classes that it is with them that the wealth of a commercial country will most accumulate; but that the masses having nothing but their labour to exchange for gold, which is cheaper, and cannot be again exchanged for so much of other wealth, they are no better off, and, in some cases, the change is to their disadvantage. And these facts throw some light upon another fallacy maintained by McCulloch and others against the opinion of Adam Smith, viz., that what is for the benefit of the individual must be for the benefit of the community, because the community is only an aggregate of individuals.

Great Britain is undoubtedly greatly richer upon the whole than she was a hundred years ago; but notwithstanding the great increase of population, whose labour is a source of wealth, vast numbers are unquestionably worse off than their predecessors were then. Wealth is much more unequally distributed; and, in spite of Mr. McCulloch, it may be held to be better that ten men as a body should have nine pounds each, making a total of ninety pounds, than two of their number should have forty pounds apiece, other two ten pounds, and the rest nothing at all, although the aggregate is one hundred instead of ninety pounds.

To observant persons it is visible that we are meeting at every turn the natural result of stimulus given to all kinds of production, or, in other words, to industry, by the large increase in the quantity of gold, and the greater usefulness accruing to gold as an article of exchange from

the growing freedom of trade and facility of intercourse between different parts of the world. But the profits of commercial prosperity, upon which we so much pride ourselves, go into the pockets of the traders, and not the workers and producers. This result was not intended; but it will be the source of the troublesome social questions which are looming in the not distant future, and have already sporadically shown themselves in many shapes. It was supposed a few years ago that political reforms were the panacea for all the evils from which the masses of the people suffer. It is beginning to be apparent in the republican United States that even the freest institutions of that cynosure of so many eyes in England will not prevent disproportionate accumulations of riches in the hands of a few; and already discussions are arising there as to what should be done to secure some more equitable redistribution.

My essay is intended as a plea for some consideration of the facts I have adduced, which I hope may be given by others better qualified than myself to deal with the whole subject. It is from disregard of them that the confusion arises, which is obvious in such controversies as that between Mr. Goldwin Smith and Mr. Greg, recently published in the Contemporary Review,' as to what is culpable luxury,' in which the quite separable, moral and economical, aspects of expenditure are so mingled as to present nothing but a blurred and unintelligible whole. If I am foolish enough to give five

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hundred gold sovereigns, exchangeable for a great many purposes, in exchange for a diamond, useful for none, my conduct may have been both idiotic and immoral in its relations to persons having claims upon me; but why my exchanging with another man a metal, alleged to be worthless, for a still more worthless stone, should have any effect in diminishing production, or the total wealth of the country, or the happiness of my poorer neighbours, I admit myself to be quite unable to perceive.

If my conclusions are not altogether erroneous, this, at least, is plain-that there should be some revision of the usual dogmas and teaching of the economists. It may be seen that in the actual transactions of the world they are generally disregarded, though they often are the real seed of the commercial panics which distress communities. Still students should not be misled by sophistical statements that money is not wealth at all, but only a medium of exchange; that gold is not capital; that wealth is not luxury; and that demand for commodities is not demand for labour. Let us not perplex ourselves and others by fanciful explanations of social circumstances. Let the truth be discerned and admitted that the artificial fabric of society and our system of commerce, as they are constructed under what we call civilisation, are based upon the exchangeable value of gold and its recognition as wealth; and that if it were in our power to demolish this foundation the whole superstructure would subside in confusion.

MONEY-A FUNCTION.

IN In my last essay I pleaded for the consideration of some facts which, I think, show that the precious metals, and especially gold, cannot justly be regarded as only a medium of exchange in the same manner as a banknote may properly be so regarded. The intrinsic exchangeable value of gold, and the possession by gold of all the essential characteristics of wealth, must be admitted, it appears to me, before we can obtain any satisfactory solution of the many interesting and highly important questions arising out of the commerce of a community within itself, or of nations with each other.

When once a glimpse has been obtained of the character of the fundamental error which vitiates so much of the arguments used on economical problems, it becomes most interesting to observe the manner in which it starts up every now and then in all branches of enquiry, like an ignis fatuus, and leads the expounders of these questions along paths which terminate in a bog of paradoxical perplexity, from which they only clumsily escape by floundering through an attempt to show that one and one make three, It is to me a matter of the

gravest astonishment that a man with the intellectual power and logical perception of Mr. Mill, should not have known, when he stated that there cannot be intrinsically a more insignificant thing in the economy of society than money-when he called it a machine, a medium, or oil for machinery-that he had really misconceived the whole affair, that he was dealing metaphysically with what is a matter of simple physics, and that it would have been far more scientifically accurate and philosophically true to say that there is no such distinct thing as money—that all articles of exchange fulfil the function of money that all commercial dealings are reducible in principle and in fact to barter, or exchange of one article of value for another-and that he who gives a sovereign for four pairs of gloves has only bartered a piece of gold for manufactured leather. Repeatedly throughout his work he says what is equivalent to an admission of this simple truth; quite as often he goes back to his favourite error, that money is not real wealth, but only represents a right to some of the produce of the country. The distinction between this error and the fact may, at first sight, appear unimportant, but it is very far from being so; in truth, it lies at the very root of all the discussions which are so frequent concerning capital, and currency, and labour; because an idea, which properly belongs only to a function, has become associated with a thing; and then, by a very singular kind of mental legerdemain, a shadow has become confounded with, and in many cases

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