Silvio Gesell - The NATURAL ECONOMIC ORDER
variations. For these new measurements new prices, ascertained by the local collecting agencies, would be incorporated in a calculation similar to the one sketched above. The new total would give the average change of prices for the whole production of the country. The prices would therefore have to be collected as often as measurements were desired, but the amounts produced would only be taken annually. For foreign commodities statistics of imports would be used. Since the volume of production varies as much as prices, the new statistics of production would not be immediately available for the new measurement. To obtain comparable quantities the new amounts of production must be used first with the old prices, and then with the new prices. The comparison of these two figures gives the index numbers of the movement of the price of money. Merchants' stocks are left out of this calculation. They are included in production, and we may assume that changes revealed by statistics of the prices of production would apply in the same proportion to the wares held by merchants. It would therefore be a useless complication to include the merchants' stocks in the statistics of prices. The same is true of wages, which are already included in the price of wares. It may also be assumed that if factory prices in general are constant, the cost of living must also be constant; that workmen, officials, stockholders and pensioners will be able to buy the same quantity of goods for their money. (The workmen's house-rent, which consists chiefly of interest, cannot be taken into consideration in this connection). Means of production (land, houses, machinery, etc.) must not be included in these statistics. The means of production are no longer wares for exchange, but goods useful to their owners through the employment to which they put them. And the price of things which are not for sale is a matter of indifference. That part of the instruments of production which is consumed by "wear and tear", and written off, is transformed into wares and reappears regularly in the market. It is thus sufficiently represented in the prices of wares. The State, by this plan, neither ascertains the prices nor estimates importance of the separate commodities. The whole work is carried out by the people themselves. The price of money is thus ascertained impartially, outside the sphere of politics. The nation is directly responsible for its monetary standard. The duty of supplying the figures to be placed at the disposal of the State would hardly be a noticeable burden upon the business world, and the records required would be extremely useful to the producer, showing him to what extent his balance was affected by the management of the monetary standard. He would learn how much depended upon his activity and how much upon the activity of the Bank of Issue. The most important objection to this method is that individuals interested in the rise or fall of prices (debtors or creditors) would falsify their reports; that farmers with debts, for example, would endeavour to prove that prices had fallen, in order to cause the State to raise prices by the issue of money - a rise of prices being equivalent to a general relief of debtors. But this danger is not great, since everyone would know how infinitely little his declaration would affect the total result. If an indebted farmer wrongly declared a loss of 1000 marks on a turnover of 10,000 marks, this would be a negligible quantity in comparison with fifty billion marks, the turnover of Germany as a whole. False declarations could be made punishable, and individuals would ask themselves whether the risk was not out of all proportion to the expected gain. Each declaration would also be checked by the others. If the majority of farmers reported a rise of prices, an exception would be noticeable, and the falsifier would have to be prepared to face an inquiry. Obviously this procedure takes no account of the illusion of "value". Wares are paid for with wares, and money can be measured only by wares, by the material characteristics of wares. There is no other measure of money. I have given wares for money and I shall receive wares for it. Not work, not sweat. Someone in exchange for my money gives me an article. How he came into possession of it, how long he worked upon it, is his concern, not mine. I am interested solely in the product. Labour must be sharply distinguished from the product of labour, and 89