I say then that the value of gold and silver, especially of the
part that is made into money, although perhaps it has not yet
been calculated accurately, is no longer arbitrary; I add that it
is no longer susceptible of depreciation, like other values,
although it may vary continually nevertheless. All the logic and
erudition that has been expended to prove, by the example of gold
and silver, that value is essentially indeterminable, is a mass
of paralogisms, arising from a false idea of the question, ab
ignorantia elenchi.
Philip I., King of France, mixed with the livre tournois of
Charlemagne one-third alloy, imagining that, since he held the
monopoly of the power of coining money, he could do what every
merchant does who holds the monopoly of a product. What was, in
fact, this adulteration of money, for which Philip and his
successors are so severely blamed? A very sound argument from
the standpoint of commercial routine, but wholly false in the
view of economic science,--namely, that, supply and demand being
the regulators of value, we may, either by causing an artificial
scarcity or by monopolizing the manufacture, raise the
estimation, and consequently the value, of things, and that this
is as true of gold and silver as of wheat, wine, oil, tobacco.
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