THE NOTION OF MONEY 173 
for it is the value of the coined metal and of the monetary 
unit itself which varies. But this objection is not valid. 
For the purchasing power of a given sum of money does 
not vary any more for the producer of gold than for any 
other producer who receives it in exchange for what he 
sells; and if the former is exposed, like anyone else, to 
fluctuations in the purchasing power of the currency, due 
to price variation, it nevertheless remains true that he 
sells his produce for a constant number of monetary 
units, or, in other words, at a fixed price. This peculiarity 
means that the cost of production! of a metal accepted 
for free coinage does not exercise the same influence over 
its rate as in the case of any other commodity ; and this 
is true even of a metal which is used for monetary pur- 
poses, but is not brought under this system. For the 
principle already enunciated shows that if the cost of 
production rises the producer cannot obtain a larger 
number of monetary units than he obtained before. This 
is easy to understand ; for if his gold were bought at a 
higher price under the system of free coinage, the result 
would be that he would obtain more gold in the form 
of coin than he handed over for minting ; otherwise the 
scaling, i.e., the definition of the monetary unit, would 
have to be altered for all existing coins, and while this 
would perhaps be the logical consequence of conceiving 
money as a commodity, it has never yet been done in the 
case of gold or even seriously considered since the system 
of free coinage has been in force. Hence the only direct 
effect of an increase in the cost of production is to limit 
! We do not hesitate to use here the phrase “cost of production,” 
although there is a tendency to discard it in certain theories of value. For 
we are unable to support those theories which merely set it aside because 
the influence of the cost of production is not always apparent. Moreover, 
it will be conceded by those who support this theory that in accordance 
with their own principles the value of money is independent of this cost, 
which they set aside. As for the remaining theories, even if they ultimately 
analyse away the notion of cost and give it only a relative value, this does 
not prevent the notion from being a very real thing from the point of view 
of the producer and from the point of view of the economist who analyses 
it, at every stage of economic equilibrium which he has under consideration.