tegwick
fecc2fd4fa
Implements markitect/llm/ package with concrete LLMAdapter implementations:
- OpenRouterAdapter: HTTP via urllib with retry/backoff on 429/5xx
- ClaudeCodeAdapter: subprocess-based Claude CLI with stdin piping
- Factory pattern: create_adapter("openrouter") or create_adapter("claude-code")
- API key resolution chain: constructor > env var > project-root key file
- 42 unit tests, 2 integration tests (gated on API key / CLI availability)
Also adds the infospace-with-history example with Wealth of Nations VSM
analysis pipeline, templates, schemas, source chapters, and processed
output for chapters 1-2. process_chapters.py now supports --provider
and --model flags for automatic LLM-driven processing.
Co-Authored-By: Claude Opus 4.6 <noreply@anthropic.com>
249 lines
16 KiB
Markdown
249 lines
16 KiB
Markdown
---
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id: book-1-chapter-04
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title: "OF THE ORIGIN AND USE OF MONEY."
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book: "1"
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chapter: 4
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artifact_type: content
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---
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CHAPTER IV.
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OF THE ORIGIN AND USE OF MONEY.
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When the division of labour has been once thoroughly established, it is
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but a very small part of a man’s wants which the produce of his own labour
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can supply. He supplies the far greater part of them by exchanging that
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surplus part of the produce of his own labour, which is over and above his
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own consumption, for such parts of the produce of other men’s labour as he
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has occasion for. Every man thus lives by exchanging, or becomes, in some
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measure, a merchant, and the society itself grows to be what is properly a
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commercial society.
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But when the division of labour first began to take place, this power of
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exchanging must frequently have been very much clogged and embarrassed in
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its operations. One man, we shall suppose, has more of a certain commodity
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than he himself has occasion for, while another has less. The former,
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consequently, would be glad to dispose of; and the latter to purchase, a
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part of this superfluity. But if this latter should chance to have nothing
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that the former stands in need of, no exchange can be made between them.
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The butcher has more meat in his shop than he himself can consume, and the
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brewer and the baker would each of them be willing to purchase a part of
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it. But they have nothing to offer in exchange, except the different
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productions of their respective trades, and the butcher is already
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provided with all the bread and beer which he has immediate occasion for.
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No exchange can, in this case, be made between them. He cannot be their
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merchant, nor they his customers; and they are all of them thus mutually
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less serviceable to one another. In order to avoid the inconveniency of
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such situations, every prudent man in every period of society, after the
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first establishment of the division of labour, must naturally have
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endeavoured to manage his affairs in such a manner, as to have at all
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times by him, besides the peculiar produce of his own industry, a certain
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quantity of some one commodity or other, such as he imagined few people
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would be likely to refuse in exchange for the produce of their industry.
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Many different commodities, it is probable, were successively both thought
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of and employed for this purpose. In the rude ages of society, cattle are
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said to have been the common instrument of commerce; and, though they must
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have been a most inconvenient one, yet, in old times, we find things were
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frequently valued according to the number of cattle which had been given
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in exchange for them. The armour of Diomede, says Homer, cost only nine
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oxen; but that of Glaucus cost a hundred oxen. Salt is said to be the
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common instrument of commerce and exchanges in Abyssinia; a species of
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shells in some parts of the coast of India; dried cod at Newfoundland;
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tobacco in Virginia; sugar in some of our West India colonies; hides or
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dressed leather in some other countries; and there is at this day a
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village in Scotland, where it is not uncommon, I am told, for a workman to
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carry nails instead of money to the baker’s shop or the ale-house.
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In all countries, however, men seem at last to have been determined by
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irresistible reasons to give the preference, for this employment, to
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metals above every other commodity. Metals can not only be kept with as
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little loss as any other commodity, scarce any thing being less perishable
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than they are, but they can likewise, without any loss, be divided into
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any number of parts, as by fusion those parts can easily be re-united
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again; a quality which no other equally durable commodities possess, and
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which, more than any other quality, renders them fit to be the instruments
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of commerce and circulation. The man who wanted to buy salt, for example,
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and had nothing but cattle to give in exchange for it, must have been
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obliged to buy salt to the value of a whole ox, or a whole sheep, at a
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time. He could seldom buy less than this, because what he was to give for
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it could seldom be divided without loss; and if he had a mind to buy more,
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he must, for the same reasons, have been obliged to buy double or triple
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the quantity, the value, to wit, of two or three oxen, or of two or three
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sheep. If, on the contrary, instead of sheep or oxen, he had metals to
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give in exchange for it, he could easily proportion the quantity of the
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metal to the precise quantity of the commodity which he had immediate
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occasion for.
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Different metals have been made use of by different nations for this
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purpose. Iron was the common instrument of commerce among the ancient
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Spartans, copper among the ancient Romans, and gold and silver among all
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rich and commercial nations.
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Those metals seem originally to have been made use of for this purpose in
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rude bars, without any stamp or coinage. Thus we are told by Pliny (Plin.
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Hist Nat. lib. 33, cap. 3), upon the authority of Timaeus, an ancient
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historian, that, till the time of Servius Tullius, the Romans had no
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coined money, but made use of unstamped bars of copper, to purchase
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whatever they had occasion for. These rude bars, therefore, performed at
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this time the function of money.
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The use of metals in this rude state was attended with two very
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considerable inconveniences; first, with the trouble of weighing, and
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secondly, with that of assaying them. In the precious metals, where a
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small difference in the quantity makes a great difference in the value,
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even the business of weighing, with proper exactness, requires at least
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very accurate weights and scales. The weighing of gold, in particular, is
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an operation of some nicety in the coarser metals, indeed, where a small
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error would be of little consequence, less accuracy would, no doubt, be
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necessary. Yet we should find it excessively troublesome if every time a
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poor man had occasion either to buy or sell a farthing’s worth of goods,
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he was obliged to weigh the farthing. The operation of assaying is still
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more difficult, still more tedious; and, unless a part of the metal is
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fairly melted in the crucible, with proper dissolvents, any conclusion
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that can be drawn from it is extremely uncertain. Before the institution
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of coined money, however, unless they went through this tedious and
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difficult operation, people must always have been liable to the grossest
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frauds and impositions; and instead of a pound weight of pure silver, or
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pure copper, might receive, in exchange for their goods, an adulterated
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composition of the coarsest and cheapest materials, which had, however, in
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their outward appearance, been made to resemble those metals. To prevent
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such abuses, to facilitate exchanges, and thereby to encourage all sorts
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of industry and commerce, it has been found necessary, in all countries
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that have made any considerable advances towards improvement, to affix a
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public stamp upon certain quantities of such particular metals, as were in
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those countries commonly made use of to purchase goods. Hence the origin
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of coined money, and of those public offices called mints; institutions
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exactly of the same nature with those of the aulnagers and stamp-masters
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of woollen and linen cloth. All of them are equally meant to ascertain, by
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means of a public stamp, the quantity and uniform goodness of those
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different commodities when brought to market.
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The first public stamps of this kind that were affixed to the current
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metals, seem in many cases to have been intended to ascertain, what it was
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both most difficult and most important to ascertain, the goodness or
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fineness of the metal, and to have resembled the sterling mark which is at
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present affixed to plate and bars of silver, or the Spanish mark which is
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sometimes affixed to ingots of gold, and which, being struck only upon one
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side of the piece, and not covering the whole surface, ascertains the
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fineness, but not the weight of the metal. Abraham weighs to Ephron the
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four hundred shekels of silver which he had agreed to pay for the field of
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Machpelah. They are said, however, to be the current money of the
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merchant, and yet are received by weight, and not by tale, in the same
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manner as ingots of gold and bars of silver are at present. The revenues
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of the ancient Saxon kings of England are said to have been paid, not in
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money, but in kind, that is, in victuals and provisions of all sorts.
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William the Conqueror introduced the custom of paying them in money. This
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money, however, was for a long time, received at the exchequer, by weight,
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and not by tale.
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The inconveniency and difficulty of weighing those metals with exactness,
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gave occasion to the institution of coins, of which the stamp, covering
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entirely both sides of the piece, and sometimes the edges too, was
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supposed to ascertain not only the fineness, but the weight of the metal.
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Such coins, therefore, were received by tale, as at present, without the
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trouble of weighing.
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The denominations of those coins seem originally to have expressed the
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weight or quantity of metal contained in them. In the time of Servius
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Tullius, who first coined money at Rome, the Roman as or pondo contained a
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Roman pound of good copper. It was divided, in the same manner as our
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Troyes pound, into twelve ounces, each of which contained a real ounce of
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good copper. The English pound sterling, in the time of Edward I.
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contained a pound, Tower weight, of silver of a known fineness. The Tower
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pound seems to have been something more than the Roman pound, and
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something less than the Troyes pound. This last was not introduced into
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the mint of England till the 18th of Henry the VIII. The French livre
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contained, in the time of Charlemagne, a pound, Troyes weight, of silver
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of a known fineness. The fair of Troyes in Champaign was at that time
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frequented by all the nations of Europe, and the weights and measures of
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so famous a market were generally known and esteemed. The Scots money
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pound contained, from the time of Alexander the First to that of Robert
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Bruce, a pound of silver of the same weight and fineness with the English
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pound sterling. English, French, and Scots pennies, too, contained all of
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them originally a real penny-weight of silver, the twentieth part of an
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ounce, and the two hundred-and-fortieth part of a pound. The shilling,
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too, seems originally to have been the denomination of a weight. “When
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wheat is at twelve shillings the quarter,” says an ancient statute of
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Henry III. “then wastel bread of a farthing shall weigh eleven shillings
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and fourpence”. The proportion, however, between the shilling, and either
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the penny on the one hand, or the pound on the other, seems not to have
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been so constant and uniform as that between the penny and the pound.
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During the first race of the kings of France, the French sou or shilling
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appears upon different occasions to have contained five, twelve, twenty,
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and forty pennies. Among the ancient Saxons, a shilling appears at one
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time to have contained only five pennies, and it is not improbable that it
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may have been as variable among them as among their neighbours, the
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ancient Franks. From the time of Charlemagne among the French, and from
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that of William the Conqueror among the English, the proportion between
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the pound, the shilling, and the penny, seems to have been uniformly the
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same as at present, though the value of each has been very different; for
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in every country of the world, I believe, the avarice and injustice of
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princes and sovereign states, abusing the confidence of their subjects,
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have by degrees diminished the real quantity of metal, which had been
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originally contained in their coins. The Roman as, in the latter ages of
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the republic, was reduced to the twenty-fourth part of its original value,
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and, instead of weighing a pound, came to weigh only half an ounce. The
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English pound and penny contain at present about a third only; the Scots
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pound and penny about a thirty-sixth; and the French pound and penny about
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a sixty-sixth part of their original value. By means of those operations,
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the princes and sovereign states which performed them were enabled, in
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appearance, to pay their debts and fulfil their engagements with a smaller
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quantity of silver than would otherwise have been requisite. It was indeed
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in appearance only; for their creditors were really defrauded of a part of
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what was due to them. All other debtors in the state were allowed the same
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privilege, and might pay with the same nominal sum of the new and debased
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coin whatever they had borrowed in the old. Such operations, therefore,
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have always proved favourable to the debtor, and ruinous to the creditor,
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and have sometimes produced a greater and more universal revolution in the
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fortunes of private persons, than could have been occasioned by a very
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great public calamity.
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It is in this manner that money has become, in all civilized nations, the
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universal instrument of commerce, by the intervention of which goods of
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all kinds are bought and sold, or exchanged for one another.
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What are the rules which men naturally observe, in exchanging them either
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for money, or for one another, I shall now proceed to examine. These rules
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determine what may be called the relative or exchangeable value of goods.
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The word VALUE, it is to be observed, has two different meanings, and
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sometimes expresses the utility of some particular object, and sometimes
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the power of purchasing other goods which the possession of that object
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conveys. The one may be called ‘value in use;’ the other, ‘value in
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exchange.’ The things which have the greatest value in use have frequently
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little or no value in exchange; and, on the contrary, those which have the
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greatest value in exchange have frequently little or no value in use.
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Nothing is more useful than water; but it will purchase scarce any thing;
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scarce any thing can be had in exchange for it. A diamond, on the
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contrary, has scarce any value in use; but a very great quantity of other
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goods may frequently be had in exchange for it.
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In order to investigate the principles which regulate the exchangeable
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value of commodities, I shall endeavour to shew,
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First, what is the real measure of this exchangeable value; or wherein
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consists the real price of all commodities.
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Secondly, what are the different parts of which this real price is
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composed or made up.
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And, lastly, what are the different circumstances which sometimes raise
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some or all of these different parts of price above, and sometimes sink
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them below, their natural or ordinary rate; or, what are the causes which
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sometimes hinder the market price, that is, the actual price of
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commodities, from coinciding exactly with what may be called their natural
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price.
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I shall endeavour to explain, as fully and distinctly as I can, those
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three subjects in the three following chapters, for which I must very
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earnestly entreat both the patience and attention of the reader: his
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patience, in order to examine a detail which may, perhaps, in some places,
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appear unnecessarily tedious; and his attention, in order to understand
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what may perhaps, after the fullest explication which I am capable of
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giving it, appear still in some degree obscure. I am always willing to run
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some hazard of being tedious, in order to be sure that I am perspicuous;
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and, after taking the utmost pains that I can to be perspicuous, some
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obscurity may still appear to remain upon a subject, in its own nature
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extremely abstracted.
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