the fluctuations would be even more violent (as may be seen from Figure 3).
If we compare this lower curve of Figure 10 with similar curves calculated for other commodities, we may see whether gold is really any better standard than any one of these other commodities.
Figure 11 gives this comparison. In it I have plotted not only the purchasing power of gold, but also the purchasing power[1] of pig iron, pig lead, cotton, silver, eggs, wheat, carpets, and brick. We see that, in terms of general purchasing power, gold is no more stable than eggs and considerably less stable than carpets!
It will also be of interest to see the relative stability of gold and the other articles combined. To paraphrase an old adage we may say that "in union there is stability." The curve representing the combined eight articles, pig iron, pig lead, copper, silver, eggs, wheat, carpets, and brick (which were originally selected at random, i.e. as representative articles and without thought of being combined), is also shown in Figure 11.
13. Seeing Ourselves as Others See Us
It will help emancipate us from the money illusions if we look at a foreign country instead of at our own. When, between 1871 and 1896, the price of silver in London went down, we readily ascribed the resultant rise of prices in India—a silver-standard country—to the "depreciation of silver." But the Indian
- ↑ The figures for these curves were easily found by dividing the index number for any commodity, pig iron, for instance, by the index number for commodities in general.
