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ch. 7 THE DIFFUSION OF PRICE-LEVELS 93

which can change relative prices—(1) a technicalchange in the costs or processes of production bywhich something is produced at a changed real cost,and (2) a change in the direction of demand from achanged taste on the part of consumers, or moreoften from a changed distribution of the availablepurchasing power. Since, therefore, a change in thequantity of money generally involves a changed dis-tribution of purchasing power, it follows that relativeprices can be affected, not only by a change on the sideof things, but also by a change on the side of money.

In the second place, there is the familiar fact,which needs, all the same, to be frequently recalledto mind, that there are many kinds of money-contracts, money-customs and money-understandingsfixed over periods of time, which is a further causewhy relative values (i.e. prices) under a monetaryregime do not move freely, even in the fairly longrun. 1 The most important factor of this type forshort-period investigations is of course Wages. Thefailure of wages to move quickly with the WholesaleStandard or with the International Standard overshort periods and the ability of wages to have a trendof their own over long periods is, indeed, probablythe largest part of the actual explanation of thefailure of different price-levels to move together.

For these reasons it is much safer to keep our mindsalive to the Plurality of Secondary Price-Levels and theseparate influences which determine their movementsin relation to General Purchasing Power, rather thanto regard any divergence of particular Price-Levels

1 I need not repeat in this familiar connection what I have alreadywritten at greater length in my Tract on Monetary Reform, chap, i., on“ The Consequences to Society of Changes in the Value of Money ”, fromthe text: “ A change in the monetary unit, which is uniform in its operationand affects all transactions equally, has no consequences. Such changeshave produced in the past, and are producing now, the vastest socialconsequences, because, as we all know, when the value of money changes,it does not change equally for all persons and for all purposes.” See alsomy Economic Consequences of Mr. Churchill.