IS ONE MAN'S GAIN ANOTHER MAN'S LOSS? 143 



worth of cloth, the circuit was again complete and the sixpence 

 flew round it in one direction while the goods went round the 

 other way. By maintaining a sufficiently rapid circulation the 

 sixpence sufficed for very large transactions, but there could be 

 no hoarding of money and no money profit. They soon learned 

 better. They invented credit locked up the sixpence in the 

 national bank kept accounts and had a sort of clearing-house 

 where from time to time balances were struck and carried to 

 the new account. So long as the transactions were all con- 

 ducted on the cash down principle, it was abundantly clear that 

 the whole process of buying and selling must come to a stand- 

 still if the sixpence did not continually return to each person 

 who paid it. A closed circuit (as we might say, borrowing a 

 metaphor from electrical science.) was necessary, round which 

 the sixpence travelled from consumer to producer while the 

 goods went the other way from producer to consumer. The 

 simplest circuit was that of two people, as when grain was 

 exchanged directly against cloth, but not unfrequently all five 

 producers were in the circuit at once. The weaver wanted grain, 

 the farmer fish, the fisher venison, the hunter wood, the car- 

 penter cloth. The order in which they took the goods could be 

 varied as much as the laws of permutation would allow, but 

 ultimately each family got for the purposes of consumption an 

 amount of goods of exactly the same value as that which they 

 produced for sale. The laws of supply and demand were in full 

 force and fixed the prices which rose and fell in open market. 

 Property was divided on principles of the strictest egotism, and 

 yet no one could make a profit of one half-penny though all 

 reaped great benefit from the mutual interchange of produce. 



"When the sixpence was locked up, these closed circuits of 

 trade became much less obvious, nevertheless a little thought 

 will show that they were still a necessary feature of the trade. 

 A made what B used, B could buy it, because he made what C 

 used, and he could buy it because he made what A used, and so 

 each got the worth of his work. Even in this state of things 

 there were rich and poor. The rich man was he who could pro- 

 duce most, that most corresponding to a perfectly definite idea 

 being measurable in fact in pennies, though no pennies ever 

 passed. If we imagine all our closed barter circuits drawn as 



