ABSTRACT OF PAPER
Title: In search of good money: from a dualist monetary system to a metallic one (Europe, 16th – 18th Centuries)
Author: Blanc Jerome, Desmedt Ludovic
Most of monetary writers of early modern Europe elaborate on the topic of “good money”. They often denounce the bad state of monetary systems they deal with or build their own views of what should be a good monetary system. The quality of money is thus a crucial feature of monetary ideas. It relates to the balance in the overall supply of the currency (avoiding chronic shortages as well as periods of excessive circulation), the balance in the composition of the currency (small change shortage being a chronic problem; big coins being submitted to international competition), the problem of the stability in the value of money (submitted to debasement as well as overflows of coins and other factors), the problem of counterfeiting and the material quality of coins, etc. In this context, the problem of quantity is subordinated by that of monetary quality. Quality and the sense of what is “good” has a debated contents, if not controversial: it is directly value-driven, and frequently opens to discourses with a major political background. Our purpose is precisely to draw on those debates and articulate them with monetary policies. It is to understand debates in various countries and regions of early modern Europe through the lenses of the distinction between four monetary systems: a dualist monetary system (articulating an “imaginary money” with “real currencies”), a metallic system (fully fledged metallic money with invariable legal tender) and two forms of credit-money : a convertible money system (wherein the issued currency is backed by a real asset in which it can be repaid) and a fiat money system (wherein the issued currency defined with reference to a given asset without convertibility). In order to solve the problems raised by the dualist system, numerous writings aimed at transforming it into a full metallic system (as did Bodin, Mariana and Locke), thus opposing the prince’s right to debase that had characterized the late Middle Ages. The monetary stabilisations that occurred from the end of the 17th century provided the foundations on which credit-money could be implemented and spread. The present paper focuses on the two first systems. It aims at interpreting the various conceptions of the quality of money, according to authors and currents of thought in the specific context of Early modern Europe. Section 1 presents the articulation between quality and quantity of money and states that a focus on qualities is necessary in order to understand the debats of Europe’s early modern monetary writings. Section 2 operates the distinction between the four types of monetary systems and emphasizes the articulation between minting, the unit of account and the settlement of balances as key elements of any payment system. Section 3 deals with the dualist monetary system and develops its contents and difficulties, identifying dualist theorists and critics. Section 4 deals with the metallic system and identifies a series of radical critics, among which Locke, who heavily contributed to the shift towards a metallic system in England. However, the metallic system, by producing huge rigidities, seems to be deemed to provoke stagnation and economic unrest, unless it is completed by new monetary forms – here are introduced the bases of credit money systems. A second paper should deal with the two credit money systems. Apologizes: due to lack of time, the complete paper has been written in French and no translation in English has been operated until now.
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