1. _The actual purchasing power of whatever is used as currency_--in our case, for nearly the whole of European history, gold[7]: the amount of wheat and leather and building materials and all the rest of it, which so much weight of gold (say an ounce) will purchase at any time. This varies in different periods according to the amount of gold present in circulation, and its efficiency in circulation. We saw how these were the factors of price, that is, of the purchasing power of money, when we spoke of money earlier in the book. 2. _The number of kinds of things_ which money can be used to buy in any society--or, to put it in learned words, “the number of categories of purchasable economic values.” 3. _The economic scale of the community_, that is, the number of its citizens and the amount of its total wealth at a given time. When we go into the full meaning of all these three things we shall see how, in combination, they make up the social value of money at any time, and why that value differs so very much between one historical period and another. 1. _The actual purchasing power of the currency._ Given the same currency (and in Western Europe it has, for all practical purposes, been gold for the last two thousand years), we can measure the purchasing value of such and such a weight of gold in any period by what is known as the _Index Number_ of that period. The Index Number is a thing important to understand, because it comes into a great deal of modern discussion as well as historical discussion; for instance: wages are nowadays largely based upon an Index Number. A particular year is taken, say the year 1900, and the records of what various commodities were fetching in gold in the market during that year are examined. Thus it is found that an ounce of gold in that year would buy (let us say) four hundred pounds weight of wheat, 600 pounds weight of barley, 80 pounds weight of bacon, 80 gallons of beer, a quarter of a ton of pig iron, and so on. A list is drawn up of all the principal commodities which are used in the community. Suppose that 100 such commodities are taken and between them make up by far the great part--say seven-eighths--of all the values commonly consumed in that community. The next thing to do is what is called to “weight” each commodity, for it is evident that a commodity which is very largely bought--such as bread--must count more in estimating the purchasing power of money than a commodity of which very much less is used--such as tin.