ch. 17 PROPERTIES OF INTEREST AND MONEY 231

like a motor-car, depressions would be avoided ormitigated because, if the price of other assets wastending to fall in terms of money, more labour wouldbe diverted into the production of money;—as we seeto be the case in gold-mining countries, though for theworld as a whole the maximum diversion in this way isalmost negligible.

(ii) Obviously, however, the above condition issatisfied, not only by money, but by all pure rent-factors,the production of which is completely inelastic. Asecond condition, therefore, is required to distinguishmoney from other rent elements.

The second differentia of money is that it has anelasticity of substitution equal, or nearly equal, to zero;which means that as the exchange value of money risesthere is no tendency to substitute some other factor forit;—except, perhaps, to some trifling extent, where themoney-commodity is also used in manufacture or thearts. This follows from the peculiarity of money thatits utility is solely derived from its exchange-value, sothat the two rise and fall pari passu , with the result thatas the exchange value of money rises there is no motiveor tendency, as in the case of rent-factors, to substitutesome other factor for it.

Thus, not only is it impossible to turn more labouron to producing money when its labour-price rises, butmoney is a bottomless sink for purchasing power, whenthe demand for it increases, since there is no value forit at which demand is diverted—as in the case of otherrent-factors—so as to slop over into a demand for otherthings.

The only qualification to this arises when the risein the value of money leads to uncertainty as to thefuture maintenance of this rise; in which event, a x and<2 2 are increased, which is tantamount to an increase inthe commodity-rates of money-interest and is, there-fore, stimulating to the output of other assets.

(iii) Thirdly, we must consider whether these con-