SCAMBIO. – A fundamental phenomenon of associated life and the specific object of economic science, which might also be defined as the “science of exchange,” or of the contract, since every free act of exchange presupposes a tacit or explicit contract expressing the conviction of the contracting parties that the things exchanged have, for them, at that moment, equivalent values. The foremost problem, therefore, of an economic science so defined is the measurement of value, an indispensable premise for the concrete realization of commutative justice, and hence also of distributive justice.
I. EVOLUTION OF THE FORMS OF S. — The evolution of the forms of exchange, from exchange in kind, or barter, to monetary and then credit exchange, marks the great stages of social evolution (v. PROGRESSO). The law of exchange has increasingly taken shape as the opposite of that governing production: whereas in production practical success is directly proportional to the forces employed, and productivity is linked to an increasing division and specialization of labor, in exchange the result appears inversely proportional to the number of persons involved (merchants, intermediaries, shopkeepers, bureaucrats, etc.), while productivity, in terms of the quality and low cost of services, seems to depend on the concentration of the means, the coordination of the services themselves, and the standardization of types and contracts (v. TIPO).
This is essential in economic life, since the anarchic expansion of the machinery of exchange causes the increasing cost of buying and selling to neutralize, to a large extent, the benefits of industrial progress, consisting chiefly in the continual reduction of production costs. Hence the paradox of the persistence of misery and unrest in a world continually enriched by marvelous scientific and industrial achievements, which have made it capable of immense and highly varied production.
II. THEORY OF MARKETS AND OTHER THEORIES. — The phenomenon of exchange, whose practical manifestation is commerce, is dominated by the celebrated theory of markets which G. B. Say (v.)
classical logy. A profound student of the classical languages and of several Oriental ones, he published critical editions of many works by Latin and Greek writers (Varro, Festus, Ausonius, Theocritus, Bion, Moschus, and Virgil’s Catalecta). With De emendatione Temporum (Leiden 1583) he reconstructed ancient chronology on new and extensive foundations; in the work Thesaurus temporum (there 1606) he published for the first time, from a Latin manuscript of the seventh–eighth centuries (Bibliothèque nationale of Paris, Lat. 4884), the Liber genealogicus, rework-
formulated as early as 1806: products are exchanged, in the final analysis, for other products, and hence each product will find buyers all the more easily, the higher the production of all the other products with which it wishes to be exchanged. But the increase in each production encounters a limit in the fall of prices caused by the increase itself in supply. The restrictive procedures that constitute the rich heritage of economic policies combat the fall in prices by reducing supply—that is, production—and obstructing exchange in a thousand ways. They fail to recognize the means of increasing, instead, all production simultaneously and proportionally, by influencing the formation of capital and the territorial and qualitative distribution of investments.
The solution to the problem requires a central direction of the economy, and can be found only along two opposing paths: either such a central direction is effectively constituted, identifying it with a political government that will follow its particular criteria, translating them into planned programs through which it will seek to interpret the true needs and tastes of all individuals; or each individual is placed in a position to intervene in the market and choose the best offer or the best demand, thereby indicating to producers, through the language of market prices, which productions should be increased, and marking the directives of an automatic economic government of production.
The first of the two paths is the socialist-communist, centralizing and authoritarian one; the second is that of national freedom and economic automatism. If the latter, however, does not find a way to be effectively implemented by solving the problem of measuring value and absorbing the totality of present supply and of the possible future supply, it will leave open only the other path, apparently easier to follow (v. PREZZO). The third ways, fashionable today, are merely temporary and scarcely effective attempts by which one tries, without hope, to delay a total identification of economic authority with political authority.
The rational solution is currently seen by certain modern economic schools (v. HALLESISMO), and by international politics itself in its desperate attempts to reconstruct and organize the world, as requiring greater technical, organizational, and unifying perfection in exchange and credit, and the rapid elimination of obstacles to trade.
Although the vicissitudes of a difficult economic life have suggested or imposed the expedient of regulated exchanges (v. SANTIFICAZIONE), the general intuition and common aspiration of producers and merchants remains the complete freedom of exchange. Though not achievable on its own—that is, without the preparation and support of decisive advances in economic technique generally, and in monetary and credit technique in particular, together with the consequent elimination of the risks of investment, immobilization, and devaluation (v.)—this freedom constitutes the mirage toward which all economic forces tend: confirmation that no political expedient can replace, in the confidence of men, the scientific and technical progress of the economy, and the power, promptness, and flexibility of free enterprise once relieved of the burden of ignorance and fear.
III. S. PRODUCTION AND CONSUMPTION. - Economic science has thus far attached greater importance to production and has given s. less and insufficient attention. The infatuation with production, productivity, and producers has not yet died out: wealth and well-being were held to depend solely on the productive potential of the nation. It was natural that the phenomena and needs of s. should remain in the shadows, and that few, apart from practitioners, should concern themselves with the problems and laws of commerce.
It is now finally clear that well-being consumption (v.). Consumption is indeed nourished by production, but if the mechanism of s. is inadequate or comes to a halt, production too is forced to stop, and misery results for all. It is known, moreover, that easy s. stimulates production, whereas s. made difficult, costly, or risky has the opposite effect.
The products that can be exchanged with one another are of three kinds: products of present labor (goods and services), of past labor (capital), and of future labor (income). S. normally takes place between products of the first kind and products of each of the three kinds: resulting, respectively, in cash commerce, short-term or credit commerce, and long-term and capitalization commerce.
Cash commerce and credit commerce have attained a considerable, if not complete, technical and contractual perfection, with a sufficient array of intermediary institutions, both contracting and insurance institutions, on the national as well as the international level. Capitalization commerce, on the other hand, although it is of vital importance for the development of the other two, for the realization of an economic equilibrium, and for the rational governance of production and s., still possesses equipment that is primitive in comparison with the now practical worldwide unification of the market. Consequently, entrepreneurs and savers remain distant and distrustful, or are completely unaware of one another, seriously obstructing the necessary transformation of part of annual production into new productive capital. It is precisely the expansion of this form of s. that should and could ensure the complete sale, at remunerative prices, of the products of present labor.
The solution to the problem can only be contractual in nature; and the continuous and growing intrusions of economic policy—not all necessary and not always judicious—as well as planning systems, dirigisme, and third forces, do nothing but divert intelligence and activity from the rational solution, delaying that natural process of unification in the field of contracts which has already been developing naturally for centuries, but by now too slowly in relation to the rapid pace of events and of worldwide economic evolution.