Hume's "Of Money"
On the long flight to China I tried to do as much sleeping as I could manage, but besides that I did some reading and one book that I was reading was Scott Sumner's The Money Illusion . I confess I haven't gotten around to finishing that book yet, but it had so many references to a much shorter work that I did manage to go out and read that. This was David Hume's Of Money , an essay that seems remarkably ahead of its time. Economists these days basically all accept the neutrality of money , that how much money a country has doesn't matter in the long run since prices will eventually rise or fall to correspond to the amount of money. Hume believed the same thing in contrast with the mercantilism common in his day. [M]oney is nothing but the representation of labour and commodities, and serves only as a method of rating or estimating them. Where coin is in greater plenty; as a greater quantity of it is required to represent the same quantity of goods; it can have