mined- by the prices of commodities, or are the prices of commodities determined by the quantity of current money? Although his analysis is obscured by his fantastic conception of the measure of value, his vacillating view of exchange value and by reminiscences of the mercantile system, he discovers the essential forms of money and the general laws of the circulation of money, because he makes no attempt at a mechanical separation of commodities from money, but proceeds to develop its different functions from the different aspects of the exchange of commodities. Money is used, he says, for two principal purposes: for the payment of debts and for the purchase of what one needs; the two together form "ready money demands." The state of trade and industry, the mode of living, the customary expenditures of the people, taken all together regulate and determine the volume of "ready money demands," i. e. the number of "alienations." In order to effect this multitude of payments, a certain proportion of money is required. This proportion may increase or decrease according to circumstances, even while the number of alienations remains the same. At any rate, the circulation of a country can absorb only a definite quantity of money.[1] "It is the complicated operations of demand and competition which determines the standard price of everything"; the latter "does not in the least depend on the quantity of gold and silver
- ↑ Steuart, l. c., v. 2, p. 377–379 passim (not found in the 1767 London edition. Translator).
