The nation does not indeed spend all that it consumes; the name expenditure, in such a case, can properly be given to that consumption only which produces nothing; while that part of the consumption which represents the wages of productive workmen, is an employment of funds, not an expenditure. Thus, the nation, when it forms manufacturing establishments, does not diminish its consumption; it consumes, in a productive manner, what it formerly consumed unproductively. Still, however, this employment of the national produce in giving movement to new labour, though it does not destroy the balance between production and consumption, renders it much more complex. The new produce thus obtained must, at last, find a consumer; and though it may be generally affirmed, that to increase the labour is to increase the wealth, and with it in a similar proportion the revenue and the consumption; still it is any thing but proved, that by too rapid an increase of its labour a nation may not altogether deviate from the proper rate of consumption, and thus ruin itself by economy as well as prodigality. Happily, in most cases, the increase of capital, of revenue and of consumption, requires no superintendence; they proceed, of their own accord, with an equal pace; and when one of them, at any time, happens to pass the others for an instant, foreign commerce is almost always ready to restore the equilibrium.
We have designedly carried on our history of the formation and progress of wealth thus far, without mentioning a circulating medium, to show, that, in fact, such an instrument is not necessary for its development. A circulating medium did not create wealth; but it simplified all the relations, and facilitated all the transactions of commerce; it gave to each the means of finding sooner what suited him best; and thus presenting an advantage to every one, it still further increased the wealth, which was already increasing without it.
The precious metals are one of the numerous values produced by the labour of man, and applicable to his use. It was soon discovered that they, more than any other species of riches, possessed the property of being preserved without alteration for any length of time, and the no less valuable one of uniting easily into a single whole, after being divided almost infinitely. The two halves of a piece of cloth, of a fleece, and still less of an ox, - though these are supposed to have once been employed as money, - were not worth the whole; but the two halves, the four quarters of a pound of gold are always, and will be, a pound of gold, however long they may be kept. As the first exchange of which men feel the need, is that which enables them to preserve the fruit of their labour for a future season, every one became eager to get precious metals in exchange for his commodity, whatever it might be; not because he at all intended to use those metals himself; but because he was sure of being able to exchange them at any time afterwards, in the same manner, and for the same reason, against whatever article he might then need. From that time the precious metals began to he sought after, not that they might be employed in the use of man, as ornaments or utensils, but that they might be accumulated, at first, as representing every species of wealth, and then that they might be used in commerce, as the means of facilitating all kinds of exchange.
Gold dust, in its primitive state, continues, even now, to be the medium of exchange among the African nations. But when once the value of gold comes to be universally admitted, there remains but a single step, much easier and far less important, till it be converted into coin, which warrants, by a legal stamp, the weight and the fineness of every particle of the precious metals employed in circulation.
The invention of money gave quite a new activity to exchange.
Whoever happened to possess any superfluity had no longer occasion to seek the article likely to be needed in time to come.
He no longer delayed selling his corn till he should meet the oil-merchant or the wool-dealer to offer them the thing they wanted; he reckoned it enough to find money, being certain that for this he could always obtain any required commodity. The buyer, too, on his side, needed not to study what would suit the seller: money was always sure to satisfy all his demands. Before the invention of a circulating medium, a fortunate concurrence of conveniences was requisite for an exchange: whereas after this invention, there could scarcely be a buyer that did not find a seller, or a seller who did not find a buyer.
As exchanges, and afterwards sales and purchases, were voluntary, it might be inferred that all values were given for values completely equal. It is more correct, however, to say, that bargains were never made without advantages to both parties.
The seller found a profit in selling, the buyer in buying. The one drew more advantages from the money which he received, than he would have done from his merchandise; the other more advantage from the merchandise which he acquired, than he would have done from his money. Both parties had gained, and hence the nation gained doubly by their bargain. On the same principle when a master set any workman to labour, and gave him in exchange for the work expected to be done, a wage which corresponded to the workman's maintenance during his labour; - both these contractors gained; the workman because he had received in advance the fruit of his labour before it was accomplished; - the master, because this workman's labour was worth more than his wages. The nation gained with both; for as the national wealth must, at the long run, be realized in enjoyment, Whatever augments the enjoyment of individuals, must be considered as a gain for all.
