Economics On price theory Locke's general theory of value and price is a
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. 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 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, he explains the value of goods as based on their
scarcity and ability to be
exchanged and
consumed. He explains
demand for goods as based on their ability to yield a flow of income. Locke develops an early theory of
capitalisation, such as of land, which has value because "by its constant production of saleable
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
measure value, and as a
pledge to lay claim to
goods. He believes that silver and gold, as opposed to
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 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 rates. He considers the latter less significant and less
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 (
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
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.
Theory of value and property Locke uses the concept of
property in both broad and narrow terms: broadly, it covers a wide range of human interests and aspirations; more particularly, it refers to
material goods. He argues that property is a
natural right that is derived from
labour. In Chapter V of his
Second Treatise, Locke argues that the individual ownership of goods and property is justified by the labour exerted to produce such goods"at least where there is enough [land], and as good, left in common for others" (para. 27)or to use property to produce goods beneficial to human society. 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
labour theory of value,
Accumulation of wealth According to Locke, unused property is wasteful and an offence against nature, but, with the introduction of
"durable" goods, men could exchange their excessive perishable goods for those which would last longer and thus not offend the
natural law. In his view, the introduction of money marked the culmination of this process, making possible the unlimited accumulation of property without causing waste through spoilage. He includes gold or silver as money because they may be "hoarded up without injury to anyone", as they do not spoil or decay in the hands of the possessor. In his view, the introduction of money eliminates limits to accumulation. Locke stresses that inequality has come about by tacit agreement on the use of money, not by the social contract establishing
civil society or the
law of land regulating property. Locke was aware of a problem posed by unlimited accumulation, but did not consider it his task. He just implies that government would function to moderate the conflict between the unlimited accumulation of property and a more nearly equal distribution of wealth; he does not say which principles government should apply to solve this problem. Not all elements of his thought form a consistent whole. For example, the
labour theory of value in the
Two Treatises of Government stands side by side with the demand-and-supply theory of value developed in a letter he wrote titled
Some Considerations on the Consequences of the Lowering of Interest and the Raising of the Value of Money. Moreover, Locke anchors property in labour but, in the end, upholds unlimited accumulation of wealth.
The human mind The self Locke defines
the self as "that conscious thinking thing, (whatever substance, made up of whether spiritual, or material, simple, or compounded, it matters not) which is sensible, or conscious of pleasure and pain, capable of happiness or misery, and so is concerned for itself, as far as that consciousness extends". He does not wholly ignore "substance", writing that "the body too goes to the making the man". In his
Essay, Locke explains the gradual unfolding of this conscious mind. Arguing against both the
Augustinian view of man as
originally sinful and the
Cartesian position, which holds that man innately knows basic logical propositions, Locke posits an 'empty mind', a
tabula rasa, which is shaped by experience,
sensations and
reflections being the two sources of all our
ideas. He writes in
An Essay Concerning Human Understanding: This source of ideas every man has wholly within himself; and though it be not sense, as having nothing to do with external objects, yet it is very like it, and might properly enough be called 'internal sense.' Locke's
Some Thoughts Concerning Education is an outline on how to educate this mind. Drawing on thoughts expressed in letters written to
Mary Clarke and her husband about their son, he expresses the belief that education makes the manor, more fundamentally, that the mind is an "empty cabinet": I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education. Locke also wrote, "the little and almost insensible impressions on our tender infancies have very important and lasting consequences". He argues that the "
associations of ideas" one makes when young are more important than those made later because they are the foundation of the
self; they are, put differently, what first mark the
tabula rasa. In his
Essay, in which both these concepts are introduced, Locke warns, for example, against letting "a foolish maid" convince a child that "goblins and sprites" are associated with the night, for "darkness shall ever afterwards bring with it those frightful ideas, and they shall be so joined, that he can no more bear the one than the other". This theory came to be called
associationism. It strongly influenced 18th-century thought, particularly
educational theory, as nearly every educational writer warned parents not to allow their children to develop negative associations. It also led to the development of
psychology and other new disciplines with
David Hartley's attempt to discover a biological mechanism for associationism in his
Observations on Man (1749).
Dream argument Locke was critical of Descartes's version of the
dream argument, making the counter-argument that people cannot have physical pain in dreams as they do in waking life.
Religion Religious beliefs Some scholars have seen Locke's political convictions as based on his religious beliefs. Locke's parents were Puritans, so religious trajectory began in
Calvinist trinitarianism. By the time of the
Reflections (1695) Locke was advocating not just
Socinian views on tolerance but also Socinian
Christology. Wainwright (1987) notes that in the posthumously published
Paraphrase (1707) Locke's interpretation of one verse,
Ephesians 1:10, is markedly different from that of Socinians such as
Biddle, and may indicate that near the end of his life Locke returned nearer to an
Arian position, thereby accepting Christ's pre-existence. Although Locke was an advocate of tolerance, he urged the authorities not to tolerate
atheism, because he thought denial of God's existence undermined the social order and led to chaos. That excluded all atheistic varieties of philosophy and all attempts to deduce ethics and natural law from purely secular premises. In Locke's opinion the
cosmological argument was valid and proved God's existence. His political thought was based on Protestant Christian views. Locke advocated a sense of piety out of gratitude to God for giving reason to men. Locke engaged deeply with contemporary theological debates about the
restoration of the Jews to the Land of Israel. He came to these views through close study of
Seder Odor by
Franciscus Mercurius van Helmont and by theological exchanges with
Isaac Newton. In his notes on Romans 11:23, Locke interpreted Paul's metaphor of Jews being "grafted in again" as indicating that the Jews would one day flourish anew as a people, profess Christianity, and be restored to the land promised to the patriarchs. This interpretation aligned with his earlier statements in
The Reasonableness of Christianity (1695), where he emphasized that first-century Jews lived in expectation of the Messiah and a divinely established kingdom. His theological framework shaped his evangelical view of contemporary Jews as a community ultimately destined for conversion and a state of their own. Locke derived the fundamental concepts of his political theory from biblical texts, in particular from
Genesis 1 and 2 (
creation), the
Decalogue, the
Golden Rule, the teachings of Jesus, and the letters of
Paul the Apostle.
The Decalogue puts a person's life, reputation and property under God's protection. Locke's philosophy on liberty is also derived from the Bible. Locke derived from the Bible basic human equality, including
equality of the sexes, the starting point of the theological doctrine of
Imago Dei. To Locke, one of the consequences of the principle of equality was that all humans were created equally free and therefore governments needed the consent of the governed. Locke compared the English monarchy's rule over the British people to Adam's rule over Eve in Genesis, which was appointed by God. Following Locke's philosophy, the American
Declaration of Independence founded human rights partially on the biblical belief in creation. Locke's doctrine that governments need the consent of the governed is also central to the Declaration of Independence. ==Locke's Library==