OH. 6

CURRENCY STANDARDS

87

items of a composite commodity. If we mean by“ influences on the side of money being unchanged ”that the total volume of monetary transactionsremains the same, then the Index-Number in questionis the one which I have catalogued above under thename of the Cash-Transactions Standard. Or if wemean that the total stock of money remains the same,then the Index-Number is the Cash-Balances Standard.Thus our quaesitum, namely a measure of the “ in-trinsic value ” of money, has no separate existence,but is merely one of the Currency Index-Numbers overagain.

The point of view under criticism makes the mis-take of assuming that there is a meaning of price-level,as a measure in some sense or another of the value ofmoney, which retains its value unaltered when onlyrelative prices have changed. The abstraction betweenthe two sets of forces, which seemed momentarilyplausible when we made it, is a false abstraction,because the thing under observation, namely the price-level, is itself a function of relative prices and liableto change its value whenever, and merely because,relative prices have changed. The hypothetical changein the price-level, which would have occurred if therehad been no changes in relative prices, is no longerrelevant if relative prices have in fact changed—forthe change in relative prices has in itself affected theprice-level.

I conclude, therefore, that the unweighted (orrather the randomly weighted) Index-Number ofPrices—Edgeworth’s “Indefinite” Index-Number—which shall in some way measure the value of money“ as such ” or the amount of influence on generalprices exerted by “ changes on the side of money ”or the “ objective mean variation of general prices ”as distinguished from the “ change in the power ofmoney to purchase advantages ”, has no placewhatever in a rightly conceived discussion of the