ON VARIATIONS IN THE VALUE OF THE MONETARY STANDARD. 299 



peculiarity of this standard, which Professor Nicholson has recently pro- 

 posed, is its taking as the measure of the purchasing power of money 

 not the value of the quantity of things consumed, but the quantity of 

 things in existence, the amount of things saleable rather than of things 

 sold. This is certain to be a good method, in so far as it is not likely o 

 diflPer much from the Consumption- Standard.' It might be dangerous 

 in so far as it attaches weight to a comparatively unimportant dimension, 

 the projection into the future of present value. 



Let us figui'e different categories of wealth, divided according to the 

 attributes of fixity and proximity to their final cause, bj the image of 

 trees bearing fruit, some ripe for consumption, some coming on. It is 

 an intelligible principle that the importance of each botanical species is 

 measured by the money value of the fruit of that species which is con- 

 sumed in a day or year. But, according to the new principle, the marks 

 of importance are the longevity of the tree and the time which the fruit 

 takes ripening. But what if a fruit much in vogue be of the nature of 

 an annual ? The gardener, taking stock of the orchard, may value the 

 existing plants of this species at less than the pei-ennial trunks, which 

 will yield to a late posterity a comparatively little desired product. But 

 the general public may be much more concerned by a change in the price 

 of the former article. 



According to the new principle, ducks' eggs shall count for more tban 

 hens' eggs, other things being equal, if the former fowl lives longer. 

 Reasonably, it may be urged, for the longer-lived fowl is more valuable. 

 Yes ; but if the same number of ducks' eggs and of hens' eggs are, exempli 

 gratia, eaten each year, then feiver ducks will be used up each year in 

 order to supply the egg market. Whether, then, we compare the two 

 intei-ests by way of the eggs or of the fowls, the Consumption-Standard 

 gives a consistent and plausible result. Again, suppose a watch costs ten 

 times as much as an umbrella, that everyone who has an umbrella has a 

 watch, and everyone who has a watch has an umbrella, and let a watch 

 last ten times as long as an umbrella. At any given moment there are 

 in existence as many watches as umbrellas, but in every year there are 

 ten times more umbrellas than watches used up. According to the 

 Capital-Standard watches shall count for ten times as much as umbrellas ; 

 for just as much according to the Consumption- Standard. Which is the 

 more reasonable ? 



It is contended that the new principle has the advantage of being 

 definite and determinate.^ This is a modest claim, and one which cannot 

 be refused to the simple unweighted index-number, or indeed to any 

 assigned random principle of selection ; for instance, that each article 

 should have a weight varying with the position in the alphabet of the 

 initial letter of the English word which designates the commodity. But 



' In so far as estimates are based upon income, and income is coincident with 

 expenditures, tliere might not be much diiference between the three principles which 

 we liave designated by the letters D, E, e. In pi-actice the difference might become 

 evanescent in virtue of the theories relative to the effect of different weiffhtsvi-pon the 

 resulting mean, which we have given in our fifth section. 



- It has been objected that the present writer should not throw stones against a 

 ' standard possessed of ' objective ' solidity, while he himself occupies the position of a 

 glasshouse construction based upon illusoiy utilities. It should be observed, however, 

 that the Consumption-Standard, in that it is based upon definite and, as it is found, 

 steady returns of National Expenditure, has just as much claic;s to objectivity as a 

 standard based upon the items of the National Inventory of all vendible articles. 



