food, and the remainder is reserved for the purchase of cloaths, fuel, for the payment of rent, &c. Here then, the price of labour will be at the rate of about an ounce of money per week; the lowest kind of labourers having a little less, and the common artificers a little more, than in the said proportion. And hence, labour becomes naturally settled, in a certain proportion to the whole stock of money in circulation; and this price again becomes, as hath been before observed, a natural standard of the values or prices of most commodities.