On the Origin of Money by Carl Menger

Author:Carl Menger [Menger, Carl]
Language: eng
Format: epub
Tags: Ensayo, Ciencias sociales
Publisher: ePubLibre
Published: 1892-06-01T05:00:00+00:00

VII. The Process of Differentiation between Commodities which have become Media of Exchange and the Rest

When the relatively most saleable commodities have become 'money', the great event has in the first place the effect of substantially increasing their originally high saleableness. Every economic subject bringing less saleable wares to market, to acquire goods of another sort, has thenceforth a stronger interest in converting what he has in the first instance into the wares which have become money. For such persons, by the exchange of their less saleable wares for those which as money are most saleable, attain not merely, as heretofore, a higher probability, but the certainty, of being able to acquire forthwith equivalent quantities of every kind of commodity to be had in the market. And their control over these depends simply upon their pleasure and their choice. Pecuniam habens, habet omnem rem quem vult habere.

On the other hand, he who brings other wares than money to market, finds himself at a disadvantage more or less. To gain the same command over what the market affords, he must first convert his exchangeable goods into money. The nature of his economic disability is shown by the fact of his being compelled to overcome a difficulty before he can attain his purpose, which difficulty does not exist for, i.e. has already been overcome by, the man who owns a stock of money.

This has all the greater significance for practical life, inasmuch as to overcome this difficulty does not lie unconditionally within reach of him who brings less saleable goods to market, but depends in part upon circumstances over which the individual bargainer has no control. The less saleable are his wares, the more certainly will he have either to suffer the penalty in the economic price, or to content himself with awaiting the moment, when it will be possible for him to effect a conversion at economic prices. He who is desirous, in an era of monetary economy, to exchange goods of any kind whatever, which are not money, for other goods supplied in the market, cannot be certain of attaining this result at once, or within any predetermined interval of time, at economic prices. And the less saleable are the goods brought by an economic subject to market, the more unfavourably, for his own purposes, will his economic position compare with the position of those who bring money to market. Consider, e.g., the owner of a stock of surgical instruments, who is obliged through sudden distress, or through pressure from creditors, to convert it into money. The prices which it will fetch will be highly accidental, nay, the goods being of such limited saleableness, they will be fairly incalculable. And this holds good of all kinds of conversions which in respect of time are compulsory sales.[9] Other is his case who wants at a market to convert the commodity, which has become money, forthwith into other goods supplied at that market. He will accomplish his purpose, not only with certainty, but usually also at a price corresponding to the general economic situation.

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