Law of Value

Principles of Economy

by Martin A. Armstrong


Law of Value

The important economic trend that becomes clear here is what one might call the Law of Value. In other words, the further one travels from the main economic center, the greater the purchasing power of the standard unit of account. Thus, the didrachm’s value tended to increase in purchasing power the further one traveled from Greece so that by the time you reached Cisalpine Gaul, the purchasing power equivalent of the didrachm became its half-denomination, the drachm. This Law of Value holds true in modern times as well. The most expensive cost of living tends to be in the dominant centers of commerce. Thus, a home outside of London or New York costs less than one located in the city. The further one travels from the city the greater the purchasing power of the standard unit of account becomes. Therefore, the cost to feed one child in New York becomes the cost of feeding 20 children in South America or Africa. The same Law of Value thus held true in ancient times as it does today in modern times.


Principles of Economy
© Martin A. Armstrong