Page:Stabilizing the dollar, Fisher, 1920.djvu/167

8] 8. Why Has So Simple a Remedy Been Overlooked

The cautious and conservative reader will ask: if the evils of our present dollar are so great and the remedy so simple, why did not our civilization improve its monetary units years ago, as it improved all other units? Why was so simple an idea overlooked or ignored?

There are several answers, some discussed in Appendix II: ignorance, the money illusion, and the absence, until recently, of any large mass of time contracts requiring any reliable standard of deferred payments.

But the most specific and conclusive answer is this: mankind could not have standardized money until recently, because until recently it lacked the necessary instrument, the index number. Just as mankind could not standardize units of weight until a suitable instrument, the scales, was devised for measuring weight; and just as electrical units, like the ohm and the kilowatt, could not be standardized until the proper instruments for measuring such magnitudes were invented; so money could not be standardized until the invention and the perfecting of the index number.

The index number, the only instrument we possess for measuring purchasing power, is a very recent invention. Professor Jevons a generation ago may, I think, be truly said to have been the inventor (although the general idea had been anticipated by others). But until the last ten or twenty years, this new instrument had not been sufficiently perfected and tested to create general confidence in its results. Only within that brief period has it come into general use among business journals and won the confidence of business men. We see, then, that the practical application of this great