The question immediately arises: Why do civilized nations buy this costly metal? Property is given away for it at all hours: what has led to such a practice? It is easy to understand the pursuit of food and clothing, of ornaments for house and garden; they are desired for consumption and enjoyment. But it is otherwise with a coin. It is not procured for pleasure or ornamentation - nay, it is obtained to be parted with at the earliest opportunity. It yields nothing whatever to its possessor, except when it leaves him. This energetic desire to acquire money at heavy cost must find its gratification in something which money bestows in the act of going away again. To keep it is wholly without profit or enjoyment; what, then, is the explanation of this incessant purchase of gold and equally incessant parting with it as soon as got? The answer is plain. Coin is manufactured in order to effect a service: in other words, it is a tool, which has the work it performs as the sole reason for its being made. It renders a useful and valuable service. In the act of passing away money is a tool: it does its work, not by staying in its owner's hands, but by leaving them: no other conception of coin is rational or intelligible. It may be purchased long before it is used, as Napoleon I. stored many millions of pounds at the Tuileries in readiness for possible war, or as bankers pile up reserves to guard against the uncertainty of the payment of their debts being suddenly demanded of them. But this changes nothing in the nature of money: it only indicates that it is occasionally wise with money, as with other tools, to provide a stock of it beforehand, lest it may not be procurable at the moment when it is required for use. The truth always remains the same that money is of no utility whatever except when employed as a tool, that is, except when it exercises its proper function by being got rid of in exchange for other property. It is a machine - a means, not an end - an instrument of the same class as a ship or a cart, a means of conveyance. The common cart transfers weights, the money cart transfers ownership. Who ever bought a cart for the purpose of enjoyment in itself? What man, not under a delusion, ever bought money, coin, except with the object of exchanging it for something which he needed?
But why was such a tool required? A cart which should transport weights which human arms could not carry is an obvious want. The intervention of coin at first sight is not so apparent. Yet the need of money in some form is one of the most urgent wants which beset humanity. Without its aid society would be brought to a stand-still, for the very decisive reason that those who wanted to obtain particular goods would otherwise be seldom able to find sellers who would be willing to accept those which they had to offer in exchange.
The tailor might starve before he found a baker who was in want of a coat. This great want is the consequence of the most distinguishing peculiarity of social existence, the division of labour - or rather the separation of employments. This is the fundamental law of society. Whether in a small village or a great nation, whether in a poor land or in a country filled with gigantic manufactures, the same phenomenon ever presents itself; the providing of the multitudinous things which human life Consumes is distributed naturally and necessarily amongst special makers. No man above a savage supplies all his own wants; every one has recourse to fellow-men for procuring every article that he uses, except those very few which he can make himself. Here springs up at once the great problem - by what method and upon what principle can he obtain these things made. by others? Only by exchanging, by giving to others what he made for them, and receiving from others what they made for him. But for exchanging each party to it must desire to acquire - the articles which the other offers, otherwise he will refuse to exchange. This dilemma might arise with every article needed. The hatter might find neither baker nor butcher nor shoemaker who was in want of a hat; direct barter would be impossible, and his trouble might be great. To overcome this difficulty - a difficulty which would have been fatal to civilization - money was invented; and it removes the obstacle perfectly. The action of money is to substitute double for single barter, and the difficulty is instantly conquered by it. The impediment to exchanging was that one of the exchangers did not want the article offered by the other; the solution consisted in interposing a third article, for which each of the two articles might be separately bartered. Go and barter your hat for money, cried the shoemaker, then bring me that money, and the shoes shall be yours. In other words, the shoemaker demands money, and with it he selects for himself in any shop any article that he desires to attain. That is the action and essence of the use of money. A sale for money is thus half a transaction - the exchange is completed only when the shoemaker has obtained with the hatter's money at his own choice one of those commodities which was his motive for engaging in the manufacture of shoes.
I. The first point to be noticed in the transaction is that the seller must feel sure that all other tradesmen will consent to do exactly the same thing that he has done - will give him their goods for money as readily as he gave away his shoes for it. Now this assurance rests only on voluntary consent; no law commands traders to sell for money. A banking oracle of great eminence once expressed unbounded astonishment on being told that a shopkeeper was not bound to give his goods away for money; he confounded the voluntary affixing of money prices on goods with the obligation imposed by the law of legal tender of discharging debts with money. Aristotle knew better, but then he was a scientific analyst rarely equalled among men. He stated that men "agreed" to take money in exchanging; and it is a matter of voluntary agreement to this hour.