Monday, September 12, 2011

Karl Marx, CAPITAL, Volume 1, Chapter 2, "EXCHANGE"









It is plain that commodities cannot go to market and make exchanges of their own account. We must, therefore, have recourse to their guardians, who are also their owners. Commodities are things, and therefore without power of resistance against man. If they are wanting in docility he can use force; in other words, he can take possession of them.[1] In order that these objects may enter into relation with each other as commodities, their guardians must place themselves in relation to one another, as persons whose will resides in those objects, and must behave in such a way that each does not appropriate the commodity of the other, and part with his own, except by means of an act done by mutual consent. They must, therefore, mutually recognize in each other the rights of private proprietors. This juridical relation, which thus expresses itself in a contract, whether such contract be part of a developed legal system or not, is a relation between two wills, and is but the reflex of the real economic relation between the two. It is this economic relation that determines the subject-matter comprised in each such juridical act.[2] The persons exist for one another merely as representatives of, and, therefore, as owners of, commodities. In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but personifications of economic relations that exist between them.

What chiefly distinguishes a commodity from its owner is the fact, that it looks upon every other commodity as but the form of appearance of its own value. A born leveller and a cynic, it is always ready to exchange not only soul, but [also] body, with any and every other commodity, be the same more repulsive than Maritornes* herself. The owner makes up for this lack in the commodity of a sense of the concrete, by his own five and more senses. His commodity possesses for himself no immediate use-value. Otherwise, he would not bring it to the market. It has use-value for others; but for himself its only direct use-value is that of being a depository of exchange-value, and, consequently, a means of exchange.[3] Therefore, he makes up his mind to part with it for commodities whose value in use is of service to him. All commodities are non-use-values for their owners, and use-values for their non-owners. Consequently, they must all change hands. But this change of hands is what constitutes their exchange, and the latter puts them in relation with each other as values, and realizes them as values. Hence commodities must be realized as values before they can be realized as use-values.

On the other hand they must show that they are use-values before they can be realized as values. For the labors spent upon them counts effectively, only insofar as it is spent in a form that is useful for others. Whether that labor is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange.

Every owner of a commodity wishes to part with it in exchange only for those commodities whose use-value satisfies some want of his. Looked at in this way, exchange is for him simply a private transaction. On the other hand, he desires to realize the value of his commodity, to convert it into any other suitable commodity of equal value, irrespective of whether his own commodity has or has not any use-value for the owner of the other. From this point of view, exchange is for him a social transaction of a general character. But one and the same set of transactions cannot be simultaneously for all owners of commodities both exclusively private and exclusively social in general.

Let us look at the matter a little closer. To the owner of a commodity, every other commodity is, in regard to his own, a particular equivalent, and consequently his own commodity is the universal equivalent for all the others. But since this applies to every owner, there is, in fact, no commodity acting as universal equivalent, and the relative value of commodities possesses no general form under which they can be equated as values and have the magnitude of their values compared. So far, therefore, they do not confront each other as commodities, but only as products or use-values. In their difficulties our commodity owners think like Faust: “Im Anfang war die That.”¨ They therefore acted and transacted before they thought. Instinctively they conform to the laws imposed by he nature of commodities. They cannot bring their commodities into relation as values, and therefore as commodities, except by comparing them with some one other commodity as the universal equivalent. That we saw from the analysis of a commodity. But a particular commodity cannot become the universal equivalent except by a social act. The social action therefore of all other commodities, sets apart the particular commodity in which they all represent their values. Thereby the bodily form of this commodity becomes the form of the socially recognized universal equivalent. To be the universal equivalent, becomes, by this social process, the specific function of the commodity thus excluded by the rest. Thus it becomes – money. Illi unum consilium habent et virtutem et potestatem suam bestiae tradunt. Et ne quis posit emere aut vendere, nisi qui habet characterem aut nomen bestiae, aut numerum nominis ejus.” (Apocalypse.) [“These have one mind, and shall give their power and strength unto the beast (Revelations, 17:13); And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name (Revelations, 13:17).” (Apocalypse.)]

Money is a crystal formed of necessity in the course of exchanges, whereby different products of labor are practically equated to one another and thus by practice converted into commodities. The historical progress and extension of exchanges develops the contrast, latent in commodities, between use-value and value. The necessity for giving an external expression to this contrast for the purposes of commercial intercourse, urges on the establishment of an independent form of value, and finds no rest until it is once for all satisfied by the differentiation of commodities into commodities and money. At the same rate, then, as the conversion of products into commodities is being accomplished, so also is the conversion of one special commodity into money.[4]

The direct barter of products attains the elementary form of the relative expression of value in one respect, but not in another. That form is x commodity A = y commodity B. The form of direct barter is x use-value A = y use-value B.[5] The articles A and B in this case are not as yet commodities, but become so only by the act of barter. The first step made by an object of utility towards acquiring exchange-value is when it forms a non-use-value for its owner, and that happens when it forms a superfluous portion of some article required for his immediate wants. Objects in themselves are external to man, and consequently alienable by him. In order that this alienation may be reciprocal, it is only necessary for men, by a tacit understanding, to treat each other as dependent individuals. But such a state of reciprocal independence has no existence in a primitive society based on property in common, whether such a society takes the form of a patriarchal family, an ancient Indian community, or a Peruvian Inca State. The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities, or with members of the latter. So soon, however, as products once become commodities in the external relations of a community, they also, by reaction, become so in internal intercourse. The proportions in which they are exchangeable are at first quite a matter of chance. What makes them exchangeable is the mutual desire of their owners to alienate them. Meantime the need for foreign objects of utility gradually establishes itself. The constant repetition of exchange makes it a normal social act. In the course of time, therefore, some portion at least of the products of labor must be produced with a special view to exchange. From that moment the distinction becomes firmly established between the utility of an object for the purposes of consumption, and its utility for the purposes of exchange. On the other hand, the quantitative proportion in which the articles are exchangeable, becomes dependent on their production itself. Custom stamps them as values with definite magnitudes.

In the direct barter of products, each commodity is directly a means of exchange to its owner, and to all other persons an equivalent, but that only insofar as it has use-valeu for them. At this stage, therefore, the articles exchanged do not acquire a value-form independent of their own use-value, or of the individual needs of the exchangers. The necessity for a value-form grows with the increasing number and variety of the commodities exchanged. The problem and the means of solution arise simultaneously. Commodity-owners do not equate their own commodities to those of others, and exchange them on a large scale without different kinds of commodities belonging to different owners being exchangeable for, and equated as values to, one and the same special article. Such last-mentioned article, by becoming the equivalent of various other commodities, acquires at once, though within narrow limits, the character of a general social equivalent. This character comes and goes with the momentary social acts that called it into life. In turns and transiently it attaches itself first to this and then to that commodity. But with the development of exchange it fixes itself firmly and exclusively to particular sorts of commodities, and becomes crystallized by assuming the money-form. The particular kind of commodity to which it sticks is at first a matter of accident. Nevertheless there are two circumstances whose influence is decisive. The money-form attaches itself either to the most important articles of exchange from outside, and these in fact are primitive and natural forms in which the exchange-value of home products finds expression; or else it attaches itself to the object of utility that forms, like cattle, the chief portion of indigenous alienable wealth. Nomad races are the first to develop the money-form, because all their worldly goods consist of moveable objects and are therefore directly alienable; and because their mode of life, by continually bringing them into contact with foreign communities, solicits the exchange of products. Man has often made man himself, under the form of slaves, serve as the primitive material of money, but has never used land for that purpose. Such an idea could only spring up in a bourgeois society already well developed. It dates from the last third of the 17th century, and the first attempt to put it in practice on a national scale was made a century afterwards, during the French bourgeois revolution.

In proportion as exchange bursts its local bonds, and the value of commodities more and more expands into an embodiment of human labor in the abstract, in the same proportion the character of money attaches itself to the commodities that are by Nature fitted to perform the social function of a universal equivalent. Those commodities are precious metals.

The truth of the proposition that, “although gold and silver are not by Nature money, money is by Nature gold and silver,”[6] is shown by the fitness of the physical properties of these metals for the functions of money.[7] Up to this point, however, we are acquainted only with one function of money, namely, to serve as the form of manifestation of the value of commodities, or as the material in which the magnitudes of their values are socially expressed. An adequate form of manifestation of value, a fit embodiment of abstract, undifferentiated, and therefore equal human labor, that material alone cane be whose every sample exhibits the same uniform qualities. On the other hand, since the difference between the magnitudes of values is purely quantitative, the money-commodity must be susceptible of merely quantitative differences, must therefore be divisible at will, and equally capable of being reunited. Gold and silver possess these properties by Nature.

The use-value of the money-commodity becomes two-fold. In addition to its special use-value as a commodity (gold, for instance, serving to stop teeth, to form the raw material of articles of luxury, &c.), it acquires a formal use-value, originating in its specific social function.

Since all commodities are merely particular equivalents of money, the latter being their universal equivalent, they, with regard to the latter as the universal commodity, play the parts of particular commodities.[8]

We have seen that the money-form is but the reflex, thrown upon one single commodity, of the value relations between all the rest. That money is a commodity[9] is therefore a new discovery only for those who, when they analyze it, start from its fully developed shape. The act of exchange gives to the commodity converted into money, not its value, but its specific value-form. By confounding these two distinct things some writers have been led to hold that the value of gold and silver is imaginary.[10] The fact that money can, in certain functions, be replaced by mere symbols of itself, gave rise to that other mistaken notion, that it is itself a mere symbol. Nevertheless under this error lurked a presentiment that the money-form of an object is not an inseparable part of that object, but is simply the form under which certain social relations manifest themselves. In this sense every commodity is a symbol, since, insofar as it is value, it is only the material envelope of the human labor spent on it.[11] But if it be declared that the social characters assumed by objects, or the material forms assumed by the social qualities of labor under the régime of a definite mode of production are mere symbols, it is in the same breath also declared that these characteristics are arbitrary fictions sanctioned by the so-called universal consent of mankind. Unable to account for the origin of the puzzling forms assumed by social relations between man and man, people sought to denude them of their strange appearance by ascribing to them a conventional origin.

It has already been remarked above that the equivalent form of a commodity does not imply the determination of the magnitude of its value. Therefore, although we may be aware that gold is money, and consequently directly exchangeable for all other commodities, yet that fact by no means tells how much 10 lbs., for instance, of gold is worth. Money, like every other commodity, cannot express the magnitude of its value except relatively in other commodities. This value is determined by the labor-time required for its production, and is expressed by the quantity of any other commodity that costs the same amount of labor-time.[12] Such quantitative determination of its relative value takes place at the source of its production by means of barter. When it steps into circulation as money, its value is already given. In the last decades of the 17th century it had already been shown that money is a commodity, but this step marks only the infancy of the analysis. The difficulty lies, not in comprehending that money is a commodity, but in discovering how, why, and by what means a commodity becomes money.[13]

We have already seen, from the most elementary expression of value, x commodity A = y commodity B, that the object in which the magnitude of the value of another object is represented, appears to have the equivalent form independently of this relation, as a social property given to it by Nature. We followed up this false appearance to its final establishment, which is complete so soon as the universal equivalent form becomes identified with the bodily form of a particular commodity, and thus crystallized into the money-form. What appears to happen is, not that gold becomes money, in consequence of all other commodities expressing their values in it, but, on the contrary, that all other commodities universally express their values in gold, because it is money. The intermediate steps of the process vanish in the result and leave no trace behind. Commodities find their own value already completely represented, without any initiative on their part, in another commodity existing in company with them. These objects, gold and silver, just as they come out of the bowels of the earth, are forthwith the direct incarnation of all human labor. Hence the magic of money. In the form of society now under consideration, the behaviour of men in the social process of production is purely atomic. Hence their relations to each other in production assume a material character independent of their control and conscious individual action. These facts manifest themselves at first by products as a general rule taking the form of commodities. We have seen how the progressive development of a society of commodity-producers stamps one privileged commodity with the character of money. Hence the riddle presented by money is but the riddle presented by commodities; only it now strikes us in its most glaring form.

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NICHOLAS BARBON (1640-1698):

From Wikipedia, the free encyclopedia

Nicholas Barbon


c. 1640


c. 1698
Osterley House, Middlesex

Other names

Nicholas Barebon, Nicholas Barebone


Physician, economist and builder

Known for

Fire insurance; economic theory;speculation

Nicholas If-Jesus-Christ-Had-Not-Died-For-Thee-Thou-Hadst-Been-Damned Barebon who traded as Nicholas Barbon [1] (c. 1640 - c. 1698) was an English economist, physician and financial speculator. He is counted among the critics of mercantilism and was one of the first proponents of the free market. In the aftermath of the Great Fire of London, he also helped to pioneer fire insurance and was a leading player in the reconstruction work – although his buildings were planned and erected primarily for his own financial gain. His unusual middle name, given to him by his strongly Puritan father, is an example of a hortatory name: religious "slogan names" were often given in Puritan families in 17th-century England.[1]


Nicholas Barbon was the eldest son of Praise-God Barebone (or Barbon), after whom the Barebone's Parliament of 1653 – the predecessor of Oliver Cromwell's Protectorate – was named.[1][2] Praise-God's reputed Christian name was "Unless-Jesus-Christ-Had-Died-For-Thee-Thou-Hadst-Been-Damned",[2] a variant of his son's middle name. He became a religious separatist with Millenarianist beliefs, with fervent views in favour of infant baptism in particular.[3][4]

Nicholas was born in London in either 1637[3] or 1640.[1][5] He studied medicine at the Universities of Leiden and Utrecht in the Netherlands, and received his Doctor of Medicine qualification from the latter in 1661. Three years later, he became an honorary fellow of the Royal College of Physicians in London.[3][5]

He soon turned from the medical profession to the building trade, which suddenly became important in 1666 when the Great Fire of London devastated the City of London – the commercial district of London which at the time was still separate from Westminster, the seat of Britain's government. Within a few years he was "the most prominent London builder of his age".[3] He worked on a large scale – building swathes of housing and commercial developments to the west of the City of London, where land was plentiful – and was ultimately responsible for connecting the City and Westminster for the first time as a result of his work in the districts which became The Strand and Bloomsbury.[5][6] Barbon did this despite long-established restrictions on new buildings associated with various Acts of Parliament and royal declarations in the late 16th century: he often simply disregarded legal and local objections, demolished existing buildings without permission and rebuilt speculatively in search of a quick profit.[5][6]

On 11 June 1684, Barbon's continued aggressive expansionary speculation brought him and his workers into conflict with lawyers based at Gray's Inn. Barbon started his largest project yet,[7] the redevelopment of Red Lion Square, without being authorised to do so. The Gray's Inn lawyers, whose Inns of Court were adjacent, started and won a physical battle with Barbon and his colleagues, and arranged for warrants to be issued against him to stop the scheme proceeding.[5] Another setback came when cheaply-built houses at Mincing Lane collapsed because their foundations were inadequate.[3][5] Nevertheless, by the time of his death, Barbon had built or financed developments to the value of £200,000 (£21 million as of 2011)[8] according to Sir John Lowther, 1st Viscount Lonsdale.[7]

At the same time, Barbon took an interest in the development of insurance and the banking industry, and helped to pioneer both.[7] In 1680–81, with 11 associates, he founded an "Insurance Office for Houses" which offered fire insurance for up to 5,000 households in London.[5][9] Fires were a major danger in London at the time: the Great Fire destroyed more than 13,000 houses and displaced about 100,000 people,[10] and another conflagration in 1678 damaged the Middle Temple, one of the Inns of Court.[3] In 1690, together with John Asgill, he founded the National Land Bank.[5] This was Britain's first land bank – a financial institution which issued loans in the form of mortgages against real estate. These were popular with landowners because they could now raise money against the value of their main asset.[11] The bank was moderately successful, and even threatened to usurp the Bank of England in 1696. The government budget deficit had grown to an unsustainable level; Barbon merged the National Land Bank with another institution (founded by John Briscoe) to form Land Bank United, and offered the government a £2 million loan (£222 million as of 2011).[8] The scheme foundered when Barbon and Briscoe could not raise enough money, and Land Bank United was demerged.[5][11]

Barbon was also active in other fields during the 1690s. He was MP for Bramber in Sussex in 1690 and 1695, which allowed him to take advantage of Parliamentary privilege (immunity from prosecution) – this helped him evade various court actions which were pending against him.[5] Another project involved trying to pump drinking water from the River Thames, to be piped to his new building developments. He patented a design in 1694, and tried to sell pumping rights alongside fire insurance contracts.[11] He built a house for himself and his business interests in Fleet Street, but later moved to Osterley House, a 16th-century manor house west of London. He died there in 1698 or 1699: his will was written in May 1698 and his executors received probate on 6 February 1699.[5][12]


During the later part of his life, Nicholas Barbon wrote extensively on economic theory. His pamphlets and books on political economy are considered important because of their innovative views on money, trade (especially free trade) and supply and demand.[5][13] His works, especially A Discourse of Trade (written in 1690), influenced and drew praise from 20th-century economists such as John Maynard Keynes (in The General Theory of Employment, Interest and Money)[14] and Joseph Schumpeter.[13] He was one of several late 17th-century economic, social and political theorists with a medical education background; contemporaries included Benjamin Worsley, Hugh Chamberlen, William Petty and John Locke.[15]

His early writings sought to explain and advertise his insurance and mortgage schemes and his building developments; for example, in his Apology for the Builder: or a Discourse showing the Cause and Effects of the Increase of Building of 1685 – written in the aftermath of his fight with the lawyers of Gray's Inn – Barbon justified (anonymously) his expansionary building policy by describing the benefits it would bring to London and Britain as a whole.[16] His A Discourse of Trade, written five years later, was much more significant, however. As a broad explanation of his economic and political views, it brought together all of his ideas and became the basis for his reputation as an economic theorist.[17]

Barbon observed the power of fashion and luxury goods to enhance trade. Fashion demanded the replacement of goods before they had worn out; he believed this directed people towards the continuous purchasing of goods, which therefore created constant demand. These views were contrary to standard moral values of the time, influenced by the government and the church. He was one of the earliest writers to draw this distinction between the moral and economic aspects of purchasing.[5][18]

His views on interest were praised by Joseph Schumpeter. Barbon described as a "mistake" the standard view that interest is a monetary value, arguing that because money is typically borrowed to buy assets (goods and stock), the interest that is charged on the loan is a type of rent - "a payment for the use of goods".[13] From this, Schumpeter extrapolated the argument that just as rent is the price paid for the use of what he called "unwrought stock, or the natural agents of [economic] production", interest is the price paid for "wrought stock—the produced means of production".[19]

One of the main arguments in A Discourse of Trade[5] was that money did not have enough intrinsic value to justify a government's hoarding of it; policies intended to help accumulate supposedly "valuable" commodities such as silver and gold were not appropriate, because the laws of supply and demand were the main determiner of their value.[18] Such criticism of mercantilism – the view that a country's prosperity can be measured by its stock of bullion – helped to lay the foundation for classical economics, and was unusual at the time. Along with John Locke, with whom he debated his theories, Barbon was one of the first theorists to argue that money's value was principally symbolic and that its main function was to assist trade. These views were expanded upon in his 1696 pamphlet, A Discourse Concerning Coining the New Money Lighter.[5][20]

Barbon was influenced by populationism; he identified a country's wealth with its population. He also advocated the use of paper and credit money, and postulated the reduction of interest rates, which he thought impeded the growth in manufacturing and trade.[18][21] He discussed these issues in his 1696 pamphlet, which also considered the effects of the Recoinage of that year, in which the Royal Mint recalled large quantities of silver coins, melted them down and reminted them, resulting in a temporary fall in the supply of money.[5]

Despite the importance of some of his theories, Barbon's work (especially A Discourse of Trade) has been criticised for an excess of "definition and classification" instead of analysis and a disjointed style which lacked rigour.[2][22] This has been attributed to the early period in which he wrote, when economic thought was not yet fully developed.[14]


§ Apology for the Builder; or a Discourse showing the Cause and Effects of the Increase of Building (1685)

§ A Discourse of Trade (1690)

§ A Discourse Concerning Coining the New Money Lighter (1696)


Barbon Close, opposite Great Ormond Street Children’s Hospital, is named after him.



1. ^ a b c d Ash 2008, p. 254.

2. ^ a b c Letwin 2003, p. 48.

3. ^ a b c d e f Letwin 2003, p. 49.

4. ^ Wright, Stephen (September 2004). "Oxford DNB article: Barbon (Barebone), Praisegod". Oxford Dictionary of National Biography. Oxford University Press. doi:10.1093/ref:odnb/1335. Retrieved 16 February 2010. Subscription or UK public library membership required

5. ^ a b c d e f g h i j k l m n o p Sheldon, R.D. (September 2004)."Oxford DNB article: Barbon, Nicholas". Oxford Dictionary of National Biography. Oxford University Press.doi:10.1093/ref:odnb/1334. Retrieved 16 February 2010.Subscription or UK public library membership required

6. ^ a b Letwin 2003, pp. 50–51.

7. ^ a b c Letwin 2003, p. 51.

8. ^ a b UK CPI inflation numbers based on data available from Lawrence H. Officer (2010) "What Were the UK Earnings and Prices Then?" MeasuringWorth.

9. ^ Dickson 1960, p. 7.

10. ^ Porter 1994, pp. 87–88.

11. ^ a b c Letwin 2003, p. 54.

12. ^ "Will of Nicholas Barbon of Osterley, Middlesex" (fee usually required to view pdf of probate copy of will). DocumentsOnline. The National Archives. Retrieved 17 February 2010.

13. ^ a b c Letwin 2003, p. 61.

14. ^ a b Ullmer, James H. (March 2007). "The Macroeconomic thought of Nicholas Barbon". Journal of the History of Economic Thought(Cambridge: Cambridge University Press) 29 (1): 101–116.doi:10.1080/10427710601178336. Retrieved 16 February 2010.

15. ^ Letwin 2003, pp. 48–49.

16. ^ Letwin 2003, p. 55.

17. ^ Letwin 2003, p. 56.

18. ^ a b c Letwin 2003, p. 63.

19. ^ Letwin 2003, pp. 62–63.

20. ^ Letwin 2003, pp. 63–64.

21. ^ Letwin 2003, p. 60.

22. ^ Letwin 2003, p. 57.

[edit]Bibliography and further reading

§ Ash, Russell (2008). Potty, Fartwell and Knob: Extraordinary but True Names of British People. London: Headline Publishing Group.ISBN 978-0-7553-1655-7.

§ Dickson, P.G.M. (1960). The Sun Insurance Office 1710–1960: The History of Two and a half Centuries of British Insurance. Oxford:Oxford University Press.

§ Letwin, William (2003) [1963]. Origins of Scientific Economics: English Economic Thought, 1660–1776. Routledge Library Editions. 9. Abingdon: Routledge. ISBN 0-415-31329-5.

§ Porter, Roy (1998). London: A Social History. Harvard University Press. ISBN 0-674-53839-0.

Chisholm, Hugh, ed (1911). "Barbon, Nicholas". Encyclopædia Britannica (11th ed.). Cambridge University Press.

Parliament of England

Preceded by
John Alford

Member of Parliament forBramber
with John Radcliffe 1690–1695
William Stringer 1695–1698


Succeeded by
Sir Henry Furnese

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LE TROSNE (1728-1780)

Guillaume-François Le Trosne

Guillaume-François Le Trosne, born October 13, 1728 in Orleans and died May 26, 1780 in Paris, is a lawyer and economist French , which remains one of the leading figures of the Physiocrats , school of thought founded by François Quesnay and Marquis de Mirabeau in July 1757.

[ edit ]Biography

Born in Orleans October 13, 1728, the son of William the Trosne, counselor and secretary to the king, judge and magistrate of the Bailiwick presidial of Orleans, and Margaret Theresa Arnault, daughter of Louis Arnault Nobleville, bourgeois merchant of Orleans.

He studied law at Orleans and follows the paternal example, intending soon to the dress. In 1748 he was in first year law student of the famous Robert Joseph Pothier he composed later, in 1773, a historic Praise. For two years he has also the privilege, with M. de Guienne, a lawyer in Parliament and a close friend of Pothier, to review the manuscript of the great work of the latter, in novum ordinem Pandectae Justinianeae digestae.

In 1753, it is installed in the office of king's advocate in the presidial Orleans. Until 1763, it addresses the issue of natural law, international law and feudal law. Founding member of the Royal Agricultural Society of the generality of Orleans, the same year he became a fervent disciple of the doctrine developed by Dr. Quesnay . Also, from 1765 to 1767, he inserts saving articles in journals, especially in the school newspaper, The Almanac of the citizen. From 1768 he is engaged in work in which he further develops the main precepts of Physiocratic movement. He is the author of a memoir against alleged fund Poissy (Paris, 1770, in-12).

Alongside his writing function, it is, from 1769, associate member of the Royal Academy of Belles-Lettres de Caen , where he read in 1770 and 1771, five speeches he published in 1777 in From the social order. It is, on the other hand, an honorary member of the Economic Society of Bern. In 1774, he left his position as king's advocate, and then receives the title of Honorary Advisor of the presidial Orleans.

His most important work, in which there is a complete and extremely detailed in the current administrative Physiocratic thought, is also the last date of 1779: From the provincial administration and tax reform. Before publication, this paper had also won the prize offered by the Academy of Toulouse. But, as in 1780 was to hold a meeting of clergy in Paris, the Minister of Justice was afraid that this book does indisposât because it suggested to impose particular property of the clergy. To avoid noise and scandal, the book is entered, that Necker , yet little known for his sympathies physiocratic in the publication is encouraged.

Shortly after this episode, The Trosne died in Paris May 26, 1780, as a result of pneumonia.

[French economist; Physiocrat. Le Trosne systematically expounded the doctrines of the physiocrats. He criticized mercantilism proving that wealth is created in the sphere of production and not in the sphere of circulation and that the circulation of money is the result of the circulation of goods whose value it measures. Le Trosne understood the distinction between value and use-value and advanced propositions that anticipated the labor theory of value. He was one of the first to use the term ‘capital’. K. Marx often referred to his works. Le Trosne also wrote books on legal problems. Works: De l’interet social, par rapport a la valeur, a la circulation, a l’industrie et au commerce interieur et exterieur. Paris, 1777 (from The Great Soviet Encyclopedia, 3rd edition, 1970-79)]

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PIETRO VERRI (1728-1797):

Pietro Verri

From Wikipedia, the free encyclopedia

Detail of Pietro Verri monument in Milan.

Pietro Verri (December 12, 1728 – June 28, 1797) was an Italian philosopher, economist, historian and writer.


Born in Milan, then under Austrian rule, to a conservative noble family, he received a strongly religious education, from which he began to rebel when he reached his twenties. He volunteered to serve in the Seven Years' War in order to escape his father's decision to register him for legal studies, but quit after a year. In his early life he translatedDestouches' works (1754) and wrote satirical almanacs (Borlanda impasticciata, Gran Zoroastro and Mal di Milza) which scandalized the Milanese society. In 1761, together with his brother Alessandro, he founded a literary association, the Società dei Pugni ("Society of the Fists"), and, from 1764, published the magazine Il Caffè ("The Coffeehouse"), where some 40 articles by him on various subjects appeared and which became an important reference on EnlightenmentMilan. Other figures who wrote on it include his brother Alessandro, the famous philosopher Cesare Beccaria, Alfonso Longo and Pietro Secchi.

In 1764 he also entered the public administration, where he distinguished for his reforming attitudes: in particular, he proposed the abolition of the exaction of taxes through intermediaries. After a documented Bilance on the Commerce of the State of Milan, in 1769 Verri published one of his most notable works, the Elementi del Commercio ("Elements of Commerce"), inspired by a wide interpretation of liberalism in commerce. This was followed by the Meditazioni di economia politica ("Meditations on Economic Politics", 1771), where he enunciated the laws regulating supply and demand (also in mathematical form), explained the role of money as "universal good", and supported laissez-fairein trade, arguing that balance of payments equilibrium is achieved by GDP adjustments rather than by exchange rate adjustments; as such, he was a precursor of both Adam Smith and marginalism.

As resistance against his reforming work in administration stiffened, Verri devoted himself increasingly to philosophy. In 1773 he wroteDell'indole del piacere e del dolore ("Discourse on Pleasure and Pain"), followed in 1777 by Osservazioni sulla tortura ("Observations on Torture"), in which he stressed the uselessness and cruelty of torture.

In 1777 he began the Storia di Milano ("History of Milan", two volumes, 1783 and 1798), a notable example of Enlightenment historiography. The ecclesiastical reforms of Joseph II of Austria inspired him the Dialogo fra Pio VI e Giuseppe II a Vienna ("Dialogue between Pius VI and Joseph II in Vienna", 1782), followed by La Decadenza del Papa ("The Pope's Decay"), marked by his disappointment for the lack of influence of Enlightenment's ideas on the Papacy.

Joseph II's increasing despotism led Verri to abandon any position in the Austrian administration of Lombardy in 1786; ten years later, after the French invasion, he returned as member of the Milanese municipality and was one of the founders of the Cisalpine Republic. Though disapproving the Jacobin excesses, Verri however welcomed the possibility of moral and economical improvement in the aftermath of the French Revolution, which he considered influenced in turn by the Enlightenment movement.

In 1786, he was elected a foreign member of the Royal Swedish Academy of Sciences.

Also notable is his correspondence with his brother Alessandro.

Verri died in Milan in 1797.

The younger brother of Alessandro Verri and Pietro Verri, Giovanni Verri, is supposed to be the natural father of the noted Italian novelist and poet Alessandro Manzoni.[citation needed] Their other brother, Carlo, was also a politician.


§ Diario Militare, 1759-60

§ Stato di Milano, 1760

§ Di Milano, 1760

§ Gli elementi del commercio, 1760.

§ Nello Stato di Milano, 1762 d

§ Felicità de sainfoin d'Espagne de Meditazioni, 1763

§ Dell'anno 1763, 1763

§ Dello Stato di Milano, 1764 de Bilanco del Commercio.

§ Grani de dei de commercio de nel de principalmente de vincolanti de Reflessioni Sulle Leggi, 1769.

§ Politica d'economia de sull de Meditazioni, 1771.

§ Dolore de del de Discorso sull'indole del piacere e, 1773

§ Le l'anno 1630, 1777 de Milano de devastò de che de pestilenza de La d'attribuì de silicium de quali d'alle de malefiche d'unzioni de delle

§ D'all'occasione de produsse de che d'effetti de sugli de singolarmente du tortura e de sainfoin d'Espagne d'Osservazioni

§ Dolore de del de Discorsi del conte Pietro Verri sull'indole del piacere e, economia de sainfoin d'Espagne du felicità e de sainfoin d'Espagne

§ Politica, 1781 (repr. of 1773, 1763, and 1771)

§ Storia di Milano, 1783

§ Stato di Milano de nello de politica d'economia de sull de storiche de Memorie, 1804


§ Capra Carlo, I progressi della ragione. Vita di Pietro Verri, Il Mulino, Collezione di testi e di studi, 2002, 648 p.

§ C. Capra (a cura di), Pietro Verri e il suo tempo (Verri, La Milano dei Lumi), Bologna, Cisalpino, 1999, 1200 pages. 2 vol.

§ Baia Curionis, S., Una grande famiglia: i Verri in Franco Della Peruta (a cura di), Storia illustrata di Milano, Elio Sellino Editore, Milano, 1993.

§ Bouvy, Eugène, Le Comte Pietro Verri: 1728-1797: ses idées et son temps, [S.l.n.n.], 1889.

* * * * *

BARON PIETRO CUSTODI (Italian politician)

Portrait by Giovanni Pok, oil in canvas, 1830.

Custodi, Pietro, created Baron de l'empire 1811, ... conseiller d'Etat, (1771 Galliate, Piemont -).

Here is a collection of some Italian classical liberals.

Scrittori classici italiani di economia politica

This sizable collection of nearly 50 volumes shows the depth and breadth of Italian polical economy in the 18th century. It first came to my attention via reading the correspondence of Frédéric Bastiat who asked his friend and colleague Ricahard Cobden to purchase the set while he was visiting Italy. He did and Bastiat was very grateful. In another letter Bastiat said that some of these theorists, although relatively unknown, were the equal of Turgot and Adam Smith. They are available on Google Books and we plan to add them to the Guillaumin collection, begining with the 50th index volume. Note: the collection also includes the work of Filangieri who considerably influenced the thinking of Benjamin Constant.

  • First Series: Parte antica (1803-1804), 7 vols.
  • Second Series: Parte moderna (1803-1805), 41 vols.
  • Vol. 49 Supplimento (1816).
  • Vol. 50 Indici (1816). [PDF 8.4 MB].

Custodi, Pietro 1771-1842

General Notes

seit 1811 Baron; Italien. Historiker


[1] In the 12th century, so renowned for its piety, they included amongst commodities some very delicate things. Thus a French poet of the period enumerates amongst the goods to be found in the market of Landit, not only clothing, shoes, leather, agricultural implements, &c., but also “femmes folles de leur corps.” [= “crazy women of their bodies”]

[2] Proudhon begins by taking his ideal of justice, of “justice éternelle,” (‘eternal justice’) from the juridical relations that correspond to the production of commodities: thereby, it may be noted, he proves, to the consolation of all good citizens, that the production of commodities is a form of production as everlasting as justice. Then he turns round and seeks to reform the actual production of commodities, and the actual legal system corresponding thereto, in accordance with this ideal. What opinion should we have of a chemist, who, instead of studying the actual laws of the molecular changes in the composition and decomposition of matter, and on that foundation solving definite problems, claimed to regulate the composition and decomposition of matter by means of the “eternal ideas,” of “naturalité” (naturality) and “affinité” (affinity)? Do we really know any more about “usury,” when we say it contradicts “justice éternelle,” “équité éternelle,” (eternal equity) “mutualité éternelle,” (eternal mutuality) and other “vérités éternelles” (eternal truths) than the fathers of the church did when they said it was incompatible with “grâce éternelle,” (eternal grace) and “la volonté éternelle de Dieu” (the eternal will of God)?

* A character in the novel Don Quixote de la Mancha by Miguel de Cervantes Saavedra, Maritornes is an ugly, but kind-hearted servant at an inn in which Don Quixote and Sancho spend the night. She is unwittingly involved in a brawl in the middle of the night when Don Quixote mistakes her for the innkeeper's daughter, whom he believes is in love with him.

[3] “For two-fold is the use of every object… The one is peculiar to the object as such, the other is not, as a sandal which may be worn, and is also exchangeable. Both are uses of the sandal, for even he who exchanges the sandal for the money or food he is in want of, makes use of the sandal as a sandal. But not in its natural way. For it has not been made for the sake of being exchanged.” (Aristoteles, “De Rep.,” 1.i.c. 9.)

¨ “In the beginning was the deed.” – Faust: the protagonist of a classic German legend, who, though a highly successful scholar, gets dissatisfied and makes a deal with the devil, exchanging his soul for unlimited knowledge and worldly pleasures. Faust, and the adjective faustian, often used to describe an arrangement in which an ambitious person surrenders moral integrity in order to achieve power and success: the proverbial “deal with the devil”. This line is from Goethe’s highly popular classic drama - Faust.Eine Tragödie[Faust: A Tragedy] by von Goethe “ hilft der Geist! auf einmal seh’ ich Rath; Und schreibe getrost: im Anfang war die That!”[= “The Spirit helps me! Suddenly I see Rath, confidently and write, ‘in the beginning was the deed’!” or “The Spirit aids me: now I see the light! "In the Beginning was the Act," I write.”]

[4] From this we may form an estimate of the shrewdness of the petit-bourgeois socialism, which, while perpetuating the production of commodities, aims at abolishing the “antagonisms” between money and commodities, and consequently, since money exists only by virtue of this antagonism, at abolishing money itself. We might just as well try to retain Catholicism without the Pope. For more on this point see my work, “Zur Kritik der Pol. Oekon.”, p. 61, sq.

[5] So long as, instead of two distinct use-values being exchanged, a chaotic mass of articles are offered as the equivalent of a single article, which is often the case with savages, even the direct barter of products is in its first infancy.

[6] Karl Marx, l.c., p. 135. “I metalli … naturalmente moneta. [‘The metal coin, of course’ or ‘metals… of course currency]” (Galiani, “Della moneta” [The currency] in Custodi’s Collection: Parte Moderna t. iii.)

[7] For further details on this subject see in my work cited above, the chapter on “The precious metals.”

[8] “Il danaro e la merce universale” [‘The money and the goods universal’ or ‘The money and the merchandise universal’] (Verri, l.c., p. 16).

[9] “Silver and gold themselves (which we may call by the general name of bullion) are … commodities … rising and falling in … value … Bullion, then, may be reckoned to be of higher value where the smaller weight will purchase the greater quantity of the product or manufacture of the countrey,” &c. (“A Discourse of the General Notions of Money, Trade, and Exchanges, as They Stand in Relation each to other.” By a Merchant. London, 1695, p. 7.) “Silver and gold, coined or uncoined, though they are used for a measure of all other things, are no less a commodity than wine, oil, tobacco, cloth, or stuffs.” (“A Discourse concerning Trade, and that in particular of the East Indies,” &c., London, 1689, p. 2.) “The stock and riches of the kingdom cannot properly be confined to money, nor ought to gold and silver to be excluded from being merchandise.” (“The East-India Trade a Most Profitable Trade.” London, 1677, p. 4.)

[10] “L’oro e l’argento hanno valore come metallic anterirore all’esser moneta. [‘Gold and silver have value as a metallic currency to being anterirore’ or ‘The gold and the silver have value as metallic anterirore to the being coin’ or ‘The gold and silver have value like metallic anteriore to being currency’ or The gold and the silver have value as metallic anterirore to the be coin’].” (Galiani, l.c.) Locke says, “The universal consent of mankind gave to silver, on account of its qualities which made it suitable for money, an imaginary value.” Law, on the other hand, “How could different nations give an imaginary value to any single thing… or how could this imaginary value have maintained itself?” But the following shows how little he himself understood about the matter: “Silver was exchanged in proportion to the value in use it possessed, consequently in proportion to its real value. By its adoption as money it received an additional value (une valeur additionnelle).” (Jean Law: “Considerations sur le numeraiere et le commerce [Considerations on the numeraiere and Trade]” in E. Daire’s Edit. of « Economistes Financiers du XVIII. Siecle, » [Financial Economists of the Eighteenth Century], p. 470.)

[11] “L’Argent en (des denrees) est le signe. [Money in (the food) is the sign]” (V. de Forbonnais: « Éléments du Commerce,, Nouv. Edit. Leyed [Elements of Commerce, New. Edit. Leyed], 1766, » t. II., p. 143.) “Comme signe il est attire par les denrees. [As a sign he is attracted by the FOOD]” (l.c., p. 155.) “L’argent est un signe d’une chose et la represente. [Money is a sign of something and represents.](Montesquieu: "Esprit des Lois,” [Spirit of the Laws] (Euvres, Lond. 1767, t. II, p. 2.) « L’argent n’est pas simple signe, car il est lui-meme richesse ; il ne represente pas les valeurs, il les equivaut. » [Money is not a simple sign, because it is itself wealth and it does not represent the values, it is equivalent to] (Le Trosne, l.c., p. 910.) “The notion of value contemplates the valuable article as a mere symbol; the article counts not for what it is, but for what it is worth.” (Hegel, l.c., p. 100.) Lawyers started long before economists the idea that money is a mere symbol, and that the value of the precious metals is purely imaginary. This they did in the sycophantic service of the crowned heads, supporting the right of the later to debase the coinage, during the whole of the middle ages, by the traditions of the Roman Empire and the conceptions to be found in the Pandects. “Qu’aucun puisse ni doive faire doute,” says an apt scholar of theirs, Philip of Valois, in a decree of 1346, “que a nous et a notre majesté royale n’appartiennent seulement … le mestier, le fait, l’état, la provision et toute l’ordonnance des monnaies, de donner tel cours, et pour tel prix comme il nous plait et bon nous semble. [None can or ought to doubt, that was us and our royal majesty belong only ... the Mestia, the fact, condition, provision and all currencies order to give such a course, and such prices as we like and we like]. It was a maxim of Roman Law that the value of money was fixed by the decree of the emperor. It was expressly forbidden to treat money as a commodity. “Pecunias vero nulli emer fas erit, nam in usu publico constitutas oportet non esse mercem. [Money in truth nulli to buy up divine law will be , for upon usu of the people to set up it behooves not to be pay’ or ‘But the money will be in no right Emer, for it must not be established in the use of public merchandise]. Some good work on this question has been done by G.F. Pagnini: “Saggio sopra il giusto pregio delle cose, 1751” [Essay on the proper value of things]; Custodi, “Parte Moderna [Modern Part],” t. II. In the second part of his work Pagnini directs his polemics especially against the lawyers.

[12] “If a man can bring to London an ounce of Silver out of the Earth in Peru, in the same time that he can produce a bushel of Corn, hen the one is the natural price of the other; now, if by reason of new or more easie mines a man can procure two ounces of silver as easily as he formerly did one, the corn will be as cheap at ten shillings the bushel as it was before at five shillings, caeteris paribus [things being equal].” William Petty. “A Treatise of Taxes and Contributions,” London, 1667, p. 32.

[13] The learned Professor Roscher, after first informing us that “the false definitions of money may be divided into two main groups; those which make it more, and those which make it less, than a commodity,” gives us a long and very mixed catalogue of works on the nature of money, from which it appears that he has not the remotest idea of the real history of the theory; and then he moralises thus: “For the rest, it is not to be denied that most of the later economists do not bear sufficiently in mind the peculiarities that distinguish money from other commodities” (it is then, after all, either more or less than a commodity!)... ‘So far, the semi-mercantilist reaction of Ganilh is not altogether without foundation.” (Wilhelm Roscher: “Die Grundlagen der Nationaloekonomie [The basics of National (or Political) Economy],” 3rd Edn., 1858, pp. 207-210.) More! less! not sufficiently! so far! not altogether! What clearness and precision of ideas and language! And such eclectic professorial twaddle is modestly baptized by Mr. Roscher, “the anatomico-physiological method” of Political Economy! One discovery, however, he must have credit for, namely, that money is “a pleasant commodity.”

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