244 MR- Faraday on 



portion to the relative services rendered, then the measure 

 of value and the medium of payment should be approxi- 

 mately subject to the same increasing influences which 

 affect the quantity of commodities ; the ratio between them 

 should remain unchanged. For it is clear that, if the 

 producer has certain payments to make to the creditor class 

 in the standard of value, and, by the exercise of genius, or 

 even increased labour, he so improves his production that 

 the yield is doubled and prices fall proportionately, then a 

 portion of his increased production, greater or less accord- 

 ing to the proportion of his debt in the standard to the 

 total value of his production, passes over as unearned 

 increment to the creditor. An equivalent change in the 

 volume or value of the standard, by leaving prices un- 

 changed, would leave the reward of increased or more 

 efficient labour in the hands of the producer without robbing 

 the creditor. We may put it that steady prices are most 

 conducive to equitable distribution. According to Sir 

 Thomas Farrer's contention, the value of the standard is 

 altered by the addition of credit to the volume of gold 

 money ; it must therefore be altered by its withdrawal ; 

 and both operations are dependent on the interests and 

 convenience of the gold-owning class. 



In dealing with this point, Sir Thomas Farrer falls into 

 error in an illustration of the " strange results " which 

 might follow an alteration in the value or quantity of the 

 standard or legal tender commodity proportionate to that 

 of the non-legal tender commodities. " Suppose, for 

 instance," he says, " that the price of labour remains the 

 same, but that the price of all articles consumed by workmen 

 falls in consequence of improvements in production, the 

 effect of lowering the measure of value in accordance with 

 the average of prices would be to diminish money wages, 

 and at the same time, in addition, by raising prices, to 

 diminish real wages." The argument overlooks the fact, 



