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The proposition
that the wealth of
a nation is not in
proportion to the
quantity of money
in it, but to the
rapidity of its circulation,
should
be confined to such
st transfers as
are productive of
labour.
2
The quantity of
and quality of the
land and existing
stock of all kinds
being given, the
addition received
by the wealth of the
nation within the
compass (say) of a
year will be in depend
solely on the labour:
proportion
it will in proportion
of to the quality and
felicity of direction
of the labour exerted bestowed
within that
period, and the
amount of the
what is remaining
of the produce of
that labour over
and above what
has been consumed.
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3
Cases Instances in which
circulation contributes or transfer
of money contributes
nothing to wealth.
1. Where money is
given for evanescent
services, as attendance,
acting, singing, dancing
prostitution, &c.
2. When it passes
from hand to hand
in the a course of
gaming.
3. When it is given
in the way of a
present.
4. When it is
lent on security
or otherwise and
repaid.
5. When it is employd
in the sale
and resale of the
same article, bought
and sold again and
again in the way
of speculation.
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4
If the increase
of wealth depended
strictly speaking
on rapidity of
circulation, as
contradistinct from
the quantity and
direction of the
labour elicited,
the addition capable
of being made to
the quantity of
wealth within
a year would
have no bounds.
5
Bag of money
or as lighter more portable
a bank note
a quantity of
bank notes sent
round a large
company — or
a wheel like a
lottery wheel
with spokes
correspondent to
the number of
the circulators
&c. — would augment
the quantity
of wealth.
as if the effect
depended upon the
quantity of the
motion not upon
the quality of the
destination and
direction.
Stagnation — what
and how occasioned.
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6
The limits to
the accession of
wealth that a
cir nation (independently
of the
accession of foreigners)
can
be made to receive
acquire within
a year is the in
the joint ratio of the
additional quantity
of labour
that can be elicited
during the time,
the superior felicity
of direction that
can be given to
that labour, and
the saving that
can be made in
pog the consumption
of the produce.
7
Where If in
any nation the
whole number of
individuals capable
of labouring, are
in a course of
engaged in labouring
and in doing performing as
much labour as they
are capable of, the
wealth of that nation
can receive
no further increase
unless it be either
by giving a more
advantageous direction
to the quantity
of labour so employd,
or by frugality.
9
Errors depending
on the above error
which makes wealth
dependent solely
on circulation.
1. No matter in
what way money is
spent, so it be spent:
for it equally promotes
circulation.
This is urged in defence
of expenditure
incurred in the purchase
of evanescent
services, or if useless
though permanent
articles: such as
useless buildings
edifices, or buildings
attended with unnecessary
expence.
2.No matter in what
way money is spent,
so it does not go
out of the country: for
it remains in readiness
for circulation.
8
If not only the
whole number capable
of labouring
employd in labouring
and in f that labours
is as much in quantity
as they can bestow
and in respect
of the direction given
to it employd in the
most advantageous
manner, the wealth
of that nation can
receive no further
increase, unless it be
by frugality.
---page break---
These errors result
from the
metaphor employ'd
in in the word circulation.
The metaphor leads
men astray from
the plain truth.
It is not a correct
one. It implies
that whatever
article passes from
any man, that
same article constantly
returns
to the same man
at the long run
It has led Adam
Smith confused the
ideas of Adam
Smith: it has
led him astray from
the subject: it has
set him a talking
about wheels.
Others have
themselves with
speaking of money
as the article circulated.
This confusion
has leads him into
thicker confusion
My way of making
the matter clearer
to makes money
a thing that circulates
other things,
he makes it a wheel
of it, and with this
wheel he circulates
other things, which
never never do make a
single round in it
but immediately
drop out and are
consumed.
---page break---
In the same manner
may be seen
the limits of credit.
All the credit in
the world can not
produce more wealth
than what corresponds
to the quantity
of additional
labour that can be
elicited in a given
time.
So also of paper
money.
---page break---
Paper money does
not represent commodities,
any otherwise
than by representing
actual
money.
Paper money is
an engagement — not
to deliver commodities
to a certain
value, but actually
to deliver actual
money to a certain
amount should it
be demanded.
When the quantity
of paper money
is in a certain ratio
to the quantity of
actual money, the
accomplishment of
the sum total of these
engagements is become,
in an event
that may happen
any day, absolutely
impossible.
No proportion of
paper money, be it
ever so small that
can be sure of maintaining
its credit
in case spite of every
alarm.
---page break---
Let the whole
quantity
amount of actual
money be 30 million
and the whole amount
of paper money be 40
million: the owners
of the paper money
amongst them promise
to deliver
30 million of actual
money, if whenever called
upon, which is more
than there exists.
There is a certain
proportion of paper
money that can
never maintain its
credit, though there
should be no alarm
or what comes to the
same thing is of itself
without any sinister event inevitably productive of
alarm.
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manual of political economy |
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polit. economy |
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circulation |
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jeremy bentham |
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