Even quite simple economies need money. A mere subsistence economy might function without one but before any kind of market economy develops, a medium of exchange is a necessity. If typical forms of money, like banknotes or coins, don’t exist, either in law or in practice, then an alternative is likely to develop on…
France was the setting of one of the largest early experiments with paper money in Europe. This experiment usually refers to the paper money introduced in France by the Scottish economist and banker John Law in the mid-to-late 1710s. This was not the true introduction of paper money in France though. The country used…
Standards of living improved in all Western countries after the Second World War. Incomes rose quickly, allowing more people to enjoy the use of products that were novelties or luxuries before the war, things like household appliances and cars. Homes were getting larger to fit all of the things people were able to afford…
For decades before the First World War, the values of currencies were broadly stable. Fixed exchange rates against gold and convincing commitments by governments to maintaining the gold standard made this so. The war caused almost all countries to suspend their gold standards and many governments printed far more money and borrowed a lot…
There have been numerous instances in history where several different currencies circulated in the same place simultaneously. Forms of this come up in several settings. One is the variation where there is no clear money-issuing institution. The result is often the importation of foreign monies. Another variation is where there are numerous money-issuing entities,…
This is the second in a two-part post. The first briefly described the banking system in England prior to the suspension of the gold standard in 1797 and the actions of the Bank of England after that suspension. It also summarized the argument of defenders of the Bank of England against accusations that the Bank…
Over the centuries, paper money has provided a number of conveniences, even in times and places more accustomed to precious metal-backed money. Unfortunately, in several different eras, issuances of paper money without gold backing caused trouble. Examples are numerous and include settings like France during the Mississippi Bubble or colonial America during the War of…
The second half of the 20th century has seen a lot of change in the world’s monetary arrangements. In the years after the Second World War was brought to an end, the Bretton Woods system tried to restore monetary order, reviving some elements of the interwar years’ gold standard and combining this with some…
Adam Smith is one of the two most famous of the 18th century Scottish Enlightenment thinkers and he counted the other, David Hume, among his closest friends. David Hume receives a handful of mentions in Smith’s The Wealth of Nations. Hume likely influenced some of Smith’s thoughts but Hume was also widely read, far…
Before the 20th century, and especially before the 19th century, new ways of thinking about the economy or finance were advanced by people who are not considered to have been economists first-and-foremost. In the English-speaking world, prior to Adam Smith, among the most influential commentators on economic subjects were Nicholas Barbon – a property…
