half, the demand remaining the same and the supply having doubled. Or is it indeed, by chance, that "the law of proportion" confounds itself this time with the so-despised law of supply and demand? This just proportion of M. Proudhon is in effect so elastic, it lends itself to so many variations, combinations and permutations, that it may possibly for once coincide with the relation of supply and demand.
To "make every commodity acceptable in exchange, if not in fact at least by right," in basing it on the function performed by gold and silver, is then to misunderstand this function. Gold and silver are only acceptable in exchange by right, because they are so in fact, and they are so in fact because the existing organisation of production has need of a universal agent of exchange. The right is only the official recognition of the fact.
We have seen this, that the example of money as an application of value passed to the state of constitution has been chosen by M. Proudhon only that he might smuggle in the whole of his theory of exchangeability; that is to say, in order to demonstrate that every commodity valued by its cost of production must arrive at the state of money. All that would be beautiful and good but for the difficulty that precisely gold and silver—as money—are of all commodities the only ones which are not determined by their cost of production; and that is so far true that in circulation they may be replaced by paper. Inasmuch as there will be a certain proportion observed between the needs of circulation and the quantity of money issued, whether the money be in paper, in gold, in platinum, or in copper, there can be no question of any proportion to the observed between the intrinsic value (the cost of production) and the nominal value of
