CHAPTER  Y

MONEY
Sometimes  the  explanation  of  the  purchasing
power  of  money  is  put  forward  as  a  distinct
and  independent  theory  which  is  no  part  of,
though  closely  analogous  to,  the  general
theory  of  value.  I  shall  hope  to  demonstrate,
however,  that  it  contains  nothing  fundamentally ­
  new.  In  the  problem  of  the
purchasing  power  of  money  the  general
theory  of  value  is  again  ensconced,  but  so
veiled  with  peculiar  conditions  which  the
student  has  not  previously  analysed  that  he
is  not  to  be  blamed  if  at  first  he  fails  to
detect  beneath  its  disguises  an  old  friend.
In  order  to  get  a  proper  grasp  of  what  the
true  explanation  of  the  purchasing  power  of
money  is,  it  is  imperative  to  bear  in  mind  that
money  is  essentially  a  commodity  or  a  promise
to  deliver  a  commodity.  The  truth  of  this
statement  becomes  apparent  when  we  briefly
note  how  the  use  of  money  has  evolved.
Originally,  no  doubt,  every  exchange  was
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