\"Thedearnessofeverything,\"saysHume,\"fromplentyofmoney,isadisadvantage,whichattendsanestablishedcommerce,andsetsboundstoitineverycountry,byenablingthepoorerstatestoundersellthericherinallforeignmarkets。\"\"Wherecoinisingreaterplenty;asagreaterquantityofitisrequiredtorepresentthesamequantityofgoods;itcanhavenoeffect,eithergoodorbad,takinganationwithinitself;anymorethanitwouldmakeanalterationonamerchant\'sbooks,if,insteadoftheArabianmethodofnotation,whichrequiresfewcharacters,heshouldmakeuseoftheRoman,whichrequiresagreatmany。Nay,thegreaterquantityofmoney,liketheRomancharacters,isratherinconvenient,andrequiresgreatertroublebothtokeepandtransportit。\"
Ifthisexampleweretoproveanything,Humewouldhavetoshowthatinagivensystemofnotationthequantityofcharactersemployeddoesnotdependonthenumericalvalue,butthatonthecontrarythenumericalvalueisdeterminedbythequantityofcharactersemployed。Itisquitetruethatthereisnoadvantageinevaluatingor\"counting\"commodityvaluesingoldorsilverofdiminishedvalue;andasthevalueofthecommoditiesincirculationincreased,therefore,nationsinvariablydecidedthatitwasmoreconvenienttocountinsilverthanincopper,andingoldthaninsilver。Intheproportionthatnationsgrewricher,theyturnedtheless—valuablemetalsintosubsidiarycoinandthemorevaluablemetalsintomoney。Hume,moreover,forgetsthatinordertocalculatevaluesintermsofgoldandsilver,neithergoldnorsilverneedbe\"present\"。Moneyofaccountandmeansofcirculationareforhimidenticalphenomenaandheregardsbothascoin。Becauseachangeinthevalueofthestandardofvalue,i。e。inthepreciousmetalswhichfunctionasmoneyofaccount,causesariseorfallincommodity—prices,andhence,providedthevelocityofmoneyremainsunchanged,anincreaseordecreaseinthevolumeofmoneyincirculation,Humeinfersthatincreasesordecreasesofcommodity—pricesaredeterminedbythequantityofmoneyincirculation。HumecouldhavededucedfromtheclosingdownofEuropeanminesthatnotonlythequantityofgoldandsilvergrewduringthesixteenthandseventeenthcenturies,butthatsimultaneouslytheircostofproductiondiminished。AlongwiththevolumeofimportedAmericangoldandsilvercommodity—pricesroseinEuropeinthesixteenthandseventeenthcenturies;commodity—pricesareconsequentlyineverycountrydeterminedbythevolumeofgoldandsilverwhichthecountrycontains。Thiswasthefirst\"necessaryconsequence\"
drawnbyHume。Pricesinthesixteenthandseventeenthcenturiesdidnotriseinstepwiththeincreasedamountofpreciousmetals;morethanhalfacenturyelapsedbeforeanychangeatallwasnoticeableinthepricesofcommodities,andevenafterthisaconsiderabletimeelapsedbeforethepricesofcommoditiesingeneralwererevolutionised,thatisbeforetheexchange—valuesofcommoditiesweregenerallyestimatedaccordingtothediminishedvalueofgoldandsilver。Hume——whoquitecontrarytotheprinciplesofhisownphilosophyuncriticallyturnsunilaterallyinterpretedfactsintogeneralpropositions——concludesthat,inconsequence,thepriceofcommoditiesorthevalueofmoneyisdeterminednotbytheabsoluteamountofmoneypresentinacountry,butratherbytheamountofgoldandsilveractuallyincirculation;inthelongrun,however,allthegoldandsilverpresentinthecountrymustbeabsorbedascoininthesphereofcirculation。[2]Itisclear,that,ifgoldandsilverthemselveshavevalue,quiteirrespectiveofallotherlawsofcirculation,onlyadefinitequantityofgoldandsilvercancirculateastheequivalentofagivenaggregatevalueofcommodities。Thus,ifwithoutreferencetothetotalvalueofcommodities,allthegoldandsilverthathappenstobeinthecountrymustparticipateasmeansofcirculationintheexchangeofcommodities,thengoldandsilverhavenointrinsicvalueandareindeednotrealcommodities。
ThisisHume\'sthird\"necessaryconsequence\"。AccordingtoHume,commoditieswithoutpriceandgoldandsilverwithoutvalueentertheprocessofcirculation。
He,therefore,nevermentionsthevalueofcommoditiesandthevalueofgold,butspeaksonlyoftheirreciprocalquantity。Lockehadalreadysaidthatgoldandsilverhaveapurelyimaginaryorconventionalvalue;thiswasthefirstbluntoppositiontothecontentionoftheMonetarySystemthatonlygoldandsilverhavegenuinevalue。Thefactthatgoldandsilveraremoneyonlyastheresultofthefunctiontheyperforminthesocialprocessofexchangeisthustakentomeanthattheirspecificvalueandhencethemagnitudeoftheirvalueisduetotheirsocialfunction。[3]Goldandsilverarethusthingswithoutvalue,butintheprocessofcirculation,inwhichtheyrepresentcommodities,theyacquireafictitiousvalue。