Thus we have here an example of the general rule, that the evolution of ideas and of facts, is always more rapid than that of the words which represent them.

Our opinion with regard to «exchange» will be found all the more justified since it will be seen later on that the power conferred by money upon the seller does not exclusively belong to the monetary system, but that it can be obtained, and that theoretically it always could be obtained, in quite another way, without exchanging anything, without having anything to do with money, by simple entry, registering or writing down of figures on paper which is not exchanged, but which remains in one's own hands.

Let us now come back to the question.

We proceed to show that the relative value of things is independent of the unity of value chosen, and that the transactions can be registered, written down, abstraction made of the real, actual value of the material support which has served to fix this unity.

In a general way and within possibly narrow limits, very different and variable according as the case may be, given the existence in actual society of fortunes and desires of all degrees of importance, one can, in principle, admit that theoretically, the value v of a thing or of a certain quantity of goods, is proportional to the average d of the desire to possess it, which the men demanding it have, either on account of its use, or from any other reason, multiplied by the number h of these men and divided by the number o offered of this thing; these three factors d, h and o not being probably in other respects determinable with precision.

We shall then have for the formula of value:

v = u × dh/o

u being a coefficient of proportionality depending on the unity of value adopted.

It will be seen that the term dh/o represents in reality the account of the conditions of the supply and of the demand at the moment and at the place where the value is determined[B]. In substituting E, we have a new term expressive of the value:

v = u × E.

The relatively fixed value of the precious metals has made it possible for the unity of value to be determined on and easily represented by means of a certain quantity of metal, and the actual monetary system is the result, the value of all things having been henceforth expressed by means of the monetary unity identifying itself with the unity of value determined on. But it may in consequence be remarked in looking closely into this, and it is important to do so, that this result has been reached not because the thing: «metal money», has made its appearance, but because thanks to it, a common denominator of the value of things in general has been employed which did not exist before.

Now, as we shall see, this common denominator does not of necessity remain invariably tied to the thing, money, or more generally to any sort of material support which has served to define it at a given moment. Once fixed it may be considered independently of this support; becoming thus a permanent quantity in time and space, taking in consequence the character of a common measure of the transactional value of things and being employed as a unity of measure of that value[C].

In reality this hypothesis could only be made when there was no such thing as money, and a system of barter exclusively prevailing, those engaged in making transactions might have said to themselves. «Let us choose a common denominator of the value of things that we may write down our transactions, and not be any longer obliged to carry on the exchange of usable things when we do not want them, let us take for example the value of a kilogram of wheat here at ... to day, the ... as common denominator and let us calculate directly the value of all other things by this unity.

»Evidently every other thing would be worth as many times this unity as we see men would give kilograms of wheat to possess it, and thus the numerical value of things would be easily established.

»Let us agree further in future always to express the value of things by this initial value of the kilogram of wheat, a value which has only existed during the preceding operation, and which strictly can only have existed for an indefinitely short time, but which can be considered as absolutely permanent, and apart from any necessity of occupying ourselves with the variation of value undergone in time and space by the kilogram of wheat itself.»

It will result that if v' is the value of a thing at any period and at any place of which the originally fixed value was v, the relations will be:

that is the value v of a thing at any time and place is equal to its initial value simply multiplied by the proportion of the terms which represent the conditions of the supply and demand at the two periods under consideration.

Let us note, that, as it should do the formula v'/v = E'/E shows that the unity is eliminated when the point in question is the estimate of relative values.

It is needless to say that we do not insist on the practical possibility of the determination of the coefficients E and E', which intervene in the preceding formula. We have in effect said that the factors d, h and o, do not appear to us determinable; we limit ourselves simply to showing here, the theoretical possibility of the system.

What is important to remark is that in proceeding, as we have just pointed out, in all estimates of value and in consequence in the registration of all transactions, the variation in the value of the material support, corn, metal, etc. of the unity adopted does not intervene in any way.

It will be further seen and we would insist on this point, that the common denominator of the value of things takes in this system, by the fact of its invariability, the character of a common measure; that it can in consequence be taken as unity, and considered in an abstract way.

In fact this unity served once in a certain place and at a given moment to fix the initial value of things. From that moment it separates itself from the material thing which served to define it, which has momentarily represented it, and which has served as a support in our mind to effect the operations necessary to the relative fixing of the value of things. These operations made, it is of little consequence if the value itself of the kilogram of wheat varies, as is the case with the value of every thing else. Its initial value was for ever fixed, it can be taken as absolutely permanent and immutable,—the fundamental condition which a unity of measure ought to satisfy.

In like manner original values of all kinds are equally constant quantities and anyone from among them might be taken as unity.

In due course the actual values of things alter; varying continually, and it is the same with the kilogram of wheat or with any support whatever that has served to define the unity. The new values will always express themselves