But however desirable may be the invariableness of money, complete uniformity of value is an impossibility. There is no such thing as absolute value. All descriptions of measures correspond with absolute qualities, such as length, weight, and number, and may be invariable. But as value is a relative and not an absolute quality, it can have no invariable measure or constant representative. The value of all com modities is continually changing; some more and some less than others. Their real value depends upon the quantity of labour expended upon them ; but temporary variations in their exchangeable value are caused by abundance or scarcity—by the relations which subsist between supply and demand. No commodity yet discovered is exempt from the laws which affect all others. If precisely the same quantity of labour were required for a long series of years to produce equal quantities of any commodity, its real value would remain unchanged ; but if it were at the same time an object of demand amongst men, variations in the proportion between its supply and the demand for it, would affect its exchangeable value. It follows therefore, that to be an invariable standard, money must always be produced by the same amount of labour, and in such quantities as shall constantly bear the same proportion to the demand for it.
But even if any description of money could be invented which possessed these extraordinary qualities, the value of all other articles would still be variable, and thus its representative character would be disturbed. At one time, for example, a given denomination of money will represent a certain number of bushels of wheat ; at another time the same money, unchanged in real value or demand, will represent a much greater number. Every application of machinery, every addition to the skill and experience of mankind, facilitates production, and by nein; labour reduces the real value of commodities. Their value Ia ales liable to temporary deprocintion from other causes, from too abun dant a supply, or from an insufficient demand. But if money maintain the same value, in relation to itself, notwithstanding the diminished value of other articles, its proportionate value is practically increasing.
In all ages of the world, and in nearly all countries, metals seem to have been used, as it were by common consent, to serve the purposes of money. It is true that other articles have also been used, and still are used, such as paper in highly civilised countries, and cowrie shells in the less civilised parts of Africa ; but in all some portion of the currency has been and is composed of metals. We read of metals amongst the J awe, the Chinese, the Egyptians. the Persians, the Greeks, the Romans. In the earliest annals of commerce they are spoken of as objects of value and of exchange ; and wherever commerce is carried on they are still used as money. But as they were introduced for this purpose in very remote times, it Is not probable that they were selected because their value was supposed to be less variable than that of other commodities. More than two thousand years ago, indeed, Aristotle
saw clearly (but what did he not see clearly 1') that the principal use of metallic money was that its value was less fluctuating than that of most other substances Ethic. Nicom.' v. 5). But however clearly this great philosopher may have observed the true character of money, many ages after the circulation of metals, those who first used them were men engaged in common barter, who considered their own con venience and security without reference to any general objects of public utility. They must have used metals not as a standard of value but as an article of exchange, which facilitated their barter. All metals are of great utility and have always been sought with eagerness for various purposes of use and ornament : but gold and silver are especial objects of desire. Their comparative scarcity, the difficulty and labour of procuring them, theirextraordinary beauty, their singular purity, their adaptation to purposes of art, of luxury, and display ; their durability and compactness ; must all have contributed to render them most suitable objects of exchange. They were easily conveyed from place to place ; a small quantity would obtain largo supplies of other articles; they were certain to find a market ; none would refuse to accept articles in payment which they could immediately transfer to others : and thus gold and silver naturally became articles of commerce, readily exchangeable for all other articles, before they were circulated as money, and were acknoaledged as such by law and custom.
The transition of the precious metals from the condition of mere articles of exchange, amongst many others, to that of a recognised standard of value by which the worth of all other articles was estimated, was very natural. Merchants carrying their wares to a distant market would soon find it necessary to calculate the quantity of gold and silver which they could obtain, rather than the uncertain quantities and bulk of other commodities. They would not know what articles it would be prudent to buy until they reached the market and examined their quality and prices : but a little experience would enable them to predict the quantity of gold and silver which would be an equivalent for their own merchandise. Merchants from different parts of the world, meeting one another in the same markets, and finding the convenience of emceeing the value of their goods in gold and silver, would begin to offer them for certain quantities of those metals. instead of engaging, more directly, in bartering one description of goods for another ; and thus, by the ordinary course of trade, without any law or binding custom, the precious metals would become the measure of value and the medium of exchange.