I state this by way of illustration: but the value of the remark may be best tested by applying it to some economical doctrines. Let us take, for example, the famous argument of Adam Smith against what he called the mercantile theory. That theory, according to him, supposed that the wealth of nations, like the wealth of an individual, was in proportion to the amount of money in their possession. He insisted upon the theory that money, as it is useful solely for exchange, cannot be, in itself, wealth; that its absolute amount is a matter of indifference, because if every coin in existence were halved or doubled, it would discharge precisely the same function; and he inferred that the doctrine which tested the advantages of foreign commerce by the balance of trade or the net return of money, was altogether illusory. His theory is expounded in every elementary treatise on the subject. It may be urged that it was a mere truism, and therefore useless; or, again, that it does not enable us to deduce a complete theory of the functions of money. In regard to the first statement, I should reply that, although Smith probably misrepresented some of his antagonists, the fallacy which he exposed was not only current at the time, but is still constantly cropping up in modern controversies. So long as arguments are put forward which implicitly involve an erroneous, because self-contradictory, conception of the true functions of money, it is essential to keep in mind these first principles, however obvious they may be in an abstract statement. Euclid's axioms are useful because they are self-evident; and so long as people make mistakes in geometry, it will be necessary to expose their blundering by bringing out the contradictions involved. As Hobbes observed, people would dispute even geometrical axioms if they had an interest in doing so; and, certainly, they are ready to dispute the plainest doctrines about money. The other remark, that we cannot deduce a complete theory from the axiom is, of course, true. Thus, for example, although the doctrine may be unimpeachable, there is a difficulty in applying it to the facts. As gold has other uses besides its use as money, its value is not regulated exclusively by the principle assigned; as other things, again, such as bank-notes and cheques, discharge some of the functions of money, we have all manner of difficult problems as to what money precisely is, and how the most elementary principles will apply to the concrete facts. A very shrewd economist once remarked, listening to a metaphysical argument, "If there had been any money to be made out of it, we should have solved that question in the city long ago". Yet, there is surely money to be made out of a correct theory of the currency; and people in the city do not seem to have arrived at a complete agreement. In fact, such controversies illustrate the extreme difficulty which arises out of the complexity of the phenomena, even