Book I: Chapter 4

CHAPTER IV.

OF THE ORIGIN AND USE OF MONEY.

When the division of labour has been once thoroughly established, it is but
a very small part of a man's wants which the produce of his own labour can
supply. He supplies the far greater part of them by exchanging that surplus
part of the produce of his own labour, which is over and above his own
consumption, for such parts of the produce of other men's labour as he has
occasion for. Every man thus lives by exchanging, or becomes, in some
measure, a merchant, and the society itself grows to be what is properly a
commercial society.

But when the division of labour first began to take place, this power of
exchanging must frequently have been very much clogged and embarrassed in
its operations. One man, we shall suppose, has more of a certain commodity
than he himself has occasion for, while another has less. The former,
consequently, would be glad to dispose of; and the latter to purchase, a
part of this superfluity. But if this latter should chance to have nothing
that the former stands in need of, no exchange can be made between them. The
butcher has more meat in his shop than he himself can consume, and the
brewer and the baker would each of them be willing to purchase a part of it.
But they have nothing to offer in exchange, except the different productions
of their respective trades, and the butcher is already provided with all the
bread and beer which he has immediate occasion for. No exchange can, in this
case, be made between them. He cannot be their merchant, nor they his
customers ; and they are all of them thus mutually less serviceable to one
another. In order to avoid the inconveniency of such situations, every
prudent man in every period of society, after the first establishment of the
division of labour, must naturally have endeavoured to manage his affairs in
such a manner, as to have at all times by him, besides the peculiar produce
of his own industry, a certain quantity of some one commodity or other, such
as he imagined few people would be likely to refuse in exchange for the
produce of their industry. Many different commodities, it is probable, were
successively both thought of and employed for this purpose. In the rude ages
of society, cattle are said to have been the common instrument of commerce ;
and, though they must have been a most inconvenient one, yet, in old times,
we find things were frequently valued according to the number of cattle
which had been given in exchange for them. The armour of Diomede, says
Homer, cost only nine oxen; but that of Glaucus cost a hundred oxen. Salt is
said to be the common instrument of commerce and exchanges in Abyssinia ; a
species of shells in some parts of the coast of India ; dried cod at