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13: Of Metals Considered as Merchandise - Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship [1776]

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Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


13

Of Metals Considered as Merchandise

Gold, silver and copper are the first metals men knew. They were often found on the earth’s surface without having been sought. Rain, floods, a thousand chances brought them to light; several rivers bear them along.

Besides, these metals are easily recognised in their pure, unadulterated state or when their purity is at least little altered. That always happens with gold, often with silver, and often enough with copper, though less frequently. Nature offers them endowed with all their properties.

It is not the same with iron. Although it is to be found almost everywhere, people have all the more difficulty in recognising it, as it normally appears in the guise of earth which is bereft of all metallic properties, and to which one needs to have learnt to restore them. So of all metals it is iron which seems to have been the last known.

Nowadays iron is in use for all mechanical arts. They all owe their progress to the use of this metal, and many even their birth. For centuries it was unknown even to organised nations, which used copper in its place. As for the tools of barbarians, they were and still are made of wood, stone, bone, and sometimes of gold or silver.

I assume that our tribe is familiar with gold, silver, copper and iron, that it has learnt the skill to work on them, and that it uses them in various ways.

Making this assumption, these metals are a commodity which has value for the tribe in relation to its needs; value which rises or falls, depending on whether they are scarcer or more plentiful, or rather following the view the tribe has of their scarcity or their abundance.

When they are still in their raw state, or as nature offers them, they have one value. They have another when they have been refined or purified from all extraneous matter. Finally, they have an ultimate value, when work has made out of them tools, weapons, vessels, utensils of all sorts; and this ultimate value grows in proportion as these articles are better conceived, better worked up, and offered for sale by a smaller number of workmen.

Metals considered as raw material have thus one value; and they have another when they are considered as worked up material. In the first case, one values the metal alone; in the second, one values the metal and the work.

Metals are essential merchandise. So there must be men in the tribe whose work it is to seek for them and refine them; and others will be needed to work on them, since one needs the articles of which they are the raw material.

In the early days our tribe had little refinement, and dressed in roughly sewn skins: it had seats made of wood, stone or turf; and its vessels were made of shells, stones or pieces of hollowed wood, or of earth, first cropped and then dried in the sun, or cooked in a fire.

Each settler could make, for his own need, all these utensils whose raw material was to hand, and the making of which was neither lengthy nor troublesome.

If some people, harder working, made a larger quantity than they needed, these surplus utensils, when carried to the market, had as little value for those to whom they were offered for sale as for those who would offer to sell them. Since I assume that each settler obtained all the utensils he needed for himself, it is clear that those put up for sale were a surplus for which the tribe had no use. But if there were some settlers who did not have the time to make enough for their needs, then these utensils would become merchandise, whose value would be in proportion to their quantity compared with the amount needed by the settlers who wanted to buy them.

These utensils, roughly made, would thus count for little in trade; and they will only become a real object of trade when, worked with more skill, they are more suitable and more durable. Then they will have all the greater value, as the number of settlers who lack either the time or the skill to make them will be larger.

The entrepreneurs who undertake this work are what we have called artisans. They will grow in number according to the needs of the tribe, and competition will regulate the price of their works; the greater the number of artisans, the more they will be forced to undercut each other when they deliver the goods, and each will give them at the lowest price possible.

All the utensils I have just mentioned are made by all and sundry, from a material I assume to be plentiful; which is worth little in itself, and the work involved alone determines almost all the price.

The case is not the same for works of metal. Metals are scarce. It takes time and effort to find them. Then they have to be refined. Lastly they have to be worked up.

No sooner are they known than they become an object of trade, and people expect to be able to use them for various purposes. Not only are they merchandise when they leave the artisan’s hands; they are so already, when they have just been drawn from the mine.

If we did not know the uses to which metals are adapted, they would be quite useless, and one would not seek them out. They would be left among the stones and earth, where they would stay without value.

But as soon as their utility is known, they are sought after; and people seek them out all the more because, being somewhat rare, they become an object of curiosity. So they acquire a new value, and this value is proportional to the number of the curious.

Considered as rare and as objects of curiosity, they soon come to be used for ornament, and this new use gives them another new price.

From all that has been said, we must conclude that metals are only merchandise because we make varied use of them, hunt them out through curiosity, and use them for ornament. Now it is because they are a commodity that they have become money. Let us see the transformation they have made in commerce.