ON VARIATIONS IN THE VALUE OF THE MONETARY STANDARD. 163 



in his book on Money. It is discussed in the sixth and the tenth sections 

 •of the former Memorandum. 



2. The Consumption Standard takes for the measure of appreciation 

 ■or depreciation the change in the monetary value on a certain set of 

 articles. This set of articles consists of all the commodities consumed 

 yearly by the community either at the earlier or the later epoch, or some 

 mean between those two sets. This standard has been recommended by 

 many eminent writers, in particular by Professor Marshall in the 'Contem- 

 porary Review ' of 1887. It is proposed by the Committee as the principal 

 standard. It is discussed in the second section of the former Memorandum. 



3. The Ourrencij Standard takes as the measure of appreciation or 

 depreciation the change in the monetary value which changes hands in a 

 certain set of sales. These sales comprise all the commodities bought and 

 sold yearly at the earlier epoch or at the later epoch, or some mean 

 between those quantities. This standard appears to be implicit in much 

 that has been written on the subject, but to have been most clearly stated 

 by Professor Foxwell. It is discussed in the second section of this 

 Memorandum. 



4. The Income Standard takes as the measure of the appreciation or - 

 depreciation the change in the monetary value of the average consump- 

 tion, or in the income per head, of the community. This standard is 

 proposed in the fourth and fifth sections of the former Memorandum. 



5. The Indefinite Standard takes as the measure of appreciation or 

 depreciation a simple unweighted average of the ratios formed by divid- 

 ing the price of each commodity at the later period by the price of the 

 same commodity at the earlier period. The average employed may be 

 the Arithmetic Mean used by Soetbeer and many others, or the Geometric 

 Mean used by Jevons, or the Median recommended by the present writer. 

 This standard is recommended by the practice of Jevons ' and the theory 

 of Cournot.2 It is discussed in the eighth and ninth sections of the 

 former Memorandum, and the fifth section of the present one. 



' Most of Jevons' celebrated calculations (^Currency and Finance, Yi.., III., and 

 IV.)., and in particular his calculation of the Probable Error incident to his result 

 {Ihiil., p. 157), involve this conception. 



- Cournot has considered our problem in each of the five volumes in which he has 

 treated of, or touched on, Political Economj' {Diotioiuiry of Political Economy, Art. 

 Cournot). It is sufficient here to refer to the first and the last of those works, the 

 Recherchesot 1838 and the Reime Sommaire of 187G— the Alpha and almost the t)mega 

 of economic wisdom. From these it is clear that variation in the ' absolute ' or ' in- 

 trinsic' value of money, in Cournot's view, corresponds to the ' Indefinite Standard ' as 

 defined in Section viii. of the predecessor to this Memorandum. Cournot illustrates 

 the variation due to a change on the part of money, by that change in the position 

 of the earth with respect to the stars, which is due to the motion of the earth. In 

 this analogy the stars are treated as ^ Taints' {Becherches, Art. 9). No account is 

 taken of their mass. The context shows that Cournot contemplates a simple average 

 of distances between the earth and each star ; not a /(vvV/ZttoZ average, or the distance 

 between the earth and the centre of ijraiity of the stars. In his later works he ex- 

 pri^ssly declares against, or at least thinks unbefitting highest place, the measure of 

 what he calls the 'power of money ' (Ilevue Sommaire, Sect. 3), that is, in our terms, 

 the Consumption Standard ; the analogy of which is the distance of the earth from 

 the centre of gravity of the stars, or rather of certain select stars — say those which 

 are nearest to our human sphere. Tlie Currency Standard, of which the analogy is 

 the distance of the earth from the centre of gravity of all stars whatever, does not 

 seem to have been entertained by Cournot. 



Cournot, alluding to Jevons' treatment of the problem in J/o«c;/, not unjustly takes 

 him to task for not having distinguished ' assez nettement ' variations in the ' intrinsic 



M 2 



