254 Mr. Faraday on 



for money which did not represent the labour of some other 

 man. The fact is, that payment by Government notes 

 would be merely a monetising of the labour of the mert 

 embodied in the public works, and the exchange would have 

 to be effected afterwards for what it was worth. The mere 

 monetising of a given construction or commodity does not 

 imply exchange ; because if there were no other labourers 

 or no other commodities in the world, the notes representing 

 their own work merely might still be paid to the labourers ; 

 and such notes would not be convertible in the product of 

 the particular labour monetised, and would not therefore 

 have the inherent force of true monetary ions.* 



The payment of gold and silver money, however, does 

 involve exchange, because such money is in itself other 

 labour and other consumption. A piece of gold or silver 

 now circulating may have been produced in the time of 

 Solomon, but it still replaces certain commodities definitely 

 consumed in its production ; it implies a certain vacuum 

 created which it has itself filled, a certain quantity of labour- 

 energy converted into the latent form ; and in every 

 exchange in which it takes part the void, so to speak, 

 created by its movement is filled by an equivalent modicum 

 of labour-energy represented by some other commodity 

 or service. 



But if any given monetary ion is to remain in practically 



*Mr. H. D. Macleod {Theory of Credit, Vol. II., Part 2) urges that the 

 real weakness of what he calls "Lawism" (the paper money theory of Law) 

 is the idea that money "represents" commodities. Is not the real weakness 

 of "Lawism" the fact that notes issued against land, for instance, do not 

 effectively represent commodities, being inconvertible in the commodity against 

 which they are issued ? The holder of a particular note under Law's scheme 

 could not redeem it in the particular fragment of land represented, nor would 

 that particular fragment be cajDable of circulation or have any value or utility if 

 exchanged. Notes, or credit instruments in any form, are only so far sound as 

 they effectively represent or are convertible into commodities or services having 

 the full value in exchange expressed by the denomination of the particular note 

 or instrument. 



