CHAPTER V.

The modern theory of money essentially wrong-How money stimulates industry-Civilisation impossible without money -The power of money.

THE

HE brief reference already made to the inconveniences inseparable from a system of barter, and to the parts played by the go-between commodities first introduced to lessen these inconveniences, is sufficient to show that such intermediaries undoubtedly served primarily as “media of exchange." But is this fact in itself an adequate ground for concluding that money continues to serve a similar end in the economy of modern civilised life? The complex systems of currency now legally established, bear but very little resemblance to the embryonic monetary contrivances first employed to reduce the difficulties of barter; and in its development may not the invention have acquired functions altogether unknown to early man? The world of to-day must be so very different from the world of that prehistoric period when the idea of money was first conceived, that we can hardly expect to find what was true of the device in its most

primitive forms to be equally true of the vast and intricate machinery by the aid of which modern international commerce is kept in motion, and the innumerable complexities of a highly-civilised state of society are so readily

overcome.

When we speak of money being a “medium of exchange," or "an instrument that facilitates exchanges," we imply the existence of a condition of affairs in which certain things are not only ready and waiting to be exchanged, but in which those things would be exchanged even if there were no money. Now, if we turn to history to discover what things have actually been exchanged between those to whom the device was unknown, we find ourselves back amongst primitive folk, whose trade-if their petty barterings can be so called-never advanced far beyond the interchange of such ornaments and articles of rude clothing as gratified their respective vanities. We find that until money had been introduced and generally adopted, the human family have invariably remained in that semi-barbarous, agricultural, or pastoral state in which we still find petty tribes in the far interiors of Asia and Africa. Search where we may we shall not be able to discover one solitary example of a marked advance in the direction of social unity, political progress, and civilisation, without the aid which the institution of money affords.

In other words, most of the rights, services, and commodities, the exchange of which is supposed to be now "facilitated" by the use of money, have never been known to exist even where money itself has been unknown. How then can we be satisfied that money is simply a "medium," when without its influence history proves that there would be but very little between which to "mediate"?

There are implanted in the human mind, over and above the appetites common to all members of the animal creation, certain powerful desires, to the operation of which we can directly trace the conditions of existence in which we now find ourselves. Although it is beyond human ability to explain the ultimate objects served by these innate desires, one fact is unquestionable: and that is, that the desires are so powerful that upon their gratification depends in a large measure the health and happiness of civilised society. These human peculiarities may be roughly generalised under the headings of (1) the various vanities, (2) the love of domination over everybody and everything, (3) the inclination towards material and mental progress, and (4) the workings of those forces usually referred to as religion.

Here we have the leading motives that explain the actions of the great majority of the human family. They are motives that exist alike in the savage breast of the uncultivated

and the trained mind of the highly civilised. They have been found continually and more or less powerfully at work in every race of man hitherto discovered. A curious fact about them that is worthy of especial attention is, that so far from their strength being diminished by gratification, precisely a contrary effect is produced. The more civilised mankind becomes, the greater the number and power of the desires that call for attention.

or

Now in spite of the fact that primitive man has within him the same peculiar motives to industry that are in other and more highlydeveloped forms influencing the actions of the civilised members of the species, until the institution of money has begun to exert its powers he has nevertheless for centuries remained in that semi-barbarous condition of life, such as that in which European travellers have found the aboriginal inhabitants of America Australia. But no sooner has that great device been discovered whereby not only can the labours of the human race be most effectively divided, but the products of those labours be as effectually distributed, then the road to progress and civilisation has opened, and those innate motives to industry to which we have just referred have received a stimulus, the power of which it is almost impossible to magnify. Men's desires have increased by leaps and bounds, and with the ability to

gratify those desires, fresh and more imperious appetites have been developed. By the legal recognition of certain metals as money, man created an object, the possession of which enabled him to command the services of his fellow-men, and so to further minister to the insatiable demands of his ever growing appetites. The existence of so fascinating an object impelled all men to labour at the most arduous. kinds of work in order to secure that by which they could so readily feed their innumerable hopes, vanities, and passions; and in this fact we have an explanation of the progress of the human race from barbarism to civilisation.

It is

The direction, nature, and incidents of the advance cannot be better recalled to mind than by a consideration of the causes that are at this moment bringing about the rapid development of South Africa or Western Australia. discovered that certain comparatively uninhabited regions are rich in that metal of which the great nations of the world now manufacture their money. In consequence of this discovery people from all parts of the world hasten to the spot, and carry with them a multitude of desires that are kept in check simply owing to the absence of money. Money, uncoined, having been found in abundance, the gratification of the desires of all who secure this money follows in due course. Some who have never stirred from London, Paris, Berlin, or New York obtain