Editing John Locke (section)

=== Economics ===
====On price theory====
Locke's general theory of value and price is a [[supply and demand|supply-and-demand]] theory, set out in a letter to a member of parliament in 1691, titled ''Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money''.<ref>{{Citation |first=John |last=Locke |year=1691 |url=http://www.marxists.org/reference/subject/economics/locke/contents.htm |title=Some Considerations on the consequences of the Lowering of Interest and the Raising of the Value of Money |publisher=Marxists |access-date=4 July 2007 |archive-date=24 March 2015 |archive-url=https://web.archive.org/web/20150324135856/https://www.marxists.org/reference/subject/economics/locke/contents.htm |url-status=live }}.</ref> In it, he refers to supply as ''quantity'' and demand as [[Economic rent|''rent'']]: "The price of any commodity rises or falls by the proportion of the number of buyers and sellers ... that which regulates the price ... [of goods] is nothing else but their quantity in proportion to their rent." The [[quantity theory of money]] forms a special case of this general theory. His idea is based on "money answers all things" ([[Ecclesiastes]]) or "rent of money is always sufficient, or more than enough" and "varies very little". Locke concludes that, as far as money is concerned, the [[demand for money|demand for it]] is exclusively regulated by its quantity, regardless of whether the demand is unlimited or constant. He also investigates the determinants of demand and supply. For [[Supply (economics)|supply]], he explains the value of goods as based on their [[scarcity]] and ability to be [[Exchange value|exchanged]] and [[Consumption (economics)|consumed]]. He explains [[demand]] for goods as based on their ability to yield a flow of income. Locke develops an early theory of [[Capital (economics)|capitalisation]], such as of land, which has value because "by its constant production of saleable [[Commodity|commodities]] it brings in a certain yearly income". He considers the demand for money as almost the same as demand for goods or land: it depends on whether money is wanted as [[medium of exchange]]. As a medium of exchange, he states that "money is capable by exchange to procure us the necessaries or conveniences of life", and for [[loanable funds]] "it comes to be of the same nature with land by yielding a certain yearly income ... or interest".

====Monetary thoughts====
Locke distinguishes two functions of money: as a ''counter'' to [[Valuation (finance)|measure value]], and as a ''pledge'' to lay claim to [[good (economics)|goods]]. He believes that silver and gold, as opposed to [[Banknote|paper money]], are the appropriate currency for international transactions. Silver and gold, he says, are treated to have equal value by all of humanity and can thus be treated as a pledge by anyone, while the value of paper money is only valid under the government which issues it.

Locke argues that a country should seek a favourable [[balance of trade]], lest it fall behind other countries and suffer a loss in its trade. Since the world [[Money supply|money stock]] grows constantly, a country must constantly seek to enlarge its own stock. Locke develops his theory of foreign exchanges, by which in addition to commodity movements, there are also movements in country stock of money, and movements of capital determine [[exchange rate]]s. He considers the latter less significant and less [[Volatility (finance)|volatile]] than commodity movements. As for a country's money stock, if it is large relative to that of other countries, he says it will cause the country's exchange to rise above par, as an export balance would do.

Locke prepares estimates of the [[cash]] requirements for different economic groups ([[Land tenure|landholders]], labourers, and brokers). In each group he posits that the cash requirements are closely related to the length of the pay period. He argues the brokers—the [[Intermediary|middlemen]]—whose activities enlarge the monetary circuit and whose profits eat into the earnings of labourers and landholders, have a negative influence on both personal and the public economy to which they supposedly contribute.<ref>{{Cite web |title=Some Considerations of the Consequences of the Lowering of Interest, and Raising the Value of Money (Diplomatic) |url=https://www.newtonproject.ox.ac.uk/view/texts/diplomatic/MINT01863 |access-date=2 March 2024 |website=www.newtonproject.ox.ac.uk |archive-date=2 March 2024 |archive-url=https://web.archive.org/web/20240302220309/https://www.newtonproject.ox.ac.uk/view/texts/diplomatic/MINT01863 |url-status=dead }}</ref>

====Theory of value and property====
Locke uses the concept of ''[[Property (philosophy)|property]]'' in both broad and narrow terms: broadly, it covers a wide range of human interests and aspirations; more particularly, it refers to [[Tangible property|material goods]]. He argues that property is a [[Natural rights and legal rights|natural right]] that is derived from [[manual labour|labour]]. In Chapter V of his ''[[Two Treatises of Government|Second Treatise]]'', Locke argues that the individual ownership of goods and property is justified by the labour exerted to produce such goods{{mdash}}"at least where there is enough [land], and as good, left in common for others" (para. 27){{mdash}}or to use property to produce goods beneficial to human society.<ref name="labortheory">{{cite journal|last=Vaughn|first=Karen|year=1978|archive-url=https://web.archive.org/web/20111019073702/http://mises.org/journals/jls/2_4/2_4_3.pdf|title=John Locke and the Labor Theory of Value|journal=[[Journal of Libertarian Studies]]|volume=2|issue=4|pages=311–326|url=https://mises.org/journals/jls/2_4/2_4_3.pdf|archive-date=19 October 2011}}</ref>

Locke states in his ''Second Treatise'' that nature on its own provides little of value to society, implying that the labour expended in the creation of goods gives them their value. From this premise, understood as a [[Labor theory of value|''labour theory of value'']],<ref name="labortheory" /> Locke developed a [[Labor theory of property|''labour theory of property'']], whereby ownership of [[property]] is created by the application of labour. In addition, he believed that property precedes government and government cannot "dispose of the estates of the subjects arbitrarily". [[Karl Marx]] later critiqued Locke's theory of property in his own social theory.<ref>{{Cite journal |last=Engle |first=Eric |date=15 September 2008 |title=Karl Marx's Intellectual Roots in John Locke |url=https://papers.ssrn.com/abstract=1268545 |journal=Postmodern Openings |language=en |location=Rochester, NY |volume=7 |issue=7 |pages=35–36 |ssrn=1268545 |via=SSRN}}</ref>