68

A TREATISE ON MONEY

BK. II

currency under distinguished authority, to the effectthat, for reasons of theoretical statistics, any index-number, which embraced a fairly wide range of inde-pendent price quotations, would work out in practiceto much the same results as any other, and that itwas, therefore, unnecessary to trouble with a varietyof price-levels. This attitude has sunk so deep intopopular economics that it still prevails widely and isthe source of a good deal of misunderstanding. Ideal with what I believe to be its errors in the secondsection of Chapter 6.

The reasons for possible discrepancies between theWholesale Standard and the Consumption Standardare of two quite distinct kinds, which—in the interestsof a much later stage of our argument—it will beuseful to disentangle here. These two standards mayfluctuate differently either because the goods of whichthe former takes account in an unfinished state aredifferent, or are accounted for in different proportions,from the goods of which the latter takes account in afinished state ; or because the unfinished goods con-sidered by the former correspond in price by anticipa-tion to finished goods existing at a different date fromthe finished goods considered by the latter.

As regards the varying importance of differentobjects of expenditure for the Wholesale and Con-sumption Standards respectively, it is evident—apartfrom other discrepancies in weighting — that theformer ignores personal services and most of the costsof marketing and all that part of consumption whichis derived from the enjoyment of fixed consumptioncapital (as, for example, house-room) into the cost ofwhich the rate of interest enters as an important con-stituent ; whereas these items account between themfor a large proportion of the consumer’s expenditure.There is, therefore, no reason in the world why, overlong periods, we should expect them to move to-gether.