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A TREATISE ON MONEY

BK. II

The first economist effectively to introduce index-numbers of prices into Monetary Science (though likeother original geniuses not without precursors), namelyJevons , did not contemplate his idea from any ofthe angles from which it has been viewed above—neither from that of the Purchasing Power of Moneynor from that of the Currency Standards as justdefined. Nor did Edgeworth exclusively, either in hisearliest or in his latest contributions to the problemover a space of forty years. Nor has Dr. Bowley—at least not unequivocally in his theoretical treatment.The name of Cournot, the great parent of so manybrilliant errors based on false analogies between themoral and the physical sciences, should also be men-tioned here, inasmuch as he illustrated the variationin prices due to a change on the part of money bythat change in the position of the earth with respectto the stars which is due to the motion of the earth.Some of these eminent authorities have been, ofcourse, as familiar as any one else with the conceptionof the Index-Number of Prices as being the price ofa composite commodity, and with the appropriatenessof different composite commodities to different times,places and purposes. Nor would they necessarilydiffer on any substantial point from what I havewritten above. Nevertheless, Jevons certainly, andEdgeworth and Dr. Bowley to the best of my under-standing, have also pursued something distinct fromthe Purchasing Power of Money, something reachedin quite a different way, something which has to dowith what they might describe as the value of moneyas such or, as Cournot called it, the “ intrinsic valueof money ”. 1 I have long believed that this is awill-o’-the-wisp, a circle-squaring expedition whichhas given an elusive taint, difficult to touch or catch,to the treatment of the Theory of Price Index-

1 As distinguished from what he called the “ power of money ” or, inmodern terminology, the “ purchasing power of money