Principles Of Political Economy / Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy by John Stuart Mill

Author:John Stuart Mill [Mill, John Stuart]
Language: eng
Format: epub
Tags: Economics
Published: 2009-09-27T04:00:00+00:00

§ 6. Résumé of the subject of money.

Before passing on to another branch of our subject, it may be a gain to clearer ideas to collect in the form of the following classification the main points discussed (in Chaps. IVto X) under money and credit, in continuance of a similar classification of value:

[pg 364] Money measures and transfers value.:

(1.) Hence best served by the precious metals, on account of their peculiar qualities.

(2.) Depends for its value, in the long run, on the cost of production at the worst mine worked (Class III); but practically on demand and supply (Class I). And (if no credit exists) its value changes exactly with the supply, which is expressed by V = 1/(Q × R)

(3.) Under two legal standards, obeys Gresham's law—e.g., experience of Japan and the United States.

(4.) Substitutes for money, called credit (which is not capital, but calls out inactive capital).

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