SOCIAL COMPTABILISM
By Ernest SOLVAY
THE CHEQUE AND CLEARING SERVICE
in the Austrian Postal Savings Bank
PROPOSED LAW
laid before the Chamber of Representatives of Belgium
By Prof. Hector DENIS

Bruxelles.—Imp. écon., N. Vandersypen, rue de Trèves, 38.

Table of Contents provided by Transcriber

SOCIAL COMPTABILISM ITS PRINCIPLE AND GROUND OF EXISTENCE
SOCIAL COMPTABILISM (COMPLEMENTARY NOTE)
THE CHEQUE AND CLEARING SERVICE
APPENDIX
PROPOSED LAW
PROPOSED LAW DEALING WITH THE ORGANISATION

SOCIAL COMPTABILISM
ITS PRINCIPLE AND GROUND OF EXISTENCE

THEORY OF THE MEASURE OF TRANSACTIONAL VALUE

By Ernest SOLVAY

Would it be possible, in a society constituted as ours is, to replace the agency of money by another agency which would have its advantages without its inconveniences, and which could be considered as theoretically perfect,—in other words would it be possible to replace the agency of money by a system which would be the final expression of possible improvement in this matter and the definitive point to which social economics ought necessarily to tend? This is the subject which we propose to consider.

The paper Social comptabilism and proportionalism[A] which was the starting point of the Institute of Social Sciences of Brussels, was necessarily done in a premature fashion, the subject being regarded from too general a point of view, so as to be harmful to a true explanation of «comptabilism» properly so called. It laid itself open to criticism and lays itself open still; it does not satisfy all those who wish to go deeply into the question. On these accounts we deem it our duty, after what the Institute has already published with reference to it, to return again to the subject, limiting ourselves to purely monetary and account-keeping grounds, and an exclusively theoretical explanation of the conception which, connected as it is with the inductive researches of our fellow workers we have submitted to their consideration.

In the first place let us examine into the use of money in society, and to whom it is of use; we will next consider if it is indispensable.

Money presents itself to us as being an indispensable instrument for effecting transactions which are not mere acts of barter, and it presents itself also as having rendered possible,—and this is of capital importance as the sequel will show,—the registering, the writing down or account-keeping of the transactions, if one may so say, which barter did not permit.

Money is exclusively of use to those who enter into commercial transactions. Thus a man who could sufficiently provide for himself in everything without any such transactions, would not have to make any use of money; a landed proprietor may have a considerable fortune and have only a small monetary need, whilst a merchant whose fortune may be much less will find himself in a very different situation: for the greater part of his fortune consisting of merchandise, continually renewed, and consequently engaged in circulation, his monetary need will be considerable. It may therefore be said that the need of money is proportional to the need for commercial transactions.

Beyond what we have just pointed out, has money fulfilled, or does it fulfil any other purpose? We shall see.

If, from the beginning, we could have had a system allowing us to exactly register transactions, would money have been indispensably necessary? In a word, is money in point of fact the particular element in such transactions which caused the writing of them down, or, in reality does not its use hide an agency entirely independent of money? Let us examine this.

But we cannot do so without offering as a necessary preliminary a few words in explanation of the term «transactions», which we have already used and which will continue to be employed in this paper to the exclusion of the word «exchanges».

In our opinion exchange properly speaking,—true exchange and free from the alloy of any foreign element whatsoever, has never been anything but barter; and as soon as the system of barter was left and that of money entered upon, the exchange system was rather abandoned for another system quite different, than that one form of exchange was simply substituted for another form of exchange. And if we have continued afterwards to make use of the word «exchange» it is due more to the force of habit than in order to define the actual condition of things.

What in reality fundamentally characterises barter, is that it is an exchange, carried out on the spot, of goods immediately usable by the two parties, each of them giving one usable thing in order to enter into possession of another; whilst that which fundamentally characterises the operation of selling and buying, by means of money, is that it constitutes an exchange of goods carried out on the spot, of which one form only can be immediately used by one of the parties, the other party obtaining not a real thing but an instrument by which he will be able to procure it. So that the party who has received the money, the seller, has only thus obtained a power to make subsequently an inverse operation, that is a purchase where and when it pleases him. The operation of selling and buying is then nothing less than the exchange of a thing for a power. But can we still make use of the word «exchange» to define such an operation? We do not think so, and it is for this reason that we substitute for it that of «transaction.»

The word «exchange» has continued to be employed after having quitted the system of barter to enter upon the system of buying and selling, by means of money, just as the expression «money» has continued to be used to describe bank-notes, which are only paper having the power of money, as money is an instrument having the power of «things.»