Monetary Theory and Cameralist Economic Management, c.

1500-1900 A.D.

Abstract

More than England and other states the German principalities were, in the preindustrial period, hampered by

silver outflow and persistent pressures on the balance of payments which led to idiosyncratic models and

strategies of economic development usually but not entirely helpfully called “Cameralism”. It is less well

understood how Cameralism as a policy of order and development and monetary theory went together. The

present paper will attempt a sketch of these working mechanisms as well as provide a few angles for new

perspectives and future research. A first section after the brief introduction studies general issues of development

in relation to balance of payment constraints (II), followed by the discourses on whether the domestic currency

ought to remain stable in terms of intrinsic (silver) value (III), or whether it may be debased so as to raise

domestic exports and competitiveness (IV). Both options were considered, at times and by varying actors, as

valid strategies of promoting economic development, especially export-led growth, although most

contemporaries viewed coin debasement as harmful to the economy. A fifth section discusses an alternative to

the aforementioned strategies, by raising effective monetary mass through increasing velocity. Since the middle

ages and into the nineteenth century the German economic tradition had a clear understanding of how velocity

could be managed and the common weal stimulated by an increase in “vivacity” of circulation (V). Upon

hindsight it appears that we find here a powerful programme towards promoting economic development and

Europe’s rise towards capitalism. A conclusion will offer some thoughts for further research (VI).

1

I. INTRODUCTION: MONETARY MANAGEMENT AND STATE INTERVENTION AS

POSSIBILITIES FOR DEVELOPMENT IN PRE-INDUSTRIAL EUROPE

Recent research has stressed the fallacy of the “free market” paradigm. Even the perfect

markets of today’s capitalist economies are tightly regulated (Harcourt 2011; Stanziani 2012;

Rössner, ed. 2015c). What historians of economic thought have often tended to forget is that

this idea, almost a truism, has had a long intellectual history as well as tradition as applied

policy. Historical evidence shows that since the last half-millennium or earlier (see Reinert

1999), Europe’s rise towards capitalism and modern economic growth took place under the

fetters of order, regulation and state interventionism. Without a sense of order and state

intervention, the mere concept of economic freedom would sound counter-intuitive (Sombart

1921; Braudel 1982-4, vol. 3; Vries 2002; Vries 2015; Reinert 1999; Reinert 2007; Epstein

2000). Neither did the world become more liberal, nor did the state withdraw from the

economy in any way after c.1800 (Stanziani 2012; Magnusson 2009).

But whilst means and theories of state interventionism post-1800 are increasingly well

understood by historians and economists (summaries in Reinert 1999, Reinert 2007, Vries

2006), the pre-1800 period, which in many ways laid the pre-conditions for later economic

growth (van Zanden 2009), still remains understudied. In an age when neither modern states

nor modern economies existed, state intervention in the economy came across in shapes and

forms profoundly different from what we have learnt to view as “economic policy” nowadays.

And as late as the nineteenth century, state interventionism looked very different from

twentieth-century economic governance (Hall 1986). Even the more powerful fiscal military

states of the Ancien Règime (Bonney 1999; Yun-Casallila and O’Brien 2012) had a fairly

limited strategic menu of economic policy choices available at their disposal (Magnusson

2009, chs. 1 and 2). These usually extended to basic means of regulatory policy, especially

market regulation, including price caps (usually at times of harvest crises), prohibitions of

usury and forestalling; quality controls, or regulation of access and market hours.1 England

was an exception, with a somewhat deeper history of economic interventionism. Industrial

and economic development had been state-promoted since the middle ages, in particular by

the stimulus which the woollen manufactures received by the policy of bounties and export

prohibitions on raw wool since the later fifteenth century (Reinert 2007, ch. 3). But similar

1 We still lack a systematic account of government policies regarding the economy (state interventionism, so to speak) in the pre-modern age. But useful remarks are to be found in Magnusson 2009, ch. 2, Vries 2015 (with a focus on early modern England and China), as well as Reinert 1999, with a focus on the theory and history of economic thought relating to the state and the economy pre- and beyond 1800.

2

prohibitions are known from the German Imperial Diets of the 1530s (e.g. Blaich 1970) and

many other European regions; there is still scope for large-scale comparative surveys. New

research has found proactive interventionist states at work in the eighteenth-century Habsburg

Netherlands (Flanders) as well as Scotland, which worked according to the modern Infant

Industry promotion scheme (ISI) (Coenen 2016; Rössner 2015a).2 To what extent such

measures were effective, still remains a matter of mystery; comparative long-term studies on

European economic policy and economic growth are still wanting.3

One major branch of economic policy and state intervention that has evaded the radar

of historians so far, was monetary policy and monetary management. Indeed, it is in the realm

of monetary policy as a “policy of order” – which the German language still has as

Ordnungspolitik (Eucken 1950; Woll 1999, pp. 8-17) – where we find a rich economic

discourse, mainly in continental Europe but in particular the German lands since the

fourteenth century. We find competing paradigms on how the well-being of the common

wealth – the emerging “states”, nations and national economies in early modern Europe,

which did not yet quite exist in their commonly-recognized post-1800 shapes yet were in the

making – could be raised by a well-designed monetary paradigm, policy and management.

This discourse has remained underexplored, both in regards to its possibilities of actively

interfering with the economy and thus the promotion of the common weal, as well as in terms

of its general contributions to modern economic reasoning.4 It is these underexplored lines of

the continental economic discourses, sometimes called “Cameralism” (on the virtues and

pitfalls of this nomenclature see Rössner 2015b, 2016), that provide a new vision not only of

the rise of the modern state but ultimately also the rise of modern capitalism. These lines of

thought will be explored in the present paper, with specific regards to Cameralist monetary

theory; Cameralist economic practices have been dealt with elsewhere (e.g. Rössner 2012).

Similar to its step-brother mercantilism “Cameralism” represents in many ways a

misnomer. It implies a degree of epistemic stringency it may have never had. Apart from the

fact that not even the modern economic sciences have ever been fully paradigmatic or

2 As the present paper is mainly concerned with ideas and not practice of state interventionism in the economy, the reader is referred, for policy implementations and “real” trajectories since the middle ages, to the following works: e.g. North, Wallis, and Weingast 2009; Epstein 2000; on Germany in the early modern period, see, e.g., Blaich 1970, Blaich 1973, and Blaich 1992. An interesting case study for Württemberg around 1500 is Weidner 1931. For early modern Britain, see Parthasarathi 2011, and Ashworth 2003; further Hoppit 2011a, Hoppit 2011b; Sickinger 2000; Gambles 2000. For global comparison, see Vries 2015 and Vries 2002.3 The present author is currently completing such a comparative long-term survey for the European economy since the Renaissance.4 An excellent sketch, however, that goes into this direction is Reinert 1999.

3

“closed” theories (such as Keynesianism/Post-Keynesian economics, Neoclassical Economics,

Monetarism etc.), eighteenth-century Cameralism was at least sufficiently codified and

“canonised” to a degree to classify as a visible and peculiar economic theory. Since the 1720s

Cameralism was a fully accredited course of study at German, Swedish, Italian and

Portuguese universities, with fairly specified range of textbooks used in class, implying a

degree of epistemological coherence which other streams of thought, such as “mercantilism”

lacked (Rössner 2015, Magnusson 2016, Reinert & Carpenter 2016; Rössner 2015; Reinert &

Rössner 2016, Backhaus 2009, Priddat 2008; Bowler 2002, Wakefield 2009).

“Cameralist” political economy – the mainstream economic reasoning in continental

Europe between the later sixteenth and the nineteenth centuries (Reinert 2007; E. Reinert &

Carpenter 2016, Rössner 2016a) – emphasised how through the ordering and structuring of

the market by monetary policy and monetary management the common weal and domestic

competitiveness could be raised. Prima facie this seemed to involve little more than some

basic market regulation, using ordinances that dealt with the types of coin to be accepted in

the market, and the fixing or setting of spot exchange rates for the hundreds of different types

of currencies and currency denominations that circulated in the German and other market

economies on the continent (gold florin, silver thaler, cruzado, gulden, down to shillings,

stuivers, groats/groschen, batzen, then pennies, kreutzers, hellers, farthings and mites and so

on). It was about getting the parameters right, mainly through setting the “right” price of

currency, usually denoted as the gold-silver ratio, or spot exchange rates for all circulating

coins in the realm – domestic (old vs. new) as well as foreign ones, as well as specifying the

amount of coin received in return for deliveries of bullion to the mint. This entailed keeping a

healthy supply of money in circulation, preventing actors from exporting or demonetising a

particular type of money or coin, on the grounds that gold or silver were under- or overvalued.

It included the prevention of individuals engaging in financial market arbitrage and

speculation, which would have led to an outflow of coin for speculative gains to foreign

financial markets and thus jeopardized the “Common Good”. Currency speculation and coin

arbitrage were frequently identified (and sometimes persecuted) malpractices in early modern

Europe. They were seen as negatively affecting the well-being of the Common Weal (Rössner

2012, ch. IV). This was, in practice, a fairly laissez-faire approach to the market economy, as

medieval and early modern economists entertained no illusion of being in control over the

actual amount of money in circulation: government could never control, let alone determine,

the amount of money put in circulation. It could only offer the “right” monetary parameters to 4

the public (see also Sargent / Velde 2003). But the story did not end there. Clever and well-

designed monetary management could significantly raise the well-being of the common weal

and achieve positive impacts upon this common weal’s economic expansion, often effecting

economic growth. The following sections will work out the central aspects of this in more

detail.

Cameralist theory was contingent upon idiosyncratic conditions of time and space,

especially the peculiar political and economic geography of the early modern Holy Roman

Empire or “Germany” (Backhaus 1993, p. 329; Backhaus 2016). A near persistent

undersupply of domestic silver – the main monetary material (Rössner 2012, ch. III; Rössner

2014a) – generated, in continental European political economy discourse before 1800, a quite

peculiar line and approach towards promoting domestic welfare through monetary policies

addressed at “ordering” the market through measures of monetary policy directed at coping

with and overcoming such silver (monetary) scarcity. This entailed strategies to close the

liquidity gap triggered by persistently negative trade balances and the absence of native silver

supplies in the case of most German and other continental economies of the age (Rössner

2016c).

But how did this translate into positive economic development? The following

sections will offer a sketch of suggestions. A focus will be on the history of economic thought

accompanying this process during the early modern/pre-industrial period, where we find

important pre-texts and pre-conditions that were laid for later (post-1800) processes of

modern economic growth and transformation (van Zanden 2009; Malanima 2009; Sombart

1921/1928). The discussion commences with general issues of development in relation to

silver scarcity or balance-of-payment-constraints (II), followed by the question of whether

currency ought to remain stable in terms of its intrinsic or silver value (III); or whether it may

be debased in some cases. Both strategies were considered, by varying authors and during

various times, as permissible strategies in terms of promoting economic stability and

development. But the mainstream inclined towards the former: currency debasement was

frowned upon by most writers. It was against God’s chosen order. It violated distributional

justice. The well-governed Christian community would be tainted by debased coins that did

not contain the “just” amount of silver and gold. Since the Renaissance and through to the

modern age, currency debasement as a means of effecting currency devaluation remained a

profoundly heterodox stance. Strikingly enough it was repeatedly applied in practice by

5

European states, leading to a sort of intellectual schizophrenia or cognitive distortion: voices

such as the Saxon “Ernestine” (1530) at least were being honest by arguing in favour of

something that had been, and would be, practiced for centuries yet was, and had always been,

condemned in the political economy writings as frivolous and utterly sacrosanct (IV).

Strategies directed at increasing money’s velocity of circulation represented an alternative

strategy of improving the effective monetary mass (M.V) as an expedient for currency

manipulations, enhancing monetary supply without resorting to currency debasement. They

represent an interesting development in continental monetary theory which exhibits wider

implications with regard to economic growth and development. These will be discussed as

well (V), before a conclusion offers some further thoughts (VI). In this way the paper opens

up new perspectives for research in the history of pre-classical economic thought and

Europe’s rise towards capitalism.

II. “LAISSEZ-FAIRE WITH THE NONSENSE TAKEN OUT”. SILVER, DEFLATION AND THE

CAMERALIST VISION OF A FREE MARKET ECONOMY AS SEEN THROUGH THE MONETARY

LENSE

Since the days of Adam Smith (Book IV, ch. 1, Wealth of Nations 1776) the mercantilists and

Cameralists had been ridiculed for their silver fetishism. Some modern historians (e.g. Mokyr

2009, ch. IV) and economists have endorsed this claim (e.g. Ekelund & Hébert 2014, pp. 48-

50, 72ff.), albeit it can be easily proven unfounded: no self-respecting early modern

mercantilist would have been as naïve to conflate gold or silver with real wealth (Stern &

Wennerlind 2014, introduction). Gold and silver were merely seen as representative of such

real wealth, which lay in production, agricultural as well as manufacturing (ibid.). But the

mercantilists and Cameralists had a point. Given the prevailing geographic and economic

circumstances of early modern continental European states, silver shortages created problems

of economic and social disequilibrium (Rössner 2012, Rössner 2014b, Keynes 1936, ch. 23).

This was a result of the peculiar nature of monetary policy, monetary management and early

modern theories of money (Redish 2006; Sargent & Velde 2003; Schremmer & Streb 1999;

Rössner 2014b).

When sixteenth century English writers used the term Common wealth or common

weale – German sources used the linguistic equivalent der gemeine Nutzen or das gemeine

Wohl – they had in mind a functional, thriving, and harmonious society at large. Economics

6

and the market economy were only one subfield within a larger field, representing a more

holistic conception that combined individual with societal welfare maximization (Roberts

2014, 135-138). In this model of economy (or oeconomy), social, economic and political

features were inseparably tied together, covering even religious well-being. The very same

ruler who had to look after a well-governed spiritual Christian community, had, with the same

degree of emphasis and enthusiasm, to keep an eye on domestic manufacturing

competitiveness, productivity increases, economic growth and development in the same way

as church services on Sunday and the upkeep of a good Christian spirit and faith amongst the

community. It is only our modern macroeconomic models and conceptions that have given up

on the “spiritual” elements of societal wellbeing focusing almost exclusively on the

“economy”, and measures for its well-being are often limited to GDP per capita, total factor

productivity and the like; indicators developed when national income accounting schedules

were derived to cope with crisis in manufacturing during the age of Keynesian ascendancy in

the 1920s and 1930s (Schmelzer 2016; Philipsen 2015).5

From Martin Luther’s On Commerce and Usury (1524) to John Hales’ A Discourse of

the Common Weal of this Realm of England (1549), not to speak of later macroeconomic

visions by Veit Ludwig von Seckendorff (Teutscher Fürstenstaat, 1655) or Philipp Wilhelm

von Hörnigk’s Oesterreich über alles wann es nur will / Austria Supreme if only it so wills

(1684) (Rössner 2017) economists began to address questions of productivity and economic

growth that were, in generic terms as well as purpose, not radically different from modern

conceptions (see essays in Rössner ed. 2016).6 Perhaps the best way to elucidate this point is

to return to the mid-fourteenth century polymath Nicolaus Oresme, Latin Oresmius, who has

been hailed, in a recent contribution, as an origin figure for modern political economy and

modern conceptions of the state (Nederman 2009, pp. 235-247).7 And indeed lliterally all later 5 See the April issue of The Economist (2016) and the special feature on GDP, and the new books by Schmelzer (2016) and Philipsen (2015). I am indebted to one of the anonymous readers of the paper who raised this important aspect in their report. On later conceptions of the well-governed Christian common weal, see, e.g. “Godfather of Cameralism’s” (Small) Veit Ludwig von Seckendorff’s Teutscher Fürstenstaat (1655), or the same author’s Christenstaat (Leipzig: Glebitsch, 1685), in which he battled the growing fashion of “ruthless” (ruchlos) “atheism” that prevailed during his days (Christenstaat, 1685: preface, p. 2). 6 On the methodological vices and virtues of what constitutes modern economic thinking, and how modern economic reasoning has evolved, there is still much debate amongst economists and historians of economic thought. Some, including Blaug 1985, Sandmo 2011, or Mokyr 2009, tended or still tend to believe in linear progress in the science of economics from worse, to bad, to good – “improvement” in economic knowledge. Others are more sceptical, see e.g. Pierenkemper 2012 or Roncaglia 2005. Magnusson 2016, p. 68 goes as far as stating that there is no good or bad economics (and thus no progress in economic analysis), but only more or less effective strategies of addressing economic reality, especially with the aim of reducing scarcity and finding optimal solutions to given problems of resource allocation. 7 Oresme also seems to have had a fairly laissez-faire attitude towards business and commerce, which many contemporary theologians would not (yet) share. See Nederman 2009, pp. 239, and pp. 222-235 on John of Paris,

7

monetary visions under the mercantilist and Cameralist paradigm would draw, between 1500

and 1900, upon “Scholastic” views of money and the economy; views that had been presented

in condensed form in Oresmius’ Tractatus de origine, natura,jure et mutationibus

monetarum, written sometime between 1350 and 1358. Although a direct link between

Oresmius and post-1600 “German” economic texts is difficult to prove (neither medieval nor

early modern authors before 1700 bothered much to use footnotes and other references to

indicate their sources), we know that Oresmius’ treatise was widely read across Europe until

the end of the middle ages. Gabriel Biel (c.1415-1495), one of Germany’s most important

“scholastic” theologians, was heavily influenced by Oresmius in his remarks on monetary

theory and policy. He was principal of the newly-founded University of Tübingen, acted as

advisor to the Duke Eberhard of Württemberg and became actively involved in south-west

German monetary policy. His fame and reputation extended as far as the Spanish “School of

Salamanca”; at Salamanca and Coimbra university chairs were instituted explicitly for the

exegesis of Biel’s works. Biel was probably the first voice in the German lands to promulgate,

Oresmius’ message that the currency – and thus monetary management – was not in the

property of the King (Prince) but belonged to the entire political nation or common weal

(Mäkeler 2003, 58-60, 81f.; Iserloh 1955, 225f.; Detloff 1980, 489-91; Kötz 2016 for a most

recent summary). Oresmius’ claim was made against the background of the absurdly-high

rates of coin debasement used by the French King to raise money for war in the 1350s

(Spufford 1998; Sussman 1993). It nevertheless made for an important intellectual refinement

in medieval and early modern conceptions of “the state” and “economy”, their boundaries as

well as fields of interaction (see also Nederman 2009). Gabriel Biel in turn proved highly

influential to other sixteenth-century German writers, including Martin Luther. Germany’s

most eminent nineteenth-century economist Wilhelm Roscher was convinced that Oresmius

stood the test of modern monetary theory (Roscher 1863, p. 306, after Schefold, ed. Caspari

2004, p. 79).

Nederman has called Oresme’s treatise “a work recognizably in the vein of political

economy,” stressing that in this treatise Oresmius accidently laid the scientific foundations of

modern aggregate economic analysis: “By acknowledging and exploring the necessity of a

symbiotic relationship between good government and the common wealth, Oresme maps out

the rudiments of a route that would be travelled time and again in European political and

private property conceptions and economic/market liberalism in medieval (Scholastic) economic thought around 1300.

8

social thought.” (Nederman 2009, p. 245; 247). By negating the Prince’s (or King’s)

prerogative to alter a currency’s precious metal value at will, stressing that this prerogative

belonged in the hands of the communitas regni (community of the realm) instead, and that to

promote the common weal should have the highest priority for any ruler (Schefold ed. Caspari

2004, p. 98), Oresmius captured the pillars of Renaissance and early modern social and

economic theory, as visible in the medieval Fürstenspiegeln (Princes’ Mirrors) literature and

Giovanni Botero’s Ragion di Stato (1589), upon which the mercantilist-Cameralist conception

of manufacturing promotion and division of labour as main sources of a nation’s wealth

seems to have rested (see contributions in Rössner ed. 2016; especially E. Reinert &

Carpenter 2016, pp. 29-39). Since the fifteenth century excerpts of Oresmius’ treatise began

to appear in print, 1484 in Cologne, 1511 in Paris (Schefold ed. Caspari 2004, p. 84). We can

be confident that to early modern writers on monetary matters knew and drew on Oresmius’

treatise (Schefold, ed. Caspari 2004, p. 98; Dittrich 1974). In the case of the German-speaking

authors of the post-1500 period, Biel’s treatise would have been known, too; with Biel acting

as an important transmitter between Oresmius and Cameralism, with early Cameralist texts

going back to the sixteenth century (Dittrich 1974; Schefold, ed. 2009, introduction;

Zielenziger 1914). Thus Oresmius’ tractatus, although not usually or specifically

acknowledged as a source of inspiration by contemporary Mercantilist and Cameralist

authors, provided the benchmark of continental monetary theory until the mid-nineteenth

century. Statements to be found in (Heckscher 1932, Vol. 2, pp. 197-216) or more recently

(Föste 2015, p. 14f.) that the mercantilists and Cameralists never made a meaningful

contribution to European monetary theory, thus need reconsideration. They reflect a

somewhat skewed view on the emergence of modern theory. Whilst the Cameralists and most

English and French mercantilists did borrow heavily from medieval conceptions, they

nevertheless devised important new departures in monetary theory and monetary management

(and in macroeconomics as well as growth and development theory, see Reinert 1999) that

deserve closer examination.

Well into the days and age of Johann Heinrich Gottlob von Justi (1717–1771) or

James Steuart (1712–1790) most contemporaries seem to have shared essentially similar

convictions as to what money should look like. These conceptions extended mainly to the

axiomatic that its purchasing power should rest upon intrinsic content. The amount of gold or

silver each coin contained should equal the market value of these metals, with only a small

allowance for deduction, usually in the area of two per cent, for brassage (cost of minting) 9

and seigniorage (at that time the regal monopoly charge). There is little here that

distinguished earlier voices during the fourteenth, fifteenth and sixteenth century from the

post-1650 Cameralist and mercantilist “mainstream” voices, from Bacon, Malynes, Potter and

Locke down to their continental counterparts of the likes of Wilhelm von Schröder, Philipp

Wilhelm von Hörnigk, or Johann Heinrich Gottlob Justi towards the later eighteenth century,

even into the nineteenth century (an age into which the metallic or commodity standard and

theory of money survived, see Redish 2003 and Sargent/Velde 2003). This “medieval”

framework of analysis carried an important set of implications. Bullionist reasoning –

bullionism denoting a sort of crude or primitive medieval mercantilism with a generally rather

undifferentiated emphasis on a positive balance of payment without considering wider

implications, such as particular trade balances which may be negative as long as the aggregate

trade balance remained positive – ran across the epistemological boundaries of what could be

called Scholastic or Neo-Aristotelian vs. Mercantilist economics and later pre-classical

schools (Pribram 1992; on the medieval period, see Wood 2002).8 It can be found in European

economic thought since the mid-fourteenth century at latest; it has even continued to re-

appear until very recently. Scholars have studied this hunger for bullion or “fear of goods” (E.

Heckscher) from various angle points; often with a critical stance. Keynes, in his General

Theory, was among the few influential non-Germanic modern economists who was

outspokenly positive, arguing that a net-inflow of money would have kept interest rates, and

thus the costs of borrowing money low, which should have helped stimulate incomes,

consumption and employment. In this way, he saw the medieval Usury Laws as an early form

of economic management, stimulating the common weal by keeping the marginal profitability

of capital high so as to sustain a good level of investment or gross domestic capital formation

(Keynes 1936; Böhle 1940; Röpke 1971). In the present context it is important to see how

those theoretical considerations (discourses) and practical requirements (policy) went beyond

providing good property rights and the frame of a healthy and well-governed early modern

Christian market economy. They touched upon the age-old question of economic growth.

On the continent monetary policy always was a policy of order in the market. And the

market theory, which the Cameralist authors entertained, from the days of Johann Joachim

Becher (1635–1682) and Veit Ludwig von Seckendorff (1626–1692) up to Johann Heinrich

Gottlob Justi (1717–1771), was quite close to our modern notion of the free market (Harcourt

2001; Eichengreen 2007 on post-1945 coordinated capitalism). In this model free markets

8 On the twentieth century the chapters in Magnusson, ed. 1993. 10

were defined as markets that were free of rent seeking, monopoly, ruinous competition

(“Polipoly” in the words of J. J. Becher), speculation, arbitrage and other forms of usurious

exchange, or what Martin Luther in the 1520s and Cyriakus Spangenberg in the 1590s called

vngleiche hendel: asymmetrical transactions involving money as a means of payment, in

which one person lost out because of imperfect market knowledge, lack of good money, i.e.

reliable full-bodied coin with which to settle obligations, or lack of stamina and standing to

withstand the other person’s usurious desires of getting an unfair advantage, by asking for

more than the official coin or spot rate of exchange, fixed by the government, would

command. This was, in contemporary early modern sources, often called agio or premium on

the exchange, contemporary German Aufwexl or Aufwechsel.9 In this way the German

Cameralists had a strong notion of economic order as a means to raise overall welfare. But the

idea did not stop there, as many accounts fixated on the Cameralist notion of economic order

would imply (e.g. Tribe 1995). Cameralist theory drew its empirical insights from the realities

of the feudal economies of the early modern age, where exploitation of peasants and serfs and

rent seeking possibilities were endemic (Backhaus 2016; Magnusson 2016). In the German

context “cooperation with no-one in charge” (Seabright 2004), the archetypically neoliberal

vision of the modern market economy (Harvey 2007) as a means to maximize societal

welfare, would have been out of order. Free markets had to be created by design; they had to

be organized: homo was, as yet, not oeconomicus but still profoundly imperfectabilis (Priddat

2008; Bowler 2002). There were too many competing freedoms in the market, such as feudal

and other privileges, as well as possibilities for rent seeking, including monopolies enjoyed by

craft guilds (Epstein 2000; Epstein and Prak, eds., 2008). Political economists facing these

sociological and distributive distortions called for an enlightened despot, an abstract

discursive figure or model, a stance that has far too often been taken literally. This more

abstract ruler could be impersonated by a monarch or parliament or any other body politic that

was effectively in charge and that would destroy or crush existing market asymmetries,

monopolies and rent seeking, thus creating the free market from scratch and by design.

9 Modern civic law codes as well as mainstream economics often speak of “non-economic” advantages when it comes to a definition of “usurious” behaviour as a criminal offence or an element of market failure. However, it is unclear to what extent such advantages, including rent seeking, can be meaningfully categorized as “non-economic”: throughout recorded history the biggest and most successful businesses, corporations and entrepreneurs often attempted to utilize monopolistic positions in the market and usually engaged in some form of rent seeking (e.g. all the venerable East India Companies of early modern Europe, big merchant firms such as the sixteenth-century Fugger family of Augsburg etc.), and to successfully be able to corner the market seems one of the paramount qualities any successful entrepreneur will have to throw into their business. See Spangenberg 1592, p. 240. Full analysis of the social and economic consequences of coin debasement in Rössner 2012, ch. IV.

11

Subsequent research has accordingly mistranslated the basic idea of “The Statesman” and

“policing” the economy – something to be found especially powerfully in James Steuart’s

Principles of Political Œconomy (1767: chs. 1, 2), where the economy “began” with the ruler

or prince. By taking the German word of Policey-Staat literally and in its modern meaning (a

modern translation wrongly suggests “police state”) – from which the Cameralist model of

free market was essentially derived, many historians of economic thought have taken the

Cameralist vision to advocate a form of dictatorial or “police state”. But this could not be

further from what the Cameralists really desired. “Policey” in the eighteenth century meant

“policy” not “police”; Policey thus simply translates as “good economic policy”. The

Cameralists had thus put Physiocracy on its feet long before it emerged (Harcourt 2011) or, in

Schumpeter’s timeless words, advocated our modern notion of “laissez-faire with the

nonsense taken out” (Schumpeter 1954, pp. 170-173). Good economic policy in the

Cameralist vision meant a free market marked by transparency, equal access, little regulation

and the absence of rent seeking, monopoly and usury – the market that corresponds to (most)

modern models of modern capitalism. But it could not be achieved without rules, laws and

strong governance (see also Harcourt 2011).10

Many contributors to the early modern economic discourse (Cameralism,

mercantilism), especially the seventeenth and eighteenth century Cameralists, also expressed

a fear of deflation.11 Low prices reflected shortfalls of aggregate demand over supply, often

caused by a lack of silver money in the economy that could, if worst came to worst, lead the

market economy into depression (Dreissig 1939, pp. 31-40). Given the times and age there

was usually a lot of common sense to it. Around 1500 Germany exported about 16 tons of

pure silver per year via Lisbon, Venice and Antwerp into the Baltic, Levant, Africa, India and

China (Rössner 2012, ch. II). Very often this equalled the entire yearly output of the German

mines (ibid.; drawing on tables and discussions in Munro 2003). Throughout most of the early

modern period most German principalities remained net-exporters of silver, which is borne

out not least by the numerous legislations, both on the territorial as well as imperial level,

directed against “mercantilist” measures, such as promoting domestic manufacture and

industry, which we find in the imperial policy ordinances of the 1530s and again in the

“Imperial Mercantilist” (Reichsmerkantilismus) legislations of the post-1660 period (Bog

10 For the early modern Netherlands an impressive description of such a modern capitalist market economy has been produced by de Vries & van der Woude 1997.11 This was not limited to any specific set of prices, say grain or bread prices; but most works spoke of rising or falling prices in generic terms, referring to what we may call the “price level”.

12

1959). Prior to the influx of American silver after the mid-sixteenth century Germany was the

world’s largest exporter of silver, not least because of the German native silver mines. Global

price differentials in the gold-silver ratio offered the merchants arbitrage opportunities, as

silver fetched an increasing price the further east it went. Silver was extensively used in

financing the spice trades (Flynn and Giráldez 1995a, 1995b, 2004, p. 83). This could have

manifest impacts on economic performance, conjunctures, trade and business cycles, even

though the pre-modern market economy worked, in many ways, different from our modern

one (Boldizzoni 2011). Between 1470 and 1530 population increased, whilst silver supplies

per capita decreased, leading to deflation in the general price level, and arguably a depression

in terms of wages, living standards and economic activity in the German lands (Rössner 2012,

166–250; Schremmer & Streb 1999). Similar mechanisms were discussed in Cameralist

textbooks as late as Johann Heinrich Justi’s Staatswirthschaft (2 vols., 1755; see section IV

below): Germany’s economic fortunes obviously rose and fell with the per capita silver stocks

in the economy. Accordingly, German political economy and economic theory evolved

around these lines, c. 1500-1900.

Silver represented the general means of payment. The Rhenish florin, Rhinegulden or

Goldgulden, i.e. a gold coin containing, around 1500 A.D., 2.5 grams of pure gold, had by

1500 all but vanished from monetary circulation; it remained a money-of-account. It had been

substituted since the 1480s by a large silver coin minted to the exact equivalent of one Florin

or Rhinegulden, weighing in at 27.3 grams of silver in Saxony during the early 1500s. This

was the Groschen so einen Gulden gilt, literally: “groat equalling one florin”, later on

nicknamed Thaler (Dollar) after the Bohemian mining town of Joachimsthal, abbreviated

“das Thal” in the 1500s (today Jàchymov in the Czech Republic), where large quantities of

silver were discovered and minted into coin after 1516. From now on the anchor money

would be expressed in terms of silver, rather than gold. Silver was finally adopted as the

“imperial” standard (Sprenger 2002, ch. 7; North 1994, 71-86, North 2009). This means that

after 1500 most coins, from the small change penny (Lat. denarius, d.) and heller (half-

penny), to groats (Groschen) and batzen (middle monetary layer or segment), up to the large

full-bodied silver coins equivalent to the Rhenish florin contained at least some silver. But the

price of currency on the financial market (exchange rate against other coins) and goods

markets (in terms of the basket of consumables one particular coin would buy) was

13

determined by each coin’s intrinsic value or silver content.12 Any shortage in the net balance

of silver in any of the German states was bound therefore to turn into a general monetary

shortage which carried an inherent risk of deflation and depression. And the economic

discourse of the day repeatedly picked up on this problem.

Martin Luther, in his great economic treatise of 1524 Von Kauffshandlung vnd Wucher

(On Commerce and Usury; see interpretation and translation in Rössner, ed. 2015c), found the

emerging global trades of his day disturbing. He called them auslendische kauffs handel,

literally “foreign trades”, which brought in, as he said, “from Calicut, India, and such places,

wares such as costly silks, gold-work and spices, which minister only to luxury and serve no

useful purpose, draining away the wealth of land and people.” (Rössner, ed. 2015c, p. 176).

This concept of superfluous luxury was something Luther shared with the early Mercantilists,

before later contributions developed a more relaxed stance, admitting that bilateral trade

balances may be negative as long as the nation’s aggregate balance of trade and payments

remained positive, sustaining a net-influx of bullion (Pribram 1992). In a famous and oft-

quoted passage Luther went on:

We have to throw our gold and silver into foreign lands and make the whole world

rich while we ourselves remain beggars. England would have less gold if Germany let

it keep its cloth, and the king of Portugal, too, would have less if we let him keep his

spices. Calculate yourself how much gold is taken out of Germany, without need or

reason, from a single Frankfurt fair, and you will wonder how it happens that there is a

heller (the smallest denomination coin: a half-penny, PRR) left in German lands.

Frankfurt is the gold and silver sink through which everything that springs and grows,

is minted or coined here, flows out of Germany. If that hole were stopped up we

should not now have to listen to the complaint that there are debts everywhere and no

money; that all lands and cities are burdened with charges and ruined with interest

payments (Rössner, ed. 2015, p. 176).

Luther seems to hint here at a situation of monetary contraction and economic depression,

which would explain, given his observations were correct, why interest rates were high in the

first two decades of the sixteenth century (full discussion in editor’s introduction, Rössner, ed.

2015, chs. 2-4). He made equivalent remarks in his Address to the Christian Nobility of the

German Nation (An den Christlichen Adel Deutscher Nation, 1520). Many other works such

12 An extended discussion of monetary policy and minting in the German lands around 1500 can be found in Rössner 2012, ch. III.

14

as his Table Talk bear out the classically Mercantilist “fear of goods”. In the same year as his

Kauffshandlung appeared a small book was published by a popular preacher Eberlin von

Günzburg entitled “I wonder why there is so little money in Germany” (Günzburg 1524).

Ulrich van Hutten and the Imperial Knights, highly educated but impoverished robber barons

who played an important role in the early Reformation public discourse, struck the same

chord. In his Vadiscus dialogue (1519/20) of the “Romans” (meaning the Curia / Papal Court)

von Hutten reported how Rome devised new means of “taking away” money from the

Germans day after day. It was three things in particular, von Hutten wrote, that anyone

returning from Rome would bring: “bad conscience, an upset stomach, an empty purse.”

There were three things everyone at Rome desired: “short Mass, good coins, having a good

time.” (Bentzinger, ed. 1983, pp. 46, 52, 72–74). Here von Hutten hinted at what has become

colloquially known amongst monetary historians and numismatists as “Gresham’s Law” or

spontaneous debasement (Sargent & Velde 2003). If coins of differing precious metal

contents circulated alongside each other at the same denomination level and face value,

rational actors would cull out the good money, substituting it with bad money in domestic

circulation.

The debates on the Imperial Diet in Nuremberg 1522 picked up on the export of good

money and silver, as did the complaints of the Imperial Knights (Reichsritterschaft) in 1523

(Schmoller 1860, pp. 635–8). The German Reichspolizeyordnung of 1548 (Imperial Policy

Ordinance) contained a general export ban on raw wool, as well as the admonition to “wear

only domestically manufactured cloth”. The Imperial Resolution of 1555 sounded similar

(Schmoller 1860, p. 650f.; Blaich 1967, pp. 17–37; Blaich 1970, pp. 135–153). We find early

traces here of the strategy later on labelled “import substitution” and “infant industry

protectionism”. Later Cameralists, especially Philipp Wilhelm von Hörnigk (Oesterreich über

alles wann es nur will, 1684, ed. Rössner 2016) or Johann Heinrich Gottlob Justi (1717–

1771), up to the economists of the nineteenth-century from Friedrich List (1789–1846) to

Gustav Schmoller (1838–1917) and Wilhelm Roscher (1817–1894), developed a full theory

about catch-up development by infant industry protection following the lines laid in the

economic discourse of the sixteenth century (Reinert 2007, ch. 3; Chang 2003). They need no

reiteration here. But we should remember three interesting policy stances derived from these

late medieval and early modern discourses in the monetary field, which have been

understudied. They amount to partly conflicting scenarios, whilst principally serving the same

goal – promoting economic stability as well as growth: first, keeping money stable; second 15

playing around with its external exchange value by coin debasement and third, increasing

money’s velocity.

III. ADVOCATES OF STABLE MONEY – THE CASE FOR SOCIAL AND ECONOMIC STABILITY

As seen above, Oresmius had argued that coins as the chief means of exchange must not be

tampered with.13 They may only be manipulated by altering, most commonly reducing, their

intrinsic value, i.e. silver content, if the market price of silver and gold changed, so as to

prevent demonetization. Otherwise coins would be taken out of circulation and smelted, as

their precious metal value would be higher than their purchasing power or nominal value. The

only other permissible scenario for “legal” or justified debasement was when society and the

Common Good were in acute danger, for instance by an imminent foreign invasion. Then the

prince would be entitled to collecting “inflation tax” by temporarily increasing seigniorage

beyond the acceptable or usual measure (Spufford 1998; Sussman 1993; Rössner 2014a).

Generally, coin debasement harmed society and economy, Oresme said, because (1) it

increased economic instability, especially when negotiations over a coin’s exchange value

made contracts harder to enforce. (2) Coin debasement was considered an unjust transfer of

assets (effectively a tax) from the subjects to the king or whoever had the sovereign right to

mint coins (Regalian right). (3) Progressive or sustained currency debasement would cause an

outflow of good or full-bodied coin; only “bad” or underweight coin would remain within the

country (Gresham’s Law). (4) An excess of bad over good money would depress imports,

because no one would want to sell goods to a country where payments were made in bad coin.

(5) Domestic circulation and exchange would be hampered by bad coin. (6) Rents and all

other types of income that were fixed and specified in terms of a certain currency would

devalue, too, once this particular currency became debased, as people would adjust their

appreciation and thus value of the debased coins downwards once they had discovered the

true nature of this debasement. Money would thus loose its function as a means of storing

value. (7) People who used differential coin types, making a profit out of substituting bad

money for good, or vice versa, depending upon nature and motif for the transaction, would

gain an undue profit. Currency arbitrage was deemed usurious by Canon Law, and it did

13 I am following the text given in Burckhardt, ed. 1999.16

cause widespread economic and social problems as well as unrest in the Germanies around

1500.14

Later Germanic texts on monetary theory completely built upon Oresmius. The Tübingen

theologian Gabriel Biel (d.1495), one of the most prolific German scholastic authors,

embedded his monetary theory within an overall treatise on theology (Collectorium circa

quattuor libros Sententiarium).15 Coin debasement was bad for economy and society;

especially when false or underweight foreign coins entered domestic circulation, in a form

and shape deceptively similar to the commonly-accepted old money of good value (the usual

case). The common people would not normally be able to distinguish new coins from old, or

debased from full-bodied, and would, effectively, be betrayed (Biel, Collectorium). Coins

must contain precious metal roughly equalling their purchasing power, Biel maintained. Only

a small deduction was allowed for covering the expenses of minting (seigniorage and

brassage). This remained standard monetary theory, not necessarily practice, into the

twentieth century. But if coins were manipulated so as to extract a profit, e.g. by reducing

their silver content below the allowance for seigniorage and brassage, this would bring ruin

to the country, Biel reiterated, echoing Oresmius. Only when the silver price changed on the

financial market so as to price existing coins out of the market, would such manipulations be

permissible. The bottom line was: “Don’t touch the coins”.

Nikolaus Koppernigk or Copernicus (1473–1543), Prussian churchman, theologian and

astronomer, produced three memoranda on Prussian currency matters between 1517 and c.

1526 (Sommerfeld, Erich, ed. [1978] 2003; see also Volckart 1996, Volckart 1997). In the

first memorandum dating from 1517 (Copernicus, Denkschrift A, printed in Sommerfeld

[1978] 2003), he maintained that the coinage was a measure of value fixed by the

“community”. An unstable or devalued currency would harm the common good. Copernicus

differentiated between two sources of a coin’s particular value: (1) intrinsic value (roughly

equalling its market value), derived from the physical amount of precious metal embodied

within each coin, and (2) the coin’s official exchange rate set by the government. The coins in

14 See Rössner 2012, ch. IV for detailed examples and full empirical discussion of the social consequences of debased currency.15 I am following the Latin text as printed in Steiger et al. eds. 1977. The original passage reads: Prima est falsitas introducta, ut si aliquis extraneus prinzeps aut falsarius malitiose effigiaret vel contrafaceret formularia seu modulos, per quos introducere niteretur monetam sophisticam minoris valoris quam sit moneta vetus, cuius tamen differentia a vera moneta cognosci a populo non posset et alio modo convenienti moneta falsa exterminari non posset, expediret mutare formam monetae verae, servato tamen iusto valore, ut sic discerni posset ab introducta falsa.

17

a sense “belonged” to the polity or common weal, because they represented the basic way of

numbering things and expressing value (qva precia emptibilium vendibiliumqve rerum

numerantur, secundum cuiusuis reipublice institutum vel gvbernantis ipsam. Est igitur

mensura qvedam estimationum). The polity or community needed a firm and stable measure

of value and order in exchange so that the public may carry out their business and transactions

without fraud and uncertainty (Oportet avtem mensuram firmum semper ac statum servare

modum; alioqvi necesse est confundi ordinacionem reipublice). Such a reliable measure and

standard of value could only be achieved through a stable, read: unadulterated, currency of

good standard of weight, which everybody can determine and, accordingly, trust (Hanc ergo

mensuram estimacionem pvto ipsius monete; qve etsi in bonitate materie fundetur oportet

tamen valorem ab estimacione discernere; Copernicus, ed. Sommerfeld 2003, p. 24 Latin; p.

25 German translation).

Coins enjoyed a liquidity premium over un-coined silver bars or ingots. Individual

probations of coins by the economic actors proved ineffective as this required considerable

knowledge of metallurgy and financial markets (ibid.). Money changers, mint masters and

merchants had this kind of knowledge; the general public did not. They would have to trust

the circulating means of exchange bona fide, i.e. give and take coins by tale (Sargent & Velde

2003), or else – if they mistrusted the coins, try to accept them at their real value or silver

equivalent (by weight), i.e. at a discount (when coins were undervalued or debased). Clearly

the liquidity premium argument only worked if coins did contain sufficient precious metal, as

over time people would devise ways and means to find out or else “spread the word” to those

who could not find out themselves: then the public would rate down the coins in day to day or

spot exchange, i.e. give and take such coins at a discount or disagio.16 Copernicus admitted

that coins may contain less precious metal than their face value; this difference must not

exceed the cost of minting (brassage plus seigniorage): then the value of the coin was

considered “just” (Copernicus 1517, in Sommerfeld [1978] 2003, p. 24/25). As every

scholastic author since Oresmius and many others still to come, Copernicus thought it a

matter-of-course that devaluation of the currency by means of coin debasement was a no-go.

He said in his more detailed 1526 memorandum that there were four plagues of mankind: war,

plague, hunger and coin debasement (monete vilitas; Copernicus 1526, in Sommerfeld [1978]

16 The relatively frequent repetition of coin debasements during the years of extreme debasement in fourteenth century France suggests that after about a year at most even the less well-informed members of the public would have found out about the true nature and extent of debasement, which necessitated new rounds of debasement, if this policy (inflation tax) was supposed to work for the King’s finances. See Spufford 1998, Sussman 1994.

18

2003, p. 48/49). Contrary to the first three evils, which are obvious, coin debasement made for

a slow corrosion of the common weal (quia non vno impetus simul, sed paulatim et occulta

quadam ratione respublicas euertit (ibid.). Modern rationales, especially the post-World War

Two Deutschmark monetary paradigm, from which the EURO was begotten towards the end

of the 1999 during the Kohl supremacy, have made similar claims as to monetary stability and

the well-being of the Common Weal. In Copernicus’ vision bad coins made purely or chiefly

of copper, would cause (1) trade, especially exports, to decay. (2) Foreign merchants would

disappear; no foreign merchant would sell for debased coin. Debased coin would purchase

nothing in foreign lands, either (Copernicus 1526, in Sommerfeld [1978] 2003, p. 54/55). This

would lead, Copernicus was convinced, to the utter ruin of the country (ingentem reipublice

prussiane […] in dies magis et magis supine negligencia miserabiliter labi ac perire sinunt;

ibid.). Gold- and silversmiths and expert metal traders – the financial market speculators of

these days – would profit from debased money by sorting out and buying up the old coins, re-

smelting them and selling the silver back to the mints (Gresham’s Law) (ibid.). Here we are

reminded again, that monetary policy these days was dependent upon free minting, i.e.

essentially a free-market game: the amount of money, as well as its composition (small

change pennies; medium sized groats; full bodied thalers etc.) was determined by the public

who brought silver and gold to the mint to have it coined or, in the case of foreign money, re-

coined into domestic money (Sargent & Velde 2003). Governments had no control of the

amount of money in circulation. The state simply set the “mint ratio”, i.e. the amount of coin

in a specified denomination (florin, thaler, shillings, kreuzers, pennies, farthings, hellers,

mites etc.) that the public received for bullion delivered to the mint.17 The state sometimes

could, but to very limited extent, control the composition of domestic new supplies of coins

by balancing the amount of small change vis-à-vis full-bodied money. Spontaneous

debasement (Gresham’s Law) resulted in an over-supply of bad underweight coin in the

economy. It would cause price inflation. Modern research on price level trends during the so-

called Price Revolution (1470–1620) has confirmed Copernicus’ hypothesis. Prices quoted in

pennies – the money of the Common Man – increased more than twice as fast as prices

expressed in “good” money such as florins and Thalers over the 150 years or so of this

inflationary cycle (Sprenger 1977). This was a result of these coins’ higher velocity of

circulation. They were heavily debased and of little use in the long run. People tried to get rid

of them as fast as they could, as such coins were of no use for saving or storing value 17 Sargent and Velde 2003; there were instances when princes actually limited mint output, for instance ordering the mint master to stop the mint, in an attempt to directly control monetary supply.

19

(Rössner 2014, p. 327–8). Copernicus was convinced that only those countries where good

coins circulated would also do well economically and flourish. Countries with a weak

currency would suffer from “inertia” (ignavia), idleness and stagnation (desidia), even

“regression” (resupinatio) (Copernicus 1526, in Sommerfeld [1978] 2003, p. 56). Not

everyone would share this view, as will be seen in section III.

The anonymous Albertine or “Catholic” (Old Church) voice in the Saxon currency debate

(Münzstreit, 1530-1), which Roscher and Schmoller judged to be amongst the first pieces of

modern economic analysis18, echoed Oresmius, Copernicus and the other medieval metallists.

Receivers of fixed income streams, such as interest, rent and census payments, would suffer

most from currency debasement (Aber die geringe Muentze berawbet von stundt den nehmer

des zehinden pfennigs seins guths / vnd alles seins werths / vnd zuweylen mehr / das er zu

auffgelde geben mus […]; Gemeyne stimmen von der Muntz [Dresden 1530] facsimile in

Schefold, ed. 2000, p. 6). In a way, the anti-debasement voices of the day represented the

interests of the capitalist “upper classes.” But it was not only the rich whose fortunes were

harmed by bad money. The entire common weal suffered, as research on coin debasement and

social unrest during the time of the medieval peasant wars and the early Reformation in

Germany has shown (Rössner 2012, ch. IV.) Bad coins would keep the level of economic

activity below full potential. Business and commerce flourished only where a reliable and

stable currency prevailed, the “Albertine” maintained (ibid., p. 7). Bad coin drove up prices

for imports (ibid., p. 11), as well as domestic goods traded within the domestic economy, as

the seller would adjust her supply price to the precious metal content of the coins offered in

return (assuming that coins circulated by weight, and not by number or tale). Bad money

would cause inflation and thus harm to the people (ibid., p. 7). The negative welfare effect of

an underweight currency that kept the economy below full potential was also highlighted by

the Saxon jurist Melchior von Osse (1506–1557) (Osse 1556, ed. Hecker 1922; discussion in

Dittrich 1974, pp. 40-42): where good money circulated, business and economy flourished, as

did fiscal income.19

Georgius Agricola (1494–1555), a polymath who wrote a series of learned treatises on

medicine, geology, mining and metallurgy (e.g. De re metallica, 1556), said in his De precio

metallorum et monetis libri III (Three Books on Money and the Price of Metals, 1550), that

18 Facsimile in Schefold, ed. 2000a; discussion in Schefold 2000b, pp. 5-58.19 Ibid., 382. Original: Dan wo gute montz ist, do ist viel handels; wo vil hendel und leut seind, do hat man den vortreib aller fruchte und war, und genissen des also nicht allein die hauswirte und hendeler sondern alle handwerksleute und kommen dordurch die land ingemein in besserung und aufnemen.

20

money use was more efficient than barter exchange (Agricola 1550 ed. Prescher 1959, p.

352), because (1) coins make it easier for prices to form and adjust. This sounds familiar to

anyone who has read W. Stanley Jevons (Jevons 1875): it is the coincidence of wants

argument. Money reduces transaction costs because it reduces complexity in exchange. (2)

The costs of transporting money were lower than payment in goods or barter. (3) Coins were

needed to settle debts with people who will not take our wares in return, Agricola said

(Agricola 1550, transl. Prescher 1959, p. 352). He picked up on one of the most prominent

debates and pressing issues of the day, i.e. whether coins should circulate full-bodied or

debased (i.e. overvalued), giving both pros and cons (ibid., p. 358). The arguments in favour

of a full-bodied coinage were, (a) that coins represent, as the document says, a “treasure” or

“investment” – they are worth their value everywhere. Undervalued or debased coins have a

higher value where they are struck, because in their native realm they contain a small fiat

element, whilst in foreign nations they are likely to be given and taken below face value, at a

discount reflecting their factual silver content or “real” value (ibid.). (b) Countries or regions

where bad or debased money is struck will be less favoured by merchants than countries

where good (full-bodied) coins are struck (ibid.). Customs and toll revenues will decline;

investors and entrepreneurs will migrate to those states offering better currency (ibid.).

The seventeenth- and eighteenth-century Cameralists were in line with the “medieval”

arguments sketched so far, extending from Oresmius to Osse. Veit Ludwig von Seckendorff,

the “Godfather of Cameralism” (Small 1909) argued, in his Teutsche Fürstenstaat (The

German Princely State, 1655 [1720])20 that coins represented a standardized means of

exchange. They should therefore always retain their “just” weight. As all medieval and

scholastic authors before him and most of them after him, Seckendorff avoided a specification

of how much debasement or under-weight was “just” or “right”. He evoked the functionalist

argument and origin myth of money, i.e. that money had been invented as societies became

ever more complex and moved from barter to monetized exchange. Even Scripture confirmed,

in Seckendorff’s view, that the use of money had been common in biblical times. Money

made of precious metal fulfilled all qualities for this purpose: it was scarce; it was highly-

estimated by the people, and it could be made to represent value and thus facilitate the

exchange of different products of different type, amount, quality etc. which would otherwise

have to be bartered against each other using costly and time-consuming schedules of enquiry

without the necessary guarantee that there was always a coincidence of wants (Denn man zu

20 See discussion in S. Reinert 2005.21

dem tausch nicht allerley so weit bringen, noch an jedem ort so wohl, als an dem andern,

verhandeln oder angenehm machen koennen, Seckendorff [1656] 1720, pp. 406–7). Whilst

Jevons, as well as virtually all modern textbooks on monetary theory have copied this stance,

most of them surely unwittingly; classical archaeologists, cultural anthropologists and some

monetary historians are in disagreement with this origin story of money, suggesting a state-

driven process of money’s origin instead (e.g. Graeber 2011, Reden 2011; Peacock 2013).

Precious metal had been transformed by the princes (monetary authorities), Seckendorff said,

into coins of varying design, shape, size and purchasing power. And due to the fact that this

regal privilege had been transmitted to the hundreds of political authorities within the Empire,

a considerable level of confusion od currencies had ensued (Seckendorff 1720 [1655], pp.

410–11). Coins should not be tampered with or altered at will (daß eine jede müntze in gold,

silber und kupffer, ihr verordnetes, richtiges gewichte habe; ibid., p. 412f.), as this would

reduce people’s trust in them. Transaction costs would rise. Seckendorff acknowledged,

however, that princes and other monetary authorities should have the right of striking slightly

underweight coins, but only for re-compensation of expenses incurred in the process of

minting (brassage); perhaps this also included an allowance for seigniorage. He alluded to a

famous principle in the business economics of running a mint (mints were usually leased to

wealthy merchants): the cost of minting coins was inversely related with a coin’s nominal

value. As labour and capital costs of minting were the same for each coin regardless the

weight or denomination (value) of a particular coin, the costs of minting small denomination

coins would be proportionally larger for small-change coins compared to high value/full-

bodied coins (Munro 1993). Small change coins must be slightly debased, the logical

conclusion went, lest their production became, over all, unprofitable. Seen in the reverse, this

explains the temptation of early modern mint masters and rulers to issue heavily debased

small changed pennies and bad groats. It is important to note that the practice of introducing a

fiat element into the small change segment of the currency must not be confused with

deliberate or outright debasement, i.e. coins whose precious metal content was reduced

significantly below face value so as to increase the mint master’s profit or the gain of the fisc

(inflation tax). Seckendorff considered debased coins “abominable”, “fraudulent” and harmful

to the people (schaendlich, gemischten, betrieglichen, unwuerdigen sorten by which viel leute

in schaden und armuth erbaermlich gesetzet warden (Seckendorff 1720 [1655], p. 416).

The later Cameralist authors followed suit. Suffice it to quote Johann Heinrich Gottlob

von Justi (1717–1771), who, with his classic treatises on principles of economics 22

(Staatswirthschaft 1755; Grundsätze der Policey-Wissenschaft, 2 vols. 1756) arguably

produced the finest models of Cameralist economics (Schumpeter 1954, pp. 170–173). Like

most of his predecessors Justi stressed that underweight coins would reduce people’s trust in

them and depress future expectations in the performance of the well-run common weal or

economy, thus doing harm to economy and society. Bad money, he argued, increased

transaction costs (Justi, [1756] 1782, I, p. 198).21

Coin debasement had been one of the biggest socio-economic problems and causes of

popular unrest in the age of the Reformation (Rössner 2012, ch. IV). It continued to be

endemic in the continental economies between the fifteenth and nineteenth centuries. But not

every writer on would have concurred that debasing coins was a bad thing per se. In fact,

there were quite interesting variations upon the standard monetary theory of the “middle ages”

which was not so monolithic as it appears after all.

IV. ADVOCATI DIABOLI – PLAYING AROUND WITH THE EXCHANGE RATE

Six years after Luther’s Von Kauffshandlung vnd Wucher appeared in 1524 (On Commerce

and Usury, ed. Rössner 2015), the anonymous “Ernestine” or heterodox (1530) voice in the

Saxon currency dispute (see above)22, a Protestant and clearly someone belonging to the

Saxon merchant community, made an important departure from the prevailing mainstream.

He said “the same kingdoms, countries and islands (referring to the Low Countries/Holland,

England and France, PRR) have orientated their business, commerce, order of things,

economic policy and practical economic activity thus that they export their and other

countries’ goods predominantly to us Germans, as well as Hungarians and Bohemians,

thereby bringing our money into their country, which enriches them and makes their wealth

increase.” And: “Our domestic industry is geared towards accumulating and exporting money

and wealth (silver being Saxony’s main export commodity, PRR.) and take manufactured

imports in return. This enriches about a hundred people, whilst driving princes and the

common man, numbering more than one hundred thousand, to ruins.” (Die Muentz

Belangende Antwort vnd bericht [1530] 2000, p. 41).23 The Ernestine had a point. Saxon silver

21 On Justi, see Reinert 2009, and Adam 2006.22 Text (facsimile) in Schefold 2000a, and discussion in Schefold, ed. 2000b; one of the best analyses still is Roscher 1874, pp. 102–106. See also Stadermann 1999.23 My translation based on the facsimile in Schefold 2000a. Original not paginated.

23

at his time may well have contributed up to fifty per cent of European silver output (Munro

2003, Tables). Theoretically the Saxon rulers would have been able to produce what should

have been by far the finest currency of their age (Rössner 2012, ch. III; Rössner, 2013).24 As

silver was cheaper in Saxony than elsewhere, coins should have contained more silver,

reflecting the inverse relationship between goods prices in the economy and the price of silver

money in Saxony compared to the lands that had no domestic silver resources and relied upon

foreign trade and payments to replenish domestic silver stocks. But it followed that Saxon

goods paid in full-bodied heavy money would have been less competitive on markets outside

Saxony, where goods were paid with lighter money, i.e. coins that contained proportionally

less silver than the “good” and “hard” Saxon currency did. The Ernestine specifically

identified the over-valued currency as the prime cause for Saxony’s lack of competitiveness in

the international economy (den wirdigen / vberigen wert der Muentz / Vnd was ferner dem

anhengig erfolgt) because, as he maintained, an overvalued “strong” currency drove up prices

for consumables as well as servants’ wages (so doch die kauff wahr / das gesinde lon / vñ alle

gemeine zerung vnd ausgaben / bey der wirdigen Muentz erhoehet vnd gestiegen). The recipe

which the Ernestine suggested in consequence, however, sounds somewhat surprising, as this

is the least what one would expect from a late Scholastic or Mercantilist author. He

straightforwardly suggested that the Saxon currency be debased, by raising the amount of

coins struck out a silver mark (around 250 grams) from 8 ¼ florins Rhenish to 10 florins

Rhenish. This debasement in the order of 21 per cent would have led to an effective

devaluation of the Saxon currency, because the public would give and take coins by weight,

not tale, according to the market value of the precious metal contained in them. As Europe’s

monetary history shows, people quickly adjusted their appreciation of devalued coins

downwards. Within weeks or months after each new mint run, or as soon as the common man

received reliable information regarding the new coins’ factual intrinsic value, market or spot

exchange rates for debased small change coins would diverge from their “fixed” or official

coin exchange rate stipulated in the government edicts (Sussman 1993; Sargent and Velde

2003; Rössner 2012, chs. III, IV; Rössner 2014a). They would usually adjust downwards,

turning debasement into effective devaluation of the new currency. This would cause inflation

– for prices of those goods that were paid in small-change coin (mainly consumables and

everyday items) – and thus result in a downward adjustment of the domestic currency in terms

of foreign coins. This quick fix should, as the Ernestine expected, have solved Saxony’s

24 Rössner 2012, ch. III.24

economic problem of the day. It would have boosted Saxony’s competitiveness by making

Saxon domestic exports cheaper. It would also have reduced the demand for imports, which

would become more expensive. And more importantly: the money would remain in the

country (damit das gelt souil mehr ynn landen blieben).

Modern policies of devaluation have sometimes worked according to the logic

presented in the 1530 “Ernestine” voice in the 1530-31 Saxon currency dispute (Schefold

2000b). This assessment, however, flew in the face of what medieval monetary theorists,

drawing upon the Scholastic argument of “just” or good currency, cherished as the

cornerstone of the prevailing monetary paradigm: currencies needed to be sound. Only a

stable currency would reflect, and safeguard, an ordered, fair and well-governed Christian

Common Weal! To most contemporaries suggestions as the Ernestine must have sounded

perverse (Rössner 2012, ch. IV). It is only one and a half-century later that we hear such an

unorthodox voice again. Johann Joachim Becher (1635–1682) was one of seventeenth-century

Germany’s most-celebrated economists, polymath, alchemist, project-maker and close

associate of the London-based Royal Society. He travelled widely in England and Scotland

during the 1660s after a spell in the Netherlands, attained proverbial fame as a “project-

maker”, propagating the creation of an East India Company for the rather insignificant Duchy

of Hanau. He became acquainted with Prince Rupert of Palatine, cavalier, daredevil and Lord

High Admiral of the Royalist Navy during the English Civil Wars (Roscher 1864, p. 40). He

was hailed by Schumpeter as the inventor of “Becher’s Law”, commonly known nowadays as

Say’s Law (Schumpeter 1954, p. 283).25 In his 1668 work on Politischer Discurs: Von den

eigentlichen Ursachen deß Auf- und Ablebens der Städt, Länder und Republicken (“Political

Discourse on the Rise of Cities, States and Republics”), Becher made remarks similar to

Seckendorff (see above) on the general nature of money as a means of reducing transaction

cost, in comparison with the counterfactual (and counterintuitive) system of pure barter

exchange (on Becher, see Roscher 1864, pp. 38-59; Hassinger 1951; Schumpeter 1954; also

Rössner 2014b). Money was the nervus rerum (Nerv uñ Seel) of things, Becher wrote. There

ought to be a uniform currency in each country. A good quality standard was to be kept for

the coins in circulation (Becher 1688 [1668], pp. 269–270). But then Becher made a departure

from mainstream dogma, suggesting upfront that domestic currency may be minted five per

cent below the intrinsic value of foreign moneys, so as to prevent spontaneous debasement

(Gresham’s Law). None of the previous authors had dared to quantify such a digression from

25 This law says that “One man’s income is another man’s expenditure”.25

the “pure” standard; albeit it seems as though a five per cent debasement was a humble

suggestion. It certainly was low by comparison with the “Ernestine” devaluation of 21 per

cent (see above) and possibly in line with medieval Scholastic stability commands which had

propagated maximum interest rates of five per cent per annum. By issuing underweight coins,

Becher said, the desire to export money was reduced and a somewhat healthier amount of

money would be retained for domestic circulation (Becher 1688 [1668], p. 272). Domestically

the money would circulate at face value with foreign coins. But everyone who took it abroad

would incur a loss on the exchange rate in the order of five per cent, as the foreign money

markets would rate, following the common notion of giving and taking coins by weight, the

domestic coins based on their precious metal content. Becher called this a “tax” on the export

of money (billige und rechtmaessige impost und zoll, ibid.). Foreign exchange transactions

should be monitored and cleared through an exchange bank (Wechsel=Banck) financed using

the profits yielded by the (mildly) debased coins (Becher 1688 [1668], pp. 272-274).

Blueprints for such an exchange bank can be found in Amsterdam (Wisselbank, est. 1609) or

Nuremberg (Banco Publico, est. 1621; see Denzel 2012). They were modelled on earlier

Italian public and city banks known since the Middle Ages (Spufford 2006).

Becher had realized one important thing. People need a certain amount of money to

make society and economy run smoothly, quite regardless of each coins’ intrinsic value:

money is an important economic resource in the process of growth and development. This

leads us to the final point – the promotion of velocity as a means of economic policy.

V. VELOCITY, OR THE MANAGEMENT OF MONETARY MASS

In his masterpiece on the History of Economic Reasoning26, Karl Pribram once hypothesized

that the discovery of velocity was made by mid-seventeenth century English economists

(Pribram 1992). William Potter’s The Key of Wealth, or A New Way for Improving Trade

(Potter 1650) seems to have been the first work in English discussing it in a specific manner

(Pribram 1992, Vol. 1, p. 147-8). Schumpeter, in his likewise monumental yet unfinished

History of Economic Analysis (1954) concurred, claiming that velocity “did not acquire

substance until the last decades of the seventeenth century. This was a purely English

achievement.” (Schumpeter 1954, p. 316). These assessments are in need of revision. When

26 I have used the German edition, Pribram 1992.26

placed into a wider context, we find the origin of “velocity” in sixteenth-century German

economic texts.

As most of the later Cameralists, but strikingly also earlier voices such as Martin

Luther, the Humanists and authors of the German Imperial Ordinances trying to ban the

import of foreign cloth manufactures into the Germanies in the 1530s and 1540s (see above),

Potter based his observations on a perceived situation of “decay of trade”, i.e. a slump or trade

depression. It is difficult to come up with economic data suitable to prove or disprove this

proposition, but that is not the matter. Important for the development in economic reasoning

was that people believed they lived through an age of depression and that they, accordingly,

devised increasingly refined models of dealing with such a depression. What Potter stated

would be good, first and foremost, for business. Many of the mid-seventeenth century English

mercantilists were successful merchants and businessmen after all. But successful strategies

of overcoming a commercial depression could, with modifications, be turned into a theory

useful for the entire common weal (Potter 1650, preface; not paginated). The German

Cameralists had this as Umlauf, with Potter’s “revolution” and the Cameralists “Umlauf”

coming close to what the modern monetary conception has as the left side of the Fisher

Equation (M.V, or effective monetary mass, Boldizzoni 2008). Such a “quick current” (Potter

1650, Book I, section VII; Book II, section III) would be a sign of ample supply of

commodities and low prices, i.e. a glut in the market. Contemporary German linguistic

convention had this as “wohlfeile Markt”.27 Because, as Potter went on, “seeing for that we

cannot increase money at pleasure to any quantity needfull; we have no feasible means

whereby to quicken Trade, (as I said before) but by multiplying a firme and knowne credit

amongst Tradesmen, fit to transmit from hand to hand.” (Potter 1650, p. 41).28

Modern economists may agree by saying that credit adds to velocity of money (V), not

the amount of money as such (M), even though historians and economists have been in debate

about this conceptual problem (Schumpeter 1954, p. 318f).29 John Locke (1632-1704) was

amongst the first to study the frequency and rhythms of payment and the duration of time

people would withhold money from the market, thus pre-empting Keynes’ concept of demand

for money to hold (Pribram 1992, Vol. I, p. 147). Potter stressed the importance of

“quicknesse of trade” and “to quicken the revolution of money and credit”, so that “money,

27 Translating literally as “cheap market”, meaning a glut of commodities which kept product prices low.28 Original in Italics.29 Whenever elements or particular forms of credit paper become fully tradable, i.e. fungible, they may with some justification be booked to the amount of money (M) rather than velocity (V).

27

resting no where (sic) must needs occasion a quick current thereof” (Potter 1650, p. 72).30 The

metaphor of blood circulation, used amongst others in Hobbes’ 1651 treatise, was popular

during the seventeenth century; according to Heckscher, it had earlier precedents (16th

century). Davenant highlighted the necessity for “A quick Stock running amongst the

People”, and Petty (1661) stressed that the more hands a fixed sum of money passed

throughout the year, the higher would be national income and employment (Heckscher 1932

vol. II, p. 198). William Petty, another important mid-seventeenth century English economist,

wrote about “frequency of exchange” and “frequency of commutations”. Amongst others he

drew attention to the fact that different classes of people would know different rhythms and

thus frequency or turnover of payment. Artisans often gave short-term credit, and accounts

were settled weekly whilst long-distance and wholesale trade was often running along long

lines of credit extending several months if not years. Irving Fisher (1867-1947) acknowledged

this differentiation in payment habits as an important way of “measuring” velocity (Morgan

2006, p. 14f.). According to Morgan and Finkelstein, Locke’s introduction of velocity into the

economic discourse can be seen as an “innovation” (Finkelstein 2000, p. 112; Morgan 2006,

p. 3). But if we look to the continent, adopting a broader and long-term view, this conception

once again turns out to be anything but new.

The above-sketched dimensions of velocity represented the epistemic base of the

seventeenth and eighteenth-century English mercantilists. Continental authors, however,

worked under a slightly different conceptual-epistemic framework, yet often came to

surprisingly similar conclusions (see also Simon 2014 and Boldizzoni 2016). The Spanish

Scholastics of the School of Salamanca had known the concept of velocity, but seem to have

interpreted it as a constant (Grice-Hutchinson 1993). Later authors would take a very different

opinion. In 1664 we find in France the voice of Jean de Lartigue, who stated:

The Prince’s affairs must be put in order, his debts paid, … his treasury filled … and

employed immediately for outlays and the needs of state, in fear that it (money) will

languish and fail; if we do not keep the existing (stock) of money in circulation it is

put in reserve and produces nothing Instead, by passing from hand to hand it gives

vigor to commerce of which it is the soul (quoted in Rothkrug 1965, p. 90).

Another Frenchman, Jean Eon, had maintained in 1646:

30 Italics in the original.28

as several persons form a family, several families a bourg, several bourgs a town and

several towns a kingdom, so …the good of the kingdom depends upon the well-being

of the towns, that of the towns upon the happy condition of the bourgs, and (that) of

the bourgs on the ease and facility of the individual persons. Thus by relating the first

to the last we find the happiness and complete felicity of the state depend upon the

prosperity and good fortune of individual people.” (Quoted in Rothkrug 1965, p. 92f.)

This sounds familiar to the analytical concept of Glückseligkeit (a holistic concept of societal

welfare maximization schedule similar to modern-day Bhutans “Happiness Index”) to be

found in German economic discourse since the age of Veit Ludwig von Seckendorff’s

Fürstenstaat (1660) (Priddat 2008). But it also shows awareness of the possibility of a

functionally and well-differentiated market economy.

The German Cameralist picked up on a discourse that was about three hundred years

old, by the time Cameralism condensed into encyclopaedic knowledge, laying the foundations

for continental non-Anglosaxon economics, 1600-2000 A.D. (nowadays misleadingly

classified as “heterodox” in the JEL keyword list). Georg Gottfried Strelin (Strelin 1788, entry

“Geld”, p. 163) distinguished between “Umlauf” – perhaps the amount of money in

circulation, perhaps monetary mass, perhaps the transactions volume – it is not always easy or

straightforwardly sensible to transmit modernisms such as “M.V=P.T” to historical problems

and times – and its “Lebhaftigkeit” (vivacity) as important variables for monetary circulation,

alongside the coins’ intrinsic value as another manifest economic variable. A good “Umlauf”

or revolution (in the sense of re-volution or circulation returning to its origin point and

starting anew) of money was accompanied by low interest rates (niedrige Interessen), absence

of “mistrust” and adverse relations or terms of trade between the number of goods on the one,

and total amount of money in circulation on the other hand, i.e. inflation or deflation (ibid.).

The more money in circulation, and thus the higher the Umlauf, the lower the Interessen. Low

interest rates were indicative of a high supply of money relative to demand (ibid., p. 162). But

how could the effective monetary mass (M.V) be stimulated? It could be enlarged through the

creation of paper money (Papiere, ibid., p. 160) – the most obvious and increasingly popular

answer during the later seventeenth century. This was an age of alchemists and project

makers, amongst which land banks and other collateralized note issuing financial institutions

were most popular (just consider John Law’s various financial adventures, Wennerlind 2011;

Carey and Findlay, eds. 2011; also Bensen 1798, p. 302). Another means was to attract

29

wealthy foreigners and producers of high-quality manufacturers, so as to increase foreign

exports (Strelin 1788, p. 160). This was standard fare in contemporary economic theory, most

clearly laid out in Austrian economist and state servant Philip Wilhelm von Hörnigk’s major

economic treatise Oesterreich über alles wann es nur will (Austria Supreme if Only it So

Wills), 1684 (ed. Rössner 2017). Cultural transfer would lead to knowledge transfer and

emulation and the generation of useful knowledge (S. Reinert 2011, ch. 1). This was

especially important in domestic manufacturing, and a strategy known widely in seventeenth

and eighteenth century Europe, from Austria and Prussia to Scotland and Sweden in the north

(Rössner 2015a).

The Umlauf of money – and goods – should be “vivacious”, as the texts went on. What

the blood circulation was to the animal and human body, a good monetary and goods

circulation was to the economy (Strellin 1788, entry “Geld”). Commodities and money would

be “drawn to each other” like blood contracted to the human heart, only to be released back

again into circulation thereafter, when the heart pulse expanded: to attract new purchases and

goods over and over again, so that no “beggar” and no Kapitalist (as in the original German,

i.e. someone hoarding money for speculative purposes) could possibly survive (“und es würde

kein Kapitalist und kein Bettler seyn”, ibid.). Money hoarded in the vaults of the avaricious

Kapitalist and lack of liquid funds in the hands of the producers would increase interest rates,

leading to disequilibrium (“allein das Gleichgewicht hört auf”). The increased costs of

borrowing (interest) would be reflected in higher prices charged by the producers of the

goods. Only a good Umlauf and moderate interest rates would keep the organism at

equilibrium.

Low interest rates in England, as Strellin went on, were indicative of England’s

national productive wealth (Strellin 1788, p. 162). Modern research on the English fiscal-

military state, the Glorious Revolution and the origins of Britain’s industrialization has

confirmed this. Low interest rates on government borrowing were part and parcel of the

fiscal-military state and the British economic miracle of the post-1688 early industrial period

(Casallilla & O’Brien, eds. 2012; Stasavage 2011). Once again, this line of argumentation

sounds almost Keynesian to the modern ear, and we know that Keynes was so appreciative of

the mercantilists that he devoted an entire chapter of his General Theory to them (Keynes

1936, ch. 23, although he never mentioned the Cameralists, who may have given him the

better historical precedent). Vivacity of circulation could be stimulated through population

30

growth, i.e. a rise in domestic demand induced independent of a possible increase in per

capita income; the expansion of manufacturing as well as “auswärtige Kommerzien” (exports,

mainly manufactures; Strelin 1788, p. 150). Later Cameralists, such as Eduard Baumstark,

would stress, on top of population level and density, the level of division of labour, economic

specialization and diversification within the economy (“Manchfaltigkeit von Gütern,

Nutzungen und Leistungen”) as factors upon which level and vivacity of circulation were

contingent (Baumstark 1835, p. 570). Banks – land banks, giro and deposit banks, extending

credit and clearing bills of exchange –, as well as “foreign trading companies” were also seen

as a generic and powerful means to stimulate monetary circulation (Justi [1756] 1782, pp.

201-213). The rather long entry on “Geld”, which appeared in the first edition 1779 (2nd ed.

1787) in vol. 17: Geld - Gesundheits=Versammlung of Krünitz’s great economic

encyclopaedia – on which large parts of later works were based almost verbatim, including

Strellin’s above-mentioned entry in his “Realwörterbuch”31, stressed that circulation would be

stimulated mostly by “useful and necessary goods”, not luxury wares. This was standard

mercantilist fare. Manufactured exports outside the luxury range – everyday textiles, ironware

etc. – were better-suited to generate lasting income and employment effects within the

domestic economy that produced such goods (E. Reinert 1999; E. Reinert 2007; E. Reinert &

Rössner 2016).

Johann Heinrich Gottlob Justi, Germany’s most famous and most prolific economist of

the early modern age (Wakefield 2009; E. Reinert 2009), wrote in his Grundsätze der

Policeywissenschaft (Principles of Policey Science and Economics, 1756) that government

should take care to keep a good amount of money in circulation (Umlauf): “Allein der Umlauf

des Geldes ist eine so wichtige Sache für die Commercien und Gewerbe, daß eines ohne das

andere unmöglich stattfinden kann.” (Justi 1759 ed., I, p. 161). He then went on to establish a

functional relationship between Umlauf (i.e. M.V) and the price level (P). If there was less

“circulation” vis-à-vis a constant number of goods and services produced, prices will

decrease, as silver-based currencies will appreciate. Goods will become cheaper, but

employment and incomes will also decrease, which is not good for the economy – classical

signs of a trade or even “macro-economic” depression. And with this slightly ambiguous

phrase of “circulation” (Umlauf), which is more than merely the amount of money, Justi also

had a grasp of velocity of money in circulation. Government should take care that enough

money was circulating at a “healthy” velocity, as Justi maintained, so as to keep the economy

31 See above.31

running at capacity (ibid. pp. 194–204). Justi was more afraid of deflation than he was of

inflation: he opined that a modest inflation may lead to a boom in economic activity, filling

the order books, inducing people to spend more, somewhat spiralling the whole system

upwards. Two hundred years later, in 1972, German Federal Chancellor Helmut Schmidt said

exactly the same (Süddeutsche Zeitung, 28 July 1972, p. 8: Lieber fünf Prozent Inflation als

fünf Prozent Arbeitslosigkeit). Obviously this could be achieved best by putting more money

into circulation. But this was difficult, if silver reserves were scarce and currency debasement

was to be ruled out as an option – the latter jeopardized social and economic equilibrium and

created rifts and tensions within society.32 As has been seen above, the German lands – with

often uncompetitive domestic manufacturing economies and no native silver resources (with

the exception of those states where silver mines were located) – faced a structural downward

pressure on their domestic balance-of-payment and were habitually short of money. One

alternative to straight currency debasement, in order to stretch the available money supply

(M) was, Justi said, to play around with money’s velocity.

But the same strategies and recipes were available elsewhere and widely-shared. In the

preface to his translation of Anders Berch’s Inledning til Almänna Hushålningen,

innefattande Grunden til Politie, Oeconomie och Cameralwetenskaperna (Stockholm: Lars

Salvius, 1747)33 from Swedish into German, Leipzig professor of Cameralist economics

Daniel Gottfried Schreber highlighted how every Swedish university these days (Schreber’s

translation was published in 1763) now had a chair in Cameral sciences, something which the

German lands were still far from, and how this had already generated manifest economic

advances within the Swedish economy (Berch [1747] Ger. trans. 1763, preface). Clever

economic policy would entail avoiding standstill (Anhalten) of the monetary flow and the

lying-idle of capital, i.e. a decline in velocity through the vicissitudes of hoarding, Berch

wrote in his successful magnum opus (ibid., pp. 417-423, see E. Reinert & Carpenter 2016,

pp. 36-39). Wilhelm Roscher, alongside Gustav (von) Schmoller (1828–1917) one of the

towering figures of the German Historical School in economics, put forth the hypothesis that

velocity was a variable rather than a constant but a somewhat culturally contingent. He

hypothesized that in the process of development the amount of money would increase first,

and then, when the populace had become accustomed to habitual money use and adjusted

their demand for money accordingly, velocity would decrease (Roscher 1854, p. 213). The

32 For the Reformation and Peasants’ War (1525) see Rössner 2012.33 Ger. Transl. Anleitung zur allgemeinen Haushaltung in sich fassend die Grundsätze der Policey-, Oeconomie-, und Cameralwissenschaften, transl. J. G. Schreber (Halle: Curts, 1763).

32

speed with which money changed hands was dependent upon factors such as political stability

(war, peace), economic development, institutions, property rights security, and fluctuations in

the business cycle (Roscher 1854, p. 209f.). It is obvious that this functional relationship or

mechanism worked in both ways. But where did Roscher – and many others – get their

knowledge of what velocity was and how it was culturally and societally contingent? One

historical example may suffice; it means going back to Martin Luther’s (1483-1546) life and

times.

As we have seen, the Cameralists seem to have devoted increasing attention to

circulation, of goods (P.T) as well as money (M.V), i.e. the idea of a high velocity of money

and a low demand for money to hold, which translated into the holding-back of money from

the market by neither spending nor saving, that is investing it in return for interest. A low

velocity and a high demand for money to hold may lead the economy into a cycle of deflation

and depression. The interesting thing is that the eighteenth century Cameralists made almost

exactly the same point as modern (twentieth-century) economists, Keynesians and many

monetarists alike, by establishing a functional relationship between a high demand for money

to hold (Keynesian hoarding of money) and a low velocity or “vivacity” of circulation. Think

of the famous “Cambridge equation”, which interprets V to be the inverse of the demand for

money to hold (k), thus V=1/k and k=1/V. Money that was put to rest idle harmed the

economy, as it increased interest rates (Interessen), lowered disposable income and thus

potential (aggregate) demand for goods. This was standard fare in early modern mercantilist

and Cameralist economic thought, with a long pedigree dating back to the age of Martin

Luther (1483-1546).

As is well known Martin Luther (1483–1546) was a great critic of religious donations,

liturgical luxury and idolatry.34 Part of his new or reformed theology of 1517 evolved around

this. His sermons of the early 1520s are full of references to indulgences, luxurious chalices,

monstrances, church bells and altar pieces, i.e. money invested in economically as well as

religiously unproductive ways (in Luther’s view!). Rather than giving the money to churches

and priests for indulgences and other religious or devotional purposes, the money should be

allocated to those in need, the poor, the hungry. Sometimes Luther picked up directly on the

practice of hoarding or burying money (Rössner 2016d). In his Sendbrief vom Dolmetschen

(On Translation, 1530), as well as many other occasions, Luther quoted scripture whilst

34 See Rössner, ed. 2015c, introduction, pp. 1-160, for a short biographical sketch and extended discussion of Luther’s contribution to modern economic thought.

33

strictly condemning the practice of burying money: “Thus is why the master in the gospel

scolds the unfaithful servant as a slothful rogue for having buried and hidden his money in the

ground [Matt. 25:25–26].” (Luther’s Works, 35, ed. Lehmann / Bachmann 1960, p. 81). Many

contemporaries would, during the 1520s and 1530s, reiterate this stance. The abolition of

payment for indulgences (one form of unproductive hoarding, as the money was sunk within

churches and cloisters), coupled with vicious anti-hoarding debates in the early sixteenth-

century, mark a pillar of “Reformation economics” (Rössner 2015, Rössner 2016d). Indirectly

therefore Luther and the early sixteenth-century discourse on hoarding and spending during

the early Reformation, had developed the idea that money was an economic resource. Money

was more than its amount (M): velocity mattered, i.e. the number of times a particular stock of

money would circulate within the economy (Rössner 2016d).

The discovery of velocity as a historical protagonist therefore happened much earlier

than usually assumed by historians of economic thought. It may have originated in the

German lands and may reflect a specifically German discourse and idiosyncratic response to

silver scarcity and balance-of-payment constraints that were specific to post-1500 German

states. Geld im kasten ist dem Lande ein schade (“money kept away in a chest will do the

country much harm”), Wilhelm von Schröder, alongside Becher and Hörnigk the third of the

seventeenth-century “Austrian mercantilists” summarized, in his major economics work

Fürstliche Rentkammer (“Princely Treasure Chest”) (Schröder 1705 ed., p. 194). So one

means of economizing on money as a scarce resource, especially when M was declining,

would be to increase its velocity: by dis-hoarding of treasure, or decreasing the demand for

money to hold, putting it back into circulation if need be at moderate rates of interest. The

current scenario, with interest rates hovering around zero in the EURO-zone, even negative

rates (as in 2016), shows that we have moved more than full circle, ever since the late

medieval and early modern economists, up to Keynes who confirmed their “rationality”, had

advocated a general interest rate ceiling at five per cent.35 And the difficulty of stimulating

Japan’s ailing economy through monetary expansion since the 1990s have widely been

acknowledged to be due to a failure of velocity to increase (or, rather, velocity to be increased

by suitable economic policy).

35 On the vagaries of the Usury laws, see Denzel 2015 and Geisst 2013.34

VI. CONCLUSION – WHY DOES MONEY MATTER?

Why does all of this matter? The answers have been given already; mainly by the voices of

the contemporary discourse, especially those on the pro-Stable Money side (section II) of the

doctrinal divide. The majority of the pre-1800 period – bar the Advocati Diaboli (section III)

– agreed that currency must remain stable, measured in terms of the intrinsic value of current

coins as the main means of monetary circulation. In reality it never did, as the longue durée

monetary history of Europe shows. The Scholastic stability command was almost constantly

violated. Revaluations (upwards adjustment of currencies’ precious metal content) took place

only during less than a handful of years within the five hundred years or so of almost

continuous debasement, 1400 to 1900 A.D. (Sargent and Velde 2003; Cipolla 1956; Rössner

2014a). Between 1400 and 1900 German small change currencies, measured in terms of

precious metal content of a sample of seven Southern German penny currencies, lost 90 per

cent of their intrinsic value (Rössner 2014a). Whilst debasement had been the norm for ages,

contemporaries had, for the same time, continuously reminded rulers and kings that it mustn’t.

Why the rulers did not adhere to the call, and why medieval and early modern European

monetary policy exhibited such seemingly schizophrenic traits of cognitive dissonance is

another matter and beyond the present paper’s remit.36 With the exception of the Ernestine

(1530) and Johann Joachim Becher, most Germano-phonic economic authors between 1500

and 1800 would have argued that coin debasement did more harm than good to society.

Later authors such as German Cameralist Johann Friedrich von Pfeiffer (1718-1787)

formulated explicitly what rulers and merchants had implied for ages: only within the full-

bodied currency segment, i.e. the upper spheres of exchange – florins/gulden, Thalers and

good groats – should extrinsic and intrinsic value of the coins coincide (metallist theory)

(Pfeiffer 1781, pp. 157-160). These coins were what German language has known for a long

time as Handelsmünzen, i.e. coins that were used for settling large and long-distance trade

balances. Small change coins on the other hand (Ger. Scheidemünzen) had a limited regional

area of circulation and may in theory be minted purely as fiduciary money, i.e. be completely

made of copper in the extreme, following our modern concept of nominalist or chartalist

money (Schumpeter 1954). This strategy has been dubbed by two economists as “getting the

formula right” (Sargent & Velde 2003); by managing and sticking to the “correct”, meaning

welfare-maximizing, relation between small change and full-bodied money in total coin

supply. The problem was, of course that you couldn’t these days mix a fiduciary element (for 36 Rössner, 2014a; a good model can also be found in Schremmer & Streb 1999.

35

the regionally circulating small change coins) with a commodity money standard (high or full-

bodied coins), without the common people opting-out of this system by creating their own

rules, effectively returning to a commodity money standard or payment by weight system for

all coins of all denominations, regardless whether full-bodied or small-change (Rössner 2012,

ch. IV). Because wherever the two theories of money coexisted side by side, they opened up

possibilities of usury, arbitrage and rent seeking. Wherever different coins of similar

denomination circulated, foreign and domestic, old and new alike, people with insider

knowledge would take the opportunity and charge unjust spot exchange rates, i.e. demand

more than some coins were officially worth; putting those who had no good money or only

little means of attesting a coin’s factual value at a disadvantage. These manipulations fulfilled

all contemporary criteria of usurious behaviour. And yet they represented an intrinsic feature

of the contemporary monetary landscape, as complaints about such transactions were

ubiquitous in early modern Europe until the 1870s (ibid.). Transaction costs increased due to

the enhanced coin exchange rates and increased haggling, bargaining and re-negotiating of

individual exchange rates between the different coins (ibid., chs. II and III for detailed

empirical analysis).

So money was never neutral. It had its inner life. And there was much more to it. The

pre-classical economists – from the neo-Aristotelian or late Scholastic authors and bullionists

of the fourteenth and fifteenth century until the late Cameralists such as Justi and the German

Historical School of the nineteenth century (Dreissig 1939, pp.7–9) – were aware of this.

Money was an economic resource that could be potentially used to the benefit, if not gain, of

the common weal. As monetary policy was one of the more obvious means of doing so, by

getting the parameters right, stabilizing economic exchange and property rights, a positive

silver balance was seen as a panacea not only for balanced economic development but also for

a reliable and credible Ordnungs- und Stabilitätspolitik or policy of order: all subsequent

principles of economic policy were derived from it. This policy seems to have worked well in

post-World War Two Western German model of coordinated capitalism, the Soziale

Marktwirtschaft, based on the stability paradigm of the Deutschmark; but this paradigm had,

as the present paper has shown, a prehistory of about six hundred years! If currency and

monetary policy were managed well, this could lead to economic growth. None of the authors

discussed in the present paper seem to have confused silver with wealth (“Midas fallacy”):

Adam Smith and those who followed were simply wrong in this assessment of Mercantilism.

Most of the “German” authors discussed above, from Biel and Copernicus to the Cameralists 36

such as Seckendorff, Becher and Justi, knew quite well what money was and what it was not;

what it could do and what it could not do, and which functions it was supposed to fulfil as an

institution directed at lowering transaction costs, stabilizing property rights and effecting

economic growth and development. They distinguished clearly between money and real

wealth.

This is yet another answer to the famous question, why the medieval bullionists and

early modern Mercantilists/Cameralists were so adamant about a positive balance of payment.

It was not that they did get their Game Theory wrong or looked for rent seeking opportunities,

as many later authors have suggested anachronistically (e.g. Mokyr 2011, ch. 4, or Ekelund &

Hébert 2014). If one followed this line of reasoning, one may in the same way and with the

same sense of reasoning sketch the history of cars by starting with the technique of stage-

coach building since the 1500s and arrive, quite naturally, at the somewhat logical, yet

probably meaningless conclusion that the sixteenth-century coach makers had not yet worked

out the “correct” theory or way of building cars.

We should, therefore, bring back idiosyncrasy as an epistemological tool or “looking

glass” into the history of economic analysis and also acknowledge that modern economic

reasoning did not start with Adam Smith. It is only from a more modern vantage point – here:

a monetary landscape that knows only fiduciary currencies – that Cameralist ideas as

discussed at present seem a bit lost on us. This is because we have not learnt to understand the

fabric of the canvas on which they were painted. And they may also act as a warning against

all modern voices of reintroducing the Gold Standard – because returning to a precious metal-

based or “metallist” monetary standard may open more cans of worms than it solves

problems.

Adam, Ulrich. 2006. The Political Economy of J.H.G. Justi. Oxford et al: Peter Lang

Agricola 1550 In Prescher, Hans, ed. 1959. Georgius Agricola. Schriften über Maße

und Gewichte (Metrologie). Berlin: Deutscher Verlag der Wissenschaften, 337–436

Ashworth, William J. 2003. Customs and Excise: Trade, Production, and

Consumption in England, 1640–1845. Oxford and New York: Oxford University Press37

Backhaus, Jürgen G. 1994. “The German Economic Tradition: From Cameralism to

the Verein für Sozialpolitik.” In Manuela Albertone and Alberto Masoero, eds., Political

Economy and National Realities: Papers presented at the Conference held at the Luigi

Einaudi Foundation, Palazzo d’Azeglio, Turin, September 10–12, 1992. Turin: Fondazione

Luigi Einaudi, 329–356

Backhaus, Jürgen G. 2016. “Mercantilism and Cameralism: two very different

variations on the same theme.” In Philipp Robinson Rössner, ed. Economic Growth and the

Origins of Modern Political Economy. Economic reasons of state. London & New York:

Routledge, pp. 72-78

Baumstark, Eduard. 1835. Kameralistische Encyclopädie: Handbuch der

Kameralwissenschaften und ihrer Literatur für Rechts- und Verwaltungsbeamte, Land-

Stände, Gemeinde-Räthe und Kameral-Kandidaten. Heidelberg & Leipzig: Karl Groos

Bensen, Karl Daniel Heinrich. 1789. Versuch eines systematischen Grundnisses der

reinen und angewandten Staatslehre für Kameralisten. Erlangen: Johann Jakob Palm

Bentzinger, Rudolf, ed. 1983. Die Wahrheit muß ans Licht! Dialoge aus der Zeit der

Reformation. Leipzig: Reclam

Berch, Anders. 1747. Inledning til almanna hushålningen, innefattande grunden til

politie, oeconomie och cameral wetenskaperne. Stockholm: Salvius

Besomi, Daniele, ed. 2013. Crises and Cycles in Economic Dictionaries and

Encyclopaedias. London & New York: Routledge

38

Gabrielis Biel, Collectorium circa quattuor libros Sententiarum. Renata Steiger et al.

eds. 1977. Tübingen: Mohr

Blaich, Fritz. 1970. Die Wirtschaftspolitik des Reichstags im Heiligen Römischen

Reich: ein Beitrag zur Problemgeschichte wirtschaftlichen Gestaltens. Stuttgart et al.: Fischer

Blaich, Fritz. 1973. Die Epoche des Merkantilismus. Wiesbaden: Steiner

Blaich, Fritz. 1992. “Die Bedeutung der Reichstage auf dem Gebiet der öffentlichen

Finanzen im Spannungsfeld zwischen Kaiser, Territorialstaaten und Reichsstädten (1495–

1679).” In Aldo De Maddalena and Hermann Kellenbenz, eds., Finanzen und Staatsräson in

Italien und Deutschland in der frühen Neuzeit. Berlin: Duncker & Humblot, 79–112

Blaug, Mark. 1985. Economic theory in retrospect. New York: Cambridge University

Press

Bog, Ingomar. 1959. Der Reichsmerkantilismus; Studien zur Wirtschaftspolitik des

Heiligen Römischen Reiches im 17. und 18. Jahrhundert. Stuttgart: Fischer

Böhle, Cilly. 1940. Die Idee der Wirtschaftsverfassung im deutschen Merkantilismus.

Jena: Fischer

Boldizzoni, Francesco. 2005. “La rivoluzione dei prezzi rivisitata: moneta ed

economia reale in Alta Italia (1550-1630).” Rivista Storica Italiana, 117, 1002–1036

Boldizzoni, Francesco. 2011. The Poverty of Clio: Resurrecting Economic History.

Princeton, NJ: Princeton University Press

39

Boldizzoni, Francesco. 2016. “The long shadow of Cameralism. The Atlantic order

and its discontents. In Philipp Robinson Rössner, ed. Economic Growth and the Origins of

Modern Political Economy. Economic reasons of state. London & New York: Routledge, pp.

299-309

Bonney, Brian. 1999. The Rise of the Fiscal State in Europe, c. 1200–1815. New

York: Oxford University Press

Bowler, Richard C. 2002. “Menschenbild und Wirtschaftsordnung: Der

Menschenbegriff im Kameralismus und in der Nationalkonomie.” Berichte zur

Wissenschaftsgeschichte, 25 (4), pp. 283-299

Braudel, Fernand. 1982-1984. Civilization and Capitalism. 3 Vols. New York : Harper

& Row

Burckhardt, Wolfram, ed. 1999. Nicolas von Oresme De mutatione monetarum:

tractatus = Traktat über Geldabwertungen. Berlin: Kulturverlag Kadmos

Carey, Daniel. and Christopher Finlay. 2011. eds. Empire of credit: the financial

revolution in the British Atlantic world, 1688-1815. Dublin: Irish Academic Press

Yun Casalilla, Bartolomé, Patrick O'Brien, eds. 2012. The Rise of Fiscal States: A

Global History, 1500–1914. New York: Cambridge University Press

Chang, Ha-Joon. 2003. Kicking Away the Ladder: Development Strategy in Historical

Perspective. London: Anthem

40

Coenen, Ann. 2016. “Infant industry protectionism and early modern growth?

Evidence from eighteenth-century entrepreneurial petitions in the Austrian Netherlands.” In

Philipp Robinson Rössner, ed. Economic Growth and the Origins of Modern Political

Economy. Economic reasons of state. London & New York: Routledge, pp. 220-239

Denzel, Markus A. 2012. Der Nürnberger Banco Publico, seine Kaufleute und ihr

Zahlungsverkehr (1621–1827). Stuttgart: Franz Steiner

Denzel, Markus A. 2015. “Das Problem des Wuchers im bargeldlosen Verkehr des

späten Mittelalters,” In Reichtum im späten Mittelalter, eds. Petra Schulte / Peter Hesse.

Stuttgart: Franz Steiner, pp. 95-114

Detloff, Werner. 1980. “Gabriel Biel.” In Theologische Realenzyklopädie, eds. Horst

Robert Balz et al., Vol. 6., Berlin and New York: De Gruyter, pp. 488–491

Dittrich, Erhard. 1974. Die deutschen und österreichischen Kameralisten. Darmstadt:

Wissenschaftliche Buchgesellschaft

Dreissig, Wilhelmine. 1939. Die Geld- und Kreditlehre des deutschen Merkantilismus.

Berlin: Dr. Emil Ebering

Eichengreen, Barry. 2007. The European Economy Since 1945: Coordinated

Capitalism and Beyond. Princeton, NJ: Princeton University Press.3

Ekelund, Robert B. & Robert F. Hébert. 2014. A History of Economic Theory and

Method. 6th ed. Longgrove, Ill.: Wave Land Press

41

Epstein, Stephan R. 2000. Freedom and Growth: The Rise of States and Markets in

Europe, 1300–1750. London and New York

Epstein, Stephan R. and Prak, Marten, eds. 2008. Guilds, Innovation, and the

European Economy, 1400–1800. Cambridge and New York: Cambridge University Press

Eucken, Walter. 1950. Die Grundlagen der Nationalökonomie, 6th ed. Berlin /

Göttingen: Springer

Flynn, Dennis O. and Giráldez, Arturo. 2004. “Cycles of Silver: Global Economic

Unity through the mid-18th Century.” In Markus A. Denzel, ed., From Commercial

Communication to Commercial Integration. Middle Ages to 19th Century. Stuttgart: Franz

Steiner, 81–111

Flynn, Dennis O. and Giráldez, Arturo. 1995a. “Arbitrage, China and World Trade in

the Early Modern Period.” Journal of the Economic and Social History of the Orient, 38:

429–428

Flynn, Dennis O. and Giráldez, Arturo. 1995b. “‘Born with a ‘Silver Spoon’: the

Origin of World Trade in 1571.” Journal of World History, 6, 201–221

Finkelstein, Andrea. 2000. Harmony and the balance: an intellectual history of

seventeenth-century English economic thought. Ann Arbour: University of Michigan Press

Föste, Wilga. 2015. Das Geld im ökonomischen Denken des Merkantilismus. Weimar

(Lahn): Metropolis

42

Gambles, Anna. 2000. “Free Trade and State Formation: The Political Economy of

Fisheries Policy in Britain and the United Kingdom, circa 1780–1850.” Journal of British

Studies 39 (3): 288–316

Geisst, Charles R. Beggar Thy Neighbor: A History of Usury and Debt. Philadelphia:

University of Pennsylvania Press, 2013.

Graeber, David. 2011. Debt. The First 5000 Years. New York: Melville House

Grice-Hutchinson, Marjorie. “Contributions of the School of Salamanca to Monetary

Theory as a Result of the Discovery of the New World”. In Economic Thought in Spain.

Selected Essays. Edited by Laurence S. Moss and Christopher K. Ryan. Aldershot: E. Elgar,

1991

Günzburg, Eberlin von. 1524. Mich wundert, dass kein Gelt ihm land ist. Ein

schimpflich doch vnschedlich gesprech dreyer landtfarer vber yetz gemelten tyttel. Eylemburg

durch Jac. Stöckel

Hall, Peter A. 1986. Governing the Economy. The Policies of State Intervention in

Britain and France. Oxford: Oxford University Press

Harcourt, Bernard. 2011. The Illusion of Free Markets. Punishment and the Myth of

Natural Order. Princeton, NJ: Princeton University Press

Harvey, David. 2007. A Brief History of Neoliberalism. Oxford: Oxford University

Press

43

Hassinger, Herbert. 1951. Johann Joachim Becher, 1635–1682: Beitrag zur

Geschichte des Merkantilismus. Vienna: Holzhausen

Politisches Testament an Augustum Churfursten zu Sachssen ein unterteniges

bedenken Melchiorn von Osse, 1556, In Oswald Artur Hecker, ed. 1922. Schriften Dr.

Melchiors von Osse: mit einem Lebensabriss und einem Anhange von Briefen und Akten.

Leipzig: Teubner

Heckscher, Eli F. 1932. Der Merkantilismus. 2 Vols. Jena: Gustav Fischer

Hoppit, Julian. 2011a. “Bounties, the Economy and the State in Britain, 1689–1800.”

In Perry Gauci, ed. Regulating the British Economy, 1660–1850. Farnham, Surrey;

Burlington, VT: Ashgate

Hoppit, Julian. 2011b. “The Nation, the State, and the First Industrial Revolution.” The

Journal of British Studies, 50 (2): 307–331

Iserloh, Erwin. 1955. “Biel, Gabriel.” In Neue Deutsche Bibliographie, Vol. 2. Berlin:

Duncker & Humblot, pp. 225-6

Justi, Johann Heinrich Gottlob von. 1755. Staatswirtschaft oder systematische

Abhandlung aller ökonomischen und Cameralwissenschaft. Leipzig: Breitkopf

Justi, Johann Heinrich Gottlob von. 1756 Grundsätze der Policeywissenschaft. 1782

ed.

Jevons, W. Stanley. 1875. Money and the Mechanism of Exchange. London: King

44

Keynes, John M. 1936. General Theory of Employment, Interest and Money. New

York: Harcourt, Brace

Kötzu, Stefan. 2016. “The Last Scholastic on Money. Gabriel Biel’s Monetary

Theory.” In David Fox and Wolfgang Ernst, eds., Money in the Western Legal Tradition:

Middle Ages to Bretton Woods. Oxford: Oxford University Press,

Luther’s Works, 35, ed. Lehmann / Bachmann 1960

Magnusson, Lars, ed. 1993. Mercantilist Economics (Recent Economic Thought).

Boston: Kluwer

Mäkeler, Hendrik. 2003. “Nicolas Oresme und Gabriel BieI Zur Geldtheorie im späten

Mittelalter,” Scripta Mercaturae 37:1, pp. 56-94

Malanima, Paolo. 2009. Pre-modern European economy: one thousand years (10th-

19th centuries). Leiden & Boston: Brill

Magnusson, Lars. 2009. Nation, State and the Industrial Revolution: the Visible Hand.

London and New York: Routledge

Magnusson, Lars. 2016. “Was Cameralism really the German version of

mercantilism?” In Philipp Robinson Rössner, ed. Economic Growth and the Origins of

Modern Political Economy. Economic reasons of state. London & New York: Routledge, pp.

57-71

Mokyr, Joel 2009. The enlightened economy: an economic history of Britain, 1700-

1850. New Haven: Yale University Press

45

Morgan, Mary S. (2006) Measuring instruments in economics and the velocity of

money. Working papers on the nature of evidence: how well do ‘facts’ travel?, 13/06.

Department of Economic History, London School of Economics and Political Science,

London, UK

Munro, John H. 1993. “Münzkosten.” In Michael North, ed., Von Aktie bis Zoll. Ein

historisches Lexikon des Geldes. Munich: Beck, p. 263

Munro John H. A. 2003. “The Monetary Origins of the ‘Price Revolution.’” In Dennis

O. Flynn, Arturo Giráldez and Richard von Glahn, eds., Global Connections and Monetary

History, 1470–1800. Aldershot and Burlington: Ashgate, 1–34

Nederman, Cary. J. 2009. Lineages of European Political Thought: Explorations

Along the Medieval/Modern Divide from John of Salisbury to Hegel. The Catholic University

of America Press

North, Michael. 1994. Das Geld und seine Geschichte: vom Mittelalter bis zur

Gegenwart. Munich: C. H. Beck

North, Douglass C., Wallis, John J. and Weingast, Barry R. 2009. Violence and Social

Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge and

New York: Cambridge University Press

Parthasarathi, Prasannan. 2011. Why Europe Grew Rich and Asia Did Not. Global

Economic Divergence, 1600–1850. Cambridge: Cambridge University Press;

Peacock, Mark. 2013. Introducing Money. Milton Park, Abingdon, Oxon: Routledge

46

Pfeifer, J. F. (von). 1781. Grundriss der Finanzwissenschaft nebst einem Anhang über

die Unausführbarkeit des physiokratischen Systems. Frankfurt-on-the-Main

Philipsen, Dirk. 2015. The little big number: how GDP came to rule the world and

what to do about it. Princeton: Princeton University Press

Pierenkemper, Toni. 2012. Geschichte des modernen ökonomischen Denkens. Große

Ökonomen und ihre Ideen. Göttingen: Vandenhoeck & Ruprecht, 2012.

Pribram, Karl. 1992. Geschichte des ökonomischen Denkens. 2 Vols. Frankfurt am

Main: Suhrkamp.

Priddat, Birger P. 2008. “Kameralismus als paradoxe Konzeption der gleichzeitigen

Stärkung von Markt und Staat. Komplexe Theorielagen im deutschen 18. Jahrhundert.”

Berichte zur Wissenschaftsgeschichte 31: 249–263.

Raeff, Marc. 1983. The Well-ordered Police State: Social and Institutional Change

Through Law in the Germanies and Russia, 1600–1800. New Haven: Yale University Press

Reden, Sitta von. 2011. Money in Classical Antiquity. Cambridge: Cambridge

University Press

Redish, Angela 2006. Bimetallism: An Economic and Historical Analysis. Cambridge:

Cambridge University Press

Reinert, Erik S. 1999. “The Role of the State in Economic Growth.” Journal of

Economic Studies 26:4/5, pp. 268-321

47

Reinert, Erik S. 2005. “A Brief Introduction to Veit Ludwig von Seckendorff (1626–

1692).” European Journal of Law and Economics, 19, pp. 221–230

Reinert, Erik S. 2007. How Rich Countries Got Rich…And Why Poor Countries Stay

Poor. London: Constable

Reinert, Erik S. 2009. “Johann Heinrich Gottlob von Justi (1717–1771) – The Life and

Times of an Economist Adventurer.” In Jürgen Georg Backhaus, ed., The Beginnings of

Political Economy: Johann Heinrich Gottlob von Justi, New York, NY: Springer, pp. 33–74

Reinert, Erik S. and Philipp R. Rössner. 2016. “German Economics as Development

Economics: From the Thirty Years War to World War II.” In: Erik S. Reinert, Jayati Ghosh

and Rainer Kattel, eds., Elgar Handbook of Alternative Theories of Economic Development.

Cheltenham / Northampton: Edward Elgar (in print)

Reinert, Sophus A. 2011. Translating Empire: Emulation and the Origins of Political

Economy. Cambridge, MA: Harvard University Press

Lissa Roberts (2014) Practicing oeconomy during the second half of the long

eighteenth century: an introduction, History and Technology, 30:3, 133-148

Roncaglia, Alessandro. 2005. The Wealth of Ideas. A History of Economic Thought.

Cambridge: Cambridge University Press.

Röpke, Hans-Joachim. 1971. Die Wachstumstheorie der deutschen Merkantilisten.

Ph.D. Diss. Marburg

48

Roscher, Wilhelm. 1864. “Die österreichische Nationalökonomik unter Kaiser

Leopold I,” Jahrbücher für Nationalökonomie und Statistik 2, pp. 105-122

Roscher, Wilhelm. 1874. Geschichte der Nationaloekonomik in Deutschland. Munich

Oldenbourg

Rössner, Philipp Robinson. 2012. Deflation – Devaluation – Rebellion. Geld im

Zeitalter der Reformation. Stuttgart: Franz Steiner, ch. IV

Rössner, Philipp Robinson. 2013. “Die (proto)globalen Spannungsfelder und

Verflechtungen mitteldeutscher Münz- und Währungspolitik um 1500. Das Beispiel der

sächsischen Talerprägung.” In Martina Schattkowsky, ed., Das Erzgebirge im 16.

Jahrhundert: Gestaltwandel einer Kulturlandschaft im Reformationszeitalter. Leipzig:

Leipziger Universitätsverlag, pp. 103–158

Rössner, Philipp Robinson. 2014. “Monetary Instability, Lack of Integration and the

Curse of a Commodity Money Standard. The German Lands, c.1400–1900 A.D.” Capital and

Credit Markets 47 (2), pp. 297–340

Rössner, Philipp Robinson. 2014b. “Mercantilism as an Effective Resource

Management Strategy? Money in the German Empire, c. 1500–1800.” In Isenmann, ed.,

Merkantilismus, pp. 39–64

Rössner, Philipp Robinson. 2015a. “Merchants, Mercantilism, and Economic

Development. The Scottish Way, c. 1700–1815.” Annales Mercaturae, 1/1, 97-126

Rössner, Philipp Robinson. 2015b. “Heckscher Reloaded? Mercantilism, the State and

Europe’s Transition to Industrialization (1600–1900).” The Historical Journal, 58,2, pp. 663–

683

49

Rössner, Philipp Robinson. 2015c. Martin Luther On Commerce and Usury. London

and New York: Anthem

Rössner, Philipp Robinson, ed. 2016a. Economic Growth and the Origins of Modern

Political Economy: Economic Reasons of State, 1500–2000. Milton Park and New York:

Routledge.

Rössner, Philipp Robinson. 2016b. “New inroads into well-known territory? On the

virtues of re-discovering pre-classical political economy.” In id., ed. Economic Growth and

the Origins of Modern Political Economy. Economic reasons of state. London & New York:

Routledge, pp. 3-26

Rössner, Philipp Robinson. 2016c. “Freie Märkte? Zur Konzeption von Konnektivität,

Wettbewerb und Markt im vorklassischen Wirtschaftsdenken und die Lektionen aus der

Geschichte.” Historische Zeitschrift (forthcoming)

Rössner, Philipp Robinson. 2016d. “Burying Money? Monetary Origins and Afterlives

of Luther’s Reformation.” History of Political Economy 48:2, pp. 225-263

Rössner, Philipp Robinson. 2017. “Introduction.” In id., ed., Philipp Wilhelm von

Hörnigk’s ‘Austria SUPREME (if It So Wishes)’ A Strategy for European Economic

Supremacy (1684). ed. with an introduction by Philipp Robinson Rössner, transl. Keith Tribe.

London & New York: Anthem (in print)

Rothkrug, Lionel. 1965. Opposition to Louis XIV. The Political and Social Origins of

the French Enlightenment. Princeton, NJ: Princeton University Press

50

Sandmo, Agnar. Economics Evolving. A History of Economic Thought. Princeton, NJ:

Princeton University Press, 2011.

Sargent, Thomas J. and Velde, François R. 2003. The Big Problem of Small Change.

Princeton, NJ: Princeton University Press

Schefold, Bertram, ed. 2000a. Die drei Flugschriften über den Münzstreit der

sächsischen Albertiner und Ernestiner. Düsseldorf: Verlag Wirtschaft und Finanzen

Schefold, Bertram. 2000b. “Wirtschaft und Geld im Zeitalter der Reformation.” In

Bertram Schefold, ed., Vademecum zu drei klassischen Schriften frühneuzeitlicher

Münzpolitik. Düsseldorf: Verlag Wirtschaft und Finanzen, pp. 5–58

Schefold, Bertram. Ed. 2009. Tractatus juridico-politico-polemico-historicus de

aerario, sive censu per honesta media absque divexatione populi licite conficiendo, libri duo.

Hildesheim/New York: Olms Weidmann

Schmoller, Gustav von. 1860. “Zur Geschichte der national-ökonomischen Ansichten

in Deutschland während der Reformations-Periode.” Zeitschrift für Gesamte

Staatswissenschaft, 16, pp. 635–8

Schneider, Ulrich Johannes. 2013. Die Erfindung des allgemeinen Wissens:

Enzyklopädisches Schreiben im Zeitalter der Aufklärung. Berlin: Akademie Verlag

Schremmer, Eckart & Jochen Streb. 1999. “Revolution oder Evolution? Der Übergang

von den feudalen Münzgeldsystemen zu den Papiergeldsystemen des 20. Jahrhunderts.”

Vierteljahrschrift für Sozial- und Wirtschaftsgeschichte 86, pp. 457–476

51

Schröder, Wilhelm von. 1705 [1686]. Fürstliche Schatz- und Rentkammer. Leipzig.

Schumpeter, Joseph A. 1954. History of Economic Analysis. New York and Oxford:

Oxford University Press

Schefold, Bertram, ed. Caspari, Volker. 2004. Beiträge zur ökonomischen

Dogmengeschichte. Düsseldorf: Verlag Wirtschaft und Finanzen

Schmelzer, Matthias. 2016. The hegemony of growth: the OECD and the making of the

economic growth paradigm. Cambridge: Cambridge University Press

Seabright, Paul. 2004. The Company of Strangers: A Natural History of Economic

Life. Princeton, NJ: Princeton University Press

Seckendorff, Veit Ludwig von. 1656. Teutscher Fürsten-Staat. Frankfurt-on-Main:

Götze; 1720 ed. Jena.

Seckendorff, Veit Ludwig von. 1685. Der Christenstaat. Leipzig: Gleditsch

Sickinger, Raymond L. 2000. “Regulation or Ruination: Parliament’s Consistent

Pattern of Mercantilist Regulation of the English Textile Trade, 1660–1800.” Parliamentary

History, 19 (2), pp. 211–32

Simon, Thomas. 2014. “Merkantilismus und Kameralismus. Zur Tragfähigkeit des

Merkantilismusbegriffs und seiner Abgrenzung zum deutschen ‘Kameralismus.’ In

Merkantilismus. Wiederaufnahme einer Debatte, ed. Moritz Isenmann. Stuttgart: Franz

Steiner, 65–82.

52

Small, Albion W. 1909. The cameralists: the pioneers of German social polity. New

York: Franklin

Sombart, Werner. 1921/28. Der moderne Kapitalismus; historisch-systematische

Darstellung des gesamteuropäischen Wirtschaftslebens von seinen Anfängen bis zur

Gegenwart, Vols. I, II. 4th ed. Munich and Leipzig: Duncker & Humblot

Sommerfeld, Erich, ed. [1978] 2003. Die Geldlehre des Nicolaus Copernicus. Texte –

Übersetzungen – Kommentare. Berlin: Neunplus 1

Tractat M. Cyriaci Spangenberg vom rechten Brauch und Mißbrauch der Muentze, in:

M. Tilemann[us], Muentz Spiegel […] (Frankfurt-on-the-Main, 1592)

Sprenger, Bernd. 1977. “Preisindizes unter Berücksichtigung verschiedener

Münzsorten als Bezugsgrößen für das 16. und 17. Jahrhundert – dargestellt anhand von

Getreidepreisen in Frankfurt/Main.” Scripta Mercaturae, 1, pp. 57–69

Sprenger, Bernd. 2002. Das Geld der Deutschen. Geldgeschichte Deutschlands von

den Anfängen bis zur Gegenwart, 3rd ed. Paderborn: Schöningh

Spufford, Peter. 1998. Money and its Use in Medieval Europe. Cambridge: Cambridge

University Press, pp. 304–311

Spufford, Peter. 2006. Power and Profit: The Merchant in Medieval Europe. London:

Thames & Hudson

53

Stadermann, Hans-Joachim. 1999. Der Streit um gutes Geld in Vergangenheit und

Gegenwart. Enthaltend drei Flugschriften über den Münzstreit der sächsischen Albertiner

und Ernestiner um 1530 nach der Ausgabe von Walther Lotz (1893). Tübingen: Mohr Siebeck

Stanziani, Allessandro. 2012. Rules of exchange: French capitalism in comparative

perspective, eighteenth to the early twentieth centuries. Cambridge: Cambridge University

Press

Stasavage, David. 2011. States of Credit. Size, Power, and the Development of

European Polities. Princeton, NJ: Princeton University Press

Stern, Philip & Carl Wennerlind, eds. 2014. Mercantilism reimagined : political

economy in early modern Britain and its empire. Oxford: Oxford University Press

Strelin, Georg Gottfried. 1788. Realwörterbuch für Kameralisten und Oekonomen:

Vierter Band: von Flußarbeit bis Juwelen. Nördlingen: Karl Gottlob Beck

Sussman, Nathan. 1993. “Debasements, Royal Revenues, and Inflation in France

During the Hundred Years’ War, 1415–1422.” The Journal of Economic History, 53 (1), pp.

44–70

Tribe, Keith. 1995. Strategies of Economic Order: German Economic Discourse,

1750–1950. Cambridge: Cambridge University Press

Vries, Peer. 2015. State, Economy and the Great Divergence. Europe, China and the

World Economy. London: Bloomsbury

54

Vries, Peer. 2002. “Governing Growth: A Comparative Analysis of the Role of the

State in the Rise of the West.” Journal of World History, 13, pp. 67–193

Weidner, K. 1931. Die Anfänge einer staatlichen Wirtschaftspolitik in Württemberg,

Stuttgart: Kohlhammer

Yun-Casalilla, Bartolomé and O’Brien, Patrick-Karl, eds. 2012. The Rise of Fiscal

States: A Global History, 1500–1914. New York: Cambridge University Press

Volckart, Oliver. 1996. Die Münzpolitik im Ordensland und Herzogtum Preußen von

1370 bis 1550. Wiesbaden: Harrassowitz

Volckart, Oliver. 1997. “Early Beginnings of the Quantity Theory of Money and their

Context in Polish and Prussian Monetary Policies, c. 1520–1550.” Economic History Review,

Second Series, 50(3), pp. 430–449

De Vries, Jan & Ad van der Woude. 1996. The first modern economy : success,

failure, and perseverance of the Dutch economy, 1500-1815. Cambridge: Cambridge

University Press

Wennerlind, Carl. 2011. Casualties of credit: the English financial revolution, 1620-

1720. Cambridge, MA: Harvard University Press

Woll, Helmut. 1999. Kontroversen der Ordnungspolitik. Munich / Vienna:

Oldenbourg

Wood, Diana. 2002. Medieval Economic Thought. Cambridge: Cambridge University

Press

55

Zanden, Jan Luiten van. 2009. The long road to the Industrial Revolution : the

European economy in a global perspective, 1000-1800. Leiden / Boston: Brill

Zielenziger, Kurt. 1914. Die alten deutschen Kameralisten. Ein Beitrag zur Geschichte

der Nationalökonomie und zum Problem des Merkantilismus. Jena: G. Fischer

56