The quoted passage is at the end of chapter 5 "Of Property" of Locke's Second Treatise. Much of the philosophical interest is in the earlier articulation of the principle known as the 'Lockean proviso' (in, recall, section 33) and the labor mixing argument grounded in self-ownership (sect 27). On re-reading the chapter recently (with expert guidance of Bas van der Vossen and Katharine Gillespie), I noticed, perhaps for the first time, that the very chapter that justifies property is also a polemic against (feudal) land-owning society (in favor of an economy focused on growing numbers and economy).
Earlier in the chapter, Locke had noted that "the invention of money, and the tacit agreement of men to put a value on it, introduced (by consent) larger possessions." (Sect 36). There are five important claims lurking here. I) (the right to) property precedes the invention of money. II) The invention of money facilitates accumulation of property (and of itself; see also sects 48 & 50 quoted above). (III) This generates inequality (this is made explicit in sect 50 quoted above). IV) The value of money is a convention. V) This convention is tacitly consented to.
As an aside, according to Locke the conventional use of money can in a growing economy itself make other things scarce and so valuable, "(where the increase of people and stock, with the use of money, had made land scarce, and so of some value)" (sect 45). There is a complex issue lurking here: in Locke, unlike Hume and later economists, scarcity is itself not a condition of the possibility of property. But that's for another time.
Now, interestingly enough, that the use of money is consented to is a refrain repeated through the chapter: e.g., "amongst that part of mankind that have consented to the use of money," (sect 45); "thus came in the use of money, some lasting thing that men might keep without spoiling, and that by mutual consent men would take in exchange for the truly useful, but perishable supports of life," (sect 47). And again in the passage quoted above.
So, one may be tempted to think that Locke's account of the legitimacy of money as an institution is grounded in a consent theory not dissimilar to his account of the social contract. But I am also reminded of his account of toleration, where (recall) the institution of (true) a church is grounded in voluntary association, that is, mutual consent ("A church...I take to be a voluntary society of men, joining themselves together of their own accord"). But it is crucial to Locke argument in his analysis of the nature of a church that it produces a positive social consequence: piety, that is, obedience to the law. This positive consequence is conducive to social order and, to connect it to the present argument, respect for property.
Let's now, finally, turn sect 50 quoted above. First, it clarifies that (IV) "the value of money is a convention" is imprecisely formulated. It would be better to say, (IV*) that money is valuable is a convention. For, the exact value of money can vary. And (VI) of this particular value labor is the measure. How Locke's version of the labor theory of value is supposed to work is not my present concern.
Second, and more important, Locke's account of the legitimacy of the convention of money as a social institution is not just grounded in (tacit) consent. It is also grounded in what we may call historical experience over time. They have learned to appreciate ("found out") the social utility ("made practicable") of the convention despite some of its equally evident drawbacks -- that is, others become richer than you do. That is to say, social utility is a matter of judgment about social costs and benefits. This two-staged for of legitimation (first) tacit consent then, after a period, (second) continued consent based on historical experience of positive social consequences.
This two-stage approach to legitimacy is, I think, capable of being extended to, appropriate for other social institutions (and conventions) in a Lockean approach. As noted above, he comes close to offering it in his account of toleration of certain churches. Obviously, it means that initial legitimacy of a social institution is always conditional on the continued proper effectiveness of the institution over historical time. This analysis of costs and benefits may well involve comparing incommensurables and so will involve good judgment, and it is not impossible that different communities and ages will come to different conclusions. For some the lack of a clear and objective decision procedure will be thought a problem for Locke; for others, this (almost Aristotelian) contextual variability will be thought a proper feature.
To put the last point provocatively: the Lockean can now respond to (say) the Marxist or Environmentalist critique of (one element of) capital accumulation as follows in the spirit of adaptation/experimentation: sure, the institutions of the status quo have serious drawbacks (as all institutions are wont to do). Why not propose, or better yet, with your comrades, try out an alternative institution or set of institution that can generate consent from its participants and that generates good social outcomes over time worth living by?
What's striking about all this is that in one sense Locke comes closer to Spinoza for whom all social contracts are never final but always dependant on continued utility of the contract to the parties; and in another sense he now clearly anticipates the more consequentialist style of justification of social institutions found in Hume and Adam Smith, while still remaining distinctly (ahh) Lockean.
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