ing the three terms, price level and money and commodities, and assuming one of them to be fixed, various conclusions can be drawn as to the other two terms. Let P. L. stand for price level, M. for money, C. for commodities. The whole scheme stated in tabular form would be as follows:
With P. L. fixed, M. depends on C.,
or C. depends on M.
With M. fixed, P. L. depends on C.,
or C. depends on P. L.
With C. fixed, P. L. depends on M.,
or M. depends on P. L.
Why Marx, out of these six forms, should pick out one only and harp on it to the exclusion of the other five, we cannot see.
Commodities are produced and sold by private individuals according to their necessities without any regard to the price level. Gold is produced and put into circulation as money by private individuals according to their necessities or interest without any regard to the price level. The price level is the result of these two forces operating against each other, and fluctuates up or down as the production of one factor increases or dimishes with referece to the other. It is about as stable as the mercury in a thermometer. These are the facts. With these facts before him, Marx puts the questions, How much money should there be in circulation? He replies by saying that, if we assume a stable price level, the quantity of money will be regulated entirely by the quantity of commodities sold. This is the sum and substance of thirty-five pages of financial philosophy in Capital, and one hundred and fifty-six pages in Critique. "The mountain labored and brought forth a mouse." It is difficult to treat the proposition with the respect due the author. When metal and coin are interconvertible and coin forms the exclusive currency with no credit, no paper money, no light weight coin, and no debased coin, these being the conditions which Marx assumes in simple circulation, and when this metal is further assumed to have a stable value, and that no change in possible in the unit of price, i. e., in the weight of the coins, then indeed the science of money becomes vastly simplified; it is simplified out of existence. Nothing remains to be said on the subject.
Let us allow Marx to make these suppositions:
1. Supposing gold to be of stable value.
2. And supposing gold metal to be coinable without limitation.
3. And supposing gold coins to be decoinable or meltable without limitation.
4. And supposing as a result of 2 and 3 that gold metal and gold coins are of equal value (disregarding abrasion) and that therefore gold coins are of stable value.
